<PAGE> 1
ANNUAL REPORT
DECEMBER 31, 1996
YOUR FOUNDATION FOR INVESTMENT STRENGTH
THE
KENT
FUNDS(R)
THE KENT GROWTH AND INCOME FUND
THE KENT SMALL COMPANY GROWTH FUND
THE KENT INTERNATIONAL GROWTH FUND
THE KENT INDEX EQUITY FUND
<PAGE> 2
MESSAGE TO SHAREHOLDERS
Dear Kent Fund Shareholder:
Enclosed is the annual report for The Kent Equity Funds for the twelve
months ended December 31, 1996. Inside, you'll find an Economic Outlook which
characterizes the U.S. economy as being in the best fundamental shape in 25
years. There are also Portfolio Reviews for each Fund that explain how the Fund
managers adjusted their portfolios in the prevailing investment environment and
what the managers expect in the months to come.
During the period, The Kent Funds concentrated on providing shareholders
good value and attractive potential for growth while managing risks. If you have
any questions about your investments after reading this report, please see your
investment representative or call 1-800-633-KENT (1-800-633-5368) to speak to a
shareholder services representative. We remain committed to providing you with
useful information that can help you make the most of your investments.
Sincerely,
The Kent Funds
<PAGE> 3
INVESTMENT ADVISER
Old Kent Bank
One Vandenberg Center
Grand Rapids, MI 49503
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
This report is submitted for the general information of shareholders of The Kent
Growth and Income Fund, The Kent Small Company Growth Fund, The Kent
International Growth Fund and The Kent Index Equity Fund. It is not authorized
for distribution to prospective investors unless preceded or accompanied by an
effective prospectus for the funds, which contains more information concerning
the funds' investment policies as well as fees and expenses and other pertinent
information. Please read the prospectus carefully before investing.
The performance indices used for comparison in this report, including the
Standard & Poor's Composite Index of 500 Stocks, the Morgan Stanley Capital
International Europe, Australia and Far East Index, the Morgan Stanley Capital
International Europe Index, the Morgan Stanley Capital International Pacific
Index and the Russell 2000 Index, are unmanaged indices. Unlike actual mutual
fund performance, the performance of an index does not reflect any management
fees, other expenses or sales charges. A direct investment in the unmanaged
index is not possible.
Shares of the funds are not deposits or obligations of, or guaranteed or
endorsed by, Old Kent Bank or any of its affiliates. Shares of the funds are not
federally insured by the U.S. Government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investment return
and principal value will vary as a result of market conditions and other
factors, so that shares of the funds, when redeemed, may be worth more or less
than their original cost. An investment in the funds involves investment risks,
including the possible loss of principal.
[LOGO FDIC]
1
<PAGE> 4
REAL ECONOMIC ACTIVITY
Economy in Best Fundamental Shape in 25 Years.
As 1997 begins, the economy appears to be in the best fundamental shape in
25 years:
- - Despite a sharp rebound in the fourth quarter, economic growth for this
business expansion at 2.6 percent remains below the economy's long-run growth
rate of 3.2 percent, which has helped prolong the longevity of the current
expansion.
- - Inflation remains in check, although worries surface from time-to-time.
- - Even though the economy is running near full employment levels, the labor
markets appear to be "comfortably tight" with few signs of accelerating wage
pressures.
- - The level of interest rates and bond yields is moderate, ranging from 5.0 to
7.0 percent in the Treasury market.
- - Corporate earnings are still rising, albeit at a slower rate in some
industries than earlier in the expansion.
- - The international competitiveness of U.S. companies has increased markedly in
recent years and cost-cutting and restructuring efforts seem likely to
continue.
- - The Federal budget deficit shrunk from $290 billion in FY1992 to $107 billion
in FY1996.
- - And finally, U.S. companies continue to lead the world in the development and
proliferation of new information and telecommunications technologies.
REAL GROSS DOMESTIC PRODUCT
Annualized Growth Rate
<TABLE>
<CAPTION>
2Q 1Q 1Q 1Q 1Q 1Q 4Q
1991 1992 1993 1994 1995 1996 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1.7 4.7 -0.1 2.5 0.4 2 4.7
1 2.5 1.9 4.9 0.7 4.7
1 3 2.3 3.5 3.8 2.1
4.3 4.8 3 0.3
Long-Run Growth
Rate = 3.2%
2Q91 to 4Q96
Growth Rate = 2.6%
</TABLE>
This business expansion will be six years old next quarter and is now the
third longest expansion since World War II. In fact, the previous business
expansion, which ended in 1990, is the second longest, with the expansion in the
1960s that was fueled by the military buildup associated with the Vietnam War
being the longest. So, the last two expansions are two of the three longest on
record, with the current expansion still rolling along. Most likely this is a
reflection of the vastly improved inventory-control technologies that have been
developed in recent years and the proclivity of the Federal Reserve under the
guidance of Alan Greenspan to engage in pre-emptive strikes against any signs of
the economy overheating and/or inflationary pressures building.
Exports Boost Fourth-Quarter Growth.
The economy's "stop/go" pattern of growth, as depicted in the previous
graph, continued in the fourth quarter. Real Gross Domestic Product (GDP)
sprinted ahead at a 4.7 percent pace compared to the 2.1 percent gain recorded
in the third quarter. Exports surged at a 25.5 percent rate, causing a
significant improvement in net exports that accounted for almost half of the
rise in real GDP. Capital goods, particularly aircraft, were primarily
responsible for the extraordinary gain in exports. Domestic private final sales,
which excludes net exports, government spending and inventory swings, rose at
the more moderate pace of 3.2 percent. This measure probably gives a more
realistic picture of the economy's underlying strength as 1996 drew to a close.
<TABLE>
<CAPTION>
REAL ECONOMIC ACTIVITY
4Q 4Q95 to
1996* 4Q 96
----- -----
<S> <C> <C>
Gross Domestic Product 4.7% 3.4%
Domestic Private Final Sales 3.2% 3.6%
Personal Consumption Expenditures 3.4% 2.7%
*Annualized
</TABLE>
Despite reports of only a moderately successful holiday season for the
nation's retailers and the sharp rise in consumer indebtedness, delinquencies
and bankruptcies, consumer spending rebounded at a 3.4 percent rate last quarter
from the paltry 0.5 percent pace of the third quarter. Durable goods
2
<PAGE> 5
ECONOMIC OUTLOOK
<TABLE>
<CAPTION>
Percent of Real GDP Annualized Growth Rate
------------------- ----------------------
2Q91 4Q96 2Q91 to 4Q96
---- ---- ------------
<S> <C> <C> <C>
Producers' Durable Equipment 6.0% 8.5% 9.3%
High Technology Equipment 1.9% 3.7% 15.6%
Computers 0.5% 2.1% 32.9%
Real GDP 2.6%
</TABLE>
spending was the strongest component, with furniture outlays leading the way. At
first blush, the rise in spending on furniture doesn't seem to be consistent
with the decline in residential construction outlays over the past two quarters,
which resulted from the rise in mortgage rates last year. The housing market
proved to be very resilient during 1996, however, as aggressive switching to
adjustable-rate mortgages and some purchases in anticipation of even higher
mortgage rates actually led to an 8.8 percent gain in housing starts last year.
The strong job market and high levels of consumer confidence also contributed to
a record sales year for existing homes as 4.09 million homes exchanged hands,
eclipsing the previous high of 3.99 million reached in 1978.
Aside from exports, business capital spending was again the strongest
sector of the economy during the fourth quarter. The contribution from the
various components was somewhat different than over the previous 23 quarters,
however. Capital outlays on structures grew at a 22.5 percent rate as the high
level of capacity utilization, falling commercial and industrial vacancy rates,
and ongoing retail expansion spurred additional construction. In a somewhat
unexpected turn, producers' durable equipment outlays fell for the first time in
over four years. Equipment outlays have been the strongest sector of the economy
during the business expansion, as demand for computers, telecommunications
equipment and other forms of information technology has surged.
<TABLE>
<CAPTION>
BUSINESS CAPITAL SPENDING*
4Q1996
<S> <C>
Structures 22.5%
Producers' Durable Equipment -1.7%
High-Technology Equipment 11.5%
Computers 26.8%
Industrial Machinery -6%
Transportation Equipment -15.7%
*Annualized
</TABLE>
Looking at the components of equipment spending shows that all of the
decline last quarter was contained in the industrial machinery and volatile
transportation equipment sectors and that outlays for high-technology equipment,
particularly computers, remained strong. The main motivation behind the surge in
equipment purchases over the past five and a half years is the desire of
businesses to improve their competitiveness by increasing productivity,
restraining costs and boosting quality. The fact that the price of capital goods
has been declining relative to labor compensation is an added incentive to
invest in equipment.
Companies have responded aggressively during this expansion to the
heightened competitive pressures coming at them from both domestic and
international competitors. The table below depicts how large the representative
share of the nation's total output equipment spending has become over the course
of this expansion. In the second quarter of 1991 when the economy turned from
recession to expansion, equipment outlays accounted for 6 percent of total
output; the high technology portion was less than 2 percent; and business
computers were half of one percent.
Five and a half years later, equipment production, and particularly
high-technology equipment, has become a much more significant portion of the
economy and has grown at rates far in excess of the 2.6 percent growth rate for
the entire economy. Equipment outlays now account for the highest proportion of
real GDP since World War II, when
3
<PAGE> 6
ECONOMIC OUTLOOK
wartime manufacturing sharply boosted equipment production and consumer spending
was severely curtailed. When students of the business cycle look back on this
expansion, what occurred in the business equipment sector will likely be the
most remarkable feature of this economic expansion.
Another Year of Moderate Growth for 1997.
As the business expansion is about to enter its seventh year, the economy
appears to be on the path toward another year of moderate growth. No serious
imbalances are evident in the economy, which lowers the odds of the economy
falling into recession during 1997. The rapid rise in consumer indebtedness over
the past three years and the attendant burden of servicing that debt buildup
points to, at best, further moderate gains in consumer spending. The housing
sector should be flat to modestly lower due to the late point in the economic
cycle and the higher level of mortgage rates. Business capital spending for
equipment should be the strongest sector of the economy as the continued
advancement of electronic technology permits sharp declines in equipment prices,
which provides incentives to substitute high-technology equipment, for labor
and/or other types of capital goods. We do anticipate that it will be tough for
spending on high-technology equipment to match the heady pace reached earlier in
the expansion, however. Exports had such a blockbuster quarter that a slower
growth rate is likely, particularly given the U.S. dollar's recent strength. We
expect the economy to grow at a rate near two percent during 1997.
INFLATION
Negligible Inflation.
The inflation data for 1996 was excellent, particularly considering the
advanced age of the current business expansion. Except for a sharp run-up in
energy costs last year, overall inflation remained very well behaved, in part
because increased competition is restraining the ability of many businesses to
raise their prices. Consumers are little influenced in their buying decisions by
expectations of price increases in the future. Pricing leverage remains the
exception and not the rule in the domestic economy.
<TABLE>
<CAPTION>
INFLATIONS MEASURES
1996
<S> <C>
Consumer Price Index (CPI) 3.3%
CPI less Food & Energy 2.6%
Producer Price Index (PPI) 2.8%
PPI less Good & Energy 0.1%
GDP Fixed-Weight Price Index 2.2%
</TABLE>
The Federal Reserve remains concerned that a slow but steady increase in
labor costs could translate into higher consumer prices. The low unemployment
rate, however, has not yet empowered labor to exact higher wage increases. The
employment cost index rose only 2.9 percent last year, the lowest annual figure
on record. Companies' emphasis on cutting labor costs, which represent about 70
percent of production expenses, has made them more resistant to higher wage
demands. At the same time, wage earners have placed more emphasis on job
security rather than wage increases as the tidal wave of substituting equipment
for labor continues to wash over Corporate America. The battle for market share
from both domestic and foreign producers remains intense, exerting additional
restraint on prices. We expect inflation to remain in the two to three percent
range for 1997.
JOSEPH T. KEATING
Chief Investment Officer
The information discussed herein is based on Commerce Department data released
January 31, 1997.
4
<PAGE> 7
PORTFOLIO REVIEWS
THE KENT GROWTH AND INCOME FUND
BY MICHAEL A. PETERSEN AND
DAVID C. EDER,
PORTFOLIO MANAGERS
The 12 months ended December 31, 1996, provided a positive environment for
stocks in general. However, the greatest gains in the broad stock market indices
came from shares of growth-oriented companies, particularly those in the
technology and health-care industries. As a value-oriented fund, The Kent Growth
and Income Fund invests in shares that may have lagged the market but continue
to have strong growth.
The Fund's Institutional and Investment Shares before sales charges had
total returns of 19.47% and 19.14%, respectively. That compares to a 20.78%
total return for the average growth and income fund tracked by Lipper Analytical
Services and 23.07% for the Standard & Poor's Composite Index of 500 Stocks
("S&P 500 Index").
A DISCIPLINED STRATEGY
In order to make it into our portfolio, a company's shares have to be
undervalued and have strong earnings growth or momentum. We try to invest in
such stocks before other investors recognize their potential.
Thus, during the recent period, we looked for attractively valued stocks to
add to the Fund's portfolio while selling stocks that had been bid up to less
attractive levels since we purchased them. For example, we began to move into
AT&T (2.68% of net assets as of 12/31/96) at the end of the third and beginning
of the fourth quarter, as its shares became attractive on a relative value
basis.
Similarly, the Fund sold Digital Equipment Corporation (0.59%) in the
technology sector as its shares became more fully valued. We purchased shares of
Intel (1.04%) and Microsoft (0.88%) in the first quarter of 1996, but sold those
stocks when their prices climbed to less attractive levels. Some of the proceeds
went to finance an investment in Motorola (1.40%), whose shares were flat most
of the year.
<TABLE>
<CAPTION>
THE KENT GROWTH AND INCOME FUND
DISTRIBUTION OF NET ASSETS
AS OF DECEMBER 31, 1996
- -----------------------
<S> <C>
Basic Materials 6.1%
Medical 6.4%
Finance 11.1%
Computer & Technology 8.8%
Consumer Staples 14.3%
Utilities 14.9%
Conglomerates 5.6%
Retail 5.7%
Oil/Energy 13.3%
Other 13.8%
<FN>
Portfolio composition is subject to change.
</TABLE>
MANAGING RISK
The Fund's beta, which is a measure of its volatility relative to the stock
market, remained below average during the period. That is consistent with our
value-oriented approach, which avoids overvalued growth issues.
The market indices' recent gains have left behind many issues of solid
companies in areas ranging from consumer staples to energy and utilities. Such
stocks are expected to continue to furnish opportunities for the Fund to pursue
long-term gains as well as current income.
5
<PAGE> 8
PORTFOLIO REVIEWS
<TABLE>
<CAPTION>
THE KENT GROWTH AND INCOME FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1996
- -------------------------------------------------------------------------------
INVESTMENT CLASS* INSTITUTIONAL CLASS
(inception: 12/1/92) (inception: 11/2/92)
------------------------------------------------------------------------
<S> <C> <C>
One Year 14.37% 19.47%
Three Years 15.66% 17.45%
Life of Fund 14.50% 16.37%
* Reflects 4.00% sales charge.
</TABLE>
<TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE STANDARD & POOR'S COMPOSITE INDEX OF 500 STOCKS
- ---------------------------------------------------------------------------------------------------
<CAPTION>
11/2/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent Growth and Income Fund
Institutional Class Shares $10,000 10,398 11,610 11,669 15,743 $18,809
Standard & Poor's Composite
Index Of 500 Stocks $10,000 10,472 11,518 11,669 16,036 $19,737
</TABLE>
<TABLE>
<CAPTION>
12/1/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent Growth and Income Fund
Investment Class Shares $ 9,596 9,652 10,793 10,846 14,599 $17,393
Standard & Poor's Composite
Index Of 500 Stocks $10,000 10,131 11,143 11,288 15,514 $19,094
</TABLE>
Past performance is no guarantee of future performance. The investment return
and principal value will fluctuate, so that shares, when redeemed, may be worth
more or less than the original cost. Performance for each class will differ
based on differences in sales charges and expenses for each class of shares.
Return figures and investment values are quoted after deducting class expenses
and sales charges (if applicable). Investment class shares are sold with a
maximum front-end sales charge of 4.00%. The Standard & Poor's Composite Index
of 500 Stocks is an unmanaged index of 500 selected common stocks, most of which
are listed on the New York Stock Exchange. Total return is based on changes in
net asset value, assuming reinvestment of all dividends and capital gains
distributions. Certain fees were being waived. Had these waivers not been in
effect, total returns would have been lower.
6
<PAGE> 9
PORTFOLIO REVIEWS
THE KENT SMALL COMPANY GROWTH FUND
BY MICHAEL A. PETERSEN AND
DAVID C. EDER,
PORTFOLIO MANAGERS
A number of factors affected the Fund's performance during the 12 months
ended December 31, 1996. Shares of small-company stocks were generally
undervalued at the beginning of the period, which set the stage for a period of
strong performance in the sector through the first five months of 1996. But at
that point, investors began to fret that stronger economic growth would trigger
higher interest rates. One result: Small-company shares slumped during June and
July, giving back the gains they had accumulated during the early months of the
year. Moreover, much of the money that flowed into the stock market during the
remainder of the year went into shares of large, well-known companies.
Fortunately, investors who did buy small-company stocks during the
second half of the year tended to favor value-oriented shares. The Fund's
Institutional and Investment Shares before sales charge deductions posted total
returns of 19.56% and 19.16%, respectively. That compares to a 20.15% total
return for the average small-company growth fund tracked by Lipper Analytical
Services, and 16.53% for the Russell 2000 Index of small-company stocks.
A FOCUS ON VALUE
We continued to hold a portfolio of value-oriented stocks in the fund,
which benefited from strong performances in sectors that included autos, energy
and financial services. The Fund's investment in shares of companies that are
attractively priced compared to their growth potential helped reduce its risk --
which is especially important in the potentially volatile small-cap arena. In
fact, the Fund's beta stood at 0.88 at the end of the period, compared to a beta
of one for the Russell 2000. That suggests that the fund has been only 88% as
volatile as the index.
THE OUTLOOK
Small-company stocks are trading at levels that appear very attractive
relative to prices for many large-company issues. Thus, we believe that good
opportunities exist in the small-company sector.
That said, we believe it also seems likely that corporate earnings will
slow down in 1997. Thus, shares of companies that can deliver relatively stable
earnings growth during periods of slow economic growth are expected to be strong
performers. Such companies include firms in the food, tobacco, energy and
utilities industries.
We will continue to maintain our long-term, value-oriented approach to
investing. That approach isn't intended to deliver the market's strongest gains
during every period. Instead, it's designed to provide solid long-term returns
at reasonable risk for investors who want exposure to the small- company sector.
Small-capitalization funds typically carry additional risks, since smaller
companies generally have a higher risk of failure and by definition, are not as
well established as "Blue Chip" companies. Historically, smaller companies'
stocks have experienced a greater degree of market volatility than average.
<TABLE>
<CAPTION>
THE KENT SMALL COMPANY GROWTH FUND
DISTRIBUTION OF NET ASSETS
AS OF DECEMBER 31, 1996
- -----------------------
<S> <C>
Basic Materials 9.9%
Medical 6.0%
Finance 17.0%
Computer & Technology 7.4%
Consumer Discretionary 7.7%
Consumer Staples 6.9%
Construction 5.5%
Utilities 6.5%
Retail 8.2%
Oil/Energy 6.5%
Industrial Products 8.9%
Other 9.5%
<FN>
Portfolio composition is subject to change.
</TABLE>
7
<PAGE> 10
PORTFOLIO REVIEWS
<TABLE>
<CAPTION>
THE KENT SMALL COMPANY GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1996
- -------------------------------------------------------------------------------
Investment Class* Institutional Class
(inception: 12/4/92) (inception: 11/2/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 14.35% 19.56%
Three Years 12.18% 13.93%
Life of Fund 13.60% 16.39%
* Reflects 4.00% sales charge.
</TABLE>
<TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE RUSSELL 2000 INDEX
- ------------------------------------------------------------------------------------------------------
<CAPTION>
11/2/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent Small Company Growth Fund
Institutional Class Shares $10,000 10,885 12,729 12,722 15,745 $18,825
Russell 2000 Index $10,000 11,140 13,246 13,005 16,704 $19,466
</TABLE>
<TABLE>
<CAPTION>
12/1/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent Small Company Growth Fund
Investment Class Shares $ 9,603 9,792 11,441 11,433 14,118 $16,823
Standard & Poor's Composite
Index Of 500 Stocks $10,000 10,348 12,304 12,080 15,516 $18,081
</TABLE>
Past performance is no guarantee of future performance. The investment return
and principal value will fluctuate, so that shares, when redeemed, may be worth
more or less than the original cost. Performance for each class will differ
based on differences in sales charges and expenses for each class of shares.
Return figures and investment values are quoted after deducting class expenses
and sales charges (if applicable). Investment class shares are sold with a
maximum front-end sales charge of 4.00%. The Russell 2000 Index is an unmanaged
index of the smallest 2,000 companies in the Russell 3000 Index, as ranked by
total market capitalization. The Russell 2000 is widely regarded in the industry
to accurately capture the universe of small-cap stocks. Total return is based on
changes in net asset value, assuming reinvestment of all dividends and capital
gains distributions. Certain fees were being waived. Had these waivers not been
in effect, total returns would have been lower.
8
<PAGE> 11
PORTFOLIO REVIEWS
THE KENT INTERNATIONAL GROWTH FUND
BY MICHAEL A. PETERSEN AND
DAVID C. EDER,
PORTFOLIO MANAGERS
The returns of overseas stock markets were decidedly mixed during the 12
months ended December 31, 1996. Europe and most countries in the Far East
delivered returns comparable to those of the U.S. stock market. But Japan's
stock market suffered serious losses, due to investors' concerns about that
country's sputtering economy.
The Fund's Institutional and Investment Shares before sales charge
deductions delivered total returns of 5.87% and 5.57%, respectively. That
compares to the 6.36% total return of the Morgan Stanley Capital International
Europe, Australia and Far East (EAFE) Index. The average international fund
tracked by Lipper Analytical Services posted a total return of 11.78%.
STRONG RETURNS IN EUROPE
At the beginning of the recent period, we increased the Fund's exposure to
countries in the Pacific Rim (from 40% to 42% of total assets). That percentage
included a 33% weighting in Japanese stocks, which accounted for roughly 38% of
the EAFE Index. Thus, we remained underweighted in Japan compared to the
EAFEIndex--a decision that helped relative performance as Japanese stocks lost
ground. At the same time, however, the Fund's largest holding was in a Japanese
issue: Toyota Motors (2.07% of net assets as of 12/31/96), which gained 52%
during the period.
The Fund held 58% of its assets in European stocks. Several European
markets delivered strong returns. The Fund especially benefited from its
investments in France, Germany, Italy and the Netherlands. One particularly
strong performer for the Fund was Royal Dutch Petroleum (1.14%), which gained
more than 35%.
<TABLE>
<CAPTION>
THE KENT INTERNATIONAL GROWTH FUND
DISTRIBUTION OF NET ASSETS
AS OF DECEMBER 31, 1996
- -----------------------
<S> <C>
France 8.2%
Japan 32.8%
Germany 10.1%
Other 20.4%
United Kingdom 17.2%
Netherlands 3.3%
Italy 3.5%
Switzerland 4.5%
Portfolio composition is subject to change.
</TABLE>
THE OUTLOOK ABROAD
Foreign markets look inexpensive compared to U.S. stocks. Consider the fact
that 13 out of 19 foreign markets have lower price-to-earnings ratios than that
of the U.S. market, and all 19 have lower price- to-book value ratios. Moreover,
foreign economies may benefit from easier monetary policy in countries such as
Japan, Germany, the United Kingdom and France. Economic growth in such countries
should cause investors to send more of their capital overseas, helping to
support stock values. In that environment, foreign stocks might provide superior
performance as well as their usual diversification benefits.
International investing is subject to certain factors such as currency
exchange-rate volatility, possible political, social or economic instability,
foreign taxation and differences in accounting and other financial standards.
9
<PAGE> 12
PORTFOLIO REVIEWS
<TABLE>
<CAPTION>
THE KENT INTERNATIONAL GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1996
- -------------------------------------------------------------------------------
Investment Class* Institutional Class
(inception: 12/4/92) (inception: 12/4/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 1.34% 5.87%
Three Years 6.48% 8.16%
Life of Fund 11.68% 13.07%
* Reflects 4.00% sales charge.
</TABLE>
<TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALIA AND FAR EAST INDEX,
THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE INDEX AND THE MORGAN STANLEY CAPITAL INTERNATIONAL PACIFIC INDEX
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
12/4/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent International Growth Fund
Institutional Class Shares $10,000 10,020 13,045 13,794 15,591 $16,507
Morgan Stanley Capital International
Europe Index $10,000 10,233 13,282 13,636 16,653 $20,246
Morgan Stanley Capital International Europe,
Australia and Far East Index $10,000 10,054 13,367 14,444 16,113 $17,138
Morgan Stanley Capital International
Pacific Index $10,000 9,887 13,444 15,195 15,650 $14,335
</TABLE>
<TABLE>
<CAPTION>
12/4/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent International Growth Fund
Investment Class Shares $ 9,597 9,607 12,481 13,170 14,863 $15,692
Morgan Stanley Capital International
Europe Index $10,000 10,233 13,282 13,636 16,653 $20,246
Morgan Stanley Capital International Europe,
Australia and Far East Index $10,000 10,054 13,367 14,444 16,113 $17,138
Morgan Stanley Capital International
Pacific Index $10,000 9,887 13,444 15,195 15,650 $14,335
</TABLE>
Past performance is no guarantee of future performance. The investment return
and principal value will fluctuate, so that shares, when redeemed, may be worth
more or less than the original cost. Performance for each class will differ
based on differences in sales charges and expenses for each class of shares.
Return figures and investment values are quoted after deducting class expenses
and sales charges (if applicable). Investment class shares are sold with a
maximum front-end sales charge of 4.00%. The Morgan Stanley Capital
International Europe, Australia and Far East Index is composed of a sample of
companies representative of the market structure of 20 European and Pacific
Basin countries. The Morgan Stanley Capital International Europe Index and the
Morgan Stanley Capital International Pacific Index are unmanaged indices of
stocks in their respective regions. Total return is based on changes in net
asset value, assuming reinvestment of all dividends and capital gain
distributions. Certain fees were being waived. Had these waivers not been in
effect, total returns would have been lower. Investors are reminded that, while
investing globally can be rewarding, investments in foreign securities involve
certain risks and considerations in addition to those inherent with investing in
U.S. companies, such as currency fluctuations and political instability.
10
<PAGE> 13
PORTFOLIO REVIEWS
THE KENT INDEX EQUITY FUND
BY MICHAEL A. PETERSEN AND
DAVID C. EDER,
PORTFOLIO MANAGERS
The returns of the stock market during the 12 months ended December 31,
1996, were dominated by gains of large-company stocks. In fact, most of those
gains came from a relatively narrow group of blue chips, which included
household names such as Intel (1.87% of net assets as of 12/31/96), Microsoft
(1.71%), Coca Cola (2.27%) and IBM (1.35%).
The Fund's investments in large-company shares that make up the Standard
and Poor's Composite Index of 500 Stocks ("S&P 500") benefited from such gains.
Institutional and Investment Shares of The Kent Index Equity Fund before sales
charge deductions gained 22.18% and 21.92%, respectively. That compares to
22.30% for the average S&P 500 Index objective fund tracked by Lipper Analytical
Services, and 23.07% for the S&P 500.
Technology and health-care service companies performed well during the
period. The Fund saw strong returns from a broad range of issues in those
sectors. For example, Microsoft and IBM gained 88% and 65.8%, respectively.
Shares of health-care giant Pfizer (0.93%) gained 31.7%, while Bristol Myers
(0.94%) rose 26.9%.
During 1996, few investors seemed to be interested in bargains; instead,
they preferred to go with high-flying growth stocks that led the market. But
that may change during the coming months, as investors pay more heed to company
fundamentals and their relation to stock prices. In particular, we expect for
stocks of automobile manufacturers, utilities and energy companies to perform
well.
<TABLE>
<CAPTION>
THE KENT INDEX EQUITY FUND
DISTRIBUTION OF NET ASSETS
AS OF DECEMBER 31, 1996
- -----------------------
<S> <C>
Consumer Stapes 12.8%
Oil/Energy 9.8%
Other 9.3%
Utilities 9.5%
Computer & Technology 13.8%
Basic Materials 5.6%
Finance 15.0%
Consumer Discretionary 3.5%
Retail 5.3%
Conglomerates 5.1%
Medical 10.3%
Portfolio composition is subject to change.
</TABLE>
We also question whether large-company stocks will continue to outperform
the broader market. Many of them appear overvalued, while some small-company
shares are trading at much more attractive levels. The upshot could be a period
of less spectacular performance for large-company stocks and the funds that
invest in them.
11
<PAGE> 14
PORTFOLIO REVIEWS
<TABLE>
THE KENT INDEX EQUITY FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1996
- -------------------------------------------------------------------------------
<CAPTION>
Investment Class* Institutional Class
(inception: 11/25/92) (inception: 11/2/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 17.08% 22.18%
Three Years 16.99% 18.84%
Life of Fund 15.06% 16.83%
* Reflects 4.00% sales charge.
</TABLE>
<TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE STANDARD & POOR'S COMPOSITE INDEX OF 500 STOCKS
- --------------------------------------------------------------------------------------------------
<CAPTION>
10/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent Index Equity Fund
Institutional Class Shares $10,000 10,440 11,390 11,488 15,648 $19,119
Standard & Poor's Composite
Index of 500 Stocks $10,000 10,472 11,518 11,669 16,036 $19,737
</TABLE>
<TABLE>
<CAPTION>
11/25/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Kent Index Equity Fund
Investment Class Shares $ 9,599 9,776 10,664 10,074 14,589 $17,787
Standard & Poor's Composite
Index Of 500 Stocks $10,000 10,131 11,143 11,289 15,514 $19,094
</TABLE>
Past performance is no guarantee of future performance. The investment return
and principal value will fluctuate, so that shares, when redeemed, may be worth
more or less than the original cost. Performance for each class will differ
based on differences in sales charges and expenses for each class of shares.
Return figures and investment values are quoted after deducting class expenses
and sales charges (if applicable). Investment class shares are sold with a
maximum front-end sales charge of 4.00%. The Standard & Poor's Composite Index
of 500 Stocks is an unmanaged index of 500 selected common stocks, most of which
are listed on the New York Stock Exchange. Total return is based on changes in
net asset value assuming reinvestment of all dividends and capital gains
distributions. Certain fees were waived. Had these waivers not been in effect
total returns would have been lower.
12
<PAGE> 15
THE KENT GROWTH AND INCOME FUND
FUNDS PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS -- 99.3%
AEROSPACE/DEFENSE EQUIPMENT -- 1.5%
166,100 Raytheon Co...................... $ 7,993,563
-------------
AEROSPACE & DEFENSE -- 1.4%
24,187 Boeing Co........................ 2,572,892
33,820 Lockheed Martin Corp............. 3,094,530
20,000 Northrop Grumman Corp............ 1,655,000
4,000 Newport News Shipbuilding,
Inc.*............................ 60,000
-------------
7,382,422
-------------
APPLIANCES -- HOUSEHOLD -- 0.7%
90,000 Maytag Corp...................... 1,777,500
35,500 Whirlpool Corp................... 1,655,188
-------------
3,432,688
-------------
AUTOMOTIVE -- DOMESTIC -- 1.2%
115,600 General Motors Corp.............. 6,444,700
-------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.3%
61,700 Navistar International Corp.*.... 563,013
20,000 TRW, Inc......................... 990,000
-------------
1,553,013
-------------
AUTO/TRUCK -- REPLACEMENT PARTS -- 0.3%
35,300 Genuine Parts Co................. 1,570,850
-------------
BANKS -- MAJOR REGIONAL -- 4.6%
41,300 Banc One Corp.................... 1,775,900
27,400 Boatmen's Bancshares, Inc........ 1,767,300
48,000 Corestates Financial Corp........ 2,490,000
15,000 First Union Corp................. 1,110,000
30,400 KeyCorp.......................... 1,535,200
34,600 Mellon Bank Corp................. 2,456,600
47,500 National City Corp............... 2,131,563
70,700 Norwest Corp..................... 3,075,450
88,700 PNC Bank Corp.................... 3,337,338
10,000 Republic NY Corp................. 816,250
60,000 Wachovia Corp.................... 3,390,000
-------------
23,885,601
-------------
BANKS -- MONEY CENTER -- 2.1%
74,300 Bankers Trust New York Corp...... 6,408,375
42,300 J.P. Morgan & Co................. 4,129,537
-------------
10,537,912
-------------
BEVERAGES -- ALCOHOLIC -- 1.9%
124,700 Anheuser-Busch Cos., Inc......... 4,988,000
120,600 Seagram Co., Ltd................. 4,673,250
-------------
9,661,250
-------------
BUILDING PRODUCTS -- RETAIL/WHOLSALE -- 1.2%
120,600 Home Depot, Inc.................. 6,045,075
-------------
BUILDING PRODUCTS -- WOOD -- 0.3%
29,600 Weyerhaeuser Co.................. 1,402,300
-------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.1%
22,300 Pulte Corp....................... 685,725
-------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUSINESS INFORMATION -- 1.1%
33,766 ACNielsen Corp.*................. $ 510,711
81,300 Cognizant Corp................... 2,682,900
101,300 Dun & Bradstreet Corp............ 2,405,875
-------------
5,599,486
-------------
CABLE TELEVISION -- 0.2%
87,700 Tele-Communications, Inc., Class
A*............................... 1,145,581
-------------
CHEMICALS -- DIVERSIFIED -- 0.8%
9,600 Dow Chemical Co.................. 752,400
55,900 PPG Industries, Inc.............. 3,137,388
-------------
3,889,788
-------------
CHEMICALS -- SPECIALTY -- 0.2%
10,000 Air Products & Chemicals, Inc.... 691,250
10,000 Great Lakes Chemical Corp........ 467,500
-------------
1,158,750
-------------
COMPUTERS -- LOCAL AREA NETWORK -- 0.5%
278,900 Novell, Inc.*.................... 2,640,834
-------------
COMPUTERS -- MINI -- 0.6%
84,200 Digital Equipment Corp.*......... 3,062,775
-------------
COMPUTERS -- SERVICES -- 1.0%
118,100 Automatic Data Processing,
Inc.............................. 5,063,538
-------------
COMPUTERS -- SOFTWARE -- 0.9%
55,200 Microsoft Corp.*................. 4,560,900
-------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.6%
101,400 American Greetings Corp., Class
A................................ 2,877,225
-------------
CONTAINERS -- METAL & GLASS -- 0.2%
40,000 Ball Corp........................ 1,040,000
-------------
DIVERSIFIED OPERATIONS -- 5.6%
90,000 General Electric Co.............. 8,898,750
13,280 Imation Corp.*................... 373,500
112,800 Minnesota Mining & Manufacturing
Co............................... 9,348,300
99,700 Rockwell International Corp.*.... 6,069,237
30,000 Tenneco, Inc.*................... 1,353,750
29,600 Textron, Inc..................... 2,789,800
-------------
28,833,337
-------------
ELECTRONIC COMPONENTS --
SEMICONDUCTORS -- 1.0%
41,000 Intel Corp....................... 5,368,438
-------------
ELECTRONIC -- CONNECTORS -- 0.3%
33,400 Thomas & Betts Corp.............. 1,482,125
-------------
FINANCIAL -- INVESTMENT BROKERS -- 0.6%
70,000 Salomon, Inc..................... 3,298,750
-------------
FINANCIAL -- LEASING COMPANY -- 0.2%
30,000 Ryder Systems, Inc............... 843,750
-------------
</TABLE>
Continued
13
<PAGE> 16
THE KENT GROWTH AND INCOME FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- SAVINGS & LOAN -- 0.3%
40,000 H.F. Ahmanson & Co............... $ 1,300,000
-------------
FOOD ITEMS -- WHOLESALE -- 0.9%
119,400 Fleming Cos., Inc................ 2,059,650
92,200 Supervalu, Inc................... 2,616,175
-------------
4,675,825
-------------
FOOD -- CANNED -- 0.5%
33,000 Campbell Soup Co................. 2,648,250
-------------
FOOD -- FLOUR & GRAIN -- 0.9%
205,448 Archer-Daniels-Midland Co........ 4,519,856
-------------
FOOD -- DIVERSIFIED -- 5.0%
43,300 ConAgra, Inc..................... 2,154,175
74,500 CPC International, Inc........... 5,773,750
71,100 General Mills, Inc............... 4,505,963
57,700 Kellogg Co....................... 3,786,562
34,100 Quaker Oats Co................... 1,300,062
60,000 Sara Lee Corp.................... 2,235,000
35,900 Unilever NV, ADR................. 6,291,475
-------------
26,046,987
-------------
GLASS PRODUCTS -- 0.3%
30,600 Corning, Inc..................... 1,415,250
-------------
INSURANCE -- BROKERS -- 0.7%
44,500 Alexander & Alexander Services,
Inc.............................. 773,187
27,700 Marsh & McLennan Co.............. 2,880,800
-------------
3,653,987
-------------
INSURANCE -- LIFE -- 0.4%
10,000 Torchmark Corp................... 505,000
53,200 U.S. Life Corp................... 1,768,900
-------------
2,273,900
-------------
INSURANCE -- MULTI-LINE -- 0.8%
38,400 Aetna, Inc....................... 3,072,000
8,100 Cigna Corp....................... 1,106,662
-------------
4,178,662
-------------
INSURANCE -- PROPERTY & CASUALTY -- 1.4%
18,300 General Re Corp.................. 2,886,825
31,300 Lincoln National Corp............ 1,643,250
20,000 SAFECO Corp...................... 788,750
90,000 USF&G Corp....................... 1,878,750
-------------
7,197,575
-------------
INSTRUMENTS -- CONTROL -- 0.4%
43,000 General Signal Corp.............. 1,838,250
-------------
INSTRUMENTS -- SCIENTIFIC -- 0.3%
80,000 EG&G, Inc........................ 1,610,000
-------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.2%
40,000 Cincinnati Milacron, Inc......... 875,000
-------------
MACHINERY -- ELECTRICAL -- 0.2%
13,000 W.W. Grainger, Inc............... 1,043,250
-------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MACHINERY -- FARM -- 0.1%
15,700 Briggs & Stratton Corp........... $ 690,800
-------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.4%
55,100 Cooper Industries, Inc........... 2,321,088
-------------
MEDICAL INSTRUMENTS -- 0.1%
40,000 Biomet, Inc.*.................... 605,000
-------------
MEDICAL PRODUCTS -- 0.9%
74,600 Allergan, Inc.................... 2,657,625
52,000 Baxter International, Inc........ 2,132,000
-------------
4,789,625
-------------
MEDICAL -- DRUGS -- 4.1%
90,000 Abbott Laboratories.............. 4,567,500
30,000 Alza Corp.*...................... 776,250
133,800 Bristol-Myers Squibb Co.......... 14,550,750
17,100 Schering-Plough Corp............. 1,107,225
-------------
21,001,725
-------------
MEDICAL -- HEALTH MAINTENANCE
ORGANIZATION -- 0.2%
50,000 Humana, Inc.*.................... 956,250
-------------
MEDICAL/DENTAL SUPPLIES -- 1.1%
84,200 Bausch & Lomb, Inc............... 2,947,000
91,800 C.R. Bard, Inc................... 2,570,400
-------------
5,517,400
-------------
METAL -- GOLD -- 0.7%
44,400 Barrick Gold Corp................ 1,276,500
120,700 Echo Bay Mines Ltd............... 799,637
35,608 Newmont Mining Corp.............. 1,593,458
-------------
3,669,595
-------------
METAL -- MISCELLANEOUS -- 0.3%
55,700 Cyprus Amax Minerals Co.......... 1,301,987
-------------
METAL -- NON FERROUS -- 0.7%
20,000 Asarco, Inc...................... 497,500
18,500 Phelps Dodge Corp................ 1,248,750
35,000 Reynolds Metals Co............... 1,973,125
-------------
3,719,375
-------------
METAL -- PROCESSING & FABRICATION -- 0.2%
22,400 Timken Co........................ 1,027,600
-------------
MOTION PICTURES & SERVICES -- 0.4%
60,000 King World Productions, Inc.*.... 2,212,500
-------------
OFFICE AUTOMATION & EQUIPMENT -- 1.3%
50,000 Pitney Bowes, Inc................ 2,725,000
71,900 Xerox Corp....................... 3,783,737
-------------
6,508,737
-------------
OFFICE SUPPLIES & FORMS -- 0.5%
134,200 Moore Corp., Ltd................. 2,734,325
-------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.3%
95,400 McDermott International, Inc..... 1,586,025
-------------
</TABLE>
Continued
14
<PAGE> 17
THE KENT GROWTH AND INCOME FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL REFINING & MARKETING -- 0.6%
25,000 Ashland, Inc..................... $ 1,096,875
91,100 Sun Co., Inc..................... 2,220,562
-------------
3,317,437
-------------
OIL & GAS -- DRILLING -- 0.2%
10,000 Schlumberger Ltd................. 998,750
-------------
OIL -- INTERNATIONAL INTEGRATED -- 4.5%
64,800 Chevron Corp..................... 4,212,000
121,600 Exxon Corp....................... 11,916,800
69,900 Texaco, Inc...................... 6,858,938
-------------
22,987,738
-------------
OIL -- PRODUCTION/PIPELINE -- 0.0%
1,860 El Paso Natural Gas.............. 93,930
-------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.5%
15,000 Helmerich & Payne, Inc........... 781,875
78,100 Orxy Energy Co.*................. 1,932,975
-------------
2,714,850
-------------
OIL -- U.S. INTEGRATED -- 7.2%
50,000 Amerada Hess Corp................ 2,893,750
138,600 Amoco Corp....................... 11,157,300
48,700 Atlantic Richfield Co............ 6,452,750
15,000 Kerr-McGee Corp.................. 1,080,000
62,400 Pennzoil Co...................... 3,525,600
120,300 Phillips Petroleum Co............ 5,323,275
75,000 Unocal Corp...................... 3,046,875
160,000 USX-Marathon Group............... 3,820,000
-------------
37,299,550
-------------
PAPER & RELATED PRODUCTS -- 2.5%
202,700 International Paper Co........... 8,184,012
25,000 Mead Corp........................ 1,453,125
72,900 Union Camp Corp.................. 3,480,975
-------------
13,118,112
-------------
PHOTOGRAPHY EQUIPMENT & SUPPLIES -- 0.4%
52,000 Polaroid Corp.................... 2,262,000
-------------
POLLUTION CONTROL -- 0.1%
40,000 Safety-Kleen Corp................ 655,000
-------------
PUBLISHING -- BOOKS -- 0.2%
18,000 McGraw-Hill Cos., Inc............ 830,250
-------------
PUBLISHING -- NEWSPAPERS -- 1.7%
10,000 Dow Jones & Co., Inc............. 338,750
96,100 Gannett, Inc..................... 7,195,487
27,900 New York Times Co., Class A...... 1,060,200
-------------
8,594,437
-------------
RETAIL -- APPAREL/SHOES -- 0.5%
136,700 Limited, Inc..................... 2,511,862
-------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- DISCOUNT -- 2.6%
595,600 Wal-Mart Stores, Inc............. $ 13,624,350
-------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.3%
30,400 J.C. Penney, Inc................. 1,482,000
-------------
RETAIL -- RESTAURANTS -- 0.2%
20,000 Luby's Cafeteria, Inc............ 397,500
20,000 Wendy's International, Inc....... 410,000
-------------
807,500
-------------
SHOES & RELATED APPAREL -- 0.4%
51,200 Reebok International Ltd......... 2,150,400
-------------
STEEL -- PRODUCERS -- 0.6%
90,800 Inland Steel Industries, Inc..... 1,816,000
46,000 USX-U.S. Steel Group, Inc........ 1,443,250
-------------
3,259,250
-------------
TELECOMMUNICATION EQUIPMENT -- 2.5%
100,000 General Instrument Corp.*........ 2,162,500
23,000 Harris Corp...................... 1,578,375
118,100 Motorola, Inc.................... 7,248,388
135,000 Scientific-Atlanta, Inc.......... 2,025,000
6,770 TCI Satellite Entertainment,
Inc., Class A*................... 66,854
-------------
13,081,117
-------------
TEXTILE -- APPAREL -- 0.4%
49,900 Russell Corp..................... 1,484,525
10,000 V.F. Corp........................ 675,000
-------------
2,159,525
-------------
TOBACCO -- 2.7%
69,800 American Brands, Inc............. 3,463,825
45,500 Philip Morris Cos., Inc.......... 5,124,438
167,400 U.S.T., Inc...................... 5,419,575
-------------
14,007,838
-------------
TOOLS -- HAND HELD -- 0.2%
22,500 Snap-On, Inc..................... 801,562
-------------
TOYS/GAME/HOBBY -- 0.2%
20,000 Hasbro, Inc...................... 777,500
-------------
TRANSPORTATION -- AIRLINE -- 0.5%
28,800 AMR Corp.*....................... 2,538,000
-------------
TRANSPORTATION -- RAILROAD -- 2.3%
45,000 CSX Corp......................... 1,901,250
68,400 Norfolk Southern Corp............ 5,985,000
64,600 Union Pacific Corp............... 3,884,075
-------------
11,770,325
-------------
TRANSPORTATION -- TRUCKING -- 0.1%
49,200 Yellow Corp.*.................... 707,250
-------------
</TABLE>
Continued
15
<PAGE> 18
THE KENT GROWTH AND INCOME FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER -- 10.4%
103,600 American Electric Power, Inc..... $ 4,260,550
107,700 Baltimore Gas & Electric Co...... 2,880,975
136,000 Consolidated Edison Co. of New
York, Inc........................ 3,978,000
96,200 Detroit Edison Co................ 3,114,475
46,700 Dominion Resources Inc. of
Virginia......................... 1,797,950
318,100 Edison International............. 6,322,238
55,000 Entergy Corp..................... 1,526,250
45,000 FPL Group, Inc................... 2,070,000
20,000 General Public Utilities Corp.... 672,500
19,400 Houston Industries, Inc.......... 438,925
45,000 Niagara Mohawk Power Corp.*...... 444,375
38,500 Northern States Power Co......... 1,766,188
98,000 Ohio Edison Co................... 2,229,500
154,200 Pacific Gas & Electric Co........ 3,238,200
165,700 PacifiCorp....................... 3,396,850
147,700 Peco Energy Corp................. 3,729,425
171,900 Public Service Enterprise Group,
Inc.............................. 4,684,275
94,200 Texas Utilities Co............... 3,838,650
79,800 Union Electric Co................ 3,072,300
-------------
53,461,626
-------------
UTILITIES -- GAS DISTRIBUTION -- 0.4%
20,000 Eastern Enterprises.............. 707,500
10,400 Nicor, Inc....................... 371,800
33,700 ONEOK, Inc....................... 1,011,000
-------------
2,090,300
-------------
UTILITIES -- TELEPHONE -- 4.1%
40,000 Alltel Corp...................... 1,255,000
318,000 AT&T Corp........................ 13,833,000
33,100 NYNEX Corp....................... 1,592,937
120,400 Pacific Telesis Group............ 4,424,700
-------------
21,105,637
-------------
TOTAL COMMON STOCKS.............. 512,587,296
(cost $418,402,013)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMERCIAL PAPER -- 0.5%
FINANCE -- 0.5%
$2,374,251 Ford Motor Credit Co., 6.00%,
1/2/97........................... $ 2,374,251
------------
TOTAL COMMERCIAL PAPER........... 2,374,251
(cost $2,374,251)
TOTAL INVESTMENTS -- 99.8%................... 514,961,547
(cost $420,776,264)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.2%........................ 958,706
------------
TOTAL NET ASSETS -- 100.0%................... $515,920,253
=============
</TABLE>
- ---------------
Percentages indicated are based on net assets of $515,920,253.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $295,000. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $100,128,687
Unrealized depreciation............... (6,238,404)
------------
Net unrealized appreciation........... $ 93,890,283
============
</TABLE>
* Non-income producing security.
ADR American Depository Receipt
See Notes to Financial Statements.
<PAGE> 19
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS -- 99.0%
ADVERTISING -- 0.7%
45,000 Catalina Marketing Corp.*........ $ 2,480,625
63,500 True North Communications,
Inc.............................. 1,389,062
------------
3,869,687
------------
AEROSPACE/DEFENSE EQUIPMENT -- 1.6%
43,400 AAR Corp......................... 1,312,850
52,800 Aviall, Inc.*.................... 488,400
48,700 Banner Aerospace, Inc.*.......... 420,038
13,600 Curtiss-Wright Corp.............. 685,100
20,900 ECC International Corp.*......... 172,425
16,200 EDO Corp......................... 115,425
44,000 Fairchild Corp., Class A*........ 649,000
47,400 Hexcel Corp.*.................... 770,250
59,275 Rohr Industries, Inc.*........... 1,341,097
45,600 Thiokol Corp..................... 2,040,600
48,000 UNC, Inc.*....................... 576,000
7,200 Whitehall Corp.*................. 309,600
24,600 Whittaker Corp.*................. 310,575
------------
9,191,360
------------
AEROSPACE/DEFENSE -- 0.6%
28,600 Alliant Techsystems, Inc.*....... 1,573,000
37,800 Logicon, Inc..................... 1,379,700
34,700 Talley Industries, Inc.*......... 255,912
------------
3,208,612
------------
AGRICULTURAL OPERATIONS -- 0.0%
27,900 Orange Co., Inc. 216,225
------------
APPLIANCES -- HOUSEHOLD -- 0.4%
109,000 Fedders Corp..................... 681,250
20,000 National Presto Industries,
Inc.............................. 747,500
65,200 Royal Appliance Manufacturing
Co.*............................. 448,250
20,500 Toastmaster, Inc................. 76,875
------------
1,953,875
------------
AUDIO/VIDEO PRODUCTION -- 0.7%
40,180 Harman International Industries,
Inc.............................. 2,235,012
157,269 Zenith Electronics Corp.*........ 1,710,300
------------
3,945,312
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 1.3%
58,300 Arvin Industries, Inc............ 1,442,925
47,000 Brilliance China Automotive
Holdings, Ltd.................... 211,500
94,400 China Yuchai International,
Ltd.............................. 448,400
67,100 Detroit Diesel Corp.*............ 1,543,300
8,600 Raytech Corp.*................... 37,625
54,800 Smith (A.O.) Corp. .............. 1,637,150
21,200 Sparton Corp.*................... 164,300
45,500 Standard Products Co............. 1,160,250
60,875 Titan Wheel International,
Inc.............................. 776,156
------------
7,421,606
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
AUTO/TRUCK -- REPLACEMENT -- 0.5%
39,300 SPX Corp......................... $ 1,522,875
35,700 Standard Motor Products, Inc. 495,338
24,750 Wynn's International, Inc........ 782,719
------------
2,800,932
------------
BANKS -- MAJOR REGIONAL -- 0.0%
10,546 First Banks America, Inc.*....... 106,778
------------
BANKS -- NORTHEAST -- 0.6%
60,500 First Commonwealth Financial
Corp............................. 1,126,812
59,800 North Fork Bancorp, Inc.......... 2,130,375
17,100 Sterling Bancorp................. 252,225
------------
3,509,412
------------
BANKS -- SOUTHEAST -- 0.7%
37,500 Centura Banks, Inc............... 1,673,437
35,400 Colonial Bancgroup, Inc.......... 1,416,000
45,000 F & M National Corp.............. 961,875
------------
4,051,312
------------
BANKS -- WEST -- 0.4%
113,100 City National Corp............... 2,445,787
------------
BUILDING -- 1.6%
62,500 Calmat Co........................ 1,171,875
62,400 Centex Construction Products,
Inc.............................. 1,123,200
40,800 Dravo Corp.*..................... 576,300
16,000 Giant Group, Ltd.*............... 134,000
32,700 Lone Star Industries, Inc........ 1,205,812
42,100 Medusa Corp...................... 1,447,188
14,800 Puerto Rican Cement Co., Inc..... 462,500
47,000 Southdown, Inc................... 1,462,875
28,600 Texas Industries, Inc............ 1,447,875
------------
9,031,625
------------
BUILDING -- HEAVY CONSTRUCTION -- 0.4%
23,300 Dycom Industries, Inc.*.......... 215,525
77,300 Morrison Knudsen Corp.*.......... 695,700
8,634 MYR Group, Inc................... 111,163
37,700 Stone & Webster, Inc............. 1,187,550
------------
2,209,938
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.2%
51,400 ABM Industries, Inc.............. 950,900
------------
BUILDING -- MOBILE/MANUFACTURING & RECREATIONAL
VEHICALS -- 0.9%
30,500 Cavalier Homes, Inc.............. 350,750
77,000 Champion Enterprises, Inc.*...... 1,501,500
40,600 Coachmen Industries, Inc......... 1,152,025
28,500 Skyline Corp..................... 705,375
24,100 Thor Industries, Inc............. 608,525
68,900 Winnebago Industries, Inc. 499,525
------------
4,817,700
------------
</TABLE>
Continued
17
<PAGE> 20
THE KENT MALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUILDING -- RESIDENTIAL/COMMERCIAL -- 1.0%
19,800 AMREP Corp.*..................... $ 76,725
21,000 Beazer Homes USA, Inc.*.......... 388,500
19,000 Continental Home Holding Corp.... 403,750
87,800 Kaufman & Broad Home Corp........ 1,130,425
23,900 M/I Schottenstein Homes, Inc.*... 262,900
52,900 MDC Holdings, Inc................ 456,263
152,500 Presley Cos., Class A*........... 171,563
42,900 Ryland Group Inc................. 589,875
81,400 Standard-Pacific Corp............ 468,050
83,900 Toll Brothers, Inc.*............. 1,636,050
20,800 Washington Homes, Inc.*.......... 93,600
------------
5,677,701
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.8%
10,800 Ameron International Corp........ 557,550
36,300 Amre, Inc.*...................... 58,987
27,200 Congoleum Corp., Class A*........ 377,400
23,600 Elcor Corp....................... 504,450
19,400 Eljer Industries, Inc.*.......... 458,325
54,600 Falcon Building Products, Inc.,
Class A*......................... 805,350
11,600 International Aluminum Corp...... 295,800
32,800 Nortek, Inc.*.................... 656,000
39,300 Ply-Gem Industries, Inc.......... 486,338
44,000 Robertson-Ceco Corp.*............ 346,500
31,900 Waxman Industries, Inc.*......... 155,512
------------
4,702,212
------------
BUILDING PRODUCTS --
AIR CONDITIONING/HEAT -- 0.2%
24,100 Mestek, Inc.*.................... 397,650
25,575 Watsco, Inc...................... 738,478
------------
1,136,128
------------
BUILDING PRODUCTS -- DOORS & TRUSSES -- 0.2%
23,400 Morgan Productions, Ltd.*........ 172,575
100,500 Premdor, Inc.*................... 917,062
13,400 Thackeray Corp.*................. 36,850
------------
1,126,487
------------
BUILDING PRODUCTS -- LIGHTING/FIXTURES -- 0.1%
18,800 Catalina Lighting, Inc.*......... 91,650
27,500 Thomas Industries, Inc........... 574,062
------------
665,712
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.4%
18,500 Hughes Supply, Inc............... 797,813
108,100 Payless Cashways, Inc.*.......... 216,200
69,700 Rexel, Inc.*..................... 1,106,488
------------
2,120,501
------------
BROADCAST -- RADIO/TELEVISION -- 0.0%
12,000 Gray Communications Systems,
Inc.............................. 226,500
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUSINESS INFORMATION -- 0.5%
14,900 Duff & Phelps Corp............... $ 359,462
47,800 Metromail Corp.*................. 872,350
56,200 Primark Corp.*................... 1,390,950
------------
2,622,762
------------
BUSINESS SERVICES -- 0.9%
56,600 Advo, Inc........................ 792,400
8,400 Caribiner International, Inc.*... 462,300
29,700 Fair Issac & Co., Inc............ 1,162,012
50,000 Franklin Quest Co.*.............. 1,050,000
29,200 Interim Services, Inc.*.......... 1,036,600
15,200 Union Corp.*..................... 347,700
------------
4,851,012
------------
CABLE TELEVISION -- 0.5%
53,500 Bet Holdings, Inc., Class A*..... 1,538,125
93,125 International Family
Entertainment, Class B*.......... 1,443,437
------------
2,981,562
------------
CHEMICALS -- DIVERSIFIED -- 0.6%
54,000 Chemfirst, Inc.*................. 1,215,000
54,700 General Chemical Group, Inc...... 1,292,287
50,900 Rexene Corp...................... 693,513
------------
3,200,800
------------
CHEMICALS -- FIBER -- 0.0%
28,613 Schawk, Inc., Class A............ 250,364
------------
CHEMICALS -- PLASTICS -- 0.6%
55,700 Geon Co.......................... 1,093,113
63,500 Spartech Corp.................... 706,437
34,945 Tredegar Industries, Inc......... 1,402,168
------------
3,201,718
------------
CHEMICALS -- SPECIALTY -- 1.2%
37,800 Arcadian Corp.................... 1,001,700
42,100 Bush Boake Allen, Inc.*.......... 1,120,913
26,800 Chemed Corp...................... 978,200
24,000 Learonal, Inc.................... 552,000
61,300 Lilly Industries, Inc., Class
A................................ 1,118,725
29,100 McWhorter Technologies, Inc.*.... 665,662
108,100 NL Industries, Inc............... 1,175,587
18,500 Oil-Dri Corp..................... 277,500
------------
6,890,287
------------
COAL -- 0.6%
45,600 Ashland Coal, Inc................ 1,265,400
22,800 Pittston Co., Minerals Group..... 350,550
18,300 Westmoreland Coal Co.*........... 18,300
77,100 Zeigler Coal Holding Co. ........ 1,648,012
------------
3,282,262
------------
COMPUTERS -- GRAPHICS -- 0.1%
242,900 Chyron Corp.*.................... 698,337
------------
COMPUTERS -- LOCAL AREA NETWORKS -- 0.2%
47,900 BBN Corp.*....................... 1,077,750
------------
</TABLE>
Continued
18
<PAGE> 21
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS -- MEMORY DEVICES -- 0.3%
62,200 Applied Magnetics Corp.*......... $ 1,858,225
------------
COMPUTERS -- MICRO -- 0.3%
28,800 Ameriquest Technologies, Inc.*... 32,400
105,700 Data General Corp.*.............. 1,532,650
35,100 Datapoint Corp.*................. 39,488
10,750 EA Industries, Inc.*............. 18,812
------------
1,623,350
------------
COMPUTERS -- OPTICAL RECOGNITION -- 0.2%
50,500 Banctec, Inc.*................... 1,041,562
------------
COMPUTERS -- PERIPHERAL EQUIPMENT -- 0.1%
20,900 Par Technology Corp.*............ 289,987
28,900 QMS, Inc.*....................... 151,725
------------
441,712
------------
COMPUTERS -- SERVICES -- 0.2%
28,000 Computer Task Group, Inc......... 1,207,500
------------
COMPUTERS -- SOFTWARE -- 0.6%
46,300 Bell & Howell Co.*............... 1,099,625
132,600 Computervision Corp.*............ 1,226,550
67,700 SPS Transaction Services,
Inc.*............................ 1,032,425
------------
3,358,600
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.5%
46,100 Department 56, Inc.*............. 1,140,975
49,900 Ekco Group, Inc.................. 218,312
10,200 General Housewares Corp.......... 99,450
60,600 Mikasa, Inc.*.................... 621,150
30,000 Oneida, Ltd...................... 540,000
26,300 Scott's Liquid Gold, Inc.*....... 42,738
------------
2,662,625
------------
CONTAINERS -- METAL & GLASS -- 0.3%
34,700 United States Can Corp.*......... 585,562
43,700 Zero Corp........................ 874,000
------------
1,459,562
------------
CONTAINERS -- PAPER & PLASTIC -- 0.4%
31,500 ACX Technologies, Inc.*.......... 626,063
44,700 Aptargroup, Inc.................. 1,575,675
8,700 Continental Can Co., Inc.*....... 122,888
10,500 Sun Coast Industries, Inc.*...... 28,875
------------
2,353,501
------------
COSMETICS & TOILETRIES -- 0.5%
25,900 Alberto Culver Co., Class A...... 1,068,375
137,800 Playtex Products, Inc.*.......... 1,102,400
45,400 Windmere-Durable Holding, Inc.... 584,525
------------
2,755,300
------------
DIVERSIFIED OPERATIONS -- 2.2%
24,800 Allied Products Corp............. 737,800
27,400 Bairnco Corp..................... 181,525
35,300 Carlisle Cos., Inc............... 2,135,650
40,300 Clarcor, Inc..................... 891,637
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
DIVERSIFIED OPERATIONS (CONTINUED)
29,100 Core Industries, Inc............. $ 480,150
15,900 Craig Corp.*..................... 228,563
10,400 Dynamics Corp. of America........ 293,800
90,800 Gencorp, Inc..................... 1,645,750
78,400 Griffon Corp.*................... 960,400
35,100 LSB Industries, Inc.............. 157,950
31,300 Manitowoc Co., Inc............... 1,267,650
115,700 Metromedia International Group,
Inc.*............................ 1,142,538
17,900 Nashua Corp.*.................... 214,800
37,900 Standex International Corp....... 1,170,162
7,500 TCC Industries, Inc.*............ 12,187
81,300 Triarc Cos., Inc.*............... 934,950
------------
12,455,512
------------
ELECTRONIC COMPONENTS --
SEMICONDUCTORS -- 0.7%
69,100 Dallas Semi-Conductors........... 1,589,300
31,200 Unitrode Corp.*.................. 916,500
22,100 Watkins-Johnson Co............... 541,450
42,000 Zilog, Inc.*..................... 1,097,250
------------
4,144,500
------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.4%
21,900 Fluke Corp....................... 977,287
54,600 Genrad, Inc.*.................... 1,269,450
------------
2,246,737
------------
ELECTRONIC PARTS -- DISTRIBUTION -- 0.9%
19,715 Bell Industries, Inc.*........... 421,408
54,400 Kent Electronics Corp.*.......... 1,400,800
45,300 Marshall Industries*............. 1,387,313
20,501 Sterling Electronics*............ 274,204
33,800 Wyle Electronics................. 1,335,100
------------
4,818,825
------------
ELECTRONIC PRODUCTS -- MISCELLANEOUS -- 0.5%
13,400 Acme Electric Corp.*............. 90,450
32,200 Aeroflex, Inc.*.................. 152,950
19,400 American Precision Industries.... 388,000
21,300 Franklin Electric Publishers,
Inc.*............................ 258,263
15,800 Hubbell, Inc., Class A........... 600,400
26,300 Kollmorgen Corp.................. 289,300
67,100 Magnetek, Inc.*.................. 863,912
15,500 SL Industries, Inc............... 120,125
21,000 Three Five Systems, Inc.*........ 270,375
------------
3,033,775
------------
ELECTRONIC -- CONNECTORS -- 0.3%
34,195 Thomas & Betts Corp.............. 1,517,403
------------
ELECTRONIC -- MILITARY -- 0.1%
13,800 Aydin Corp.*..................... 129,375
30,400 Esco Electronics Corp............ 304,000
33,100 United Industrial Corp........... 194,462
------------
627,837
------------
</TABLE>
Continued
19
<PAGE> 22
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC -- MISCELLANEOUS COMPONENTS -- 1.2%
67,300 BMC Industries, Inc.............. $ 2,119,950
14,000 CTS Corp......................... 598,500
51,000 DDL Electronics, Inc.*........... 47,812
44,400 Oak Industries, Inc.*............ 1,021,200
47,500 OEA, Inc......................... 2,173,125
31,400 Park Electrochemical Corp........ 714,350
------------
6,674,937
------------
ENERGY -- ALTERNATIVE SOURCES -- 0.2%
31,000 Trigen Energy Corp............... 891,250
------------
ENGINEERING -- RESEARCH & DEVELOPMENT
SERVICES -- 0.4%
50,100 CDI Corp.*....................... 1,421,588
17,800 Corrpro Cos., Inc.*.............. 169,100
27,100 General Physics Corp............. 108,400
24,900 GRC International, Inc.*......... 202,313
24,190 URS Corp.*....................... 217,710
------------
2,119,111
------------
FERTILIZERS -- 0.3%
63,636 Mississippi Chemical Corp........ 1,527,264
------------
FINANCIAL -- CONSUMER LOANS -- 0.5%
73,300 Olympic Financial Ltd.*.......... 1,053,687
45,400 Student Loan Corp................ 1,691,150
------------
2,744,837
------------
FINANCIAL -- INVESTMENT BANKERS -- 1.8%
22,600 Advest Group, Inc.*.............. 242,950
32,750 Inter-Regional Financial Group,
Inc.............................. 1,154,438
16,700 Interstate/Johnson Lane, Inc..... 227,538
12,600 Jefferies Group, Inc............. 508,725
41,800 Legg Mason, Inc.................. 1,609,300
23,900 McDonald & Co. Investments,
Inc.............................. 830,525
56,350 Morgan Keegan, Inc............... 964,993
47,800 Piper Jaffray Cos., Inc.......... 746,875
60,980 Quick & Reilly Group, Inc........ 1,821,777
56,225 Raymond James Financial, Inc..... 1,693,778
17,400 Rodman & Renshaw Capital
Group*........................... 19,575
34,400 Sherwood Group, Inc.*............ 356,900
11,886 Stifel Financial Corp............ 104,003
------------
10,281,377
------------
FINANCIAL -- INVESTMENT FUNDS -- 0.2%
29,500 Petroleum & Resources............ 1,025,125
------------
FINANCIAL -- INVESTMENT MANAGEMENT
COMPANIES -- 0.6%
24,000 Atalanta Sosnoff Capital Corp.... 210,000
157,400 Goldcorp, Inc., Class A.......... 1,337,900
54,000 Insignia Financial Group, Inc.,
Class A*......................... 1,215,000
46,400 Phoenix Duff & Phelps Corp....... 330,600
------------
3,093,500
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- LEASING COMPANIES -- 0.7%
29,300 DVI, Inc.*....................... $ 380,900
46,900 Interpool, Inc................... 1,096,288
77,430 National Auto Credit, Inc.*...... 929,160
16,500 PS Group Holdings, Inc........... 222,750
116,500 Rollins Truck Leasing Corp....... 1,470,812
------------
4,099,910
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 0.1%
13,600 Hallwood Group, Inc.*............ 215,900
17,100 Stewart Information Services
Corp............................. 354,825
27,400 Transmedia Network, Inc.......... 133,575
------------
704,300
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 0.5%
56,000 CMAC Investment Corp............. 2,058,000
40,900 North American Mortgage Co....... 807,775
------------
2,865,775
------------
FINANCIAL -- SMALL BUSINESS INVESTMENT CO. &
COMMERCIAL -- 0.6%
51,000 PEC Israel Economic Corp.*....... 854,250
71,000 Safeguard Scientifics, Inc.*..... 2,254,250
------------
3,108,500
------------
FINANCIAL -- SAVINGS & LOAN -- 2.2%
46,200 Coast Savings Financial, Inc.*... 1,692,075
32,700 Commercial Federal Corp.......... 1,569,600
69,172 Downey Financial Corp............ 1,357,500
19,926 First Republic Bancorp, Inc.*.... 333,761
41,250 Firstbank Puerto Rico............ 1,072,500
28,800 Firstfed Financial Corp.*........ 633,600
101,700 Glendale Federal Bank*........... 2,364,525
32,300 New York Bancorp, Inc............ 1,251,625
16,100 PonceBank........................ 402,500
67,773 Westcorp......................... 1,482,534
------------
12,160,220
------------
FOOD -- FLOUR & GRAIN -- 0.2%
48,900 International Multi-Foods
Corp............................. 886,312
------------
FOOD -- MEAT PRODUCTS -- 0.5%
11,767 Diana Corp.*..................... 323,592
81,800 Hudson Foods, Inc., Class A...... 1,554,200
75,000 Pilgrim's Pride Corp............. 646,875
27,400 Rymer Foods, Inc.*............... 9,419
------------
2,534,086
------------
FOOD -- MISCELLANEOUS/DIVERSIFIED -- 0.5%
29,151 Chock Full O'Nuts Corp.*......... 145,755
21,500 Earthgrains Co................... 1,123,375
78,800 Smucker (J.M.) Co., Class B...... 1,260,800
------------
2,529,930
------------
FOOD -- SUGAR & REFRIGERATED -- 0.2%
71,300 Savannah Foods & Industries,
Inc.............................. 962,550
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
40,225 Rykoff-Sexton, Inc............... 638,572
------------
</TABLE>
Continued
20
<PAGE> 23
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FURNITURE -- 0.4%
34,887 Bush Industries, Inc............. $ 671,575
15,600 Chromcraft Revington, Inc.*...... 432,900
45,700 O'Sullivan Industries*........... 639,800
36,250 Rowe Furniture Corp.............. 290,000
24,100 Shelby Williams Industries,
Inc.............................. 295,225
------------
2,329,500
------------
GLASS PRODUCTS -- 0.2%
10,300 Kerr Group, Inc.*................ 24,462
40,800 Libbey, Inc...................... 1,137,300
------------
1,161,762
------------
HOTELS & MOTELS -- 0.9%
17,200 Hammons (John Q.) Hotels,
Inc.*............................ 146,200
53,300 Marcus Corp...................... 1,132,625
77,800 Prime Hospitality Corp.*......... 1,254,525
66,500 Red Roof Inns, Inc.*............. 1,030,750
48,900 Wyndham Hotel Corp.*............. 1,204,163
------------
4,768,263
------------
INDUSTRIAL -- AUTOMOTIVE/ROBOTICS -- 0.3%
18,100 Esterline Technologies Corp.*.... 472,862
62,900 Gerber Scientific, Inc........... 935,638
------------
1,408,500
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.9%
45,900 Capitol American Financial
Corp............................. 1,669,613
55,200 Penncorp Financial Group, Inc.... 1,987,200
27,300 Pioneer Financial Services,
Inc.............................. 682,500
21,350 RLI Corp......................... 712,556
16,100 Westbridge Capital Corp.*........ 156,975
------------
5,208,844
------------
INSURANCE -- BROKERS -- 0.6%
37,900 Acordia, Inc..................... 1,099,100
40,400 Arthur J. Gallagher & Co......... 1,252,400
35,900 Blanch (E.W.) Holdings, Inc...... 722,488
36,900 Hilb, Rogal & Hamilton Co........ 488,925
------------
3,562,913
------------
INSURANCE -- LIFE -- 1.9%
107,400 American Annuity Group, Inc...... 1,517,025
37,200 American Heritage Life Investment
Corp............................. 976,500
27,600 Amvestors Financial Corp......... 407,100
38,600 Delphi Financial Group*.......... 1,138,700
59,600 John Alden Financial Corp........ 1,102,600
38,500 Life Re Corp..................... 1,487,063
42,600 Reinsurance Group of America,
Inc.............................. 2,007,525
23,300 Security-Connecticut Corp........ 818,412
33,300 Washington National Corp......... 915,750
------------
10,370,675
------------
INSURANCE -- MULTI-LINE -- 0.9%
44,000 Enhance Financial Services
Group............................ 1,606,000
43,700 FBL Financial Group Inc., Class
A................................ 1,087,038
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
INSURANCE -- MULTI-LINE (CONTINUED)
39,809 Fidelity National Financial,
Inc.............................. $ 602,111
45,600 Mutual Risk Management Ltd....... 1,687,200
------------
4,982,349
------------
INSURANCE -- PROPERTY & CASUALTY -- 3.7%
40,400 Acceptance Insurance Cos.*....... 797,900
19,100 American Eagle Group, Inc........ 90,725
23,500 Avemco Corp...................... 367,188
37,400 Capital Re Corp.................. 1,743,775
41,900 Capsure Holdings Corp............ 476,613
24,500 China Tire Holdings, Ltd......... 238,875
51,200 Crawford & Co., Class A.......... 1,107,200
31,100 Executive Risk, Inc.............. 1,150,700
30,800 First American Financial Corp.... 1,266,650
62,715 Fremont General Corp............. 1,944,165
36,190 Frontier Insurance Group, Inc.... 1,384,268
40,667 Guaranty National Corp........... 681,172
70,000 HCC Insurance Holdings, Inc...... 1,680,000
42,700 Integon Corp..................... 757,925
26,300 MMI Cos., Inc.................... 841,600
30,600 NYMAGIC, Inc..................... 550,800
33,500 Orion Capital Corp............... 2,047,688
49,900 Sphere Drake Holdings, Ltd....... 442,862
21,056 Titan Holdings, Inc.............. 347,424
43,750 Vesta Insurance Group, Inc....... 1,372,656
47,900 Zenith National Insurance Co..... 1,311,262
------------
20,601,448
------------
INSTRUMENTS -- CONTROL -- 0.5%
64,700 BW/IP Holdings, Inc.............. 1,067,550
46,400 IMO Delaval, Inc.*............... 145,000
42,700 Measurex Corp.................... 1,024,800
32,600 Pacific Scientific Co............ 366,750
------------
2,604,100
------------
LEISURE & RECREATION PRODUCTS -- 0.8%
90,800 Alliance Entertainment Co.*...... 170,250
24,700 Coastcast Corp.*................. 358,150
36,500 Huffy Corp....................... 524,688
45,030 K2, Inc.......................... 1,238,325
54,500 Outboard Marine Corp............. 899,250
135,400 Roadmaster Industries, Inc....... 169,250
68,000 Sturm, Ruger & Co., Inc.......... 1,317,500
------------
4,677,413
------------
LEISURE & RECREATION SERVICES -- 0.3%
30,300 Carmike Cinemas, Inc., Class
A*............................... 768,863
308,800 Cineplex Odeon Corp.*............ 424,600
21,200 GC Cos., Inc.*................... 734,050
------------
1,927,513
------------
LEISURE & RECREATION -- GAMING -- 0.8%
104,000 Aztar Corp.*..................... 728,000
132,100 Boyd Gaming Corp.*............... 1,089,825
75,450 Grand Casinos, Inc.*............. 1,018,575
25,500 Harveys Casinos Resorts.......... 430,313
25,300 Jackpot Enterprises, Inc......... 246,675
</TABLE>
Continued
21
<PAGE> 24
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
LEISURE & RECREATION -- GAMING (CONTINUED)
42,700 Showboat, Inc.................... $ 736,575
26,400 Trump Hotels & Casino Resorts,
Inc.*............................ 316,800
------------
4,566,763
------------
LINEN SUPPLY & RELATED -- 0.3%
24,800 Angelica Corp.................... 474,300
55,500 Unifirst Corp.................... 1,179,375
------------
1,653,675
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.4%
36,500 Applied Power, Inc., Class A..... 1,446,313
23,600 Brown & Sharpe Manufacturing Co.,
Class A*......................... 330,400
14,100 Gleason Corp..................... 467,062
10,100 Monarch Machine Tool Co.......... 83,325
------------
2,327,100
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.3%
14,100 Christiana Cos., Inc.*........... 363,075
55,400 CMI Corp., Class A............... 242,375
42,050 Commercial Intertech Corp........ 572,931
28,700 Terex Corp.*..................... 290,588
------------
1,468,969
------------
MACHINERY -- ELECTRIC UTILITIES -- 0.1%
35,857 Kuhlman Corp..................... 694,729
------------
MACHINERY -- ELECTRICAL -- 0.3%
67,310 Baldor Electric Co............... 1,657,509
------------
MACHINERY -- FARM -- 0.1%
26,000 Alamo Group Inc.................. 445,250
------------
MACHINERY -- GENERAL INDUSTRIAL -- 1.5%
27,000 Chart Industries, Inc............ 462,375
61,700 Global Industrial Technologies,
Inc.*............................ 1,365,112
46,925 Graco, Inc....................... 1,149,663
43,350 Idex Corp........................ 1,728,581
23,700 Katy Industries, Inc............. 343,650
15,700 Kysor Industrial Corp............ 512,213
75,433 Paxar Corp.*..................... 1,301,219
11,570 Portec, Inc...................... 114,254
24,400 Scotsman Industries, Inc......... 576,450
10,100 Sequa Corp., Class B*............ 505,000
7,400 Twin Disc, Inc................... 160,025
------------
8,218,542
------------
MACHINERY -- MATERIAL HANDLING -- 0.2%
62,600 Interlake Corp.*................. 219,100
21,600 Nacco Industries, Class A........ 1,155,600
------------
1,374,700
------------
MEDICAL INSTRUMENTS -- 0.5%
72,900 Acuson Corp.*.................... 1,776,938
43,260 Elscint, Ltd.*................... 270,375
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL INSTRUMENTS (CONTINUED)
38,300 Graham Field Health Products,
Inc.*............................ $ 330,337
33,100 OEC Medical Systems, Inc.*....... 496,500
------------
2,874,150
------------
MEDICAL PRODUCTS -- 0.5%
43,700 BEC Group, Inc.*................. 229,425
62,600 Haemonetics Corp.*............... 1,181,575
21,900 Maxxim Medical, Inc.*............ 273,750
83,900 Owens & Minor, Inc............... 859,975
------------
2,544,725
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
29,200 Biowhittaker, Inc.*.............. 233,600
35,500 Diagnostic Products Corp......... 918,563
36,089 Molecular Biosystems, Inc.*...... 234,579
------------
1,386,742
------------
MEDICAL -- DRUGS -- 0.3%
73,423 ICN Pharmaceuticals, Inc......... 1,440,926
------------
MEDICAL -- GENERIC DRUGS -- 0.2%
58,900 Alpharma, Inc., Class A.......... 839,325
49,400 Pharmaceutical Resources,
Inc.*............................ 172,900
------------
1,012,225
------------
MEDICAL -- HEALTH MAINTENANCE ORGANIZATION --
0.6%
29,600 PHP Healthcare Corp.*............ 758,500
50,800 Rightchoice Managed Care, Inc.,
Class A*......................... 539,750
37,400 Sierra Health Services, Inc.*.... 920,975
17,800 United American Healthcare*...... 104,575
34,200 United Wisconsin Services,
Inc.............................. 897,750
------------
3,221,550
------------
MEDICAL -- HOSPITALS -- 0.9%
64,400 Coastal Healthcare Group*........ 225,400
7,200 Comprehensive Care Corp.*........ 87,300
36,400 Healthplan Services Corp.*....... 768,950
29,400 Pediatrix Medical Group, Inc.*... 1,084,125
110,100 Transitional Hospitals Corp.*.... 1,059,713
62,600 Universal Health Services*....... 1,791,925
------------
5,017,413
------------
MEDICAL -- NURSING HOMES -- 1.0%
14,400 Advocat, Inc.*................... 104,400
62,470 Grancare, Inc.*.................. 1,116,651
47,700 Integrated Health Services,
Inc.............................. 1,162,688
48,400 Living Centers of America,
Inc.*............................ 1,343,100
67,050 Multicare Cos., Inc.*............ 1,357,762
45,200 Regency Health Services, Inc.*... 435,050
------------
5,519,651
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 0.8%
109,200 Coram Healthcare Corp.*.......... 546,000
55,500 Genesis Health Ventures, Inc.*... 1,727,437
31,000 Health Images, Inc............... 515,375
</TABLE>
Continued
22
<PAGE> 25
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL -- OUTPATIENT/HOME CARE (CONTINUED)
16,676 Hospital Staffing Services,
Inc.*............................ $ 41,690
165,100 NovaCare, Inc.*.................. 1,816,100
------------
4,646,602
------------
MEDICAL -- WHOLESALE DRUG -- 0.1%
30,500 Bindley Western Industries,
Inc.............................. 590,938
45,000 Foxmeyer Health Corp.*........... 73,125
------------
664,063
------------
MEDICAL/DENTAL SUPPLIES -- 1.0%
47,400 American Medical Response,
Inc.*............................ 1,540,500
73,600 Ballard Medical Products......... 1,370,800
31,700 Cooper Cos., Inc.*............... 546,825
18,800 Isomedix, Inc.*.................. 244,400
51,000 Sunrise Medical, Inc.*........... 809,625
45,200 West Co., Inc.................... 1,276,900
------------
5,789,050
------------
METAL -- GOLD -- 0.7%
93,000 Agnico-Eagle Mines, Ltd.......... 1,302,000
155,400 Amax Gold, Inc.*................. 990,675
46,200 Atlas Corp.*..................... 31,763
337,000 Campbell Resources, Inc.*........ 315,938
71,600 Glamis Gold, Ltd................. 501,200
130,700 Hecla Mining Co.*................ 735,187
73,100 Northgate Exploration, Ltd.*..... 50,256
------------
3,927,019
------------
METAL -- IRON -- 0.4%
32,200 Cleveland Cliffs, Inc............ 1,461,075
107,300 National Steel Corp.*............ 992,525
------------
2,453,600
------------
METAL -- MISCELLANEOUS -- 0.3%
43,100 Brush Wellman, Inc............... 705,763
43,000 Nord Resources Corp.*............ 188,125
20,000 Tremont Corp.*................... 722,500
23,206 Zemex Corp....................... 162,442
------------
1,778,830
------------
METAL -- NON-FERROUS -- 0.3%
131,400 Kaiser Aluminum Corp.*........... 1,527,525
------------
METAL -- SILVER -- 0.2%
55,600 Coeur D'Alene Mines Corp......... 840,950
515,872 Sunshine Mining & Refining
Co.*............................. 483,630
------------
1,324,580
------------
METAL PRODUCTS -- DISTRIBUTION -- 0.3%
31,950 Bearings, Inc. (c)............... 890,606
27,900 Reliance Steel & Aluminum Co..... 976,500
------------
1,867,106
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
METAL PRODUCTS -- FASTENERS -- 0.2%
14,800 Hi-Shear Industries, Inc.*....... $ 38,850
15,900 SPS Technologies, Inc.*.......... 1,021,575
13,700 Transtechnology Corp............. 268,863
------------
1,329,288
------------
METAL -- PROCESSING & FABRICATION -- 1.6%
23,400 Amcast Industrial Corp........... 579,150
26,000 Ampco-Pittsburgh Corp............ 312,000
27,300 Chase Brass & Copper Co.,
Inc.*............................ 542,587
40,733 Commercial Metals Co............. 1,227,082
23,300 Fansteel, Inc.*.................. 145,625
24,300 Huntco, Inc., Class A............ 358,425
41,900 Kaydon Corp...................... 1,974,538
43,900 Mueller Industries, Inc.*........ 1,690,150
20,300 Sinter Metals, Inc., Class A*.... 603,925
53,700 Tyler Corp.*..................... 100,687
35,800 Wolverine Tube, Inc.*............ 1,261,950
------------
8,796,119
------------
OFFICE SUPPLIES & FORMS -- 0.7%
44,500 American Business Products....... 1,118,063
29,100 CSS Industries, Inc.*............ 756,600
44,700 Ennis Business Forms, Inc........ 502,875
43,400 Hunt Manufacturing Co............ 786,625
40,700 New England Business Service,
Inc.............................. 875,050
------------
4,039,213
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.4%
32,800 Daniel Industries, Inc........... 483,800
82,700 Varco International, Inc.*....... 1,912,438
------------
2,396,238
------------
OIL REFINING & MARKETING -- 0.7%
34,400 Getty Petroleum Corp............. 559,000
30,600 Giant Industries, Inc............ 428,400
86,000 Quaker State Corp................ 1,214,750
67,400 Tesoro Petroleum Corp.*.......... 943,600
21,600 Tokheim Corp.*................... 175,500
21,900 World Fuel Services Corp......... 487,275
------------
3,808,525
------------
OIL & GAS -- DRILLING -- 0.3%
152,700 Parker Drilling Co.*............. 1,469,738
80,220 Zapata Corp.*.................... 340,935
------------
1,810,673
------------
OIL -- FIELD SERVICES -- 0.6%
63,000 Oceaneering International,
Inc.*............................ 1,000,125
39,500 RPC Energy Services, Inc.*....... 592,500
25,600 Seitel, Inc.*.................... 1,024,000
56,800 Unit Corp.*...................... 560,900
------------
3,177,525
------------
</TABLE>
Continued
23
<PAGE> 26
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL -- PRODUCTION/PIPELINE -- 0.5%
79,900 Aquila Gas Pipeline Corp......... $ 1,268,413
91,300 Kaneb Services, Inc.*............ 296,725
70,000 Western Gas Resources, Inc....... 1,347,500
------------
2,912,638
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 3.0%
59,400 Berry Petroleum Co., Class A..... 853,875
61,900 Cabot Oil & Gas Corp., Class A... 1,060,037
50,000 Cross Timers Oil Co.............. 1,256,250
49,000 Goodrich Petroleum Corp.*........ 33,687
29,500 HS Resources, Inc.*.............. 486,750
31,200 KCS Energy, Inc.................. 1,115,400
75,600 Louis Dreyfus Natural Gas*....... 1,294,650
173,600 Mesa, Inc.*...................... 911,400
86,000 Newfield Exploration Co.*........ 2,236,000
32,000 Nuevo Energy Co.*................ 1,664,000
85,100 Snyder Oil Corp.................. 1,478,613
32,100 Stone Energy Corp.*.............. 958,988
33,960 Swift Energy Co.*................ 1,014,555
51,900 Vintage Petroleum, Inc........... 1,790,550
73,700 Wainoco Oil Corp.*............... 230,313
25,440 Wilshire Oil Co. of Texas........ 133,560
24,300 Wiser Oil Co..................... 479,925
------------
16,998,553
------------
OIL -- U.S. INTEGRATED -- 0.1%
13,300 Howell Corp...................... 196,175
25,700 USX-Delhi Group.................. 407,988
------------
604,163
------------
PAPER & RELATED PRODUCTS -- 0.4%
31,500 Paragon Trade Brands, Inc.*...... 945,000
36,300 Pope & Talbot, Inc............... 576,263
28,600 Republic Gypsum Co............... 446,875
------------
1,968,138
------------
PHOTOGRAPHY EQUIPMENT & SUPPLIES -- 0.1%
37,700 CPI Corp......................... 631,475
------------
POLLUTION CONTROL -- 1.6%
108,100 Allwaste, Inc.*.................. 554,012
81,000 American Waste Services, Inc.,
Class A*......................... 192,375
109,900 Calgon Carbon Corp............... 1,346,275
61,300 Dames & Moore, Inc............... 896,512
18,000 Environmental Elements Co.*...... 42,750
57,600 ICF Kaiser International,
Inc.*............................ 115,200
32,000 Imco Recycling, Inc.............. 468,000
24,275 International Technology
Corp.*........................... 206,338
26,300 Ionics, Inc.*.................... 1,262,400
18,300 Kimmins Environmental Service
Corp.*........................... 61,763
47,100 Lydall, Inc.*.................... 1,059,750
69,600 Mid-American Waste*.............. 28,275
72,600 OHM Corp.*....................... 617,100
34,700 Osmonics, Inc.*.................. 763,400
164,100 Rollins Environmental Service*... 287,175
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
POLLUTION CONTROL (CONTINUED)
19,300 TRC Cos., Inc.*.................. $ 86,850
44,700 Wahlco Environmental Systems*.... 16,763
33,500 Zurn Industries, Inc............. 875,187
------------
8,880,125
------------
PRECIOUS METALS -- JEWELRY -- 0.1%
19,000 Artra Group, Inc.*............... 121,125
38,100 Handy & Harman................... 666,750
------------
787,875
------------
PRINTING -- COMMERCIAL -- 0.1%
51,800 American Banknote Corp.*......... 239,575
------------
PROTECTION -- SAFETY -- 0.7%
63,200 Borg-Warner Security Corp.*...... 679,400
69,000 Checkpoint Systems, Inc.*........ 1,707,750
52,700 Wackenhut Corrections Corp.*..... 1,054,000
32,725 Wackenhut Corp., Class A......... 564,506
------------
4,005,656
------------
PUBLISHING -- BOOKS -- 0.3%
44,600 Nelson (Thomas), Inc............. 663,425
37,100 Wiley (John) & Sons, Class A..... 1,196,475
------------
1,859,900
------------
PUBLISHING -- NEWSPAPERS -- 0.7%
70,600 Harte-Hanks Communication,
Inc.............................. 1,959,150
47,233 Pulitzer Publishing Co........... 2,190,430
------------
4,149,580
------------
PUBLISHING -- PERIODICALS -- 0.2%
114,100 American Media, Inc., Class A*... 670,338
54,200 Playboy Enterprises, Inc.*....... 528,450
------------
1,198,788
------------
REAL ESTATE OPERATIONS -- 0.2%
23,900 Grubb & Ellis Co.*............... 107,550
45,300 Webb (Del) Corp.................. 741,788
------------
849,338
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.2%
45,000 Discount Auto Parts, Inc.*....... 1,051,875
29,100 Hi-Lo Automotive, Inc.*.......... 72,750
------------
1,124,625
------------
RETAIL -- APPAREL/SHOES -- 0.9%
62,700 Ann Taylor Stores Corp.*......... 1,097,250
110,400 Burlington Coat Factory Warehouse
Corp.*........................... 1,435,200
133,300 CML Group........................ 449,888
35,600 Cole (Kenneth) Productions, Inc.,
Class A*......................... 551,800
24,100 Frederick's of Hollywood, Inc.,
Class B.......................... 99,412
28,300 Gottschalks, Inc.*............... 148,575
89,400 Hartmarx Corp.*.................. 502,875
</TABLE>
Continued
24
<PAGE> 27
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- APPAREL/SHOES (CONTINUED)
71,800 Starter Corp.*................... $ 412,850
47,900 Syms Corp.*...................... 407,150
------------
5,105,000
------------
RETAIL -- CATALOG -- 0.0%
14,800 Luria (L.) & Son, Inc.*.......... 38,850
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.2%
91,000 Handleman Co..................... 773,500
30,000 Intertan, Inc.*.................. 146,250
24,400 Rex Stores Corp.*................ 198,250
------------
1,118,000
------------
RETAIL -- DISCOUNT -- 1.2%
13,500 Alexander's, Inc.*............... 1,068,187
29,900 Bradlees, Inc.*.................. 26,162
45,900 Caldor Corp.*.................... 51,638
73,900 Duty Free International, Inc..... 1,071,550
35,000 Hills Stores Co.*................ 210,000
66,800 Mac Frugal's Bargains -- Close-
Outs, Inc.*...................... 1,745,150
87,000 Shopko Stores, Inc............... 1,305,000
54,700 Smart & Final, Inc............... 1,182,888
47,100 Venture Stores, Inc.*............ 141,300
------------
6,801,875
------------
RETAIL -- HOME FURNISHINGS -- 0.9%
101,400 Bombay Co., Inc.*................ 468,975
39,000 Ethan Allen Interiors, Inc....... 1,501,500
80,200 Levitz Furniture, Inc.*.......... 250,625
99,040 Pier One Imports, Inc............ 1,745,580
25,200 Rhodes, Inc.*.................... 195,300
29,600 Syratech Corp.*.................. 932,400
------------
5,094,380
------------
RETAIL -- JEWELRY -- 0.3%
118,800 Claire's Stores, Inc............. 1,544,400
------------
RETAIL -- MAIL ORDER -- 0.3%
43,100 National Media Corp.*............ 301,700
18,250 Sport Supply Group, Inc.......... 100,375
40,400 Stanhome, Inc.................... 1,070,600
------------
1,472,675
------------
RETAIL -- MISCELLANEOUS/DIVERSIFIED -- 1.9%
77,200 AmeriCredit Corp.*............... 1,582,600
78,000 Cash America Intl., Inc.......... 663,000
28,300 Cole National Corp., Class A*.... 742,875
50,000 Fabri-Centers of America, Inc.,
Class A*......................... 806,250
126,800 Furniture Brands
International*................... 1,775,200
63,125 General Host Corp................ 165,703
58,500 Hancock Fabrics, Inc............. 606,937
67,500 Jenny Craig, Inc.*............... 599,063
14,600 Martin Lawrence Limited Editions,
Inc.*............................ 146
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- MISCELLANEOUS/DIVERSIFIED (CONTINUED)
93,000 Musicland Stores Corp.*.......... $ 139,500
58,550 Russ Berrie & Co., Inc........... 1,053,900
53,700 Sports & Recreation Inc.*........ 416,175
32,800 Tandycrafts, Inc.*............... 196,800
79,050 The Sports Authority, Inc.*...... 1,719,338
------------
10,467,487
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.2%
44,500 Carson Pirie Scott & Co.*........ 1,123,625
------------
RETAIL -- RESTAURANTS -- 1.2%
22,300 Chart House Enterprises, Inc.*... 111,500
48,600 CKE Restaurants, Inc............. 1,749,600
19,400 Cooker Restaurant Corp........... 225,525
105,500 Foodmaker, Inc.*................. 936,313
50,500 Luby's Cafeteria, Inc............ 1,003,687
17,300 Morton's Restaurant Group,
Inc.*............................ 291,937
28,300 Piccadilly Cafeterias, Inc....... 261,775
53,300 Sbarro, Inc...................... 1,359,150
75,100 Sizzler International, Inc.*..... 215,913
15,300 Spaghetti Warehouse, Inc.*....... 80,325
68,500 TCBY Enterprises, Inc............ 274,000
33,775 UNO Restaurant Corp.*............ 223,759
15,500 Volunteer Capital Corp.*......... 127,875
------------
6,861,359
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
86,100 Value City Department Stores,
Inc.*............................ 904,050
------------
RETAIL -- SUPERMARKET -- 0.1%
41,483 Carr-Gottstein Foods Co.*........ 155,561
29,300 Penn Traffic Co.*................ 106,213
------------
261,774
------------
RUBBER & PLASTICS -- 0.1%
24,000 Furon Co......................... 510,000
36,100 Lamson & Sessions Co.*........... 261,725
------------
771,725
------------
SCHOOLS -- 0.6%
27,100 Berlitz International, Inc.*..... 562,325
68,400 ITT Educational Services,
Inc.*............................ 1,581,750
86,800 National Education Corp.*........ 1,323,700
------------
3,467,775
------------
SHOES & RELATED APPAREL -- 1.1%
25,175 Barry (R.G.) Corp.*.............. 276,925
48,700 Brown Group, Inc................. 894,863
45,300 Converse, Inc.*.................. 770,100
11,900 Fuqua Enterprises, Inc.*......... 288,575
66,200 Genesco, Inc.*................... 612,350
62,200 L.A. Gear, Inc.*................. 116,625
29,900 Timberland Co., Class A*......... 1,136,200
61,987 Wolverine World Wide, Inc........ 1,797,623
------------
5,893,261
------------
</TABLE>
Continued
25
<PAGE> 28
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SOAP & CLEANING -- 0.5%
53,100 Church & Dwight Co., Inc......... $ 1,214,663
21,600 NCH Corp......................... 1,301,400
------------
2,516,063
------------
STEEL -- PIPES & TUBES -- 0.2%
37,500 NS Group, Inc.*.................. 168,750
36,700 Quanex Corp...................... 1,004,663
------------
1,173,413
------------
STEEL -- PRODUCERS -- 1.1%
247,700 Armco, Inc.*..................... 1,021,763
77,600 Birmingham Steel Corp............ 1,474,400
77,900 Chaparral Steel Co............... 944,537
19,500 Cold Metal Products, Inc.*....... 119,438
41,400 Geneva Steel Co., Class A*....... 124,200
58,800 Rouge Steel Co................... 1,242,150
113,700 Weirton Steel Corp.*............. 397,950
68,600 WHX Corp.*....................... 608,825
------------
5,933,263
------------
STEEL -- SPECIALTY -- 1.1%
39,900 Carpenter Technology............. 1,461,337
83,900 J & L Specialty Steel, Inc....... 954,363
40,100 Lukens, Inc...................... 807,013
41,500 Material Sciences Corp.*......... 747,000
52,600 Oregon Steel Mills, Inc.......... 881,050
41,730 RMI Titanium Co.*................ 1,173,656
------------
6,024,419
------------
TELECOMMUNICATION EQUIPMENT -- 0.6%
56,000 General Datacomm Industries,
Inc.*............................ 588,000
20,685 Intellicall, Inc.*............... 118,939
56,100 Network Equipment Technologies,
Inc.*............................ 925,650
23,100 Plantronics, Inc.*............... 1,039,500
17,800 Tech-Sym Corp.*.................. 529,550
37,900 Titan Corp.*..................... 127,912
------------
3,329,551
------------
TEXTILE -- APPAREL -- 1.3%
55,300 Authentic Fitness Corp........... 663,600
71,400 Chaus (Bernard), Inc.*........... 116,025
26,500 Chic by H.I.S., Inc.*............ 125,875
66,500 Delta Woodside Industries,
Inc.............................. 423,937
27,600 Farah, Inc.*..................... 213,900
17,600 He-Ro Group, Ltd.*............... 12,100
57,650 Kellwood Co...................... 1,153,000
5,400 Munsingwear, Inc.*............... 48,600
18,600 Oneita Industries, Inc.*......... 32,550
23,900 Oxford Industries, Inc........... 573,600
73,300 Phillips Van Heusen.............. 1,053,688
40,900 Salant Corp.*.................... 132,925
31,000 Signal Apparel Co., Inc.*........ 93,000
41,600 St. John Knits, Inc.............. 1,809,600
81,000 Tultex Corp.*.................... 567,000
39,200 Worldtex, Inc.*.................. 347,900
------------
7,367,300
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TEXTILE -- HOME FURNISHINGS -- 0.2%
21,700 Crown Crafts, Inc................ $ 217,000
24,300 Fieldcrest Cannon, Inc.*......... 388,800
28,900 Pillowtex Corp................... 520,200
------------
1,126,000
------------
TEXTILE -- PRODUCTS -- 0.9%
19,400 Belding Heminway Co., Inc.*...... 46,075
174,500 Collins & Aikman Corp.*.......... 1,090,625
74,300 Cone Mills Corp.*................ 585,113
38,500 Dyersburg Corp................... 269,500
31,900 Galey & Lord, Inc.*.............. 474,512
38,300 Guilford Mills, Inc.............. 1,019,737
28,625 Johnston Industries, Inc......... 207,531
76,500 Polymer Group Inc.*.............. 1,061,438
23,500 Texfi Industries, Inc.*.......... 55,813
------------
4,810,344
------------
TOBACCO -- 0.8%
50,300 Brooke Group, Ltd................ 251,500
12,000 Culbro Corp.*.................... 778,500
89,900 Dimon, Inc....................... 2,078,937
34,200 Schweitzer-Mauduit
International.................... 1,081,575
25,234 Standard Commercial Corp......... 510,988
------------
4,701,500
------------
TOOLS -- HAND HELD -- 0.3%
19,200 Starrett (L.S.) Co., Class A..... 544,800
33,400 Toro Co.......................... 1,219,100
------------
1,763,900
------------
TOYS/GAME/HOBBY -- 0.3%
27,400 Galoob (Lewis) Toys, Inc.*....... 383,600
94,400 Tyco Toys, Inc.*................. 1,109,200
------------
1,492,800
------------
TRANSPORTATION -- AIR FREIGHT -- 0.4%
57,300 Airborne Freight Corp............ 1,339,387
51,200 Pittston Burlington Group........ 1,024,000
------------
2,363,387
------------
TRANSPORTATION -- AIRLINE -- 0.2%
36,900 Alaska Airgroup, Inc.*........... 774,900
41,400 Worldcorp, Inc.*................. 181,125
------------
956,025
------------
TRANSPORTATION -- EQUIPMENT & LEASING -- 0.3%
96,000 Fruehauf Trailer Corp.*.......... 11,520
38,300 Greenbrier Cos., Inc............. 397,362
102,300 Westinghouse Air Brake Co........ 1,291,537
------------
1,700,419
------------
TRANSPORTATION -- SHIPPING -- 0.7%
17,950 International Shipholding
Corp............................. 332,075
31,800 Maritrans, Inc................... 194,775
84,400 OMI Corp.*....................... 738,500
30,000 Sea Containers, Ltd., Class B.... 468,750
47,200 Teekay Shipping Corp............. 1,545,800
47,400 Todd Shipyards Corp.*............ 308,100
------------
3,588,000
------------
</TABLE>
Continued
26
<PAGE> 29
THE KENT SMALL COMPANY GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- TRUCKING -- 0.0%
23,900 Matlack Systems, Inc.*........... $ 164,312
------------
UTILITIES -- ELECTRIC POWER -- 2.5%
19,800 Bangor Hydro-Electric Co......... 183,150
39,200 Black Hills Corp................. 1,102,500
44,100 Central Hudson Gas & Electric
Corp............................. 1,383,638
88,200 Central Maine Power Co........... 1,025,325
31,500 Central Vermont Public Service
Corp............................. 378,000
32,500 CILCORP, Inc..................... 1,190,313
54,000 Commonwealth Energy System....... 1,269,000
41,400 Empire District Electric Co...... 776,250
13,100 Green Mountain Power Corp........ 312,763
26,000 Interstate Power Co.............. 754,000
24,200 Northwestern Public Service
Co............................... 828,850
37,100 Orange & Rockland Utilities...... 1,330,962
21,000 St. Joseph Light & Power Co...... 322,875
29,700 TNP Enterprises, Inc............. 813,037
81,320 Tucson Electric Power Co.*....... 1,351,945
32,700 United Illuminating Co........... 1,025,962
------------
14,048,570
------------
UTILITIES -- GAS DISTRIBUTION -- 3.1%
43,250 Atmos Energy Corp................ 1,032,594
36,400 Bay State Gas Co................. 1,028,300
24,850 Cascade Natural Gas Corp......... 422,450
10,100 Chesapeake Utilities Corp........ 170,438
24,200 Connecticut Energy Corp.......... 514,250
27,000 Connecticut Natural Gas Corp..... 688,500
29,500 Energen Corp..................... 892,375
8,700 Energynorth, Inc................. 189,225
57,100 Indiana Energy, Inc.............. 1,391,812
47,500 Laclede Gas Co................... 1,145,937
44,900 New Jersey Resources Corp........ 1,313,325
17,700 North Carolina Natural Gas....... 511,087
24,800 NUI Corp. 561,100
14,500 Pennsylvania Enterprises, Inc.... 636,187
51,100 Public Service Co. of North
Carolina......................... 932,575
29,100 South Jersey Industries, Inc..... 709,313
46,305 Southern Union Co.*.............. 1,018,710
66,500 Southwest Gas Corp............... 1,280,125
67,000 Southwestern Energy Co........... 1,013,375
65,600 Washington Energy Co............. 1,353,000
28,300 Yankee Energy System, Inc........ 604,912
------------
17,409,590
------------
UTILITIES -- WATER SUPPLY -- 0.8%
18,600 Aquarion Co...................... 518,475
16,900 California Water Service Co...... 709,800
20,400 E'town Corp...................... 645,150
49,650 Philadelphia Suburban Corp....... 986,794
21,200 Southern California Water........ 461,100
86,200 United Water Resources, Inc...... 1,336,100
------------
4,657,419
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
WIRE & CABLE PRODUCTS -- 0.3%
17,800 Barnes Group, Inc................ $ 1,068,000
22,800 Insteel Industries, Inc.......... 202,350
24,680 Keystone Consolidated
Industries*...................... 203,610
14,500 National-Standard Co.*........... 108,750
------------
1,582,710
------------
TOTAL COMMON STOCKS.............. 553,106,743
------------
(Cost $446,652,911)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATION -- 0.2%
$1,135,000 U.S. Treasury Bill,
5.08%**, 6/26/97 (b)............ $ 1,106,648
------------
TOTAL U.S. GOVERNMENT
OBLIGATION...................... 1,106,648
------------
(Cost $1,107,478)
COMMERCIAL PAPER -- 0.8%
FINANCE -- 0.8%
4,137,213 Ford Motor Credit, 6.00%,
1/2/97.......................... 4,137,213
------------
TOTAL COMMERCIAL PAPER.......... 4,137,213
(Cost $4,137,213)
TOTAL INVESTMENTS............................ 558,350,604
(Cost $451,897,602)(a) -- 100.0%
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.0%........................ 165,992
------------
NET ASSETS -- 100.00%........................ $558,516,596
=============
</TABLE>
- ---------------
Percentages indicated are based on net assets of $558,516,596.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $74,000. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.................... $144,148,085
Unrealized depreciation....................
(37,769,083)
------------
Net unrealized appreciation................
$106,379,002
=============
</TABLE>
(b) Security has been deposited as initial margin on open futures contract.
(c) Name change to Applied Industrial Technology, Inc. effective 1/2/97.
* Non-income producing securities.
** Annualized yield at time of purchase.
At December 31, 1996, the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ------------------- ---------- ----------
<S> <C> <C> <C>
20 Russell 2000 Index, $3,585,200 $3,627,500
3/21/97
</TABLE>
See Notes to Financial Statements.
<PAGE> 30
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS -- 96.2%
AUSTRALIA -- 2.5%
38,993 Amcor Ltd........................ $ 250,550
18,100 Australian Gas Light Co., Ltd.... 102,932
10,658 Australian National Industries
Ltd.............................. 10,581
72,270 Boral Ltd........................ 205,495
13,819 Brambles Industries Ltd.......... 269,456
137,916 Broken Hill Proprietary Co.,
Ltd.............................. 1,962,965
16,999 Burns, Philp & Co., Ltd.......... 30,243
31,309 Coca-Cola Amatil Ltd............. 334,466
67,737 Coles Myer Ltd................... 278,686
21,036 CRA Ltd.......................... 329,982
31,100 Crown Ltd.*...................... 64,964
61,118 CSR Ltd.......................... 213,590
6,153 Email Ltd........................ 19,890
7,100 Faulding (F.H.) & Co., Ltd....... 47,990
122,736 Foster's Brewing Group Ltd....... 248,583
45,016 General Property Trust Units..... 87,598
37,200 Gio Australia Holdings Ltd....... 95,139
78,403 Goodman Fielder Ltd.............. 97,144
15,900 Great Central Mines Ltd.......... 45,211
24,600 Hardie (James) Industries Ltd.... 77,373
18,470 ICI Australia Ltd................ 200,244
16,200 Leighton Holdings Ltd............ 69,481
15,184 Lend Lease Corp., Ltd............ 294,263
102,215 M.I.M. Holdings Ltd.............. 142,885
98,214 National Australia Bank Ltd...... 1,154,503
15,077 Newcrest Mining Ltd.............. 59,875
135,619 News Corp., Ltd.................. 715,234
95,800 Normandy Mining Ltd.............. 132,396
44,461 North Ltd........................ 129,953
63,900 Pacific Dunlop Ltd............... 162,409
55,488 Pioneer International Ltd........ 165,269
11,700 Plutonic Resources Ltd........... 54,363
17,750 QBE Insurance Group Ltd.......... 93,470
40,855 QCT Resources Ltd................ 55,164
13,239 RGC Ltd.......................... 58,780
8,400 Rothmans Holdings Ltd............ 54,041
33,592 Santos Ltd....................... 136,071
11,644 Smith (Howard) Ltd............... 95,720
37,032 Southcorp Holdings Ltd........... 117,651
2,000 Stockland Trust Group............ 5,163
34,300 Sydney Harbour Casino Holdings
Ltd.*............................ 52,851
18,800 TABCORP Holdings Ltd............. 89,592
70,086 Westfield Trust Units............ 132,485
128,412 Westpac Banking Corp., Ltd....... 730,262
76,193 WMC Ltd.......................... 479,897
------------
10,154,860
------------
AUSTRIA -- 1.6%
18,750 Bank Austria AG.................. 1,383,823
100 Bank Austria AG, Participating
Certificates..................... 3,229
3,400 Boehler-Uddeholm AG.............. 243,092
9,320 Creditanstalt-Bankverein......... 630,245
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
AUSTRIA (CONTINUED)
2,280 EA-Generali AG................... $ 673,091
6,500 Flughafen Wien AG................ 331,010
500 Oesterreichische
Brau-Beteiligungs AG............. 33,904
10,069 Oesterreichische
Elektrizitaetswirtschafts AG --
Class A.......................... 752,885
8,740 OMV AG........................... 984,501
75 Radex-Heraklith
Industriebeteiligungs AG......... 2,373
100 Steyr-Daimler-Puch AG*........... 1,596
4,900 VA Technologie AG................ 768,257
2,133 Wienerberger Baustoffindustrie
AG............................... 413,237
------------
6,221,243
------------
BELGIUM -- 0.8%
1,625 Cimenteries CBR Cementbedrijven.. 147,590
3,400 Delhaize-Le Lion SA.............. 201,766
3,100 Electrabel SA.................... 732,925
2,000 Fortis AG........................ 320,484
683 Generale de Banque SA............ 244,585
1,300 Groupe Bruxelles Lambert SA...... 167,184
652 Kredietbank NV................... 213,471
1,097 PetroFina SA..................... 348,808
850 Royale Belge..................... 175,274
450 Solvay SA........................ 275,189
568 Tractebel........................ 264,201
1,422 Union Miniere Group*............. 96,248
------------
3,187,725
------------
DENMARK -- 2.2%
28 Aarhus Oliefabrik AS -- Class
A................................ 1,448
9 Aarhus Oliefabrik AS -- Class
B................................ 467
6,360 Carlsberg AS -- Class A.......... 429,110
5,205 Carlsberg AS -- Class B.......... 351,182
10,095 Danisco AS....................... 612,658
10,147 Den Danske Bank.................. 817,071
39 D/S 1912 -- Class B.............. 1,001,626
29 D/S Svendborg AS -- Class B...... 1,086,472
1,643 FLS Industries AS -- Class B..... 210,287
42 GN Store Nord AS................. 4,094
2,190 ISS International Service System
AS, Series B..................... 57,545
1,185 Korn-OG Foderstof Kompagniet AS.. 47,989
134 Lauritzen (J.) Holding AS --
Class B*......................... 15,674
111 NKT Holding AS................... 6,586
7,423 Novo Nordisk AS -- Class B....... 1,396,789
6,974 Ostasiatiske Kompagni AS*........ 151,328
84 Radiometer AS -- Class B......... 4,984
320 SAS Danmark AS................... 3,960
327 Sophus Berendsen AS -- Class A... 42,130
3,506 Sophus Berendsen AS -- Class B... 450,515
</TABLE>
Continued
28
<PAGE> 31
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
DENMARK (CONTINUED)
556 Superfos AS...................... $ 70,220
26,100 Tele Danmark AS -- Class B....... 1,437,978
9,693 Unidanmark AS -- Class A......... 501,172
------------
8,701,285
------------
FINLAND -- 0.4%
800 Amer Group Ltd................... 16,490
1,300 Cultor OY, Series 2.............. 66,847
1,500 Instrumentarium Group, Series
B................................ 54,350
500 Kone Corp. -- Class B............ 55,109
14,606 Merita Ltd. -- Class A*.......... 45,317
4,100 Metra OY -- Class B.............. 229,507
11,600 Nokia AB -- Class A.............. 671,485
800 Pohjola Insurance Group, Series
B................................ 17,965
750 Stockmann AB -- Class B.......... 44,749
14,560 UPM-Kymmene Corp.*............... 304,846
------------
1,506,665
------------
FRANCE -- 8.2%
2,550 Accor SA......................... 322,261
14,537 Alcatel Alsthom.................. 1,165,480
17,400 AXA SA........................... 1,104,499
16,500 Banque Nationale de Paris........ 637,309
1,466 Bouygues......................... 151,711
1,900 Canal Plus....................... 418,833
3,480 Carrefour SA..................... 2,259,872
498 Chargeurs International SA*...... 24,619
500 Club Mediterranee SA............. 32,392
1,972 Compagnie Bancaire SA............ 232,904
7,733 Compagnie de Saint Gobain........ 1,091,808
13,017 Compagnie de Suez SA............. 552,355
9,864 Compagnie Financiere de
Paribas -- Class A............... 665,792
50 Compagnie Generale de Geophysique
SA*.............................. 3,462
11,018 Compagnie Generale des Eaux...... 1,362,749
320 Comptoirs Modernes............... 172,350
500 CPR (Compagnie Parisenne de
Reescompte)...................... 39,798
816 Credit National.................. 46,900
1,050 Dollfus-Mieg & Cie............... 25,408
24,567 Elf Aquitane SA.................. 2,231,887
2,000 Eridania Beghin-Say SA........... 321,232
500 Essilor International............ 151,479
4,000 Etablissements Economiques du
Casino Guichard-Perrachon........ 185,891
1,050 Finextel......................... 16,198
6,521 Groupe Danone.................... 906,890
525 Groupe Saint Louis............... 130,474
200 GTM ENTREPOSE SA................. 9,233
5,075 Havas SA......................... 355,336
1,195 Imetal SA........................ 176,075
7,421 Lafarge SA....................... 444,369
5,400 Lagardere SCA.................... 147,913
6,473 L'Air Liquide.................... 1,008,539
2,200 Legrand SA....................... 374,091
6,009 L'OREAL.......................... 2,258,546
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
7,820 LVMH (Moet Hennessy Louis
Vuitton)......................... $ 2,179,602
5,833 Lyonnaise des Eaux SA............ 541,815
9,200 Michelin -- Class B Registered... 495,682
3,050 Moulinex*........................ 70,108
1,350 Nord-Est SA...................... 33,525
498 Pathe SA*........................ 119,741
3,500 Pernod Ricard.................... 193,220
1,748 Pinault-Printemps-Redoute SA..... 691,973
1,300 Primagaz Cie..................... 152,787
1,450 Promodes......................... 408,609
3,962 PSA Peugeot...................... 445,071
29,600 Rhone-Poulenc -- Class A......... 1,007,214
200 Sagem SA......................... 120,414
9,323 Sanofi SA........................ 925,353
10,700 Schneider SA..................... 493,760
2,600 SEFIMEG.......................... 188,046
3,200 SEITA............................ 133,571
1,600 Sidel SA......................... 109,873
918 Simco SA......................... 79,991
2,200 Societe BIC SA................... 329,234
192 Societe Eurafrance SA............ 82,802
8,189 Societe Generale................. 883,682
510 Sodexho SA....................... 283,511
9,425 Thomson CSF...................... 305,118
21,800 Total SA -- Class B.............. 1,769,584
800 Unibail.......................... 79,404
27,600 Union des Assurances de Paris.... 687,513
572 Union Immobiliere de France...... 46,596
19,300 Usinor Sacilor................... 280,289
5,538 Valeo SA......................... 340,883
------------
32,507,626
------------
GERMANY -- 9.8%
4,100 Adidas AG........................ 353,836
2,040 AGIV AG*......................... 29,784
2,060 Allianz AG Holding............... 3,702,658
178 AMB Aachener & Muenchener
Beteiligungs AG, Bearer.......... 115,501
366 AMB Aachener & Muenchener
Beteiligungs AG, Registered...... 261,240
55,480 BASF AG.......................... 2,124,003
64,140 Bayer AG......................... 2,599,130
23,320 Bayerische Hypotheken-und
Weschel-Bank AG.................. 702,123
23,980 Bayerische Vereinsbank AG........ 970,958
7,860 Beiersdorf AG, Series ABC........ 389,147
2,970 Bilfinger & Berger Bau AG........ 110,235
4,870 Continental AG................... 88,008
46,770 Daimler-Benz AG*................. 3,201,743
732 Degussa AG....................... 332,488
45,460 Deutsche Bank AG................. 2,117,973
34,680 Deutsche Lufthansa AG............ 467,618
185,000 Deutsche Telekom AG*............. 3,853,394
1,630 Douglas Holding AG............... 65,576
40,460 Dresdner Bank AG................. 1,207,676
2,480 Fag Kugelfischer Georg Schaefer
AG............................... 33,874
</TABLE>
Continued
29
<PAGE> 32
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
GERMANY (CONTINUED)
3,700 Heidelberger Zement AG........... $ 298,188
4,730 Hochtief AG...................... 185,688
791 Karstadt AG...................... 262,793
3,830 Kloeckner-Humboldt-Deutz AG*..... 18,142
765 Linde AG......................... 464,130
761 MAN AG........................... 183,447
3,280 Mannesmann AG.................... 1,409,385
15,600 Merck KGaA....................... 560,285
8,239 Metro AG*........................ 644,211
726 Muenchener Rueckversicherungs-
Gesellschaft AG.................. 1,759,519
1,331 Preussag AG...................... 300,555
796 PWA Papierwerke Waldhof-
Aschaffenburg AG................. 104,852
30,650 RWE AG........................... 1,280,805
5,500 SAP AG........................... 751,245
6,200 Schering AG...................... 522,598
50,970 Siemens AG....................... 2,362,115
2,834 Thyssen AG....................... 501,845
44,390 VEBA AG.......................... 2,549,148
2,312 Viag AG.......................... 903,882
2,493 Volkswagen AG.................... 1,031,262
------------
38,821,060
------------
HONG KONG -- 1.7%
79,182 Bank of East Asia Ltd............ 352,148
86,000 Cathay Pacific Airways........... 135,643
74,000 Cheung Kong Holdings Ltd......... 657,725
61,400 China Light & Power Co., Ltd..... 273,065
57,800 Hang Seng Bank Ltd............... 702,418
4,600 Hong Kong Aircraft Engineering
Co., Ltd......................... 14,154
320,800 Hong Kong Telecommunications
Ltd.............................. 516,349
139,375 Hong Kong & China Gas Co., Ltd... 269,380
20,000 Hong Kong & Shanghai Hotels
Ltd.............................. 37,750
130,000 Hopewell Holdings Ltd............ 84,034
119,000 Hutchison Whampoa Ltd............ 934,616
34,000 Hysan Development Co., Ltd....... 135,385
26,000 Johnson Electric Holdings Ltd.... 71,933
7,200 Lai Sun Garment International
Ltd.............................. 11,449
11,000 Miramar Hotel & Investment
Ltd.............................. 22,043
59,000 New World Development Co., Ltd... 398,546
595 Regal Hotels International....... 208
32,258 Shun Tak Holdings Ltd............ 21,478
130,000 South China Morning Post Holdings
Ltd.*............................ 107,563
72,100 Sun Hung Kai Properties Ltd...... 883,190
47,000 Swire Pacific Ltd. -- Class A.... 448,126
33,270 Tai Cheung Holdings Ltd.......... 31,399
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
HONG KONG (CONTINUED)
16,000 Television Broadcasts Ltd........ $ 63,917
71,000 Wharf Holdings Ltd............... 354,312
17,496 Wing Lung Bank................... 118,751
------------
6,645,582
------------
ITALY -- 3.5%
81,563 Assicurazioni Generali........... 1,542,214
139,600 Banca Commerciale Italiana....... 253,401
54,694 Banco Ambrosiano Veneto SpA...... 131,294
38,900 Banco Ambrosiano Veneto SpA di
Risp, (Non-convertible).......... 72,658
18,400 Banco Popolare di Milano......... 93,180
15,400 Benetton Group SpA............... 194,361
11,300 Burgo (Cartiere) SpA............. 52,022
1,900 Cementir SpA..................... 1,213
198,000 Credito Italiano SpA............. 216,947
56,000 Edison SpA....................... 353,568
723,800 Ente Nazionale Idrocarburi SpA
(ENI)............................ 3,705,875
249,280 Fiat SpA......................... 752,512
63,400 Fiat SpA di Risp,
(Non-convertible)................ 110,914
7,900 Impregilo SpA*................... 6,131
69,700 Istituto Bancario San Paolo di
Torino........................... 426,314
45,500 Istituto Mobiliare Italiano
SpA.............................. 389,017
303,500 Istituto Nazionale delle
Assicurazioni.................... 394,420
14,350 Italcementi SpA.................. 80,220
900 Italcementi SpA di Risp, (Non-
convertible)..................... 2,199
58,500 Italgas SpA...................... 243,734
14,000 La Rinascente SpA................ 81,026
38,500 Magneti Marelli SpA.............. 47,729
42,075 Mediobanca SpA................... 226,494
11,400 Mondadori (Arnoldo) Editore SpA.. 92,595
348,762 Montedison SpA*.................. 237,172
1,600 Montedison SpA di Risp, (Non-
convertible)*.................... 1,017
300,800 Olivetti Group SpA*.............. 105,839
100,700 Parmalat Finanziaria SpA......... 153,649
129,800 Pirelli SpA...................... 240,307
20,900 Pirelli SpA di Risp, (Non-
convertible)..................... 30,721
29,062 Riunione Adriatica di Sicurta
SpA.............................. 270,455
10,923 Riunione Adriatica di Sicurta SpA
di Risp, (Non-convertible)....... 57,830
9,900 Sasib SpA........................ 30,927
19,400 Sirti SpA........................ 117,382
35,600 Snia BPD SpA..................... 36,759
900 Snia BPD SpA di Risp, (Non-
convertible)..................... 666
10,800 Societa Assicuratrice Industriale
(SAI) SpA........................ 99,441
534,160 Telecom Italia Mobile SpA........ 1,347,257
</TABLE>
Continued
30
<PAGE> 33
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ITALY (CONTINUED)
138,260 Telecom Italia Mobile SpA di
Risp, (Non-convertible).......... $ 196,865
525,260 Telecom Italia SpA............... 1,361,081
138,260 Telecom Italia SpA di Risp, (Non-
convertible)..................... 269,155
------------
14,026,561
------------
JAPAN -- 32.8%
10,000 Acom Co., Ltd.................... 425,605
5,400 Advantest Corp................... 252,623
48,000 Ajinomoto Co., Inc............... 487,981
12,000 Alps Electric Co................. 130,266
27,000 Amada Co., Ltd................... 209,356
22,000 Aoki Corp.*...................... 45,679
5,000 Aoyama Trading Co., Ltd.......... 132,679
3,100 Arabian Oil Co., Ltd.*........... 114,845
176,000 Asahi Bank Ltd................... 1,561,816
32,000 Asahi Breweries Ltd.............. 330,835
109,000 Asahi Chemical Industry Co.,
Ltd.............................. 616,042
88,000 Asahi Glass Co., Ltd............. 826,398
44,000 Ashikaga Bank Ltd................ 211,907
2,000 Autobacs Seven Co., Ltd.......... 141,122
353,200 Bank of Tokyo -- Mitsubishi...... 6,542,431
85,000 Bank of Yokohama Ltd............. 549,237
60,000 Bridgestone Corp................. 1,137,245
14,000 Brother Industries Ltd........... 60,308
64,000 Canon, Inc....................... 1,411,562
19,000 Casio Computer Co., Ltd.......... 146,670
58,000 Chiba Bank Ltd................... 394,762
41,000 Chichibu Onoda Cement Corp....... 174,145
10,000 Chiyoda Corp..................... 64,702
17,000 Chugai Pharmaceutical Co.,
Ltd.............................. 142,069
22,000 Citizen Watch Co., Ltd........... 157,319
51,000 Cosmo Oil Co., Ltd............... 244,740
9,000 Credit Saison Co., Ltd........... 200,827
3,000 CSK Corp......................... 78,573
19,000 Daicel Chemical Industries
Ltd.............................. 88,886
42,000 Daido Steel Co., Ltd............. 155,596
53,000 Daiei, Inc....................... 404,110
5,000 Daifuku Co., Ltd................. 62,893
19,000 Daiichi Pharmaceutical Co........ 304,471
18,000 Daikin Industries Ltd............ 159,731
14,000 Daimaru, Inc..................... 74,662
56,000 Dainippon Ink & Chemicals,
Inc.............................. 206,979
56,000 Dainippon Printing Co., Ltd...... 979,409
8,000 Dainippon Screen Manufacturing
Co., Ltd......................... 58,930
7,000 Daito Trust Construction Co.,
Ltd.............................. 77,798
38,000 Daiwa House Industry Co., Ltd.... 487,809
7,000 Daiwa Kosho Lease Co., Ltd....... 53,674
101,000 Daiwa Securities Co., Ltd........ 896,269
27,000 Denki Kagaku Kogyo KK............ 66,296
65,000 Denso Corp....................... 1,562,419
20,000 Ebara Corp....................... 260,188
19,650 Eisai Co., Ltd................... 385,991
17,100 Fanuc Co., Ltd................... 546,575
219,000 Fuji Bank........................ 3,188,679
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
38,000 Fuji Photo Film Co., Ltd......... $ 1,250,625
24,000 Fujikura Ltd..................... 191,884
25,000 Fujita Corp...................... 71,724
8,000 Fujita Kanko, Inc................ 148,186
139,000 Fujitsu Ltd...................... 1,293,357
46,000 Furukawa Electric Co............. 217,576
38,000 Gunma Bank....................... 330,663
12,000 Gunze Ltd........................ 62,135
61,000 Hankyu Corp...................... 302,188
13,000 Hankyu Department Stores......... 128,802
32,000 Haseko Corp.*.................... 85,466
13,000 Higo Bank........................ 86,577
2,000 Hirose Electric.................. 115,620
252,000 Hitachi Ltd...................... 2,344,792
71,000 Hitachi Zosen Corp............... 275,265
49,000 Hokuriku Bank.................... 239,786
73,000 Honda Motor Co., Ltd............. 2,081,761
5,000 House Foods Industry............. 80,555
8,000 Hoya Corp........................ 313,604
17,000 Inax............................. 125,665
192,000 Industrial Bank of Japan......... 3,324,890
15,000 Isetan Co........................ 193,849
107,000 Itochu Corp...................... 573,395
12,000 Itoham Foods..................... 74,231
31,000 ITO-Yokado Co., Ltd.............. 1,346,084
134,000 Japan Airlines*.................. 710,002
78,000 Japan Energy Corp................ 211,683
9,000 JGC Corp......................... 67,382
66,200 Joyo Bank........................ 398,101
23,000 JUSCO Co......................... 778,754
72,000 Kajima Corp...................... 513,621
13,000 Kamigumi Co., Ltd................ 85,121
9,000 Kandenko Co., Ltd................ 85,293
26,000 Kanebo Ltd.*..................... 53,537
18,000 Kaneka Corp...................... 91,962
72,900 Kansai Electric Power Co, Inc.... 1,507,366
45,000 Kao Corp......................... 523,391
104,000 Kawasaki Heavy Industries........ 429,189
30,000 Kawasaki Kisen Kaisha Ltd.*...... 68,235
246,000 Kawasaki Steel Corp.............. 705,764
36,000 Keihin Electric Express
Railway.......................... 164,694
10,000 Kikkoman......................... 59,016
19,000 Kinden Corp...................... 240,631
122,000 Kinki Nippon Railway............. 759,938
79,000 Kirin Brewery Co., Ltd........... 775,911
3,000 Kissei Pharmaceutical Co......... 59,447
9,000 Kokuyo Co., Ltd.................. 221,763
74,000 Komatsu Ltd...................... 605,669
4,000 Komori Corp...................... 84,776
25,000 Konica Corp...................... 165,417
10,000 Koyo Seiko Co., Ltd.............. 82,709
106,000 Kubota Corp...................... 510,502
35,000 Kumagai Gumi Co., Ltd............ 86,543
24,000 Kuraray Co., Ltd................. 221,246
9,000 Kurita Water Industries.......... 181,442
13,000 Kyocera Corp..................... 808,650
31,000 Kyowa Hakko Kogyo Co., Ltd....... 236,099
</TABLE>
Continued
31
<PAGE> 34
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
15,000 Lion Corp........................ $ 74,309
5,000 Maeda Road Construction.......... 57,724
11,000 Makita Corp...................... 153,528
113,000 Marubeni Corp.................... 484,828
27,000 Marui Co., Ltd................... 486,172
159,000 Matsushita Electric Industrial
Co., Ltd......................... 2,589,041
15,000 Meiji Milk Products Co., Ltd..... 76,247
27,000 Meiji Seika...................... 139,804
31,000 Minebea Co., Ltd................. 258,534
165,000 Mitsubishi Chemical Corp......... 533,083
118,000 Mitsubishi Corp.................. 1,219,953
162,000 Mitsubishi Electric Corp......... 963,039
98,000 Mitsubishi Estate Co., Ltd....... 1,004,738
35,000 Mitsubishi Gas Chemical Co....... 125,743
255,000 Mitsubishi Heavy Industries
Ltd.............................. 2,021,194
12,000 Mitsubishi Logistics Corp........ 155,079
85,000 Mitsubishi Material Corp......... 342,724
32,000 Mitsubishi Oil Co., Ltd.......... 191,057
17,000 Mitsubishi Paper Mills........... 66,348
44,000 Mitsubishi Rayon Co., Ltd........ 162,626
98,000 Mitsubishi Trust & Banking Co.... 1,308,693
53,000 Mitsui Engineering & Shipbuilding
Co., Ltd.*....................... 107,762
61,000 Mitsui Fudosan................... 609,632
51,000 Mitsui Marine & Fire Insurance
Co., Ltd......................... 273,740
26,000 Mitsui Mining & Smelting......... 88,481
79,000 Mitsui OSK Lines, Ltd.*.......... 188,533
55,000 Mitsui Toatsu Chemicals.......... 167,270
90,000 Mitsui Trust & Banking Co........ 701,732
117,000 Mitsui & Co...................... 947,532
34,000 Mitsukoshi Ltd................... 240,786
5,000 Mori Seiki....................... 68,924
17,000 Murata Manufacturing Co., Ltd.... 563,884
20,000 Mycal Corp....................... 289,480
1,000 Nagase & Co...................... 8,279
57,000 Nagoya Railroad Co............... 218,532
35,000 Nankai Electric Railway.......... 188,464
117,000 NEC Corp......................... 1,411,217
77,000 New Oji Paper Co................. 486,267
24,000 NGK Insulators Ltd............... 227,449
15,000 NGK Spark Plug Co................ 164,125
32,000 Nichido Fire & Marine Insurance
Co., Ltd......................... 181,959
16,000 Nichirei Corp.................... 77,608
17,000 Nihon Cement Co., Ltd............ 86,560
26,000 Nikon Corp....................... 322,564
6,000 Nippon Comsys Co................. 68,235
81,000 Nippon Express Co., Ltd.......... 554,097
40,000 Nippon Fire & Marine Insurance... 180,925
38,000 Nippon Light Metal Co............ 155,837
16,000 Nippon Meat Packers, Inc......... 206,772
92,000 Nippon Oil Co., Ltd.............. 471,612
71,000 Nippon Paper Industries Co....... 330,318
1,000 Nippon Sharyo Ltd................ 7,151
22,000 Nippon Sheet Glass Co., Ltd...... 77,901
VALUE
SHARES (NOTE 2)
- ---------- ------------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
17,000 Nippon Shinpan Co................ $ 95,201
10,000 Nippon Shokubai KK Co............ 74,093
523,000 Nippon Steel Co.................. 1,541,018
88,000 Nippon Yusen Kabushiki Kaisha.... 397,277
19,000 Nishimatsu Construction.......... 165,331
190,000 Nissan Motor Co., Ltd............ 1,100,026
16,000 Nisshinbo Industries............. 124,339
9,000 Nissin Food Products............. 191,522
10,000 Nitto Denko Corp................. 146,463
267,000 NKK Corp.*....................... 600,388
148,000 Nomura Securities Co., Ltd....... 2,218,661
8,000 Noritake Co., Ltd................ 66,580
40,000 NSK Ltd.......................... 241,923
33,000 NTN Corp......................... 179,116
56,000 Obayashi Corp.................... 377,289
52,000 Odakyu Electric Railway.......... 311,364
7,000 Okuma Corp.*..................... 55,725
13,000 Okumura Corp..................... 78,849
18,000 Olympus Optical Co., Ltd......... 170,587
19,000 Omron Corp....................... 356,854
12,000 Onward Kashiyama Co., Ltd........ 168,519
24,000 Orient Corp...................... 128,819
4,000 Orix Corp........................ 166,107
191,000 Osaka Gas Co..................... 521,642
1,100 Oyo Corp......................... 47,670
18,000 Penta-Ocean Construction Co.,
Ltd.............................. 80,021
12,000 Pioneer Electronic Corp.......... 228,483
8,000 QP Corp.......................... 64,789
8,000 Rohm Co.......................... 523,822
259,000 Sakura Bank Ltd.................. 1,847,609
13,000 Sankyo Aluminum Industry Co...... 51,073
33,000 Sankyo Co., Ltd.................. 932,541
12,000 Sanwa Shutter Corp............... 89,429
147,000 Sanyo Electric Co................ 607,909
24,000 Sapporo Breweries................ 198,501
13,000 Sato Kogyo....................... 45,248
8,000 Secom............................ 483,157
6,700 Sega Enterprises................. 225,123
8,000 Seino Transportation............. 88,223
15,000 Seiyu Ltd........................ 147,325
41,000 Sekisui Chemical Co.............. 413,285
53,000 Sekisui House Ltd................ 538,813
27,000 77 Bank.......................... 220,987
85,000 Sharp Corp....................... 1,208,323
2,000 Shimachu......................... 51,176
10,000 Shimano, Inc..................... 169,725
59,000 Shimizu Corp..................... 439,692
25,000 Shin-Etsu Chemical Co............ 454,467
25,000 Shionogi & Co.................... 178,125
29,000 Shiseido Co., Ltd................ 334,798
60,000 Shizuoka Bank.................... 635,823
74,000 Showa Denko KK*.................. 169,587
5,000 Skylark Co., Ltd................. 76,247
4,000 SMC Corp......................... 268,459
23,000 Snow Brand Milk Products......... 129,792
27,200 Sony Corp........................ 1,778,651
238,000 Sumitomo Bank.................... 3,424,313
</TABLE>
Continued
32
<PAGE> 35
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
122,000 Sumitomo Chemical Co............. $ 482,450
80,000 Sumitomo Corp.................... 629,275
53,000 Sumitomo Electric Industries..... 739,726
12,000 Sumitomo Forestry Co............. 145,774
63,000 Sumitomo Heavy Industries,
Ltd.*............................ 191,057
50,000 Sumitomo Marine & Fire
Insurance........................ 310,158
238,000 Sumitomo Metal Industries........ 584,389
40,000 Sumitomo Metal Mining Co......... 269,148
23,000 Sumitomo Osaka Cement Co., Ltd... 75,894
76,000 Taisei Corp...................... 392,866
25,000 Taisho Pharmaceutical Co......... 588,007
11,000 Takara Shuzo Co., Ltd............ 77,238
7,000 Takara Standard.................. 58,198
21,000 Takashimaya Co................... 251,486
66,000 Takeda Chemical Industries....... 1,381,752
69,000 Teijin Ltd....................... 300,801
14,000 Teikoko Oil Ltd.................. 75,868
64,000 Tobu Railway Co., Ltd............ 312,639
700 Toho Co.......................... 101,318
37,500 Tohoku Electric Power............ 743,086
153,000 Tokai Bank....................... 1,594,986
117,000 Tokio Marine & Fire Insurance
Co............................... 1,098,733
12,000 Tokyo Broadcasting System........ 182,993
11,000 Tokyo Dome Corp.................. 191,436
102,000 Tokyo Electric Power............. 2,232,101
10,000 Tokyo Electron Ltd............... 305,850
213,000 Tokyo Gas Co., Ltd............... 576,221
11,000 Tokyo Steel Manufacturing........ 156,371
5,000 Tokyo Style Co................... 69,785
22,000 Tokyotokeiba..................... 71,078
82,000 Tokyu Corp....................... 464,857
52,000 Toppan Printing Co., Ltd......... 649,608
106,000 Toray Industries, Inc............ 652,968
42,000 Tosoh Corp.*..................... 143,655
16,000 Tostem Corp...................... 441,113
24,000 Toto Ltd......................... 272,939
14,000 Toyo Seikan Kaisha............... 336,521
49,000 Toyobo Ltd....................... 146,911
20,000 Toyoda Automatic Loom Works...... 373,912
286,000 Toyota Motor Corp................ 8,205,221
59,000 Ube Industries Ltd............... 166,727
3,000 Uni-Charm........................ 73,404
25,000 Unitika Ltd.*.................... 53,847
13,000 Uny Co., Ltd..................... 237,443
8,000 Wacoal Corp...................... 88,223
14,000 Yamaguchi Bank................... 205,049
13,000 Yamaha Corp...................... 220,643
91,000 Yamaichi Securities Co., Ltd..... 403,765
24,000 Yamanouchi Pharmaceutical Co.,
Ltd.............................. 492,117
26,000 Yamato Transport Co., Ltd........ 268,803
VALUE
SHARES (NOTE 2)
- ---------- ------------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
15,000 Yamazaki Baking Co............... $ 239,080
83,000 Yasuda Trust & Banking........... 351,107
18,000 Yokogawa Electric Corp........... 155,079
------------
130,118,290
------------
MALAYSIA -- 1.0%
16,000 AMMB Holdings Berhad............. 134,310
180,000 Amsteel Corp. Berhad............. 133,993
130,000 Golden Hope Plantations Berhad... 221,342
22,500 Highlands & Lowlands Berhad...... 37,597
63,000 Kuala Lumpur Kepong Berhad....... 159,651
45,500 Malayan Banking Berhad........... 504,453
92,400 Malaysia Mining Corp. Berhad..... 106,833
58,000 Multi-Purpose Holdings Berhad.... 112,532
13,500 Perlis Plantations Berhad........ 41,962
22,000 Perusahaan Otomobil Nasional
Berhad........................... 139,378
44,000 Resorts World Berhad............. 200,356
10,300 Rothmans of Pall Mall (Malaysia)
Berhad........................... 108,077
51,000 Selangor Properties Berhad....... 55,937
11,500 Shell Refining Co. (Malaysia)
Berhad........................... 33,696
93,040 Sime Darby Berhad................ 366,559
80,000 Telekom Malaysia Berhad.......... 712,729
123,000 Tenega Nasional Berhad........... 589,308
32,326 United Engineers (Malaysia)
Berhad........................... 291,836
7,000 YTL Corp. Berhad................. 37,695
------------
3,988,244
------------
NETHERLANDS -- 3.3%
15,871 ABN Amro Holding NV.............. 1,031,313
4,383 Akzo Nobel NV.................... 598,003
1,880 Assurantieconcern Stad Rotterdam
anno 1720 NV..................... 74,229
38,430 Elsevier NV...................... 648,744
2,936 Getronics NV..................... 79,606
2,670 Heineken NV...................... 472,029
1,920 IHC Caland NV.................... 109,557
34,677 ING Groep NV..................... 1,246,958
3,862 KLM Royal Dutch Air Lines NV..... 108,510
6,349 Koninklijke Ahold N.V............ 396,414
5,120 Koninklijke KNP BT NV............ 111,591
1,262 Koninklijke Nederlandsche
Hoogovens en Staalfabrieken NV... 52,531
1,100 Koninklijke Pakhoed NV........... 34,340
22,761 Koninklijke Royal PTT Nederland
NV............................... 867,155
968 Oce-Van Der Grinten NV........... 104,985
16,840 Philips Electronics NV........... 681,491
25,847 Royal Dutch Petroleum Co......... 4,526,154
</TABLE>
Continued
33
<PAGE> 36
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
NETHERLANDS (CONTINUED)
249 Stork NV......................... $ 8,767
7,731 Unilever NV CVA.................. 1,365,869
3,179 Wolters Kluwer NV CVA............ 421,787
------------
12,940,033
------------
NEW ZEALAND -- 0.2%
109,100 Brierley Investments Ltd......... 100,979
48,581 Carter Holt Harvey Ltd........... 110,181
400 Ceramco Corp., Ltd............... 382
5,100 Fisher & Paykel Industries
Ltd.............................. 19,998
14,111 Fletcher Challenge Building...... 43,369
14,111 Fletcher Challenge Energy........ 40,877
15,481 Fletcher Challenge Forests....... 25,923
28,222 Fletcher Challenge Paper......... 58,025
8,200 Lion Nathan Ltd.................. 19,640
56,765 Telecom Corp. of New Zealand
Ltd.............................. 289,569
------------
708,943
------------
NORWAY -- 1.7%
10,500 Aker ASA, Series A............... 233,502
14,100 Bergesen d.y. ASA -- Class A..... 344,475
1,400 Bergesen d.y. ASA -- Class B..... 33,326
61,300 Christiania Bank Og
Kreditkasse...................... 193,921
1,000 Dyno Industrier ASA.............. 25,370
15,650 Hafslund ASA, Series A........... 115,193
10,326 Hafslund ASA, Series B........... 70,669
8,950 Kvaerner ASA, Series A........... 435,209
2,200 Leif Hoegh & Co. ASA............. 46,512
60,850 Norsk Hydro ASA.................. 3,287,706
3,200 Norske Skogindustrier ASA --
Class A.......................... 106,744
16,050 Nycomed ASA, Series A*........... 245,072
10,326 Nycomed ASA, Series B*........... 158,479
10,500 Orkla ASA, Series A.............. 731,750
8,300 Petroleum Geo-Services ASA*...... 323,661
73,500 Storebrand ASA*.................. 425,895
1,200 Unitor ASA....................... 15,410
------------
6,792,894
------------
SINGAPORE -- 1.0%
53,600 City Developments Ltd............ 482,807
11,000 DBS Land Ltd..................... 40,499
12,750 Development Bank of Singapore
Ltd.............................. 172,270
12,000 Fraser & Neave Ltd............... 123,533
29,600 Haw Par Brothers International
Ltd.............................. 67,291
11,000 Inchcape Berhad.................. 38,218
2,000 Jurong Shipyard Ltd.............. 10,080
6,000 Keppel Corp., Ltd................ 46,754
60,750 NatSteel Ltd..................... 138,106
59,000 Neptune Orient Lines Ltd......... 51,036
26,582 Oversea-Chinese Banking Corp.,
Ltd.............................. 330,655
1,000 Overseas Union Enterprise Ltd.... 5,004
1,100 Shangri-La Hotel Ltd............. 3,759
91,000 Singapore Airlines Ltd........... 826,197
6,000 Singapore Press Holdings Ltd..... 56,190
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SINGAPORE (CONTINUED)
10,320 Singapore Press Holdings Ltd.
(Foreign)........................ $ 203,623
471,000 Singapore Telecommunications
Ltd.............................. 1,111,152
7,000 Straits Trading Co., Ltd......... 17,014
8,000 United Industrial Corp., Ltd..... 6,749
7,350 United Overseas Bank Ltd......... 81,969
52,000 United Overseas Land Ltd......... 79,181
------------
3,892,087
------------
SPAIN -- 2.2%
300 Acerinox SA...................... 43,267
7,927 Autopistas Concesionaria
Espanola SA...................... 109,086
17,547 Banco Bilbao Vizcaya SA.......... 945,642
9,271 Banco Central
Hispanoamericano SA.............. 237,700
12,432 Banco Santander SA............... 794,233
9,500 Corporacion Bancaria de Espana
SA............................... 424,332
675 Corporacion Financiera Alba...... 68,084
800 Corporacion Mapfre............... 48,649
3,400 Dragados & Construcciones SA..... 52,278
400 Ebro Agricolas, Compania de
Alimentacion SA.................. 7,027
1,650 El Aguila SA*.................... 7,903
100 Empresa Nacional de Celulosas
SA............................... 1,195
20,570 Empresa Nacional de
Electricidad SA.................. 1,461,209
700 Ercros SA*....................... 431
752 Fomento de Construcciones y
Contratas SA..................... 69,953
2,856 Gas Natural SDG SA............... 663,088
73,724 Iberdrola SA..................... 1,042,876
236 Inmobiliaria Metropolitana Vasco
Central SA....................... 8,663
200 Inmobiliaria Urbis SA*........... 800
820 Portland Valderrivas SA.......... 55,097
500 Prosegur, CIA de Seguridad SA.... 4,613
23,798 Repsol SA........................ 911,121
2,498 Sarrio SA........................ 8,219
1,106 Tabacalera SA, Series A.......... 47,531
74,575 Telefonica de Espana............. 1,728,569
9,566 Union Electrica Fenosa SA........ 102,591
5,400 Uralita SA....................... 42,137
2,361 Vallehermoso SA.................. 51,095
1,221 Viscofan Industria Navarra de
Envolturas Celulosicas SA........ 17,835
------------
8,955,224
------------
SWEDEN -- 1.6%
3,900 ABB AB, Series A................. 439,805
2,850 ABB AB, Series B................. 322,231
28,650 Astra AB, Series A............... 1,414,033
5,000 Astra AB, Series B............... 240,919
8,250 Atlas Copco AB, Series A......... 199,362
500 Atlas Copco AB, Series B......... 12,156
3,700 Electrolux AB, Series B.......... 214,586
300 Esselte AB, Series B............. 6,634
</TABLE>
Continued
34
<PAGE> 37
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SWEDEN (CONTINUED)
4,400 Scancem AB -- Class A............ $ 161,101
12,000 Skandia Forsakrings AB........... 339,190
100 Skanska AB, Series B............. 4,416
9,300 SKF AB, Series A................. 213,158
10,100 SKF AB, Series B................. 238,890
14,500 Stora Kopparbergs Bergslags
Aktiebolag, Series A............. 199,619
3,250 Stora Kopparbergs Bergslags
Aktiebolag, Series B............. 44,266
3,800 Svenska Cellusoa AB, Series B.... 77,079
6,300 Svenska Handlesbanken -- Class
B................................ 173,462
54,600 Telefonaktiebolaget LM Ericsson,
Series B......................... 1,687,252
7,960 Trelleborg AB, Series B.......... 105,503
19,000 Volvo AB, Series B............... 418,789
------------
6,512,451
------------
SWITZERLAND -- 4.5%
450 ABB AG, Bearer Shares............ 558,009
390 Adecco SA........................ 97,546
643 Adecco SA -- SICO................ 160,825
40 Alusuisse-Lonza Holding AG,
Bearer........................... 31,191
225 Alusuisse-Lonza Holding AG,
Registered....................... 178,797
11,220 CS Holding AG, Registered........ 1,148,973
5 Danzas Holding AG, Participating
Certificates..................... 1,043
30 Fischer (Georg) AG, Bearer....... 31,056
65 Grands Magasins Jelmoli SA,
Bearer*.......................... 35,823
325 Grands Magasins Jelmoli SA,
Registered*...................... 34,371
436 Holderbank Financiere Glarus
AG............................... 310,426
2,360 Nestle SA, Registered............ 2,525,707
461 Novartis AG, Bearer*............. 526,180
3,709 Novartis AG, Registered*......... 4,234,295
420 Roche Holding AG................. 3,257,788
82 Roche Holding AG, Bearer......... 922,157
15 Schindler Holding AG,
Participating Certificates....... 16,254
1,167 Schweizerische
Bankgesellschaft -- Class B...... 1,019,490
715 Schweizerische
Rueckversicherungs-Gesellschaft,
Registered....................... 760,944
4,380 Schweizerische Bankverein,
Registered....................... 830,187
81 SGS Societe Generale de
Surveillance Holding SA.......... 198,470
25 Sulzer AG, Participating
Certificates..................... 13,331
157 Sulzer AG, Registered............ 90,384
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SWITZERLAND (CONTINUED)
220 Swissair AG, Registered*......... $ 177,446
260 Valora Holding AG................ 49,571
2,350 Zurich Versicherungsgesellschaft,
Registered....................... 651,066
------------
17,861,330
------------
UNITED KINGDOM -- 17.2%
91,937 Abbey National PLC............... 1,203,588
10,902 AMEC PLC......................... 17,257
1,100 Amstrad PLC...................... 2,758
17,957 Anglian Water PLC................ 181,306
12,736 Argos PLC........................ 167,496
43,404 Arjo Wiggins Appleton PLC........ 132,956
57,800 Associated British Foods PLC..... 479,234
100,206 Barclays PLC..................... 1,715,683
171 Barratt Developments PLC......... 739
67,527 Bass PLC......................... 948,739
202,501 B.A.T. Industries PLC............ 1,678,986
19,014 BBA Group PLC.................... 115,187
24,878 BICC Group PLC................... 117,929
25,870 Blue Circle Industries PLC....... 157,163
30,948 BOC Group PLC.................... 462,617
58,068 Boots Co., PLC................... 598,715
24,797 Bowthorpe PLC.................... 191,807
37,736 BPB PLC.......................... 247,655
27,566 British Aerospace PLC............ 603,823
61,802 British Airways PLC.............. 640,388
287,216 British Gas PLC.................. 1,103,446
28,409 British Land Co., PLC............ 251,346
368,321 British Petroleum Co., PLC....... 4,415,306
112,200 British Sky Broadcasting Group
PLC.............................. 1,002,281
94,916 British Steel PLC................ 260,700
411,966 British Telecommunications PLC... 2,781,215
261,939 BTR PLC.......................... 1,273,048
171 Burmah Castrol PLC............... 3,222
160,216 Cable & Wireless PLC............. 1,331,133
63,796 Cadbury Schweppes PLC............ 537,683
13,652 Calor Group PLC.................. 69,270
63,237 Caradon PLC...................... 258,640
43,042 Carlton Communications PLC....... 378,969
31,787 Chubb Security PLC............... 177,607
35,426 Coats Viyella PLC................ 80,631
800 Cobham PLC....................... 8,385
43,173 Commercial Union PLC............. 504,983
21,004 Courtaulds PLC................... 141,440
3,534 Courtaulds Textiles PLC.......... 13,668
4,808 De La Rue PLC.................... 47,105
6,722 Delta PLC........................ 44,000
9,988 East Midlands Electricity PLC.... 113,750
32,398 Electrocomponents PLC............ 256,145
27,619 EMI Group PLC.................... 652,249
23,334 English China Clays PLC.......... 76,868
21,296 FKI PLC.......................... 73,617
185,160 General Electric Co., PLC........ 1,210,422
15,117 GKN PLC.......................... 258,956
229,738 Glaxo Wellcome PLC............... 3,727,069
59,878 Granada Group PLC................ 882,773
</TABLE>
Continued
35
<PAGE> 38
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
137,200 Grand Metropolitan PLC........... $ 1,077,688
2,100 Great Portland Estates PLC....... 7,493
68,616 Great Universal Stores PLC....... 718,626
142 Guardian Royal Exchange PLC...... 679
126,161 Guinness PLC..................... 987,740
34,821 Hammerson PLC.................... 239,847
333,519 Hanson PLC....................... 465,162
15,900 Harrisons & Crosfield PLC........ 36,325
27,842 Hepworth PLC..................... 120,783
56,381 HSBC Holdings PLC................ 1,260,092
117,250 HSBC Holdings PLC................ 2,552,267
18,984 IMI PLC.......................... 121,990
51,551 Imperial Chemical Industries
PLC.............................. 677,965
1,400 Imperial Tobacco Group PLC*...... 9,032
10,804 Johnson Matthey PLC.............. 101,689
43,079 Kingfisher PLC................... 465,549
42,863 Ladbroke Group PLC............... 169,442
3,446 Laird Group PLC.................. 23,471
34,945 Land Securities PLC.............. 444,922
40,782 LASMO PLC........................ 166,101
80,107 Legal & General Group PLC........ 510,650
3,101 Lex Service PLC.................. 16,875
338,618 Lloyds TSB Group PLC............. 2,494,649
6,952 London Electricity PLC........... 80,959
40,060 Lonrho PLC....................... 85,351
35,924 LucasVarity PLC*................. 137,093
184,526 Marks & Spencer PLC.............. 1,550,477
8,306 Marley PLC....................... 17,981
13,249 MEPC PLC......................... 98,174
13,726 Mercury Asset Management Group
PLC.............................. 292,089
9,189 Meyer International PLC.......... 56,846
40,669 National Grid Group PLC.......... 136,062
73,066 National Power PLC............... 611,435
11,226 Next PLC......................... 109,023
5,532 Northern Electric PLC............ 61,488
13,207 Ocean Group PLC.................. 109,729
36,473 Pearson PLC...................... 467,810
29,178 Peninsular & Oriental Steam
Navigation Co.................... 294,601
30,100 Pilkington PLC................... 80,613
19,582 Provident Financial PLC.......... 168,391
125,304 Prudential Corp., PLC............ 1,053,937
16,186 Racal Electronic PLC............. 71,325
50,900 Rank Group PLC................... 381,521
17,647 Redland PLC...................... 110,680
36,298 Reed International PLC........... 684,216
110,855 Reuters Holdings PLC............. 1,425,642
24,358 Rexam PLC........................ 150,270
6,254 RMC Group PLC.................... 106,757
77,521 Rolls-Royce PLC.................. 341,604
51,737 Royal Bank of Scotland Group
PLC.............................. 498,909
97,720 Royal & Sun Alliance Insurance
Group PLC........................ 743,330
69,900 RTZ Corp., PLC, Registered....... 1,120,240
VALUE
SHARES (NOTE 2)
- ---------- ------------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
77,228 Rugby Group PLC.................. $ 125,552
69,423 Safeway PLC...................... 479,967
120,023 Sainsbury (J) PLC................ 796,934
11,679 Schroders PLC.................... 302,792
74,183 Scottish Power PLC............... 446,862
39,461 Scottish & Newcastle PLC......... 463,591
83,403 Sears PLC........................ 135,591
16,318 Sedgwick Group PLC............... 36,721
23,972 Slough Estates PLC............... 114,250
180,196 SmithKline Beecham PLC........... 2,496,251
12,464 Smiths Industries PLC............ 170,850
13,330 Southern Electric PLC............ 181,581
25,910 St. James's Place Capital PLC.... 43,675
39,582 T & N PLC........................ 117,523
51,452 Tarmac PLC....................... 86,289
23,280 Tate & Lyle PLC.................. 188,837
55,683 Taylor Woodrow PLC............... 146,747
142,679 Tesco PLC........................ 865,571
17,099 Thames Water PLC................. 179,227
26,219 Thorn PLC*....................... 112,844
30,233 TI Group PLC..................... 301,114
23,478 Transport Development Group PLC.. 75,735
9,334 Unigate PLC...................... 66,369
53,287 Unilever PLC..................... 1,291,707
32,669 United Biscuits (Holdings) PLC... 117,404
20,014 United Utilities PLC............. 212,692
11,415 Vickers PLC...................... 49,813
200,168 Vodafone Group PLC............... 844,380
23,173 Williams Holdings PLC............ 136,218
28,271 Willis Corroon Group PLC......... 67,974
31,929 Wilson Connolly Holdings PLC..... 90,429
30,094 Wimpey (George) PLC.............. 65,147
29,792 Wolseley PLC..................... 235,542
61,869 Zeneca Group PLC................. 1,744,314
------------
68,106,036
------------
TOTAL COMMON STOCKS.............. 381,648,139
------------
(cost $319,395,879)
PREFERRED STOCKS -- 0.5%
AUSTRALIA -- 0.1%
61,727 News Corp., Ltd., Limited Voting
Shares........................... 274,551
------------
AUSTRIA -- 0.1%
100 Bank Austria AG.................. 3,875
4,833 Creditanstalt-Bankverein......... 222,934
------------
226,809
------------
GERMANY -- 0.3%
168 MAN AG, Non-Voting............... 33,772
19,640 RWE AG........................... 656,320
3,800 Sap AG, Non-Voting............... 522,247
527 Volkswagen AG.................... 167,903
------------
1,380,242
------------
</TABLE>
Continued
36
<PAGE> 39
THE KENT INTERNATIONAL GROWTH FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
PREFERRED STOCKS (CONTINUED)
ITALY -- 0.0%
82,200 Fiat SpA......................... $ 135,423
------------
TOTAL PREFERRED STOCKS........... 2,017,025
------------
(cost $1,842,163)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------
<S> <C> <C>
COMMERCIAL PAPER -- 3.2%
UNITED STATES -- 3.2%
$12,598,436 Ford Motor Credit Co., 6.00%,
1/2/97......................... 12,598,436
------------
TOTAL COMMERCIAL PAPER......... 12,598,436
------------
(cost $12,598,436)
TOTAL INVESTMENTS -- 99.9%................... 396,263,600
(cost $333,836,478)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1%........................ 334,265
------------
NET ASSETS -- 100.00%........................ $396,597,865
=============
</TABLE>
- ---------------
Percentages indicated are based on net assets of $396,597,865.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $189,000. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $ 80,570,288
Unrealized depreciation............... (18,332,166)
------------
Net unrealized appreciation........... $ 62,238,122
============
</TABLE>
*Non-income producing security.
At December 31, 1996, the International Growth Fund's open forward foreign
currency exchange contracts were as follows:
<TABLE>
<CAPTION>
DELIVERY CONTRACT CONTRACT CONTRACT MARKET UNREALIZED
CURRENCY DATE PRICE** AMOUNT** VALUE VALUE APPRECIATION
- ------------------------------- ------------- ---------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Long Contracts:
Italian Lira................. 1/2/97 1,527.63 1,064,588,491 $ 696,889 $ 700,157 $3,268
Malaysian Ringgit............ 1/2/97 2.5258 1,343,370 531,859 531,921 62
---------- ---------- ------
Total Long Contracts......... $1,228,748 $1,232,078 $3,330
========== ========== ======
</TABLE>
** Contract price is in local currency.
Continued
37
<PAGE> 40
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS -- 97.5%
ADVERTISING -- 0.1%
3,600 Interpublic Group of Companies,
Inc.............................. $ 171,000
------------
AEROSPACE/DEFENSE EQUIPMENT -- 0.2%
10,400 Raytheon Co...................... 500,500
------------
AEROSPACE & DEFENSE -- 1.3%
15,386 Boeing Co........................ 1,636,686
2,800 General Dynamics Corp............ 197,400
8,494 Lockheed Martin Corp............. 777,201
9,300 McDonnell Douglas Corp........... 595,200
2,500 Northrop Grumman Corp............ 206,875
------------
3,413,362
------------
AGRICULTURAL OPERATIONS -- 0.1%
3,600 Pioneer Hi-Bred International,
Inc.............................. 252,000
------------
APPLIANCES -- HOUSEHOLD -- 0.1%
4,600 Maytag Corp...................... 90,850
3,300 Whirlpool Corp................... 153,862
------------
244,712
------------
AUTOMOTIVE -- DOMESTIC -- 1.8%
32,038 Chrysler Corp.................... 1,057,254
52,100 Ford Motor Co.................... 1,660,687
33,200 General Motors Corp.............. 1,850,900
------------
4,568,841
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.3%
4,500 Dana Corp........................ 146,812
3,400 Eaton Corp....................... 237,150
3,220 Navistar International Corp.*.... 29,383
1,725 PACCAR, Inc...................... 117,300
5,600 TRW, Inc......................... 277,200
------------
807,845
------------
AUTO/TRUCK -- REPLACEMENT -- 0.1%
2,700 Echlin, Inc...................... 85,387
5,250 Genuine Parts Co................. 233,625
------------
319,012
------------
BANKS -- MAJOR REGIONAL -- 4.9%
18,744 Banc One Corp.................... 805,992
6,700 Bank of Boston Corp.............. 430,475
17,200 Bank of New York Co., Inc........ 580,500
8,600 Barnett Banks, Inc............... 353,675
6,800 Boatmen's Bancshares, Inc........ 438,600
4,900 Comerica, Inc.................... 256,637
9,800 Corestates Financial Corp........ 508,375
5,900 First Bank System, Inc........... 402,675
14,053 First Chicago NBD Corp........... 755,349
12,425 First Union Corp................. 919,450
11,507 Fleet Financial Group, Inc....... 573,912
9,900 KeyCorp.......................... 499,950
5,650 Mellon Bank Corp................. 401,150
9,700 National City Corp............... 435,287
12,657 NationsBank Corp................. 1,237,222
16,300 Norwest Corp..................... 709,050
15,000 PNC Bank Corp.................... 564,375
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BANKS -- MAJOR REGIONAL (CONTINUED)
2,400 Republic New York Corp........... $ 195,900
9,800 SunTrust Banks, Inc.............. 482,650
6,600 U.S. Bancorp..................... 296,588
7,300 Wachovia Corp.................... 412,450
4,100 Wells Fargo & Co................. 1,105,975
------------
12,366,237
------------
BANKS -- MIDWEST -- 0.1%
4,700 Fifth Third Bancorp.............. 295,219
------------
BANKS -- MONEY CENTER -- 2.6%
15,724 BankAmerica Corp................. 1,568,469
3,600 Bankers Trust New York Corp...... 310,500
19,258 Chase Manhattan Corp............. 1,718,776
20,700 Citicorp......................... 2,132,100
8,200 J.P. Morgan & Co................. 800,525
------------
6,530,370
------------
BEVERAGES -- ALCOHOLIC -- 0.7%
1,700 Adolph Coors Co., Class B........ 32,300
21,970 Anheuser-Busch Cos., Inc......... 878,800
3,000 Brown-Forman Corp., Class B...... 137,250
16,400 Seagram Co., Ltd................. 635,500
------------
1,683,850
------------
BEVERAGES -- SOFT DRINKS -- 3.1%
109,300 Coca-Cola Co..................... 5,751,912
68,300 PepsiCo, Inc..................... 1,997,775
------------
7,749,687
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.5%
21,121 Home Depot, Inc.................. 1,058,690
7,600 Lowe's Cos., Inc................. 269,800
------------
1,328,490
------------
BUILDING PRODUCTS -- WOOD -- 0.2%
4,800 Louisiana-Pacific Corp........... 101,400
8,750 Weyerhaeuser Co.................. 414,531
------------
515,931
------------
BUILDING & CONSTRUCTION -- MISCELLANEOUS --
0.2%
1,800 Armstrong World Industries,
Inc.............................. 125,100
7,100 Masco Corp....................... 255,600
2,300 Owens Corning.................... 98,037
------------
478,737
------------
BUILDING -- HEAVY CONSTRUCTION -- 0.1%
3,700 Fluor Corp....................... 232,175
1,800 Foster Wheeler Corp.............. 66,825
------------
299,000
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.0%
2,900 Ecolab, Inc...................... 109,112
------------
BUILDING -- MOBILE/MANUFACTURING & RECREATIONAL
VEHICLES -- 0.0%
1,600 Fleetwood Enterprises, Inc....... 44,000
------------
</TABLE>
Continued
38
<PAGE> 41
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.0%
1,200 Centex Corp...................... $ 45,150
1,740 Kaufman & Broad Home Corp........ 22,402
1,200 Pulte Corp....................... 36,900
------------
104,452
------------
BUSINESS INFORMATION -- 0.2%
7,565 Cognizant Corp................... 249,645
7,465 Dun & Bradstreet Corp............ 177,294
------------
426,939
------------
BUSINESS SERVICES -- 0.1%
4,600 H&R Block, Inc................... 133,400
------------
CABLE TELEVISION -- 0.5%
14,300 Comcast Corp., Class A........... 254,719
29,200 Tele-Communications, Inc., Class
A*............................... 381,425
27,400 U.S. West, Inc., Media Group*.... 506,900
------------
1,143,044
------------
CHEMICALS -- DIVERSIFIED -- 2.2%
2,400 B.F. Goodrich Co................. 97,200
10,700 Dow Chemical Co.................. 838,613
24,700 E.I. DuPont de Nemours & Co...... 2,331,063
4,500 Hercules, Inc.................... 194,625
25,800 Monsanto Co...................... 1,002,975
8,100 PPG Industries, Inc.............. 454,612
2,800 Rohm & Haas Co................... 228,550
5,600 Union Carbide Corp............... 228,900
3,900 W.R. Grace & Co.................. 201,825
------------
5,578,363
------------
CHEMICALS -- PLASTIC -- 0.1%
3,400 Eastman Chemical Co.............. 187,850
------------
CHEMICALS -- SPECIALTY -- 0.6%
4,900 Air Products & Chemicals, Inc.... 338,712
6,337 Engelhard Corp................... 121,195
2,800 Great Lakes Chemical Corp........ 130,900
6,300 Morton International, Inc........ 256,725
3,000 Nalco Chemical Co................ 108,375
6,900 Praxair, Inc..................... 318,263
2,200 Sigma-Aldrich Corp............... 137,363
------------
1,411,533
------------
COMPUTERS -- GRAPHICS -- 0.0%
2,100 Intergraph Corp.*................ 21,525
------------
COMPUTERS -- LOCAL AREA NETWORKS -- 1.2%
7,600 3COM Corp.*...................... 557,650
8,500 Bay Networks, Inc.*.............. 177,437
6,900 Cabletron Systems, Inc.*......... 229,425
28,500 Cisco Systems, Inc.*............. 1,813,313
15,100 Novell, Inc.*.................... 142,978
------------
2,920,803
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS -- MAINFRAME -- 1.4%
5,300 Amdahl Corp.*.................... $ 64,262
22,700 International Business Machines
Corp............................. 3,427,700
7,700 Unisys Corp.*.................... 51,975
------------
3,543,937
------------
COMPUTERS -- MEMORY DEVICES -- 0.3%
10,200 EMC Corp.*....................... 337,875
9,400 Seagate Technology, Inc.*........ 371,300
------------
709,175
------------
COMPUTERS -- MICRO -- 0.6%
5,500 Apple Computer, Inc.*............ 114,812
11,900 Compaq Computer Corp.*........... 883,575
1,700 Data General Corp.*.............. 24,650
9,900 Dell Computer Corp.*............. 525,938
------------
1,548,975
------------
COMPUTERS -- MINI -- 1.3%
6,800 Digital Equipment Corp.*......... 247,350
44,700 Hewlett-Packard Co............... 2,246,175
7,700 Silicon Graphics, Inc.*.......... 196,350
16,100 Sun Microsystems, Inc.*.......... 413,569
5,200 Tandem Computers, Inc.*.......... 71,500
------------
3,174,944
------------
COMPUTERS -- SERVICES -- 0.7%
12,800 Automatic Data Processing,
Inc.............................. 548,800
3,000 Ceridian Corp.*.................. 121,500
3,300 Computer Sciences Corp.*......... 271,013
19,700 First Data Corp.................. 719,050
1,000 Shared Medical Systems Corp...... 49,250
------------
1,709,613
------------
COMPUTERS -- SOFTWARE -- 2.5%
2,000 Autodesk, Inc.................... 56,000
16,012 Computer Associates
International, Inc............... 796,597
52,500 Microsoft Corp.*................. 4,337,812
28,850 Oracle Corp.*.................... 1,204,488
------------
6,394,897
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.3%
3,300 American Greetings Corp., Class
A................................ 93,638
1,695 Jostens, Inc..................... 35,807
7,000 Newell Co........................ 220,500
6,600 Rubbermaid, Inc.................. 150,150
2,700 Tupperware Corp.................. 144,787
------------
644,882
------------
CONTAINERS -- METAL & GLASS -- 0.1%
1,300 Ball Corp........................ 33,800
5,600 Crown Cork & Seal Co., Inc....... 304,500
------------
338,300
------------
CONTAINERS -- PAPER & PLASTIC -- 0.0%
2,300 Bemis Co., Inc................... 84,813
------------
COSMETICS & TOILETRIES -- 0.8%
1,200 Alberto-Culver Co., Class B...... 57,600
5,800 Avon Products, Inc............... 331,325
</TABLE>
Continued
39
<PAGE> 42
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COSMETICS & TOILETRIES (CONTINUED)
19,632 Gillette Co...................... $ 1,526,388
4,900 International Flavors &
Fragrances, Inc.................. 220,500
------------
2,135,813
------------
DIVERSIFIED OPERATIONS -- 5.0%
7,620 Allegheny Teledyne, Inc.......... 175,260
12,400 AlliedSignal, Inc................ 830,800
1,950 Crane Co......................... 56,550
1,600 FMC Corp.*....................... 112,200
72,300 General Electric Co.............. 7,148,663
5,200 ITT Industries, Inc.............. 127,400
1,800 Johnson Controls, Inc............ 149,175
18,400 Minnesota Mining & Manufacturing
Co............................... 1,524,900
2,100 National Service Industries,
Inc.............................. 78,488
9,600 Rockwell International Corp.*.... 584,400
7,500 Tenneco, Inc.*................... 338,437
3,600 Textron, Inc..................... 339,300
10,600 United Technologies Corp......... 699,600
18,500 Westinghouse Electric Corp....... 367,687
4,600 Whitman Corp..................... 105,225
------------
12,638,085
------------
ELECTRICAL COMPONENTS -- SEMICONDUCTORS -- 2.5%
6,000 Advanced Micro Devices, Inc.*.... 154,500
7,900 Applied Materials, Inc.*......... 283,906
36,100 Intel Corp....................... 4,726,844
5,700 LSI Logic Corp.*................. 152,475
9,200 Micron Technology, Inc........... 267,950
6,100 National Semiconductor Corp.*.... 148,688
8,300 Texas Instruments, Inc........... 529,125
------------
6,263,488
------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.0%
1,400 Tektronix, Inc................... 71,750
------------
ELECTRONIC PRODUCTS -- MISCELLANEOUS -- 0.1%
2,000 Raychem Corp..................... 160,250
------------
ELECTRONIC -- CONNECTORS -- 0.2%
9,636 AMP, Inc......................... 369,781
2,300 Thomas & Betts Corp.............. 102,063
------------
471,844
------------
ENGINES -- INTERNAL COMBUSTION -- 0.0%
1,700 Cummins Engine Co., Inc.......... 78,200
------------
FINANCIAL -- CONSUMER LOANS -- 0.4%
2,400 Beneficial Corp.................. 152,100
4,300 Household International, Inc..... 396,675
9,750 MBNA Corp........................ 404,625
------------
953,400
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.5%
7,200 Merrill Lynch & Co., Inc......... 586,800
6,700 Morgan Stanley Group, Inc........ 382,737
4,800 Salomon, Inc..................... 226,200
------------
1,195,737
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- LEASING COMPANY -- 0.0%
3,600 Ryder Systems, Inc............... $ 101,250
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 0.6%
20,800 American Express Co.............. 1,175,200
7,033 Dean Witter Discover & Co........ 465,936
------------
1,641,136
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.1%
7,900 Federal Home Loan Mortgage
Corp............................. 869,988
48,000 Federal National Mortgage
Assoc............................ 1,788,000
6,000 Green Tree Financial Corp........ 231,750
------------
2,889,738
------------
FINANCIAL -- SAVINGS & LOAN -- 0.2%
2,500 Golden West Financial Corp....... 157,812
6,100 Great Western Financial Corp..... 176,900
4,600 H.F. Ahmanson & Co............... 149,500
------------
484,212
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
1,700 Fleming Cos., Inc................ 29,325
3,000 Supervalu, Inc................... 85,125
7,900 Sysco Corp....................... 257,738
------------
372,188
------------
FOOD -- CANNED -- 0.6%
10,300 Campbell Soup Co................. 826,575
16,200 H.J. Heinz Co.................... 579,150
------------
1,405,725
------------
FOOD -- CONFECTIONARY -- 0.2%
6,700 Hershey Foods Corp............... 293,125
5,100 Wm. Wrigley Jr. Co............... 286,875
------------
580,000
------------
FOOD -- FLOUR & GRAIN -- 0.2%
23,903 Archer-Daniels-Midland Co........ 525,866
------------
FOOD -- DIVERSIFIED -- 1.8%
10,625 ConAgra, Inc..................... 528,594
6,300 CPC International, Inc........... 488,250
6,900 General Mills, Inc............... 437,287
9,300 Kellogg Co....................... 610,313
6,000 Quaker Oats Co................... 228,750
4,680 Ralston Purina Group............. 343,395
21,300 Sara Lee Corp.................... 793,425
7,000 Unilever NV, ADR................. 1,226,750
------------
4,656,764
------------
FUNERAL SERVICES & RELATED -- 0.1%
10,400 Service Corp. International...... 291,200
------------
GLASS PRODUCTS -- 0.2%
10,100 Corning, Inc..................... 467,125
------------
HOTELS & MOTELS -- 0.4%
8,600 Hilton Hotels Corp............... 224,675
5,700 HFS, Inc.*....................... 340,575
5,100 ITT Corp.*....................... 221,213
5,600 Marriott International, Inc...... 309,400
------------
1,095,863
------------
</TABLE>
Continued
40
<PAGE> 43
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
INSURANCE -- ACCIDENT & HEALTH -- 0.1%
4,800 Aon Corp......................... $ 298,200
------------
INSURANCE -- BROKERS -- 0.1%
2,000 Alexander & Alexander Services,
Inc.............................. 34,750
3,200 Marsh & McLennan Cos., Inc....... 332,800
------------
367,550
------------
INSURANCE -- LIFE -- 0.6%
8,900 American General Corp............ 363,787
3,150 Jefferson-Pilot Corp............. 178,369
4,100 Providian Corp................... 210,638
3,100 Torchmark Corp................... 156,550
2,882 Transamerica Corp................ 227,678
3,200 UNUM Corp........................ 231,200
1,525 U.S. Life Corp................... 50,706
------------
1,418,928
------------
INSURANCE -- MULTI-LINE -- 1.4%
6,570 Aetna, Inc....................... 525,600
3,300 Cigna Corp....................... 450,862
5,200 ITT Hartford Group, Inc.......... 351,000
5,100 Loews Corp....................... 480,675
1,900 MBIA, Inc........................ 192,375
2,600 MGIC Investment Corp............. 197,600
28,178 Travelers Group, Inc............. 1,278,577
------------
3,476,689
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.0%
19,499 Allstate Corp.................... 1,128,505
20,680 American International Group,
Inc.............................. 2,238,610
7,600 Chubb Corp....................... 408,500
3,600 General Re Corp.................. 567,900
4,600 Lincoln National Corp............ 241,500
5,500 SAFECO Corp...................... 216,906
3,600 St. Paul Cos., Inc............... 211,050
5,100 USF&G Corp....................... 106,463
------------
5,119,434
------------
INSTRUMENTS -- CONTROL -- 0.2%
2,222 General Signal Corp.............. 94,990
5,600 Honeywell, Inc................... 368,200
------------
463,190
------------
INSTRUMENTS -- SCIENTIFIC -- 0.1%
2,300 EG&G, Inc........................ 46,288
1,900 Millipore Corp................... 78,613
1,900 Perkin-Elmer Corp................ 111,862
------------
236,763
------------
LEISURE & RECREATION PRODUCTS -- 0.0%
4,300 Brunswick Corp................... 103,200
------------
LEISURE & RECREATION/GAMING -- 0.0%
4,500 Harrah's Entertainment, Inc.*.... 89,438
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.0%
1,800 Cincinnati Milacron, Inc......... 39,375
1,500 Giddings & Lewis, Inc............ 19,313
------------
58,688
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MACHINERY -- CONSTRUCTION/MINING -- 0.3%
8,400 Caterpillar, Inc................. $ 632,100
4,800 Ingersoll-Rand Co................ 213,600
------------
845,700
------------
MACHINERY -- ELECTRICAL -- 0.5%
9,900 Emerson Electric Co.............. 957,825
2,300 W.W. Grainger, Inc............... 184,575
------------
1,142,400
------------
MACHINERY -- FARM -- 0.3%
1,300 Briggs & Stratton Corp........... 57,200
3,200 Case Corp........................ 174,400
11,400 Deere & Co....................... 463,125
------------
694,725
------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.5%
4,700 Cooper Industries, Inc........... 197,987
4,900 Dover Corp....................... 246,225
2,122 Harnischfeger Industries, Inc.... 102,121
5,400 Illinois Tool Works, Inc......... 431,325
3,250 Parker-Hannifin Corp............. 125,938
1,200 TRINOVA Corp..................... 43,650
------------
1,147,246
------------
MACHINERY -- MATERIAL HANDLING -- 0.0%
400 NACCO Industries, Inc., Class
A................................ 21,400
------------
MEDICAL INSTRUMENTS -- 0.4%
5,100 Biomet, Inc...................... 77,138
10,500 Medtronic, Inc................... 714,000
3,600 St. Jude Medical, Inc.*.......... 153,450
2,800 U.S. Surgical Corp............... 110,250
------------
1,054,838
------------
MEDICAL PRODUCTS -- 0.5%
2,900 Allergan, Inc.................... 103,312
12,000 Baxter International, Inc........ 492,000
7,800 Boston Scientific Corp.*......... 468,000
1,500 Guidant Corp..................... 85,500
3,200 Mallinckrodt, Inc................ 141,200
------------
1,290,012
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
11,600 Amgen, Inc.*..................... 630,750
------------
MEDICAL -- DRUGS -- 6.7%
34,100 Abbott Laboratories.............. 1,730,575
3,700 Alza Corp.*...................... 95,738
28,100 American Home Products Corp...... 1,647,362
22,000 Bristol-Myers Squibb Co.......... 2,392,500
24,200 Eli Lilly & Co................... 1,766,600
53,000 Merck & Co, Inc.................. 4,200,250
28,300 Pfizer, Inc...................... 2,345,363
22,330 Pharmacia & Upjohn, Inc.......... 884,826
16,200 Schering-Plough Corp............. 1,048,950
11,900 Warner-Lambert Co................ 892,500
------------
17,004,664
------------
</TABLE>
Continued
41
<PAGE> 44
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL -- HEALTH MEDICAL ORGANIZATIONS -- 0.2%
7,100 Humana, Inc.*.................... $ 135,787
8,100 United Healthcare Corp........... 364,500
------------
500,287
------------
MEDICAL -- HOSPITAL -- 0.6%
29,449 Columbia/HCA Healthcare Corp..... 1,200,047
9,500 Tenet Healthcare Corp.*.......... 207,812
------------
1,407,859
------------
MEDICAL -- NURSING HOMES -- 0.1%
4,400 Beverly Enterprises, Inc.*....... 56,100
2,800 Manor Care, Inc.................. 75,600
------------
131,700
------------
MEDICAL/DENTAL SUPPLIES -- 1.3%
2,500 Bausch & Lomb, Inc............... 87,500
5,500 Becton, Dickinson & Co........... 238,563
2,500 C.R. Bard, Inc................... 70,000
58,500 Johnson & Johnson................ 2,910,375
------------
3,306,438
------------
MEDIA CONGLOMERATES -- 1.4%
24,960 Time Warner, Inc................. 936,000
15,500 Viacom, Inc., Class B*........... 540,562
29,800 Walt Disney Co................... 2,074,825
------------
3,551,387
------------
METAL -- GOLD -- 0.5%
15,700 Barrick Gold Corp................ 451,375
9,900 Battle Mountain Gold Co.......... 68,062
6,100 Echo Bay Mines Ltd............... 40,413
6,400 Homestake Mining Co.............. 91,200
4,409 Newmont Mining Corp.............. 197,303
10,500 Placer Dome, Inc................. 228,375
5,762 Santa Fe Pacific Gold Corp....... 88,591
------------
1,165,319
------------
METAL -- MISCELLANEOUS -- 0.1%
4,100 Cyprus Amax Minerals Co.......... 95,837
7,400 Inco, Ltd........................ 235,875
------------
331,712
------------
METAL -- NON-FERROUS -- 0.6%
9,950 Alcan Aluminum Ltd............... 334,569
7,600 Aluminum Co. of America.......... 484,500
1,900 Asarco, Inc...................... 47,262
8,500 Freeport-McMoRan Copper & Gold,
Inc., Class B.................... 253,938
2,800 Phelps Dodge Corp................ 189,000
2,800 Reynolds Metals Co............... 157,850
------------
1,467,119
------------
METAL -- PROCESSING & FABRICATION -- 0.1%
1,400 Timken Co........................ 64,225
4,025 Worthington Industries, Inc...... 72,953
------------
137,178
------------
MOTION PICTURES & SERVICES -- 0.0%
1,650 King World Productions, Inc.*.... 60,844
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OFFICE AUTOMATION & EQUIPMENT -- 0.4%
6,500 Pitney Bowes, Inc................ $ 354,250
14,267 Xerox Corp....................... 750,801
------------
1,105,051
------------
OFFICE SUPPLIES & FORMS -- 0.3%
5,744 Alco Standard Corp............... 296,534
4,600 Avery-Dennison Corp.............. 162,725
3,600 Deluxe Corp...................... 117,900
1,400 John H. Harland Co............... 46,200
4,400 Moore Corp., Ltd................. 89,650
------------
713,009
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.2%
6,400 Baker Hughes, Inc................ 220,800
7,700 Dresser Industries, Inc.......... 238,700
2,400 McDermott International, Inc..... 39,900
------------
499,400
------------
OIL REFINING & MARKETING -- 0.1%
2,800 Ashland, Inc..................... 122,850
3,274 Sun Co., Inc..................... 79,804
------------
202,654
------------
OIL & GAS -- DRILLING -- 0.5%
3,800 Rowan Cos., Inc.*................ 85,975
10,800 Schlumberger Ltd................. 1,078,650
------------
1,164,625
------------
OIL-FIELD SERVICES -- 0.2%
5,500 Halliburton Co................... 331,375
2,400 Western Atlas, Inc.*............. 170,100
------------
501,475
------------
OIL -- INTERNATIONAL INTEGRATED -- 5.7%
28,700 Chevron Corp..................... 1,865,500
54,600 Exxon Corp....................... 5,350,800
17,300 Mobil Corp....................... 2,114,925
23,600 Royal Dutch Petroleum Co., ADR... 4,029,700
11,600 Texaco, Inc...................... 1,138,250
------------
14,499,175
------------
OIL -- PRODUCTION/PIPELINE -- 0.7%
4,650 Coastal Corp..................... 227,269
2,400 Columbia Gas System, Inc......... 152,700
11,200 Enron Corp....................... 483,000
3,100 ENSERCH Corp..................... 71,300
6,600 PanEnergy Corp................... 297,000
3,800 Sonat, Inc....................... 195,700
6,900 Williams Cos., Inc............... 258,750
------------
1,685,719
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.3%
5,500 Burlington Resources, Inc........ 277,062
1,100 Helmerich & Payne, Inc........... 57,337
4,600 Oryx Energy Co.*................. 113,850
3,972 Santa Fe Energy Resources,
Inc.*............................ 55,112
11,023 Union Pacific Resources Group,
Inc.............................. 322,423
------------
825,784
------------
</TABLE>
Continued
42
<PAGE> 45
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL -- U.S. INTEGRATED -- 1.9%
4,100 Amerada Hess Corp................ $ 237,287
21,800 Amoco Corp....................... 1,754,900
7,100 Atlantic Richfield Co............ 940,750
2,200 Kerr-McGee Corp.................. 158,400
1,500 Louisiana Land & Exploration
Co............................... 80,437
14,500 Occidental Petroleum Corp........ 338,938
2,000 Pennzoil Co...................... 113,000
11,600 Phillips Petroleum Co............ 513,300
11,000 Unocal Corp...................... 446,875
12,600 USX-Marathon Group............... 300,825
------------
4,884,712
------------
PAINTS & RELATED PRODUCTS -- 0.1%
3,800 Sherwin-Williams Co.............. 212,800
------------
PAPER & RELATED PRODUCTS -- 1.3%
2,108 Boise Cascade Corp............... 66,929
4,200 Champion International Corp...... 181,650
4,000 Georgia Pacific Corp............. 288,000
13,224 International Paper Co........... 533,919
3,800 James River Corp. of Virginia.... 125,875
12,370 Kimberly-Clark Corp.............. 1,178,242
2,300 Mead Corp........................ 133,688
1,300 Potlatch Corp.................... 55,900
4,346 Stone Container Corp............. 64,647
2,400 Temple-Inland, Inc............... 129,900
3,100 Union Camp Corp.................. 148,025
4,450 Westvaco Corp.................... 127,937
2,400 Willamette Industries, Inc....... 167,100
------------
3,201,812
------------
PHOTOGRAPHY EQUIPMENT & SUPPLIES -- 0.5%
14,600 Eastman Kodak Co................. 1,171,650
1,989 Polaroid Corp.................... 86,522
------------
1,258,172
------------
POLLUTION CONTROL -- 0.5%
9,300 Browning-Ferris Industries,
Inc.............................. 244,125
13,800 Laidlaw, Inc., Class B........... 158,700
5,099 Pall Corp........................ 130,025
2,600 Safety-Kleen Corp................ 42,575
21,300 WMX Technologies, Inc............ 694,912
------------
1,270,337
------------
PRINTING -- COMMERCIAL -- 0.1%
6,600 R.R. Donnelley & Sons Co......... 207,075
------------
PROTECTION -- SAFETY -- 0.1%
6,900 Tyco International Ltd........... 364,838
------------
PUBLISHING -- BOOKS -- 0.1%
4,400 McGraw-Hill Cos., Inc............ 202,950
------------
PUBLISHING -- NEWSPAPERS -- 0.5%
4,200 Dow Jones & Co., Inc............. 142,275
6,200 Gannett, Inc..................... 464,225
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PUBLISHING -- NEWSPAPERS (CONTINUED)
4,200 Knight-Ridder, Inc............... $ 160,650
4,300 New York Times Co., Class A...... 163,400
4,300 Times Mirror Co., Class A........ 213,925
2,700 Tribune Co....................... 212,962
------------
1,357,437
------------
PUBLISHING -- PERIODICALS -- 0.0%
1,200 Meredith Corp.................... 63,300
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.0%
2,700 Pep Boys-Manny, Moe & Jack....... 83,025
------------
RETAIL/WHOLESALE -- COMPUTERS -- 0.0%
2,564 Tandy Corp....................... 112,816
------------
RETAIL -- APPAREL/SHOES -- 0.4%
4,600 Charming Shoppes, Inc.*.......... 23,288
4,600 CVS Corp......................... 190,325
12,500 Gap, Inc......................... 376,562
11,878 Limited, Inc..................... 218,258
3,600 Nordstrom, Inc................... 127,575
3,400 TJX Cos., Inc.................... 161,075
------------
1,097,083
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
4,300 Circuit City Stores, Inc......... 129,537
------------
RETAIL -- DISCOUNT -- 1.3%
21,300 Kmart Corp.*..................... 220,987
8,650 Price/Costco, Inc.*.............. 217,331
12,050 Toys 'R' Us, Inc.*............... 361,500
100,800 Wal-Mart Stores, Inc............. 2,305,800
5,900 Woolworth Corp.*................. 129,063
------------
3,234,681
------------
RETAIL -- DRUG STORE -- 0.3%
900 Longs Drug Stores Corp........... 44,213
5,400 Rite Aid Corp.................... 214,650
10,800 Walgreen Co...................... 432,000
------------
690,863
------------
RETAIL -- MAIL ORDER -- 0.2%
17,300 CUC International, Inc.*......... 410,875
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.9%
9,500 Dayton-Hudson Corp............... 372,875
3,116 Harcourt General, Inc............ 143,725
10,100 J.C. Penney, Inc................. 492,375
11,100 May Department Stores Co......... 518,925
17,175 Sears, Roebuck & Co.............. 792,197
------------
2,320,097
------------
RETAIL -- RESTAURANTS -- 0.6%
6,900 Darden Restaurants, Inc.......... 60,375
30,700 McDonald's Corp.................. 1,389,175
5,700 Wendy's International, Inc....... 116,850
------------
1,566,400
------------
</TABLE>
Continued
43
<PAGE> 46
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
5,000 Dillard Department Stores,
Inc.............................. $ 154,375
9,100 Federated Department Stores,
Inc.*............................ 310,537
1,600 Mercantile Stores Co., Inc....... 79,000
------------
543,912
------------
RETAIL -- SUPERMARKETS -- 0.5%
11,100 Albertson's, Inc................. 395,437
6,400 American Stores Co............... 261,600
2,600 Giant Food Inc., Class A......... 89,700
1,700 Great Atlantic & Pacific Tea Co.,
Inc.............................. 54,188
5,500 Kroger Co.*...................... 255,750
6,600 Winn-Dixie Stores, Inc........... 208,725
------------
1,265,400
------------
RUBBER -- TIRES -- 0.2%
3,600 Cooper Tire & Rubber Co.......... 71,100
6,800 Goodyear Tire & Rubber Co........ 349,350
------------
420,450
------------
SHOES & RELATED APPAREL -- 0.3%
12,700 Nike, Inc., Class B.............. 758,825
2,400 Reebok International Ltd......... 100,800
2,200 Stride Rite Corp................. 22,000
------------
881,625
------------
SOAP & CLEANING PREPARATIONS -- 1.6%
2,300 Clorox Co........................ 230,863
6,500 Colgate-Palmolive Co............. 599,625
30,000 Procter & Gamble Co.............. 3,225,000
------------
4,055,488
------------
STEEL -- PRODUCERS -- 0.2%
4,700 Armco, Inc.*..................... 19,387
4,900 Bethlehem Steel Corp.*........... 44,100
2,200 Inland Steel Industries, Inc..... 44,000
3,900 Nucor Corp....................... 198,900
3,740 USX-U.S. Steel Group, Inc........ 117,343
------------
423,730
------------
TELECOMMUNICATION EQUIPMENT -- 1.7%
2,637 Andrew Corp.*.................... 139,926
5,200 DSC Communications Corp.*........ 92,950
6,000 General Instrument Corp.*........ 129,750
1,700 Harris Corp...................... 116,663
28,023 Lucent Technologies, Inc......... 1,296,064
26,100 Motorola, Inc.................... 1,601,887
11,400 Northern Telecom Ltd............. 705,375
3,400 Scientific-Atlanta, Inc.......... 51,000
7,900 Tellabs, Inc.*................... 297,237
------------
4,430,852
------------
TELECOMMUNICATION -- CELLULAR -- 0.2%
22,000 AirTouch Communications, Inc.*... 555,500
------------
TEXTILE -- APPAREL -- 0.2%
3,400 Fruit of the Loom, Inc., Class
A*............................... 128,775
3,200 Liz Claiborne, Inc............... 123,600
1,700 Russell Corp..................... 50,575
2,800 VF Corp.......................... 189,000
------------
491,950
------------
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TEXTILES -- HOME FURNISHINGS -- 0.0%
900 Springs Industries, Inc. Class
A................................ $ 38,700
------------
TOBACCO -- 1.8%
7,500 American Brands, Inc............. 372,187
35,800 Philip Morris Cos., Inc.......... 4,031,975
8,200 U.S.T., Inc...................... 265,475
------------
4,669,637
------------
TOOLS -- HAND HELD -- 0.1%
3,900 Black & Decker Corp.............. 117,488
2,650 Snap-On, Inc..................... 94,406
3,900 The Stanley Works................ 105,300
------------
317,194
------------
TOYS/GAME/HOBBY -- 0.2%
3,800 Hasbro, Inc...................... 147,725
11,947 Mattel, Inc...................... 331,529
------------
479,254
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
5,000 Federal Express Corp.*........... 222,500
------------
TRANSPORTATION -- AIRLINE -- 0.3%
4,000 AMR Corp.*....................... 352,500
3,300 Delta Air Lines, Inc............. 233,888
6,400 Southwest Airlines Co............ 141,600
2,800 USAir Group, Inc.*............... 65,450
------------
793,438
------------
TRANSPORTATION -- RAILROAD -- 1.0%
6,700 Burlington Northern Santa Fe
Corp............................. 578,713
3,503 Conrail, Inc..................... 348,986
9,508 CSX Corp......................... 401,713
5,500 Norfolk Southern Corp............ 481,250
10,800 Union Pacific Corp............... 649,350
------------
2,460,012
------------
TRANSPORTATION -- TRUCKING -- 0.0%
1,700 Caliber System, Inc.............. 32,725
------------
UTILITIES -- ELECTRIC POWER -- 2.8%
8,200 American Electric Power Co....... 337,225
6,500 Baltimore Gas & Electric Co...... 173,875
6,700 Carolina Power & Light Co........ 244,550
9,300 Central & South West Corp........ 238,312
6,935 CINergy Corp..................... 231,456
10,300 Consolidated Edison Co. of New
York, Inc........................ 301,275
6,400 Detroit Edison Co................ 207,200
7,950 Dominion Resources, Inc.......... 306,075
8,900 Duke Power Co.................... 411,625
19,000 Edison International............. 377,625
10,100 Entergy Corp..................... 280,275
8,000 FPL Group, Inc................... 368,000
5,300 General Public Utilities Corp.... 178,212
11,100 Houston Industries, Inc.......... 251,137
</TABLE>
Continued
44
<PAGE> 47
THE KENT INDEX EQUITY FUND
FUNDS PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (CONTINUED)
6,300 Niagara Mohawk Power Corp.*...... $ 62,213
3,000 Northern States Power Co......... 137,625
6,700 Ohio Edison Co................... 152,425
18,100 Pacific Gas & Electric Co........ 380,100
12,900 PacifiCorp....................... 264,450
9,800 Peco Energy Co................... 247,450
7,100 PP&L Resources, Inc.............. 163,300
10,500 Public Service Enterprise Group,
Inc.............................. 286,125
29,600 Southern Co...................... 669,700
9,900 Texas Utilities Co............... 403,425
9,500 Unicom Corp...................... 257,688
4,500 Union Electric Co................ 173,250
------------
7,104,593
------------
UTILITIES -- GAS DISTRIBUTION -- 0.3%
4,200 Consolidated Natural Gas Co...... 232,050
900 Eastern Enterprises.............. 31,837
2,200 Nicor, Inc....................... 78,650
6,000 NorAm Energy Corp................ 92,250
1,200 ONEOK, Inc....................... 36,000
3,700 Pacific Enterprises.............. 112,388
1,500 People's Energy Corp............. 50,813
------------
633,988
------------
UTILITIES -- TELEPHONE -- 6.2%
8,300 Alltel Corp...................... 260,413
24,100 Ameritech Corp................... 1,461,062
71,156 AT&T Corp........................ 3,095,286
19,200 Bell Atlantic Corp............... 1,243,200
43,700 BellSouth Corp................... 1,764,387
42,300 GTE Corp......................... 1,924,650
30,100 MCI Communications Corp.......... 983,894
19,300 NYNEX Corp....................... 928,812
18,800 Pacific Telesis Group............ 690,900
26,500 SBC Communications, Inc.......... 1,371,375
18,900 Sprint Corp...................... 753,638
21,000 U.S. West, Inc................... 677,250
18,000 Worldcom, Inc.*.................. 469,125
------------
15,623,992
------------
TOTAL COMMON STOCKS.............. 247,069,284
(cost $162,869,407)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ---------- ------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATION -- 0.3%
$705,000 U.S. Treasury Bill,
5.08%**, 6/26/97 (b)............. $ 687,389
------------
TOTAL U.S. GOVERNMENT
OBLIGATION....................... 687,389
(cost $687,905)
COMMERCIAL PAPER -- 2.1%
$5,354,434 Ford Motor Credit Co., 6.00%,
1/2/97........................... 5,354,434
------------
TOTAL COMMERCIAL PAPER........... 5,354,434
(cost $5,354,434)
TOTAL INVESTMENTS -- 99.9% ... 253,111,107
(cost $168,911,746)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1%........................ 251,356
------------
NET ASSETS -- 100.0%......................... $253,362,463
============
- ----------
Percentages indicated are based on net assets of
$253,362,463.
(a) Represents cost for financial reporting purposes and
differs from cost basis for federal income tax purposes
by the amount of losses recognized for financial
reporting in excess of federal income tax reporting of
approximately $839,000. Cost for federal income tax
purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation ... $ 86,024,712
Unrealized depreciation ... (2,664,351)
------------
Net unrealized appreciation ... $ 83,360,361
============
(b) Security has been deposited as initial
margin on open future contracts.
* Non-income producing security.
** Annualized yield at time of purchase.
ADR American Depository Receipt
</TABLE>
At December 31, 1996, the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ------------- ---------- ----------
<S> <C> <C> <C>
S & P 500
13 March 1997 $4,833,055 $4,839,250
</TABLE>
See Notes to Financial Statements
45
<PAGE> 48
THE KENT STATEMENTS OF ASSETS AND LIABILITIES
FUNDS DECEMBER 31, 1996
<TABLE>
<CAPTION>
GROWTH SMALL
AND COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost................................. $420,776,264 $451,897,602 $ 333,836,478 $168,911,746
Net unrealized appreciation......................... 94,185,283 106,453,002 62,427,122 84,199,361
------------ ------------ ------------ ------------
Total investments at value........................ 514,961,547 558,350,604 396,263,600 253,111,107
Foreign currency at value (cost $894,580)............. -- -- 894,919 --
Receivable for investments sold....................... -- -- -- 54,970
Interest and dividends receivable..................... 1,176,840 455,718 467,170 421,317
Tax reclaim receivable................................ -- -- 483,045 --
Unrealized gains on forward foreign currency exchange
contracts........................................... -- -- 3,330 --
Prepaid expenses (Note 2)............................. -- 1,344 858 --
------------ ------------ ------------ ------------
Total Assets...................................... 516,138,387 558,807,666 398,112,922 253,587,394
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased..................... -- 39,132 1,232,078 --
Payable for capital shares redeemed................... -- 257 30,776 --
Net payable for variation margin on future
contracts........................................... -- 26,530 -- 93,700
Advisory fees payable (Note 3)........................ 40,114 42,437 32,038 8,497
Distribution fees payable (Investment Shares) (Note
3).................................................. 3,143 2,972 1,839 2,098
Payable to administrator (Note 3)..................... 75,499 82,654 56,739 16,114
Payable to transfer agent (Note 3).................... 32,013 30,175 10,633 25,664
Payable to custodian.................................. 10,047 19,200 121,274 9,343
Accrued expenses and other liabilities................ 57,318 47,713 29,680 69,515
------------ ------------ ------------ ------------
Total Liabilities................................. 218,134 291,070 1,515,057 224,931
------------ ------------ ------------ ------------
NET ASSETS.............................................. $515,920,253 $558,516,596 $ 396,597,865 $253,362,463
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital....................................... $416,316,045 $438,010,682 $ 335,104,648 $169,963,979
Undistributed (distributions in excess of) net
investment income................................... 9,008 21,461 (637,883) (733)
Accumulated net realized gains (losses) on
investments, foreign currency and futures contracts
sold................................................ 5,409,917 13,989,151 (293,774) (806,339)
Net unrealized appreciation of investments............ 94,185,283 106,453,002 62,427,122 84,199,361
Net unrealized depreciation of foreign currency and
forward foreign currency exchange contracts......... -- -- (2,248) --
Net unrealized appreciation of futures contracts...... -- 42,300 -- 6,195
------------ ------------ ------------ ------------
TOTAL NET ASSETS........................................ $515,920,253 $558,516,596 $ 396,597,865 $253,362,463
============ ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets............................................ $500,856,886 $544,080,907 $ 387,798,521 $243,437,579
Shares Outstanding.................................... 36,032,375 34,776,451 26,286,311 16,551,211
Net Asset Value, offering and redemption price per
share............................................... $ 13.90 $ 15.65 $ 14.75 $ 14.71
============ ============ ============ ============
INVESTMENT SHARES:
Net Assets............................................ $ 15,063,367 $ 14,435,689 $ 8,799,344 $ 9,924,884
Shares Outstanding.................................... 1,090,608 924,573 599,004 674,264
Net Asset Value and redemption price per share........ $ 13.81 $ 15.61 $ 14.69 $ 14.72
============ ============ ============ ============
Maximum Sales Charge -- Investment Shares............. 4.00% 4.00% 4.00% 4.00%
============ ============ ============ ============
Maximum Offering Price Per Share (100%/(100%-Maximum
Sales Charge) of net asset value adjusted to nearest
cent) (Investment Shares)........................... $ 14.39 $ 16.26 $ 15.30 $ 15.33
============ ============ ============ ============
<FN>
See Notes to Financial Statements.
</TABLE>
46
<PAGE> 49
THE KENT STATEMENTS OF OPERATIONS
FUNDS FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
GROWTH SMALL
AND COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 2):
Dividends................................................. $14,285,964 $ 8,841,723 $ 8,015,441 $ 5,181,285
Interest.................................................. 28,842 63,764 22,589 34,417
Less: Net foreign taxes withheld.......................... (10,190) -- (1,271,144) (10,113)
----------- ----------- ----------- -----------
Total Investment Income................................. 14,304,616 8,905,487 6,766,886 5,205,589
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fees (Note 3)......................... 3,202,775 3,613,394 2,465,291 654,709
Administration fees (Note 3).............................. 907,073 1,023,402 651,538 436,103
Custodian fees............................................ 26,048 78,258 294,414 31,798
Legal and audit fees (Note 3)............................. 31,552 33,838 26,326 18,380
Transfer agent fees (Note 3).............................. 107,816 77,530 63,724 97,203
Distribution fees (Investment Shares) (Note 3)............ 32,309 32,104 20,815 20,946
Other expenses............................................ 54,847 92,372 83,206 36,658
----------- ----------- ----------- -----------
Total expenses before waivers........................... 4,362,420 4,950,898 3,605,314 1,295,797
Less: waivers (Note 3).................................. (10,783) (11,802) (8,113) (223,616)
----------- ----------- ----------- -----------
Net Expenses............................................ 4,351,637 4,939,096 3,597,201 1,072,181
----------- ----------- ----------- -----------
NET INVESTMENT INCOME....................................... 9,952,979 3,966,391 3,169,685 4,133,408
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS (NOTE 2):
Net realized gains on investments......................... 39,233,025 32,298,684 3,376,665 1,057,376
Net realized gains on futures contracts................... 2,415,000 3,527,985 -- 1,498,615
Net realized losses on foreign currency and forward
foreign currency exchange contracts..................... -- -- (45,781) --
Net change in unrealized appreciation/depreciation of
investments............................................. 30,902,403 53,847,793 11,900,956 37,969,480
Net change in unrealized appreciation/depreciation of
foreign currency and forward foreign currency exchange
contracts............................................... -- -- (8,886) --
Net change in unrealized appreciation/depreciation of
futures contracts....................................... -- 87,425 -- 49,520
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS............................................ 72,550,428 89,761,887 15,222,954 40,574,991
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS................................. $82,503,407 $93,728,278 $18,392,639 $44,708,399
=========== =========== ============ ===========
<FN>
See Notes to Financial Statements.
</TABLE>
47
<PAGE> 50
THE KENT
FUNDS STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
----------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD...................... $412,450,592 $316,830,050 $461,027,443 $312,611,638
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income................................ 9,952,979 9,437,219 3,966,391 2,613,616
Net realized gains on investments.................... 39,233,025 29,158,461 32,298,684 13,578,009
Net realized gains on futures contracts.............. 2,415,000 86,350 3,527,985 1,119,425
Net change in unrealized appreciation/depreciation of
investments........................................ 30,902,403 64,996,671 53,847,793 50,415,105
Net change in unrealized appreciation/depreciation of
futures contracts.................................. -- -- 87,425 (45,125)
------------- ------------ ------------ ------------
Net increase in net assets resulting from
operations......................................... 82,503,407 103,678,701 93,728,278 67,681,030
------------- ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
INSTITUTIONAL:
Net investment income................................ (9,772,575) (9,117,562) (3,891,501) (2,536,986)
Net realized gains................................... (49,510,778) (15,389,908) (24,783,337) (21,377,049)
------------- ------------ ------------ ------------
Total Distributions -- Institutional Shares........ (59,283,353) (24,507,470) (28,674,838) (23,914,035)
------------- ------------ ------------ ------------
INVESTMENT:
Net investment income................................ (246,918) (225,735) (70,033) (52,489)
In excess of net investment income................... (18,400) -- (7,537) --
Net realized gains................................... (1,458,817) (419,285) (629,504) (575,105)
------------- ------------ ------------ ------------
Total Distributions -- Investment Shares........... (1,724,135) (645,020) (707,074) (627,594)
------------- ------------ ------------ ------------
Total Distributions to shareholders................ (61,007,488) (25,152,490) (29,381,912) (24,541,629)
------------- ------------ ------------ ------------
FUND SHARE TRANSACTIONS (NOTE 4):
Shares issued........................................ 153,847,838 138,196,829 135,473,783 218,014,323
Reinvestment of distributions........................ 27,411,595 11,234,369 14,891,206 13,605,763
Shares redeemed...................................... (99,285,691) (132,336,867) (117,222,202) (126,343,682)
------------- ------------ ------------ -------------
NET INCREASE FROM SHARE TRANSACTIONS................... 81,973,742 17,094,331 33,142,787 105,276,404
------------- ------------ ------------ ------------
Net increase in net assets........................... 103,469,661 95,620,542 97,489,153 148,415,805
------------- ------------ ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)......... $515,920,253 $412,450,592 $558,516,596 $461,027,443
============ ============ ============ ============
(A) Accumulated undistributed net investment income.... $ 9,008 $ 93,922 $ 21,461 $ 24,141
============= ============ ============ ============
<FN>
See Notes to Financial Statements.
</TABLE>
48
<PAGE> 51
THE KENT STATEMENTS OF CHANGES IN NET ASSETS
FUNDS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD..................... $294,093,096 $184,724,501 $190,488,589 $250,286,380
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income............................... 3,169,685 2,660,778 4,133,408 4,499,422
Net realized gains on investments................... 3,376,665 2,507,398 1,057,376 15,892,396
Net realized gains on futures contracts............. -- -- 1,498,615 1,921,920
Net realized gains (losses) on foreign currency and
foreign currency contracts........................ (45,781) 1,799,288
Net change in unrealized appreciation/depreciation
of investments.................................... 11,900,956 20,329,631 37,969,480 44,492,052
Net change in unrealized appreciation/depreciation
of futures contracts.............................. -- -- 49,520 (43,325)
Net change in unrealized appreciation/depreciation
of foreign currency and forward currency exchange
contracts......................................... (8,886) (15,164) -- --
------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations........................................ 18,392,639 27,281,931 44,708,399 66,762,465
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
INSTITUTIONAL:
Net investment income............................... (2,589,632) (2,613,863) (3,996,731) (4,347,671)
In excess of net investment income.................. (504,939) (2,246,651) -- --
Net realized gains.................................. (3,325,497) (4,858,921) (4,383,680) (25,081,995)
In excess of realized gains......................... (161,046) -- (668,004) --
------------ ------------ ------------ ------------
Total Distributions -- Institutional Shares....... (6,581,114) (9,719,435) (9,048,415) (29,429,666)
------------ ------------ ------------ ------------
INVESTMENT:
Net investment income............................... (49,833) (46,915) (137,968) (99,887)
In excess of net investment income.................. -- (59,182) (5,705) --
Net realized gains.................................. (82,522) (150,827) (199,306) (698,289)
------------ ------------ ------------ ------------
Total Distributions -- Investment Shares.......... (132,355) (256,924) (342,979) (798,176)
------------ ------------ ------------ ------------
Total Distributions to shareholders............... (6,713,469) (9,976,359) (9,391,394) (30,227,842)
------------ ------------ ------------ ------------
FUND SHARE TRANSACTIONS (NOTE 4):
Shares issued....................................... 139,625,382 153,567,406 72,390,118 58,690,104
Reinvestment of distributions....................... 3,275,693 5,007,653 6,280,152 18,776,943
Shares redeemed..................................... (52,075,476) (66,512,036) (51,113,401) (173,799,461)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS....... 90,825,599 92,063,023 27,556,869 (96,332,414)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets............... 102,504,769 109,368,595 62,873,874 (59,797,791)
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)........ $396,597,865 $294,093,096 $253,362,463 $190,488,589
============ ============ ============ ============
(A) Accumulated undistributed (distributions in excess
of) net investment income........................... $ (637,883) $ (506,545) $ (733) $ 51,864
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
49
<PAGE> 52
THE KENT
FUNDS NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Kent Funds (the "Trust") was organized as a Massachusetts business trust
on May 9, 1986 and is registered under the Investment Company Act of 1940 (the
"1940 Act"), as amended, as an open-end management investment company. As of the
date of this report, the Trust offered thirteen managed investment portfolios.
The accompanying financial statements and financial highlights are those of The
Kent Growth and Income Fund, The Kent Small Company Growth Fund, The Kent
International Growth Fund, and The Kent Index Equity Fund (individually, a
"Portfolio", collectively the "Portfolios") only.
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest without par value. It allows for the
creation of one or more classes of shares within each series, each of which,
regardless of class designation, represents an equal proportionate interest in
the Portfolios with each other share of that series.
The Trust may issue more than one series of shares investing in portfolios of
securities. The Trust currently issues thirteen series of shares with two
separate classes in each series, Investment Shares and Institutional Shares.
Each class of shares is entitled upon liquidation of a series to a pro rata
share in the net assets of that class of such series. Each share in each series
or class has identical voting, dividend, liquidation and other rights, except in
matters affecting only a particular series or class, in which case only shares
of the affected series or class are entitled to vote. Class specific expenses,
if any, are currently limited to expenses directly attributable to the
Investment Shares under a Distribution Plan, shareholder services fees and
certain printing and postage expenses incurred as they relate to a particular
class of shares.
The investment objective of the Growth and Income Fund is long-term capital
growth with current income as a secondary goal. The Small Company Growth Fund's
investment objective is to seek long-term capital appreciation by investing in
equity securities of small companies. The investment objective of the
International Growth Fund is to seek long-term growth of capital and additional
diversification for U.S. investors by investing in a varied portfolio of foreign
equity securities. The Index Equity Fund's investment objective is to seek
investment results which mirror the capital performance and dividend income of
the Standard & Poor's 500 Composite Stock Price Index.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Portfolios in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual amounts could differ from those estimates.
PORTFOLIO VALUATION: Listed securities are valued at the last sales price on
the principal exchange where such securities are traded. Listed securities for
which last sales prices are not available are valued at the last bid price.
Unlisted securities are valued at the mean of the current bid and asked prices
in the principal market where such securities trade. Short-term obligations that
mature in 60 days or less are valued at amortized cost, which constitutes fair
value and approximates market value. All other securities and other assets are
appraised at their fair value as determined in good faith under consistently
applied procedures established by and under the general supervision of the Board
of Trustees.
FOREIGN CURRENCY TRANSLATION: Investments and other assets and liabilities
initially expressed in foreign currencies are converted each business day into
U.S. dollars based upon current exchange rates. Realized gains and losses on
foreign investments and foreign income and expenses are converted into U.S.
dollars based upon exchange rates prevailing on the respective dates of such
transactions. That portion of unrealized gains or losses on investments due to
fluctuations in foreign currency exchange rates is not separately disclosed.
Foreign currency-denominated receivables and payables are "marked-to-market"
using the current exchange rate. The fluctuation between the original exchange
rate and the current exchange rate is recorded as unrealized currency gain or
loss. Upon receipt of payment, a Portfolio realizes a gain or loss on foreign
currency amounting to the difference between the original value and the ending
value of the receivable or payable. Foreign currency gains and losses related to
dividend receivables are reported as part of dividend income.
FUTURES CONTRACTS: Each Portfolio may invest in futures contracts. To the
extent that a Portfolio enters into futures contracts on an index or group of
securities the Portfolio exposes itself to an indeterminate liability and will
be required to pay or receive a sum of money
50
<PAGE> 53
THE KENT
FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
measured by the change in the market value of the index or group of securities.
Upon entering into a futures contract the Portfolio is required to deposit
either cash or securities in an amount ("initial margin") equal to a certain
percentage of the contract value with a broker. Subsequent payments ("variation
margin") equal to changes in the daily settlement price or last sale on the
exchanges where they trade are paid or received each day and are recorded as a
gain or loss on futures contracts.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The International Growth Fund may
enter into forward foreign currency exchange contracts. The purpose of these
contracts is to hedge against fluctuation in the value of the underlying
currency of certain portfolio investments. A forward foreign currency exchange
contract is an agreement to purchase or sell a specified currency at a specified
price on a future date. Risks associated with the contract include changes in
the value of the foreign currency relative to the U.S. dollar and/or the
counterparty's potential inability to perform under the contract.
The forward foreign currency exchange contracts are valued daily using the
current exchange rate of the underlying currency with any fluctuations recorded
as unrealized gains or losses. Realized gains or losses are recognized when
entering a closing or offsetting forward foreign currency exchange contract with
the same settlement date and broker.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Net realized gains and losses from securities and
currency transactions are recorded on the basis of identified cost. Interest
income is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date.
The International Growth Fund, upon the purchase or sale of a security
denominated in a foreign currency, may enter into foreign currency exchange
contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the
amount of foreign currency involved in the underlying security transaction to
hedge the portfolio against currency fluctuations during the settlement period.
In such cases, the Portfolio has not realized currency gains or losses between
the trade and settlement dates on these security transactions.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Portfolios declare and
distribute dividends from net investment income monthly, with the exception of
the International Growth Fund which declares and pays dividends annually. Net
realized capital gains, if any, are distributed at least annually.
The amounts of income and capital gains to be distributed are determined in
accordance with income tax regulations. Such amounts may vary from income and
capital gains recognized in accordance with generally accepted accounting
principles.
FEDERAL INCOME TAXES: For federal income tax purposes, each Portfolio is
treated as a separate entity for the purpose of determining its qualification as
a regulated investment company under the Internal Revenue Code (the "Code"). It
is the policy of each Portfolio to meet the requirements of the Code applicable
to regulated investment companies, including the requirement that it distribute
substantially all of its taxable income to shareholders. Therefore, no federal
income tax provision is required. Withholding taxes on foreign dividends have
been paid or provided for in accordance with the applicable country's tax rules
and rates.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
EXPENSES: Expenses directly attributable to a Portfolio are charged to the
Portfolio, while expenses which are attributable to more than one series of the
Trust are allocated among the respective series based upon relative net assets
or another appropriate basis. In addition, investors in Investment Shares will
pay the expenses directly attributable to the Investment Shares as a class, and
investors in Institutional Shares will pay the expenses directly attributable to
the Institutional Shares as a class.
51
<PAGE> 54
THE KENT
FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS
Old Kent Bank ("Investment Adviser") serves as the investment adviser to the
Trust. The Investment Adviser is a member of the Michigan State Banking
Association and the principal subsidiary of Old Kent Financial Corporation. The
Investment Adviser is entitled to receive a fee, computed daily and paid
monthly, at the annual rate of 0.70% of the average daily net assets of the
Growth and Income Fund and Small Company Growth Fund, 0.75% of the average daily
net assets of the International Growth Fund and 0.30% of the average daily net
assets of the Index Equity Fund.
Effective August 5, 1996, BISYS Fund Services Limited Partnership d/b/a BISYS
Fund Services ("BISYS") assumed the duties as Administrator and Distributor for
the Trust from First Data Investor Services Group, Inc. ("First Data") and 440
Financial Distributors, Inc. an indirect wholly-owned subsidiary of First Data,
respectively. Also, effective August 5, 1996 and October 7, 1996, respectively,
BISYS Fund Services, Inc. assumed the duties as Fund Accountant and Transfer
Agent for the Trust from First Data. BISYS and BISYS Fund Services, Inc. are
both wholly owned subsidiaries of The BISYS Group, Inc. The Administrator is
entitled to receive a fee, computed daily and paid monthly, at the annual rate
of 0.185% of the average daily net assets of the Trust up to $5 billion; 0.165%
of the average daily net assets of the Trust in excess of $5 billion up to $7.5
billion; and 0.135% of the average daily net assets of the Trust in excess of
$7.5 billion. Fund Accounting fees are computed daily and paid monthly at the
annual rate of 0.015% of the average daily net assets of the Trust and are
included as part of the fees paid to the Administrator.
Transfer agent fees for each Portfolio for the year ended December 31, 1996
are as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTMENT
FUND SHARES SHARES
- ------------------------------ ------------- ----------
<S> <C> <C>
Growth and Income Fund........ $ 104,746 $3,070
Small Company Growth Fund..... 75,603 1,927
International Growth Fund..... 62,056 1,668
Index Equity Fund............. 93,421 3,782
</TABLE>
The current and previous Administrators have voluntarily reduced their fees
for the Portfolios. Total administrative fees waived for the year ended December
31, 1996 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTMENT
FUND SHARES SHARES
- ------------------------------ ------------- ----------
<S> <C> <C>
Growth and Income Fund........ $ 10,469 $ 314
Small Company Growth Fund..... 11,505 297
International Growth Fund..... 7,930 183
Index Equity Fund............. 214,980 8,636
</TABLE>
Certain officers of the Trust are affiliated with BISYS. Such officers receive
no direct payments or fees from the Portfolios for serving as officers.
The Trust has adopted a distribution plan (the "Plan") on behalf of the
Investment Shares of the Portfolios pursuant to Rule 12b-1 of the 1940 Act. The
Plan provides for payments to the Distributor of up to 0.25% of the average
daily net assets of the Investment Shares of the Portfolios.
Distribution fees for each Portfolio for the year ended December 31, 1996 are
as follows:
<TABLE>
<CAPTION>
FUND INVESTMENT SHARES
- ----------------------------------- -----------------
<S> <C>
Growth and Income Fund............. $32,309
Small Company Growth Fund.......... 32,104
International Growth Fund.......... 20,815
Index Equity Fund.................. 20,946
</TABLE>
Expenses for the Trust include legal fees paid to Drinker Biddle & Reath. A
partner of that firm serves as an Assistant Secretary of the Trust.
52
<PAGE> 55
THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FUNDS
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Portfolios are summarized below:
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued......................................... $150,224,731 $135,405,690 $132,474,283 $214,950,302
Reinvestment of distributions......................... 25,727,424 10,602,239 14,200,151 12,988,002
Shares redeemed....................................... (97,365,654) (130,005,699) (115,454,666) (123,856,962)
------------ ------------ ------------ ------------
Net increase from Institutional Share
transactions...................................... $ 78,586,501 $ 16,002,230 $ 31,219,768 $104,081,342
============ ============ ============ ============
INVESTMENT:
Shares issued......................................... $ 3,623,107 $ 2,791,139 $ 2,999,500 $ 3,064,021
Reinvestment of distributions......................... 1,684,171 632,130 691,055 617,761
Shares redeemed....................................... (1,920,037) (2,331,168) (1,767,536) (2,486,720)
------------ ------------ ------------ ------------
Net increase from Investment Share transactions..... $ 3,387,241 $ 1,092,101 $ 1,923,019 $ 1,195,062
============ ============ ============ ============
Net increase from share transactions................ $ 81,973,742 $ 17,094,331 $ 33,142,787 $105,276,404
============ ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued......................................... 10,889,808 10,940,374 8,964,612 15,959,355
Reinvestment of distributions......................... 1,890,610 836,269 937,802 1,016,738
Shares redeemed....................................... (7,034,231) (10,901,212) (7,693,348) (9,782,762)
------------ ------------ ------------ ------------
Net increase from Institutional Share
transactions...................................... 5,746,187 875,431 2,209,066 7,193,331
============ ============ ============ ============
INVESTMENT:
Shares issued......................................... 265,482 231,715 203,920 236,573
Reinvestment of distributions......................... 124,536 49,928 45,725 48,614
Shares redeemed....................................... (139,590) (207,110) (118,619) (195,767)
------------ ------------ ------------ ------------
Net increase from Investment Share transactions..... 250,428 74,533 131,026 89,420
============ ============ ============ ============
Net increase from share transactions................ 5,996,615 949,964 2,340,092 7,282,751
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
53
<PAGE> 56
THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FUNDS
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------------------------ -------------------------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued........................................ $137,648,487 $151,546,595 $ 69,650,513 $ 56,866,010
Reinvestment of distributions........................ 3,147,652 4,756,128 5,950,954 18,021,509
Shares redeemed...................................... (50,898,479) (64,667,292) (50,001,044) (172,291,970)
------------ ------------ ------------ -------------
Net increase (decrease) from Institutional Share
transactions..................................... $ 89,897,660 $ 91,635,431 $ 25,600,423 $ (97,404,451)
============ ============ ============ =============
INVESTMENT:
Shares issued........................................ $ 1,976,895 $ 2,020,811 $ 2,739,605 $ 1,824,094
Reinvestment of distributions........................ 128,041 251,525 329,198 755,434
Shares redeemed...................................... (1,176,997) (1,844,744) (1,112,357) (1,507,491)
------------ ------------ ------------ -------------
Net increase from Investment Share transactions.... $ 927,939 $ 427,592 $ 1,956,446 $ 1,072,037
============ ============ ============ =============
Net increase (decrease) from share transactions.... $ 90,825,599 $ 92,063,023 $ 27,556,869 $ (96,332,414)
============ ============ ============ =============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued........................................ 9,359,272 11,200,281 5,172,550 4,734,274
Reinvestment of distributions........................ 215,585 346,491 434,418 1,508,630
Shares redeemed...................................... (3,491,780) (4,991,387) (3,699,843) (14,594,583)
------------ ------------ ------------ -------------
Net increase (decrease) from Institutional Share
transactions..................................... 6,083,077 6,555,385 1,907,125 (8,351,679)
============ ============ ============ =============
INVESTMENT:
Shares issued........................................ 137,013 153,600 205,672 149,481
Reinvestment of distributions........................ 8,820 18,673 24,012 62,301
Shares redeemed...................................... (81,019) (141,025) (81,276) (128,627)
------------ ------------ ------------ -------------
Net increase from Investment Share transactions.... 64,814 31,248 148,408 83,155
============ ============ ============ =============
Net increase (decrease) from share transactions.... 6,147,891 6,586,633 2,055,533 (8,268,524)
============ ============ ============ =============
</TABLE>
See Notes to Financial Statements.
54
<PAGE> 57
THE KENT
FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended December 31, 1996, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------------------------ ------------ ------------
<S> <C> <C>
Growth and Income
Fund.................. $212,771,808 $172,450,396
Small Company Growth
Fund.................. 108,061,586 79,382,408
International Growth
Fund.................. 140,594,308 41,180,383
Index Equity Fund....... 28,300,325 4,117,798
</TABLE>
6. FOREIGN SECURITIES
The Growth and Income Fund and the International Growth Fund can purchase
securities of foreign issuers. Investing in securities of foreign issuers
involves special risks not typically associated with investing in securities of
U.S. issuers.
The risks include devaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than those of
securities of comparable U.S. issuers.
7. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
During the year ended December 31, 1996, the following Portfolios declared
long-term capital gain distributions in the following amounts:
<TABLE>
<CAPTION>
FUND AMOUNT
- --------------------------------------- -----------
<S> <C>
Growth and Income Fund................. $38,779,536
Small Company Growth Fund.............. 16,865,229
International Growth Fund.............. 3,240,886
Index Equity Fund...................... 4,624,058
</TABLE>
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal year.
The International Growth Fund had deferred losses of $81,562 which will be
treated as arising on the first day of the fiscal year ending December 31, 1997.
For the taxable year ended December 31, 1996, the following percentages of
income dividends paid by the following Portfolios qualify for the dividends
received deduction available to corporations:
<TABLE>
<CAPTION>
QUALIFIED
FUND DIVIDEND INCOME
- ------------------------------------ ---------------
<S> <C>
Growth and Income Fund.............. 59.7%
Small Company Growth Fund........... 52.6
Index Equity Fund................... 96.0
</TABLE>
See Notes to Financial Statements.
55
<PAGE> 58
THE KENT
FUNDS
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992(1)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 13.25 $ 10.50 $ 10.91 $ 10.31 $ 10.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.30 0.33 0.31 0.27 0.06
Net realized and unrealized gains (losses) on
securities and futures contracts.................... 2.16 3.28 (0.26) 0.95 0.31
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 2.46 3.61 0.05 1.22 0.37
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.30) (0.33) (0.31) (0.27) (0.06)
In excess of net investment income.................... -- -- ** (0.01) **
Net realized gains on securities and futures
contracts........................................... (1.51) (0.53) (0.15) (0.34) --
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (1.81) (0.86) (0.46) (0.62) (0.06)
-------- -------- -------- -------- --------
Net change in net asset value........................... 0.65 2.75 (0.41) 0.60 0.31
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 13.90 $ 13.25 $ 10.50 $ 10.91 $ 10.31
======== ======== ======== ======== ========
Total return............................................ 19.47% 34.91% 0.51% 11.98% 3.68%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $500,857 $401,371 $308,825 $180,864 $ 76,449
Ratio of expenses to average net assets............... 0.95% 0.94% 0.98% 1.03% 0.19%++
Ratio of net investment income to average net
assets.............................................. 2.18% 2.73% 3.04% 2.61% 3.51%+
Ratio of expenses to average net assets............... 0.95%* +++ +++ +++ +++
Ratio of net investment income to average net
assets.............................................. 2.18%* +++ +++ +++ +++
Portfolio turnover rate(2)............................ 39% 58% 28% 54% 0%
Average commission rate paid(3)....................... $ 0.0539 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized
++ Not Annualized
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on November 2, 1992.
(2) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
56
<PAGE> 59
THE KENT
FUNDS
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992(1)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 13.19 $ 10.46 $ 10.87 $ 10.29 $ 10.23
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.26 0.30 0.32 0.27 **
Net realized and unrealized gains (losses) on
securities and futures contracts.................... 2.15 3.26 (0.27) 0.93 0.06
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 2.41 3.56 0.05 1.20 0.06
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.26) (0.30) (0.31) (0.23) --
In excess of net investment income.................... (0.02) -- ** (0.05) --
Net realized gains on securities and futures
contracts........................................... (1.51) (0.53) (0.15) (0.20) --
In excess of net realized gains....................... -- -- -- (0.14) --
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (1.79) (0.83) (0.46) (0.62) --
-------- -------- -------- -------- --------
Net change in net asset value........................... 0.62 2.73 (0.41) 0.58 0.06
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 13.81 $ 13.19 $ 10.46 $ 10.87 $ 10.29
======== ======== ======== ======== ========
Total return(2)......................................... 19.14% 34.61% 0.50% 11.81% 0.59%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 15,063 $ 11,079 $ 8,005 $ 4,607 $ 102
Ratio of expenses to average net assets............... 1.09% 1.18% 0.98% 1.22% 0.33%++
Ratio of net investment income (loss) to average net
assets.............................................. 1.77% 2.48% 3.03% 2.43% (0.88%)+
Ratio of expenses to average net assets............... 1.09%* +++ +++ +++ +++
Ratio of net investment income to average net
assets.............................................. 1.77%* +++ +++ +++ +++
Portfolio turnover rate(3)............................ 39% 58% 28% 54% 0%
Average commission rate paid(4)....................... $ 0.0539 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized
++ Not Annualized
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Investment Class date of initial public investment was December 1,
1992.
(2) Calculation does not include sales charge.
(3) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(4) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
57
<PAGE> 60
THE KENT
FUNDS
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1996 1995 1994 1993 1992(1)
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period..................... $ 13.82 $ 11.99 $ 12.50 $ 10.85 $ 10.00
-------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income.................................. 0.12 0.10 0.10 0.08 0.02
Net realized and unrealized gains (losses) on
securities and futures contracts..................... 2.55 2.64 (0.10) 1.76 0.86
-------- -------- -------- -------- -------
Total Income from Investment Operations.............. 2.67 2.74 -- 1.84 0.88
-------- -------- -------- -------- -------
Less Dividends and Distributions from:
Net investment income.................................. (0.12) (0.10) (0.09) (0.08) (0.02)
In excess of net investment income..................... -- -- (0.01) (0.01) (0.01)
Net realized gains on securities and futures
contracts............................................ (0.72) (0.81) (0.41) (0.10) --
-------- -------- -------- -------- -------
Total Dividends and Distributions.................... (0.84) (0.91) (0.51) (0.19) (0.03)
-------- -------- -------- -------- -------
Net change in net asset value............................ 1.83 1.83 (0.51) 1.65 0.85
-------- -------- -------- -------- -------
Net asset value, end of period........................... $ 15.65 $ 13.82 $ 11.99 $ 12.50 $ 10.85
======== ======== ======== ======== =======
Total return............................................. 19.56% 23.75% (0.06) 17.04% 8.75%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $544,081 $450,072 $304,179 $252,401 $95,999
Ratio of expenses to average net assets................ 0.96% 0.97% 0.98% 1.06% 0.18%++
Ratio of net investment income to average net assets... 0.78% 0.83% 0.79% 0.74% 1.35%+
Ratio of expenses to average net assets................ 0.96%* +++ +++ +++ +++
Ratio of net investment income to average net assets... 0.78%* +++ +++ +++ +++
Portfolio turnover rate(2)............................. 16% 30% 20% 14% 1%
Average commission rate paid(3)........................ $ 0.0481 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized.
++ Not Annualized.
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Institutional Class commenced operations on November 2, 1992.
(2) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
58
<PAGE> 61
THE KENT
FUNDS
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1996 1995 1994 1993 1992(1)
------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............................ $ 13.81 $ 11.98 $12.49 $10.86 $10.65
------- ------- ------ ------ ------
Income (Loss) from Investment Operations:
Net investment income......................................... 0.07 0.07 0.10 0.08 **
Net realized and unrealized gains (losses) on securities and
futures contracts........................................... 2.54 2.64 (0.11) 1.74 0.21
------- ------- ------ ------ ------
Total Income (Loss) from Investment Operations.............. 2.61 2.71 (0.01) 1.82 0.21
------- ------- ------ ------ ------
Less Dividends and Distributions from:
Net investment income......................................... (0.08) (0.07) (0.08) (0.06) --
In excess of net investment income............................ (0.01) -- (0.01) (0.03) --
Net realized gains on securities and futures contracts........ (0.72) (0.81) (0.41) (0.10) --
------- ------- ------ ------ ------
Total Dividends and Distributions........................... (0.81) (0.88) (0.50) (0.19) --
------- ------- ------ ------ ------
Net change in net asset value................................... 1.80 1.83 (0.51) 1.63 0.21
------- ------- ------ ------ ------
Net asset value, end of period.................................. $ 15.61 $ 13.81 $11.98 $12.49 $10.86
======= ======= ====== ====== ======
Total return(2)................................................. 19.16% 23.47% (0.08%) 16.84% 1.97%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)............................... $14,436 $10,955 $8,433 $5,345 $ 84
Ratio of expenses to average net assets....................... 1.21% 1.20% 0.98% 1.25% 0.27%++
Ratio of net investment income to average net assets.......... 0.53% 0.59% 0.79% 0.59% (1.50%)+
Ratio of expenses to average net assets....................... 1.21%* +++ +++ +++ +++
Ratio of net investment income to average net assets.......... 0.53%* +++ +++ +++ +++
Portfolio turnover rate(3).................................... 16% 30% 20% 14% 1%
Average commission rate paid(4)............................... $0.0481 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized.
++ Not Annualized.
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
* Amount is less than $0.005.
(1) The Investment Class date of initial public investment was December 4,
1992.
(2) Calculation does not include sales charge.
(3) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(4) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
59
<PAGE> 62
THE KENT
FUNDS
INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992(1)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 14.18 $ 13.06 $ 12.84 $ 10.01 $ 10.00
-------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income................................. 0.13 0.13 0.12 0.09 **
Net realized and unrealized gains (losses) on
securities and foreign currency..................... 0.70 1.54 0.61 2.95 0.02
-------- -------- -------- -------- -------
Total Income from Investment Operations................. 0.83 1.67 0.73 3.04 0.02
-------- -------- -------- -------- -------
Less Dividends and Distributions from:
Net investment income................................. (0.10) (0.13) (0.07) (0.08) --
In excess of net investment income.................... (0.02) (0.11) (0.03) (0.04) (0.01)
Net realized gains on securities and foreign
currency............................................ (0.13) (0.31) (0.41) (0.08) --
In excess of net realized gains....................... (0.01) -- -- (0.01) --
-------- -------- -------- -------- -------
Total Dividends and Distributions................... (0.26) (0.55) (0.51) (0.21) (0.01)
-------- -------- -------- -------- -------
Net change in net asset value........................... 0.57 1.12 0.22 2.83 0.01
-------- -------- -------- -------- -------
Net asset value, end of period.......................... $ 14.75 $ 14.18 $ 13.06 $ 12.84 $ 10.01
======== ======== ======== ======== =======
Total return............................................ 5.87% 13.00% 5.73% 30.32% 0.20%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $387,799 $286,545 $178,186 $157,716 $ 81,105
Ratio of expenses to average net assets............... 1.09% 1.17% 1.22% 1.33% 0.14%++
Ratio of net investment income to average net
assets.............................................. 0.97% 1.35% 0.87% 0.86% (0.28%)+
Ratio of expenses to average net assets............... 1.09%* +++ +++ +++ +++
Ratio of net investment income to average net
assets.............................................. 0.97%* +++ +++ +++ +++
Portfolio turnover rate(2)............................ 13% 6% 20% 5% 0%
Average commission rate paid(3)....................... $ 0.0219 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized
++ Not Annualized
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on December 4, 1992.
(2) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
60
<PAGE> 63
THE KENT
FUNDS
INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992(1)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 14.13 $ 13.00 $ 12.81 $ 10.03 $ 10.00
-------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income................................. 0.12 0.14 0.14 0.13 **
Net realized and unrealized gains on securities and
foreign currency.................................... 0.66 1.50 0.56 2.85 0.03
-------- -------- -------- -------- -------
Total Income from Investment Operations............. 0.78 1.64 0.70 2.98 0.03
-------- -------- -------- -------- -------
Less Dividends and Distributions from:
Net investment income................................. (0.08) (0.09) (0.07) (0.02) --
In excess of net investment income.................... -- (0.11) (0.03) (0.09) --
Net realized gains on securities and foreign
currency............................................ (0.14) (0.31) (0.41) (0.05) --
In excess of net realized gains....................... -- -- -- (0.04) --
-------- -------- -------- -------- -------
Total Dividends and Distributions................... (0.22) (0.51) (0.51) (0.20) --
-------- -------- -------- -------- -------
Net change in net asset value........................... 0.56 1.13 0.19 2.78 0.03
-------- -------- -------- -------- -------
Net asset value, end of period.......................... $ 14.69 $ 14.13 $ 13.00 $ 12.81 $ 10.03
======== ======== ======== ======== =======
Total return(2)......................................... 5.57% 12.86% 5.51% 29.67% 0.30%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 8,799 $ 7,548 $ 6,539 $ 3,202 $ 15
Ratio of expenses to average net assets............... 1.34% 1.40% 1.25% 1.43% 0.20%++
Ratio of net investment income to average net
assets.............................................. 0.74% 1.11% 0.81% 0.32% (1.34%)+
Ratio of expenses to average net assets............... 1.34%* +++ +++ +++ +++
Ratio of net investment income to average net
assets.............................................. 0.74%* +++ +++ +++ +++
Portfolio turnover rate(3)............................ 13% 6% 20% 5% 0%
Average commission rate paid(4)....................... $ 0.0219 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized
++ Not annualized.
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Investment Class date of initial public investment was December 4,
1992.
(2) Calculation does not include sales charge.
(3) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(4) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
61
<PAGE> 64
THE KENT
FUNDS
INDEX EQUITY FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1996 1995 1994 1993 1992(1)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 12.56 $ 10.68 $ 11.04 $ 10.41 $ 10.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.26 0.26 0.25 0.23 0.05
Net realized and unrealized gains (losses) on
securities and futures contracts.................... 2.47 3.44 (0.15) 0.71 0.41
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 2.73 3.70 0.10 0.94 0.46
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.26) (0.25) (0.26) (0.23) (0.05)
In excess of net investment income.................... -- -- -- ** **
Net realized gains on securities and future
contracts........................................... (0.28) (1.57) (0.20) (0.08) --
In excess of net realized gains....................... (0.04) -- -- -- --
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (0.58) (1.82) (0.46) (0.31) (0.05)
-------- -------- -------- -------- --------
Net change in net asset value........................... 2.15 1.88 (0.36) 0.63 0.41
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 14.71 $ 12.56 $ 10.68 $ 11.04 $ 10.41
======== ======== ======== ======== ========
Total return............................................ 22.18% 36.23% 0.86% 9.11% 4.55%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $243,438 $183,877 $245,550 $233,451 $153,431
Ratio of expenses to average net assets............... 0.49% 0.56% 0.58% 0.65% 0.13%++
Ratio of net investment income to average net
assets.............................................. 1.91% 2.14% 2.32% 2.18% 2.65%+
Ratio of expenses to average net assets*.............. 0.59% 0.56% 0.58% 0.65% 0.13%++
Ratio of net investment income to average net
assets*............................................. 1.81% 2.14% 2.32% 2.18% 2.65%+
Portfolio turnover rate(2)............................ 2% 3% 50% 1% 0%
Average commission rate paid(3)....................... $ 0.0496 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized
++ Not Annualized
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on November 2, 1992.
(2) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
62
<PAGE> 65
THE KENT
FUNDS
INDEX EQUITY FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1996 1995 1994 1993 1992(1)
------- ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............................ $ 12.57 $10.70 $11.07 $10.44 $ 10.28
------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income......................................... 0.22 0.23 0.26 0.22 **
Net realized and unrealized gains (losses) on securities and
futures contracts........................................... 2.48 3.44 (0.17) 0.72 0.16
------ ------ ------ ------ ------
Total Income from Investment Operations......................... 2.70 3.67 0.09 0.94 0.16
------ ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income......................................... (0.22) (0.23) (0.26) (0.20) --
In excess of net investment income............................ (0.01) -- -- (0.03) --
Net realized gains on securities and futures contracts........ (0.32) (1.57) (0.20) (0.06) --
In excess of net realized gains............................... -- -- -- (0.02) --
------ ------ ------ ------ ------
Total Dividends and Distributions........................... (0.55) (1.80) (0.46) (0.31) --
------ ------ ------ ------ ------
Net change in net asset value................................... 2.15 1.87 (0.37) 0.63 0.16
------ ------ ------ ------ ------
Net asset value, end of period.................................. $ 14.72 $12.57 $10.70 $11.07 $ 10.44
====== ====== ====== ====== ======
Total return(2)................................................. 21.92% 35.81% 0.75% 9.09% 1.56%++
Net Assets, end of Period (000's)............................... $ 9,925 $6,612 $4,736 $3,776 $ 89
Ratio of expenses to average net assets....................... 0.74% 0.80% 0.60% 0.86% 0.12%++
Ratio of net investment income to average net assets.......... 1.67% 1.86% 2.30% 2.04% 1.03%+
Ratio of expenses to average net assets*...................... 0.84% 0.81% 0.60% 0.86% 0.12%++
Ratio of net investment income to average net assets*......... 1.57% 1.85% 2.30% 2.04% 1.03%+
Portfolio turnover rate(3).................................... 2% 3% 50% 1% 0%
Average commission rate paid(4)............................... $0.0496 -- -- -- --
<FN>
- ------------------------------------------------------------------------
+ Annualized
++ Not Annualized
+++ During the period, there were no waivers and/or reimbursements.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Investment Class date of initial public investment was November 25,
1992.
(2) Calculation does not include sales charge.
(3) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(4) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for prior periods.
</TABLE>
See Notes to Financial Statements.
63
<PAGE> 66
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees of
The Kent Funds:
We have audited the accompanying statements of assets and liabilities of The
Kent Funds -- Growth and Income Fund, Small Company Growth Fund, International
Growth Fund, and Index Equity Fund, including the portfolios of investments, as
of December 31, 1996, and the related statements of operations, statements of
changes in net assets and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of The Kent Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
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 verification of securities owned as of
December 31, 1996, by confirmation with the custodian and other appropriate
audit procedures. 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 position of each
of the aforementioned funds at December 31, 1996, the results of their
operations, the changes in their net assets and the financial highlights for
each of the periods indicated herein, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 21, 1997
<PAGE> 67
THE ----------------
KENT FUNDS(R) | BULK RATE |
| USPOSTAGE |
P.O. Box 182201 | PAID |
Columbus, Ohio 43218-2201 | PERMIT No. 1 |
| CLEVELAND, OH |
----------------
KKF-0160 (2/97)
