<PAGE> 1
Kent Funds
Semi-Annual Report
[Kent Funds Logo] June 30, 1998
Kent Growth and Income Fund
Kent Small Company Growth Fund
Kent International Growth Fund
Kent Index Equity Fund
Kent Short Term Bond Fund
Kent Intermediate Bond Fund
Kent Income Fund
Kent Limited Term Tax-Free Fund
Kent Intermediate Tax-Free Fund
Kent Tax-Free Income Fund
Kent Michigan Municipal Bond Fund
Kent Money Market Fund
Kent Michigan Municipal Money Market Fund
Kent Government Money Market Fund
[Kent Funds Logo]
<PAGE> 2
MESSAGE TO SHAREHOLDERS
Dear Kent Funds Shareholder:
Following is the semi-annual report for the Kent Funds for the six-months
ended June 30, 1998. The report contains the following features:
- Economic Outlook by Joseph T. Keating, Chief Investment Officer, Lyon
Street Asset Management Company
- Fund Manager Updates -- investment strategy, performance overview and
outlook for the coming months for each of the Kent Funds
- Portfolio of Investments --summary of the holdings in each portfolio
by industry
- Statements of Assets and Liabilities --summary of the assets and
liabilities of the fund
- Statement of Operations -- summary of operations and its effect on the
assets of the fund
- Statements of Changes in Net Assets -- summary of changes in asserts
during period
- Notes to Financial Statements
- Financial Highlights -- per share summary of activity affecting net
asset value
We appreciate the confidence you have placed in us and continue to focus on
providing our shareholders with good value and attractive potential for growth.
If you have any questions about your investments after reading this report,
please call the Kent Funds Shareholder Servicing Center at 1-800-633-KENT (5368)
between the hours of 8:00 am. and 9:00 p.m. EST.
We remain committed to sound investment principles and to providing you
with useful information that can help you make the most of your investments.
Sincerely,
/s/ James F. Duca, II
James F. Duca, II
President
INVESTMENT ADVISER
Lyon Street Asset Management Company
111 Lyon Street N.W.
Grand Rapids, MI 49503
- --------------------------------------------------------------------------------
Shares of the funds are not deposits or obligations of, or guaranteed or
endorsed by, Lyon Street Asset Management Company 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. There
can be no assurance that the money market funds will be able to sustain a
stable net asset value of $1.00 per share.
- --------------------------------------------------------------------------------
This report is submitted for the general information of shareholders of The Kent
Funds. 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 distributor for the Kent Funds is BISYS Fund Services.
The performance indices used for comparison in this report 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.
1
<PAGE> 3
ECONOMIC OUTLOOK
REAL ECONOMIC ACTIVITY
Widening Trade Deficit and Inventory Drawdown Dampen Economy's Growth Rate.
The economy's growth rate slowed to its slowest pace in three years during
the second quarter, but several factors masked a much stronger pace of domestic
demand. The economy grew at only a 1.4 percent rate, much below the first
quarter pace of 5.5 percent. The rising trade deficit--largely the result of
falling exports to Asia and rising imports from the region--subtracted three
percentage points from the economy's growth rate. The combination of the virtual
implosion of a number of the Asian economies and the continued strength in the
U.S. dollar are largely responsible for a $121.3 billion deterioration in real
net exports over the past four quarters. The foreign trade sector is expected to
further impede the economy's growth rate during the second half of the year, as
there simply is not a likely quick resolution for many Asian economies'
fundamental problems of over-capacity and the related over-indebtedness and bank
credit crunch difficulties.
<TABLE>
Real Economic Activity*
<CAPTION>
1Q 1998* 2Q 1998
<S> <C> <C>
Gross Domestic Product 5.5% 1.4%
Domestic Private Final Sales 8.7% 7%
Personal Consumption Expenditures 6.1% 5.8%
Disposible Personal Income 4% 2.9%
<FN>
*Annualized
</TABLE>
A scaling back of business inventories, which had ballooned over the past
two quarters, reduced real gross domestic product by another 2.6 percentage
points during the second quarter. The inventory drawdown was amplified by the
strike at General Motors, which took about a half percentage point off the
economy's growth rate. This internal brake on the economy's growth rate largely
will vanish during the second half of the year as inventory-to-sales ratios have
quickly gotten back in line.
Strong Consumer Spending and the Wealth Effect.
Despite the economy's slower growth rate last quarter, domestic demand was
strong across practically all sectors of the economy. Consumer spending was
surprisingly strong, growing at a 5.8 percent rate on the heels of a 6.1 percent
gain during the first quarter. This means consumer spending in the first half of
the year was running at nearly twice the healthy 3.2 percent average gains of
the past three years. While solid employment and income gains are helping to
support the sharp gains in household spending, the second-quarter data gave the
most conclusive indication to date that the consumption boom fueling the economy
has strong links to the heady gains in the stock market. The personal savings
rate fell to an all-time low of 0.6 percent during the quarter, implying that
consumers were willing to spend virtually all of their wage and salary income as
long as their investments gained in value. Should the current weakness in stock
prices persist a while longer, this would imply that consumer spending could
weaken from its torrid first half pace during the second half of the year.
<TABLE>
Consumer Spending*
<CAPTION>
2Q 1998
<S> <C>
Durable Goods 10.0%
Motor Vehicles 17.1%
Furniture 3.9%
Nondurable Goods 5.9%
Food 6.3%
Apparel 6.5%
Services 4.8%
Electricity & Gas 24.8%
<FN>
*Annualized
</TABLE>
Durable goods outlays were the strongest component of consumer spending,
with automobile and light truck purchases leading the way. The aforementioned
wealth effect and a buy in advance of shortages phenomenon arising from the
General Motors' strike pushed motor vehicle purchases ahead at a robust 17.1
percent annual rate. Despite continued strength in the housing market, furniture
outlays slowed to a 3.9 percent rate following a very sharp rise of 24.2 percent
during the first quarter.
Spending for nondurable goods and services, typically the steadiest
components of consumer spending, rose at strong 5.9 and 4.8 percent rates,
2
<PAGE> 4
respectively. Outlays for food and apparel both rose at rates in excess of six
percent, far above their trendline growth rates. The gain in services was
boosted by a 24.8 percent jump in utility expenditures due to the extremely hot
weather in many regions of the country.
Slower, But Still Strong Equipment Outlays.
Producers' durable equipment purchases were, once again, the strongest
sector of the economy last quarter, growing at a very healthy 17.8 percent rate.
That advance was sharply below the first quarter's blistering 34.3 percent
increase, however. A dampened pace of spending for computers helped contribute
to the slower growth rate for equipment outlays, as they grew at only an
astounding 64.3 percent rate compared to the unbelievable rate of 109.4 percent
during the first quarter.
<TABLE>
<CAPTION>
Business Capital Spending*
1Q 1998* 2Q 1998
<S> <C> <C>
Producers' Durable Equipment 34.3% 17.8%
High Technology Equipment 47.5% 30.5%
Computers 109.4% 64.3%
Structures -4.9% -4.5%
</FN>
*Annualized
</TABLE>
While the economy has grown at a 3.0 percent rate since the beginning of
the current business expansion, equipment expenditures have grown at an 11.3
percent rate. Roughly two thirds of the advance in equipment purchases has been
on high-technology equipment, which has grown at an amazing 18.3 percent rate
over the past seven years. Spending on computers alone has increased almost
elevenfold. We believe the main motivation behind the surge in equipment
purchases is the desire of businesses to improve their competitiveness by
increasing productivity, restraining costs, boosting quality, and increasing
product differentiation. The fact that the price of high-technology equipment
has been declining at a 7.3 percent compound annual rate since the beginning of
the expansion while labor compensation has been rising has been an added
incentive to invest in high-technology equipment. The massive push to upgrade
operating, accounting, and peripheral systems to ensure compliance with Year
2000 standards also is providing a significant near-term push to computer
outlays.
Reflecting the sharp decline in mortgage rates, the solid gains in
employment and income, and the wealth created through higher common stock
prices; all segments of the housing market remain very strong. Residential
construction outlays rose at a 13.2 percent rate following a 15.6 percent gain
during the first quarter. Housing starts averaged 1.56 million during the second
quarter, 6.9 percent above year ago levels. Housing starts during February and
June reached their highest level since 1989. Existing home sales ran at an
annual rate of 4.77 million during the second quarter, after reaching an
all-time high of 4.89 million during March. Existing home sales during the first
six months of the year ran at a rate 11.2 percent ahead of their 1997 pace.
No End to the Expansion in Sight.
Despite the sharp slowdown in the second quarter from the economy's
first-quarter growth rate, we feel there is little risk of the economy falling
into a recession in the near term. Domestic demand remains strong, although some
slowing in consumer spending and housing expenditures is expected. The
adjustment to inventory levels has largely been made and (R) foreign trade
deficit will continue to grow, the rate of deterioration will likely slow. We
had been looking for the economy's growth rate to slow from its unsustainable
first quarter pace to a growth rate closer to two percent over the remaining
three quarters of the year. With the release of the second-quarter data, our
outlook is unchanged. We believe the current developments will help to prolong
the life of the current business expansion and keep it on track to become the
longest peacetime expansion on record.
INFLATION
No Inflationary Pressures on the Horizon.
Inflation remains utterly absent. The gross domestic product price index
was below one percent in both the first and second quarters of the year, with
3
<PAGE> 5
Economic Outlook
the 0.8 percent rise in the second quarter being the lowest in thirty-five
years. The price index for gross domestic purchases, which measures what
domestic purchasers pay for domestically produced and imported goods and
services, recorded mild deflation during the first quarter and was largely
unchanged during the second quarter. The consumer price index rose at a 2.5
percent rate as El Nino-related increases in food prices and higher taxes on
tobacco products provided a one-time boost to consumer prices. The producer
price index signaled that price increases at the wholesale level are still very
much under control.
We still do not foresee any material increase in inflationary pressures in
the foreseeable future, although we admit it would be very difficult for the
inflation readings to improve much further. In our view the self-reinforcing
nature of a low inflation environment, ample world wide manufacturing capacity,
the focus on achieving additional productivity gains to keep costs under
control, the deflationary influences of ever expanding global trade, the
strength of the U.S. dollar, and the ongoing economic crisis in Asia will
continue to restrain inflationary pressures. Inflation may rise about 1.0
percent to 1.5 percent in 1998 and be close to that mark in 1999.
<TABLE>
INFLATION MEASURES*
<CAPTION>
1Q 1998 2Q 1998
<S> <C> <C>
Gross Domestic Product Price Index 0.9% 0.8%
Gross Domestic Purchases Price Index -0.2% 0.4%
Consumer Price Index 0.4% 2.5%
Producer Price Index -4.3% 1.2%
<FN>
*Annualized
</TABLE>
JOSEPH T. KEATING
President and Chief Investment Officer
The information contained herein is based on U.S. Commerce Department data
released July 31, 1998.
4
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[THIS PAGE INTENTIONALLY LEFT BLANK]
5
<PAGE> 7
PORTFOLIO REVIEWS
THE KENT GROWTH AND INCOME FUND
by Allan J. Meyers
Portfolio Manager
Market conditions were mixed during the six months that ended June 30,
1998. Common stocks performed extremely well during the first four and one-half
months of the period, as strong economic growth, low inflation and falling
interest rates combined to provide an ideal investment environment. The Dow
Jones Industrial Average climbed over 9000 for the first time, eventually
peaking at 9211 in mid-May. Subsequently, however, stock prices fell as
investors became concerned about the impact a deepening recession in Asia could
have on corporate earnings in this country. Large-company stocks outperformed
the rest of the market as investors sought liquidity in the face of uncertainty
in Asia.
For the six months ended June 30, 1998, the Fund's Institutional and
Investment shares delivered total returns of 16.62% and 16.40%, respectively.
That compares with returns of 12.17% for the average of growth and income
funds(1) tracked by Lipper Analytical Services, and 17.72% for the S&P 500
Composite Stock Price Index. The S&P 500 Index is an unmanaged index generally
representative of the U.S. stock market.
FOCUS ON LARGE-COMPANY SHARES
During the period, the Fund benefited from moves made at the end of 1997
and the beginning of 1998. Such moves included the addition of large-company
shares such as General Electric (3.5% of the Portfolio), Microsoft (3.2%), Merck
(1.8%), Coca-Cola (2.3%) and Lucent Technology (1.5%). Those stocks performed
well during the period as large-cap technology, health-care and consumer
cyclical stocks showed strong gains. Those gains came as investors sought
liquidity that might offer some protection if Asia's financial uncertainties
caused the United States market to decline sharply. Investors also prized larger
companies' ability to increase shareholder value through stock buybacks,
acquisitions and restructurings.
Underperforming sectors included transportation, basic materials and energy
stocks. We added to the Fund's stake in financial services companies such as
Allstate (0.6%) and Morgan Stanley Dean Witter (0.8%), as well as
telecommunications stocks such as WorldCom (0.3%). We also trimmed the Fund's
holdings in the technology sector.
<TABLE>
THE KENT GROWTH AND INCOME FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<S> <C>
Consumer Discretionary 4.2%
Consumer Staples 11.5%
Utilities 8.6%
Conglomerates 5.0%
Retail 6.7%
Oil/Energy 8.0%
Other 7.1%
Basic Materials 3.7%
Medical 12.2%
Finance 17.5%
Computer & Technology 15.5%
</TABLE>
Portfolio composition is subject to change.
LOOKING AHEAD
In our view it seems possible that economic growth in the United States
will slow during the coming months, with corporate profits perhaps rising at a
more modest 5% rate. While common stock prices may have gotten ahead of the
underlying fundamentals during the first half of the year, as long as interest
rates and inflation remain stable, and the economic expansion remains intact,
the investment environment should be conducive to common stock prices rising
over time. We will continue to invest in companies with strong growth prospects
when their shares appear undervalued based on factors such as price-to-earnings
and price-to-book value ratios. In the long run, such a strategy could reward
shareholders with solid returns regardless of short-term market fluctuations.
(1)The Lipper Growth and Income Funds Average consist of funds that combine a
growth-of-earnings orientation and income requirement for level and/or rising
dividends.
6
<PAGE> 8
PORTFOLIO REVIEWS
THE KENT GROWTH AND INCOME FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 12/1/92)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months* 16.62% 16.40%
One Year 26.20% 25.83%
Three Years 25.39% 25.06%
Five Years 19.71% 19.47%
Life of Fund 19.37% 18.79%
<FN>
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON WITH STANDARD & POOR'S COMPOSITE INDEX
OF 500 STOCKS
- --------------------------------------------------------------------------------
STANDARD & POOR'S COMPOSITE INDEX OF 500 STOCKS
<TABLE>
THE KENT GROWTH AND INCOME FUND
INSTITUTIONAL CLASS SHARES
<CAPTION>
Standard & Poor's Composite of 500 Stocks
<S> <C> <C>
11/2/92 $10,000 $10,000
12/31/92 10,398 10,472
12/31/93 11,610 11,518
12/31/94 11,669 11,669
12/31/95 15,743 16,036
12/31/96 18,809 19,737
12/31/97 23,351 26,321
6/30/98 27,234 30,985
</TABLE>
<TABLE>
THE KENT GROWTH AND INCOME FUND
INVESTMENT CLASS SHARES
<CAPTION>
<S> <C> <C>
12/1/92 $10,000 $10,000
12/31/92 10,059 10,131
12/31/93 11,247 11,143
12/31/94 11,302 11,288
12/31/95 15,213 15,514
12/31/96 18,124 19,093
12/31/97 22,454 25,464
6/30/98 26,132 29,976
</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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses. 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.
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.
7
<PAGE> 9
PORTFOLIO REVIEWS
THE KENT SMALL COMPANY GROWTH FUND+
by David Eder
Portfolio Manager
The six months ended June 30, 1998, were difficult for small-company
stocks, as investors sought safety in liquid stocks of the largest companies.
This flight to liquidity stemmed from concerns about how the Asian financial
crisis would affect corporate earnings in this country. Technology stocks in the
small-cap sector were hit especially hard. Financial services companies were the
best performing sector; those companies' shares rose 5.2% during the period.
The Fund's Institutional and Investment shares returned 4.31% and 4.15%,
respectively, for the six-month period ended June 30, 1998. Over the same
period, the average of small-cap growth Funds(1) tracked by Lipper Analytical
Services returned 6.48%, and the Russell 2000 Index gained 4.93%. The Russell
2000 Index is an unmanaged index that is generally representative of
small-capitalization stocks in the U.S. stock market.
OPPORTUNITIES IN TECHNOLOGY AND MEDICAL STOCKS
As a matter of investment policy, we added to the Fund's holdings in
underperforming sectors, with an eye toward finding individual stocks that offer
good value. During the first half of 1998, the poor performance of small-company
technology and medical stocks presented good opportunities in those sectors. As
companies' stock prices and market capitalizations rise, we sell our shares in
them to ensure that the Fund retains its small-cap focus. Two such stocks that
we sold during the period were Suiza Foods and North Fork Bank Corp.
Although small-company stocks lagged the overall market during the period,
some individual issues performed well. Top performing stocks in the Fund
included shares of VISX, Inc. (up 169%), which develops equipment for laser
vision correction, and shares of InterVoice (up 137%), which makes call
automation systems.
The Fund lagged its benchmark index, the Russell 2000, largely because the
Fund has a much smaller stake than the Russell 2000 in smaller stocks listed on
the Nasdaq stock exchange, which outperformed smaller stocks listed on the New
York Stock Exchange during the period. In addition, the stocks in the Fund have
an average market capitalization of $520 million, significantly smaller than
that of the stocks in the Russell 2000. That size difference contributed to the
Fund's underperformance of its benchmark, as smaller firms were among the worst
performers in the market.
<TABLE>
THE KENT SMALL COMPANY GROWTH FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<S> <C>
Oil/Energy 4.5%
Conglomerates 1.0%
Industrial Products 6.9%
Utilities 5.6%
Other 11.3%
Retail 7.5%
Medical 8.3%
Basic Materials 5.9%
Computer & Technology 17.5%
Consumer Staples 4.9%
Consumer Discretionary 6.4%
Finance 20.2%
</TABLE>
Portfolio composition is subject to change.
THE OUTLOOK
We believe that the outlook for the small-company sector is positive.
Valuations in this sector are much lower than in other sectors of the market.
For example, the stocks that make up the Russell 2000 have an average
price-to-earnings ratio of 23.5, compared to a P/E of more than 28 for the
stocks in the Standard & Poor's 500 Stock Index. Stocks in the technology and
medical sectors in particular have fallen to very attractive valuation levels
over the last six months, and the Fund is well positioned to take advantage of a
rebound in those sectors. We will maintain a broadly diversified portfolio,
taking advantage of opportunities to invest in the small-company sectors' best
values.
+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'
stock has experienced a greater degree of market volatility than average.
(1)The Lipper Small Cap Funds Average consists of funds that, by prospectus
language or portfolio practice, invest primarily in companies with market
capitalizations less than $1 billion at the time of purchase.
8
<PAGE> 10
PORTFOLIO REVIEWS
<TABLE>
THE KENT SMALL COMPANY GROWTH FUND+
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 12/4/92)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months * 4.31% 4.15%
One Year 15.31% 15.00%
Three Years 20.80% 20.48%
Five Years 16.43% 16.20%
Life of Fund 17.68% 16.40%
<FN>
*Aggregate Total Return
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE RUSSELL 2000 INDEX
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
KENT SMALL COMPANY
GROWTH FUND
INSTITUTIONAL Russell 2000
CLASS SHARES Index
<S> <C> <C>
11/2/92 $10,000 $10,000
12/31/92 10,885 11,140
12/31/93 12,729 13,246
12/31/94 12,722 13,005
12/31/95 15,745 16,704
12/31/96 18,825 19,466
12/31/97 24,085 23,819
6/30/98 25,119 24,993
</TABLE>
<TABLE>
<CAPTION>
KENT SMALL COMPANY
GROWTH FUND
INVESTMENT Russell 2000
CLASS SHARES Index
<S> <C> <C>
12/4/92 $10,000 $10,000
12/31/92 10,197 10,348
12/31/93 11,915 12,304
12/31/94 11,906 12,080
12/31/95 14,702 15,516
12/31/96 17,518 18,081
12/31/97 22,372 22,124
6/30/98 23,296 23,215
</TABLE>
+Small-Cap funds typically carry additional risks since smaller companies
generally have a higher risk of failure. Historically, stocks of smaller
companies have experienced a greater degree of market volatility than stocks
on average. 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.
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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses.
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.
9
<PAGE> 11
PORTFOLIO REVIEWS
THE KENT INTERNATIONAL GROWTH FUND+
BY DAVID EDER
PORTFOLIO MANAGER
During the six months through June 30, 1998, the Kent International Growth
Fund's Institutional and Investment shares returned 14.33% and 14.22%,
respectively. That compares to a 15.93% return for the Morgan Stanley Capital
International Europe, Australia and Far East (EAFE) Index, an unmanaged index
generally representative of foreign stocks. The average international fund(1)
tracked by Lipper Analytical Services returned 15.53%.
The period was characterized by an exceptionally strong performance in
Europe, particularly among countries that will be taking part in the European
Monetary Union (EMU). The advent of a single currency has forced many European
countries to practice greater fiscal and monetary discipline than before. That
discipline, combined with companies' rising emphasis on increasing shareholder
value through cost cutting and restructuring, has led to an extremely positive
investment environment. The MSCI Europe Index(2) rose 26.5% during the first
half of 1998, with markets in Finland (up 65.6%), Spain (up 43.9%), and Belgium
(up 43.3%) posting especially strong returns. In particular, the Fund benefited
from its overweighting in Spain and Italy (up 33.2%).
The strong performance in Europe was offset by continued troubles in Asia,
however. The MSCI Pacific Index fell 5.9% during the period, as investors fled
markets in countries such as Malaysia (down 29.6%) and Singapore (down 31.0%).
Japan continued its slide, as government officials failed to assure investors
that they are serious about instituting policies designed to revive that
country's economy. We held off on any new investments in Japan and will continue
to do so in the absence of effective government policies to address the
country's economic malaise. During the period, we decreased the Fund's holdings
in Japan to 26.3% of the portfolio.
<TABLE>
THE KENT INTERNATIONAL GROWTH FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<S> <C>
Germany 10.0%
Other 8.3%
United Kingdom 21.3%
Netherlands 5.3%
Italy 5.3%
Switzerland 6.3%
France 7.5%
Japan 26.3%
Denmark 1.0%
Australia 2.5%
Spain 3.5%
Hong Kong 2.5%
</TABLE>
Portfolio composition is subject to change.
CONTINUED OPPORTUNITIES OVERSEAS
The Kent International Growth Fund remains a well-diversified fund, with
investments in 862 securities as of June 30, 1998. We aim to reduce risk by
maintaining a balanced portfolio in each country in which the Fund invests.
Looking ahead, we think that Europe can continue to provide strong gains,
as the markets there benefit further from the EMU and increased corporate
efficiency. In Japan, we are waiting to see whether the government follows
through on its promises to stimulate the economy through tax cuts and
restructure a banking system burdened with bad debt. On balance, we believe
overseas markets continue to offer opportunity for gains as well as
diversification benefits.
+International investing involves increased risk and volatility.
(1)The Lipper International Average consists of funds that invest their assets
in securities whose primary trading markets are outside of the United States.
(2)The Morgan Stanley Capital International (MSCI) indices measure performance
for a diverse range of developed country global stock markets, including the
United States, Canada, Europe, Australia, New Zealand and the Far East. The
foundation of the various MSCI Indices is the database of approximately 1,500
companies listed on the stock exchanges of the twenty-four countries for which
there are MSCI national indices. The indices are capitalization weighted.
Furthermore, companies included in the indices replicate the industry
composition of each local market and, in addition, represent a sampling of
large, medium and small capitalization companies from each local market,
taking into account the stocks' liquidity.
10
<PAGE> 12
PORTFOLIO REVIEWS
<TABLE>
THE KENT INTERNATIONAL GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 12/4/92) (inception: 12/4/92)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months * 14.33% 14.22%
One Year 5.43% 5.19%
Three Years 12.98% 12.68%
Five Years 10.47% 10.24%
Life of Fund 12.60% 12.31%
<FN>
*Aggregate Total Return
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
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Morgan Stanley KENT INTERNATIONAL
Morgan Stanley Morgan Stanley Capital International GROWTH FUND,
Capital International Capital International Europe, Australia and INSTITUTIONAL
Pacific Index Europe Index Far East Index CLASS SHARES
<S> <C> <C> <C> <C>
12/4/92 10,000 10,000 10,000 10,000
12/31/92 10,020 10,054 10,233 9,887
12/31/93 13,045 13,367 13,282 13,444
12/31/94 13,794 14,444 13,636 15,195
12/31/95 15,591 16,113 16,653 15,650
12/31/96 16,507 17,138 20,246 14,335
12/31/97 16,926 17,443 25,063 10,681
6/30/98 19,368 20,222 31,702 10,059
</TABLE>
<TABLE>
<CAPTION>
Morgan Stanley KENT INTERNATIONAL
Morgan Stanley Morgan Stanley Capital International GROWTH FUND,
Capital International Capital International Europe, Australia and INVESTMENT
Pacific Index Europe Index Far East Index CLASS SHARES
<S> <C> <C> <C> <C>
12/4/92 $10,000 $10,000 $10,000 $10,000
12/31/92 10,010 10,054 10,233 9,887
12/31/93 13,006 13,367 13,282 13,444
12/31/94 13,723 14,444 13,636 15,195
12/31/95 15,487 16,113 16,653 15,650
12/31/96 16,350 17,138 20,245 14,335
12/31/97 16,719 17,443 25,063 10,681
6/30/98 19,095 20,222 31,702 10,059
</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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses. Total
return is based on changes in net asset value, assuming reinvestment of all
dividends and capitals gain distributions. Certain fees were waived. Had these
waivers not been in effect, total returns would have been lower.
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.
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.
11
<PAGE> 13
PORTFOLIO REVIEWS
THE KENT INDEX EQUITY FUND
BY DAVID EDER
PORTFOLIO MANAGER
The six months through June 30, 1998, were characterized by strong gains in
stocks early in the period and less positive results later on. The stocks in the
Standard & Poor's 500 Index performed very well during the early months of the
year, as investors saw few signs that Asia's financial crisis would affect the
earnings of U.S. corporations. But the stock market's performance fell off
slightly as those concerns later resurfaced. Throughout the period, shares of
the largest companies outperformed the rest of the market as investors sought
liquidity in the face of the uncertainty caused by Asia's financial troubles.
Large-company stocks in the technology, health-care and financial services
sectors outperformed the rest of the market.
For the six months ended June 30, 1998, Institutional and Investment shares
of The Kent Index Equity Fund posted total returns of 17.52% and 17.37%,
respectively. During the same period, the average of growth and income Funds(1)
tracked by Lipper Analytical Services returned 12.17%, and the Standard & Poor's
500 Composite Stock Price Index, an unmanaged index generally representative of
the U.S. stock market, had a total return of 17.72%.
The combination of continued strong performance of the largest companies
and lower earnings expectations has resulted in historically high valuations
among many stocks in the S&P 500. However, with a relatively strong economy, low
interest rates and no signs of an upsurge in inflation, we feel that the
investment environment is conducive to prices of the stocks in the S&P 500
being able to move higher over time as investors continue to favor shares of
large, well-established firms. In fact, any significant correction in shares of
those firms might provide investors with the opportunity to buy great American
companies at a discount, and in some cases at a significant discount to where
they traded just a few weeks or months ago.
<TABLE>
The Kent Index Equity Fund
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<S> <C>
Oil/Energy 7.9%
Other 7.7%
Utilities 8.9%
Computer & Technology 15.4%
Basic Materials 3.7%
Finance 17.7%
Retail 6.5%
Conglomerates 4.7%
Medical 11.8%
Consumer Discretionary 4.2%
Consumer Staples 11.5%
</TABLE>
Portfolio composition is subject to change.
(1)The Lipper Growth and Income Funds Average consists of funds that combine a
growth-of-earnings orientation and income requirement for level and/or rising
dividends.
12
<PAGE> 14
PORTFOLIO REVIEWS
<TABLE>
The Kent Index Equity Fund
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 11/25/92)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months 17.52% 17.37%
One Year 29.55% 29.24%
Three Years 29.43% 29.14%
Five Years 22.28% 22.04%
Life of Fund 21.27% 20.78%
<FN>
*Aggregate Total Return
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE STANDARD & POOR'S COMPOSITE INDEX OF 500 STOCKS
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
The Kent Index Equity Fund Standard & Poor's Composite
Institutional Class Shares Index of 500 Stocks
<S> <C> <C>
11/2/92 $10,000 $10,000
12/31/92 10,440 10,472
12/31/93 11,390 11,518
12/31/94 11,488 11,669
12/31/95 15,648 16,036
12/31/96 19,119 19,737
12/31/97 25,342 26,321
6/30/98 29,781 30,985
</TABLE>
<TABLE>
The Kent Index Equity Fund Stand & Poor's Composite
Investment Class Shares Index of 500 Stocks
<S> <C> <C>
11/25/92 $10,000 $10,000
12/31/92 10,185 10,131
12/31/93 11,111 11,143
12/31/94 11,194 11,288
12/31/95 15,199 15,514
12/31/96 18,531 19,093
12/31/97 24,505 25,464
6/30/98 28,759 29,976
</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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses. 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.
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.
13
<PAGE> 15
PORTFOLIO REVIEWS
THE KENT SHORT TERM BOND FUND
BY MITCHELL STAPLEY
PORTFOLIO MANAGER
The six-month period ended June 30, 1998, was an eventful time for the bond
market. Yields fell sharply early in January as investors flocked to
high-quality U.S. Treasury securities in the wake of the Asian economic crisis.
Yields rebounded temporarily in March, reflecting investors' fears that
continued strong economic growth in the United States would lead to higher
inflation and interest rates. But yields declined during the rest of the period
as investors were reassured by evidence that the Asian crisis was indeed
dampening domestic economic growth. Meanwhile, fewer new Treasury bonds were
issued because of the U.S. budget surplus, thereby boosting demand for existing
bonds. The yield on two-year Treasury notes began the period at 5.64%, and fell
to 5.15% in January before rebounding to 5.63% in March and ending the period at
5.48%.
The Fund's Institutional and Investment Shares gained 2.74% and 2.68%,
respectively, for the six months ended June 30, 1998. That compares to a 3.03%
gain for the Fund's benchmark, the Lehman Brothers 1-3 Year Government Bond
Index, an unmanaged index generally representative of the short-term government
bond market.
A LONG AVERAGE MATURITY
Throughout the period, the Fund maintained an average maturity longer than
that of its benchmark. We extended the Fund's average maturity from 2 years in
January to 2.2 years when rates peaked in early March. We brought that average
maturity back down to 2 years by the end of June as rates declined.
We continued to hold a mix of government issues and high-quality corporate
securities. The average credit rating of the Fund's portfolio was very high, at
AA3. We found opportunities to purchase select corporate issues with high credit
quality in June, when corporate bonds offered attractive yields relative to
Treasury securities. In particular, we believe our holdings in high-quality
finance paper and industrial issues helped boost the Fund's yield without
exposing shareholders to unnecessary risk.
THE KENT SHORT TERM BOND FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
<TABLE>
<S> <C>
Corporate Notes & Bonds 62.9%
U.S. Government & Agency Issues 28.9%
Cash Equivalents Net Other Assets & Liabilities 8.2%
</TABLE>
Portfolio composition is subject to change.
THE OUTLOOK
We expect that the economic expansion will continue into the foreseeable
future despite the significant slowdown in the growth of the economy's gross
domestic product during the second quarter. We believe that continued strength
in domestic demand will be countered by fallout from the Asian crisis, which
could continue to hurt the U.S. manufacturing sector.
Putting it together, economic growth likely will slow and may be closer to
two percent in the months ahead, and inflation should remain low. In that
environment, interest rates could fall further. We will maintain the Fund's
relatively long average maturity, and we will consider any increase in interest
rates as an opportunity to purchase select high-quality issues at attractive
prices.
<TABLE>
<CAPTION>
THE KENT SHORT TERM BOND FUND+
SEC30-DAY YIELDS AS OF JUNE 30, 1998
- ------------------------------------
Institutional Class Investment Class
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
5.15% 5.00%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1998. Yield calculations represent past performance and will fluctuate.
+ Certain fees were being waived. Had these waivers not been in effect, the
30-day SEC yields would have been 5.14% for Institutional Shares and 4.91% for
Investment Shares.
14
<PAGE> 16
PORTFOLIO REVIEWS
THE KENT SHORT TERM BOND FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 11/2/92) (inception: 12/4/92)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months* 2.74% 2.68%
One Year 6.58% 6.46%
Three Years 5.77% 5.59%
Five Years 5.25% 5.08%
Life of Fund 5.07% 4.93%
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS 1-3-YEAR GOVERNMENT BOND INDEX, CONSUMER PRICE INDEX
AND 91-DAY TREASURY BILL
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Lehman
The Kent Short Brothers
Term Bond Fund Consumer 91-Day 1-3 Year
Institutional Price Treasury Government
Class Shares Index Bill* Bond Index
<S> <C> <C> <C> <C>
11/2/92 ................ $10,000 $10,000 $10,000 $10,000
12/31/92 ............... 10,087 9,992 10,053 10,078
12/31/93 ............... 10,395 10,267 10,356 10,621
12/31/94 ............... 10,502 10,542 10,798 10,675
12/31/95 ............... 11,608 10,809 11,393 11,832
12/31/96 ............... 12,098 11,213 11,965 12,433
12/31/97 ............... 12,875 11,404 12,593 13,625
6/30/98 ................ 13,226 11,523 12,911 14,407
</TABLE>
<TABLE>
<CAPTION>
The Lehman
The Kent Short Brothers
Term Bond Fund Consumer 91-Day 1-3 Year
Investment Price Treasury Government
Class Shares Index Bill* Bond Index
<S> <C> <C> <C> <C>
12/4/92 ............ $10,000 $10,000 $10,000 $10,000
12/31/92 ........... 10,030 9,992 10,027 10,093
12/31/93 ........... 10,335 10,267 10,329 10,637
12/31/94 ........... 10,439 10,542 10,770 10,691
12/31/95 ........... 11,514 10,809 11,364 11,850
12/31/96 ........... 11,982 11,197 11,935 12,452
12/31/97 ........... 12,732 11,387 12,562 13,646
6/30/98 ............ 13,072 11,523 12,880 14,429
</TABLE>
*Treasury Bills are insured by the U. S. Government as to timely payment of
principal and interest and tend to be less volatile than longer maturity
bonds.
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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses. 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.
The Lehman Brothers 1-3-Year Government Bond Index is an unmanaged index of
U.S. Treasury issues and publicly issued debt of U.S. Government agencies with
maturities of one to three years. The 91-day Treasury bill return tracks the
investment returns paid on U.S. Treasury bills maturing in 91 days. The
Consumer Price Index is an unmanaged index measuring price increases in a
standardized "market basket" of consumer products.
15
<PAGE> 17
PORTFOLIO REVIEWS
THE KENT INTERMEDIATE BOND FUND
BY MITCHELL STAPLEY
PORTFOLIO MANAGER
Investors' concerns about the potential effects of the Asian financial
crisis on U.S. economic growth boosted demand for U.S. Treasury securities in
January, and bond yields fell sharply. But the economy continued to grow at a
rapid pace, igniting fears that inflation and interest rates would rise, causing
yields to rebound in early March. Yields then declined through June, as
continued economic troubles in Asia dampened prospects for U.S. economic growth
and kept inflation low.
Increased volatility in the stock market also led many investors to
increase their portfolios' bond allocations, which helped support bond prices.
The yield on the 10-year Treasury Bill began the period at 5.74%. That yield
fell to as low as 5.37% in January and peaked at 5.78% in March before falling
to 5.48% on June 30, 1998.
The Fund's Institutional and Investment Shares posted total returns of
3.48% and 3.24%, respectively, during the six months ended June 30, 1998. That
compares to a 3.39% total return for the Lehman Brothers Intermediate
Government/Corporate Bond Index.
A FOCUS ON QUALITY
The Fund's average maturity stood at 5.3 years at the beginning of the
period. The average maturity was extended to 5.5 years when yields peaked in
March. We reduced the Fund's average maturity to 4.8 years by the end of the
period as yields fell and longer-term issues became less attractively priced.
The Fund's average maturity remained longer than that of its benchmark, during
the first half of the year, which benefited the Fund's performance as yields
fell.
The Fund's portfolio consisted of U.S. government and high-quality
corporate securities, and its average credit rating was AAA. We purchased select
high-quality corporate issues in June, when yields on those issues were more
attractive than yields on Treasury bonds. In particular, we found opportunities
in high-quality finance and industrial issues, as well as securities of regional
banks without significant exposure to Asia. Overall, we increased the
portfolio's corporate bond holdings by around 5% during the period.
THE KENT INTERMEDIATE BOND FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<TABLE>
<S> <C>
U.S. Government & Agency Issues 68.7%
Corporate Notes & Bonds 29.7%
Cash Equivalents Net Other Assets & Liabilities 1.6%
</TABLE>
Portfolio composition is subject to change.
We also structured the Fund using a barbell approach, combining
shorter-term issues with Treasury issues that mature in 15 to 25 years. Those
longer-term holdings boosted the Fund's return during the period, since
long-term bonds' prices rise more than those of short-term bonds when yields
fall.
GOING FORWARD
It appears that the U.S. economy will grow at a moderate pace in the coming
months due to the effects of the Asian crisis on the U.S. manufacturing sector,
and inflation will remain low. Demand for bonds likely will remain strong, and
yields could decline slightly. If that happens, the Fund could benefit from its
relatively long average maturity. If yields rise, we will use that opportunity
to purchase select high-quality issues at attractive prices. In particular, we
will look for values among corporate securities when they offer attractive
yields.
<TABLE>
<CAPTION>
THE KENT INTERMEDIATE BOND FUND+
SEC 30-DAY YIELDS AS OF JUNE 30, 1998
- -------------------------------------
Institutional Class Investment Class
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
5.09% 4.84%
</TABLE>
SEC30-day yield is computed based on net income during the 30-day period ended
June 30, 1998. Yield calculations represent past performance and will fluctuate.
+ Certain fees were waived. Had these waivers not been in effect, the 30-day
SEC yields would have been 5.08% for Institutional Shares and 4.83% for
Investment Shares.
16
<PAGE> 18
PORTFOLIO REVIEWS
<TABLE>
<CAPTION>
THE KENT INTERMEDIATE BOND FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
Institutional Class Investment Class
(inception: 11/2/92) (inception: 11/25/92)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months* 3.48% 3.24%
One Year 8.72% 8.42%
Three Years 6.46% 6.18%
Five Years 5.72% 5.48%
Life of Fund 6.30% 6.07%
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Kent Intermediate Bond Fund The Lehman Brothers Intermediate
Institutional Class Shares Government/Corporate Bond Index
<S> <C> <C>
11/2/92 $10,000 $10,000
12/31/92 10,125 10,095
12/31/93 10,934 10,976
12/31/94 10,585 10,762
12/31/95 12,298 12,410
12/31/96 12,667 12,913
12/31/97 13,655 13,929
6/30/98 14,130 14,412
</TABLE>
<TABLE>
<CAPTION>
The Kent Intermediate Bond Fund The Lehman Brothers Intermediate
Investment Class Shares Government/Corporate Bond Index
<S> <C> <C>
11/25/92 $10,000 $10,000
12/31/92 10,050 10,134
12/31/93 10,873 11,018
12/31/94 10,545 10,803
12/31/95 12,207 12,457
12/31/96 12,544 12,962
12/31/97 13,500 13,982
6/30/98 13,906 14,456
</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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses. 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.
The Lehman Brothers Intermediate Government/Corporate Bond Index is an
unmanaged index comprised of U.S. Treasury issues, publicly issued debt of
U.S. Government agencies, corporate debt guaranteed by the U.S. Government and
all publicly issued, fixed-rate, nonconvertible, investment-grade,
dollar-denominated, SEC-registered corporate debt.
17
<PAGE> 19
PORTFOLIO REVIEWS
THE KENT INCOME FUND
BY MITCHELL STAPLEY
PORTFOLIO MANAGER
Yields on long-term bonds fluctuated during the recent period due to
concerns about how the Asian economic and financial crisis would affect U.S.
economic conditions. The yield on the 30-year Treasury bond began the period at
5.92% but fell to 5.69% in early January as investors flocked to high-quality,
relatively safe U.S. Treasury securities in the wake of the Asian crisis. The
yield rose to 6.07% in early March as investors worried that continued strong
economic growth would ignite inflation. But those concerns diminished as the
lingering malaise in from Asia helped slow the U.S. economy. The yield on the
30-year Treasury fell sharply to 5.63% by the end of the period.
The Fund seeks to provide shareholders with a high level of current income,
and therefore generally maintains a relatively long average maturity. That
strategy also helped boost the Fund's total return as yields declined during the
period. The Fund's Institutional and Investment shares returned 4.14% and 4.02%,
respectively, during the six months ended June 30, 1998. That compares to a
6.25% return for the Fund's benchmark, the Lehman Brothers Long
Government/Corporate Bond Index.
HIGH-QUALITY BONDS BOOST PERFORMANCE
The Fund's average maturity began the period at 10.6 years. We increased
that average maturity to 11.6 years in March when yields peaked. As yields fell,
we reduced the average maturity to 9.8 years by June 30, 1998. The Fund's large
investment in corporate bonds (41% of the portfolio) performed well, boosting
the Fund's total return--even though the corporate sector as a whole
underperformed the Treasury market. Our focus on high-quality corporate issues
helped us avoid some of the poorest performing bonds.
<TABLE>
<CAPTION>
The Kent Income Fund
Distribution of Net Assets
as of June 30, 1998
- -------------------
<S> <C>
U.S. Government & Agency Obligation 53.8%
Corporate Notes & Bonds 40.9%
Cash Equivalents Net Other Assets & Liabilities 5.3%
</TABLE>
Portfolio composition is subject to change.
The average credit rating of the Fund's portfolio remained very high at
AA1. The Fund also benefited from its investment in high-coupon Treasury
securities with maturities of 20 to 25 years, which were in high demand as
interest rates declined.
LOOKING AHEAD
We believe that continued fallout from Asia will help to keep U.S. economic
growth moderate and inflation low. What's more, with Asia affecting many other
foreign markets, the U.S. bond market is especially attractive to investors.
Fixed-income yields may fall slightly further, which will benefit the Fund due
to its relatively long average maturity. If rates rise, however, we will take
advantage of such an increase to buy high-quality securities at attractive
prices and yields. Meanwhile, we will continue to maintain the Fund's high
credit quality.
<TABLE>
<CAPTION>
THE KENT INCOME FUND+
SEC 30-DAY YIELDS AS OF JUNE 30, 1998
- ------------------------------------
Institutional Class Investment Class
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
5.46% 5.20%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1998. Yield calculations represent past performance and will fluctuate.
+ Certain fees were being waived. Had these waivers not been in effect, the
30-day SEC yields would have been 5.45% for Institutional Shares and 5.20%
for Investment Shares.
18
<PAGE> 20
PORTFOLIO REVIEWS
THE KENT INCOME FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 3/20/95) (inception: 3/22/95)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months* 7.73% 7.53%
One Year 12.48% 12.15%
Three Years 4.14% 4.02%
Life of Fund 9.31% 9.04%
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
AND THE LEHMAN BROTHERS LONG GOVERNMENT/CORPORATE BOND INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Kent The Lehman Brothers The Lehman Brothers
Income Fund Government/ Long Government/
Institutional Corporate Corporate
Class Shares Bond Index Bond Index
<S> <C> <C> <C>
3/20/95 $10,000 $10,000 $10,000
12/31/95 11,506 11,358 12,190
12/31/96 11,643 11,688 12,207
12/31/97 12,828 12,871 13,979
6/30/98 13,408 13,564 14,853
</TABLE>
<TABLE>
<CAPTION>
The Kent The Lehman Brothers The Lehman Brothers
Income Fund Government/ Long Government/
Investment Corporate Corporate
Class Shares Bond Index Bond Index
<S> <C> <C> <C>
3/22/95 $10,000 $10,000 $10,000
12/31/95 11,464 11,358 12,190
12/31/96 11,597 11,688 12,207
12/31/97 12,779 12,828 13,979
6/30/98 13,292 13,564 14,853
</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 expenses for each class of shares. Return
figures and investment values are quoted after deducting all expenses. Total
return is based on changes in net asset value, assuming the reinvestment of
dividends and capital gains distributions. Certain fees were waived. Had these
waivers not been in effect total returns would have been lower.
The Lehman Brothers Government/Corporate Bond Index and the Lehman Brothers
Long Government/Corporate Bond Index are unmanaged indices comprised of U.S.
Treasury issues, debt of U.S. Government agencies, corporate debt guaranteed
by the U.S. Government and all publicly issued, fixed-rate, nonconvertible
investment-grade dollar-denominated, SEC-registered corporate debt.
19
<PAGE> 21
PORTFOLIO REVIEWS
THE KENT LIMITED TERM TAX-FREE FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
During the six months through June 30, 1998, the Fund's Institutional and
Investment Shares returned 1.72% and 1.63%, respectively. That compares to a
return of 2.12% for the Lehman Brothers Three-Year General Obligation Municipal
Bond Index, an unmanaged index comprised of municipal bonds with average
maturities of around three years.
The Fund's returns reflected the relatively stable conditions in the
shorter term portion of the municipal bond market. Although, experiencing some
modest intra-period fluctuations, the yield on a three-year AAA-rated general
obligation bond was flat, beginning and ending the period at 3.95%. Short-term
bond rates largely are linked to actions of the Federal Reserve Board, which
made no interest rate changes during the period. Municipal bonds underperformed
Treasuries, with the yield on a three-year Treasury security falling some 18
basis points during the period.
MAINTAINING A LONGER MATURITY
The Fund seeks to provide a higher yield than a money market fund while
staying less volatile than a fund with a longer average maturity. In general, we
pursue that goal by maintaining an average maturity at the upper end of the
Fund's two-to-three-year range. Thus, the Fund's average maturity remained
relatively stable at around 2.9 years during the period. We also looked for
opportunities to boost the Fund's yield by purchasing issues that offered
attractive yields for the credit risk they carry. For example, we invested in
Baa1-rated Flint, Michigan, Hospital Building Authority for Hurley Medical
Center bonds that mature in 2003 (2.9%), because of their 5% coupon at a yield
that offered more than adequate compensation for their additional credit risk
over higher-rated issues. The Fund maintained a high average credit rating of AA
during the period.
<TABLE>
<CAPTION>
THE KENT LIMITED TERM TAX-FREE FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<S> <C>
North Central 42.6%
East 16.6%
South 15.1%
Mountain 13.1%
Pacific 10.2%
Other 2.4%
</TABLE>
Portfolio composition is subject to change.
LOOKING AHEAD
We believe that continuing effects from the Asian economic crisis will keep
U.S. economic growth slow to moderate, and that inflation will remain low. In
that environment, the municipal bond market may continue to trade in a
relatively narrow range. We will maintain an average maturity near the long end
of the Fund's range to pick up additional income and to benefit from any rally
in the municipal market. We also will continue to invest in select
higher-yielding securities that can provide additional income without putting
the Fund's strong credit quality at risk.
+The Fund's income may be subject to the federal alternative minimum tax and
to certain state and local taxes.
<TABLE>
<CAPTION>
THE KENT LIMITED TERM TAX-FREE FUND
TAX EQUIVALENT YIELDS+ AS OF JUNE 30, 1998
- ------------------------------------------
TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
28.0% 4.93% 4.74%
31.0% 5.14% 4.94%
36.0% 5.55% 5.33%
39.6% 5.88% 5.65%
</TABLE>
+Based on an SEC 30-day yield on 6/30/98 of 3.56% for the Institutional Class
and 3.41% for the Investment Class. SEC 30-day yield is computed based on net
income during the 30-day period ended June 30, 1998. Yield calculations
represent past performance and will fluctuate.
Certain fees were being waived. Had these waivers not been in effect, the 30-day
SEC yields would have been 3.55% for Institutional Shares and 3.26% for
Investment Shares.
20
<PAGE> 22
PORTFOLIO REVIEWS
THE KENT LIMITED TERM TAX-FREE FUND++
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 9/1/94) (inception: 11/1/94)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months* 1.72% 1.63%
One Year 4.41% 4.24%
Three Years 4.48% 4.36%
Life of Fund 4.59% 4.95%
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS ONE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX
AND THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Kent Limited The Lehman Brothers The Lehman Brothers
Term Tax-Free Fund One-Year General Three-Year General
Institutional Class Obligation Municipal Obligation Municipal
Shares Bond Index Bond Index
<S> <C> <C> <C>
9/1/94 10,000 10,000 10,000
12/31/94 9,923 10,108 9,943
12/31/95 10,760 10,767 10,821
12/31/96 11,140 11,245 11,319
12/31/97 11,672 11,762 11,931
6/30/98 11,873 12,024 12,184
</TABLE>
<TABLE>
<CAPTION>
The Kent Limited The Lehman Brothers The Lehman Brothers
Term Tax-Free Fund One-Year General Three-Year General
Institutional Class Obligation Municipal Obligation Municipal
Shares Bond Index Bond Index
<S> <C> <C> <C>
11/1/94 10,000 10,005 10,000
12/31/94 10,003 10,198 10,132
12/31/95 10,843 10,863 11,027
12/31/96 11,224 11,343 11,534
12/31/97 11,742 11,867 12,158
6/30/98 11,934 12,132 12,416
</TABLE>
"The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
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 expenses for each class of shares. Return figures and
investment values are quoted after deducting all expenses. 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 return would have been lower.
The Lehman Brothers One-Year General Obligation Municipal Bond Index and the
Lehman Brothers Three-Year General Obligation Municipal Bond Index are unmanaged
indices of debt instruments issued by municipalities.
21
<PAGE> 23
PORTFOLIO REVIEWS
THE KENT INTERMEDIATE TAX-FREE FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
The municipal bond market traded in a narrow range during the six-month
period ended June 30, 1998. The yield on a 10-year AAA-rated general obligation
municipal bond began the period at 4.35% and ended it almost unchanged at 4.38%.
The municipal market was affected by investors' changing responses to the Asian
crisis and the uncertainty about its potential impact on the domestic economy.
For example, bond prices rose in January due to investors' expectation that
deteriorating economic conditions in Asia would slow the U.S. economy and keep
inflation low. Later, fears that a strong domestic housing market and increasing
consumer confidence would trigger inflation hurt bond prices.
The Treasury market outperformed the municipal markets during the period,
as both foreign and domestic investors sought safe haven in Treasury securities.
The strong supply of new municipal issues during the first half of the year also
dampened the municipal market's performance. At the end of June, a total of $146
billion in new issues had come to market, a 51% increase over the $97 billion
that came to market during the first half of 1997. Municipalities took advantage
of low interest rates to refinance existing debt and fund new projects.
The total returns for the Fund's Institutional and Investment Shares during
the six-month period ended June 30, 1998, were 1.84% and 1.80%, respectively.
That compares to a total return of 2.69% for the Lehman Brothers Municipal Bond
Index, an unmanaged index generally representative of municipal bonds.
A HIGH-QUALITY APPROACH
The average maturity of the Fund stood at 6.8 years on June 30, 1998, down
from 7.1 years at the beginning of the period. The Fund's average maturity
fluctuated during the period, reflecting our tendency to sell into strength and
buy when the market weakens. For example, we reduced the Fund's average maturity
when the market rallied in June. The Fund also maintained its high-quality
orientation with an average credit rating of AA. In our view, the extra yield
available from issues with lower credit quality was not sufficient to justify
the additional risk in those securities.
THE KENT INTERMEDIATE TAX-FREE FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
<TABLE>
<CAPTION>
East Mountain Pacific South North Central Other
<S> <C> <C> <C> <C> <C>
16.2% 3.6% 21.6% 20.3% 33.9% 4.4%
</TABLE>
Portfolio composition is subject to change.
LOOKING AHEAD
If the brisk pace of new issuance continues, we expect the municipal market
will continue to underperform the taxable market. It seems likely that the
municipal bond market may continue to fluctuate in response to investors'
perceptions of the Asian economic situation. We will take advantage of weakness
in the market to extend the Fund's average maturity. As always we will pursue
such opportunities to help maximize the Fund's total return while seeking to
carefully manage shareholders' risk.
'The Fund's income may be subject to the federal alternative minimum tax and to
certain state and local taxes.
THE KENT INTERMEDIATE TAX-FREE FUND+
TAX EQUIVALENT YIELDS' AS OF JUNE 30,1998
- -----------------------------------------
<TABLE>
<CAPTION>
TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
28.0% 5.14% 4.79%
31.0% 5.36% 5.00%
36.0% 5.78% 5.39%
39.6% 6.13% 5.71%
</TABLE>
+Based on an SEC 30-day yield on 6/30/98 of 3.70% for the Institutional Class
and 3.45% for the Investment Class. SEC 30-day yield is computed based on net
income during the 30-day period ended June 30, 1998. Yield calculations
represent past performance and will fluctuate.
Certain fees were being waived. Had these waivers not been in effect, the 30-day
SEC yields would have been 3.69% for Institutional Shares and 3.44% for
Investment Shares.
22
<PAGE> 24
PORTFOLIO REVIEWS
THE KENT INTERMEDIATE TAX-FREE FUND++
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 12/16/92) (inception: 12/18/92)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months* 1.84% 1.80%
One Year 6.47% 6.30%
Three Years 5.85% 5.62%
Five Years 5.07% 4.87%
Life of Fund 5.52% 5.34%
* Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX
AND THE LEHMAN BROTHERS FIVE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
The Kent Intermediate The Lehman Brothers The Lehman Brothers
Tax-Free Fund Three-Year General Obligation Five-Year General Obligation
Institutional Class Shares Municipal Bond Index Municipal Bond Index
<S> <C> <C> <C>
12/16/92 10,000 10,000 10,000
12/31/92 10,060 10,300 10,500
12/31/93 10,895 10,673 10,930
12/31/94 10,567 10,755 10,779
12/31/95 11,941 11,705 12,032
12/31/96 12,349 12,243 12,589
12/31/97 13,222 12,905 13,406
6/30/98 13,464 13,179 13,701
</TABLE>
<TABLE>
<CAPTION>
The Kent Intermediate The Lehman Brothers The Lehman Brothers
Tax-Free Fund Three-Year General Obligation Five-Year General Obligation
Institutional Class Shares Municipal Bond Index Municipal Bond Index
<S> <C> <C> <C>
12/16/92 10,000 10,000 10,000
12/31/92 10,060 10,300 10,500
12/31/93 10,895 10,673 10,930
12/31/94 10,567 10,755 10,779
12/31/95 11,941 11,705 12,032
12/31/96 12,349 12,243 12,589
12/31/97 13,222 12,905 13,406
6/30/98 13,334 13,179 13,701
</TABLE>
++ The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
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 expenses for each class of shares. Return figures and
investment values are quoted after deducting all expenses. 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 return would have been lower.
The Lehman Brothers Three-Year General Obligation Municipal Bond Index and the
Lehman Brothers Five-Year General Obligation Municipal Bond Index are unmanaged
indices of debt instruments issued by municipalities.
23
<PAGE> 25
PORTFOLIO REVIEWS
THE KENT TAX-FREE INCOME FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
The municipal bond market reacted strongly to signs of how the Asian
economic crisis would affect domestic economic conditions during the recent
six-month period. The yield on 30-year AAA-rated general obligation municipal
bonds began the period at 5.03%, but fell to as low as 4.88% in early January
due to investors' belief that the Asian crisis would slow U.S. economic growth
and keep bond yields low. Yields rose to as high as 5.28% in April as the
economy continued to grow at a rapid pace--evidenced by the strong housing
market and strong consumer spending--and investors worried that inflation and
bond yields would rise. Those concerns faded late in the period as the lingering
economic malaise in Asia began to slow the U.S. economy, and the yield fell to
5.05% in late June.
The municipal market underperformed the Treasury market during the period,
as investors flocked to Treasury bonds in the wake of the Asian crisis. The
strong supply of new issues during the period also dampened the municipal
market's performance. A total of $146 billion of new municipal issues came to
market through June, a 51% increase over the first six months of 1997.
The Fund's Institutional and Investment Shares delivered total returns of
2.01% and 1.89%, respectively, for the six months through June 30, 1998. That
compares to a 2.69% return for the Lehman Brothers Municipal Bond Index.
MANAGING AVERAGE MATURITY
We typically lengthen the Fund's average maturity to lock in yields as they
rise to more attractive levels. As yields decline, we attempt to reduce
shareholders' risk by letting the Fund's average maturity gradually decline. The
Fund's average maturity fluctuated during the period as a result of this
strategy. The average maturity of the Fund began the period at 11.8 years and
rose to as high as 12.4 years in March. We then reduced the average maturity to
10.3 years in June as yields fell to less attractive levels. Throughout the
period, the Fund maintained a high average credit rating of AA.
THE KENT TAX-FREE INCOME FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<TABLE>
<CAPTION>
East Mountain Pacific South North Central Other
<S> <C> <C> <C> <C> <C>
13.6% 8.6% 17.2% 35.6% 41.4% 3.6%
</TABLE>
Portfolio composition is subject to change.
THE OUTLOOK
If the supply of new issues maintains its recent pace, we expect the
municipal market will continue to underperform the taxable bond market. The
municipal bond market also may continue to fluctuate in response to investors'
reactions to economic data from Asia. We believe that fallout from Asia will
slow domestic demand in the U.S. economy somewhat in the coming months, helping
to keep inflation low. We will continue to take advantage of any market weakness
by extending the Fund's average maturity to lock in higher yields. Of course, we
will pursue such opportunities with an eye toward increasing the Fund's total
return without exposing shareholders to unnecessary risk.
+The Fund's income may be subject to the federal alternative minimum tax and to
certain state and local taxes.
THE KENT TAX-FREE INCOME FUND+
TAX EQUIVALENT YIELDS+ AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
28.0% 5.38% 5.03%
31.0% 5.61% 5.25%
36.0% 6.05% 5.66%
39.6% 6.41% 5.99%
</TABLE>
+ Based on an SEC 30-day yield on 6/30/98 of 3.87% for the Institutional Class
and 3.62% for the Investment Class. SEC 30-day yield is computed based on net
income during the 30-day period ended June 30, 1998. yield calculations
represent past performance and will fluctuate.
Certain fees were waived. Had these waivers not been in effect, the 30-day SEC
yields would have been 3.86% for Institutional Shares and 3.61% for Investment
Shares.
24
<PAGE> 26
THE KENT TAX-FREE INCOME FUND++
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 3/20/95) (inception: 3/31/95)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Month* 2.01% 1.89%
One Year 7.76% 7.40%
Three Year 6.97% 6.70%
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Kent Tax-Free
Income Fund Institutional The Lehman Brothers
Class Shares Municipal Bond Index
<S> <C> <C>
3/20/95 10,000 10,000
12/31/95 10,860 10,971
12/31/96 11,290 11,457
12/31/97 12,261 12,511
6/30/98 12,502 12,847
</TABLE>
<TABLE>
<CAPTION>
The Kent Tax-Free
Income Fund Investment The Lehman Brothers
Class Shares Municipal Bond Index
<S> <C> <C>
3/20/95 10,000 10,000
12/31/95 10,834 10,971
12/31/96 11,217 11,457
12/31/97 12,150 12,511
6/30/98 12,378 12,847
</TABLE>
++The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
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 expenses for each class of shares. Return figures and
investment values are quoted after deducting all expenses. 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 return would have been lower.
The Lehman Brothers Municipal Bond Index is an unmanaged index of general
obligation municipal debt instruments.
25
<PAGE> 27
PORTFOLIO REVIEWS
THE KENT MICHIGAN MUNICIPAL BOND FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
During the six months ended June 30, 1998, the Fund's Institutional and
Investor shares returned 1.82% and 1.75%, respectively. That compares to a 2.12%
total return for the Lehman Brothers Three-Year General Obligations Municipal
Bond Index.
Yields on Michigan municipal securities did not change much during the
period, despite some modest fluctuations in the bond market. The yield to
maturity on a five-year AAA general obligation bond began the period at 4.1%; it
fell to as low as 3.9% in early January as investors expected the Asian crisis
to slow U.S. economic growth and cause interest rates to decline. The yield
rebounded to 4.35% in late April due to signs of continued strong economic
growth in the United States -- including a strong housing market and robust
consumer spending -- and finished the period where it started, at 4.10%.
During the same period, the yield on a five-year Treasury bond declined 24
basis points; thus, allowing Treasury securities to outperform municipal
securities. However, the Michigan municipal market benefited from the state's
strong economy. Michigan now has one of the lowest unemployment rates of the
country's ten largest states. Low interest rates, low energy prices and improved
productivity have contributed to the strength in the Michigan economy, which was
borne out by all three major rating agencies: Moody's, S&P and Fitch. The three
agencies upgraded their ratings on Michigan's general obligation debt to Aa1, Aa
and AA+, respectively.
OPPORTUNITIES IN NEW ISSUES
A number of new issues in the Michigan market offered opportunities to the
Fund. In taking advantage of those opportunities, we increased the Fund's
average maturity from 4.1 years to as high as 4.3 years in March. We sold some
bonds to take advantage of the market's rally in June, and the Fund's average
maturity fell to 4.2 years at the end of the period.
THE KENT MICHIGAN MUNICIPAL BOND FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1998
- -------------------
<TABLE>
<CAPTION>
Cash Equivalents & Net Other Assets & Liabilities Municipal Securities
<S> <C>
0.9% 99.1%
</TABLE>
Portfolio composition is subject to change.
LOOKING AHEAD
We expect the economic expansion to move forward at a moderate pace of
growth with continued low inflation. Combined with the strength of Michigan's
economy, we expect this environment to provide opportunities for the Fund. We
will continue to take advantage of new issues in various sectors to enhance the
Fund's yield. We will also attempt to manage the Fund's average maturity to
produce attractive total returns while avoiding undue risk, by following our
long-term strategy of buying into market weakness and selling into strength.
'The Fund's income may be subject to the federal alternative minimum tax and to
certain state and local taxes.
THE KENT MICHIGAN MUNICIPAL BOND FUND+
TAX EQUIVALENT YIELDS+ AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
28.0% 5.47% 5.26%
31.0% 5.71% 5.49%
36.0% 6.16% 5.92%
39.6% 6.52% 6.27%
</TABLE>
+Based on an SEC 30-day yield on 6/30/98 of 3.94% for the Institutional Class
and 3.79% for the Investment Class. SEC 30-day yield is computed based on net
income during the 30-day period ended June 30, 1998. Yield calculations
represent past performance and will fluctuate.
Certain fees were waived. Had these waivers not been in effect, the 30-day SEC
yields would have been 3.93% for Institutional Shares and 3.71% for Investment
Shares.
26
<PAGE> 28
THE KENT MICHIGAN MUNICIPAL BOND FUND++
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1998
- ------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 5/3/93) (inception: 5/11/93)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Month* 1.82% 1.75%
One Year 5.28% 5.14%
Three Year 4.78% 4.62%
Five Year 4.32% 4.17%
Life of Fund 4.33% 4.16%
*Aggregate Total Return
</TABLE>
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS THREE YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Kent Michigan Lehman Brothers
Municipal Bond Fund Three-Year General Obligation
Institutional Class Shares Municipal Bond Index
<S> <C> <C>
5/11/93 10,000 10,000
12/31/93 10,285 10,311
12/31/94 10,301 10,390
12/31/95 11,126 11,308
12/31/96 11,500 11,828
12/31/97 12,119 12,468
6/30/98 12,444 12,776
</TABLE>
<TABLE>
<CAPTION>
The Kent Michigan Lehman Brothers
Municipal Bond Fund Three-Year General Obligation
Investments Class Shares Municipal Bond Index
<S> <C> <C>
5/3/93 10,000 10,000
12/31/93 10,300 10,311
12/31/94 10,340 10,390
12/31/95 11,190 11,308
12/31/96 11,580 11,828
12/31/97 12,222 12,468
6/30/98 12,330 12,776
</TABLE>
++The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
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 expenses for each class of shares. Return figures and
investment values are quoted after deducting all expenses. Total return is based
on changes in net asset value, assuming reinvestment of dividends and capital
gains distributions. Certain fees were waived. Had these waivers not been in
effect, total return would have been lower.
The Lehman Brothers Three-Year General Obligation Municipal Bond Index is an
unmanaged index of debt obligations issued by municipalities.
27
<PAGE> 29
[LOGO] KENT FUNDS
P.O. BOX 182201
COLUMBUS, OHIO 43218-2201
<PAGE> 30
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS -- 97.5%
ADVERTISING -- 0.1%
15,000 Interpublic Group Cos., Inc..... $ 910,313
------------
AEROSPACE & DEFENSE -- 1.0%
95,900 Boeing Co....................... 4,273,544
21,000 Lockheed Martin Corp............ 2,223,375
28,600 Raytheon Co. -- Class B......... 1,690,975
------------
8,187,894
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.3%
24,800 Maytag Corp..................... 1,224,500
11,600 Whirlpool Corp.................. 797,500
------------
2,022,000
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.2%
14,800 Dana Corp....................... 791,800
16,600 TRW, Inc........................ 906,775
------------
1,698,575
------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.1%
12,200 Genuine Parts Co................ 421,663
------------
AUTOMOTIVE -- 1.6%
116,600 Ford Motor Co................... 6,879,400
88,100 General Motors Corp............. 5,886,181
------------
12,765,581
------------
BANKS -- MAJOR REGIONAL -- 5.7%
75,000 Banc One Corp................... 4,185,937
35,800 Bank of New York Co., Inc....... 2,172,613
33,800 BankBoston Corp................. 1,880,125
11,300 Comerica, Inc................... 748,625
27,500 First Chicago NBD Corp.......... 2,437,188
81,570 First Union Corp................ 4,751,452
23,200 Fleet Financial Group, Inc...... 1,937,200
62,000 KeyCorp......................... 2,208,750
29,500 Mellon Bank Corp................ 2,053,938
20,000 National City Corp.............. 1,420,000
62,000 NationsBank..................... 4,742,999
98,400 Norwest Corp.................... 3,677,700
41,900 PNC Bank Corp................... 2,254,744
13,600 Republic New York Corp.......... 855,950
20,500 SunTrust Banks, Inc............. 1,666,906
69,000 U.S. Bancorp.................... 2,967,000
23,700 Wachovia Corp................... 2,002,650
8,300 Wells Fargo & Co................ 3,062,700
------------
45,026,477
------------
BANKS -- MIDWEST -- 0.3%
25,100 Fifth Third Bancorp............. 1,581,300
19,000 Huntington Bancshares........... 636,500
------------
2,217,800
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BANKS -- MONEY CENTER -- 2.5%
63,700 BankAmerica Corp................ $ 5,506,069
8,800 Bankers Trust New York Corp..... 1,021,350
68,600 Chase Manhattan Corp............ 5,179,300
41,900 Citicorp........................ 6,253,575
16,200 J.P. Morgan & Co., Inc.......... 1,897,425
------------
19,857,719
------------
BANKS -- NORTHEAST -- 0.1%
15,700 State Street Corp............... 1,091,150
------------
BEVERAGES -- ALCOHOLIC -- 0.3%
45,800 Anheuser-Busch Co., Inc......... 2,161,188
------------
BEVERAGES -- SOFT DRINKS -- 3.2%
213,700 Coca-Cola Co.................... 18,271,349
178,700 PepsiCo, Inc.................... 7,360,206
------------
25,631,555
------------
BROADCASTING/CABLE -- 0.9%
14,000 Clear Channel Communications.... 1,527,750
31,200 Comcast Corp. Special........... 1,266,525
58,500 Media One Group*................ 2,570,344
54,900 Tele-Communications Inc.,
Class A*........................ 2,110,219
------------
7,474,838
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.3%
9,800 Armstrong World Industries,
Inc............................. 660,275
23,900 Masco Corp...................... 1,445,950
------------
2,106,225
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.2%
18,400 Centex Corp..................... 694,600
36,600 Pulte Corp...................... 1,093,425
------------
1,788,025
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.9%
68,100 Home Depot, Inc................. 5,656,556
34,200 Lowe's Cos., Inc................ 1,387,238
------------
7,043,794
------------
BUILDING PRODUCTS -- WOOD -- 0.1%
18,300 Weyerhaeuser Co................. 845,231
------------
CHEMICALS -- DIVERSIFIED -- 1.9%
25,600 Dow Chemical Co................. 2,475,200
107,500 E.I. du Pont de Nemours & Co.... 8,022,187
22,300 Hercules, Inc................... 917,088
36,500 PPG Industries, Inc............. 2,539,031
23,400 Union Carbide Corp.............. 1,248,975
------------
15,202,481
------------
</TABLE>
Continued
28
<PAGE> 31
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
CHEMICALS -- SPECIALTY -- 0.3%
25,300 Great Lakes Chemical Corp....... $ 997,768
27,100 Nalco Chemical Co............... 951,888
9,900 Sigma-Aldrich Corp.............. 347,738
------------
2,297,394
------------
COMMERCIAL SERVICES -- 0.2%
71,400 Cendant Corp.................... 1,490,475
------------
COMPUTER SOFTWARE -- 3.7%
29,600 Computer Associates
International, Inc.............. 1,644,650
235,400 Microsoft Corp.*................ 25,511,474
96,300 Oracle Corp.*................... 2,365,369
------------
29,521,493
------------
COMPUTERS -- LOCAL AREA NETWORK -- 1.3%
19,100 Cabletron Systems*.............. 256,656
106,050 Cisco Systems, Inc.*............ 9,763,228
------------
10,019,884
------------
COMPUTERS -- MAINFRAME -- 1.3%
93,300 International Business Machines
Corp............................ 10,712,006
------------
COMPUTERS -- MEMORY DEVICES -- 0.1%
30,800 Seagate Technology, Inc.*....... 733,425
------------
COMPUTERS -- MICRO -- 1.3%
154,574 Compaq Computer Corp............ 4,386,037
66,200 Dell Computer Corp.*............ 6,144,188
------------
10,530,225
------------
COMPUTERS -- MINI -- 0.9%
99,400 Hewlett-Packard Co.............. 5,951,575
35,600 Sun Microsystems, Inc.*......... 1,546,375
------------
7,497,950
------------
COMPUTERS -- SERVICES -- 0.6%
56,200 Automatic Data Processing,
Inc............................. 4,095,575
29,600 First Data Corp................. 986,050
------------
5,081,625
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.7%
13,300 American Greetings Corp......... 677,469
59,900 Unilever NV, ADR................ 4,728,356
------------
5,405,825
------------
CONTAINERS & PACKAGING -- 0.1%
20,200 Owens-Illinois*................. 903,950
------------
COSMETICS & TOILETRIES -- 1.0%
103,600 Gillette Co..................... 5,872,825
51,200 Kimberly-Clark Corp............. 2,348,800
------------
8,221,625
------------
DIVERSIFIED -- 5.1%
53,800 Allied Signal, Inc.............. 2,387,375
305,700 General Electric Co. (b)........ 27,818,699
23,600 Johnson Controls, Inc........... 1,346,675
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
DIVERSIFIED (CONTINUED)
38,200 Minnesota Mining & Manufacturing
Co.............................. $ 3,139,563
45,500 Seagram Co., Ltd................ 1,862,656
24,500 Tenneco, Inc.................... 932,531
22,400 Textron, Inc.................... 1,605,800
22,200 United Technologies Corp........ 2,053,500
------------
41,146,799
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 2.1%
40,000 Applied Materials, Inc.*........ 1,180,000
141,800 Intel Corp...................... 10,510,924
18,600 Micron Technology, Inc.......... 461,513
48,900 Rockwell International Corp..... 2,350,256
38,600 Texas Instruments, Inc.......... 2,250,863
------------
16,753,556
------------
ELECTRONIC -- CONNECTORS -- 0.3%
45,800 AMP, Inc........................ 1,574,375
8,900 Thomas & Betts Corp............. 438,325
------------
2,012,700
------------
ELECTRONIC MEASURING EQUIPMENT -- 0.1%
30,400 Tektronix, Inc.................. 1,075,400
------------
FINANCE -- 0.3%
30,557 Associates First Capital,
Class A......................... 2,349,069
------------
FINANCIAL -- CONSUMER LOANS -- 0.3%
6,100 Beneficial Corp................. 934,444
22,200 Household International, Inc.... 1,104,450
------------
2,038,894
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.4%
38,200 Merrill Lynch & Co., Inc........ 3,523,950
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 1.4%
40,300 American Express Co............. 4,594,200
70,400 Morgan Stanley, Dean Witter,
Discover & Co................... 6,432,800
------------
11,027,000
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.1%
98,500 Fannie Mae...................... 5,983,875
61,300 Freddie Mac..................... 2,884,931
------------
8,868,806
------------
FINANCIAL -- SAVINGS & LOAN -- 0.1%
11,300 H.F. Ahmanson & Co.............. 802,300
------------
FOOD -- CANNED -- 0.6%
42,000 Campbell Soup Co................ 2,231,250
44,200 H.J. Heinz Co................... 2,480,725
------------
4,711,975
------------
FOOD -- CONFECTIONARY -- 0.1%
12,400 Hershey Foods Corp.............. 855,600
------------
</TABLE>
Continued
29
<PAGE> 32
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FOOD -- DIVERSIFIED -- 1.3%
26,200 Bestfoods....................... $ 1,521,238
44,800 ConAgra, Inc.................... 1,419,600
23,000 General Mills, Inc.............. 1,572,625
37,500 Kellogg Co...................... 1,408,594
20,000 Quaker Oats Co.................. 1,098,750
10,300 Ralston Purina Group............ 1,203,169
45,600 Sara Lee Corp................... 2,550,749
------------
10,774,725
------------
FOOD -- FLOUR & GRAIN -- 0.1%
53,200 Archer-Daniels-Midland Co....... 1,030,750
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
23,800 Supervalu, Inc.................. 1,056,125
------------
GAS & ELECTRIC UTILITY -- 0.4%
41,100 PG & E Corp..................... 1,297,219
57,000 Public Service Enterprises...... 1,962,937
------------
3,260,156
------------
HOTELS & LODGING -- 0.2%
39,400 Hilton Hotels Corp.............. 1,122,900
24,800 Marriott International,
Class A......................... 802,900
------------
1,925,800
------------
INSTRUMENTS -- CONTROL -- 0.2%
9,700 General Signal Corp............. 349,200
12,600 Honeywell, Inc.................. 1,052,888
------------
1,402,088
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.2%
19,300 Aon Corp........................ 1,355,825
------------
INSURANCE -- BROKERS -- 0.2%
22,350 Marsh & McLennan Cos., Inc...... 1,350,778
------------
INSURANCE -- LIFE -- 0.7%
43,700 American General Corp........... 3,110,894
19,800 Torchmark Corp.................. 905,850
12,200 TransAmerica Corp............... 1,404,525
------------
5,421,269
------------
INSURANCE -- MULTI-LINE -- 1.6%
14,900 Aetna, Inc...................... 1,134,263
30,300 CIGNA Corp...................... 2,090,699
19,700 Loews Corp...................... 1,716,363
10,700 MBIA, Inc....................... 801,163
110,300 Travelers Group, Inc............ 6,686,937
------------
12,429,425
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.6%
56,300 Allstate Corp................... 5,154,969
64,400 American International Group.... 9,402,399
16,100 Chubb Corp...................... 1,294,038
11,700 General Re Corp................. 2,965,950
21,400 Safeco Corp..................... 972,363
15,596 St. Paul Cos., Inc.............. 656,007
------------
20,445,726
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
LEISURE & RECREATION/GAMING -- 0.1%
11,600 Harrah's Entertainment, Inc..... $ 269,700
16,300 Mirage Resorts*................. 347,394
------------
617,094
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.1%
47,500 Cincinnati Milacron, Inc........ 1,154,844
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.2%
36,400 Caterpillar, Inc................ 1,924,650
------------
MACHINERY -- ELECTRICAL -- 0.4%
40,900 Emerson Electric Co............. 2,466,781
21,400 W.W. Grainger, Inc.............. 1,065,988
------------
3,532,769
------------
MACHINERY -- FARM -- 0.2%
33,000 Deere & Co...................... 1,744,875
------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.4%
34,000 Cooper Industries, Inc.......... 1,867,875
15,900 Illinois Tool Works, Inc........ 1,060,331
------------
2,928,206
------------
MACHINERY -- THERMAL PROCESSOR -- 0.1%
26,100 Thermo Electron Corp.*.......... 892,294
------------
MEDIA CONGLOMERATES -- 1.4%
55,200 Time Warner, Inc................ 4,716,150
63,700 Walt Disney Co.................. 6,692,481
------------
11,408,631
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
25,000 Amgen, Inc.*.................... 1,634,375
------------
MEDICAL -- DRUGS -- 9.4%
145,200 Abbott Laboratories............. 5,935,050
126,800 American Home Products Corp..... 6,561,900
116,600 Bristol-Myers Squibb Co......... 13,401,712
98,400 Eli Lilly & Co.................. 6,500,550
108,300 Merck & Co., Inc................ 14,485,124
116,000 Pfizer, Inc..................... 12,607,750
46,900 Pharmacia & Upjohn, Inc......... 2,163,263
71,800 Schering-Plough Corp............ 6,578,675
87,000 Warner-Lambert Co............... 6,035,625
------------
74,269,649
------------
MEDICAL -- HEALTH MEDICAL ORGANIZATION -- 0.1%
21,200 Humana, Inc.*................... 661,175
------------
MEDICAL -- WHOLESALE DRUG -- 0.2%
14,700 Cardinal Health, Inc............ 1,378,125
------------
MEDICAL INSTRUMENTS -- 0.2%
42,100 Biomet, Inc.*................... 1,391,931
------------
MEDICAL PRODUCTS -- 0.5%
37,400 Baxter International, Inc....... 2,012,588
27,700 Guidant Corp.................... 1,975,356
------------
3,987,944
------------
</TABLE>
Continued
30
<PAGE> 33
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL/DENTAL SUPPLIES -- 1.5%
19,700 Becton, Dickinson & Co.......... $ 1,529,213
34,300 C.R. Bard, Inc.................. 1,305,544
125,900 Johnson & Johnson............... 9,285,124
------------
12,119,881
------------
METAL -- GOLD -- 0.3%
57,400 Barrick Gold Corp............... 1,101,363
39,400 Newmont Mining Corp............. 930,825
------------
2,032,188
------------
METAL -- MISCELLANEOUS -- 0.1%
75,600 Cyprus Amax Minerals Co......... 1,001,700
------------
METAL -- NON-FERROUS -- 0.4%
23,300 Aluminum Co. of America......... 1,536,343
5,300 Phelps Dodge Corp............... 303,094
24,600 Reynolds Metals Co.............. 1,376,063
------------
3,215,500
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.7%
28,700 IKON Office Solutions, Inc...... 417,944
41,200 Pitney Bowes, Inc............... 1,982,750
29,800 Xerox Corp...................... 3,028,425
------------
5,429,119
------------
OIL & GAS -- DRILLING -- 0.4%
49,400 Schlumberger Ltd................ 3,374,638
------------
OIL -- INTERNATIONAL INTEGRATED -- 4.4%
63,000 Chevron Corp.................... 5,232,938
238,500 Exxon Corp...................... 17,008,030
76,000 Mobil Corp...................... 5,823,500
130,500 Royal Dutch Petroleum Co., ADR.. 7,153,031
------------
35,217,499
------------
OIL -- PRODUCTION/PIPELINE -- 0.1%
14,250 Columbia Gas System, Inc........ 792,656
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.0%
19,700 Union Pacific Resources Group,
Inc............................. 345,981
------------
OIL -- U.S. INTEGRATED -- 2.4%
109,600 Amoco Corp...................... 4,562,099
91,400 Atlantic Richfield Co........... 7,140,624
12,900 Kerr-Mcgee Corp................. 746,588
15,700 Pennzoil Co..................... 794,813
39,400 Phillips Petroleum Co........... 1,898,588
39,400 Unocal Corp..................... 1,408,550
87,100 USX-Marathon Group.............. 2,988,619
------------
19,539,881
------------
OIL REFINING -- 0.4%
30,400 Ashland, Inc.................... 1,569,400
35,100 Sun Co., Inc.................... 1,362,319
------------
2,931,719
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PAPER & RELATED PRODUCTS -- 0.6%
28,000 Fort James Corp................. $ 1,246,000
39,300 International Paper Co.......... 1,689,900
19,700 Mead Corp....................... 625,475
19,400 Union Camp Corp................. 962,725
9,900 Westvaco Corp................... 279,675
------------
4,803,775
------------
PHOTOGRAPHY -- 0.1%
26,100 Polaroid Corp................... 928,181
------------
PROTECTION -- SAFETY -- 0.6%
74,900 Tyco International Ltd.......... 4,718,700
------------
PUBLISHING -- BOOKS -- 0.1%
13,800 McGraw-Hill Cos., Inc........... 1,125,563
------------
PUBLISHING -- NEWSPAPERS -- 0.8%
9,100 Dow Jones & Co.................. 507,325
40,100 Gannett, Inc.................... 2,849,606
14,400 Knight-Ridder, Inc.............. 792,900
9,900 New York Times Co............... 784,575
9,300 Times Mirror Co................. 584,738
17,700 Tribune Co...................... 1,217,981
------------
6,737,125
------------
RESTAURANTS -- 0.6%
65,100 McDonald's Corp................. 4,491,900
------------
RETAIL -- APPAREL/SHOES -- 0.7%
58,200 Gap, Inc........................ 3,586,575
57,800 Limited, Inc.................... 1,914,625
------------
5,501,200
------------
RETAIL -- DISCOUNT -- 2.7%
61,600 Dayton-Hudson Corp.............. 2,987,600
39,400 Kmart Corp.*.................... 758,450
293,700 Wal-Mart Stores, Inc............ 17,842,274
------------
21,588,324
------------
RETAIL -- DRUG STORE -- 0.3%
48,500 Walgreen Co..................... 2,003,656
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.7%
30,000 J.C. Penney, Inc................ 2,169,375
22,800 May Department Stores Co........ 1,493,400
37,000 Sears, Roebuck & Co............. 2,259,313
------------
5,922,088
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.1%
20,200 Federated Department Stores,
Inc.*........................... 1,087,013
------------
RETAIL -- SUPERMARKETS -- 0.1%
34,100 American Stores Co.............. 824,794
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.2%
37,700 Autozone, Inc.*................. 1,204,044
------------
RUBBER -- TIRES -- 0.1%
17,200 Goodyear Tire & Rubber Co....... 1,108,325
------------
</TABLE>
Continued
31
<PAGE> 34
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SOAP & CLEANING PREPARATIONS -- 1.4%
125,200 Procter & Gamble Co............. $ 11,401,025
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.3%
45,700 Airtouch Communications,
Inc.*........................... 2,670,594
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 2.2%
27,300 General Instrument Corp.*....... 742,219
15,800 Harris Corp..................... 706,063
142,300 Lucent Technologies, Inc........ 11,837,580
82,700 Motorola, Inc................... 4,346,919
------------
17,632,781
------------
TEXTILE -- APPAREL -- 0.1%
19,700 VF Corp......................... 1,013,319
------------
TOBACCO -- 1.3%
243,500 Philip Morris Cos., Inc......... 9,587,813
28,600 U.S.T., Inc..................... 772,200
------------
10,360,013
------------
TOOLS -- HAND HELD -- 0.2%
9,300 Black & Decker Corp............. 567,300
12,300 Snap-On, Inc.................... 445,875
9,600 The Stanley Works............... 399,000
------------
1,412,175
------------
TOYS/GAME/HOBBY -- 0.3%
33,300 Hasbro, Inc..................... 1,309,107
30,900 Mattel, Inc..................... 1,307,456
------------
2,616,563
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
14,700 FDX Corp.*...................... 922,425
------------
TRANSPORTATION -- AIRLINE -- 0.5%
18,000 AMR Corp.*...................... 1,498,500
7,200 Delta Air Lines, Inc............ 930,600
43,200 Southwest Airlines Co........... 1,279,800
------------
3,708,900
------------
TRANSPORTATION -- EQUIPMENT &
LEASING -- 0.0%
9,900 Ryder Systems, Inc.............. 312,469
------------
TRANSPORTATION -- RAILROAD -- 0.5%
34,500 CSX Corp........................ 1,569,750
34,000 Norfolk Southern Corp........... 1,013,625
29,100 Union Pacific Corp.............. 1,284,038
------------
3,867,413
------------
UTILITIES -- ELECTRIC POWER -- 1.9%
9,600 Ameren Corp..................... 381,600
39,400 Baltimore Gas & Electric Co..... 1,223,863
47,900 Consolidated Edison, Inc........ 2,206,393
33,200 Detroit Edison Co............... 1,340,450
37,200 Dominion Resources, Inc......... 1,515,900
19,700 Entergy Corp.................... 566,375
49,800 First Energy Corp............... 1,531,350
16,600 Florida Power & Light, Inc...... 1,045,800
19,100 Houston Industries, Inc......... 589,713
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (CONTINUED)
30,400 Northern States Power Co........ $ 870,200
43,500 PacifiCorp...................... 984,188
43,900 Peco Energy Corp................ 1,281,331
34,600 Texas Utilities Co.............. 1,440,225
------------
14,977,388
------------
UTILITIES -- GAS DISTRIBUTION -- 0.1%
19,700 Eastern Enterprises............. 844,638
8,600 ONEOK, Inc...................... 342,925
------------
1,187,563
------------
UTILITIES -- TELEPHONE -- 6.0%
94,300 Ameritech Corp.................. 4,231,713
139,600 AT&T Corp....................... 7,974,649
160,400 Bell Atlantic Corp.............. 7,318,249
103,600 BellSouth Corp.................. 6,954,150
88,800 GTE Corp........................ 4,939,500
17,800 MCI Communications Corp......... 1,034,625
182,200 SBC Communications, Inc......... 7,288,000
40,200 Sprint Corp..................... 2,834,100
49,997 US West, Inc.................... 2,349,859
53,400 WorldCom, Inc.*................. 2,586,563
------------
47,511,408
------------
TOTAL COMMON STOCKS............. 779,653,150
------------
(Cost $574,851,717)
INVESTMENT COMPANIES -- 2.5%
10,029,788 Dreyfus Cash Management Money
Market Fund..................... 10,029,788
9,826,991 Federated Prime Value
Obligations Money Market Fund... 9,826,991
------------
TOTAL INVESTMENT COMPANIES...... 19,856,779
------------
(Cost $19,856,779)
TOTAL INVESTMENTS -- 100.0%................. 799,509,929
(Cost $594,708,496)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.0%....................... 303,909
------------
TOTAL NET ASSETS -- 100.0%.................. $799,813,838
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $215,160,344
Unrealized depreciation............... (10,358,911)
------------
Net unrealized appreciation........... $204,801,433
============
</TABLE>
(b) Security has been deposited as initial margin on open futures contract.
* Non-income producing security
ADR American Depositary Receipt
At June 30, 1998 the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ----------------- ----------- -----------
<S> <C> <C> <C>
66... Standard & Poor's $18,615,835 $18,859,500
500, 9/17/98
</TABLE>
See Notes to Financial Statements.
32
<PAGE> 35
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS -- 98.4%
ADVERTISING -- 0.9%
51,000 Catalina Market Corp. *......... $ 2,648,813
45,400 Ha-Lo Industries, Inc. *........ 1,413,075
163,400 Sitel Corp. *................... 1,082,525
66,300 True North Communications....... 1,939,275
------------
7,083,688
------------
AEROSPACE & DEFENSE -- 0.3%
20,200 Alliant Techsystems, Inc. *..... 1,277,650
39,100 Newport News Shipbuilding....... 1,045,925
------------
2,323,575
------------
AEROSPACE/DEFENSE EQUIPMENT -- 0.6%
42,250 AAR Corp. ...................... 1,249,016
42,800 Aviall, Inc. *.................. 585,825
39,100 Banner Aerospace, Inc. *........ 503,413
3,600 Ducommun, Inc. *................ 72,000
38,800 Fairchild Corp., Class A *...... 783,275
56,200 Hexcel Corp. *.................. 1,271,524
3,000 Simula, Inc. *.................. 49,313
------------
4,514,366
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
119,900 Fedders Corp. .................. 801,831
50,400 Royal Appliance Manufacturing
Co. *........................... 315,000
------------
1,116,831
------------
AUDIO/VIDEO PRODUCTION -- 0.2%
48,280 Harman International Industries,
Inc. ........................... 1,858,780
148,369 Zenith Electronics Corp. *...... 44,511
------------
1,903,291
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 1.0%
51,800 Arvin Industries, Inc. ......... 1,880,987
23,100 Breed Technologies, Inc. *...... 353,719
71,500 Detroit Diesel Corp. *.......... 1,541,718
3,100 Excel Industries, Inc........... 44,369
37,500 Miller Industries, Inc. *....... 290,625
27,700 Standard Products Co. .......... 779,063
23,000 Superior Industries
International................... 648,313
64,975 Titan International Inc. ....... 1,104,575
35,500 Tower Automotive, Inc. *........ 1,522,062
5,800 Wabash National Corp. .......... 149,350
------------
8,314,781
------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.3%
16,200 Exide Corp. .................... 272,363
38,000 Standard Motor Products, Inc. *. 845,500
61,837 Wynn's International, Inc. ..... 1,190,362
------------
2,308,225
------------
BANKS -- MIDWEST -- 0.9%
63,900 CNB Bancshares, Inc. ........... 3,067,199
57,200 First Midwest Bancgroup, Inc. .. 2,515,013
68,200 Irwin Financial Corp. .......... 1,982,063
------------
7,564,275
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BANKS -- NORTHEAST -- 1.1%
45,045 Commerce Bancorp, Inc. ......... $ 2,635,133
11,100 Commercial Bank of New York..... 294,150
72,600 First Commonwealth Financial.... 2,050,950
57,200 Hubco, Inc. .................... 2,048,475
43,200 Independent Bank Corp. ......... 837,000
21,800 Sterling Bancorp................ 566,800
------------
8,432,508
------------
BANKS -- SOUTHEAST -- 0.7%
115,600 BancorpSouth, Inc. ............. 2,427,600
62,300 F & M National Corp. ........... 1,806,700
28,700 Trans Financial, Inc. .......... 1,646,663
------------
5,880,963
------------
BANKS -- SOUTHWEST -- 0.1%
32,800 Texas Regional Bancshares....... 1,074,200
------------
BANKS -- WEST -- 0.1%
25,826 First Republic Bancorp, Inc. *.. 932,964
------------
BEVERAGES -- ALCOHOLIC -- 0.0%
31,000 Boston Beer Company, Inc.-
Class A *....................... 395,250
------------
BEVERAGES -- SOFT DRINKS -- 0.0%
2,145 Buenos Aires Embotella Doro-
ADR *........................... 0
8,000 Pepsi-Cola Puerto Rico
Bottling Co. *.................. 60,000
------------
60,000
------------
BROADCASTING/CABLE -- 0.5%
45,500 BET Holdings, Inc. *............ 2,863,656
130,300 Spelling Entertainment Group *.. 1,221,563
------------
4,085,219
------------
BUILDING -- 0.7%
65,400 Calmat Co. ..................... 1,438,800
37,400 Centex Construction Products,
Inc. ........................... 1,439,900
40,800 Dravo Corp. *................... 374,850
22,700 Lone Star Industries, Inc. ..... 1,749,319
12,000 Medusa Corp. ................... 753,000
------------
5,755,869
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.4%
2,200 Butler Manufacturing Co. ....... 74,938
45,900 Dal-Tile International, Inc. *.. 450,394
1,700 Dayton Superior Corp. .......... 30,600
37,050 Elcor Corp. .................... 935,513
32,800 Nortek, Inc. *.................. 1,008,599
33,760 Republic Gypsum Co. ............ 708,960
4,400 Willbros Group, Inc. *.......... 68,750
------------
3,277,754
------------
</TABLE>
Continued
33
<PAGE> 36
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUILDING -- HEAVY CONSTRUCTION -- 0.6%
24,600 Dycom Industries, Inc. *........ $ 830,250
5,200 Granite Construction, Inc. ..... 159,250
18,400 Jacobs Engineering Group,
Inc. *.......................... 591,100
123,000 Morrison Knudsen Corp. *........ 1,729,687
37,700 Stone & Webster, Inc. .......... 1,493,863
------------
4,804,150
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.2%
57,800 ABM Industries, Inc............. 1,611,175
4,100 American Residential Services *. 46,125
9,700 Rollins, Inc. .................. 198,850
4,100 Service Experts, Inc. *......... 141,450
------------
1,997,600
------------
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES -- 0.2%
30,500 Cavalier Homes, Inc. ........... 394,594
25,100 Coachmen Industries, Inc. ...... 655,737
38,300 Winnebago Industries, Inc. ..... 478,750
------------
1,529,081
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 1.0%
10,000 Beazer Homes USA, Inc. *........ 259,375
46,000 D. R. Horton, Inc. ............. 960,250
54,400 Kaufman & Broad Home Corp. ..... 1,727,199
23,900 M/I Schottenstein Homes, Inc. .. 516,838
24,900 MDC Holdings, Inc. ............. 491,775
35,400 Pulte Corp. .................... 1,057,575
21,800 Ryland Group, Inc. ............. 572,250
64,500 Standard-Pacific Corp. ......... 1,330,313
31,000 Toll Brothers, Inc. *........... 889,313
3,300 U.S. Home Corp. *............... 136,125
------------
7,941,013
------------
BUILDING PRODUCTS -- AIR CONDITIONING/
HEAT -- 0.2%
41,975 Watsco, Inc. ................... 1,476,995
------------
BUILDING PRODUCTS -- LIGHTING/FIXTURES -- 0.1%
23,000 Thomas Industries, Inc. ........ 562,063
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.3%
71,400 HomeBase, Inc. *................ 566,738
59,900 Hughes Supply, Inc.............. 2,193,837
------------
2,760,575
------------
BUSINESS INFORMATION -- 0.3%
71,900 Primark Corp. *................. 2,251,369
------------
BUSINESS SERVICES -- 1.2%
61,600 ADVO, Inc. *.................... 1,736,349
37,400 Budget Group, Inc.-Class A *.... 1,194,463
56,400 Caribiner International, Inc. *. 987,000
38,300 Fair Issac & Co., Inc. ......... 1,455,400
66,700 Franklin Covey Co. *............ 1,283,975
45,200 Healthplan Services Corp. ...... 791,000
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUSINESS SERVICES (CONTINUED)
51,200 Interim Services, Inc. *........ $ 1,644,800
64,100 Physicians Resource Group,
Inc. *.......................... 292,456
------------
9,385,443
------------
CHEMICALS -- DIVERSIFIED -- 0.2%
47,800 ChemFirst, Inc. ................ 1,206,950
------------
CHEMICALS -- PLASTIC -- 0.5%
12,600 Borden Chemicals & Plastics LP.. 72,450
44,100 Geon Co. ....................... 1,011,544
61,700 Spartech Corp. ................. 1,322,693
57,400 Wellman, Inc. .................. 1,302,263
------------
3,708,950
------------
CHEMICALS -- SPECIALTY -- 1.2%
40,000 Bush Boake Allen, Inc. *........ 1,172,500
45,800 General Chemical Group, Inc. ... 1,270,950
55,600 Lawter International, Inc. ..... 604,650
30,400 LeaRonal, Inc. ................. 725,800
53,000 Lilly Industries, Inc. ......... 1,146,125
45,300 Material Sciences Corp. *....... 526,613
24,000 McWhorter Technologies, Inc. *.. 634,500
91,400 NL Industries, Inc. ............ 1,827,999
40,800 OM Group, Inc................... 1,683,000
5,000 TETRA Technologies, Inc. *...... 83,750
------------
9,675,887
------------
COAL -- 0.1%
49,100 Zeigler Coal Holding Co. ....... 840,838
------------
COMMERCIAL SERVICES -- 1.2%
35,100 CDI Corp. *..................... 938,925
4,800 InaCom Corp. *.................. 152,400
24,500 Leasing Solutions, Inc. *....... 704,375
40,100 Maximus, Inc. *................. 1,170,419
140,400 National Processing, Inc. *..... 1,500,525
65,900 Norrell Corp. .................. 1,313,881
85,800 NOVA Corp. *.................... 3,067,349
54,200 Personnel Group of America,
Inc. *.......................... 1,084,000
------------
9,931,874
------------
COMPUTER SOFTWARE -- 1.6%
27,700 Ardent Software, Inc. *......... 380,875
60,000 Excalibur Technologies Corp. *.. 660,000
133,000 Learning Co., Inc. *............ 3,940,124
34,500 MacNeal-Schwendler Corp. *...... 338,531
17,400 Microprose, Inc. *.............. 77,213
138,208 Midway Games, Inc. *............ 2,159,500
63,200 Platinum Software, Inc. *....... 1,540,500
29,400 Project Software & Development,
Inc. *.......................... 589,838
25,100 Rainbow Technologies, Inc. *.... 514,550
15,800 Software Spectrum, Inc. *....... 319,950
135,700 Vanstar Corp. *................. 1,976,131
------------
12,497,212
------------
</TABLE>
Continued
34
<PAGE> 37
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS -- GRAPHICS -- 0.1%
105,366 Chyron Corp. *.................. $ 388,537
28,800 STB Systems, Inc. *............. 360,000
------------
748,537
------------
COMPUTERS -- INTEGRATED SYSTEMS -- 0.6%
104,000 Cerner Corp. *.................. 2,944,500
48,600 MICROS Systems, Inc. *.......... 1,608,356
------------
4,552,856
------------
COMPUTERS -- LOCAL AREA NETWORK -- 0.4%
149,600 Anixter International, Inc. *... 2,851,750
------------
COMPUTERS -- MEMORY DEVICES -- 0.3%
74,911 Applied Magnetics Corp. *....... 571,196
57,100 Hutchinson Technology, Inc. *... 1,555,975
------------
2,127,171
------------
COMPUTERS -- MICRO -- 0.2%
128,100 Data General Corp. *............ 1,913,494
------------
COMPUTERS -- OPTICAL RECOGNITION -- 0.2%
65,900 BancTec, Inc. *................. 1,523,938
------------
COMPUTERS -- PERIPHERAL EQUIPMENT -- 0.4%
37,000 Analogic Corp. ................. 1,655,750
31,100 ENCAD, Inc. *................... 423,738
44,900 Media 100, Inc. *............... 171,181
69,500 Mylex Corp. *................... 469,125
24,200 Printronix, Inc. *.............. 387,200
18,362 TransAct Technologies, Inc. *... 162,963
12,400 Tridex Corp. *.................. 89,900
------------
3,359,857
------------
COMPUTERS -- SERVICES -- 2.2%
105,000 Affiliated Computer
Services--Class A *............. 4,042,499
70,500 Analysts International Corp. ... 2,000,438
44,000 BA Merchant Services, Inc. *.... 888,250
65,300 Bell & Howell Co. *............. 1,685,556
24,500 Broadway & Seymour, Inc. *...... 137,813
20,400 BTG, Inc. *..................... 183,600
57,600 Computer Task Group, Inc. ...... 1,929,600
52,500 DBT Online, Inc. *.............. 1,417,500
30,100 Factset Research Systems *...... 978,250
114,400 PSINet, Inc. *.................. 1,487,200
82,000 Safeguard Scientifics, Inc. *... 3,418,374
------------
18,169,080
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.8%
61,200 Department 56, Inc. *........... 2,172,599
49,900 Ekco Group, Inc. *.............. 392,963
67,500 Jenny Craig, Inc. *............. 409,219
71,500 Jostens, Inc. .................. 1,724,938
46,950 Oneida, Ltd. ................... 1,437,844
------------
6,137,563
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
CONTAINERS -- METAL & GLASS -- 0.3%
17,900 BWAY Corp. *.................... $ 384,850
37,400 United States Can Corp. *....... 549,313
43,700 Zero Corp. ..................... 1,250,912
------------
2,185,075
------------
CONTAINERS -- PAPER & PLASTIC -- 0.3%
58,700 ACX Technologies, Inc. *........ 1,276,725
95,400 Longview Fibre Co. ............. 1,359,450
------------
2,636,175
------------
COSMETICS & TOILETRIES -- 0.4%
118,000 Playtex Products, Inc. *........ 1,880,625
39,400 Windmere-Durable
Holding, Inc. *................. 1,411,013
------------
3,291,638
------------
DATA PROCESSING & REPRODUCTION -- 0.5%
38,400 Choicepoint, Inc. *............. 1,944,000
90,100 Pegasystems, Inc. *............. 2,443,963
------------
4,387,963
------------
DIVERSIFIED -- 1.4%
33,850 Allied Products Corp. .......... 717,197
17,700 Chemed Corp. ................... 602,906
38,400 Clarcor, Inc. .................. 806,400
45,100 Federal Signal Corp. ........... 1,096,494
60,800 Gencorp, Inc. .................. 1,535,200
41,700 Griffon Corp. *................. 534,281
17,200 Imation Corp. *................. 284,875
23,350 Manitowoc Co., Inc. ............ 942,756
38,000 MascoTech, Inc. ................ 912,000
31,500 Standex International Corp. .... 933,188
84,300 Triarc Cos., Inc. *............. 1,849,330
30,720 U.S. Industries, Inc. .......... 760,320
------------
10,974,947
------------
ELECTRICAL & ELECTRONIC -- 0.3%
36,600 MDU Resources Group, Inc. ...... 1,306,162
29,400 Sigcorp, Inc. .................. 942,638
------------
2,248,800
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 1.5%
279,700 Cypress Semiconductor Corp. *... 2,325,005
115,000 General Semiconductor, Inc. *... 1,135,625
36,900 Integrated Circuit Systems,
Inc. ........................... 613,463
158,500 International Rectifier Corp. *. 1,347,250
128,600 MEMC Electronic Materials,
Inc. *.......................... 1,334,225
86,900 PMC-Sierra, Inc. *.............. 4,073,437
72,700 Unitrode Corp. *................ 836,050
------------
11,665,055
------------
ELECTRICAL EQUIPMENT -- 0.3%
17,300 C&D Technologies, Inc. ......... 1,003,400
27,100 United Illuminating Co. ........ 1,371,938
------------
2,375,338
------------
</TABLE>
Continued
35
<PAGE> 38
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC -- CONNECTORS -- 0.3%
131,400 Berg Electronics Corp. *........ $ 2,570,513
------------
ELECTRONIC -- MANUFACTURING &
MACHINERY -- 0.4%
70,300 Kulicke & Soffa Industries,
Inc. *.......................... 1,195,100
46,400 PRI Automation, Inc. *.......... 791,700
48,100 SpeedFam International, Inc. *.. 886,844
27,600 Watkins-Johnson Co.............. 717,600
------------
3,591,244
------------
ELECTRONIC -- MILITARY -- 0.1%
29,800 ESCO Electronics Corp. *........ 566,200
36,100 United Industrial Corp. ........ 469,300
------------
1,035,500
------------
ELECTRONIC -- MISCELLANEOUS
COMPONENTS -- 1.6%
24,100 ACT Manufacturing, Inc. *....... 228,950
83,600 BMC Industries, Inc. ........... 731,500
29,800 California Amplifier, Inc. *.... 55,875
46,056 CTS Corp. ...................... 1,358,652
24,100 Del Global Technologies
Corp. *......................... 241,000
32,500 Hadco Corp. *................... 757,656
44,800 Innovex, Inc. .................. 585,200
61,200 Littlefuse, Inc. *.............. 1,545,300
57,300 Oak Industries, Inc. *.......... 2,026,987
63,800 OEA, Inc. *..................... 1,020,800
37,700 Park Electrochemical Corp. ..... 796,413
73,700 Photronics Corp. *.............. 1,626,006
40,000 Plexus Corp. *.................. 795,000
23,500 RadiSys Corp. *................. 505,250
17,900 Reptron Electronics, Inc. *..... 200,256
------------
12,474,845
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.7%
74,000 Artesyn Technologies, Inc. *.... 1,184,000
87,200 Cable Design Technologies *..... 1,798,500
25,150 Dynatech Corporation-W/I *...... 78,468
50,900 Technitrol, Inc. ............... 2,032,819
3,200 Triumph Group, Inc. *........... 134,400
------------
5,228,187
------------
ELECTRONIC MEASURING MACHINES -- 0.5%
58,200 Fluke Corp. .................... 1,913,325
82,800 Genrad, Inc. *.................. 1,635,300
32,500 Microtest, Inc. *............... 148,281
------------
3,696,906
------------
ELECTRONIC PARTS -- DISTRIBUTION -- 0.4%
29,418 Bell Industries, Inc. *......... 334,630
86,200 Kent Electronics Corp. *........ 1,578,537
51,500 Marshall Industries *........... 1,403,375
29,200 Nu Horizons Electronics Corp. *. 175,200
------------
3,491,742
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC PRODUCTS -- MISCELLANEOUS -- 1.3%
32,900 Aeroflex, Inc. *................ $ 341,338
83,900 Allen Telecom, Inc. *........... 975,338
23,500 American Precision Industries *. 358,375
104,600 Ametek, Inc. ................... 3,066,087
61,900 Electronic Retailing Systems
International, Inc. *........... 177,963
26,400 Franklin Electronic Publishers,
Inc. *.......................... 264,000
51,400 Integrated Process Equipment *.. 578,250
31,700 Kollmorgen Corp. ............... 635,981
34,100 Kopin Corp. *................... 656,425
96,500 MagneTek, Inc. *................ 1,519,874
39,900 Recoton Corp. *................. 1,336,649
25,300 Three-Five Systems, Inc. *...... 441,169
------------
10,351,449
------------
ENGINEERING -- RESEARCH & DEVELOPMENT
SERVICES -- 0.1%
26,490 URS Corp. *..................... 450,330
------------
ENTERTAINMENT -- 0.3%
31,430 Loews Cineplex Entertainment *.. 402,697
4,700 Scientific Games Holdings
Corp. *......................... 108,100
63,400 Vail Resorts, Inc. *............ 1,688,025
------------
2,198,822
------------
FERTILIZERS -- 0.4%
54,636 Mississippi Chemical Corp. ..... 898,079
138,300 Terra Industries, Inc. ......... 1,244,700
6,200 Terra Nitrogen Company LP....... 155,000
16,100 The Scotts Company *............ 599,725
------------
2,897,504
------------
FINANCIAL -- CONSUMER LOANS -- 0.8%
83,600 AmeriCredit Corp. *............. 2,983,474
113,500 Arcadia Financial Ltd. *........ 858,344
47,800 Student Loan Corp. ............. 2,249,588
------------
6,091,406
------------
FINANCIAL -- INVESTMENT BANKER/BROKER -- 1.2%
35,000 Ameritrade Holding Corp.-
Class A *....................... 945,000
38,750 Dain Rauscher Corp. ............ 2,121,563
126,700 E*Trade Group, Inc. *........... 2,906,180
100,600 Everen Capital Corp. ........... 2,816,800
28,600 Southwest Securities Group,
Inc. ........................... 643,500
------------
9,433,043
------------
FINANCIAL -- INVESTMENT BANKERS -- 1.1%
28,200 Advest Group, Inc. ............. 814,275
17,900 Interstate/Johnson Lane, Inc. .. 563,850
62,800 Jefferies Group, Inc. .......... 2,574,800
59,300 McDonald & Co. Investments,
Inc. ........................... 1,945,781
</TABLE>
Continued
36
<PAGE> 39
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- INVESTMENT BANKERS (CONTINUED)
100,325 Morgan Keegan, Inc. ............ $ 2,595,909
39,500 National Discount Brokers
Group *......................... 419,688
------------
8,914,303
------------
FINANCIAL -- LEASING COMPANY -- 0.9%
30,900 Cort Business Services Corp. *.. 973,350
36,200 DVI, Inc. *..................... 923,100
43,000 Rental Service Corp. *.......... 1,445,875
100,400 U S Rentals, Inc. *............. 3,959,525
------------
7,301,850
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.0%
82,800 Aames Financial Corp. .......... 1,138,500
34,100 Delta Financial Corp. *......... 626,588
109,100 Imperial Credit Industries,
Inc. *.......................... 2,563,849
56,700 Southern Pacific Funding
Corp. *......................... 889,481
31,000 Triad Guaranty, Inc. *.......... 1,054,000
88,100 United Cos. Financial Corp. .... 1,376,563
------------
7,648,981
------------
FINANCIAL -- SAVINGS & LOAN -- 1.2%
91,486 Downey Financial Corp. ......... 2,990,448
101,300 Firstbank Puerto Rico........... 2,633,799
34,700 Firstfed Financial Corp. *...... 1,804,400
17,700 Maryland Federal Bancorp........ 701,363
18,100 PonceBank....................... 467,206
80,273 Westcorp........................ 1,103,754
------------
9,700,970
------------
FINANCIAL -- SMALL BUSINESS INVESTMENT CO. &
COMMERCIAL -- 0.2%
66,000 Sirrom Capital Corp. ........... 1,716,000
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 0.6%
28,500 Healthcare Financial Partners *. 1,747,406
105,000 Paymentech, Inc. *.............. 2,159,063
144,500 Phoenix Investment Partners..... 1,255,344
------------
5,161,813
------------
FOOD -- DIVERSIFIED -- 0.7%
54,400 Earthgrains Co. ................ 3,039,599
4,400 Morrison Health Care, Inc....... 81,400
39,400 Ralcorp Holding, Inc. *......... 743,675
41,500 Smucker (J.M.) Co. ............. 1,011,563
2,900 Tasty Baking Co. ............... 45,131
64,020 Zapata Corp. ................... 632,198
------------
5,553,566
------------
FOOD -- FLOUR & GRAIN -- 0.2%
50,600 International Multi-Foods
Corp. .......................... 1,391,500
------------
FOOD -- MEAT PRODUCTS -- 0.2%
77,500 Pilgrim's Pride Corp. .......... 1,550,000
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FOOD ITEMS -- WHOLESALE -- 0.4%
42,500 Fleming Co., Inc. .............. $ 746,406
69,436 U.S. Foodservices *............. 2,434,600
------------
3,181,006
------------
FOREST PRODUCTS -- 0.1%
12,400 Crown Pacific Partners, LP...... 313,875
3,700 Deltic Timber Corp. ............ 92,731
------------
406,606
------------
FUNERAL SERVICES -- 0.1%
23,000 Equity Corp. International *.... 552,000
------------
FURNITURE -- 0.2%
40,387 Bush Industries, Inc. .......... 878,417
3,900 Falcon Products, Inc. .......... 49,238
47,700 O'Sullivan Industries *......... 667,800
24,900 Shelby Williams Industries,
Inc. ........................... 373,500
------------
1,968,955
------------
GLASS PRODUCTS -- 0.2%
36,200 Libbey, Inc. ................... 1,386,913
------------
HEALTH CARE -- 0.3%
108,000 IDEXX Laboratories, Inc. *...... 2,686,500
------------
HOTELS & LODGING -- 0.7%
37,800 Capstar Hotel Co. *............. 1,058,400
54,450 Marcus Corp. ................... 973,294
107,500 Prime Hospitality Corp. *....... 1,874,532
79,900 Red Roof Inns, Inc. *........... 1,353,306
15,500 Sunburst Hospitality Corp. *.... 107,531
------------
5,367,063
------------
INDUSTRIAL -- AUTOMOTIVE/ROBOTICS -- 0.4%
56,800 Esterline Technologies Corp. ... 1,167,950
76,000 Gerber Scientific, Inc. ........ 1,729,000
35,500 Medar, Inc. *................... 75,438
------------
2,972,388
------------
INSTRUMENTS -- CONTROL -- 0.5%
93,200 Roper Industries, Inc. ......... 2,434,850
85,500 Watts Industries, Inc.-Class A.. 1,784,813
------------
4,219,663
------------
INSTRUMENTS -- SCIENTIFIC -- 0.6%
73,400 Dionex Corp. *.................. 1,935,925
98,200 EG&G, Inc....................... 2,946,000
------------
4,881,925
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.6%
76,800 John Alden Financial Corp. ..... 1,689,600
18,600 Penn Treaty American Corp. *.... 585,900
79,200 Penncorp Financial Group, Inc. . 1,623,600
31,937 RLI Corp. ...................... 1,299,437
------------
5,198,537
------------
</TABLE>
Continued
37
<PAGE> 40
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
INSURANCE -- BROKERS -- 0.6%
58,500 Arthur J. Gallagher & Co. ...... $ 2,617,875
43,300 Blanch (E.W.) Holdings, Inc. ... 1,591,275
43,800 Hilb, Rogal & Hamilton Co. ..... 684,375
------------
4,893,525
------------
INSURANCE -- LIFE -- 2.2%
126,700 American Annuity Group, Inc. *.. 3,048,719
90,200 American Heritage Life
Investment Corp. ............... 2,085,875
51,554 Amerus Life Holdings, Inc. ..... 1,669,061
53,040 Delphi Financial Group *. ...... 2,986,815
41,800 Life Re Corp. .................. 3,464,174
47,300 Life USA Holding, Inc. ......... 611,944
73,500 Nationwide Financial Services... 3,748,499
------------
17,615,087
------------
INSURANCE -- MULTI-LINE -- 1.3%
99,300 Allied Group, Inc. ............. 4,648,480
91,600 Enhance Financial Services
Group, Inc. .................... 3,091,500
108,200 FBL Financial Group, Inc. --
Class A......................... 2,772,625
------------
10,512,605
------------
INSURANCE -- PROPERTY & CASUALTY -- 4.1%
49,600 Acceptance Insurance Cos. *..... 1,218,300
42,200 Capital Re Corp. ............... 3,022,574
25,600 Centris Group, Inc. ............ 316,800
21,300 Chartwell Re Corp. ............. 627,019
32,600 Executive Risk, Inc. ........... 2,404,250
51,599 Fidelity National Financial,
Inc. ........................... 2,054,285
45,950 First American Financial Corp. . 4,135,499
26,800 FPIC Insurance Group, Inc. *.... 901,150
85,118 Frontier Insurance Group, Inc. . 1,920,475
59,700 GAINSCO, Inc. .................. 402,975
9,500 Gryphon Holdings, Inc. *........ 156,750
103,500 HCC Insurance Holdings, Inc. ... 2,277,000
43,700 Highlands Insurance Group *..... 808,450
69,900 Lasalle Re Holdings Ltd. ....... 2,647,463
39,100 MMI Cos., Inc. ................. 904,188
59,900 NAC Re Corp. ................... 3,197,162
15,700 Penn--America Group, Inc. ...... 211,950
26,000 Philadelphia Consolidated
Holding Corp. *................. 546,000
40,400 PXRE Corp. ..................... 1,212,000
28,900 SCPIE Holdings, Inc. ........... 978,988
26,900 Symons International Group *.... 504,375
54,050 Vesta Insurance Group, Inc. .... 1,151,941
58,300 Zenith National Insurance Co. .. 1,643,331
------------
33,242,925
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
LASERS -- SYSTEMS/COMPONENTS -- 0.6%
64,900 Coherent, Inc. *................ $ 1,113,441
16,200 Cyberoptics Corp. *............. 232,875
30,800 Electro Scientific Industries,
Inc. *.......................... 972,125
47,500 VISX, Inc. *.................... 2,826,250
------------
5,144,691
------------
LEISURE & RECREATION PRODUCTS -- 0.9%
21,200 Coastcast Corp. *............... 381,600
38,000 Huffy Corp. .................... 688,750
47,530 K2, Inc. ....................... 837,716
112,500 Oakley, Inc. *.................. 1,462,500
42,400 Polaris Industries, Inc. ....... 1,595,300
21,900 Steinway Musical Instruments *.. 706,275
76,400 Sturm, Ruger & Co., Inc. ....... 1,279,700
------------
6,951,841
------------
LEISURE & RECREATION SERVICES -- 0.1%
32,100 Carmike Cinemas, Inc. *......... 864,694
------------
LEISURE & RECREATION/GAMING -- 0.9%
96,900 Aztar Corp. *................... 660,131
173,400 Boyd Gaming Corp. *............. 997,050
101,550 Grand Casinos, Inc. *........... 1,700,962
27,900 Harveys Casino Resorts.......... 756,788
37,200 Hollywood Park, Inc. *.......... 469,650
25,300 Jackpot Enterprises, Inc. *..... 317,831
48,100 Rio Hotel & Casino, Inc. *...... 907,888
56,300 Station Casinos, Inc. *......... 826,906
48,700 Trump Hotels & Casino Resorts,
Inc. *.......................... 343,944
52,800 WMS Industries, Inc. *.......... 221,100
------------
7,202,250
------------
LINEN SUPPLY & RELATED -- 0.2%
26,000 Angelica Corp. ................. 546,000
27,900 Unifirst Corp. ................. 704,475
------------
1,250,475
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.4%
60,000 Applied Power, Inc. ............ 2,062,500
23,600 Brown & Sharpe Manufacturing
Co. *........................... 283,200
20,400 Gleason Corp. .................. 573,750
------------
2,919,450
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.4%
40,400 CMI Corp., Class A.............. 287,850
35,150 Commercial Intertech Corp. ..... 637,094
62,300 JLG Industries, Inc. ........... 1,257,681
40,600 Terex Corp. *................... 1,157,100
------------
3,339,725
------------
</TABLE>
Continued
38
<PAGE> 41
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MACHINERY -- DIVERSIFIED -- 0.1%
22,500 Cascade Corp. .................. $ 410,625
3,800 Gardner Denver Machinery,
Inc. *.......................... 104,975
------------
515,600
------------
MACHINERY -- ELECTRICAL -- 0.6%
65,800 Baldor Electric Co. ............ 1,607,988
28,157 Kuhlman Corp. .................. 1,113,961
38,600 Smith (A.O.) Corp. ............. 1,995,137
------------
4,717,086
------------
MACHINERY -- GENERAL INDUSTRIAL -- 1.1%
48,466 Albany International Corp.,
Class A......................... 1,160,167
42,725 Applied Industrial Technology,
Inc. ........................... 878,533
35,400 Chart Industries, Inc. ......... 845,175
52,900 Global Industrial Technologies,
Inc. *.......................... 760,438
48,087 Graco, Inc. .................... 1,677,034
62,425 Idex Corp. ..................... 2,153,662
83,566 Paxar Corp. *................... 961,009
27,700 Scotsman Industries, Inc. ...... 768,675
------------
9,204,693
------------
MACHINERY -- MATERIAL HANDLING -- 0.3%
62,600 Interlake Corp. *............... 266,050
14,600 Nacco Industries, Inc. ......... 1,887,050
------------
2,153,100
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.6%
64,400 Affymetrix, Inc. *.............. 1,549,624
57,900 Alkermes, Inc. *................ 1,034,963
90,800 Creative Biomolecules, Inc. *... 436,975
81,400 Millennium Pharmaceuticals *.... 1,149,775
52,889 Molecular Biosystems, Inc. *.... 380,140
------------
4,551,477
------------
MEDICAL -- BIOTECHNOLOGY -- 0.1%
29,800 Cryolife, Inc. *................ 469,350
------------
MEDICAL -- DRUGS -- 1.1%
66,200 Alpharma, Inc. ................. 1,456,400
131,400 Carter-Wallace, Inc. ........... 2,373,412
54,000 Guilford Pharmaceuticals *...... 951,750
91,900 Ligand Pharmaceuticals *........ 1,183,213
39,900 Medicus Pharmaceuticals, Inc. *. 1,456,350
73,060 Vitalink Pharmacy Services,
Inc. *.......................... 1,611,886
------------
9,033,011
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.6%
131,900 Mid Atlantic Medical Services,
Inc. *.......................... 1,516,850
41,200 PHP Healthcare Corp. *.......... 303,850
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
1,100 Rightchoice Managed Care *...... $ 13,956
80,250 Sierra Health Services, Inc. *.. 2,021,297
44,900 United Wisconsin Services,
Inc. ........................... 1,274,038
------------
5,129,991
------------
MEDICAL -- HOSPITAL -- 0.4%
34,900 Curative Health Services, Inc. . 994,650
165,400 Paracelsus Health *............. 516,875
46,900 Pediatrix Medical Group, Inc. *. 1,744,094
------------
3,255,619
------------
MEDICAL -- HOSPITAL SERVICES -- 0.5%
81,700 Magellan Health Services,
Inc. *.......................... 2,073,138
89,400 Quest Diagnostics, Inc. *....... 1,955,625
------------
4,028,763
------------
MEDICAL -- NURSING HOMES -- 1.0%
25,000 American Retirement Corp. *..... 443,750
70,600 Integrated Health Services,
Inc. ........................... 2,647,500
166,292 Paragon Health Network *........ 2,681,459
35,100 Retirement Care Associates *.... 254,475
140,700 Sun Healthcare Group, Inc. *.... 2,066,531
------------
8,093,715
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 1.2%
144,400 Apria Healthcare Group, Inc. *.. 965,675
126,900 Coram Healthcare Corp. *........ 245,869
99,300 Genesis Health Ventures, Inc. *. 2,482,500
52,400 National Surgery Centers,
Inc. *.......................... 1,522,875
172,700 NovaCare, Inc. *................ 2,029,225
124,800 Orthodontic Centers of
America *....................... 2,612,999
------------
9,859,143
------------
MEDICAL -- WHOLESALE DRUG -- 0.3%
47,066 Bindley Western Industries,
Inc. ........................... 1,553,178
11,000 Express Scripts, Inc.-Class A *. 886,875
------------
2,440,053
------------
MEDICAL EQUIPMENT & SUPPLIES -- 0.2%
41,000 CONMED Corp. *.................. 943,000
55,200 Respironics, Inc. *............. 859,050
------------
1,802,050
------------
MEDICAL INSTRUMENTS -- 0.3%
82,000 Acuson Corp. *.................. 1,491,375
72,690 Graham-Field Health Products,
Inc. *.......................... 408,881
38,800 OEC Medical Systems, Inc. *..... 873,000
------------
2,773,256
------------
MEDICAL PRODUCTS -- 0.5%
41,600 Diagnostic Products Corp. ...... 1,198,600
83,200 Haemonetics Corp. *............. 1,331,200
24,800 Maxxim Medical, Inc. *.......... 719,200
96,200 Owens & Minor, Inc. ............ 962,000
------------
4,211,000
------------
</TABLE>
Continued
39
<PAGE> 42
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL SUPPLIES -- 0.5%
58,000 Ocular Sciences, Inc. *......... $ 1,885,000
69,200 Sola International, Inc. *...... 2,261,975
------------
4,146,975
------------
MEDICAL/DENTAL SUPPLIES -- 0.7%
82,000 Ballard Medical Products........ 1,476,000
41,000 Cooper Cos, Inc. *.............. 1,493,938
57,100 Sunrise Medical, Inc. *......... 856,500
50,000 West Co., Inc. ................. 1,415,625
------------
5,242,063
------------
METAL -- GOLD -- 0.1%
91,100 Hecla Mining Co. *.............. 483,969
10,000 Meridian Gold, Inc. *........... 21,250
------------
505,219
------------
METAL -- IRON -- 0.2%
24,000 Cleveland Cliffs, Inc. ......... 1,287,000
------------
METAL -- MISCELLANEOUS -- 0.1%
37,400 Brush Wellman, Inc. ............ 769,038
------------
METAL -- NON-FERROUS -- 0.2%
135,000 Kaiser Aluminum Corp. *......... 1,290,938
------------
METAL -- PROCESSING & FABRICATION -- 0.6%
25,000 Amcast Industrial Corp. ........ 465,625
30,300 Chase Industries, Inc. *........ 598,425
35,233 Commercial Metals Co. .......... 1,092,223
24,600 Huntco, Inc., Class A........... 292,125
40,000 Mueller Industries, Inc. *...... 1,485,000
32,500 Wolverine Tube, Inc. *.......... 1,235,000
------------
5,168,398
------------
METAL -- SILVER -- 0.0%
36,400 Coeur d'Alene Mines Corp. *..... 245,700
------------
METAL PRODUCTS -- DISTRIBUTION -- 0.2%
32,950 Reliance Steel & Aluminum Co. .. 1,272,694
------------
METAL PRODUCTS -- FASTENERS -- 0.2%
27,500 SPS Technologies, Inc. *........ 1,608,750
13,800 TransTechnology Corp. .......... 354,488
------------
1,963,238
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.1%
68,600 In Focus Systems, Inc. *........ 484,488
------------
OFFICE SUPPLIES & FORMS -- 0.9%
38,400 American Business Products,
Inc. ........................... 787,200
51,200 American Pad & Paper Co. *...... 230,400
58,300 BT Office Products
International *................. 787,050
34,000 Daisytek International Corp.
*............................... 864,875
29,700 Ennis Business Forms, Inc. ..... 345,263
32,200 Hunt Manufacturing Corp. ....... 762,738
39,900 John H. Harland Co. ............ 675,806
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OFFICE SUPPLIES & FORMS (CONTINUED)
33,800 New England Business Service,
Inc. ........................... $ 1,090,050
43,400 Standard Register Co. .......... 1,535,274
------------
7,078,656
------------
OIL & GAS -- DRILLING -- 0.2%
20,200 Atwood Oceanics, Inc. *......... 804,213
165,800 Parker Drilling Co. *........... 1,170,962
------------
1,975,175
------------
OIL -- FIELD SERVICES -- 0.8%
28,400 Hanover Compressor Co. *........ 768,575
47,800 Oceaneering International,
Inc. *.......................... 848,450
67,600 RPC Energy Services, Inc. ...... 845,000
23,600 Seacor Holdings, Inc. *......... 1,446,974
54,600 Seitel, Inc. *.................. 883,838
73,800 Unit Corp. *.................... 447,413
23,100 Veritas DGC, Inc. *............. 1,153,556
------------
6,393,806
------------
OIL -- PRODUCTION/PIPELINE -- 0.6%
46,800 Aquila Gas Pipeline Corp. ...... 573,300
101,200 Kaneb Services, Inc. *.......... 550,275
38,100 Leviathan Gas Pipe Line
Partners, LP.................... 1,114,425
31,600 Northern Border Partners, LP.... 1,007,250
13,200 TEPPCO Partners................. 712,800
65,000 Western Gas Resources, Inc. .... 950,625
------------
4,908,675
------------
OIL -- U.S. EXPLORATION &
PRODUCTION -- 2.1%
27,400 Barrett Resources Corp. *....... 1,025,788
31,300 Belco Oil & Gas Corp. *......... 269,963
30,600 Benton Oil & Gas Co. *.......... 325,125
66,000 Berry Petroleum Co. ............ 858,000
59,700 Cabot Oil & Gas Corp. .......... 1,194,000
100,800 Chesapeake Energy Corp. ........ 403,200
17,500 Comstock Resources, Inc. *...... 130,156
64,150 Cross Timbers Oil Co. .......... 1,222,859
27,000 Forcenergy, Inc. *.............. 480,938
30,100 Forest Oil Corp. *.............. 430,806
7,200 Houston Exploration Co. *....... 165,150
53,000 HS Resources, Inc. *............ 771,813
71,900 KCS Energy, Inc. ............... 822,356
3,800 Key Production Company,
Inc. *.......................... 45,125
6,300 Lomak Petroleum, Inc. .......... 65,756
71,500 Louis Dreyfus Natural Gas *..... 1,354,030
24,900 Meridian Resource Corp. *....... 175,856
57,700 Newfield Exploration Co. *...... 1,435,287
32,000 Nuevo Energy Co. *.............. 1,028,000
66,000 Snyder Oil Corp. ............... 1,315,875
24,000 Stone Energy Corp. *............ 853,500
50,036 Swift Energy Co. *.............. 797,449
</TABLE>
Continued
40
<PAGE> 43
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL -- U.S. EXPLORATION &
PRODUCTION (CONTINUED)
83,700 Vintage Petroleum, Inc. ........ $ 1,579,837
24,700 Wiser Oil Co. .................. 273,244
------------
17,024,113
------------
OIL -- U.S. INTEGRATED -- 0.0%
13,600 Howell Corp. ................... 147,900
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.1%
51,300 Daniel Industries, Inc. ........ 974,700
------------
OIL REFINING -- 0.5%
5,800 Eott Energy Partners, LP........ 86,638
77,400 Frontier Oil Corp. *............ 648,225
33,500 Giant Industries, Inc. ......... 582,063
63,500 Quaker State Corp. ............. 1,039,812
55,100 Tesoro Petroleum Corp. *........ 874,712
21,600 Tokheim Corp. *................. 442,800
27,050 World Fuel Services Corp. ...... 468,303
------------
4,142,553
------------
PAPER & RELATED PRODUCTS -- 0.5%
70,800 Buckeye Technologies, Inc. *.... 1,668,225
43,300 Chesapeake Corp. ............... 1,685,994
2,100 Fibermark, Inc. ................ 33,600
38,700 Pope & Talbot, Inc. ............ 452,306
12,200 Rock-Tenn Company............... 153,263
------------
3,993,388
------------
POLLUTION CONTROL -- 0.6%
78,700 Calgon Carbon Corp. ............ 782,080
47,500 Dames & Moore, Inc. ............ 611,563
34,700 Imco Recycling, Inc. ........... 641,950
51,239 International Technology
Corp. *......................... 486,771
15,700 Ionics, Inc. *.................. 578,938
200,000 Laidlaw Environmental Services,
Inc. *.......................... 724,999
41,000 Lydall, Inc. *.................. 597,063
28,200 Osmonics, Inc. *................ 338,400
------------
4,761,764
------------
PRINTING -- COMMERCIAL -- 0.3%
36,800 American Banknote Corp. *....... 112,700
14,300 Consolidated Graphics, Inc. *... 843,700
62,300 Mail-Well, Inc. *............... 1,351,131
------------
2,307,531
------------
PROTECTION -- SAFETY -- 0.3%
42,100 Borg-Warner Security Corp. *.... 952,513
28,400 Checkpoint Systems, Inc. *...... 401,150
46,900 Wackenhut Corrections Corp. *... 1,105,081
------------
2,458,744
------------
PUBLISHING -- BOOKS -- 0.1%
46,300 Thomas Nelson, Inc. ............ 619,263
------------
PUBLISHING -- NEWSPAPERS -- 0.2%
107,200 Journal Register Co. *.......... 1,795,600
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PUBLISHING -- PERIODICALS -- 0.3%
117,400 American Media, Inc. *.......... $ 777,775
26,600 Big Flower Holdings, Inc. *..... 798,000
41,100 Playboy Enterprises, Inc. *..... 729,525
------------
2,305,300
------------
REAL ESTATE -- 0.9%
46,300 Castle & Cooke, Inc. *.......... 879,700
32,100 CB Richard Ellis Services *..... 1,073,344
65,100 Grubb & Ellis Co. *............. 927,675
107,300 Insignia Financial Group,
Inc. *.......................... 2,628,850
58,300 Webb (Del) Corp. ............... 1,512,156
------------
7,021,725
------------
RESTAURANTS -- 1.0%
6,700 Consolidated Products, Inc. *... 141,538
30,600 Cooker Restaurant Corp. ........ 298,350
116,400 Foodmaker, Inc. *............... 1,964,249
54,300 Host Marriott Services Corp. *.. 790,744
69,700 Luby's Cafeteria, Inc. ......... 1,224,106
19,000 Morton's Restaurant Group,
Inc. *.......................... 457,188
45,000 Ruby Tuesday, Inc. ............. 697,500
60,200 Sbarro, Inc. *.................. 1,632,925
65,500 Shoney's, Inc. *................ 229,250
73,900 TCBY Enterprises, Inc. ......... 678,956
------------
8,114,806
------------
RETAIL -- APPAREL/SHOES -- 1.4%
60,700 Ann Taylor Stores Corp. *....... 1,286,081
132,480 Burlington Coat Factory
Warehouse Corp. *............... 2,980,799
107,000 CML Group, Inc. *............... 207,313
40,000 Cole (Kenneth) Productions,
Inc. *.......................... 1,035,000
56,100 Footstar, Inc. *................ 2,692,800
55,500 Genesco, Inc. *................. 905,344
52,200 Syms Corp. *.................... 743,850
42,400 Talbots Inc. ................... 1,110,350
18,150 The Buckle, Inc. *.............. 535,425
------------
11,496,962
------------
RETAIL -- AUTOMOBILE -- 0.1%
9,300 Circuit City Stores-Carmax *.... 94,744
6,000 Cross-Continent Auto Retailer *. 41,625
17,700 United Auto Group, Inc. *....... 387,187
------------
523,556
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
73,900 Handleman Co. *................. 849,850
------------
RETAIL -- DISCOUNT -- 0.5%
25,300 99 Cents Only Stores *.......... 1,049,950
57,000 Shopko Stores, Inc. *........... 1,938,000
62,600 Smart & Final, Inc. ............ 1,072,025
------------
4,059,975
------------
RETAIL -- GENERAL MERCHANDISE -- 1.1%
55,900 Cash America Intl., Inc. ....... 852,475
35,200 Cole National Corp. *........... 1,408,000
54,700 Fabri-Centers of America,
Inc. *.......................... 1,497,413
</TABLE>
Continued
41
<PAGE> 44
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- GENERAL MERCHANDISE (CONTINUED)
63,500 Hancock Fabrics, Inc. .......... $ 793,750
69,000 Musicland Stores Corp. *........ 966,000
64,350 Russ Berrie & Co., Inc. ........ 1,608,750
95,550 The Sports Authority, Inc. *.... 1,427,278
------------
8,553,666
------------
RETAIL -- HOME FURNISHINGS -- 0.7%
96,500 Bombay Co., Inc. *.............. 458,375
104,000 Heilig Meyers Co. .............. 1,280,500
30,400 La-Z-Boy, Inc. ................. 1,717,600
44,200 Linens 'n Things, Inc. *........ 1,350,863
33,800 Maxim Group, Inc. *............. 671,775
------------
5,479,113
------------
RETAIL -- JEWELRY -- 0.6%
98,800 Claire's Stores, Inc. .......... 2,025,400
75,800 Zale Corp. *.................... 2,411,388
------------
4,436,788
------------
RETAIL -- MAIL ORDER -- 0.5%
32,100 Brylane, Inc. *................. 1,476,600
52,900 Enesco Group, Inc. ............. 1,626,675
65,900 Global Directmail, Inc. *....... 831,988
56,800 National Media Corp. *.......... 63,900
------------
3,999,163
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
73,500 Value City Department Stores,
Inc. *.......................... 1,543,500
------------
RETAIL -- SPECIAL LINE -- 0.0%
2,400 Heritage Propane Partners LP.... 57,450
3,500 National Propane Partners LP.... 54,469
------------
111,919
------------
RETAIL -- SUPERMARKETS -- 0.4%
39,500 Dominick's Supermarkets, Inc. *. 1,762,688
32,100 Penn Traffic Co. *.............. 106,331
86,000 Ruddick Corp. .................. 1,558,750
------------
3,427,769
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.2%
48,900 Discount Auto Parts, Inc. *..... 1,271,400
41,000 Tyler Corp. *................... 425,375
------------
1,696,775
------------
RUBBER & PLASTICS -- 0.1%
34,300 Furon Co. ...................... 621,688
------------
SHOES & RELATED APPAREL -- 0.6%
25,175 Barry (R.G.) Corp. *............ 415,388
49,800 Brown Group, Inc. .............. 989,775
45,300 Converse, Inc. *................ 249,150
80,400 Stride Rite Corp. .............. 1,211,025
29,900 Timberland Co., Class A *....... 2,150,931
------------
5,016,269
------------
SOAP & CLEANING PREPARATIONS -- 0.2%
54,800 Church & Dwight Co., Inc. ...... 1,774,150
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
STEEL -- PIPES & TUBES -- 0.2%
41,800 NS Group, Inc. *................ $ 423,225
31,900 Quanex Corp. ................... 966,969
12,300 Shaw Group, Inc. *.............. 319,800
------------
1,709,994
------------
STEEL -- PRODUCERS -- 0.9%
21,000 ACME Metals, Inc. *............. 105,000
197,600 Armco, Inc. *................... 1,259,700
2,600 Atchison Casting Corp. *........ 46,475
48,900 Birmingham Steel Corp. ......... 605,138
36,000 Carpenter Technology............ 1,809,000
31,300 Lone Star Technologies, Inc. *.. 477,325
78,800 National Steel Corp. ........... 935,750
50,200 Rouge Industries, Inc. ......... 640,050
76,700 Weirton Steel Corp. *........... 282,831
55,800 WHX Corp. *..................... 718,425
------------
6,879,694
------------
STEEL -- SPECIALTY -- 0.3%
88,900 J & L Specialty Steel, Inc. .... 527,844
60,000 Oregon Steel Mills, Inc. ....... 1,117,499
33,630 RMI Titanium Co. *.............. 765,083
------------
2,410,426
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.1%
70,300 American Mobile Satellite
Corp. * ........................ 685,425
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 1.3%
37,200 C-Cor Electronics, Inc. *....... 706,800
27,600 Centigram Communications
Corp. *......................... 310,500
35,550 Davox Corp. *................... 777,656
57,300 InterVoice, Inc. *.............. 1,017,075
69,400 Network Equipment Technologies,
Inc. *.......................... 1,088,713
57,800 Plantronics, Inc. *............. 2,976,699
51,100 Superior Telecom, Inc. ......... 2,127,037
20,300 Tech-Sym Corp. *................ 564,594
31,200 Telco Systems, Inc. *........... 442,650
100,500 Telular Corp. *................. 194,719
45,900 Titan Corp. *................... 275,400
------------
10,481,843
------------
TELECOMMUNICATIONS -- SERVICES AND
EQUIPMENT -- 0.3%
62,700 Mastec, Inc. *.................. 1,496,963
50,500 Smartalk Teleservices, Inc. *... 735,406
------------
2,232,369
------------
TEXTILE -- APPAREL -- 1.2%
63,000 Authentic Fitness Corp. ........ 996,188
104,300 Burlington Industries, Inc. *... 1,466,718
66,500 Delta Woodside Industries,
Inc. ........................... 344,969
8,000 Donna Karan International,
Inc. *.......................... 117,500
37,700 Guess ?, Inc. *................. 186,144
82,700 Hartmarx Corp. *................ 625,419
57,650 Kellwood Co. ................... 2,060,987
</TABLE>
Continued
42
<PAGE> 45
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TEXTILE -- APPAREL (CONTINUED)
24,700 Oxford Industries, Inc. ........ $ 862,956
75,900 Phillips-Van Heusen Corp. ...... 1,119,525
33,500 St. John Knits, Inc. ........... 1,293,937
81,000 Tultex Corp. *.................. 197,438
------------
9,271,781
------------
TEXTILE -- HOME FURNISHINGS -- 0.2%
34,013 Pillowtex Corp. ................ 1,364,772
------------
TEXTILE -- PRODUCTS -- 0.4%
46,900 Collins & Aikman Corp. *........ 348,819
75,300 Cone Mills Corp. *.............. 649,463
4,800 Culp, Inc. ..................... 62,100
38,500 Dyersburg Corp. ................ 223,781
20,700 Galey & Lord, Inc. *............ 307,913
47,550 Guilford Mills, Inc. ........... 950,999
74,900 Polymer Group, Inc. *........... 870,713
------------
3,413,788
------------
TOBACCO -- 0.4%
38,300 Brooke Group, Ltd. ............. 430,875
60,700 Consolidated Cigar Holdings,
Inc. *.......................... 743,575
10,100 General Cigar Holdings *........ 99,738
53,346 General Cigar Holdings, Inc.-
Class B *....................... 526,792
45,100 Schweitzer-Mauduit
International................... 1,307,899
25,740 Standard Commercial Corp. *..... 283,140
------------
3,392,019
------------
TOOLS -- HAND HELD -- 0.2%
35,200 Toro Co. ....................... 1,205,600
------------
TOYS/GAME/HOBBY -- 0.1%
49,700 Galoob (Lewis) Toys, Inc. *..... 497,000
10,900 Toy Biz, Inc. *................. 100,825
------------
597,825
------------
TRANSPORTATION -- 0.3%
29,100 Coach USA, Inc. *............... 1,327,688
129,900 OMI Corp. *..................... 1,039,200
------------
2,366,888
------------
TRANSPORTATION -- AIR FREIGHT -- 0.3%
20,600 Airnet Systems, Inc. *.......... 332,175
22,700 Atlas Air, Inc. *............... 767,544
58,900 Pittston Burlington Group....... 916,631
------------
2,016,350
------------
TRANSPORTATION -- AIRLINE -- 0.4%
31,900 Alaska Airgroup, Inc. *......... 1,740,543
57,800 America West Holding Corp.--
Class B *....................... 1,650,913
5,550 Midwest Express Holdings........ 200,841
------------
3,592,297
------------
TRANSPORTATION -- EQUIPMENT &
LEASING -- 1.0%
43,000 Greenbrier Cos., Inc. .......... 741,750
71,250 Interpool, Inc. ................ 1,028,672
6,700 Motivepower Industries, Inc. *.. 164,150
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- EQUIPMENT &
LEASING (CONTINUED)
166,650 Rollins Truck Leasing Corp. .... $ 2,093,541
82,800 Westinghouse Air Brake Co. ..... 2,183,850
26,000 Xtra Corp....................... 1,573,000
------------
7,784,963
------------
TRANSPORTATION -- RAILROAD -- 0.2%
50,400 Florida East Coast Industries... 1,474,200
------------
TRANSPORTATION -- SHIPPING -- 0.1%
12,990 Marine Transport Corp. *........ 52,772
43,600 Overseas Shipholding Group...... 888,350
------------
941,122
------------
TRAVEL SERVICES -- 0.1%
26,800 Sabre Group Holdings, Inc. *.... 1,018,400
------------
UTILITIES -- ELECTRIC POWER -- 2.2%
39,900 Black Hills Corp. .............. 917,700
5,900 Calpine Corp. *................. 119,106
34,400 Central Hudson Gas & Electric
Corp. .......................... 1,578,100
55,200 Central Maine Power Co. ........ 1,076,400
31,500 Central Vermont Public Service
Corp. .......................... 470,531
28,200 CILCORP, Inc. .................. 1,353,600
31,700 Cleco Corp. .................... 943,075
41,600 Commonwealth Energy Systems
Co. ............................ 1,570,400
21,000 Eastern Utilities Association... 551,250
35,200 Empire District Electric Co. ... 734,800
64,681 Interstate Energy Corp. ........ 2,102,132
37,800 Northwestern Corp. ............. 945,000
25,900 Orange & Rockland Utilities..... 1,390,506
64,200 Public Service New Mexico....... 1,456,538
31,000 TNP Enterprises, Inc. .......... 957,125
70,320 UniSource Energy Corp. *........ 1,107,540
34,000 WPS Resources Corp. ............ 1,115,625
------------
18,389,428
------------
UTILITIES -- GAS DISTRIBUTION -- 2.3%
33,150 Atmos Energy Corp. ............. 1,011,075
25,800 Bay State Gas Co. .............. 988,463
25,400 Connecticut Energy Corp. ....... 708,025
29,900 Connecticut Natural Gas Corp. .. 702,650
22,400 Eastern Enterprises............. 960,400
59,200 Energen Corp. .................. 1,191,400
48,500 Indiana Energy, Inc. ........... 1,448,938
39,400 Laclede Gas Co. ................ 965,300
40,800 New Jersey Resources Corp. ..... 1,456,049
11,750 North Carolina Natural Gas...... 298,156
31,200 NUI Corp. ...................... 793,650
38,900 Public Service Co. of North
Carolina........................ 846,075
30,200 South Jersey Industries, Inc. .. 834,275
35,605 Southern Union Co. *............ 1,148,261
54,900 Southwest Gas Corp. ............ 1,341,619
69,500 Southwestern Energy Co. ........ 638,531
34,800 UGI Corp. ...................... 865,650
</TABLE>
Continued
43
<PAGE> 46
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UTILITIES -- GAS DISTRIBUTION (CONTINUED)
53,600 Wicor, Inc. .................... $ 1,239,500
29,400 Yankee Energy System, Inc. ..... 723,975
------------
18,161,992
------------
UTILITIES -- WATER SUPPLY -- 0.5%
19,600 Aquarion Co. ................... 670,075
43,700 Philadelphia Suburban Corp. .... 955,938
22,500 Southern California Water *..... 610,313
76,600 United Water Resources, Inc. ... 1,378,799
------------
3,615,125
------------
WHOLESALE DISTRIBUTION -- 0.0%
3,300 Aviation Sales Co. *............ 130,763
------------
WIRE & CABLE PRODUCTS -- 0.5%
6,900 Alpine Group, Inc. *............ 143,175
40,700 Barnes Group, Inc. ............. 1,101,444
37,100 Belden, Inc. ................... 1,136,188
67,400 General Cable Corp. *........... 1,946,174
------------
4,326,981
------------
TOTAL COMMON STOCKS............. 787,644,839
------------
(Cost $619,890,235)
INVESTMENT COMPANIES -- 2.7%
10,872,568 Dreyfus Cash Management Money
Market Fund..................... 10,872,568
10,885,705 Federated Prime Value
Obligations Money Market Fund... 10,885,705
------------
TOTAL INVESTMENT COMPANIES...... 21,758,273
------------
(Cost $21,758,273)
RIGHTS -- FOREIGN -- 0.0%
STEEL -- PRODUCERS -- 0.0%
99,400 WCI Steel, Inc.--Escrow A/C..... 0
------------
TOTAL RIGHTS -- FOREIGN......... 0
------------
(Cost $0)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS -- 0.1%
$840,000 U.S. Treasury Bill, Discount
Note, 9/24/98................... $ 830,399
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS..................... 830,399
------------
(Cost $830,480)
TOTAL INVESTMENTS -- 101.2%................. 810,233,511
(Cost $642,478,988) (a)
LIABILITIES IN EXCESS OF OTHER
ASSETS -- 1.2%............................ (9,626,758)
------------
TOTAL NET ASSETS -- 100.0%.................. $800,606,753
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation $218,556,030
Unrealized depreciation (50,801,507)
------------
Net unrealized appreciation $167,754,523
============
</TABLE>
(b) Security has been deposited as initial margin on open futures contract
* Non-income producing security
At June 30, 1998 the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ------------------ ----------- -----------
<S> <C> <C> <C>
42 Standard & Poor's $11,724,995 $12,001,500
500, 9/17/98
</TABLE>
See Notes to Financial Statements.
44
<PAGE> 47
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS -- 97.2%
AUSTRALIA -- 2.0%
BANKING -- 0.5%
106,087 National Australia Bank Ltd...... $ 1,399,285
142,912 Westpac Banking Corp., Ltd....... 871,704
------------
2,270,989
------------
BEVERAGES & TOBACCO -- 0.1%
70,676 Coca-Cola Amatil Ltd............. 458,798
------------
BREWERY -- 0.1%
178,336 Fosters Brewing Group Ltd........ 419,650
------------
BROADCASTING & PUBLISHING -- 0.2%
147,083 News Corp., Ltd.................. 1,200,445
------------
BUILDING PRODUCTS -- 0.1%
107,742 Boral Ltd........................ 202,158
34,780 Hardie (James) Industries Ltd.... 97,134
80,788 Pioneer International Ltd........ 192,607
------------
491,899
------------
CHEMICALS -- 0.0%
22,970 ICI Australia Ltd................ 135,840
------------
CLOSED END FUNDS -- 0.0%
29,241 Stockland Trust Group............ 66,816
------------
DIVERSIFIED -- 0.0%
16,044 Smith (Howard) Ltd............... 94,384
54,495 Southcorp Holdings Ltd........... 158,268
------------
252,652
------------
ENERGY -- 0.2%
156,213 Broken Hill Proprietary Co.,
Ltd.............................. 1,320,426
------------
ENGINEERING -- 0.0%
22,400 Leighton Holdings Ltd............ 78,441
------------
ENTERTAINMENT -- 0.0%
62,916 Crown Ltd.*...................... 18,896
40,300 Sydney Harbour Casino Holdings
Ltd.*............................ 23,458
26,100 TABCORP Holdings Ltd............. 133,339
------------
175,693
------------
FOOD PRODUCTS -- 0.0%
39,301 Burns, Philp & Co., Ltd.*........ 3,164
109,142 Goodman Fielder Ltd.............. 158,827
------------
161,991
------------
GAS UTILITY -- 0.0%
25,513 Australian Gas Light Co., Ltd.... 159,569
------------
INDUSTRIAL GOODS & SERVICES -- 0.1%
91,818 CSR Ltd.......................... 264,959
88,700 Pacific Dunlop Ltd............... 143,360
------------
408,319
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
AUSTRALIA (CONTINUED)
INSURANCE -- 0.0%
53,350 GIO Australia Holdings Ltd....... $ 136,905
32,565 QBE Insurance Group Ltd.......... 114,945
------------
251,850
------------
MANUFACTURING-CAPITAL GOODS -- 0.0%
26,212 Email Ltd........................ 45,449
------------
METALS -- 0.0%
145,238 M.I.M. Holdings Ltd.............. 70,152
15,796 RGC Ltd.......................... 15,651
------------
85,803
------------
METALS & MINING -- 0.2%
68,058 Australian National Industries
Ltd.............................. 39,195
16,431 Great Central Mines Ltd.......... 15,669
3,978 Homestake Mining Co.............. 38,182
17,377 Newcrest Mining Ltd..*........... 21,306
146,141 Normandy Mining Ltd.............. 119,457
62,696 North Ltd........................ 128,897
49,377 QCT Resources Ltd................ 32,717
29,836 Rio Tinto Ltd.................... 354,737
104,971 WMC Ltd.......................... 315,915
------------
1,066,075
------------
OIL & GAS -- 0.0%
52,241 Santos Ltd....................... 161,751
------------
PACKAGING -- 0.0%
58,093 Amcor Ltd........................ 254,336
------------
PHARMACEUTICALS -- 0.0%
10,510 Faulding (F.H.) & Co., Ltd....... 47,934
------------
REAL ESTATE -- 0.2%
109,430 General Property Trust Units..... 176,865
24,706 Lend Lease Corp., Ltd............ 499,517
104,347 Westfield Trust Units............ 200,312
------------
876,694
------------
REAL ESTATE INVESTMENT TRUST -- 0.0%
14,411 Schroders Property Fund.......... 21,775
------------
RETAIL STORES -- 0.1%
115,528 Coles Myer Ltd................... 450,705
------------
SERVICES -- 0.1%
20,119 Brambles Industries Ltd.......... 394,814
------------
TOBACCO -- 0.0%
8,400 Rothmans Holdings Ltd............ 51,653
------------
11,310,367
------------
AUSTRIA -- 0.7%
AIRLINES -- 0.0%
4,100 Austrian Airlines*............... 134,955
------------
</TABLE>
Continued
45
<PAGE> 48
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
AUSTRIA (CONTINUED)
BANKING -- 0.2%
10,550 Bank Austria AG.................. $ 858,106
100 Bank Austria AG, Participating
Certificates..................... 7,182
------------
865,288
------------
BEVERAGES & TOBACCO -- 0.0%
3,100 Oesterreichische
Brau-Beteiligungs AG............. 183,085
------------
BUILDING PRODUCTS -- 0.1%
1,433 Wienerberger Baustoffindustrie
AG............................... 346,655
------------
CHEMICALS -- 0.0%
600 Lenzing AG *..................... 45,830
------------
CONSTRUCTION -- 0.0%
1,455 Bau Holding AG*.................. 82,495
------------
ELECTRIC UTILITY -- 0.1%
4,769 Oesterreichische
Elektrizitaetswirtschafts AG,
Class A.......................... 570,822
------------
ELECTRICAL EQUIPMENT -- 0.0%
1,000 Austria Mikro Systeme
International AG................. 67,722
------------
ENGINEERING -- 0.1%
2,400 VA Technologie AG................ 298,606
------------
INSURANCE -- 0.1%
1,180 EA-Generali AG................... 346,594
------------
MANUFACTURING-CONSUMER GOODS -- 0.0%
100 Steyr-Daimler-Puch AG............ 2,740
------------
METALS & MINING -- 0.0%
2,575 Radex-Heraklith
Industriebeteiligungs AG......... 124,705
------------
OIL & GAS -- 0.1%
4,240 OMV AG........................... 567,937
------------
PAPER PRODUCTS -- 0.0%
1,900 Mayr-Melnhof Karton AG........... 124,183
------------
STEEL -- 0.0%
1,800 Boehler-Uddeholm AG.............. 118,923
------------
TRANSPORTATION -- 0.0%
3,300 Flughafen Wien AG................ 158,256
------------
4,038,796
------------
BELGIUM -- 1.4%
BANKING -- 0.3%
1,116 Generale de Banque SA............ 828,527
12,520 Kredietbank NV................... 1,120,441
------------
1,948,968
------------
BUILDING PRODUCTS -- 0.0%
1,925 Cimenteries CBR Cementbedrijven.. 215,728
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BELGIUM (CONTINUED)
CHEMICALS -- 0.1%
8,510 Solvay SA........................ $ 674,671
------------
ELECTRIC UTILITY -- 0.2%
5,840 Tractebel........................ 855,361
------------
ENERGY -- 0.1%
1,897 PetroFina SA..................... 778,733
------------
GAS & ELECTRIC UTILITY -- 0.2%
3,800 Electrabel SA.................... 1,077,398
------------
INDUSTRIAL HOLDING COMPANY -- 0.1%
2,000 Groupe Bruxelles Lambert SA...... 403,655
------------
INSURANCE -- 0.2%
2,900 Fortis AG........................ 740,392
1,350 Royale Belge..................... 513,370
------------
1,253,762
------------
MERCHANDISING -- 0.1%
4,400 Delhaize-Le Lion SA.............. 307,444
------------
TECHNOLOGY -- 0.1%
1,000 Barco NV......................... 279,495
------------
TRANSPORTATION -- 0.0%
1,422 Union Miniere SA*................ 87,896
------------
7,883,111
------------
DENMARK -- 1.0%
BANKING & FINANCE -- 0.2%
4,147 Den Danske Bank.................. 497,494
4,193 Unidanmark AS, Class A........... 376,802
------------
874,296
------------
BEVERAGES & TOBACCO -- 0.1%
2,760 Carlsberg AS, Class A*........... 200,668
2,305 Carlsberg AS, Class B*........... 167,587
------------
368,255
------------
COMMERCIAL SERVICES -- 0.0%
2,390 ISS International Service System
AS, Series B*.................... 139,014
------------
ENGINEERING -- 0.0%
3,615 FLS Industries AS, Class B....... 91,991
------------
FOOD PRODUCTS -- 0.1%
4,795 Danisco AS....................... 322,130
------------
PHARMACEUTICALS -- 0.2%
6,946 Novo Nordisk AS, Class B......... 957,510
------------
TELECOMMUNICATIONS -- 0.2%
11,300 Tele Danmark AS, Class B......... 1,084,482
------------
</TABLE>
Continued
46
<PAGE> 49
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
DENMARK (CONTINUED)
TRANSPORTATION & SHIPPING -- 0.2%
85 D/S 1912, Class B................ $ 729,241
60 D/S Svendborg AS, Class B........ 732,876
------------
1,462,117
------------
5,299,795
------------
FINLAND -- 0.9%
BANKING & FINANCE -- 0.1%
57,106 Merita Ltd., Class A............. 376,787
------------
CHEMICALS -- 0.0%
8,900 Kemira........................... 91,977
------------
DIVERSIFIED -- 0.0%
800 Amer Group Ltd.*................. 15,456
1,500 Instrumentarium Group, Series B.. 95,690
------------
111,146
------------
ENGINEERING -- 0.0%
5,500 Metra AB......................... 180,443
------------
FOOD PRODUCTS -- 0.0%
5,200 Cultor-Series 1.................. 83,405
4,400 Cultor-Series 2.................. 71,375
------------
154,780
------------
FOREST PRODUCTS -- 0.1%
18,660 UPM-Kymmene Corp................. 513,564
------------
INSURANCE -- 0.0%
800 Pohjola Insurance Group, Class B. 39,807
4,300 Sampo Insurance Co............... 203,773
------------
243,580
------------
MACHINERY & EQUIPMENT -- 0.0%
500 Kone Corp.-Class B............... 70,172
------------
METALS -- 0.0%
8,700 Outokumpu........................ 111,000
------------
RETAIL-GENERAL MERCHANDISE -- 0.0%
6,300 Kesko............................ 99,326
2,250 Stockmann AB-B Share............. 52,493
------------
151,819
------------
TELECOMMUNICATIONS -- 0.6%
30,600 Nokia-Class A.................... 2,250,458
11,000 Nokia-Class K.................... 809,991
------------
3,060,449
------------
5,065,717
------------
FRANCE -- 8.0%
ADVERTISING -- 0.0%
3 Havas SA......................... 255
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0%
3,050 Moulinex*........................ 79,150
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
AUTO PARTS -- 0.1%
7,267 Valeo SA......................... $ 742,803
------------
AUTOMOTIVE -- 0.1%
3,662 PSA Peugeot Citroen.............. 787,393
------------
BANKING -- 0.8%
14,674 Banque Nationale de Paris........ 1,198,962
11,664 Paribas.......................... 1,248,192
6,847 Societe Generale................. 1,423,526
------------
3,870,680
------------
BEVERAGES & TOBACCO -- 0.3%
6,120 LVMH (Moet Hennessy Louis
Vuitton)......................... 1,224,804
5,400 Pernod Ricard.................... 374,229
------------
1,599,033
------------
BROADCASTING/CABLE -- 0.1%
3,136 Canal Plus....................... 586,117
------------
BUILDING PRODUCTS -- 0.2%
1,195 Imetal SA........................ 164,247
6,721 Lafarge SA....................... 694,774
------------
859,021
------------
CHEMICALS -- 0.4%
5,932 L'Air Liquide.................... 981,160
24,814 Rhone-Poulenc SA................. 1,399,526
------------
2,380,686
------------
COMMERCIAL SERVICES -- 0.1%
2,840 Sodexho SA....................... 536,901
------------
CONSTRUCTION -- 0.0%
1,466 Bouygues......................... 266,236
------------
DEFENSE -- 0.1%
200 Sagem SA......................... 155,606
12,325 Thomson CSF...................... 468,861
------------
624,467
------------
DIVERSIFIED -- 0.1%
498 Chargeurs International SA....... 41,143
12,106 Lagardere SCA.................... 503,980
1,350 Nord-Est SA...................... 29,697
------------
574,820
------------
ELECTRICAL & ELECTRONIC -- 0.6%
10,437 Alcatel Alsthom.................. 2,125,022
2,100 Legrand SA....................... 555,737
10,800 Schneider SA..................... 861,174
------------
3,541,933
------------
ENERGY -- 0.9%
17,367 Elf Aquitane SA.................. 2,441,594
15,800 Total SA, Class B................ 2,054,042
------------
4,495,636
------------
</TABLE>
Continued
47
<PAGE> 50
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
ENGINEERING -- 0.0%
200 Groupe Gtm....................... $ 20,774
------------
FINANCE -- 0.5%
11,988 Compagnie Generale des Eaux...... 2,559,781
523 CPR (Compagnie Parisenne de
Reescompte)...................... 42,127
844 Credit National.................. 53,046
192 Eurafrance*...................... 120,674
------------
2,775,628
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.1%
2,600 Eridania Beghin-Say SA........... 574,096
------------
FOOD PRODUCTS -- 0.3%
5,121 Groupe Danone.................... 1,411,953
------------
HEALTH & PERSONAL CARE -- 0.6%
4,266 L'OREAL.......................... 2,372,889
7,623 Sanofi SA........................ 896,448
------------
3,269,337
------------
INDUSTRIAL GOODS & SERVICES -- 0.1%
9,690 Michelin Class B, Registered..... 559,344
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
8,780 Lyonnaise des Eaux SA............ 1,444,932
------------
INSURANCE -- 0.4%
21,000 Axa-UAP.......................... 2,361,881
------------
LEISURE -- 0.1%
2,650 Accor SA......................... 741,611
541 Club Mediterranee SA*............ 46,709
------------
788,320
------------
MACHINE -- DIVERSIFIED -- 0.0%
1,600 Sidel SA......................... 116,440
------------
MEDIA -- 0.0%
498 Pathe SA......................... 97,606
------------
MEDICAL SUPPLIES -- 0.0%
500 Essilor International............ 211,461
------------
MERCHANDISING -- 0.9%
2,639 Carrefour SA..................... 1,669,555
6,600 Etablissements Economiques du
Casino Guichard-Perrachon........ 527,037
1,577 Pinault-Printemps-Redoute SA..... 1,319,812
1,450 Promodes......................... 803,420
------------
4,319,824
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.2%
6,333 Compagnie de Saint Gobain........ 1,174,208
------------
OFFICE EQUIPMENT & SERVICES -- 0.1%
5,700 Bic.............................. 405,390
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
OIL & GAS -- 0.0%
50 Cie Gen Geophysiq*............... $ 7,335
1,300 Primagaz Cie..................... 114,174
------------
121,509
------------
REAL ESTATE -- 0.1%
2,600 SEFIMEG.......................... 188,355
918 Simco SA......................... 75,310
800 Unibail.......................... 103,473
572 Union Immobiliere de France...... 45,128
------------
412,266
------------
RETAIL -- SPECIAL LINE -- 0.0%
352 Comptoirs Modernes............... 183,393
------------
STEEL -- 0.1%
25,100 Unisor Sacilor SA................ 387,749
------------
TELECOMMUNICATIONS -- SERVICES &
EQUIPMENT -- 0.4%
35,000 France Telecom*.................. 2,413,981
------------
TEXTILE PRODUCTS -- 0.0%
1,050 Dollfus-Mieg & Cie*.............. 28,308
------------
TOBACCO -- 0.0%
3,200 SEITA............................ 145,021
------------
44,168,552
------------
GERMANY -- 10.0%
AIRLINES -- 0.1%
28,980 Lufthansa AG*.................... 727,296
------------
AUTOMOTIVE -- 1.2%
39,170 Daimler-Benz AG.................. 3,840,975
761 MAN AG*.......................... 295,962
2,447 Volkswagen AG.................... 2,352,058
------------
6,488,995
------------
BANKING -- 1.8%
54,840 Bayer AG......................... 2,828,536
23,028 Bayerische Vereinsbank AG........ 1,958,300
40,260 Deutsche Bank AG................. 3,409,211
37,160 Dresdner Bank AG................. 2,003,102
------------
10,199,149
------------
BANKING & FINANCE -- 0.2%
19,520 Bayerische Hypotheken-und
Weschel-Bank AG.................. 1,237,145
------------
BUILDING PRODUCTS -- 0.1%
4,070 Heidelberger Zement AG........... 385,572
------------
CHEMICALS -- 0.5%
46,780 BASF AG.......................... 2,215,853
7,120 Degussa AG....................... 438,237
------------
2,654,090
------------
</TABLE>
Continued
48
<PAGE> 51
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
GERMANY (CONTINUED)
CLOTHING -- 0.1%
3,500 Adidas AG........................ $ 604,975
------------
COMPUTER SOFTWARE -- 0.5%
4,700 SAP AG........................... 2,851,193
------------
CONSTRUCTION -- 0.0%
4,730 Hochtief AG...................... 226,669
------------
DIVERSIFIED -- 0.8%
1,231 Preussag AG...................... 439,196
37,390 VEBA AG.......................... 2,547,858
2,007 Viag AG.......................... 1,356,506
------------
4,343,560
------------
ELECTRICAL & ELECTRONIC -- 0.5%
43,470 Siemens AG....................... 2,644,275
------------
ENGINEERING -- 0.5%
2,040 AGIV-AG*......................... 56,057
2,970 Bilfinger & Berger Bau AG........ 100,863
27,820 Mannesmann AG.................... 2,822,020
------------
2,978,940
------------
GAS & ELECTRIC UTILITY -- 0.3%
25,650 RWE AG *......................... 1,520,498
------------
HEALTH & PERSONAL CARE -- 0.1%
7,860 Beiersdorf AG, Series ABC........ 500,331
------------
HEALTH CARE -- 0.1%
5,300 Schering AG...................... 624,537
------------
INSURANCE -- 1.7%
1,780 Aachener & Muenchener............ 208,074
17,070 Allianz AG....................... 5,626,847
3,660 Amb Aachener & Muenchener........ 427,634
6,045 Muenchener Rueckver.............. 2,997,326
------------
9,259,881
------------
MACHINERY & EQUIPMENT -- 0.1%
3,830 Kloeckner-Humbolt-Deutz AG*...... 44,559
636 Linde AG......................... 445,720
------------
490,279
------------
METALS & MINING -- 0.1%
2,480 FAG Kugelfischer Georg Schaefer
AG............................... 36,959
2,734 Thyssen AG....................... 692,196
------------
729,155
------------
PHARMACEUTICALS -- 0.1%
13,100 Merck KGaA....................... 585,679
------------
RETAIL STORES -- 0.3%
791 Karstadt AG...................... 382,127
17,073 Metro AG*........................ 1,035,711
------------
1,417,838
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
GERMANY (CONTINUED)
RETAIL -- GENERAL MERCHANDISE -- 0.0%
1,630 Douglas Holding AG............... $ 86,239
------------
TELECOMMUNICATIONS -- 0.8%
158,800 Deutsche Telekom AG.............. 4,284,440
------------
TIRE & RUBBER -- 0.0%
4,870 Continental AG................... 151,628
------------
54,992,364
------------
HONG KONG -- 1.8%
AIRLINES -- 0.0%
12,600 Hong Kong Aircraft Engineering
Co., Ltd......................... 19,513
------------
BANKING -- 0.2%
356,630 Bank of East Asia Ltd.*.......... 386,612
108,800 Hang Seng Bank Ltd............... 615,008
------------
1,001,620
------------
BANKING & FINANCE -- 0.0%
14,695 Wing Lung Bank................... 34,137
------------
BROADCASTING & PUBLISHING -- 0.0%
96,000 South China Morning Post Holdings
Ltd.............................. 46,150
25,000 Television Broadcasts Ltd........ 66,141
------------
112,291
------------
DISTRIBUTION -- 0.0%
18,000 Dickson Concepts International... 25,088
------------
DIVERSIFIED -- 0.1%
94,500 Swire Pacific Ltd., Class A...... 356,727
250,000 Wharf Holdings Ltd............... 246,820
------------
603,547
------------
ELECTRIC UTILITY -- 0.1%
141,400 CLP Holdings Ltd................. 644,173
------------
ELECTRICAL & ELECTRONIC -- 0.1%
161,700 Johnson Electric Holdings Ltd.... 598,922
------------
ELECTRICAL EQUIPMENT -- 0.0%
65,000 Elec & Eltek International
Holdings Ltd..................... 12,415
------------
GAS UTILITY -- 0.1%
383,075 Hong Kong & China Gas Co., Ltd... 435,055
------------
HOTELS & LODGING -- 0.0%
65,500 Hong Kong & Shanghai Hotels Ltd.. 32,756
33,000 Miramar Hotel & Investment Ltd... 28,960
218,714 Regal Hotels International....... 26,251
------------
87,967
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
282,000 Hutchison Whampoa Ltd............ 1,488,506
------------
</TABLE>
Continued
49
<PAGE> 52
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
HONG KONG (CONTINUED)
MANUFACTURING -- CONSUMER GOODS -- 0.0%
20,000 Varitronix International Ltd..... $ 40,007
------------
PRINTING & PUBLISHING -- 0.0%
127,500 Oriental Press Group Ltd......... 11,847
------------
REAL ESTATE -- 0.4%
133,000 Cheung Kong Holdings Ltd. ....... 653,965
108,000 Chinese Estates Ltd. ............ 18,816
241,000 Hopewell Holdings Ltd. .......... 25,815
332,000 Hysan Development Co., Ltd. ..... 274,218
26,000 Kumagai Gumi (Hong Kong)......... 10,821
116,525 New World Development Co., Ltd. . 225,574
384,000 Shangri-La Asia Ltd. ............ 247,787
773,796 Sino Land Company................ 269,630
133,695 Sun Hung Kai Properties Ltd. .... 567,661
43,270 Tai Cheung Holdings Ltd. ........ 10,498
------------
2,304,785
------------
REAL ESTATE INVESTMENT TRUST -- 0.1%
455,100 Hang Lung Development Co. ....... 452,247
------------
RETAIL STORES -- 0.0%
50,000 Giordano International Ltd. ..... 10,131
------------
TELECOMMUNICATIONS -- 0.2%
677,343 Hong Kong Telecommunications
Ltd. ............................ 1,271,891
------------
TRANSPORTATION -- 0.1%
1,092,000 Cathay Pacific Airways........... 768,064
109,859 Shun Tak Holdings Ltd. .......... 10,775
------------
778,839
------------
9,932,981
------------
IRELAND -- 0.2%
BANKING -- 0.2%
33,900 Allied Irish Banks............... 489,399
------------
BUILDING PRODUCTS -- 0.0%
15,100 C.R.H. PLC....................... 214,201
------------
CONSUMER GOODS & SERVICES -- 0.0%
29,000 Waterford Wedgewood.............. 37,619
------------
DIVERSIFIED -- 0.0%
3,200 DCC PLC.......................... 28,566
------------
FINANCE -- 0.0%
3,700 Irish Permanent PLC.............. 43,610
------------
FOOD PRODUCTS -- 0.0%
11,700 Fyffes PLC....................... 28,396
7,600 Greencore Group.................. 41,343
6,500 Kerry Group PLC.................. 89,758
------------
159,497
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
IRELAND (CONTINUED)
INDUSTRIAL GOODS & SERVICES -- 0.0%
43,100 Smurfit (Jefferson) Group........ $ 128,050
------------
INSURANCE -- 0.0%
12,500 Irish Life PLC................... 115,074
------------
MEDIA -- 0.0%
9,800 Independent Newspapers PLC....... 52,627
------------
OIL & GAS -- 0.0%
9,100 Tullow Oil....................... 16,501
------------
PRINTING & PUBLISHING -- 0.0%
1,600 Clondalkin Group PLC............. 13,390
------------
TRANSPORTATION & SHIPPING -- 0.0%
1,000 Irish Continental Group PLC...... 16,041
------------
1,314,575
------------
ITALY -- 5.0%
AGRICULTURE -- 0.0%
130,300 Parmalat Finanziaria SpA......... 265,724
------------
AUTO PARTS -- 0.0%
72,520 Magneti Marelli SpA.............. 159,111
------------
AUTOMOTIVE -- 0.3%
322,938 Fiat SpA......................... 1,413,438
70,340 Fiat SpA di Risp.
(Non-convertible)*............... 174,114
90,820 Fiat SpA Preferred............... 226,086
------------
1,813,638
------------
BANKING -- 0.9%
157,800 Banca Commerciale Italiana....... 943,666
136,782 Banco Ambrosiano Veneto SpA...... 765,265
59,100 Banco Ambrosiano Veneto SpA di
Risp. (Non-convertible).......... 174,220
20,400 Banco Popolare de Milano......... 162,392
253,200 Credito Italiano SpA............. 1,325,434
71,800 Istituto Bancario San Paolo di
Torino........................... 1,036,072
12,523 Riunione Adriatica di Sicurta SpA
di Risp., (Non-convertible)...... 112,721
------------
4,519,770
------------
BROADCASTING & PUBLISHING -- 0.1%
103,400 Mediaset SpA..................... 659,938
------------
BUILDING PRODUCTS -- 0.0%
1,900 Cementir SpA..................... 2,159
15,050 Italcementi SpA.................. 135,298
900 Italcementi SpA di Risp.
(Non-convertible)................ 3,944
------------
141,401
------------
</TABLE>
Continued
50
<PAGE> 53
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ITALY (CONTINUED)
CHEMICALS -- 0.1%
438,762 Montedison SpA................... $ 544,272
12,800 Montedison SpA di Risp.
(Non-convertible)................ 9,901
84,200 Snia BPD SpA..................... 103,263
900 Snia BPD SpA di Risp.
(Non-convertible)................ 861
------------
658,297
------------
ENGINEERING -- 0.0%
7,900 Impregilo SpA*................... 6,978
------------
FINANCE -- 0.3%
52,800 Istituto Mobiliare Italiano SpA.. 831,707
50,370 Mediobanca SpA*.................. 638,994
------------
1,470,701
------------
GAS & ELECTRIC UTILITY -- 0.1%
55,800 Edison SpA....................... 447,800
------------
GAS UTILITY -- 0.0%
61,300 Italgas SpA...................... 249,676
------------
INSURANCE -- 0.8%
86,263 Assicurazioni Generali*.......... 2,804,985
351,600 Istituto Nazionale delle
Assicurazioni.................... 998,892
29,262 Riuniune Adriatici de Sicurta
SpA.............................. 381,095
10,900 Societa Assicuratrice Industriale
(SAI) SpA........................ 139,197
------------
4,324,169
------------
JEWELRY -- 0.0%
25,400 Bulgari SpA...................... 133,177
------------
OFFICE EQUIPMENT & SERVICES -- 0.1%
236,196 Olivetti SpA*.................... 351,460
------------
OIL & GAS -- 0.8%
674,000 ENI SpA.......................... 4,417,372
------------
PAPER PRODUCTS -- 0.0%
15,200 Burgo (Cartiere) SpA............. 121,725
------------
PRINTING & PUBLISHING -- 0.0%
11,400 Mondadori (Arnoldo) Editore SpA.. 134,680
------------
RETAIL STORES -- 0.0%
18,300 La Rinascente SpA................ 182,223
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ITALY (CONTINUED)
STEEL -- 0.0%
10,400 Falck, Acciaierie & Ferriere
Lombarde SpA..................... $ 67,284
------------
TELECOMMUNICATIONS -- 1.3%
19,400 Sirti SpA........................ 105,537
137,560 Telecom Italia Mobile SpA........ 464,324
559,460 Telecom Italia Mobile SpA di
Risp. (Non-convertible).......... 3,421,186
317,911 Telecom Italia SpA*.............. 2,340,224
80,060 Telecom Italia SpA--Rnc*......... 387,565
------------
6,718,836
------------
TEXTILE PRODUCTS -- 0.1%
160,320 Benetton Group Spa............... 332,807
4,200 Marzotto (Gaetano) & Figli SpA... 64,032
------------
396,839
------------
TIRE & RUBBER -- 0.1%
145,000 Pirelli SpA...................... 452,730
10,600 Pirelli SpA di Risp.
(Non-convertible)................ 25,344
------------
478,074
------------
27,718,873
------------
JAPAN -- 24.8%
ALUMINUM -- 0.0%
38,000 Nippon Light Metal Co., Ltd...... 43,809
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 1.6%
203,000 Matsushita Electric Industrial
Co., Ltd......................... 3,261,807
16,000 Pioneer Electronic Corp.......... 305,508
187,000 Sanyo Electric Co................ 565,911
108,000 Sharp Corp....................... 874,677
39,000 Sony Corp........................ 3,358,071
------------
8,365,974
------------
AUTOMOTIVE -- 2.7%
3,000 Autobacs Seven Co., Ltd.......... 85,816
93,000 Honda Motor Co., Ltd............. 3,310,300
241,000 Nissan Motor Co., Ltd............ 758,850
26,000... Toyoda Automatic Loom Works 458,983
367,000 Toyota Motor Corp................ 9,493,316
------------
14,107,265
------------
</TABLE>
Continued
51
<PAGE> 54
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
BANKING -- 3.1%
36,000 77 Bank.......................... $ 300,897
228,000 Asahi Bank Ltd................... 1,002,125
44,000 Ashikaga Bank Ltd................ 54,847
449,000 Bank of Tokyo -- Mitsubishi Ltd.. 4,752,538
104,000 Bank of Yokohama Ltd............. 254,783
71,000 Chiba Bank Ltd................... 245,560
300,000 Fuji Bank Ltd.................... 1,338,041
49,000 Gunma Bank Ltd................... 331,527
62,000 Hokuriku Bank.................... 80,412
265,000 Industrial Bank of Japan......... 1,661,202
85,000 Joyo Bank........................ 313,579
110,000 Mitsui Trust & Banking Co., Ltd.. 259,178
359,000 Sakura Bank Ltd.................. 931,224
77,000 Shizuoka Bank.................... 826,674
305,000 Sumitomo Bank Ltd................ 2,966,819
199,000 Tokai Bank....................... 1,095,478
18,000 Yamaguchi Bank................... 230,861
------------
16,645,745
------------
BEVERAGES & TOBACCO -- 0.3%
46,000 Asahi Breweries Ltd.............. 580,034
101,000 Kirin Brewery Co., Ltd........... 953,345
11,000 Takara Shuzo..................... 45,653
------------
1,579,032
------------
BREWERY -- 0.0%
31,000 Sapporo Breweries Ltd............ 118,608
------------
BROADCASTING & PUBLISHING -- 0.0%
16,000 Tokyo Broadcasting System........ 178,694
------------
BUILDING PRODUCTS -- 0.1%
52,000 Chichibu Onoda Cement Corp....... 94,045
17,000 Nihon Cement Co., Ltd............ 34,053
21,000 Sanwa Shutter Corp............... 92,301
23,000 Sumitomo Osaka Cement Co., Ltd... 29,499
20,000 Tostem Corp...................... 259,106
------------
509,004
------------
CHEMICALS -- 1.3%
138,000 Asahi Chemical Industry Co.,
Ltd.............................. 497,172
19,000 Daicel Chemical Industries Ltd... 40,249
72,000 Dainippon Ink & Chemicals Inc.... 220,485
27,000 Denki Kagaku Kogyo Kabushiki
Kaisha........................... 43,578
32,000 Kaneka Corp...................... 168,318
32,000 Konica Corp...................... 144,108
201,000 Mitsubishi Chemical Corp......... 363,519
45,000 Mitsubishi Gas Chemical Co....... 135,858
10,000 Nippon Shokubai Kabushiki Kaisha
Co............................... 53,680
50,000 Sekisui Chemical Co., Ltd........ 255,791
37,000 Shin-Etsu Chemical Co., Ltd...... 639,839
95,000 Showa Denko Kabushiki Kaisha..... 95,832
155,000 Sumitomo Chemical Co............. 478,005
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
89,000 Takeda Chemical Industries....... $ 2,366,322
134,000 Toray Industries Inc............. 695,176
54,000 Tosoh Corp.*..................... 93,771
76,000 Ube Industries Ltd............... 98,570
------------
6,390,273
------------
CLOTHING -- 0.0%
5,000 Tokyo Style...................... 48,997
------------
COMMERCIAL SERVICES -- 0.0%
100 Oyo Corp......................... 1,347
------------
COMPUTER SOFTWARE -- 0.0%
5,000 CSK Corp......................... 99,434
------------
CONSTRUCTION -- 0.3%
50,000 Daiwa House Industry Co., Ltd.... 441,330
35,000 Kumagai Gumi Co., Ltd............ 25,219
13,000 Okumura Corp..................... 45,617
18,000 Penta-Ocean Construction......... 41,503
68,000 Sekisui House Ltd................ 526,714
72,000 Shimizu Corp..................... 207,515
93,000 Taisei Corp...................... 201,030
------------
1,488,928
------------
CONSUMER GOODS & SERVICES -- 0.1%
22,000 Nippon Sheet Glass Co., Ltd...... 34,716
13,000 Shimano Inc...................... 329,719
34,000 Toto Ltd......................... 206,521
------------
570,956
------------
COSMETICS/PERSONAL CARE -- 0.1%
40,000 Shiseido Co., Ltd................ 454,228
------------
DATA PROCESSING & REPRODUCTION -- 0.4%
197,000 Fujitsu Ltd...................... 2,072,414
------------
DISTRIBUTION -- 0.1%
137,000 Itochu Corp...................... 296,141
------------
DIVERSIFIED -- 0.0%
18,000 Yamaha Corp...................... 175,091
------------
ELECTRIC UTILITY -- 0.9%
107,900 Kansai Electric Power Co.,
Inc.............................. 1,873,682
47,500 Tohoku Electric Power............ 699,913
132,000 Tokyo Electric Power Co.......... 2,587,023
------------
5,160,618
------------
ELECTRICAL & ELECTRONIC -- 0.6%
25,000 Casio Computer Co., Ltd.......... 232,194
18,000 Kyocera Corp..................... 879,346
206,000 Mitsubishi Electric Corp......... 473,495
35,000 Nikon Corp....................... 251,684
25,000 Omron Corp....................... 381,886
11,000 Rohm Co., Ltd.................... 1,129,445
------------
3,348,050
------------
</TABLE>
Continued
52
<PAGE> 55
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
ELECTRICAL EQUIPMENT -- 0.1%
16,000 Alps Electric Co., Ltd........... $ 190,222
6,000 SMC Corp......................... 456,101
10,000 Taiyo Yuden Co., Ltd............. 106,352
------------
752,675
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.9%
8,690 Advantest Corp................... 467,107
8,000 Dainippon Screen Manufacturing
Co., Ltd......................... 32,741
22,100 Fanuc Ltd........................ 764,348
3,000 Hirose Electric Co., Ltd......... 146,341
330,000 Hitachi Ltd...................... 2,151,889
153,000 NEC Corp......................... 1,425,435
23,000 Yokogawa Electric Corp........... 122,636
------------
5,110,497
------------
ELECTRONICS -- 0.0%
13,000 Nitto Denko Corp................. 195,302
------------
ENERGY -- 0.1%
57,000 Cosmo Oil Co., Ltd............... 102,677
100,000 Japan Energy Corp................ 105,919
118,000 Nippon Oil Co., Ltd.............. 380,906
------------
589,502
------------
ENGINEERING -- 0.3%
7,000 Daito Trust Construction Co.,
Ltd. ............................ 52,960
92,000 Kajima Corp. .................... 251,900
18,000 Kandenko Co., Ltd. .............. 111,410
127,000 Kawasaki Heavy Industries Ltd. .. 256,224
25,000 Kinden Corp. .................... 302,626
25,000 Nishimatsu Construction.......... 122,492
71,000 Obayashi Corp. .................. 300,811
------------
1,398,423
------------
ENTERTAINMENT -- 0.0%
1,700 Toho Co. ........................ 178,838
14,000 Tokyo Dome Corp. ................ 75,657
------------
254,495
------------
FINANCE -- 1.0%
14,000 Acom Co., Ltd. .................. 664,769
128,000 Daiwa Securities Co., Ltd. ...... 550,607
23,000 Higo Bank........................ 103,577
125,000 Mitsubishi Trust & Banking
Corp. ........................... 1,061,894
195,000 Nomura Securities Co., Ltd. ..... 2,269,157
24,000 Orient Corp. .................... 52,398
6,000 Orix Corp. ...................... 405,087
6,000 Uni-Charm........................ 222,214
100,000 Yasuda Trust & Banking........... 93,670
------------
5,423,373
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
FOOD & HOUSEHOLD PRODUCTS -- 0.3%
62,000 Ajinomoto Co., Inc. ............. $ 542,782
59,000 Kao Corp. ....................... 909,752
21,000 Nippon Meat Packers Inc. ........ 257,081
12,000 Nissin Food Products Co., Ltd. .. 214,865
------------
1,924,480
------------
FOOD PRODUCTS -- 0.1%
65,000 Daiei Inc. ...................... 152,214
10,000 House Foods Industry............. 128,328
12,000 Itoham Foods..................... 51,879
17,000 Kikkoman Corp. .................. 89,419
15,000 Meiji Milk Products Co., Ltd. ... 39,990
16,000 Nichirei Corp. .................. 32,857
8,000 QP Corp. ........................ 52,167
23,000 Snow Brand Milk Products Co.,
Ltd. ............................ 69,604
20,000 Yamazaki Baking Co., Ltd. ....... 177,253
------------
793,711
------------
FOREST PRODUCTS -- 0.2%
17,000 Mitsubishi Paper Mills........... 33,073
91,000 Nippon Paper Industries Co. ..... 378,989
99,000 Oji Paper Co., Ltd. ............. 430,853
12,000 Sumitomo Forestry Co., Ltd. ..... 67,356
------------
910,271
------------
GAS UTILITY -- 0.2%
243,000 Osaka Gas Co., Ltd. ............. 623,324
270,000 Tokyo Gas Co., Ltd. ............. 601,146
------------
1,224,470
------------
HEALTH & PERSONAL CARE -- 0.4%
22,000 Chugai Pharmaceutical Co., Ltd. . 143,935
40,000 Kyowa Hakko Kogyo Co. ........... 158,519
15,000 Lion Corp. ...................... 50,798
44,000 Sankyo Co., Ltd. ................ 1,001,837
32,000 Yamanouchi Pharmaceutical Co.,
Ltd. ............................ 666,354
------------
2,021,443
------------
HOTELS & LODGING -- 0.0%
11,000 Fujita Kanko Inc. ............... 89,563
------------
INDUSTRIAL GOODS & SERVICES -- 0.9%
88,000 Bridgestone Corp. ............... 2,079,763
97,000 Denso Corp. ..................... 1,607,522
17,000 Inax Corp. ...................... 58,429
58,000 Mitsui Engineering & Shipbuilding
Co., Ltd.*....................... 43,881
35,000 NGK Insulators Ltd. ............. 303,887
20,000 NGK Spark Plug Co., Ltd. ........ 170,047
70,000 Sumitomo Electric Industries
Ltd. ............................ 707,641
------------
4,971,170
------------
</TABLE>
Continued
53
<PAGE> 56
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
INSURANCE -- 0.5%
69,000 Mitsui Marine & Fire Insurance
Co., Ltd. ....................... $ 346,529
41,000 Nichido Fire & Marine Insurance
Co., Ltd. ....................... 214,180
53,000 Nippon Fire & Marine Insurance
Co. ............................. 216,529
64,000 Sumitomo Marine & Fire Insurance
Co. ............................. 357,848
170,000 Tokio Marine & Fire Insurance
Co. ............................. 1,746,730
------------
2,881,816
------------
JEWELRY -- 0.1%
29,000 Citizen Watch Co., Ltd. ......... 239,255
11,000 Hoya Corp. ...................... 311,489
------------
550,744
------------
LEASING -- 0.1%
7,000 Daiwa Kosho Lease Co., Ltd. ..... 29,405
38,000 Yamato Transport Co., Ltd. ...... 425,766
------------
455,171
------------
LEISURE -- 0.0%
4,000 Namco............................ 93,382
------------
MACHINE-DIVERSIFIED -- 0.0%
7,000 Komori Corp. .................... 132,903
12,000 Kurita Water Industries Ltd. .... 141,802
------------
274,705
------------
MACHINERY & EQUIPMENT -- 0.7%
27,000 Amada Co., Ltd. ................. 131,318
14,000 Brother Industries Ltd. ......... 52,253
24,000 Daikin Industries Ltd. .......... 154,599
26,000 Ebara Corp. ..................... 231,178
93,000 Komatsu Ltd. .................... 451,648
10,000 Koyo Seiko Co., Ltd. ............ 37,324
135,000 Kubota Corp. .................... 311,273
38,000 Minebea Co., Ltd. ............... 378,124
324,000 Mitsubishi Heavy Industries
Ltd. ............................ 1,223,302
5,000 Mori Seiki Co. .................. 61,210
51,000 NSK Ltd. ........................ 207,623
42,000 NTN Corp. ....................... 131,945
63,000 Sumitomo Heavy Industries Ltd. .. 143,899
16,000 Tokyo Electron Ltd. ............. 489,966
------------
4,005,662
------------
MANUFACTURING -- CAPITAL GOODS -- 0.2%
31,000 Fujikura Ltd. ................... 138,041
12,000 Kokuyo Co. ...................... 203,192
14,000 Makita Corp. .................... 161,300
23,000 Murata Manufacturing Co., Ltd. .. 745,758
8,000 Noritake Co., Ltd. .............. 37,468
7,000 Takara Standard Co. ............. 40,602
------------
1,326,361
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
MANUFACTURING -- CONSUMER GOODS -- 0.7%
88,000 Canon Inc. ...................... $ 1,997,334
54,000 Fuji Photo Film Co., Ltd. ....... 1,879,310
8,700 Sega Enterprises Ltd. ........... 150,135
------------
4,026,779
------------
MEDICAL SUPPLIES -- 0.0%
24,000 Olympus Optical Co., Ltd. ....... 208,553
------------
MERCHANDISING -- 0.5%
41,000 Ito-Yokado Co., Ltd. ............ 1,929,099
31,000 JUSCO Co., Ltd. ................. 568,469
35,000 Marui Co., Ltd. ................. 522,030
------------
3,019,598
------------
METALS -- 0.5%
42,000 Daido Steel Co., Ltd. ........... 75,354
312,000 Kawasaki Steel Corp. ............ 562,020
104,000 Mitsubishi Materials Corp. ...... 212,069
662,000 Nippon Steel Corp. .............. 1,163,872
338,000 NKK Corp. ....................... 323,911
302,000 Sumitomo Metal Industries Ltd. .. 485,254
11,000 Tokyo Steel Manufacturing Co. ... 56,591
------------
2,879,071
------------
METALS & MINING -- 0.1%
92,000 Hitachi Zosen Corp. ............. 148,489
46,000 Mitsui Mining & Smelting Co. .... 190,914
52,000 Sumitomo Metal Mining Co. ....... 210,945
------------
550,348
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.1%
113,000 Asahi Glass Co., Ltd. ........... 610,657
------------
OFFICE EQUIPMENT & SERVICES -- 0.2%
73,000 Dai Nippon Printing Co., Ltd. ... 1,165,075
------------
OIL & GAS -- 0.0%
3,100 Arabian Oil Co., Ltd. ........... 45,008
32,000 Mitsubishi Oil Co., Ltd. ........ 44,962
14,000 Teikoko Oil Co., Ltd. ........... 43,276
------------
133,246
------------
PACKAGING -- 0.0%
21,000 Toyo Seikan Kaisha Ltd. ......... 257,232
------------
PHARMACEUTICALS -- 0.3%
26,000 Dai-Ichi Pharmaceuticals......... 342,832
27,000 Eisai Co., Ltd. ................. 367,691
3,000 Kissei Pharmaceutical Co., Ltd. . 44,313
35,000 Meiji Seika Co. ................. 106,424
32,000 Shionogi & Co., Ltd. ............ 184,458
33,000 Taisho Pharmacuetical Co. ....... 615,845
------------
1,661,563
------------
</TABLE>
Continued
54
<PAGE> 57
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
REAL ESTATE -- 0.3%
124,000 Mitsubishi Estate Co., Ltd. ..... $ 1,090,031
78,000 Mitsui Fudosan Co., Ltd. ........ 615,974
------------
1,706,005
------------
RESTAURANTS -- 0.0%
5,000 Skylark Co., Ltd. ............... 49,357
------------
RETAIL STORES -- 0.1%
6,000 Aoyama Trading Co., Ltd. ........ 147,855
16,000 Hankyu Department Stores Co. .... 83,237
20,000 Isetan Co. ...................... 167,165
29,000 Mycal Corp. ..................... 183,882
28,000 Takashimaya Co., Ltd. ........... 211,031
------------
793,170
------------
RETAIL -- GENERAL MERCHANDISE -- 0.1%
15,300 Credit Saison Co., Ltd. ......... 303,167
14,000 Daimuru Inc. .................... 36,719
43,000 Mitsukoshi Ltd. ................. 123,623
------------
463,509
------------
RETAIL -- SPECIAL LINE -- 0.1%
15,000 Seiyu Ltd. ...................... 31,343
2,000 Shimachu Co. .................... 32,857
18,000 Uny Co., Ltd. ................... 291,818
------------
356,018
------------
SERVICES -- 0.2%
11,000 Secom Co., Ltd. ................. 634,867
67,000 Toppan Printing Co., Ltd. ....... 716,417
------------
1,351,284
------------
STORAGE -- 0.0%
15,000 Mitsubishi Logistics Corp. ...... 133,696
------------
TELECOMMUNICATIONS -- 2.0%
11,000 Nippon Comsys Corp. ............. 126,339
1,224 Nippon Telegraph & Telephone
Corp. ........................... 10,142,305
------------
10,268,644
------------
TEXTILE PRODUCTS -- 0.2%
12,000 Gunze Ltd. ...................... 27,409
33,000 Kuraray Co., Ltd. ............... 280,340
57,000 Mitsubishi Rayon Co., Ltd. ...... 159,354
21,000 Nisshinbo Industries Inc. ....... 83,979
15,000 Onward Kashiyama Co., Ltd. ...... 187,520
89,000 Teijin Ltd. ..................... 269,337
49,000 Toyobo Ltd. ..................... 64,258
14,000 Wacoal Corp. .................... 142,234
------------
1,214,431
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
TRANSPORTATION -- 0.9%
422 East Japan Railway Co. .......... $ 1,982,520
82,000 Hankyu Corp. .................... 336,189
171,000 Japan Airlines Co.*.............. 475,599
155,000 Kinki Nippon Railway Co. ........ 725,943
75,000 Nagoya Railroad Co., Ltd. ....... 226,970
46,000 Nankai Electric Railway Co. ..... 198,869
103,000 Nippon Express Co., Ltd. ........ 552,163
67,000 Odakyu Electric Railway Co. ..... 205,173
78,000 Tobu Railway Co., Ltd. .......... 206,261
105,000 Tokyu Corp. ..................... 318,514
------------
5,228,201
------------
TRANSPORTATION & SHIPPING -- 0.2%
25,000 Kamigumi Co., Ltd. .............. 104,478
30,000 Kawasaki Kisen Kaisha Ltd.*...... 51,879
47,000 Keihin Electric Express Railway
Co., Ltd. ....................... 136,139
101,000 Mitsui OSK Lines Ltd.*........... 171,748
113,000 Nippon Yusen Kabushiki Kaisha 382,678
8,000 Seino Transportation............. 44,385
------------
891,307
------------
WHOLESALE & INTERNATIONAL TRADE -- 0.5%
143,000 Marubeni Corp. .................. 285,413
150,000 Mitsubishi Corp. ................ 929,495
152,000 Mitsui & Co. .................... 821,414
102,000 Sumitomo Corp. .................. 490,211
------------
2,526,533
------------
WIRE & CABLE PRODUCTS -- 0.0%
60,000 Furukawa Electric Co., Ltd. ..... 201,895
------------
136,597,996
------------
MALAYSIA -- 0.6%
AGRICULTURE -- 0.1%
130,000 Golden Hope Plantations Berhad... 119,108
37,500 Highlands & Lowlands Berhad...... 26,492
52,000 IOI Corp. Berhad*................ 25,953
79,000 Kuala Lumpur Kepong Berhad....... 127,619
------------
299,172
------------
AIRLINES -- 0.0%
47,000 Malaysian Airlines............... 15,525
12,000 Malaysian Pacific................ 14,177
------------
29,702
------------
AUTOMOTIVE -- 0.0%
13,000 Ederan Otomobil.................. 12,538
19,200 Oriental Holdings................ 31,942
123,000 Tan Chong International Ltd.*.... 0
41,000 Tan Chong Motors................. 7,464
------------
51,944
------------
</TABLE>
Continued
55
<PAGE> 58
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MALAYSIA (CONTINUED)
AUTOMOTIVE PARTS -- REPLACEMENT -- 0.0%
33,000 Perusahaan Otomobil Nasional
Berhad........................... $ 21,085
------------
BANKING -- 0.2%
24,000 AMMB Holdings Berhad*............ 12,615
48,000 Commerce Asset Holdings Berhad... 17,939
343,000 Malayan Banking Berhad........... 345,688
213,600 Public Bank...................... 64,376
187,000 RHB Capital Berhad............... 76,198
------------
516,816
------------
BEVERAGES & TOBACCO -- 0.0%
18,000 Guinness Anchor.................. 19,096
------------
BUILDING PRODUCTS -- 0.0%
15,000 Jaya Tiasa Holdings Berhad....... 18,626
------------
CHEMICALS -- 0.0%
8,000 Malaysian Oxygen Berhad.......... 17,746
------------
CONSTRUCTION -- 0.0%
132,500 YTL Corp. Berhad................. 99,675
------------
DIVERSIFIED -- 0.0%
113,000 Malayan United Industries........ 13,078
58,000 Multi-Purpose Holdings Berhad*... 14,404
22,500 Perlis Plantations Berhad........ 19,530
247,040 Sime Darby Berhad................ 170,352
46,000 Time Engineering Berhard......... 6,322
------------
223,686
------------
ELECTRIC UTILITY -- 0.1%
327,000 Tenaga Nasional Berhad........... 394,214
------------
ENERGY -- 0.0%
16,000 Umw Holdings Berhard............. 7,175
------------
ENGINEERING -- 0.0%
180,000 Amsteel Corp. Berhad............. 18,228
6,300 Silverstone Berhad*.............. 0
49,326 United Engineers (Malaysia)
Ltd. ............................ 20,099
------------
38,327
------------
ENTERTAINMENT -- 0.0%
141,000 Magnum Corp. Berhad.............. 52,354
118,000 Resorts World Berhad............. 129,736
------------
182,090
------------
FINANCE -- 0.0%
48,000 MBf Capital Berhad*.............. 8,043
23,000 Rashid Hussain Berhad............ 11,313
------------
19,356
------------
FOOD PRODUCTS -- 0.0%
26,000 Nestle (Malaysia) Berhad......... 117,854
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MALAYSIA (CONTINUED)
HOME FURNISHINGS -- 0.0%
47,000 Technology Resources Industries
Berhad........................... $ 32,297
------------
LEISURE -- 0.0%
38,000 Berjaya Land Berhad.............. 20,890
------------
METALS & MINING -- 0.0%
92,400 Malaysia Mining Corp. Berhad..... 29,408
------------
OIL & GAS -- 0.0%
17,500 Shell Refining Co. (Malaysia)
Berhad........................... 24,895
------------
PRINTING & PUBLISHING -- 0.0%
11,000 New Straits Time Press........... 4,084
------------
REAL ESTATE -- 0.0%
60,000 Malaysian Resources.............. 15,190
------------
TELECOMMUNICATIONS -- 0.2%
351,000 Telekom Malaysia Berhad.......... 592,405
------------
TOBACCO -- 0.0%
15,000 RJ Reynolds...................... 20,796
29,300 Rothmans of Pall Mall (Malaysia)
Berhad........................... 203,104
------------
223,900
------------
TRANSPORTATION -- 0.0%
91,000 Malaysian International Shipping. 132,743
------------
3,132,376
------------
NETHERLANDS -- 5.2%
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.4%
24,740 Philips Electronics NV........... 2,079,685
------------
BANKING -- 0.4%
97,985 ABN Amro Holding NV.............. 2,292,811
------------
BEVERAGES & TOBACCO -- 0.1%
20,437 Heineken NV...................... 802,723
------------
BROADCASTING & PUBLISHING -- 0.1%
46,030 Elsevier NV...................... 694,674
------------
CHEMICALS -- 0.2%
5,283 Akzo Nobel NV.................... 1,174,391
------------
COMPUTER SOFTWARE -- 0.1%
6,165 Getronics NV..................... 319,733
------------
ENERGY -- 1.6%
150,288 Royal Dutch Petroleum Co. ....... 8,333,646
------------
FINANCE -- 0.8%
65,487 ING Groep NV..................... 4,288,061
------------
FOOD PRODUCTS -- 0.6%
45,024 Unilever NV-CVA.................. 3,572,311
------------
</TABLE>
Continued
56
<PAGE> 59
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
NETHERLANDS (CONTINUED)
INSURANCE -- 0.0%
2,123 Stad Rotterdam NV................ $ 180,133
------------
MANUFACTURING -- CONSUMER GOODS -- 0.0%
262 Stork NV......................... 8,346
------------
PACKAGING -- 0.0%
6,620 Koninklijke KNP BT NV............ 170,852
------------
PRINTING & PUBLISHING -- 0.2%
5,124 Oce NV........................... 218,137
4,911 Wolters Kluwer CVA............... 674,042
------------
892,179
------------
RETAIL -- SPECIAL LINE -- 0.2%
38,919 Ahold............................ 1,249,328
------------
SERVICES -- 0.2%
32,787 Koninklijke Royal PTT Nederland
NV............................... 1,262,017
------------
STEEL -- 0.0%
3,036 Koninklijke Hoogovens NV......... 131,337
------------
TRANSPORTATION -- 0.3%
1,950 IHC Caland NV.................... 109,759
9,809 KLM Royal Dutch Air Lines NV..... 398,296
1,133 Pakhoed NV Kon................... 36,760
32,787 TNT Post Group NV................ 838,121
------------
1,382,936
------------
28,835,163
------------
NEW ZEALAND -- 0.2%
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0%
8,949 Fisher & Paykel Industries Ltd. . 22,762
------------
BEVERAGES & TOBACCO -- 0.0%
41,300 Lion Nathan Ltd. ................ 91,756
------------
BUILDING PRODUCTS -- 0.0%
26,010 Fletcher Challenge Building*..... 32,403
------------
FINANCE -- 0.0%
201,800 Brierley Investments Ltd. ....... 100,562
------------
FOREST PRODUCTS -- 0.0%
130,281 Carter Holt Harvey Ltd. ......... 113,614
60,761 Fletcher Challenge Forests....... 34,063
49,122 Fletcher Challenge Paper......... 54,567
------------
202,244
------------
OIL & GAS -- 0.0%
25,761 Fletcher Challenge Energy........ 61,512
------------
TELECOMMUNICATIONS -- 0.2%
131,965 Telecom Corp. of New Zealand
Ltd. ............................ 543,900
------------
1,055,139
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
NORWAY -- 0.5%
BANKING -- 0.1%
49,100 Christiania Bank Og Kreditkasse.. $ 205,395
18,100 Den norske Bank ASA.............. 94,822
------------
300,217
------------
CHEMICALS -- 0.0%
1,000 Dyno Industrier ASA.............. 17,854
------------
ELECTRIC UTILITY -- 0.0%
15,650 Hafslund ASA, Series A........... 84,638
10,326 Hafslund ASA, Series B........... 40,774
------------
125,412
------------
ENGINEERING -- 0.0%
3,050 Kvaerner ASA, Series A........... 103,342
------------
FOREST PRODUCTS -- 0.0%
3,200 Norske Skogindustrier ASA-
Class A.......................... 98,833
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
1,200 Unitor ASA....................... 17,671
------------
INSURANCE -- 0.0%
24,700 Storebrand ASA................... 218,882
------------
MANUFACTURING -- CONSUMER GOODS -- 0.1%
14,400 Orkla ASA-Class A................ 334,969
------------
OIL & GAS -- 0.2%
10,500 Aker RGI ASA, Series A........... 164,885
2,100 Aker RGI ASA, Series B........... 29,967
16,850 Norsk Hydro ASA.................. 741,102
6,600 Petroleum Geo--Services ASA...... 205,564
------------
1,141,518
------------
TRANSPORTATION -- 0.0%
9,000 Bergesen d.y. ASA-Class A........ 171,238
1,400 Bergesen d.y. ASA-Class B........ 26,181
2,200 Leif Hoegh & Co. ASA............. 32,110
------------
229,529
------------
2,588,227
------------
SINGAPORE -- 0.7%
AUTOMOTIVE -- 0.0%
1,000 Cycle & Carriage................. 2,439
------------
BANKING -- 0.2%
77,375 Development Bank Of Singapore
Ltd. ............................ 428,212
114,042 Oversea-Chinese Banking Corp.,
Ltd. ............................ 388,132
117,350 United Overseas Bank Ltd. ....... 364,661
------------
1,181,005
------------
BEVERAGES & TOBACCO -- 0.0%
47,000 Fraser & Neave Ltd. ............. 126,299
------------
ELECTRICAL EQUIPMENT -- 0.0%
5,000 Creative Technology Ltd. *....... 60,670
------------
</TABLE>
Continued
57
<PAGE> 60
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SINGAPORE (CONTINUED)
FINANCE -- 0.0%
29,600 Haw Par Brothers International
Ltd. ............................ $ 31,011
------------
HOTELS & LODGING -- 0.0%
1,400 Overseas Union Enterprise Ltd. .. 2,063
1,100 Shangri-La Hotel Ltd. ........... 1,361
------------
3,424
------------
METALS & MINING -- 0.0%
7,000 Straits Trading Co., Ltd. ....... 4,123
------------
PRINTING & PUBLISHING -- 0.1%
45,136 Singapore Press Holdings Ltd. ... 301,892
------------
REAL ESTATE -- 0.1%
69,600 City Developments Ltd. .......... 194,446
115,000 DBS Land Ltd. ................... 95,296
8,000 United Industrial Corp., Ltd. ... 2,297
52,000 United Overseas Land Ltd. ....... 28,009
------------
320,048
------------
STEEL -- 0.0%
60,750 NatSteel Ltd. ................... 58,971
------------
TELECOMMUNICATIONS -- 0.2%
635,000 Singapore Telecommunications
Ltd. ............................ 902,052
------------
TRANSPORTATION -- 0.1%
59,000 Neptune Orient Lines Ltd. *...... 20,429
133,000 Singapore Airlines Ltd. ......... 621,907
------------
642,336
------------
TRANSPORTATION & SHIPPING -- 0.0%
79,000 Keppel Corp. .................... 118,770
------------
WHOLESALE DISTRIBUTION -- 0.0%
11,000 Inchcape Berhad.................. 7,553
------------
3,760,593
------------
SPAIN -- 3.6%
AGRICULTURE -- 0.0%
400 Azucarera Ebro Agricolas SA...... 11,915
------------
BANKING -- 0.8%
32,142 Banco Central Hispanoamericano
SA............................... 1,011,983
83,822 Banco Santander SA............... 2,149,071
42,800 Corporation Bancaria De Espana
SA............................... 961,735
------------
4,122,789
------------
BANKING & FINANCE -- 0.5%
58,941 Banco Bilbao Vizcaya SA.......... 3,030,019
------------
BEVERAGES & TOBACCO -- 0.1%
1,650 El Aguila SA *................... 15,413
16,530 Tabacalera SA-Class A............ 339,044
------------
354,457
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
BUILDING PRODUCTS -- 0.0%
820 Portland Valderrivas SA.......... $ 100,645
5,400 Uralita SA....................... 77,072
------------
177,717
------------
CHEMICALS -- 0.0%
700 Ercros SA *...................... 887
------------
COMMERCIAL SERVICES -- 0.0%
500 Prosegur, CIA de Seguridad SA.... 5,961
------------
ENERGY -- 0.3%
26,198 Repsol SA........................ 1,446,032
------------
ENGINEERING -- 0.1%
22,064 Autopistas Concesionaria Espanola
SA............................... 342,290
5,800 Dragados & Construcciones SA..... 186,021
200 Urbis SA *....................... 2,796
------------
531,107
------------
FOREST PRODUCTS -- 0.0%
100 Empresa Nacional de Celulosas
SA............................... 1,764
2,498 Sarrio SA *...................... 11,748
------------
13,512
------------
GAS & ELECTRIC UTILITY -- 0.8%
90,480 Endesa--Empresa Nac Elec......... 1,982,888
5,308 Fomento de Construcciones y
Contratas SA..................... 274,259
78,524 Iberdrola SA..................... 1,277,188
26,566 Union Electrica Fenosa SA........ 342,725
------------
3,877,060
------------
INDUSTRIAL HOLDING COMPANY -- 0.0%
1,475 Corporacion Financiara Alba SA... 162,347
------------
INSURANCE -- 0.0%
5,500 Corporacion Mapfre............... 193,285
------------
MACHINERY & EQUIPMENT -- 0.0%
6,417 Zardoya Otis SA.................. 191,129
------------
METALS -- 0.0%
1,200 Acerinox SA...................... 160,063
------------
MISCELLANEOUS MATERIALS &
COMMODITIES -- 0.0%
1,221 Viscofan Industria Navarra de
Envolturas Celulosicassa SA...... 56,946
------------
NATURAL GAS UTILITY -- 0.2%
13,124 Gas Natural SDG SA............... 949,859
------------
REAL ESTATE -- 0.0%
3,669 Metrovacesa SA................... 108,079
4,361 Vallehermoso SA.................. 160,664
------------
268,743
------------
</TABLE>
Continued
58
<PAGE> 61
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
TELECOMMUNICATIONS -- 0.8%
89,209 Telefonica de Espana............. $ 4,131,503
------------
WATER UTILITY -- 0.0%
4,700 Aquas De Barcelona............... 262,493
------------
19,947,824
------------
SWEDEN -- 2.8%
AUTOMOTIVE -- 0.2%
11,300 Volvo AB, Series A............... 328,729
24,100 Volvo AB, Series B............... 717,716
------------
1,046,445
------------
BANKING & FINANCE -- 0.5%
24,700 ForeningsSparbanken AB........... 743,328
46,600 Skandiaviska Enskilda Banken,
Series A......................... 797,610
17,200 Svenska Handelsbanken, Series A.. 797,999
6,300 Svenska Handlesbanken, Series B.. 276,491
------------
2,615,428
------------
CONSUMER GOODS & SERVICES -- 0.0%
3,000 Securitas AB, Series B........... 146,898
------------
ENGINEERING -- 0.3%
53,000 ABB AB, Series A................. 750,977
28,500 ABB AB, Series B................. 396,680
9,300 Skanska AB, Series B............. 417,482
------------
1,565,139
------------
FOREST PRODUCTS -- 0.1%
21,500 Stora Kopparbergs Bergslags
Aktiebolag, Series A............. 338,341
3,250 Stora Kopparbergs Bergslags
Aktiebolag, Series B............. 51,348
16,200 Svenska Cellusoa AB, Series B.... 419,476
------------
809,165
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
4,200 Sandvik AB, Series A............. 116,126
------------
INSURANCE -- 0.1%
45,500 Skandia Forsakrings AB........... 650,412
------------
MACHINERY & EQUIPMENT -- 0.1%
10,050 Atlas Copco AB, Series A......... 274,093
500 Atlas Copco AB, Series B......... 13,636
------------
287,729
------------
MANUFACTURING--CONSUMER GOODS -- 0.1%
30,000 Electrolux AB, Series B.......... 515,364
------------
METAL FABRICATE/HARDWARE -- 0.0%
9,300 SKF AB, Series A................. 165,011
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SWEDEN (CONTINUED)
METALS & MINING -- 0.1%
10,100 SKF AB, Series B................. $ 183,638
7,960 Trelleborg AB, Series B.......... 104,803
------------
288,441
------------
OFFICE EQUIPMENT & SERVICES -- 0.0%
300 Esselte AB, Series B 6,959
------------
PHARMACEUTICALS -- 0.4%
94,400 Astra AB, Series A............... 1,929,442
24,333 Astra AB, Series B............... 485,138
------------
2,414,580
------------
RETAIL--SPECIAL LINE -- 0.2%
16,500 Hennes & Mauritz AB, Series B.... 1,053,110
------------
TELECOMMUNICATIONS -- 0.7%
135,800 Telefonaktiebolaget LM Ericsson,
Series B......................... 3,967,600
------------
15,648,407
------------
SWITZERLAND -- 6.7%
AIRLINES -- 0.1%
1,100 SAirGroup........................ 361,878
------------
BUILDING PRODUCTS -- 0.2%
700 Holderbank Financiere Glarus AG-
Class A.......................... 176,060
542 Holderbank Financiere Glarus AG-
Class B.......................... 689,644
------------
865,704
------------
COMMERCIAL SERVICES -- 0.1%
1,690 Addeco SA........................ 762,099
------------
DIVERSIFIED -- 0.3%
704 ABB AG, Bearer Shares *.......... 1,039,655
579 Alusuisse-Lonza Holding AG,
Registered....................... 734,433
------------
1,774,088
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.1%
285 The Swatch Group AG, Bearer...... 220,212
1,100 The Swatch Group AG, Registered.. 183,477
------------
403,689
------------
FINANCE -- 1.7%
14,820 Credit Suisse Group, Registered.. 3,297,543
16,543 UBS AG, Registered............... 6,151,063
------------
9,448,606
------------
FOOD PRODUCTS -- 1.1%
2,813 Nestle SA, Registered............ 6,019,865
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
83 SGS Societe Generale de
Surveillance Holding SA.......... 140,685
------------
</TABLE>
Continued
59
<PAGE> 62
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SWITZERLAND (CONTINUED)
INSURANCE -- 0.8%
929 Swiss Reinsurance Co.,
Registered....................... $ 2,349,432
2,940 Zuerich Verichrng Gesellschft Rg. 1,876,252
------------
4,225,684
------------
MANUFACTURING--CONSUMER GOODS -- 0.0%
281 Sulzer AG, Registered............ 221,753
------------
PHARMACEUTICALS -- 2.3%
578 Novartis AG, Bearer.............. 962,564
3,315 Novartis AG, Registered.......... 5,516,884
418 Roche Holding AG................. 4,104,737
133 Roche Holding AG, Bearer......... 1,970,697
------------
12,554,882
------------
36,778,933
------------
UNITED KINGDOM -- 21.1%
AEROSPACE -- 0.1%
25,464 Smiths Industries PLC............ 356,039
------------
AEROSPACE & MILITARY TECHNOLOGY -- 0.2%
136,688 British Aerospace PLC............ 1,049,095
7,300 Cobham PLC....................... 127,891
------------
1,176,986
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
65,300 EMI Group PLC.................... 572,549
------------
AUTO PARTS -- 0.0%
34,514 BBA Group PLC.................... 260,292
------------
AUTOMOTIVE -- 0.1%
124,647 Rolls-Royce PLC.................. 515,255
------------
BANKING -- 2.4%
110,837 Abbey National PLC............... 1,975,071
119,828 Barclays PLC..................... 3,460,845
68,595 HSBC Holdings PLC................ 1,740,798
141,539 HSBC Holdings PLC (Hong Kong
Dollars)......................... 3,438,462
72,495 Royal Bank of Scotland Group
PLC.............................. 1,256,754
24,268 Schroders PLC.................... 623,173
------------
12,495,103
------------
BEVERAGES & TOBACCO -- 0.7%
279,142 Diageo PLC....................... 3,323,119
51,361 Scottish & Newcastle PLC......... 722,845
------------
4,045,964
------------
BREWERY -- 0.2%
62,127 Bass PLC......................... 1,160,981
73,727 Bass PLC, Class B................ 113,788
------------
1,274,769
------------
BROADCASTING/CABLE -- 0.3%
143,100 British Sky Broadcasting Group
PLC.............................. 1,030,858
48,242 Carlton Communications PLC....... 430,229
------------
1,461,087
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
BUILDING PRODUCTS -- 0.3%
61,602 Blue Circle Industries PLC....... $ 346,379
42,536 BPB PLC.......................... 260,465
21,454 RMC Group PLC.................... 372,637
50,900 Rugby Group PLC.................. 95,543
77,348 Tarmac PLC....................... 139,057
63,173 Williams PLC..................... 408,442
------------
1,622,523
------------
CHEMICALS -- 0.3%
40,448 BOC Group PLC.................... 552,048
33,804 Courtaulds PLC................... 251,271
28,860 Elementis PLC.................... 74,156
60,251 Imperial Chemical Industries
PLC.............................. 971,109
------------
1,848,584
------------
CONGLOMERATES -- 0.4%
243,883 B.A.T. Industries PLC............ 2,435,412
------------
CONSTRUCTION -- 0.0%
31,200 Taylor Woodrow PLC............... 104,635
------------
DISTRIBUTION -- 0.4%
308,609 BG PLC........................... 1,784,180
366,494 Centrica PLC *................... 620,668
------------
2,404,848
------------
ELECTRIC UTILITY -- 0.4%
121,353 National Grid Group PLC.......... 818,516
97,883 Scottish Power PLC............... 863,952
39,709 Southern Electric PLC............ 366,719
------------
2,049,187
------------
ELECTRICAL & ELECTRONIC -- 0.4%
15,800 Bowthorpe PLC.................... 138,007
35,374 Electrocomponents PLC............ 285,369
212,860 General Electric Co., PLC........ 1,834,388
------------
2,257,764
------------
ENERGY -- 1.2%
467,850 British Petroleum Co., PLC....... 6,810,811
FINANCE -- 1.2%
56,913 Cardon PLC....................... 176,625
434,219 Lloyds TSB Group PLC............. 6,064,025
22,109 Provident Financial PLC.......... 349,522
31,900 St. James's Place Capital PLC.... 173,248
------------
6,763,420
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.7%
83,202 Cadbury Schweppes PLC............ 1,288,275
255,848 Unilever PLC..................... 2,746,991
------------
4,035,266
------------
</TABLE>
Continued
60
<PAGE> 63
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
FOOD PRODUCTS -- 0.3%
74,900 Associated British Foods PLC..... $ 704,835
37,080 Tate & Lyle PLC.................. 294,337
19,834 Unigate PLC...................... 219,738
43,459 United Biscuits (Holdings) PLC... 174,390
------------
1,393,300
------------
FOREST PRODUCTS -- 0.0%
68,504 Arjo Wiggins Appleton PLC........ 232,027
------------
GAS & ELECTRIC UTILITY -- 0.2%
100,766 National Power PLC............... 948,243
------------
HEALTH & PERSONAL CARE -- 2.2%
283,559 Glaxo Wellcome PLC............... 8,535,063
74,469 Zeneca Group PLC................. 3,199,481
------------
11,734,544
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
314,244 BTR PLC.......................... 892,649
54,127 TI Group PLC..................... 328,506
------------
1,525,673
------------
INSURANCE -- 2.5%
74,068 Boots Co., PLC................... 1,232,119
57,041 Commercial Union PLC............. 1,064,986
83,616 Great Universal Stores PLC....... 1,102,854
71,949 Guardian Royal Exchange.......... 426,467
99,807... Legal & General Group PLC........ 1,064,115
223,326 Marks & Spencer PLC.............. 2,038,231
152,133 Prudential Corp., PLC............ 2,005,290
123,473 Royal & Sun Alliance insurance
Group PLC........................ 1,259,781
148,438 Sainsbury (J) PLC................ 1,317,600
43,500 Sedgwick Group PLC............... 92,902
171,337 Tesco PLC........................ 1,670,946
------------
13,275,291
------------
LEISURE -- 0.4%
69,592 Granada Group PLC................ 1,281,903
97,672 Ladbroke Group PLC............... 539,010
68,058 Rank Group PLC................... 370,473
------------
2,191,386
------------
MACHINE -- DIVERSIFIED -- 0.0%
44,496 FK1 PLC.......................... 129,552
------------
MACHINERY & EQUIPMENT -- 0.1%
58,800 GNK PLC.......................... 744,639
------------
MANUFACTURING -- CAPITAL GOODS -- 0.1%
28,784 IMI PLC.......................... 178,417
47,392 Wolseley PLC..................... 280,909
------------
459,326
------------
MERCHANDISING -- 0.1%
90,523 Safeway PLC...................... 595,089
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
METALS -- 0.2%
169,516 British Steel PLC................ $ 374,760
89,082 Rio Tinto PLC, Registered........ 1,004,019
------------
1,378,779
------------
METALS & MINING -- 0.0%
18,004 Johnson Matthey PLC.............. 161,914
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.0%
86,232 Pilkington PLC................... 159,705
------------
OIL & GAS -- 0.1%
17,571 Burmah Castrol PLC............... 314,574
80,282 LASMO PLC........................ 322,151
------------
636,725
------------
PAPER PRODUCTS -- 0.0%
41,858 Rexam PLC........................ 183,330
------------
PHARMACEUTICALS -- 1.0%
437,464 SmithKline Beecham PLC........... 5,324,690
------------
PRINTING & PUBLISHING -- 0.6%
4,808 De La Rue PLC.................... 24,026
47,573 Pearson PLC...................... 873,132
94,996 Reed International PLC........... 858,283
114,527 Reuters Group PLC 1,310,867
------------
3,066,308
------------
RAILROADS -- 0.2%
41,900 Railtrack Group PLC.............. 1,029,778
------------
REAL ESTATE -- 0.4%
42,809 British Land Co., PLC............ 440,704
31,336 Great Portland Estates PLC....... 130,188
35,421 Hammerson PLC.................... 288,704
44,495 Land Securities PLC.............. 695,540
34,849 MEPC PLC......................... 307,590
32,472 Slough Estates PLC............... 186,649
------------
2,049,375
------------
RETAIL STORES -- 0.0%
31,126 Nect PLC......................... 267,978
------------
RETAIL -- GENERAL MERCHANDISE -- 0.2%
23,736 Argos PLC........................ 247,522
56,751 Kingfisher PLC................... 919,432
119,900 Sears PLC........................ 106,528
------------
1,273,482
------------
RETAIL -- SPECIAL LINE -- 0.1%
119,041 Lucas Varity PLC................. 476,192
------------
TELECOMMUNICATIONS -- 2.1%
499,617 British Telecommunications PLC... 6,147,888
177,851 Cable & Wireless PLC............. 2,164,753
241,321 Vodafone Group PLC............... 3,064,125
------------
11,376,766
------------
</TABLE>
Continued
61
<PAGE> 64
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
TELECOMMUNICATIONS -- EQUIPMENT -- 0.0%
22,300 Racal Electronic PLC............. $ 125,948
------------
TRANSPORTATION -- 0.3%
86,272 British Airways PLC.............. 929,165
13,207 Ocean Group PLC.................. 166,702
51,346 Peninsular & Oriental Steam
Navigation Co.................... 740,625
------------
1,836,492
------------
WATER UTILITY -- 0.3%
22,457 Anglian Water PLC................ 316,056
12,000 BPS Hyder PLC.................... 188,007
31,499 Thames Water PLC................. 574,964
44,614 United Utilities PLC............. 650,965
------------
1,729,992
------------
116,797,018
------------
TOTAL COMMON STOCKS 536,866,807
------------
(Cost $444,495,517)
CORPORATE NOTES & BONDS -- 0.0%
UNITED KINGDOM -- 0.0%
COMPUTER HARDWARE MANUFACTURING -- 0.0%
$1,793 Viglen Technology PLC, 6.94%**,
9/1/98........................... 0
------------
TOTAL CORPORATE NOTES & BONDS 0
------------
(Cost $0)
INVESTMENT COMPANIES -- 1.3%
UNITED STATES -- 1.3%
3,994,955 Dreyfus Cash Management Money
Market Fund...................... 3,994,955
3,424,723 Federated Prime Value Obligations
Money Market Fund................ 3,424,723
------------
TOTAL INVESTMENT COMPANIES....... 7,419,678
------------
(Cost $7,419,678)
PREFERRED STOCKS -- 0.8%
AUSTRALIA -- 0.2%
PRINTING & PUBLISHING -- 0.2%
132,935 News Corp., Ltd.................. 941,737
------------
AUSTRIA -- 0.0%
BANKING -- 0.0%
2,600 Bank Austria AG.................. 211,087
------------
GERMANY -- 0.6%
AUTOMOTIVE -- 0.1%
168 MAN AG Preferred................. 45,513
527 Volkswagen AG Preferred.......... 359,112
------------
404,625
------------
COMPUTER SOFTWARE -- 0.4%
3,300 SP AG Preferred.................. 2,243,226
------------
GAS & ELECTRIC UTILITY -- 0.1%
16,540 RWE AG........................... 711,069
------------
3,358,920
------------
TOTAL PREFERRED STOCKS........... 4,511,744
------------
(Cost $1,742,550)
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
RIGHTS -- FOREIGN -- 0.0%
AUSTRIA -- 0.0%
BANKING -- 0.0%
13,150 Bank Austria*.................... $ 0
------------
GERMANY -- 0.0%
AUTOMOTIVE -- 0.0%
39170 Daimler-Benz Rights*............. 43,401
------------
RETAIL STORES -- 0.0%
17,073 Metro Rights*.................... 662
------------
44,063
------------
NETHERLANDS -- 0.0%
MACHINERY & EQUIPMENT -- 0.0%
10 Stork Rights*.................... 9
------------
SWEDEN -- 0.0%
BANKING -- 0.0%
23,500 Handelsbanken Rights*............ 23,721
------------
BANKING & FINANCE -- 0.0%
24,700 Mandamus Units*.................. 7,743
------------
31,464
------------
TOTAL RIGHTS -- FOREIGN.......... 75,536
------------
(Cost $56,459)
WARRANTS -- 0.0%
HONG KONG -- 0.0%
GAS UTILITY -- 0.0%
17,412 Hong Kong & China Gas Warrants*.. 1,191
------------
REAL ESTATE -- 0.0%
33,200 Hysen Development Co.,
Warrants*........................ 274
12,500 Wharf Holdings Warrants*......... 0
------------
274
------------
TOTAL WARRANTS................... 1,465
------------
(Cost $0)
TOTAL INVESTMENTS -- 99.4%.................. 548,875,218
(Cost $453,714,204)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.6%....................... 3,513,031
------------
TOTAL NET ASSETS -- 100.0%.................. $552,388,249
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $165,238,695
Unrealized depreciation............... (70,122,681)
------------
Net unrealized appreciation........... $ 95,161,014
============
</TABLE>
* Non-income producing security.
** Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
See Notes to Financial Statements
62
<PAGE> 65
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS -- 98.7%
ADVERTISING -- 0.2%
10,300 Interpublic Group Cos., Inc. ... $ 625,081
13,300 Omnicom Group................... 663,338
------------
1,288,419
------------
AEROSPACE & DEFENSE -- 1.1%
81,992 Boeing Co. ..................... 3,653,768
10,300 General Dynamics Corp. *........ 478,950
15,994 Lockheed Martin Corp. .......... 1,693,365
5,500 Northrop Grumman Corp. ......... 567,188
27,800 Raytheon Co. -- Class B......... 1,643,675
------------
8,036,946
------------
AGRICULTURE -- 0.1%
20,000 Pioneer Hi Bred, Inc. .......... 827,500
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
7,800 Maytag Corp. ................... 385,125
6,200 Whirlpool Corp. ................ 426,250
------------
811,375
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.3%
3,100 Cummins Engine, Inc. ........... 158,875
8,600 Dana Corp. ..................... 460,100
6,300 Eaton Corp. .................... 489,825
5,920 Navistar International Corp. *.. 170,940
6,350 PACCAR, Inc. ................... 331,788
10,100 TRW, Inc. ...................... 551,712
------------
2,163,240
------------
AUTO/TRUCK -- REPLACEMENT
EQUIPMENT -- 0.1%
5,200 Echlin, Inc. ................... 255,125
14,625 Genuine Parts Co. .............. 505,477
------------
760,602
------------
AUTOMOTIVE -- 1.7%
53,238 Chrysler Corp. ................. 3,001,292
98,400 Ford Motor Co. ................. 5,805,600
58,000 General Motors Corp. ........... 3,875,125
------------
12,682,017
------------
BANKS -- MAJOR REGIONAL -- 5.5%
52,998 Banc One Corp. ................. 2,957,950
30,900 Bank of New York Co., Inc. ..... 1,875,244
23,800 BankBoston Corp. ............... 1,323,875
12,950 Comerica, Inc. ................. 857,938
23,853 First Chicago NBD Corp. ........ 2,113,972
79,370 First Union Corp. .............. 4,623,302
22,407 Fleet Financial Group, Inc. .... 1,870,985
36,000 KeyCorp......................... 1,282,500
20,900 Mellon Bank Corp. .............. 1,455,163
26,800 National City Corp. ............ 1,902,800
77,169 NationsBank..................... 5,903,428
9,200 Northern Trust Corp. ........... 701,500
62,000 Norwest Corp. .................. 2,317,250
25,000 PNC Bank Corp. ................. 1,345,313
9,000 Republic New York Corp. ........ 566,438
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BANKS -- MAJOR REGIONAL (CONTINUED)
14,400 Summit Bancorp *................ $ 684,000
17,300 SunTrust Banks, Inc. ........... 1,406,706
60,362 U.S. Bancorp.................... 2,595,566
16,900 Wachovia Corp. ................. 1,428,050
7,100 Wells Fargo & Co. .............. 2,619,899
------------
39,831,879
------------
BANKS -- MIDWEST -- 0.2%
19,100 Fifth Third Bancorp............. 1,203,300
15,700 Huntington Bancshares........... 525,950
------------
1,729,250
------------
BANKS -- MONEY CENTER -- 2.6%
56,848 BankAmerica Corp. .............. 4,913,799
8,000 Bankers Trust New York Corp. ... 928,500
11,700 BB&T Corp. *.................... 791,213
69,116 Chase Manhattan Corp. .......... 5,218,258
37,500 Citicorp........................ 5,596,874
14,600 J.P. Morgan & Co., Inc. ........ 1,710,025
------------
19,158,669
------------
BANKS -- NORTHEAST -- 0.1%
13,200 State Street Corp. ............. 917,400
------------
BEVERAGES -- ALCOHOLIC -- 0.3%
3,000 Adolph Coors Co. ............... 102,000
40,170 Anheuser-Busch Co., Inc. ....... 1,895,522
5,700 Brown-Forman Corp. ............. 366,225
------------
2,363,747
------------
BEVERAGES -- SOFT DRINKS -- 3.0%
202,900 Coca-Cola Co. .................. 17,347,949
124,500 PepsiCo, Inc. .................. 5,127,844
------------
22,475,793
------------
BROADCASTING/CABLE -- 0.8%
10,100 Clear Channel Communications.... 1,102,163
28,600 Comcast Corp. Special........... 1,160,981
49,800 Media One Group *............... 2,188,087
41,646 Tele-Communications Inc.,
Class A *....................... 1,600,768
------------
6,051,999
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.2%
3,300 Armstrong World Industries,
Inc. ........................... 222,338
13,600 Masco Corp. .................... 822,800
4,400 Owens-Corning Fiberglas Corp. *. 179,575
------------
1,224,713
------------
BUILDING -- HEAVY CONSTRUCTION -- 0.1%
6,900 Fluor Corp. .................... 351,900
3,300 Foster Wheeler Corp. ........... 70,744
------------
422,644
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.0%
10,600 Ecolab, Inc. ................... 328,600
------------
</TABLE>
Continued
63
<PAGE> 66
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES -- 0.0%
3,000 Fleetwood Enterprises, Inc. *... $ 120,000
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.1%
4,900 Centex Corp. ................... 184,975
3,240 Kaufman & Broad Home Corp. ..... 102,870
3,500 Pulte Corp. .................... 104,563
------------
392,408
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.8%
60,031 Home Depot, Inc. ............... 4,986,324
28,600 Lowe's Cos., Inc. .............. 1,160,088
------------
6,146,412
------------
BUILDING PRODUCTS -- WOOD -- 0.1%
9,000 Louisiana-Pacific Corp. ........ 164,250
16,350 Weyerhaeuser Co. ............... 755,166
------------
919,416
------------
BUSINESS INFORMATION -- 0.2%
13,265 Cognizant Corp. *............... 835,695
13,965 Dun & Bradstreet Corp. ......... 504,486
------------
1,340,181
------------
BUSINESS SERVICES -- 0.0%
8,600 H & R Block *................... 362,275
------------
CAPITAL GOODS -- 0.2%
58,300 CBS Corp. ...................... 1,851,025
------------
CHEMICALS -- DIVERSIFIED -- 2.0%
5,900 B.F.Goodrich Co. ............... 292,788
18,600 Dow Chemical Co. ............... 1,798,387
92,800 E.I. du Pont de Nemours & Co. .. 6,925,199
6,400 Eastman Chemical Co. ........... 398,400
7,900 Hercules, Inc. ................. 324,888
48,600 Monsanto Co. ................... 2,715,524
14,600 PPG Industries, Inc. ........... 1,015,612
5,000 Rohm & Haas Co. ................ 519,688
10,100 Union Carbide Corp. ............ 539,088
6,100 W.R. Grace & Co. *.............. 104,081
------------
14,633,655
------------
CHEMICALS -- SPECIALTY -- 0.3%
19,400 Air Products & Chemical, Inc. .. 776,000
11,837 Engelhard Corp. ................ 239,699
4,900 Great Lakes Chemical Corp. ..... 193,244
10,700 Morton International, Inc. *.... 267,500
5,500 Nalco Chemical Co. ............. 193,188
12,900 Praxair, Inc. .................. 603,881
8,200 Sigma-Aldrich Corp. ............ 288,025
------------
2,561,537
------------
COMMERCIAL SERVICES -- 0.2%
66,519 Cendant Corp. .................. 1,388,584
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTER SOFTWARE -- 3.6%
5,600 Adobe Systems, Inc. *........... $ 237,650
44,818 Computer Associates
International, Inc. ............ 2,490,199
199,700 Microsoft Corp. *............... 21,642,487
80,675 Oracle Corp. *.................. 1,981,580
21,100 Parametric Technology Corp. *... 572,338
------------
26,924,254
------------
COMPUTERS -- LOCAL AREA NETWORK -- 1.3%
29,100 3COM Corp. *.................... 893,006
18,000 Bay Networks, Inc. *............ 580,500
13,000 Cabletron Systems *............. 174,688
83,500 Cisco Systems, Inc. *........... 7,687,219
28,800 Novell, Inc. *.................. 367,200
------------
9,702,613
------------
COMPUTERS -- MAINFRAME -- 1.3%
79,800 International Business Machines
Corp. .......................... 9,162,038
20,500 Unisys Corp. ................... 579,125
------------
9,741,163
------------
COMPUTERS -- MEMORY DEVICES -- 0.3%
40,700 EMC Corp. *..................... 1,823,869
19,900 Seagate Technology, Inc. *...... 473,869
------------
2,297,738
------------
COMPUTERS -- MICRO -- 1.3%
10,900 Apple Computer, Inc. *.......... 312,694
135,574 Compaq Computer Corp. .......... 3,846,912
4,000 Data General Corp. *............ 59,750
53,600 Dell Computer Corp. *........... 4,974,750
12,700 Gateway 2000, Inc. *............ 642,938
------------
9,837,044
------------
COMPUTERS -- MINI -- 0.9%
85,300 Hewlett-Packard Co. ............ 5,107,337
15,400 Silicon Graphics, Inc. *........ 186,725
31,000 Sun Microsystems, Inc. *........ 1,346,563
------------
6,640,625
------------
COMPUTERS -- SERVICES -- 0.6%
24,500 Automatic Data Processing,
Inc. ........................... 1,785,437
6,200 Ceridian Corp. *................ 364,250
12,800 Computer Science *.............. 819,200
12,300 Equifax, Inc. .................. 446,644
35,100 First Data Corp. ............... 1,169,269
2,200 Shared Medical Systems Corp. ... 161,563
------------
4,746,363
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.8%
6,000 American Greetings Corp. ....... 305,625
3,195 Jostens, Inc. .................. 77,079
13,100 Newell Cos., Inc. .............. 652,544
12,300 Rubbermaid, Inc. *.............. 408,206
5,000 Tupperware Corp. ............... 140,625
</TABLE>
Continued
64
<PAGE> 67
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
CONSUMER PRODUCTS -- MISCELLANEOUS (CONTINUED)
52,500 Unilever NV, ADR................ $ 4,144,219
------------
5,728,298
------------
CONTAINERS & PACKAGING -- 0.1%
12,700 Owens-Illinois *................ 568,325
6,716 Sealed Air Corp. *.............. 246,813
------------
815,138
------------
CONTAINERS -- METAL & GLASS -- 0.1%
2,500 Ball Corp. ..................... 100,469
10,500 Crown Cork & Seal Co., Inc. .... 498,750
------------
599,219
------------
CONTAINERS -- PAPER & PLASTIC -- 0.0%
4,300 Bemis Co. ...................... 175,763
------------
COSMETICS & TOILETRIES -- 1.2%
4,700 Alberto Culver Co., Class B..... 136,300
10,800 Avon Products, Inc. ............ 837,000
91,864 Gillette Co. ................... 5,207,540
9,000 International Flavors &
Fragrances, Inc. ............... 390,938
45,640 Kimberly-Clark Corp. ........... 2,093,735
------------
8,665,513
------------
DIVERSIFIED -- 4.8%
16,020 Allegheny Teledyne, Inc. ....... 366,458
46,300 Allied Signal, Inc. ............ 2,054,563
3,750 Crane Co. ...................... 182,109
3,000 FMC Corp. *..................... 204,563
268,500 General Electric Co. (b)........ 24,433,499
9,700 ITT Industries, Inc. ........... 362,538
6,900 Johnson Controls, Inc. ......... 393,731
33,500 Minnesota Mining & Manufacturing
Co. ............................ 2,753,280
3,500 National Service Industries,
Inc. ........................... 178,063
29,200 Seagram Co., Ltd. .............. 1,195,375
14,000 Tenneco, Inc. .................. 532,875
13,500 Textron, Inc. .................. 967,781
19,100 United Technologies Corp. ...... 1,766,750
------------
35,391,585
------------
ELECTRICAL & ELECTRONIC -- 0.0%
6,900 KLA-Tencor Corp. *.............. 191,044
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 2.0%
11,600 Advanced Micro Devices, Inc. *.. 197,925
30,000 Applied Materials, Inc. *....... 885,000
134,200 Intel Corp. .................... 9,947,574
11,600 LSI Logic Corp. *............... 267,525
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRICAL COMPONENTS -- SEMICONDUCTORS
(CONTINUED)
17,400 Micron Technology, Inc. ........ $ 431,738
13,500 National Semiconductor Corp. *.. 178,031
16,500 Rockwell International Corp. ... 793,031
32,000 Texas Instruments, Inc. ........ 1,866,000
------------
14,566,824
------------
ELECTRONIC -- CONNECTORS -- 0.1%
18,036 AMP, Inc. ...................... 619,988
4,500 Thomas & Betts Corp. ........... 221,625
------------
841,613
------------
ELECTRONIC MEASURING EQUIPMENT -- 0.0%
4,100 Tektronix, Inc. ................ 145,038
------------
ELECTRONICS -- 0.0%
7,000 Raychem Corp. .................. 206,938
------------
ENERGY -- 0.0%
8,700 Orxy Energy Co. *............... 192,488
------------
FINANCE -- 0.8%
28,427 Associates First Capital,
Class A......................... 2,185,325
20,700 Franklin Resources, Inc. ....... 1,117,800
10,800 Mercantile Bancorporation....... 544,050
16,000 Sunamerica, Inc. ............... 919,000
31,645 Washington Mutual, Inc. ........ 1,374,580
------------
6,140,755
------------
FINANCIAL -- BANKING -- 0.1%
21,500 Synovus Financial Corp. ........ 510,625
FINANCIAL -- CONSUMER LOANS -- 0.4%
4,400 Beneficial Corp. ............... 674,025
26,300 Household International, Inc. .. 1,308,425
41,087 MBNA Corp. ..................... 1,355,871
------------
3,338,321
------------
FINANCIAL --
INVESTMENT BANKER/BROKER -- 0.1%
8,400 Lehman Brothers Holding, Inc. .. 651,525
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.4%
27,300 Merrill Lynch & Co., Inc. ...... 2,518,425
21,750 Schwab (Charles) Corp. ......... 706,875
------------
3,225,300
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 1.2%
38,100 American Express Co. ........... 4,343,400
48,616 Morgan Stanley, Dean Witter,
Discover & Co. ................. 4,442,287
------------
8,785,687
------------
</TABLE>
Continued
65
<PAGE> 68
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.2%
8,900 Country Wide Credit Industries,
Inc. *.......................... $ 451,675
87,000 Fannie Mae...................... 5,285,250
57,000 Freddie Mac..................... 2,682,563
11,200 Green Tree Financial Corp. ..... 479,500
------------
8,898,988
------------
FINANCIAL -- SAVINGS & LOAN -- 0.2%
4,700 Golden West Financial Corp. .... 499,669
9,000 H.F. Ahmanson & Co. ............ 639,000
------------
1,138,669
------------
FOOD -- CANNED -- 0.5%
37,400 Campbell Soup Co. .............. 1,986,875
30,000 H.J. Heinz Co. ................. 1,683,750
------------
3,670,625
------------
FOOD -- CONFECTIONARY -- 0.2%
11,700 Hershey Foods Corp. ............ 807,300
9,500 Wm. Wrigley Jr. Co. *........... 931,000
------------
1,738,300
------------
FOOD -- DIVERSIFIED -- 1.2%
23,600 Bestfoods....................... 1,370,275
39,050 ConAgra, Inc. .................. 1,237,397
13,000 General Mills, Inc. ............ 888,875
33,700 Kellogg Co. .................... 1,265,856
11,400 Quaker Oats Co. ................ 626,288
8,780 Ralston Purina Group............ 1,025,614
38,800 Sara Lee Corp. ................. 2,170,374
------------
8,584,679
------------
FOOD -- FLOUR & GRAIN -- 0.1%
46,863 Archer-Daniels-Midland Co. ..... 907,971
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
4,900 Supervalu, Inc. ................ 217,438
27,900 Sysco Corp. .................... 714,937
------------
932,375
------------
FUNERAL SERVICES -- 0.1%
20,700 Service Corp. International *... 887,513
------------
GAS & ELECTRIC UTILITY -- 0.2%
31,300 PG & E Corp..................... 987,906
19,000 Public Service Enterprises...... 654,313
------------
1,642,219
------------
GLASS PRODUCTS -- 0.1%
19,000 Corning, Inc. .................. 660,250
------------
HOTELS & LODGING -- 0.2%
20,500 Hilton Hotels Corp. ............ 584,250
20,900 Marriott International,
Class A......................... 676,638
------------
1,260,888
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
INSTRUMENTS -- CONTROL -- 0.1%
4,022 General Signal Corp. ........... $ 144,792
10,400 Honeywell, Inc. ................ 869,050
------------
1,013,842
------------
INSTRUMENTS -- SCIENTIFIC -- 0.1%
3,700 EG&G, Inc. ..................... 111,000
3,600 Millipore Corp. ................ 98,100
4,000 Perkin-Elmer Corp. ............. 248,750
------------
457,850
------------
INSURANCE -- 0.2%
13,500 Cincinnati Financial Corp. ..... 518,063
5,900 Progressive Corp. -- Ohio....... 831,900
------------
1,349,963
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.1%
13,800 Aon Corp. ...................... 969,450
------------
INSURANCE -- BROKERS -- 0.2%
20,850 Marsh & McLennan Cos., Inc. .... 1,260,122
------------
INSURANCE -- LIFE -- 0.7%
20,798 American General Corp. ......... 1,480,557
15,500 Conseco, Inc. .................. 724,625
8,725 Jefferson-Pilot Corp.*.......... 505,505
7,800 Providian Financial............. 612,788
11,500 Torchmark Corp. ................ 526,125
5,182 TransAmerica Corp. ............. 596,578
11,400 UNUM Corp. ..................... 632,700
------------
5,078,878
------------
INSURANCE -- MULTI-LINE -- 1.5%
12,170 Aetna, Inc. .................... 926,441
18,200 CIGNA Corp. .................... 1,255,800
9,700 Hartford Financial Services
Group, Inc. .................... 1,109,438
9,400 Loews Corp. .................... 818,975
8,000 MBIA, Inc. ..................... 599,000
9,400 MGIC Investment Corp. .......... 536,388
94,094 Travelers Group, Inc. .......... 5,704,448
------------
10,950,490
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.2%
35,199 Allstate Corp. ................. 3,222,908
57,520 American International Group.... 8,397,920
14,00 Chubb Corp. .................... 1,125,250
6,400 General Re Corp. ............... 1,622,400
8,400 Lincoln National Corp.*......... 767,550
11,600 Safeco Corp. ................... 527,075
18,934 St. Paul Cos., Inc. ............ 796,411
------------
16,459,514
------------
LEISURE & RECREATION PRODUCTS -- 0.0%
8,200 Brunswick Corp.................. 202,950
------------
</TABLE>
Continued
66
<PAGE> 69
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
LEISURE & RECREATION/GAMING -- 0.1%
8,300 Harrah's Entertainment, Inc. ... $ 192,975
14,700 Mirage Resorts *................ 313,294
------------
506,269
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.0%
3,300 Cincinnati Milacron, Inc. ...... 80,231
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.3%
30,500 Caterpillar, Inc. .............. 1,612,687
13,550 Ingersoll-Rand Co. ............. 597,047
------------
2,209,734
------------
MACHINERY -- ELECTRICAL -- 0.4%
36,400 Emerson Electric Co. ........... 2,195,375
8,200 W.W. Grainger, Inc. ............ 408,463
------------
2,603,838
------------
MACHINERY -- FARM -- 0.2%
2,000 Briggs & Stratton Corp. ........ 74,875
6,200 Case Corp. ..................... 299,150
20,500 Deere & Co. .................... 1,083,938
------------
1,457,963
------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.4%
2,300 Aeroquip-Vickers Inc. .......... 134,263
9,900 Cooper Industries, Inc. ........ 543,881
18,200 Dover Corp...................... 623,350
3,922 Harnischfeger Industries, Inc. . 111,042
20,500 Illinois Tool Works, Inc. ...... 1,367,093
9,125 Parker-Hannifin Corp. .......... 347,891
------------
3,127,520
------------
MACHINERY -- MATERIAL HANDLING -- 0.0%
700 Nacco Industries, Inc. ......... 90,475
------------
MACHINERY -- THERMAL PROCESSOR -- 0.1%
13,100 Thermo Electron Corp. *......... 447,856
------------
MEDIA CONGLOMERATES -- 1.6%
47,460 Time Warner, Inc. .............. 4,054,864
29,000 ViaCom, Inc., Class B *......... 1,689,250
55,400 Walt Disney Co. ................ 5,820,462
------------
11,564,576
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
21,600 Amgen, Inc. *................... 1,412,100
------------
MEDICAL -- DRUGS -- 8.6%
125,500 Abbott Laboratories............. 5,129,813
7,000 Alza Corp. ..................... 302,750
106,600 American Home Products Corp. ... 5,516,550
81,600 Bristol-Myers Squibb Co. ....... 9,378,899
91,000 Eli Lilly & Co. ................ 6,011,688
98,300 Merck & Co., Inc. .............. 13,147,624
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL -- DRUGS (CONTINUED)
106,100 Pfizer, Inc. ................... $ 11,531,743
41,630 Pharmacia & Upjohn, Inc. ....... 1,920,184
60,100 Schering-Plough Corp. .......... 5,506,663
67,000 Warner-Lambert Co. ............. 4,648,125
------------
63,094,039
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.2%
13,400 Humana, Inc. *.................. 417,913
15,500 United Healthcare Corp. ........ 984,250
------------
1,402,163
------------
MEDICAL -- HOSPITAL -- 0.3%
53,149 Columbia/HCA Healthcare Corp. .. 1,547,965
25,100 Tenet Healthcare Corp. *........ 784,375
------------
2,332,340
------------
MEDICAL -- NURSING HOMES -- 0.0%
5,200 Manor Care, Inc. *.............. 199,875
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 0.1%
32,300 HEALTHSOUTH Corp. *............. 862,006
------------
MEDICAL -- WHOLESALE DRUG -- 0.1%
9,000 Cardinal Health, Inc. .......... 843,750
------------
MEDICAL INSTRUMENTS -- 0.4%
9,200 Biomet, Inc. *.................. 304,175
38,400 Medtronic, Inc. ................ 2,448,000
6,900 St. Jude Medical, Inc. *........ 254,006
6,200 U.S. Surgical Corp. ............ 282,875
------------
3,289,056
------------
MEDICAL PRODUCTS -- 0.7%
5,400 Allergan, Inc. ................. 250,425
23,000 Baxter International, Inc. ..... 1,237,688
16,000 Boston Scientific Corp. *....... 1,146,000
12,400 Guidant Corp. .................. 884,275
34,600 HBO & Co. ...................... 1,219,650
6,000 Mallinckrodt, Inc. ............. 178,125
------------
4,916,163
------------
MEDICAL/DENTAL SUPPLIES -- 1.3%
4,500 Bausch & Lomb, Inc. ............ 225,563
10,000 Becton, Dickinson & Co. ........ 776,250
4,700 C.R. Bard, Inc. ................ 178,894
110,300 Johnson & Johnson............... 8,134,624
------------
9,315,331
------------
METAL -- GOLD -- 0.2%
30,600 Barrick Gold Corp. ............. 587,137
18,800 Battle Mountian Gold Co. ....... 111,625
17,300 Homestake Mining Co. ........... 179,488
12,815 Newmont Mining Corp. ........... 302,754
20,300 Placer Dome, Inc. .............. 238,525
------------
1,419,529
------------
</TABLE>
Continued
67
<PAGE> 70
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
METAL -- MISCELLANEOUS -- 0.0%
7,700 Cyprus Amax Minerals Co. ....... $ 102,025
13,700 Inco, Ltd. ..................... 186,663
------------
288,688
------------
METAL -- NON-FERROUS -- 0.3%
18,650 Alcan Aluminum, Ltd. ........... 515,206
14,100 Aluminum Co. of America......... 929,719
3,300 Asarco, Inc. ................... 73,425
15,900 Freeport-McMoran Copper & Gold,
Inc.-Class B.................... 241,481
4,800 Phelps Dodge Corp. ............. 274,500
6,100 Reynolds Metals Co. ............ 341,219
------------
2,375,550
------------
METAL -- PROCESSING & FABRICATION -- 0.0%
5,200 Timken Co....................... 160,225
7,925 Worthington Industries, Inc. ... 119,370
------------
279,595
------------
MOVIE/TELEVISION PRODUCTION &
DISTRIBUTION -- 0.0%
6,000 King World Productions, Inc. ... 153,000
------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.2%
37,300 Waste Management Inc. .......... 1,305,500
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.5%
11,044 IKON Office Solutions, Inc. .... 160,828
23,800 Pitney Bowes, Inc. ............. 1,145,375
26,767 Xerox Corp. .................... 2,720,197
------------
4,026,400
------------
OFFICE SUPPLIES & FORMS -- 0.1%
8,400 Avery Dennison Corp. ........... 451,500
6,700 Deluxe Corp. ................... 239,944
7,300 Moore Corp., Ltd. .............. 96,725
------------
788,169
------------
OIL & GAS -- 0.1%
4,900 Anadarko Petroleum Corp. ....... 329,219
7,800 Apache Corp. ................... 245,700
------------
574,919
------------
OIL & GAS -- DRILLING -- 0.4%
7,100 Rowan Cos., Inc. *.............. 138,006
40,800 Schlumberger Ltd. .............. 2,787,150
------------
2,925,156
------------
OIL -- FIELD SERVICES -- 0.2%
21,500 Halliburton Co. ................ 958,093
4,500 Western Atlas *................. 381,938
------------
1,340,031
------------
OIL -- INTERNATIONAL INTEGRATED -- 4.9%
53,900 Chevron Corp. .................. 4,477,069
202,300 Exxon Corp. .................... 14,426,518
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL -- INTERNATIONAL INTEGRATED (CONTINUED)
64,300 Mobil Corp. .................... $ 4,926,987
175,900 Royal Dutch Petroleum Co., ADR.. 9,641,518
45,000 Texaco, Inc. ................... 2,685,938
------------
36,158,030
------------
OIL -- PRODUCTION/PIPELINE -- 0.5%
8,750 Coastal Corp. .................. 610,859
6,750 Columbia Gas System, Inc. ...... 375,469
26,900 Enron Corp. .................... 1,454,281
9,000 Sonat, Inc. .................... 347,625
33,700 Williams Co. ................... 1,137,375
------------
3,925,609
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.1%
14,465 Burlington Resources, Inc. ..... 622,899
4,100 Helmerich & Payne, Inc. ........ 91,225
20,823 Union Pacific Resources Group,
Inc. ........................... 365,704
------------
1,079,828
------------
OIL -- U.S. INTEGRATED -- 1.3%
7,500 Amerada Hess Corp. ............. 407,344
79,900 Amoco Corp. .................... 3,325,837
26,300 Atlantic Richfield Co. ......... 2,054,687
3,900 Kerr-Mcgee Corp. ............... 225,713
27,800 Occidental Petroleum Corp. ..... 750,600
3,900 Pennzoil Co. ................... 197,438
21,600 Phillips Petroleum Co. ......... 1,040,850
20,200 Unocal Corp. ................... 722,150
23,700 USX-Marathon Group.............. 813,206
------------
9,537,825
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.2%
13,900 Baker Hughes, Inc. ............. 480,419
14,400 Dresser Industries, Inc. ....... 634,499
5,000 McDermott International, Inc. .. 172,188
------------
1,287,106
------------
OIL REFINING -- 0.1%
6,200 Ashland, Inc. .................. 320,075
7,774 Sun Co., Inc. .................. 301,728
------------
621,803
------------
PAINTS & RELATED PRODUCTS -- 0.1%
14,200 Sherwin-Williams Co. ........... 470,375
------------
PAPER & RELATED PRODUCTS -- 0.6%
4,608 Boise Cascade Corp. ............ 150,912
7,900 Champion International Co. ..... 388,581
17,100 Fort James Corp. ............... 760,950
7,600 Georgia Pacific Corp. .......... 447,925
24,824 International Paper Co. ........ 1,067,432
8,600 Mead Corp. ..................... 273,050
2,400 Potlatch Corp. ................. 100,800
8,146 Stone Container Corp. *......... 127,281
4,600 Temple-Inland, Inc. ............ 247,825
</TABLE>
Continued
68
<PAGE> 71
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PAPER & RELATED PRODUCTS (CONTINUED)
5,700 Union Camp Corp. ............... $ 282,863
8,350 Westvaco Corp. ................. 235,888
9,100 Williamette Industries, Inc. ... 291,200
------------
4,374,707
------------
PHOTOGRAPHY -- 0.3%
26,700 Eastman Kodak Co. .............. 1,950,769
3,689 Polaroid Corp. ................. 131,190
------------
2,081,959
------------
POLLUTION CONTROL -- 0.1%
15,900 Browning-Ferris Industries,
Inc. ........................... 552,524
27,000 Laidlaw, Inc. .................. 329,063
10,199 Pall Corp. ..................... 209,080
------------
1,090,667
------------
PRINTING -- COMMERCIAL -- 0.1%
12,000 R.R. Donnelley & Sons Co. ...... 549,000
------------
PROTECTION -- SAFETY -- 0.4%
46,900 Tyco International Ltd. ........ 2,954,700
------------
PUBLISHING -- BOOKS -- 0.1%
8,100 McGraw-Hill Cos., Inc. ......... 660,656
------------
PUBLISHING -- NEWSPAPERS -- 0.6%
7,900 Dow Jones & Co. ................ 440,425
23,300 Gannett, Inc. .................. 1,655,756
6,900 Knight-Ridder, Inc. ............ 379,931
7,900 New York Times Co. ............. 626,075
7,300 Times Mirror Co. ............... 458,988
10,100 Tribune Co. .................... 695,006
------------
4,256,181
------------
PUBLISHING -- PERIODICALS -- 0.0%
4,300 Meredith Corp. ................. 201,831
------------
RESTAURANTS -- 0.6%
12,200 Darden Restaurants, Inc. ....... 193,675
56,500 McDonald's Corp. ............... 3,898,500
12,410 Tricon Global Restaurants *..... 393,242
10,800 Wendy's International, Inc. .... 253,800
------------
4,739,217
------------
RETAIL -- 0.0%
8,800 Consolidated Stores *........... 319,000
------------
RETAIL -- APPAREL/SHOES -- 0.5%
32,450 Gap, Inc. ...................... 1,999,731
22,078 Limited, Inc. .................. 731,334
6,300 Nordstrom, Inc. ................ 486,675
26,400 TJX Companies, Inc. *........... 636,900
11,100 Venator Group, Inc. ............ 212,288
------------
4,066,928
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
8,100 Circuit City Stores, Inc. ...... 379,688
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- DISCOUNT -- 2.1%
17,550 Costco. Cos., Inc. *............ $ 1,106,747
35,900 Dayton-Hudson Corp. ............ 1,741,150
40,000 Kmart Corp. *................... 770,000
23,250 Toys 'R' Us, Inc. *............. 547,828
184,200 Wal-Mart Stores, Inc. .......... 11,190,149
------------
15,355,874
------------
RETAIL -- DRUG STORE -- 0.5%
28,200 CVS Corp.*...................... 1,098,038
3,200 Longs Drug Stores Corp. ........ 92,400
21,200 Rite Aid Corp. *................ 796,325
40,600 Walgreen Co. ................... 1,677,287
------------
3,664,050
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.7%
5,816 Harcourt General, Inc. *........ 346,052
20,500 J.C. Penney, Inc. .............. 1,482,406
19,000 May Department Stores Co. ...... 1,244,500
32,175 Sears, Roebuck & Co. ........... 1,964,686
------------
5,037,644
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
9,100 Dillards Department Stores,
Inc. ........................... 377,081
17,200 Federated Department Stores,
Inc. *.......................... 925,575
3,000 Mercantile Stores Co. .......... 236,813
------------
1,539,469
------------
RETAIL -- SUPERMARKETS -- 0.5%
20,100 Albertsons, Inc. *.............. 1,041,430
22,400 American Stores Co. ............ 541,800
4,900 Giant Food Inc. ................ 211,006
3,100 Great Atlantic & Pacific Tea
Co., Inc. ...................... 102,494
20,900 Kroger Co. *.................... 896,088
12,200 Winn-Dixie Stores, Inc. *....... 624,488
------------
3,417,306
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.1%
12,500 Autozone, Inc. *................ 399,219
5,200 Pep Boys -- Manny, Moe & Jack *. 98,475
------------
497,694
------------
RETAIL/WHOLESALE -- COMPUTERS -- 0.1%
8,528 Tandy Corp. .................... 452,517
------------
RUBBER -- TIRES -- 0.1%
6,500 Cooper Tire & Rubber Co. ....... 134,063
12,800 Goodyear Tire & Rubber Co. ..... 824,800
------------
958,863
------------
</TABLE>
Continued
69
<PAGE> 72
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SHOES & RELATED APPAREL -- 0.2%
23,800 Nike, Inc., Class B............. $ 1,158,762
4,600 Reebok International Ltd. *..... 127,363
------------
1,286,125
------------
SOAP & CLEANING PREPARATIONS -- 1.7%
8,500 Clorox, Inc. ................... 810,688
24,300 Colgate-Palmolive Co. .......... 2,138,400
110,100 Procter & Gamble Co. ........... 10,025,980
------------
12,975,068
------------
STEEL -- PRODUCERS -- 0.1%
8,900 Armoc, Inc. *................... 56,738
10,500 Bethlehem Steel Corp. *......... 130,594
7,200 Nucor Corp. .................... 331,199
7,040 USX-U.S. Steel Group, Inc. ..... 232,320
------------
750,851
------------
TECHNOLOGY -- SOFTWARE -- 0.0%
3,800 Auto Desk *..................... 146,775
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.4%
46,300 Airtouch Communications, Inc. *. 2,705,656
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 2.2%
7,255 Andrew Corp. *.................. 131,043
5,800 Ascend Communications, Inc. *... 287,463
9,700 DSC Communications Corp. *...... 291,000
12,100 General Instrument Corp. *...... 328,969
6,600 Harris Corp. ................... 294,938
106,746 Lucent Technologies, Inc. ...... 8,879,932
49,000 Motorola, Inc. ................. 2,575,562
42,700 Northern TeleCom Ltd. .......... 2,423,224
6,500 Scientific-Atlanta, Inc. ....... 164,938
14,900 Tellabs, Inc. *................. 1,067,213
------------
16,444,282
------------
TEXTILE -- APPAREL -- 0.1%
6,000 Fruit of the Loom, Inc. *....... 199,125
5,500 Liz Claiborne, Inc. *........... 287,375
3,000 Russell Corp. .................. 90,563
10,000 VF Corp. ....................... 514,375
------------
1,091,438
------------
TEXTILE -- HOME FURNISHINGS -- 0.0%
1,700 Springs Industries, Inc. ....... 78,413
------------
TOBACCO -- 1.2%
14,100 Fortune Brands, Inc. ........... 541,969
198,900 Philip Morris Cos., Inc. ....... 7,831,687
15,100 U.S.T., Inc. ................... 407,700
------------
8,781,356
------------
TOOLS -- HAND HELD -- 0.1%
7,800 Black & Decker Corp. ........... 475,800
4,950 Snap-On, Inc. .................. 179,438
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
7,300 The Stanley Works............... $ 303,406
------------
958,644
------------
TOYS/GAME/HOBBY -- 0.2%
10,900 Hasbro, Inc. ................... 428,506
23,847 Mattel, Inc. ................... 1,009,026
------------
1,437,532
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
12,060 FDX Corp. *..................... 756,765
------------
TRANSPORTATION -- AIRLINE -- 0.4%
15,000 AMR Corp. *..................... 1,248,750
6,100 Delta Air Lines, Inc. .......... 788,425
18,150 Southwest Airlines Co. ......... 537,694
7,500 US Airways Group, Inc. *........ 594,375
------------
3,169,244
------------
TRANSPORTATION -- EQUIPMENT & LEASING -- 0.0%
6,300 Ryder Systems, Inc. ............ 198,844
------------
TRANSPORTATION -- RAILROAD -- 0.5%
12,800 Burlington Northern Santa Fe
Corp. .......................... 1,256,800
17,908 CSX Corp. ...................... 814,814
30,900 Norfolk Southern Corp. ......... 921,206
20,300 Union Pacific Corp. ............ 895,738
------------
3,888,558
------------
UTILITIES -- ELECTRIC POWER -- 2.1%
11,300 Ameren Corp. ................... 449,175
15,600 American Electric Power Co. .... 707,850
12,100 Baltimore Gas & Electric Co. ... 375,856
12,300 Carolina Power & Light Co. *.... 533,513
17,400 Central & South West Corp. ..... 467,625
12,935 CINergy Corp. .................. 452,725
19,300 Consolidated Edison, Inc. ...... 889,006
11,900 Detroit Edison Co. ............. 480,463
15,850 Dominion Resources, Inc. ....... 645,888
29,506 Duke Power Co. *................ 1,748,230
31,300 Edison International............ 925,305
20,000 Entergy Corp. .................. 575,000
18,900 First Energy Corp. ............. 581,175
14,900 Florida Power & Light, Inc. .... 938,699
10,400 General Public Utilities Corp.
*............................... 393,250
23,144 Houston Industries, Inc. ....... 714,571
11,800 Niagara Mohawk Power Corp. *.... 176,263
12,200 Northern States Power Co. ...... 349,225
24,300 PacifiCorp. .................... 549,788
18,300 Peco Energy Corp. .............. 534,131
13,600 PP&L Resources, Inc. ........... 308,550
56,600 Southern Co. ................... 1,567,112
20,170 Texas Utilities Co. ............ 839,576
17,800 Unicom Corp. ................... 624,113
------------
15,827,089
------------
</TABLE>
Continued
70
<PAGE> 73
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (CONTINUED)
UTILITIES -- GAS DISTRIBUTION -- 0.2%
7,800 Consolidated Natural Gas Co. *.. $ 459,224
1,700 Eastern Enterprises............. 72,888
4,000 Nicor, Inc. .................... 160,500
2,500 ONEOK, Inc. .................... 99,688
2,900 People's Energy Corp. .......... 112,013
10,226 Sempra Energy *................. 283,767
------------
1,188,080
------------
UTILITIES -- TELEPHONE -- 6.4%
15,100 Alltel Corp. ................... 702,150
89,800 Ameritech Corp. ................ 4,029,775
133,256 AT&T Corp. ..................... 7,612,248
127,440 Bell Atlantic Corp. ............ 5,814,450
81,300 BellSouth Corp. ................ 5,457,263
13,500 Frontier Corp. *................ 425,250
78,600 GTE Corp. ...................... 4,372,125
57,100 MCI Communications Corp. ....... 3,318,938
21,600 Nextel Communications, Inc. --
Class A *....................... 537,300
150,418 SBC Communications, Inc. ....... 6,016,719
35,300 Sprint Corp. ................... 2,488,650
40,960 US West, Inc. .................. 1,925,120
83,100 Worldcom, Inc. *................ 4,025,156
------------
46,725,144
------------
TOTAL COMMON STOCKS............. 732,237,509
------------
(Cost $445,894,497)
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
INVESTMENT COMPANIES -- 1.2%
4,553,156 Dreyfus Cash Management Money
Market Fund..................... $ 4,553,156
4,594,644 Federated Prime Value
Obligations Money Market Fund... 4,594,644
------------
TOTAL INVESTMENT COMPANIES...... 9,147,800
------------
(Cost $9,147,800)
TOTAL INVESTMENTS -- 99.9%.................. 741,385,309
(Cost $455,042,297)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1%....................... 652,046
------------
TOTAL NET ASSETS -- 100.0%.................. $742,037,355
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $297,256,997
Unrealized depreciation............... (10,913,985)
------------
Net unrealized appreciation........... $286,343,012
============
</TABLE>
(b) Security has been deposited as initial margin on open future contracts.
* Non-income producing security.
ADR American Depositary Receipt
At June 30, 1998, the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------------------- ----------------- ---------- ----------
<S> <C> <C> <C>
32 Standard & Poor's $8,848,570 $9,144,000
500, 9/17/98
</TABLE>
See Notes to Financial Statements.
71
<PAGE> 74
SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS -- 61.8%
AEROSPACE -- 4.5%
$ 6,000,000 Boeing Capital Corp., 6.83%,
05/21/01....................... $ 6,092,040
------------
AUTOMOTIVE PARTS -- REPLACEMENT -- 3.7%
5,000,000 Ford Motor Credit Co., 6.13%,
04/28/03....................... 5,000,350
------------
BANKING -- 7.4%
5,000,000 ABN Amro Bank, 6.63%,
10/31/01....................... 5,094,790
5,000,000 Bankers Trust Corp., 5.85%,
5/11/00........................ 4,995,100
------------
10,089,890
------------
BROKERS -- 7.3%
6,000,000 Morgan Stanley Group, Inc.,
6.50%, 3/30/01................. 6,092,100
3,750,000 Salomon, Inc., 6.50%, 3/1/00... 3,778,500
------------
9,870,600
------------
FINANCE -- 22.6%
5,000,000 Associates Corp. N.A., 8.19%,
11/10/99....................... 5,160,150
5,000,000 Bear Stearns Co., Inc., 6.50%,
7/5/00......................... 5,045,100
5,000,000 Household International, 7.28%,
7/22/99........................ 5,074,500
5,000,000 MCN Investment Corp., 6.89%,
1/16/02........................ 5,143,400
5,000,000 Merrill Lynch & Co., Inc.,
6.64%, 09/19/02................ 5,109,400
5,000,000 Norwest Financial, Inc., 7.88%,
2/15/02........................ 5,300,300
------------
30,832,850
------------
INDUSTRIAL GOODS & SERVICES -- 8.8%
4,375,000 Enron Corp., 6.45%, 11/15/01... 4,406,894
3,500,000 Pepsico, Inc., 6.25%, 9/1/99... 3,515,610
4,000,000 SuperValu, Inc., 7.25%,
7/15/99........................ 4,041,960
------------
11,964,464
------------
PHARMACEUTICALS -- 3.8%
5,000,000 American Home Products Corp.,
7.70%, 2/15/00................. 5,139,000
------------
UTILITIES -- 3.7%
5,000,000 Georgia Power Co., First
Mortgage, 6.13%, 9/1/99........ 5,011,750
------------
TOTAL CORPORATE NOTES & BONDS.. 84,000,944
------------
(Cost $83,433,308)
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.4%
$ 5,000,000 Federal Home Loan Bank, 5.81%,
11/4/99........................ $ 5,009,350
5,000,000 Federal National Mortgage
Assoc., 6.03%, 7/2/99.......... 5,021,850
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 10,031,200
------------
(Cost $9,993,758)
U.S. GOVERNMENT OBLIGATIONS -- 21.1%
U.S. TREASURY NOTES -- 21.1%
2,000,000 5.00%, 02/15/99................ 1,994,060
20,000,000 7.50%, 10/31/99................ 20,496,799
2,250,000 6.00%, 8/15/00................. 2,271,443
3,750,000 6.63%, 7/31/01................. 3,863,663
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 28,625,965
------------
(Cost $28,342,265)
INVESTMENT COMPANIES -- 8.1%
4,966,973 Dreyfus Cash Management Money
Market Fund.................... 4,966,973
6,091,612 Federated Prime Value
Obligations Money Market Fund.. 6,091,612
------------
TOTAL INVESTMENT COMPANIES.................. 11,058,585
------------
(Cost $11,058,585)
TOTAL INVESTMENTS -- 98.4%.................. 133,716,693
------------
(Cost $132,827,916)(a)
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6%.. 2,158,254
------------
TOTAL NET ASSETS -- 100.0%.................. $135,874,947
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $ 1,114,076
Unrealized depreciation............... (225,299)
------------
Net unrealized appreciation........... $ 888,777
============
</TABLE>
See Notes to Financial Statements.
72
<PAGE> 75
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS -- 27.9%
BANKING -- 9.5%
$6,000,000 Bank of Montreal-Chicago,
7.80%, 4/1/07.................. $ 6,599,160
10,000,000 Bankers Trust Corp., 5.85%,
5/11/00........................ 9,990,200
10,000,000 Chase Manhattan Corp., 6.75%,
9/15/06........................ 10,391,500
8,000,000 Chase Manhattan Corp.-New,
6.50%, 1/15/09................. 8,136,160
8,000,000 Dresdner Bank New York, 7.25%,
9/15/15........................ 8,467,040
5,000,000 J.P. Morgan & Co., 7.63%,
9/15/04........................ 5,348,800
5,000,000 MBNA American Bank NA, 7.25%,
9/15/02........................ 5,163,650
5,000,000 MBNA Master Credit Card Trust,
5.77%, 8/15/05................. 5,001,550
5,000,000 NCNB Corp., 9.38%, 9/15/09..... 6,176,650
7,000,000 Societe Generale New York,
9.88%, 7/15/03................. 8,061,060
------------
73,335,770
------------
BROKERS -- 0.6%
5,000,000 Salomon, Inc., 5.64%*, 2/15/99. 5,017,000
------------
FINANCE -- 10.2%
5,000,000 Associates Corp., N.A.,
6.52%,10/11/02................. 5,113,850
5,500,000 Bear Stearns Co., 6.75%,
4/15/03........................ 5,620,505
5,000,000 First Union Institutional
Capital I, 8.04%, 12/1/26,
Callable 12/1/06 @ 104.02...... 5,372,650
10,000,000 Ford Capital Guaranteed Notes,
9.88%, 5/15/02................. 11,237,000
8,400,000 Ford Motor Credit Corp., 9.03%,
12/30/09, Callable 12/30/04 @
100............................ 9,627,912
5,000,000 General Electric Capital Corp.,
6.66%*, 5/1/18, Putable 5/1/00
@ 100.......................... 5,063,650
5,000,000 Household Finance Corp., 8.00%,
8/1/04......................... 5,427,350
8,000,000 HSBC America Capital II, 8.38%,
5/15/27, Callable 5/15/07 @
104.19......................... 8,841,040
5,000,000 Lehman Brothers, Inc., 7.38%,
1/15/07........................ 5,268,000
7,000,000 Safeco, 6.88%, 7/15/07 (b)..... 7,314,720
5,000,000 Salomon Smith Barney, 7.13%,
10/1/06........................ 5,279,550
5,100,000 Travelers Group Inc, 6.88%,
12/15/03....................... 5,211,996
------------
79,378,223
------------
INDUSTRIAL GOODS & SERVICES -- 4.1%
4,000,000 Boston Scientific, 6.63%,
3/15/05........................ 4,042,320
11,500,000 Champion International Corp.,
7.70%, 12/15/99................ 11,758,175
6,000,000 ConAgra, Inc., 6.70%, 8/1/27... 6,190,620
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (CONTINUED)
INDUSTRIAL GOODS & SERVICES (CONTINUED)
$10,000,000 SuperValue, Inc., 7.25%,
7/15/99........................ $ 10,104,900
------------
32,096,015
------------
INSURANCE -- 0.6%
5,000,000 American Annuity Group, 6.88%,
6/1/08......................... 5,015,400
------------
TELECOMMUNICATIONS -- 0.9%
6,000,000 Bell Canada, 7.75%, 4/1/06..... 6,603,120
------------
TRANSPORTATION -- AIRLINE -- 1.3%
10,000,000 Boeing Capital Corp., 6.30%,
10/20/99....................... 10,024,800
------------
UTILITIES -- 0.7%
5,000,000 Western Resorces, Inc., 6.88%,
8/1/04......................... 5,110,950
------------
TOTAL CORPORATE NOTES & BONDS.. 216,581,278
------------
(Cost $210,496,007)
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 9.7%
FEDERAL FARM CREDIT BANK -- 1.3%
10,000,000 6.30%, 9/23/04................. 10,278,100
------------
FEDERAL HOME LOAN BANK -- 0.7%
5,000,000 6.49%, 1/8/04.................. 5,182,800
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 1.9%
10,410,000 8.12%, 1/31/05................. 11,722,597
3,000,000 7.22%, 6/14/06................. 3,262,500
------------
14,985,097
------------
FANNIE MAE -- 5.1%
7,950,000 7.35%, 3/28/05................. 8,624,478
10,000,000 5.75%, 6/15/05................. 9,989,100
9,100,000 6.00%, 11/15/22................ 9,074,338
12,000,000 6.25%, 11/18/23................ 12,112,440
------------
39,800,356
------------
TENNESSEE VALLEY AUTHORITY: -- 0.7%
5,000,000 6.25%, 12/15/17................ 5,159,350
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 75,405,703
------------
(Cost $73,124,031)
U.S. GOVERNMENT OBLIGATIONS -- 58.0%
U.S. TREASURY BONDS -- 2.9%
19,500,000 9.13%, 5/15/09................. 22,839,375
------------
U.S. TREASURY NOTES -- 51.9%
5,800,000 5.13%, 11/30/98................ 5,795,476
5,000,000 8.88%, 2/15/99................. 5,101,550
33,000,000 6.25%, 3/31/99................. 33,190,740
62,000,000 6.38%, 5/15/99................. 62,445,780
28,250,000 7.75%, 1/31/00................. 29,185,640
23,050,000 6.88%, 3/31/00................. 23,561,480
24,000,000 8.75%, 8/15/00................. 25,530,000
33,500,000 6.25%, 8/31/00................. 33,992,115
56,000,000 6.50%, 5/31/01................. 57,434,720
13,300,000 6.25%, 10/31/01................ 13,576,374
</TABLE>
Continued
73
<PAGE> 76
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (CONTINUED)
U.S. TREASURY NOTES (CONTINUED)
$77,000,000 7.50%, 11/15/01................ $ 81,559,940
21,700,000 7.50%, 2/15/05................. 24,019,079
6,000,000 7.00%, 7/15/06................. 6,552,180
------------
401,945,074
------------
U.S. TREASURY STRIPS -- 3.2%
36,500,000 5/15/05........................ 25,055,425
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 449,839,874
(Cost $448,462,634) ------------
YANKEE CERTIFICATES OF DEPOSIT -- 1.3%
10,000,000 Potash Corp. Saskatchewan,
7.13%, 6/15/07................. 10,401,600
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT........................ 10,401,600
(Cost $10,026,500) ------------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ----------- ------
<C> <S> <C>
INVESTMENT COMPANIES -- 1.6%
5,816,062 Dreyfus Cash Management Money
Market Fund.................... $ 5,816,062
6,705,230 Federated Prime Value
Obligations Money Market Fund.. 6,705,230
------------
TOTAL INVESTMENT COMPANIES..... 12,521,292
(Cost $12,521,292) ------------
TOTAL INVESTMENTS -- $98.6%................. 764,749,746
(Cost $754,630,464) (a)
OTHER ASSETS IN EXCESS OF LIABILITIES 1.4%.. 10,671,311
------------
TOTAL NET ASSETS -- 100.0%.................. $775,421,057
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................ $11,964,632
Unrealized depreciation................ (1,845,350)
-----------
Net unrealized appreciation............ $10,119,282
===========
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
See Notes to Financial Statements.
74
<PAGE> 77
INCOME FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS -- 38.8%
AUTOMOTIVE -- 1.5%
$4,000,000 Ford Motor Co., 6.63%,
2/15/28........................ $ 4,003,320
------------
BANKING -- 14.0%
2,700,000 Bank of Montreal-Chicago,
7.80%, 4/1/07.................. 2,969,622
2,000,000 Bank of New York, 8.50%,
12/15/04....................... 2,222,120
2,000,000 BankAmerica Corp., 7.20%,
4/15/06........................ 2,113,020
2,000,000 Chase Manhattan Corp., 7.13%,
3/1/05......................... 2,088,500
3,000,000 Dresdner Bank New York, 7.25%,
9/15/15........................ 3,175,140
2,000,000 Fleet/Norstar Group, 8.63%,
1/15/07........................ 2,299,600
2,000,000 Midland Bank PLC, 7.63%,
6/15/06........................ 2,138,480
3,000,000 National City Bank of
Cleveland, 7.25%, 7/15/10...... 3,276,870
5,000,000 NCNB Corp., 10.20%, 7/15/15.... 6,871,499
2,250,000 PNC Bank N.A., 7.88%,
4/15/05........................ 2,449,868
2,000,000 Republic New York Corp., 7.00%,
3/22/11........................ 2,109,420
2,000,000 Southtrust Bank NA, 6.57%,
12/15/27....................... 2,059,220
2,000,000 Swiss Bank Corp.-New York,
7.38%, 7/15/15................. 2,186,640
------------
35,959,999
------------
BROKERS -- 0.8%
2,000,000 Salomon, Inc., 6.75%,
2/15/03........................ 2,040,140
------------
FINANCE -- 8.1%
3,500,000 British Gas Finance, 6.63%,
06/01/18....................... 3,510,150
2,000,000 Discover Credit, 9.26%,
03/20/12....................... 2,548,720
2,000,000 Ford Motor Credit Corp., 9.03%,
12/30/09, Callable 12/30/04 @
100............................ 2,292,360
3,500,000 Great Western Financial Trust
II, 8.21%, 2/1/27, Callable
2/1/07 @ 104.1................. 3,822,980
2,000,000 HSBC America Capital II, 8.38%,
5/15/27, Callable 5/15/07 @
104.19......................... 2,210,260
2,000,000 Lehman Brothers Holdings, Inc.,
8.75%, 3/15/05................. 2,258,600
4,000,000 St. Paul Cos, Inc., 7.25%,
8/9/07......................... 4,347,320
------------
20,990,390
------------
GAS TRANSMISSION -- 1.0%
2,500,000 Enserch Corp., 7.13%,
6/15/05........................ 2,601,000
------------
INDUSTRIAL GOODS & SERVICES -- 6.0%
2,000,000 ConAgra, Inc., 6.70%, 8/1/27... 2,063,540
5,000,000 Cyprus Amax, 7.38%, 5/15/07.... 5,074,150
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (CONTINUED)
INDUSTRIAL GOODS & SERVICES (CONTINUED)
$3,000,000 Engelhard Corp., 7.38%,
8/1/06......................... $ 3,198,660
2,000,000 General Motors Corp., 9.13%,
7/15/01........................ 2,158,200
2,950,000 Raytheon Co., 6.75%, 8/15/07... 3,025,019
------------
15,519,569
------------
INSURANCE -- 0.9%
2,000,000 Travelers Capital III, 7.63%,
12/1/36........................ 2,231,980
------------
OIL & GAS -- 2.4%
5,000,000 Phillips Petroleum, 9.38%,
2/15/11........................ 6,276,150
------------
RETAIL -- 1.9%
4,818,254 Fred Meyer, Inc., Lease Trust,
8.50%, 7/15/17................. 5,039,894
------------
TELECOMMUNICATIONS -- 1.4%
3,500,000 GTE Florida, Inc., 6.86%,
2/1/28......................... 3,670,100
------------
UTILITIES -- 0.8%
2,000,000 Pacific Gas & Electric, 6.25%,
3/1/04......................... 2,017,220
------------
TOTAL CORPORATE NOTES & BONDS.. 100,349,762
(Cost $95,019,530) ------------
FOREIGN GOVERNMENT AGENCIES -- 0.4%
1,000,000 Hydro-Quebec, 9.41%, 3/23/00... 1,056,300
------------
TOTAL FOREIGN GOVERNMENT
AGENCIES....................... 1,056,300
(Cost $1,059,483) ------------
MUNICIPAL BOND -- TAXABLE -- 0.8%
2,000,000 San Bernardino County,
Financing Authority Pension
Obligation Revenue, 6.99%,
8/1/10 (Insured by MBIA)....... 2,125,000
------------
TOTAL MUNICIPAL BOND --
TAXABLE........................ 2,125,000
(Cost $2,030,920) ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.5%
FEDERAL HOME LOAN MORTGAGE CORP. -- 1.1%
2,500,000 7.22%, 6/14/06................. 2,718,750
------------
FANNIE MAE -- 3.4%
5,000,000 7.40%, 7/1/04.................. 5,407,050
3,500,000 6.25%, 11/18/23................ 3,532,795
------------
8,939,845
------------
TENNESSEE VALLEY AUTHORITY -- 2.0%
5,000,000 6.25%, 12/15/17................ 5,159,350
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 16,817,945
(Cost $15,956,484) ------------
</TABLE>
Continued
75
<PAGE> 78
INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS -- 46.7%
$29,500,000 U.S. Treasury Bond, 11.88%,
11/15/03....................... $ 38,018,125
9,500,000 U.S. Treasury Bond, 10.75%,
8/15/05........................ 12,360,355
6,230,000 U.S. Treasury Bond, 7.25%,
5/15/16........................ 7,298,819
11,000,000 U.S. Treasury Bond, 8.75%,
5/15/20........................ 15,104,320
12,200,000 U.S. Treasury Note, 6.75%,
6/30/99........................ 12,346,766
30,000,000 U.S. Treasury Note, 8.00%,
5/15/01........................ 31,940,700
7,300,000 U.S. Treasury Note, Zero
Coupon, 5/15/10................ 3,750,083
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 120,819,168
------------
(Cost $119,869,343)
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ------ ----------- ------
<C> <S> <C>
INVESTMENT COMPANIES -- 5.3%
6,135,328 Dreyfus Cash Management Money
Market Fund.................... $ 6,135,328
7,598,073 Federated Prime Value
Obligations Money Market Fund.. 7,598,073
------------
TOTAL INVESTMENT COMPANIES..... 13,733,401
(Cost $13,733,401) ------------
TOTAL INVESTMENTS -- $98.5%................. 254,901,575
(Cost $247,669,161) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5%....................... 3,928,204
------------
TOTAL NET ASSETS -- 100.0%.................. $258,829,779
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................ $7,433,591
Unrealized depreciation................ (201,177)
----------
Net unrealized appreciation............ $7,232,414
==========
</TABLE>
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
76
<PAGE> 79
LIMITED TERM TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS -- 97.6%
ALASKA -- 1.4%
$ 530,000 Alaska State Housing Finance
Corp., 4.60%, 12/1/00 (Insured
by MBIA)........................ $ 537,950
------------
ARIZONA -- 2.9%
1,000,000 Arizona State University
Revenue, 7.10%, 7/1/16,
Prerefunded 7/1/01 @ 102........ 1,103,750
------------
ARKANSAS -- 2.7%
1,000,000 Arkansas State Economic
Development, 5.00%, 2/01/03,
(Insured by AMBAC).............. 1,027,500
------------
CALIFORNIA -- 3.2%
1,000,000 University of California
Revenue, Multiple Purpose
Projects, Series B, 9.00%,
9/1/03 (Insured by MBIA)........ 1,216,250
------------
COLORADO -- 1.3%
500,000 Colorado Housing Finance
Authority, 4.50%, 11/1/05....... 498,125
------------
CONNECTICUT -- 2.8%
1,000,000 Connecticut State, GO, Series C,
5.38%, 8/15/02.................. 1,048,750
------------
DISTRICT OF COLUMBIA -- 2.7%
1,000,000 District of Columbia, GO, 5.10%,
12/1/99 (Insured by MBIA)....... 1,016,250
------------
ILLINOIS -- 7.7%
1,000,000 Chicago Metropolitan Water
Reclamation District, Working
Cash Fund, 5.90%, 12/1/04....... 1,086,250
1,000,000 Illinois Educational Facilities
Authority Revenue, Loyola
University, Series A, 6.30%,
7/1/98 (Insured by MBIA)........ 1,000,000
745,000 University of Illinois Revenue,
Health Service Facility, 4.90%,
10/1/01 (Insured by AMBAC)...... 762,694
------------
2,848,944
------------
INDIANA -- 3.0%
1,100,000 Greenwood Indiana School
Building Corp., 4.75%,
7/15/07......................... 1,122,000
------------
KENTUCKY -- 2.7%
1,000,000 Kentucky State Property &
Buildings Commission, Project
No. 53, 5.80%, 10/1/98.......... 1,005,140
------------
LOUISIANA -- 2.7%
1,000,000 Louisiana State Gas & Fuels Tax
Revenue, Series A, 7.00%,
11/15/98 (Insured by FGIC)...... 1,011,610
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN -- 19.1%
$1,235,000 Detroit, GO, 8.00%, 4/1/11,
Prerefunded 4/1/01 @ 102........ $ 1,383,200
1,050,000 Flint Michigan Hospital Building
Authority Revenue, 5.00%,
7/1/03.......................... 1,063,125
1,000,000 Michigan State Hospital Finance
Authority Revenue, Detroit
Medical Group, Series A, 5.00%,
8/15/06, (Insured by AMBAC)..... 1,030,000
1,600,000 Michigan State Hospital Finance
Authority Revenue, Sisters of
Mercy Health Corp. Bond 1993,
Series F, 4.60%, 8/15/02
(Insured by MBIA)............... 1,620,000
1,000,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, 5.15%, 10/1/00
(Insured by MBIA)............... 1,021,250
1,000,000 Michigan Strategic Fund, Dow
Chemical Project, 3.80%*,
2/1/09.......................... 1,000,000
------------
7,117,575
------------
NEVADA -- 2.9%
1,090,000 Las Vegas, GO, 6.75%, 8/1/98
(Insured by MBIA)............... 1,092,267
------------
NEW JERSEY -- 3.0%
1,000,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Series A 1994,
7.00%, 7/1/03 (Insured by
MBIA)........................... 1,125,000
------------
NEW MEXICO -- 2.7%
1,000,000 Albuquerque New Mexico Gross
Receipts Tax, 5.375%, 7/1/01,
Callable 7/1/99 @ 100 (Insured
by MBIA)........................ 1,013,930
------------
NEW YORK -- 2.7%
1,000,000 New York State Dormitory
Authority Revenue, State
University Educational
Facilities, 4.70%, 5/15/99...... 1,007,560
------------
OHIO -- 4.3%
500,000 Cleveland Airport System
Revenue, 5.50%, 1/1/04, (Insured
by FSA)......................... 528,125
565,000 Cleveland-Cuyahoga County Port
Authority, Rock & Roll Hall of
Fame, Refunding, Subordinated
Bonds, 4.30%, 12/1/98........... 566,396
500,000 Cleveland-Cuyahoga County Port
Authority, Rock & Roll Hall of
Fame, Refunding, Subordinated
Bonds, 4.90%, 12/1/00........... 507,500
------------
1,602,021
------------
</TABLE>
Continued
77
<PAGE> 80
LIMITED TERM TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
OKLAHOMA -- 3.1%
$1,115,000 Tulsa Industrial Authority
Revenue, University of Tulsa,
Series A, 5.50%, 10/1/00
(Insured by MBIA)............... $ 1,152,631
------------
PENNSYLVANIA -- 5.4%
1,000,000 Allegheny County Airport
Revenue, Pittsburgh
International Airport, 5.00%,
1/1/99 (Insured by MBIA)........ 1,005,090
1,000,000 Pennsylvania State, First
Series, GO, 5.00%, 5/1/99....... 1,011,470
------------
2,016,560
------------
TEXAS -- 5.6%
1,000,000 Houston Independent School
District, GO, Public Property
Finance Contractual Obligation,
6.25%, 7/15/99.................. 1,024,180
1,000,000 Pasadena Independent School
District, GO, 6.75%, 8/15/05,
Prerefunded 8/15/01 @ 100,
(Insured by FGIC)............... 1,077,500
------------
2,101,680
------------
UTAH -- 3.5%
1,310,000 Salt Lake City Redevelopment
Agency, Neighborhood
Redevelopment Tax, Inc.,
Series A, (AMT), 5.25%,
10/1/99......................... 1,329,650
------------
VIRGINIA -- 4.1%
1,500,000 Norfolk, GO, 5.13%, 6/1/01...... 1,541,250
------------
WISCONSIN -- 2.7%
1,000,000 Green Bay, GO, Series A, 5.10%,
4/1/00.......................... 1,020,000
------------
WYOMING -- 5.4%
1,000,000 Campbell County School District,
No. 001 Gillette, GO, 5.15%,
6/1/02.......................... 1,038,750
1,000,000 Wyoming Community Development,
(AMT), 4.45%, 6/1/99, Callable
9/1/98 @ 100, Mandatory Put
6/1/99 @ 100.................... 1,002,680
------------
2,041,430
------------
TOTAL MUNICIPAL BONDS........... 36,597,823
------------
(Cost $35,944,355)
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
INVESTMENT COMPANIES -- 0.9%
$ 350,610 Dreyfus Tax Exempt Money Market
Fund............................ $ 350,610
------------
TOTAL INVESTMENT COMPANIES...... 350,610
------------
(Cost $350,610)
TOTAL INVESTMENTS -- 98.5%.................. 36,948,432
(Cost $36,294,965) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5%....................... 549,143
------------
TOTAL NET ASSETS -- 100.0%.................. $ 37,497,575
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............... $ 660,390
Unrealized depreciation............... (6,923)
------------
Net unrealized appreciation........... $ 653,467
============
</TABLE>
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
<TABLE>
<S> <C>
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
GO General Obligation
MBIA Municipal Bond Insurance Association
</TABLE>
See Notes to Financial Statements.
78
<PAGE> 81
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS -- 95.6%
ALASKA -- 3.1%
$1,520,000 Alaska Municipal Bond Bank
Authority, Series A, GO, 4.75%,
10/1/99......................... $ 1,533,300
1,000,000 Anchorage Electric Utility,
Revenue Bond, Senior Lien,
5.50%, 12/1/03, Callable 6/1/03
@ 102 (Insured by MBIA)......... 1,058,750
1,000,000 Anchorage, GO, 6.30%, 7/1/99
(Insured by MBIA)............... 1,025,430
5,000,000 North Slope Boro, Series B, GO,
7.50%, 6/30/01 (Insured by
FSA)............................ 5,462,500
------------
9,079,980
------------
ARIZONA -- 4.2%
1,750,000 Phoenix, GO, Series A, 4.90%,
7/1/02.......................... 1,800,313
3,065,000 Phoenix, GO, Series A, 6.00%,
7/1/10.......................... 3,474,944
1,500,000 Pima County Unified School
District No. 1 Tucson, Series B,
GO, ETM, 6.80%, 7/1/00.......... 1,580,625
5,000,000 Salt River Project Agricultural
Improvement & Power District
Electric System, Series A,
5.63%, 1/1/06................... 5,399,999
------------
12,255,881
------------
CALIFORNIA -- 6.1%
3,400,000 California State, GO, 6.60%,
2/1/10.......................... 4,016,250
3,000,000 Orange County, Series A, 6.00%,
6/1/10 (Insured by MBIA)........ 3,382,500
2,000,000 Riverside County Transportation
Commission, Sales Tax Revenue,
Series A, 5.60%, 6/1/05 (Insured
by AMBAC)....................... 2,152,500
2,000,000 Turlock Irrigation District
Revenue, Series A, 6.00%, 1/1/06
(Insured by MBIA)............... 2,207,500
4,850,000 University of California
Revenue, Multiple Purpose
Projects, Series B, 9.00%,
9/1/03 (Insured by MBIA)........ 5,898,813
------------
17,657,563
------------
COLORADO -- 2.7%
4,000,000 Arapahoe County, School District
No. 005, Cherry Creek, Series A,
GO, 5.25%, 12/15/02............. 4,180,000
1,400,000 Boulder Valley School District,
5.50%, 12/1/07 (Insured by
FGIC)........................... 1,517,250
1,000,000 Colorado Springs Utility
Revenue, Series A, 6.50%,
11/15/03, Callable 11/15/01 @
102............................. 1,090,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
COLORADO (CONTINUED)
$1,000,000 E-470 Public Highway Authority
Revenue, Series C, 6.00%, 9/1/07
(Insured by MBIA)............... $ 1,113,750
------------
7,901,000
------------
CONNECTICUT -- 1.5%
4,000,000 Connecticut State, Series A,
6.00%, 5/15/02.................. 4,270,000
------------
FLORIDA -- 2.5%
1,000,000 Broward County School District,
GO, 5.20%, 2/15/03.............. 1,042,500
1,625,000 Florida State Board Of
Education, Series B, 6.50%,
06/01/06........................ 1,852,500
2,000,000 Lakeland Electric & Water
Revenue, 5.90%, 10/1/07......... 2,212,500
1,000,000 Tampa Guaranteed Entitlement
Revenue, 6.60%, 10/1/00 (Insured
by AMBAC)....................... 1,057,500
1,000,000 Tampa Utilities, Tax & Special
Revenue, 6.30%, 10/1/00 (Insured
by AMBAC)....................... 1,051,250
------------
7,216,250
------------
GEORGIA -- 2.9%
2,670,000 Atlanta Airport Facilities
Revenue, Series B, (AMT), 5.50%,
1/1/03 (Insured by AMBAC)....... 2,790,150
1,000,000 Georgia State Tollway Authority
Revenue, Georgia 400 Project,
6.25%, 7/1/00................... 1,045,000
4,000,000 Georgia State, Series B, GO,
5.95%, 3/1/08................... 4,485,000
------------
8,320,150
------------
HAWAII -- 1.2%
1,025,000 Honolulu City & County,
Series A, GO, 5.60%, 1/1/05..... 1,092,906
1,000,000 Honolulu City & County,
Series D, GO, ETM, 6.50%,
12/1/00......................... 1,058,750
1,150,000 Maui County, Series A, GO,
6.80%, 12/1/03, Prerefunded
12/1/00 @ 101 (Insured by
AMBAC).......................... 1,236,250
------------
3,387,906
------------
ILLINOIS -- 6.0%
2,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 6.80%, 1/1/03,
Prerefunded 1/1/00 @ 102........ 2,117,500
3,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 5.50%,
12/1/10......................... 3,236,250
4,270,000 Du Page & Will Counties,
Community School District No.
204, GO, 4.95%, 12/30/01
(Insured by FGIC)............... 4,382,087
</TABLE>
Continued
79
<PAGE> 82
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
$4,000,000 Illinois Development Finance
Authority, Pollution Control
Revenue, Commonwealth Edison,
5.30%, 1/15/04 (Insured by
MBIA)........................... $ 4,180,000
3,135,000 Northwest Suburban Municipal
Joint Action, Water Agency,
Water Supply System, Series A,
5.25%, 5/1/04 (Insured by
MBIA)........................... 3,279,994
------------
17,195,831
------------
INDIANA -- 3.6%
1,580,000 Elberfeld JH Castle School
Building Corp., 4.50%, 7/5/04,
(Insured by MBIA)............... 1,593,825
2,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 5.88%, 1/1/10 (Insured by
MBIA)........................... 2,205,000
3,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 6.00%, 1/1/13 (Insured by
MBIA)........................... 3,348,750
1,000,000 Indiana Transportation Finance
Authority, Highway Revenue,
Series A, 5.75%, 6/1/12 (Insured
by AMBAC)....................... 1,092,500
1,000,000 Purdue University Dormitory
System Revenue, Series A, 6.40%,
7/1/99 (Insured by AMBAC)....... 1,025,210
1,000,000 Purdue University Student Fee
Revenue, Series D, 6.50%,
7/1/03, Callable 1/1/00 @ 103... 1,065,000
------------
10,330,285
------------
KANSAS -- 1.1%
3,000,000 Kansas State Department of
Transportation Highway Revenue,
5.50%, 9/1/11................... 3,240,000
------------
LOUISIANA -- 2.6%
4,000,000 Louisiana State, Series A, GO,
5.30%, 8/1/04 (Insured by
MBIA)........................... 4,205,000
3,000,000 Louisiana State, Series A, GO,
6.00%, 4/15/07 (Insured by FGIC) 3,322,500
------------
7,527,500
------------
MASSACHUSETTS -- 3.1%
5,000,000 Massachusetts Bay Transportation
Authority, Series A, 5.00%,
3/1/02.......................... 5,137,500
3,750,000 Massachusetts State, Special
Obligation Revenue, Series A,
5.25%, 6/1/08 (Insured by
AMBAC).......................... 3,942,188
------------
9,079,688
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN -- 18.6%
$2,215,000 Battle Creek Downtown
Development Authority, 6.00%,
5/1/07 (Insured by MBIA)........ $ 2,455,881
4,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 7.30%,
5/1/10, Prerefunded 5/1/04 @
102............................. 4,685,000
2,100,000 Caledonia Community Schools, GO,
6.70%, 5/1/22, Prerefunded
5/1/02 @ 102 (Insured by
AMBAC).......................... 2,328,375
3,000,000 Detroit Sewage Disposal Revenue,
Series B, 6.00%, 7/1/09 (Insured
by MBIA)........................ 3,348,750
6,000,000 Detroit Water Supply System,
Permanent Linked Bonds, 5.25%,
7/1/13, Callable 7/1/04 @ 104
(Insured by FGIC)............... 6,134,999
1,000,000 Detroit Water Supply System,
Second Lien, Series A, 5.20%,
7/1/08 (Insured by MBIA)........ 1,048,750
3,000,000 Detroit, GO, Distributable State
Aid, 5.70%, 5/1/01 (Insured by
AMBAC).......................... 3,123,750
2,840,000 Grand Ledge Public Schools
District, GO, 5.35%, 5/1/10
(Insured by MBIA)............... 3,024,600
1,700,000 Greater Detroit Resource
Recovery Authority, Series A,
5.50%, 12/13/04 (Insured by
AMBAC).......................... 1,804,125
2,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.35%, 5/15/06
(Insured by MBIA)............... 2,105,000
2,000,000 Michigan State Comprehensive
Transportation, Series B, 5.50%,
5/15/02......................... 2,097,500
1,000,000 Michigan State Hospital Finance
Authority Revenue, Detroit
Medical Group, Series A, 5.00%,
8/15/06, (Insured by AMBAC)..... 1,030,000
1,450,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 5.00%, 5/15/06
(Insured by AMBAC).............. 1,493,500
1,000,000 Michigan State South Central
Power Agency, Power Supply
System Revenue, 5.80%, 11/1/05
(Insured by MBIA)............... 1,086,250
1,000,000 Michigan State Strategic Fund,
Detroit Edison, 4.10%*, 7/1/98
(LOC Barclays) 1,000,000
</TABLE>
Continued
80
<PAGE> 83
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,300,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Ford
Motor Co. Project, Series A,
7.10%, 2/1/06................... $ 2,682,375
2,500,000 Michigan State Trunk Line,
Series A, 5.50%, 10/1/02........ 2,634,375
3,500,000 Michigan State Underground
Storage Tank Financial Assurance
Authority, Series I, 6.00%,
5/1/05 (Insured by AMBAC)....... 3,828,125
2,000,000 Northville Public Schools,
Series A, GO, 7.00%, 5/1/08..... 2,175,000
1,575,000 South Redford School District,
5.25%, 5/1/09 (Insured by
FGIC)........................... 1,647,844
2,900,000 University of Michigan Hospital
Revenue, Series A, 3.80%*,
12/1/27......................... 2,900,000
1,000,000 Western Michigan University
Revenue, GO, 5.40%, 11/15/01
(Insured by FGIC)............... 1,041,250
------------
53,675,449
------------
MINNESOTA -- 0.4%
1,000,000 Minneapolis Community
Development Agency, Tax
Increment Revenue, 7.00%, 9/1/00
(Insured by MBIA)............... 1,062,500
------------
NEVADA -- 0.9%
2,500,000 Clark County School District,
Group 2, GO, 7.20%, 5/1/01,
Prerefunded 5/1/00 @ 102
(Insured by FGIC)............... 2,687,500
------------
NEW JERSEY -- 4.0%
6,000,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Senior Lien,
7.00%, 7/1/04 (Insured by
MBIA)........................... 6,840,000
1,375,000 New Jersey State, Series D, GO,
5.25%, 2/15/01.................. 1,417,969
3,000,000 Ocean County Utilities
Authority, Wastewater Revenue,
Refunding, GO, 6.00%, 1/1/07.... 3,333,750
------------
11,591,719
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
NEW YORK -- 2.1%
$1,130,000 Metropolitan Transportation
Authority, Series M, 5.50%,
7/1/08 (Insured by FGIC)........ $ 1,218,988
1,660,000 New York State Urban Development
Corp., Refunding, Syracuse
University Center, 5.50%,
1/1/15.......................... 1,759,600
3,000,000 Triborough Bridge & Tunnel
Authority, General Purpose,
Series Y, 5.50%, 1/1/17......... 3,165,000
------------
6,143,588
------------
NORTH CAROLINA -- 0.7%
2,000,000 North Carolina Municipal Power
Agency No. 1, Catawba Electric
Revenue, 5.90%, 1/1/03 2,117,500
------------
OHIO -- 0.8%
2,125,000 Columbus, Sewer Improvement, GO,
6.30%, 9/15/99.................. 2,191,406
------------
OKLAHOMA -- 2.1%
1,990,000 Oklahoma City, GO, 5.00%,
07/01/04........................ 2,064,625
3,500,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16 (Insured by
MBIA)........................... 3,950,625
------------
6,015,250
------------
OREGON -- 0.5%
1,400,000 Washington County School
District, 5.25%, 6/1/09......... 1,482,250
------------
PENNSYLVANIA -- 2.9%
2,000,000 Allegheny County Airport Revenue
(AMT), 5.00%, 1/1/02 (Insured by
MBIA)........................... 2,042,500
4,310,000 Chartiers Valley Joint School,
ETM, 6.15%, 3/1/07.............. 4,751,775
1,475,000 Pennsylvania State, Series A,
GO, 7.00%, 5/1/05, Prerefunded
5/1/00 @ 101.5.................. 1,574,563
------------
8,368,838
------------
PUERTO RICO -- 1.9%
3,055,000 Puerto Rico Commonwealth
Aquaduct & Sewer Authority,
6.00%, 7/1/06................... 3,360,500
2,000,000 Puerto Rico Commonwealth Highway
& Transportation Authority,
Highway Revenue, Series X,
4.90%, 7/1/01................... 2,040,000
------------
5,400,500
------------
</TABLE>
Continued
81
<PAGE> 84
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
RHODE ISLAND -- 2.6%
$1,000,000 Providence, GO, 6.70%, 1/15/02,
Prerefunded 1/15/00 @ 102
(Insured by MBIA)............... $ 1,060,000
3,025,000 Rhode Island State, Series A,
GO, 5.50%, 8/1/04 (Insured by
MBIA)........................... 3,221,625
2,000,000 State Depositors Economic
Protection Corp., Series A,
Special Obligation, 6.15%,
8/1/99 (Insured by MBIA)........ 2,050,420
1,000,000 State Depositors Economic
Protection Corp., Series B,
Special Obligation, 5.20%,
8/1/03 (Insured by MBIA)........ 1,041,250
------------
7,373,295
------------
TENNESSEE -- 0.5%
1,230,000 Tennessee State, Series B, GO,
6.20%, 6/1/01................... 1,303,800
------------
TEXAS -- 8.8%
1,000,000 Austin Independent School
District, GO, 6.20%, 8/1/99
(Insured by PSFG)............... 1,025,300
2,245,000 Dallas Independent School
District, GO, 5.40%, 8/15/03
(Insured by PSFG)............... 2,360,056
1,500,000 Houston Water & Sewer System
Revenue, Junior Lien, Series C,
5.75%, 12/1/03 (Insured by
MBIA)........................... 1,608,750
1,000,000 Houston Water & Sewer System
Revenue, Prior Lien, Series A,
7.00%, 12/1/01 (Insured by
AMBAC).......................... 1,091,250
3,000,000 Lower Colorado River Authority,
4.90%, 1/1/07, Callable 1/1/06 @
102............................. 3,093,750
1,050,000 Round Rock Independent School
District, GO, 5.25%, 2/15/05
(Insured by PSFG)............... 1,101,188
2,800,000 Texas Municipal Power Agency,
5.60%, 9/1/01 (Insured by
MBIA)........................... 2,926,000
5,595,000 Texas State Public Finance
Authority, Series A, GO, 6.50%,
10/1/04......................... 6,245,418
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
$4,450,000 Texas State, Series A, GO,
5.70%, 10/1/03.................. $ 4,767,062
1,015,000 University of Texas, University
Revenue, Series A, 6.60%,
8/15/02, Callable 8/15/01 @
102............................. 1,107,619
------------
25,326,393
------------
WASHINGTON -- 6.5%
1,000,000 King County School District,
4.60%, 12/1/03 (Insured by
FGIC)........................... 1,027,500
3,095,000 Snohomish County School District
No. 002, 5.50%, 12/1/10 (Insured
by MBIA)........................ 3,365,813
2,695,000 Tacoma Electric System,
Refunding, 6.00%, 1/1/06
(Insured by AMBAC).............. 2,940,919
2,000,000 Washington State Public Power
Supply System, Nuclear Project
No. 1 Bond Revenue, Series C,
7.25%, 7/1/00 (Insured by
FGIC)........................... 2,125,000
8,000,000 Washington State, Series A, GO,
5.50%, 9/1/05, Callable 9/1/04 @
100............................. 8,479,999
850,000 Washington State, Series III-H,
Motor Vehicle Fuel Tax, 5.75%,
9/1/12.......................... 936,063
------------
18,875,294
------------
WEST VIRGINIA -- 0.4%
1,095,000 West Virginia School Building
Authority Revenue, Capital
Improvement, Series A, 6.70%,
7/1/00 (Insured by MBIA)........ 1,151,119
------------
WISCONSIN -- 1.3%
1,025,000 Milwaukee Metropolitan Sewer
District, Series A, GO, 6.60%,
10/1/99......................... 1,059,594
1,500,000 Milwaukee Metropolitan Sewer
District, Series A, GO, 6.70%,
10/1/00......................... 1,584,375
1,000,000 Wisconsin State Public Power,
Inc., Supply System, Series A,
7.00%, 7/1/01, Callable 7/1/00 @
102 (Insured by AMBAC).......... 1,072,500
------------
3,716,469
------------
TOTAL MUNICIPAL BONDS........... 275,944,904
------------
(Cost $260,750,070)
</TABLE>
Continued
82
<PAGE> 85
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
INVESTMENT COMPANIES -- $2.9%
8,505,182 Dreyfus Tax Exempt Money Market
Fund............................ $ 8,505,182
------------
TOTAL INVESTMENT COMPANIES...... 8,505,182
------------
(Cost $8,505,182)
TOTAL INVESTMENTS -- 98.5%.................. 284,450,086
(Cost $269,255,252)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5% 4,299,785
------------
TOTAL NET ASSETS -- 100.0%.................. $288,749,871
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation $15,205,885
Unrealized depreciation (11,051)
-----------
Net unrealized appreciation $15,194,834
===========
</TABLE>
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PSFG Permanent School Fund Guarantee
See Notes to Financial Statements.
83
<PAGE> 86
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS -- 96.5%
ARIZONA -- 1.3%
$1,500,000 Arizona State University
Revenue, 7.00%, 7/1/15,
Prerefunded 7/1/02 @ 101
(Insured by AMBAC)............. $ 1,672,500
------------
CALIFORNIA -- 9.5%
1,000,000 Anaheim Public Financing
Authority, Lease Revenue,
Public Improvements Project,
Series A, 6.00%, 9/1/24
(Insured by FSA)............... 1,131,250
1,400,000 California State, GO, 7.00%,
6/1/05......................... 1,617,000
2,000,000 California State, GO, 6.25%,
9/1/12......................... 2,307,500
3,000,000 Northern California Power
Agency Revenue, Geothermal
Project, Series A, 5.50%,
7/1/05 (Insured by AMBAC)...... 3,209,999
2,000,000 Orange County, Series A, 6.00%,
6/1/10 (Insured by MBIA)....... 2,255,000
1,380,000 Turlock Irrigation District
Revenue, Series A, 6.00%,
1/1/07 (Insured by MBIA)....... 1,533,525
------------
12,054,274
------------
COLORADO -- 2.8%
1,000,000 Colorado Housing Financial
Authority, Single Family,
Series B-2, 6.40%, 11/1/24,
Callable 5/1/08 @ 105.......... 1,097,500
1,580,000 Denver City & County Airport
Revenue, (AMT), 6.75%,
11/15/22, Prerefunded 11/1/02 @
102............................ 1,706,400
650,000 Denver City & County Airport
Revenue, Series C, (AMT),
6.75%, 11/15/22, Callable
11/15/02 @ 102................. 725,563
------------
3,529,463
------------
FLORIDA -- 2.3%
1,080,000 Lee County Florida, Revenue
Bond, Series A, 5.50%,
10/1/09........................ 1,169,100
1,400,000 Port Everglades Authority, Port
Improvement, ETM, 7.13%,
11/1/16........................ 1,697,500
------------
2,866,600
------------
GEORGIA -- 0.9%
1,000,000 Georgia State, Series B, GO,
5.95%, 3/1/08.................. 1,121,250
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
HAWAII -- 2.6%
$2,000,000 Hawaii State, Series CB, GO,
5.75%, 1/1/07.................. $ 2,167,500
1,000,000 Honolulu City & County, Series
A, GO, 5.75%, 4/1/10........... 1,096,250
------------
3,263,750
------------
ILLINOIS -- 9.2%
2,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 5.50%,
12/1/10........................ 2,157,500
1,000,000 Chicago Public Building
Commission, Series A, ETM,
7.00%, 1/1/20 (Insured by
MBIA).......................... 1,257,500
2,000,000 Chicago School Finance
Authority, Series A, GO, 4.90%,
6/1/05, Callable 6/1/04 @ 102
(Insured by MBIA).............. 2,057,500
2,000,000 Du Page & Will Counties,
Community School District No.
204, GO, 4.95%, 12/30/01
(Insured by FGIC).............. 2,052,500
2,000,000 Illinois State Civic Center,
5.25%, 12/15/10, Special State
Obligation 12/30/01 (Insured by
FGIC)(Insured by AMBAC)........ 2,112,500
1,000,000 Illinois State Sales Tax,
Series S, 5.00%, 6/15/08....... 1,037,500
1,000,000 Will County Forest Preserve
District, GO, 5.90%, 12/1/03,
Callable 12/1/02 @ 100 (Insured
by AMBAC)...................... 1,063,750
------------
11,738,750
------------
INDIANA -- 5.3%
2,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 6.00%, 1/1/13 (Insured by
MBIA).......................... 2,232,500
2,250,000 Indiana State Office Building
Commission, Capital Complex,
Government Center Parking
Facilities, Series A, 4.80%,
7/1/03 (Insured by AMBAC)...... 2,297,813
1,000,000 Indiana Transportation Finance
Authority, Highway Revenue,
Series A, 5.75%, 6/1/12
(Insured by AMBAC)............. 1,092,500
1,000,000 Marion County Hospital
Authority Revenue, Community
Hospital, Indianapolis Project,
ETM, 6.00%, 5/1/06............. 1,083,750
------------
6,706,563
------------
</TABLE>
Continued
84
<PAGE> 87
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
IOWA -- 1.9%
$2,055,000 Iowa Finance Authority, Private
College Revenue, Drake
University Project, 6.50%,
12/1/11 (Insured by MBIA)...... $ 2,412,056
------------
KANSAS -- 2.1%
1,000,000 Kansas State Department of
Transportation Highway Revenue,
5.50%, 9/1/11.................. 1,080,000
1,600,000 Kansas State Development
Financial Authority Revenue,
4.40%, 5/1/06, Series I
Municipal Bond................. 1,596,000
------------
2,676,000
------------
KENTUCKY -- 1.0%
1,315,000 Louisville & Jefferson County,
Metropolitan Sewer District,
Sewer & Drain System Revenue,
Series A, 5.25%, 5/15/27,
Callable 5/15/07 @ 101 (Insured
by MBIA)....................... 1,324,863
------------
LOUISIANA -- 2.5%
3,000,000 Louisiana State Gas & Fuels Tax
Revenue, Series A, 7.25%,
11/15/00, Callable 11/15/99 @
102............................ 3,187,500
------------
MARYLAND -- 1.6%
2,000,000 Prince Georges County,
Consolidated Public
Improvement, GO, 5.00%, 1/1/02
(Insured by MBIA).............. 2,060,000
------------
MASSACHUSETTS -- 2.4%
1,000,000 Massachusetts State Industrial
Finance Agency, Resource
Recovery Revenue, Refusetech,
Inc. Project, Series A, 5.25%,
7/1/99 (Insured by FSA)........ 1,013,310
1,000,000 Massachusetts State Water,
Resource Authority, Series B,
5.00%, 12/1/25, Callable
12/1/05 @ 102 (Insured by
MBIA).......................... 972,500
1,000,000 Massachusetts State, Series B,
GO, 5.40%, 11/1/06............. 1,067,500
------------
3,053,310
------------
MICHIGAN -- 19.8%
2,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 7.30%,
5/1/10, Prerefunded 5/1/04 @
102............................ 2,342,500
1,300,000 Berkley School District, GO,
7.00%, 1/1/07 (Insured by
FGIC).......................... 1,525,875
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,000,000 Detroit Sewage Disposal
Revenue, Series B, 6.00%,
7/1/09 (Insured by MBIA)....... $ 2,232,500
1,000,000 Detroit Water Supply System,
Series B, 5.10%, 7/1/07
(Insured by MBIA).............. 1,040,000
930,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.50%, 1/1/07,
Callable 1/1/05 @ 102.......... 995,100
1,000,000 Michigan Higher Education
Facilities Authority, 5.35%,
05/1/15, Thomas................ 1,002,500
2,000,000 Michigan State Hospital Finance
Authority, Sisters of Mercy,
Series P, 5.25%, 8/15/21,
Callable 8/15/03 @ 102 (Insured
by MBIA)....................... 2,000,000
2,365,000 Michigan State Hospital Finance
Authority, Detroit Medical
Center, Series B, 5.00%,
8/15/06 (Insured by AMBAC)..... 2,435,949
2,000,000 Michigan State Hospital Finance
Authority, Henry Ford Health,
Series A, 5.25%, 11/15/20,
Callable 11/15/06 @ 102
(Insured by AMBAC)............. 2,000,000
1,300,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, Series A,
5.15%, 4/1/02 (Insured by
AMBAC)......................... 1,340,625
1,000,000 Michigan State South Central
Power Agency, Power Supply
System Revenue, 5.80%, 11/1/05
(Insured by MBIA).............. 1,086,250
2,000,000 Michigan State Trunk Line,
5.50%, 11/1/16, Callable
11/1/06 @ 101 (Insured by
FGIC).......................... 2,090,000
1,000,000 Michigan State Underground
Storage Tank Financial
Assurance Authority, Series I,
6.00%, 5/1/05 (Insured by
AMBAC)......................... 1,093,750
2,000,000 Michigan State University
Revenue, Series A, 5.50%,
8/15/22, Callable 8/15/02 @
100............................ 2,037,500
2,000,000 University of Michigan Hospital
Revenue, Series A, 3.80%*,
12/1/27........................ 2,000,000
------------
25,222,549
------------
MISSOURI -- 0.4%
500,000 Missouri State, Health &
Education Facilities, Lake of
Ozarks General Hospital, 6.50%,
2/15/21, Callable 2/15/06 @
102............................ 540,625
------------
</TABLE>
Continued
85
<PAGE> 88
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
NEBRASKA -- 0.9%
$1,075,000 Omaha Public Power District,
5.10%, 2/1/08.................. $ 1,130,094
------------
NEVADA -- 3.4%
1,805,000 Clark County School District,
GO, 5.75%, 6/15/10, Callable
6/15/06 @ 101 (Insured by
FGIC).......................... 1,949,400
2,000,000 Nevada State, Nevada Municipal
Bond Bank, Series A, GO, 8.00%,
11/1/05........................ 2,442,500
------------
4,391,900
------------
NEW JERSEY -- 2.6%
1,500,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Senior Lien,
7.00%, 7/1/04 (Insured by
MBIA).......................... 1,710,000
1,500,000 New Jersey State Transportation
Trust Fund Authority,
Transportation System, Series
A, 6.00%, 12/15/06 (Insured by
MBIA).......................... 1,659,375
------------
3,369,375
------------
NEW YORK -- 4.6%
1,350,000 New York City, Municipal Water
& Sewer Revenue, 5.50%,
6/15/24, Callable 6/15/06 @
101............................ 1,390,500
1,500,000 New York City, Tax Revenue
Anticipation Note, Livingston
Plaza Project, 5.40%, 1/1/18... 1,593,750
1,250,000 New York Dorm Authority
Revenue, 5.00%, 2/15/01........ 1,270,313
1,000,000 New York State Thruway
Authority, Series 1997 B,
6.00%, 4/1/07.................. 1,098,750
500,000 New York State Urban
Development Corp., 7.50%,
4/1/11, Prerefunded 4/1/01 @
102............................ 553,750
------------
5,907,063
------------
OKLAHOMA -- 1.8%
1,000,000 Grand River Dam Authority,
5.75%, 6/1/08 (Insured by
FSA)........................... 1,107,500
1,000,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16 (Insured by
MBIA).......................... 1,128,750
------------
2,236,250
------------
PENNSYLVANIA -- 1.6%
2,000,000 Pennsylvania State, First
Series, GO, 5.38%, 5/15/16,
Callable 5/15/06 @ 101.5
(Insured by FGIC).............. 2,040,000
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO -- 0.8%
$1,000,000 Puerto Rico Commonwealth
Highway & Transportation
Authority, Highway Revenue,
Series X, 4.90%, 7/1/01........ $ 1,020,000
------------
RHODE ISLAND -- 0.8%
1,000,000 Convention Center Authority,
Series B, 5.00%, 5/15/09
(Insured by MBIA).............. 1,036,250
------------
SOUTH CAROLINA -- 1.0%
1,200,000 Myrtle Beach Water & Sewer
Revenue, 4.90%, 3/1/02 (Insured
by MBIA)....................... 1,230,000
------------
TENNESSEE -- 1.0%
1,225,000 Tennessee Housing Development
Agency, Mortgage Finance,
Series C, (AMT), 5.95%, 7/1/09,
Callable 7/1/05 @ 102 (Insured
by MBIA)....................... 1,309,219
------------
TEXAS -- 6.1%
1,000,000 Brownsville Utility System,
6.25%, 9/1/11 (Insured by
AMBAC)......................... 1,147,500
1,000,000 Clear Creek Texas, Zero Coupon,
2/15/03........................ 818,750
1,000,000 Harris County, Certificates of
Obligation, 6.00%, 12/15/11.... 1,136,250
2,000,000 Texas City Industrial
Development Corp., Marine
Terminal Revenue, Arco Pipeline
Co. Project, 7.38%, 10/1/20.... 2,575,000
2,000,000 Texas State, Series A, GO,
5.70%, 10/1/03................. 2,142,500
------------
7,820,000
------------
UTAH -- 2.4%
2,175,000 Intermountain Power Agency,
Utah Power Supply, Series D,
5.00%, 7/1/23, Callable 7/1/06
@ 100.......................... 2,098,875
1,000,000 St. George, Parks &
Recreational Facilities, GO,
5.38%, 8/1/21, Callable 8/1/07
@ 101 (Insured by FGIC)........ 1,020,000
------------
3,118,875
------------
</TABLE>
Continued
86
<PAGE> 89
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
WASHINGTON -- 3.8%
$1,000,000 Douglas County Public Utility
District No. 001, Electric
Distribution System, 5.90%,
1/1/11, Callable 1/1/05 @ 102
(Insured by MBIA).............. $ 1,077,500
2,500,000 Port Seattle Limited, GO,
(AMT), 5.35%, 5/1/04........... 2,612,500
1,000,000 Washington State, Motor Vehicle
Fuel Tax, R-92D, GO, 6.25%,
9/1/07......................... 1,132,500
------------
4,822,500
------------
TOTAL MUNICIPAL BONDS.......... 122,861,579
------------
(Cost $115,773,078)
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
DESCRIPTION VALUE
SHARES ----------- ------
<C> <S> <C>
INVESTMENT COMPANIES -- 2.8%
3,576,699 Dreyfus Tax Exempt Money Market
Fund........................... $ 3,576,699
------------
TOTAL INVESTMENT COMPANIES..... 3,576,699
------------
(Cost $3,576,699)
TOTAL INVESTMENTS -- 99.3%.................. 126,438,278
(Cost $119,349,777)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.7%....................... 874,835
------------
TOTAL NET ASSETS -- 100.0%.................. $127,313,113
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................. $7,092,378
Unrealized depreciation................. (3,877)
----------
Net unrealized appreciation............. $7,088,501
==========
</TABLE>
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
<TABLE>
<S> <C>
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
</TABLE>
See Notes to Financial Statements.
87
<PAGE> 90
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS -- 99.1%
MICHIGAN -- 96.6%
$1,785,000 Allegan Sanitary Sewer System,
(AMT), 5.45%, 11/1/02........... $ 1,838,550
2,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 6.90%,
5/1/04.......................... 2,217,500
1,000,000 Bay City Electric Utility
Revenue, 5.15%, 1/1/07 (Insured
by AMBAC)....................... 1,045,000
560,000 Chippewa County Hospital Finance
Authority, 4.20%, 11/1/98....... 560,616
290,000 Chippewa County Hospital Finance
Authority, 4.40%, 11/1/99....... 290,725
585,000 Chippewa County Hospital Finance
Authority, 4.40%, 11/1/99....... 586,463
260,000 Chippewa County Hospital Finance
Authority, 4.60%, 11/1/00....... 260,975
1,000,000 Chippewa Valley School District,
GO, 6.38%, 5/1/05, Prerefunded
5/1/01 @ 101.5 (Insured by
FGIC)........................... 1,076,250
745,000 Chippewa Valley School District,
Series A, GO, 5.60%, 5/1/99..... 757,300
1,700,000 Clintondale Community School
District GO, 4.65%, 5/1/03...... 1,731,875
2,000,000 Dearborn School District, GO,
6.63%, 5/1/09, Prerefunded
5/1/00 @ 102 (Insured by
MBIA)........................... 2,132,500
1,000,000 Dearborn School District, GO,
6.38%, 5/1/10, Prerefunded
5/1/00 @ 102 (Insured by
MBIA)........................... 1,062,500
965,000 Dearborn Sewage Disposal System,
6.90%, 4/1/02 (Insured by
MBIA)........................... 1,055,469
2,800,000 Detroit Sewage Disposal, Series
A, 4.85%, 7/1/01 (Insured by
FGIC)........................... 2,855,999
580,000 Detroit, Distributable State
Aid, GO, 5.60%, 5/1/00 (Insured
by AMBAC)....................... 595,950
1,000,000 Detroit, GO, 5.00%, 4/1/04,
(Insured by FGIC)............... 1,032,500
750,000 Detroit, GO, 6.00%, 4/1/06,
(Insured by FGIC)............... 825,000
1,730,000 Dexter Community School
District, GO, 6.25%, 5/1/07,
(Insured by FGIC)............... 1,939,763
2,000,000 East China Township School
District, GO, 6.00%, 5/1/02,
Callable 5/1/01 @ 102........... 2,127,500
1,000,000 Eastern Michigan University, GO,
5.80%, 6/1/01 (Insured by
AMBAC).......................... 1,046,250
445,000 Farmington Hills Economic
Development Corp. Revenue,
Botsford Continuing Care, Series
A, 5.10%, 2/15/04 (Insured by
MBIA)........................... 460,019
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 470,000 Farmington Hills Economic
Development Corp. Revenue,
Botsford Continuing Care, Series
A, 5.20%, 2/15/05 (Insured by
MBIA)........................... $ 488,800
465,000 Flint Hospital Building
Authority, Hurley Medical
Center, 4.00%, 7/1/99........... 463,707
1,600,000 Flint Hospital Building
Authority, Hurley Medical
Center, Series A, 5.00%,
7/1/03.......................... 1,620,000
305,000 Flint Hospital Building
Authority, Hurley Medical
Center, Series B, 4.00%,
7/1/99.......................... 304,152
1,000,000 Grand Haven Area Public Schools,
GO, 5.45%, 5/1/04 (Insured by
MBIA)........................... 1,058,750
1,000,000 Grand Rapids Sanitary Sewer
System, Refunding & Improvement,
Series A, 4.38%, 1/1/06,
(Insured by FGIC)............... 996,250
1,250,000 Greater Detroit Resource
Recovery Authority, Series B,
5.00%, 12/13/02 (Insured by
AMBAC).......................... 1,287,500
435,000 Highland Park School District,
GO, 3.90%, 5/1/99, (Insured by
FSA)............................ 436,166
445,000 Highland Park School District,
GO, 4.00%, 5/1/00, (Insured by
FSA)............................ 445,556
485,000 Highland Park School District,
GO, 4.05%, 5/1/01, (Insured by
FSA)............................ 485,000
460,000 Highland Park School District,
GO, 4.15%, 5/1/02, (Insured by
FSA)............................ 460,575
1,000,000 Holland Electric Revenue, 6.40%,
7/1/02, Prerefunded 7/1/99 @
100............................. 1,026,880
1,100,000 Holland Electric Revenue, 6.50%,
7/1/03, Prerefunded 7/1/99 @
100............................. 1,130,085
1,250,000 Huron Valley School District,
GO, 7.10%, 5/1/08, Prerefunded
5/1/01 @ 102 (Insured by
FGIC)........................... 1,375,000
750,000 Kalamazoo Hospital Finance
Authority Revenue, Bronson
Methodist Hospital, 5.50%,
5/15/08, (Insured by MBIA)...... 800,625
1,810,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 4.95%, 5/15/02
(Insured by MBIA)............... 1,852,988
1,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.25%, 5/15/05
(Insured by MBIA)............... 1,043,750
1,295,000 Kenowa Hills Public Schools, GO,
5.50%, 5/1/05................... 1,382,413
</TABLE>
Continued
88
<PAGE> 91
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 500,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.25%, 1/1/04... $ 523,125
515,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 4.20%, 1/1/04,
(Insured by MBIA)............... 508,563
505,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.30%, 1/1/05... 530,250
645,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 4.30%, 1/1/05,
(Insured by MBIA)............... 636,131
1,150,000 Kent Hospital Finance Authority,
Butterworth Hospital, 4.90%,
1/15/05......................... 1,177,313
1,050,000 Kent Hospital Finance Authority,
Spectrum Health, Series A,
4.40%, 1/15/05.................. 1,044,078
2,000,000 Lake Orion Community School
District, GO, 6.20%, 5/1/04
(Insured by AMBAC).............. 2,192,500
2,707,776 Michigan Department of State
Police Lease, 4.95%, 3/10/02.... 2,731,469
1,265,000 Michigan Higher
Education--Thomas A. Cooley,
4.75%, 5/1/07, (LOC: First of
America)........................ 1,268,163
1,000,000 Michigan Hospital Finance
Authority, Sisters Of Mercy,
7.5%, 2/15/18, Prerefunded
2/15/01
@ 102........................... 1,103,750
1,020,000 Michigan Municipal Bond
Authority, Local Government Loan
Program, Qualified School,
6.35%, 5/15/01.................. 1,083,750
1,000,000 Michigan Municipal Bond
Authority, Pooled Projects,
Series B, 5.10%, 10/1/04........ 1,053,750
1,000,000 Michigan Municipal Bond
Authority, State Revolving Fund,
5.50%, 10/1/99.................. 1,021,250
2,000,000 Michigan Municipal Bond
Authority, State Revolving Fund,
5.50%, 10/1/06 2,170,000
2,000,000 Michigan Public Power Agency,
Belle River Project, Series A,
5.30%, 1/1/00................... 2,040,000
750,000 Michigan Public Power Agency,
Belle River Project, Series A,
5.70%, 1/1/03................... 795,938
1,000,000 Michigan State Building
Authority, Series II, 6.10%,
10/1/01......................... 1,062,500
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$3,000,000 Michigan State Comprehensive
Transportation, Series B, 5.63%,
5/15/03......................... $ 3,187,499
1,000,000 Michigan State Hospital Finance
Authority Revenue, Sisters of
Mercy Health Corp. Bond 1993,
Series F, 4.60%, 8/15/02
(Insured by MBIA)............... 1,012,500
1,855,000 Michigan State Hospital Finance
Authority, Bay Medical Center,
Series A, 5.38%, 7/1/06 (Insured
by FSA)......................... 1,957,025
750,000 Michigan State Hospital Finance
Authority, GO, Detroit Medical
Center Group A, 5.00%, 8/15/04
(Insured by AMBAC).............. 773,438
2,000,000 Michigan State Hospital Finance
Authority, Mclaren Obligated
Group, Series A, 5.75%,
10/15/03........................ 2,132,500
1,500,000 Michigan State Hospital Finance
Authority, Mercy Health
Services, Series S, 6.00%,
8/15/06......................... 1,640,625
1,060,000 Michigan State Hospital Finance
Authority, Sisters of Mercy
Health Corp., Series J, 7.15%,
2/15/99......................... 1,079,928
2,800,000 Michigan State Hospital Finance
Authority, Sisters of Mercy
Health Corp., Series J, 7.38%,
2/15/11
Prerefunded 2/15/01 @ 102....... 3,083,499
1,150,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 4.50%, 5/15/01
(Insured by AMBAC).............. 1,160,063
1,000,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 5.00%, 5/15/05
(Insured by AMBAC).............. 1,028,750
2,680,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, Series A,
(AMT), 5.25%, 10/1/01 (Insured
by MBIA)........................ 2,757,049
415,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Lutheran Social Services
Project, 4.40%, 9/1/98 (LOC:
First of America)............... 415,398
2,000,000 Michigan State Underground
Storage, Tank Financial
Assurance Authority, Series I,
5.00%, 5/1/00 (Insured by
AMBAC).......................... 2,035,000
3,270,000 Michigan State Underground
Storage, Tank Financial
Assurance Authority, Series I,
6.00%, 5/1/06 (Insured by
AMBAC).......................... 3,601,087
</TABLE>
Continued
89
<PAGE> 92
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,000,000 Mount Clemens Community School
District, GO, 6.60%, 5/1/20,
Prerefunded 5/1/02 @ 102
(Insured by MBIA)............... $ 1,106,250
1,495,000 Oakland County Economic
Development Corp. Revenue,
Boardwalk Shopping Center,
Limited Obligation Revenue,
4.38%*, 7/1/98, Mandatory Put
(LOC: NBD)...................... 1,495,000
580,000 Oakland County Economic
Development Corp., Sugartree
Shopping Center, 4.38%*, 7/1/98,
Mandatory Put (LOC: NBD)........ 580,000
500,000 Oakland County Economic
Development Corp., Sugartree
Shopping Center, 4.38%*, 7/1/98,
Mandatory Put (LOC: NBD)........ 500,000
1,000,000 Oakland Washtenaw County
Community College, 6.65%,
5/1/11, Prerefunded 5/1/02 @
100............................. 1,105,000
3,000,000 Okemos Public School District,
Series I, GO, 6.90%, 5/1/11,
Prerefunded 5/1/01 @ 102........ 3,277,499
3,200,000 Plymouth--Canton Community
School District, Series B, GO,
6.80%, 5/1/17, Prerefunded
5/1/01 @ 101.................... 3,459,999
735,000 Reeths--Puffer Schools, GO,
6.75%, 5/1/01 (Insured by
FGIC)........................... 786,450
750,000 Reeths--Puffer Schools, GO,
6.25%, 5/1/02 (Insured by FGIC) 804,375
2,000,000 Rockford Public Schools, GO,
7.38%, 5/1/19, Prerefunded
5/1/00 @ 101.................... 2,137,500
1,500,000 Royal Oak Hospital Finance
Authority, 5.75%, 11/15/03 1,595,625
1,530,000 Taylor Tax Increment Finance
Authority, 4.40%, 5/1/04,
(Insured by FSA)................ 1,537,650
1,660,000 Taylor Tax Increment Finance
Authority, 4.50%, 5/1/05,
(Insured by FSA)................ 1,670,375
2,035,000 Walled Lake Consolidated School
District, GO, 4.70%, 5/1/01..... 2,070,613
2,235,000 Walled Lake Consolidated School
District, GO, 4.80%, 5/1/02..... 2,285,288
2,000,000 Walled Lake Consolidated School
District, Series II, GO, 7.10%,
5/1/05, Prerefunded 5/1/00 @
102............................. 2,147,500
1,025,000 Washtenaw Community College, GO,
4.70%, 4/1/03 (Insured by
FGIC)........................... 1,046,781
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/99.......................... $ 549,274
550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/00.......................... 545,875
1,750,000 Western Michigan University,
Series A, 6.50%, 7/15/21,
Prerefunded 7/15/01 @ 102
(Insured by AMBAC).............. 1,905,313
1,000,000 Wyandotte Electric Revenue,
6.20%, 10/1/03 (Insured by
MBIA)........................... 1,093,750
1,150,000 Ypsilanti School District,
4.50%, 5/1/00 (Insured by
FGIC)........................... 1,160,063
------------
121,823,972
------------
PUERTO RICO -- 2.4%
3,000,000 Puerto Rico Commonwealth Highway
& Transportation Authority,
Highway Revenue, Series X,
4.90%, 7/1/01................... 3,060,000
------------
TOTAL MUNICIPAL BONDS........... 124,883,972
(Cost $121,759,373) ------------
INVESTMENT COMPANIES -- 0.9%
1,105,236.. Dreyfus Tax Exempt Money Market
Fund............................ 1,105,236
------------
TOTAL INVESTMENT COMPANIES...... 1,105,236
(Cost $1,105,236) ------------
TOTAL INVESTMENTS -- 100.0%................. 125,989,208
(Cost $122,864,609)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.0%....................... 60,426
------------
TOTAL NET ASSETS -- 100.0%.................. $126,049,634
============
</TABLE>
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......... $3,165,737
Unrealized depreciation.......... (41,138)
----------
Net unrealized appreciation...... $3,124,599
==========
</TABLE>
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
90
<PAGE> 93
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
<C> <S> <C>
BANK NOTES -- 1.9%
$5,000,000 First Union National Bank of
North Carolina, 5.50%,
7/8/98......................... $ 5,000,000
5,000,000 First Union National Bank of
North Carolina, 5.52%,
10/30/98....................... 5,000,000
------------
TOTAL BANK NOTES............... 10,000,000
(Amortized Cost $10,000,000) ------------
BANKERS ACCEPTANCES -- 1.0%
5,000,000 Corestates Bank N.A., 5.35%,
7/21/98........................ 4,985,139
------------
TOTAL BANKERS ACCEPTANCES...... 4,985,139
(Amortized Cost $4,985,139) ------------
CERTIFICATES OF DEPOSIT -- 6.4%
5,000,000 Bank Of Nova Scotia, 5.65%,
3/23/99........................ 4,994,367
3,000,000 Bankers Trust, 6.00%, 7/7/98... 3,000,142
5,000,000 Bankers Trust, 5.84%,
4/30/99........................ 4,998,411
5,000,000 Mellon Bank, 5.57%, 7/1/98..... 5,000,000
5,000,000 Mellon Bank, 5.50%, 9/21/98.... 5,000,000
5,000,000 Mellon Bank, 5.71%, 3/5/99..... 5,000,000
5,000,000 Mellon Bank, 5.75%, 6/3/99..... 5,000,000
------------
TOTAL CERTIFICATES OF
DEPOSIT........................ 32,992,920
(Amortized Cost $32,992,920) ------------
COMMERCIAL PAPER -- 31.7%
4,300,000 Armstrong World Industries,
5.60%, 7/1/98.................. 4,300,000
5,000,000 Banque National de Paris
Canada, 5.39%, 7/21/98......... 4,985,028
5,000,000 Bell South Telecommunications,
5.50%, 8/21/98................. 4,961,042
5,000,000 Cargill, Inc., 5.47%, 7/1/98... 5,000,000
5,000,000 Commonwealth Bank of Australia,
5.42%, 10/13/98................ 4,921,711
10,400,000 Daimler Benz, 6.15%, 7/1/98.... 10,399,999
5,000,000 Daimler Benz, 5.53%, 8/21/98... 4,960,829
5,000,000 Deutsche Bank Financial, 5.52%,
8/14/98........................ 4,966,267
5,000,000 Dresdner US Finance, 5.51%,
8/4/98......................... 4,973,981
5,000,000 Du Pont De Nemours & Co.,
5.36%, 8/14/98................. 4,967,244
10,000,000 Ford Motor Credit Corp., 6.0%,
7/1/98......................... 9,999,999
10,000,000 Ford Motor Credit Corp., 6.0%,
7/2/98......................... 9,998,333
5,000,000 General Electric Capital Corp.,
5.38%, 8/7/98.................. 4,972,353
5,000,000 General Electric Capital Corp.,
5.36%, 8/17/98................. 4,965,011
5,000,000 General Electric Capital Corp.,
5.43%, 8/27/98................. 4,957,013
5,000,000 GMAC, 5.43%, 8/27/98........... 4,957,013
5,000,000 GTE Corp., 5.56%, 7/2/98....... 4,999,228
5,000,000 GTE Corp., 5.53%, 7/10/98...... 4,993,088
5,000,000 GTE Funding, 5.56%, 7/22/98.... 4,983,783
5,000,000 Household Finance, 5.51%,
8/6/98......................... 4,972,450
10,000,000 JP Morgan & Co, 5.52%,
7/6/98......................... 9,992,333
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
$6,875,000 Morgan Guaranty, 5.50%,
10/19/98....................... $ 6,759,462
6,500,000 Novartis Finance Corp., 5.50%,
7/8/98......................... 6,493,049
8,300,000 Novartis Finance Corp., 5.50%,
8/4/98......................... 8,256,855
5,000,000 Southern New England
Telecommunication, 5.55%,
7/20/98........................ 4,985,354
5,000,000 Toyota Motor Credit Corp.,
5.50%, 7/29/98................. 4,978,611
8,000,000 UBS Finance, Inc., 5.58%,
7/6/98......................... 7,993,800
------------
TOTAL COMMERCIAL PAPER......... 163,693,836
(Amortized Cost $163,693,836) ------------
DEMAND NOTES -- 21.9%
6,000,000 American Healthcare Funding
L.L.C., 5.70%*, 7/1/98 (LOC:
LaSalle National Bank)......... 6,000,000
4,000,000 American Mfg. Co., Inc., Series
1997, 5.70%*, 7/2/98 (LOC:
Mellon Bank)................... 4,000,000
7,500,000 Arboretum Properties, L.L.C.,
5.67%*, 7/1/98 (LOC: Michigan
National Bank)................. 7,500,000
2,400,000 Buckeye Corrugated, Inc.,
5.67%*, 7/1/98 (LOC:
Keybank)....................... 2,400,000
4,400,000 City of Cloquet, Minnesota
Taxable Industrial Bond, Series
1996B, 5.80%*, 4/1/26 (LOC:
Credit Suisse)................. 4,400,000
5,915,000 FC Bellevue, Inc., 5.69%*,
7/2/98 (LOC: National City Bank
Cleveland, Ohio)............... 5,915,000
4,830,000 First Metro Title Co., 5.68%*,
7/2/98 (LOC: Michigan National
Bank).......................... 4,830,000
4,565,000 Harry W. Albright, Jr., 5.70%*,
7/2/98......................... 4,565,000
3,500,000 HWP Co., Ltd. Project, 5.69%*,
7/2/98 (LOC: National City Bank
Cleveland, Ohio)............... 3,500,000
7,500,000 Katz Capital Corp., 5.69%*,
7/2/98 (LOC: Citizens Bank).... 7,500,000
4,730,000 Labelle Capital Funding L.L.C.,
5.70%*, 7/2/98 (LOC: First of
America Bank -- Michigan)...... 4,730,000
1,575,000 Laird's Auto Glass & Trim,
Inc., 5.75%*, 7/2/98 (LOC:
Michigan National Bank)........ 1,575,000
4,000,000 Macroe Properties, Inc.,
5.70%*, 7/2/98 (LOC: Huntington
Bank).......................... 4,000,000
5,000,000 Mississippi Business Finance
Corp., 5.70%*, 1/1/23 (LOC:
First National Bank of
Chicago)....................... 5,000,000
8,545,000 Ordeal Properties L.L.C.,
5.67%*, 7/1/98 (LOC:
Keybank)....................... 8,545,000
</TABLE>
Continued
91
<PAGE> 94
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
<C> <S> <C>
DEMAND NOTES (CONTINUED)
$2,500,000 Patt's Enterprises L.L.C.,
5.70%*, 7/2/98 (LOC: Huntington
National Bank)................. $ 2,500,000
5,000,000 PRA at Glenwood Hills
Corporate, Centre Limited
Liability Co., 5.66%*,......... 5,000,000
7/2/98 (LOC: First of America
Bank -- Michigan)
8,350,000 PRD Finance L.L.C., 5.66%*,
7/2/98 (LOC: First of America
Bank Michigan) --.............. 8,350,000
3,000,000 Royal Town Center L.L.C.
Project, 5.67%*, 7/2/98 (LOC:
Comerica Bank)................. 3,000,000
2,655,000 Rumpf Development Ltd., 5.67%*,
7/1/98 (LOC: Keybank).......... 2,655,000
5,000,000 Sheperd Capital L.L.C., 5.70%*,
7/2/98 (LOC: Comerica Bank).... 5,000,000
2,000,000 South Bend MAC, L.P., 5.70%*,
7/1/98 (LOC: LaSalle National
Bank).......................... 2,000,000
1,075,000.. The Economic Development Corp.
of the County of Marquette,
Pioneer 1,075,000
Laboratories, Inc. Project,
5.55%*, 7/2/98 (LOC: NBD Bank)
3,250,000 White Mountain Imaging, 5.67%*,
7/1/98 (LOC: Keybank).......... 3,250,000
5,645,000 Zeigler Realty, L.L.C., 5.70%*,
7/2/98 (LOC: First of America
Bank -- Michigan).............. 5,645,000
------------
TOTAL DEMAND NOTES............. 112,935,000
(Amortized Cost $112,935,000) ------------
EURO CERTIFICATES OF DEPOSIT -- 1.0%
5,000,000 ABN Amro, 5.55%, 7/31/98....... 5,000,000
------------
TOTAL EURO CERTIFICATES OF
DEPOSIT........................ 5,000,000
(Amortized Cost $5,000,000) ------------
FUNDING AGREEMENTS -- 3.9%
5,000,000 Allstate Financial Corp.,
5.84%*, 7/1/98 (b)............. 5,000,000
5,000,000 Allstate Financial Corp.,
5.84%*, 7/1/98 (b)............. 5,000,000
10,000,000 General American Life Insurance
Co., 5.89%*, 7/1/98 (b)........ 10,000,000
------------
TOTAL FUNDING AGREEMENTS....... 20,000,000
(Amortized Cost $20,000,000) ------------
YANKEE CERTIFICATES OF DEPOSIT -- 20.5%
5,000,000.. ABN Amro Bank, 5.82%, 7/17/98 4,999,974
5,000,000.. Bank Of New York, 5.50%,
2/17/99 4,990,622
5,000,000.. Bankers Trust Co., 5.90%,
8/10/98 4,999,738
5,000,000.. Banque National De Paris,
5.63%, 12/28/98 5,000,000
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
<C> <S> <C>
YANKEE CERTIFICATES OF DEPOSIT (CONTINUED)
$3,000,000.. Barclays Bank PLC, 5.85%,
8/11/98 $ 3,000,578
5,000,000.. Barclays Bank PLC, 5.65%,
3/2/99 4,998,238
5,000,000.. Canadian Imperial Bank of
Commerce, 5.46%, 7/13/98 5,000,049
5,000,000.. Canadian Imperial Bank of
Commerce, 5.86%, 8/11/98 5,001,074
5,000,000.. Canadian Imperial Bank of
Commerce, 5.55%, 2/10/99 4,995,137
5,000,000.. Commerzbank Ag, 5.65%, 2/26/99 4,996,097
4,000,000.. Commerze Bank, 5.67%, 3/5/99,
5.67%, 3/5/99 3,997,755
5,000,000.. Credit Agricole Indosuez,
5.705%, 1/7/99 4,996,410
5,000,000.. Credit Agricole Indosuez,
5.66%, 3/4/99 4,998,708
5,000,000.. Deutche Bank, 5.58%, 7/9/98 5,000,065
4,000,000.. Deutche Bank, 5.86%, 10/14/98 4,002,530
5,000,000.. National Westminster, 5.54%,
7/29/98 5,000,098
5,000,000.. Rabobank, 5.69%, 4/16/98 4,998,103
5,000,000.. Societe Generale, 5.53%, 8/5/98 5,000,047
5,000,000.. Societe Generale, 5.89%,
10/14/98 5,003,515
5,000,000.. Societe Generale, 5.70%,
3/23/99 4,998,261
5,000,000.. Societe Generale, 5.77%,
4/19/99 4,998,517
5,000,000.. Swiss Bank, 5.74%, 6/11/99 4,999,547
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT........................ 105,975,063
(Amortized Cost $105,975,063) ------------
REPURCHASE AGREEMENTS -- 8.1%
42,000,000 Donaldson, Lufkin & Jenrette
5.50%, dated 6/30/98, due
7/1/98 with a maturity value of
4,000,611 (collateralized by
$10,925,000 FNMA, Discount
Note, 7/10/98, market value
$10,898,977 and by $32,030,000
FNMA, Discount Note, 7/15/98,
market value $31,958,157)...... 42,000,000
------------
TOTAL REPURCHASE AGREEMENTS.... 42,000,000
(Amortized Cost $42,000,000) ------------
INVESTMENT COMPANIES -- 3.1%
16,147,208 Dreyfus Cash Management Money
Market Fund.................... 16,147,208
------------
TOTAL INVESTMENT COMPANIES..... 16,147,208
------------
(Amortized Cost $16,147,208)
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.6%............... $513,729,166
(Amortized Cost $513,729,166)(a)
OTHER ASSETS IN EXCESS OF LIABILITIES
0.4% 1,992,017
------------
TOTAL NET ASSETS -- 100.0% $515,721,183
============
</TABLE>
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Illiquid security.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
LOC Letter of Credit
See Notes to Financial Statements.
92
<PAGE> 95
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS -- 83.8%
MICHIGAN -- 78.2%
$ 440,000 Calhoun County, GO, 3.95%,
7/1/98, (Insured by AMBAC)...... $ 440,000
950,000 Clinton Township Economic
Development Corp., Pointe
Village Square, (AMT), 3.80%*,
8/1/98, (LOC: First of
America)........................ 950,000
1,000,000 Detroit Water Revenue, 7.78%,
7/1/98, Prerefunded 7/1/98 @
102, (Insured by MBIA).......... 1,000,000
700,000 Dexter Michigan Community
Schools, QSBLF, 3.80%, 5/1/99,
(Insured by FGIC)............... 700,000
390,000 Farmington Hills Michigan
Education, Marketing Displays,
(AMT), 3.80%*, 9/1/98 (LOC:
Comerica Bank).................. 390,000
9,000,000 Garden City Michigan Hospital,
3.75%*, 7/7/98, (LOC: First of
America)........................ 9,000,000
1,900,000 Genesee County Economic
Development Corp., Grand Blanc
Convalescent Center, 3.75%*,
11/1/98 (LOC: Citizens Banking
Corp.).......................... 1,900,000
1,700,000 Genesee County Michigan, Atlas
Technology, (AMT), 3.65%*,
7/7/98, (LOC: NBD Bank)......... 1,700,000
3,000,000 Grand Ledge Michigan Public
School District, 4.00%,
11/24/98........................ 3,003,138
2,060,000 Leelanau County Economic
Development Corp., American
Mutual Insurance Co., 3.85%*,
12/15/98, (LOC: First of
America)........................ 2,060,000
4,500,000 Lenawee County Economic
Development Corp., Rima Mfg. Co
Project, (AMT), 3.80%*, 7/7/98
(LOC: Keybank).................. 4,500,000
445,000 Livonia County Economic
Development Corp., American
Community Mutual Insurance Co.,
3.80%*, 11/15/98 (LOC: First of
America)........................ 445,000
1,200,000 Marquette County Economic
Development Corp., Pioneer Labs,
Inc., (AMT), 4.00%*,7/7/98,
(LOC: NBD Bank)................. 1,200,000
1,800,000 Meridian, Hannah Technology,
3.70%*, 7/30/98 (LOC: Comerica
Bank)........................... 1,800,000
1,650,000 Michigan Housing Development
Authority, Laurel Valley,
3.55%*, 7/7/98 (LOC:
Wachovia)....................... 1,650,000
7,165,000 Michigan Municipal Bond
Authority, 4.25%, 7/31/98....... 7,169,634
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,670,000 Michigan Municipal Bond
Authority, Revenue Note, Series
1997C, 4.50%, 9/18/98........... $ 1,672,087
1,000,000 Michigan Municipal Bond
Authority, Local Government Loan
Program, Series B, 6.90%, 5/1/99
(Insured by FGIC)............... 1,026,023
7,300,000 Michigan Municipal Bond
Authority, Series 1997 B,
4.50%,.......................... 7,300,124
7,000,000 Michigan State, 4.50%,
9/30/98......................... 7,012,462
2,045,000 Michigan State Building
Authority, 4.50%, 10/15/98...... 2,048,911
1,000,000 Michigan State Building
Authority, 1997 Revenue, Series
I, 4.50%, 10/1/98............... 1,001,465
1,000,000 Michigan State Comprehensive
Transportation, 5.10%,
5/15/99......................... 1,011,361
2,100,000 Michigan State Comprehensive
Transportation, Series 1998-I,
6.70%, 7/31/98.................. 2,109,812
595,000 Michigan State Hospital Finance
Authority Revenue, Mercy Health
Services, 5.00%, 8/15/98........ 595,748
2,600,000 Michigan State Hospital Finance
Authority, St. Mary's Hospital
of Livonia, Series A, 3.50%*,
7/7/98, (LOC: Comerica Bank).... 2,600,000
1,500,000 Michigan State Housing
Development Authority, Limited
Obligation Revenue, Pine Ridge,
3.55%*, 7/7/98, (LOC:
Wachovia)....................... 1,500,000
3,300,000 Michigan State Job Development
Authority, BASF Wyandotte,
3.45%*, 7/7/98 (LOC: Credit
Suisse)......................... 3,300,000
3,000,000 Michigan State Strategic Fund,
Van Andel Research Project,
3.60%*, 7/7/98 (LOC: National
Australia Bank)................. 3,000,000
2,700,000 Michigan State Strategic Fund,
AACOA Extrusions, Inc., (AMT),
3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 2,700,000
2,510,000 Michigan State Strategic Fund,
Atmosphere Annealing, (AMT),
3.75%*, 7/7/98 (LOC: First of
America)........................ 2,510,000
1,160,000 Michigan State Strategic Fund,
B.K. Hardwoods, (AMT), 3.70%*,
7/7/98, (LOC: Huntington Bank).. 1,160,000
4,345,000 Michigan State Strategic Fund,
Banks Hardwoods, Inc., (AMT),
3.70%*, 7/7/98 (LOC: Bank One).. 4,345,000
2,000,000 Michigan State Strategic Fund,
Besser International Sales Co
Project, (AMT), 3.65%*, 7/7/98
(LOC: NBD Bank)................. 2,000,000
</TABLE>
Continued
93
<PAGE> 96
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$3,000,000 Michigan State Strategic Fund,
Bloomfield Valley Properties,
3.70%*, 10/1/98, (LOC: Charter
One)............................ $ 3,000,000
200,000 Michigan State Strategic Fund,
Bloomfield Valley Properties,
3.70%*, 10/1/98, (LOC: Charter
One)............................ 200,000
1,500,000 Michigan State Strategic Fund,
C-1, (AMT), 4.00%*, 7/7/98,
(LOC: Comerica Bank)............ 1,500,000
1,000,000 Michigan State Strategic Fund,
C-Tec Inc. Project, (AMT),
3.65%*, 7/7/98 (LOC: Suntrust
Bank)........................... 1,000,000
2,600,000 Michigan State Strategic Fund,
CEC Products Co. Inc. Project,
(AMT), 3.75%*, 7/7/98 (LOC:
Comerica Bank).................. 2,600,000
4,000,000 Michigan State Strategic Fund,
Creative Foam Corp. Project,
(AMT), 3.65%*, 7/7/98 (LOC: NBD
Bank)........................... 4,000,000
5,000,000 Michigan State Strategic Fund,
Dawnbreakers LLC, (AMT), 3.75%*,
7/7/98 (LOC: National City
Bank)........................... 5,000,000
2,500,000 Michigan State Strategic Fund,
Delta Containers, Inc. Project,
(AMT), 3.65%*, 7/7/98 (LOC: NBD
Bank)........................... 2,500,000
4,000,000 Michigan State Strategic Fund,
Detroit Edison, 4.10%*, 7/1/98
(LOC Barclays).................. 4,000,000
2,500,000 Michigan State Strategic Fund,
Donnelly Corp., Series B, (AMT),
3.90%*, 10/1/98 (LOC: Dresdner
Bank)........................... 2,500,000
5,000,000 Michigan State Strategic Fund,
Dow Chemical Co. Project, (AMT),
4.10%*, 7/1/98.................. 5,000,000
1,275,000 Michigan State Strategic Fund,
Enviromental Powder Co., (AMT),
3.70%*, 7/7/98 (LOC: Michigan
National Bank).................. 1,275,000
1,000,000 Michigan State Strategic Fund,
Equad Project, (AMT), 3.75%*,
7/7/98, (LOC: National City
Bank)........................... 1,000,000
2,000,000 Michigan State Strategic Fund,
Genesee Packaging Inc. Project,
(AMT), 3.70%*, 7/7/98 (LOC:
Citizens Banking Corp.)......... 2,000,000
1,500,000 Michigan State Strategic Fund,
Gollin Block & Supply Co.,
(AMT), 4.00%*, 7/7/98 (LOC:
Northern Trust)................. 1,500,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,510,000 Michigan State Strategic Fund,
Hamilton Industrial Products
Inc. Project, (AMT), 3.75%*,
7/7/98 (LOC: National Australia
Bank)........................... $ 1,510,000
2,000,000 Michigan State Strategic Fund,
I.V.C. Industrial Coatings,
Inc., (AMT), 3.70%*, 7/7/98
(LOC: Bank One)................. 2,000,000
1,700,000 Michigan State Strategic Fund,
Industrial Development, Kinder
Care, 3.70%*, 7/7/98 (LOC: Chase
Manhattan Bank)................. 1,700,000
190,000 Michigan State Strategic Fund,
Kazoo, Inc. Project, (AMT),
3.80%*, 9/15/98 (LOC: First of
America)........................ 190,000
3,005,000 Michigan State Strategic Fund,
Kerkstra Precast Project (AMT),
3.70%*, 7/7/98 (LOC: Huntington
Bank)........................... 3,005,000
1,500,000 Michigan State Strategic Fund,
Kerkstra, (AMT), 3.70%*, 7/7/98
(LOC: Huntington Bank).......... 1,500,000
630,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Tawas Bay Associates Project
(AMT), 3.80%*, 12/1/98 (LOC:
First of America)............... 630,000
1,350,000 Michigan State Strategic Fund,
Limited Obligation Revenue, John
A. Biewer Co. Inc. Project,
(AMT), 3.75%*, 9/1/98, (LOC:
National Australia Bank)........ 1,350,000
1,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Autocam Corp., (AMT), 3.70%*,
7/7/98 (LOC: Comerica Bank)..... 1,000,000
2,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Cincinnati Millacron, (AMT)
3.75%*, 7/7/98 (LOC: PNC
Bank)........................... 2,500,000
1,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Dickinson Press, Inc. Project,
(AMT) 3.70%*, 7/7/98 (LOC:
Huntington Bank)................ 1,000,000
2,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Donnelly Corp., (AMT) 3.65%*,
7/7/98 (LOC: Dresdner Bank)..... 2,500,000
2,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Eclipse Mold (AMT), 3.65%*,
7/7/98 (LOC: NBD Bank).......... 2,000,000
</TABLE>
Continued
94
<PAGE> 97
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$4,800,000 Michigan State Strategic Fund,
Limited Obligation Revenue, H.P.
Pelzer, Inc. Project, (AMT)
3.65%*, 7/7/98 (LOC: NBD
Bank)........................... $ 4,800,000
4,800,000 Michigan State Strategic Fund,
Limited Obligation Revenue, JB
Labs, Inc., (AMT) 3.70%*, 7/7/98
(LOC: Huntington Bank).......... 4,800,000
940,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Kay
Screen Printing, (AMT) 3.90%*,
7/7/98 (LOC: Comerica Bank)..... 940,000
185,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Kay
Screening (AMT), 3.90%*, 7/7/98
(LOC: Comerica Bank)............ 185,000
1,400,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Knight Industries, (AMT),
3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 1,400,000
3,025,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Midbrook Products, Inc. Project,
(AMT) 3.70%*, 7/7/98 (LOC:
Comerica Bank).................. 3,025,000
715,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Patten Monument, (AMT) 3.70%*,
7/7/98 (LOC: Huntington Bank)... 715,000
1,600,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Pilot Industries, (AMT) 3.80%*,
7/7/98 (LOC: NBD Bank).......... 1,600,000
915,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Stephenson Land, (AMT) 3.70%*,
7/7/98 (LOC: Comerica Bank)..... 915,000
475,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Tom
Miller, Inc., (AMT) 3.65%*,
7/7/98 (LOC: First Union)....... 475,000
4,295,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
United Fixtures, (AMT) 3.70%*,
7/7/98 (LOC: Bankers Trust)..... 4,295,000
1,785,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Wayne, Disposal Oakland Project,
(AMT), 3.70%*, 7/7/98 (LOC:
Comerica Bank).................. 1,785,000
905,000 Michigan State Strategic Fund,
Molmec, Inc. (AMT), 3.75%*,
7/7/98, (LOC: Comerica Bank).... 905,000
1,000,000 Michigan State Strategic Fund,
Northern Pure Ice Co. Project,
(AMT), 4.00%*, 7/7/98 (LOC:
National Australia Bank)........ 1,000,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,000,000 Michigan State Strategic Fund,
NSF International Project,
Series 1997B, 4.00%*, 7/7/98,
(LOC: National City)............ $ 1,000,000
1,685,000 Michigan State Strategic Fund,
Omni Technical Services, Inc.,
(AMT) 3.75%*, 7/7/98 (LOC:
National City).................. 1,685,000
945,000 Michigan State Strategic Fund,
Plascore, Inc., (AMT), 3.70%*,
7/7/98, (LOC: Huntington Bank).. 945,000
3,100,000 Michigan State Strategic Fund,
Rochester Gear Project, (AMT),
3.65%*, 7/7/98, (LOC: Comerica
Bank)........................... 3,100,000
11,900,000 Michigan State Strategic Fund,
Solid Waste Disposal, Grayling
Generating Project, (AMT)
3.60%*, 7/7/98 (LOC: Barclays
Bank)........................... 11,900,001
2,200,000 Michigan State Strategic Fund,
Sunrise Windows Ltd. Project,
(AMT), 3.80%*, 7/7/98 (LOC:
Keybank)........................ 2,200,000
800,000 Michigan State Strategic Fund,
Ultimate Laser Inc. Project,
(AMT), 3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 800,000
1,900,000 Michigan State Strategic Fund,
Uni Mist, Inc. Project, (AMT),
3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 1,900,000
2,800,000 Michigan State Strategic Fund,
United Waste System (AMT),
3.70%*, 7/7/98, (LOC: Bank of
America)........................ 2,800,000
1,075,000 Michigan State Strategic Fund,
Wright -- Technology, Inc.,
Series 1997, (AMT), 3.75%*,
7/7/98 (LOC: National City)..... 1,075,000
2,000,000 Michigan State Strategic Fund,
Xibitz Inc. Project, (AMT),
3.65%*, 7/7/98 (LOC: NBD
Bank)........................... 2,000,000
10,000,000 Midland County Economic
Development Corp., Limited
Obligation Revenue, Dow Chemical
Project, Series A, (AMT), Series
A, 4.30%*, 7/1/98............... 10,000,000
3,000,000 Oakland County Economic
Development Corp., Cranbrook
Community, 3.55%*, 7/7/98 (LOC:
Comerica Bank).................. 3,000,000
675,000 Oakland County Economic
Development Corp., Orchard Maple
Project, 3.75%*, 11/15/98 (LOC:
National City Bank)............. 675,000
</TABLE>
Continued
95
<PAGE> 98
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 310,000 Rochester Hills Economic
Development Corp., BRG Assoc.,
4.00%*, 12/1/98 (LOC: Comerica
Bank)........................... $ 310,000
825,000 Saginaw Township School
Refunding, QSBLF, 3.90%,
12/1/98......................... 825,000
1,200,000 Scio Township Economic
Development Corp., Daycroft
School Project, 3.85%*, 7/7/98,
(LOC: National Australia
Bank)........................... 1,200,000
1,170,000 St. Clair Shores, Michigan
Education, Borman's, Inc.
Project, (AMT), 3.85%*, 10/15/98
(LOC: Michigan National Bank)... 1,170,000
760,000 University Of Michigan Hospital
Revenue, 4.00%, 12/1/98......... 760,611
5,000,000 University Of Michigan Hospital
Revenue, 3.80%*, 7/1/98......... 5,000,000
1,205,000 Warren Economic Development
Corp. (Cross Country Inn),
(AMT), 3.75%*, 11/1/98 (LOC:
Huntington Bank)................ 1,205,000
1,740,000 Warren Economic Development
Corp., CMX Corp. Project, (AMT),
3.80%*, 9/15/98 (LOC: First of
America)........................ 1,740,000
550,000 Warren Economic Development
Corp., Limited Obligation
Revenue, Elias Brothers, (AMT),
3.95%*, 12/1/98, (LOC: Comerica
Bank)........................... 550,000
4,510,000 Wayne County Airport, Detroit
Airport, Series A, (AMT),
3.60%*, 7/7/98 (LOC: Baerische
Landesbank)..................... 4,510,000
2,000,000 Whitmore Lake Michigan Public
Schools, 4.50%, 6/30/99......... 2,009,560
------------
231,960,937
------------
PUERTO RICO -- 5.6%
4,500,000 Commonwealth of Puerto Rico, Tax
& Revenue Anticipation Notes,
Series A, 4.50%, 7/30/98........ 4,502,902
2,750,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Reynolds Metals, 3.80%*, 9/1/98
(LOC: ABN/Amro)................. 2,750,000
3,000,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Abbott Labs Project, 3.55%*,
3/1/99.......................... 3,000,000
500,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Reynolds Metals, 3.80%*, 9/1/98
(LOC: ABN/Amro)................. 500,082
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,695,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Abbott Labs Project, 3.55%*,
3/1/99.......................... $ 1,695,000
4,200,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Merck, 4.00%*, 12/1/98.......... 4,200,000
------------
16,647,984
------------
TOTAL MUNICIPAL BONDS........... 248,608,921
------------
(Amortized Cost $248,608,921)
TAX FREE COMMERCIAL PAPER -- 15.1%
MICHIGAN -- 15.1%
1,100,000 Cornell Township Economic
Development Corp., Industrial
Development Revenue, Mead
Escanaba Paper Co., 3.75%*,
7/9/98 (LOC: Credit Suisse)..... 1,100,000
2,900,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.60%*, 7/15/98 (LOC: Morgan
Guaranty)....................... 2,900,000
3,000,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.75%*, 7/16/98 (LOC: Morgan
Guaranty)....................... 3,000,000
3,000,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.55%*,
7/16/98, (LOC: Union Bank of
Switzerland).................... 3,000,000
3,840,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.15%*,
8/11/98, (LOC: Union Bank of
Switzerland).................... 3,8400,000
450,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.60%*,
8/11/98, (LOC: Union Bank of
Switzerland).................... 450,000
</TABLE>
Continued
96
<PAGE> 99
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
TAX FREE COMMERCIAL PAPER (CONTINUED)
MICHIGAN (CONTINUED)
9,525,000 Michigan State Building
Authority, 3.70%, 10/1/98,
(LOC:........................... $ 9,525,000
8,050,000 Michigan State Housing
Development Authority,
Multifamily, Series A, 3.75%*,
8/20/98, (LOC: Helaba).......... 8,050,000
12,780,000 Michigan State Underground Tank
Storage, 3.70%, 8/10/98, (LOC:
CIBC)........................... 12,780,000
------------
44,645,000
------------
TOTAL TAX FREE COMMERCIAL
PAPER........................... 44,645,000
------------
(Amortized Cost $44,645,000)
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
INVESTMENT COMPANIES -- 1.4%
3,315,062 Dreyfus Tax Exempt Money Market
Fund............................ $ 3,315,062
791,540 Federated Tax Exempt Money
Market.......................... 791,540
------------
TOTAL INVESTMENT COMPANIES...... 4,106,602
------------
(Amortized Cost $4,106,602)
TOTAL INVESTMENTS--100.3%................... 297,360,523
(Amortized Cost $297,360,523) (a)
LIABILITIES IN EXCESS OF OTHER ASSETS
-- (0.3)%.................................. (1,001,160)
------------
TOTAL NET ASSETS -- 100.0%.................. $296,359,363
============
</TABLE>
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
<TABLE>
<S> <C>
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
QSBLF Qualified School Board Lending Fund
STP Short Term Put
</TABLE>
See Notes to Financial Statements.
97
<PAGE> 100
GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998
The Kent Funds (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 80.3%
FEDERAL FARM CREDIT BANK -- 7.5%
$3,550,000 5.45%, 12/14/98.................. $ 3,546,281
4,000,000 5.25%, 3/5/99.................... 3,855,917
-----------
7,402,198
-----------
FEDERAL HOME LOAN BANK -- 22.8%
5,000,000 5.55%, 7/1/98.................... 4,999,999
3,000,000 5.29%, 7/29/98................... 2,987,657
4,000,000 5.44%*, 7/30/98.................. 4,000,000
2,654,000 5.32%, 9/9/98.................... 2,626,546
3,000,000 5.25%, 2/26/99................... 2,895,000
5,000,000 5.50%, 3/26/99................... 4,997,182
-----------
22,506,384
-----------
FEDERAL HOME LOAN MORTGAGE CORP. -- 25.4%
4,000,000 5.40%, 7/2/98.................... 3,999,400
2,167,000 5.40%, 7/10/98................... 2,164,075
3,000,000 5.42%, 7/17/98................... 2,992,773
1,670,000 5.45%, 7/20/98................... 1,665,196
4,000,000 5.69%, 8/21/98................... 3,999,458
2,311,000 5.34%, 8/21/98................... 2,293,517
3,000,000 5.43%, 9/2/98.................... 2,971,493
5,000,000 5.33%, 9/18/98................... 4,941,573
-----------
25,027,485
-----------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 24.6%
3,000,000 5.33%, 7/7/98.................... 2,997,335
3,000,000 5.26%, 7/14/98................... 2,994,302
1,062,000 5.34%, 7/30/98................... 1,057,432
5,000,000 5.44%, 8/28/98................... 4,956,178
3,352,000 5.425%, 9/4/98................... 3,319,167
4,000,000 5.61%*, 11/3/98.................. 4,000,000
5,000,000 5.50%*, 2/4/99................... 4,999,999
-----------
24,324,413
-----------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS...................... 79,260,480
-----------
(Amortized Cost $79,260,480)
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
<C> <S> <C>
REPURCHASE AGREEMENTS -- 12.1%
$ 4,000,000 Donaldson, Lufkin & Jenrette
5.50%, dated 6/30/98, due
7/1/98 with a maturity value of
4,000,611 (collateralized by
$4,020,000 FNMA, MTN, 6.59%,
3/27/08, market value
$4,083,808).................... $ 4,000,000
4,000,000 HSBC 5.50%, dated 6/30/98, due
7/1/98 with a maturity value of
$4,000,611, (collateralized by
$2,940,000 U.S. Treasury Notes,
8.875%, 8/15/17 market value
$4,186,782).................... 4,000,000
4,000,000 Merrill Lynch 5.65%, dated
6/30/98, due 7/1/98 with a
maturity value of $4,000,628
(collateralized by $4,010,000
FNMA MTN, 6.58%, 12/17/07
market value $4,083,205)....... 4,000,000
------------
TOTAL REPURCHASE AGREEMENTS.... 12,000,000
------------
(Amortized Cost $12,000,000)
INVESTMENT COMPANIES -- 7.7%
4,090,082 Dreyfus Cash Management Money
Market Fund.................... 4,090,082
3,522,978 Federated Government
Obligations Money Market Fund.. 3,522,978
------------
TOTAL INVESTMENT COMPANIES..... 7,613,060
------------
(Amortized Cost $7,613,060)
TOTAL INVESTMENTS -- 100.1%................ 98,873,540
(Amortized Cost $98,873,540)(a)
LIABILITIES IN EXCESS OF OTHER
ASSETS -- 0.1%.............................. (80,780)
------------
TOTAL NET ASSETS -- 100.0%.................. $ 98,792,760
============
</TABLE>
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
See Notes to Financial Statements.
98
<PAGE> 101
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH AND SMALL COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost.................................... $594,708,496 $642,478,988 $453,714,204 $455,042,297
Net unrealized appreciation (depreciation)............. 204,801,433 167,754,523 95,161,014 286,343,012
------------ ------------ ------------ ------------
Total investments at value............................. 799,509,929 810,233,511 548,875,218 741,385,309
Foreign currency at value (cost $0; $0; $1,028,482; $0,
respectively).......................................... -- -- 1,056,556 --
Receivable for investments sold.......................... 33,880 -- -- 146,432
Receivable for capital shares issued..................... 46,764 2,732 936 11,971
Interest and dividends receivable........................ 885,569 524,065 2,349,650 779,250
Tax reclaim receivable................................... -- -- 1,134,982 --
Prepaid expenses......................................... 23,086 20,185 20,518 28,196
------------ ------------ ------------ ------------
Total Assets........................................... 800,499,228 810,780,493 553,437,860 742,351,158
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased........................ -- 9,557,871 219,852 --
Payable for capital shares redeemed...................... 3,445 -- -- 26,113
Foreign withholding taxes payable........................ -- -- 374,294 --
Net payable for variation margin on futures contracts.... 144,520 89,380 -- 76,790
Cash overdraft........................................... -- 1,466 -- --
Payable to adviser....................................... 451,059 444,150 334,302 148,499
Payable to administrator................................. 19,810 19,614 13,464 12,247
Payable to transfer agent................................ 19,990 15,375 16,030 3,417
Payable to distributor (Investment Shares)............... 9,327 5,239 2,347 7,264
Payable to custodian..................................... -- -- 65,540 --
Accrued expenses and other liabilities................... 37,239 40,645 23,782 39,473
------------ ------------ ------------ ------------
Total Liabilities...................................... 685,390 10,173,740 1,049,611 313,803
------------ ------------ ------------ ------------
NET ASSETS................................................. $799,813,838 $800,606,753 $552,388,249 $742,037,355
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital.......................................... $574,976,275 $579,661,898 $415,860,651 $455,156,107
Accumulated undistributed (distributions in excess of)
net investment income.................................. (738,085) 33,217 2,022,792 (4,878)
Accumulated undistributed net realized gains (losses) on
investments, foreign currency and futures contracts
sold................................................... 20,530,551 52,880,609 39,323,374 247,685
Net unrealized appreciation (depreciation) of
investments, foreign currency, forward foreign currency
exchange contracts and futures contracts............... 205,045,097 168,031,029 95,181,432 286,638,441
------------ ------------ ------------ ------------
TOTAL NET ASSETS........................................... $799,813,838 $800,606,753 $552,388,249 $742,037,355
============ ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets............................................... $753,308,043 $774,504,790 $540,202,587 $705,841,136
Shares Outstanding....................................... 44,905,451 42,376,692 31,732,755 31,564,788
Net Asset Value, offering and redemption price per
share.................................................. $ 16.78 $ 18.28 $ 17.02 $ 22.36
============ ============ ============ ============
INVESTMENT SHARES:
Net Assets............................................... $ 46,505,795 $ 26,101,963 $ 12,185,662 $ 36,196,218
Shares Outstanding....................................... 2,794,598 1,434,137 721,470 1,618,064
Net Asset Value, offering and redemption price per
share.................................................. $ 16.64 $ 18.20 $ 16.89 $ 22.37
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
99
<PAGE> 102
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at cost..................................... $132,827,916 $754,630,464 $247,669,161
Net unrealized appreciation (depreciation).............. 888,777 10,119,282 7,232,414
------------ ------------ ------------
Total investments at value.............................. 133,716,693 764,749,746 254,901,575
Receivable for investments sold........................... -- 5,148,250 --
Receivable for capital shares issued...................... 8,299 8 3,500
Interest and dividends receivable......................... 2,247,340 11,214,711 4,049,071
Prepaid expenses.......................................... 24,647 15,905 22,825
------------ ------------ ------------
Total Assets............................................ 135,996,979 781,128,620 258,976,971
------------ ------------ ------------
LIABILITIES:
Payable for investments purchased......................... -- 5,254,887 --
Payable for capital shares redeemed....................... 48,384 21,079 535
Payable to adviser........................................ 56,527 358,292 125,828
Payable to administrator.................................. 3,362 19,283 6,433
Payable to transfer agent................................. 7,245 22,694 2,963
Payable to distributor (Investment Shares)................ 829 1,955 1,816
Payable to custodian...................................... 409 557 346
Accrued expenses and other liabilities.................... 5,276 28,816 9,271
------------ ------------ ------------
Total Liabilities....................................... 122,032 5,707,563 147,192
------------ ------------ ------------
NET ASSETS.................................................. $135,874,947 $775,421,057 $258,829,779
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital........................................... $141,916,898 $772,500,514 $249,168,529
Accumulated undistributed (distributions in excess of) net
investment income....................................... 12,220 17,605 45,943
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (6,942,948) (7,216,345) 2,382,893
Net unrealized appreciation (depreciation) of
investments............................................. 888,777 10,119,283 7,232,414
------------ ------------ ------------
TOTAL NET ASSETS............................................ $135,874,947 $775,421,057 $258,829,779
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets................................................ $129,226,590 $765,401,799 $249,546,319
Shares Outstanding........................................ 13,277,762 76,942,692 24,032,308
Net Asset Value, offering and redemption price per
share................................................... $ 9.73 $ 9.95 $ 10.38
============ ============ ============
INVESTMENT SHARES:
Net Assets................................................ $ 6,648,357 $ 10,019,257 $ 9,283,461
Shares Outstanding........................................ 683,820 1,004,960 895,178
Net Asset Value, offering and redemption price per
share................................................... $ 9.72 $ 9.97 $ 10.37
============ ============ ============
</TABLE>
See Notes to Financial Statements
100
<PAGE> 103
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost..................................... $36,294,965 $269,255,252 $119,349,777 $122,864,609
Net unrealized appreciation (depreciation).............. 653,467 15,194,834 7,088,501 3,124,599
----------- ------------ ------------ ------------
Total investments at value.............................. 36,948,432 284,450,086 126,438,278 125,989,208
Receivable for investments sold........................... -- -- 5,638,880 --
Interest and dividends receivable......................... 566,035 4,431,968 1,730,912 1,615,980
Unamortized organizational costs.......................... -- -- 348 --
Prepaid expenses.......................................... 2,971 7,976 25,013 8,065
----------- ------------ ------------ ------------
Total Assets............................................ 37,517,438 288,890,030 133,833,431 127,613,253
----------- ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased......................... -- -- 6,454,070 1,495,260
Payable for capital shares redeemed....................... 2,000 -- 150 --
Payable to adviser........................................ 14,106 119,194 57,679 47,342
Payable to administrator.................................. 930 7,167 3,161 3,133
Payable to transfer agent................................. 1,205 4,200 -- 3,902
Payable to distributor (Investment Shares)................ 40 776 406 579
Accrued expenses and other liabilities.................... 1,582 8,822 4,852 13,403
----------- ------------ ------------ ------------
Total Liabilities....................................... 19,863 140,159 6,520,318 1,563,619
----------- ------------ ------------ ------------
NET ASSETS.................................................. $37,497,575 $288,749,871 $127,313,113 $126,049,634
=========== ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital........................................... $36,840,862 $273,360,177 $120,133,633 $123,034,931
Accumulated undistributed (distributions in excess of) net
investment income....................................... 3,966 61,464 8,106 10,896
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (720) 133,396 82,874 (120,793)
Net unrealized appreciation (depreciation) of
investments............................................. 653,467 15,194,834 7,088,501 3,124,599
----------- ------------ ------------ ------------
TOTAL NET ASSETS............................................ $37,497,575 $288,749,871 $127,313,114 $126,049,633
=========== ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets................................................ $37,205,184 $284,980,217 $125,280,385 $121,374,091
Shares Outstanding........................................ 3,657,786 26,746,405 11,788,179 11,906,668
Net Asset Value, offering and redemption price per
share................................................... $ 10.17 $ 10.66 $ 10.63 $ 10.19
=========== ============ ============ ============
INVESTMENT SHARES:
Net Assets................................................ $ 292,391 $ 3,769,653 $ 2,032,728 $ 4,675,544
Shares Outstanding........................................ 28,633 353,745 190,840 459,165
Net Asset Value, offering and redemption price per
share................................................... $ 10.21 $ 10.66 $ 10.65 $ 10.18
=========== ============ ============ ============
</TABLE>
See Notes to Financial Statements
101
<PAGE> 104
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments in securities at amortized cost............. $471,729,166 $297,380,509 $86,873,540
Repurchase agreements (cost $42,000,000; $0; and
$12,000,000, respectively)............................ 42,000,000 -- 12,000,000
------------ ------------ -----------
Total investments at amortized cost..................... 513,729,166 297,380,509 98,873,540
Cash...................................................... -- 63,961 --
Interest and dividends receivable......................... 4,473,328 2,030,350 365,864
Prepaid expenses.......................................... 15,870 2,458 20,548
------------ ------------ -----------
Total Assets............................................ 518,218,364 299,477,278 99,259,952
------------ ------------ -----------
LIABILITIES:
Dividends payable......................................... 2,245,640 787,968 440,869
Payable for investments purchased......................... -- 2,209,560 --
Cash overdraft............................................ 48,572 -- --
Payable to adviser........................................ 176,629 98,655 17,178
Payable to administrator.................................. 8,002 4,060 1,072
Payable to transfer agent................................. 6,228 3,199 4,556
Accrued expenses and other liabilities.................... 12,110 14,473 3,517
------------ ------------ -----------
Total Liabilities....................................... 2,497,181 3,117,915 467,192
------------ ------------ -----------
NET ASSETS.................................................. $515,721,183 $296,359,363 $98,792,760
============ ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital........................................... $515,710,154 $296,369,178 $98,790,546
Accumulated undistributed (distributions in excess of )net
investment income....................................... 13,072 781 2,214
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (2,043) (10,596) --
------------ ------------ -----------
TOTAL NET ASSETS............................................ $515,721,183 $296,359,363 $98,792,760
============ ============ ===========
INSTITUTIONAL SHARES:
Net Assets................................................ $512,831,244 $295,970,792 $98,758,508
Shares Outstanding........................................ 512,825,420 295,958,311 98,758,504
Net Asset Value, offering and redemption price per
share................................................... $ 1.00 $ 1.00 $ 1.00
============ ============ ===========
INVESTMENT SHARES:
Net Assets................................................ $ 2,889,939 $ 388,571 $ 34,252
Shares Outstanding........................................ 2,889,928 388,549 34,252
Net Asset Value, offering and redemption price per
share................................................... $ 1.00 $ 1.00 $ 1.00
============ ============ ===========
</TABLE>
See Notes to Financial Statements.
102
<PAGE> 105
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH AND SMALL COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.......................................... $ 6,611,585 $ 4,103,028 $ 7,590,259 $ 5,269,655
Interest........................................... 2,433 31,525 113,276 925
Less: Net foreign taxes withheld................... (47,181) (1,391) (681,459) (54,262)
------------ ------------ ----------- ------------
Total Investment Income.......................... 6,566,837 4,133,162 7,022,076 5,216,318
------------ ------------ ----------- ------------
EXPENSES:
Investment advisory fees........................... 2,694,142 2,717,125 2,013,699 1,019,677
Administration fees................................ 696,608 702,563 485,481 614,693
Fund accounting fees............................... 64,105 74,075 59,967 61,899
Custodian fees..................................... 4,061 18,839 177,567 10,551
Audit fees......................................... 3,601 4,735 3,475 4,185
Legal fees......................................... 4,888 4,990 3,441 4,420
Transfer agent fees................................ 85,875 86,244 68,257 76,747
Trustees' fees and expenses........................ 3,282 2,545 2,117 2,490
Distribution fees (Investment Shares).............. 52,068 31,228 13,511 40,957
Printing expenses.................................. 13,191 12,459 8,578 11,455
Registration fees.................................. 31,782 26,279 28,138 39,610
Other expenses..................................... 6,562 6,775 4,636 5,495
------------ ------------ ----------- ------------
Total expenses before waivers.................... 3,660,165 3,687,857 2,868,867 1,892,179
Less: waivers.................................... (38,486) (38,814) (26,848) (424,777)
------------ ------------ ----------- ------------
Net Expenses..................................... 3,621,679 3,649,043 2,842,019 1,467,402
------------ ------------ ----------- ------------
NET INVESTMENT INCOME................................ 2,945,158 484,119 4,180,057 3,748,916
------------ ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses) on investments, foreign
currency, and foreign currency contracts......... 19,400,029 51,316,112 39,479,491 635,885
Net realized gains/(losses) on futures contracts... 1,449,280 1,843,230 -- 569,878
Net change in unrealized appreciation/
(depreciation) of futures contracts.............. 243,665 276,505 -- 295,430
Net change in unrealized appreciation/
(depreciation) of investments, foreign currency,
and foreign currency contracts.................. 94,679,191 (20,315,685) 27,986,888 103,663,727
------------ ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS........................................ 115,772,165 33,120,162 67,466,379 105,164,920
------------ ------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................... $118,717,323 $ 33,604,281 $71,646,436 $108,913,836
============ ============ =========== ============
</TABLE>
See Notes to Financial Statements
103
<PAGE> 106
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
<TABLE>
<CAPTION>
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
---------- ------------ -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $ 4,424,087 $25,433,905 $ 8,587,366
Dividends................................................. 202,936 567,890 266,855
----------- ----------- -----------
Total Investment Income................................. 4,627,023 26,001,795 8,854,221
----------- ----------- -----------
EXPENSES:
Investment advisory fees.................................. 351,710 2,162,409 731,393
Administration fees....................................... 127,297 711,426 220,524
Fund accounting fees...................................... 12,764 63,373 21,633
Custodian fees............................................ 323 774 430
Audit fees................................................ 4,574 7,567 4,627
Legal fees................................................ 963 5,152 1,465
Transfer agent fees....................................... 27,755 44,016 22,387
Trustees' fees and expenses............................... 509 2,489 891
Distribution fees (Investment Shares)..................... 9,024 10,262 9,327
Printing expenses......................................... 1,244 12,746 2,414
Registration fees......................................... 7,753 12,767 7,916
Other expenses............................................ 37 7,488 2,470
----------- ----------- -----------
Total expenses before waivers........................... 543,953 3,040,469 1,025,477
Less: waivers........................................... (10,643) (39,315) (12,189)
----------- ----------- -----------
Net Expenses............................................ 533,310 3,001,154 1,013,288
----------- ----------- -----------
NET INVESTMENT INCOME....................................... 4,093,713 23,000,641 7,840,933
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS:
Net realized gains/(losses) on investments sold........... (242,985) 3,214,146 2,373,749
Net change in unrealized appreciation/(depreciation) of
investments............................................. 101,666 261,946 (102,128)
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS... (141,319) 3,476,092 2,271,621
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 3,952,394 $26,476,733 $10,112,554
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
104
<PAGE> 107
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND
------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest............................................. $ 847,422 $ 7,009,662 $3,043,289 $2,961,110
Dividends............................................ 15,131 90,759 49,305 37,789
---------- ----------- ---------- ----------
Total Investment Income............................ 862,553 7,100,421 3,092,594 2,998,899
---------- ----------- ---------- ----------
EXPENSES:
Investment advisory fees............................. 84,418 709,192 337,287 286,284
Administration fees.................................. 33,945 256,634 110,955 115,113
Distribution fees (Investment Shares)................ 525 4,645 2,333 5,720
Fund accounting fees................................. 5,750 28,932 14,352 15,799
Custodian fees....................................... 224 962 255 872
Audit fees........................................... 1,179 6,734 2,228 4,256
Legal fees........................................... 243 1,779 787 1,551
Transfer agent fees.................................. 15,024 19,996 10,803 17,670
Trustees' fees and expenses.......................... 197 949 419 526
Amortization of organization costs................... -- -- 2,200 --
Printing expenses.................................... 662 7,790 2,381 2,082
Registration fees.................................... 566 9,848 5,188 1,945
Other expenses....................................... 564 739 667 120
---------- ----------- ---------- ----------
Total expenses before waivers...................... 143,297 1,048,200 489,855 451,938
Less: waivers...................................... (2,086) (14,183) (6,132) (8,650)
---------- ----------- ---------- ----------
Net Expenses....................................... 141,211 1,034,017 483,723 443,288
---------- ----------- ---------- ----------
NET INVESTMENT INCOME.................................. 721,342 6,066,404 2,608,871 2,555,611
---------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses) on investments sold...... (2,861) 151,942 84,606 (51,863)
Net change in unrealized appreciation/(depreciation)
of investments..................................... (79,816) (902,594) (269,337) (217,623)
---------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS:......................................... (82,677) (750,652) (184,731) (269,486)
---------- ----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS... $ 638,665 $ 5,315,752 $2,424,140 $2,286,125
========== =========== ========== ==========
</TABLE>
See Notes to Financial Statements
105
<PAGE> 108
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $14,160,573 $5,503,729 $2,744,115
Dividends................................................. 506,665 147,701 183,892
----------- ---------- ----------
Total Investment Income................................. 14,667,238 5,651,430 2,928,007
----------- ---------- ----------
EXPENSES:
Investment advisory fees.................................. 1,039,288 623,452 211,788
Administration fees....................................... 470,082 280,669 96,053
Fund accounting fees...................................... 40,809 25,363 8,787
Custodian fees............................................ 3,534 129 1,807
Audit fees................................................ 5,810 3,532 1,441
Legal fees................................................ 3,368 2,122 654
Transfer agent fees....................................... 37,748 18,039 20,190
Trustees' fees and expenses............................... 1,639 1,389 415
Printing expenses......................................... 14,841 6,751 876
Registration fees......................................... 15,300 20,180 18,995
Other expenses............................................ 4,966 1,826 947
----------- ---------- ----------
Total expenses before waivers........................... 1,637,385 983,452 361,953
Less: waivers........................................... (220,830) (147,491) (164,975)
----------- ---------- ----------
Net Expenses............................................ 1,416,555 835,961 196,978
----------- ---------- ----------
NET INVESTMENT INCOME....................................... 13,250,683 4,815,469 2,731,029
----------- ---------- ----------
NET REALIZED GAINS/(LOSSES) ON INVESTMENTS:................. -- 1,873 --
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $13,250,683 $4,817,342 $2,731,029
=========== ========== ==========
</TABLE>
See Notes to Financial Statements.
106
<PAGE> 109
The Kent Funds STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------------------------- --------------------------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD.................. $733,315,634 $515,920,253 $742,781,688 $ 558,516,596
------------ ------------ ------------ -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................ 2,945,158 10,415,521 484,119 1,548,638
Net realized gains (losses) on investments,
foreign currency, and foreign currency
contracts...................................... 19,400,029 111,932,563 51,316,112 78,087,896
Net realized gains (losses) on futures
contracts...................................... 1,449,280 (61,005) 1,843,230 524,810
Net change in unrealized appreciation/
depreciation of futures contracts.............. 243,665 275,070 276,505 227,785
Net change in unrealized appreciation/
depreciation of investments, foreign currency,
and foreign currency contracts................. 94,679,191 15,661,888 (20,315,685) 81,347,122
------------ ------------ ------------ -------------
Net increase in net assets resulting from
operations..................................... 118,717,323 138,224,037 33,604,281 161,736,251
------------ ------------ ------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
INSTITUTIONAL:
Net investment income............................ (2,891,165) (10,051,899) (444,722) (1,572,242)
In excess of net investment income............... (685,173) -- -- (570,748)
Net realized gains on investments................ (53,299,154) (58,514,755) (36,791,276) (52,695,021)
------------ ------------ ------------ -------------
Total dividends and distributions --
Institutional Shares......................... (56,875,492) (68,566,654) (37,235,998) (54,838,011)
------------ ------------ ------------ -------------
INVESTMENT:
Net investment income............................ (104,002) (322,621) -- --
In excess of net investment income............... (52,912) -- -- (36,830)
Net realized gains on investments................ (3,026,738) (2,725,491) (1,225,423) (1,565,329)
In excess of net realized gains.................. (34,095) -- -- --
------------ ------------ ------------ -------------
Total dividends and distributions -- Investment
Shares....................................... (3,217,747) (3,048,112) (1,225,423) (1,602,159)
------------ ------------ ------------ -------------
Total dividends and distributions to
shareholders................................. (60,093,239) (71,614,766) (38,461,421) (56,440,170)
------------ ------------ ------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 83,677,799 269,087,243 117,500,991 216,183,011
Reinvestment of distributions.................... 28,454,307 33,077,724 19,428,888 28,070,255
Cost of shares redeemed.......................... (104,257,986) (151,378,857) (74,247,674) (165,284,255)
------------ ------------ ------------ -------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS..................................... 7,874,120 150,786,110 62,682,205 78,969,011
------------ ------------ ------------ -------------
Net increase (decrease) in net assets............ 66,498,204 217,395,381 57,825,065 184,265,092
------------ ------------ ------------ -------------
NET ASSETS AT END OF PERIOD........................ $799,813,838 $733,315,634 $800,606,753 $ 742,781,688
============ ============ ============ =============
</TABLE>
See Notes to Financial Statements
107
<PAGE> 110
The Kent Funds STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------------------------- --------------------------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD.................. $502,378,709 $396,597,865 $618,163,526 $ 253,362,463
------------ ------------ ------------ -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................ 4,180,057 3,728,587 3,748,916 6,100,887
Net realized gains (losses) on investments,
foreign currency, and foreign currency
contracts...................................... 39,479,491 2,742,836 635,885 1,138,162
Net realized gains (losses) on futures
contracts...................................... -- -- 569,878 1,370,043
Net change in unrealized appreciation/
depreciation of futures contracts.............. -- -- 295,430 120,014
Net change in unrealized appreciation/
depreciation of investments, foreign currency,
and foreign currency contracts................. 27,986,888 4,769,670 103,663,727 98,353,714
------------ ------------ ------------ -------------
Net increase in net assets resulting from
operations..................................... 71,646,436 11,241,093 108,913,836 107,082,820
------------ ------------ ------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income............................ -- (3,055,002) (3,605,275) (5,884,290)
In excess of net investment income............... -- (1,831,420) -- (65,127)
Net realized gains on investments................ (95,553) (2,401,097) (277,770) (1,613,042)
In excess of net realized gains.................. -- (341,685) -- (585,460)
------------ ------------ ------------ -------------
Total dividends and distributions --
Institutional Shares......................... (95,553) (7,629,204) (3,883,045) (8,147,919)
------------ ------------ ------------ -------------
INVESTMENT:
Net investment income............................ -- (35,702) (135,943) (215,864)
In excess of net investment income............... -- (59,234) (7,854) (9,227)
Net realized gains on investments................ (1,983) (47,965) (14,200) (88,824)
In excess of net realized gains.................. -- (6,876) -- (11,017)
------------ ------------ ------------ -------------
Total dividends and distributions -- Investment
Shares....................................... (1,983) (149,777) (157,997) (324,932)
------------ ------------ ------------ -------------
Total dividends and distributions to
shareholders................................. (97,536) (7,778,981) (4,041,042) (8,472,851)
------------ ------------ ------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 56,978,331 193,400,718 94,349,805 339,198,444
Reinvestment of distributions.................... 45,260 3,565,223 3,308,354 6,673,196
Cost of shares redeemed.......................... (78,562,951) (94,647,209) (78,657,124) (79,680,546)
------------ ------------ ------------ -------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS..................................... (21,539,360) 102,318,732 19,001,035 266,191,094
------------ ------------ ------------ -------------
Net increase (decrease) in net assets............ 50,009,540 105,780,844 123,873,829 364,801,063
------------ ------------ ------------ -------------
NET ASSETS AT END OF PERIOD........................ $552,388,249 $502,378,709 $742,037,355 $ 618,163,526
============ ============ ============ =============
</TABLE>
See Notes to Financial Statements
108
<PAGE> 111
The Kent Funds STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT TERM BOND FUND INTERMEDIATE BOND FUND INCOME FUND
----------------------------- ----------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF
PERIOD.......................... $147,171,664 $237,096,910 $769,711,501 $776,722,838 $235,388,305 $242,781,715
------------ ------------ ------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income........... 4,093,713 10,326,405 23,000,641 46,719,968 7,840,933 16,498,462
Net realized gains (losses) on
investments sold.............. (242,985) (1,502,731) 3,214,146 (3,309,390) 2,373,749 3,441,169
Net change in unrealized
appreciation/depreciation of
investments................... 101,666 1,638,919 261,946 15,305,110 (102,128) 5,214,704
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations..... 3,952,394 10,462,593 26,476,733 58,715,688 10,112,554 25,154,335
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income........... (3,879,121) (10,203,409) (22,787,131) (46,492,693) (7,573,340) (16,298,443)
Net realized gains on
investments................... -- -- -- -- (279,136) (4,496,656)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional Shares........ (3,879,121) (10,203,409) (22,787,131) (46,492,693) (7,852,476) (20,795,099)
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT:
Net investment income........... (186,088) (230,620) (231,320) (400,310) (221,112) (236,638)
In excess of net investment
income........................ (19,414) -- (3,682) -- (13,608) --
Net realized gains on
investments................... -- -- -- -- (8,712) (85,457)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions -- Investment
Shares...................... (205,502) (230,620) (235,002) (400,310) (243,432) (322,095)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders................ (4,084,623) (10,434,029) (23,022,133) (46,893,003) (8,095,908) (21,117,194)
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 16,308,034 55,848,711 104,996,465 201,540,137 43,595,805 67,917,967
Reinvestment of distributions... 2,479,978 6,828,762 11,974,584 25,204,467 1,881,294 4,339,793
Cost of shares redeemed......... (29,952,500) (152,631,283) (114,716,093) (245,578,626) (24,052,271) (83,688,311)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM
CAPITAL TRANSACTIONS............ (11,164,488) (89,953,810) 2,254,956 (18,834,022) 21,424,828 (11,430,551)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets........................ (11,296,717) (89,925,246) 5,709,556 (7,011,337) 23,441,474 (7,393,410)
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD....... $135,874,947 $147,171,664 $775,421,057 $769,711,501 $258,829,779 $235,388,305
============ ============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
109
<PAGE> 112
The Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LIMITED TERM INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND
---------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD......................... $36,497,570 $41,577,319 $279,175,752 $289,042,905
----------- ----------- ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income................................... 721,342 1,439,072 6,066,404 12,269,050
Net realized gains (losses) on investments sold......... (2,861) 159,864 151,942 691,582
Net change in unrealized appreciation/depreciation of
investments........................................... (79,816) 136,663 (902,594) 6,286,893
----------- ----------- ------------ ------------
Net increase in net assets resulting from operations.... 638,665 1,735,599 5,315,752 19,247,525
----------- ----------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income................................... (713,447) (1,432,406) (5,961,138) (12,149,068)
Net realized gains on investments....................... -- (170,851) -- (86,552)
In excess of net realized gains......................... -- -- -- (17,244)
----------- ----------- ------------ ------------
Total dividends and distributions -- Institutional
Shares.............................................. (713,447) (1,603,257) (5,961,138) (12,252,864)
----------- ----------- ------------ ------------
INVESTMENT:
Net investment income................................... (7,440) (11,595) (74,278) (135,115)
Net realized gains on investments....................... -- (2,045) -- (863)
In excess of net realized gains......................... -- -- -- (441)
----------- ----------- ------------ ------------
Total dividends and distributions -- Investment
Shares.............................................. (7,440) (13,640) (74,278) (136,419)
----------- ----------- ------------ ------------
Total dividends and distributions to shareholders..... (720,887) (1,616,897) (6,035,416) (12,389,283)
----------- ----------- ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 6,372,230 9,736,272 27,474,194 44,265,909
Reinvestment of distributions........................... 11,843 27,364 132,804 207,641
Cost of shares redeemed................................. (5,301,846) (14,962,087) (17,313,215) (61,198,945)
----------- ----------- ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL TRANSACTIONS... 1,082,227 (5,198,451) 10,293,783 (16,725,395)
----------- ----------- ------------ ------------
Net increase (decrease) in net assets................... 1,000,005 (5,079,749) 9,574,119 (9,867,153)
----------- ----------- ------------ ------------
NET ASSETS AT END OF PERIOD............................... $37,497,575 $36,497,570 $288,749,871 $279,175,752
=========== =========== ============ ============
</TABLE>
See Notes to Financial Statements
110
<PAGE> 113
The Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX-FREE MICHIGAN MUNICIPAL
INCOME FUND BOND FUND
---------------------------- ------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------------------- ------------------------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD........................ $118,364,159 $110,883,746 $116,148,299 $155,044,170
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.................................. 2,608,871 5,050,397 2,555,611 5,042,224
Net realized gains (losses) on investments sold........ 84,606 376,069 (51,863) 49,676
Net change in unrealized appreciation/depreciation of
investments.......................................... (269,337) 4,279,292 (217,623) 1,602,539
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations... 2,424,140 9,705,758 2,286,125 6,694,439
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income.................................. (2,561,573) (5,016,230) (2,495,223) (4,914,390)
In excess of net investment income..................... -- (610) -- --
Net realized gains on investments...................... (92,723) (330,223) -- --
------------ ------------ ------------ ------------
Total dividends and distributions -- Institutional
Shares............................................. (2,654,296) (5,347,063) (2,495,223) (4,914,390)
------------ ------------ ------------ ------------
INVESTMENT:
Net investment income.................................. (36,519) (42,572) (84,147) (121,577)
In excess of net investment income..................... (1,304) (929) (5,391) --
Net realized gains on investments...................... (523) (4,346) -- --
In excess of net realized gains........................ (926) -- -- --
------------ ------------ ------------ ------------
Total dividends and distributions -- Investment
Shares............................................. (39,272) (47,847) (89,538) (121,577)
------------ ------------ ------------ ------------
Total dividends and distributions to shareholders.... (2,693,568) (5,394,910) (2,584,761) (5,035,967)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................ 16,873,469 33,039,586 25,035,408 35,519,586
Reinvestment of distributions.......................... 82,613 116,653 87,944 131,586
Cost of shares redeemed................................ (7,737,700) (29,986,674) (14,923,381) (76,205,515)
------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS........................................... 9,218,382 3,169,565 10,199,971 (40,554,343)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets.................. 8,948,954 7,480,413 9,901,335 (38,895,871)
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD.............................. $127,313,113 $118,364,159 $126,049,634 $116,148,299
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
111
<PAGE> 114
The Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
------------------------------- ----------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997(1)
----------------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF
PERIOD........................ $ 475,557,215 $ 484,722,709 $ 211,971,193 $ 156,205,940 $ 94,626,461 $ --
------------- --------------- ------------- ------------- ------------- -------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income......... 13,250,683 26,741,343 4,815,469 6,381,928 2,731,029 2,952,675
Net realized gains (losses) on
investments................. -- (1,165) 1,873 (12,469) -- 4
------------- --------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations... 13,250,683 26,740,178 4,817,342 6,369,459 2,731,029 2,952,679
------------- --------------- ------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income......... (13,184,778) (26,699,476) (4,809,401) (6,369,567) (2,730,688) (2,952,603)
------------- --------------- ------------- ------------- ------------- -------------
Total dividends and
distributions --
Institutional Shares...... (13,184,778) (26,699,476) (4,809,401) (6,369,567) (2,730,688) (2,952,603)
------------- --------------- ------------- ------------- ------------- -------------
INVESTMENT:
Net investment income......... (65,905) (41,867) (6,068) (12,361) (341) (72)
------------- --------------- ------------- ------------- ------------- -------------
Total dividends and
distributions --
Investment Shares......... (65,905) (41,867) (6,068) (12,361) (341) (72)
------------- --------------- ------------- ------------- ------------- -------------
Total dividends and
distributions to
shareholders.............. (13,250,683) (26,741,343) (4,815,469) (6,381,928) (2,731,029) (2,952,675)
------------- --------------- ------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued... 606,531,858 1,153,447,515 345,849,071 279,204,632 202,383,919 328,636,541
Reinvestment of
distributions............... 1,011,593 1,731,961 144,791 205,995 2,624,219 2,413,648
Cost of shares redeemed....... (567,379,483) (1,164,343,805) (261,607,565) (223,632,905) (200,841,839) (236,423,732)
------------- --------------- ------------- ------------- ------------- -------------
TOTAL NET INCREASE (DECREASE)
FROM CAPITAL TRANSACTIONS..... 40,163,968 (9,164,329) 84,386,297 55,777,722 4,166,299 94,626,457
------------- --------------- ------------- ------------- ------------- -------------
Net increase in net assets.... 40,163,968 (9,165,494) 84,388,170 55,765,253 4,166,299 94,626,461
------------- --------------- ------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD..... $ 515,721,183 $ 475,557,215 $ 296,359,363 $ 211,971,193 $ 98,792,760 $ 94,626,461
============= =============== ============= ============= ============= =============
</TABLE>
- ---------------
(1) For the period from June 2, 1997 (commencement of operations) through
December 31, 1997.
See Notes to Financial Statements.
112
<PAGE> 115
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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, as
amended (the "1940 Act"), as an open-end management investment company. As of
the date of this report, the Trust offered fourteen 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, The Kent Index Equity Fund, The Kent Short
Term Bond Fund, The Kent Intermediate Bond Fund, The Kent Income Fund, The Kent
Limited Term Tax-Free Fund, The Kent Intermediate Tax-Free Fund, The Kent
Tax-Free Income Fund, The Kent Michigan Municipal Bond Fund, The Kent Money
Market Fund, The Kent Michigan Municipal Money Market Fund and The Kent
Government Money Market Fund (individually, a "Fund" and collectively, the
"Funds").
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 Funds 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 fourteen series of shares with two
separate classes in each series: Investment Shares and Institutional Shares.
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 the Distribution Plan, shareholder
services fees and certain printing and postage expenses incurred as they relate
to a particular class of shares.
The investment objectives of the Funds are as follows:
Growth and Income Fund -- To seek long-term capital growth with current income
as a secondary goal.
Small Company Growth Fund -- To seek long-term capital appreciation by
investing in equity securities of small companies.
International Growth Fund -- To seek long-term growth of capital and
additional diversification for U.S. investors by investing in a varied portfolio
of foreign equity securities.
Index Equity Fund -- To seek investment results which mirror the capital
performance and dividend income of the Standard & Poor's 500 Composite Stock
Price Index.
Short Term Bond Fund -- To seek current income by investing primarily in a
limited range of investment quality fixed income securities.
Intermediate Bond Fund -- To seek current income by investing primarily in a
broad range of investment quality debt securities.
Income Fund -- To seek a high level of current income by investing in a broad
range of investment quality debt securities.
Limited Term Tax-Free Fund -- To seek current income, exempt from federal
income tax, while preserving capital.
Intermediate Tax-Free Fund -- To seek current income, exempt from federal
income tax, while preserving capital.
Tax-Free Income Fund -- To seek to provide as high a level of current income
exempt from federal income tax as is consistent with prudent investing, while
preserving capital.
Michigan Municipal Bond Fund -- To seek current income, exempt from federal
and State of Michigan personal income taxes, while preserving capital.
Money Market Fund -- To seek current income from short-term securities while
preserving capital and maintaining liquidity.
Michigan Municipal Money Market Fund -- To seek current income from short-term
securities that is exempt from federal and State of Michigan personal income
taxes, while preserving capital and maintaining liquidity.
Government Money Market Fund -- To seek current income from short-term United
States Government
113
<PAGE> 116
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
securities while preserving capital and maintaining liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds 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: Securities in the Money Market Fund, Government Money
Market Fund and Michigan Municipal Money Market Fund are valued utilizing the
amortized cost valuation method permitted in accordance with Rule 2a-7 under the
1940 Act, which approximates market value. This method involves valuing a
portfolio security initially at its cost on the date of purchase and thereafter
assuming a constant amortization to maturity of the difference between the
principal amount due at maturity and initial cost.
In the Limited Term Tax-Free Fund, Intermediate Tax-Free Fund, Tax-Free Income
Fund, Michigan Municipal Bond Fund, Short Term Bond Fund, Intermediate Bond
Fund, and Income Fund, corporate debt securities, municipal securities and debt
securities of the U.S. government and its agencies (other than short-term
investments maturing in 60 days or less) are valued on the basis of valuations
provided by dealers or by an independent pricing service approved by the Board
of Trustees. 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.
The Growth and Income Fund, Small Company Growth Fund, International Growth
Fund and the Index Equity Fund value listed securities 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.
REPURCHASE AGREEMENTS: The Trust's custodian and other banks acting in a
sub-custodian capacity, take possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued daily
on a mark-to-market basis to determine that the value, including accrued
interest, exceeds the repurchase price. In the event of the seller's default of
the obligation to repurchase, the Funds have the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of the default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings.
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 Fund 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.
FUTURES CONTRACTS: The Growth and Income Fund, Small Company Growth Fund,
International Growth Fund, Index Equity Fund, Limited Term Tax-Free Fund,
Intermediate Tax-Free Fund, Tax-Free Income Fund and Michigan Municipal Bond
Fund may invest in futures contracts. This investment involves, to varying
degrees,
114
<PAGE> 117
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect the
extent of the involvement the Funds have in the particular classes of
instruments. Risks include an imperfect correlation between the movements in the
price of the instruments and the price of the underlying securities and interest
rates. Risks may also arise if there is an illiquid secondary market for the
instruments or due to the inability of counterparties to perform under the terms
of the contract.
Cash or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received daily by the Fund based on the change in
the market value of the position are recorded as an unrealized gain or loss
until the contract is closed out at which time the gain or loss is recognized.
Futures contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.
To the extent that the Fund enters into futures contracts on an index or group
of securities, the Fund exposes itself to an indeterminate liability and will be
required to pay or receive a sum of money measured by the change in the market
value of the index or group of securities. Upon entering into a futures
contract, the Fund 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.
The average market value of futures contracts held during the six-months ended
June 30, 1998 was as follows:
<TABLE>
<CAPTION>
AVERAGE
FUND MARKET VALUE
---- ------------
<S> <C>
Growth and Income Fund................ $15,157,100
Small Company Growth Fund............. 10,764,439
Index Equity Fund..................... 7,882,254
</TABLE>
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 on investments sold
and on foreign currency transactions are recorded on the basis of identified
cost. Interest income is recorded on the accrual basis and includes, where
applicable, the amortization of premiums or accretion of discounts. 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 Fund against currency fluctuations during the settlement period. In
such cases, the Fund has not realized currency gains or losses between the trade
and settlement dates on these security transactions.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Funds declare and distribute
dividends from net investment income monthly, with the exception of the
International Growth Fund which declares and pays dividends annually. Net
investment income for this purpose consists of interest accrued, discount earned
(including both original issue and market discount), dividends earned less
amortization of any market premium and accrued expenses. 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
115
<PAGE> 118
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
and capital gains recognized in accordance with generally accepted accounting
principles.
FEDERAL INCOME TAXES: For federal income tax purposes, each Fund 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 Fund 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.
At December 31, 1997, the following Funds had the following capital loss
carryforwards which will expire in the years indicated:
<TABLE>
<CAPTION>
FUND AMOUNT YEAR
---- ----------- ----
<S> <C> <C>
Short Term Bond Fund........... $ 656,100 2001
3,015,994 2002
467,881 2003
438,260 2004
1,927,928 2005
-----------
$ 6,506,163
===========
</TABLE>
<TABLE>
<CAPTION>
FUND AMOUNT YEAR
---- ----------- ----
<S> <C> <C>
Intermediate Bond Fund......... $ 6,353,600 2004
4,043,228 2005
-----------
$10,396,828
===========
Michigan Municipal Bond Fund... $ 68,930 2003
Money Market Fund.............. $ 433 1999
224 2002
194 2003
27 2004
432 2005
-----------
$ 1,310
===========
Michigan Municipal Money Market
Fund......................... $ 12,469 2005
</TABLE>
EXPENSES: Expenses directly attributable to a Fund are charged to the Fund,
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.
ORGANIZATIONAL COSTS: The Tax-Free Income Fund bears all costs in connection
with its organization, including the fees and expenses of registering and
qualifying their initial shares for distribution under federal and state
securities laws. All such costs are amortized using the straight-line method
over a period of five years beginning with the respective Fund's commencement of
operations. In the event that any of the initial shares purchased by the Fund's
sponsors are redeemed during such period by any holder thereof, the Fund will be
reimbursed by such holder for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption. The other Funds bore all
costs in connection with their organization. All such costs were fully amortized
as of June 30, 1998.
116
<PAGE> 119
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
3. RELATED PARTY TRANSACTIONS
The Funds are advised by Lyon Street Asset Management Company ("Lyon Street"
or the "Investment Adviser"), a wholly-owned subsidiary of Old Kent Bank ("Old
Kent"). Effective as of March 2, 1998, Lyon Street assumed the investment
advisory responsibilities for each of the Funds from the Investment Management
Group of Old Kent. This change did not involve a change in control or management
of the investment adviser or a change in the Funds' portfolio managers. The
Investment Adviser is entitled to receive a fee, computed daily and paid
monthly, based on each Fund's average daily net assets at the following annual
rates:
<TABLE>
<S> <C>
Growth and Income Fund...................... 0.70%
Small Company Growth Fund................... 0.70%
International Growth Fund................... 0.75%
Index Equity Fund........................... 0.30%
Short Term Bond Fund........................ 0.50%
Intermediate Bond Fund...................... 0.55%
Income Fund................................. 0.60%
Limited Term Tax-Free Fund.................. 0.45%
Intermediate Tax-Free Fund.................. 0.50%
Tax-Free Income Fund........................ 0.55%
Michigan Municipal Bond Fund................ 0.45%
Money Market Fund........................... 0.40%
Government Money Market Fund................ 0.40%
Michigan Municipal Money Market Fund........ 0.40%
</TABLE>
The Index Equity Fund and Government Money Market Fund had investment advisory
fees waived by Lyon Street equal to $169,948 and $105,893, respectively.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
serves the Funds as Administrator and Distributor. BISYS Fund Services, Inc.
serves the Funds as Fund Accountant and Transfer Agent. 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.
Gross administration fees and fees waived for the six months ended June 30,
1998 were as follows for the Funds indicated:
<TABLE>
<CAPTION>
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
<S> <C> <C>
Growth and Income Fund..... $696,608 $ --
Small Company Growth
Fund..................... 702,563 --
International Growth
Fund..................... 485,481 --
Index Equity Fund.......... 614,693 203,845
Short Term Bond Fund....... 127,297 --
Intermediate Bond Fund..... 711,426 --
Income Fund................ 220,524 --
Limited Term Tax-Free
Fund..................... 33,945 --
Intermediate Tax-Free
Fund..................... 256,634 --
Tax-Free Income Fund....... 110,955 --
Michigan Municipal Bond
Fund..................... 115,113 --
Money Market Fund.......... 470,082 181,854
Michigan Municipal Money
Market Fund.............. 280,669 124,111
Government Money Market
Fund..................... 96,053 51,140
</TABLE>
Beginning June 1, 1997, Old Kent provided certain administrative services to
the Trust pursuant to a Sub-Administration Agreement between Old Kent and BISYS.
BISYS agreed to pay Old Kent a fee, calculated daily and paid monthly, at an
annual rate of up to 0.05% of each Fund's average daily net assets. The fees
paid to Old Kent by BISYS for such administrative services come out of BISYS'
administration fee and are not an additional charge to the Funds.
Sub-administration fees for each Fund for the six months ended June 30,1998
are as follows:
<TABLE>
<CAPTION>
FUNDS SUB-ADMINISTRATION FEES
----- -----------------------
<S> <C>
Growth and Income Fund........ $188,950
Small Company Growth Fund..... 190,662
International Growth Fund..... 131,901
Index Equity Fund............. 166,552
Short Term Bond Fund.......... 27,716
Intermediate Bond Fund........ 154,689
Income Fund................... 47,855
Limited Term Tax-Free Fund.... 7,379
Intermediate Tax-Free Fund.... 55,765
Tax-Free Income Fund.......... 24,092
</TABLE>
117
<PAGE> 120
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
FUNDS SUB-ADMINISTRATION FEES
----- -----------------------
<S> <C>
Michigan Municipal Bond Fund.. 25,010
Money Market Fund............. 102,113
Michigan Municipal Money
Market Fund................. 45,902
Government Money Market
Fund........................ 26,056
</TABLE>
Fund Accounting Fees and fees waived for each Fund for the six months ended
June 30, 1998 are as follows:
<TABLE>
<CAPTION>
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
<S> <C> <C>
Growth and Income Fund..... $57,732 $38,486
Small Company Growth
Fund..................... 58,224 38,814
International Growth
Fund..................... 40,274 26,848
Index Equity Fund.......... 50,984 50,984
Short Term Bond Fund....... 10,551 7,034
Intermediate Bond Fund..... 58,975 39,315
Income Fund................ 18,285 12,189
Limited Term Tax-Free
Fund..................... 2,814 1,876
Intermediate Tax-Free
Fund..................... 21,276 14,183
Tax-Free Income Fund....... 9,199 6,132
Michigan Municipal Bond
Fund..................... 9,543 6,362
Money Market Fund.......... 38,976 38,976
Michigan Municipal Money
Market Fund.............. 23,380 23,380
Government Money Market
Fund..................... 7,942 7,942
</TABLE>
Certain officers of the Trust are affiliated with BISYS. Such officers receive
no direct payments or fees from the Funds for serving as officers.
The Trust has adopted a distribution plan (the "Plan") on behalf of the
Investment Shares of the Funds 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 Funds. Although the Money Market Fund,
the Michigan Municipal Money Market Fund, and the Government Money Market Fund
are authorized to pay 12b-1 fees of up to 0.25% in connection with the sale of
Investment Shares, none currently intends to pay such fees.
Gross distribution fees and fees waived for each of Fund for the six months
ended June 30, 1998 are as follows:
<TABLE>
<CAPTION>
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
<S> <C> <C>
Growth and Income Fund..... $52,068 $ --
Small Company Growth
Fund..................... 31,228 --
International Growth
Fund..................... 13,511 --
Index Equity Fund.......... 40,957 --
Short Term Bond Fund....... 9,024 3,609
Intermediate Bond Fund..... 10,262 --
Income Fund................ 9,327 --
Limited Term Tax-Free
Fund..................... 525 210
Intermediate Tax-Free
Fund..................... 4,645 --
Tax-Free Income Fund....... 2,333 --
Michigan Municipal Bond
Fund..................... 5,720 2,288
Money Market Fund.......... -- --
Michigan Municipal Money
Market Fund.............. -- --
Government Money Market
Fund..................... -- --
</TABLE>
Expenses for the Trust include legal fees paid to Drinker Biddle & Reath LLP.
A partner of that firm serves as Assistant Secretary of the Trust.
118
<PAGE> 121
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Portfolios are summarized below:
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
---------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
----------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.............................. $ 74,213,556 $ 249,081,909 $112,376,511 $ 208,702,084
Reinvestment of distributions.............. 25,311,874 30,110,268 18,225,651 26,503,462
Shares redeemed............................ (99,766,393) (147,058,160) (71,502,921) (161,953,808)
------------ ------------- ------------ -------------
Net increase (decrease) from
Institutional shares transactions...... $ (240,963) $ 132,134,017 $ 59,099,241 $ 73,251,738
------------ ------------- ------------ -------------
INVESTMENT:
Shares issued.............................. $ 9,464,243 $ 20,005,334 $ 5,124,481 $ 7,480,927
Reinvestment of distributions.............. 3,142,433 2,967,456 1,203,237 1,566,793
Shares redeemed............................ (4,491,593) (4,320,697) (2,744,754) (3,330,447)
------------ ------------- ------------ -------------
Net increase (decrease) from Investment
shares transactions.................... $ 8,115,083 $ 18,652,093 $ 3,582,964 $ 5,717,273
------------ ------------- ------------ -------------
Total net increase (decrease) from shares
transactions........................... $ 7,874,120 $ 150,786,110 $ 62,682,205 $ 78,969,011
============ ============= ============ =============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.............................. 4,546,510 16,279,124 6,070,971 11,956,401
Reinvestment of distributions.............. 1,563,327 1,971,493 957,845 1,547,774
Shares redeemed............................ (6,086,340) (9,401,038) (3,801,230) (9,131,520)
------------ ------------- ------------ -------------
Net increase (decrease) from
Institutional shares transactions...... 23,497 8,849,579 3,227,586 4,372,655
------------ ------------- ------------ -------------
INVESTMENT:
Shares issued.............................. 585,779 1,283,992 273,920 419,135
Reinvestment of distributions.............. 195,654 195,172 63,462 91,169
Shares redeemed............................ (276,347) (280,261) (146,262) (191,859)
------------ ------------- ------------ -------------
Net increase (decrease) from Investment
shares transactions.................... 505,086 1,198,903 191,120 318,445
------------ ------------- ------------ -------------
Total net increase (decrease) from shares
transactions........................... 528,583 10,048,482 3,418,706 4,691,100
============ ============= ============ =============
</TABLE>
119
<PAGE> 122
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
-------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued................................... $ 53,043,793 $189,937,844 $ 88,620,020 $323,258,744
Reinvestment of distributions................... 43,310 3,418,753 3,154,022 6,357,380
Shares redeemed................................. (75,622,614) (92,021,615) (76,028,296) (77,077,375)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... $(22,535,511) $101,334,982 $ 15,745,746 $252,538,749
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued................................... $ 3,934,537 $ 3,462,874 $ 5,729,786 $ 15,939,700
Reinvestment of distributions................... 1,951 146,470 154,332 315,816
Shares redeemed................................. (2,940,336) (2,625,594) (2,628,829) (2,603,171)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ $ 996,152 $ 983,750 $ 3,255,289 $ 13,652,345
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions................................ $(21,539,359) $102,318,732 $ 19,001,035 $266,191,094
============ ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued................................... 3,261,560 12,562,555 4,302,815 18,391,993
Reinvestment of distributions................... 2,527 230,973 149,083 353,825
Shares redeemed................................. (4,620,989) (5,990,183) (3,721,984) (4,462,155)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... (1,356,902) 6,803,345 729,914 14,283,663
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued................................... 239,973 227,807 278,345 915,280
Reinvestment of distributions................... 115 9,962 7,288 17,611
Shares redeemed................................. (180,002) (175,388) (125,609) (149,114)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ 60,086 62,381 160,024 783,777
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions................................ (1,296,816) 6,865,726 889,938 15,067,440
============ ============ ============ ============
</TABLE>
120
<PAGE> 123
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
--------------------------------- -------------------------------- ----------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED)
----------------- ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued...................... $ 15,429,132 $ 48,001,662 $ 100,788,121 $ 199,760,848 $ 39,138,174
Reinvestment of distributions...... 2,278,463 6,604,162 11,764,434 24,873,643 1,649,425
Shares redeemed.................... (28,098,105) (150,317,030) (113,314,910) (243,018,554) (22,982,323)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Institutional shares
transactions................... $(10,390,510) $ (95,711,206) $ (762,355) $ (18,384,063) $ 17,805,276
------------ ------------- ------------- ------------- ------------
INVESTMENT:
Shares issued...................... $ 878,903 $ 7,847,049 $ 4,208,343 $ 1,779,289 $ 4,457,631
Reinvestment of distributions...... 201,515 224,600 210,150 330,824 231,869
Shares redeemed.................... (1,854,396) (2,314,253) (1,401,182) (2,560,072) (1,069,948)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Investment shares
transactions................... $ (773,978) $ 5,757,396 $ 3,017,311 $ (449,959) $ 3,619,552
------------ ------------- ------------- ------------- ------------
Total net increase (decrease)
from shares transactions....... $(11,164,488) $ (89,953,810) $ 2,254,956 $ (18,834,022) $ 21,424,828
============ ============= ============= ============= ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued...................... 1,579,207 4,932,559 10,127,341 20,424,141 3,775,897
Reinvestment of distributions...... 234,165 681,245 1,187,148 2,553,873 160,208
Shares redeemed.................... (2,874,459) (15,426,349) (11,382,133) (24,790,453) (2,217,308)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Institutional shares
transactions................... (1,061,087) (9,812,545) (67,644) (1,812,439) 1,718,797
------------ ------------- ------------- ------------- ------------
INVESTMENT:
Shares issued...................... 89,796 806,758 421,709 180,929 430,540
Reinvestment of distributions...... 20,731 23,130 21,156 33,899 22,551
Shares redeemed.................... (190,071) (237,636) (140,347) (261,548) (103,388)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Investment shares
transactions................... (79,544) 592,252 302,518 (46,720) 349,703
------------ ------------- ------------- ------------- ------------
Total net increase (decrease)
from shares transactions....... (1,140,631) (9,220,293) 234,874 (1,859,159) 2,068,500
============ ============= ============= ============= ============
<CAPTION>
INCOME FUND
------------
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued...................... $ 64,474,285
Reinvestment of distributions...... 4,044,114
Shares redeemed.................... (82,779,834)
------------
Net increase (decrease) from
Institutional shares
transactions................... $(14,261,435)
------------
INVESTMENT:
Shares issued...................... $ 3,443,682
Reinvestment of distributions...... 295,679
Shares redeemed.................... (908,477)
------------
Net increase (decrease) from
Investment shares
transactions................... $ 2,830,884
------------
Total net increase (decrease)
from shares transactions....... $(11,430,551)
============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued...................... 6,376,298
Reinvestment of distributions...... 400,874
Shares redeemed.................... (8,087,197)
------------
Net increase (decrease) from
Institutional shares
transactions................... (1,310,025)
------------
INVESTMENT:
Shares issued...................... 338,211
Reinvestment of distributions...... 29,196
Shares redeemed.................... (89,859)
------------
Net increase (decrease) from
Investment shares
transactions................... 277,548
------------
Total net increase (decrease)
from shares transactions....... (1,032,477)
============
</TABLE>
121
<PAGE> 124
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
LIMITED TERM INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND
-------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued................................... $ 6,308,730 $ 9,059,260 $ 26,535,651 $ 43,176,593
Reinvestment of distributions................... 4,403 13,903 81,819 124,001
Shares redeemed................................. (5,049,801) (14,638,082) (16,571,106) (60,115,232)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... $ 1,263,332 $(5,564,919) $ 10,046,364 $(16,814,638)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued................................... $ 63,500 $ 677,012 $ 938,543 $ 1,089,316
Reinvestment of distributions................... 7,440 13,461 50,985 83,640
Shares redeemed................................. (252,045) (324,005) (742,109) (1,083,713)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ $ (181,105) $ 366,468 $ 247,419 $ 89,243
----------- ------------ ------------ ------------
Total net increase (decrease) from shares
transactions................................ $ 1,082,227 $(5,198,451) $ 10,293,783 $(16,725,395)
=========== ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued................................... 617,952 888,774 2,481,303 4,110,419
Reinvestment of distributions................... 433 1,369 7,685 11,820
Shares redeemed................................. (495,055) (1,435,754) (1,551,627) (5,717,526)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... 123,330 (545,611) 937,361 (1,595,287)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued................................... 6,213 66,418 87,785 103,878
Reinvestment of distributions................... 728 1,317 4,788 7,978
Shares redeemed................................. (24,682) (31,731) (69,781) (104,039)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ (17,741) 36,004 22,792 7,817
----------- ------------ ------------ ------------
Total net increase (decrease) from share
transactions................................ 105,589 (509,607) 960,153 (1,587,470)
=========== ============ ============ ============
</TABLE>
122
<PAGE> 125
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
TAX-FREE MICHIGAN MUNICIPAL
INCOME FUND BOND FUND
--------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
----------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.................................. $16,109,076 $31,815,166 $ 24,379,464 $ 32,654,052
Reinvestment of distributions.................. 45,861 76,956 27,079 70,141
Shares redeemed................................ (7,263,010) (29,459,976) (14,476,540) (75,229,474)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions........................ $ 8,891,927 $ 2,432,146 $ 9,930,003 $(42,505,281)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued.................................. $ 764,393 $ 1,224,420 $ 655,944 $ 2,865,534
Reinvestment of distributions.................. 36,752 39,697 60,864 61,445
Shares redeemed................................ (474,690) (526,698) (446,840) (976,041)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment
shares transactions........................ $ 326,455 $ 737,419 $ 269,968 $ 1,950,938
----------- ------------ ------------ ------------
Total net increase (decrease) from shares
transactions............................... $ 9,218,382 $ 3,169,565 $ 10,199,971 $(40,554,343)
=========== ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.................................. 1,511,065 3,066,893 2,376,723 3,222,928
Reinvestment of distributions.................. 4,323 7,401 2,654 6,941
Shares redeemed................................ (681,484) (2,828,842) (1,417,285) (7,426,189)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions........................ 833,904 245,452 962,092 (4,196,320)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued.................................. 71,491 116,872 64,231 283,459
Reinvestment of distributions.................. 3,456 3,802 5,977 6,073
Shares redeemed................................ (44,471) (51,267) (43,757) (97,266)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment
shares transactions........................ 30,476 69,407 26,451 192,266
----------- ------------ ------------ ------------
Total net increase (decrease) from share
transactions............................... 864,380 314,859 988,543 (4,004,054)
=========== ============ ============ ============
</TABLE>
123
<PAGE> 126
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
--------------------------------- -------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- -------------- ---------------- ------------
<S> <C> <C> <C> <C>
SHARE AMOUNTS
(AT $1.00 PER SHARE)
INSTITUTIONAL:
Shares issued..................... 595,011,645 1,151,538,209 342,780,178 279,013,482
Reinvestment of distributions..... 954,568 1,693,047 138,858 192,298
Shares redeemed................... (557,512,743) (1,162,770,823) (258,632,293) (222,935,437)
------------ -------------- ------------ ------------
Net increase (decrease) from
Institutional shares
transactions.................. 38,453,470 (9,539,567) 84,286,743 56,270,343
------------ -------------- ------------ ------------
INVESTMENT:
Shares issued..................... 11,520,214 1,909,306 3,068,893 191,150
Reinvestment of distributions..... 57,025 38,916 5,933 13,697
Shares redeemed................... (9,866,741) (1,572,981) (2,975,272) (697,468)
------------ -------------- ------------ ------------
Net increase from Investment
shares transactions........... 1,710,498 375,241 99,554 (492,621)
------------ -------------- ------------ ------------
Total net increase (decrease)
from shares transactions...... 40,163,968 (9,164,326) 84,386,297 55,777,722
============ ============== ============ ============
<CAPTION>
GOVERNMENT
MONEY MARKET FUND
--------------------------------
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997(1)
----------------- ------------
<S> <C> <C>
SHARE AMOUNTS
(AT $1.00 PER SHARE)
INSTITUTIONAL:
Shares issued..................... 202,345,837 328,632,081
Reinvestment of distributions..... 2,624,012 2,413,585
Shares redeemed................... (200,835,789) (236,421,222)
------------ ------------
Net increase (decrease) from
Institutional shares
transactions.................. 4,134,060 94,624,444
------------ ------------
INVESTMENT:
Shares issued..................... 38,083 4,460
Reinvestment of distributions..... 206 63
Shares redeemed................... (6,050) (2,510)
------------ ------------
Net increase from Investment
shares transactions........... 32,239 2,013
------------ ------------
Total net increase (decrease)
from shares transactions...... 4,166,299 94,626,457
============ ============
</TABLE>
- ---------------
(1) From the period June 2, 1997 (commencement of operations) through December
31, 1997.
See Notes to Financial Statements
124
<PAGE> 127
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the six months ended June 30, 1998 were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ---- ------------ ------------
<S> <C> <C>
Growth and Income
Fund................. $111,596,658 $ 81,174,114
Small Company Growth
Fund................. 255,691,482 221,367,560
International Growth
Fund................. 84,783,430 87,259,925
Index Equity Fund...... 25,132,934 8,414,319
Short Term Bond Fund... 53,649,592 73,432,319
Intermediate Bond
Fund................. 486,912,246 477,517,170
Income Fund............ 124,710,448 108,129,102
Limited Term Tax-Free
Fund................. 8,735,943 8,816,633
Intermediate Tax-Free
Fund................. 36,475,323 32,758,043
Tax-Free Income Fund... 31,294,752 23,832,515
Michigan Municipal Bond
Fund................. 41,813,803 31,391,636
</TABLE>
6. RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES
The Growth and Income Fund, Small Company Growth Fund, the International
Growth Fund, and the Index Equity 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. CONCENTRATION OF CREDIT RISK
The Michigan Municipal Money Market Fund and Michigan Municipal Bond Fund
invest primarily in debt obligations issued by the State of Michigan and its
respective political subdivisions, agencies and public authorities to obtain
funds for various public purposes. The Funds are more susceptible to economic
and political factors adversely affecting issuers of Michigan specific municipal
securities than are municipal bond funds that are not concentrated in these
issuers to the same extent.
The Limited Term Tax-Free Fund, the Intermediate Tax-Free Fund, the Tax-Free
Income Fund, the Michigan Municipal Bond Fund and the Michigan Municipal Money
Market Fund had the following concentrations by industry sector at June 30, 1998
(as a percentage of total investments):
<TABLE>
<CAPTION>
MICHIGAN
LIMITED MICHIGAN MUNICIPAL
TERM INTERMEDIATE TAX-FREE MUNICIPAL MONEY
TAX-FREE TAX-FREE INCOME BOND MARKET
FUND FUND FUND FUND FUND
-------- ------------ -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Airport.............. 4.15% 1.70% 2.71% 1.74% 1.51%
Development.......... 17.84% 7.27% 8.76% 5.73% 60.83%
Education............ 16.82% 5.55% 8.21% 4.23% 1.93%
Environmental........ -- 2.10% 0.80% 1.02% 8.39%
General Obligation... 30.37% 32.80% 29.30% 15.34% 13.94%
Medical.............. 10.05% 1.63% 7.38% 21.09% 4.72%
Multifamily
Housing............ -- -- 2.10% 2.19% 3.74%
Mutual Funds......... 0.95% 2.99% 2.83% 0.88% 1.37%
Sewer................ -- -- -- 5.35% --
Power................ -- 9.61% 8.59% 5.66% --
School District...... 8.50% 13.78% 6.65% 30.94% 2.19%
Single Family
Housing............ 8.28% -- 0.87% -- --
Transportation....... 3.04% 11.17% 12.35% 4.96% 1.04%
Utilities............ -- 7.72% 7.86% 0.87% --
Water................ -- 3.68% 1.59% -- 0.34%
----- ----- ----- ----- -----
100% 100% 100% 100% 100%
===== ===== ===== ===== =====
</TABLE>
See Notes to Financial Statements
125
<PAGE> 128
The Kent Funds
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 15.55 $ 13.90 $ 13.25 $ 10.50 $ 10.91 $ 10.31
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income...................... 0.06 0.25 0.30 0.33 0.31 0.27
Net realized and unrealized gains (losses)
on investments and futures contracts..... 2.47 3.04 2.16 3.28 (0.26) 0.95
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations...... 2.53 3.29 2.46 3.61 0.05 1.22
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income...................... (0.06) (0.25) (0.30) (0.33) (0.31) (0.27)
In excess of net investment income......... (0.02) -- -- -- ** (0.01)
Net realized gains on investments and
futures contracts........................ (1.22) (1.39) (1.51) (0.53) (0.15) (0.34)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ (1.30) (1.64) (1.81) (0.86) (0.46) (0.62)
-------- -------- -------- -------- -------- --------
Net change in net asset value................ 1.23 1.65 0.65 2.75 (0.41) 0.60
-------- -------- -------- -------- -------- --------
Net asset value, end of period............... $ 16.78 $ 15.55 $ 13.90 $ 13.25 $ 10.50 $ 10.91
======== ======== ======== ======== ======== ========
Total return................................. 16.62%++ 24.14% 19.47% 34.91% 0.51% 11.98%
Ratios/Supplemental Data:
Net Assets, end of period (000's)............ $753,308 $697,973 $500,857 $401,371 $308,825 $180,864
Ratio of expenses to average net assets.... 0.93%+ 0.92% 0.95% 0.94% 0.98% 1.03%
Ratio of net investment income to average
net assets............................... 0.78%+ 1.61% 2.18% 2.73% 3.04% 2.61%
Ratio of expenses to average net assets*... 0.94%+ 0.93% 0.95% *** *** ***
Ratio of net investment income to average
net assets*.............................. 0.77%+ 1.60% 2.18% *** *** ***
Portfolio turnover rate(1)................. 11% 88% 39% 58% 28% 54%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
126
<PAGE> 129
The Kent Funds
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................ $ 15.44 $ 13.81 $ 13.19 $ 10.46 $10.87 $10.29
------- ------- ------- ------- ------ ------
Income from Investment Operations:
Net investment income............................. 0.04 0.21 0.26 0.30 0.32 0.27
Net realized and unrealized gains (losses) on
investments and futures contracts............... 2.44 3.02 2.15 3.26 (0.27) 0.93
------- ------- ------- ------- ------ ------
Total Income from Investment Operations............. 2.48 3.23 2.41 3.56 0.05 1.20
------- ------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income............................. (0.04) (0.21) (0.26) (0.30) (0.31) (0.23)
In excess of net investment income................ (0.02) -- (0.02) -- ** (0.05)
Net realized gains on investments and futures
contracts....................................... (1.21) (1.39) (1.51) (0.53) (0.15) (0.20)
In excess of net realized gains................... (0.01) -- -- -- -- (0.14)
------- ------- ------- ------- ------ ------
Total Dividends and Distributions............... (1.28) (1.60) (1.79) (0.83) (0.46) (0.62)
------- ------- ------- ------- ------ ------
Net change in net asset value....................... 1.20 1.63 0.62 2.73 (0.41) 0.58
------- ------- ------- ------- ------ ------
Net asset value, end of period...................... $ 16.64 $ 15.44 $ 13.81 $ 13.19 $10.46 $10.87
======= ======= ======= ======= ====== ======
Total return(1)..................................... 16.40%++ 23.89% 19.14% 34.61% 0.50% 11.81%
Ratios/Supplemental Data:
Net Assets, end of period (000's)................... $46,506 $35,343 $15,063 $11,079 $8,005 $4,607
Ratio of expenses to average net assets........... 1.18%+ 1.17% 1.09% 1.18% 0.98% 1.22%
Ratio of net investment income to average net
assets.......................................... 0.53%+ 1.31% 1.77% 2.48% 3.03% 2.43%
Ratio of expenses to average net assets*.......... 1.19%+ 1.18% 1.09% *** *** ***
Ratio of net investment income to average net
assets*......................................... 0.52%+ 1.30% 1.77% *** *** ***
Portfolio turnover rate(2)........................ 11% 88% 39% 58% 28% 54%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
127
<PAGE> 130
The Kent Funds
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 18.39 $ 15.65 $ 13.82 $ 11.99 $ 12.50 $ 10.85
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income...................... 0.01 0.04 0.12 0.10 0.10 0.08
Net realized and unrealized gains (losses)
on investments and futures contracts..... 0.82 4.19 2.55 2.64 (0.10) 1.76
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations...... 0.83 4.23 2.67 2.74 -- 1.84
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income...................... (0.01) (0.04) (0.12) (0.10) (0.09) (0.08)
In excess of net investment income......... -- (0.02) -- -- (0.01) (0.01)
Net realized gains on investments and
futures contracts........................ (0.93) (1.43) (0.72) (0.81) (0.41) (0.10)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ (0.94) (1.49) (0.84) (0.91) (0.51) (0.19)
-------- -------- -------- -------- -------- --------
Net change in net asset value................ (0.11) 2.74 1.83 1.83 (0.51) 1.65
-------- -------- -------- -------- -------- --------
Net asset value, end of period............... $ 18.28 $ 18.39 $ 15.65 $ 13.82 $ 11.99 $ 12.50
======== ======== ======== ======== ======== ========
Total return................................. 4.31%++ 27.94% 19.56% 23.75% (0.06%) 17.04%
Ratios/Supplemental Data:
Net Assets, end of period (000's)............ $774,505 $719,998 $544,081 $450,072 $304,179 $252,401
Ratio of expenses to average net assets.... 0.93%+ 0.93% 0.96% 0.97% 0.98% 1.06%
Ratio of net investment income to average
net assets............................... 0.13%+ 0.24% 0.78% 0.83% 0.79% 0.74%
Ratio of expenses to average net assets*... 0.94%+ 0.94% 0.96% *** *** ***
Ratio of net investment income to average
net assets*.............................. 0.12%+ 0.23% 0.78% *** *** ***
Portfolio turnover rate(1)................. 29% 32% 16% 30% 20% 14%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
128
<PAGE> 131
The Kent Funds
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................ $ 18.33 $ 15.61 $ 13.81 $ 11.98 $12.49 $10.86
------- ------- ------- ------- ------ ------
Income (Loss) from Investment Operations:
Net investment income............................. (0.01) -- 0.07 0.07 0.10 0.08
Net realized and unrealized gains (losses) on
investments and futures contracts............... 0.81 4.19 2.54 2.64 (0.11) 1.74
------- ------- ------- ------- ------ ------
Total Income (Loss) from Investment Operations...... 0.80 4.19 2.61 2.71 (0.01) 1.82
------- ------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income............................. -- -- (0.08) (0.07) (0.08) (0.06)
In excess of net investment income................ -- (0.04) (0.01) -- (0.01) (0.03)
Net realized gains on investments and futures
contracts....................................... (0.93) (1.43) (0.72) (0.81) (0.41) (0.10)
------- ------- ------- ------- ------ ------
Total Dividends and Distributions............... (0.93) (1.47) (0.81) (0.88) (0.50) (0.19)
------- ------- ------- ------- ------ ------
Net change in net asset value....................... (0.13) 2.72 1.80 1.83 (0.51) 1.63
------- ------- ------- ------- ------ ------
Net asset value, end of period...................... $ 18.20 $ 18.33 $ 15.61 $ 13.81 $11.98 $12.49
======= ======= ======= ======= ====== ======
Total return(1)..................................... 4.15%++ 27.71% 19.16% 23.47% (0.08%) 16.84%
Ratios/Supplemental Data:
Net Assets, end of period (000's)................... $26,102 $22,784 $14,436 $10,955 $8,433 $5,345
Ratio of expenses to average net assets........... 1.18%+ 1.18% 1.21% 1.20% 0.98% 1.25%
Ratio of net investment income (loss) to average
net assets...................................... (0.12%)+ (0.01%) 0.53% 0.59% 0.79% 0.59%
Ratio of expenses to average net assets*.......... 1.19%+ 1.19% 1.21% *** *** ***
Ratio of net investment income (loss) to average
net assets*..................................... (0.13%)+ (0.02%) 0.53% *** *** ***
Portfolio turnover rate(2)........................ 29% 32% 16% 30% 20% 14%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
129
<PAGE> 132
The Kent Funds
INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 14.89 $ 14.75 $ 14.18 $ 13.06 $ 12.84 $ 10.01
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income...................... 0.13 0.11 0.13 0.13 0.12 0.09
Net realized and unrealized gains (losses)
on investments and foreign currency...... 2.00 0.26 0.70 1.54 0.61 2.95
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations...... 2.13 0.37 0.83 1.67 0.73 3.04
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income...................... -- (0.09) (0.10) (0.13) (0.07) (0.08)
In excess of net investment income......... -- (0.06) (0.02) (0.11) (0.03) (0.04)
Net realized gains on investments and
foreign currency......................... ** (0.07) (0.13) (0.31) (0.41) (0.08)
In excess of net realized gains............ -- (0.01) (0.01) -- -- (0.01)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ ** (0.23) (0.26) (0.55) (0.51) (0.21)
-------- -------- -------- -------- -------- --------
Net change in net asset value................ 2.13 0.14 0.57 1.12 0.22 2.83
-------- -------- -------- -------- -------- --------
Net asset value, end of period............... $ 17.02 $ 14.89 $ 14.75 $ 14.18 $ 13.06 $ 12.84
======== ======== ======== ======== ======== ========
Total return................................. 14.33%++ 2.54% 5.87% 13.00% 5.73% 30.32%
Ratios/Supplemental Data:
Net Assets, end of period (000's)............ $540,203 $492,598 $387,799 $286,545 $178,186 $157,716
Ratio of expenses to average net assets.... 1.05%+ 1.05% 1.09% 1.17% 1.22% 1.33%
Ratio of net investment income to average
net assets............................... 1.56%+ 0.80% 0.97% 1.35% 0.87% 0.86%
Ratio of expenses to average net assets*... 1.06%+ 1.06% 1.09% *** *** ***
Ratio of net investment income to average
net assets*.............................. 1.55%+ 0.79% 0.97% *** *** ***
Portfolio turnover rate(1)............... 16% 3% 13% 6% 20% 5%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
130
<PAGE> 133
The Kent Funds
INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 14.79 $14.69 $14.13 $13.00 $12.81 $10.03
------- ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income................................ 0.11 0.08 0.12 0.14 0.14 0.13
Net realized and unrealized gains on securities and
foreign currency................................... 1.99 0.25 0.66 1.50 0.56 2.85
------- ------ ------ ------ ------ ------
Total Income from Investment Operations................ 2.10 0.33 0.78 1.64 0.70 2.98
------- ------ ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income................................ -- (0.06) (0.08) (0.09) (0.07) (0.02)
In excess of net investment income................... -- (0.09) -- (0.11) (0.03) (0.09)
Net realized gains on securities and foreign
currency........................................... ** (0.07) (0.14) (0.31) (0.41) (0.05)
In excess of net realized gains...................... -- (0.01) -- -- -- (0.04)
------- ------ ------ ------ ------ ------
Total Dividends and Distributions.................. ** (0.23) (0.22) (0.51) (0.51) (0.20)
------- ------ ------ ------ ------ ------
Net change in net asset value.......................... 2.10 0.10 0.56 1.13 0.19 2.78
------- ------ ------ ------ ------ ------
Net asset value, end of period......................... $ 16.89 $14.79 $14.69 $14.13 $13.00 $12.81
======= ====== ====== ====== ====== ======
Total return(1)........................................ 14.22%++ 2.25% 5.57% 12.86% 5.51% 29.67%
Ratios/Supplemental Data:
Net Assets, End of period (000's)...................... $12,186 $9,780 $8,799 $7,548 $6,539 $3,202
Ratio of expenses to average net assets.............. 1.30%+ 1.30% 1.34% 1.40% 1.25% 1.43%
Ratio of net investment income to average net
assets............................................. 1.35%+ 0.53% 0.74% 1.11% 0.81% 0.32%
Ratio of expenses to average net assets*............. 1.31%+ 1.31% 1.34% *** *** ***
Ratio of net investment income to average net
assets*............................................ 1.34%+ 0.52% 0.74% *** *** ***
Portfolio turnover rate(2)........................... 16% 3% 13% 6% 20% 5%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
131
<PAGE> 134
The Kent Funds
INDEX EQUITY FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 19.14 $ 14.71 $ 12.56 $ 10.68 $ 11.04 $ 10.41
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.12 0.25 0.26 0.26 0.25 0.23
Net realized and unrealized gains
(losses) on investments and futures
contracts.............................. 3.23 4.50 2.47 3.44 (0.15) 0.71
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations.... 3.35 4.75 2.73 3.70 0.10 0.94
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................... (0.12) (0.25) (0.26) (0.25) (0.26) (0.23)
In excess of net investment income....... -- -- -- -- -- **
Net realized gains on investments and
futures contracts...................... (0.01) (0.05) (0.28) (1.57) (0.20) (0.08)
In excess of net realized gains.......... -- (0.02) (0.04) -- -- --
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions...... (0.13) (0.32) (0.58) (1.82) (0.46) (0.31)
-------- -------- -------- -------- -------- --------
Net change in net asset value.............. 3.22 4.43 2.15 1.88 (0.36) 0.63
-------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 22.36 $ 19.14 $ 14.71 $ 12.56 $ 10.68 $ 11.04
======== ======== ======== ======== ======== ========
Total return............................... 17.52%++ 32.55% 22.18% 36.23% 0.86% 9.11%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......... $705,841 $590,241 $243,438 $183,877 $245,550 $233,451
Ratio of expenses to average net
assets................................. 0.42%+ 0.43% 0.49% 0.56% 0.58% 0.65%
Ratio of net investment income to average
net assets............................. 1.11%+ 1.44% 1.91% 2.14% 2.32% 2.18%
Ratio of expenses to average net
assets*................................ 0.54%+ 0.54% 0.59% 0.56% 0.58% 0.65%
Ratio of net investment income to average
net assets*............................ 0.99%+ 1.33% 1.81% 2.14% 2.32% 2.18%
Portfolio turnover rate(1)............... 1% 1% 2% 3% 50% 1%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
132
<PAGE> 135
The Kent Funds
INDEX EQUITY FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 19.15 $ 14.72 $12.57 $10.70 $11.07 $10.44
------- ------- ------ ------ ------ ------
Income from Investment Operations:
Net investment income............................... 0.09 0.20 0.22 0.23 0.26 0.22
Net realized and unrealized gains (losses) on
investments and futures contracts................. 3.23 4.51 2.48 3.44 (0.17) 0.72
------- ------- ------ ------ ------ ------
Total Income from Investment Operations............... 3.32 4.71 2.70 3.67 0.09 0.94
------- ------- ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income............................... (0.09) (0.20) (0.22) (0.23) (0.26) (0.20)
In excess of net investment income.................. -- (0.01) (0.01) -- -- (0.03)
Net realized gains on investments and futures
contracts......................................... (0.01) (0.06) (0.32) (1.57) (0.20) (0.06)
In excess of net realized gains..................... -- (0.01) -- -- -- (0.02)
------- ------- ------ ------ ------ ------
Total Dividends and Distributions................. (0.10) (0.28) (0.55) (1.80) (0.46) (0.31)
------- ------- ------ ------ ------ ------
Net change in net asset value......................... 3.22 4.43 2.15 1.87 (0.37) 0.63
------- ------- ------ ------ ------ ------
Net asset value, end of period........................ $ 22.37 $ 19.15 $14.72 $12.57 $10.70 $11.07
======= ======= ====== ====== ====== ======
Total return(1)....................................... 17.37%++ 32.24% 21.92% 35.81% 0.75% 9.09%
Net Assets, end of period (000's)..................... $36,196 $27,922 $9,925 $6,612 $4,736 $3,776
Ratio of expenses to average net assets............. 0.67%+ 0.68% 0.74% 0.80% 0.60% 0.86%
Ratio of net investment income to average net
assets............................................ 0.86%+ 1.20% 1.67% 1.86% 2.30% 2.04%
Ratio of expenses to average net assets*............ 0.79%+ 0.79% 0.84% 0.81% 0.60% 0.86%
Ratio of net investment income to average net
assets*........................................... 0.74%+ 1.09% 1.57% 1.85% 2.30% 2.04%
Portfolio turnover rate(2).......................... 1% 1% 2% 3% 50% 1%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
133
<PAGE> 136
The Kent Funds
SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 9.75 $ 9.75 $ 9.96 $ 9.52 $ 9.91 $ 9.99
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.28 0.61 0.61 0.55 0.48 0.42
Net realized and unrealized gains
(losses) on investments................ -- -- (0.21) 0.43 (0.38) (0.09)
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations.... 0.28 0.61 0.40 0.98 0.10 0.33
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................... (0.30) (0.61) (0.61) (0.54) (0.49) (0.41)
In excess of net investment income....... -- -- -- -- ** --
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions...... (0.30) (0.61) (0.61) (0.54) (0.49) (0.41)
-------- -------- -------- -------- -------- --------
Net change in net asset value.............. (0.02) 0.00 (0.21) 0.44 (0.39) (0.08)
-------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 9.73 $ 9.75 $ 9.75 $ 9.96 $ 9.52 $ 9.91
======== ======== ======== ======== ======== ========
Total return............................... 2.74%++ 6.42% 4.22% 10.53% 1.03% 3.36%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......... $129,227 $139,739 $235,430 $310,680 $176,765 $255,892
Ratio of expenses to average net
assets................................. 0.75%+ 0.72% 0.70% 0.77% 0.73% 0.81%
Ratio of net investment income to average
net assets............................. 5.83%+ 6.04% 6.17% 5.60% 4.75% 4.24%
Ratio of expenses to average net
assets*................................ 0.76%+ 0.73% 0.70% *** *** ***
Ratio of net investment income to average
net assets*............................ 5.82%+ 6.03% 6.17% *** *** ***
Portfolio turnover rate(1)............... 41% 89% 32% 75% 56% 50%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
134
<PAGE> 137
The Kent Funds
SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 9.74 $ 9.74 $ 9.95 $ 9.52 $ 9.91 $ 10.02
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................... 0.28 0.57 0.59 0.52 0.47 0.38
Net realized and unrealized gains
(losses) on investments............... -- 0.02 (0.20) 0.44 (0.37) (0.08)
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations... 0.28 0.59 0.39 0.96 0.10 0.30
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................... (0.27) (0.59) (0.54) (0.53) (0.48) (0.41)
In excess of net investment income...... (0.03) -- (0.06) -- (0.01) --
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.30) (0.59) (0.60) (0.53) (0.49) (0.41)
-------- -------- -------- -------- -------- --------
Net change in net asset value............. (0.02) 0.00 (0.21) 0.43 (0.39) (0.11)
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 9.72 $ 9.74 $ 9.74 $ 9.95 $ 9.52 $ 9.91
======== ======== ======== ======== ======== ========
Total return(1)........................... 2.68%++ 6.26% 4.06% 10.30% 1.01% 3.04%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $ 6,648 $ 7,433 $ 1,667 $ 1,634 $ 1,649 $ 1,427
Ratio of expenses to average net
assets................................ 0.90%+ 0.88% 0.85% 0.91% 0.74% 1.24%
Ratio of net investment income to
average net assets.................... 5.68%+ 5.75% 6.02% 5.40% 4.79% 3.91%
Ratio of expenses to average net
assets*............................... 1.01%+ 0.99% 0.96% *** *** ***
Ratio of net investment income to
average net assets*................... 5.57%+ 5.64% 5.91% *** *** ***
Portfolio turnover rate(2).............. 41% 89% 32% 75% 56% 50%
</TABLE>
- ---------------
+ 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.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
135
<PAGE> 138
The Kent Funds
INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE SIX YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 9.90 $ 9.76 $ 10.12 $ 9.29 $ 10.18 $ 10.00
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income................... 0.29 0.59 0.60 0.65 0.56 0.51
Net realized and unrealized gains
(losses) on investments............... 0.05 0.14 (0.32) 0.81 (0.88) 0.32
-------- -------- -------- -------- -------- --------
Total Income (Loss) from Investment
Operations.............................. 0.34 0.73 0.28 1.46 (0.32) 0.83
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................... (0.29) (0.59) (0.61) (0.63) (0.54) (0.51)
In excess of net investment income...... -- -- (0.03) -- (0.01) **
Net realized gains on investments....... -- -- -- -- (0.02) (0.14)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.29) (0.59) (0.64) (0.63) (0.57) (0.65)
-------- -------- -------- -------- -------- --------
Net change in net asset value............. 0.05 0.14 (0.36) 0.83 (0.89) 0.18
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 9.95 $ 9.90 $ 9.76 $ 10.12 $ 9.29 $ 10.18
======== ======== ======== ======== ======== ========
Total return.............................. 3.48%++ 7.80% 3.01% 16.18% (3.19%) 8.42%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $765,402 $762,740 $769,395 $854,801 $977,865 $434,264
Ratio of expenses to average net
assets................................ 0.76%+ 0.75% 0.77% 0.77% 0.80% 0.85%
Ratio of net investment income to
average net assets.................... 5.85%+ 6.03% 6.18% 6.50% 6.03% 5.03%
Ratio of expenses to average net
assets*............................... 0.77%+ 0.76% 0.78% *** *** ***
Ratio of net investment income to
average net assets*................... 5.84%+ 6.02% 6.17% *** *** ***
Portfolio turnover rate(1).............. 64% 114% 135% 166% 124% 126%
</TABLE>
- ---------------
+ 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.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
136
<PAGE> 139
The Kent Funds
INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 9.93 $ 9.78 $ 10.14 $ 9.32 $ 10.19 $ 10.03
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment
Operations:
Net investment income................. 0.27 0.57 0.58 0.61 0.57 0.47
Net realized and unrealized gains
(losses) on investments............. 0.05 0.15 (0.32) 0.82 (0.87) 0.34
-------- -------- -------- -------- -------- --------
Total Income (Loss) from Investment
Operations............................ 0.32 0.72 0.26 1.43 (0.30) 0.81
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................. (0.27) (0.57) (0.57) (0.61) (0.54) (0.46)
In excess of net investment income.... (0.01) -- (0.05) -- (0.01) (0.05)
Net realized gains on investments..... -- -- -- -- (0.02) (0.14)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions... (0.28) (0.57) (0.62) (0.61) (0.57) (0.65)
-------- -------- -------- -------- -------- --------
Net change in net asset value........... 0.04 0.15 (0.36) 0.82 (0.87) 0.16
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 9.97 $ 9.93 $ 9.78 $ 10.14 $ 9.32 $ 10.19
======== ======== ======== ======== ======== ========
Total return(1)......................... 3.24%++ 7.62% 2.76% 15.76% (3.01%) 8.19%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $ 10,019 $ 6,972 $ 7,327 $ 6,862 $ 9,196 $ 4,966
Ratio of expenses to average net
assets.............................. 1.01%+ 1.00% 1.02% 1.01% 0.81% 1.13%
Ratio of net investment income to
average net assets.................. 5.60%+ 5.79% 5.92% 6.24% 5.94% 4.75%
Ratio of expenses to average net
assets*............................. 1.02%+ 1.01% 1.03% *** *** ***
Ratio of net investment income to
average net assets*................. 5.59%+ 5.78% 5.91% *** *** ***
Portfolio turnover rate(2)............ 64% 114% 135% 166% 124% 126%
</TABLE>
- ---------------
+ 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.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
137
<PAGE> 140
The Kent Funds
INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------
(UNAUDITED) 1997 1996 1995(1)
------------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 10.30 $ 10.16 $ 10.84 $ 10.00
-------- -------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.33 0.68 0.66 0.55
Net realized and unrealized gains (losses) on
investments............................................. 0.09 0.34 (0.56) 0.92
-------- -------- -------- --------
Total Income from Investment Operations..................... 0.42 1.02 0.10 1.47
-------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.33) (0.68) (0.65) (0.54)
In excess of net investment income........................ -- -- (0.10) --
Net realized gains on investments......................... (0.01) (0.20) (0.03) (0.09)
-------- -------- -------- --------
Total Dividends and Distributions....................... (0.34) (0.88) (0.78) (0.63)
-------- -------- -------- --------
Net change in net asset value............................... 0.08 0.14 (0.68) 0.84
-------- -------- -------- --------
Net asset value, end of period.............................. $ 10.38 $ 10.30 $ 10.16 $ 10.84
======== ======== ======== ========
Total return................................................ 4.14%++ 10.55% 1.19% 15.05%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $249,546 $229,778 $240,060 $126,056
Ratio of expenses to average net assets................... 0.82%+ 0.82% 0.83% 0.91%+
Ratio of net investment income to average net assets...... 6.44%+ 6.65% 6.57% 6.65%+
Ratio of expenses to average net assets*.................. 0.83%+ 0.83% 0.83% **
Ratio of net investment income to average net assets*..... 6.43%+ 6.64% 6.57% **
Portfolio turnover rate(2)................................ 47% 84% 102% 50%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
** During the period, there were no waivers and/or
reimbursements.
(1) The Institutional Class commenced operations on March 20,
1995.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
138
<PAGE> 141
The Kent Funds
INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -----------------------------
(UNAUDITED) 1997 1996 1995(1)
------------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 10.29 $ 10.16 $ 10.82 $ 10.00
------- ------- ------- -------
Income from Investment Operations:
Net investment income..................................... 0.32 0.63 0.66 0.52
Net realized and unrealized gains (losses) on
investments............................................. 0.09 0.35 (0.56) 0.91
------- ------- ------- -------
Total Income from Investment Operations..................... 0.41 0.98 0.10 1.43
------- ------- ------- -------
Less Dividends and Distributions from:
Net investment income..................................... (0.30) (0.65) (0.64) (0.52)
In excess of net investment income........................ (0.02) -- (0.09) --
Net realized gains on investments......................... (0.01) (0.20) (0.03) (0.09)
------- ------- ------- -------
Total Dividends and Distributions....................... (0.33) (0.85) (0.76) (0.61)
------- ------- ------- -------
Net change in net asset value............................... 0.08 0.13 (0.66) 0.82
------- ------- ------- -------
Net asset value, end of period.............................. $ 10.37 $ 10.29 $ 10.16 $ 10.82
======= ======= ======= =======
Total return(2)............................................. 4.02%++ 10.19% 1.16% 14.63%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 9,283 $ 5,611 $ 2,722 $ 1,961
Ratio of expenses to average net assets................... 1.07%+ 1.07% 1.08% 1.14%+
Ratio of net investment income to average net assets...... 6.19%+ 6.38% 6.31% 6.40%+
Ratio of expenses to average net assets*.................. 1.08%+ 1.08% 1.08% **
Ratio of net investment income to average net assets*..... 6.18%+ 6.37% 6.31% **
Portfolio turnover rate(3)................................ 47% 84% 102% 50%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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. ** During the period, there were no waivers
and/or reimbursements.
(1) The Investment Class date of initial public investment was
March 22, 1995.
(2) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(3) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
139
<PAGE> 142
The Kent Funds
LIMITED TERM TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------
(UNAUDITED) 1997 1996 1995 1994(1)
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period..................... $ 10.19 $ 10.16 $ 10.22 $ 9.80 $ 10.00
------- ------- ------- ------- -------
Income (Loss) from Investment Operations:
Net investment income.................................. 0.19 0.40 0.39 0.39 0.13
Net realized and unrealized gains (losses) on
investments.......................................... (0.02) 0.08 (0.04) 0.42 (0.21)
------- ------- ------- ------- -------
Total Income (Loss) from Investment Operations........... 0.17 0.48 0.35 0.81 (0.08)
------- ------- ------- ------- -------
Less Dividends and Distributions from:
Net investment income.................................. (0.19) (0.40) (0.40) (0.39) (0.12)
In excess of net investment income..................... -- -- ** -- --
Net realized gains on investments...................... -- (0.05) (0.01) -- --
------- ------- ------- ------- -------
Total Dividends and Distributions.................... (0.19) (0.45) (0.41) (0.39) (0.12)
------- ------- ------- ------- -------
Net change in net asset value............................ (0.02) 0.03 (0.06) 0.42 (0.20)
------- ------- ------- ------- -------
Net asset value, end of period........................... $ 10.17 $ 10.19 $ 10.16 $ 10.22 $ 9.80
======= ======= ======= ======= =======
Total return............................................. 1.72%++ 4.78% 3.54% 8.43% (0.77%)++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $37,205 $36,023 $41,472 $55,347 $43,497
Ratio of expenses to average net assets................ 0.75%+ 0.76% 0.75% 0.69% 0.79%+
Ratio of net investment income to average net assets... 3.85%+ 3.86% 3.84% 3.87% 3.81%+
Ratio of expenses to average net assets*............... 0.76%+ 0.77% 0.75% 0.74% 0.96%+
Ratio of net investment income to average net
assets*.............................................. 3.84%+ 3.85% 3.84% 3.82% 3.64%+
Portfolio turnover rate(2)............................. 24% 29% 32% 51% 10%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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 September 1,
1994.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
140
<PAGE> 143
The Kent Funds
LIMITED TERM TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ---------------------------------------
(UNAUDITED) 1997 1996 1995 1994(1)
------------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period..................... $ 10.23 $ 10.20 $ 10.24 $ 9.81 $ 9.87
------- ------- ------- ------ ------
Income from Investment Operations:
Net investment income.................................. 0.19 0.38 0.37 0.37 0.06
Net realized and unrealized gains (losses) on
investments.......................................... (0.02) 0.08 (0.02) 0.44 (0.06)
------- ------- ------- ------ ------
Total Income from Investment Operations.................. 0.17 0.46 0.35 0.81 --
------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income.................................. (0.19) (0.38) (0.35) (0.38) (0.06)
In excess of net investment income..................... -- -- (0.03) -- --
Net realized gains on investments...................... -- (0.05) (0.01) -- --
------- ------- ------- ------ ------
Total Dividends and Distributions.................... (0.19) (0.43) (0.39) (0.38) (0.06)
------- ------- ------- ------ ------
Net change in net asset value............................ (0.02) 0.03 (0.04) 0.43 (0.06)
------- ------- ------- ------ ------
Net asset value, end of period........................... $ 10.21 $ 10.23 $ 10.20 $10.24 $ 9.81
======= ======= ======= ====== ======
Total return(2).......................................... 1.63%++ 4.61% 3.51% 8.40% 0.03%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $ 292 $ 474 $ 106 $ 54 $ 7
Ratio of expenses to average net assets................ 0.90%+ 0.93% 0.87% 0.84% 0.87%+
Ratio of net investment income to average net assets... 3.70%+ 3.67% 3.69% 3.69% 3.86%+
Ratio of expenses to average net assets*............... 1.01%+ 1.04% 0.97% 0.85% 0.98%+
Ratio of net investment income to average net
assets*.............................................. 3.59%+ 3.56% 3.59% 3.69% 3.75%+
Portfolio turnover rate(3)............................. 24% 29% 32% 51% 10%
</TABLE>
- ---------------
+ 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.
(1) The Investment Class date of initial public investment was November 1, 1994.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
141
<PAGE> 144
The Kent Funds
INTERMEDIATE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 10.68 $ 10.42 $ 10.52 $ 9.74 $ 10.45 $ 10.02
Income (Loss) from Investment Operations:
Net investment income................... 0.23 0.45 0.44 0.45 0.40 0.37
Net realized and unrealized gains
(losses) on investments............... (0.02) 0.26 (0.08) 0.79 (0.71) 0.47
-------- -------- -------- -------- -------- --------
Total Income (Loss) from Investment
Operations.............................. 0.21 0.71 0.36 1.24 (0.31) 0.84
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................... (0.23) (0.45) (0.46) (0.45) (0.39) (0.36)
In excess of net investment income...... -- -- ** (0.01) (0.01) --
Net realized gains on investments....... -- -- -- -- -- (0.05)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.23) (0.45) (0.46) (0.46) (0.40) (0.41)
Net change in net asset value............. (0.02) 0.26 (0.10) 0.78 (0.71) 0.43
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 10.66 $ 10.68 $ 10.42 $ 10.52 $ 9.74 $ 10.45
======== ======== ======== ======== ======== ========
Total return.............................. 1.84%++ 7.07% 3.41% 12.90% (3.00%) 8.51%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $284,980 $275,641 $285,674 $283,733 $380,715 $135,862
Ratio of expenses to average net
assets................................ 0.73%+ 0.72% 0.73% 0.72% 0.78% 0.84%
Ratio of net investment income to
average net assets.................... 4.28%+ 4.31% 4.34% 4.39% 4.07% 3.62%
Ratio of expenses to average net
assets*............................... 0.74%+ 0.73% 0.73% 0.72% 0.78% 0.84%
Ratio of net investment income to
average net assets*................... 4.27%+ 4.30% 4.34% 4.39% 4.07% 3.62%
Portfolio turnover rate(1).............. 12% 23% 35% 6% 36% 14%
</TABLE>
- ---------------
+ 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) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
142
<PAGE> 145
The Kent Funds
INTERMEDIATE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................ $10.68 $10.42 $10.52 $ 9.74 $10.45 $10.04
------ ------ ------ ------ ------ ------
Income (Loss) from Investment Operations:
Net investment income............................. 0.21 0.43 0.42 0.42 0.40 0.36
Net realized and unrealized gains (losses) on
investments..................................... (0.02) 0.26 (0.09) 0.79 (0.71) 0.46
------ ------ ------ ------ ------ ------
Total Income (Loss) from Investment Operations...... 0.19 0.69 0.33 1.21 (0.31) 0.82
------ ------ ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income............................. (0.21) (0.43) (0.41) (0.42) (0.39) (0.33)
In excess of net investment income................ -- -- (0.02) (0.01) (0.01) (0.03)
Net realized gains on investments................. -- -- -- -- -- (0.05)
------ ------ ------ ------ ------ ------
Total Dividends and Distributions............... (0.21) (0.43) (0.43) (0.43) (0.40) (0.41)
------ ------ ------ ------ ------ ------
Net change in net asset value....................... (0.02) 0.26 (0.10) 0.78 (0.71) 0.41
------ ------ ------ ------ ------ ------
Net asset value, end of period...................... $10.66 $10.68 $10.42 $10.52 $ 9.74 $10.45
====== ====== ====== ====== ====== ======
Total return(1)..................................... 1.80%++ 6.80% 3.17% 12.66% (3.03%) 8.29%
Ratios/Supplemental Data:
Net Assets, end of period (000's)................... $3,770 $3,534 $3,368 $3,807 $4,505 $3,307
Ratio of expenses to average net assets........... 0.98%+ 0.97% 0.98% 0.97% 0.79% 1.08%
Ratio of net investment income to average net
assets.......................................... 4.03%+ 4.06% 4.09% 4.13% 3.99% 3.44%
Ratio of expenses to average net assets*.......... 0.99%+ 0.98% 0.98% 0.97% 0.79% 1.08%
Ratio of net investment income to average net
assets*......................................... 4.02%+ 4.05% 4.09% 4.13% 3.99% 3.44%
Portfolio turnover rate(2)........................ 12% 23% 35% 6% 36% 14%
</TABLE>
- ---------------
+ 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.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
143
<PAGE> 146
The Kent Funds
TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------
JUNE 30, 1998 1997 1996 1995(1)
------------- --------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 10.65 $ 10.27 $ 10.49 $ 10.00
-------- --------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.23 0.45 0.46 0.36
Net realized and unrealized gains (losses) on investments
and futures contracts:.................................. (0.02) 0.41 (0.06) 0.49
-------- --------- -------- --------
Total Income from Investment Operations..................... 0.21 0.86 0.40 0.85
-------- --------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.22) (0.45) (0.46) (0.36)
Net realized gains on investments and futures contracts... (0.01) (0.03) (0.16) --
-------- --------- -------- --------
Total Dividends and Distributions....................... (0.23) (0.48) (0.62) (0.36)
-------- --------- -------- --------
Net change in net asset value............................. (0.02) 0.38 (0.22) 0.49
-------- --------- -------- --------
Net asset value, end of period............................ $ 10.63 $ 10.65 $ 10.27 $ 10.49
======== ========= ======== ========
Total return................................................ 2.01%++ 8.59% 3.92% 8.64%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)......................... $125,280 $ 116,652 $109,948 $121,855
Ratio of expenses to average net assets................... 0.78%+ 0.79% 0.82% 0.73%+
Ratio of net investment income to average net assets...... 4.26%+ 4.32% 4.38% 4.44%+
Ratio of expenses to average net assets*.................. 0.79%+ 0.80% 0.82% 0.91%+
Ratio of net investment income to average net assets*..... 4.25%+ 4.31% 4.38% 4.26%+
Portfolio turnover rate(2)................................ 20% 16% 40% 10%
</TABLE>
- ---------------
<TABLE>
<C> <S>
+ 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.
(1) The Institutional Class commenced operations on March 20,
1995.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
</TABLE>
See Notes to Financial Statements
144
<PAGE> 147
The Kent Funds
TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ---------------------------
(UNAUDITED) 1997 1996 1995(1)
------------- ------ ------ -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $10.67 $10.29 $10.52 $10.00
------ ------ ------ ------
Income from Investment Operations:
Net investment income..................................... 0.21 0.42 0.41 0.31
Net realized and unrealized gains (losses) on investments
and futures contracts:................................. (0.01) 0.42 (0.05) 0.51
------ ------ ------ ------
Total Income from Investment Operations..................... 0.20 0.84 0.36 0.82
------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income..................................... (0.20) (0.42) (0.43) (0.30)
In excess of net investment income........................ (0.01) (0.01) -- --
Net realized gains on investments and futures contracts... ** (0.03) (0.12) --
In excess of net realized gains........................... (0.01) -- (0.04) --
------ ------ ------ ------
Total Dividends and Distributions........................... (0.22) (0.46) (0.59) (0.30)
------ ------ ------ ------
Net change in net asset value............................... (0.02) 0.38 (0.23) 0.52
------ ------ ------ ------
Net asset value, end of period.............................. $10.65 $10.67 $10.29 $10.52
====== ====== ====== ======
Total return(2)............................................. 1.89%++ 8.32% 3.53% 8.34%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)......................... $2,033 $1,712 $ 936 $ 529
Ratio of expenses to average net assets................... 1.03%+ 1.04% 1.07% 0.95%+
Ratio of net investment income to average net assets...... 4.01%+ 4.05% 4.14% 4.25%+
Ratio of expenses to average net assets*.................. 1.04%+ 1.05% 1.07% 1.17%+
Ratio of net investment income to average net assets*..... 4.00%+ 4.04% 4.14% 4.03%+
Portfolio turnover rate(3)................................ 20% 16% 40% 10%
</TABLE>
- ---------------
+ 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 Investment Class date of the initial public investment was March 31,
1995.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
145
<PAGE> 148
The Kent Funds
MICHIGAN MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993(1)
------------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $ 10.21 $ 10.08 $ 10.12 $ 9.72 $ 10.06 $ 10.00
-------- -------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income.................. 0.20 0.41 0.39 0.39 0.37 0.23
Net realized and unrealized gains
(losses) on investments.............. (0.02) 0.13 (0.04) 0.39 (0.34) 0.07
-------- -------- -------- -------- -------- -------
Total Income from Investment
Operations............................. 0.18 0.54 0.35 0.78 0.03 0.30
-------- -------- -------- -------- -------- -------
Less Dividends and Distributions from:
Net investment income.................. (0.20) (0.41) (0.39) (0.37) (0.36) (0.22)
In excess of net investment income..... -- -- -- (0.01) (0.01) (0.01)
Net realized gains on investments...... -- -- -- -- -- (0.01)
In excess of net realized gains........ -- -- -- -- -- **
-------- -------- -------- -------- -------- -------
Total Dividends and Distributions.... (0.20) (0.41) (0.39) (0.38) (0.37) (0.24)
-------- -------- -------- -------- -------- -------
Net change in net asset value............ (0.02) 0.13 (0.04) 0.40 (0.34) 0.06
-------- -------- -------- -------- -------- -------
Net asset value, end of period........... $ 10.19 $ 10.21 $ 10.08 $ 10.12 $ 9.72 $ 10.06
======== ======== ======== ======== ======== =======
Total return............................. 1.82%++ 5.52% 3.51% 8.20% 0.36% 3.06%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........ $121,374 $111,735 $152,623 $185,466 $118,485 $74,647
Ratio of expenses to average net
assets............................... 0.69%+ 0.69% 0.70% 0.69% 0.49% 0.24%+
Ratio of net investment income to
average net assets................... 4.02%+ 4.04% 3.83% 3.81% 3.74% 3.34%+
Ratio of expenses to average net
assets*.............................. 0.70%+ 0.70% 0.70% 0.70% 0.74% 0.84%+
Ratio of net investment income to
average net assets*.................. 4.01%+ 4.03% 3.83% 3.80% 3.50% 2.74%+
Portfolio turnover rate(2)............. 25% 13% 24% 42% 27% 10%
</TABLE>
- ---------------
+ 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 May 3, 1993.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
146
<PAGE> 149
The Kent Funds
MICHIGAN MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993(1)
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 10.20 $ 10.07 $ 10.11 $ 9.72 $ 10.08 $ 10.02
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................. 0.20 0.39 0.38 0.37 0.35 0.21
Net realized and unrealized gains
(losses) on investments............. (0.02) 0.14 (0.05) 0.40 (0.34) 0.07
-------- -------- -------- -------- -------- --------
Total Income from Investment
Operations............................ 0.18 0.53 0.33 0.77 0.01 0.28
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................. (0.19) (0.40) (0.35) (0.37) (0.34) (0.21)
In excess of net investment income.... (0.01) -- (0.02) (0.01) (0.03) **
Net realized gains on investments..... -- -- -- -- -- (0.01)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions... (0.20) (0.40) (0.37) (0.38) (0.37) (0.22)
-------- -------- -------- -------- -------- --------
Net change in net asset value........... (0.02) 0.13 (0.04) 0.39 (0.36) 0.06
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 10.18 $ 10.20 $ 10.07 $ 10.11 $ 9.72 $ 10.08
======== ======== ======== ======== ======== ========
Total return(2)......................... 1.75%++ 5.38% 3.36% 8.01% 0.16% 2.85%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $ 4,676 $ 4,413 $ 2,422 $ 1,900 $ 1,980 $ 283
Ratio of expenses to average net
assets.............................. 0.84%+ 0.84% 0.85% 0.83% 0.49% 0.25%+
Ratio of net investment income to
average net assets.................. 3.87%+ 3.88% 3.68% 3.68% 3.80% 3.43%+
Ratio of expenses to average net
assets*............................. 0.95%+ 0.95% 0.95% 0.85% 0.68% 1.08%+
Ratio of net investment income to
average net assets*................. 3.76%+ 3.77% 3.58% 3.67% 3.61% 2.60%+
Portfolio turnover rate(3)............ 25% 13% 24% 42% 27% 10%
</TABLE>
- ---------------
+ 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 Investment Class date of initial public investment was May 11, 1993.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
147
<PAGE> 150
The Kent Funds
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................. 0.025 0.051 0.050 0.050 0.040 0.030
-------- -------- -------- -------- -------- --------
Less Dividends from:
Net investment income................. (0.025) (0.051) (0.050) (0.050) (0.040) (0.030)
-------- -------- -------- -------- -------- --------
Net change in net asset value........... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total return............................ 2.56%++ 5.23% 5.06% 5.58% 3.75% 2.68%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $512,831 $474,378 $483,919 $424,815 $323,539 $359,624
Ratio of expenses to average net
assets.............................. 0.55%+ 0.52% 0.52% 0.55% 0.60% 0.60%
Ratio of net investment income to
average net assets.................. 5.10%+ 5.11% 4.95% 5.45% 3.65% 2.65%
Ratio of expenses to average net
assets*............................. 0.63%+ 0.62% 0.62% 0.63% 0.65% 0.68%
Ratio of net investment income to
average net assets*................. 5.02%+ 5.01% 4.85% 5.37% 3.59% 2.57%
</TABLE>
- ---------------
+ 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.
See Notes to Financial Statements
148
<PAGE> 151
The Kent Funds
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................... 0.025 0.051 0.050 0.050 0.040 0.030
-------- -------- -------- -------- -------- --------
Less Dividends from:
Net investment income................... (0.025) (0.051) (0.050) (0.050) (0.040) (0.030)
-------- -------- -------- -------- -------- --------
Net change in net asset value............. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total return.............................. 2.56%++ 5.23% 5.06% 5.56% 3.71% 2.67%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $ 2,890 $ 1,179 $ 804 $ 1,227 $ 369 $ 593
Ratio of expenses to average net
assets................................ 0.55%+ 0.52% 0.52% 0.55% 0.63% 0.63%
Ratio of net investment income to
average net assets.................... 5.10%+ 5.11% 4.94% 5.41% 3.58% 2.63%
Ratio of expenses to average net
assets*............................... 0.63%+ 0.62% 0.62% 0.62% 0.68% 4.49%
Ratio of net investment income (loss) to
average net assets*................... 5.02%+ 5.01% 4.84% 5.33% 3.53% (1.24%)
</TABLE>
- ---------------
+ 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.
See Notes to Financial Statements
149
<PAGE> 152
The Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.015 0.033 0.030 0.030 0.020 0.020
-------- -------- -------- -------- -------- --------
Less Dividends from:
Net investment income.................... (0.015) (0.033) (0.030) (0.030) (0.020) (0.020)
-------- -------- -------- -------- -------- --------
Net change in net asset value.............. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total return............................... 1.55%++ 3.31% 3.11% 3.50% 2.40% 2.00%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......... $295,971 $211,682 $155,424 $145,215 $128,164 $183,366
Ratio of expenses to average net
assets................................. 0.54%+ 0.52% 0.54% 0.56% 0.60% 0.60%
Ratio of net investment income to average
net assets............................. 3.09%+ 3.27% 3.06% 3.45% 2.33% 1.96%
Ratio of expenses to average net
assets*................................ 0.63%+ 0.63% 0.64% 0.65% 0.70% 0.69%
Ratio of net investment income to average
net assets*............................ 3.00%+ 3.16% 2.96% 3.36% 2.23% 1.87%
</TABLE>
- ---------------
+ 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.
See Notes to Financial Statements
150
<PAGE> 153
The Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $ 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------------- ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income............................ 0.015 0.033 0.030 0.030 0.020 0.020
------------- ------ ------ ------ ------ ------
Less Dividends from:
Net investment income............................ (0.015) (0.033) (0.030) (0.030) (0.020) (0.020)
------------- ------ ------ ------ ------ ------
Net change in net asset value...................... -- -- -- -- -- --
Net asset value, end of period..................... $ 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
============= ====== ====== ====== ====== ======
Total return....................................... 1.55%++ 3.31% 3.11% 3.48% 2.38% 1.98%
Ratios/Supplemental Data:
Net Assets, end of period (000's).................. $ 389 $ 289 $ 782 1,603 379 149
Ratio of expenses to average net assets.......... 0.54%+ 0.52% 0.54% 0.54% 0.63% 0.63%
Ratio of net investment income to average net
assets......................................... 3.09%+ 3.22% 3.06% 3.48% 2.47% 2.01%
Ratio of expenses to average net assets *........ 0.63%+ 0.63% 0.64% 0.62% 0.73% 3.77%
Ratio of net investment income (loss) to average
net assets *................................... 3.00%+ 3.11% 2.96% 3.39% 2.37% (1.13)%
</TABLE>
- ---------------
+ 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.
See Notes to Financial Statements
151
<PAGE> 154
The Kent Funds
GOVERNMENT MONEY MARKET
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
FOR THE SIX PERIOD
MONTHS ENDED ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997(1)
------------- ------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 1.000 $ 1.000
------- -------
Income from Investment Operations:
Net investment income..................................... 0.026 0.031
------- -------
Less Dividends from:
Net investment income..................................... (0.026) (0.031)
------- -------
Net change in net asset value............................... -- --
------- -------
Net asset value, end of period.............................. $ 1.000 $ 1.000
======= =======
Total return................................................ 2.58%++ 3.10%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $98,759 $94,624
Ratio of expenses to average net assets................... 0.37%+ 0.35%+
Ratio of net investment income to average net assets...... 5.16%+ 5.23%+
Ratio of expenses to average net assets*.................. 0.68%+ 0.50%+
Ratio of net investment income to average net assets*..... 4.85%+ 5.08%+
</TABLE>
- ---------------
+ 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.
(1) The Fund commenced operations June 2, 1997.
See Notes to Financial Statements
152
<PAGE> 155
The Kent Funds
GOVERNMENT MONEY MARKET
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
<TABLE>
<CAPTION>
FOR THE SIX PERIOD
MONTHS ENDED ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997(1)
------------- ------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 1.000 $ 1.000
------- -------
Income from Investment Operations:
Net investment income..................................... 0.026 0.030
------- -------
Less Dividends from:
Net investment income..................................... (0.026) (0.030)
------- -------
Net change in net asset value............................... -- --
------- -------
Net asset value, end of period.............................. $ 1.000 $ 1.000
======= =======
Total return................................................ 2.58%++ 3.06%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 34 $ 2
Ratio of expenses to average net assets................... 0.37%+ 0.43%+
Ratio of net investment income to average net assets...... 5.16%+ 5.17%+
Ratio of expenses to average net assets*.................. 0.68%+ 0.57%+
Ratio of net investment income to average net assets*..... 4.85%+ 5.03%+
</TABLE>
- ---------------
+ 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.
(1) The Fund commenced operations June 2, 1997.
See Notes to Financial Statements
153
