<PAGE>
[LOGO]
SEMI-
ANNUAL
REPORT
June 30, 1999
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 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
<PAGE>
MESSAGE TO SHAREHOLDERS
Dear Kent Funds Shareholder:
Following is the Semi-Annual Report for the Kent Funds for the six months
ended June 30, 1999. The report contains the following features:
- Economic Outlook by Joseph T. Keating, President and Chief Investment
Officer, Lyon Street Asset Management Company
- Portfolio Reviews -- investment strategy, performance overview and outlook
for the coming months for each of the Kent Funds
- Schedules of Portfolio Investments -- summary of the holdings in each fund
by industry
- Statements of Assets and Liabilities -- summary of the assets and
liabilities of each fund
- Statements of Operations -- summary of operations and its effect on the
assets of each fund
- Statements of Changes in Net Assets -- summary of changes in net assets
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 a.m. and 9:00 p.m. Eastern Time.
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. DUPA]
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 Kent Funds Distributors,
Inc.
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>
ECONOMIC OUTLOOK
I. REAL ECONOMIC ACTIVITY
A. MR. GREENSPAN'S STERN WARNING.
This remarkable economic expansion continues to roll along, now 100 months
old. It is already the LONGEST PEACETIME EXPANSION on record and, in six months
will achieve the distinction of the LONGEST EXPANSION OF ALL TIME. The expansion
received a second wind during the past two years from a drop in interest rates,
lower gasoline prices, a surge in mortgage refinance activity, and a surging
stock market. A somewhat mixed report on the economy for the second quarter and
a less ebullient outlook are directly related to the factors above becoming less
supportive of future growth.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL ECONOMIC ACTIVITY*
1999
DOMESTIC PERSONAL RESIDENTIAL BUSINESS
PRIVATE CONSUMPTION CONSTRUCTION CAPITAL
FINAL SALES EXPENDITURES OUTLAYS SPENDING
<S> <C> <C> <C> <C>
2Q 5.0% 4.0% 5.1% 10.8%
1Q 7.5% 6.7% 15.4% 8.5%
*Annualized
</TABLE>
Gasoline prices have rebounded in recent months, while refinance activity has
plunged. The Federal Reserve raised short-term interest rates from 4.75 to 5.00
percent on June 30 and has sent stern warnings that additional hikes could be on
the way. The stock market has held up very well in this environment, but few
analysts are looking for a continuation of the heady gains of the past four and
a half years.
Federal Reserve Chairman Alan Greenspan's testimony before the House Banking
Committee in late July caught many analysts and investors by surprise due to its
more hawkish tone than the official statement released after the last Federal
Reserve meeting. Mr. Greenspan emphasized that the Federal Reserve is prepared
to intervene "PROMPTLY AND FORCEFULLY" as soon as it detects signs that
inflation is likely to increase. An unexpectedly large jump in the second
quarter employment cost index, a bellwether of inflationary pressures, roiled
the financial markets during the last two days of July and raised the likelihood
of a rate hike at the next meeting of the Federal Reserve on August 24.
What needs to be analyzed is whether conditions have changed enough to
continue the incipient slowdown in the pace of economic activity that is evident
in the recent economic reports or whether the Federal Reserve will need to
tighten monetary policy more aggressively. Related to this analysis, and key to
the conclusions, is the outlook for inflation and labor cost pressures.
B. A MIXED ECONOMIC PICTURE DURING THE SECOND QUARTER.
The economy is reported to have grown at a 2.3 percent annual rate during the
second quarter, well beneath the 4.3 percent rate seen in the first quarter and
little more than a third of the 6.0 percent pace of the 1998's fourth quarter.
While the economy's growth rate did moderate, a look behind the headline number
shows a still strong, yet moderating, pace of final demand.
Our best measure of final demand in the economy is domestic private final
sales, the sum of consumer spending, housing construction, and business capital
spending. While this measure did slow in the second quarter from its first
quarter pace, it was still at a very strong 5.0 percent growth rate. Most of the
reconciliation between this 5.0 percent figure and the 2.3 percent real GDP
number is a slower pace of inventory building and a further deterioration in net
exports, each of which subtracted a percentage point from the reported gross
domestic product figure. The two most interest rate-sensitive sectors of the
economy, consumer spending and residential construction, showed the most
moderation; but the pace of business capital spending actually rose.
C. PLUNGE IN REFINANCE ACTIVITY STARTING TO HIT CONSUMER SPENDING.
Despite a decline from its first quarter pace, consumer spending again grew at
a pace above its long run growth rate during the second quarter. The sharp
deceleration in certain categories and the second consecutive negative quarterly
reading on the personal savings rate are harbingers of a further slowdown in
consumer outlays.
Gains in real disposable personal income have slowed recently from 4.3 percent
in the fourth quarter to 3.5 in
- --------------------------------------------------------------------------------
This report is not personal investment advice. The information in this report is
obtained from sources believed to be reliable. However, Lyon Street Asset
Management Company and its affiliates do not guarantee or warrant the accuracy
or completeness of the information or its use, nor the effects of acting on any
of the opinions expressed in this report.
2
<PAGE>
ECONOMIC OUTLOOK
the first quarter and only 2.4 percent last quarter. This deceleration reflects
a slowdown in wage growth and hours worked at the same time oil prices boosted
consumer prices. Consumer spending far outpaced income growth, however, growing
at a 5.3 percent annualized pace over the same three quarters. The income
shortfall has been made up by the personal savings rate falling to zero in the
fourth quarter, only to be followed by two NEGATIVE readings of 0.7 and 1.1
percent, respectively, during the first and second quarters of 1999.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CONSUMER SPENDING*
2Q 1999 1Q 1999
<S> <C> <C>
Durable Goods 5.6% 12.9%
Furniture and Household Equipment 10.2% 23.3%
Nondurable Goods 3.0% 9.5%
Apparel 2.5% 29.1%
Services 4.2% 4.1%
*Annualized
</TABLE>
Conventional wisdom has attributed the willingness of consumers to move into a
position of dissaving to the recent strong gains in the stock market -- the
thought being that consumers have felt less of a need to add to their savings
pool when continued gains in stock prices have boosted their net worth. While we
ascribe to that WEALTH EFFECT theory, we feel the contribution from last year's
surge in refinance activity may be overlooked, and consequently, the moderating
influence from the recent plunge in refinance activity may be underestimated.
Consumers benefit from refinancing their mortgages via monthly interest cost
savings and a one time cashing out on some of their appreciated equity. This
REAL ESTATE EFFECT on consumer spending definitely helped drive the savings rate
lower and eventually into negative territory. With the nine month-long rise in
mortgage rates, which have now exceeded eight percent, mortgage refinance
activity has plunged. In June, the mortgage refinance index was 61.0 percent
below the average 1998 level. While the drop in refinance activity is already
having a moderating influence on consumer spending, its negative effect will
persist through the remainder of this year and could well accelerate as it tends
to work with a six to nine month lag.
Consumer spending was also aided by the drop in gasoline prices last year, but
that also has been reversed as pump prices have risen thirty percent since
February. Additionally, the stimulus from rising stock prices is also likely to
fade. This expectation partly reflects our view that the very rapid common stock
price appreciation of the past few years is behind us and that returns closer
to, if not slightly below, long run returns are in the offing. We expect the
personal savings rate to move back into positive territory and a further,
gradual retrenchment by consumers.
D. HOUSING PAST ITS PEAK AND FURTHER SLOWING AHEAD.
The rise in mortgage rates has clearly begun to hit the housing market;
despite a reported 5.1 percent rise in residential construction outlays during
the second quarter. Outlays on single-family residences fell at a 2.8 percent
rate, while multi-family structures dropped 5.0 percent. The entire rise in
residential outlays was contained in the home improvement category and mobile
homes.
Housing starts dropped 5.6 percent in June to a 1.57 million pace, 13.7
percent below the 1.82 million peak reached in January. Housing starts for the
second quarter were down 9.5 percent from the first quarter, further reinforcing
our view that the peak level of activity is behind us. Given the additional rise
in mortgage interest rates in recent weeks, a further general softening in
housing related activity should occur over the second half of the year.
E. THE ONGOING INVESTMENT IN PRODUCTIVITY-ENHANCING EQUIPMENT.
The ongoing effort to raise productivity by enhancing the hourly output of
labor resources already employed continues to push expenditures on high
technology equipment ever higher. Producers' durable equipment outlays were the
strongest sector in the economy's second quarter growth rate, with virtually all
of the growth coming on high technology equipment.
The rapid and sustained growth in high technology equipment outlays has been a
hallmark of this business expansion. As companies have confronted new
constraints on their pricing power, managements have targeted labor costs as the
key item to control in an effort to defend and expand profit margins. Providing
workers with more and better equipment has been one viable solution to raising
productivity and growing earnings.
3
<PAGE>
ECONOMIC OUTLOOK
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BUSINESS CAPITAL SPENDING*
1999
PRODUCERS' HIGH
DURABLE TECHNOLOGY
EQUIPMENT EQUIPMENT COMPUTERS STRUCTURES
<S> <C> <C> <C> <C>
2Q 15.3% 34.2% 41.5% -1.2%
1Q 9.5% 26.6% 44.6% 5.7%
*Annualized
</TABLE>
As business managers have come to expect that business cycles will last longer
and be less volatile, they have become more confident that capital investments
will not be ill-timed, i.e., that a downturn in business activity is less likely
to hurt the returns on investments under consideration. Additionally, delivery
times for equipment, particularly high technology equipment, have dropped
significantly in recent years; meaning that equipment can be brought on line
more quickly to help deal with rising demand. Given our outlook for continued
low inflation and very limited pricing power, we look for companies to continue
their search for further productivity gains in earnest and for equipment
spending to remain the strongest sector in the economy.
II. A LOOK AHEAD.
A. EXPANSION TO CONTINUE, GROWTH RATE TO SLOW FURTHER.
Our hunch is that the Federal Reserve is tightening monetary policy into an
already slowing economy from the effects of rising mortgage rates on the housing
industry and on consumer spending through dimished mortgage refinance activity.
The Federal Reserve is taking out a very appropriate insurance policy to
increase the likelihood that the current low inflation, low interest rate,
continued economic growth environment remains in place.
To gain a perspective on the Federal Reserve's move on June 30 to raise short
term interest rates 25 basis points and their warnings that additional increases
could follow, recall that when the federal funds rate was lowered by 75 basis
points last Fall the Federal Reserve was responding to an extraordinary
disturbance in the international financial markets. Prior to that financial
dislocation, the Federal Reserve had maintained a BIAS TO TIGHTEN monetary
policy from a federal funds rate of 5.50 percent, to achieve the goal of slowing
the U.S. economy to a sustainable pace. We think the Federal Reserve could take
back all of the 75 basis point reduction in the federal funds rate of last Fall
without threatening the longevity of the current business expansion. Given the
current vigor of the U.S. economy, it appears unnecessary for the Federal
Reserve to maintain the level of short-term interest rates at crisis determined
levels.
We look for the economy to grow at a pace near 3.0 percent over the next year,
with the possibility of some Year 2000 inventory stockpiling boosting the fourth
quarter real GDP figure and the subsequent inventory drawdown during the first
quarter artificially depressing that quarter's GDP report. We expect the move to
tighten monetary policy by the Federal Reserve not to exceed last Fall's 75
basis point easing moves and that the key impetus for slowing the economy's
growth rate is the rebound in mortgage rates to the eight percent level.
B. DECLINE MAY BE OVER, BUT NO RESURGENCE IN INFLATION.
While the outsized jump in the second quarter employment cost index (ECI)
might guarantee further tightening moves by the Federal Reserve, the message in
that report may actually be neutral to positive rather than the initial negative
read. The 1.1 percent second quarter increase followed a record low 0.4 percent
gain during the first quarter. Averaging the two quarters together shows
quarterly gains of 0.8 percent -- in line with 1998's pattern. The second
quarter rise in the ECI was exaggerated by a 3.0 percent jump in labor costs for
the finance, insurance, and, real estate sectors following the first quarter's
0.7 percent drop.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INFLATION MEASURES*
1999
GROSS GROSS CONSUMER
DOMESTIC DOMESTIC PRICE INDEX
PRODUCT PURCHASES CONSUMER LESS FOOD
PRICE INDEX PRICE INDEX PRICE INDEX AND ENERGY
<S> <C> <C> <C> <C>
2Q 1.60% 2.10% 2.90% 2.30%
1Q 1.60% 1.20% 1.50% 0.90%
*Annualized
</TABLE>
4
<PAGE>
ECONOMIC OUTLOOK
While the two decade-long DECLINE in the inflation rate may be nearing an end,
we see no reason to fear a significant rekindling of inflationary pressures.
Certain structural changes in the world economy that have allowed competition to
flourish make any meaningful rise in inflation on a sustained basis virtually
impossible. Global competition is a reality and there is ample capacity for
producing the vast majority of items in the world. Nearly all companies view a
cost issue as a local problem that does not necessarily apply to a competitor in
a different area of the country, or in a different country. Therefore, cost
issues are a company's own problems, not something that can be passed on to its
consumers. The result in a widespread corporate focus on cost containment. In
such a climate, it is difficult to see how a meaningful reemergence of inflation
can occur.
As a final comment on the inflation outlook, it is virtually impossible to
assess the exact impact that the growth in the Internet will have on the way
business is transacted and how it will alter the outlook for inflation. But
suffice it to say that the IMPACT WILL BE ENORMOUS AND THE DEFLATIONARY
INFLUENCE WILL LIKELY BE SIGNIFICANT.
The Internet and the new medium of commerce it facilitates are quickly
invading all areas of the economy and are providing an exciting new opportunity
to lower distribution and communication costs further. Transaction costs are
being reduced as more direct sales take place. Information is spread more
quickly and widely and, consequently, is used more effectively by management.
Productivity gains will be squeezed out of a powerful combination of technology,
increased management information, and innovation; bringing about heretofore
unthought of ways to lower the cost structure of doing business on an ongoing
basis. These lower costs will continue to put downward pressure on prices for a
wide array of services and goods, helping to keep inflationary pressures at bay.
JOSEPH T. KEATING
President and Chief Investment Officer
THE INFORMATION CONTAINED HEREIN IS BASED ON UNITED STATES DEPARTMENT OF
COMMERCE DATA RELEASED JULY 29, 1999.
5
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT GROWTH AND INCOME FUND
BY ALLAN J. MEYERS
PORTFOLIO MANAGER
The six months ended June 30, 1999, were characterized by strong growth in the
U.S. economy. Those conditions supported basic-materials and cyclical stocks,
which previously had been beaten down. As a result, value stocks performed
exceptionally well in April, and in May the Dow Jones Industrial Average(1)
reached 11,000 for the first time. Some investors worried about a potential
resurgence in inflation, but those fears abated in June when the Federal Reserve
Board raised the federal funds rate by 25 basis points.
For the six months ended June 30, 1999, the Fund's Institutional and
Investment Shares returned 11.38% and 11.28%, respectively. The Fund's
benchmark, the Standard & Poor's 500 Stock Index, returned 12.38% for the same
period.
STRONG RESULTS FOR VALUE STOCKS
The best-performing sector during the period was technology (up 24.8% for the
period), with large companies such as IBM (2.35% of the portfolio), up 40.5%,
Cisco Systems (1.86%), up 38.9%, and Microsoft (4.01%), up 30%, leading the
top-performing stock list. Investors also found attractive valuations in the
basic materials sector (up 21.8%). Meanwhile, healthcare (down 0.9% for the
period) and utilities (up 1.0%) lagged the market by wide margins.*
We increased the Fund's exposure to value stocks by purchasing shares of firms
such as BF Goodrich (0.06%), Spring Industries (0.05%), Conseco (0.13%), Cendant
(0.15%) and Schlumberger (0.25%). We sold the Fund's positions in some
large-company growth stocks, including shares of American Greetings, EGG,
Hershey Foods and Airtouch Communications.*
- --------------------------------------------------
KENT GROWTH AND INCOME FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Goods 8.5%
Consumer Staples 12.4%
Utilities 2.7%
Consumer Cyclicals 9.1%
Communication Services 8.6%
Energy 6.1%
Transportation 0.9%
Basic Materials 3.2%
Health 10.9%
Financials 15.9%
Technology 21.7%
</TABLE>
- ---------------------------------------------------------------
LOOKING AHEAD
The Growth and Income Fund is a well-diversified fund, with investments in
approximately 249 companies. Going forward, we believe investors will continue
to look for bargains in the value sector of the market, but that growth stocks
with good earnings will continue to perform well also. We believe the Fund is
well-positioned to benefit from this investor orientation, and our research
continues to identify excellent prospects based on earnings growth potential and
stock valuations.
- --------------------------------------------------------------------------------
1 The Dow Jones Industrial Average is a price-weighted average based on the
price movements of 30 blue-chip stocks.
*The Fund's portfolio composition is subject to change.
6
<PAGE>
KENT GROWTH AND INCOME FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 12/1/92)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* 11.38% 11.28%
- -------------------------------------------------------------------------------
One Year 22.31% 22.07%
- -------------------------------------------------------------------------------
Three Years 24.78% 24.46%
- -------------------------------------------------------------------------------
Five Years 24.69% 24.25%
- -------------------------------------------------------------------------------
Life of Fund 19.81% 19.28%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE STANDARD & POOR'S 500 STOCK INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT GROWTH AND INCOME
FUND INSTITUTIONAL CLASS STANDARD & POOR'S 500
SHARES STOCK INDEX
<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
12/31/98 29,907 33,886
6/30/99 33,310 38,081
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT GROWTH AND INCOME
FUND INVESTMENT CLASS STANDARD & POOR'S 500
SHARES STOCK INDEX
<S> <C> <C>
12/1/92 10,000 10,000
12/31/92 10,059 10,472
12/31/93 11,247 11,518
12/31/94 11,302 11,669
12/31/95 15,213 16,036
12/31/96 18,124 19,737
12/31/97 22,454 26,321
12/31/98 28,666 33,886
6/30/99 31,898 36,840
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Standard & Poor's 500 Stock
Index, which is an unmanaged index that generally represents the performance of
the U.S. stock market as a whole. The index is unmanaged and does not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The performance of the Fund does reflect
the deduction of fees for these value-added services.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
7
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT SMALL COMPANY GROWTH FUND+
BY ROB CUMMISFORD
PORTFOLIO MANAGER
The six months ended June 30, 1999, were good for small-company stocks, which
began the period trading at very attractive valuations. During the second
quarter alone, the Russell 2000 Index of small-cap stocks outpaced the Standard
& Poor's 500 Stock Index(1) of blue-chip stocks by more than eight percentage
points. The best performing sectors for the six-month period included
communication services (up 33%) and energy (up 32.1%). Health-care (down 0.9%)
and utilities (down 0.5%) were among the worst performers.*
For the six months ended June 30, 1999, the Fund's Institutional and
Investment Shares returned 9.97% and 9.89%, respectively. Over the same period,
the Russell 2000 Index returned 9.28%.
SMALL-CAP VALUE STOCKS LEAD THE WAY
Small-cap value stocks attracted many investors during the second quarter,
boosting the Fund's performance. Small-company shares benefited from merger and
acquisition activity and unexpectedly strong earnings growth.
The Fund slightly outperformed its benchmark, the Russell 2000, largely due to
the Fund's weighting in communication services as well as energy, where rising
oil prices helped drive share prices higher. The top-performing stocks in the
Fund included Western Wireless (0.38% of the portfolio), up 128.1%, which
provides wireless communications to the western United States, and Cross Timbers
Oil Company (0.18%), which was up 99% for the first half of 1999. The stocks in
the Fund have an average market capitalization of approximately $1,080 million,
which is slightly larger than the average market cap of the stocks that compose
the Russell 2000 ($730 million) after it was re-balanced on June 30.*
- --------------------------------------------------
KENT SMALL COMPANY GROWTH FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Communication Services 1.7%
Consumer Staples 4.4%
Utilities 5.0%
Consumer Cyclicals 19.0%
Transportation 1.8%
Energy 2.7%
Capital Goods 11.2%
Basic Materials 3.5%
Healthcare 10.7%
Financials 18.9%
Technology 21.1%
</TABLE>
- ---------------------------------------------------------------
GOING FORWARD
We believe that investors will continue to find the valuations of small
company shares attractive during the coming months. We will look for
opportunities in undervalued sectors such healthcare, technology and
communications services where the companies are poised to deliver significant
earnings growth. Meanwhile, we believe that the Fund is positioned to take
advantage of a market that favors small-company shares and value stocks.
- --------------------------------------------------------------------------------
+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 Standard & Poor's 500 Stock Index is an unmanaged index that generally
represents the performance of the U.S. stock market as a whole.
*The Fund's portfolio composition is subject to change.
8
<PAGE>
KENT SMALL COMPANY GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 12/4/92)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* 9.97% 9.89%
- -------------------------------------------------------------------------------
One Year -1.06% -1.24%
- -------------------------------------------------------------------------------
Three Years 11.87% 11.62%
- -------------------------------------------------------------------------------
Five Years 15.05% 14.82%
- -------------------------------------------------------------------------------
Life of Fund 14.65% 13.52%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE RUSSELL 2000 INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT SMALL COMPANY GROWTH RUSSELL 2000 INDEX
FUND INSTITUTIONAL CLASS
SHARES
<S> <C> <C>
11/2/1992 10,000 10,000
12/31/1992 10,885 11,140
12/31/1993 12,729 13,246
12/31/1994 12,722 13,005
12/31/1995 15,745 16,704
12/31/1996 18,825 19,466
12/31/1997 24,085 23,819
12/31/1998 22,600 23,212
6/30/1999 24,851 25,366
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT SMALL COMPANY GROWTH RUSSELL 2000 INDEX
FUND INVESTMENT CLASS SHARES
<S> <C> <C>
12/4/1992 10,000 10,000
12/31/1992 10,197 10,348
12/31/1993 11,915 12,304
12/31/1994 11,906 12,080
12/31/1995 14,702 15,516
12/31/1996 17,518 18,081
12/31/1997 22,372 22,124
12/31/1998 20,937 21,560
6/30/1999 23,008 23,561
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Russell 2000 Index, which is an
unmanaged index that represents the performance of domestically traded common
stocks of small to mid-sized companies. The index is unmanaged and does not
reflect the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The performance of the Fund does reflect
the deduction of fees for these value-added services.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth
more or less than the original cost. Performance of 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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
9
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT INTERNATIONAL GROWTH FUND+
BY DAVE EDER
PORTFOLIO MANAGER
The Kent International Growth Fund outperformed the Morgan Stanley Capital
International Europe, Australia and Far East (MSCI EAFE) Index during the
six-month period ended June 30, 1999. The Fund's Institutional and Investment
shares returned 5.08% and 4.92%, respectively, during the period while the EAFE
Index returned 4.11%.
ASIA RECOVERS, EUROPE SLUMPS
The Fund invests in stocks from individual countries based on the countries'
relative gross domestic products. During the six-month period, the Fund remained
overweighted in the Pacific Rim (35.5% of the portfolio) relative to the EAFE,
while exposure to European shares (64.5%) was slightly underweight relative to
the index.
Asian markets performed exceptionally well during the period, after falling to
record lows last autumn. We began adding to the Fund's position in the Pacific
Rim during the fourth quarter of 1998, which benefited the Fund greatly. The
MSCI Pacific Index rose 21.8% during the six-month period ended June 30, 1999.
The recovery in that region was driven by strong gross domestic product numbers
for Japan. Investors found opportunities in markets such as Malaysia (up 73.2%
for the period) and Singapore (up 60.4%), where stock valuations were very
attractive. During the period, we decreased slightly the Fund's holdings in
Japan, yet remained overweight relative to the EAFE.*
European markets performed poorly as the euro fell 10% against the U.S. dollar
over the six-month period. Weak economic growth and concerns about the Kosovo
crisis hurt equity markets' performance in the region. The MSCI Europe Index
fell 2.4% during the first half of 1999, as investors fled countries such as
Belgium (down 19.4% for the period) and Portugal (down 18.1%). Nonetheless,
markets such as Sweden (up 19.5% for the period) and Finland (up 28.5%) were
strong performers. During the period, we boosted the Fund's position in France
from 8.1% to 9.4% of the Fund's portfolio and trimmed the Fund's weighting in
Switzerland from 7.1% to 6.2%.*
- --------------------------------------------------
KENT INTERNATIONAL GROWTH FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Japan 26.7%
United Kingdom 19.8%
Germany 9.5%
France 9.4%
Switzerland 6.7%
Netherlands 5.4%
Italy 3.7%
Spain 3.0%
Australia 4.0%
Hong Kong 2.5%
Denmark 0.8%
Other 3.9%
Sweden 2.3%
Belgium 1.3%
Finland 1.5%
</TABLE>
- ---------------------------------------------------------------
GROWTH EXPECTED IN OVERSEAS MARKETS
The Kent International Growth Fund remains a well-diversified fund, with
investments in 767 securities as of June 30, 1999. We aim to reduce risk by
maintaining a balanced portfolio in each country in which the Fund invests. We
believe that Asia will continue to recover as economies in Japan, China and Hong
Kong grow. In Europe, the weak euro may allow the region's exporters to sell
their goods to the U.S. at lower prices, which should help boost European
economies.*
- --------------------------------------------------------------------------------
+International investing involves increased risk and volatility.
*The Fund's portfolio composition is subject to change.
10
<PAGE>
KENT INTERNATIONAL GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 12/4/92) (inception: 12/4/92)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* 5.08% 4.92%
- -------------------------------------------------------------------------------
One Year 8.38% 8.02%
- -------------------------------------------------------------------------------
Three Years 8.72% 8.44%
- -------------------------------------------------------------------------------
Five Years 8.83% 8.57%
- -------------------------------------------------------------------------------
Life of Fund 11.95% 11.65%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE,
AUSTRALIA AND FAR EAST INDEX,
AND THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI)
EUROPE INDEX AND
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI)
PACIFIC RIM INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INTERNATIONAL MSCI MSCI MSCI
GROWTH FUND EUROPE, EUROPE PACIFIC RIM
INSTITUTIONAL CLASS AUSTRALIA AND FAR EAST
SHARES INDEX INDEX INDEX
<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 13,626 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
12/31/98 19,976 20,989 32,213 10,942
6/30/99 20,991 21,852 31,482 13,344
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INTERNATIONAL MSCI MSCI MSCI
GROWTH FUND EUROPE, AUSTRALIA EUROPE PACIFIC RIM
INVESTMENT CLASS
SHARES AND FAR EAST INDEX INDEX INDEX
<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 13,626 15,195
12/31/95 15,487 16,113 16,653 15,650
12/31/96 16,350 17,138 20,246 14,335
12/31/97 16,719 17,443 25,063 10,681
12/31/98 19,661 20,989 32,213 10,942
6/30/99 20,627 21,852 31,482 13,344
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Morgan Stanley Capital
International Europe, Australia and Far East Index (EAFE), which is an
unmanaged index that is comprised 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 Rim 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. The indices are
unmanaged and do not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. The performance
of the Fund does reflect the deduction of fees for these value-added services.
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 24 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 samplings of large-, medium- and
small-capitalization companies from each local market, taking into account the
stocks' liquidity.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth
more or less than the original cost. Performance of 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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
11
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT INDEX EQUITY FUND
BY BRIAN SMOLINSKI
PORTFOLIO MANAGER
The six-month period ended June 30, 1999, was characterized by strong
performance in the U.S. stock market as the Dow Jones Industrial Average passed
the 11,000 mark in May. Undervalued stocks became dominant drivers of the market
after many quarters of disappointing performance, with small-company, cyclical
and other value stocks surging during the second quarter. Signs of inflation
prompted the Federal Reserve to raise the federal funds rate by 25 basis points
in June.
The Institutional and Investment shares of the Kent Index Equity Fund returned
12.23% and 12.09%, respectively, for the six months ended June 30, 1999. The
Standard & Poor's 500 Stock Index returned 12.38% during the same period. The
best performing sectors during the six-month period were technology (up 24.8%)
and basic materials (up 21.8%). LSI Logic (0.06% of the portfolio), a firm that
makes circuits and semiconductors for electronic goods, led the best-performing
companies (up 186% for the period), followed by telecommunications giant Sprint
Corp. (0.22%), up 147%.*
The Kent Index Equity Fund seeks to replicate the performance of the S&P 500
Index. Despite the recent strong performances by small caps and value-oriented
shares, we believe that the large-company shares that make up the index will
continue to perform well due to continued economic growth and modest inflation.
- --------------------------------------------------
KENT INDEX EQUITY FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Communication Services 8.4%
Consumer Staples 13.6%
Utilities 2.6%
Capital Goods 8.0%
Transportation 0.9%
Energy 5.6%
Consumer Cyclicals 9.2%
Basic Materials 3.0%
Health 12.0%
Financials 16.1%
Technology 20.6%
</TABLE>
- ---------------------------------------------------------------
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
12
<PAGE>
KENT INDEX EQUITY FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 11/25/92)
<S> <C> <C>
- -----------------------------------------------------------------------
Six Months* 12.23% 12.09%
- -----------------------------------------------------------------------
One Year 22.49% 22.17%
- -----------------------------------------------------------------------
Three Years 28.55% 28.21%
- -----------------------------------------------------------------------
Five Years 27.14% 26.85%
- -----------------------------------------------------------------------
Life of Fund 21.46% 20.99%
- -----------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE STANDARD & POOR'S 500 STOCK INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INDEX EQUITY FUND STANDARD & POOR'S 500
INSTITUTIONAL CLASS
SHARES STOCK INDEX
<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
12/31/98 32,503 33,886
6/30/99 36,479 38,081
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INDEX EQUITY FUND STANDARD & POOR'S 500
INVESTMENT CLASS SHARES STOCK INDEX
<S> <C> <C>
11/25/92 10,000 10,000
12/31/92 10,185 10,472
12/31/93 11,111 11,518
12/31/94 11,194 11,669
12/31/95 15,199 16,036
12/31/96 18,531 19,737
12/31/97 24,505 26,321
12/31/98 31,347 33,886
6/30/99 35,137 36,840
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Standard & Poor's 500 Stock
Index, which is an unmanaged index that generally represents the performance of
the U.S. stock market as a whole. The index is unmanaged and does not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The performance of the Fund does reflect
the deduction of fees for these value-added services.
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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
13
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT SHORT TERM BOND FUND
BY MITCHELL STAPLEY
PORTFOLIO MANAGER
Yields on short-term bonds rose throughout the six-month period ended June 30,
1999. Investors worried that the economy's strong growth rate and rising oil
prices would lead to inflation, forcing the Federal Reserve Board (the Fed) to
aggressively raise interest rates. Those fears caused the yield on two-year
Treasury notes to rise from 4.58% at the beginning of the period to 5.50% at the
end. The Fed did raise rates by 25 basis points in late June, but that was a
smaller increase than many investors had feared.
During the six-months ended June 30, 1999, the Fund's Institutional and
Investment Shares posted total returns of 0.89% and 0.81%, respectively. That
compared to a 5.05% return for the Fund's benchmark, the Lehman Brothers
1-to-3-Year Government Bond Index.
VALUE IN HIGH-QUALITY CORPORATE SECURITIES
During the period, we found attractive investment opportunities in
high-quality securities issued by corporations. Such issues offered higher
yields than comparable Treasury securities and should provide shareholders with
good performance and stability of principal going forward. As a result of that
strategy, the Fund's allocation to corporate securities increased from 57% at
the beginning of the period to 67% at the end.*
We extended the Fund's average maturity somewhat, from 2.1 years at the
beginning of the period to 2.2 years at the end of the period. That extension
reflected our strategy of locking in the higher yields available on longer
issues. We maintained a high average credit rating of AA2.*
- --------------------------------------------------
KENT SHORT TERM BOND FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents
Net Other Assets
& Liabilities 3.4%
Corporate Notes
& Bonds 63.6%
U.S. Government &
Agency Issues 33.0%
</TABLE>
- ---------------------------------------------------------------
KENT SHORT TERM BOND FUND
SEC 30-DAY YIELDS
AS OF JUNE 30, 1999
<TABLE>
<S> <C>
Institutional Class..................................... 5.40%
Investment Class........................................ 5.25%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1999. 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 5.39% for Institutional Shares and 5.14% for Investment
Shares.
- ---------------------------------------------------------------
LOOKING AHEAD
We expect yields to fall going forward, as the Federal Reserve's recent rate
increase and the eight-month-long rise in mortgage rates slow the economy and
hold off inflation. We already have seen a slowdown in housing starts and
mortgage refinancings, indicating that the rise in mortgage rates has begun to
take effect. The Fund's relatively long average maturity and high credit rating
position it well for an environment of slower economic growth and falling
interest rates.
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
14
<PAGE>
KENT SHORT TERM BOND FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 11/2/92) (inception: 12/4/92)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* 0.89% 0.81%
- -------------------------------------------------------------------------------
One Year 4.22% 4.08%
- -------------------------------------------------------------------------------
Three Years 5.62% 5.47%
- -------------------------------------------------------------------------------
Five Years 5.75% 5.60%
- -------------------------------------------------------------------------------
Life of Fund 4.94% 4.80%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE LEHMAN BROTHERS 1-3-YEAR GOVERNMENT BOND INDEX,
THE CONSUMER PRICE INDEX AND THE 91-DAY TREASURY BILL
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT SHORT TERM THE LEHMAN BROTHERS 1-3-YEAR CONSUMER PRICE INDEX 91-DAY
BOND FUND GOVERNMENT BOND INDEX TREASURY BILL
INSTITUTIONAL CLASS
SHARES
<S> <C> <C> <C> <C>
11/2/92 10,000 10,000 10,000 10,000
12/31/92 10,087 10,078 10,007 10,052
12/31/93 10,395 10,621 10,282 10,362
12/31/94 10,502 10,675 10,557 10,802
12/31/95 11,608 11,832 10,825 11,423
12/31/96 12,098 12,430 11,185 12,023
12/31/97 12,875 13,626 11,375 12,655
12/31/98 13,663 14,517 11,559 13,295
6/30/99 13,784 15,250 11,721 13,593
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT SHORT TERM THE LEHMAN BROTHERS 1-3-YEAR CONSUMER PRICE INDEX 91-DAY
BOND FUND GOVERNMENT BOND INDEX TREASURY BILL
INVESTMENT CLASS
SHARES
<S> <C> <C> <C> <C>
12/4/92 10,000 10,000 10,000 10,000
12/31/92 10,030 10,078 9,993 10,027
12/31/93 10,335 10,621 10,268 10,336
12/31/94 10,439 10,675 10,542 10,775
12/31/95 11,514 11,832 10,810 11,395
12/31/96 11,982 12,430 11,169 11,993
12/31/97 12,732 13,626 11,359 12,623
12/31/98 13,495 14,517 11,542 13,262
6/30/99 13,605 15,274 11,704 13,559
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers 1-3-Year
Government Bond Index, which is an unmanaged index comprised of U.S. Treasury
issues and publicly issued debt of U.S. Government agencies with maturities of
one to three years. The index is unmanaged and does not reflect the deduction
of fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the Fund does reflect the deduction of fees
for these value-added services.
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. Total return is based on
changes in net asset value, assuming reinvestment of all dividends and capital
gains distributions.
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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
15
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT INTERMEDIATE BOND FUND
BY MITCHELL STAPLEY
PORTFOLIO MANAGER
Yields on intermediate-term bonds rose dramatically during the six-month
period ended June 30, 1999. Investors feared that a strong economy and rising
oil prices would lead to an increase in inflation, forcing the Federal Reserve
Board (the Fed) to raise interest rates. Those fears pushed up the yield on the
10-year Treasury from 4.65% at the beginning of the period to 5.78% at the end
of the period. The Fed did raise rates by 25 basis points in late June, but that
increase was smaller than many investors had feared.
The Intermediate Bond Fund's relatively long average maturity hampered
performance during the period. That long average maturity allowed the Fund to
offer an attractive dividend yield, however. The return on the Fund's
Institutional and Investment Shares was -1.68% and -1.70%, respectively, during
the six months ended June 30, 1999. That compared to a -0.58% return for the
Fund's benchmark, the Lehman Brothers Intermediate Government/Corporate Bond
Index.
EXTENDING AVERAGE MATURITY
We bought securities with relatively long maturities during the period to lock
in the higher yield that those issues offered. We found many such opportunities
in the second half of the period, as yields on intermediate-term bonds rose
higher than 5.5%. That strategy increased the Fund's average maturity from 5.5
years at the beginning of the period to 6.2 years at the end of the period.
We increased the Fund's weighting in corporate bonds from 35% of assets at the
beginning of the period to 40% at the end. That increase reflected the
attractive opportunities we found in bonds issued by high-quality companies
including regional banks, automakers and oil and gas firms. The Fund's average
credit rating remained high at AA1, down somewhat from AAA at the beginning of
the period. That slight decline reflected the increase in corporate bonds in the
portfolio.*
- --------------------------------------------------
KENT INTERMEDIATE BOND FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents
Net Other Assets
& Liabilities 2.3%
Corporate Notes
& Bonds 34.9%
U.S. Government &
Agency Issues 62.8%
</TABLE>
- ---------------------------------------------------------------
KENT INTERMEDIATE BOND FUND
SEC 30-DAY YIELDS
AS OF JUNE 30, 1999
<TABLE>
<S> <C>
Institutional Class..................................... 5.72%
Investment Class........................................ 5.46%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1999. 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 5.71% for Institutional Shares and 5.45% for Investment
Shares.
- ---------------------------------------------------------------
LOOKING AHEAD
We expect yields to decline going forward. We have already seen signs that the
eight-month-long rise in mortgage rates is slowing the economy. For example,
housing starts and mortgage refinancings have lost momentum significantly.
Slowing economic activity should prevent inflation from increasing, allowing the
Federal Reserve to refrain from aggressively raising rates. We believe that our
recent strategy of extending the Fund's average maturity and investing in
high-quality corporate bonds has positioned the Fund to perform well in an
environment of slower economic growth and falling yields.
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
16
<PAGE>
KENT INTERMEDIATE BOND FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception:
(inception: 11/2/92) 11/25/92)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* -1.68% -1.70%
- -------------------------------------------------------------------------------
One Year 2.28% 2.14%
- -------------------------------------------------------------------------------
Three Years 5.94% 5.71%
- -------------------------------------------------------------------------------
Five Years 6.52% 6.30%
- -------------------------------------------------------------------------------
Life of Fund 5.69% 5.46%
- -------------------------------------------------------------------------------
*Aggregate Returns
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND
INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INTERMEDIATE THE LEHMAN BROTHERS INTERMEDIATE
BOND FUND GOVERNMENT/CORPORATE
INSTITUTIONAL CLASS
SHARES 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
12/31/98 14,699 15,105
6/30/99 14,452 15,017
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INTERMEDIATE THE LEHMAN BROTHERS INTERMEDIATE
BOND FUND GOVERNMENT/CORPORATE
INVESTMENT CLASS
SHARES 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
12/31/98 14,448 15,162
6/30/99 14,203 15,074
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers Intermediate
Government/Corporate Bond Index, which 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. The index is unmanaged and does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the Fund does reflect the deduction of fees
for these value-added services.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
17
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT INCOME FUND
BY MITCHELL STAPLEY
PORTFOLIO MANAGER
Yields on long-term bonds increased throughout the six-month period ended June
30, 1999, as investors sold bonds due to fears of rising inflation. Those
concerns were driven by strong domestic growth and rising oil prices. The
Federal Reserve Board responded to signs of inflation by raising the federal
funds rate by 25 basis points in late June. A heavy supply of corporate
securities caused their yields to rise even more than yields on Treasury
securities. The yield on the 30-year Treasury began the period at 5.10% and
finished the period at 5.97%.
The Fund's Institutional and Investment Shares posted returns of -3.62% and
- -3.75%, respectively, for the six months ended June 30, 1999. That compares to a
- -5.95% return for the Lehman Brothers Long Government/Corporate Bond Index. The
Fund's relatively long average maturity hurt its performance during the period.
EXTENDING AVERAGE MATURITY
During the second half of the period, we extended the Fund's average maturity
to take advantage of the higher yields offered by longer dated issues. That
strategy allowed us to increase the Fund's dividend yield. The Fund began the
period with an average maturity of 10.8 years and ended the period with an
average maturity of 11.5 years.
The rise in yields throughout the period led to good buying opportunities
among high-quality corporate bonds. In particular, we bought securities issued
by regional banks, automakers and oil and gas producers. We concentrated on
bonds issued by high-quality companies that we felt would hold up well in an
economic downturn. That high-quality approach improved the Fund's credit rating
from AA2 to AA1 during the period.
- --------------------------------------------------
KENT INCOME FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents
Net Other Assets
& Liabilities 0.7%
Corporate Notes
& Bonds 48.3%
U.S. Government &
Agency Issues 51.0%
</TABLE>
- ---------------------------------------------------------------
KENT INCOME FUND
SEC 30-DAY YIELD
AS OF JUNE 30, 1999
<TABLE>
<S> <C>
Institutional Class.................................... 6.14%
Investment Class....................................... 5.89%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1999. 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 6.13% for Institutional Shares and 5.88% for Investment
Shares.
- ---------------------------------------------------------------
GOING FORWARD
We expect yields to decrease over the coming months. We already are seeing
signs that the eight-month-long rise in mortgage rates is slowing the economy;
for example, new housing starts and mortgage refinancings have decreased. Such
signs indicate a slowing economy, which would make an increase in inflation less
likely. We believe that our strategy during the past three months of buying
high-quality corporate bonds with relatively long maturities has positioned the
Fund well for an environment of slower growth and falling interest rates.*
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
18
<PAGE>
KENT INCOME FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 3/20/95) (inception: 3/22/95)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* -3.62% -3.75%
- -------------------------------------------------------------------------------
One Year 1.14% 0.89%
- -------------------------------------------------------------------------------
Three Years 7.08% 6.87%
- -------------------------------------------------------------------------------
Life of Fund 7.35% 7.08%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
AND THE LEHMAN BROTHERS LONG GOVERNMENT/CORPORATE BOND INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INCOME FUND THE LEHMAN BROTHERS THE LEHMAN BROTHERS LONG
INSTITUTIONAL CLASS
SHARES GOVERNMENT/CORPORATE GOVERNMENT/CORPORATE
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
12/31/98 14,063 14,043 15,624
6/30/99 13,553 13,723 14,694
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INCOME FUND THE LEHMAN BROTHERS THE LEHMAN BROTHERS LONG
INVESTMENT CLASS
SHARES GOVERNMENT/CORPORATE GOVERNMENT/CORPORATE
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 12,871 13,979
12/31/98 13,933 14,043 15,624
6/30/99 13,411 13,723 14,694
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers
Government/Corporate Bond Index and Lehman Brothers Long Government/Corporate
Bond Index which 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. The indices do not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. The performance of the Fund does reflect
the deduction of fees for these value-added services.
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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
19
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT INTERMEDIATE TAX-FREE FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
The six-month period ended June 30, 1999, was characterized by rising interest
rates across the bond market. The increase in interest rates was brought on by
concerns that stronger-than-expected economic growth in the United States and
strengthening foreign economies would send inflation higher and force the
Federal Reserve to boost short-term rates. In fact, the Fed did raise rates at
the end of June in an effort to ward off any inflationary pressures.
Intermediate-term municipal securities outperformed comparable Treasury
securities during the period. The yield on the 10-year AAA-rated general
obligation municipal security rose by 70 basis points, versus a 114 basis point
increase in the 10-year Treasury yield. The ratio of the 10-year AAA-rated
general obligation bond yield to the 10-year Treasury's yield fell from 88.3% in
January to 82.7% by the end of June.*
Municipal securities typically are less volatile than Treasury securities and,
therefore, tend to perform relatively well in an environment of rising interest
rates. During the period, lower supply in the municipal market also helped
support municipal bond prices as municipalities issue fewer new securities in a
rising rates environment. As a result, new issuance during the first six months
of 1999 fell 23% compared to the first half of 1998 (a period when new issuance
was near record levels).
For the six months ended June 30, 1999, the Fund's Institutional and
Investment Shares delivered total returns of -1.14% and -1.17%, respectively.
That compares to a 0.67% return for the Fund's benchmark, the Lehman Brothers
Three-Year General Obligation Municipal Bond Index.
MANAGING AVERAGE MATURITY
The Fund's target average maturity is currently 7.50 years. The average
maturity of the Fund stood at 7.12 years at the end of June, up from 6.94 years
on January 1, 1999. We are in the process of extending the Fund's average
maturity, given the recent backup in municipal yields, in order to capture
additional yield for shareholders. We implemented the longer average maturity
strategy by purchasing issues such as Massachusetts State Port Authority bonds
with a 5.00% coupon due in 2028 (1.09%). The Fund maintained its strong average
credit quality, as we saw few opportunities to purchase lower-quality issues at
attractive prices.*
- --------------------------------------------------
KENT INTERMEDIATE TAX-FREE FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
North Central 37.4%
South 26.1%
Pacific 17.2%
Mountain 3.6%
Other 3.1%
East 12.6%
</TABLE>
- ---------------------------------------------------------------
KENT INTERMEDIATE TAX-FREE FUND
SEC 30-DAY YIELDS
AS OF JUNE 30, 1999
<TABLE>
<S> <C>
Institutional Class..................................... 3.75%
Investment Class........................................ 3.49%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1999. 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 3.74% for Institutional Shares and 3.48% for Investment
Shares.
- ---------------------------------------------------------------
THE OUTLOOK
We believe that inflation will remain in check during the coming months, as
the economy's growth rate slows. That environment will help to make bonds an
attractive investment option going forward, even though municipal bond investors
continue to be distracted by the strong equity market. We expect to maintain the
Fund's relatively long average maturity, and possibly extend it further to
capture yield for shareholders if rates continue to rise. We also will maintain
the Fund's high-quality orientation, as the extra yield on lower-quality bonds
is not enough to justify taking on the additional risk in such securities.
- --------------------------------------------------------------------------------
+The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
*The Fund's portfolio composition is subject to change.
20
<PAGE>
KENT INTERMEDIATE TAX-FREE FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: (inception:
12/16/92) 12/18/92)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* -1.14% -1.17%
- -------------------------------------------------------------------------------
One Year 2.28% 2.03%
- -------------------------------------------------------------------------------
Three Years 5.01% 4.78%
- -------------------------------------------------------------------------------
Five Years 5.45% 5.23%
- -------------------------------------------------------------------------------
Life of Fund 5.02% 4.83%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL
BOND INDEX
AND THE LEHMAN BROTHERS FIVE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INTERMEDIATE TAX- THE LEHMAN BROTHERS THREE- THE LEHMAN BROTHERS FIVE-
FREE FUND YEAR GENERAL OBLIGATION 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
12/31/98 13,929 13,572 13,521
6/30/99 13,771 13,663 13,502
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT INTERMEDIATE TAX- THE LEHMAN BROTHERS THREE- THE LEHMAN BROTHERS FIVE-
FREE FUND YEAR GENERAL OBLIGATION YEAR GENERAL OBLIGATION
INVESTMENT CLASS
SHARES MUNICIPAL BOND INDEX MUNICIPAL BOND INDEX
<S> <C> <C> <C>
12/18/92 10,000 10,000 10,000
12/31/92 10,040 10,200 10,600
12/31/93 10,873 10,673 10,930
12/31/94 10,543 10,755 10,779
12/31/95 11,889 11,705 12,032
12/31/96 12,266 12,243 12,581
12/31/97 13,100 12,905 13,406
12/31/98 13,765 13,572 13,521
6/30/99 13,605 13,663 13,502
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers Three-Year
General Obligation Municipal Bond Index and the Lehman Brothers Five-Year
General Obligation Municipal Bond Index, both of which are unmanaged indices
comprised of debt instruments issued by municipalities. The index is unmanaged
and does not reflect the deduction of fees associated with a mutual fund, such
as investment management and fund accounting fees. The performance of the Fund
does reflect the deduction of fees for these value-added services.
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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
21
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT TAX-FREE INCOME FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
Interest rates rose throughout the bond market during the six-month period
ended June 30, 1999. That increase reflected investor concerns that strong
domestic growth and signs of recovery in battered overseas economies would force
the Federal Reserve Board (the Fed) to raise short-term interest rates to slow
the economy's growth rate. In fact, the Fed eventually did raise rates by 25
basis points late in the period in an attempt to avoid a resurgence in inflation
pressures.
MUNICIPALS OUTPERFORMED TREASURIES
Municipal bonds outperformed Treasury securities in that environment. The
yield on a 30-year AAA-rated general obligation municipal security rose 39 basis
points, from 4.94% on January 1 to 5.33% by the end of June. That compares to an
87 basis point rise in the 30-year Treasury bond yield during that same time.
Likewise, the ratio of the yield on a 30-year AAA-rated general obligation
municipal security to the yield on a comparable Treasury ended the period at
89.2%, down from 97.4% in January.*
Several factors helped municipal bonds outperform Treasury securities. For
one, municipal securities typically are less volatile than Treasuries and,
therefore, tend to perform relatively well in an environment of rising interest
rates. Municipal bonds also benefited from a much lower level of supply than in
1998, due in part to the fact that rising rates caused municipalities to issue
fewer new bonds. For example, new issuance of municipal securities during the
first six months of 1999 fell 23% compared to the same period in 1998.
The Fund's Institutional and Investment Shares posted total returns of -1.80%
and -1.82%, respectively, for the six months through June 30, 1999. That
compares to a -0.89% total return for the Lehman Brothers Municipal Bond Index.
MANAGING THE FUND
We took advantage of the increase in municipal yields to extend the Fund's
average maturity from 10.8 years in January to 12.2 years by the end of June.
That approach allowed the Fund to capture attractive levels of current income
for shareholders. We extended the Fund's average maturity by purchasing
longer-term bonds such as New York City Transitional Finance Authority bonds
with a 5.00% coupon, due in 2029 (2.46%).
- --------------------------------------------------
KENT TAX-FREE INCOME FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
North Central 38.3%
South 11.7%
Pacific 16.7%
Mountain 14.8%
Other 3.9%
East 14.6%
</TABLE>
- ---------------------------------------------------------------
KENT TAX-FREE INCOME FUND
SEC 30-DAY YIELDS
AS OF JUNE 30, 1999
<TABLE>
<S> <C>
Institutional Class..................................... 4.12%
Investment Class........................................ 3.87%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1999. 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 4.11% for Institutional Shares and 3.86% for Investment
Shares.
- ---------------------------------------------------------------
We maintained the Fund's high average credit rating of AA during the six
months ended June 30, 1999. The reason is that we believe the additional yield
available on lower-rated securities was not sufficient to compensate for the
increased risk such issues carry.*
LOOKING AHEAD
The municipal market still faces stiff competition from the robust equity
market. We believe that the economy's growth rate will slow and inflation will
remain tame during the second half of 1999, making municipal bonds an attractive
option for investors. Given that perspective, we have positioned the Fund with
an average maturity that is slightly longer than that of its benchmark index,
and we will take advantage of any additional rise in yields to increase the
average maturity further. We also will continue to favor bonds with strong
credit ratings.
- --------------------------------------------------------------------------------
+The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
*The Fund's portfolio composition is subject to change.
22
<PAGE>
KENT TAX-FREE INCOME FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 3/20/95) (inception: 3/31/95)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* -1.80% -1.82%
- -------------------------------------------------------------------------------
One Year 1.77% 1.60%
- -------------------------------------------------------------------------------
Three Years 5.64% 5.40%
- -------------------------------------------------------------------------------
Life of Fund 5.78% 5.54%
- -------------------------------------------------------------------------------
*Aggregate Returns
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT TAX-FREE INCOME
FUND INSTITUTIONAL
CLASS THE LEHMAN BROTHERS MUNICIPAL
SHARES 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
12/31/98 12,957 13,242
6/30/99 12,724 13,124
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT TAX-FREE INCOME
FUND INVESTMENT CLASS THE LEHMAN BROTHERS MUNICIPAL
SHARES BOND INDEX
<S> <C> <C>
3/31/95 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
12/31/98 12,809 13,242
6/30/99 12,575 13,124
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers Municipal Bond
Index, which is an unmanaged index comprised of general obligation municipal
debt instruments. The index is unmanaged and does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the Fund does reflect the deduction of fees
for these value-added services.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
23
<PAGE>
PORTFOLIO
REVIEWS
- --------------------------------------------------
KENT MICHIGAN MUNICIPAL BOND FUND+
BY MICHAEL MARTIN
PORTFOLIO MANAGER
Interest rates rose throughout the six-month period ended June 30, 1999. This
environment developed as strong domestic growth and signs of recovery from in
overseas economies caused concerns that the Federal Reserve Board (the Fed)
would raise rates to slow the economy and head off inflation. The Fed eventually
did raise rates by 25 basis points in late June.
Municipal bonds outperformed Treasury securities during the period, due in
large part to the low supply of municipal issues. For example, new issuance of
municipal bonds in Michigan during the first half of 1999 was down 41% compared
to the same period in 1998. The yield on the five-year AAA-rated general
obligation municipal security rose 58 basis points during the period, from 3.75%
in January to 4.33% by the end of June. That increase compares to a 111 basis
point rise in the five-year Treasury bond yield. The ratio of the yield on the
five-year AAA-rated general obligation municipal security to the yield on the
five-year Treasury began the period at 82.6% and fell to 76.5% by the end of
June.*
The Fund's Institutional and Investment Shares delivered total returns of
- -0.07% and -0.15%, respectively, during the six-month period ended June 30,
1999. The Fund's benchmark, the Lehman Brothers Three-Year General Obligation
Index, posted a total return of 0.67% during that period.
MANAGING THE FUND
As always, we looked for opportunities to increase the Fund's overall yield
while maintaining the portfolio's high credit quality. We pursued that strategy
during the period by purchasing bonds such as Bishop International Airport
Authority with a 4.88% coupon due in 2001, and Michigan State Hospital Finance
Authority for Memorial Healthcare with a 4.40% coupon due in 2001 (0.31%). The
Fund's average maturity ended the period at 3.92 years, down slightly from 4.10
years on January 1, 1999. We are in the process of extending the Fund's average
maturity to 4.15 years given the recent backup in yields.*
- --------------------------------------------------
KENT MICHIGAN MUNICIPAL BOND FUND
DISTRIBUTION OF NET ASSETS
AS OF JUNE 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents
Net Other Assets
& Liabilities 10.31%
Municipal
Securities 89.69%
</TABLE>
- ---------------------------------------------------------------
KENT MICHIGAN MUNICIPAL BOND FUND
SEC 30-DAY YIELD
AS OF JUNE 30, 1999
<TABLE>
<S> <C>
Institutional Class..................................... 4.00%
Investment Class........................................ 3.85%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
June 30, 1999. 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 3.99% for Institutional Shares and 3.74% for Investment
Shares.
- ---------------------------------------------------------------
GOING FORWARD
Michigan's economy continues to benefit from the strong fundamentals enjoyed
by the overall U.S. economy. The state's unemployment rate is 3.8%, which is
below the national average. Going forward, Michigan's unemployment rate should
fall modestly, while personal income is expected to grow at a strong 3.8%
annualized rate. The market should benefit from low inflation. We will continue
to look for attractive investments in a variety of sectors, and take advantage
of opportunities to boost the Fund's yield without compromising the portfolio's
high credit quality.
- --------------------------------------------------------------------------------
+The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
*The Fund's portfolio composition is subject to change.
24
<PAGE>
KENT MICHIGAN MUNICIPAL BOND FUND
AVERAGE ANNUAL RETURNS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INVESTMENT CLASS
(inception: 5/3/93) (inception: 5/11/93)
<S> <C> <C>
- -------------------------------------------------------------------------------
Six Months* -0.07% -0.15%
- -------------------------------------------------------------------------------
One Year 2.80% 2.66%
- -------------------------------------------------------------------------------
Three Years 4.34% 4.19%
- -------------------------------------------------------------------------------
Five Years 4.45% 4.32%
- -------------------------------------------------------------------------------
Life of Fund 4.08% 3.91%
- -------------------------------------------------------------------------------
*Aggregate Return
</TABLE>
GROWTH OF A $10,000 INVESTMENT
AS COMPARED WITH THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION
MUNICIPAL BOND INDEX
INSTITUTIONAL CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT MICHIGAN THE LEHMAN BROTHERS THREE-
MUNICIPAL BOND FUND YEAR GENERAL OBLIGATION
INSTITUTIONAL 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
12/31/98 12,802 13,113
6/30/99 12,793 13,201
</TABLE>
- --------------------------------------------------------------------------------
INVESTMENT CLASS SHARES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
KENT MICHIGAN THE LEHMAN BROTHERS THREE-
MUNICIPAL BOND FUND YEAR GENERAL OBLIGATION
INVESTMENT 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
12/31/98 12,676 13,113
6/30/99 12,657 13,201
</TABLE>
- --------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers Three-Year
General Obligation Municipal Bond Index, which is an unmanaged index comprised
of debt instruments issued by municipalities. The index is unmanaged and does
not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The performance of the Fund
does not reflect the deduction of fees for these value-added services.
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 gain distributions.
Certain fees were waived during the period. Had these waivers not been in
effect, total returns would have been lower.
25
<PAGE>
Kent Funds
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (92.6%):
ADVERTISING (0.1%):
14,900 Interpublic Group Cos., Inc............. $ 1,290,713
AEROSPACE & DEFENSE (0.7%):
84,000 Boeing Co............................... 3,711,750
32,400 Lockheed Martin Corp.................... 1,206,900
29,900 Raytheon Co., Class B................... 2,104,213
--------------
7,022,863
--------------
APPLIANCES & HOUSEHOLD PRODUCTS (0.2%):
24,600 Maytag Corp............................. 1,714,313
--------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT (0.2%):
20,750 Dana Corp............................... 955,796
45,640 Delphi Automotive Systems Corp.......... 847,193
--------------
1,802,989
--------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT (0.1%):
26,700 Genuine Parts Co........................ 934,500
--------------
AUTOMOTIVE (1.1%):
115,400 Ford Motor Co........................... 6,512,888
65,300 General Motors Corp..................... 4,309,800
--------------
10,822,688
--------------
BANKS -- MAJOR REGIONAL (4.2%):
73,000 Bank of New York Co., Inc............... 2,678,188
122,946 Bank One Corp........................... 7,322,970
32,500 BankBoston Corp......................... 1,661,563
13,500 Comerica, Inc........................... 802,406
93,000 First Union Corp........................ 4,370,999
49,700 Fleet Financial Group, Inc.............. 2,205,438
37,500 KeyCorp................................. 1,204,688
58,800 Mellon Bank Corp........................ 2,138,850
28,900 National City Corp...................... 1,892,950
20,200 Northern Trust Corp..................... 1,959,400
40,200 PNC Bank Corp. (c)...................... 2,316,525
40,200 SunTrust Banks, Inc..................... 2,791,388
66,200 U.S. Bancorp............................ 2,250,800
26,500 Wachovia Corp. (c)...................... 2,267,406
158,200 Wells Fargo Co.......................... 6,763,049
--------------
42,626,620
--------------
BANKS -- MIDWEST (0.2%):
24,100 Fifth Third Bancorp..................... 1,604,156
--------------
BANKS -- MONEY CENTER (2.1%):
154,100 Bank Of America Corp.................... 11,297,455
83,900 Chase Manhattan Corp.................... 7,267,838
15,900 J.P. Morgan & Co., Inc.................. 2,233,950
--------------
20,799,243
--------------
BANKS -- NORTHEAST (0.1%):
17,200 State Street Corp....................... 1,468,450
--------------
BEVERAGES -- ALCOHOLIC (0.3%):
44,700 Anheuser-Busch Co., Inc................. 3,170,906
--------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BEVERAGES -- SOFT DRINKS (1.8%):
207,200 Coca-Cola Co............................ $ 12,950,000
127,800 PepsiCo, Inc............................ 4,944,263
--------------
17,894,263
--------------
BROADCASTING/CABLE (0.8%):
21,250 Clear Channel Communications, Inc.*..... 1,464,922
66,700 Comcast Corp., Special Class A.......... 2,563,781
57,000 MediaOne Group, Inc.*................... 4,239,375
--------------
8,268,078
--------------
BUILDING & CONSTRUCTION -- MISCELLANEOUS (0.2%):
59,300 Masco Corp.............................. 1,712,288
--------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE (1.0%):
130,800 Home Depot, Inc......................... 8,428,425
32,800 Lowe's Cos., Inc........................ 1,859,350
--------------
10,287,775
--------------
BUILDING PRODUCTS -- WOOD (0.1%):
18,200 Weyerhaeuser Co......................... 1,251,250
--------------
CHEMICALS -- DIVERSIFIED (1.4%):
25,400 Dow Chemical Co......................... 3,222,625
94,900 E.I. du Pont de Nemours & Co............ 6,482,856
21,450 Hercules, Inc........................... 843,253
35,100 PPG Industries, Inc..................... 2,073,094
22,500 Union Carbide Corp...................... 1,096,875
--------------
13,718,703
--------------
CHEMICALS -- SPECIALTY (0.3%):
24,300 Great Lakes Chemical Corp............... 1,119,319
26,100 Nalco Chemical Co....................... 1,353,937
19,800 Sigma-Aldrich Corp...................... 681,863
--------------
3,155,119
--------------
COMMERCIAL SERVICES (0.2%):
75,000 Cendant Corp.*.......................... 1,537,500
--------------
COMPUTER SOFTWARE (4.7%):
57,300 Computer Associates International, 3,151,500
Inc.....................................
446,000 Microsoft Corp.*........................ 40,223,624
121,500 Oracle Corp.*........................... 4,510,688
--------------
47,885,812
--------------
COMPUTERS -- LOCAL AREA NETWORK (1.9%):
29,650 3Com Corp.*............................. 791,284
289,800 Cisco Systems, Inc.*.................... 18,637,763
--------------
19,429,047
--------------
COMPUTERS -- MAINFRAME (2.4%):
182,600 IBM Corp................................ 23,601,049
--------------
COMPUTERS -- MEMORY DEVICES (0.4%):
66,000 EMC Corp.*.............................. 3,630,000
29,000 Seagate Technology, Inc.*............... 743,125
--------------
4,373,125
--------------
</TABLE>
CONTINUED
26
<PAGE>
Kent Funds
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS -- MICRO (1.2%):
153,074 Compaq Computer Corp.................... $ 3,625,940
215,000 Dell Computer Corp.*.................... 7,955,000
--------------
11,580,940
--------------
COMPUTERS -- MINI (1.5%):
102,000 Hewlett-Packard Co...................... 10,251,000
64,400 Sun Microsystems, Inc.*................. 4,435,550
--------------
14,686,550
--------------
COMPUTERS -- SERVICES (0.8%):
104,440 Automatic Data Processing, Inc.......... 4,595,360
14,500 Computer Sciences Corp.*................ 1,003,219
40,300 First Data Corp......................... 1,972,181
--------------
7,570,760
--------------
CONTAINERS & PACKAGING (0.1%):
19,500 Owens-Illinois, Inc.*................... 637,406
--------------
COSMETICS & TOILETRIES (0.8%):
24,120 Alberto-Culver Co., Class B............. 642,195
105,412 Gillette Co............................. 4,321,892
51,800 Kimberly-Clark Corp..................... 2,952,600
--------------
7,916,687
--------------
DIVERSIFIED (4.8%):
51,700 Allied Signal, Inc...................... 3,257,100
299,000 General Electric Co. (b)................ 33,786,999
18,700 Johnson Controls, Inc................... 1,296,144
34,800 Minnesota Mining & Manufacturing Co..... 3,025,425
44,300 Seagram Co., Ltd........................ 2,231,613
23,600 Tenneco, Inc............................ 563,450
19,700 Textron, Inc............................ 1,621,556
44,000 United Technologies Corp................ 3,154,250
--------------
48,936,537
--------------
ELECTRICAL COMPONENTS -- SEMICONDUCTORS (2.7%):
31,700 Applied Materials, Inc.*................ 2,341,838
286,000 Intel Corp.............................. 17,016,999
18,500 Micron Technology, Inc.* (c)............ 745,781
28,700 Rockwell International Corp............. 1,743,525
37,100 Texas Instruments, Inc.................. 5,379,500
--------------
27,227,643
--------------
ELECTRONIC -- CONNECTORS (0.0%):
8,600 Thomas & Betts Corp..................... 406,350
--------------
ELECTRONIC MEASURING EQUIPMENT (0.0%):
14,800 Tektronix, Inc. (c)..................... 446,775
--------------
FINANCE (0.5%):
60,414 Associates First Capital Corp., Class 2,677,095
A.......................................
62,516 Washington Mutual, Inc.................. 2,211,504
--------------
4,888,599
--------------
FINANCIAL -- CONSUMER LOANS (0.2%):
44,800 Household International, Inc............ 2,122,400
--------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- INVESTMENT BANKERS (0.4%):
45,700 Merrill Lynch & Co., Inc................ $ 3,653,144
--------------
FINANCIAL -- MISCELLANEOUS SERVICES (1.3%):
44,650 American Express Co..................... 5,810,081
71,200 Morgan Stanley, Dean Witter & Co........ 7,298,000
--------------
13,108,081
--------------
FINANCIAL -- MORTGAGE & RELATED SERVICES (1.1%):
108,050 Fannie Mae.............................. 7,387,919
61,600 Freddie Mac............................. 3,572,800
--------------
10,960,719
--------------
FINANCIAL SERVICES -- DIVERSIFIED (1.5%):
322,725 Citigroup, Inc.......................... 15,329,438
--------------
FOOD -- CANNED (0.4%):
46,100 Campbell Soup Co........................ 2,068,738
44,491 H.J. Heinz Co........................... 2,230,111
--------------
4,298,849
--------------
FOOD -- DIVERSIFIED (1.4%):
26,000 Bestfoods............................... 1,287,000
67,100 ConAgra, Inc............................ 1,786,538
22,400 General Mills, Inc...................... 1,800,400
36,900 Kellogg Co. (c)......................... 1,217,700
19,600 Quaker Oats Co.......................... 1,300,950
30,100 Ralston Purina Group.................... 916,169
88,900 Sara Lee Corp........................... 2,016,919
53,750 Unilever NV............................. 3,749,062
--------------
14,074,738
--------------
FOOD ITEMS -- WHOLESALE (0.1%):
46,400 Supervalu, Inc.......................... 1,191,900
--------------
FOOD PRODUCTS (0.2%):
42,000 Safeway Inc.*........................... 2,079,000
--------------
HEALTH CARE (0.1%):
24,000 McKesson HBOC, Inc...................... 771,000
--------------
HOME DECORATION PRODUCTS (0.2%):
40,500 Newell Rubbermaid Inc. (c).............. 1,883,250
--------------
HOTELS & LODGING (0.2%):
41,500 Marriott International, Inc., Class A... 1,551,063
--------------
INSTRUMENTS -- CONTROL (0.2%):
20,150 Honeywell, Inc.......................... 2,334,881
--------------
INSURANCE -- ACCIDENT & HEALTH (0.1%):
31,650 Aon Corp................................ 1,305,563
--------------
INSURANCE -- BROKERS (0.3%):
33,600 Marsh & McLennan Cos., Inc.............. 2,536,800
--------------
INSURANCE -- LIFE (0.6%):
31,600 American General Corp................... 2,381,849
43,000 Conseco, Inc............................ 1,308,813
</TABLE>
CONTINUED
27
<PAGE>
Kent Funds
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
INSURANCE -- LIFE (CONTINUED)
<TABLE>
<C> <S> <C>
19,100 Torchmark Corp.......................... $ 651,788
30,000 UNUM Corp.*............................. 1,642,500
--------------
5,984,950
--------------
INSURANCE -- MULTI-LINE (0.4%):
12,400 Aetna, Inc.............................. 1,109,025
24,150 CIGNA Corp.............................. 2,149,350
12,300 MBIA, Inc............................... 796,425
--------------
4,054,800
--------------
INSURANCE -- PROPERTY & CASUALTY (1.8%):
106,200 Allstate Corp........................... 3,809,925
104,700 American International Group, Inc....... 12,256,443
15,500 Chubb Corp.............................. 1,077,250
23,100 Safeco Corp............................. 1,019,288
--------------
18,162,906
--------------
INTERNET SOFTWARE (0.9%):
80,100 America Online, Inc.*................... 8,851,050
--------------
MACHINE TOOLS & RELATED PRODUCTS (0.1%):
16,800 The Black & Decker Corp................. 1,060,500
--------------
MACHINERY & EQUIPMENT (0.1%):
45,700 Milacron, Inc........................... 845,450
--------------
MACHINERY -- CONSTRUCTION/MINING (0.3%):
35,000 Caterpillar, Inc........................ 2,100,000
18,800 Ingersoll-Rand Co....................... 1,214,950
--------------
3,314,950
--------------
MACHINERY -- ELECTRICAL (0.3%):
47,500 Emerson Electric Co..................... 2,986,563
--------------
MACHINERY -- GENERAL INDUSTRIAL (0.2%):
21,700 Illinois Tool Works, Inc................ 1,779,400
--------------
MEDIA CONGLOMERATES (1.3%):
110,900 Time Warner, Inc........................ 7,984,800
178,555 Walt Disney Co.*........................ 5,501,726
--------------
13,486,526
--------------
MEDICAL -- BIOMEDICAL/GENETIC (0.3%):
48,000 Amgen, Inc.*............................ 2,922,000
--------------
MEDICAL -- DRUGS (7.7%):
147,000 Abbott Laboratories..................... 6,688,500
112,200 American Home Products Corp............. 6,451,500
200,600 Bristol-Myers Squibb Co................. 14,129,762
97,300 Eli Lilly & Co.......................... 6,969,113
218,400 Merck & Co., Inc........................ 16,161,599
114,100 Pfizer, Inc............................. 12,522,475
45,100 Pharmacia & Upjohn, Inc................. 2,562,244
140,400 Schering-Plough Corp.................... 7,441,200
81,400 Warner-Lambert Co....................... 5,647,125
--------------
78,573,518
--------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL -- HEALTH MEDICAL ORGANIZATION (0.0%):
20,950 Humana, Inc.*........................... $ 271,041
--------------
MEDICAL -- OUTPATIENT/HOME CARE (0.1%):
70,400 HEALTHSOUTH Corp.*...................... 1,051,600
--------------
MEDICAL -- WHOLESALE DRUG (0.2%):
24,800 Cardinal Health, Inc.................... 1,590,300
--------------
MEDICAL INSTRUMENTS (0.1%):
18,500 Biomet, Inc............................. 735,375
--------------
MEDICAL PRODUCTS (0.4%):
26,200 Baxter International, Inc............... 1,588,375
40,900 Guidant Corp.*.......................... 2,103,794
--------------
3,692,169
--------------
MEDICAL/DENTAL SUPPLIES (1.4%):
32,100 Becton, Dickinson & Co.................. 963,000
24,300 C.R. Bard, Inc.......................... 1,161,844
117,220 Johnson & Johnson....................... 11,487,560
--------------
13,612,404
--------------
METAL -- GOLD (0.1%):
56,850 Barrick Gold Corp....................... 1,101,469
30,150 Homestake Mining Co. (c)................ 246,853
--------------
1,348,322
--------------
METAL -- MISCELLANEOUS (0.1%):
36,600 Cyprus Amax Minerals Co................. 555,863
--------------
METAL -- NON-FERROUS (0.2%):
29,250 Freeport-McMoran Copper & Gold, Inc., 524,672
Class B*................................
23,600 Reynolds Metals Co...................... 1,392,400
--------------
1,917,072
--------------
METALS (0.3%):
44,900 Alcoa Inc............................... 2,778,188
--------------
OFFICE AUTOMATION & EQUIPMENT (0.6%):
39,500 Pitney Bowes, Inc....................... 2,537,875
58,100 Xerox Corp.............................. 3,431,531
--------------
5,969,406
--------------
OIL -- FIELD SERVICES (0.5%):
50,600 Halliburton Co.......................... 2,289,650
40,000 Schlumberger Ltd........................ 2,547,500
--------------
4,837,150
--------------
OIL -- INTERNATIONAL INTEGRATED (4.3%):
65,200 Chevron Corp............................ 6,206,225
212,000 Exxon Corp.............................. 16,350,499
73,000 Mobil Corp.............................. 7,227,000
182,000 Royal Dutch Petroleum Co., ADR.......... 10,965,500
46,500 Texaco, Inc............................. 2,906,250
--------------
43,655,474
--------------
</TABLE>
CONTINUED
28
<PAGE>
Kent Funds
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL -- PRODUCTION/PIPELINE (0.3%):
15,900 Columbia Gas System, Inc................ $ 996,731
29,650 Enron Corp.............................. 2,423,888
--------------
3,420,619
--------------
OIL -- U.S. INTEGRATED (0.7%):
27,800 Atlantic Richfield Co................... 2,323,037
34,000 Phillips Petroleum Co................... 1,710,625
37,900 Unocal Corp............................. 1,501,788
48,700 USX-Marathon Group...................... 1,585,794
--------------
7,121,244
--------------
OIL REFINING (0.1%):
21,350 Ashland, Inc............................ 856,669
--------------
PAPER & RELATED PRODUCTS (0.5%):
28,150 Fort James Corp......................... 1,066,181
53,773 International Paper Co.................. 2,715,537
29,600 Mead Corp............................... 1,235,800
--------------
5,017,518
--------------
PHOTOGRAPHY (0.2%):
28,950 Eastman Kodak Co........................ 1,961,363
--------------
PIPELINES (0.2%):
14,800 Consolidated Natural Gas Co............. 899,100
37,600 The Williams Companies, Inc............. 1,600,350
--------------
2,499,450
--------------
POLLUTION CONTROL (0.3%):
50,000 Waste Management, Inc.*................. 2,687,500
--------------
PROTECTION -- SAFETY (0.7%):
79,000 Tyco International Ltd.................. 7,485,250
--------------
PUBLISHING -- BOOKS (0.2%):
34,000 McGraw-Hill Cos., Inc................... 1,833,875
--------------
PUBLISHING -- NEWSPAPERS (0.6%):
36,200 Gannett, Inc............................ 2,583,775
13,850 Knight-Ridder, Inc. (c)................. 760,884
19,700 New York Times Co., Class A............. 725,206
17,500 Tribune Co.............................. 1,524,688
--------------
5,594,553
--------------
RESTAURANTS (0.5%):
130,800 McDonald's Corp......................... 5,403,675
--------------
RETAIL -- APPAREL/SHOES (0.6%):
78,600 Gap, Inc................................ 3,959,475
40,100 Limited, Inc............................ 1,819,538
--------------
5,779,013
--------------
RETAIL -- DISCOUNT (2.9%):
61,000 Dayton-Hudson Corp...................... 3,965,000
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
RETAIL -- DISCOUNT (CONTINUED)
<TABLE>
<C> <S> <C>
42,700 Kmart Corp.*............................ $ 701,881
497,000 Wal-Mart Stores, Inc. (b)............... 23,980,249
--------------
28,647,130
--------------
RETAIL -- DRUG STORE (0.3%):
102,356 Walgreen Co............................. 3,006,708
--------------
RETAIL -- MAJOR DEPARTMENT STORES (0.4%):
22,850 J.C. Penney, Inc. (c)................... 1,109,653
33,900 May Department Stores Co................ 1,385,663
36,600 Sears, Roebuck & Co..................... 1,630,987
--------------
4,126,303
--------------
RETAIL -- REGIONAL DEPARTMENT STORES (0.1%):
19,500 Federated Department Stores, Inc.*...... 1,032,281
--------------
RETAIL -- SUPERMARKETS (0.2%):
47,779 Albertson's, Inc........................ 2,463,605
--------------
RUBBER -- TIRES (0.2%):
16,600 Goodyear Tire & Rubber Co............... 976,288
15,000 The B.F. Goodrich Co. (c)............... 637,500
--------------
1,613,788
--------------
SOAP & CLEANING PREPARATIONS (1.4%):
26,178 Colgate-Palmolive Co. (c)............... 2,585,078
125,800 Procter & Gamble Co..................... 11,227,650
--------------
13,812,728
--------------
STEEL -- PRODUCERS (0.1%):
16,500 Nucor Corp.............................. 782,719
13,600 USX-U.S. Steel Group.................... 367,200
--------------
1,149,919
--------------
TELECOMMUNICATIONS -- EQUIPMENT (3.1%):
15,200 Harris Corp............................. 595,650
272,200 Lucent Technologies, Inc................ 18,356,487
60,300 Motorola, Inc........................... 5,713,425
50,000 Nortel Networks Corp.................... 4,340,625
24,000 Tellabs, Inc.*.......................... 1,621,500
--------------
30,627,687
--------------
TEXTILE -- APPAREL (0.1%):
20,800 VF Corp................................. 889,200
--------------
TEXTILE -- HOME FURNISHINGS (0.1%):
12,000 Springs Industries, Inc................. 523,500
--------------
TOBACCO (1.1%):
250,800 Philip Morris Cos., Inc................. 10,079,025
27,900 U.S.T., Inc............................. 816,075
--------------
10,895,100
--------------
TOOLS -- HAND HELD (0.0%):
11,850 Snap-On, Inc............................ 428,822
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
Kent Funds
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED):
TOYS/GAME/HOBBY (0.2%):
33,150 Hasbro, Inc............................. $ 926,128
24,700 Mattel, Inc............................. 653,006
--------------
1,579,134
--------------
TRANSPORTATION -- AIR FREIGHT (0.2%):
28,300 FDX Corp.*.............................. 1,535,275
--------------
TRANSPORTATION -- AIRLINE (0.3%):
17,300 AMR Corp.*.............................. 1,180,725
14,900 Delta Air Lines, Inc.................... 858,613
40,700 Southwest Airlines Co................... 1,266,787
--------------
3,306,125
--------------
TRANSPORTATION -- EQUIPMENT & LEASING (0.0%):
14,300 Ryder Systems, Inc...................... 371,800
--------------
TRANSPORTATION -- RAILROAD (0.4%):
20,000 CSX Corp................................ 906,250
32,700 Norfolk Southern Corp................... 985,088
28,300 Union Pacific Corp...................... 1,650,243
--------------
3,541,581
--------------
UTILITIES -- ELECTRIC POWER (1.9%):
40,500 Consolidated Edison, Inc................ 1,832,625
23,700 Detroit Edison Co....................... 948,000
35,300 Dominion Resources, Inc. (c)............ 1,528,931
45,500 Duke Energy Corp........................ 2,474,062
44,500 Entergy Corp............................ 1,390,625
21,750 First Energy Corp....................... 674,250
29,650 Florida Power & Light, Inc.............. 1,619,631
38,000 Northern States Power Co................ 919,125
28,700 Peco Energy Corp........................ 1,207,194
38,500 Public Service Enterprise Group, Inc.... 1,573,688
50,200 Reliant Energy, Inc..................... 1,386,775
87,000 Southern Co............................. 2,305,500
37,600 Texas Utilities Co...................... 1,551,000
--------------
19,411,406
--------------
UTILITIES -- TELEPHONE (7.8%):
107,548 Ameritech Corp.......................... 7,904,778
306,420 AT&T Corp............................... 17,102,065
139,400 Bell Atlantic Corp...................... 9,113,275
188,800 BellSouth Corp.......................... 8,850,000
79,950 GTE Corp................................ 6,051,216
155,100 MCI Worldcom, Inc.*..................... 13,377,375
174,900 SBC Communications, Inc................. 10,144,200
77,200 Sprint Corp............................. 4,077,125
49,497 US West, Inc............................ 2,907,949
--------------
79,527,983
--------------
TOTAL COMMON STOCKS..................... 930,058,304
--------------
INVESTMENT COMPANIES (6.7%):
19,604,624 Dreyfus Cash Management Money Market 19,604,624
Fund....................................
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
INVESTMENT COMPANIES (CONTINUED)
47,453,166 Federated Prime Value Obligations Money $ 47,453,166
Market Fund.............................
--------------
TOTAL INVESTMENT COMPANIES.............. 67,057,790
--------------
SHORT-TERM SECURITIES HELD AS COLLATERAL (1.5%):
COMMERICAL PAPER (0.6%):
400,000 Ameritech Capital Funding Corp., 5.12%, 398,676
7/23/99.................................
350,000 Bell South Telecommunications, 5.16%, 349,544
7/9/99..................................
400,000 Cargill Inc., 5.65%, 7/1/99............. 400,000
400,000 Coca-Cola Co., 5.13%, 7/30/99........... 398,279
400,000 Daimler, 5.14%, 8/11/99................. 397,583
400,000 R.R. Donnelley & Sons Co., 5.26%, 398,847
7/20/99.................................
400,000 Duke Energy, 5.50%, 7/1/99.............. 400,000
400,000 Ford Motor Credit Corp., 5.18%, 399,076
7/16/99.................................
300,000 Gannett Co., 5.09%, 7/19/99............. 299,178
400,000 General Electric Capital Corp., 5.10%, 397,583
8/11/99.................................
400,000 General Motors Acceptance Corp., 5.09%, 397,699
8/9/99..................................
400,000 GTE Funding Corp., 5.04%, 7/8/99........ 399,089
400,000 H.J.Heinz Co., 5.14%, 8/19/99........... 397,117
400,000 Mobil Corp., 5.50%, 7/1/99.............. 400,000
400,000 Nestle Capital Corp., 5.23%, 7/1/99..... 400,000
400,000 UBS Finance, 5.50%, 7/1/99.............. 400,000
--------------
6,232,671
--------------
REPURCHASE AGREEMENTS (0.8%):
1,500,204 Chase Securities Inc. 4.90%, 7/1/99 1,500,204
(Collateralized by $1,501,138 various
Corporate Notes & Bonds, 6.25%-7.25%,
6/30/01-5/15/16, market value
$1,500,086).............................
3,042,439 Goldman Sachs & Co. 5.20%, 7/1/99 3,042,439
(Collateralized by $4,904,686 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$3,102,840).............................
2,000,813 Merrill Lynch GSI 4.83%, 7/1/99, 2,000,813
(Collateralized by $1,915,408 various
Corporate Bonds & Notes, 5.50%-8.88%,
2/15/00-5/15/21, market value
$2,040,009).............................
1,242,513 Prudential Securities Inc. 4.90%, 7/1/99 1,242,513
(Collateralized by $2,356,395 various
Government Agency Securities, 5.50%-
12.50%, 1/15/01-6/20/29, market value
$1,266,840).............................
--------------
7,785,969
--------------
TIME DEPOSITS (0.1%):
500,081 Barclays Bank PLC London, 5.81%, 500,081
7/1/99..................................
--------------
</TABLE>
CONTINUED
30
<PAGE>
Kent Funds
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- --------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS
COLLATERAL (CONTINUED):
TIME DEPOSITS (CONTINUED):
$ 500,082 Canadian Imperial Bank Commerce Cay, $ 500,082
5.88%,7/1/99............................
--------------
1,000,163
--------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 15,018,803
--------------
TOTAL INVESTMENTS
(Cost $645,558,069) (a) -- 100.8%....... 1,012,134,897
--------------
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.8)%.................................. (7,995,364)
--------------
TOTAL NET ASSETS -- 100.0%.............. $1,004,139,533
--------------
--------------
</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........................... $373,974,165
Unrealized depreciation........................... (7,397,337)
------------
Net unrealized appreciation....................... $366,576,828
------------
------------
</TABLE>
(b) Security has been deposited as initial margin on open futures contract
(c) A portion of this security was loaned as of June 30, 1999.
* Non-income producing security
ADR American Depositary Receipt
At June 30, 1999 the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING FACE MARKET
CONTRACTS CONTRACT TYPE AMOUNT VALUE
- --------- ------------- ------------- -------------
<S> <C> <C> <C>
Standard &
195 Poor's $ 65,255,200 $ 67,357,875
500, 9/16/99
</TABLE>
CONTINUED
31
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (98.3%):
ADVERTISING (1.0%):
51,000 Catalina Market Corp.*.................. $ 4,692,000
81,900 Ha-Lo Industries, Inc.*................. 808,763
40,000 True North Communications............... 1,200,000
------------
6,700,763
------------
AEROSPACE & DEFENSE (0.5%):
20,400 Alliant Techsystems, Inc.*.............. 1,764,600
54,800 Newport News Shipbuilding............... 1,616,600
------------
3,381,200
------------
AEROSPACE/DEFENSE EQUIPMENT (0.3%):
43,150 AAR Corp................................ 978,965
54,630 Fairchild Corp., Class A*............... 696,533
48,000 Hexcel Corp.*........................... 486,000
------------
2,161,498
------------
AUDIO/VIDEO PRODUCTION (0.3%):
50,280 Harman International Industries, Inc.... 2,212,320
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT (0.9%):
46,800 Arvin Industries, Inc................... 1,772,550
45,000 Detroit Diesel Corp..................... 1,108,125
27,700 Standard Products Co.................... 709,813
23,000 Superior Industries International....... 632,500
79,100 Tower Automotive, Inc.*................. 2,012,106
------------
6,235,094
------------
BANKS -- CENTRAL US (1.6%):
170,000 Community First Bankshares.............. 4,058,749
122,700 MAF Bancorp, Inc........................ 2,975,475
85,000 Republic Bancorp........................ 1,290,938
122,500 St. Paul Bancorp, Inc................... 3,123,750
------------
11,448,912
------------
BANKS -- EAST (1.7%):
65,000 Banknorth Group, Inc.................... 2,145,000
27,000 Community Bank System, Inc.............. 678,375
100,000 Hudson United Bancorp................... 3,062,500
124,000 Roslyn Bancorp, Inc..................... 2,131,250
122,000 UST Corp................................ 3,690,499
------------
11,707,624
------------
BANKS -- MIDWEST (0.5%):
71,900 First Midwest Bancgroup, Inc............ 2,858,025
45,000 Irwin Financial Corp.................... 877,500
------------
3,735,525
------------
BANKS -- NORTHEAST (0.9%):
77,286 Commerce Bancorp, Inc................... 3,303,977
79,200 First Commonwealth Financial............ 1,890,900
52,200 Independent Bank Corp................... 822,150
25,300 Sterling Bancorp........................ 480,700
------------
6,497,727
------------
BANKS -- SOUTH (0.9%):
111,300 Firstbank Corp.......................... 2,511,206
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
BANKS -- SOUTH (CONTINUED)
<TABLE>
<C> <S> <C>
78,100 Premier Bancshares, Inc................. $ 1,430,206
91,500 Republic Security Financial Corp........ 766,313
77,100 Triangle Bancorp, Inc................... 1,305,881
------------
6,013,606
------------
BANKS -- SOUTHEAST (0.7%):
139,000 BancorpSouth, Inc....................... 2,519,375
72,800 F & M National Corp..................... 2,416,050
------------
4,935,425
------------
BANKS -- SOUTHWEST (0.2%):
46,800 Texas Regional Bancshares............... 1,272,375
------------
BANKS -- WEST (0.8%):
33,326 First Republic Bancorp, Inc.*........... 964,371
143,200 Imperial Bancorp.*...................... 2,837,150
72,500 Silicon Valley Bankshares*.............. 1,794,375
------------
5,595,896
------------
BEVERAGES -- SOFT DRINKS (0.0%):
2,145 Buenos Aires Embotella Doro - ADR* 0
(c).....................................
------------
BROADCASTING/CABLE (0.1%):
16,000 Jones Intercable, Inc., Class A*........ 784,000
------------
BUILDING (0.4%):
37,400 Centex Construction Products, Inc....... 1,276,275
35,400 Lone Star Industries, Inc............... 1,329,713
------------
2,605,988
------------
BUILDING & CONSTRUCTION -- MISCELLANEOUS (0.5%):
70,900 Dal-Tile International, Inc.*........... 806,488
37,050 Elcor Corp.............................. 1,618,621
27,800 Nortek, Inc.*........................... 870,488
------------
3,295,597
------------
BUILDING -- HEAVY CONSTRUCTION (0.4%):
23,400 Dycom Industries, Inc.* (c)............. 1,310,400
42,700 Granite Construction, Inc............... 1,251,644
------------
2,562,044
------------
BUILDING -- MAINTENANCE & SERVICE (0.2%):
48,800 ABM Industries, Inc..................... 1,497,550
------------
BUILDING -- MOBILE/MANUFACTURING & RECREATIONAL
VEHICLES (0.1%):
38,300 Winnebago Industries, Inc............... 861,750
------------
BUILDING -- RESIDENTIAL/COMMERCIAL (0.9%):
53,400 D. R. Horton, Inc....................... 887,775
63,200 Kaufman & Broad Home Corp............... 1,572,100
35,400 Pulte Corp.............................. 818,625
21,800 Ryland Group, Inc....................... 647,188
59,500 Standard-Pacific Corp................... 769,781
</TABLE>
CONTINUED
32
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
BUILDING -- RESIDENTIAL/COMMERCIAL (CONTINUED)
<TABLE>
<C> <S> <C>
53,300 Toll Brothers, Inc.*.................... $ 1,142,619
18,300 U.S. Home Corp.*........................ 649,650
------------
6,487,738
------------
BUILDING PRODUCTS -- AIR CONDITIONING/HEAT (0.1%):
47,962 Watsco, Inc............................. 785,378
------------
BUILDING PRODUCTS -- LIGHTING/FIXTURES (0.1%):
23,000 Thomas Industries, Inc.................. 471,500
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE (0.3%):
86,400 HomeBase, Inc.* (c)..................... 545,400
59,900 Hughes Supply, Inc...................... 1,778,281
------------
2,323,681
------------
BUSINESS INFORMATION (0.3%):
70,000 Primark Corp.*.......................... 1,964,375
------------
BUSINESS SERVICES (1.0%):
67,000 ADVO, Inc.*............................. 1,390,250
54,600 Budget Group, Inc. - Class A*........... 672,263
38,300 Fair Issac & Co., Inc................... 1,342,894
69,300 Franklin Covey Co.*..................... 511,088
45,200 Healthplan Services Corp................ 307,925
132,000 Interim Services, Inc.*................. 2,722,499
------------
6,946,919
------------
CHEMICALS -- PLASTIC (0.5%):
50,100 Geon Co................................. 1,615,725
41,700 Spartech Corp........................... 1,279,669
50,000 Wellman, Inc............................ 796,875
------------
3,692,269
------------
CHEMICALS -- SPECIALTY (0.5%):
19,800 Bush Boake Allen, Inc.*................. 579,150
84,900 NL Industries, Inc...................... 944,513
47,300 OM Group, Inc........................... 1,631,850
------------
3,155,513
------------
COMMERCIAL SERVICES (1.1%):
35,000 CDI Corp.*.............................. 1,192,188
129,688 InaCom Corp.*........................... 1,637,310
29,500 Maximus, Inc.* (c)...................... 851,813
28,500 Metamor Worldwide, Inc.*................ 685,781
49,500 Norrell Corp............................ 931,219
64,200 NOVA Corp.*............................. 1,604,999
60,000 Personnel Group of America, Inc.* (c)... 600,000
------------
7,503,310
------------
COMPUTER DATA SECURITY (0.2%):
30,000 ISS Group, Inc.*........................ 1,132,500
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTER HARDWARE MANUFACTURING (0.3%):
33,100 Sequent Computer*....................... $ 587,525
101,165 SpeedFam-IPEC, Inc.*.................... 1,624,963
------------
2,212,488
------------
COMPUTER SOFTWARE (2.5%):
30,800 Ardent Software, Inc.*.................. 654,500
25,000 Broadvision, Inc.*...................... 1,843,749
20,700 Documentum, Inc.* (c)................... 270,394
82,700 Epicor Software Corp.*.................. 615,081
60,000 Excalibur Technologies Corp.* (c)....... 855,000
65,000 Hyperion Solutions Corp.*............... 1,157,813
25,000 Infoseek Corp.* (c)..................... 1,198,438
50,000 Mercury Interactive Corp.*.............. 1,768,750
92,500 Midway Games, Inc.*..................... 1,196,719
50,300 MSC. Software Corp.*.................... 292,369
50,000 Peregrine Systems, Inc.*................ 1,284,375
12,800 Progress Software Corp.*................ 361,600
36,600 Project Software & Development, Inc.*... 1,143,750
42,650 Rainbow Technologies, Inc.*............. 503,803
61,300 Sybase, Inc.*........................... 674,300
60,000 Transaction Systems Architects, Inc.*... 2,339,999
90,000 Wind River Systems, Inc.*............... 1,445,625
------------
17,606,265
------------
COMPUTERS -- EQUIPMENT (0.3%):
50,000 Insight Enterprises, Inc.* (c).......... 1,237,500
53,000 Systemax Inc.*.......................... 655,875
------------
1,893,375
------------
COMPUTERS -- INTEGRATED SYSTEMS (0.7%):
85,000 Cerner Corp.*........................... 1,782,344
58,900 MICROS Systems, Inc.*................... 2,002,600
51,500 Systems & Computer Technology Corp.*.... 749,969
------------
4,534,913
------------
COMPUTERS -- LOCAL AREA NETWORK (0.3%):
35,000 ACT Networks, Inc.*..................... 597,188
81,000 Anixter International, Inc.*............ 1,478,250
------------
2,075,438
------------
COMPUTERS -- MEMORY DEVICES (0.7%):
92,011 Applied Magnetics Corp.* (c)............ 281,784
72,700 Hutchinson Technology, Inc.*............ 2,017,425
15,000 SanDisk Corp.*.......................... 675,000
278,100 Western Digital Corp.* (c).............. 1,807,650
------------
4,781,859
------------
COMPUTERS -- MICRO (0.3%):
150,300 Data General Corp.* (c)................. 2,188,744
------------
COMPUTERS -- NETWORKING PRODUCTS (0.1%):
29,500 Visual Networks, Inc.*.................. 944,000
------------
COMPUTERS -- OPTICAL RECOGNITION (0.2%):
78,800 BancTec, Inc.*.......................... 1,413,475
------------
</TABLE>
CONTINUED
33
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS -- PERIPHERAL EQUIPMENT (0.1%):
78,600 Mylex Corp.*............................ $ 456,863
30,800 Printronix, Inc.*....................... 431,200
------------
888,063
------------
COMPUTERS -- SERVICES (2.8%):
82,700 Analysts International Corp............. 1,188,813
83,800 Bell & Howell Co.*...................... 3,168,687
32,000 CheckFree Holdings Corp.*............... 882,000
33,000 Computer Horizons Corp.*................ 455,813
66,500 Computer Task Group, Inc................ 1,130,500
67,600 DBT Online, Inc.*....................... 2,213,900
60,150 Factset Research Systems*............... 3,405,993
148,800 PSINet, Inc.* (c)....................... 6,509,999
25,000 Sykes Enterprises, Inc.*................ 834,375
------------
19,790,080
------------
CONSTRUCTION (0.1%):
84,200 Morrison Knudsen Corp.*................. 868,313
------------
CONSULTING SERVICES (0.3%):
80,000 USWeb Corp.* (c)........................ 1,775,000
------------
CONSUMER NON-DURABLE (0.2%):
107,900 Wolverine World Wide, Inc............... 1,510,600
------------
CONSUMER PRODUCTS -- MISCELLANEOUS (0.7%):
50,000 Department 56, Inc.*.................... 1,343,750
105,700 Jostens, Inc............................ 2,226,306
43,500 Oneida, Ltd............................. 1,223,438
------------
4,793,494
------------
CONTAINERS -- PAPER & PLASTIC (0.4%):
45,000 ACX Technologies, Inc.*................. 731,250
110,700 Longview Fibre Co....................... 1,729,688
------------
2,460,938
------------
COSMETICS & TOILETRIES (0.2%):
105,000 Playtex Products, Inc.*................. 1,634,063
------------
DATA PROCESSING & REPRODUCTION (0.7%):
39,600 Choicepoint, Inc.*...................... 2,658,150
50,000 CSG Systems International, Inc.*........ 1,309,375
85,200 Pegasystems, Inc.* (c).................. 873,300
------------
4,840,825
------------
DIVERSIFIED (1.2%):
38,400 Clarcor, Inc............................ 736,800
65,400 Federal Signal Corp..................... 1,385,663
60,800 Gencorp, Inc............................ 1,535,199
41,700 Griffon Corp.*.......................... 325,781
54,900 Imation Corp.*.......................... 1,362,206
35,025 Manitowoc Co., Inc...................... 1,457,916
45,900 MascoTech, Inc.......................... 777,431
50,000 Triarc Cos., Inc.* (c).................. 1,062,500
------------
8,643,496
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRICAL & ELECTRONIC (0.2%):
40,400 Sigcorp, Inc............................ $ 1,153,925
------------
ELECTRICAL COMPONENTS -- SEMICONDUCTORS (2.5%):
328,300 Cypress Semiconductor Corp.*............ 5,416,949
136,700 General Semiconductor, Inc.*............ 1,247,388
189,500 International Rectifier Corp.*.......... 2,522,719
100,000 MEMC Electronic Materials, Inc.*........ 1,218,750
72,000 PMC-Sierra, Inc.*....................... 4,243,500
87,100 Unitrode Corp.*......................... 2,498,681
------------
17,147,987
------------
ELECTRICAL EQUIPMENT (0.4%):
40,500 C&D Technologies, Inc................... 1,240,313
27,100 United Illuminating Co.................. 1,150,056
23,448 World Access, Inc.*..................... 331,203
------------
2,721,572
------------
ELECTRONIC -- MANUFACTURING & MACHINERY (0.7%):
80,000 Kulicke & Soffa Industries, Inc.*....... 2,145,000
55,600 PRI Automation, Inc.* (c)............... 2,015,500
25,000 Watkins-Johnson Co...................... 737,500
------------
4,898,000
------------
ELECTRONIC -- MILITARY (0.1%):
36,100 United Industrial Corp.................. 399,356
------------
ELECTRONIC -- MISCELLANEOUS COMPONENTS (2.3%):
88,000 BMC Industries, Inc..................... 907,500
45,000 CTS Corp................................ 3,149,999
38,900 Hadco Corp.*............................ 1,546,275
53,500 Innovex, Inc............................ 749,000
62,500 Littlefuse, Inc.*....................... 1,203,125
57,000 Oak Industries, Inc.*................... 2,490,188
55,000 OEA, Inc................................ 488,125
30,000 Park Electrochemical Corp............... 862,500
65,000 Photronics Corp.*....................... 1,592,500
50,000 Plexus Corp.*........................... 1,506,250
28,800 RadiSys Corp.*.......................... 1,119,600
------------
15,615,062
------------
ELECTRONIC COMPONENTS/INSTRUMENTS (1.7%):
30,000 Applied Micro Circuits Corp.*........... 2,467,500
88,600 Artesyn Technologies, Inc.*............. 1,965,813
64,300 Cable Design Technologies*.............. 992,631
50,000 Lam Research Corp.*..................... 2,334,375
20,000 QLogic Corp.*........................... 2,639,999
46,000 Technitrol, Inc......................... 1,483,500
------------
11,883,818
------------
ELECTRONIC MEASURING EQUIPMENT (0.5%):
125,000 Tektronix, Inc. (c)..................... 3,773,438
------------
ELECTRONIC MEASURING MACHINES (0.3%):
99,100 Genrad, Inc.*........................... 2,062,519
------------
</TABLE>
CONTINUED
34
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC PARTS -- DISTRIBUTION (0.6%):
103,000 Kent Electronics Corp.*................. $ 2,040,688
61,800 Marshall Industries*.................... 2,220,937
------------
4,261,625
------------
ELECTRONIC PRODUCTS -- MISCELLANEOUS (0.6%):
40,000 Aeroflex, Inc.*......................... 790,000
100,300 Allen Telecom, Inc.*.................... 1,078,224
40,500 Kopin Corp.*............................ 969,469
87,500 MagneTek, Inc.*......................... 924,219
33,000 Recoton Corp.* (c)...................... 300,094
------------
4,062,006
------------
ENGINEERING (0.2%):
40,100 Jacobs Engineering Group, Inc.*......... 1,523,800
------------
ENGINEERING -- RESEARCH & DEVELOPMENT SERVICES (0.1%):
19,490 URS Corp.*.............................. 571,301
------------
ENTERTAINMENT (0.3%):
70,500 Acclaim Entertainment* (c).............. 449,438
78,900 Vail Resorts, Inc.* (c)................. 1,380,750
------------
1,830,188
------------
FERTILIZERS (0.3%):
39,900 The Scotts Company*..................... 1,900,238
------------
FINANCIAL -- CONSUMER LOANS (0.6%):
190,000 AmeriCredit Corp.*...................... 3,040,000
136,500 Arcadia Financial Ltd.*................. 1,057,875
------------
4,097,875
------------
FINANCIAL -- INVESTMENT BANKER/BROKER (4.3%):
23,500 Advest Group, Inc....................... 468,531
60,000 Ameritrade Holding Corp. - Class A* 6,359,999
(c).....................................
40,000 Dain Rauscher Corp...................... 2,165,000
125,000 E*Trade Group, Inc.*.................... 4,992,187
75,000 Everen Capital Corp..................... 2,235,938
87,700 Hambrecht & Quist Group*................ 3,255,863
71,800 Investment Technology Group, Inc........ 2,324,525
60,000 Jefferies Group, Inc.................... 1,800,000
113,225 Morgan Keegan, Inc...................... 2,144,198
35,000 National Discount Brokers Group* (c).... 2,030,000
34,630 Southwest Securities Group, Inc......... 2,484,703
------------
30,260,944
------------
FINANCIAL -- INVESTMENT MANAGEMENT COS. (0.5%):
100,000 Eaton Vance Corp........................ 3,443,750
------------
FINANCIAL -- LEASING COMPANY (0.5%):
43,300 Cort Business Services Corp.*........... 1,036,494
39,700 DVI, Inc.*.............................. 679,863
53,400 Rental Service Corp.*................... 1,528,574
------------
3,244,931
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL -- MORTGAGE & RELATED SERVICES (0.1%):
47,600 Triad Guaranty, Inc.*................... $ 853,825
------------
FINANCIAL -- SAVINGS & LOAN (0.6%):
100,686 Downey Financial Corp................... 2,208,799
70,000 FirstFed Financial Corp.*............... 1,347,500
40,000 Westcorp................................ 450,000
------------
4,006,299
------------
FINANCIAL SERVICES -- DIVERSIFIED (0.5%):
34,600 Healthcare Financial Partners*.......... 1,185,050
50,000 Paymentech, Inc.*....................... 1,268,750
130,000 Phoenix Investment Partners (c)......... 1,186,250
------------
3,640,050
------------
FOOD -- DIVERSIFIED (0.4%):
83,200 Ralcorp Holding, Inc.*.................. 1,336,400
60,000 The Earthgrains Co...................... 1,548,750
------------
2,885,150
------------
FOOD -- FLOUR & GRAIN (0.2%):
50,600 International Multi-Foods Corp.......... 1,141,663
------------
FOOD -- MEAT PRODUCTS (0.1%):
20,000 Pilgrim's Pride Corp.................... 600,000
------------
FURNITURE (0.1%):
47,700 O' Sullivan Industries*................. 810,900
------------
GLASS PRODUCTS (0.2%):
36,200 Libbey, Inc............................. 1,049,800
------------
HAZARDOUS WASTE DISPOSAL (0.2%):
62,500 Safety-Kleen Corp.* (c)................. 1,132,813
------------
HEALTH CARE (0.4%):
122,600 IDEXX Laboratories, Inc.*............... 2,858,113
------------
HOTELS & LODGING (0.4%):
100,000 Prime Hospitality Corp.*................ 1,200,000
79,900 Red Roof Inns, Inc.*.................... 1,433,206
------------
2,633,206
------------
INDUSTRIAL -- AUTOMOTIVE/ROBOTICS (0.4%):
56,000 Esterline Technologies Corp.*........... 805,000
86,700 Gerber Scientific, Inc.................. 1,912,819
------------
2,717,819
------------
INSTRUMENTS -- CONTROL (0.6%):
98,500 Roper Industries, Inc................... 3,152,000
52,000 Watts Industries, Inc. - Class A........ 997,750
------------
4,149,750
------------
INSTRUMENTS -- SCIENTIFIC (1.2%):
76,500 Dionex Corp.*........................... 3,098,250
145,000 EG&G, Inc............................... 5,165,624
------------
8,263,874
------------
</TABLE>
CONTINUED
35
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
INSURANCE -- ACCIDENT & HEALTH (0.3%):
76,500 Arm Financial Group, Inc. - Class A..... $ 650,250
19,000 Penn Treaty American Corp.*............. 457,188
16,600 RLI Corp................................ 643,250
------------
1,750,688
------------
INSURANCE -- BROKERS (1.0%):
59,100 Arthur J. Gallagher & Co................ 2,925,450
40,000 Blanch (E.W.) Holdings, Inc............. 2,727,500
47,200 Hilb, Rogal & Hamilton Co............... 1,053,150
------------
6,706,100
------------
INSURANCE -- LIFE (1.1%):
113,800 American Heritage Life Investment 2,788,100
Corp....................................
50,000 Amerus Life Holdings, Inc............... 1,350,000
51,000 Delphi Financial Group*................. 1,829,625
74,500 Life USA Holding, Inc................... 1,508,625
------------
7,476,350
------------
INSURANCE -- MULTI-LINE (0.7%):
126,000 Enhance Financial Services Group, 2,488,500
Inc.....................................
119,800 FBL Financial Group, Inc. - Class A..... 2,336,100
------------
4,824,600
------------
INSURANCE -- PROPERTY & CASUALTY (1.9%):
38,000 Acceptance Insurance Cos.*.............. 572,375
60,278 Fidelity National Financial, Inc........ 1,265,838
60,000 First American Financial Corp........... 1,072,500
65,000 Foremost Corporation of America......... 1,430,000
32,300 FPIC Insurance Group, Inc.*............. 1,566,549
100,000 Frontier Insurance Group, Inc........... 1,537,500
133,700 HCC Insurance Holdings, Inc............. 3,033,318
41,700 MMI Cos., Inc........................... 703,688
30,000 Philadelphia Consolidated Holding 735,000
Corp.* (c)..............................
40,500 SCPIE Holdings, Inc..................... 1,321,313
------------
13,238,081
------------
INTERNET CONTENT (0.3%):
26,500 DoubleClick Inc.* (c)................... 2,424,750
------------
INTERNET SOFTWARE (0.6%):
17,000 Concentric Network Corp.*............... 675,750
13,500 EarthLink Network, Inc.*................ 829,406
21,000 Exodus Communications, Inc.* (c)........ 2,518,688
------------
4,023,844
------------
LASERS -- SYSTEMS/COMPONENTS (2.4%):
83,900 Coherent, Inc.*......................... 1,562,638
36,900 Electro Scientific Industries, Inc.*.... 1,541,728
170,000 VISX, Inc.*............................. 13,461,874
------------
16,566,240
------------
LEISURE & RECREATION PRODUCTS (0.5%):
80,000 Oakley, Inc.* (c)....................... 570,000
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
LEISURE & RECREATION PRODUCTS (CONTINUED)
<TABLE>
<C> <S> <C>
55,000 Polaris Industries, Inc................. $ 2,392,500
50,000 Sturm, Ruger & Co., Inc................. 534,375
------------
3,496,875
------------
LEISURE & RECREATION SERVICES (0.1%):
32,100 Carmike Cinemas, Inc.*.................. 511,594
------------
LEISURE & RECREATION/GAMING (0.4%):
104,400 Aztar Corp.*............................ 959,175
44,900 Hollywood Park, Inc.*................... 763,300
56,000 Station Casinos, Inc.*.................. 1,141,000
------------
2,863,475
------------
LINEN SUPPLY & RELATED (0.1%):
27,900 Unifirst Corp........................... 512,663
------------
MACHINE TOOLS & RELATED PRODUCTS (0.3%):
80,000 Applied Power, Inc...................... 2,185,000
------------
MACHINERY -- CONSTRUCTION/MINING (0.5%):
35,150 Commercial Intertech Corp............... 560,203
92,500 JLG Industries, Inc..................... 1,884,687
35,000 Terex Corp.* (c)........................ 1,065,313
------------
3,510,203
------------
MACHINERY -- ELECTRICAL (0.4%):
76,000 Baldor Electric Co...................... 1,510,500
45,000 Smith (A.O.) Corp....................... 1,243,125
------------
2,753,625
------------
MACHINERY -- GENERAL INDUSTRIAL (1.0%):
56,000 Albany International Corp., Class A..... 1,162,000
42,725 Applied Industrial Technology, Inc...... 811,775
53,100 Chart Industries, Inc................... 411,525
52,900 Global Industrial Technologies, Inc.*... 638,106
46,500 Graco, Inc.............................. 1,365,938
62,425 Idex Corp............................... 2,052,222
83,566 Paxar Corp.*............................ 752,094
------------
7,193,660
------------
MACHINERY -- MATERIAL HANDLING (0.2%):
15,000 Nacco Industries, Inc................... 1,102,500
------------
MEDICAL -- BIOMEDICAL/GENETIC (1.4%):
55,000 Affymetrix, Inc.*....................... 2,715,624
67,100 Alkermes, Inc.* (c)..................... 1,551,688
107,300 Creative Biomolecules, Inc.*............ 388,963
25,000 IDEC Pharmaceuticals Corp.*............. 1,926,563
93,400 Millennium Pharmaceuticals*............. 3,362,399
------------
9,945,237
------------
MEDICAL -- BIOTECHNOLOGY (0.2%):
40,000 Biomatrix, Inc.* (c).................... 865,000
31,900 Cryolife, Inc.*......................... 390,775
------------
1,255,775
------------
</TABLE>
CONTINUED
36
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL -- DRUGS (1.3%):
60,000 Alpharma, Inc. (c)...................... $ 2,133,749
100,000 Carter-Wallace, Inc..................... 1,818,750
62,700 Guilford Pharmaceuticals*............... 799,425
30,000 Jones Pharma Inc........................ 1,181,250
106,200 Ligand Pharmaceuticals*................. 1,181,475
67,950 Medicus Pharmaceuticals, Inc.*.......... 1,724,231
------------
8,838,880
------------
MEDICAL -- HEALTH MEDICAL ORGANIZATION (0.5%):
149,800 Mid Atlantic Medical Services, Inc.*.... 1,479,275
86,250 Sierra Health Services, Inc.*........... 1,245,234
53,000 United Wisconsin Services*.............. 424,000
------------
3,148,509
------------
MEDICAL -- HOSPITAL (0.3%):
40,300 Curative Health Services, Inc.*......... 221,650
228,792 Mariner Post-Acute Network, Inc.*....... 128,696
177,200 Paracelsus Health*...................... 232,575
60,000 Pediatrix Medical Group, Inc.* (c)...... 1,275,000
------------
1,857,921
------------
MEDICAL -- HOSPITAL SERVICES (0.5%):
92,800 Magellan Health Services, Inc.*......... 928,000
95,700 Quest Diagnostics, Inc.*................ 2,619,788
------------
3,547,788
------------
MEDICAL -- NURSING HOMES (0.5%):
36,700 American Retirement Corp.* (c).......... 458,750
335,000 Beverly Enterprises, Inc.*.............. 2,700,938
80,100 Integrated Health Services, Inc.*....... 640,800
------------
3,800,488
------------
MEDICAL -- OUTPATIENT/HOME CARE (0.8%):
165,500 Apria Healthcare Group, Inc.*........... 2,813,500
138,200 Coram Healthcare Corp.*................. 241,850
112,800 Genesis Health Ventures, Inc.*.......... 338,400
196,100 NovaCare, Inc.*......................... 294,150
118,000 Orthodontic Centers of America*......... 1,666,750
------------
5,354,650
------------
MEDICAL -- WHOLESALE DRUG (0.3%):
70,667 Bindley Western Industries, Inc......... 1,629,750
12,000 Express Scripts, Inc. - Class A*........ 722,250
------------
2,352,000
------------
MEDICAL EQUIPMENT & SUPPLIES (0.4%):
50,000 Conmed Corp.*........................... 1,531,250
63,800 Respironics, Inc.*...................... 964,975
------------
2,496,225
------------
MEDICAL INSTRUMENTS (0.4%):
93,100 Acuson Corp.*........................... 1,600,156
43,000 OEC Medical Systems, Inc.*.............. 1,053,500
------------
2,653,656
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL PRODUCTS (1.0%):
44,000 Diagnostic Products Corp................ $ 1,215,500
86,800 Haemonetics Corp.*...................... 1,741,425
27,500 Maxxim Medical, Inc.*................... 641,094
103,400 Owens & Minor, Inc...................... 1,137,400
53,000 West Pharmaceutical Services, Inc....... 2,080,250
------------
6,815,669
------------
MEDICAL SUPPLIES (0.4%):
65,800 Ocular Sciences, Inc.*.................. 1,143,275
78,500 Sola International, Inc.*............... 1,525,844
------------
2,669,119
------------
MEDICAL/DENTAL SUPPLIES (0.5%):
91,900 Ballard Medical Products................ 2,142,419
46,500 Cooper Cos., Inc.*...................... 1,159,594
62,200 Sunrise Medical, Inc.*.................. 443,175
------------
3,745,188
------------
METAL -- IRON (0.1%):
14,200 Cleveland Cliffs, Inc................... 459,725
------------
METAL -- MISCELLANEOUS (0.1%):
37,400 Brush Wellman, Inc...................... 677,875
------------
METAL -- NON-FERROUS (0.2%):
100,000 Kaiser Aluminum Corp.*.................. 887,500
34,000 RTI International Metals, Inc.* (c)..... 499,375
------------
1,386,875
------------
METAL -- PROCESSING & FABRICATION (0.6%):
35,233 Commercial Metals Co.................... 1,004,141
77,700 Mueller Industries, Inc.*............... 2,636,943
32,500 Wolverine Tube, Inc.*................... 816,563
------------
4,457,647
------------
METAL PRODUCTS -- DISTRIBUTION (0.1%):
25,000 Reliance Steel & Aluminum Co............ 975,000
------------
OFFICE SUPPLIES & FORMS (0.7%):
38,400 American Business Products, Inc......... 585,600
34,000 Daisytek International Corp.*........... 554,625
62,900 John H. Harland Co...................... 1,254,069
33,800 New England Business Service, Inc....... 1,043,575
41,500 Standard Register Co.................... 1,276,125
------------
4,713,994
------------
OIL & GAS (0.1%):
129,355 Santa Fe Snyder Corp.*.................. 986,332
------------
OIL & GAS -- DRILLING (0.2%):
34,000 Atwood Oceanics, Inc.*.................. 1,062,500
------------
OIL -- FIELD SERVICES (0.9%):
57,700 Hanover Compressor Co.*................. 1,853,614
49,600 Oceaneering International, Inc.*........ 799,801
49,700 RPC Energy Services, Inc................ 434,875
29,500 Seacor Holdings, Inc.*.................. 1,578,250
</TABLE>
CONTINUED
37
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
OIL -- FIELD SERVICES (CONTINUED)
<TABLE>
<C> <S> <C>
54,600 Seitel, Inc.*........................... $ 883,838
46,600 Veritas DGC, Inc.*...................... 853,363
------------
6,403,741
------------
OIL -- PRODUCTION/PIPELINE (0.2%):
40,000 Northern Border Partners, LP............ 1,242,500
------------
OIL -- U.S. EXPLORATION & PRODUCTION (1.5%):
48,200 Berry Petroleum Co...................... 671,788
44,600 Cabot Oil & Gas Corp.................... 830,675
83,850 Cross Timbers Oil Co.................... 1,247,268
64,700 Forest Oil Corp.*....................... 812,794
25,000 Houston Exploration Co.*................ 473,438
28,700 HS Resources, Inc.*..................... 423,325
56,900 KCS Energy, Inc......................... 35,563
54,200 Louis Dreyfus Natural Gas*.............. 1,168,688
76,100 Newfield Exploration Co.*............... 2,164,093
32,000 Stone Energy Corp.*..................... 1,355,999
32,836 Swift Energy Co.*....................... 350,935
109,900 Vintage Petroleum, Inc.*................ 1,181,424
------------
10,715,990
------------
OIL REFINING (0.1%):
57,200 Tesoro Petroleum Corp.*................. 911,625
------------
PAPER & RELATED PRODUCTS (0.4%):
76,500 Buckeye Technologies, Inc.*............. 1,161,844
50,200 Chesapeake Corp......................... 1,879,362
------------
3,041,206
------------
PHARMACEUTICALS (0.2%):
25,000 Dura Pharmaceuticals*................... 298,438
31,627 Priority Healthcare Corp., Class A*..... 1,091,131
------------
1,389,569
------------
POLLUTION CONTROL (0.2%):
34,700 Imco Recycling, Inc..................... 605,081
20,700 Ionics, Inc.*........................... 755,550
------------
1,360,631
------------
PRINTING -- COMMERCIAL (0.4%):
26,500 Consolidated Graphics, Inc.*............ 1,325,000
73,600 Mail-Well, Inc.* (c).................... 1,191,400
------------
2,516,400
------------
PROTECTION -- SAFETY (0.2%):
42,100 Borg-Warner Security Corp.*............. 855,156
48,400 Checkpoint Systems, Inc.* (c)........... 432,575
------------
1,287,731
------------
PUBLISHING -- NEWSPAPERS (0.1%):
36,000 Journal Register Co.*................... 810,000
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PUBLISHING -- PERIODICALS (0.3%):
38,500 Big Flower Holdings, Inc.*.............. $ 1,227,187
41,100 Playboy Enterprises, Inc.*.............. 1,091,719
------------
2,318,906
------------
REAL ESTATE (0.3%):
44,000 CB Richard Ellis Services*.............. 1,094,500
46,000 Webb (Del) Corp......................... 1,098,250
------------
2,192,750
------------
RESTAURANTS (1.1%):
35,000 Applebee's International, Inc........... 1,054,375
100,000 Foodmaker, Inc.*........................ 2,837,499
79,300 Host Marriott Services Corp.*........... 644,313
69,700 Luby's Cafeteria, Inc................... 1,045,500
67,900 Ruby Tuesday, Inc....................... 1,290,100
40,000 Sbarro, Inc.*........................... 1,082,500
------------
7,954,287
------------
RETAIL -- APPAREL/SHOES (1.6%):
57,800 Ann Taylor Stores Corp.*................ 2,600,999
49,800 Brown Shoe Company, Inc................. 1,083,150
55,500 Burlington Coat Factory Warehouse 1,071,844
Corp.*..................................
23,000 Cole (Kenneth) Productions, Inc.*....... 641,125
69,500 Footstar, Inc.*......................... 2,584,531
55,500 Genesco, Inc.*.......................... 808,219
40,000 Talbots Inc............................. 1,525,000
23,000 The Buckle, Inc.*....................... 667,000
------------
10,981,868
------------
RETAIL -- CONSUMER ELECTRONICS (0.1%):
73,900 Handleman Co.*.......................... 872,944
------------
RETAIL -- DISCOUNT (0.5%):
27,000 99 Cents Only Stores*................... 1,348,313
58,000 Shopko Stores, Inc.*.................... 2,102,500
------------
3,450,813
------------
RETAIL -- GENERAL MERCHANDISE (0.2%):
55,900 Cash America Intl., Inc................. 719,713
36,500 Russ Berrie & Co., Inc.................. 903,375
------------
1,623,088
------------
RETAIL -- HOME FURNISHINGS (1.0%):
81,500 Bombay Co., Inc.*....................... 626,531
128,900 Heilig Meyers Co........................ 878,131
149,300 La-Z-Boy, Inc........................... 3,433,901
44,200 Linens 'n Things, Inc.*................. 1,933,750
------------
6,872,313
------------
RETAIL -- JEWELRY (0.8%):
102,300 Claire's Stores, Inc.................... 2,621,438
70,000 Zale Corp.*............................. 2,800,000
------------
5,421,438
------------
</TABLE>
CONTINUED
38
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAIL -- MAIL ORDER (0.2%):
51,500 Enesco Group, Inc....................... $ 1,190,938
------------
RETAIL -- REGIONAL DEPARTMENT STORES (0.1%):
40,000 Value City Department Stores, Inc.*..... 490,000
------------
RETAIL -- SUPERMARKETS (0.2%):
80,000 Ruddick Corp............................ 1,600,000
------------
RUBBER & PLASTICS (0.1%):
34,300 Furon Co................................ 651,700
------------
SHOES & RELATED APPAREL (0.6%):
90,000 Reebok International Ltd.* (c).......... 1,676,250
115,200 Stride Rite Corp........................ 1,188,000
20,000 Timberland Co., Class A*................ 1,361,250
------------
4,225,500
------------
SOAP & CLEANING PREPARATIONS (0.3%):
54,800 Church & Dwight Co., Inc................ 2,383,800
------------
STEEL -- PIPES & TUBES (0.1%):
31,900 Quanex Corp............................. 909,150
------------
STEEL -- PRODUCERS (0.6%):
229,200 Armco Inc.*............................. 1,518,449
41,800 Carpenter Technology.................... 1,193,913
39,300 Lone Star Technologies, Inc.* (c)....... 697,575
62,700 National Steel Corp..................... 525,113
------------
3,935,050
------------
TECHNOLOGY (0.2%):
53,400 Security Dynamics Technologies, Inc.*... 1,134,750
25,000 Structural Dynamics*.................... 464,063
------------
1,598,813
------------
TELECOMMUNICATIONS -- CELLULAR (0.5%):
93,500 American Mobile Satelllite Corp.* (c)... 1,531,063
69,000 VoiceStream Wireless Corp.* (c)......... 1,962,187
------------
3,493,250
------------
TELECOMMUNICATIONS -- EQUIPMENT (1.8%):
67,500 DSP Communications Inc (c).............. 1,949,062
120,200 InterVoice, Inc.*....................... 1,735,388
78,600 Network Equipment Technologies, Inc.*... 776,175
58,800 Plantronics, Inc.*...................... 3,829,349
75,000 Superior Telecom, Inc. (c).............. 1,875,000
22,300 Tech-Sym Corp.*......................... 529,625
25,000 Terayon Communications Systems, Inc.* 1,396,875
(c) ....................................
54,300 Titan Corp.*............................ 597,300
------------
12,688,774
------------
TELECOMMUNICATIONS -- SATELLITE (0.2%):
10,000 EchoStar Communications Corp., 1,534,375
Class A* (c)............................
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- SERVICES AND EQUIPMENT (1.6%):
100,000 ICG Communications, Inc.*............... $ 2,137,500
75,000 ITC DeltaCom, Inc.*..................... 2,100,000
42,700 Mastec, Inc.*........................... 1,206,275
40,000 Pacific Gateway Exchange, Inc.*......... 1,165,000
75,000 Premiere Technologies, Inc.*............ 862,500
15,000 Teligent, Inc., Class A*................ 897,188
98,000 Western Wireless Corp. - Class A*....... 2,645,999
------------
11,014,462
------------
TEXTILE -- APPAREL (0.6%):
50,000 Authentic Fitness Corp.................. 875,000
100,000 Burlington Industries, Inc.*............ 906,250
40,000 Kellwood Co............................. 1,085,000
50,000 Phillips-Van Heusen Corp................ 493,750
33,500 St. John Knits, Inc..................... 979,875
------------
4,339,875
------------
TEXTILE -- HOME FURNISHINGS (0.1%):
24,000 Pillowtex Corp.......................... 391,500
------------
TEXTILE -- PRODUCTS (0.3%):
99,900 Collins & Aikman Corp.*................. 761,738
47,550 Guilford Mills, Inc..................... 496,303
74,900 Polymer Group, Inc.*.................... 880,075
------------
2,138,116
------------
TOOLS -- HAND HELD (0.2%):
35,200 Toro Co................................. 1,386,000
------------
TRANSPORTATION (0.2%):
36,000 Coach USA, Inc.*........................ 1,509,750
------------
TRANSPORTATION -- AIR FREIGHT (0.3%):
45,000 Atlas Air, Inc.*........................ 1,451,250
58,900 Pittston Burlington Group............... 559,550
------------
2,010,800
------------
TRANSPORTATION -- AIRLINE (0.5%):
31,900 Alaska Airgroup, Inc.*.................. 1,331,825
95,300 America West Holding Corp. - Class B*... 1,798,788
------------
3,130,613
------------
TRANSPORTATION -- EQUIPMENT & LEASING (0.6%):
146,650 Rollins Truck Leasing Corp.............. 1,631,481
49,800 Westinghouse Air Brake Co............... 1,273,013
32,500 Xtra Corp.*............................. 1,492,969
------------
4,397,463
------------
TRANSPORTATION -- RAILROAD (0.2%):
37,000 Florida East Coast Industries........... 1,637,250
------------
TRANSPORTATION -- SHIPPING (0.1%):
77,800 Overseas Shipholding Group.............. 1,001,675
------------
UTILITIES -- ELECTRIC POWER (2.1%):
29,900 Black Hills Corp........................ 691,438
</TABLE>
CONTINUED
39
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
UTILITIES -- ELECTRIC POWER (CONTINUED)
<TABLE>
<C> <S> <C>
29,400 Central Hudson Gas & Electric Corp...... $ 1,234,800
25,200 CILCORP, Inc............................ 1,574,999
37,700 Cleco Corp.............................. 1,145,138
55,200 CMP Group, Inc.......................... 1,445,549
30,000 Commonwealth Energy Systems Co.......... 1,260,000
26,200 Eastern Utilities Assoc................. 763,075
32,800 Northwestern Corp....................... 793,350
25,900 Orange & Rockland Utilities............. 1,513,530
70,700 Public Service New Mexico............... 1,405,163
23,300 TNP Enterprises, Inc.................... 844,625
55,320 UniSource Energy Corp.*................. 660,383
40,000 WPS Resources Corp...................... 1,200,000
------------
14,532,050
------------
UTILITIES -- GAS DISTRIBUTION (2.0%):
33,150 Atmos Energy Corp....................... 828,750
15,400 Connecticut Energy Corp................. 593,863
27,800 Eastern Enterprises..................... 1,105,050
51,200 Energen Corp............................ 953,600
53,466 Indiana Energy, Inc..................... 1,139,494
30,400 Laclede Gas Co.......................... 706,800
34,300 New Jersey Resources Corp............... 1,284,106
38,900 Public Service Co. of North Carolina.... 1,137,825
50,000 Southwest Gas Corp...................... 1,431,249
59,500 Southwestern Energy Co.................. 628,469
49,800 UGI Corp. (c)........................... 1,005,338
62,600 Wicor, Inc.............................. 1,748,887
24,400 Yankee Energy System, Inc............... 971,425
------------
13,534,856
------------
UTILITIES -- WATER SUPPLY (0.3%):
21,900 Aquarion Co............................. 761,025
71,600 United Water Resources, Inc............. 1,624,425
------------
2,385,450
------------
WHOLESALE DISTRIBUTION (0.1%):
16,300 Aviation Sales Co.*..................... 643,850
------------
WIRE & CABLE PRODUCTS (0.5%):
42,100 Barnes Group, Inc....................... 915,675
45,100 Belden, Inc............................. 1,079,581
77,800 General Cable Corp...................... 1,244,800
------------
3,240,056
------------
TOTAL COMMON STOCKS..................... 682,123,320
------------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
INVESTMENT COMPANIES (1.6%):
104 Dreyfus Cash Management Money Market 104
Fund....................................
10,815,124 Federated Prime Value Obligations Money 10,815,124
Market Fund.............................
------------
TOTAL INVESTMENT COMPANIES.............. 10,815,228
------------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS COLLATERAL (6.7%):
COMMERCIAL PAPER (3.7%):
1,800,000 Ameritech Capital Funding Corp., 5.12%, $ 1,794,042
7/23/99.................................
500,000 Bell South Telecommunications, 5.18%, 497,487
8/4/99..................................
975,000 Bell South Telecommunications, 5.16%, 973,729
7/9/99..................................
1,800,000 Cargill Inc., 5.65%, 7/1/99............. 1,800,000
1,800,000 Coca-Cola Co., 5.13%, 7/30/99........... 1,792,254
1,500,000 Daimler, 5.14%, 8/11/99................. 1,490,936
1,500,000 R.R. Donnelley & Sons Co., 5.26%, 1,495,676
7/20/99.................................
1,800,000 Duke Energy, 5.50%, 7/1/99.............. 1,800,000
1,800,000 Ford Motor Credit Corp., 5.18%, 1,795,841
7/16/99.................................
1,000,000 Gannett Co., 5.09%, 7/19/99............. 997,260
1,500,000 General Electric Capital Corp., 5.10%, 1,490,936
8/11/99.................................
1,500,000 General Motors Acceptance Corp., 5.09%, 1,491,372
8/9/99..................................
1,500,000 GTE Funding Corp., 5.04%, 7/8/99........ 1,496,585
1,500,000 H. J. Heinz Co., 5.14%, 8/19/99......... 1,489,188
1,800,000 Mobil Corp., 5.50%, 7/1/99.............. 1,800,000
1,800,000 Nestle Capital Corp., 5.23%, 7/1/99..... 1,800,000
1,800,000 UBS Finance, 5.50%, 7/1/99.............. 1,800,000
------------
25,805,306
------------
MASTER NOTE (0.3%):
2,008,417 General American Masternote, 5.05%, 2,008,417
7/1/99..................................
------------
REPURCHASE AGREEMENTS (2.4%):
2,500,340 Chase Securities Inc. 4.90%, 7/1/99 2,500,340
(Collateralized by $2,501,896 various
Corporate Notes & Bonds, 6.25%-7.25%
6/30/01-5/15/16, market value
$2,500,143).............................
3,861,558 Goldman Sachs & Co. 5.20%, 7/1/99 3,861,558
(Collateralized by $6,225,179 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$3,938,220).............................
10,021,460 J P Morgan Securities, 4.90%, 7/1/99 10,021,460
(Collateralized by $46,956,993 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$10,213,002)............................
------------
16,383,358
------------
TIME DEPOSITS (0.3%):
1,000,161 Barclays Bank PLC London, 1,000,161
5.81%, 7/1/99...........................
1,000,163 Canadian Imperial Bank Commerce Cay, 1,000,163
5.88%, 7/1/99...........................
------------
2,000,324
------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 46,197,405
------------
</TABLE>
CONTINUED
40
<PAGE>
Kent Funds
SMALL COMPANY GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (0.2%):
1,720,000 U.S. Treasury Bill, 4.84%**, 12/23/99 $ 1,680,199
(b).....................................
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS....... 1,680,199
------------
TOTAL INVESTMENTS (COST $587,201,793) (a) --
106.8%.............................................. 740,816,152
------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (6.8)%..... (46,851,599)
------------
TOTAL NET ASSETS -- 100.0%.......................... $693,964,553
------------
------------
</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........................... $210,800,124
Unrealized depreciation........................... (57,185,775)
------------
Net unrealized appreciation....................... $153,614,349
------------
------------
</TABLE>
(b) Security has been deposited as initial margin on open futures contract
(c) A portion of this security was loaned as of June 30, 1999.
* Non-income producing security
** Effective yield at purchase
ADR -- American Depositary Receipt
At June 30, 1999 the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ----------------------------------- -------------- --------------
<S> <C> <C> <C>
40 Russell 2000, 9/16/99 $ 8,927,150 $ 9,240,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (96.9%):
AUSTRALIA (3.7%):
BANKING (0.8%):
140,814 National Australia Bank Ltd............. $ 2,330,195
184,339 Westpac Banking Corp., Ltd.............. 1,195,776
------------
3,525,971
------------
BEVERAGES & TOBACCO (0.1%):
136,862 Coca-Cola Amatil Ltd.................... 551,614
------------
BREWERY (0.1%):
170,236 Fosters Brewing Group Ltd............... 479,804
------------
BROADCASTING & PUBLISHING (0.3%):
193,257 News Corp., Ltd......................... 1,648,901
------------
BUILDING PRODUCTS (0.1%):
114,808 Boral Ltd............................... 194,544
34,780 Hardie (James) Industries Ltd........... 92,087
80,788 Pioneer International Ltd............... 205,880
------------
492,511
------------
CHEMICALS (0.0%):
24,206 Orica Ltd............................... 132,201
------------
DIVERSIFIED (0.1%):
12,073 Smith (Howard) Ltd...................... 92,300
56,346 Southcorp Holdings Ltd.................. 227,548
20,800 Wesfarmers Ltd.......................... 187,244
------------
507,092
------------
ENERGY (0.4%):
170,747 Broken Hill Proprietary Co., Ltd........ 1,977,870
------------
ENGINEERING (0.0%):
22,400 Leighton Holdings Ltd................... 87,480
------------
ENTERTAINMENT (0.0%):
40,300 Star City Holdings Ltd.................. 39,213
26,100 TABCORP Holdings Ltd.................... 175,871
------------
215,084
------------
FOOD PRODUCTS (0.1%):
109,975 Goodman Fielder Ltd..................... 98,055
96,331 Woolworths Ltd.......................... 320,412
------------
418,467
------------
GAS UTILITY (0.0%):
26,533 Australian Gas Light Co., Ltd........... 161,402
------------
INDUSTRIAL GOODS & SERVICES (0.1%):
91,818 CSR Ltd................................. 262,554
88,700 Pacific Dunlop Ltd...................... 127,993
------------
390,547
------------
INSURANCE (0.3%):
105,000 AMP Ltd................................. 1,147,891
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
AUSTRALIA (CONTINUED)
INSURANCE (CONTINUED)
<TABLE>
<C> <S> <C>
53,847 GIO Australia Holdings Ltd.............. $ 131,164
34,020 QBE Insurance Group Ltd................. 129,482
------------
1,408,537
------------
MANUFACTURING -- CAPITAL GOODS (0.0%):
27,944 Email Ltd. (c).......................... 53,789
------------
METALS (0.0%):
150,621 M.I.M. Holdings Ltd..................... 106,678
------------
METALS & MINING (0.2%):
17,377 Newcrest Mining Ltd.*................... 39,016
154,162 Normandy Mining Ltd..................... 102,655
66,046 North Ltd............................... 133,775
28,973 Rio Tinto Ltd........................... 475,074
29,168 Smorgon Steel Group Ltd.*............... 44,212
10,357 Westralian Sands Ltd.................... 22,390
104,971 WMC Ltd................................. 450,942
------------
1,268,064
------------
OIL & GAS (0.0%):
52,241 Santos Ltd.............................. 171,168
------------
PACKAGING (0.1%):
58,093 Amcor Ltd............................... 322,928
------------
PHARMACEUTICALS (0.0%):
10,787 Faulding (F.H.) & Co., Ltd.............. 65,689
------------
PROPERTY TRUST (0.0%):
31,280 Stockland Trust Group................... 71,432
------------
REAL ESTATE (0.2%):
117,125 General Property Trust Units............ 190,408
49,072 Lend Lease Corp., Ltd................... 673,770
111,073 Westfield Trust Units................... 224,829
------------
1,089,007
------------
REAL ESTATE INVESTMENT TRUST (0.0%):
14,411 Schroders Property Fund................. 22,417
------------
RETAIL STORES (0.1%):
112,336 Coles Myer Ltd.......................... 653,603
------------
SERVICES (0.1%):
20,119 Brambles Industries Ltd................. 530,025
------------
TELECOM EQUIPMENT (0.6%):
493,400 Telstra Corporation Ltd................. 2,827,308
------------
19,179,589
------------
AUSTRIA (0.3%):
BANKING (0.2%):
7,585 Bank Austria AG......................... 398,933
------------
BEVERAGES & TOBACCO (0.0%):
700 Oesterreichische Brau-Beteiligungs AG... 31,041
------------
</TABLE>
CONTINUED
42
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
AUSTRIA (CONTINUED)
<TABLE>
<C> <S> <C>
BUILDING PRODUCTS (0.0%):
5,064 Wienerberger Baustoffindustrie AG....... $ 131,134
------------
CHEMICALS (0.0%):
400 Lenzing AG.............................. 22,688
------------
CONSTRUCTION (0.0%):
1,355 Bau Holding AG.......................... 43,319
------------
ELECTRIC UTILITY (0.1%):
2,069 Oesterreichische 301,279
Elektrizitaetswirtschafts AG, Class
A*......................................
------------
ENGINEERING (0.0%):
1,100 VA Technologie AG....................... 99,657
------------
INSURANCE (0.0%):
580 EA-Generali AG.......................... 106,469
------------
METALS & MINING (0.0%):
175 Radex-Heraklith Industriebeteiligungs 4,737
AG......................................
------------
OIL & GAS (0.0%):
1,840 OMV AG.................................. 164,118
------------
PAPER PRODUCTS (0.0%):
900 Mayr-Melnhof Karton AG.................. 40,838
------------
STEEL (0.0%):
800 Boehler-Uddeholm AG..................... 39,593
------------
TRANSPORTATION (0.0%):
1,800 Austrian Airlines....................... 43,437
1,500 Flughafen Wien AG....................... 62,944
------------
106,381
------------
1,490,187
------------
BELGIUM (1.3%):
BANKING (0.1%):
12,520 KBC Bancassurance Holding NV............ 742,414
------------
BUILDING PRODUCTS (0.0%):
1,925 Cimenteries CBR Cementbedrijven......... 177,080
------------
CHEMICALS (0.1%):
8,410 Solvay SA............................... 558,108
------------
ELECTRIC UTILITY (0.2%):
5,840 Tractebel............................... 819,079
------------
ENERGY (0.2%):
1,897 PetroFina SA............................ 1,089,673
------------
GAS & ELECTRIC UTILITY (0.2%):
3,400 Electrabel SA........................... 1,097,481
------------
INDUSTRIAL HOLDING COMPANY (0.1%):
2,000 Groupe Bruxelles Lambert SA............. 338,051
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
BELGIUM (CONTINUED)
<TABLE>
<C> <S> <C>
INSURANCE (0.3%):
35,600 Fortis (B).............................. $ 1,117,921
------------
MERCHANDISING (0.1%):
4,400 Delhaize-Le Lion SA..................... 374,579
------------
PHARMACEUTICALS (0.0%):
4,000 UCB SA.................................. 171,191
------------
TECHNOLOGY (0.0%):
1,000 Barco NV................................ 160,982
------------
6,646,559
------------
DENMARK (0.8%):
BANKING & FINANCE (0.3%):
4,547 Den Danske Bank......................... 493,155
4,693 Unidanmark AS, Class A.................. 313,224
------------
806,379
------------
BEVERAGES & TOBACCO (0.0%):
3,060 Carlsberg AS, Class A................... 123,391
2,305 Carlsberg AS, Class B................... 96,151
------------
219,542
------------
COMMERCIAL SERVICES (0.0%):
2,390 ISS International Service System AS, 127,945
Series B................................
------------
ENGINEERING (0.0%):
3,615 FLS Industries AS - Class B............. 93,997
------------
FOOD PRODUCTS (0.0%):
5,195 Danisco AS.............................. 234,765
------------
PHARMACEUTICALS (0.1%):
4,946 Novo Nordisk AS, Class B................ 534,366
------------
TELECOMMUNICATIONS (0.1%):
14,000 Tele Danmark AS Class B................. 689,120
------------
TRANSPORTATION & SHIPPING (0.3%):
70 D/S 1912, Class B....................... 620,987
53 D/S Svendborg AS, Class B............... 656,625
------------
1,277,612
------------
3,983,726
------------
FINLAND (1.5%):
BANKING & FINANCE (0.1%):
57,106 Merita PLC, Class A..................... 324,494
------------
CHEMICALS (0.0%):
8,900 Kemira.................................. 53,785
------------
DIVERSIFIED (0.0%):
800 Amer Group Ltd.......................... 11,509
1,792 Instrumentarium Group, Series B......... 72,998
------------
84,507
------------
</TABLE>
CONTINUED
43
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
FINLAND (CONTINUED)
<TABLE>
<C> <S> <C>
ENGINEERING (0.0%):
5,500 Metra OYJ............................... $ 116,276
------------
FOREST PRODUCTS (0.1%):
13,860 UPM-Kymmene Corp........................ 397,358
------------
INSURANCE (0.0%):
800 Pohjola Insurance Group, Class B........ 41,045
4,300 Sampo Insurance Co...................... 124,608
------------
165,653
------------
MACHINERY & EQUIPMENT (0.0%):
500 Kone Corp. - Class B.................... 62,392
------------
METALS (0.0%):
8,700 Outokumpu OYJ........................... 97,796
------------
RETAIL -- GENERAL MERCHANDISE (0.0%):
6,300 Kesko................................... 84,787
2,250 Stockmann AB-B Share.................... 34,225
------------
119,012
------------
TELECOMMUNICATIONS (1.3%):
74,000 Nokia Oyj............................... 6,486,709
------------
7,907,982
------------
FRANCE (9.2%):
ALUMINUM (0.0%):
2,000 Pechiney SA - A Shares.................. 85,967
------------
AUTO PARTS (0.1%):
7,345 Valeo SA................................ 605,976
------------
AUTOMOTIVE (0.1%):
3,662 PSA Peugeot Citroen..................... 577,808
------------
BANKING (0.7%):
14,798 Banque Nationale de Paris............... 1,233,071
11,664 Paribas................................. 1,307,528
6,247 Societe Generale........................ 1,101,000
------------
3,641,599
------------
BEVERAGES & TOBACCO (0.4%):
6,732 LVMH (Moet Hennessy Louis Vuitton)...... 1,970,985
5,400 Pernod Ricard........................... 361,977
------------
2,332,962
------------
BROADCASTING/CABLE (0.1%):
2,136 Canal Plus.............................. 599,382
------------
BUILDING PRODUCTS (0.2%):
1,195 Imetal SA............................... 177,462
6,721 Lafarge SA.............................. 639,055
------------
816,517
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
FRANCE (CONTINUED)
<TABLE>
<C> <S> <C>
CHEMICALS (0.4%):
5,932 L'Air Liquide........................... $ 932,921
24,814 Rhone-Poulenc SA........................ 1,133,893
------------
2,066,814
------------
COMMERCIAL SERVICES (0.1%):
2,840 Sodexho SA.............................. 489,112
------------
COMPUTER SOFTWARE (0.0%):
3,000 Dassault Systems SA..................... 99,157
------------
CONSTRUCTION (0.1%):
1,466 Bouygues SA............................. 387,486
------------
DEFENSE (0.1%):
200 Sagem SA................................ 133,653
12,325 Thomson CSF............................. 428,342
------------
561,995
------------
DIVERSIFIED (0.6%):
498 Chargeurs International SA.............. 27,733
7,206 Lagardere S.C.A......................... 268,272
35,464 Vivendi................................. 2,872,815
------------
3,168,820
------------
ELECTRICAL & ELECTRONIC (0.5%):
13,037 Alcatel Alsthom......................... 1,835,203
2,100 Legrand SA.............................. 427,504
10,800 Schneider SA............................ 606,451
------------
2,869,158
------------
ENERGY (0.9%):
18,067 Elf Aquitane SA......................... 2,651,336
14,700 Total SA, Class B....................... 1,896,481
------------
4,547,817
------------
ENGINEERING (0.0%):
200 Groupe Gtm.............................. 21,450
------------
FINANCE (0.0%):
546 CPR (Compagnie Parisenne de 24,359
Reescompte).............................
863 Credit National......................... 45,345
201 Societe Eurafrance SA*.................. 124,786
------------
194,490
------------
FOOD & HOUSEHOLD PRODUCTS (0.1%):
2,600 Eridania Beghin-Say SA.................. 372,702
------------
FOOD PRODUCTS (0.8%):
15,318 Carrefour SA............................ 2,251,080
6,600 Etablissements Economiques du Casino.... 578,544
4,821 Groupe Danone........................... 1,242,942
------------
4,072,566
------------
</TABLE>
CONTINUED
44
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
FRANCE (CONTINUED)
<TABLE>
<C> <S> <C>
HEALTH & PERSONAL CARE (1.1%):
4,437 L'OREAL................................. $ 2,999,410
47,992 Sanofi-Synthelabo SA* (c)............... 2,036,632
------------
5,036,042
------------
INDUSTRIAL GOODS & SERVICES (0.1%):
9,801 Michelin Class B, Registered............ 400,965
------------
INDUSTRIAL HOLDING COMPANY (0.3%):
8,380 Lyonnaise des Eaux SA................... 1,511,498
------------
INSURANCE (0.6%):
23,100 Axa - UAP............................... 2,818,192
2,000 Cap Gemini (c).......................... 314,332
------------
3,132,524
------------
LEISURE (0.1%):
2,650 Accor SA................................ 665,455
541 Club Mediterranee SA*................... 57,410
------------
722,865
------------
MACHINE-DIVERSIFIED (0.0%):
1,600 Sidel SA................................ 194,539
------------
MEDIA (0.0%):
1,494 Pathe SA................................ 179,340
------------
MEDICAL SUPPLIES (0.0%):
500 Essilor International................... 156,289
------------
MERCHANDISING (0.4%):
7,085 Pinault Printemps Redoute............... 1,215,814
1,450 Promodes................................ 951,788
------------
2,167,602
------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.2%):
6,333 Compagnie de Saint Gobain............... 1,009,048
------------
OFFICE EQUIPMENT & SERVICES (0.1%):
5,700 Bic..................................... 300,673
------------
OIL & GAS (0.0%):
50 Cie Gen Geophysique*.................... 2,656
1,300 Primagaz Cie............................ 113,955
------------
116,611
------------
REAL ESTATE (0.1%):
247 Gecina.................................. 29,166
1,000 SEFIMEG................................. 69,611
918 Simco SA................................ 77,630
800 Unibail................................. 102,385
------------
278,792
------------
STEEL (0.0%):
14,600 Unisor Sacilor SA....................... 217,568
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
FRANCE (CONTINUED)
<TABLE>
<C> <S> <C>
TELECOMMUNICATIONS -- SERVICES & EQUIPMENT (1.0%):
66,600 France Telecom (c)...................... $ 5,031,016
------------
TOBACCO (0.0%):
3,200 SEITA................................... 184,804
------------
48,151,954
------------
GERMANY (9.0%):
AUTOMOTIVE (1.3%):
65,987 DaimlerChrysler AG...................... 5,716,254
1,680 MAN AG.................................. 38,116
7,610 MAN AG.................................. 259,768
19,970 Volkswagen AG........................... 1,278,920
------------
7,293,058
------------
BANKING (1.0%):
25,168 Bayerische Vereinsbank AG............... 1,635,171
32,260 Deutsche Bank AG........................ 1,967,854
35,360 Dresdner Bank AG (c).................... 1,382,055
------------
4,985,080
------------
BUILDING PRODUCTS (0.1%):
4,070 Heidelberger Zement AG.................. 335,783
------------
CHEMICALS (0.7%):
39,980 BASF AG................................. 1,766,719
45,240 Bayer AG................................ 1,884,854
------------
3,651,573
------------
CLOTHING (0.1%):
2,800 Adidas AG............................... 277,928
------------
COMPUTER SOFTWARE (0.3%):
4,003 SAP AG.................................. 1,354,045
------------
CONSTRUCTION (0.0%):
4,730 Hochtief AG............................. 217,555
------------
DIVERSIFIED (0.6%):
9,440 Preussag AG............................. 507,205
31,990 VEBA AG................................. 1,880,454
2,007 Viag AG................................. 947,953
------------
3,335,612
------------
ELECTRICAL & ELECTRONIC (0.5%):
34,770 Siemens AG.............................. 2,682,132
------------
ENGINEERING (0.7%):
2,040 AGIV-AG................................. 46,241
25,020 Mannesmann AG........................... 3,733,616
------------
3,779,857
------------
GAS & ELECTRIC UTILITY (0.3%):
29,050 RWE AG*................................. 1,344,837
------------
</TABLE>
CONTINUED
45
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
GERMANY (CONTINUED)
<TABLE>
<C> <S> <C>
HEALTH & PERSONAL CARE (0.1%):
7,860 Beiersdorf AG, Series ABC............... $ 522,825
------------
HEALTH CARE (0.1%):
5,300 Schering AG............................. 561,879
------------
INSURANCE (1.3%):
5,440 Aachener & Muenchener................... 552,598
16,870 Allianz AG (c).......................... 4,679,949
1,000 Axa Colonia Konzern AG.................. 95,908
10,161 Munchener Rueckver AG (c)............... 1,880,939
------------
7,209,394
------------
MACHINERY & EQUIPMENT (0.1%):
3,830 Kloeckner-Humbolt-Deutz AG*............. 26,069
636 Linde AG................................ 381,072
------------
407,141
------------
METALS & MINING (0.1%):
2,480 FAG Kugelfischer Georg Schaefer AG...... 25,192
21,340 Thyssen Krupp AG*....................... 469,417
------------
494,609
------------
PHARMACEUTICALS (0.1%):
13,100 Merck KGaA.............................. 426,095
------------
RETAIL -- MAJOR DEPARTMENT STORES (0.2%):
17,073 Metro AG................................ 1,059,937
------------
RETAIL STORES (0.1%):
791 Karstadt AG............................. 380,134
------------
RETAIL-GENERAL MERCHANDISE (0.0%):
1,630 Douglas Holding AG...................... 73,122
------------
TELECOMMUNICATIONS (1.2%):
148,800 Deutsche Telekom AG..................... 6,245,557
------------
TIRE & RUBBER (0.0%):
4,870 Continental AG.......................... 115,513
------------
TRANSPORTATION (0.1%):
23,580 Lufthansa AG (c)........................ 427,500
------------
47,181,166
------------
HONG KONG (2.5%):
AIRLINES (0.0%):
200 Hong Kong Aircraft Engineering Co., 387
Ltd.....................................
------------
BANKING (0.3%):
97,973 Bank of East Asia Ltd.*................. 248,133
108,800 Hang Seng Bank Ltd...................... 1,216,506
14,695 Wing Lung Bank.......................... 57,200
------------
1,521,839
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
HONG KONG (CONTINUED)
<TABLE>
<C> <S> <C>
DIVERSIFIED (0.2%):
94,500 Swire Pacific Ltd., Class A............. $ 467,713
155,500 Wharf Holdings Ltd...................... 485,022
------------
952,735
------------
ELECTRIC UTILITY (0.1%):
141,400 CLP Holdings Ltd........................ 687,079
------------
ELECTRICAL & ELECTRONIC (0.1%):
67,900 Johnson Electric Holdings Ltd.*......... 280,050
------------
ELECTRICAL EQUIPMENT (0.0%):
65,000 Elec & Eltek International Holdings 11,561
Ltd.....................................
------------
GAS UTILITY (0.1%):
442,454 Hong Kong & China Gas Co., Ltd.......... 641,559
------------
HOTELS & LODGING (0.0%):
65,500 Hong Kong & Shanghai Hotels Ltd......... 55,719
33,000 Miramar Hotel & Investment Ltd.*........ 40,194
120,000 Shangri-La Asia Ltd..................... 148,480
------------
244,393
------------
INDUSTRIAL HOLDING COMPANY (0.5%):
265,000 Hutchison Whampoa Ltd................... 2,399,431
------------
MANUFACTURING -- CONSUMER GOODS (0.0%):
20,000 Varitronix International Ltd............ 41,631
------------
REAL ESTATE (0.7%):
133,000 Cheung Kong Holdings Ltd................ 1,182,815
378,048 Hysan Development Co., Ltd.............. 570,097
118,542 New World Development Co., Ltd. (c)..... 355,231
135,136 Sun Hung Kai Properties Ltd............. 1,232,293
------------
3,340,436
------------
REAL ESTATE INVESTMENT TRUST (0.0%):
91,100 Hang Lung Development Co................ 112,721
------------
TELECOMMUNICATIONS (0.4%):
864,674 Hong Kong Telecommunications Ltd........ 2,245,657
------------
TRANSPORTATION (0.1%):
252,000 Cathay Pacific Airways.................. 386,512
------------
12,865,991
------------
IRELAND (0.4%):
AIRLINES (0.0%):
7,300 Ryanair Holdings PLC*................... 75,659
------------
BANKING (0.3%):
59,879 Allied Irish Banks*..................... 787,334
------------
BUILDING PRODUCTS (0.1%):
26,219 C.R.H. PLC*............................. 465,070
------------
CONSUMER GOODS & SERVICES (0.0%):
29,000 Waterford Wedgewood*.................... 29,907
------------
</TABLE>
CONTINUED
46
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
IRELAND (CONTINUED)
<TABLE>
<C> <S> <C>
DIVERSIFIED (0.0%):
3,227 DCC PLC*................................ $ 26,291
------------
FINANCE (0.0%):
13,205 Irish Permanent PLC*.................... 139,584
------------
FOOD PRODUCTS (0.0%):
11,700 Fyffes PLC*............................. 25,338
7,816 Greencore Group*........................ 24,181
7,300 Kerry Group PLC*........................ 86,576
------------
136,095
------------
HOTELS & LODGING (0.0%):
1,900 Jurys Hotel Group PLC*.................. 15,088
------------
INDUSTRIAL GOODS & SERVICES (0.0%):
63,500 Smurfit (Jefferson) Group*.............. 148,980
------------
INSURANCE (0.0%):
37 Irish Life PLC*......................... 324
------------
MEDIA (0.0%):
10,254 Independent Newspapers PLC*............. 49,172
------------
OIL & GAS (0.0%):
9,100 Tullow Oil PLC*......................... 7,226
------------
PRINTING & PUBLISHING (0.0%):
1,608 Clondalkin Group PLC*................... 10,779
------------
TRANSPORTATION & SHIPPING (0.0%):
1,000 Irish Continental Group PLC*............ 12,788
------------
1,904,297
------------
ITALY (3.6%):
AGRICULTURE (0.0%):
94,400 Parmalat Finanziaria SpA................ 123,637
------------
AUTO PARTS (0.0%):
72,520 Magneti Marelli SpA..................... 96,103
------------
AUTOMOTIVE (0.2%):
215,538 Fiat SpA................................ 682,395
70,340 Fiat SpA di Risp., (Non-convertible) 120,053
(c).....................................
90,820 Fiat SpA Preferred (c).................. 145,642
------------
948,090
------------
BANKING (0.6%):
135,329 Banca Ambrosiano Veneto SpA............. 650,355
65,650 Banca Ambrosiano Veneto SpA di Risp., 146,916
(Non-convertible).......................
105,300 Banca Commerciale Italiana (c).......... 768,839
17,100 Banca Popolare de Milano................ 132,084
264,900 Credito Italiano SpA.................... 1,163,766
11,723 Riunione Adriatica di Sicurta SpA di 98,893
Risp., (Non-convertible)................
------------
2,960,853
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
ITALY (CONTINUED)
<TABLE>
<C> <S> <C>
BROADCASTING & PUBLISHING (0.1%):
75,600 Mediaset SpA (c)........................ $ 672,052
------------
BUILDING PRODUCTS (0.0%):
2,090 Cementir SpA............................ 2,220
10,950 Italcementi SpA (c)..................... 138,897
900 Italcementi SpA di Risp., 4,511
(Non-convertible).......................
------------
145,628
------------
CHEMICALS (0.1%):
165,340 Montedison SpA (c)...................... 269,408
6,656 Montedison SpA di Risp., 7,722
(Non-convertible).......................
84,200 Snia BPD SpA............................ 105,502
900 Snia BPD SpA di Risp., 706
(Non-convertible).......................
------------
383,338
------------
COMPUTER SOFTWARE (0.1%):
124,327 Tecnost SpA*............................ 317,972
------------
ENGINEERING (0.0%):
7,900 Impregilo SpA*.......................... 6,672
------------
FINANCE (0.3%):
82,312 Banc San Paolo Torino................... 1,120,497
36,470 Mediobanca SpA*......................... 381,747
------------
1,502,244
------------
GAS & ELECTRIC UTILITY (0.1%):
40,500 Edison SpA.............................. 350,839
------------
GAS UTILITY (0.0%):
44,500 Italgas SpA............................. 186,779
------------
INSURANCE (0.6%):
57,663 Assicurazioni Generali (c).............. 1,998,068
240,200 Istituto Nazionale delle Assicurazioni 557,352
(c).....................................
27,062 Riuniune Adriatici de Sicurta SpA....... 262,896
10,900 Societa Assicuratrice Industriale (SAI) 112,409
SpA.....................................
298,200 Unione Immobiliare (c).................. 132,236
------------
3,062,961
------------
JEWELRY (0.0%):
21,300 Bulgari SpA............................. 143,219
------------
OFFICE EQUIPMENT & SERVICES (0.1%):
179,696 Olivetti SpA* (c)....................... 431,786
------------
OIL & GAS (0.7%):
542,500 ENI SpA (c)............................. 3,239,307
------------
PAPER PRODUCTS (0.0%):
15,200 Burgo (Cartiere) SpA.................... 97,501
------------
PRINTING & PUBLISHING (0.0%):
11,400 Mondadori (Arnoldo) Editore SpA......... 197,509
------------
RETAIL STORES (0.0%):
14,200 La Rinascente SpA....................... 107,488
------------
</TABLE>
CONTINUED
47
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
ITALY (CONTINUED)
<TABLE>
<C> <S> <C>
TELECOMMUNICATIONS (0.6%):
19,400 Sirti SpA............................... $ 93,631
99,760 Telecom Italia Mobile SpA............... 367,281
379,660 Telecom Italia Mobile SpA di Risp, (Non- 2,266,978
convertible)............................
57,260 Telecom Italia SpA-RNC.................. 310,607
------------
3,038,497
------------
TEXTILE PRODUCTS (0.0%):
115,720 Benetton Group SpA (c).................. 227,938
4,200 Marzotto (Gaetano) & Figli SpA.......... 32,658
------------
260,596
------------
TIRE & RUBBER (0.1%):
120,700 Pirelli SpA............................. 328,614
10,600 Pirelli SpA di Risp, 20,988
(Non-convertible).......................
------------
349,602
------------
18,622,673
------------
JAPAN (25.8%):
APPLIANCES & HOUSEHOLD PRODUCTS (1.5%):
148,000 Matsushita Electric Industrial Co., Ltd. 2,873,521
(c).....................................
13,000 Pioneer Electronic Corp................. 252,941
137,000 Sanyo Electric Co....................... 556,891
81,000 Sharp Corp.............................. 956,987
29,700 Sony Corp............................... 3,202,225
------------
7,842,565
------------
AUTOMOTIVE (2.4%):
3,000 Autobacs Seven Co., Ltd................. 145,742
72,000 Honda Motor Co., Ltd.................... 3,051,650
183,000 Nissan Motor Co., Ltd.*................. 873,904
275,000 Toyota Motor Corp. (c).................. 8,701,945
------------
12,773,241
------------
BANKING (3.4%):
32,000 77 Bank................................. 280,247
180,000 Asahi Bank Ltd.......................... 862,552
44,000 Ashikaga Bank Ltd.*..................... 85,793
340,000 Bank of Tokyo -- Mitsubishi Ltd. (c).... 4,840,041
94,000 Bank of Yokohama Ltd.................... 241,531
65,000 Chiba Bank Ltd. (c)..................... 240,052
250,000 Fuji Bank Ltd. (c)...................... 1,743,281
43,000 Gunma Bank Ltd.......................... 270,002
23,000 Higo Bank............................... 94,063
57,000 Hokuriku Bank*.......................... 113,024
192,000 Industrial Bank of Japan (c)............ 1,522,851
73,000 Joyo Bank............................... 284,072
95,000 Mitsubishi Trust & Banking Corp......... 923,030
99,000 Mitsui Trust & Banking Co., Ltd......... 157,862
283,000 Sakura Bank Ltd......................... 1,073,208
59,000 Shizuoka Bank........................... 587,874
228,000 Sumitomo Bank Ltd. (c).................. 2,827,486
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
BANKING (CONTINUED)
<TABLE>
<C> <S> <C>
152,000 Tokai Bank (c).......................... $ 866,518
17,000 Yamaguchi Bank.......................... 153,797
------------
17,167,284
------------
BREWERY (0.3%):
37,000 Asahi Breweries Ltd..................... 460,375
76,000 Kirin Brewery Co., Ltd.................. 910,472
25,000 Sapporo Breweries Ltd................... 110,917
------------
1,481,764
------------
BROADCASTING & PUBLISHING (0.0%):
13,000 Tokyo Broadcasting System............... 187,960
------------
BUILDING PRODUCTS (0.1%):
17,000 Sanwa Shutter Corp...................... 92,138
23,000 Sumitomo Osaka Cement Co., Ltd.......... 44,656
72,400 Taiheiyo Cement Corp.................... 207,564
19,000 Tostem Corp............................. 364,974
------------
709,332
------------
CHEMICALS (1.3%):
105,000 Asahi Chemical Industry Co., Ltd........ 582,099
19,000 Daicel Chemical Industries Ltd.......... 69,855
59,000 Dainippon Ink & Chemicals Inc........... 200,833
26,000 Kaneka Corp. (c)........................ 244,886
152,000 Mitsubishi Chemical Corp................ 526,190
42,000 Mitsubishi Gas Chemical Co.............. 132,555
10,000 Nippon Shokubai Kabushiki Kaisha Co..... 59,486
46,000 Sekisui Chemical Co., Ltd............... 266,796
30,000 Shin-Etsu Chemical Co., Ltd............. 1,003,832
118,000 Sumitomo Chemical Co.................... 541,078
65,000 Takeda Chemical Industries.............. 3,012,736
45,000 Tosoh Corp.............................. 125,665
63,000 Ube Industries Ltd...................... 135,852
------------
6,901,863
------------
CONSTRUCTION (0.3%):
39,000 Daiwa House Industry Co., Ltd........... 410,183
13,000 Okumura Corp............................ 48,333
53,000 Sekisui House Ltd....................... 571,878
59,000 Shimizu Corp. (c)....................... 230,080
72,000 Taisei Corp............................. 158,234
------------
1,418,708
------------
CONSUMER GOODS & SERVICES (0.1%):
22,000 Nippon Sheet Glass Co., Ltd............. 78,340
31,000 Toto Ltd................................ 239,474
------------
317,814
------------
COSMETICS/PERSONAL CARE (0.3%):
46,000 Kao Corp................................ 1,292,176
15,000 Lion Corp............................... 61,965
31,000 Shiseido Co., Ltd....................... 464,605
------------
1,818,746
------------
</TABLE>
CONTINUED
48
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
<TABLE>
<C> <S> <C>
DATA PROCESSING & REPRODUCTION (0.5%):
137,000 Fujitsu Ltd. (c)........................ $ 2,756,160
------------
DISTRIBUTION (0.1%):
106,000 Itochu Corp.*........................... 263,607
------------
DIVERSIFIED (0.0%):
18,000 Yamaha Corp............................. 216,382
------------
ELECTRIC UTILITY (0.8%):
71,800 Kansai Electric Power Co., Inc.......... 1,364,386
37,500 Tohoku Electric Power................... 567,599
98,900 Tokyo Electric Power Co................. 2,087,719
------------
4,019,704
------------
ELECTRICAL & ELECTRONIC (0.6%):
23,000 Casio Computer Co., Ltd................. 174,824
14,000 Kyocera Corp............................ 821,242
156,000 Mitsubishi Electric Corp................ 599,325
22,000 Omron Corp.............................. 381,704
8,000 Rohm Co., Ltd........................... 1,252,518
------------
3,229,613
------------
ELECTRICAL EQUIPMENT (0.2%):
16,000 Alps Electric Co., Ltd. (c)............. 374,764
6,000 SMC Corp. (c)........................... 671,700
10,000 Taiyo Yuden Co., Ltd.................... 164,083
------------
1,210,547
------------
ELECTRONIC COMPONENTS/INSTRUMENTS (1.2%):
7,600 Advantest Corp.......................... 835,122
17,100 Fanuc Ltd............................... 918,321
3,000 Hirose Electric Co., Ltd................ 311,312
239,000 Hitachi Ltd............................. 2,241,190
115,000 NEC Corp................................ 1,429,945
13,000 Nitto Denko Corp. (c)................... 272,811
23,000 Yokogawa Electric Corp.................. 135,868
------------
6,144,569
------------
ENERGY (0.0%):
90,000 Japan Energy Corp....................... 105,588
------------
ENGINEERING (0.3%):
7,000 Daito Trust Construction Co., Ltd....... 78,076
72,000 Kajima Corp. (c)........................ 261,740
18,000 Kandenko Co., Ltd....................... 110,347
115,000 Kawasaki Heavy Industries Ltd........... 311,642
23,000 Kinden Corp............................. 247,984
25,000 Nishimatsu Construction (c)............. 143,346
56,000 Obayashi Corp........................... 281,767
------------
1,434,902
------------
ENTERTAINMENT (0.1%):
4,000 NAMCO................................... 107,406
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
ENTERTAINMENT (CONTINUED)
<TABLE>
<C> <S> <C>
1,700 Toho Co................................. $ 248,603
14,000 Tokyo Dome Corp.*....................... 81,199
------------
437,208
------------
FINANCE (0.7%):
11,000 Acom Co., Ltd........................... 949,716
97,000 Daiwa Securities Co., Ltd. (c).......... 641,131
143,000 Nomura Securities Co., Ltd.............. 1,674,136
24,000 Orient Corp............................. 69,797
5,000 Orix Corp............................... 446,148
------------
3,780,928
------------
FOOD & HOUSEHOLD PRODUCTS (0.2%):
48,000 Ajinomoto Co., Inc...................... 547,274
20,000 Nippon Meat Packers Inc................. 261,079
12,000 Nissin Food Products Co., Ltd........... 292,475
------------
1,100,828
------------
FOOD PRODUCTS (0.2%):
51,000 Daiei Inc.* (c)......................... 174,444
10,000 House Foods Industry.................... 147,394
12,000 Itoham Foods............................ 48,779
15,000 Kikkoman Corp. (c)...................... 127,028
15,000 Meiji Milk Products Co., Ltd............ 53,662
8,000 QP Corp................................. 57,503
23,000 Snow Brand Milk Products Co., Ltd....... 112,305
19,000 Yamazaki Baking Co., Ltd................ 235,781
------------
956,896
------------
FOREST PRODUCTS (0.2%):
70,000 Nippon Paper Industries Co.............. 364,932
76,000 Oji Paper Co., Ltd...................... 439,538
12,000 Sumitomo Forestry Co., Ltd.............. 93,394
6,000 Uni-Charm............................... 260,253
------------
1,158,117
------------
GAS UTILITY (0.2%):
184,000 Osaka Gas Co., Ltd...................... 624,805
204,000 Tokyo Gas Co., Ltd...................... 502,263
------------
1,127,068
------------
HEALTH & PERSONAL CARE (0.2%):
33,000 Kyowa Hakko Kogyo Co.................... 188,944
34,000 Sankyo Co., Ltd......................... 856,768
------------
1,045,712
------------
HEALTH CARE (0.1%):
8,000 Hoya Corp............................... 451,435
------------
HOTELS & LODGING (0.0%):
11,000 Fujita Kanko Inc........................ 104,514
------------
INDUSTRIAL GOODS & SERVICES (0.8%):
60,000 Bridgestone Corp........................ 1,814,335
65,000 Denso Corp.............................. 1,321,093
</TABLE>
CONTINUED
49
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
INDUSTRIAL GOODS & SERVICES (CONTINUED)
<TABLE>
<C> <S> <C>
17,000 Inax Corp............................... $ 103,795
30,000 NGK Insulators Ltd...................... 313,295
19,000 NGK Spark Plug Co., Ltd. (c)............ 195,437
54,000 Sumitomo Electric Industries Ltd........ 613,899
------------
4,361,854
------------
INSURANCE (0.4%):
65,000 Mitsui Marine & Fire Insurance Co., 319,533
Ltd.....................................
34,000 Nichido Fire & Marine Insurance Co., 175,006
Ltd.....................................
48,000 Nippon Fire & Marine Insurance Co....... 162,596
55,000 Sumitomo Marine & Fire Insurance Co..... 331,719
113,000 Tokio Marine & Fire Insurance Co........ 1,227,690
------------
2,216,544
------------
JEWELRY (0.0%):
23,000 Citizen Watch Co., Ltd.................. 199,527
------------
LEASING (0.1%):
32,000 Yamato Transport Co., Ltd............... 557,850
------------
MACHINE-DIVERSIFIED (0.1%):
7,000 Komori Corp............................. 126,078
10,000 Kurita Water Industries Ltd............. 179,285
22,000 Toyoda Automatic Loom Works (c)......... 373,525
------------
678,888
------------
MACHINERY & EQUIPMENT (0.8%):
22,000 Amada Co., Ltd.......................... 155,408
14,000 Brother Industries Ltd.................. 48,234
23,000 Daikin Industries Ltd................... 266,986
21,000 Ebara Corp.............................. 249,669
71,000 Komatsu Ltd............................. 453,443
10,000 Koyo Seiko Co., Ltd..................... 87,164
116,000 Kubota Corp............................. 346,938
34,000 Minebea Co., Ltd........................ 379,226
245,000 Mitsubishi Heavy Industries Ltd......... 993,876
5,000 Mori Seiki Co........................... 68,161
40,000 NSK Ltd................................. 219,439
33,000 NTN Corp................................ 112,603
13,000 Tokyo Electron Ltd...................... 881,802
------------
4,262,949
------------
MANUFACTURING -- CAPITAL GOODS (0.3%):
31,000 Fujikura Ltd............................ 148,038
10,000 Kokuyo Co............................... 161,109
14,000 Makita Corp............................. 158,349
17,000 Murata Manufacturing Co., Ltd........... 1,118,014
8,000 Noritake Co., Ltd....................... 41,640
7,000 Takara Standard Co...................... 43,954
------------
1,671,104
------------
MANUFACTURING -- CONSUMER GOODS (0.8%):
64,000 Canon Inc............................... 1,840,112
38,000 Fuji Photo Film Co., Ltd................ 1,437,917
30,000 Konica Corp............................. 123,682
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
MANUFACTURING -- CONSUMER GOODS (CONTINUED)
<TABLE>
<C> <S> <C>
27,000 Nikon Corp.............................. $ 441,686
8,700 Sega Enterprises Ltd. (c)............... 115,079
12,000 Shimano Inc............................. 284,047
------------
4,242,523
------------
MEDICAL SUPPLIES (0.1%):
23,000 Olympus Optical Co., Ltd................ 339,956
------------
MERCHANDISING (0.6%):
30,000 Ito-Yokado Co., Ltd..................... 2,007,664
24,000 JUSCO Co., Ltd.......................... 436,233
28,000 Marui Co., Ltd.......................... 462,672
------------
2,906,569
------------
METALS (0.4%):
236,000 Kawasaki Steel Corp..................... 440,662
80,000 Mitsubishi Materials Corp.*............. 179,120
494,000 Nippon Steel Corp....................... 1,146,881
280,000 NKK Corp.*.............................. 229,022
264,000 Sumitomo Metal Industries Ltd.*......... 329,356
------------
2,325,041
------------
METALS & MINING (0.1%):
83,000 Hitachi Zosen Corp.*.................... 100,119
43,000 Mitsui Mining & Smelting Co. (c)........ 222,041
41,000 Sumitomo Metal Mining Co................ 169,371
------------
491,531
------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.1%):
86,000 Asahi Glass Co., Ltd.................... 557,767
------------
OIL & GAS (0.1%):
53,000 Cosmo Oil Co., Ltd...................... 97,211
107,800 Nippon Oil Co., Ltd..................... 454,228
------------
551,439
------------
PACKAGING (0.1%):
17,000 Toyo Seikan Kaisha Ltd.................. 382,035
------------
PHARMACEUTICALS (0.6%):
18,000 Chugai Pharmaceutical Co., Ltd.......... 193,926
20,000 Dai-Ichi Pharmaceuticals................ 310,320
22,000 Eisai Co., Ltd.......................... 433,507
3,000 Kissei Pharmaceutical Co., Ltd.......... 59,610
29,000 Meiji Seika Co.......................... 162,208
26,000 Shionogi & Co., Ltd..................... 205,575
26,000 Taisho Pharmacuetical Co................ 859,247
25,000 Yamanouchi Pharmaceutical Co., Ltd...... 956,326
------------
3,180,719
------------
PRINTING & PUBLISHING (0.3%):
56,000 Dai Nippon Printing Co., Ltd............ 895,269
52,000 Toppan Printing Co., Ltd................ 580,422
------------
1,475,691
------------
</TABLE>
CONTINUED
50
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
<TABLE>
<C> <S> <C>
REAL ESTATE (0.3%):
95,000 Mitsubishi Estate Co., Ltd. (c)......... $ 926,955
60,000 Mitsui Fudosan Co., Ltd................. 485,805
------------
1,412,760
------------
RETAIL STORES (0.2%):
5,000 Aoyama Trading Co., Ltd................. 157,804
14,000 Daimuru Inc............................. 68,475
16,000 Hankyu Department Stores Co............. 106,150
19,000 Isetan Co............................... 163,728
34,000 Mitsukoshi Ltd.* (c).................... 147,758
23,000 Mycal Corp.............................. 144,420
5,000 Skylark Co., Ltd........................ 107,406
22,000 Takashimaya Co., Ltd.................... 210,300
------------
1,106,041
------------
RETAIL -- GENERAL MERCHANDISE (0.1%):
14,300 Credit Saison Co., Ltd.................. 298,911
------------
RETAIL-SPECIAL LINE (0.0%):
2,000 Shimachu Co............................. 44,284
14,000 Uny Co., Ltd............................ 210,516
------------
254,800
------------
SERVICES (0.2%):
9,000 Secom Co., Ltd.......................... 936,910
------------
STORAGE (0.0%):
15,000 Mitsubishi Logistics Corp............... 168,669
------------
TELECOMMUNICATIONS (2.1%):
11,000 Nippon Comsys Corp. (c)................. 178,583
951 Nippon Telegraph & Telephone Corp....... 11,078,590
------------
11,257,173
------------
TEXTILE PRODUCTS (0.4%):
30,000 Kuraray Co., Ltd........................ 360,884
54,000 Mitsubishi Rayon Co., Ltd............... 153,921
21,000 Nisshinbo Industries Inc................ 95,600
15,000 Onward Kashiyama Co., Ltd............... 164,827
76,000 Teijin Ltd.............................. 307,677
5,000 Tokyo Style............................. 53,703
102,000 Toray Industries Inc.................... 510,689
49,000 Toyobo Ltd.............................. 74,085
14,000 Wacoal Corp............................. 142,503
------------
1,863,889
------------
TOBACCO (0.0%):
11,000 Takara Shuzo............................ 89,700
------------
TRANSPORTATION (0.8%):
296 East Japan Railway Co................... 1,589,607
72,000 Hankyu Corp............................. 285,535
130,000 Japan Airlines Co. (c).................. 429,624
118,000 Kinki Nippon Railway Co................. 580,074
68,000 Nagoya Railroad Co., Ltd................ 223,603
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
JAPAN (CONTINUED)
TRANSPORTATION (CONTINUED)
<TABLE>
<C> <S> <C>
44,000 Nankai Electric Railway Co.............. $ 203,939
79,000 Nippon Express Co., Ltd................. 473,206
55,000 Odakyu Electric Railway Co.............. 184,036
64,000 Tobu Railway Co., Ltd................... 181,367
82,000 Tokyu Corp.............................. 206,632
------------
4,357,623
------------
TRANSPORTATION & SHIPPING (0.2%):
23,000 Kamigumi Co., Ltd....................... 118,006
30,000 Kawasaki Kisen Kaisha Ltd............... 64,691
38,000 Keihin Electric Express Railway Co., 125,582
Ltd.....................................
83,000 Mitsui OSK Lines Ltd.................... 178,294
89,000 Nippon Yusen Kabushiki Kaisha........... 342,659
8,000 Seino Transportation (c)................ 47,589
------------
876,821
------------
WHOLESALE & INTERNATIONAL TRADE (0.5%):
112,000 Marubeni Corp........................... 234,112
114,000 Mitsubishi Corp......................... 772,331
116,000 Mitsui & Co., Ltd....................... 808,883
78,000 Sumitomo Corp........................... 570,325
------------
2,385,651
------------
WIRE & CABLE PRODUCTS (0.0%):
47,000 Furukawa Electric Co., Ltd.............. 215,514
------------
135,789,504
------------
MALAYSIA (1.1%):
AGRICULTURE (0.0%):
130,000 Golden Hope Plantations Berhad.......... 100,429
37,500 Highlands & Lowlands Berhad............. 23,638
52,000 IOI Corp. Berhad*....................... 29,698
79,000 Kuala Lumpur Kepong Berhad.............. 97,349
------------
251,114
------------
AUTOMOTIVE (0.0%):
13,000 Ederan Otomobil......................... 43,745
19,200 Oriental Holdings....................... 47,319
33,000 Perusahaan Otomobil Nasional Berhad..... 68,818
41,000 Tan Chong Motors*....................... 21,569
------------
181,451
------------
BANKING (0.4%):
24,000 AMMB Holdings Berhad*................... 55,167
48,000 Commerce Asset Holdings Berhad.......... 106,922
343,000 Malayan Banking Berhad.................. 926,613
213,600 Public Bank Berhad...................... 201,458
187,000 RHB Capital Berhad*..................... 217,139
------------
1,507,299
------------
BEVERAGES & TOBACCO (0.0%):
18,000 Guinness Anchor......................... 17,830
------------
</TABLE>
CONTINUED
51
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
MALAYSIA (CONTINUED)
<TABLE>
<C> <S> <C>
BUILDING PRODUCTS (0.0%):
15,000 Jaya Tiasa Holdings Berhad*............. $ 27,549
113,000 Malayan United Industries*.............. 26,242
------------
53,791
------------
CHEMICALS (0.0%):
8,000 Malaysian Oxygen Berhad................. 17,062
------------
DIVERSIFIED (0.1%):
60,000 Malaysian Resources*.................... 36,257
58,000 Multi-Purpose Holdings Berhad*.......... 30,925
22,500 Perlis Plantations Berhad............... 23,674
247,040 Sime Darby Berhad....................... 291,538
132,500 YTL Corp. Berhad*....................... 251,192
------------
633,586
------------
ELECTRIC UTILITY (0.2%):
327,000 Tenaga Nasional Berhad*................. 678,040
------------
ELECTRICAL & ELECTRONIC (0.0%):
12,000 Malaysian Pacific....................... 30,143
------------
ENERGY (0.0%):
16,000 UMW Holdings Berhad..................... 32,418
------------
ENGINEERING (0.0%):
180,000 Amsteel Corp. Berhad.................... 39,669
6,300 Silverstone Berhad*..................... 0
46,000 Time Engineering Berhard*............... 15,370
49,326 United Engineers (Malaysia) Ltd.*....... 76,563
------------
131,602
------------
ENTERTAINMENT (0.1%):
38,000 Berjaya Land Berhad*.................... 21,972
141,000 Magnum Corp. Berhad..................... 92,555
118,000 Resorts World Berhad.................... 250,268
------------
364,795
------------
FINANCE (0.0%):
48,000 MBf Capital Berhad*..................... 11,716
23,000 Rashid Hussain Berhad*.................. 24,309
------------
36,025
------------
FOOD PRODUCTS (0.0%):
26,000 Nestle (Malaysia) Berhad................ 92,420
------------
METALS & MINING (0.0%):
92,400 Malaysia Mining Corp. Berhad............ 45,982
------------
OIL & GAS (0.0%):
17,500 Shell Refining Co. (Malaysia) Berhad.... 20,943
------------
PRINTING & PUBLISHING (0.0%):
11,000 New Straits Time Press*................. 22,548
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
MALAYSIA (CONTINUED)
<TABLE>
<C> <S> <C>
TELECOMMUNICATIONS (0.3%):
47,000 Technology Resources Industries $ 34,527
Berhad..................................
351,000 Telekom Malaysia Berhad................. 1,181,122
------------
1,215,649
------------
TOBACCO (0.0%):
15,000 RJ Reynolds............................. 15,782
29,300 Rothmans of Pall Mall (Malaysia) 199,621
Berhad..................................
------------
215,403
------------
TRANSPORTATION (0.0%):
47,000 Malaysian Airlines...................... 57,916
91,000 Malaysian International Shipping........ 149,874
------------
207,790
------------
5,755,891
------------
NETHERLANDS (5.2%):
BANKING (0.4%):
91,835 ABN Amro Holding NV..................... 1,988,847
------------
BEVERAGES & TOBACCO (0.2%):
19,937 Heineken NV............................. 1,020,829
------------
BROADCASTING & PUBLISHING (0.1%):
48,430 Elsevier NV............................. 561,876
------------
CHEMICALS (0.1%):
18,132 Akzo Nobel NV........................... 762,921
------------
COMPUTER SOFTWARE (0.0%):
6,708 Getronics NV............................ 258,033
------------
ELECTRONICS (0.4%):
21,381 Philips Electronics NV.................. 2,109,030
------------
FINANCE (0.6%):
58,883 ING Groep NV............................ 3,188,035
------------
FOOD PRODUCTS (0.5%):
36,270 Unilever NV - CVA....................... 2,444,370
------------
INSURANCE (0.4%):
27,594 Aegon NV................................ 2,001,947
------------
OIL & GAS (1.5%):
145,400 Royal Dutch Petroleum Co................ 8,516,998
------------
PRINTING & PUBLISHING (0.2%):
6,216 Oce NV.................................. 158,337
18,000 Wolters Kluwer CVA...................... 716,528
------------
874,865
------------
RETAIL-SPECIAL LINE (0.3%):
38,917 Ahold................................... 1,340,478
------------
TELECOMMUNICATIONS (0.3%):
30,605 KPN NV.................................. 1,436,077
------------
</TABLE>
CONTINUED
52
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
NETHERLANDS (CONTINUED)
<TABLE>
<C> <S> <C>
TRANSPORTATION (0.2%):
10,159 KLM Royal Dutch Air Lines NV............ $ 287,586
30,417 TNT Post Group NV....................... 726,174
------------
1,013,760
------------
27,518,066
------------
NEW ZEALAND (0.2%):
APPLIANCES & HOUSEHOLD PRODUCTS (0.0%):
8,949 Fisher & Paykel Industries Ltd.......... 28,454
------------
BEVERAGES & TOBACCO (0.0%):
41,300 Lion Nathan Ltd......................... 98,923
------------
FOREST PRODUCTS (0.0%):
130,281 Carter Holt Harvey Ltd.................. 156,027
------------
TELECOMMUNICATIONS (0.2%):
131,965 Telecom Corp. of New Zealand Ltd. (c)... 566,440
------------
849,844
------------
NORWAY (0.4%):
BANKING (0.1%):
48,900 Christiania Bank Og Kreditkasse......... 175,791
37,000 Den Norske Bank ASA..................... 122,202
------------
297,993
------------
CHEMICALS (0.0%):
1,000 Dyno Industrier ASA..................... 18,038
------------
DIVERSIFIED (0.2%):
18,650 Norsk Hydro ASA (c)..................... 703,618
------------
ELECTRIC UTILITY (0.0%):
15,650 Hafslund ASA, Series A.................. 104,370
10,326 Hafslund ASA, Series B.................. 42,761
------------
147,131
------------
FOREST PRODUCTS (0.0%):
3,200 Norske Skogindustrier ASA -- Class A.... 117,883
------------
INDUSTRIAL GOODS & SERVICES (0.0%):
1,200 Unitor ASA.............................. 10,366
------------
INSURANCE (0.0%):
24,100 Storebrand ASA*......................... 162,254
------------
MANUFACTURING -- CONSUMER GOODS (0.0%):
14,800 Orkla ASA -- Class A.................... 230,303
------------
OIL & GAS (0.1%):
10,500 Aker RGI ASA, Series A.................. 142,717
2,100 Aker RGI ASA, Series B.................. 26,143
9,700 Petroleum Geo-Services ASA*............. 146,013
------------
314,873
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
NORWAY (CONTINUED)
<TABLE>
<C> <S> <C>
TRANSPORTATION (0.0%):
2,200 Leif Hoegh & Co. ASA.................... $ 27,946
------------
2,030,405
------------
PORTUGAL (0.4%):
BANKING (0.1%):
13,300 Banco Commercial Portuguese............. 344,681
7,900 Banco Espirito Santo.................... 183,798
------------
528,479
------------
ELECTRICAL & ELECTRONIC (0.2%):
41,000 Electricidade De Portugal............... 738,246
------------
FOOD PRODUCTS (0.0%):
6,300 Jeronimo Martins, SGPS, SA.............. 208,100
------------
TELECOMMUNICATIONS (0.1%):
13,000 Portugal Telecom SA..................... 528,889
------------
TRANSPORTATION (0.0%):
4,000 Brisa Auto-Estradas..................... 165,004
------------
2,168,718
------------
SINGAPORE (1.1%):
BANKING (0.5%):
77,375 Development Bank Of Singapore Ltd. 945,334
(c).....................................
65,676 Oversea-Chinese Banking Corp., Ltd...... 547,793
117,350 United Overseas Bank Ltd................ 820,260
------------
2,313,387
------------
FINANCE (0.0%):
29,600 Haw Par Brothers International Ltd...... 50,421
------------
HOTELS & LODGING (0.0%):
1,400 Overseas Union Enterprise Ltd........... 4,441
1,100 Shangri-La Hotel Ltd.................... 2,649
------------
7,090
------------
PRINTING & PUBLISHING (0.1%):
31,472 Singapore Press Holdings Ltd.*.......... 541,643
------------
REAL ESTATE (0.1%):
67,600 City Developments Ltd................... 432,807
115,000 DBS Land Ltd............................ 229,667
52,000 United Overseas Land Ltd................ 58,644
------------
721,118
------------
STEEL (0.0%):
60,750 NatSteel Ltd............................ 106,337
------------
TELECOMMUNICATIONS (0.2%):
519,000 Singapore Telecommunications Ltd.* 890,167
(c).....................................
------------
TRANSPORTATION (0.1%):
80,000 Singapore Airlines Ltd.*................ 761,248
------------
</TABLE>
CONTINUED
53
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
SINGAPORE (CONTINUED)
<TABLE>
<C> <S> <C>
TRANSPORTATION & SHIPPING (0.1%):
79,000 Keppel Corp............................. $ 269,139
------------
5,660,550
------------
SPAIN (2.9%):
AGRICULTURE (0.0%):
4,500 Azucarera Ebro Agricolas SA............. 68,868
------------
BANKING (0.7%):
246,320 Banco Santander Central Hispanoamericano 2,565,635
SA......................................
32,700 Corporation Bancaria De Espana SA....... 744,933
------------
3,310,568
------------
BANKING & FINANCE (0.4%):
133,923 Banco Bilbao Vizcaya.................... 1,934,939
2,460 Portland Valoerrivass................... 77,376
------------
2,012,315
------------
BEVERAGES & TOBACCO (0.1%):
1,650 El Aguila SA*........................... 15,791
12,330 Tabacalera SA -- Class A (c)............ 249,226
------------
265,017
------------
BUILDING PRODUCTS (0.0%):
5,400 Uralita SA.............................. 45,386
------------
CHEMICALS (0.0%):
700 Ercros SA*.............................. 570
------------
COMMERCIAL SERVICES (0.0%):
500 Prosegur, CIA de Seguridad SA........... 5,579
------------
CONSTRUCTION (0.1%):
3,300 ACS, Actividades de Construccion y 94,473
Servicios SA............................
4,108 Fomento de Construcciones y Contratas 235,124
SA......................................
------------
329,597
------------
ENGINEERING (0.1%):
16,863 Autopistas Concesionaria Espanola SA.... 197,381
11,700 Grupo Dragados SA....................... 137,189
------------
334,570
------------
FOOD PRODUCTS (0.0%):
14,400 Telepizza SA*........................... 74,549
2,564 Viscofan Industria Navarra de Envolturas 29,086
Celulosicassa SA........................
------------
103,635
------------
GAS & ELECTRIC UTILITY (0.6%):
63,480 Endesa SA (c)........................... 1,353,820
10,024 Gas Natural SDG SA*..................... 728,793
59,924 Iberdrola SA (c)........................ 912,757
20,366 Union Electrica Fenosa SA (c)........... 266,317
------------
3,261,687
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
SPAIN (CONTINUED)
<TABLE>
<C> <S> <C>
HOTELS & LODGING (0.0%):
2,700 Sol Melia SA*........................... $ 114,023
------------
INDUSTRIAL HOLDING COMPANY (0.0%):
975 Corporacion Financiara Alba SA.......... 157,862
------------
INSURANCE (0.0%):
4,700 Corporacion Mapfre...................... 95,728
------------
MACHINERY & EQUIPMENT (0.0%):
4,216 Zardoya Otis SA......................... 105,870
------------
METALS (0.0%):
3,900 Acerinox SA (c)......................... 114,023
------------
OIL & GAS (0.2%):
59,994 Repsol SA (c)........................... 1,225,030
------------
PAPER PRODUCTS (0.0%):
3,493 Reno de Medici SpA*..................... 8,213
------------
REAL ESTATE (0.0%):
4,268 Metrovacesa SA*......................... 83,584
8,683 Vallehermoso SA......................... 84,083
------------
167,667
------------
TELECOMMUNICATIONS (0.7%):
69,487 Telefonica de Espana*................... 3,347,244
------------
WATER UTILITY (0.0%):
3,100 Aquas De Barcelona*..................... 161,446
47 Sociedad General de Aguas de Barcelona 2,423
SA......................................
------------
163,869
------------
15,237,321
------------
SWEDEN (2.2%):
AUTOMOTIVE (0.2%):
11,300 Volvo AB, Series A...................... 325,639
18,300 Volvo AB, Series B...................... 530,591
------------
856,230
------------
BANKING & FINANCE (0.3%):
31,500 ForeningsSparbanken AB.................. 444,615
35,400 Skandiaviska Enskilda Banken, Series 412,221
A.......................................
39,000 Svenska Handelsbanken, Series A......... 467,904
3,600 Svenska Handlesbanken, Series B......... 39,804
------------
1,364,544
------------
CHEMICALS (0.0%):
7,400 Aga AB, Series A........................ 92,263
8,900 Aga AB, Series B........................ 109,919
------------
202,182
------------
COMPUTER HARDWARE MANUFACTURING (0.0%):
5,800 WM-Data AB, Series B.................... 221,037
------------
</TABLE>
CONTINUED
54
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
SWEDEN (CONTINUED)
<TABLE>
<C> <S> <C>
CONSUMER GOODS & SERVICES (0.1%):
19,600 Securitas AB, Series B.................. $ 292,787
------------
ENGINEERING (0.2%):
40,200 ABB AB, Series A........................ 534,313
28,500 ABB AB, Series B........................ 377,129
6,500 Skanska AB, Series B.................... 245,038
------------
1,156,480
------------
FINANCE (0.0%):
5,800 Om Gruppen AB........................... 65,492
------------
FOREST PRODUCTS (0.1%):
700 Korsnas AB, Series B.................... 9,757
11,900 Svenska Cellusoa AB, Series B........... 307,937
------------
317,694
------------
HEALTH & PERSONAL CARE (0.0%):
196 TeleLarm Care AB*....................... 2,271
------------
INDUSTRIAL GOODS & SERVICES (0.1%):
14,900 Sandvik AB, Series A.................... 325,104
------------
INSURANCE (0.1%):
30,800 Skandia Forsakrings AB.................. 576,023
------------
MACHINERY & EQUIPMENT (0.1%):
10,050 Atlas Copco AB, Series A................ 273,659
500 Atlas Copco AB, Series B................ 13,409
------------
287,068
------------
MANUFACTURING -- CONSUMER GOODS (0.1%):
22,000 Electrolux AB, Series B................. 460,611
------------
METALS & MINING (0.0%):
3,110 Boliden Ltd.*........................... 7,133
7,960 Trelleborg AB, Series B................. 70,221
------------
77,354
------------
OFFICE EQUIPMENT & SERVICES (0.0%):
300 Esselte AB, Series B.................... 3,105
300 Meto AG*................................ 1,486
------------
4,591
------------
REAL ESTATE (0.0%):
6,500 Drott AB................................ 52,754
------------
RETAIL -- SPECIAL LINE (0.2%):
49,600 Hennes & Mauritz AB, Series B........... 1,225,160
------------
TELECOMMUNICATIONS (0.7%):
7,300 Netcom AB, Series B*.................... 245,573
123,800 Telefonaktiebolaget LM Ericsson, Series 3,968,068
B.......................................
------------
4,213,641
------------
11,701,023
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SWITZERLAND (6.0%):
AIRLINES (0.0%):
1,100 SAirGroup............................... $ 230,318
------------
BUILDING PRODUCTS (0.2%):
700 Holderbank Financiere Glarus AG -- Class 222,888
A.......................................
542 Holderbank Financiere Glarus AG -- Class 639,764
B.......................................
------------
862,652
------------
COMMERCIAL SERVICES (0.1%):
1,144 Adecco SA............................... 612,993
------------
DIVERSIFIED (0.3%):
704 ABB AG, Bearer Shares................... 1,041,561
579 Alusuisse-Lonza Holding AG, 674,872
Registered*.............................
------------
1,716,433
------------
ELECTRONIC COMPONENTS/INSTRUMENTS (0.1%):
285 The Swatch Group AG, Bearer............. 191,762
1,100 The Swatch Group AG, Registered......... 157,083
------------
348,845
------------
FINANCE (1.2%):
14,820 Credit Suisse Group, Registered......... 2,564,395
12,842 UBS AG, Registered...................... 3,832,967
------------
6,397,362
------------
FOOD PRODUCTS (0.8%):
2,465 Nestle SA, Registered (c)............... 4,441,344
------------
INSURANCE (0.7%):
927 Swiss Reinsurance Co., Registered....... 1,765,045
2,940 Zurich Allied AG........................ 1,671,799
------------
3,436,844
------------
MANUFACTURING -- CONSUMER GOODS (0.0%):
281 Sulzer AG, Registered................... 170,814
------------
PHARMACEUTICALS (2.4%):
3,990 Novartis AG, Registered................. 5,826,754
436 Roche Holding AG........................ 4,481,750
133 Roche Holding AG, Bearer................ 2,190,161
------------
12,498,665
------------
TELECOMMUNICATIONS (0.2%):
2,500 Swisscom AG, Registered................. 940,763
------------
31,657,033
------------
UNITED KINGDOM (19.3%):
AEROSPACE (0.1%):
25,464 Smiths Industries PLC................... 338,572
------------
AEROSPACE & MILITARY TECHNOLOGY (0.1%):
119,388 British Aerospace PLC................... 780,523
------------
</TABLE>
CONTINUED
55
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
UNITED KINGDOM (CONTINUED)
<TABLE>
<C> <S> <C>
AIRLINES (0.0%):
26,216 BAA PLC................................. $ 251,458
------------
AUTOMOTIVE (0.1%):
126,025 Rolls-Royce PLC......................... 534,874
------------
BANKING (2.4%):
93,637 Abbey National PLC...................... 1,752,012
102,720 Barclays PLC............................ 2,993,855
122,454 HSBC Holdings PLC (Hong Kong Dollars)... 4,339,184
59,534 HSBC Holdings PLC*...................... 2,111,478
58,477 Royal Bank of Scotland Group PLC........ 1,190,009
------------
12,386,538
------------
BEVERAGES & TOBACCO (0.6%):
240,212 Diageo PLC.............................. 2,502,852
51,361 Scottish & Newcastle PLC................ 536,362
------------
3,039,214
------------
BREWERY (0.2%):
62,127 Bass PLC................................ 903,412
------------
BROADCASTING/CABLE (0.2%):
114,000 British Sky Broadcasting Group PLC...... 1,053,930
------------
BUILDING PRODUCTS (0.1%):
58,313 Williams Holdings....................... 385,140
------------
CHEMICALS (0.3%):
40,448 BOC Group PLC........................... 793,789
60,251 Imperial Chemical Industries PLC........ 595,485
------------
1,389,274
------------
COMPUTER SOFTWARE (0.0%):
25 Mysis PLC............................... 214
------------
DISTRIBUTION (0.4%):
260,409 BG PLC.................................. 1,593,699
279,174 Centrica PLC............................ 657,893
------------
2,251,592
------------
DIVERSIFIED (0.3%):
120,000 Rentokil Initial PLC.................... 468,161
219,492 Siebe PLC............................... 1,038,821
------------
1,506,982
------------
ELECTRIC UTILITY (0.3%):
101,653 National Grid Group PLC................. 703,835
79,283 Scottish Power PLC...................... 686,106
------------
1,389,941
------------
ELECTRICAL & ELECTRONIC (0.4%):
35,374 Electrocomponents PLC................... 261,793
180,203 General Electric Co., PLC............... 1,823,627
------------
2,085,420
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
UNITED KINGDOM (CONTINUED)
<TABLE>
<C> <S> <C>
ENERGY (2.1%):
604,673 British Petroleum Co., PLC.............. $ 10,827,739
------------
FINANCE (1.2%):
123,210 Halifax PLC............................. 1,470,215
362,806 Lloyds TSB Group PLC.................... 4,903,966
------------
6,374,181
------------
FOOD & HOUSEHOLD PRODUCTS (0.5%):
134,004 Cadbury Schweppes PLC................... 855,484
192,810 Unilever PLC............................ 1,746,057
------------
2,601,541
------------
FOOD PRODUCTS (0.2%):
65,912 Associated British Foods PLC............ 430,394
15,000 Compass Group........................... 148,724
37,080 Tate & Lyle PLC......................... 232,920
19,834 Unigate PLC............................. 125,995
------------
938,033
------------
GAS & ELECTRIC UTILITY (0.1%):
85,371 National Power PLC...................... 624,406
------------
HEALTH & PERSONAL CARE (2.1%):
236,685 Glaxo Wellcome PLC...................... 6,573,785
110,132 Zeneca Group PLC........................ 4,267,114
------------
10,840,899
------------
INSURANCE (2.0%):
102,941 Allied Zurich PLC....................... 1,285,957
60,568 Boots Co., PLC.......................... 722,733
17,700 Bps Sun Life & Provincial Holdings 126,875
PLC.....................................
57,041 Commercial Union PLC.................... 819,564
83,616 Great Universal Stores PLC.............. 935,149
337,628 Legal & General Group PLC............... 858,177
189,526 Marks & Spencer PLC..................... 1,102,387
128,433 Prudential Corp., PLC................... 1,900,996
96,855 Royal & Sun Alliance Insurance Group 870,997
PLC.....................................
126,338 Sainsbury (J) PLC....................... 794,595
441,269 Tesco PLC............................... 1,144,216
------------
10,561,646
------------
LEISURE (0.2%):
60,431 Granada Group PLC*...................... 1,127,847
------------
MACHINERY & EQUIPMENT (0.2%):
58,800 GKN PLC................................. 1,006,575
------------
METALS (0.2%):
71,082 Rio Tinto PLC, Registered............... 1,183,212
------------
OIL & GAS (0.1%):
14,642 Burmah Castrol PLC*..................... 278,809
------------
PAPER PRODUCTS (0.0%):
19,673 Rexam PLC -- B Shares*.................. 29,925
------------
</TABLE>
CONTINUED
56
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
UNITED KINGDOM (CONTINUED)
<TABLE>
<C> <S> <C>
PHARMACEUTICALS (0.9%):
371,734 SmithKline Beecham PLC.................. $ 4,825,416
------------
PRINTING & PUBLISHING (0.5%):
47,573 Pearson PLC............................. 962,113
94,996 Reed International PLC.................. 638,650
97,327 Reuters Group PLC....................... 1,281,796
------------
2,882,559
------------
RAILROADS (0.1%):
33,667 Railtrack Group PLC..................... 686,717
------------
REAL ESTATE (0.2%):
25,421 Hammerson PLC........................... 188,935
44,945 Land Securities PLC..................... 602,907
------------
791,842
------------
RETAIL -- GENERAL MERCHANDISE (0.2%):
90,385 Kingfisher PLC.......................... 1,040,772
------------
TELECOMMUNICATIONS (2.4%):
428,388 British Telecommunications PLC.......... 7,157,840
159,526 Cable & Wireless PLC.................... 2,030,546
205,400 Vodafone Group PLC...................... 4,060,101
------------
13,248,487
------------
TELECOMMUNICATIONS -- EQUIPMENT (0.0%):
22,300 Racal Electronic PLC.................... 135,861
------------
TOBACCO (0.2%):
102,941 British American Tobacco................ 960,614
------------
TRANSPORTATION (0.3%):
88,901 British Airways PLC..................... 611,337
52,509 Peninsular & Oriental Steam Navigation 788,798
Co......................................
------------
1,400,135
------------
WATER UTILITY (0.1%):
257 Hyder PLC............................... 3,034
429 Thames Water PLC........................ 6,830
46,044 United Utilities PLC.................... 561,763
------------
571,627
------------
101,235,927
------------
TOTAL COMMON STOCKS..................... 507,538,406
------------
CORPORATE NOTES & BONDS (0.0%):
AUSTRALIA (0.0%):
METALS & MINING (0.0%):
15,796 Westralian Sands........................ 10,456
------------
TOTAL CORPORATE NOTES & BONDS........... 10,456
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
FLOATING RATE NOTES (0.0%):
ITALY (0.0%):
FINANCE (0.0%):
207,211 Tecnost International NV................ $ 217,516
------------
TOTAL FLOATING RATE NOTES............... 217,516
------------
INVESTMENT COMPANIES (1.7%):
UNITED STATES (1.7%):
INDUSTRY NOT SPECIFIED (1.7%):
9,135,916 Federated Prime Value Obligations Money 9,135,916
Market Fund.............................
------------
TOTAL INVESTMENT COMPANIES.............. 9,135,916
------------
PREFERRED STOCKS (0.6%):
AUSTRALIA (0.2%):
PRINTING & PUBLISHING (0.2%):
133,976 News Corp., Ltd......................... 1,020,725
------------
GERMANY (0.4%):
AUTOMOTIVE (0.0%):
5,270 Den Volkswagen.......................... 194,838
------------
COMPUTER SOFTWARE (0.3%):
3,300 SAP AG.................................. 1,318,741
------------
GAS & ELECTRIC UTILITY (0.1%):
16,540 RWE AG*................................. 574,830
------------
2,088,409
------------
TOTAL PREFERRED STOCKS.................. 3,109,134
------------
RIGHTS (0.0%):
AUSTRALIA (0.0%):
MANUFACTURING -- CAPITAL GOODS (0.0%):
27,944 Email Ltd. Rights*...................... 604
------------
FRANCE (0.0%):
CONSTRUCTION (0.0%):
1,466 Bouygues SA Rights*..................... 3,901
------------
ITALY (0.0%):
BUILDING PRODUCTS (0.0%):
190 Cementir SpA Rights*.................... 0
------------
OFFICE EQUIPMENT & SERVICES (0.0%):
179,696 Olivetti SpA Rights*.................... 24,184
------------
MALAYSIA (0.0%):
FINANCE (0.0%):
23,000 Rashid Hussain Berhad Rights*........... 0
------------
PORTUGAL (0.0%):
TELECOMMUNICATIONS (0.0%):
13,000 Portugal Telecom SA Rights*............. 134
------------
SPAIN (0.0%):
ENGINEERING (0.0%):
16,863 Autopista Concesionaria Espanola SA 9,739
Rights*.................................
------------
</TABLE>
CONTINUED
57
<PAGE>
Kent Funds
INTERNATIONAL GROWTH
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
RIGHTS (CONTINUED)
</TABLE>
SPAIN (CONTINUED)
<TABLE>
<C> <S> <C>
REAL ESTATE (0.0%):
4,268 Metrovacesa Sa Rights*.................. $ 4,137
------------
13,876
------------
TOTAL RIGHTS............................ 42,699
------------
SHORT-TERM SECURITIES HELD AS
COLLATERAL (9.5%):
COMMERCIAL PAPER (5.3%):
1,800,000 Ameritech Capital Funding Corp., 5.12%, 1,794,042
7/23/99.................................
1,500,000 Bell South Telecommunications, 5.16%, 1,498,044
7/9/99..................................
2,000,000 Cargill Inc., 5.65%, 7/1/99............. 2,000,000
2,000,000 Coca-Cola Co., 5.13%, 7/30/99........... 1,991,393
1,500,000 Daimler, 5.14%, 8/11/99................. 1,490,936
2,000,000 R.R. Donnelley & Sons Co., 5.26%, 1,994,235
7/20/99.................................
2,000,000 Duke Energy, 5.50%, 7/1/99.............. 2,000,000
2,000,000 Ford Motor Credit Corp., 5.18%, 1,995,379
7/16/99.................................
1,000,000 Gannett Co., 5.09%, 7/19/99............. 997,260
1,500,000 General Electric Capital Corp., 5.10%, 1,490,936
8/11/99.................................
1,500,000 General Motors Acceptance Corp., 5.09%, 1,491,372
8/9/99..................................
1,500,000 GTE Funding Corp., 5.04%, 7/8/99........ 1,496,585
1,500,000 H.J. Heinz Co., 5.14%, 8/19/99.......... 1,489,188
2,000,000 Mobil Corp., 5.50%, 7/1/99.............. 2,000,000
2,000,000 Nestle Capital Corp., 5.23%, 7/1/99..... 2,000,000
2,000,000 UBS Finance, 5.50%, 7/1/99.............. 2,000,000
------------
27,729,370
------------
REPURCHASE AGREEMENTS (3.4%):
2,000,272 Chase Securities Inc., 4.90%, 7/1/99 2,000,272
(Collateralized by $2,001,517 various
Corporate Notes & Bonds, 6.25%-7.25%,
6/30/01-5/15/16, market value
$2,000,114).............................
3,965,573 Goldman Sachs & Co., 5.20%*, 7/1/99 3,965,573
(Collateralized by $6,392,861 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$4,044,300).............................
7,015,022 JP Morgan Securities, 4.90%*, 7/1/99 7,015,022
(Collateralized by $32,869,895 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$7,149,101).............................
5,002,067 Prudential Securities Inc., 4.90%*, 5,002,067
7/1/99 (Collateralized by $9,486,290
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $5,100,000).......................
------------
17,982,934
------------
TIME DEPOSITS (0.8%):
2,000,323 Barclays Bank PLC London, 5.81%, 2,000,323
7/1/99..................................
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS
COLLATERAL (CONTINUED)
TIME DEPOSITS (CONTINUED)
2,000,326 Canadian Imperial Bank Commerce Cay, $ 2,000,326
5.88%, 7/1/99...........................
------------
4,000,649
------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 49,712,953
------------
WARRANTS (0.0%):
GERMANY (0.0%):
INSURANCE (0.0%):
209 Munchener Ruckversicherungs Warrants 6,682
*.......................................
------------
HONG KONG (0.0%):
REAL ESTATE (0.0%):
11,529 Chinese Estates Ltd. Warrants *......... 951
11,529 Chinese Estates Ltd. Warrants*.......... 743
5,200 Kumagai Gumi Company Warrants *......... 912
------------
2,606
------------
2,606
------------
ITALY (0.0%):
FINANCIAL -- BANKING (0.0%):
8,395 Mediobanca Warrants *................... 18,353
------------
TOTAL WARRANTS.......................... 27,641
------------
TOTAL INVESTMENTS (COST $466,372,109) (A) --
108.7%............................................. 569,794,721
LIABILITIES IN EXCESS OF OTHER ASSETS -- (8.7)%.... (45,598,433)
------------
TOTAL NET ASSETS -- 100.0%......................... $524,196,288
------------
------------
</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........................... $140,647,925
Unrealized depreciation........................... (37,225,313)
------------
Net unrealized appreciation....................... $103,422,612
------------
------------
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This security has been deemed liquid.
(c) A portion of this security was loaned as of June 30, 1999.
* Non-income producing
AB - Aktiebolag (Swedish Stock Company)
AG - Aktiengesellschaft (German Stock Company)
NV - Naamloze Vennootschap (Dutch Corporation)
PL - Public Limited Company (British)
SA - Sociedad Anonima (Spanish Corporation)
Sp - Societa per Azioni (Italian Corporation)
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (98.6%):
ADVERTISING (0.2%):
11,100 Interpublic Group Cos., Inc............. $ 961,538
13,400 Omnicom Group........................... 1,072,000
------------
2,033,538
------------
AEROSPACE & DEFENSE (0.8%):
77,592 Boeing Co............................... 3,428,596
10,100 General Dynamics Corp. (c).............. 691,850
31,288 Lockheed Martin Corp.................... 1,165,478
5,500 Northrop Grumman Corp................... 364,719
26,900 Raytheon Co., Class B................... 1,893,088
------------
7,543,731
------------
AGRICULTURE (0.1%):
19,100 Pioneer Hi-Bred, Inc.................... 743,706
------------
APPLIANCES & HOUSEHOLD PRODUCTS (0.1%):
7,200 Maytag Corp............................. 501,750
6,100 Whirlpool Corp.......................... 451,400
------------
953,150
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT (0.4%):
3,400 Cummins Engine, Inc. (c)................ 194,225
13,232 Dana Corp............................... 609,499
41,484 Delphi Automotive Systems Corp.......... 770,046
5,700 Eaton Corp.............................. 524,400
5,320 Navistar International Corp.*........... 266,000
6,250 PACCAR, Inc............................. 333,594
9,500 TRW, Inc................................ 521,313
------------
3,219,077
------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT (0.1%):
14,325 Genuine Parts Co........................ 501,375
------------
AUTOMOTIVE (1.0%):
96,400 Ford Motor Co........................... 5,440,575
52,200 General Motors Corp..................... 3,445,200
------------
8,885,775
------------
BANKS -- CENTRAL US (0.2%):
55,000 Firstar Corp. (c)....................... 1,540,000
------------
BANKS -- MAJOR REGIONAL (3.9%):
60,600 Bank of New York Co., Inc............... 2,223,263
93,711 Bank One Corp........................... 5,581,660
23,600 BankBoston Corp......................... 1,206,550
12,350 Comerica, Inc........................... 734,053
78,970 First Union Corp........................ 3,711,589
45,314 Fleet Financial Group, Inc.............. 2,010,809
36,300 KeyCorp................................. 1,166,138
41,600 Mellon Bank Corp........................ 1,513,200
26,000 National City Corp...................... 1,703,000
8,800 Northern Trust Corp..................... 853,600
24,000 PNC Bank Corp. (c)...................... 1,383,000
8,500 Republic New York Corp.................. 579,594
13,800 Summit Bancorp.......................... 577,013
25,500 SunTrust Banks, Inc..................... 1,770,656
58,062 U.S. Bancorp............................ 1,974,108
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
BANKS -- MAJOR REGIONAL (CONTINUED)
<TABLE>
<C> <S> <C>
16,200 Wachovia Corp. (c)...................... $ 1,386,113
131,000 Wells Fargo Co.......................... 5,600,249
------------
33,974,595
------------
BANKS -- MIDWEST (0.2%):
21,200 Fifth Third Bancorp..................... 1,411,125
16,770 Huntington Bancshares................... 586,950
------------
1,998,075
------------
BANKS -- MONEY CENTER (2.1%):
137,942 Bank Of America Corp.................... 10,112,872
24,800 BB&T Corp............................... 909,850
67,416 Chase Manhattan Corp.................... 5,839,911
13,900 J.P. Morgan & Co., Inc.................. 1,952,950
------------
18,815,583
------------
BANKS -- NORTHEAST (0.1%):
12,800 State Street Corp....................... 1,092,800
------------
BANKS -- SOUTH (0.1%):
14,250 AmSouth Bancorporation (c).............. 330,422
13,200 SouthTrust Corp......................... 506,550
------------
836,972
------------
BEVERAGES -- ALCOHOLIC (0.4%):
2,900 Adolph Coors Co......................... 143,550
38,070 Anheuser-Busch Co., Inc................. 2,700,591
5,500 Brown-Forman Corp....................... 358,531
------------
3,202,672
------------
BEVERAGES -- SOFT DRINKS (1.9%):
196,400 Coca-Cola Co............................ 12,274,999
116,900 PepsiCo, Inc............................ 4,522,569
------------
16,797,568
------------
BROADCASTING/CABLE (0.8%):
25,800 Clear Channel Communications, Inc.*..... 1,778,588
59,000 Comcast Corp., Special Class A.......... 2,267,813
48,400 MediaOne Group, Inc.*................... 3,599,749
------------
7,646,150
------------
BUILDING & CONSTRUCTION -- MISCELLANEOUS (0.1%):
3,200 Armstrong World Industries, Inc......... 185,000
27,000 Masco Corp.............................. 779,625
4,400 Owens-Corning Fiberglass Corp........... 151,250
------------
1,115,875
------------
BUILDING -- HEAVY CONSTRUCTION (0.0%):
6,000 Fluor Corp.............................. 243,000
3,300 Foster Wheeler Corp..................... 46,613
------------
289,613
------------
BUILDING -- MAINTENANCE & SERVICE (0.0%):
10,300 Ecolab, Inc............................. 449,338
------------
BUILDING -- MOBILE/MANUFACTURING & RECREATIONAL
VEHICLES (0.0%):
2,800 Fleetwood Enterprises, Inc.............. 74,025
------------
</TABLE>
CONTINUED
59
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
BUILDING -- RESIDENTIAL/COMMERCIAL (0.0%):
4,800 Centex Corp............................. $ 180,300
3,840 Kaufman & Broad Home Corp............... 95,520
3,500 Pulte Corp.............................. 80,938
------------
356,758
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE (1.0%):
117,462 Home Depot, Inc......................... 7,568,958
29,600 Lowe's Cos., Inc........................ 1,677,950
------------
9,246,908
------------
BUILDING PRODUCTS -- WOOD (0.1%):
8,900 Louisiana-Pacific Corp.................. 211,375
15,850 Weyerhaeuser Co......................... 1,089,688
------------
1,301,063
------------
BUSINESS EQUIPMENT & SERVICES (0.6%):
15,200 AES Corp.*.............................. 883,500
39,300 Electronic Data Systems Corp............ 2,222,906
20,000 Office Depot, Inc.*..................... 441,250
19,500 Paychex, Inc............................ 621,563
36,700 Staples, Inc.*.......................... 1,135,406
------------
5,304,625
------------
------------
BUSINESS SERVICES (0.0%):
7,800 H & R Block, Inc........................ 390,000
------------
CAPITAL GOODS (0.3%):
56,300 CBS Corp.*.............................. 2,445,531
------------
CHEMICALS -- DIVERSIFIED (1.5%):
17,600 Dow Chemical Co......................... 2,233,000
89,700 E.I. du Pont de Nemours & Co............ 6,127,632
6,300 Eastman Chemical Co..................... 326,025
8,100 Hercules, Inc........................... 318,431
49,900 Monsanto Co............................. 1,967,931
14,000 PPG Industries, Inc..................... 826,875
16,977 Rohm & Haas Co. (c)..................... 727,894
10,600 Union Carbide Corp...................... 516,750
6,200 W.R. Grace & Co.*....................... 113,925
------------
13,158,463
------------
CHEMICALS -- SPECIALTY (0.3%):
18,300 Air Products & Chemical, Inc............ 736,575
11,437 Engelhard Corp.......................... 258,762
4,800 Great Lakes Chemical Corp............... 221,100
5,200 Nalco Chemical Co....................... 269,750
12,600 Praxair, Inc............................ 616,613
8,000 Sigma-Aldrich Corp...................... 275,500
------------
2,378,300
------------
COMMERCIAL SERVICES (0.1%):
61,219 Cendant Corp.*.......................... 1,254,990
------------
COMPUTER SOFTWARE (5.1%):
4,900 Adobe Systems, Inc...................... 402,566
42,918 Computer Associates International, 2,360,490
Inc.....................................
29,300 Compuware Corp.*........................ 932,106
406,100 Microsoft Corp.*........................ 36,625,143
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
COMPUTER SOFTWARE (CONTINUED)
<TABLE>
<C> <S> <C>
114,712 Oracle Corp.*........................... $ 4,258,682
21,026 Parametric Technology Corp.*............ 291,736
------------
44,870,723
------------
COMPUTERS -- LOCAL AREA NETWORK (2.0%):
28,600 3Com Corp.*............................. 763,263
13,400 Cabletron Systems*...................... 174,200
251,700 Cisco Systems, Inc.*.................... 16,187,455
26,900 Novell, Inc.*........................... 712,850
------------
17,837,768
------------
COMPUTERS -- MAINFRAME (2.2%):
144,400 IBM Corp................................ 18,663,699
20,800 Unisys Corp.*........................... 809,900
------------
19,473,599
------------
COMPUTERS -- MEMORY DEVICES (0.5%):
80,000 EMC Corp.*.............................. 4,400,000
19,400 Seagate Technology, Inc.* (c)........... 497,125
------------
4,897,125
------------
COMPUTERS -- MICRO (1.3%):
10,900 Apple Computer, Inc.*................... 504,806
134,474 Compaq Computer Corp.................... 3,185,353
4,000 Data General Corp.* (c)................. 58,250
202,800 Dell Computer Corp.*.................... 7,503,600
12,500 Gateway 2000, Inc.*..................... 737,500
------------
11,989,509
------------
COMPUTERS -- MINI (1.4%):
80,900 Hewlett-Packard Co...................... 8,130,450
14,900 Silicon Graphics, Inc.*................. 243,988
61,400 Sun Microsystems, Inc.*................. 4,228,925
------------
12,603,363
------------
COMPUTERS -- NETWORKING PRODUCTS (0.0%):
1,000 Network Appliance Inc.*................. 55,875
------------
COMPUTERS -- SERVICES (0.6%):
49,100 Automatic Data Processing, Inc.......... 2,160,399
11,400 Ceridian Corp.*......................... 372,638
12,700 Computer Sciences Corp.*................ 878,681
11,700 Equifax, Inc............................ 417,544
35,300 First Data Corp......................... 1,727,494
2,100 Shared Medical Systems Corp............. 137,025
------------
5,693,781
------------
CONSUMER DURABLE (0.1%):
10,700 Danaher Corp............................ 621,938
------------
CONSUMER NON-DURABLE (0.1%):
33,800 Coca-Cola Enterprises, Inc.............. 1,039,350
------------
CONSUMER PRODUCTS -- MISCELLANEOUS (0.0%):
5,700 American Greetings Corp., Class A....... 171,712
2,795 Jostens, Inc............................ 58,870
4,700 Tupperware Corp......................... 119,850
------------
350,432
------------
</TABLE>
CONTINUED
60
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
CONSUMER SERVICES (0.3%):
47,400 Carnival Cruise Lines................... $ 2,298,900
------------
CONTAINERS & PACKAGING (0.1%):
12,400 Owens-Illinois, Inc.*................... 405,325
6,616 Sealed Air Corp.* (c)................... 429,213
------------
834,538
------------
CONTAINERS -- METAL & GLASS (0.0%):
2,500 Ball Corp............................... 105,625
9,700 Crown Cork & Seal Co., Inc.............. 276,450
------------
382,075
------------
CONTAINERS -- PAPER & PLASTIC (0.0%):
4,100 Bemis Co................................ 162,975
------------
COSMETICS & TOILETRIES (0.9%):
4,500 Alberto-Culver Co., Class B............. 119,813
20,900 Avon Products, Inc...................... 1,159,950
88,364 Gillette Co............................. 3,622,923
8,500 International Flavors & Fragrances, Inc. 377,188
(c).....................................
43,140 Kimberly-Clark Corp..................... 2,458,980
------------
7,738,854
------------
DIVERSIFIED (4.9%):
15,620 Allegheny Teledyne, Inc................. 353,403
44,400 Allied Signal, Inc...................... 2,797,199
5,425 Crane Co................................ 170,548
2,600 Freeport-McMoran-Copper Corp.*.......... 177,613
261,100 General Electric Co. (b)................ 29,504,299
25,430 IMS Health, Inc......................... 794,688
8,300 ITT Industries, Inc..................... 316,438
6,800 Johnson Controls, Inc................... 471,325
32,000 Minnesota Mining & Manufacturing Co..... 2,781,999
3,200 National Service Industries, Inc........ 115,200
31,800 Seagram Co., Ltd........................ 1,601,925
13,600 Tenneco, Inc............................ 324,700
12,600 Textron, Inc............................ 1,037,138
38,000 United Technologies Corp................ 2,724,125
------------
43,170,600
------------
ELECTRICAL & ELECTRONIC (0.1%):
7,000 KLA-Tencor Corp.*....................... 454,125
------------
ELECTRICAL COMPONENTS -- SEMICONDUCTORS (2.8%):
11,500 Advanced Micro Devices, Inc.*........... 207,719
29,400 Applied Materials, Inc.*................ 2,171,925
264,200 Intel Corp.............................. 15,719,899
11,300 LSI Logic Corp.*........................ 521,213
19,700 Micron Technology, Inc.* (c)............ 794,156
13,300 National Semiconductor Corp.*........... 336,656
15,100 Rockwell International Corp............. 917,325
31,100 Texas Instruments, Inc.................. 4,509,500
------------
25,178,393
------------
ELECTRONIC -- CONNECTORS (0.0%):
4,600 Thomas & Betts Corp..................... 217,350
------------
ELECTRONIC COMPONENTS/INSTRUMENTS (0.1%):
20,000 Solectron Corp.*........................ 1,333,750
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC MEASURING EQUIPMENT (0.0%):
3,800 Tektronix, Inc. (c)..................... $ 114,713
------------
ELECTRONICS (0.0%):
6,300 Raychem Corp............................ 233,100
------------
ENERGY (0.0%):
15,200 Niagara Mohawk Holdings Inc.*........... 244,150
------------
FINANCE (1.0%):
58,054 Associates First Capital Corp., Class 2,572,517
A.......................................
8,850 Bear Stearns Companies, Inc............. 413,738
15,600 Capital One Financial Corp.............. 868,725
20,100 Franklin Resources, Inc. (c)............ 816,563
12,500 Mercantile Bancorporation............... 714,063
10,800 Provident Cos., Inc..................... 432,000
17,600 Regions Financial Corp.................. 676,500
13,200 SLM Holding Corp........................ 604,725
10,900 Union Planters Corp..................... 487,094
47,269 Washington Mutual, Inc.................. 1,672,140
------------
9,258,065
------------
FINANCIAL -- BANKING (0.0%):
21,400 Synovus Financial Corp.................. 425,325
------------
FINANCIAL -- CONSUMER LOANS (0.5%):
38,493 Household International, Inc............ 1,823,606
63,930 MBNA Corp............................... 1,957,856
11,250 Providian Financial Corp................ 1,051,875
------------
4,833,337
------------
FINANCIAL -- INVESTMENT BANKER/BROKER (0.1%):
9,100 Lehman Brothers Holding, Inc............ 566,475
11,400 Paine Webber Group Inc. (c)............. 532,950
------------
1,099,425
------------
FINANCIAL -- INVESTMENT BANKERS (0.6%):
28,300 Merrill Lynch & Co., Inc................ 2,262,231
31,975 Schwab (Charles) Corp................... 3,513,253
------------
5,775,484
------------
FINANCIAL -- MISCELLANEOUS SERVICES (1.0%):
36,100 American Express Co..................... 4,697,513
46,016 Morgan Stanley, Dean Witter & Co........ 4,716,640
------------
9,414,153
------------
FINANCIAL -- MORTGAGE & RELATED SERVICES (1.0%):
9,000 Countrywide Credit Industries, Inc...... 384,750
82,600 Fannie Mae.............................. 5,647,775
54,100 Freddie Mac............................. 3,137,800
------------
9,170,325
------------
FINANCIAL -- SAVINGS & LOAN (0.0%):
4,500 Golden West Financial Corp.............. 441,000
FINANCIAL SERVICES -- DIVERSIFIED (1.4%):
269,916 Citigroup, Inc.......................... 12,821,010
------------
</TABLE>
CONTINUED
61
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FOOD -- CANNED (0.3%):
35,400 Campbell Soup Co........................ $ 1,588,575
28,800 H.J. Heinz Co........................... 1,443,600
------------
3,032,175
------------
FOOD -- CONFECTIONARY (0.2%):
11,400 Hershey Foods Corp...................... 676,875
9,300 Wm. Wrigley Jr. Co...................... 837,000
------------
1,513,875
------------
FOOD -- DIVERSIFIED (1.2%):
22,800 Bestfoods............................... 1,128,600
38,950 ConAgra, Inc............................ 1,037,044
12,200 General Mills, Inc...................... 980,575
32,300 Kellogg Co. (c)......................... 1,065,900
25,900 Nabisco Group Holdings.................. 506,669
10,900 Quaker Oats Co.......................... 723,488
26,140 Ralston Purina Group.................... 795,636
72,700 Sara Lee Corp........................... 1,649,381
45,535 Unilever NV............................. 3,176,066
------------
11,063,359
------------
FOOD -- FLOUR & GRAIN (0.1%):
47,166 Archer-Daniels-Midland Co............... 728,125
------------
FOOD ITEMS -- WHOLESALE (0.1%):
9,600 Supervalu, Inc.......................... 246,600
26,500 Sysco Corp.............................. 790,031
------------
1,036,631
------------
FOOD PRODUCTS (0.2%):
38,700 Safeway Inc.*........................... 1,915,650
------------
FUNERAL SERVICES (0.0%):
21,800 Service Corp. International............. 419,650
------------
GAS & ELECTRIC UTILITY (0.1%):
30,500 PG & E Corp. (c)........................ 991,250
------------
GLASS PRODUCTS (0.1%):
18,500 Corning, Inc............................ 1,297,313
------------
HEALTH CARE (0.1%):
8,800 HCR Manor Care, Inc.*................... 212,850
20,927 McKesson HBOC, Inc. (c)................. 672,280
5,400 Wellpoint Health Networks*.............. 458,325
------------
1,343,455
------------
HOME DECORATION PRODUCTS (0.1%):
22,380 Newell Rubbermaid Inc. (c).............. 1,040,670
------------
HOTELS & LODGING (0.1%):
20,800 Hilton Hotels Corp...................... 295,100
19,300 Marriott International, Inc., Class A... 721,338
------------
1,016,438
------------
INSTRUMENTS -- CONTROL (0.1%):
10,000 Honeywell, Inc.......................... 1,158,750
------------
INSTRUMENTS -- SCIENTIFIC (0.1%):
3,700 EG&G, Inc............................... 131,813
3,600 Millipore Corp.......................... 146,025
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
INSTRUMENTS -- SCIENTIFIC (CONTINUED)
<TABLE>
<C> <S> <C>
3,900 Perkin-Elmer Corp. -- PE Biosystems $ 447,525
Group ..................................
------------
725,363
------------
INSURANCE (0.2%):
13,300 Cincinnati Financial Corp. (c).......... 499,581
9,100 Loews Corp.............................. 720,038
5,800 Progressive Corp. (c)................... 841,000
------------
2,060,619
------------
INSURANCE -- ACCIDENT & HEALTH (0.1%):
20,400 Aon Corp................................ 841,500
------------
INSURANCE -- BROKERS (0.2%):
20,550 Marsh & McLennan Cos., Inc.............. 1,551,525
------------
INSURANCE -- LIFE (0.6%):
21,000 AFLAC, INC.............................. 1,005,375
20,098 American General Corp................... 1,514,887
25,564 Conseco, Inc............................ 778,104
8,425 Jefferson-Pilot Corp.................... 557,630
11,200 Torchmark Corp.......................... 382,200
9,964 Transamerica Corp....................... 747,300
11,000 UNUM Corp.*............................. 602,250
------------
5,587,746
------------
INSURANCE -- MULTI-LINE (0.5%):
11,370 Aetna, Inc.............................. 1,016,904
16,500 CIGNA Corp.............................. 1,468,499
18,600 Hartford Financial Services Group, 1,084,613
Inc.....................................
7,900 MBIA, Inc............................... 511,525
8,700 MGIC Investment Corp.................... 407,813
------------
4,489,354
------------
INSURANCE -- PROPERTY & CASUALTY (1.8%):
65,398 Allstate Corp........................... 2,346,153
97,874 American International Group, Inc....... 11,457,374
13,000 Chubb Corp.............................. 903,500
16,200 Lincoln National Corp................... 847,463
10,900 Safeco Corp............................. 480,963
18,734 St. Paul Cos., Inc...................... 595,975
------------
16,631,428
------------
INTERNET SOFTWARE (1.1%):
86,400 America Online, Inc.*................... 9,547,200
------------
LEISURE & RECREATION PRODUCTS (0.0%):
7,200 Brunswick Corp.......................... 200,700
------------
LEISURE & RECREATION/GAMING (0.1%):
10,100 Harrah's Entertainment, Inc.*........... 222,200
14,200 Mirage Resorts, Inc.*................... 237,850
------------
460,050
------------
MACHINE TOOLS & RELATED PRODUCTS (0.0%):
7,000 The Black & Decker Corp................. 441,875
------------
MACHINERY & EQUIPMENT (0.0%):
3,200 Milacron, Inc........................... 59,200
------------
</TABLE>
CONTINUED
62
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MACHINERY -- CONSTRUCTION/MINING (0.3%):
28,600 Caterpillar, Inc........................ $ 1,716,000
13,150 Ingersoll-Rand Co....................... 849,819
------------
2,565,819
------------
MACHINERY -- ELECTRICAL (0.3%):
34,900 Emerson Electric Co..................... 2,194,338
7,600 W.W. Grainger, Inc...................... 408,975
------------
2,603,313
------------
MACHINERY -- FARM (0.1%):
1,900 Briggs & Stratton Corp.................. 109,725
6,000 Case Corp............................... 288,750
19,000 Deere & Co.............................. 752,875
------------
1,151,350
------------
MACHINERY -- GENERAL INDUSTRIAL (0.3%):
8,200 Cooper Industries, Inc.................. 426,400
17,800 Dover Corp.............................. 680,850
19,900 Illinois Tool Works, Inc................ 1,631,800
8,625 Parker Hannifin Corp.................... 394,594
------------
3,133,644
------------
MACHINERY -- MATERIAL HANDLING (0.0%):
600 Nacco Industries, Inc................... 44,100
------------
MACHINERY -- THERMAL PROCESSOR (0.0%):
12,700 Thermo Electron Corp.*.................. 254,794
------------
MEDIA CONGLOMERATES (1.6%):
94,920 Time Warner, Inc........................ 6,834,239
55,400 Viacom, Inc., Class B*.................. 2,437,600
163,800 Walt Disney Co.*........................ 5,047,088
------------
14,318,927
------------
MEDICAL -- BIOMEDICAL/GENETIC (0.3%):
40,600 Amgen, Inc.*............................ 2,471,525
------------
MEDICAL -- DRUGS (7.6%):
120,900 Abbott Laboratories..................... 5,500,950
8,000 ALZA Corp.*............................. 407,000
105,000 American Home Products Corp............. 6,037,500
158,300 Bristol-Myers Squibb Co................. 11,150,256
87,600 Eli Lilly & Co.......................... 6,274,350
187,800 Merck & Co., Inc........................ 13,897,199
103,400 Pfizer, Inc............................. 11,348,149
40,530 Pharmacia & Upjohn, Inc................. 2,302,611
117,100 Schering-Plough Corp.................... 6,206,300
67,700 Warner-Lambert Co....................... 4,696,688
7,500 Watson Pharmaceutical, Inc.* (c)........ 262,969
------------
68,083,972
------------
MEDICAL -- HEALTH MEDICAL ORGANIZATION (0.1%):
13,300 Humana, Inc.*........................... 172,069
14,800 United Healthcare Corp.................. 926,850
------------
1,098,919
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL -- HOSPITAL (0.2%):
51,449 Columbia HCA Healthcare Corp............ $ 1,173,680
24,700 Tenet Healthcare Corp.*................. 458,494
------------
1,632,174
------------
MEDICAL -- OUTPATIENT/HOME CARE (0.1%):
33,700 HEALTHSOUTH Corp.*...................... 503,394
------------
MEDICAL -- WHOLESALE DRUG (0.2%):
21,700 Cardinal Health, Inc.................... 1,391,513
------------
MEDICAL INSTRUMENTS (0.5%):
8,900 Biomet, Inc............................. 353,775
46,500 Medtronic, Inc.......................... 3,621,188
6,800 St. Jude Medical, Inc.*................. 242,250
------------
4,217,213
------------
MEDICAL PRODUCTS (0.5%):
5,300 Allergan, Inc........................... 588,300
22,800 Baxter International, Inc............... 1,382,249
31,300 Boston Scientific Corp.*................ 1,375,244
24,000 Guidant Corp.*.......................... 1,234,500
5,700 Mallinckrodt, Inc....................... 207,338
------------
4,787,631
------------
MEDICAL/DENTAL SUPPLIES (1.3%):
4,500 Bausch & Lomb, Inc...................... 344,250
19,800 Becton, Dickinson & Co.................. 594,000
4,300 C.R. Bard, Inc.......................... 205,594
107,100 Johnson & Johnson....................... 10,495,800
------------
11,639,644
------------
METAL -- GOLD (0.1%):
29,700 Barrick Gold Corp....................... 575,438
18,700 Battle Mountian Gold Co................. 45,581
20,700 Homestake Mining Co..................... 169,481
13,315 Newmont Mining Corp..................... 264,636
19,700 Placer Dome, Inc........................ 232,706
------------
1,287,842
------------
METAL -- MISCELLANEOUS (0.0%):
7,600 Cyprus Amax Minerals Co................. 115,425
13,500 Inco, Ltd.* (c)......................... 243,000
------------
358,425
------------
METAL -- NON-FERROUS (0.2%):
18,150 Alcan Aluminum, Ltd..................... 579,665
3,200 Asarco, Inc............................. 60,200
13,200 Freeport-McMoran Copper & Gold, Inc., 236,775
Class B*................................
4,600 Phelps Dodge Corp....................... 284,913
5,100 Reynolds Metals Co...................... 300,900
------------
1,462,453
------------
METAL -- PROCESSING & FABRICATION (0.0%):
5,100 Timken Co............................... 99,450
7,325 Worthington Industries, Inc............. 120,405
------------
219,855
------------
</TABLE>
CONTINUED
63
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
METALS (0.2%):
29,300 Alcoa Inc............................... $ 1,812,938
------------
MOVIE/TELEVISION PRODUCTION & DISTRIBUTION (0.0%):
5,600 King World Productions, Inc.*........... 194,950
------------
OFFICE AUTOMATION & EQUIPMENT (0.5%):
11,744 IKON Office Solutions, Inc.............. 176,160
21,700 Pitney Bowes, Inc....................... 1,394,225
52,234 Xerox Corp.............................. 3,085,071
------------
4,655,456
------------
OFFICE SUPPLIES & FORMS (0.1%):
9,300 Avery Dennison Corp..................... 561,488
6,400 Deluxe Corp............................. 249,200
------------
810,688
------------
OIL & GAS (0.1%):
9,600 Anadarko Petroleum Corp................. 353,400
7,700 Apache Corp............................. 300,300
------------
653,700
------------
OIL & GAS -- DRILLING (0.0%):
6,900 Rowan Cos., Inc.*....................... 127,219
------------
OIL -- FIELD SERVICES (0.5%):
35,000 Halliburton Co.......................... 1,583,750
43,500 Schlumberger Ltd........................ 2,770,406
------------
4,354,156
------------
OIL -- INTERNATIONAL INTEGRATED (4.4%):
52,000 Chevron Corp............................ 4,949,750
193,700 Exxon Corp.............................. 14,939,112
62,100 Mobil Corp.............................. 6,147,900
170,900 Royal Dutch Petroleum Co., ADR.......... 10,296,725
42,600 Texaco, Inc............................. 2,662,500
------------
38,995,987
------------
OIL -- PRODUCTION/PIPELINE (0.4%):
16,900 Coastal Corp............................ 676,000
6,650 Columbia Gas System, Inc................ 416,872
28,000 Enron Corp.............................. 2,288,999
8,900 Sonat, Inc.............................. 294,813
------------
3,676,684
------------
OIL -- U.S. EXPLORATION & PRODUCTION (0.1%):
14,165 Burlington Resources, Inc............... 612,637
4,100 Helmerich & Payne, Inc.................. 97,631
19,723 Union Pacific Resources Group, Inc...... 321,731
------------
1,031,999
------------
OIL -- U.S. INTEGRATED (0.7%):
7,200 Amerada Hess Corp....................... 428,400
26,000 Atlantic Richfield Co................... 2,172,625
6,773 Kerr-Mcgee Corp......................... 339,920
27,600 Occidental Petroleum Corp............... 583,050
20,300 Phillips Petroleum Co................... 1,021,344
19,200 Unocal Corp............................. 760,800
24,500 USX-Marathon Group...................... 797,781
------------
6,103,920
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL FIELD MACHINERY & EQUIPMENT (0.1%):
26,080 Baker Hughes, Inc....................... $ 873,680
4,800 McDermott International, Inc............ 135,600
------------
1,009,280
------------
OIL REFINING (0.1%):
5,900 Ashland, Inc............................ 236,737
7,374 Sunoco, Inc............................. 222,603
------------
459,340
------------
PAINTS & RELATED PRODUCTS (0.0%):
13,700 Sherwin-Williams Co..................... 380,175
------------
PAPER & RELATED PRODUCTS (0.5%):
4,608 Boise Cascade Corp...................... 198,144
7,600 Champion International Co............... 363,850
17,600 Fort James Corp......................... 666,600
14,000 Georgia Pacific Corp.................... 663,250
32,644 International Paper Co.................. 1,648,522
8,200 Mead Corp............................... 342,350
2,400 Potlatch Corp........................... 105,450
4,400 Temple-Inland, Inc...................... 300,300
8,050 Westvaco Corp........................... 233,450
8,800 Williamette Industries, Inc............. 405,350
------------
4,927,266
------------
PHOTOGRAPHY (0.2%):
25,800 Eastman Kodak Co........................ 1,747,950
3,589 Polaroid Corp........................... 99,146
------------
1,847,096
------------
PIPELINES (0.2%):
7,600 Consolidated Natural Gas Co............. 461,700
34,100 The Williams Companies, Inc............. 1,451,381
------------
1,913,081
------------
POLLUTION CONTROL (0.4%):
12,500 Browning-Ferris Industries, Inc......... 537,500
26,300 Laidlaw, Inc............................ 193,963
9,899 Pall Corp............................... 219,634
47,742 Waste Management, Inc.*................. 2,566,132
------------
3,517,229
------------
PRINTING & PUBLISHING (0.1%):
13,165 Dun & Bradstreet Corp................... 466,535
------------
PRINTING -- COMMERCIAL (0.0%):
10,600 R.R. Donnelley & Sons Co................ 392,863
------------
PROTECTION -- SAFETY (0.7%):
65,096 Tyco International Ltd.................. 6,167,846
------------
PUBLISHING -- BOOKS (0.1%):
15,700 McGraw-Hill Cos., Inc................... 846,819
------------
PUBLISHING -- NEWSPAPERS (0.5%):
7,500 Dow Jones & Co.......................... 397,969
22,400 Gannett, Inc............................ 1,598,800
6,300 Knight-Ridder, Inc. (c)................. 346,106
14,500 New York Times Co., Class A............. 533,781
</TABLE>
CONTINUED
64
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
PUBLISHING -- NEWSPAPERS (CONTINUED)
<TABLE>
<C> <S> <C>
6,300 Times Mirror Co., Class A............... $ 373,275
9,500 Tribune Co.............................. 827,688
------------
4,077,619
------------
PUBLISHING -- PERIODICALS (0.0%):
4,300 Meredith Corp........................... 148,888
------------
RESTAURANTS (0.6%):
11,000 Darden Restaurants, Inc................. 239,938
107,800 McDonald's Corp......................... 4,453,487
12,110 Tricon Global Restaurants*.............. 655,454
9,900 Wendy's International, Inc. (c)......... 280,294
------------
5,629,173
------------
RETAIL (0.2%):
1,000 Best Buy*............................... 67,500
8,600 Consolidated Stores*.................... 232,200
17,687 Dollar General Corp..................... 512,923
12,600 Kohl's Corp.*........................... 972,563
------------
1,785,186
------------
RETAIL -- APPAREL/SHOES (0.6%):
68,138 Gap, Inc................................ 3,432,426
17,878 Limited, Inc............................ 811,214
11,200 Nordstrom, Inc.......................... 375,200
25,800 TJX Companies, Inc...................... 859,463
------------
5,478,303
------------
RETAIL -- CONSUMER ELECTRONICS (0.1%):
8,000 Circuit City Stores, Inc................ 744,000
------------
RETAIL -- DISCOUNT (2.4%):
17,350 Costco Cos., Inc.*...................... 1,389,084
35,100 Dayton-Hudson Corp...................... 2,281,500
39,300 Kmart Corp.*............................ 645,994
20,050 Toys 'R' Us, Inc.*...................... 414,784
354,300 Wal-Mart Stores, Inc.................... 17,094,975
------------
21,826,337
------------
RETAIL -- DRUG STORE (0.5%):
31,100 CVS Corp................................ 1,589,988
3,200 Longs Drug Stores Corp.................. 110,600
20,600 Rite Aid Corp........................... 507,275
79,600 Walgreen Co............................. 2,338,250
------------
4,546,113
------------
RETAIL -- MAJOR DEPARTMENT STORES (0.4%):
5,616 Harcourt General, Inc................... 289,575
21,000 J.C. Penney, Inc........................ 1,019,813
27,900 May Department Stores Co................ 1,140,413
30,575 Sears, Roebuck & Co..................... 1,362,497
------------
3,812,298
------------
RETAIL -- REGIONAL DEPARTMENT STORES (0.1%):
8,500 Dillards Department Stores, Inc......... 298,563
16,700 Federated Department Stores, Inc.*...... 884,056
------------
1,182,619
------------
RETAIL -- SUPERMARKETS (0.5%):
33,397 Albertson's, Inc........................ 1,722,033
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
</TABLE>
RETAIL -- SUPERMARKETS (CONTINUED)
<TABLE>
<C> <S> <C>
3,100 Great Atlantic & Pacific Tea Co., $ 104,819
Inc.....................................
65,400 Kroger Co.*............................. 1,827,112
11,800 Winn-Dixie Stores, Inc.................. 435,863
------------
4,089,827
------------
RETAIL/WHOLESALE -- AUTO PARTS (0.0%):
12,000 AutoZone, Inc.* (c)..................... 361,500
4,200 Pep Boys-Manny, Moe & Jack.............. 90,825
------------
452,325
------------
RETAIL/WHOLESALE -- COMPUTERS (0.1%):
15,856 Tandy Corp.............................. 774,962
------------
RUBBER -- TIRES (0.1%):
6,000 Cooper Tire & Rubber Co................. 141,750
12,400 Goodyear Tire & Rubber Co............... 729,275
6,000 The B.F. Goodrich Co. (c)............... 255,000
------------
1,126,025
------------
SHOES & RELATED APPAREL (0.2%):
22,500 Nike, Inc., Class B..................... 1,424,531
4,600 Reebok International Ltd.* (c).......... 85,675
------------
1,510,206
------------
SOAP & CLEANING PREPARATIONS (1.4%):
9,300 Clorox, Inc............................. 993,356
23,300 Colgate-Palmolive Co.................... 2,300,875
105,800 Procter & Gamble Co..................... 9,442,650
------------
12,736,881
------------
STEEL -- PRODUCERS (0.1%):
10,500 Bethlehem Steel Corp.*.................. 80,719
7,000 Nucor Corp.............................. 332,062
7,140 USX-U.S. Steel Group.................... 192,780
------------
605,561
------------
TECHNOLOGY (0.1%):
18,800 BMC Software, Inc.*..................... 1,015,200
18,700 Peoplesoft, Inc.* (c)................... 322,575
------------
1,337,775
------------
TECHNOLOGY -- SOFTWARE (0.0%):
4,700 AutoDesk, Inc........................... 138,944
------------
TELECOMMUNICATIONS (0.2%):
35,000 Sprint Corp., PCS*...................... 1,999,375
------------
TELECOMMUNICATIONS -- EQUIPMENT (3.1%):
6,955 Andrew Corp.*........................... 131,710
13,400 General Instrument Corp.*............... 569,500
6,200 Harris Corp............................. 242,963
239,137 Lucent Technologies, Inc. (c)........... 16,126,800
47,800 Motorola, Inc........................... 4,529,050
52,900 Nortel Networks Corp.................... 4,592,381
6,000 Scientific-Atlanta, Inc................. 216,000
31,000 Tellabs, Inc.*.......................... 2,094,438
------------
28,502,842
------------
</TABLE>
CONTINUED
65
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- SERVICES AND EQUIPMENT (0.0%):
10,900 CenturyTel, Inc......................... $ 433,275
------------
TEXTILE -- APPAREL (0.1%):
5,900 Fruit of the Loom, Inc.*................ 57,525
5,100 Liz Claiborne, Inc...................... 186,150
2,900 Russell Corp............................ 56,550
9,600 VF Corp................................. 410,400
------------
710,625
------------
TEXTILE -- HOME FURNISHINGS (0.0%):
1,500 Springs Industries, Inc................. 65,438
------------
TOBACCO (1.0%):
13,600 Fortune Brands, Inc..................... 562,700
194,000 Philip Morris Cos., Inc................. 7,796,375
0 R.J. Reynolds Tobacco*.................. 11
14,800 U.S.T., Inc............................. 432,900
------------
8,791,986
------------
TOOLS -- HAND HELD (0.0%):
4,650 Snap-On, Inc............................ 168,272
7,200 The Stanley Works....................... 231,750
------------
400,022
------------
TOYS/GAME/HOBBY (0.1%):
15,600 Hasbro, Inc............................. 435,825
33,147 Mattel, Inc............................. 876,324
------------
1,312,149
------------
TRANSPORTATION (0.1%):
8,700 Kansas City Southern Industries, Inc.... 555,169
------------
TRANSPORTATION -- AIR FREIGHT (0.1%):
23,520 FDX Corp.*.............................. 1,275,960
------------
TRANSPORTATION -- AIRLINE (0.3%):
12,200 AMR Corp.*.............................. 832,650
11,300 Delta Air Lines, Inc.................... 651,163
26,825 Southwest Airlines Co................... 834,927
7,000 US Airways Group, Inc.*................. 304,938
------------
2,623,678
------------
TRANSPORTATION -- EQUIPMENT & LEASING (0.0%):
5,700 Ryder Systems, Inc...................... 148,200
------------
TRANSPORTATION -- RAILROAD (0.4%):
37,400 Burlington Northern Santa Fe Corp....... 1,159,400
17,308 CSX Corp................................ 784,269
30,200 Norfolk Southern Corp................... 909,775
19,700 Union Pacific Corp...................... 1,148,756
------------
4,002,200
------------
UTILITIES (0.1%):
9,000 CMS Energy Corp......................... 376,875
7,800 Florida Progress Corp................... 322,238
------------
699,113
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (1.8%):
10,900 Ameren Corp............................. $ 418,288
15,100 American Electric Power Co.............. 567,194
12,100 Carolina Power & Light Co............... 518,031
16,900 Central & South West Corp............... 395,038
12,635 CINergy Corp............................ 404,320
18,600 Consolidated Edison, Inc................ 841,649
11,900 Constellation Energy Group.............. 352,538
11,600 Detroit Edison Co....................... 464,000
15,550 Dominion Resources, Inc................. 673,509
28,806 Duke Energy Corp........................ 1,566,325
28,100 Edison International.................... 751,675
19,600 Entergy Corp............................ 612,500
18,900 First Energy Corp....................... 585,900
14,400 Florida Power & Light, Inc.............. 786,599
10,200 General Public Utilities Corp........... 430,313
9,000 New Century Energies Inc................ 349,313
12,200 Northern States Power Co................ 295,088
23,700 PacifiCorp.............................. 435,488
17,900 Peco Energy Corp........................ 752,919
12,100 PP&L Resources, Inc..................... 372,075
17,800 Public Service Enterprise Group, Inc.... 727,575
22,644 Reliant Energy, Inc..................... 625,541
55,600 Southern Co............................. 1,473,399
22,470 Texas Utilities Co...................... 926,887
17,300 Unicom Corp............................. 667,131
------------
15,993,295
------------
UTILITIES -- GAS DISTRIBUTION (0.1%):
1,700 Eastern Enterprises..................... 67,575
3,900 NICOR, Inc.............................. 148,444
2,600 ONEOK, Inc.............................. 82,550
2,900 People's Energy Corp.................... 109,294
19,125 Sempra Energy........................... 432,703
------------
840,566
------------
UTILITIES -- TELEPHONE (8.2%):
21,900 Alltel Corp............................. 1,565,850
87,600 Ameritech Corp.......................... 6,438,600
253,101 AT&T Corp............................... 14,126,199
123,640 Bell Atlantic Corp...................... 8,082,965
155,400 BellSouth Corp.......................... 7,284,375
13,700 Frontier Corp........................... 808,300
76,900 GTE Corp................................ 5,820,369
148,099 MCI Worldcom, Inc.*..................... 12,773,538
22,900 Nextel Communications, Inc. - Class A* 1,149,294
(c).....................................
155,818 SBC Communications, Inc................. 9,037,444
68,900 Sprint Corp............................. 3,638,781
40,060 US West, Inc............................ 2,353,525
------------
73,079,240
------------
TOTAL COMMON STOCKS..................... 892,747,176
------------
INVESTMENT COMPANIES (0.8%):
6,882,183 Federated Prime Value Obligations Money 6,882,183
Market Fund.............................
TOTAL INVESTMENT COMPANIES.............. 6,882,183
------------
</TABLE>
CONTINUED
66
<PAGE>
Kent Funds
INDEX EQUITY
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS
COLLATERAL (2.4%):
COMMERCIAL PAPER (1.7%):
1,000,000 Ameritech Capital Funding Corp., 5.12%, $ 996,690
7/23/99.................................
800,000 Bell South Telecommunications, 5.16%, 798,957
7/9/99..................................
1,000,000 Cargill Inc., 5.65%, 7/1/99............. 1,000,000
1,000,000 Coca-Cola Co., 5.13%, 7/30/99........... 995,697
1,000,000 Daimler, 5.14%, 8/11/99................. 993,957
1,000,000 R.R. Donnelley & Sons Co., 5.26%, 997,117
7/20/99.................................
1,000,000 Duke Energy, 5.50%, 7/1/99.............. 1,000,000
1,000,000 Ford Motor Credit Corp., 5.18%, 997,690
7/16/99.................................
1,000,000 Gannett Co., 5.09%, 7/19/99............. 997,260
1,000,000 General Electric Capital Corp., 5.10%, 993,957
8/11/99.................................
1,000,000 General Motors Acceptance Corp., 5.09%, 994,248
8/9/99..................................
600,000 GTE Funding Corp., 5.04%, 7/8/99........ 598,634
1,000,000 H.J. Heinz Co., 5.14%, 8/19/99.......... 992,792
1,000,000 Mobil Corp., 5.50%, 7/1/99.............. 1,000,000
1,000,000 Nestle Capital Corp., 5.23%, 7/1/99..... 1,000,000
1,000,000 UBS Finance, 5.50%, 7/1/99.............. 1,000,000
------------
15,356,999
------------
REPURCHASE AGREEMENTS (0.6%):
1,949,265 Chase Securities Inc. 4.90%, 7/1/99 1,949,265
(Collateralized by $1,950,478 various
Corporate Notes & Bonds, 6.25%-7.25%,
6/30/01-5/15/16, market value
$1,949,111).............................
3,537,511 Goldman Sachs & Co. 5.20%, 7/1/99 3,537,511
(Collateralized by $5,702,787 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$3,607,740).............................
------------
5,486,776
------------
TIME DEPOSITS (0.1%):
500,081 Barclays Bank PLC London, 5.81%, 500,081
7/1/99..................................
------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS
COLLATERAL (CONTINUED)
</TABLE>
TIME DEPOSITS (CONTINUED)
<TABLE>
<C> <S> <C>
500,082 Canadian Imperial Bank Commerce Cay, $ 500,082
5.88%, 7/1/99...........................
------------
1,000,163
------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 21,843,938
------------
TOTAL INVESTMENTS
(Cost $484,898,209) (a) -- 101.8%.................. 921,473,297
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.8)%.... (16,051,636)
------------
TOTAL NET ASSETS -- 100.0%......................... $905,421,661
------------
------------
</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........................... $445,974,383
Unrealized depreciation........................... (8,399,295)
------------
Net unrealized appreciation....................... $436,575,088
------------
------------
</TABLE>
(b) Security has been deposited as initial margin on open future contracts.
(c) A portion of this security was loaned as of June 30, 1999.
* Non-income producing security.
ADR American Depositary Receipt
At June 30, 1999, the Fund's open future contracts were as follows:
<TABLE>
<CAPTION>
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ----------------------------------- -------------- --------------
<S> <C> <C> <C>
35.... Standard & Poor's $ 11,675,925 $ 12,089,875
500, 9/16/99
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
Kent Funds
SHORT TERM BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- ------------
<C> <S> <C>
CORPORATE NOTES & BONDS (62.4%):
AEROSPACE (4.1%):
6,000,000 Boeing Capital Corp., 6.83%, 5/21/01.... $ 6,030,000
------------
AUTOMOTIVE PARTS -- REPLACEMENT (3.4%):
5,000,000 Premier Auto Trust, 5.28%, 11/8/01...... 5,021,150
------------
BANKING (9.7%):
5,000,000 ABN Amro Bank, 6.63%, 10/31/01.......... 5,014,700
5,000,000 Bankers Trust Corp., 5.85%, 5/11/00..... 4,987,500
4,000,000 First Of America, 8.50%, 2/1/04......... 4,335,000
------------
14,337,200
------------
BROKERS (7.5%):
5,000,000 Merrill Lynch & Co., Inc., 6.64%, 5,031,250
9/19/02.................................
6,000,000 Morgan Stanley Group, Inc., 6.50%, 6,037,500
3/30/01.................................
------------
11,068,750
------------
CABLE TELEVISION (3.5%):
5,000,000 Tele-Commun Inc., 8.25%, 1/15/03........ 5,256,250
------------
COMPUTER HARDWARE MANUFACTURING (3.4%):
5,000,000 IBM Corp., 5.76%, 7/10/00............... 4,987,500
------------
FINANCE (25.2%):
5,000,000 Aristar, Inc., 6.00%, 8/1/01............ 4,962,500
5,000,000 Associates Corp., 5.50%, 2/15/02........ 4,900,000
4,000,000 Beneficial Corp., 6.28%, 1/15/02........ 3,985,000
5,000,000 Ford Motor Credit Corp., 7.50%, 5,143,750
1/15/03.................................
3,000,000 General Motors Acceptance Corp., 6.80%, 3,030,000
5/22/01.................................
4,000,000 Household Netherlands BV, 6.20%, 3,910,000
12/1/03.................................
5,000,000 MCN Investment Corp., 6.89%, 1/16/02.... 5,000,000
5,000,000 Norwest Financial, Inc., 7.88%, 5,175,000
2/15/02.................................
1,500,000 Transamerica Financial Corp., 6.13%, 1,492,500
11/1/01.................................
------------
37,598,750
------------
GROCERY (1.3%):
2,000,000 SuperValu, Inc., 7.25%, 7/15/99......... 2,000,000
------------
INDUSTRIAL GOODS & SERVICES (4.3%):
4,375,000 Enron Corp., 6.45%, 11/15/01............ 4,375,000
2,000,000 Monsanto Co., 5.38%, 12/1/01............ 1,957,500
------------
6,332,500
------------
TOTAL CORPORATE NOTES & BONDS........... 92,632,100
------------
SHORT-TERM SECURITIES HELD AS COLLATERAL (11.6%):
COMMERICAL PAPER (3.7%):
350,000 Bell South Telecommunications, 5.16%, 349,544
7/9/99..................................
500,000 Cargill Inc., 5.65%, 7/1/99............. 500,000
500,000 Coca-Cola Co., 5.13%, 7/30/99........... 497,848
400,000 R.R. Donnelley & Sons Co., 5.26%, 398,847
7/20/99.................................
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS COLLATERAL (CONTINUED)
</TABLE>
COMMERICAL PAPER (CONTINUED)
<TABLE>
<C> <S> <C>
500,000 Duke Energy, 5.50%, 7/1/99.............. $ 500,000
500,000 Ford Motor Credit Corp., 5.18%, 498,845
7/16/99.................................
500,000 General Electric Capital Corp., 5.10%, 496,979
8/11/99.................................
500,000 General Motors Acceptance Corp., 5.09%, 497,124
8/9/99..................................
250,000 GTE Funding Corp., 5.04%, 7/8/99........ 249,431
500,000 Mobil Corp., 5.50%, 7/1/99.............. 500,000
500,000 Nestle Capital Corp., 5.23%, 7/1/99..... 500,000
500,000 UBS Finance, 5.50%, 7/1/99.............. 500,000
------------
5,488,618
------------
REPURCHASE AGREEMENTS (7.0%):
1,750,238 Chase Securities Inc. 4.90%, 7/1/99 1,750,238
(Collateralized by $1,501,138 various
Corporate Notes & Bonds, 6.25%-7.25%,
6/30/01-5/15/16, market value
$1,500,086).............................
2,524,365 Goldman Sachs & Co. 5.20%, 7/1/99 2,524,365
(Collateralized by $4,904,686 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$3,102,840).............................
2,505,365 J P Morgan Securities, 4.90%, 7/1/99 2,505,365
(Collateralized by $11,739,248 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$2,553,250).............................
2,000,827 Prudential Securities Inc., 4.90%, 2,000,827
7/1/99 (Collateralized by $3,794,516
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $2,040,000).......................
1,500,620 Prudential Securities Inc. 4.90%,7/1/99 1,500,620
(Collateralized by $2,845,887 various
Government Agency Securities, 5.50%-
12.50%, 1/15/01-6/20/29, market value
$1,530,000).............................
------------
10,281,415
------------
TIME DEPOSITS (0.9%):
700,113 Barclays Bank PLC London, 5.81%, 700,113
7/1/99..................................
700,114 Canadian Imperial Bank Commerce Cay, 700,114
5.88%, 7/1/99...........................
------------
1,400,227
------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 17,170,260
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (13.4%):
FANNIE MAE (3.4%):
5,000,000 6.03%, 7/2/99........................... 5,000,050
------------
</TABLE>
CONTINUED
68
<PAGE>
Kent Funds
SHORT TERM BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
FREDDIE MAC (10.0%):
5,000,000 5.00%, 2/15/01 (c)...................... $ 4,947,650
5,000,000 5.75%, 6/15/01 (c)...................... 4,993,450
5,000,000 5.75%, 7/15/03.......................... 4,941,500
------------
14,882,600
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................. 19,882,650
------------
U.S. GOVERNMENT OBLIGATIONS (18.9%):
U.S. TREASURY NOTES (18.9%):
10,000,000 6.00%, 8/15/00 (c)...................... 10,067,100
8,250,000 6.63%, 7/31/01.......................... 8,410,298
3,900,000 6.25%, 1/31/02.......................... 3,954,327
5,600,000 6.25%, 2/28/02 (c)...................... 5,675,992
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS....... 28,107,717
------------
INVESTMENT COMPANIES (3.4%):
470,061 Dreyfus Cash Management Money Market 470,061
Fund....................................
4,538,302 Federated Prime Value Obligations Money 4,538,302
Market Fund.............................
------------
TOTAL INVESTMENT COMPANIES.............. 5,008,363
------------
TOTAL INVESTMENTS (COST $164,343,789)
(a) -- 109.7%........................... 162,801,090
LIABILITIES IN EXCESS OF OTHER ASSETS --
(9.7)%.................................. (14,362,307)
------------
TOTAL NET ASSETS -- 100.0%.............. $148,438,783
------------
------------
</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........................... $ 98,757
Unrealized depreciation........................... (1,641,456)
-----------
Net unrealized depreciation....................... $(1,542,699)
-----------
-----------
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This security has been deemed liquid.
(c) A portion of this security was loaned as of June 30, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
Kent Funds
INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
CORPORATE NOTES & BONDS (33.4%):
AUTOMOTIVE (0.9%):
$ 8,000,000 Ford Motor Credit Co., 5.80%, 1/12/09... $ 7,310,000
-------------
BANKING (9.4%):
10,000,000 Bank America, 5.88%, 2/15/09 (c)........ 9,187,500
6,000,000 Bank of Montreal-Chicago, 7.80%, 4/1/07 6,307,500
........................................
5,000,000 Bank One Corp., 6.00%, 2/17/09.......... 4,618,750
5,000,000 Bankers Trust Corp., 5.85%, 5/11/00..... 4,987,500
10,000,000 Chase Manhattan Corp., 6.75%, 9/15/06... 9,737,500
8,000,000 Chase Manhattan Corp., 7.13%, 6/15/09 8,020,000
(c).....................................
5,000,000 J.P. Morgan & Co., 7.63%, 9/15/04....... 5,150,000
5,270,000 Keycorp, 6.75%, 3/15/06................. 5,177,775
5,000,000 MBNA American Bank NA, 7.25%, 9/15/02... 5,056,250
5,000,000 MBNA Master Credit Card Trust, 5.10%*, 5,004,500
8/15/05.................................
5,000,000 NCNB Corp., 9.38%, 9/15/09.............. 5,818,750
10,000,000 Wachovia Corp., 6.38%, 2/1/09........... 9,637,500
-------------
78,703,525
-------------
BROKERS (3.4%):
5,500,000 Bear Stearns Co., 6.75%, 4/15/03........ 5,479,375
8,500,000 Donaldson Lufkin Jenrett, 5.88%, 8,340,625
4/1/02..................................
3,000,000 Goldman Sachs Group, 6.65%, 5/15/09..... 2,898,750
7,000,000 Merrill Lynch & Co., 6.00%, 2/17/09..... 6,457,500
5,000,000 Salomon Smith Barney, 7.13%, 10/1/06.... 4,968,750
-------------
28,145,000
-------------
FINANCE (9.8%):
5,000,000 Associates Corp., N.A., 6.52%, 5,012,500
10/11/02................................
5,000,000 Citigroup Capital II, 7.75%, 12/1/36.... 4,818,750
10,000,000 Ford Capital Guaranteed Notes, 9.88%, 10,900,000
5/15/02.................................
8,400,000 Ford Motor Credit Corp., 9.03%, 9,219,000
12/30/09, Callable 12/30/04 @ 100.......
5,000,000 General Electric Capital Corp., 6.66%*, 5,031,250
5/1/00, Putable 5/1/00 @100.............
10,000,000 General Motors Acceptance Corp., 5.35%, 9,775,000
12/7/01.................................
5,000,000 General Motors Acceptance Corp., 5.91%, 4,931,250
3/11/02.................................
5,000,000 General Motors Acceptance Corp., 6.15%, 4,762,500
4/5/07 (c)..............................
5,000,000 Household Finance Corp., 8.00%, 8/1/04.. 5,268,750
5,000,000 National City Bank, 6.25%, 3/15/11...... 4,700,000
5,000,000 Norwest Corp., 6.50%, 6/1/05............ 4,906,250
6,000,000 Norwest Finance Inc., 5.38%, 9/30/03.... 5,745,000
8,000,000 PNC Funding Corp., 6.13%, 2/15/09....... 7,510,000
-------------
82,580,250
-------------
INDUSTRIAL GOODS & SERVICES (3.2%):
5,500,000 Boston Scientific, 6.63%, 3/15/05....... 5,252,500
7,500,000 Comdisco Inc., 6.13%*, 8/1/01, Callable 7,462,500
8/1/01 @ 100............................
5,000,000 General Motors, 6.25%, 5/1/05........... 4,856,250
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
CORPORATE NOTES & BONDS (CONTINUED)
</TABLE>
INDUSTRIAL GOODS & SERVICES (CONTINUED)
<TABLE>
<C> <S> <C>
$10,000,000 Tyco International Group SA, 5.88%, $ 9,487,500
11/1/04 (b).............................
-------------
27,058,750
-------------
INSURANCE (1.8%):
5,000,000 American Annuity Group, 6.88%, 6/1/08... 4,650,000
5,000,000 St. Paul Companies, Inc., 7.19%, 5,056,250
8/2/07..................................
5,100,000 Travelers Group, Inc., 6.88%, 5,138,250
12/15/03................................
-------------
14,844,500
-------------
MACHINERY & EQUIPMENT (0.7%):
6,000,000 Case Corp., 7.25%, 1/15/16.............. 5,737,500
-------------
TECHNOLOGY (1.2%):
10,000,000 MCI Worldcom Inc., 7.55%, 4/1/04........ 10,275,000
-------------
TELECOMMUNICATIONS (1.6%):
6,000,000 Bell Canada, 7.75%, 4/1/06.............. 6,292,500
8,000,000 Sprint Cap. Corp., 6.88%, 11/15/28...... 7,310,000
-------------
13,602,500
-------------
TRANSPORTATION -- RAILROAD (0.8%):
7,000,000 Union Pacific Co., 6.34%, 11/25/03...... 6,868,750
-------------
UTILITIES (0.6%):
5,000,000 Western Resources, Inc., 6.88%, 4,956,250
8/1/04..................................
-------------
TOTAL CORPORATE NOTES & BONDS........... 280,082,025
-------------
SHORT-TERM SECURITIES HELD AS COLLATERAL (14.1%):
COMMERCIAL PAPER (5.5%):
3,000,000 Ameritech Capital Funding Corp., 5.12%, 2,990,069
7/23/99.................................
1,800,000 Bell South Telecommunications, 5.16%, 1,797,653
7/9/99..................................
1,000,000 Bell South Telecommunications, 5.18%, 994,973
8/4/99..................................
3,000,000 Cargill Inc., 5.65%, 7/1/99............. 3,000,000
3,000,000 Coca-Cola Co., 5.13%, 7/30/99........... 2,987,090
1,500,000 Daimler, 5.14%, 8/11/99................. 1,490,936
3,000,000 R.R. Donnelley & Sons Co., 2,991,352
5.26%, 7/20/99..........................
3,000,000 Duke Energy, 5.50%, 7/1/99.............. 3,000,000
3,000,000 Ford Motor Credit Corp., 5.18%, 2,993,069
7/16/99.................................
1,500,000 Gannett Co., 5.09%, 7/19/99............. 1,495,890
4,000,000 General Electric Capital Corp., 5.10%, 3,975,829
8/11/99.................................
4,000,000 General Motors Acceptance Corp., 5.09%, 3,976,992
8/9/99..................................
2,500,000 GTE Funding Corp., 5.04%, 7/8/99........ 2,494,308
1,250,000 GTE Funding Corp., 5.05%, 7/16/99....... 1,247,112
1,500,000 H.J.Heinz Co., 5.14%, 8/19/99........... 1,489,188
3,000,000 Mobil Corp., 5.50%, 7/1/99.............. 3,000,000
3,000,000 Nestle Capital Corp., 5.23%, 7/1/99..... 3,000,000
3,000,000 UBS Finance, 5.50%, 7/1/99.............. 3,000,000
-------------
45,924,461
-------------
</TABLE>
CONTINUED
70
<PAGE>
Kent Funds
INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS COLLATERAL (CONTINUED)
REPURCHASE AGREEMENTS (7.9%):
$17,083,325 Chase Securities Inc. 4.90%, 7/1/99 $ 17,083,325
(Collateralized by $17,093,952 various
Corporate Notes & Bonds, 6.25%-7.25%,
6/30/01-5/15/16, market value
$17,081,975)............................
25,003,611 Goldman Sachs & Co. 5.20%, 7/1/99 25,003,611
(Collateralized by $40,308,075 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$25,500,001)............................
4,225,048 J P Morgan Securities, 4.90%, 7/1/99 4,225,048
(Collateralized by $19,797,068 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$4,305,801).............................
1,686,612 J P Morgan Securities, 4.90%, 7/1/99 1,686,612
(Collateralized by $7,902,862 various
Government Agency Securities, 6.00%-
9.00%,1/15/05-1/15/29, market value
$1,718,848).............................
1,503,219 J P Morgan Securities, 4.90%, 7/1/99 1,503,219
(Collateralized by $7,043,549 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$1,531,950).............................
3,001,240 Prudential Securities Inc. 4.90%, 7/1/99 3,001,240
(Collateralized by $5,691,774 various
Government Agency Securities, 5.50%-
12.50%, 1/15/01-6/20/29, market value
$3,060,000).............................
3,001,240 Prudential Securities Inc., 4.90%, 3,001,240
7/1/99 (Collateralized by $5,691,774
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $3,060,000).......................
7,002,893 Prudential Securities Inc., 4.90%, 7,002,893
7/1/99 (Collateralized by $13,280,806
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $7,140,000).......................
4,001,653 Prudential Securities Inc., 4.90%, 4,001,653
7/1/99 (Collateralized by $7,589,032
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $4,080,000).......................
-------------
66,508,841
-------------
TIME DEPOSITS (0.7%):
3,000,484 Barclays Bank PLC London, 5.81%, 3,000,484
7/1/99..................................
3,000,490 Canadian Imperial Bank Commerce Cay, 3,000,490
5.88%, 7/1/99...........................
-------------
6,000,974
-------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 118,434,276
-------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (12.9%):
FANNIE MAE (6.5%):
$10,000,000 5.13%, 2/13/04.......................... $ 9,612,000
25,000,000 5.63%, 5/14/04 (c)...................... 24,504,000
9,100,000 6.00%, 11/15/22......................... 8,851,024
12,000,000 6.25%, 11/18/23......................... 11,619,000
-------------
54,586,024
-------------
FEDERAL FARM CREDIT BANK (1.2%):
10,000,000 6.30%, 9/23/04.......................... 10,060,500
-------------
FEDERAL HOME LOAN BANK (0.6%):
5,000,000 6.49%, 1/8/04........................... 5,070,000
-------------
FREDDIE MAC (4.6%):
24,000,000 5.75%, 7/15/03.......................... 23,719,200
10,410,000 8.12%, 1/31/05.......................... 11,271,636
3,000,000 7.22%, 6/14/06.......................... 3,136,170
-------------
38,127,006
-------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................. 107,843,530
-------------
U.S. GOVERNMENT OBLIGATIONS (48.9%):
U.S. TREASURY BONDS (10.2%):
59,200,000 9.13%, 5/15/09.......................... 66,685,248
12,000,000 10.38%, 11/15/09........................ 14,322,960
3,200,000 12.00%, 8/15/13......................... 4,478,848
-------------
85,487,056
-------------
U.S. TREASURY NOTES (31.8%):
56,000,000 6.50%, 5/31/01.......................... 56,981,120
13,300,000 6.25%, 10/31/01 (c)..................... 13,473,565
77,000,000 7.50%, 11/15/01 (c)..................... 80,113,880
47,000,000 6.38%, 8/15/02.......................... 47,838,480
2,000,000 6.25%, 2/15/03.......................... 2,030,160
10,350,000 7.50%, 2/15/05 (c)...................... 11,115,072
2,100,000 6.88%, 5/15/06.......................... 2,210,355
31,800,000 7.00%, 7/15/06.......................... 33,676,200
2,300,000 6.50%, 10/15/06 (c)..................... 2,373,577
16,000,000 6.63%, 5/15/07 (c)...................... 16,659,360
-------------
266,471,769
-------------
U.S. TREASURY STRIPS (6.9%):
38,000,000 11/15/04 (c)............................ 27,559,120
53,000,000 11/15/08................................ 30,205,760
-------------
57,764,880
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS....... 409,723,705
-------------
YANKEE CERTIFICATES OF DEPOSIT (1.2%):
10,000,000 Potash Corp. Saskatchewan, 7.13%, 9,887,500
6/15/07.................................
-------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT.... 9,887,500
-------------
INVESTMENT COMPANIES (2.3%):
3,259,464 Dreyfus Cash Management Money Market 3,259,464
Fund....................................
</TABLE>
CONTINUED
71
<PAGE>
Kent Funds
INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
INVESTMENT COMPANIES (CONTINUED)
$15,689,224 Federated Prime Value Obligations Money $ 15,689,223
Market Fund.............................
-------------
TOTAL INVESTMENT COMPANIES.............. 18,948,687
-------------
TOTAL INVESTMENTS -- 112.8%.......................... 944,919,723
-------------
(Cost $963,024,495) (a)
LIABILITIES IN EXCESS OF OTHER ASSETS -- (12.8)%..... (107,451,249)
-------------
TOTAL NET ASSETS -- 100.0%........................... $ 837,468,474
-------------
-------------
</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........................... $ 3,684,091
Unrealized depreciation........................... (21,788,863)
------------
Net unrealized appreciation....................... $(18,104,772)
------------
------------
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This security has been deemed liquid.
(c) A portion of this security was loaned as of June 30, 1999.
* Non-income producing
PLC - Public Limited Company (British)
SA - Sociedad Anonima (Spanish Corporation)
SEE NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
Kent Funds
INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
CORPORATE NOTES & BONDS (46.2%):
BANKING (12.1%):
2,700,000 Bank of Montreal-Chicago, 7.80%, $ 2,838,375
4/1/07..................................
2,000,000 Bank of New York, 8.50%, 12/15/04....... 2,150,000
2,000,000 BankAmerica Corp., 7.20%, 4/15/06....... 2,005,000
2,000,000 Chase Manhattan Corp., 7.13%, 3/1/05.... 2,027,500
4,000,000 First Union Corp., 9.45%, 8/15/01....... 4,235,000
2,000,000 Fleet/Norstar Group, 8.63%, 1/15/07..... 2,167,500
2,000,000 Midland Bank PLC, 7.63%, 6/15/06........ 2,045,000
3,000,000 National City Bank of Cleveland, 7.25%, 3,093,750
7/15/10.................................
5,000,000 NCNB Corp., 10.20%, 7/15/15............. 6,275,001
5,000,000 PNC Bank N.A., 7.88%, 4/15/05........... 5,175,000
2,000,000 Republic New York Corp., 7.00%, 1,922,500
3/22/11.................................
2,000,000 Swiss Bank Corp. -- New York, 7.38%, 2,010,000
7/15/15.................................
------------
35,944,626
------------
BEVERAGES & TOBACCO (1.6%):
4,390,000 Seagram Co. Ltd., 8.35%, 1/15/22........ 4,609,500
------------
BROKERS (0.7%):
2,000,000 Salomon, Inc., 6.75%, 2/15/03........... 2,010,000
------------
FINANCE (11.5%):
5,000,000 Associates Corp. NA, 7.95%, 2/15/10..... 5,306,250
3,500,000 British Gas Finance, 6.63%, 6/1/18...... 3,220,000
2,000,000 Discover Credit, 9.26%, 3/20/12......... 2,347,500
5,000,000 Ford Motor Credit Corp., 9.03%, 5,487,500
12/30/09, Callable 12/30/04 @ 100.......
5,000,000 General Motors Acceptance Corp., 6.85%, 5,056,250
6/17/04.................................
3,500,000 Great Western Financial Trust II, 8.21%, 3,504,375
2/1/27, Callable 2/1/07 @ 104.10........
5,000,000 Lehman Brothers Holdings, Inc., 8.75%, 5,306,250
3/15/05.................................
4,000,000 St. Paul Cos, Inc., 7.25%, 8/9/07....... 4,060,000
------------
34,288,125
------------
GAS TRANSMISSION (0.8%):
2,500,000 Enserch Corp., 7.13%, 6/15/05........... 2,512,500
------------
INDUSTRIAL GOODS & SERVICES (6.8%):
5,000,000 Cyprus Amax, 7.38%, 5/15/07............. 4,675,000
3,000,000 Engelhard Corp., 7.38%, 8/1/06.......... 3,026,250
5,000,000 Protection One Alarm, 7.38%, 8/15/05 4,793,750
(b).....................................
2,950,000 Raytheon Co., 6.75%, 8/15/07............ 2,905,750
5,000,000 Union Carbide Corp., 6.70%, 4/1/09...... 4,793,750
------------
20,194,500
------------
INSURANCE (0.7%):
2,000,000 Travelers Capital III, 7.63%, 12/1/36... 1,932,500
------------
MACHINERY & EQUIPMENT (0.6%):
2,000,000 Case Corp., 7.25%, 1/15/16.............. 1,912,500
------------
OIL & GAS (2.0%):
5,000,000 Phillips Petroleum, 9.38%, 2/15/11...... 5,912,500
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
CORPORATE NOTES & BONDS (CONTINUED)
RETAIL (1.6%):
4,658,403 Fred Meyer, Inc., Lease Trust, 8.50%, $ 4,827,270
7/15/17.................................
------------
TELECOMMUNICATIONS (7.1%):
3,500,000 GTE Florida, Inc., 6.86%, 2/1/28........ 3,311,875
4,000,000 Sprint Cap. Corp., 6.88%, 11/15/28...... 3,655,000
5,000,000 TCI Communications, Inc., 7.13%, 4,856,250
2/15/28.................................
5,000,000 US West Cap Funding, Inc., 6.88%, 4,500,000
7/15/28.................................
5,000,000 Worldcom Inc., 6.95%, 8/15/28........... 4,725,000
------------
21,048,125
------------
UTILITIES (0.7%):
2,000,000 Pacific Gas & Electric, 6.25%, 3/1/04... 1,980,000
------------
TOTAL CORPORATE NOTES & BONDS........... 137,172,146
------------
FOREIGN GOVERNMENT AGENCIES (0.3%):
1,000,000 Hydro-Quebec, 9.41%, 3/23/00............ 1,021,250
------------
TOTAL FOREIGN GOVERNMENT AGENCIES....... 1,021,250
------------
MUNICIPAL BOND -- TAXABLE (0.7%):
CALIFORNIA (0.7%):
2,000,000 San Bernardino County, Financing 2,010,000
Authority Pension Obligation Revenue,
6.99%, 8/1/10 (Insured by MBIA).........
------------
TOTAL MUNICIPAL BOND -- TAXABLE......... 2,010,000
------------
SHORT-TERM SECURITIES HELD AS COLLATERAL (21.0%):
COMMERICAL PAPER (7.7%):
1,000,000 Ameritech Capital Funding Corp., 5.12%, 996,690
7/23/99.................................
600,000 Bell South Telecommunications, 5.16%, 599,218
7/9/99..................................
1,000,000 Bell South Telecommunications, 5.18%, 994,973
8/4/99..................................
1,600,000 Cargill Inc., 5.65%, 7/1/99............. 1,600,000
1,600,000 Coca-Cola Co., 5.13%, 7/30/99........... 1,593,115
1,000,000 Daimler, 5.14%, 8/11/99................. 993,957
1,200,000 R.R. Donnelley & Sons Co., 5.26%, 1,196,541
7/20/99.................................
1,600,000 Duke Energy, 5.50%, 7/1/99.............. 1,600,000
1,600,000 Ford Motor Credit Corp., 5.18%, 1,596,303
7/16/99.................................
1,000,000 Gannett Co., 5.09%, 7/19/99............. 997,260
1,500,000 General Electric Capital Corp., 5.10%, 1,490,936
8/11/99.................................
1,500,000 General Motors Acceptance Corp., 5.09%, 1,491,372
8/9/99..................................
2,000,000 GTE Funding Corp., 5.04%, 7/8/99........ 1,995,446
1,000,000 H.J.Heinz Co., 5.14%, 8/19/99........... 992,792
1,600,000 Mobil Corp., 5.50%, 7/1/99.............. 1,600,000
1,600,000 Nestle Capital Corp., 5.23%, 7/1/99..... 1,600,000
1,600,000 UBS Finance, 5.50%, 7/1/99.............. 1,600,000
------------
22,938,603
------------
</TABLE>
CONTINUED
73
<PAGE>
Kent Funds
INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES HELD AS COLLATERAL (CONTINUED)
REPURCHASE AGREEMENTS (12.1%):
10,001,361 Chase Securities Inc. 4.90%, 7/1/99 $ 10,001,361
(Collateralized by $10,007,583 various
Corporate Notes & Bonds, 6.25%-7.25%,
6/30/01-5/15/16, market value
$10,000,571)............................
11,839,710 Goldman Sachs & Co. 5.20%, 7/1/99 11,839,710
(Collateralized by $19,086,679 various
Government Agency Securities, 4.50%-
12.50%, 3/15/01-6/20/29, market value
$12,074,760)............................
7,015,022 J P Morgan Securities, 4.90%, 7/1/99 7,015,022
(Collateralized by $32,869,895 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$7,149,101).............................
785,683 J P Morgan Securities, 4.90%, 7/1/99 785,683
(Collateralized by $3,681,428 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$800,699)...............................
2,505,365 J P Morgan Securities, 4.90%, 7/1/99 2,505,365
(Collateralized by $11,739,248 various
Government Agency Securities, 6.00%-
9.00%, 1/15/05-1/15/29, market value
$2,553,250).............................
1,519,628 Prudential Securities Inc., 4.90%, 1,519,628
7/1/99 (Collateralized by $2,881,935
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $1,549,380).......................
2,231,922 Prudential Securities Inc., 4.90%, 2,231,922
7/1/99 (Collateralized by $4,232,783
various Government Agency Securities,
5.50%-12.50%, 1/15/01-6/20/29, market
value $2,275,620).......................
------------
35,898,691
------------
TIME DEPOSITS (1.2%):
1,800,291 Barclays Bank PLC London, 5.81%*, 7/1/99 1,800,291
........................................
1,800,294 Canadian Imperial Bank Commerce Cay, 1,800,294
5.88%, 7/1/99...........................
------------
3,600,585
------------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL.............................. 62,437,879
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (13.0%):
FANNIE MAE (8.9%):
10,000,000 5.63%, 5/14/04 (c)...................... 9,801,600
10,000,000 7.40%, 7/1/04........................... 10,548,600
2,985,581 6.05%, 12/1/08.......................... 2,912,106
3,500,000 6.25%, 11/18/23......................... 3,388,875
------------
26,651,181
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
FREDDIE MAC (4.1%):
2,500,000 7.22%, 6/14/06.......................... $ 2,613,475
10,000,000 5.75%, 3/15/09.......................... 9,512,500
------------
12,125,975
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................. 38,777,156
------------
U.S. GOVERNMENT OBLIGATIONS (37.5%):
U.S. TREASURY BONDS (14.2%):
8,750,000 9.13%, 5/15/09.......................... 9,856,350
15,500,000 11.75%, 11/15/14 (c).................... 22,086,415
2,200,000 7.50%, 11/15/16 (c)..................... 2,477,266
6,000,000 8.75%, 5/15/20.......................... 7,697,760
------------
42,117,791
------------
U.S. TREASURY NOTES (16.3%):
6,000,000 8.00%, 5/15/01 (c)...................... 6,260,640
12,000,000 7.50%, 5/15/02 (c)...................... 12,566,880
11,000,000 7.00%, 7/15/06 (c)...................... 11,649,000
10,000,000 5.50%, 5/15/09 (c)...................... 9,784,500
6,300,000 12.75%, 11/15/10 (c).................... 8,479,674
------------
48,740,694
------------
U.S. TREASURY STRIPS (7.0%):
40,000,000 5/15/10................................. 20,703,600
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS....... 111,562,085
------------
INVESTMENT COMPANIES (0.7%):
8,069 Dreyfus Cash Management Money Market 8,069
Fund....................................
1,967,329 Federated Prime Value Obligations Money 1,967,329
Market Fund.............................
------------
TOTAL INVESTMENT COMPANIES.......................... 1,975,398
------------
TOTAL INVESTMENTS
(Cost $362,138,755) (a) -- 119.4%................... 354,955,913
------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (19.4)%.... (57,709,157)
------------
TOTAL NET ASSETS -- 100.0%.......................... $297,246,756
------------
------------
</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........................... $ 1,379,215
Unrealized depreciation........................... (8,562,057)
------------
Net unrealized depreciation....................... $ (7,182,842)
------------
------------
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This security has been deemed liquid.
(c) A portion of this security was loaned as of June 30, 1999.
MBIA - Municipal Bond Insurance Association
PLC - Public Limited Company
SEE NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
Kent Funds
INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (97.5%):
ALASKA (2.2%):
$ 710,000 Alaska Municipal Bond Bank Authority, $ 712,222
Series A, GO, 4.75%, 10/1/99............
1,000,000 Anchorage Electric Utility, Revenue 1,042,500
Bond, Senior Lien, 5.50%, 12/1/03,
Callable 6/1/03 @ 102 (Insured by
MBIA)...................................
5,000,000 North Slope Boro, Series B, GO, 7.50%, 5,306,250
6/30/01 (Insured by FSA)................
------------
7,060,972
------------
ARIZONA (2.6%):
1,000,000 Arizona State University Revenue, 7.10%, 1,075,000
7/1/16, Prerefunded 7/1/01 @102.........
500,000 Phoenix, GO, 6.00%, 7/1/99.............. 500,000
1,500,000 Pima County Unified School District No. 1,546,080
1 Tucson, Series B, GO, ETM, 6.80%,
7/1/00..................................
5,000,000 Salt River Project Agricultural 5,281,250
Improvement & Power District Electric
System, Series A, 5.63%, 1/1/06.........
------------
8,402,330
------------
ARKANSAS (0.3%):
1,000,000 Arkansas State Economic Development, 1,016,250
5.00%, 2/1/03 (Insured by AMBAC)........
------------
CALIFORNIA (5.9%):
3,400,000 California State, GO, 6.60%, 2/1/10..... 3,863,250
3,000,000 Orange County, Series A, 6.00%, 6/1/10 3,255,000
(Insured by MBIA).......................
2,000,000 Riverside County Transportation 2,125,000
Commission, Sales Tax Revenue, Series A,
5.60%, 6/1/05 (Insured by AMBAC)........
2,000,000 Turlock Irrigation District Revenue, 2,167,500
Series A, 6.00%, 1/1/06 (Insured by
MBIA) ..................................
5,850,000 University of California Revenue, 6,888,374
Multiple Purpose Projects, Series B,
9.00%, 9/1/03 (Insured by MBIA).........
------------
18,299,124
------------
COLORADO (2.6%):
4,000,000 Arapahoe County, School District No. 4,130,000
005, Cherry Creek, Series A, GO, 5.25%,
12/15/02................................
1,400,000 Boulder Valley School District, 1,471,750
5.50%, 12/1/07 (Insured by FGIC)........
500,000 Colorado Housing Finance Authority, 496,250
4.50%, 11/1/05..........................
1,000,000 Colorado Springs Utility Revenue, 1,066,250
Series A, 6.50%, 11/15/03, Callable
11/15/01 @ 102..........................
1,000,000 E-470 Public Highway Authority Revenue, 1,076,250
Series C, 6.00%, 9/1/07 (Insured by
MBIA)...................................
------------
8,240,500
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
CONNECTICUT (1.6%):
$1,000,000 Connecticut State, GO, Series C, 5.38%, $ 1,035,000
8/15/02.................................
4,000,000 Connecticut State, Series A, 6.00%, 4,190,000
5/15/02.................................
------------
5,225,000
------------
FLORIDA (2.3%):
1,000,000 Broward County School District, GO, 1,026,250
5.20%, 2/15/03..........................
1,000,000 Florida State Division Finance 1,060,000
Department Of General Service,
6.10%, 7/1/04...........................
1,000,000 Hillsborough County Florida Development 1,078,750
Authority Revenue,
6.38%, 12/1/12 (Insured by MBIA)........
2,000,000 Lakeland Electric & Water Revenue, 2,142,500
5.90%, 10/1/07..........................
1,000,000 Tampa Guaranteed Entitlement Revenue, 1,033,750
6.60%, 10/1/00 (Insured by AMBAC).......
1,000,000 Tampa Utilities, Tax & Special Revenue, 1,030,000
6.30%, 10/1/00 (Insursed by AMBAC)......
------------
7,371,250
------------
GEORGIA (6.9%):
2,670,000 Atlanta Airport Facilities Revenue 2,746,763
(AMT), Series B, 5.50%, 1/1/03 (Insured
by AMBAC)...............................
7,000,000 Atlanta Georgia Water & Wastewater 7,209,999
Revenue, 5.50%, 11/1/15 (Insured by
FGIC)...................................
5,000,000 Atlanta Georgia Water & Wastewater 5,131,250
Revenue, 5.50%, 11/1/18 (Insured by
FGIC)...................................
2,000,000 Georgia State UTGO, Series B, 6.25%, 2,192,500
3/1/07..................................
4,000,000 Georgia State, Series B, GO, 5.95%, 4,330,000
3/1/08..................................
------------
21,610,512
------------
HAWAII (1.0%):
1,000,000 Honolulu City & County, Series D, GO, 1,037,500
ETM, 6.50%, 12/1/00.....................
855,000 Honolulu Hawaii City & County, 5.60%, 893,475
1/1/05..................................
170,000 Honolulu Hawaii City & County ETM, 177,650
5.60%, 1/1/05...........................
1,150,000 Maui County, Series A, GO, 6.80%, 1,208,938
12/1/03, Prerefunded 12/1/00 @ 101
(Insured by AMBAC)......................
------------
3,317,563
------------
IDAHO (0.6%):
1,915,000 Ada & Canyon Counties, Joint School 1,991,600
District No. 2, Meridan, GO, 5.50%,
7/30/14.................................
------------
ILLINOIS (7.4%):
2,000,000 Chicago Ill UTGO; Emergency Telephone 1,992,500
System, 5.25%, 1/1/15 (Insured by
FGIC)...................................
</TABLE>
CONTINUED
75
<PAGE>
Kent Funds
INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
ILLINOIS (CONTINUED)
<TABLE>
<C> <S> <C>
$ 805,000 Chicago Illinois; Emergency Telephone $ 799,969
System, 5.25%, 1/1/16 (Insured by
FGIC)...................................
1,000,000 Chicago Metropolitan Water Reclamation 1,063,750
District, Working Cash Fund, 5.90%,
12/1/04.................................
3,000,000 Chicago Metropolitan, Water Reclamation 3,105,000
District, Capital Improvement, GO,
5.50%, 12/1/10..........................
305,000 Chicago, GO, 6.00%, 1/1/09, Callable 326,350
1/1/08 @ 102 (Insured by FGIC)..........
4,270,000 Du Page & Will Counties, Community 4,344,724
School District No. 204, GO, 4.95%,
12/30/01 (Insured by FGIC)..............
4,000,000 Illinois Development Finance Authority, 4,130,000
Pollution Control Revenue, Commonwealth
Edison, 5.30%, 1/15/04 (Insured by
MBIA)...................................
1,000,000 Illinois State Toll Highway Authority, 1,027,500
5.50%, 1/1/13...........................
2,640,000 Lake County Illinois School District No. 2,590,500
13, 3.95%, 12/1/03 (LOC: Guaranteed
Student Loans)..........................
3,135,000 Northwest Suburban Municipal Joint 3,232,969
Action, Water Agency, Water Supply
System, Series A, 5.25%, 5/1/04 (Insured
by MBIA)................................
745,000 University of Illinois Revenue, Health 756,175
Service Facility, 4.90%, 10/1/01
(Insured by AMBAC)......................
------------
23,369,437
------------
INDIANA (3.6%):
1,100,000 Greenwood Indiana School Building Corp., 1,091,750
4.75%, 7/15/07..........................
2,000,000 Indiana Municipal Power Supply Agency, 2,137,500
System Revenue, Series B, 5.88%, 1/1/10
(Insured by MBIA).......................
3,000,000 Indiana Municipal Power Supply Agency, 3,217,500
System Revenue, Series B, 6.00%, 1/1/13
(Insured by MBIA).......................
465,000 Indiana State Educational Facilities 449,306
Authority Revenue, 4.35%, 10/1/07
(Insured by AMBAC)......................
1,000,000 Indiana Transportation Finance 1,046,250
Authority, Highway Revenue, Series A,
5.75%, 6/1/12 (Insured by AMBAC)........
1,565,000 Indianapolis Utilities District, Series 1,201,138
B, 3.50%, 6/1/18 (Insured by FGIC)......
1,300,000 Purdue University Student Fee Revenue, 1,316,250
Series P, 5.25%, 7/1/13.................
1,000,000 Purdue University Student Fee Revenue, 1,042,820
Series D, 6.50%, 7/1/03, Callable 1/1/00
@ 103...................................
------------
11,502,514
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
IOWA (0.6%):
$2,000,000 Chillicothe Pollution Control Revenue $ 1,975,000
Bond, 4.25%, 11/1/23, Mandatory Put
11/1/03 @ 100...........................
------------
LOUISIANA (2.3%):
4,000,000 Louisiana State, Series A, GO, 5.30%, 4,155,000
8/1/04 (Insured by MBIA)................
3,000,000 Louisiana State, Series A, GO, 6.00%, 3,232,500
4/15/07 (Insured by FGIC)...............
------------
7,387,500
------------
MARYLAND (0.0%):
50,000 Maryland State Refunding Bond, GO, 50,188
4.20%, 8/1/01...........................
------------
MASSACHUSETTS (2.3%):
3,750,000 Massachusetts State Port Authority, 3,459,375
5.00%, 7/1/28, Callable 7/1/08 @ 101....
3,750,000 Massachusetts State, Special Obligation 3,839,063
Revenue, Series A, 5.25%, 6/1/08
(Insured by AMBAC)......................
------------
7,298,438
------------
MICHIGAN (18.3%):
2,215,000 Battle Creek Downtown Development 2,386,663
Authority, 6.00%, 5/1/07 (Insured by
MBIA)...................................
4,000,000 Battle Creek Downtown Development 4,534,999
Authority, Tax Increment Revenue, 7.30%,
5/1/10..................................
300,000 Cadillac Public Schools, GO, 7.25%, 339,000
5/1/05 (Insured by FGIC)................
2,100,000 Caledonia Community Schools, GO, 6.70%, 2,270,625
5/1/22, Prerefunded 5/1/02 @102 (Insured
by AMBAC)...............................
1,525,000 Detroit Michigan UTGO, 4.10%, 4/1/03.... 1,486,875
3,000,000 Detroit Sewage Disposal Revenue, Series 3,251,250
B, 6.00%, 7/1/09 (Insured by MBIA)......
6,000,000 Detroit Water Supply System, Permanent 6,029,999
Linked Bonds, 5.25%, 7/1/13, Callable
7/1/04 @ 104 (Insured by FGIC)..........
1,000,000 Detroit Water Supply System, Second 1,022,500
Lien, Series A, 5.20%, 7/1/08 (Insured
by MBIA)................................
3,000,000 Detroit, GO, Distributable State Aid, 3,075,000
5.70%, 5/1/01 (Insured by AMBAC)........
2,840,000 Grand Ledge Public Schools District, GO, 2,921,650
5.35%, 5/1/10 (Insured by MBIA).........
205,000 Grand Rapids Charter Township; Porter 201,925
Hills Obligated, 4.20%, 7/1/03..........
210,000 Grand Rapids Charter Township; Porter 206,063
Hills Obligated, 4.25%, 7/1/04..........
200,000 Grand Rapids Charter Township; Porter 194,750
Hills Obligated, 4.35%, 7/1/05..........
1,700,000 Greater Detroit Resource Recovery 1,774,375
Authority, Series A, 5.50%, 12/13/04
(Insured by AMBAC)......................
</TABLE>
CONTINUED
76
<PAGE>
Kent Funds
INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$1,000,000 Ingham County, GO, 5.13%, 11/1/12 $ 1,000,000
(Insured by FSA)........................
2,000,000 Kalamazoo Hospital Finance Authority, 2,070,000
Refunding & Improvement, Bronson
Methodist Hospital, 5.35%, 5/15/06
(Insured by MBIA).......................
250,000 Michigan Higher Education Facilities 241,250
Authority, 4.50%, 10/1/07...............
320,000 Michigan Higher Education Facilities 308,000
Authority, 4.60%, 10/1/08...............
200,000 Michigan Higher Education Facilities 192,250
Authority, 4.70%, 10/1/09...............
590,000 Michigan Higher Education Facilities 562,713
Authority, 4.80%, 10/1/10...............
1,000,000 Michigan Municipal Bond Authority, 986,250
3.65%, 11/1/01..........................
2,000,000 Michigan State Comprehensive 2,065,000
Transportation, Series B, 5.50%,
5/15/02.................................
1,600,000 Michigan State Hospital Finance 1,614,000
Authority, Sisters of Mercy Health Corp.
Bond 1993, Series F, 4.60%, 8/15/02
(Insured by MBIA).......................
1,450,000 Michigan State Hospital Finance 1,469,938
Authority, St. John Hospital & Medical
Center, 5.00%, 5/15/06 (Insured by
AMBAC)..................................
1,000,000 Michigan State Housing Development 1,013,750
Authority, Rental Housing Revenue,
5.15%, 10/1/00 (Insured by MBIA)........
1,000,000 Michigan State South Central Power 1,065,000
Agency, Power Supply System Revenue,
5.80%, 11/1/05 (Insured by MBIA)........
1,000,000 Michigan State Strategic Fund, Hope 986,250
Network Project, Series B, 4.80%,
9/1/08, (LOC: First of America).........
1,000,000 Michigan State Strategic Fund, Hope 982,500
Network Project, Series B, 5.13%,
9/1/13, Callable 9/1/08 @ 102, (LOC:
First of America).......................
2,300,000 Michigan State Strategic Fund, Limited 2,601,875
Obligation Revenue, Ford Motor Co.
Project, Series A, 7.10%, 2/1/06........
2,500,000 Michigan State Trunk Line, Series A, 2,590,625
5.50%, 10/1/02..........................
3,500,000 Michigan State Underground Storage Tank 3,744,999
Financial Assurance Authority, Series I,
6.00%, 5/1/05 (Insured by AMBAC)........
2,000,000 Northville Public Schools, Series A, GO, 2,127,500
7.00%, 5/1/08...........................
1,575,000 South Redford School District, 5.25%, 1,620,281
5/1/09 (Insured by FGIC)................
1,000,000 Western Michigan University Revenue, GO, 1,028,750
5.40%, 11/15/01 (Insured by FGIC).......
------------
57,966,605
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
MINNESOTA (1.2%):
$1,000,000 Minneapolis Community Development $ 1,036,250
Agency, Tax Increment Revenue, 7.00%,
9/1/00 (Insured by MBIA)................
2,500,000 Minneapolis Minnesota Sales Tax, 6.15%, 2,650,000
4/1/05..................................
------------
3,686,250
------------
NEW JERSEY (4.0%):
350,000 Manalapan School District, GO, 5.00%, 348,688
12/1/11, Callable 12/1/08 @ 100 (Insured
by FGIC)................................
6,000,000 New Jersey Economic Development 6,660,000
Authority, Market Transition Facility
Revenue, Senior Lien, 7.00%, 7/1/04
(Insured by MBIA).......................
1,000,000 New Jersey Economic Development 1,092,500
Authority, Market Transition Facility
Revenue, Series A 1994, 7.00%, 7/1/03
(Insured by MBIA).......................
1,375,000 New Jersey State, Series D, GO, 5.25%, 1,400,781
2/15/01.................................
3,000,000 Ocean County Utilities Authority, 3,228,750
Wastewater Revenue, Refunding, GO,
6.00%, 1/1/07...........................
------------
12,730,719
------------
NEW YORK (2.2%):
1,030,000 Metropolitan Transportation Authority, 1,073,775
Series M, 5.50%, 7/1/08 (Insured by
FGIC)...................................
1,660,000 New York State Urban Development Corp., 1,684,900
Refunding, Syracuse University Center,
5.50%, 1/1/15...........................
1,250,000 Triborough Bridge & Tunnel Authority, 1,201,563
5.00%, 1/1/16 (Insured by FGIC).........
3,000,000 Triborough Bridge & Tunnel Authority, 3,078,750
General Purpose, Series Y, 5.50%,
1/1/17..................................
------------
7,038,988
------------
NORTH CAROLINA (0.6%):
2,000,000 North Carolina Municipal Power Agency 2,042,500
No. 1, Catawba Electric Revenue, 5.90%,
1/1/03..................................
------------
OHIO (1.9%):
500,000 Cleveland Airport System Revenue, Series 518,125
A, 5.50%, 1/1/04........................
500,000 Cleveland-Cuyahoga County Port 502,500
Authority, Rock & Roll Hall of Fame,
Refunding, Subordinated Bonds, 4.90%,
12/1/00.................................
5,000,000 Ohio State Building Authority, 5.00%, 5,106,250
10/1/02.................................
------------
6,126,875
------------
</TABLE>
CONTINUED
77
<PAGE>
Kent Funds
INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
OKLAHOMA (1.2%):
$3,500,000 Tulsa Industrial Authority, University $ 3,801,875
of Tulsa, Series A, 6.00%, 10/1/16
(Insured by MBIA).......................
------------
PENNSYLVANIA (2.1%):
2,000,000 Allegheny County Airport Revenue (AMT), 2,025,000
5.00%, 1/1/02 (Insured by MBIA).........
4,260,000 Chartiers Valley Joint School, ETM, 4,531,575
6.15%, 3/1/07...........................
------------
6,556,575
------------
PUERTO RICO (1.7%):
3,055,000 Puerto Rico Commonwealth Aqueduct & 3,291,763
Sewer Authority, 6.00%, 7/1/06..........
2,000,000 Puerto Rico Commonwealth Highway & 2,027,500
Transportation Authority, Highway
Revenue, Series X, 4.90%, 7/1/01........
------------
5,319,263,
------------
RHODE ISLAND (1.6%):
1,000,000 Providence, GO, 6.70%, 1/15/02, 1,035,860
Prerefunded 1/15/00 @ 102 (Insured by
MBIA)...................................
3,025,000 Rhode Island State, Series A, GO, 5.50%, 3,168,688
8/1/04 (Insured by MBIA)................
1,000,000 State Depositors Economic Protection 1,030,000
Corp., Series B, Special Obligation,
5.20%, 8/1/03 (Insured by MBIA).........
------------
5,234,548
------------
TENNESSEE (0.4%):
1,230,000 Tennessee State, Series B, GO, 6.20%, 1,277,663
6/1/01..................................
------------
TEXAS (10.1%):
400,000 Arlington Permanent Improvements, GO, 411,500
5.38%, 8/15/08, Callable 8/15/06 @
100.....................................
2,250,000 Central Texas Higher Education 2,261,250
Authority, Inc., 4.85%, 12/1/02.........
2,245,000 Dallas Independent School District, GO, 2,329,188
5.40%, 8/15/03 (Insured by PSFG)........
1,500,000 Houston Water & Sewer System Revenue, 1,578,750
Junior Lien, Series C, 5.75%, 12/1/03
(Insured by MBIA).......................
1,000,000 Houston Water & Sewer System Revenue, 1,063,750
Prior Lien, Series A, 7.00%, 12/1/01
(Insured by AMBAC)......................
3,000,000 Lower Colorado River Authority, 4.90%, 3,026,250
1/1/07, Callable 1/1/06 @ 102...........
1,000,000 Pasadena Independent School District, 1,052,500
GO, 6.75%, 8/15/05, Prerefunded 8/15/01
@ 100...................................
1,050,000 Round Rock Independent School District, 1,081,500
GO, 5.25%, 2/15/05 (Insured by PSFG)....
2,980,000 San Antonio Texas Water Revenue: 3,173,699
Unrefunded Balance, 6.30%, 5/15/04
(Insured by FGIC).......................
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
TEXAS (CONTINUED)
<TABLE>
<C> <S> <C>
$2,800,000 Texas Municipal Power Agency, 5.60%, $ 2,880,500
9/1/01 (Insured by MBIA)................
5,595,000 Texas State Public Finance Authority, 6,112,537
Series A, GO, 6.50%, 10/1/04............
4,450,000 Texas State, Series A, GO, 5.70%, 4,678,062
10/1/03.................................
1,155,000 United Texas Independent School 1,173,769
District, 5.5, 8/15/14 (LOC: PSF-GTD)
(b).....................................
1,015,000 University of Texas, University Revenue, 1,082,244
Series A, 6.60%, 8/15/02, Callable
8/15/01 @ 102...........................
------------
31,905,499
------------
VIRGINIA (2.0%):
4,675,000 Metropolitan Washington DC Airports, 4,879,531
5.50%, 10/1/05..........................
1,500,000 Norfolk, GO, 5.13%, 6/1/01.............. 1,526,250
------------
6,405,781
------------
WASHINGTON (5.7%):
5,000,000 Port Seattle Passenger Facilities (AMT), 5,025,000
Series B, 5.00%, 12/1/07 (Insured by
AMBAC)..................................
1,010,000 Port Tacoma Washington, (AMT), 4.9%, 1,006,213
12/1/07, (LOC: AMBAC)...................
2,695,000 Tacoma Electric System, Refunding, 2,883,650
6.00%, 1/1/06 (Insured by AMBAC)........
8,000,000 Washington State, Series A, GO, 5.50%, 8,339,999
9/1/05, Callable 9/1/04 @ 100...........
850,000 Washington State, Series III-H, Motor 897,813
Vehicle Fuel Tax, 5.75%, 9/1/12.........
------------
18,152,675
------------
WISCONSIN (2.0%):
2,500,000 Milwaukee County Revenue, Series B, 2,500,000
4.35%, 6/1/29 (LOC: First National
Bank)...................................
350,000 Milwaukee County, Series A, GO, 5.00%, 345,188
10/1/10, Callable 10/1/08 @ 100.........
1,025,000 Milwaukee Metropolitan Sewer District, 1,032,667
Series A, GO, 6.60%, 10/1/99............
1,500,000 Milwaukee Metropolitan Sewer District, 1,552,500
Series A, GO, ETM, 6.70%, 10/1/00.......
1,000,000 Wisconsin State Public Power, Inc., 1,048,450
Supply System, Series A, 7.00%, 7/1/01,
Callable 7/1/00 @ 102 (Insured by
AMBAC)..................................
------------
6,478,805
------------
WYOMING (0.3%):
1,000,000 Campbell County School District, No. 001 1,027,500
Gillette, GO, 5.15%, 6/1/02.............
------------
TOTAL MUNICIPAL BONDS................... 309,870,299
------------
</TABLE>
CONTINUED
78
<PAGE>
Kent Funds
INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
INVESTMENT COMPANIES (1.4%):
$4,553,660 Dreyfus Tax Exempt Money Market $ 4,553,660
Fund....................................
------------
TOTAL INVESTMENT COMPANIES.............. 4,553,660
------------
TOTAL INVESTMENTS
(Cost $305,666,178) (a) -- 98.9%.................... 314,423,959
------------
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.1%....... 3,547,877
------------
TOTAL NET ASSETS -- 100.0%.......................... $317,971,836
------------
------------
</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........................... $ 10,624,422
Unrealized depreciation........................... (1,866,641)
------------
Net unrealized appreciation....................... $ 8,757,781
------------
------------
</TABLE>
(b) Represents security purchased on a when issued basis.
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.
79
<PAGE>
Kent Funds
TAX-FREE INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
ALTERNATIVE MINIMUM TAX PAPER (0.9%):
LOUISIANA (0.9%):
$1,000,000 Louisiana Housing Finance Agency, Single $ 1,071,250
Family Mortgage Revenue, 6.40%,
6/1/30, Callable 6/1/09 @ 101
(LOC: GNMA/FNMA)........................
------------
TOTAL ALTERNATIVE MINIMUM TAX PAPER..... 1,071,250
------------
MUNICIPAL BONDS (96.4%):
CALIFORNIA (10.6%):
1,000,000 Anaheim Public Financing Authority, 1,092,500
Lease Revenue, Public Improvements
Project, Series A, 6.00%, 9/1/24
(Insured by FSA)........................
1,000,000 California Educational Facilities 1,001,250
Authority, Santa Clara University,
5.25%, 9/1/17
(LOC: AMBAC)............................
500,000 California Educational Facilities 501,250
Authority, Santa Clara University,
5.25%, 9/1/18
(LOC: AMBAC)............................
1,400,000 California State, GO, 7.00%, 6/1/05..... 1,585,500
2,000,000 California State, GO, 6.25%, 9/1/12..... 2,235,000
3,000,000 Northern California Power Agency 3,168,749
Revenue, Geothermal Project, Series A,
5.50%, 7/1/05 (Insured by AMBAC)........
2,000,000 Orange County, Series A, 6.00%, 6/1/10 2,170,000
(Insured by MBIA).......................
1,380,000 Turlock Irrigation District Revenue, 1,502,475
Series A, 6.00%, 1/1/07 (Insured by
MBIA)...................................
------------
13,256,724
------------
COLORADO (7.0%):
400,000 Colorado Housing Finance Authority, 394,500
4.25%, 10/1/05..........................
650,000 Denver City & County Airport Revenue, 707,688
Series C, (AMT), 6.75%, 11/15/22,
Prerefunded 11/15/02 @ 102..............
1,580,000 Denver City & County Airport Revenue, 1,682,700
Series C, (AMT), 6.75%, 11/15/22,
Callable 11/15/02 @ 102.................
2,730,000 Denver City & County School District No. 2,706,113
1, 5.25%, 12/1/16, Callable 12/1/09 @
101 (Insured by FGIC)...................
3,365,000 Denver City & County School District No. 3,327,143
1, 5.25%, 12/1/17, Callable 12/1/09 @
101 (Insured by FGIC)...................
------------
8,818,144
------------
GEORGIA (1.8%):
1,000,000 Georgia State, Series B, GO, 5.95%, 1,082,500
3/1/08..................................
1,300,000 Private Colleges & Universities 1,241,500
Authority, Mercer University Project,
Series A, 4.75%, 10/1/11, Callable
10/1/09 @ 101...........................
------------
2,324,000
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
HAWAII (2.5%):
$2,000,000 Hawaii State, Series CB, GO, 5.75%, $ 2,105,000
1/1/07..................................
200,000 Honolulu City & County, Pre-refunded, 211,500
Series A, ETM, 5.75%, 4/1/10............
800,000 Honolulu City & County, Series A, 5.75%, 844,000
4/1/10..................................
------------
3,160,500
------------
IDAHO (1.2%):
1,500,000 Ada & Canyon Counties School District 1,563,750
No. 2, GO, 5.50%, 7/30/13...............
------------
ILLINOIS (10.2%):
2,000,000 Chicago Metropolitan, Water Reclamation 2,069,999
District, Capital Improvement, GO,
5.50%, 12/1/10..........................
1,000,000 Chicago Public Building Commission, 1,212,500
Series A, ETM, 7.00%, 1/1/20 (Insured by
MBIA)...................................
2,000,000 Chicago School Finance Authority, Series 2,025,000
A, GO, 4.90%, 6/1/05, Callable 6/1/04
@ 102 (Insured by MBIA).................
1,750,000 Chicago Single Family Mortgage Revenue, 1,728,125
Series A, 4.70%, 10/1/17, Callable
4/1/09
@ 102...................................
1,770,000 Chicago UTGO Emergency Telelephone 1,750,088
System, 5.25%, 1/1/18 (Insured by
FGIC)...................................
2,000,000 Du Page & Will Counties, Community 2,035,000
School District No. 204, GO, 4.95%,
12/30/01 (Insured by FGIC)..............
1,000,000 Illinois State Sales Tax, Series S, 1,006,250
5.00%, 6/15/08..........................
1,000,000 Will County Forest Preserve District, 1,045,000
GO, 5.90%, 12/1/03, Callable 12/1/02 @
100 (Insured by AMBAC)..................
------------
12,871,962
------------
INDIANA (5.2%):
2,000,000 Indiana Municipal Power Supply Agency, 2,145,000
System Revenue, Series B, 6.00%, 1/1/13
(Insured by MBIA).......................
2,250,000 Indiana State Office Building 2,278,125
Commission, Capital Complex, Government
Center
Parking Facilities, Series A, 4.80%,
7/1/03 (Insured by AMBAC)...............
1,000,000 Indiana Transportation Finance 1,046,250
Authority, Highway Revenue, Series A,
5.75%, 6/1/12
(Insured by AMBAC)......................
1,000,000 Marion County Hospital Authority 1,066,250
Revenue, Community Hospital,
Indianapolis Project, ETM, 6.00%,
5/1/06..................................
------------
6,535,625
------------
</TABLE>
CONTINUED
80
<PAGE>
Kent Funds
TAX-FREE INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
IOWA (1.8%):
2,055,000 Iowa Finance Authority, Private College $ 2,324,719
Revenue, Drake University Project,
6.50%,
12/1/11 (Insured by MBIA)...............
------------
KENTUCKY (1.0%):
1,315,000 Louisville & Jefferson County, 1,283,769
Metropolitan Sewer District, Sewer &
Drain System
Revenue, Series A, 5.25%, 5/15/27,
Callable 5/15/07 @ 101 (Insured by
MBIA)...................................
------------
LOUISIANA (0.2%):
315,000 Shreveport LA, GO, 4.00%, 2/1/08 295,313
(Insured by FGIC).......................
------------
MARYLAND (1.6%):
2,000,000 Prince Georges County, Consolidated 2,037,500
Public Improvement, GO, 5.00%, 1/1/02
(Insured by MBIA).......................
------------
MASSACHUSETTS (3.3%):
2,370,000 Massachusetts State Port Authority, 2,186,325
5.00%, 7/1/28, Callable 7/1/08 @ 101....
1,000,000 Massachusetts State Water, Resource 926,250
Authority, Series B, 5.00%, 12/1/25,
Callable 12/1/05 @ 102 (Insured by
MBIA)...................................
1,000,000 Massachusetts State, Series B, GO, 1,045,000
5.40%, 11/1/06..........................
------------
4,157,575
------------
MICHIGAN (16.9%):
2,000,000 Battle Creek Downtown Development 2,267,499
Authority, Tax Increment Revenue,
7.30%, 5/1/10, Prerefunded 5/1/04
@ 102...................................
1,300,000 Berkley School District, GO, 7.00%, 1,472,250
1/1/07 (Insured by FGIC)................
2,000,000 Detroit Sewage Disposal Revenue, Series 2,167,499
B, 6.00%, 7/1/09 (Insured by MBIA)......
1,000,000 Detroit Water Supply System, Series B, 1,020,000
5.10%, 7/1/07 (Insured by MBIA).........
1,625,000 Jenison Michigan Public Schools, 5.25%, 1,629,063
5/1/15 (Insured by FGIC)................
930,000 Kent County Airport Facility, Kent 977,663
County International Airport, (AMT),
5.50%,
1/1/07, Callable 1/1/05 @ 102...........
1,000,000 Michigan Higher Education Facilities 981,250
Authority, 5.35%, 5/1/15, Callable
5/1/08
@ 101 (LOC: FOA)........................
2,000,000 Michigan State Hospital Finance 1,940,000
Authority, Sisters of Mercy, Series P,
5.25%, 8/15/21,
Callable 8/15/03 @ 102 (Insured by
MBIA)...................................
1,300,000 Michigan State Housing Development 1,324,375
Authority, Rental Housing Revenue,
Series A, 5.15%, 4/1/02 (Insured by
AMBAC)..................................
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
1,000,000 Michigan State South Central Power $ 1,065,000
Agency, Power Supply System Revenue,
5.80%, 11/1/05 (Insured by MBIA)........
1,100,000 Michigan State Strategic Fund, Dow 1,100,000
Chemical Co. Project, 3.45%*, 7/1/99....
2,000,000 Michigan State Trunk Line, 5.50%, 2,112,500
11/1/16, Prerefunded 11/1/06 @ 101
(Insured
by FGIC)................................
1,000,000 Michigan State Underground Storage Tank 1,070,000
Financial Assurance Authority, Series I,
6.00%, 5/1/05 (Insured by AMBAC)........
2,000,000 Michigan State University Revenue, 2,067,500
Series A, 5.50%, 8/15/22, Callable
8/15/02 @ 100...........................
------------
21,194,599
------------
MISSISSIPPI (0.3%):
350,000 Mississippi Home Corp. Single Family 343,875
Mortgage, Class 4, Series A, 4.80%,
6/1/19,
Callable 6/1/09 @ 102...................
------------
MISSOURI (0.4%):
335,000 Missouri State, Health & Education 373,944
Facilities, 6.50%, 2/15/21, Callable
2/15/06 @ 102...........................
165,000 Missouri State, Health & Education 174,281
Facilities, Lake of Ozarks General
Hospital,
6.50%, 2/15/21, Callable 2/15/06 @
102.....................................
------------
548,225
------------
NEBRASKA (0.9%):
1,075,000 Omaha Public Power District, 5.10%, 1,093,813
2/1/08..................................
------------
NEVADA (3.4%):
1,805,000 Clark County School District, GO, 5.75%, 1,929,094
6/15/10, Prerefunded 6/15/06 @ 101
(Insured by FGIC).......................
2,000,000 Nevada State, Nevada Municipal Bond 2,375,000
Bank, Series A, GO, 8.00%, 11/1/05......
------------
4,304,094
------------
NEW JERSEY (3.4%):
1,000,000 New Jersey Economic Development 1,017,500
Authority Revenue, Trenton Office
Complex, 5.25%, 6/15/10 (Insured by
FSA)....................................
1,500,000 New Jersey Economic Development 1,665,000
Transition Facility Revenue, Senior
Lien,
7.00%, 7/1/04 (Insured by MBIA).........
1,500,000 New Jersey State Transportation Trust 1,621,875
Fund Authority, Transportation System,
Series A, 6.00%, 12/15/06 (Insured by
MBIA)...................................
------------
4,304,375
------------
</TABLE>
CONTINUED
81
<PAGE>
Kent Funds
TAX-FREE INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
NEW YORK (6.3%):
3,360,000 New York City Transitional Finance $ 3,099,600
Authority, Future Tax Secured, Series C,
5.00%, 5/1/29, Callable 5/1/09 @ 101....
1,350,000 New York City, Municipal Water & Sewer 1,343,250
Revenue, 5.50%, 6/15/24, Callable
6/15/06
@ 101...................................
1,500,000 New York City, Tax Revenue Anticipation 1,515,000
Note, Livingston Plaza Project, 5.40%,
1/1/18 (Insured by FSA).................
1,000,000 New York State Thruway Authority, Series 1,072,500
1997 B, 6.00%, 4/1/07...................
1,000,000 Triborough Bridge & Tunnel Authority, 961,250
5.00%, 01/01/16 (Insured by FGIC).......
------------
7,991,600
------------
OKLAHOMA (1.7%):
1,000,000 Grand River Dam Authority, 5.75%, 6/1/08 1,065,000
(Insured by FSA)........................
1,000,000 Tulsa Industrial Authority, University 1,086,250
of Tulsa, Series A, 6.00%, 10/1/16
(Insured
by MBIA)................................
------------
2,151,250
------------
PENNSYLVANIA (1.6%):
2,000,000 Pennsylvania State, First Series, GO, 2,005,000
5.38%, 5/15/16, Callable 5/15/06 @ 101.5
(Insured by FGIC).......................
------------
RHODE ISLAND (0.8%):
1,000,000 Convention Center Authority, Series B, 1,003,750
5.00%, 5/15/09 (Insured by MBIA)........
------------
SOUTH CAROLINA (1.0%):
1,200,000 Myrtle Beach Water & Sewer Revenue, 1,218,000
4.90%, 3/1/02 (Insured by MBIA).........
------------
TENNESSEE (1.0%):
1,225,000 Tennessee Housing Development Agency, 1,266,344
Mortgage Finance, Series C, (AMT),
5.95%,
7/1/09, Callable 7/1/05 @ 102 (Insured
by MBIA)................................
------------
TEXAS (5.4%):
1,000,000 Brownsville Utility System, 6.25%, 1,103,750
9/1/11 (Insured by......................
1,000,000 Harris County, Certificates of 1,077,500
Obligation, 6.00%, 12/15/11.............
2,000,000 Texas City Industrial Development Corp., 2,487,500
Marine Terminal Revenue, Arco
Pipeline Co. Project, 7.38%, 10/1/20....
2,000,000 Texas State, Series A, GO, 5.70%, 2,102,500
10/1/03.................................
------------
6,771,250
------------
UTAH (2.4%):
2,175,000 Intermountain Power Agency, Utah Power 2,025,469
Supply, Series D, 5.00%, 7/1/23,
Callable
7/1/06 @ 102............................
1,000,000 St. George, Parks & Recreational 987,500
Facilities, GO, 5.38%, 8/1/21, Callable
8/1/07 @ 101
(Insured by FGIC).......................
------------
3,012,969
------------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
WASHINGTON (3.7%):
1,000,000 Douglas County Public Utility District $ 1,047,500
No. 001, Electric Distribution System,
5.90%, 1/1/11, Callable 1/1/05 @ 102
(Insured by MBIA).......................
2,500,000 Port Seattle Limited Tax, GO, (AMT), 2,578,125
5.35%, 5/1/04...........................
1,000,000 Washington State, Motor Vehicle Fuel 1,092,500
Tax, R-92D, GO, 6.25%, 9/1/07...........
------------
4,718,125
------------
WYOMING (0.8%):
1,000,000 Green River-Sweetwater County, Board 991,250
Revenue, Series B, 4.50%, 3/1/14,
Callable 3/1/05 @ 100...................
------------
TOTAL MUNICIPAL BONDS................... 121,548,100
------------
INVESTMENT COMPANIES (2.2%):
$2,564,805 Dreyfus Tax Exempt Money Market Fund.... 2,564,805
147,502 Federated Tax Exempt Money Market 147,502
Fund....................................
------------
TOTAL INVESTMENT COMPANIES.............. 2,712,307
------------
TOTAL INVESTMENTS -- 99.5%.......................... 125,331,657
------------
(Cost $121,856,346) (a)
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%....... 600,534
------------
TOTAL NET ASSETS -- 100.0%.......................... $125,932,191
------------
------------
</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........................... $4,189,758
Unrealized depreciation........................... (714,447)
----------
Net unrealized appreciation....................... $3,475,311
----------
----------
</TABLE>
(b) Represents security purchased on a when issued basis.
* Variable rate security. Rate presented represents rate in effect at June
30, 1999. Maturity date reflects effective maturity for Rule 2a-7 purposes.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FOA First of America
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PSF Permanent School Fund
SEE NOTES TO FINANCIAL STATEMENTS.
82
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (97.3%):
MICHIGAN (94.8%):
1,465,000 Allegan Sanitary Sewer System, (AMT), $ 1,486,975
5.45%, 11/1/02..........................
2,000,000 Battle Creek Downtown Development 2,162,500
Authority, Tax Increment Revenue, 6.90%,
5/1/04..................................
1,000,000 Bay City Electric Utilility Revenue, 1,021,250
5.15%, 1/1/07 (Insured by AMBAC)........
635,000 Bishop International Airport Authority, 636,588
4.88%, 12/1/01..........................
2,450,000 Brighton Area School District, 5.13%, 2,486,750
5/01/08, (Insured by FSA)...............
875,000 Chippewa County Hospital Finance 876,628
Authority, 4.40%, 11/1/99...............
260,000 Chippewa County Hospital Finance 260,325
Authority, 4.60%, 11/1/00...............
1,000,000 Chippewa Valley School District, GO, 1,053,750
6.38%, 5/1/05, Prerefunded 5/1/01 @
101.5 (Insured by FGIC).................
1,700,000 Clintondale Community School District 1,712,750
GO, 4.65%, 5/1/03.......................
2,000,000 Dearborn School District, GO, 6.63%, 2,088,800
5/1/09, Prerefunded 5/1/00 @ 102
(Insured by MBIA).......................
1,000,000 Dearborn School District, GO, 6.38%, 1,042,400
5/1/10, Prerefunded 5/1/00 @ 102
(Insured by MBIA).......................
965,000 Dearborn Sewage Disposal System, 6.90%, 1,028,931
4/1/02 (Insured by MBIA)................
1,800,000 Delta County Economic Development Corp., 1,800,000
Environmental Improvement Revenue, Mead
Escanaba Paper Co., Series F, 3.45%*,
7/1/99, (LOC: Bank of Nova Scotia)......
1,630,000 Detroit Michigan City School District, 1,599,438
3.90%, 5/1/03 (Insured by MBIA).........
1,000,000 Detroit Michigan City School District, 980,000
3.90%, 11/1/03 (Insured by MBIA)........
1,000,000 Detroit Michigan UTGO Series A, 3.90%, 980,000
4/1/02..................................
580,000 Detroit, Distributable State Aid, GO, 589,959
5.60%, 5/1/00 (Insured by AMBAC)........
1,000,000 Detroit, GO, 5.00%, 4/1/04 (Insured by 1,016,250
FGIC) ..................................
750,000 Detroit, GO, 6.00%, 4/1/06 (Insured by 800,625
FGIC) ..................................
1,570,000 Detroit, Local Development Finance 1,603,363
Authority, Tax Increment Revenue, 5.25%,
5/1/07..................................
1,730,000 Dexter Community School District, GO, 1,890,025
6.25%, 5/1/07 (Insured by FGIC).........
2,000,000 East China Township School District, GO, 2,102,500
6.00%, 5/1/02, Callable 5/1/01 @ 102....
1,000,000 Eastern Michigan University, GO, 5.80%, 1,031,250
6/1/01 (Insured by AMBAC)...............
445,000 Farmington Hills Economic Development 455,569
Corp. Revenue, Botsford Continuing Care,
Series A, 5.10%, 2/15/04 (Insured by
MBIA)...................................
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
470,000 Farmington Hills Economic Development $ 482,338
Corp. Revenue, Botsford Continuing Care,
Series A, 5.20%, 2/15/05 (Insured by
MBIA)...................................
465,000 Flint Hospital Building Authority, 465,000
Hurley Medical Center, 4.00%, 7/1/99....
1,400,000 Flint Hospital Building Authority, 1,389,500
Hurley Medical Center, Series A, 5.00%,
7/1/03..................................
305,000 Flint Hospital Building Authority, 305,000
Hurley Medical Center, Series B, 4.00%,
7/1/99..................................
740,000 Grand Haven Area Public Schools, 5.45%, 779,775
5/1/04, (Insured by MBIA), Prerefunded
5/1/03 @ 102............................
260,000 Grand Haven Area Public Schools, 5.45%, 270,400
5/1/04, (Insured by MBIA), Callable
5/1/03 @ 102............................
510,000 Grand Rapids Charter Twp Michigan, 504,263
4.10%, 7/1/02...........................
1,250,000 Greater Detroit Resource Recovery 1,275,000
Authority, Series B, 5.00%, 12/13/02
(Insured by AMBAC)......................
1,575,000 Hamilton Community Schools District, 1,645,875
5.50%, 5/1/07 (Insured by FGIC).........
1,250,000 Huron Valley School District, GO, 7.10%, 1,339,063
5/1/08, Prerefunded 5/1/01 @ 102
(Insured by FGIC).......................
750,000 Kalamazoo Hospital Finance Authority 780,000
Revenue, Bronson Methodist Hospital,
5.50%, 5/15/08 (Insured by MBIA)........
1,810,000 Kalamazoo Hospital Finance Authority, 1,841,675
Refunding & Improvement, Bronson
Methodist Hospital, 4.95%, 5/15/02
(Insured by MBIA).......................
1,000,000 Kalamazoo Hospital Finance Authority, 1,030,000
Refunding & Improvement, Bronson
Methodist Hospital, 5.25%, 5/15/05
(Insured by MBIA).......................
1,295,000 Kenowa Hills Public Schools, GO, 5.50%, 1,351,656
5/1/05..................................
500,000 Kent County Airport Facility, Kent 512,500
County International Airport, (AMT),
5.25%, 1/1/04...........................
505,000 Kent County Airport Facility, Kent 519,519
County International Airport, (AMT),
5.30%, 1/1/05...........................
645,000 Kent County Airport Facility, Kent 631,294
County International Airport, (AMT),
4.30%, 1/1/05 (Insured by MBIA).........
1,150,000 Kent Hospital Finance Authority, 1,155,750
Butterworth Hospital, 4.90%, 1/15/05....
2,000,000 Lake Orion Community School District, 2,145,000
GO, 6.20%, 5/1/04 (Insured by AMBAC)....
2,034,014 Michigan Department of State Police 2,034,014
Lease, 4.95%, 3/10/02 (b)...............
1,265,000 Michigan Higher Education Facility 1,244,444
Authority - Thomas M. Cooley Law School,
4.75%, 5/1/07, (LOC: National City).....
1,000,000 Michigan Hospital Finance Authority, 1,071,250
Sisters Of Mercy, 7.50%, 2/15/18,
Prerefunded 2/15/01 @ 102...............
</TABLE>
CONTINUED
83
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
1,020,000 Michigan Municipal Bond Authority, Local $ 1,059,525
Government Loan Program, Qualified
School, 6.35%, 5/15/01..................
1,000,000 Michigan Municipal Bond Authority, 1,027,500
Pooled Projects, Series B, 5.10%,
10/1/04.................................
2,000,000 Michigan Municipal Bond Authority, State 2,097,500
Revolving Fund, 5.50%, 10/1/06..........
1,500,000 Michigan Municipal Bond Authority, State 1,593,750
Revolving Fund, Series A, 6.00%,
10/1/03.................................
750,000 Michigan Public Power Agency, Belle 781,875
River Project, Series A, 5.70%,
1/1/03..................................
2,000,000 Michigan State Building Authority, 1,965,000
Series I, 4.25%, 10/15/05...............
1,010,000 Michigan State Building Authority, 999,900
Series I, 4.75%, 10/15/08,
Program-Series I........................
1,000,000 Michigan State Building Authority, 1,041,250
Series II, 6.10%, 10/1/01...............
3,000,000 Michigan State Comprehensive 3,131,249
Transportation, Series B, 5.63%,
5/15/03.................................
1,855,000 Michigan State Hospital Finance 1,922,244
Authority, Bay Medical Center, Series A,
5.38%, 7/1/06 (Insured by FSA)..........
2,000,000 Michigan State Hospital Finance 2,015,000
Authority, Daughters of Charity National
Health System, 4.80%, 11/1/17, Mandatory
Put, 11/1/04 @ 100......................
2,000,000 Michigan State Hospital Finance 2,092,500
Authority, McLaren Obligated Group,
Series A, 5.75%, 10/15/03...............
370,000 Michigan State Hospital Finance 369,538
Authority, Memorial Healthcare Center,
4.40%,
11/15/01................................
1,500,000 Michigan State Hospital Finance 1,599,375
Authority, Mercy Health Services, Series
S, 6.00%, 8/15/06.......................
1,000,000 Michigan State Hospital Finance 1,008,750
Authority, Sisters of Mercy Health Corp.
Bond 1993, Series F, 4.60%, 8/15/02
(Insured by MBIA).......................
2,800,000 Michigan State Hospital Finance 2,995,999
Authority, Sisters of Mercy Health
Corp., Series J, 7.38%,
2/15/11,Prerefunded 2/15/01 @ 102.......
1,000,000 Michigan State Hospital Finance 1,017,500
Authority, St. John Hospital & Medical
Center, 5.00%, 5/15/05 (Insured by
AMBAC)..................................
2,680,000 Michigan State Housing Development 2,733,599
Authority, Rental Housing Revenue,
Series A, (AMT), 5.25%, 10/1/01 (Insured
by MBIA)................................
3,270,000 Michigan State Underground Storage, Tank 3,515,249
Financial Assurance Authority, Series I,
6.00%, 5/1/06 (Insured by AMBAC)........
505,000 Michigan Strategic Fund, Clark 502,475
Retirement Community Project, 4.50%,
6/1/03..................................
520,000 Michigan Strategic Fund, Clark 509,600
Retirement Community Project, 4.60%
6/1/04..................................
610,000 Michigan Strategic Fund, Clark 587,125
Retirement Community Project, 4.85%,
6/1/07..................................
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
615,000 Michigan Strategic Fund, Hope Network $ 609,619
Project, Series B, 4.75%, 9/1/07, (LOC:
First of America).......................
1,000,000 Mount Clemens Community School District, 1,078,750
GO, 6.60%, 5/1/20, Prerefunded 5/1/02 @
102 (Insured by MBIA)...................
1,405,000 Oakland County Economic Development 1,405,000
Corp., Boardwalk Shopping Center,
4.38%*, 1/1/09, (LOC: Banc One),
Mandatory Put, 7/1/03 @ 100.............
1,040,000 Oakland County Economic Development 1,040,000
Corp., Sugartree Shopping Center,
4.38%*, 1/1/14, (LOC: Banc One),
Mandatory Put, 7/1/03 @ 100.............
1,000,000 Oakland Washtenaw County Community 1,078,750
College, 6.65%, 5/1/11, Prerefunded
5/1/02 @ 100............................
3,000,000 Okemos Public School District, Series I, 3,198,749
GO, 6.90%, 5/1/11, Prerefunded 5/1/01 @
102.....................................
3,200,000 Plymouth-Canton Community School 3,379,999
District, Series B, GO, 6.80%, 5/1/17,
Prerefunded 5/1/01 @ 101................
735,000 Reeths-Puffer Schools, GO, 6.75%, 5/1/01 768,075
(Insured by FGIC).......................
750,000 Reeths-Puffer Schools, GO, 6.25%, 5/1/02 788,438
(Insured by FGIC).......................
2,000,000 Rockford Public Schools, GO, 7.38%, 2,080,540
5/1/19, Prerefunded 5/1/00 @ 101........
2,035,000 Walled Lake Consolidated School 2,052,806
District, GO, 4.70%,....................
2,235,000 Walled Lake Consolidated School 2,262,938
District, GO, 4.80%,....................
1,025,000 Washtenaw Community College, GO, 4.70%, 1,035,250
4/1/03 (Insured by FGIC)................
550,000 Wayne County Downriver System Sewer 549,538
Disposal, GO, 3.75%, 5/1/00.............
1,000,000 Wayne State University, 4.25%, 11/15/03, 995,000
(Insured by FGIC).......................
1,750,000 Western Michigan University, Series A, 1,863,750
6.50%, 7/15/21, Prerefunded 7/15/01 @
102 (Insured by AMBAC)..................
1,000,000 Wyandotte Electric Revenue, 6.20%, 1,071,250
10/1/03 (Insured by MBIA)...............
------------
113,304,897
------------
PUERTO RICO (2.5%):
3,000,000 Puerto Rico Commonwealth Highway & 3,041,250
Transportation Authority, Highway
Revenue, Series X, 4.90%, 7/1/01........
------------
TOTAL MUNICIPAL BONDS (COST
$115,008,326)........................... 116,346,147
------------
</TABLE>
CONTINUED
84
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ---------------------------------------- ------------
<C> <S> <C>
INVESTMENT COMPANIES (1.5%):
1,834,644 Dreyfus Tax Exempt Money Market Fund.... $ 1,834,644
------------
TOTAL INVESTMENT COMPANIES (COST $1,834,644)....... 1,834,644
------------
TOTAL INVESTMENTS (COST $116,842,970) (a) --
98.8%.............................................. 118,180,791
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2%...... 1,379,836
------------
TOTAL NET ASSETS -- 100.0%......................... $119,560,627
------------
------------
</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........................... $ 1,861,274
Unrealized depreciation........................... (523,453)
------------
Net unrealized appreciation....................... $ 1,337,821
------------
------------
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This security has been deemed liquid by the Board of Trustees.
* Variable rate security. Rate presented represents rate in effect at June
30, 1999. Maturity date reflects effective maturity for
Rule 2a-7 purposes.
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.
85
<PAGE>
Kent Funds
MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
BANK NOTES (2.0%):
$ 5,000,000 First Union National Bank of North $ 5,000,000
Carolina, 5.25%, 9/17/99................
8,000,000 Wacovia, 4.90%, 1/10/00................. 7,997,315
------------
TOTAL BANK NOTES........................ 12,997,315
------------
BANKERS ACCEPTANCES (2.1%):
4,000,000 First Union, 4.85%, 7/12/99............. 3,994,072
5,000,000 First Union, 4.70%, 7/28/99............. 4,982,375
2,390,711 First Union, 4.80%, 9/20/99............. 2,364,891
2,291,000 First Union, 4.80%, 9/22/99............. 2,265,646
------------
TOTAL BANKERS ACCEPTANCES............... 13,606,984
------------
CERTIFICATES OF DEPOSIT (5.4%):
5,000,000 Abn Amro Bank NV, 4.94%, 11/17/99....... 4,994,492
5,000,000 Bank Of Nova Scotia, 5.13%, 9/22/99..... 5,000,000
5,000,000 LaSalle Bank NA, 4.97%, 2/1/00.......... 4,998,863
9,500,000 Michigan National Bank, 4.94%, 9,500,281
9/15/99.................................
5,000,000 National Westminster Bank, 5.20%, 4,997,867
5/10/00 ................................
5,000,000 Toronto Dominion Bank, 5.13%, 4/28/00... 4,999,545
------------
TOTAL CERTIFICATES OF DEPOSIT........... 34,491,048
------------
COMMERCIAL PAPER (38.7%):
4,000,000 Ameritech Cap Fdg Corp., 4.97%, 3,995,582
7/9/99..................................
4,800,000 Ameritech Cap Fdg Corp., 5.00%, 4,792,667
7/12/99.................................
5,000,000 Becton Dickinson & Co., 4.78%,8/19/99... 4,967,469
19,685,000 BellSouth Telecommunications, 5.50%, 19,685,000
7/1/99..................................
4,986,000 BellSouth Telecommunications, 5.05%, 4,981,803
7/7/99..................................
5,000,000 BellSouth Telecommunications, 5.25%, 4,985,417
7/21/99.................................
30,000,000 Cargill, Inc., 5.70%, 7/1/99............ 30,000,001
3,500,000 Coca Cola Co., 5.00%, 7/12/99........... 3,494,653
5,000,000 DaimlerChrysler, 4.99%, 7/7/99.......... 4,995,841
4,669,000 DaimlerChrysler, 4.92%, 8/31/99......... 4,630,076
5,000,000 DaimlerChyrsler, 4.75%, 7/9/99.......... 4,994,722
5,000,000 Dresdner US Finance, Inc., 4.87%, 4,999,324
7/2/99..................................
5,000,000 Dresdner US Finance, Inc., 5.10%, 4,981,583
7/27/99.................................
5,000,000 Duke Energy Trust, 5.00%, 7/6/99........ 4,996,528
20,000,000 Ford Motor Credit Corp., 5.64%, 20,000,000
7/1/99..................................
4,200,000 Ford Motor Credit Corp., 5.50%, 4,196,792
7/6/99..................................
5,000,000 Gannett Co. Inc., 5.10%, 7/19/99........ 4,987,250
7,000,000 General Electric Capital Corp., 4.82%, 6,973,757
7/29/99.................................
5,000,000 General Electric Capital Corp., 4.82%, 4,971,883
8/12/99.................................
7,000,000 General Electric Capital Corp., 4.83%, 6,926,745
9/17/99.................................
5,000,000 General Electric Capital Corp., 4.91%, 4,858,838
1/24/00.................................
5,000,000 General Electric Corp., 4.75%, 4,986,806
7/21/99.................................
5,000,000 General Motors Acceptance Corp., 5.03%, 4,995,110
7/8/99..................................
5,000,000 General Motors Acceptance Corp., 4.94%, 4,973,242
8/9/99..................................
5,000,000 General Motors Acceptance Corp., 4.84%, 4,963,700
8/24/99.................................
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
$ 4,700,000 GTE Corp., 4.98%, 7/13/99............... $ 4,692,198
10,000,000 GTE Corp., 5.01%, 7/14/99............... 9,981,908
5,000,000 GTE Corp., 5.05%, 7/19/99............... 4,987,375
5,000,000 H.J. Heinz Co., 4.82%**, 7/22/99........ 4,985,941
5,000,000 H.J. Heinz Co., 5.08%, 8/19/99.......... 4,965,428
5,000,000 McGraw Hill Inc., 4.78%, 7/13/99........ 4,992,034
10,000,000 Michigan Consolidated Gas Co., 5.80%, 10,000,000
7/1/99..................................
10,000,000 Mobil Corp., 5.12%, 7/8/99.............. 9,990,044
5,000,000 Motorola Inc., 5.02%**, 7/29/99......... 4,980,594
10,000,000 UBS Finance Delaware Inc., 5.25%, 9,998,542
7/2/99..................................
------------
TOTAL COMMERCIAL PAPER.................. 248,908,853
------------
CORPORATE NOTES & BONDS (2.0%):
5,000,000 Ford Motor Credit Corp., 5.73%, 5,021,410
2/23/00.................................
7,825,000 General Motors Acceptance Corp., 6.15%, 7,843,405
9/20/99.................................
------------
TOTAL CORPORATE NOTES & BONDS........... 12,864,815
------------
DEMAND NOTES (29.8%):
4,000,000 Adena Health System, 5.37%*, 7/7/99..... 4,000,000
8,000,000 American Healthcare Funding L.L.C., 8,000,000
5.15%*, 7/7/99 (LOC: LaSalle National
Bank)...................................
4,000,000 American Mfg. Co., Inc., Series 1997, 4,000,000
5.20%*, 7/7/99 (LOC: Mellon Bank).......
7,300,000 Arboretum Properties L.L.C., 5.37%*, 7,300,000
7/7/99 (LOC: Michigan National Bank)....
3,570,000 Buckeye Corrugated, Inc., 5.37%*, 7/7/99 3,570,000
(LOC: Keybank)..........................
7,788,000 Capital One Funding Corp., 5.18%*, 7,788,000
7/7/99 (LOC: Bank One)..................
4,019,000 Capital One Funding Corp., 5.18%*,7/7/99 4,019,000
(LOC: Bank One).........................
4,000,000 Chesterwood Village Realty, 5.13%*, 4,000,000
7/7/99 (LOC: Fifth Third Bank)..........
3,100,000 City of Cloquet, Minnesota Taxable 3,100,000
Industrial Bond, Series 1996B, 5.25%*,
7/7/99 (LOC: Credit Suisse).............
5,000,000 Elsinore Properities Ltd Partner, 5,000,000
5.13%*, 7/7/99 (LOC: Fifth Third
Bank)...................................
3,920,000 Excel Health Services, Inc., 5.37%*, 3,920,000
7/7/99..................................
4,645,000 First Metro Title Co., 5.13%*, 7/7/99 4,645,000
(LOC: Michigan National Bank)...........
6,565,000 GTB Properties L.L.C., 5.20%*, 7/7/99 6,565,000
(LOC: Michigan National Bank)...........
4,325,000 Harry W. Albright, Jr., 5.15%*, 4,325,000
7/7/99..................................
3,400,000 HWP Co., Ltd. Project, 5.27%*, 7/7/99 3,400,000
(LOC: National City Bank Cleveland,
Ohio)...................................
3,350,000 Idaho Associates L.L.C., 5.20%*, 7/7/99 3,350,000
(LOC: LaSalle National Bank)............
5,010,000 Jackson Tube Service, Inc., 5.37%*, 5,010,000
7/7/99..................................
5,000,000 JW Harris Co., Inc., 5.13%*, 7/7/99 5,000,000
(LOC: Fifth Third Bank).................
4,445,000 Labelle Capital Funding L.L.C., 5.15%*, 4,445,000
7/7/99 (LOC: First of America Bank -
Michigan)...............................
</TABLE>
CONTINUED
86
<PAGE>
Kent Funds
MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
DEMAND NOTES (CONTINUED)
$ 1,500,000 Laird's Auto Glass & Trim, Inc., 5.35%*, $ 1,500,000
7/7/99 (LOC: Michigan National Bank)....
3,920,000 Macroe Properties, Inc., 5.15%*, 7/7/99 3,920,000
(LOC: Huntington Bank)..................
5,000,000 Nationsbank Corp., 4.96%*, 7/1/99....... 5,000,000
6,000,000 Nationsbank Corp., 5.38%*, 11/18/99..... 6,004,238
2,500,000 Neenah Wisc. Indl Dev, 5.16%*, 7/7/99 2,500,000
(LOC: Banc One Capital).................
8,220,000 Ordeal Properties L.L.C., 5.37%*, 7/7/99 8,220,000
(LOC: Keybank)..........................
2,420,000 Patt's Enterprises L.L.C., 5.15%*, 2,420,000
7/7/99 (LOC: Huntington National
Bank)...................................
2,250,000 Pittsburgh Technical Institute, 5.27%*, 2,250,000
7/7/99 (LOC: National City Bank)........
8,700,000 Polk County Florida, 5.29%*, 7/7/99 8,700,000
(LOC: Nationsbank)......................
8,150,000 PRD Finance L.L.C., 5.24%*, 7/7/99 (LOC: 8,150,000
First of America Bank - Michigan).......
5,940,000 Reynolds Road Fitness Center, Inc., 5,940,000
5.13%*, 7/7/99 (LOC: Fifth Third
Bank)...................................
1,895,000 Riverview Medical Office Building, 1,895,000
5.27%*, 7/7/99 (LOC: National City
Bank)...................................
4,000,000 Royal Town Center L.L.C. Project, 4,000,000
5.37%*, 7/7/99 (LOC: Comerica Bank).....
2,595,000 Rumpf Development Ltd., 5.37%*, 7/7/99 2,595,000
(LOC: Keybank)..........................
6,740,000 Shelburne Realty And Troy Realty, 6,740,000
5.27%*, 7/7/99 (LOC: National City
Bank)...................................
5,000,000 Sheperd Capital L.L.C., 5.15%*, 7/7/99 5,000,000
(LOC: Comerica Bank)....................
1,900,000 South Bend MAC, L.P., 5.15%*, 7/7/99 1,900,000
(LOC: LaSalle National Bank)............
975,000 The Economic Development Corp. of the 975,000
County of Marquette, Pioneer
Laboratories, Inc. Project, 5.20%*,
7/7/99 (LOC: NBD Bank)..................
2,500,000 Town Of Caledonia, Wisconsin, 5.20%*, 2,500,000
7/7/99 (LOC: Banc One Capital)..........
4,105,000 Tri-O Development L.L.C., 5.27%*, 7/7/99 4,105,000
(LOC: National City Bank)...............
7,300,000 Watson Clinic L.L.P., 5.29%*, 7/7/99 7,300,000
(LOC: Nationsbank)......................
2,790,000 White Mountain Imaging, 5.37%*, 7/7/99 2,790,000
(LOC: Keybank)..........................
5,275,000 Zeigler Realty L.L.C, 5.15%*, 7/1/99 5,275,000
(LOC: First of America Bank-Michigan)...
------------
TOTAL DEMAND NOTES...................... 191,116,238
------------
FUNDING AGREEMENTS (7.0%):
15,000,000 Allmerica Funding Agreement, 5.12%*, 15,000,000
9/1/99..................................
10,000,000 Allstate Financial Corp., 5.07%*, 7/1/99 10,000,000
(b).....................................
20,000,000 General American Life Insurance Co., 20,000,000
5.12%*, 7/1/99 (b)......................
------------
TOTAL FUNDING AGREEMENTS................ 45,000,000
------------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (0.2%):
$ 1,300,000 Michigan State Strategic Fund, Phipps $ 1,300,000
Emmett Assoc, 5.20%*, 7/7/99, (LOC:
National Australia Bank)................
TOTAL MUNICIPAL BONDS................... 1,300,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (1.4%):
4,000,000 Federal Home Loan Bank, 5.01%, 2/3/00... 4,000,000
5,046,000 Freddie Mac, 4.90%, 9/10/99............. 4,997,236
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................. 8,997,236
------------
YANKEE CERTIFICATES OF DEPOSIT (10.3%):
5,000,000 Bank Of Nova Scotia, 4.90%, 1/26/00..... 5,000,000
5,000,000 Bank Of Nova Scotia, 5.19%, 2/28/00..... 5,001,486
5,000,000 Bank Of Nova Scotia, 5.17%, 2/28/00..... 4,999,202
5,000,000 Bayerische Hypo-Und Vereinsbank Ag, 4,998,832
5.01%, 2/7/00...........................
5,000,000 Canadian Imperial Bank Of Canada, 5.01%, 4,999,722
1/27/00.................................
6,000,000 Canadian Imperial Bank Of Commerce, 6,049,715
6.48%, 1/24/00..........................
5,000,000 Canadian Imperial Bank Of Commerce, 4,999,359
5.20%, 2/29/00..........................
5,000,000 Landesbank Hessen, 4.86%, 10/29/99...... 5,000,161
5,000,000 Landesbank Hessen Thuringen 4,999,840
Gironzentale, 5.22%, 2/29/00............
5,000,000 Landesbank Hessen-Thuringen, 5.19%, 4,996,070
2/29/00.................................
5,000,000 National Westminster Bank, 4.98%, 5,001,254
1/7/00..................................
5,000,000 Rabobank Nederland, 5.03%, 1/13/00...... 4,999,482
5,000,000 Toronto Dominion, 5.06%, 2/10/00........ 4,999,113
------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT.... 66,044,236
------------
INVESTMENT COMPANIES (0.9%):
1,983,375 Dreyfus Cash Management Money Market 1,983,375
Fund....................................
3,629,695 Federated Prime Value Obligations Money 3,629,695
Market Fund.............................
TOTAL INVESTMENT COMPANIES........................... 5,613,070
------------
TOTAL INVESTMENTS (AMORTIZED COST $640,939,795) (a)
- -- 99.8%............................................. 640,939,795
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2%........ 1,070,494
------------
TOTAL NET ASSETS -- 100.0%........................... $642,010,289
------------
------------
</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, 1999. Maturity date reflects effective maturity for Rule 2a-7 purposes.
** Effective yield at purchase.
LOC Letter of Credit
PLC Public Limited Company
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (93.2%):
MICHIGAN (89.0%):
$ 1,090,000 Ann Arbor Public Schools, 7.00%, 5/1/00, $ 1,123,684
Q-Sblf..................................
5,000,000 City Of Dearborn Economic Development 5,000,000
Corp., Henry Ford Village, 3.85%*,
7/1/99, (LOC: Comerica).................
910,000 Clinton Township Economic Development 910,000
Corp., Pointe
Village Square, (AMT), 3.40%*, 8/1/99,
(LOC: National City)....................
2,100,000 Delta County Economic Development Corp., 2,100,000
Environmental Improvement Revenue, Mead
Escanaba Paper Co., Series D, 3.45%*,
7/1/99, (LOC: Credit Suisse)............
500,000 Delta County Economic Development Corp., 500,000
Environmental Improvement Revenue, Mead
Escanaba Paper Co., Series F, 3.45%*,
7/1/99, (LOC: Bank of Nova Scotia)......
7,700,000 Detroit Michigan City School District, 7,700,000
4.50%, 7/1/99...........................
500,000 Detroit Michigan Downtown Development 500,000
Authority Tax Increment, Project A,
3.60%, 7/1/99, (Insured by MBIA)........
7,530,000 Detroit Michigan Economic Development 7,530,000
Corp, 3.80%*, 7/1/99, (LOC: Bank Of
America)................................
3,730,000 Detroit Michigan Economic Development 3,730,000
Corp., 3.80%*, 7/1/99, (LOC: Bank of
America)................................
1,000,000 Detroit Michigan School District, 4.00%, 1,007,112
6/1/00..................................
1,300,000 Detroit Michigan Sewage Disposal, 7.13%, 1,319,500
7/1/99, Prerefunded 7/1/99 @ 101.50,
(Insured by MBIA).......................
1,460,000 Detroit Public Schools, 2.90%, 11/1/99, 1,460,000
(Insured by MBIA).......................
365,000 Farmington Hills Michigan Education, 365,000
Marketing Displays, (AMT), 3.25%*,
9/1/99, (LOC: Comerica Bank)............
7,000,000 Genesee County Economic Development 7,000,000
Corp., Rue Properties, (AMT), 3.95%*,
7/1/99, (LOC: Nationsbank)..............
1,750,000 Jackson Public Schools State Aid Notes, 1,750,784
3.30%, 8/25/99, (LOC: Comerica).........
3,000,000 Kalamazoo Michigan City School District, 3,002,128
3.75%, 9/16/99, (LOC: National City)....
5,000,000 Kalamazoo Michigan Tax Anticipation 5,010,250
Notes, 3.50%, 12/1/99...................
1,000,000 Kent County Hospital Authority, 1,041,589
Butterworth Hospital, 7.25%, 1/15/12,
Prerefunded 1/15/00 @ 102...............
1,875,000 Leelanau County Economic Development 1,875,000
Corp., American Mutual Insurance Co.,
3.40%*, 12/15/99, (LOC: National City)..
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 4,290,000 Lenawee County Economic Development $ 4,290,000
Corp., Rima Mfg. Co. Project, (AMT),
3.75%*, 7/7/99, (LOC: Keybank)..........
390,000 Livonia County Economic Development 390,000
Corp., American Community Mutual
Insurance Co., 3.50%*, 11/15/99, (LOC:
National City)..........................
1,400,000 Marquette County Economic Development 1,400,000
Corp., Pioneer Labs, Inc., (AMT),
3.90%*, 7/7/99, (LOC: Banc One).........
1,800,000 Meridian Michigan Economic Development 1,800,000
Corp., Hannah Technology, 3.35%*,
7/7/99, (LOC: Comerica Bank)............
2,000,000 Michigan Building Authority Detroit 2,020,938
Prison, 7.25%, 10/1/08, Prerefunded
10/1/99 @ 100...........................
2,520,000 Michigan Municipal Bond Authority, 2,523,416
4.50%, 8/27/99, (LOC: Comerica).........
6,000,000 Michigan Municipal Bond Authority, 6,006,053
4.25%, 8/27/99, (LOC: Bank of Nova
Scotia).................................
10,059,309 Michigan Municipal Bond Authority, 10,059,310
4.00%, 6/30/00, (LOC: Morgan Guaranty
Trust)..................................
8,000,000 Michigan Municipal Bond Authority, 8,019,642
School Loan, 3.50%, 12/1/99.............
3,500,000 Michigan Municipal Bond Authority, 3,500,083
Series B-1, 4.50%, 7/2/99...............
3,500,000 Michigan Municipal Bond Authority, 3,504,497
Series D-1, 4.25%, 8/27/99..............
1,000,000 Michigan State Building Authority, 1,002,012
Series 1, 4.20%, 10/1/99, (Insured by
AMBAC)..................................
6,000,000 Michigan State Housing Development 6,000,000
Authority Multifamily Series A, 3.35%,
8/25/99, (LOC: Helaba)..................
3,000,000 Michigan State Housing Development 3,000,000
Authority, Canton Club East, (AMT),
3.60%*, 7/7/99, (LOC: Keybank)..........
1,650,000 Michigan State Housing Development 1,650,000
Authority, Laurel Valley, 3.50%*,
7/7/99, (LOC: Wachovia).................
1,500,000 Michigan State Housing Development 1,500,000
Authority, Limited Obligation Revenue,
Pine Ridge, 3.50%*, 7/7/99, (LOC:
Wachovia)...............................
1,190,000 Michigan State Housing Development 1,190,000
Authority, Series B, (AMT), 3.00%,
12/1/99.................................
1,300,000 Michigan State Housing Development 1,300,000
Authority, Woodland Meadows, (AMT),
3.60%*, 7/7/99, (LOC: Union Bank of
Switzerland)............................
3,300,000 Michigan State Job Development 3,300,000
Authority, BASF Wyandotte, 3.70%*,
7/7/99, (LOC: Bayerische Landesbank)....
</TABLE>
CONTINUED
88
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 1,000,000 Michigan State Strategic Fund, AACOA $ 1,000,000
Extrusions, Inc., (AMT), 3.85%*, 7/7/99,
(LOC: Banc One).........................
2,510,000 Michigan State Strategic Fund, 2,510,000
Atmosphere Annealing, (AMT), 3.80%*,
7/7/99, (LOC: National City)............
1,160,000 Michigan State Strategic Fund, B.K. 1,160,000
Hardwoods, (AMT), 3.70%*, 7/7/99, (LOC:
National Australia).....................
4,035,000 Michigan State Strategic Fund, Banks 4,035,000
Hardwoods, Inc., (AMT), 3.72%*, 7/7/99,
(LOC: Banc One).........................
1,900,000 Michigan State Strategic Fund, Besser 1,900,000
International Sales Inc. Project, (AMT),
3.85%*, 7/7/99, (LOC: Banc One).........
2,900,000 Michigan State Strategic Fund, Biewer Of 2,900,000
Lansing, 3.85%*, 7/7/99, (LOC: National
Australia)..............................
3,135,000 Michigan State Strategic Fund, 3,135,000
Bloomfield Valley Properties, 3.20%*,
7/1/99, (LOC: Charter One)..............
3,700,000 Michigan State Strategic Fund, Brazing 3,700,000
Concepts Co., (AMT), 3.85%*, 7/7/99,
(LOC: Banc One).........................
1,275,000 Michigan State Strategic Fund, C-1, 1,275,000
(AMT), 3.90%*, 7/7/99, (LOC: Comerica
Bank)...................................
1,000,000 Michigan State Strategic Fund, C-Tec 1,000,000
Inc. Project, (AMT), 3.80%*, 7/7/99,
(LOC: Suntrust Bank)....................
2,300,000 Michigan State Strategic Fund, Consumers 2,300,000
Power, 3.40%*, 7/7/99, (LOC: Union Bank
of Switzerland).........................
2,375,000 Michigan State Strategic Fund, 2,375,000
Cyberplast, (AMT), 3.60%*, 7/7/99, (LOC:
Banc One)...............................
4,855,000 Michigan State Strategic Fund, 4,855,000
Dawnbreakers LLC, (AMT), 3.80%*, 7/7/99,
(LOC: National City)....................
2,400,000 Michigan State Strategic Fund, Dixie Cut 2,400,000
Stone Project, 3.90%*, 7/7/99, (LOC:
National Australia).....................
2,500,000 Michigan State Strategic Fund, Donnelly 2,500,000
Corp., Series B, (AMT), 3.40%*, 10/1/99,
(LOC: Dresdner Bank)....................
2,600,000 Michigan State Strategic Fund, Dow 2,600,000
Chemical Co. Project, (AMT) 3.60%*,
7/1/99..................................
2,000,000 Michigan State Strategic Fund, Dow 2,000,000
Chemical Co. Project, 3.45%*, 7/1/99....
3,000,000 Michigan State Strategic Fund, E & L 3,000,000
Meat Project, 3.90%*, 7/7/99, (LOC:
National Australia).....................
1,170,000 Michigan State Strategic Fund, 1,170,000
Enviromental Powder Co., (AMT), 3.70%*,
7/7/99, (LOC: National Australia).......
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 1,000,000 Michigan State Strategic Fund, Equad $ 1,000,000
Project, (AMT), 3.80%*, 7/7/99, (LOC:
National City)..........................
750,000 Michigan State Strategic Fund, Focus 750,000
Hope Group, 3.65%, 10/1/99, (LOC:
National Australia).....................
1,405,000 Michigan State Strategic Fund, Gollin 1,405,000
Block & Supply Co., (AMT), 3.90%*,
7/7/99, (LOC: Northern Trust)...........
1,510,000 Michigan State Strategic Fund, Hamilton 1,510,000
Industrial Products, Inc. Project,
(AMT), 3.70%*, 7/7/99, (LOC: National
Australia)..............................
1,715,000 Michigan State Strategic Fund, I.V.C. 1,715,000
Industrial Coatings, Inc., (AMT),
3.72%*, 7/7/99, (LOC: Banc One).........
1,700,000 Michigan State Strategic Fund, 1,700,000
Industrial Development, Kinder Care,
3.65%*, 7/7/99, (LOC: Chase Manhattan
Bank)...................................
2,300,000 Michigan State Strategic Fund, Jedco 2,300,000
Inc., 3.70%*, 7/1/99, (LOC: Banc One)...
555,000 Michigan State Strategic Fund, Kazoo, 555,000
Inc. Project, (AMT), 3.35%*, 9/15/99,
(LOC: National City)....................
2,845,000 Michigan State Strategic Fund, Kerkstra 2,845,000
Precast Project (AMT), 3.70%*, 7/1/99,
(LOC: Huntington Bank)..................
1,380,000 Michigan State Strategic Fund, Kerkstra, 1,380,000
(AMT), 3.70%*, 7/7/99, (LOC: Huntington
Bank)...................................
1,400,000 Michigan State Strategic Fund, 1,400,000
Kundinger, 3.85%*, 7/7/99, (LOC: Banc
One)....................................
1,320,000 Michigan State Strategic Fund, Limited 1,320,000
Obligation Revenue, John A. Biewer Co.
Project, (AMT), 3.35%*, 9/1/99, (LOC:
National Australia).....................
2,500,000 Michigan State Strategic Fund, Limited 2,500,000
Obligation Revenue, Cincinnati
Millacron, (AMT), 3.75*%, 7/7/99, (LOC:
PNC
Bank)...................................
945,000 Michigan State Strategic Fund, Limited 945,000
Obligation Revenue, Dickinson Press,
Inc. Project, (AMT), 3.70%*, 7/7/99,
(LOC: Huntington Bank)..................
2,500,000 Michigan State Strategic Fund, Limited 2,500,000
Obligation Revenue, Donnelly Corp.,
(AMT), 3.75%*, 7/7/99, (LOC: Dresdner
Bank)...................................
4,615,000 Michigan State Strategic Fund, Limited 4,615,000
Obligation Revenue, JB Laboratories,
Inc., (AMT), 3.70%*, 7/7/99, (LOC:
Huntington Bank)........................
695,000 Michigan State Strategic Fund, Limited 695,000
Obligation Revenue, Kay Screen Printing,
(AMT), 3.60%*, 7/7/99, (LOC: Comerica
Bank)...................................
</TABLE>
CONTINUED
89
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 1,025,000 Michigan State Strategic Fund, Limited $ 1,025,000
Obligation Revenue, Midbrook Products,
Inc. Project, (AMT), 3.70%*, 7/7/99,
(LOC: Comerica Bank)....................
675,000 Michigan State Strategic Fund, Limited 675,000
Obligation Revenue, Patten Monument,
(AMT), 3.70%, 7/7/99, (LOC: Huntington
Bank)...................................
1,100,000 Michigan State Strategic Fund, Limited 1,100,000
Obligation Revenue, Pilot Industries,
(AMT), 4.00%*, 7/7/99, (LOC: Banc One)..
850,000 Michigan State Strategic Fund, Limited 850,000
Obligation Revenue, Stephenson Land,
(AMT), 3.70%*, 7/7/99, (LOC: Comerica
Bank)...................................
500,000 Michigan State Strategic Fund, Limited 500,000
Obligation Revenue, Tawas Bay
Associates, (AMT), 3.85%, 12/1/99, (LOC:
National City)..........................
430,000 Michigan State Strategic Fund, Limited 430,000
Obligation Revenue, Tom Miller, Inc.,
(AMT), 3.65%*, 7/7/99, (LOC: First
Union)..................................
2,010,000 Michigan State Strategic Fund, Limited 2,010,000
Obligation Revenue, Wayne Disposal
Project, (AMT), 3.60%*, 7/7/99, (LOC:
Comerica)...............................
2,000,000 Michigan State Strategic Fund, Ltd., 2,000,000
5.65%*, 7/1/99..........................
4,000,000 Michigan State Strategic Fund, 4,000,000
Middleville Tool & Die Project, (AMT),
3.85%*, 7/7/99, (LOC: Banc One).........
3,000,000 Michigan State Strategic Fund, Midwest 3,000,000
Kellering Co., 3.80%*, 7/7/99, (LOC:
Banc One)...............................
1,490,000 Michigan State Strategic Fund, Molmec, 1,490,000
Inc., (AMT), 3.80%*, 7/7/99, (LOC:
Comerica Bank)..........................
3,000,000 Michigan State Strategic Fund, Nicholas 3,000,000
Plastics Projects, 3.70%*, 7/7/99, (LOC:
National City)..........................
950,000 Michigan State Strategic Fund, Northern 950,000
Pure Ice Co. Project, (AMT), 3.90%*,
7/7/99, (LOC: National Australia).......
1,000,000 Michigan State Strategic Fund, NSF 1,000,000
International Project, Series 1997B,
3.90%*, 7/7/99, (LOC: National City)....
1,615,000 Michigan State Strategic Fund, Omni 1,615,000
Technical Services, Inc., (AMT), 3.80%*,
7/7/99, (LOC: National City)............
865,000 Michigan State Strategic Fund, Plascore, 865,000
Inc., (AMT), 3.70%*, 7/7/99, (LOC:
Huntington Bank)........................
3,950,000 Michigan State Strategic Fund, Rochester 3,950,000
Gear Project, (AMT), 3.75%*, 7/7/99,
(LOC: Comerica Bank)....................
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 2,200,000 Michigan State Strategic Fund, SFI, $ 2,200,000
3.60%*, 7/7/99, (LOC: ABM/Amro).........
4,500,000 Michigan State Strategic Fund, Stegner 4,500,000
East, 4.05%*, 7/7/99, (LOC: Comerica)...
2,040,000 Michigan State Strategic Fund, Sunrise 2,040,000
Windows Ltd. Project, (AMT), 3.75%*,
7/7/99 (LOC: Keybank)...................
1,000,000 Michigan State Strategic Fund, Thompson 1,000,000
Family Holdings, (AMT), 3.80%*, 7/7/99,
(LOC: National City)....................
5,000,000 Michigan State Strategic Fund, Van Andel 5,000,000
Research Project, 3.55%*, 7/7/99, (LOC:
National Australia).....................
1,000,000 Michigan State Strategic Fund, Wright- 1,000,000
Technology, Inc., Series 1997, (AMT),
3.80%*, 7/7/99, (LOC: National City)....
2,000,000 Michigan State Strategic Fund, Xibitz, 2,000,000
Inc. Project, (AMT), 3.85%*, 7/7/99,
(LOC: Banc One).........................
1,000,000 Michigan State Trunk Line, 4.70%, 1,006,051
11/15/99, (Insured by FGIC).............
1,000,000 Michigan State Trunk Line, 7.00%, 1,024,757
8/15/99, Prerefunded 8/15/99 @ 102......
2,000,000 Michigan State Underground Storage, Tank 2,028,804
Financial Assurance Authority, Series I,
5.00%, 5/1/00 (Insured by AMBAC)........
6,700,000 Michigan State Underground Tank Storage, 6,700,000
3.25%, 9/15/99, (LOC: CIBC).............
5,500,000 Midland County Economic Development 5,500,000
Corp., Limited Obligation Revenue, Dow
Chemical Project, Series A, (AMT),
3.80%*, 7/1/99..........................
1,000,000 Midland County, Economic Development 1,000,000
Corp., Dow Chemical, Series B, 3.75%*,
7/1/99..................................
750,000 Municipal Bond Authority, Revenue, 750,000
3.05%, 11/1/99, (Insured by AMBAC)......
3,000,000 Oakland County Economic Development 3,000,000
Corp., Cranbrook Community, 3.50%*,
7/7/99, (LOC: Comerica Bank)............
675,000 Oakland County Economic Development 675,000
Corp., Orchard Maple Project, 3.90%*,
11/15/99, (LOC: National City)..........
675,000 Oakland County Michigan Building 677,007
Authority, West Wing Extension, 5.10%,
9/1/99..................................
280,000 Rochester Hills Economic Development 280,000
Corp., BRG Assoc., 3.40%*, 12/1/99,
(LOC: Comerica Bank)....................
1,200,000 Scio Township Economic Development 1,200,000
Corp., Daycroft School Project, 3.90%*,
7/7/99, (LOC: National Australia).......
1,070,000 St. Clair Shores, Michigan Education, 1,070,000
Borman's, Inc. Project, (AMT), 3.30%*,
10/15/99, (LOC: National Australia).....
</TABLE>
CONTINUED
90
<PAGE>
Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 7,000,000 University of Michigan Hospital Revenue, $ 7,000,000
Series A, 3.45%*, 7/1/99................
1,150,000 University of Michigan Hospital Revenue, 1,150,000
Series A, 3.45%*, 7/1/99................
2,000,000 University of Michigan University 900,000
Revenue, 3.45%*, 7/1/99.................
900,000 University of Michigan, Medical Service 2,000,000
Plan, Series A, 3.45%*, 7/1/99..........
1,610,000 Warren Economic Development Corp., CMX 1,610,000
Corp. Project, (AMT), 3.35%*, 9/15/99,
(LOC: National City)....................
1,120,000 Warren Economic Development Corp., Cross 1,120,000
Country Inn, (AMT), 3.40%, 11/1/99,
(LOC: Huntington Bank)..................
525,000 Warren Economic Development Corp., 525,000
Limited Obligation Revenue, Elias
Brothers, (AMT), 3.55%, 12/1/99, (LOC:
AMN/Amro)...............................
4,410,000 Wayne County Airport, Detroit Airport, 4,410,000
Series A, (AMT), 3.45%*, 7/7/99, (LOC:
Baerische Landesbank)...................
1,150,000 Ypsilanti School District, 4.50%, 5/1/00 1,161,902
(Insured by FGIC).......................
------------
281,319,519
------------
PUERTO RICO (4.2%):
4,695,000 Puerto Rico Industrial Medical & 4,695,000
Environmental Pollution Control,
Facilities Financing Authority, Abbott
Labs, 2.90%*, 9/1/99....................
4,200,000 Puerto Rico Industrial Medical & 4,200,000
Environmental Pollution Control,
Facilities Financing Authority, Merck,
2.90%*, 12/1/99.........................
4,250,000 Puerto Rico Industrial Medical & 4,250,200
Environmental Pollution Control,
Facilities Financing Authority, Reynolds
Metal, 3.60%*, 9/1/99, (LOC:
ABN/Amro)...............................
------------
13,145,200
------------
TOTAL MUNICIPAL BONDS (AMORTIZED COST $294,464,719).. 294,464,719
------------
TAX FREE COMMERCIAL PAPER (9.0%):
MICHIGAN (9.0%):
9,600,000 Delta County Economic Development Corp., 9,600,000
Environmental Improvement Revenue, Mead
Escanaba Paper Co., Series A, 3.10%*,
7/7/99, (LOC: Morgan Guaranty)..........
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ----------- ---------------------------------------- ------------
<C> <S> <C>
TAX FREE COMMERCIAL PAPER (CONTINUED)
</TABLE>
MICHIGAN (CONTINUED)
<TABLE>
<C> <S> <C>
$ 5,810,000 Delta County Economic Development Corp., $ 5,810,000
Environmental Improvement Revenue, Mead
Escanaba Paper Co., Series B, 3.00%*,
7/12/99, (LOC: Union Bank of
Switzerland)............................
2,490,000 Delta County Economic Development Corp., 2,490,000
Environmental Improvement Revenue, Mead
Escanaba Paper Co., Series B, 3.00%*,
7/7/99, (LOC: Union Bank of
Switzerland)............................
1,530,000 Detroit, Michigan, Waterfront 1,530,000
Reclamation, 3.75%, 7/7/99, (LOC:
LaSalle Bank)...........................
1,500,000 Michigan State Builders, 3.15%, 1,500,000
8/5/99..................................
7,500,000 Michigan State Builders, 3.15%, 7,500,000
8/15/99.................................
------------
28,430,000
------------
TOTAL TAX FREE COMMERCIAL PAPER
(AMORTIZED COST $28,430,000)............ 28,430,000
------------
INVESTMENT COMPANIES (0.5%):
109,625 Dreyfus Tax Exempt Money Market Fund.... 109,625
------------
1,333,847 Federated Tax Exempt Money Market 1,333,847
Fund....................................
------------
TOTAL INVESTMENT COMPANIES (AMORTIZED
COST $1,443,472)........................ 1,443,472
------------
TOTAL INVESTMENTS
(AMORTIZED COST $324,338,191) (a) -- 102.7%.......... 324,338,191
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.7)%...... (8,668,614)
------------
TOTAL NET ASSETS -- 100.0%........................... $315,669,577
------------
------------
</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, 1999. Maturity date reflects effective maturity for
Rule 2a-7 purposes.
AMBAC - AMBAC Indemnity Corp.
AMT - Alternative Minimum Tax Paper
FGIC - Financial Guaranty Insurance Corp.
FOA - First of America
FSA - Financial Security Assurance
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
QSBLF - Qualified School Board Lending Fund
STP - Short Term Put
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE>
Kent Funds
KENT FUNDS
GOVERNMENT MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ---------- ---------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (76.8%):
FANNIE MAE (13.0%):
$3,000,000 4.87%**, 8/5/99......................... $ 2,985,942
5,000,000 4.80%**, 8/11/99........................ 4,973,009
5,000,000 4.80%**, 8/26/99........................ 4,963,211
5,000,000 4.93%**, 11/19/99....................... 4,905,804
4,000,000 4.83%, 1/11/00.......................... 3,998,584
4,000,000 5.34%**, 1/18/00........................ 3,884,313
------------
25,710,863
------------
FEDERAL FARM CREDIT BANK (1.8%):
3,483,000 4.74%**, 7/6/99......................... 3,480,760
------------
FEDERAL HOME LOAN BANK (17.7%):
4,000,000 4.75%**, 7/7/99......................... 3,996,907
5,000,000 5.33%*, 7/7/99.......................... 4,999,723
5,000,000 4.86%**, 7/16/99........................ 4,989,917
4,155,000 4.94%**, 7/21/99........................ 4,143,643
4,000,000 4.94%, 10/27/99......................... 4,000,000
4,000,000 5.36%*, 7/7/99.......................... 4,000,391
4,000,000 5.15%, 3/17/00.......................... 4,000,000
4,750,000 5.08%, 4/28/00.......................... 4,750,566
------------
34,881,147
------------
FREDDIE MAC (44.3%):
2,000,000 4.76%, 7/1/99........................... 2,000,000
1,657,000 5.01%**, 7/2/99......................... 1,656,779
1,611,000 4.81%**, 7/6/99......................... 1,609,937
5,000,000 4.77%**, 7/9/99......................... 4,994,767
4,000,000 4.82%**, 7/9/99......................... 3,995,778
2,245,000 4.80%**, 7/12/99........................ 2,241,728
6,270,000 4.85%**, 7/13/99........................ 6,259,917
15,461,000 4.80%**, 7/14/99........................ 15,434,440
5,000,000 4.84%**, 7/19/99........................ 4,987,975
5,000,000 4.79%**, 8/2/99......................... 4,978,978
5,947,000 4.98%**, 8/9/99......................... 5,916,527
5,000,000 4.86%**, 8/19/99........................ 4,967,367
5,000,000 4.84%**, 8/20/99........................ 4,967,222
2,318,000 4.93%**, 9/9/99......................... 2,296,816
5,000,000 5.02%**, 9/15/99........................ 4,947,750
5,000,000 5.09%**, 9/23/99........................ 4,941,433
6,195,000 4.95%**, 10/8/99........................ 6,114,759
5,000,000 5.28%**, 12/2/99........................ 4,889,633
------------
87,201,806
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................. 151,274,576
------------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ---------- ---------------------------------------- ------------
<C> <S> <C>
REPURCHASE AGREEMENTS (19.3%):
$16,000,000 Donaldson, Lufkin & Jenrette Capital $ 16,000,000
Markets, 4.90%, dated 6/30/99, due
7/1/99 with a maturity value of
$16,002,178 (collateralized by
$16,525,000 DHLB, 5.25%, 4/25/02, market
value $16,320,834)......................
3,000,000 Donaldson, Lufkin & Jenrette Capital 3,000,000
Markets, 4.90%, dated 6/30/99, due
7/1/99 with a maturity value of
$3,000,408 (collateralized by $2,960,000
DHLB, 8.60%, 8/25/99, market value
$2,973,974).............................
19,000,000 Morgan Stanley & Co., Inc., 4.90%, dated 19,000,000
6/30/99, due 7/1/99 with a maturity
value of $19,002,586 (collateralized by
$19,450,000, 4.90%**, 7/23/99, market
value $18,999,999)......................
------------
TOTAL REPURCHASE AGREEMENTS............. 38,000,000
------------
INVESTMENT COMPANIES (4.1%):
8,120,557 Federated Treasury Money Market......... 8,120,557
------------
TOTAL INVESTMENT COMPANIES.............. 8,120,557
------------
TOTAL INVESTMENTS (AMORTIZED COST $197,395,133)(a)
- -- 100.2%........................................... 197,395,133
------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2)%..... (309,080)
------------
TOTAL NET ASSETS -- 100.0%.......................... $197,086,053
------------
------------
</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, 1999. Maturity date reflects effective maturity for Rule 2a-7 purposes.
** Effective yield at purchase.
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE>
Kent Funds
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1999 (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....... $ 637,772,100 $570,818,435 $ 448,389,175 $ 479,411,433
Net unrealized
appreciation/(depreciation)... 366,576,828 153,614,359 103,422,612 436,575,088
Repurchase agreements, at
cost.................... 7,785,969 16,383,358 17,982,934 5,486,776
-------------- -------------- ------------- -------------
Total Investments at
value................... 1,012,134,897 740,816,152 569,794,721 921,473,297
Foreign currency at value
(cost $0; $0; $2,594,025;
$0, respectively)......... -- -- 2,590,273 --
Interest and dividends
receivable................ 1,085,840 439,607 1,056,454 825,875
Receivable for capital
shares issued............. -- 2,458 1,000 23,289
Receivable for investments
sold...................... 5,357,650 -- -- 5,111,497
Tax reclaim receivable...... -- -- 1,042,376 --
Net receivable for variation
margin on future
contracts................. 1,218,750 90,165 -- 225,640
Prepaid expenses and other
assets.................... 25,848 21,429 20,508 24,120
-------------- -------------- ------------- -------------
Total Assets.............. 1,019,822,985 741,369,811 574,505,332 927,683,718
-------------- -------------- ------------- -------------
LIABILITIES:
Custodian payable........... -- -- 31,031 --
Payable for investments
purchased................. -- 707,391 -- 125,675
Payable for capital shares
redeemed.................. 31,267 53,780 23,688 48,624
Payable for return of
collateral received for
securities on loan........ 15,018,803 46,197,405 49,712,953 21,843,938
Foreign withholding taxes
payable................... -- -- 123,056 --
Payable to investment
adviser................... 557,841 387,446 323,580 178,721
Payable to administrator.... 14,426 10,021 7,808 8,643
Distribution fees payable
(Investment Shares)....... 11,154 4,758 2,620 8,656
Accrued expenses and other
liabilities............... 49,961 44,457 84,308 47,800
-------------- -------------- ------------- -------------
Total Liabilities......... 15,683,452 47,405,258 50,309,044 22,262,057
-------------- -------------- ------------- -------------
NET ASSETS.................... $1,004,139,533 $693,964,553 $ 524,196,288 $ 905,421,661
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
NET ASSETS CONSIST OF:
Paid-in capital............. $ 613,021,907 $546,568,039 $ 417,972,339 $ 461,701,872
Accumulated undistributed
(distributions in excess
of) net investment
income.................... 586,840 (34,631) (1,704,295) 272,787
Accumulated undistributed
net realized
gains/(losses) on
investments, foreign
currency and futures
contracts sold............ 21,851,283 (6,496,054) 4,565,670 6,457,964
Net unrealized
appreciation/(depreciation)
of investments,
futures and translation of
assets and liabilities in
foreign
currencies................ 368,679,503 153,927,199 103,362,574 436,989,038
-------------- -------------- ------------- -------------
TOTAL NET ASSETS.............. $1,004,139,533 $693,964,553 $ 524,196,288 $ 905,421,661
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
INSTITUTIONAL SHARES:
Net Assets.................. $ 947,532,582 $669,928,130 $ 511,413,690 $ 858,270,803
Shares Outstanding.......... 48,030,217 40,394,847 31,925,147 31,809,016
Net Assets Value, offering
and redemption price per
share..................... $ 19.73 $ 16.58 $ 16.02 $ 26.98
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
INVESTMENT SHARES:
Net Assets.................. $ 56,606,951 $ 24,036,423 $ 12,782,598 $ 47,150,858
Shares Outstanding.......... 2,893,123 1,456,272 807,501 1,746,685
Net Assets Value, offering
and redemption price per
share..................... $ 19.57 $ 16.51 $ 15.83 $ 26.99
-------------- -------------- ------------- -------------
-------------- -------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE>
Kent Funds
STATEMENTS OF ASSETS AND LIABILITIES
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at cost............ $154,062,374 $896,515,654 $326,240,064
Net unrealized
appreciation/(depreciation)... (1,542,699) (18,104,772) (7,182,842)
Repurchase agreements, at
cost......................... 10,281,415 66,508,841 35,898,691
------------ ------------ ------------
Total investments at value..... 162,801,090 944,919,723 354,955,913
Interest and dividends
receivable..................... 2,869,487 11,394,005 4,868,873
Receivable for capital shares
issued......................... -- 7,759 --
Prepaid expenses and other
assets......................... 14,879 25,433 17,318
------------ ------------ ------------
Total Assets................... 165,685,456 956,346,920 359,842,104
------------ ------------ ------------
LIABILITIES:
Payable for capital shares
redeemed....................... 1,325 250 4,486
Payable for return of collateral
received for securities on
loan........................... 17,170,260 118,434,276 62,437,879
Payable to investment adviser.... 61,034 384,349 138,408
Payable to administrator......... 2,197 12,330 4,359
Distribution fees payable
(Investment Shares)............ 642 2,399 2,288
Accrued expenses and other
liabilities.................... 11,215 44,842 7,928
------------ ------------ ------------
Total Liabilities.............. 17,246,673 118,878,446 62,595,348
------------ ------------ ------------
NET ASSETS......................... $148,438,783 $837,468,474 $297,246,756
------------ ------------ ------------
------------ ------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital.................. $156,745,343 $863,390,449 $305,478,031
Accumulated undistributed
(distributions in excess of)
net investment
income......................... 913 2,307 (10,960)
Accumulated undistributed net
realized gains/(losses) on
investments sold............... (1,542,699) (18,104,772) (7,182,842)
Net unrealized
appreciation/(depreciation) of
investments.................... (6,764,774) (7,819,510) (1,037,473)
------------ ------------ ------------
TOTAL NET ASSETS................... $148,438,783 $837,468,474 $297,246,756
------------ ------------ ------------
------------ ------------ ------------
INSTITUTIONAL SHARES:
Net Assets....................... $143,269,935 $826,027,340 $285,654,536
Shares Outstanding............... 14,932,042 85,915,483 29,596,012
Net Assets Value, offering and
redemption price per share..... $ 9.59 $ 9.61 $ 9.65
------------ ------------ ------------
------------ ------------ ------------
INVESTMENT SHARES:
Net Assets....................... $ 5,168,848 $ 11,441,134 $ 11,592,220
Shares Outstanding............... 539,272 1,187,349 1,202,776
Net Assets Value, offering and
redemption price per share..... $ 9.58 $ 9.64 $ 9.64
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE>
Kent Funds
STATEMENTS OF ASSETS AND LIABILITIES
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND INCOME FUND BOND FUND
-------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at cost............ $305,666,178 $ 121,856,346 $ 116,842,970
Net unrealized
appreciation/(depreciation)... 8,757,781 3,475,311 1,337,821
-------------- ------------- -------------
Total investments at value..... 314,423,959 125,331,657 118,180,791
Interest and dividends
receivable..................... 4,838,488 1,726,015 1,418,763
Prepaid expenses and other
assets......................... 28,416 17,780 8,146
-------------- ------------- -------------
Total Assets................... 319,290,863 127,075,452 119,607,700
-------------- ------------- -------------
LIABILITIES:
Payable for capital shares
redeemed....................... 3,000 -- --
Payable for investments
purchased...................... 1,178,712 1,077,500 --
Payable to investment adviser.... 131,700 57,086 44,541
Payable to administrator......... 4,704 1,859 1,768
Distribution fees payable
(Investment Shares)............ 911 426 665
Accrued expenses and other
liabilities.................... -- 6,390 99
-------------- ------------- -------------
Total Liabilities.............. 1,319,027 1,143,261 47,073
-------------- ------------- -------------
NET ASSETS......................... $317,971,836 $ 125,932,191 $ 119,560,627
-------------- ------------- -------------
-------------- ------------- -------------
NET ASSETS CONSIST OF:
Paid-in capital.................. $308,963,212 $ 122,270,188 $ 118,079,432
Accumulated undistributed
(distributions in excess of)
net investment income.......... (26,157) 14,354 (5,884)
Accumulated undistributed net
realized gains/(losses) on
investments sold............... 8,757,781 3,475,311 1,337,821
Net unrealized
appreciation/(depreciation) of
investments.................... 277,000 172,338 149,258
-------------- ------------- -------------
TOTAL NET ASSETS................... $317,971,836 $ 125,932,191 $ 119,560,627
-------------- ------------- -------------
-------------- ------------- -------------
INSTITUTIONAL SHARES:
Net Assets....................... $313,322,959 $ 123,774,262 $ 114,178,680
Shares Outstanding............... 30,083,881 11,979,342 11,348,788
Net Assets Value, offering and
redemption price per share..... $ 10.41 $ 10.33 $ 10.06
-------------- ------------- -------------
-------------- ------------- -------------
INVESTMENT SHARES:
Net Assets....................... $ 4,648,877 $ 2,157,929 $ 5,381,947
Shares Outstanding............... 446,290 208,380 535,570
Net Assets Value, offering and
redemption price per share..... $ 10.42 $ 10.36 $ 10.05
-------------- ------------- -------------
-------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE>
Kent Funds
STATEMENTS OF ASSETS AND LIABILITIES
(CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at amortized
cost......................... $640,939,795 $324,338,202 $159,395,133
Repurchase agreements, at cost
($0; $0; $38,000,000,
respectively)................ -- -- 38,000,000
------------ ------------ ------------
Total investments at amortized
cost......................... $640,939,795 $324,338,202 $197,395,133
Interest and dividends
receivable..................... 3,916,920 2,282,803 440,230
Prepaid expenses and other
assets......................... 25,223 8,366 16,478
------------ ------------ ------------
Total Assets................... 644,881,938 326,629,371 197,851,841
------------ ------------ ------------
LIABILITIES:
Custodian payable................ 189,040 4,029 --
Dividends payable................ 2,406,746 762,281 722,459
Payable for investments
purchased...................... -- 10,059,310 --
Payable to investment adviser.... 215,339 109,065 32,355
Payable to administrator......... 5,925 2,578 1,887
Accrued expenses and other
liabilities.................... 54,599 22,520 9,087
------------ ------------ ------------
Total Liabilities.............. 2,871,649 10,959,783 765,788
------------ ------------ ------------
NET ASSETS......................... $642,010,289 $315,669,588 $197,086,053
------------ ------------ ------------
------------ ------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital.................. $642,002,452 $315,679,392 $197,084,605
Accumulated undistributed
(distributions in excess of)
net investment
income......................... 13,072 781 2,214
Accumulated undistributed net
realized gains/(losses) on
investments
sold........................... (5,235 ) (10,596 ) (766 )
------------ ------------ ------------
TOTAL NET ASSETS................... $642,010,289 $315,669,577 $197,086,053
------------ ------------ ------------
------------ ------------ ------------
INSTITUTIONAL SHARES:
Net Assets....................... $640,209,323 $314,918,392 $196,953,210
Shares Outstanding............... 640,207,512 314,905,911 196,953,971
Net Assets Value, offering and
redemption price per share..... $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------
------------ ------------ ------------
INVESTMENT SHARES:
Net Assets....................... $ 1,800,966 $ 751,185 $ 132,843
Shares Outstanding............... 1,801,193 751,163 132,843
Net Assets Value, offering and
redemption price per share..... $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE>
Kent Funds
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(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................... $ 7,250,476 $ 3,902,115 $ 6,698,075 $ 5,763,574
Interest.................... 13,293 60,152 45,080 9,728
Less: Net foreign taxes
withheld.................. (4,271) (1,836) (467,098) (7,527)
------------ -------------- ------------ ------------
Total Investment Income... 7,259,498 3,960,431 6,276,057 5,765,775
------------ -------------- ------------ ------------
EXPENSES:
Investment advisory fees.... 3,232,731 2,404,746 1,957,314 1,262,087
Administration fees......... 830,934 617,840 469,518 756,706
Distribution fees
(Investment Shares)....... 65,277 27,496 15,295 50,112
Fund accounting fees........ 75,596 66,906 59,175 74,937
Custodian fees.............. 5,870 14,887 108,625 16,339
Transfer agent fees......... 85,453 81,639 60,146 85,913
Other expenses.............. 61,868 64,153 41,828 56,833
------------ -------------- ------------ ------------
Total expenses before
waivers................. 4,357,729 3,277,667 2,711,901 2,302,927
Less: expenses voluntarily
waived.................. (46,180) (34,352) (26,096) (525,793)
------------ -------------- ------------ ------------
Net Expenses.............. 4,311,549 3,243,315 2,685,805 1,777,134
------------ -------------- ------------ ------------
NET INVESTMENT INCOME......... 2,947,949 717,116 3,590,252 3,988,641
------------ -------------- ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses)
on investments and foreign
currency transactions..... 20,047,058 (7,765,031) 5,032,129 8,673,989
Net realized gains/(losses)
on futures contracts...... 1,929,795 2,625,773 -- 451,907
Net change in unrealized
appreciation/(depreciation)
of investments and
translation of assets and
liabilities in foreign
currencies................ 75,774,854 64,322,376 17,147,622 85,427,463
------------ -------------- ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS................. 97,751,707 59,183,118 22,259,828 94,553,359
------------ -------------- ------------ ------------
NET INCREASE/(DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS... $100,699,656 $59,900,234 $25,770,003 $ 98,542,000
------------ -------------- ------------ ------------
------------ -------------- ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE>
Kent Funds
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
----------- ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest......................... $ 4,573,753 $ 27,794,944 $ 8,689,572
Dividends........................ 91,253 623,274 139,555
----------- ------------ ------------
Total Investment Income........ 4,665,006 28,418,218 8,829,127
----------- ------------ ------------
EXPENSES:
Investment advisory fees......... 370,821 2,407,730 760,230
Administration fees.............. 133,421 787,778 228,039
Distribution fees (Investment
Shares)........................ 6,861 15,069 13,190
Fund accounting fees............. 13,453 70,253 22,847
Custodian fees................... 168 821 659
Transfer agent fees.............. 23,688 42,644 22,059
Other expenses................... 20,607 72,031 30,746
----------- ------------ ------------
Total expenses before
waivers...................... 569,019 3,396,326 1,077,770
Less: expenses voluntarily
waived....................... (10,161) (43,774) (12,670)
----------- ------------ ------------
Net Expenses................... 558,858 3,352,552 1,065,100
----------- ------------ ------------
NET INVESTMENT INCOME.............. 4,106,148 25,065,666 7,764,027
----------- ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses) on
investments sold............... 31,262 (3,074,005) (952,049)
Net change in unrealized
appreciation/(depreciation) of
investments.................... (2,819,116) (37,024,548) (15,830,175)
----------- ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS...................... (2,787,854) (40,098,553) (16,782,224)
----------- ------------ ------------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... $ 1,318,294 $(15,032,887) $ (9,018,197)
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
98
<PAGE>
Kent Funds
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INTERMEDIATE MICHIGAN
TAX-FREE TAX-FREE MUNICIPAL
FUND INCOME FUND BOND FUND
----------- -------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest......................... $7,390,179 $ 3,122,506 $ 2,751,781
Dividends........................ 90,686 41,747 37,330
----------- -------------- ------------
Total Investment Income........ 7,480,865 3,164,253 2,789,111
----------- -------------- ------------
EXPENSES:
Investment advisory fees......... 766,973 346,119 269,170
Administration fees.............. 275,431 113,254 107,623
Distribution fees (Investment
Shares)........................ 5,161 2,444 6,903
Fund accounting fees............. 30,713 15,001 14,954
Custodian fees................... 1,087 -- 466
Transfer agent fees.............. 19,379 17,063 16,554
Other expenses................... 38,817 26,587 14,843
----------- -------------- ------------
Total expenses before
waivers...................... 1,137,561 520,468 430,513
Less: expenses voluntarily
waived....................... (15,339 ) (6,293) (8,742)
----------- -------------- ------------
Net Expenses................... 1,122,222 514,175 421,771
----------- -------------- ------------
NET INVESTMENT INCOME.............. 6,358,643 2,650,078 2,367,340
----------- -------------- ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses) on
investments sold............... 275,512 171,350 149,258
Net change in unrealized
appreciation/(depreciation) of
investments.................... (9,506,051 ) (5,068,371) (2,572,780)
----------- -------------- ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS...................... (9,230,539 ) (4,897,021) (2,423,522)
----------- -------------- ------------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... $(2,871,896) $(2,246,943) $ (56,182)
----------- -------------- ------------
----------- -------------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<PAGE>
Kent Funds
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------- ------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest......................... $15,600,802 $4,979,654 $4,111,799
Dividends........................ 1,552,997 92,425 270,527
------------- ------------- -------------
Total Investment Income........ 17,153,799 5,072,079 4,382,326
------------- ------------- -------------
EXPENSES:
Investment advisory fees......... 1,360,678 629,970 359,466
Administration fees.............. 612,297 283,213 161,679
Fund accounting fees............. 52,921 25,704 14,406
Custodian fees................... 5,443 2,092 2,330
Transfer agent fees.............. 32,171 16,388 15,882
Other expenses................... 80,490 28,212 29,066
------------- ------------- -------------
Total expenses before
waivers...................... 2,144,647 985,579 582,829
Less: expenses voluntarily
waived....................... (289,907) (149,643) (247,777)
------------- ------------- -------------
Net Expenses................... 1,854,740 835,936 335,052
------------- ------------- -------------
NET INVESTMENT INCOME.............. 15,299,059 4,236,143 4,047,274
------------- ------------- -------------
NET REALIZED GAINS/(LOSSES) ON
INVESTMENTS...................... (162) -- --
------------- ------------- -------------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... $15,298,897 $4,236,143 $4,047,274
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
100
<PAGE>
Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SMALL COMPANY
GROWTH AND INCOME FUND GROWTH FUND
-------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
<S> <C> <C> <C> <C>
-------------------------------- ----------------------------------
NET ASSETS AT BEGINNING OF
PERIOD...................... $ 878,285,832 $ 733,315,634 $ 783,790,477 $ 742,781,688
-------------- ---------------- --------------- ----------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income....... 2,947,949 5,881,760 717,116 1,303,294
Net realized gains/(losses)
on investment and foreign
currency transactions..... 20,047,058 25,901,332 (7,765,031) 56,249,334
Net realized gains/(losses)
on futures contracts...... 1,929,795 3,481,810 2,625,773 3,370,391
Net change in unrealized
appreciation/(depreciation)
of
investments and
translation of assets and
liabilities in
foreign currencies........ 75,774,854 164,789,723 64,322,376 (99,658,205)
-------------- ---------------- --------------- ----------------
Net increase/(decrease) in
net assets resulting from
operations................ 100,699,656 200,054,625 59,900,234 (38,735,186)
-------------- ---------------- --------------- ----------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income....... (2,280,724) (5,717,209) (744,588) (1,316,803)
In excess of net investment
income.................... -- (497,079) -- --
Net realized gains on
investments............... (12,373,781) (67,102,370) (15,592,345) (78,853,710)
-------------- ---------------- --------------- ----------------
Total dividends and
distributions --
Institutional Shares.... (14,654,505) (73,316,658) (16,336,933) (80,170,513)
-------------- ---------------- --------------- ----------------
INVESTMENT:
Net investment income....... (73,340) (214,560) -- --
In excess of net investment
income.................... -- (46,210) -- --
Net realized gains on
investments............... (775,701) (3,959,835) (486,419) (2,576,664)
-------------- ---------------- --------------- ----------------
Total dividends and
distributions --
Investment Shares....... (849,041) (4,220,605) (486,419) (2,576,664)
-------------- ---------------- --------------- ----------------
Total dividends and
distributions to
shareholders............ (15,503,546) (77,537,263) (16,823,352) (82,747,177)
-------------- ---------------- --------------- ----------------
NET INCREASE/(DECREASE) FROM
CAPITAL TRANSACTIONS........ 40,657,591 22,452,836 (132,902,806) 162,491,152
-------------- ---------------- --------------- ----------------
Net increase/(decrease) in
net assets................ 125,853,701 144,970,198 (89,825,924) 41,008,789
-------------- ---------------- --------------- ----------------
NET ASSETS AT END OF PERIOD... $1,004,139,533 $ 878,285,832 $ 693,964,553 $ 783,790,477
-------------- ---------------- --------------- ----------------
-------------- ---------------- --------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<PAGE>
Kent Funds
(CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
--------------------------------- ---------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
<S> <C> <C> <C> <C>
--------------------------------- ---------------------------------
NET ASSETS AT BEGINNING OF
PERIOD...................... $ 540,889,186 $ 502,378,709 $ 809,351,352 $ 618,163,526
-------------- ---------------- -------------- ----------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income....... 3,590,252 4,592,271 3,988,641 7,736,080
Net realized gains/(losses)
on investments and foreign
currency transactions..... 5,032,129 65,343,795 8,673,989 2,640,102
Net realized gains/(losses)
on futures contracts...... -- -- 451,907 226,836
Net change in unrealized
appreciation/(depreciation)
of
investments and
translation of assets and
liabilities in
foreign currencies........ 17,147,622 19,020,408 85,427,463 168,607,691
-------------- ---------------- -------------- ----------------
Net increase/(decrease) in
net assets resulting from
operations................ 25,770,003 88,956,474 98,542,000 179,210,709
-------------- ---------------- -------------- ----------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income....... (1,350,534) (2,352,718) (3,580,459) (7,447,316)
In excess of net investment
income.................... -- (3,928,519) -- (5,750)
Net realized gains on
investments............... (20,356,350) (43,820,789) (3,143,377) (1,228,000)
-------------- ---------------- -------------- ----------------
Total dividends and
distributions --
Institutional Shares.... (21,706,884) (50,102,026) (6,723,836) (8,681,066)
-------------- ---------------- -------------- ----------------
INVESTMENT:
Net investment income....... (28,858) -- (129,436) (284,041)
In excess of net investment
income.................... -- (144,473) -- (7,182)
Net realized gains on
investments............... (474,091) (1,024,896) (153,979) (61,833)
-------------- ---------------- -------------- ----------------
Total dividends and
distributions --
Investment Shares....... (502,949) (1,169,369) (283,415) (353,056)
-------------- ---------------- -------------- ----------------
Total dividends and
distributions to
shareholders............ (22,209,833) (51,271,395) (7,007,251) (9,034,122)
-------------- ---------------- -------------- ----------------
NET INCREASE/(DECREASE) FROM
CAPITAL TRANSACTIONS........ (20,253,069) 825,398 4,535,560 21,011,239
-------------- ---------------- -------------- ----------------
Net increase/(decrease) in
net assets................ (16,692,899) 38,510,477 96,070,309 191,187,826
-------------- ---------------- -------------- ----------------
NET ASSETS AT END OF PERIOD... $ 524,196,287 $ 540,889,186 $ 905,421,661 $ 809,351,352
-------------- ---------------- -------------- ----------------
-------------- ---------------- -------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
102
<PAGE>
Kent Funds
(CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT TERM BOND FUND INTERMEDIATE BOND FUND INCOME FUND
----------------------------- ----------------------------- -----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
<S> <C> <C> <C> <C> <C> <C>
----------------------------- ----------------------------- -----------------------------
NET ASSETS AT BEGINNING
OF PERIOD.............. $ 145,355,056 $ 147,171,664 $ 897,892,875 $ 769,711,501 $ 241,646,346 $ 235,388,305
-------------- ------------- -------------- ------------- -------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS:
Net investment
income............... 4,106,148 7,990,388 25,065,666 45,554,802 7,764,027 15,411,966
Net realized
gains/(losses) on
investments sold..... 31,262 (96,072) (3,074,005) 5,947,686 (952,049) 5,514,294
Net change in
unrealized
appreciation/(depreciation)
of investments....... (2,819,116) 489,306 (37,024,548) 5,377,857 (15,830,175) 1,312,791
-------------- ------------- -------------- ------------- -------------- -------------
Net increase/(decrease)
in net assets
resulting from
operations........... 1,318,294 8,383,622 (15,032,887) 56,880,345 (9,018,197) 22,239,051
-------------- ------------- -------------- ------------- -------------- -------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment
income............... (3,958,091) (7,612,645) (24,974,762) (45,070,559) (7,461,183) (14,910,611)
In excess of net
investment income.... -- -- -- -- -- (2,725)
Net realized gains on
investments.......... -- -- -- -- (278,297) (5,347,331)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions --
Institutional
Shares............. (3,958,091) (7,612,645) (24,974,762) (45,070,559) (7,739,480) (20,260,667)
-------------- ------------- -------------- ------------- -------------- -------------
INVESTMENT:
Net investment
income............... (145,709) (364,391) (332,666) (541,970) (307,194) (514,425)
In excess of net
investment income.... -- (17,935) -- -- -- (23,412)
Net realized gains on
investments.......... -- -- -- -- (12,034) (239,521)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions --
Investment
Shares............. (145,709) (382,326) (332,666) (541,970) (319,228) (777,358)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions to
shareholders....... (4,103,800) (7,994,971) (25,307,428) (45,612,529) (8,058,708) (21,038,025)
-------------- ------------- -------------- ------------- -------------- -------------
NET INCREASE/(DECREASE)
FROM CAPITAL
TRANSACTIONS........... 5,869,233 (2,205,259) (20,084,086) 116,913,558 72,677,315 5,057,015
-------------- ------------- -------------- ------------- -------------- -------------
Net increase/(decrease)
in net assets........ 3,083,727 (1,816,608) (60,424,401) 128,181,374 55,600,410 6,258,041
-------------- ------------- -------------- ------------- -------------- -------------
NET ASSETS AT END OF
PERIOD................. $ 148,438,783 $ 145,355,056 $ 837,468,474 $ 897,892,875 $ 297,246,756 $ 241,646,346
-------------- ------------- -------------- ------------- -------------- -------------
-------------- ------------- -------------- ------------- -------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<PAGE>
Kent Funds
(CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE MICHIGAN MUNICIPAL
TAX-FREE FUND INCOME FUND BOND FUND
----------------------------- ----------------------------- -----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
<S> <C> <C> <C> <C> <C> <C>
----------------------------- ----------------------------- -----------------------------
NET ASSETS AT BEGINNING
OF PERIOD.............. $ 300,521,904 $ 279,175,752 $ 130,170,230 $ 118,364,159 $ 123,902,863 $ 116,148,299
-------------- ------------- -------------- ------------- -------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS:
Net investment
income............... 6,358,643 12,057,430 2,650,078 5,194,579 2,367,340 4,950,765
Net realized
gains/(losses) on
investments sold..... 275,512 1,069,994 171,350 628,871 149,258 174,981
Net change in
unrealized
appreciation/(depreciation)
of investments....... (9,506,051) 1,761,120 (5,068,371) 1,185,845 (2,572,780) 568,378
-------------- ------------- -------------- ------------- -------------- -------------
Net increase/(decrease)
in net assets
resulting from
operations........... (2,871,896) 14,888,544 (2,246,943) 7,009,295 (56,182) 5,694,124
-------------- ------------- -------------- ------------- -------------- -------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment
income............... (6,308,886) (11,933,893) (2,597,168) (5,118,923) (2,287,671) (4,809,973)
In excess of net
investment income.... -- (738,103) -- -- -- --
Net realized gains on
investments.......... (297,655) -- (108,848) (600,924) -- (80,492)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions --
Institutional
Shares............. (6,606,541) (12,671,996) (2,706,016) (5,719,847) (2,287,671) (4,890,465)
-------------- ------------- -------------- ------------- -------------- -------------
INVESTMENT:
Net investment
income............... (80,296) (149,636) (38,970) (73,875) (105,719) (182,181)
In excess of net
investment income.... -- (10,299) -- -- -- --
Net realized gains on
investments.......... (3,898) -- (1,661) (8,888) -- (4,050)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions --
Investment
Shares............. (84,194) (159,935) (40,631) (82,763) (105,719) (186,231)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions to
shareholders....... (6,690,735) (12,831,931) (2,746,647) (5,802,610) (2,393,390) (5,076,696)
-------------- ------------- -------------- ------------- -------------- -------------
NET INCREASE/(DECREASE)
FROM CAPITAL
TRANSACTIONS........... 27,012,563 19,289,539 755,551 10,599,386 (1,892,664) 7,137,136
-------------- ------------- -------------- ------------- -------------- -------------
Net increase/(decrease)
in net assets........ 17,449,932 21,346,152 (4,238,039) 11,806,071 (4,342,236) 7,754,564
-------------- ------------- -------------- ------------- -------------- -------------
NET ASSETS AT END OF
PERIOD................. $ 317,971,836 $ 300,521,904 $ 125,932,191 $ 130,170,230 $ 119,560,627 $ 123,902,863
-------------- ------------- -------------- ------------- -------------- -------------
-------------- ------------- -------------- ------------- -------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
104
<PAGE>
Kent Funds
(CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
----------------------------- ----------------------------- -----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
<S> <C> <C> <C> <C> <C> <C>
----------------------------- ----------------------------- -----------------------------
NET ASSETS AT BEGINNING
OF PERIOD.............. $ 697,127,619 $ 475,557,215 $ 323,617,493 $ 211,971,193 $ 167,015,544 $ 94,626,461
-------------- ------------- -------------- ------------- -------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS:
Net investment
income............... 15,299,059 28,254,914 4,236,143 9,607,143 4,047,274 5,863,503
Net realized
gains/(losses) on
investments.......... (162) (3,030) -- 1,873 -- (766)
-------------- ------------- -------------- ------------- -------------- -------------
Net increase/(decrease)
in net assets
resulting from
operations........... 15,298,897 28,251,884 4,236,143 9,609,016 4,047,274 5,862,737
-------------- ------------- -------------- ------------- -------------- -------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment
income............... (15,253,657) (28,105,841) (4,226,582) (9,596,573) (4,044,581) (5,861,605)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions --
Institutional
Shares............. (15,253,657) (28,105,841) (4,226,582) (9,596,573) (4,044,581) (5,861,605)
-------------- ------------- -------------- ------------- -------------- -------------
INVESTMENT:
Net investment
income............... (45,402) (149,073) (9,561) (10,570) (2,692) (1,898)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions --
Investment
Shares............. (45,402) (149,073) (9,561) (10,570) (2,692) (1,898)
-------------- ------------- -------------- ------------- -------------- -------------
Total dividends and
distributions to
shareholders....... (15,299,059) (28,254,914) (4,236,143) (9,607,143) (4,047,273) (5,863,503)
-------------- ------------- -------------- ------------- -------------- -------------
NET INCREASE/(DECREASE)
FROM CAPITAL
TRANSACTIONS........... (55,117,168) 221,573,434 (7,947,916) 111,644,427 30,070,508 72,389,849
-------------- ------------- -------------- ------------- -------------- -------------
Net increase/(decrease)
in net assets........ (55,117,330) 221,570,404 (7,947,916) 111,646,300 30,070,509 72,389,083
-------------- ------------- -------------- ------------- -------------- -------------
NET ASSETS AT END OF
PERIOD................. $ 642,010,289 $ 697,127,619 $ 315,669,577 $ 323,617,493 $ 197,086,053 $ 167,015,544
-------------- ------------- -------------- ------------- -------------- -------------
-------------- ------------- -------------- ------------- -------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
105
<PAGE>
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 thirteen managed investment funds.
The accompanying financial statements and financial highlights are those of the
following: 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 Intermediate Tax-Free Fund,
Kent Tax-Free Income Fund, Kent Michigan Municipal Bond Fund, Kent Money Market
Fund, Kent Michigan Municipal Money Market Fund and 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 and it allows for the
creation of one or more classes of shares within each series.
The Trust may issue more than one series of shares investing in Funds of
securities. The Trust currently issues thirteen 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.
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 objective.
SMALL COMPANY GROWTH FUND -- To seek long-term capital appreciation.
INTERNATIONAL GROWTH FUND -- To seek long-term growth of capital.
INDEX EQUITY FUND -- To seek long-term capital appreciation with current
income as a secondary objective.
SHORT TERM BOND FUND -- To seek current income.
INTERMEDIATE BOND FUND -- To seek current income.
INCOME FUND -- To seek current income.
INTERMEDIATE TAX-FREE FUND -- To seek current income that is exempt from
federal income tax.
TAX-FREE INCOME FUND -- To seek current income that is exempt from federal
income tax.
MICHIGAN MUNICIPAL BOND FUND -- To seek current income that is exempt from
federal income tax and Michigan personal income tax.
MONEY MARKET FUND -- To seek current income.
MICHIGAN MUNICIPAL MONEY MARKET FUND -- To seek current income that is exempt
from federal income tax and Michigan personal income tax.
GOVERNMENT MONEY MARKET FUND -- To seek current income.
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
may 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.
SECURITY VALUATION: Securities in the Money Market Fund, Michigan Municipal
Money Market Fund and Government Money Market Fund (the "Money Market Funds")
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 Fund 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 Short Term Bond Fund, Intermediate Bond Fund, Income Fund, Intermediate
Tax-Free Fund, Tax-Free Income Fund and Michigan Municipal Bond 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 selected by Lyon Street and approved by the Board of Trustees.
Short-term obligations that mature in 60 days or less are valued at amortized
cost, which 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
106
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
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
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: Each Fund may agree to purchase portfolio securities
from financial institutions subject to the seller's agreement to repurchase them
at a mutually agreed upon date and price ("repurchase agreement"). 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
denominated 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 Funds (except for the Money Market Funds) may invest in
futures contracts. This investment involves, to varying degrees, 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 a realized gain or loss.
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 a 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.
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 Fund 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 contracts
with the same settlement date and broker.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Each Fund may purchase securities
on a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and/or yield,
thereby, involving the risk that the price and/or yield obtained may be more or
less than those available in the market when delivery takes place. At the time a
Fund makes the commitment to purchase a security on a when-issued basis, the
Fund records the transaction and reflects the value of the security in
determining net asset value. Normally, the settlement date occurs within one
month of the purchase. The Funds segregate cash
107
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
and marketable securities at least equal in value to commitments for when-issued
securities. Securities purchased on a when-issued basis do not earn income until
settlement date.
SECURITIES LENDING: To generate additional income, each Fund may lend portfolio
securities valued up to 33 1/3% of a Fund's total assets, pursuant to agreements
requiring that the loan be continuously secured by cash, U.S. Government or U.S.
Government Agency securities, shares of an investment trust or mutual fund, or
any combination of cash and such securities as collateral equal at all times to
at least 102% (105% for foreign securities) of the market value plus accrued
interest on the securities lent. The Funds continue to earn interest on
securities lent while simultaneously seeking to earn interest on the investment
of collateral. Collateral is marked to market daily to provide a level of
collateral at least equal to the market value of securities lent.
When cash is received as collateral for securities loaned, the Funds may
invest such cash in short-term U.S. Government securities, repurchase
agreements, or other securities with maturities equal to or less than maturity
date of the applicable lending transaction. The cash or subsequent short-term
investments are recorded as assets of the Funds, offset by a corresponding
liability to repay the cash at the termination of the loan. In addition, the
short-term securities purchased with the cash collateral are included in the
accompanying schedules of investments. Fixed income securities received as
collateral are not recorded as an asset or liability of the Fund because the
Fund does not have effective control of such securities.
There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail financially.
However, loans will be made only to borrowers deemed by the Investment Adviser
to be of good standing and creditworthy under guidelines established by the
Board of Trustees and when, in the judgment of the Investment Adviser, the
consideration which can be earned currently from such securities loans justifies
the attendant risks. Loans are subject to termination by the Funds or the
borrower at any time, and are, therefore, not considered to be illiquid
investments. As of June 30, 1999, the following Funds had securities with the
following market values on loan (amounts in thousands):
<TABLE>
<CAPTION>
MARKET
MARKET VALUE
VALUE OF OF LOANED
COLLATERAL SECURITIES
----------- ----------
<S> <C> <C>
Growth and Income Fund.................. $ 15,048 $ 14,764
Small Company Growth Fund............... $ 46,364 $ 46,094
International Growth Fund............... $ 49,824 $ 46,680
Index Equity Fund....................... $ 21,878 $ 21,496
Short Term Bond Fund.................... $ 17,169 $ 16,838
<CAPTION>
MARKET
MARKET VALUE
VALUE OF OF LOANED
COLLATERAL SECURITIES
----------- ----------
<S> <C> <C>
Intermediate Bond Fund.................. $ 118,486 $ 115,974
Income Fund............................. $ 62,434 $ 61,261
</TABLE>
The loaned securities were fully collateralized by cash, corporate notes and
bonds and U.S. Government securities as of June 30, 1999.
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 Money Market Fund, Michigan
Municipal Money Market Fund and Government Money Market Fund declare dividends
daily from net investment income and pay such dividends monthly. The other 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 realized capital gains, if any, are distributed at least annually.
The amounts of income and capital gains to be distributed are determined in
accordance with income tax regulations. Such amounts may vary from income and
capital gains recognized in accordance with generally accepted accounting
principles.
FEDERAL INCOME TAXES: For federal income tax purposes, each 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
108
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
have been paid or provided for in accordance with the applicable country's tax
rules and rates.
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.
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:
The Index Equity Fund and Government Money Market Fund had investment advisory
fees waived by Lyon Street equal to $210,349 and $179,566, respectively.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
serves the Funds as Administrator and 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.
Effective July 1, 1999, Kent Funds Distributors, Inc. (also a wholly-owned
subsidiary of The BISYS Group, Inc.) assumed the role of the Funds' Distributor
from BISYS.
Old Kent provides certain administrative services to the Trust pursuant to a
Sub-Administration Agreement between Old Kent and BISYS. BISYS pays 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.
Certain officers of the Trust are affiliated with BISYS and Lyon Street. 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 Funds
are authorized to pay 12b-1 fees of up to 0.25% in connection with the sale of
Investment Shares, none of the Money Market Funds currently intends to pay such
fees.
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.
109
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
INVESTMENT FUND DISTRIBUTION
ADVISORY ADMINISTRATION ACCOUNTING FEES --
FEES FEES FEES INVESTMENT CLASS
---------- -------------------------------- ----------- -----------------
ANNUAL
FEE BEFORE
VOLUNTARY
FEE FEES SUB-ADMINISTRATION FEES FEES
REDUCTIONS WAIVED FEES WAIVED WAIVED
---------- ---------- ------------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Growth and Income Fund... 0.70% $ -- $230,909 $46,180 $ --
Small Company Growth
Fund................... 0.70% -- 171,767 34,352 --
International Growth
Fund................... 0.75% -- 130,488 26,096 --
Index Equity Fund........ 0.30% 252,337 210,347 63,104 --
Short Term Bond Fund..... 0.50% -- 37,082 7,416 2,745
Intermediate Bond Fund... 0.55% -- 218,884 43,774 --
Income Fund.............. 0.60% -- 63,352 12,670 --
Intermediate Tax-Free
Fund................... 0.50% -- 76,697 15,339 --
Tax-Free Income Fund..... 0.55% -- 31,465 6,293 --
Michigan Municipal Bond
Fund................... 0.45% -- 29,908 5,981 2,761
Money Market Fund........ 0.40% 238,210 170,166 51,050 --
Michigan Municipal Money
Market Fund............ 0.40% 125,922 62,997 23,624 --
Government Money Market
Fund................... 0.40% 54,731 44,933 13,480 --
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued............... $ 164,033,987 $ 227,159,369 $ 75,621,311 $ 302,052,649
Reinvestment of
distributions............. 6,495,240 32,729,339 8,715,080 40,424,917
Shares redeemed............. (131,188,920) (246,102,212) (216,284,338) (184,973,716)
------------- ------------- ------------- -------------
Net increase (decrease)
from Institutional
capital transactions.... 39,340,307 13,786,496 (131,947,947) 157,503,850
------------- ------------- ------------- -------------
INVESTMENT:
Shares issued............... 6,581,788 14,780,302 2,531,050 8,768,844
Reinvestment of
distributions............. 831,102 4,118,060 479,211 2,517,754
Shares redeemed............. (6,095,606) (10,232,022) (3,965,120) (6,299,296)
------------- ------------- ------------- -------------
Net increase (decrease)
from Investment capital
transactions............ 1,317,284 8,666,340 (954,859) 4,987,302
------------- ------------- ------------- -------------
Total net increase
(decrease) from capital
transactions............ $ 40,657,591 $ 22,452,836 $(132,902,806) $ 162,491,152
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued............... 8,736,482 14,055,251 5,134,861 18,894,661
Reinvestment of
distributions............. 350,758 1,992,365 633,686 2,459,426
Shares redeemed............. (6,980,320) (15,006,273) (14,549,309) (11,327,584)
------------- ------------- ------------- -------------
Net increase (decrease)
from Institutional
shares
transactions............ 2,106,920 1,041,343 (8,780,762) 10,026,503
------------- ------------- ------------- -------------
INVESTMENT:
Shares issued............... 351,848 913,994 166,649 511,690
Reinvestment of
distributions............. 45,296 252,348 35,153 152,813
Shares redeemed............. (325,622) (634,252) (269,373) (383,678)
------------- ------------- ------------- -------------
Net increase (decrease)
from Investment shares
transactions............ 71,522 532,090 (67,571) 280,825
------------- ------------- ------------- -------------
Total net increase
(decrease) from shares
transactions............ 2,178,442 1,573,433 (8,848,333) 10,307,328
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
110
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
------------------------------- -------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued............... $ 51,444,849 $ 136,493,110 $ 92,072,231 $ 190,070,776
Reinvestment of
distributions............. 10,381,898 23,365,621 5,359,499 7,019,186
Shares redeemed............. (82,413,621) (161,041,176) (97,404,689) (178,461,700)
-------------- -------------- -------------- --------------
Net increase (decrease)
from Institutional
capital transactions.... (20,586,874) (1,182,445) 27,041 18,628,262
-------------- -------------- -------------- --------------
INVESTMENT:
Shares issued............... 1,633,921 7,181,444 8,078,146 8,289,279
Reinvestment of
distributions............. 495,543 1,132,738 278,225 334,605
Shares redeemed............. (1,795,659) (6,306,339) (3,847,852) (6,250,907)
-------------- -------------- -------------- --------------
Net increase (decrease)
from Investment capital
transactions............ 333,805 2,007,843 4,508,519 2,372,977
-------------- -------------- -------------- --------------
Total net increase
(decrease) from capital
transactions............ $ (20,253,069) $ 825,398 $ 4,535,560 $ 21,001,239
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued............... 3,257,725 8,614,874 3,617,976 9,139,342
Reinvestment of
distributions............. 683,469 1,492,409 211,558 322,723
Shares redeemed............. (5,226,005) (9,986,982) (3,839,080) (8,478,378)
-------------- -------------- -------------- --------------
Net increase (decrease)
from Institutional
shares transactions..... (1,284,811) 120,301 (9,546) 983,687
-------------- -------------- -------------- --------------
INVESTMENT:
Shares issued............... 103,156 441,796 311,019 394,992
Reinvestment of
distributions............. 32,986 73,057 10,986 15,815
Shares redeemed............. (115,296) (389,582) (150,884) (293,283)
-------------- -------------- -------------- --------------
Net increase (decrease)
from Investment shares
transactions............ 20,846 125,271 171,121 117,524
-------------- -------------- -------------- --------------
Total net increase
(decrease) from shares
transactions............ (1,263,965) 245,572 161,575 1,101,211
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
111
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
SHORT TERM BOND FUND INTERMEDIATE BOND FUND INCOME FUND
------------------------------ ------------------------------- ------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
-------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.......... $ 30,182,321 $ 46,983,304 $ 113,010,765 $ 338,390,247 $ 90,668,588 $ 72,628,587
Reinvestment of
distributions........ 2,317,570 4,494,488 13,253,717 23,782,242 1,950,192 4,483,402
Shares redeemed........ (25,773,225) (52,355,665) (146,037,040) (250,453,733) (21,621,124) (77,077,231)
-------------- ------------- -------------- -------------- -------------- -------------
Net increase
(decrease) from
Institutional
capital
transactions....... 6,726,666 (877,873) (19,772,558) 111,718,756 70,997,656 34,758
-------------- ------------- -------------- -------------- -------------- -------------
INVESTMENT:
Shares issued.......... 310,565 1,555,661 2,343,801 8,360,353 3,156,935 7,872,571
Reinvestment of
distributions........ 139,044 372,460 308,482 489,509 305,475 742,082
Shares redeemed........ (1,307,042) (3,255,507) (2,963,811) (3,655,060) (1,782,751) (3,592,396)
-------------- ------------- -------------- -------------- -------------- -------------
Net increase
(decrease) from
Investment capital
transactions....... (857,433) (1,327,386) (311,528) 5,194,802 1,679,659 5,022,257
-------------- ------------- -------------- -------------- -------------- -------------
Total net increase
(decrease) from
capital
transactions....... $ 5,869,233 $ (2,205,259) $ (20,084,086) $ 116,913,558 $ 72,677,315 $ 5,057,015
-------------- ------------- -------------- -------------- -------------- -------------
-------------- ------------- -------------- -------------- -------------- -------------
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.......... 3,107,994 4,796,963 11,450,052 33,667,668 9,208,026 6,983,209
Reinvestment of
distributions........ 239,641 460,770 1,350,511 2,384,021 196,347 433,651
Shares redeemed........ (2,660,232) (5,351,943) (14,893,672) (25,053,433) (2,165,821) (7,372,911)
-------------- ------------- -------------- -------------- -------------- -------------
Net increase
(decrease) from
Institutional
shares
transactions....... 687,403 (94,210) (2,093,109) 10,998,256 7,238,552 43,949
-------------- ------------- -------------- -------------- -------------- -------------
INVESTMENT:
Shares issued.......... 32,100 159,007 237,566 833,731 320,886 757,461
Reinvestment of
distributions........ 14,388 38,229 31,369 48,917 30,760 71,851
Shares redeemed........ (134,655) (333,161) (302,666) (364,011) (178,973) (344,684)
-------------- ------------- -------------- -------------- -------------- -------------
Net increase
(decrease) from
Investment shares
transactions....... (88,167) (135,925) (33,731) 518,637 172,673 484,628
-------------- ------------- -------------- -------------- -------------- -------------
Total net increase
(decrease) from
shares
transactions....... 599,236 (230,135) (2,126,840) 11,516,893 7,411,225 528,577
-------------- ------------- -------------- -------------- -------------- -------------
-------------- ------------- -------------- -------------- -------------- -------------
</TABLE>
112
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL
INTERMEDIATE TAX-FREE FUND TAX-FREE INCOME FUND BOND FUND
------------------------------ ------------------------------ ------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
-------------- ------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.......... $ 59,069,094 $ 66,076,832 $ 14,481,287 $ 32,537,497 $ 13,694,053 $ 40,230,617
Reinvestment of
distributions........ 174,430 208,477 87,970 111,411 43,796 47,874
Shares redeemed........ (32,978,299) (47,473,584) (14,114,347) (22,259,614) (15,174,603) (34,650,281)
-------------- ------------- -------------- ------------- -------------- -------------
Net increase
(decrease) from
Institutional
capital
transactions....... 26,265,225 18,811,725 454,910 10,389,294 (1,436,754) 5,628,210
-------------- ------------- -------------- ------------- -------------- -------------
INVESTMENT:
Shares issued.......... 1,874,827 2,087,564 657,165 1,402,556 1,185,601 3,062,612
Reinvestment of
distributions........ 58,097 116,321 34,837 77,686 70,193 129,291
Shares redeemed........ (1,185,586) (1,726,071) (391,361) (1,270,150) (1,711,704) (1,682,977)
-------------- ------------- -------------- ------------- -------------- -------------
Net increase
(decrease) from
Investment capital
transactions....... 747,338 477,814 300,641 210,092 (455,910) 1,508,926
-------------- ------------- -------------- ------------- -------------- -------------
Total net increase
(decrease) from
capital
transactions....... $ 27,012,563 $ 19,289,539 $ 755,551 $ 10,599,386 $ (1,892,664) $ 7,137,136
-------------- ------------- -------------- ------------- -------------- -------------
-------------- ------------- -------------- ------------- -------------- -------------
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.......... 5,587,742 6,151,853 1,360,623 3,037,158 1,336,784 3,919,445
Reinvestment of
distributions........ 16,370 19,474 8,290 10,424 4,292 4,681
Shares redeemed........ (3,078,172) (4,422,430) (1,318,486) (2,072,941) (1,478,149) (3,382,841)
-------------- ------------- -------------- ------------- -------------- -------------
Net increase
(decrease) from
Institutional
shares
transactions....... 2,525,940 1,748,897 50,427 974,641 (137,073) 541,285
-------------- ------------- -------------- ------------- -------------- -------------
INVESTMENT:
Shares issued.......... 176,369 194,674 61,965 130,884 115,818 298,776
Reinvestment of
distributions........ 5,447 10,869 3,269 7,256 6,869 12,655
Shares redeemed........ (110,848) (161,174) (36,742) (118,616) (166,755) (164,507)
-------------- ------------- -------------- ------------- -------------- -------------
Net increase
(decrease) from
Investment shares
transactions....... 70,968 44,369 28,492 19,524 (44,068) 146,924
-------------- ------------- -------------- ------------- -------------- -------------
Total net increase
(decrease) from
share
transactions....... 2,596,908 1,793,266 78,919 994,165 (181,141) 688,209
-------------- ------------- -------------- ------------- -------------- -------------
-------------- ------------- -------------- ------------- -------------- -------------
</TABLE>
113
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
MICHIGAN MUNICIPAL GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
------------------------------ ---------------------------- ----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
------------- --------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.......... $ 661,728,165 $ 1,330,695,260 $ 216,052,484 $ 559,420,529 $ 338,854,359 $ 525,385,514
Reinvestment of
distributions........ 1,422,299 2,064,457 168,119 358,257 2,783,741 5,375,385
Shares redeemed........ (716,340,419) (1,113,735,038) (224,573,909) (448,191,138) (311,607,347) (458,462,125)
------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Institutional
capital
transactions....... (53,189,955) 219,024,679 (8,353,306) 111,587,648 30,030,753 72,298,774
------------- --------------- ------------- ------------- ------------- -------------
INVESTMENT:
Shares issued.......... 4,374,612 19,973,693 3,233,291 5,192,300 50,568 124,496
Reinvestment of
distributions........ 52,461 136,660 8,347 10,702 2,219 1,547
Shares redeemed........ (6,354,286) (17,561,598) (2,836,248) (5,146,223) (13,032) (34,968)
------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Investment capital
transactions....... (1,927,213) 2,548,755 405,390 56,779 39,755 91,075
------------- --------------- ------------- ------------- ------------- -------------
Total net increase
(decrease) from
capital
transactions....... $ (55,117,168) $ 221,573,434 $ (7,947,916) $ 111,644,427 $ 30,070,508 $ 72,389,849
------------- --------------- ------------- ------------- ------------- -------------
------------- --------------- ------------- ------------- ------------- -------------
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.......... 661,728,165 1,330,695,260 216,052,484 559,420,529 338,854,359 525,385,514
Reinvestment of
distributions........ 1,422,299 2,064,457 168,119 358,257 2,783,741 5,375,385
Shares redeemed........ (716,340,418) (1,113,735,038) (224,573,909) (448,191,138) (311,607,347) (458,462,125)
------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Institutional
shares
transactions....... (53,189,954) 219,024,679 (8,353,306) 111,587,648 30,030,753 72,298,774
------------- --------------- ------------- ------------- ------------- -------------
INVESTMENT:
Shares issued.......... 4,374,612 19,973,693 3,233,291 5,192,299 50,568 124,496
Reinvestment of
distributions........ 52,461 136,660 8,347 10,702 2,219 1,547
Shares redeemed........ (6,354,286) (17,561,598) (2,836,248) (5,146,223) (13,032) (34,968)
------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Investment shares
transactions ...... (1,927,213) 2,548,755 405,390 56,778 39,755 91,075
------------- --------------- ------------- ------------- ------------- -------------
(55,117,167) 221,573,434 (7,947,916) 111,644,426 30,070,508 72,389,849
------------- --------------- ------------- ------------- ------------- -------------
------------- --------------- ------------- ------------- ------------- -------------
</TABLE>
114
<PAGE>
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, 1999 were as follows:
<TABLE>
<CAPTION>
FUNDS PURCHASES SALES
- ---------------------------------------- ----------- -----------
<S> <C> <C>
Growth and Income Fund.................. $43,423,209 $50,614,003
Small Company Growth Fund............... 52,202,415 179,073,266
International Growth Fund............... 26,195,681 74,857,983
Index Equity Fund....................... 38,708,174 39,696,899
Short Term Bond Fund.................... 68,823,044 63,579,480
Intermediate Bond Fund.................. 456,697,818 485,757,159
Income Fund............................. 209,654,932 133,090,693
Intermediate Tax-Free Fund.............. 92,860,554 100,498,284
Tax-Free Income Fund.................... 65,012,403 54,718,362
Michigan Municipal Bond Fund............ 8,394,796 12,795,564
</TABLE>
6. RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES
The Growth and Income Fund and the International Growth Fund can purchase
securities of foreign issuers. Investing in securities of foreign issuers
involves special risks not typically associated with investing in securities of
U.S. issuers.
The risks include devaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than those of
securities of comparable U.S. issuers.
7. 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 Intermediate Tax-Free Fund, Tax-Free Income Fund, Michigan Municipal Bond
Fund and the Michigan Municipal Money Market Fund had the following
concentrations by industry sector at June 30, 1999 (as a percentage of total
investments):
<TABLE>
<CAPTION>
MICHIGAN
MICHIGAN MUNICIPAL
INTERMEDIATE TAX-FREE MUNICIPAL MONEY
TAX-FREE INCOME BOND MARKET
FUND FUND FUND FUND
------------ -------- --------- ---------
<S> <C> <C> <C> <C>
Airport....................... 3.23% 2.69% 1.90% 1.36%
Development................... 3.51% 1.74% 5.16% 58.35%
Education..................... 0.49% 0.97% -- --
Facilities.................... 7.24% 5.24% 4.37% 1.14%
General Obligation............ 30.14% 30.28% 10.71% 17.60%
Higher Education.............. 4.61% 6.48% 5.26% 1.55%
Housing Development........... 0.32% 1.01% 2.31% 2.31%
Law Enforcement............... -- -- 1.72% --
Medical....................... 1.98% 2.84% 18.78% 2.17%
Miscellaneous Facilities...... -- -- 0.85% --
Multifamily Housing........... -- 1.06% -- 1.33%
Mutual Funds.................. 1.45% 2.16% 1.56% 0.45%
Nursing Homes................. -- -- 1.35% --
Pollution..................... 2.51% -- 2.60% 7.03%
Power......................... 7.83% 8.43% 2.43% --
School District............... 11.34% 13.32% 33.13% 5.30%
Single Family Housing......... 0.16% 2.82% -- 0.37%
Student Loan.................. 0.72% -- -- --
Transportation................ 9.07% 11.70% 5.22% 0.63%
Utilities..................... 11.12% 7.71% 2.60% 0.41%
Water......................... 4.28% 1.55% -- --
----- -------- --------- ---------
100% 100% 100% 100%
----- -------- --------- ---------
----- -------- --------- ---------
</TABLE>
8. COMMON TRUST FUND CONVERSIONS:
On December 3, 1998, the net assets of certain common trust funds managed by
the Investment Adviser were exchanged in a tax-free conversion for Institutional
shares of the corresponding Kent Funds. The following is a summary of shares
issued, net assets converted, net assets value per share issued and unrealized
appreciation of assets acquired as of the conversion date:
<TABLE>
<CAPTION>
SHARES NET ASSETS NET ASSET VALUE UNREALIZED
ISSUED CONVERTED PER SHARE ISSUED APPRECIATION
--------- ----------- ----------------- -------------
<S> <C> <C> <C> <C>
Growth and Income Fund........ 3,222,690 $54,431,232 $16.89 $ 17,190,675
Intermediate Bond Fund........ 9,258,351 93,787,091 10.13 3,684,581
Intermediate Tax-Free Fund.... 1,042,405 11,247,552 10.79 405,284
</TABLE>
9. SHAREHOLDER VOTE:
A meeting of the Shareholders of the Limited Term Tax-Free Fund was held on
March 24, 1999, to consider a Plan of
115
<PAGE>
Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
Reorganization whereby the assets and liabilities of the Limited Term Tax-Free
Fund would be transferred to the Intermediate Tax-Free Fund. The shareholders of
the Limited Term Tax-Free Fund approved the proposal by the following votes:
<TABLE>
<S> <C>
Yes............................................... 3,125,329,848
No................................................ 0
Abstentions....................................... 0
</TABLE>
Shareholders of the Limited Term Tax-Free Fund became shareholders of the
Intermediate Tax-Free Fund upon consummation of the reorganization on March 30,
1999.
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER REORGANIZATION
------------------------------- ---------------------
LIMITED TERM INTERMEDIATE INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND TAX-FREE FUND
-------------- -------------- ---------------------
<S> <C> <C> <C>
Shares (000)....................... 3,152 30,133 30,428
Net Assets (000)................... $ 32,045 $ 322,314 $ 325,411
Net Asset Value.................... $ 10.17 $ 10.70 $ 10.69
Unrealized Appreciation............ $667,311 $ 17,300,212 $17,283,020
</TABLE>
116
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
EQUITY FUNDS
INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
----------------------------- LESS DIVIDENDS AND DISTRIBUTIONS FROM
NET REALIZED AND ----------------------------------------------
UNREALIZED GAINS NET REALIZED
(LOSSES) ON TOTAL GAINS ON
INVESTMENTS, INCOME INVESTMENTS, IN
NET ASSET FUTURES CONTRACTS (LOSS) IN EXCESS FUTURES EXCESS
VALUE, NET AND FOREIGN FROM NET OF NET CONTRACTS OF NET
BEGINNING INVESTMENT CURRENCY INVESTMENT INVESTMENT INVESTMENT AND FOREIGN REALIZED
OF PERIOD INCOME TRANSLATIONS OPERATIONS INCOME INCOME CURRENCY GAINS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
GROWTH AND
INCOME FUND
TICKER SYMBOL:
KNVEX
Year ended 1994 $10.91 0.31 (0.26) 0.05 (0.31) ** (0.15) --
Year ended 1995 $10.50 0.33 3.28 3.61 (0.33) -- (0.53) --
Year ended 1996 $13.25 0.30 2.16 2.46 (0.30) -- (1.51) --
Year ended 1997 $13.90 0.25 3.04 3.29 (0.25) -- (1.39) --
Year ended 1998 $15.55 0.13 4.03 4.16 (0.13) (0.01) (1.54) --
Six months
ended
(Unaudited) 1999 $18.03 0.06 1.97 2.03 (0.05) -- (0.28) --
- ------------------------------------------------------------------------------------------------------------------------
SMALL COMPANY
GROWTH FUND
TICKER SYMBOL:
KNEEX
Year ended 1994 $12.50 0.10 (0.10) -- (0.09) (0.01) (0.41) --
Year ended 1995 $11.99 0.10 2.64 2.74 (0.10) -- (0.81) --
Year ended 1996 $13.82 0.12 2.55 2.67 (0.12) -- (0.72) --
Year ended 1997 $15.65 0.04 4.19 4.23 (0.04) (0.02) (1.43) --
Year ended 1998 $18.39 0.03 (1.08) (1.05) (0.03) -- (1.85) --
Six months
ended
(Unaudited) 1999 $15.46 0.02 1.46 1.47 (0.02) -- (0.33) --
- ------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL
GROWTH FUND
TICKER SYMBOL:
KNINX
Year ended 1994 $12.84 0.12 0.61 0.73 (0.07) (0.03) (0.41) --
Year ended 1995 $13.06 0.13 1.54 1.67 (0.13) (0.11) (0.31) --
Year ended 1996 $14.18 0.13 0.70 0.83 (0.10) (0.02) (0.13) (0.01)
Year ended 1997 $14.75 0.11 0.26 0.37 (0.09) (0.06) (0.07) (0.01)
Year ended 1998 $14.89 0.14 2.48 2.62 (0.07) (0.12) (1.41) --
Six months
ended
(Unaudited) 1999 $15.91 0.10 0.67 0.77 (0.04) -- (0.62) --
- ------------------------------------------------------------------------------------------------------------------------
INDEX EQUITY
FUND
TICKER SYMBOL:
KNIEX
Year ended 1994 $11.04 0.25 (0.15) 0.10 (0.26) -- (0.20) --
Year ended 1995 $10.68 0.26 3.44 3.70 (0.25) -- (1.57) --
Year ended 1996 $12.56 0.26 2.47 2.73 (0.26) -- (0.28) (0.04)
Year ended 1997 $14.71 0.25 4.50 4.75 (0.25) -- (0.05) (0.02)
Year ended 1998 $19.14 0.24 5.14 5.38 (0.24) -- (0.04) --
Six months
ended
(Unaudited) 1999 $24.24 0.12 2.83 2.95 (0.11) -- (0.10) --
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS/SUPPLEMENTAL DATA:
----------------------------------------------------------
RATIO OF
NET NET
TOTAL NET ASSET NET ASSETS, RATIO OF INVESTMENT RATIO OF
DIVIDENDS CHANGE IN VALUE, END OF EXPENSES INCOME EXPENSES PORTFOLIO
AND NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER
DISTRIBUTIONS VALUE PERIOD RETURN (000'S) NET ASSETS NET ASSETS NET ASSETS* RATE(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------
GROWTH AND
INCOME FUND
TICKER SYMBOL:
KNVEX
Year ended (0.46) (0.41) $10.50 0.51% $ 308,825 0.98% 3.04% *** 28%
Year ended (0.86) 2.75 $13.25 34.91% $ 401,371 0.94% 2.73% *** 58%
Year ended (1.81) 0.65 $13.90 19.47% $ 500,857 0.95% 2.18% 0.95% 39%
Year ended (1.64) 1.65 $15.55 24.14% $ 697,973 0.92% 1.61% 0.93% 88%
Year ended (1.68) 2.48 $18.03 28.07% $ 827,828 0.93% 0.77% 0.94% 20%
Six months
ended
(Unaudited) (0.33) 1.70 $19.73 11.38%^^ $ 947,533 0.92%^ 0.65%^ 0.93%^ 9%
- --------------
SMALL COMPANY
GROWTH FUND
TICKER SYMBOL:
KNEEX
Year ended (0.51) (0.51) $11.99 0.06% $ 304,179 0.98% 0.79% *** 20%
Year ended (0.91) 1.83 $13.82 23.75% $ 450,072 0.97% 0.83% *** 30%
Year ended (0.84) 1.83 $15.65 19.56% $ 544,081 0.96% 0.78% 0.96% 16%
Year ended (1.49) 2.74 $18.39 27.94% $ 719,998 0.93% 0.24% 0.94% 32%
Year ended (1.88) (2.93) $15.46 (6.15%) $ 760,335 0.94% 0.18% 0.95% 41%
Six months
ended
(Unaudited) (0.35) 1.12 $16.58 9.97%^^ $ 669,928 0.94%^ 0.22%^ 0.95%^ 8%
- --------------
INTERNATIONAL
GROWTH FUND
TICKER SYMBOL:
KNINX
Year ended (0.51) 0.22 $13.06 5.73% $ 178,186 1.22% 0.87% *** 20%
Year ended (0.55) 1.12 $14.18 13.00% $ 286,545 1.17% 1.35% *** 6%
Year ended (0.26) 0.57 $14.75 5.87% $ 387,799 1.09% 0.97% 1.09% 13%
Year ended (0.23) 0.14 $14.89 2.54% $ 492,598 1.05% 0.80% 1.06% 3%
Year ended (1.60) 1.02 $15.91 17.92% $ 528,500 1.05% 0.87% 1.06% 22%
Six months
ended
(Unaudited) (0.66) 0.11 $16.02 5.08%^^ $ 511,414 1.02%^ 1.35%^ 1.01%^ 5%
- --------------
INDEX EQUITY
FUND
TICKER SYMBOL:
KNIEX
Year ended (0.46) (0.36) $10.68 0.86% $ 245,550 0.58% 2.32% 0.58% 50%
Year ended (1.82) 1.88 $12.56 36.23% $ 183,877 0.56% 2.14% 0.56% 3%
Year ended (0.58) 2.15 $14.71 22.18% $ 243,438 0.49% 1.91% 0.59% 2%
Year ended (0.32) 4.43 $19.14 32.55% $ 590,241 0.43% 1.44% 0.54% 1%
Year ended (0.28) 5.10 $24.24 28.26% $ 771,147 0.42% 1.10% 0.55% 12%
Six months
ended
(Unaudited) (0.21) 2.74 $26.98 12.23%^^ $ 858,271 0.41%^ 0.96%^ 0.54%^ 5%
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
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 Fund as a whole distinguishing between the classes of shares
issued.
</TABLE>
117
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
EQUITY FUNDS
INVESTMENT SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income (Loss) from Investment
Operations Less Dividends and Distributions from
----------------------------- ----------------------------------------------
Net Realized and Net Realized
Unrealized Gains Gains on
(Losses) on Total Investments,
Investments, Income Futures In
Net Asset Net Futures Contracts (Loss) In Excess Contracts Excess
Value, Investment and Foreign from Net of Net and Foreign of Net
Beginning Income Currency Investment Investment Investment Currency Realized
of Period (Loss) Translations Operations Income Income Translations Gains
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
GROWTH AND
INCOME FUND
TICKER SYMBOL:
KNVIX
Year ended 1994 $10.87 0.32 (0.27) 0.05 (0.31) ** (0.15) --
Year ended 1995 $10.46 0.30 3.26 3.56 (0.30) -- (0.53) --
Year ended 1996 $13.19 0.26 2.15 2.41 (0.26) (0.02) (1.51) --
Year ended 1997 $13.81 0.21 3.02 3.23 (0.21) -- (1.39) --
Year ended 1998 $15.44 0.08 4.00 4.08 (0.08) (0.02) (1.54) --
Six months
ended
(Unaudited) 1999 $17.88 0.04 1.96 2.00 (0.03) -- (0.28) --
- ------------------------------------------------------------------------------------------------------------------------
SMALL COMPANY
GROWTH FUND
TICKER SYMBOL:
KNEMX
Year ended 1994 $12.49 0.10 (0.11) (0.01) (0.08) (0.01) (0.41) --
Year ended 1995 $11.98 0.07 2.64 2.71 (0.07) -- (0.81) --
Year ended 1996 $13.81 0.07 2.54 2.61 (0.08) (0.01) (0.72) --
Year ended 1997 $15.61 -- 4.19 4.19 -- (0.04) (1.43) --
Year ended 1998 $18.33 (0.01) (1.08) (1.09) -- -- (1.85) --
Six months
ended
(Unaudited) 1999 $15.39 (0.02) 1.47 1.45 -- -- (0.33) --
- ------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL
GROWTH FUND
TICKER SYMBOL:
KNIVX
Year ended 1994 $12.81 0.14 0.56 0.70 (0.07) (0.03) (0.41) --
Year ended 1995 $13.00 0.14 1.50 1.64 (0.09) (0.11) (0.31) --
Year ended 1996 $14.13 0.12 0.66 0.78 (0.08) -- (0.14) --
Year ended 1997 $14.69 0.08 0.25 0.33 (0.06) (0.09) (0.07) (0.01)
Year ended 1998 $14.79 0.10 2.46 2.56 -- (0.19) (1.41) --
Six months
ended
(Unaudited) 1999 $15.75 0.09 0.65 0.74 (0.04) -- (0.62) --
- ------------------------------------------------------------------------------------------------------------------------
INDEX EQUITY
FUND
TICKER SYMBOL:
KNIOX
Year ended 1994 $11.07 0.26 (0.17) 0.09 (0.26) -- (0.20) --
Year ended 1995 $10.70 0.23 3.44 3.67 (0.23) -- (1.57) --
Year ended 1996 $12.57 0.22 2.48 2.70 (0.22) (0.01) (0.32) --
Year ended 1997 $14.72 0.20 4.51 4.71 (0.20) (0.01) (0.06) (0.01)
Year ended 1998 $19.15 0.18 5.14 5.32 (0.18) -- (0.04) --
Six months
ended
(Unaudited) 1999 $24.25 0.09 2.83 2.92 (0.08) -- (0.10) --
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data:
----------------------------------------------------------
Ratio of
Net
Net Investment
Total Net Asset Net Assets, Ratio of Income Ratio of
Dividends Change in Value, End of Expenses (Loss) Expenses Portfolio
and Net Asset End of Total Period to Average to Average to Average Turnover
Distributions Value Period Return(1) (000's) Net Assets Net Assets Net Assets* Rate(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------
GROWTH AND
INCOME FUND
TICKER SYMBOL:
KNVIX
Year ended (0.46) (0.41) $10.46 0.50% $ 8,005 0.98% 3.03% *** 28%
Year ended (0.83) 2.73 $13.19 34.61% $ 11,079 1.18% 2.48% *** 58%
Year ended (1.79) 0.62 $13.81 19.14% $ 15,063 1.09% 1.77% 1.09% 39%
Year ended (1.60) 1.63 $15.44 23.89% $ 35,343 1.17% 1.31% 1.18% 88%
Year ended (1.64) 2.44 $17.88 27.68% $ 50,458 1.18% 0.50% 1.19% 20%
Six months
ended
(Unaudited) (0.31) 1.69 $19.57 11.28%^^ $ 56,607 1.17%^ 0.40%^ 1.18%^ 9%
- --------------
SMALL COMPANY
GROWTH FUND
TICKER SYMBOL:
KNEMX
Year ended (0.50) (0.51) $11.98 (0.08%) $ 8,433 0.98% 0.79% *** 20%
Year ended (0.88) 1.83 $13.81 23.47% $ 10,955 1.20% 0.59% *** 30%
Year ended (0.81) 1.80 $15.61 19.16% $ 14,436 1.21% 0.53% 1.21% 16%
Year ended (1.47) 2.72 $18.33 27.71% $ 22,784 1.18% (0.01%) 1.19% 32%
Year ended (1.85) (2.94) $15.39 (6.40%) $ 23,455 1.19% (0.07%) 1.20% 41%
Six months
ended
(Unaudited) (0.33) 1.12 $16.51 9.89%^^ $ 24,036 1.19%^ (0.03%)^ 1.20%^ 8%
- --------------
INTERNATIONAL
GROWTH FUND
TICKER SYMBOL:
KNIVX
Year ended (0.51) 0.19 $13.00 5.51% $ 6,539 1.25% 0.81% *** 20%
Year ended (0.51) 1.13 $14.13 12.86% $ 7,548 1.40% 1.11% *** 6%
Year ended (0.22) 0.56 $14.69 5.57% $ 8,799 1.34% 0.74% 1.34% 13%
Year ended (0.23) 0.10 $14.79 2.25% $ 9,780 1.30% 0.53% 1.31% 3%
Year ended (1.60) 0.96 $15.75 17.60% $ 12,390 1.30% 0.59% 1.31% 22%
Six months
ended
(Unaudited) (0.66) 0.08 $15.83 4.92%^^ $ 12,782 1.27%^ 1.13%^ 1.28%^ 5%
- --------------
INDEX EQUITY
FUND
TICKER SYMBOL:
KNIOX
Year ended (0.46) (0.37) $10.70 0.75% $ 4,736 0.60% 2.30% 0.60% 50%
Year ended (1.80) 1.87 $12.57 35.81% $ 6,612 0.80% 1.86% 0.81% 3%
Year ended (0.55) 2.15 $14.72 21.92% $ 9,925 0.74% 1.67% 0.84% 2%
Year ended (0.28) 4.43 $19.15 32.24% $ 27,922 0.68% 1.20% 0.79% 1%
Year ended (0.22) 5.10 $24.25 27.93% $ 38,205 0.67% 0.85% 0.80% 12%
Six months
ended
(Unaudited) (0.18) 2.74 $26.99 12.09%^^ $ 47,151 0.66%^ 0.71%^ 0.79%^ 5%
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
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 Fund as a whole distinguishing between the classes of shares
issued.
</TABLE>
118
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
BOND FUNDS
INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME (LOSS) FROM LESS DIVIDENDS AND DISTRIBUTIONS
INVESTMENT OPERATIONS TOTAL FROM
----------------------------- INCOME ------------------------------------
NET ASSET NET REALIZED AND (LOSS) IN EXCESS TOTAL
VALUE, NET UNREALIZED GAINS FROM NET OF NET NET REALIZED DIVIDENDS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT INVESTMENT GAINS ON AND
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INCOME INVESTMENTS DISTRIBUTIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
SHORT TERM
BOND FUND
TICKER SYMBOL:
KNLMX
Year ended 1994 $ 9.91 0.48 (0.38) 0.10 (0.49) ** -- (0.49)
Year ended 1995 $ 9.52 0.55 0.43 0.98 (0.54) -- -- (0.54)
Year ended 1996 $ 9.96 0.61 (0.21) 0.40 (0.61) -- -- (0.61)
Year ended 1997 $ 9.75 0.61 -- 0.61 (0.61) -- -- (0.61)
Year ended 1998 $ 9.75 0.56 0.02 0.58 (0.56) -- -- (0.56)
Six months
ended
(Unaudited) 1999 $ 9.77 0.27 (0.18) 0.09 (0.27) -- -- (0.27)
- -----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE
BOND FUND
TICKER SYMBOL:
KNFIX
Year ended 1994 $10.18 0.56 (0.88) (0.32) (0.54) (0.01) (0.02) (0.57)
Year ended 1995 $ 9.29 0.65 0.81 1.46 (0.63) -- -- (0.63)
Year ended 1996 $10.12 0.60 (0.32) 0.28 (0.61) (0.03) -- (0.64)
Year ended 1997 $ 9.76 0.59 0.14 0.73 (0.59) -- -- (0.59)
Year ended 1998 $ 9.90 0.58 0.16 0.74 (0.58) -- -- (0.58)
Six months
ended
(Unaudited) 1999 $10.06 0.28 (0.44) (0.17) (0.28) -- -- (0.28)
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FUND
TICKER SYMBOL:
KNIIX
Year ended 1995 $10.00 0.55 0.92 1.47 (0.54) -- (0.09) (0.63)
Year ended 1996 $10.84 0.66 (0.56) 0.10 (0.65) (0.10) (0.03) (0.78)
Year ended 1997 $10.16 0.68 0.34 1.02 (0.68) -- (0.20) (0.88)
Year ended 1998 $10.30 0.65 0.27 0.92 (0.65) -- (0.24) (0.89)
Six months
ended
(Unaudited) 1999 $10.33 0.30 (0.67) (0.37) (0.30) -- (0.01) (0.31)
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS/SUPPLEMENTAL DATA:
RATIO OF
NET NET
NET ASSET NET ASSETS, RATIO OF INVESTMENT RATIO OF
CHANGE IN VALUE, END OF EXPENSES INCOME EXPENSES PORTFOLIO
NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER
VALUE PERIOD RETURN (000'S) NET ASSETS NET ASSETS NET ASSETS* RATE(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------
SHORT TERM
BOND FUND
TICKER SYMBOL:
KNLMX
Year ended (0.39) $ 9.52 1.03% $ 176,765 0.73% 4.75% *** 56%
Year ended 0.44 $ 9.96 10.53% $ 310,680 0.77% 5.60% *** 75%
Year ended (0.21) $ 9.75 4.22% $ 235,430 0.70% 6.17% 0.70% 32%
Year ended -- $ 9.75 6.42% $ 139,739 0.72% 6.04% 0.73% 89%
Year ended 0.02 $ 9.77 6.14% $ 139,229 0.76% 5.74% 0.77% 72%
Six months
ended
(Unaudited) (0.18) $ 9.59 0.89%^^ $ 143,270 0.75%^ 5.54%^ 0.76%^ 45%
- --------------
INTERMEDIATE
BOND FUND
TICKER SYMBOL:
KNFIX
Year ended (0.89) $ 9.29 (3.19%) $ 977,865 0.80% 6.03% *** 124%
Year ended 0.83 $10.12 16.18% $ 854,801 0.77% 6.50% *** 166%
Year ended (0.36) $ 9.76 3.01% $ 769,395 0.77% 6.18% 0.78% 135%
Year ended 0.14 $ 9.90 7.80% $ 762,740 0.75% 6.03% 0.76% 114%
Year ended 0.16 $10.06 7.65% $ 885,580 0.76% 5.77% 0.77% 106%
Six months
ended
(Unaudited) (0.45) $ 9.61 (1.68%)^^ $ 826,027 0.76%^ 5.73%^ 0.77%^ 55%
- --------------
INCOME FUND
TICKER SYMBOL:
KNIIX
Year ended 0.84 $10.84 15.05%^^ $ 126,056 0.91%^ 6.65%^ *** 50%
Year ended (0.68) $10.16 1.19% $ 240,060 0.83% 6.57% 0.83% 102%
Year ended 0.14 $10.30 10.55% $ 229,778 0.82% 6.65% 0.83% 84%
Year ended 0.03 $10.33 9.29% $ 231,017 0.83% 6.25% 0.84% 108%
Six months
ended
(Unaudited) (0.68) $ 9.65 (3.62%)^^ $ 285,655 0.83%^ 6.14%^ 0.84%^ 54%
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
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 Fund as a whole distinguishing between the classes of shares
issued.
(2) The Institutional Class of the Income Fund commenced operations on March 20, 1995.
</TABLE>
119
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
BOND FUNDS
INVESTMENT SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME (LOSS) FROM
INVESTMENT OPERATIONS TOTAL LESS DIVIDENDS AND DISTRIBUTIONS FROM
----------------------------- INCOME ---------------------------------------------------
NET ASSET NET REALIZED AND (LOSS) IN EXCESS TOTAL
VALUE, NET UNREALIZED GAINS FROM NET OF NET NET REALIZED DIVIDENDS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT INVESTMENT GAINS ON AND
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INCOME INVESTMENTS DISTRIBUTIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
SHORT TERM
BOND FUND
TICKER SYMBOL:
KNLIX
Year ended 1994 $ 9.91 0.47 (0.37) 0.10 (0.48) (0.01) -- (0.49)
Year ended 1995 $ 9.52 0.52 0.44 0.96 (0.53) -- -- (0.53)
Year ended 1996 $ 9.95 0.59 (0.20) 0.39 (0.54) (0.06) -- (0.60)
Year ended 1997 $ 9.74 0.57 0.02 0.59 (0.59) -- -- (0.59)
Year ended 1998 $ 9.74 0.55 0.02 0.57 (0.52) (0.03) -- (0.55)
Six months
ended
(Unaudited) 1999 $ 9.76 0.26 (0.18) 0.08 (0.26) -- -- (0.26)
- -----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE
BOND FUND
TICKER SYMBOL:
KNFVX
Year ended 1994 $10.19 0.57 (0.87) (0.30) (0.54) (0.01) (0.02) (0.57)
Year ended 1995 $ 9.32 0.61 0.82 1.43 (0.61) -- -- (0.61)
Year ended 1996 $10.14 0.58 (0.32) 0.26 (0.57) (0.05) -- (0.62)
Year ended 1997 $ 9.78 0.57 0.15 0.72 (0.57) -- -- (0.57)
Year ended 1998 $ 9.93 0.54 0.16 0.70 (0.55) -- -- (0.55)
Six months
ended
(Unaudited) 1999 $10.08 0.27 (0.44) (0.17) (0.27) -- -- (0.27)
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FUND
TICKER SYMBOL:
N/A
Year ended 1995(3) $10.00 0.52 0.91 1.43 (0.52) -- (0.09) (0.61)
Year ended 1996 $10.82 0.66 (0.56) 0.10 (0.64) (0.09) (0.03) (0.76)
Year ended 1997 $10.16 0.63 0.35 0.98 (0.65) -- (0.20) (0.85)
Year ended 1998 $10.29 0.62 0.28 0.90 (0.60) (0.03) (0.24) (0.87)
Six months
ended
(Unaudited) 1999 $10.32 0.29 (0.67) (0.38) (0.29) -- (0.01) (0.30)
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS/SUPPLEMENTAL DATA:
RATIO OF
NET NET
NET ASSET NET ASSETS, RATIO OF INVESTMENT RATIO OF
CHANGE IN VALUE, END OF EXPENSES INCOME EXPENSES PORTFOLIO
NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER
VALUE PERIOD RETURN(1) (000'S) NET ASSETS NET ASSETS NET ASSETS* RATE(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------
SHORT TERM
BOND FUND
TICKER SYMBOL:
KNLIX
Year ended (0.39) $ 9.52 1.01% $ 1,649 0.74% 4.79% ** 56%
Year ended 0.43 $ 9.95 10.30% $ 1,634 0.91% 5.40% ** 75%
Year ended (0.21) $ 9.74 4.06% $ 1,667 0.85% 6.02% 0.96% 32%
Year ended 0.00 $ 9.74 6.26% $ 7,433 0.88% 5.75% 0.99% 89%
Year ended 0.02 $ 9.76 6.00% $ 6,126 0.91% 5.60% 1.02% 72%
Six months
ended
(Unaudited) (0.18) $ 9.58 0.81%^^ $ 5,169 0.90%^ 5.39%^ 1.01%^ 45%
- --------------
INTERMEDIATE
BOND FUND
TICKER SYMBOL:
KNFVX
Year ended (0.87) $ 9.32 (3.01%) $ 9,196 0.81% 5.94% ** 124%
Year ended 0.82 $10.14 15.76% $ 6,862 1.01% 6.24% ** 166%
Year ended (0.36) $ 9.78 2.76% $ 7,327 1.02% 5.92% 1.03% 135%
Year ended 0.15 $ 9.93 7.62% $ 6,972 1.00% 5.79% 1.01% 114%
Year ended 0.15 $10.08 7.26% $ 12,313 1.01% 5.51% 1.02% 106%
Six months
ended
(Unaudited) (0.44) $ 9.64 (1.70%)^^ $ 11,441 1.01%^ 5.48%^ 1.02%^ 55%
- --------------
INCOME FUND
TICKER SYMBOL:
N/A
Year ended 0.82 $10.82 14.63%^^ $ 1,961 1.14%^ 6.40%^ ** 50%
Year ended (0.66) $10.16 1.16% $ 2,722 1.08% 6.31% 1.08% 102%
Year ended 0.13 $10.29 10.19% $ 5,611 1.07% 6.38% 1.08% 84%
Year ended 0.03 $10.32 9.04% $ 10,629 1.08% 5.97% 1.09% 108%
Six months
ended
(Unaudited) (0.68) $ 9.64 (3.75%)^^ $ 11,592 1.08%^ 5.88%^ 1.09%^ 54%
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
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 Fund as a whole distinguishing between the classes of shares
issued.
(3) The date of initial public investment of the Investment Class of the Income Fund was March 22, 1995.
</TABLE>
120
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
MUNICIPAL BOND FUNDS
INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME (LOSS) FROM
INVESTMENT OPERATIONS LESS DIVIDENDS AND
----------------------------- DISTRIBUTIONS FROM
NET REALIZED AND TOTAL ------------------------------------
UNREALIZED GAINS INCOME NET REALIZED
NET ASSET (LOSSES) ON (LOSS) IN EXCESS GAINS ON TOTAL
VALUE, NET INVESTMENTS FROM NET OF NET INVESTMENTS DIVIDENDS
BEGINNING INVESTMENT AND FUTURES INVESTMENT INVESTMENT INVESTMENT AND FUTURE AND
OF PERIOD INCOME CONTRACTS OPERATIONS INCOME INCOME CONTRACTS DISTRIBUTIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE
TAX-FREE FUND
TICKER SYMBOL:
KNMTX
Year ended 1994 $10.45 0.40 (0.71) (0.31) (0.39) (0.01) -- (0.40)
Year ended 1995 $ 9.74 0.45 0.79 1.24 (0.45) (0.01) -- (0.46)
Year ended 1996 $10.52 0.44 (0.08) 0.36 (0.46) ** -- (0.46)
Year ended 1997 $10.42 0.45 0.26 0.71 (0.45) -- -- (0.45)
Year ended 1998 $10.68 0.45 0.11 0.56 (0.45) -- (0.03) (0.48)
Six months
ended
(Unaudited) 1999 $10.76 0.22 (0.34) (0.12) (0.22) -- (0.01) (0.23)
- -----------------------------------------------------------------------------------------------------------------------------
TAX-FREE
INCOME FUND
TICKER SYMBOL:
KNTIX
Year ended 1995(2) $10.00 0.36 0.49 0.85 (0.36) -- -- (0.36)
Year ended 1996 $10.49 0.46 (0.06) 0.40 (0.46) -- (0.16) (0.62)
Year ended 1997 $10.27 0.45 0.41 0.86 (0.45) -- (0.03) (0.48)
Year ended 1998 $10.65 0.44 0.15 0.59 (0.44) -- (0.05) (0.49)
Six months
ended
(Unaudited) 1999 $10.75 0.22 (0.41) (0.19) (0.22) -- (0.01) (0.23)
- -----------------------------------------------------------------------------------------------------------------------------
MICHIGAN
MUNICIPAL BOND
FUND
TICKER SYMBOL:
KNMIX
Year ended 1994 $10.06 0.37 (0.34) 0.03 (0.36) (0.01) -- (0.37)
Year ended 1995 $ 9.72 0.39 0.39 0.78 (0.37) (0.01) -- (0.38)
Year ended 1996 $10.12 0.39 (0.04) 0.35 (0.39) -- -- (0.39)
Year ended 1997 $10.08 0.41 0.13 0.54 (0.41) -- -- (0.41)
Year ended 1998 $10.21 0.40 0.08 0.48 (0.41) -- (0.01) (0.42)
Six months
ended
(Unaudited) 1999 $10.27 0.20 (0.21) (0.01) (0.20) -- -- (0.20)
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS/SUPPLEMENTAL DATA:
----------------------------------------------------------
RATIO OF
NET NET
NET ASSET NET ASSETS, RATIO OF INVESTMENT RATIO OF
CHANGE IN VALUE, END OF EXPENSES INCOME EXPENSES PORTFOLIO
NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER
VALUE PERIOD RETURN (000'S) NET ASSETS NET ASSETS NET ASSETS* RATE(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------
INTERMEDIATE
TAX-FREE FUND
TICKER SYMBOL:
KNMTX
Year ended (0.71) $ 9.74 (3.00%) $ 380,715 0.78% 4.07% 0.78% 36%
Year ended 0.78 $10.52 12.90% $ 283,733 0.72% 4.39% 0.72% 6%
Year ended (0.10) $10.42 3.41% $ 285,674 0.73% 4.34% 0.73% 35%
Year ended 0.26 $10.68 7.07% $ 275,641 0.72% 4.31% 0.73% 23%
Year ended 0.08 $10.76 5.37% $ 296,484 0.73% 4.22% 0.74% 40%
Six months
ended
(Unaudited) (0.35) $10.41 (1.14%)^^ $ 313,323 0.73%^ 4.15%^ 0.74%^ 31%
- --------------
TAX-FREE
INCOME FUND
TICKER SYMBOL:
KNTIX
Year ended 0.49 $10.49 8.64%^^ $ 121,855 0.73%^ 4.44%^ 0.91%^ 10%
Year ended (0.22) $10.27 3.92% $ 109,948 0.82% 4.38% 0.82% 40%
Year ended 0.38 $10.65 8.59% $ 116,652 0.79% 4.32% 0.80% 16%
Year ended 0.10 $10.75 5.71% $ 128,232 0.81% 4.16% 0.82% 53%
Six months
ended
(Unaudited) (0.42) $10.33 (1.80%)^^ $ 123,774 0.81%^ 4.21%^ 0.82%^ 45%
- --------------
MICHIGAN
MUNICIPAL BOND
FUND
TICKER SYMBOL:
KNMIX
Year ended (0.34) $ 9.72 0.36% $ 118,485 0.49% 3.74% 0.74% 27%
Year ended 0.40 $10.12 8.20% $ 185,466 0.69% 3.81% 0.70% 42%
Year ended (0.04) $10.08 3.51% $ 152,623 0.70% 3.83% 0.70% 24%
Year ended 0.13 $10.21 5.52% $ 111,735 0.69% 4.04% 0.70% 13%
Year ended 0.06 $10.27 4.75% $ 117,957 0.69% 3.97% 0.70% 51%
Six months
ended
(Unaudited) (0.21) $10.06 (0.07%)^^ $ 114,179 0.70%^ 3.96%^ 0.71%^ 13%
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
would have been as indicated.
** Amount is less than $0.005.
(1) Portfolio turnover is calculated on the basis of the Fund as a whole distinguishing between the classes of shares
issued.
(2) The Institutional Class of the Tax-Free Income Fund commenced operations on March 20, 1995.
</TABLE>
121
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
MUNICIPAL BOND FUNDS
INVESTMENT SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT LESS DIVIDENDS AND DISTRIBUTIONS FROM
OPERATIONS ----------------------------------------------
----------------------------- TOTAL NET REALIZED
NET REALIZED AND INCOME GAINS ON IN
NET ASSET UNREALIZED GAINS (LOSS) IN EXCESS INVESTMENTS EXCESS
VALUE, NET (LOSSES) ON FROM NET OF NET AND OF NET
BEGINNING INVESTMENT INVESTMENTS AND INVESTMENT INVESTMENT INVESTMENT FUTURE REALIZED
OF PERIOD INCOME FUTURES CONTRACTS OPERATIONS INCOME INCOME CONTRACTS GAINS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE
TAX-FREE FUND
TICKER SYMBOL:
KNMBX
Year ended 1994 $10.45 0.40 (0.71) (0.31) (0.39) (0.01) -- --
Year ended 1995 $ 9.74 0.42 0.79 1.21 (0.42) (0.01) -- --
Year ended 1996 $10.52 0.42 (0.09) 0.33 (0.41) (0.02) -- --
Year ended 1997 $10.42 0.43 0.26 0.69 (0.43) -- -- --
Year ended 1998 $10.68 0.42 0.11 0.53 (0.42) -- (0.03) --
Six months
ended
(Unaudited) 1999 $10.76 0.21 (0.33) (0.12) (0.21) -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------
TAX-FREE
INCOME FUND
TICKER SYMBOL:
N/A
Year ended 1995(3) $10.00 0.31 0.51 0.82 (0.30) -- -- --
Year ended 1996 $10.52 0.41 (0.05) 0.36 (0.43) -- (0.12) (0.04)
Year ended 1997 $10.29 0.42 0.42 0.84 (0.42) (0.01) (0.03) --
Year ended 1998 $10.67 0.42 0.15 0.57 (0.42) -- (0.05) --
Six months
ended
(Unaudited) 1999 $10.77 0.21 (0.40) (0.19) (0.21) -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------
MICHIGAN
MUNICIPAL BOND
TICKER SYMBOL:
KNMVX
Year ended 1994 $10.08 0.35 (0.34) 0.01 (0.34) (0.03) -- --
Year ended 1995 $ 9.72 0.37 0.40 0.77 (0.37) (0.01) -- --
Year ended 1996 $10.11 0.38 (0.05) 0.33 (0.35) (0.02) -- --
Year ended 1997 $10.07 0.39 0.14 0.53 (0.40) -- -- --
Year ended 1998 $10.20 0.39 0.07 0.46 (0.39) -- (0.01) --
Six months
ended
(Unaudited) 1999 $10.26 0.19 (0.21) (0.01) (0.20) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------------
RATIO OF
NET NET
TOTAL NET ASSET NET ASSETS, RATIO OF INVESTMENT RATIO OF
DIVIDENDS CHANGE IN VALUE, END OF EXPENSES INCOME EXPENSES PORTFOLIO
AND NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER
DISTRIBUTIONS VALUE PERIOD RETURN(1) (000'S) NET ASSETS NET ASSETS NET ASSETS* RATE(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------
INTERMEDIATE
TAX-FREE FUND
TICKER SYMBOL:
KNMBX
Year ended (0.40) (0.71) $ 9.74 (3.03%) $ 4,505 0.79% 3.99% 0.79% 36%
Year ended (0.43) 0.78 $10.52 12.66% $ 3,807 0.97% 4.13% 0.97% 6%
Year ended (0.43) (0.10) $10.42 3.17% $ 3,368 0.98% 4.09% 0.98% 35%
Year ended (0.43) 0.26 $10.68 6.80% $ 3,534 0.97% 4.06% 0.98% 23%
Year ended (0.45) 0.08 $10.76 5.09% $ 4,038 0.98% 3.97% 0.99% 40%
Six months
ended
(Unaudited) (0.22) (0.34) $10.42 (1.17%)^^ $ 4,649 0.98%^ 3.90%^ 0.99%^ 31%
- --------------
TAX-FREE
INCOME FUND
TICKER SYMBOL:
N/A
Year ended (0.30) 0.52 $10.52 8.34%^^ $ 529 0.95%^ 4.25%^ 1.17%^ 10%
Year ended (0.59) (0.23) $10.29 3.53% $ 936 1.07% 4.14% 1.07% 40%
Year ended (0.46) 0.38 $10.67 8.32% $ 1,712 1.04% 4.05% 1.05% 16%
Year ended (0.47) 0.10 $10.77 5.43% $ 1,938 1.06% 3.91% 1.07% 53%
Six months
ended
(Unaudited) (0.22) (0.41) $10.36 (1.82%)^^ $ 2,158 1.06%^ 3.97%^ 1.07%^ 45%
- --------------
MICHIGAN
MUNICIPAL BOND
TICKER SYMBOL:
KNMVX
Year ended (0.37) (0.36) $ 9.72 0.16% $ 1,980 0.49% 3.80% 0.84% 27%
Year ended (0.38) 0.39 $10.11 8.01% $ 1,900 0.83% 3.68% 0.85% 42%
Year ended (0.37) (0.04) $10.07 3.36% $ 2,422 0.85% 3.68% 0.95% 24%
Year ended (0.40) 0.13 $10.20 5.38% $ 4,413 0.84% 3.88% 0.95% 13%
Year ended (0.40) 0.06 $10.26 4.60% $ 5,946 0.84% 3.82% 0.95% 51%
Six months
ended
(Unaudited) (0.20) (0.21) $10.05 (0.15%)^^ $ 5,382 0.85%^ 3.81%^ 0.96%^ 13%
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
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 Fund as a whole distinguishing between the classes of shares
issued.
(3) The date of initial public investment of the Investment Class of the Tax-Free Income Fund was March 31, 1995.
</TABLE>
122
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME
(LOSS)
FROM RATIO OF
INVESTMENT LESS NET NET
NET ASSET OPERATIONS: DIVIDENDS NET NET ASSET ASSETS, RATIO OF INVESTMENT
VALUE, NET FROM NET CHANGE IN VALUE, END OF EXPENSES INCOME
BEGINNING INVESTMENT INVESTMENT NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME INCOME VALUE PERIOD RETURN (000'S) NET ASSETS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
MONEY MARKET
FUND
TICKER SYMBOL:
KIMXX
Year ended 1994 $1.000 0.040 (0.040) -- $ 1.000 3.75% $323,539 0.60% 3.65%
Year ended 1995 $1.000 0.050 (0.050) -- $ 1.000 5.58% $424,815 0.55% 5.45%
Year ended 1996 $1.000 0.050 (0.050) -- $ 1.000 5.06% $483,919 0.52% 4.95%
Year ended 1997 $1.000 0.051 (0.051) -- $ 1.000 5.23% $474,378 0.52% 5.11%
Year ended 1998 $1.000 0.050 (0.050) -- $ 1.000 5.13% $693,399 0.55% 5.00%
Six months
ended
(Unaudited) 1999 $1.000 0.022 (0.022) -- $ 1.000 2.25%^^ $640,209 0.54%^ 4.50%^
- ------------------------------------------------------------------------------------------------------------------------
MICHIGAN
MUNICIPAL
MONEY MARKET
FUND
TICKER SYMBOL:
KMIXX
Year ended 1994 $1.000 0.020 (0.020) -- $ 1.000 2.40% $128,164 0.60% 2.33%
Year ended 1995 $1.000 0.030 (0.030) -- $ 1.000 3.50% $145,215 0.56% 3.45%
Year ended 1996 $1.000 0.030 (0.030) -- $ 1.000 3.11% $155,424 0.54% 3.06%
Year ended 1997 $1.000 0.033 (0.033) -- $ 1.000 3.31% $211,682 0.52% 3.27%
Year ended 1998 $1.000 0.030 (0.030) -- $ 1.000 3.06% $323,272 0.54% 3.00%
Six months
ended
(Unaudited) 1999 $1.000 0.013 (0.013) -- $ 1.000 1.34%^^ $314,918 0.53%^ 2.69%^
- ------------------------------------------------------------------------------------------------------------------------
GOVERNMENT
MONEY MARKET
FUND
TICKER SYMBOL:
KGIXX
Year ended 1994 $1.000 0.031 (0.031) -- $ 1.000 3.10%^^ $94,624 0.35%^ 5.23%^
Year ended 1995 $1.000 0.051 (0.051) -- $ 1.000 5.17% $166,922 0.38% 5.03%
Six months
ended
(Unaudited) 1999 $1.000 0.022 (0.022) -- $ 1.000 2.25%^^ $196,953 0.37%^ 4.50%^
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIO OF
EXPENSES
TO AVERAGE
NET ASSETS*
<S> <C>
- --------------
MONEY MARKET
FUND
TICKER SYMBOL:
KIMXX
Year ended 0.65%
Year ended 0.63%
Year ended 0.62%
Year ended 0.62%
Year ended 0.64%
Six months
ended
(Unaudited) 0.63%^
- --------------
MICHIGAN
MUNICIPAL
MONEY MARKET
FUND
TICKER SYMBOL:
KMIXX
Year ended 0.70%
Year ended 0.65%
Year ended 0.64%
Year ended 0.63%
Year ended 0.64%
Six months
ended
(Unaudited) 0.63%^
- --------------
GOVERNMENT
MONEY MARKET
FUND
TICKER SYMBOL:
KGIXX
Year ended 0.69%^^
Year ended 0.69%
Six months
ended
(Unaudited) 0.65%^
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
would have been as indicated.
(1) The Government Money Market Fund commenced operations on June 2, 1997.
</TABLE>
123
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
INVESTMENT SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL
DATA:
INCOME ----------------------
FROM RATIO OF
INVESTMENT LESS NET NET
NET ASSET OPERATIONS: DIVIDENDS NET NET ASSET ASSETS, RATIO OF INVESTMENT
VALUE, NET FROM NET CHANGE IN VALUE, END OF EXPENSES INCOME
BEGINNING INVESTMENT INVESTMENT NET ASSET END OF TOTAL PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME INCOME VALUE PERIOD RETURN (000'S) NET ASSETS NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
MONEY MARKET
FUND
TICKER SYMBOL:
N/A
Year ended 1994 $1.000 0.040 (0.040) -- $1.000 3.71% $ 369 0.63% 3.58%
Year ended 1995 $1.000 0.050 (0.050) -- $1.000 5.56% $1,227 0.55% 5.41%
Year ended 1996 $1.000 0.050 (0.050) -- $1.000 5.06% $ 804 0.52% 4.94%
Year ended 1997 $1.000 0.051 (0.051) -- $1.000 5.23% $1,179 0.52% 5.11%
Year ended 1998 $1.000 0.050 (0.050) -- $1.000 5.13% $3,728 0.55% 5.00%
Six months
ended 1999 $1.000 0.022 (0.022) -- $1.000 2.25%^^ $1,801 0.55%^ 4.48%^
- ------------------------------------------------------------------------------------------------------------------------
MICHIGAN
MUNICIPAL
MONEY MARKET
FUND
TICKER SYMBOL:
N/A
Year ended 1994 $1.000 0.020 (0.020) -- $1.000 2.38% $ 379 0.63% 2.47%
Year ended 1995 $1.000 0.030 (0.030) -- $1.000 3.48% $1,603 0.54% 3.48%
Year ended 1996 $1.000 0.030 (0.030) -- $1.000 3.11% $ 782 0.54% 3.06%
Year ended 1997 $1.000 0.033 (0.033) -- $1.000 3.31% $ 289 0.52% 3.22%
Year ended 1998 $1.000 0.030 (0.030) -- $1.000 3.06% $ 346 0.54% 3.02%
Six months
ended 1999 $1.000 0.013 (0.013) -- $1.000 1.34%^^ $ 751 0.53%^ 2.70%^
- ------------------------------------------------------------------------------------------------------------------------
GOVERNMENT
MONEY MARKET
FUND
TICKER SYMBOL:
N/A
Year ended 1997(1) $1.000 0.030 (0.030) -- $1.000 3.06%^^ $ 2 0.43%^ 5.17%^
Year ended 1998 $1.000 0.051 (0.051) -- $1.000 5.17% $ 93 0.38% 4.92%
Six months
ended 1999 $1.000 0.022 (0.022) -- $1.000 2.25%^^ $ 133 0.37%^ 4.50%^
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIO OF
EXPENSES
TO AVERAGE
NET ASSETS*
<S> <C>
- --------------
MONEY MARKET
FUND
TICKER SYMBOL:
N/A
Year ended 0.68%
Year ended 0.62%
Year ended 0.62%
Year ended 0.62%
Year ended 0.64%
Six months
ended 0.63%^
- --------------
MICHIGAN
MUNICIPAL
MONEY MARKET
FUND
TICKER SYMBOL:
N/A
Year ended 0.73%
Year ended 0.62%
Year ended 0.64%
Year ended 0.63%
Year ended 0.64%
Six months
ended 0.63%^
- --------------
GOVERNMENT
MONEY MARKET
FUND
TICKER SYMBOL:
N/A
Year ended 0.77%^^
Year ended 0.69%
Six months
ended 0.65%^
- --------------
</TABLE>
<TABLE>
<S> <C>
^ Annualized.
^^ Not Annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio
would have been as indicated.
(1) The Government Money Market Fund commenced operations on June 2, 1997.
</TABLE>
124
<PAGE>
[LOGO]
P.O. BOX 182201
COLUMBUS, OHIO 43218-2201
KKF-1391 (8/99)
