<PAGE>
[LOGO] KENT FUNDS
Annual
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December 31, 1999
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Report
EQUITY FUNDS
Kent Growth and Income Fund
Kent Large Company Growth Fund
Kent Small Company Growth Fund
Kent International Growth Fund
Kent Index Equity Fund
BOND FUNDS
Kent Short Term Bond Fund
Kent Intermediate Bond Fund
Kent Income Fund
MUNICIPAL BONDS FUNDS
Kent Intermediate Tax-Free Fund
Kent Tax-Free Income Fund
Kent Michigan Municipal Bond Fund
MONEY MARKET FUNDS
Kent Money Market Fund
Kent Government Money Market Fund
Kent Michigan Municipal Money Market Fund
<PAGE>
MESSAGE TO SHAREHOLDERS
Dear Kent Funds Shareholder:
Following is the Annual Report for the Kent Funds for the twelve months ended
December 31, 1999. The report contains the following features:
. Economic Outlook by Joseph T. Keating, 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 the 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. EST.
We remain committed to sound investment principles and to providing you with
useful information that can help you make the most of your investments.
Sincerely,
/s/ James F. Duca, II
James F. Duca, II
President
INVESTMENT ADVISER
Lyon Street Asset Management Company
111 Lyon Street N.W.
Grand Rapids, MI 49503
Shares of the funds are not deposits or obligations of, or guaranteed or
endorsed by, Lyon Street Asset Management Company or any of its affiliates.
Shares of the funds are not federally insured by the U.S. Government, the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency. Investment return and principal value will vary as a result
of market conditions and other factors, so that shares of the funds, when
redeemed, may be worth more or less than their original cost. An investment
in the funds involves investment risks, including the possible loss of
principal. There can be no assurance that the money market funds will be
able to sustain a stable net asset value of $1.00 per share.
This report is submitted for the general information of shareholders of the
Kent Funds. It is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective prospectus for the funds, which
contains more information concerning the funds' investment policies as well as
fees and expenses and other pertinent information. Please read the prospectus
carefully before investing. The distributor for the Kent Funds is 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.UNCHARTERED WATERS
This month the current economic boom becomes the longest in the nation's his-
tory, entering its record 107th month as measured by the National Bureau of
Economic Research. The longest previous stretch of growth unbroken by reces-
sion was the 106-month run from February 1961 through December 1969, which
ended when spending on the Vietnam War pushed inflation to an intolerable lev-
el.
This economic cycle has been remarkably resilient, given that the decade
kicked off with the recession of 1990-91 and the Gulf War. The current expan-
sion, which began in March 1991, survived a succession of potential catastro-
phes: the Asian financial crisis, Russia's economic meltdown, a presidential
impeachment, and aggressive corporate restructurings and downsizings.
Yet the good times rolled, as the nation's production of goods and services
has grown by more than a third and 22 million new jobs were created, or one
out of every six positions in existence today. The unemployment rate at 4.1
percent is at its lowest point in thirty years and has been below the five
percent mark since mid-1997. The inflation rate has dropped steadily and cur-
rently hovers near two percent. Productivity has grown at an average of 2.6
percent per year since 1996, a pace that doubles living standards every 27
years. Common stock prices, using the S&P 500 Stock Index/1/, have increased
threefold since the beginning of the expansion and nearly 50 percent of house-
holds own common stocks today compared to 32 percent in 1989.
The question before us now is whether too much prosperity is a bad thing in
terms of its potential inflationary implications. The Federal Reserve is in
the midst of a series of moves to tighten monetary policy to bring about a
soft landing for the economy and the fixed income markets have been mired in a
14 month-long slump. We will begin to address the question at hand by starting
with a review of the recently released fourth quarter real Gross Domestic
Product (GDP)/2/ figures.
II.REAL ECONOMIC ACTIVITY
A. Strong Fourth Quarter Growth, But Signs of a Cooling?
The U.S. economy ended last year enjoying continued strong growth, though
inflation fears took much of the luster off the news. Real gross domestic
product grew at a 5.8 percent annual rate in the final three months of 1999
after expanding at a 5.7 percent pace during the third quarter. For all of
last year, the economy grew 4.0 percent, after gaining 4.3 percent in 1998 and
4.5 percent in 1997. The last time the economy expanded at a four percent or
greater rate for three years in a row was 1976-78.
Leading the way was consumer spending, which grew at a 5.3 percent rate dur-
ing the quarter, and for the full year, registering its strongest yearly gain
in 15 years. The fundamentals for consumer outlays remain strong as households
are benefiting from the lowest jobless rate in three decades, soaring consumer
confidence, and strong income gains. Nineteen ninety-nine was the best year
ever for car and light truck sales, surpassing the previous peak year of 1986
with 17.0 million units sold. The consumer sector also has been powered by the
tremendous rise in equity values, which created double-digit increases in
household net worth in each of the past three years. We estimate that the
cumulative impact of this unusual wealth gain contributed more than one per-
centage point to the economy's growth rate last year.
While not trying to take anything away from the strength in consumer outlays
last quarter, several categories had surprisingly big jumps that may be par-
tially attributable to stocking up for potential Y2K disruptions. The food
portion of nondurable goods rose at a 9.3 percent rate and gasoline outlays
increased at a 4.4 percent rate. The other category, which would include drug
and proprietary store sales, registered a gain of 8.8 percent rate. The stock-
piling of extra food supplies, filling up the gas tank, and precautionary
refilling of prescriptions may be part of the explanation of the strength in
consumer spending last quarter.
Federal government spending gave the economy an unexpected boost, soaring at
a 16.0 percent rate, the biggest gain since 1986. The largest contribution
came in national defense spending which jumped at an 18.9 percent rate. Much
of the increase was Y2K-related as a final push to upgrade systems and equip-
ment took place plus a major manpower commitment to command centers, monitor-
ing stations, systems checking, and security and national defense safeguards.
By our estimate, the Y2K-related boost to government outlays added 1.1 per-
centage points to the rise in real GDP last quarter.
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/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.
/2/Gross Domestic Product (GDP) is the market value of the goods and services
produced by labor and property in the United States. The GDP is made up of
consumer and government purchases, private domestic investments, and net
exports of goods and services.
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 economy also received a temporary boost from businesses bulking up their
inventories of work-in-process inputs to their manufacturing process in the
event of any Y2K-related supply disruptions from smaller or overseas suppliers.
The quarter-to-quarter rise in nonfarm inventories added 1.4 percentage points
to the economy's fourth quarter growth rate.
[CHART]
Real Economic Activity+
4Q 1998 to
4Q 1999* 4Q 1999*
Domestic Private Final Sales 4.5% 5.6%
Personal Consumption Expenditures 5.3% 5.4%
Residential Construction Outlays -1.2% 3.2%
Business Capital Spending 2.5% 7.0%
* Annualized
Upon close review, last quarter's real growth figure may not be quite as
strong as it appears, especially since a good portion of the increase was tied
to one time or accelerated purchases related to the century date change. By our
estimates, without the Y2K-related distortions in the pattern of economic
activity, the economy's fourth quarter growth rate would have been closer to
3.5 to 4.0 percent rather than 5.8 percent. Even including the impact on con-
sumer spending, our measure of private sector final demand rose at the more
moderate pace of 4.5 percent during the quarter. This growth rate was below the
year-over-year advance of 5.6 percent, which is consistent with the economy's
forward momentum losing some steam.
B. Looking Ahead.
We believe, the higher level of bond yields, mortgage rates, and the ongoing
moves to tighten monetary policy by the Fed are creating an environment in
which, we believe domestic demand eventually should slow. In fact, as mentioned
above, upon brushing aside the century date change-related distortions last
quarter, the incipient signs of a cooling in the economy's growth rate may
already be evident. While we are not expecting a dramatic slowing, in our opin-
ion, the economy could brake enough to ease pressure in the labor market, keep-
ing the risk of higher inflation to a minimum.
We anticipate that, strong job growth, rising incomes, and heady levels of
consumer confidence should provide strong fundamental support for further gains
in consumer spending. The virtual elimination of mortgage refinance activity
and the moderation in the housing market could take a little of the steam out
of the consumer sector, however. The big issue, though, remains the ongoing
contribution of the wealth effect on consumer spending.
This effect drove the personal savings rate down to 1.5 percent in December,
the lowest on record. As stock market gains have raised their net worths, con-
sumers have increasingly gambled that they can reduce current savings and rely
on future stock gains to help them meet their long-term financial goals. With
the wealth effect being a prime contributor to consumer spending, it needs to
be restrained, at the very least, in order to slow the pace of economic growth
to the Federal Reserve's liking.
As of this writing, common stock prices are flat to slightly lower on the year
and we are not anticipating stock market gains in the twenty percent-plus area
again this year. We expect the rise in equity values to be more moderate, in
line with an expected 8 to 10 percent rise in earnings. Consequently, we look
for the thrust from wealth effects to diminish over time, but remain positive.
Another place that the wealth effect has had an impact is in the housing mar-
ket. While the forward momentum in the housing market has rolled over in recent
months, the slowdown has been less than expected given the roughly percentage
point and a half rise in thirty-year fixed mortgage rates during 1999. A sub-
stitution of adjustable rate mortgages for fixed rate mortgage debt has helped
support the housing sector, but our sense is that the key support has come from
a portion of the new wealth created by rising stock prices finding its way to
the housing sector.
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A Dampened Pace of Housing Activity
Annual Rates+
<TABLE>
<S> <C> <C> <C> <C> <C>
Housing Jan '99 1.82 mil. Nov '99 1.60 mil. (-12.1%)
Starts Dec '99 1.71 mil. (-6.0%)
Housing Jan '99 1.78 mil. Nov '99 1.61 mil. (-9.6%)
Permits Dec'99 1.61 mil. (-9.6%)
New Home Sales Oct '99 986,000 Nov '99 865,000 (-12.3%)
Existing Home Sales June '99 5.63 mil. Nov '99 5.09 mil. (-9.6%)
</TABLE>
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Residential construction outlays have fallen for two straight quarters, but at
the very modest rates of 3.8 and 1.2 percent and were still 3.4 percent ahead
of year ago levels during the fourth quarter. Single-family outlays rose
3
<PAGE>
ECONOMIC OUTLOOK
at a 5.5 percent rate while remodeling and mobile home expenditures accounted
for the vast majority of the weakness, declining at a 9.4 percent rate. The
plunge in refinance activity hurt remodeling activity while the wealth effect
has less of an impact on the mobile home sector.
Through November, new and existing home sales, housing starts and permits had
all dropped about ten percent from their earlier peak levels. The bounceback
in housing starts in December was a direct result of the very mild weather
across the nation with no commensurate rise in housing permits. We anticipate
the rise in mortgage rates and a dampened wealth effect to cut into housing
activity a bit further over the course of 2000, which could lead to subsequent
weakness in housing-related retail sales.
Technology equipment and software outlays continued their double-digit growth
rate, rising at a 14.1 percent pace last quarter. The no pricing power envi-
ronment that businesses continue to operate within has kept managements
intensely focused on improving efficiency and productivity in order to grow
earnings. The high technology sector of the economy has grown at the astound-
ing annual rate of 17.5 percent over the past eight years. The revolution in
technology and its applications is having an increasingly important influence
on the manner in which businesses operate and commerce is conducted.
Over the past two years, nothing is more symbolic of the technological revo-
lution than the rapid growth of the Internet, whose productivity-enhancing and
inflation-taming properties are still evolving. Corporate America continues to
operate in an ever-competitive marketplace, with the need to innovate and
implement new Internet technologies of utmost importance. Those who are suc-
cessful will survive, flourish, and gain market share. Those who do not imple-
ment quickly enough will be squeezed out by competitors. The Internet will be
used both to organize and reduce the cost of companies' supply chains, as well
as to improve customer satisfaction as customers access more information and
do more transactions through this new medium. In our opinion, as businesses
continue to implement new Internet-related technologies, high technology
equipment and software growth could continue on the longest extended period of
double-digit gains for any sector of the economy in the post WWII era.
We believe expansion will continue, but at a more moderate pace as the year
progresses. We believe, some fourth quarter strength could not only not be
repeated, but may be reversed into a first quarter drag. Additional moves to
tighten monetary policy will likely occur as the Fed has explicitly stated
their concern that the growth in domestic demand will continue to exceed the
growth in potential supply if left unchecked. Keep in mind that the pace of
economic activity responds to changes in the level of interest rates and bond
yields with a lag. We believe, the lagged effect of last year's efforts will
intensify as we move through 2000.
INFLATION
A. A Bottoming, But No Significant Upturn.
The nation's broadest measure of inflation, the Gross Domestic Purchases
Price Index, moved slightly higher during 1999, rising at a 2.3 percent rate
during the fourth quarter and 1.9 percent over the four quarters of last year.
This represents a slight rise from the 1.1 and 0.7 percent increases over the
four quarters of 1997 and 1998, respectively. The inflation measures were
helped along during those years by the dumping of lower priced Asian goods, a
collapse in commodity prices, and a strong dollar. At the consumer and pro-
ducer levels, the pick-up in inflation over the twelve months ending in Decem-
ber was derived mainly from rising oil prices.
[CHART]
Inflation Measures+
1999*
Gross
Domestic Consumer CPI less Producer PPI less
Purchases Price Food & Price Food &
Price Index Index Energy Index Energy
- ----------- ----- ------ ----- ------
1.9% 2.7% 2.1% 3.0% 0.1%
* Annualized
From a business cycle perspective, the quiescence of inflation this long into
the economic expansion must be regarded as one of the most impressive outcomes
during this expansion. The long expansions of the 1960's and 1980's experi-
enced an upturn in inflationary pressures much earlier in the cycle. Part of
the story, to be sure, is the effect of secular changes such as globalization,
deregulation and the nascent arrival of the Internet/e-commerce. Effective
monetary policy also gets some of the credit, as does the sharp improvement in
the nation's federal budget from massive deficits to surprising surpluses.
Looking back over the 1998-99 period, it appears a bottoming in the falling
inflation rate occurred with ever so mild an upturn. It seems to us that a two
percent inflation rate is imperceptivity different from a one percent rate,
but clearly the trend is in the wrong direction
4
<PAGE>
ECONOMIC OUTLOOK
and is a cause for concern in the financial markets and at the Federal Reserve.
We acknowledge that a bottoming out in the inflation rate has likely occurred,
but see no significant upturn in the making.
The nation's economy has been transformed through advances in information
technology, the use of productivity as a competitive weapon, globalization,
deregulation, and excess global productive capacity. Additionally, the Internet
is having a pervasive impact on consumer behavior and company operations. Mil-
lions of Americans have access to price information on virtually any product on
the market, empowering them as never before to search for the best prices
available. At the same time, businesses are just beginning to understand and
initially realize the enormous cost savings possibilities provided by the
Internet. We believe, the economy's growth potential has been boosted and it is
far less inflation-prone than in the past.
JOSEPH T. KEATING
President and Chief Investment Officer
+The information contained herein is based on Commerce Department data released
January 28, 2000.
5
<PAGE>
Portfolio
Reviews
Kent Growth and Income Fund
By Allan J. Meyers
Portfolio Manager
****
4 star
Morningstar
rating
(among 3,469
domestic
equity funds
overall as of
12/31/99)+
The economy was strong during the twelve months ended December 31, 1999.
Despite the fact that the Federal Reserve raised the federal funds rate three
times to safeguard against a rise in inflation, the Dow Jones Industrials Aver-
age/1/ and the NASDAQ Composite Index/2/ enjoyed stellar growth during the
period as technology and telecommunications companies posted strong earnings
growth. Pending Medicare legislation hurt shares of companies in the healthcare
sector during the period, while rising interest rates hurt shares of financial
service companies, especially in the banking and insurance industries.
The Fund's Institutional and Investment shares returned 18.79% and 18.53%,
respectively, during the twelve months ended December 31, 1999. The Fund's
benchmark, the S&P 500 Stock Index, returned 21.03% for the same period.
Technology leads the way
Only three sectors had returns better than the S&P 500 Index during 1999.
Technology rose 74.8%, with companies such as Oracle (up 289%) and Sun
Microsystems (up 262%) leading the way. The Fund's overweighting in technology
played a major role in boosting its returns. Investors also found opportunities
in the capital goods (up 26.2%), consumer cyclicals sectors (up 21.8%). Lagging
sectors included utilities (down 12.5%), consumer staples (down 7.5%)
healthcare (down 8.4%) and financial services (up 3.3%).*
During the period, we increased the Fund's exposure to shares of companies
that presented relatively attractive valuations given their growth prospects,
including technology and telecommunications stocks such as Comverse Technology
(0.09% of the portfolio), Global Crossing (0.24%) and Nextel Communications
(0.22%). We sold the Fund's positions in some large-company growth stocks due
to the dra
[CHART]
Kent Growth and Income Fund
Percentage of Portfolio Investments*
As of December 31, 1999
Technology 29.9%
Financials 13.3%
Health 9.1%
Basic Materials 2.9%
Transportation 0.7%
Energy 5.4%
Communication Services 8.0%
Consumer Cyclicals 9.3%
Utilities 2.2%
Consumer Staples 11.0%
Capital Goods 8.2%
matic rise in their valuations, including Airtouch Communications and American
Greetings.*
Looking ahead
We think the economy and corporate earnings will continue to grow at healthy
rates. Rising interest rates could dampen the performance of sectors such as
financial services. We believe other sectors, including technology, should con-
tinue to deliver excellent earnings growth.
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/1/The Dow Jones Industrial Average is a price-weighted average based on the
price movements of 30 blue chip stocks.
/2/The NASDAQ Composite Index is a market capitalization price only index that
tracks the performance of domestic common stocks traded on the regular NASDAQ
market, as well as the National Market System-traded foreign common stocks and
American Depository Receipts.
*The Fund's portfolio composition is subject to change.
+Morningstar proprietary ratings reflect risk-adjusted performance through
12/31/99. The ratings are subject to change every month. Past performance is no
guarantee of future results. Morningstar ratings are calculated from a fund's
three-, five-, and ten-year returns (with fee adjustments) on excess of 90-day
Treasury bill returns, and a risk factor that reflects performance below 90-day
Treasury bill returns. The Fund received 4 stars for the three-year and five-
year periods. It was rated among 3,469 and 2,180 domestic equity funds for the
three- and five-year periods, respectively. Ten percent of the funds in a
rating category receive 5 stars, 22.5% receive 4 stars, 35% receive 3 stars,
22.5% receive 2 stars and 10% receive 1 star.
6
<PAGE>
Kent Growth and Income Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 11/2/92) (inception: 12/1/92)
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<S> <C> <C>
One Year 18.79% 18.53%
...............................................................................
Three Years 23.61% 23.31%
...............................................................................
Five Years 24.93% 24.63%
...............................................................................
Life of Fund 19.36% 18.85%
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</TABLE>
Growth of a $10,000 Investment
As compared with the Standard & Poor's 500 Stock Index
[CHART]
Institutional Class Shares
Kent G&I S&P
11/92 10,000 10,000
12/92 10,398 10,472
12/93 11,610 11,518
12/94 11,669 11,669
12/95 15,743 16,036
12/96 18,809 19,737
12/97 23,351 26,321
12/98 29,907 33,886
12/99 35,526 41,012
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
Kent G&I S&P
12/1/92 10,000 10,000
12/31/92 10,059 10,472
12/93 11,247 11,518
12/94 11,302 11,669
12/95 15,213 16,036
12/96 18,124 19,737
12/97 22,454 26,321
12/98 28,666 33,886
12/99 33,978 39,676
- -------------------------------------------------------------------------------
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 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. Investors cannot invest directly in an
index, although they can invest in the underlying securities.
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 Large Company Growth Fund
By Allan J. Meyers
Portfolio Manager
The Kent Large Company Growth Fund was added to the family of Kent Funds on
October 19, 1999. The strategy of the Fund is to invest in large, well-estab-
lished companies with strong earnings potential.
The domestic economy has remained strong since the Fund's inception and the
stock market rebounded sharply from the lows recorded on October 16, 1999. The
Standard and Poor's 500 Index, the Dow Jones Industrials Average/1/, and the
NASDAQ Composite Index/2/ all posted strong returns during the period as tech-
nology and telecommunications companies posted strong earnings growth. Pending
Medicare legislation hurt prospects for companies in the healthcare sector dur-
ing the period, however, while rising interest rates hurt financial services
companies, especially in the banking and insurance industries.
The Fund's Institutional and Investment shares returned 18.91% and 18.87%,
respectively during the period from the Fund's inception through December 31,
1999. The Fund's benchmark, the S&P 500 Stock Index, returned 14.75% for the
same period.
Technology leads the way
The best performing sectors during the period were technology (up 74.8% for
the period) and capital goods (up 26.2%). The Fund's overweighting in technol-
ogy names such as Oracle (1.50% of the portfolio) and EMC (0.95%) helped boost
the Fund's return. Also, in the telecommunications sector, Qualcomm (1.04%)
enjoyed very strong performance.*
[CHART]
Kent Large Company Growth Fund
Percentage of Portfolio Investments*
As of December 31, 1999
Technology 35.0%
Financials 9.4%
Health 11.6%
Other 0.9%
Capital Goods 8.3%
Energy 3.6%
Consumer Cyclicals 8.3%
Utilities 0.3%
Consumer Staples 12.7%
Communication Services 9.9%
Looking ahead
We are optimistic about domestic economic growth. The possibilities of rising
interest rates could dampen the performance of certain sectors such as finan-
cial services, but we believe that the interest rate-sensitive sectors could
rally later in the year should interest rates fall with a cooling of the
economy's growth rate.
- --------------------------------------------------------------------------------
/1/The Dow Jones Industrial Average is a price-weighted average based on the
price movements of 30 blue chip stocks.
/2/The NASDAQ Composite Index is a market capitalization price only index that
tracks the performance of domestic common stocks traded on the regular NASDAQ
market, as well as the National Market System traded foreign common stocks and
American Depository Receipts.
*The Fund's portfolio composition is subject to change.
8
<PAGE>
Kent Large Company Growth Fund
Aggregate Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 10/19/99) (inception: 10/19/99)
- ---------------------------------------------------------
<S> <C> <C>
Life of Fund 18.91% 18.87%
- ---------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Standard & Poor's 500 Stock Index
[CHART]
Institutional Class Shares
Kent Large Company Growth Fund Standard & Poor's
Institutional Class Shares 500 Stock Index
10/19/99 10,000 10,000
12/31/99 11,891 11,475
- -------------------------------------------------------------------------------
[CHART]
Institutional Class Shares
Kent Large Company Growth Fund Standard & Poor's
Investment Class Shares 500 Stock Index
10/19/99 10,000 10,000
12/31/99 11,887 11,475
- -------------------------------------------------------------------------------
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 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. Investors cannot invest directly in an
index, although they can invest in the underlying securities.
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.
9
<PAGE>
Portfolio
Reviews
Kent Small Company Growth Fund+
By Robert Cummisford
Portfolio Manager
Small-company stocks performed well during the 12-month period ended December
31, 1999. The Russell 2000 Index of small-cap stocks outpaced the Standard &
Poor's 500 Index/1/ for the first time in six years, but only by a mere 0.23%.
The best-performing sectors for the period included telecommunications (up
104.3%), technology (up 74.8%), energy (up 25.1%) and consumer cyclicals (up
21.8%). Lagging sectors included consumer staples (down 7.5%), financial serv-
ices (down 8.4%) and utilities (down 12.5%).
The Fund's Institutional and Investment shares returned 27.98% and 27.73%,
respectively, for the 12-month period ended December 31, 1999. The Russell 2000
Index gained 21.26% during the period.
Opportunities in telecommunications and technology
We took advantage of a dip in the market in March and April to buy Internet
and technology companies at relatively attractive prices. Small-cap value
stocks dominated in the second quarter, but investors soon turned to growth-
oriented shares -- in particular technology and communications stocks. Nearly
one-sixth of the companies owned by the Fund at the end of the period returned
more than 100% on the year.
The Fund outpaced the Russell 2000 Index largely due to its heavy
overweighting in technology. Companies in the technology sector that posted
exceptional performance included software developer Micromuse (0.44% of the
portfolio), up 772%, and business-to-business Internet firm Broadvision
(1.65%), up 301%. The Fund was also overweight in communication services,
including shares of satellite company Echostar (0.32%), up 706%. Other compa-
nies that performed well during the period included Titan Corp. (0.46%), up
760%, which makes bacteria-killing lasers, and semiconductor manufacturer
Applied Micro Circuits (0.82%), up 649%.*
[CHART]
Kent Small Company Growth Fund
Percentage of Portfolio Investments*
As of December 31, 1999
Technology 35.4%
Financials 13.2%
Health 10.3%
Basic Materials 3.3%
Capital Goods 10.0%
Energy 2.5%
Transportation 1.6%
Consumer Cyclicals 13.5%
Utilities 3.7%
Consumer Staples 3.4%
Communication Services 3.1%
Going forward
We are optimistic about the prospects for small-company stocks during the com-
ing year. We believe many firms will benefit from growing demand for upgraded
equipment and software, as well as the growth of the Internet. We will continue
to seek out opportunities in undervalued sectors such as healthcare, communica-
tions services and capital goods. Meanwhile, we believe the Fund is positioned
to benefit from a market environment 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.
10
<PAGE>
Kent Small Company Growth Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 11/2/92) (inception: 12/4/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 27.98% 27.73%
...............................................................................
Three Years 15.39% 15.15%
...............................................................................
Five Years 17.85% 17.57%
...............................................................................
Life of Fund 15.98% 14.92%
- -------------------------------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Russell 2000 Index
[CHART]
Institutional Class Shares
Kent Small Company Growth Fund Russell
Institutional Class Shares 2000 Index
11/2/92 10,000 10,000
12/31/92 10,885 11,140
12/93 12,729 13,246
12/94 12,722 13,005
12/95 15,745 16,704
12/96 18,825 19,466
12/97 24,085 23,819
12/98 22,600 23,212
12/99 28,922 28,147
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
Kent Small company Growth Fund Russell
Institutional Class Shares 2000 Index
12/4/92 10,000 10,000
12/92 10,197 10,348
12/93 11,915 12,304
12/94 11,906 12,080
12/95 14,702 15,516
12/96 17,518 18,081
12/97 22,372 22,124
12/98 20,937 21,560
12/99 26,743 26,144
- -------------------------------------------------------------------------------
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 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. Investors cannot invest
directly in an index, although they can invest in the underlying securities.
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.
11
<PAGE>
Portfolio
Reviews
Kent International Growth Fund+
By Dave Eder
Portfolio Manager
The Kent International Growth Fund slightly outperformed the Morgan Stanley
Capital International Europe, Australasia and Far East Equity (MSCI EAFE) Index
during the 12-month period ended December 31, 1999. The Fund's Institutional
and Investment shares during the period returned 28.30% and 27.95%, respective-
ly, while the MSCI EAFE Index rose 26.96%.
The Pacific Rim rebounds
The Fund allocates its investments among countries based on the countries'
relative gross domestic products. It typically holds shares of the largest 100
companies -- approximately 60% -- of the MSCI EAFE Index, giving the Fund a
large-cap bias. The Fund remained slightly overweight in Japan relative to the
Index, and ended the year with a 28.5% weighting versus a 27.3% weighting for
the MSCI EAFE Index. We maintained a slight underweight in European shares
(65.1% versus 66.7% for the Index).*
The Pacific Rim enjoyed exceptional performance during the period as many
countries experienced an economic rebound. The MSCI Pacific Rim Index was (up
57.63%) for the year. The rising strength of the Japanese yen and other curren-
cies in the region contributed to the excellent return. Countries that per-
formed well during the period included Singapore (up 99.4%), Japan (up 61.5%)
and Hong Kong (up 59.5%). The Fund's overweighting in this region helped con-
tribute to its strong performance.
European markets slid throughout the period as the euro performed poorly and
concerns about the Kosovo crisis early in the year hurt European markets. The
MSCI Europe Index returned 15.89% for the 12-month period. Countries such as
Finland (up 152.6%) and Sweden (up 79.7%) were boosted by strong economies and
excellent returns in the telecommunications sector. Countries that performed
poorly during the period included Belgium (down 14.3%), Ireland (down 12.6%)
and Austria (down 9.1%).
[CHART]
Kent International Growth Fund
Percentage of Portfolio Investments*
As of December 31, 1999
Denmark 0.7%
Hong Kong 2.4%
Australia 2.2%
Spain 2.8%
Italy 3.9%
Netherlands 4.5%
Switzerland 5.3%
France 10.0%
Germany 10.5%
United Kingdom 15.2%
Japan 26.8%
Finland 2.4%
Belgium 0.8%
Sweden 2.6%
Other 9.9%
Overseas markets to continue to grow
We believe global economic conditions are less worrisome than they have been
in recent years. The improved global economic environment could translate into
faster-paced economies and greater earnings gains in overseas markets. Foreign
companies are beginning to embrace the idea of maximizing shareholder value by
focusing on increasing efficiency and raising productivity levels while
acknowledging the importance of basic fundamentals such as improving cash flow
and balance sheets. In our opinion, it is unlikely that the Pacific Rim will
duplicate its 1999 performance in 2000. We are optimistic that the interna-
tional markets will do well in 2000.
- --------------------------------------------------------------------------------
+International investing involves increased risk and volatility.
*The Fund's portfolio composition is subject to change.
12
<PAGE>
Kent International Growth Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 12/4/92) (inception: 12/4/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 28.30% 27.95%
...............................................................................
Three Years 15.76% 15.45%
...............................................................................
Five Years 13.17% 12.89%
...............................................................................
Life of Fund 14.23% 13.93%
- -------------------------------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Morgan Stanley Capital International (MSCI)
Europe, Australasia and Far East Index, and the Morgan Stanley
Capital International (MSCI) Europe Index and
the Morgan Stanley Capital International (MSCI) Pacific Rim Index
[CHART]
<TABLE>
<CAPTION>
Institutional Class Shares
Kent International Growth Fund MCSI Europe, Australasia MSCI Europe MSCI Pacific
Investment Class Shares and Far East Index Index Rim Index
<S> <C> <C> <C> <C>
12/4/92 $10,000 $10,000 $10,000 $10,000
12/92 $10,020 $10,054 $10,233 $9,887
12/93 $13,045 $13,367 $13,282 $13,444
12/94 $13,974 $14,444 $13,626 $15,195
12/95 $15,591 $16,113 $16,653 $15,650
12/96 $16,507 $17,138 $20,246 $14,335
12/97 $16,926 $17,443 $25,063 $10,681
12/98 $19,976 $20,989 $32,213 $10,942
12/99 $25,630 $26,648 $37,332 $17,248
</TABLE>
- -------------------------------------------------------------------------------
[CHART]
<TABLE>
<CAPTION>
Investment Class Shares
Kent International Growth Fund MCSI Europe, Australasia MSCI Europe MSCI Pacific
Investment Class Shares and Far East Index Index Rim Index
<S> <C> <C> <C> <C>
12/4/92 $10,000 $10,000 $10,000 $10,000
12/92 $10,010 $10,054 $10,233 $9,887
12/93 $13,006 $13,367 $13,282 $13,444
12/94 $13,723 $14,444 $13,626 $15,195
12/95 $15,487 $16,113 $16,653 $15,650
12/96 $16,350 $17,138 $20,246 $14,335
12/97 $16,719 $17,443 $25,063 $10,681
12/98 $19,661 $20,989 $32,213 $10,942
12/99 $25,156 $26,648 $37,332 $17,248
</TABLE>
- -------------------------------------------------------------------------------
The Fund's performance is measured against the Morgan Stanley Capital
International Europe, Australasia 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 representative 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 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. Investors
cannot invest directly in an index, although they can invest in the underlying
securities.
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 a 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 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 Index Equity Fund
By Brian Smolinski
Portfolio Manager
****
4 star
Morningstar
rating
(among 3,469
domestic
equity funds
overall as of
12/31/99)+
The economy grew strongly during the twelve-month period ended December 31,
1999. Shares of technology and telecommunication firms led the stock market. In
fact, shares of technology companies at the beginning of the year composed only
18.6% of the Fund's benchmark, the Standard & Poor's 500 Stock Index, but tech-
nology shares made up nearly 30% of the Index at the end of the period. The
Index also experienced more than 40 additions and deletions, as merger and
acquisition activity remained strong throughout the period.
The Fund's Institutional and Investment shares returned 20.55% and 20.24%,
respectively, for the 12 months ended December 31, 1999. The S&P 500 Index,
returned 21.03% for the period.
Technology is leading the way.
The Index's strongest sectors were capital goods (up 26.2% for the period) and
technology (up 74.8%). Qualcomm (0.93% of the portfolio), up 350%, a digital
wireless communications company, was added to the Index in June and was its
top-performing company. Other top performers included Sprint PCS (0.36%), up
343% and Nextel (0.30%), up 336%.*
[CHART]
Kent Index Equity Fund
Percentage of Portfolio Investments*
As of December 31, 1999
Technology 29.8%
Financials 13.1%
Health 9.0%
Basic Materials 3.0%
Consumer Cyclicals 9.3%
Energy 5.5%
Transportation 0.7%
Capital Goods 8.4%
Utilities 2.3%
Consumer Staples 11.0%
Communication Services 7.9%
Looking Ahead
The Kent Index Equity Fund seeks to replicate the performance of the S&P 500
Stock Index. We believe the large-company shares that make up the Index will
continue to post strong returns as long as the domestic economy is character-
ized by strong economic growth and low inflation.
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
+Morningstar proprietary ratings reflect risk-adjusted performance through
12/31/99. The ratings are subject to change every month. Past performance is no
guarantee of future results. Morningstar ratings are calculated from a fund's
three-, five-, and ten-year returns (with fee adjustments) on excess of 90-day
Treasury bill returns, and a risk factor that reflects performance below 90-day
Treasury bill returns. The Fund received 4 stars for the three-year and five-
year periods. It was rated among 3,469 and 2,180 domestic equity funds for the
three- and five-year periods, respectively. Ten percent of the funds in a
rating category receive 5 stars, 22.5% receive 4 stars, 35% receive 3 stars,
22.5% receive 2 stars and 10% receive 1 star.
14
<PAGE>
Kent Index Equity Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 11/2/92) (inception: 11/25/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 20.55% 20.24%
...............................................................................
Three Years 27.02% 26.70%
...............................................................................
Five Years 27.81% 27.49%
...............................................................................
Life of Fund 21.01% 20.55%
- -------------------------------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Standard & Poor's 500 Stock Index
[CHART]
Institutional Class Shares
Kent Index Equity Fund Standard & Poor's
Institutional Class Shares 500 Stock Index
11/2/92 10,000 10,000
12/31/92 10,440 10,472
12/93 11,390 11,518
12/94 11,488 11,669
12/95 15,648 16,036
12/96 19,119 19,737
12/97 25,342 26,321
12/98 32,503 33,886
12/99 39,183 41,012
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
Kent Index Equity Fund Standard & Poor's
Institutional Class Shares 500 Stock Index
11/25/92 10,000 10,000
12/92 10,185 10,472
12/93 11,111 11,518
12/94 11,194 11,669
12/95 15,199 16,036
12/96 18,531 19,737
12/97 24,505 26,321
12/98 31,347 33,886
12/99 37,694 39,676
- -------------------------------------------------------------------------------
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 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. Investors cannot invest directly in an
index, although they can invest in the underlying securities.
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 Short Term Bond Fund
By Mitchell Stapley
Portfolio Manager
****
4 star
Morningstar
rating
(among 1,617
fixed income
funds overall
as of
12/31/99)+
Yields rose throughout the bond market during the twelve-month period ended
December 31, 1999. The yield on the two-year Treasury note increased from 4.53%
to 6.25%.
Yields on shorter maturity instruments rose largely due to the Federal
Reserve's actions to tighten monetary policy. The Federal Reserve raised rates
three times during the period, each time by one quarter of a percentage point.
Those actions reflected concerns that inflation could result from the strength
in domestic demand outpacing the economy's productive capacity as well as from
rising oil prices and recovering overseas economies.
The Fund's Institutional and Investment shares posted total returns of 2.50%
and 2.35%, respectively. Those returns compared to a 2.96% return for the
Fund's benchmark, the Lehman Brothers 1-3-Year Government Bond Index.
A Focus on quality
We extended the Fund's average maturity from 2.1 years to 2.2 years during the
period, as rising rates created opportunities among intermediate term securi-
ties. We also increased the Fund's exposure to corporate bonds to take advan-
tage of the higher yields those issues offered. We focused on very high-quality
corporate securities, especially in the financial and industrial sectors, and
sold some lower rated issues. We believe that emphasis on quality helped insu-
late the Fund against most of the bond market volatility that occurred during
the period. We also increased the Fund's weighting in agency issues, which
offered better yields than Treasury securities. The Fund's average credit qual-
ity increased from AA2 at the beginning of the period to AA3 as of December 31,
1999.*
Going forward
We believe the Federal Reserve will likely raise interest rates at least one
more time, starting early in 2000. They are not likely to wait longer because
rate hikes later in the
[CHART]
Kent Short Term Bond Fund
Distributions of Net Assets
As of December 31, 1999
U.S. Government & Agency Issues 35.0%
Cash Equivalents Net Other Assets & Liabilities 3.6%
Corporate Notes & Bonds 61.4%
Kent Short Term Bond Fund
SEC 30-Day Yields
As of December 31, 1999
<TABLE>
<S> <C>
Institutional Class....................... 5.85%
Investment Class.......................... 5.70%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
December 31, 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 5.84% for Institutional Shares and 5.59% for Investment
Shares.
- --------------------------------------------------------------------------------
year could become an issue in the presidential campaign. Meanwhile, there are
signs that the economy has begun to slow. For example, housing starts and new
home sales have fallen at a double-digit rate from their peak levels. A slower
pace of economic activity should remove some of the inflationary concerns that
have hurt the fixed-income markets during the past year. We will continue to
look for opportunities to lock in additional yield for shareholders by invest-
ing in high quality short-term corporate bonds and agency issues.
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
+Morningstar proprietary ratings reflect risk-adjusted performance through
12/31/99. The ratings are subject to change every month. Past performance is no
guarantee of future results. Morningstar ratings are calculated from a fund's
three-, five-, and ten-year returns (with fee adjustments) on excess of 90-day
Treasury bill returns, and a risk factor that reflects performance below 90-day
Treasury bill returns. The Fund received 4 stars for the three-year and five-
year periods for the investment shares and 5 and 4 stars for the three- and
five-year periods for the institutional shares, respectively. It was rated
among 1,617 and 1,221 fixed income funds for the three- and five-year periods
respectively. Ten percent of the funds in a rating category receive 5 stars,
22.5% receive 4 stars, 35% receive 3 stars, 22.5% receive 2 stars and 10%
receive 1 star.
16
<PAGE>
Kent Short Term Bond Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 11/2/92) (inception: 12/4/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 2.50% 2.35%
...............................................................................
Three Years 5.00% 4.86%
...............................................................................
Five Years 5.93% 5.76%
...............................................................................
Life of Fund 4.82% 4.67%
- -------------------------------------------------------------------------------
</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
[CHART]
<TABLE>
<CAPTION>
Kent Short Term Bond Fund The Lehman Brothers 1 to 3 Year Consumer Price 91 Day
Investment Class Shares Government Bond Index Index Treasury Bill
<S> <C> <C> <C> <C>
11/2/92 $10,000 $10,000 $10,000 $10,000
12/92 $10,087 $10,078 $9,992 $10,053
12/93 $10,395 $10,621 $10,267 $10,356
12/94 $10,502 $10,675 $10,542 $10,798
12/95 $11,608 $11,832 $10,809 $11,393
12/96 $12,098 $12,430 $11,213 $11,965
12/97 $12,875 $13,626 $11,404 $12,593
12/98 $13,663 $14,517 $11,580 $13,160
12/99 $14,005 $14,947 $11,926 $13,784
</TABLE>
- -------------------------------------------------------------------------------
[CHART]
<TABLE>
<CAPTION>
Kent Short Term Bond Fund The Lehman Brothers 1 to 3 Year Consumer Price 91 Day
Investment Class Shares Government Bond Index Index Treasury Bill
<S> <C> <C> <C> <C>
11/2/92 $10,000 $10,000 $10,000 $10,000
12/92 $10,030 $10,078 $9,992 $10,053
12/93 $10,335 $10,621 $10,267 $10,356
12/94 $10,439 $10,675 $10,542 $10,798
12/95 $11,514 $11,832 $10,809 $11,393
12/96 $11,982 $12,430 $11,213 $11,965
12/97 $12,732 $13,626 $11,404 $12,593
12/98 $13,495 $14,517 $11,580 $13,160
12/99 $13,812 $14,970 $11,909 $13,749
</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 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. Investors cannot invest directly in an
index, although they can invest in the underlying securities.
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 the price increases
in a standardized "market basket" of consumer products.
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.
17
<PAGE>
Portfolio
Reviews
Kent Intermediate Bond Fund
By Mitchell Stapley
Portfolio Manager
The bond market performed poorly during the twelve-month period ended December
31, 1999. Investors worried that the strong U.S. economy, rising oil prices and
rebounding overseas economies would fuel inflation and force the Federal
Reserve to raise short-term interest rates. The Federal Reserve did raise
interest rates three times during the year, each time by one quarter of a per-
centage point. In addition, corporations such as Rite Aid and Waste Management
encountered financial troubles, which hurt the credit worthiness of their
issues. The yield on the ten-year Treasury note increased from 4.65% to 6.34%
during the period.
The Kent Intermediate Bond Fund underperformed its benchmark index during the
period, although it provided high levels of current income to shareholders. The
Fund's Institutional and Investment shares returned -1.22% and -1.36%, respec-
tively, compared to a 0.39% return for the Lehman Brothers Intermediate
Government/Corporate Bond Index.
Positioning the Fund
Our emphasis on high-quality issues helped the Fund avoid some of the losses
that lower-quality corporate issues suffered as a result of the problems at
Rite Aid and Waste Management. During the period, we found opportunities among
bonds issued by cable companies, regional banks and automakers. The Fund began
the period with an average credit rating of AAA, and finished the period with
an average credit rating of AA1.*
Rising yields led to opportunities to lock in higher yields for shareholders.
We saw opportunities in longer-term issues, and thus extended the Fund's aver-
age maturity from 5.5 years at the beginning of the period to 6.7 years as of
December 31, 1999, significantly longer than the benchmark's average maturity
of 4.5 years at the end of the year. The Fund's longer average maturity helped
provide high levels of current income to shareholders.*
[CHART]
Kent Intermediate Bond Fund
Percentage of Portfolio Investments*
As of December 31, 1999
U.S. Government & Agency Issues 49.3%
Other 13.8%
Corporate Notes & Bonds 36.9%
Kent Intermediate Bond Fund
SEC 30-Day Yields
As of December 31, 1999
<TABLE>
<S> <C>
Institutional Class....................... 6.12%
Investment Class.......................... 5.86%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
December 31, 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 6.11% for Institutional Shares and 5.85% for Investment
Shares.
- --------------------------------------------------------------------------------
Looking ahead
We believe that the stage is set for slower economic growth, given the Federal
Reserve's three rate hikes and the sharp increase in bond yields during the
past year. That said, we do expect the Federal Reserve to raise interest rates
at least once more in 2000. A slower economy should prevent an uptick in infla-
tion and allow fixed income yields to decline. We believe the Fund is posi-
tioned well for such an environment, with a relatively long average maturity
that also can provide a high level of income for shareholders.
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
18
<PAGE>
Kent Intermediate Bond Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 11/2/92) (inception: 11/25/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year -1.22% -1.36%
...............................................................................
Three Years 4.65% 4.42%
...............................................................................
Five Years 6.52% 6.25%
...............................................................................
Life of Fund 5.34% 5.12%
- -------------------------------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Lehman Brothers Intermediate Government/Corporate Bond
Index
[CHART]
Institutional Class Shares
Kent Intermediate Lehman Brothers
Bond Fund Intermediate
Institutional Government/Corporate
Class Shares Bond Index
11/2/92 10,000 10,000
12/92 10,125 10,095
12/93 10,934 10,976
12/94 10,585 10,762
12/95 12,298 12,410
12/96 12,667 12,913
12/97 13,655 13,929
12/98 14,699 15,105
12/99 14,519 15,164
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
Kent Intermediate The Lehman Brothers
Bond Fund Intermediate
Investment Government/Corporate
Class Shares Bond Index
11/25/92 10,000 10,000
12/92 10,050 10,134
12/93 10,873 11,018
12/94 10,545 10,803
12/95 12,207 12,457
12/96 12,544 12,962
12/97 13,500 13,982
12/98 14,448 15,162
12/99 14,252 15,221
- -------------------------------------------------------------------------------
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 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. Investors cannot invest directly in an index, although they
can invest in the underlying securities.
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.
19
<PAGE>
Portfolio
Reviews
Kent Income Fund
By Mitchell Stapley
Portfolio Manager
Yields on long-term bonds rose sharply during the 12-month period ended Decem-
ber 31, 1999. Bond investors feared that the strong domestic economy, rising
oil prices and resurgent foreign economies would force the Federal Reserve to
raise short-term interest rates. In fact, the Federal Reserve did raise inter-
est rates three times during the period, each time by one quarter of a percent-
age point. The yield on the thirty-year Treasury rose from 5.08% to 6.40% dur-
ing the period.
The Fund's relatively long average maturity and significant exposure to corpo-
rate securities provided strong levels of income for shareholders but was a
drag on total returns. The Fund's Institutional and Investment shares returned
- -4.41% and -4.76%, respectively, for the 12 months ended December 31, 1999.
That compared to a -7.65% return for the Lehman Brothers Long
Government/Corporate Bond Index.
Finding opportunities
Rising interest rates led to attractive opportunities among high-quality cor-
porate bonds, especially among issues with relatively long maturities. We
locked in the high yields offered by bonds issued by high-quality cable compa-
nies, regional banks and automakers. The emphasis on quality helped the Fund's
performance, as investors avoided lower quality bonds. The Fund began the
period with an average credit rating of AA2, and ended the period with an aver-
age credit rating of AA2.*
We found opportunities to enhance the Fund's yield by extending its average
maturity. We extended somewhat during the second half of the period as the
yield on the thirty-year Treasury climbed above 6.16%, and again as those
yields rose past 6.42%. The Fund's average maturity began the period at 10.8
years and ended at 11.8 years. That compares to the benchmark's average matu-
rity of 9.8 years as of December 31, 1999.*
Going forward
We expect the Federal Reserve to raise short-term interest rates early in
2000. That rate hike, combined with high
[CHART]
Kent Income Fund
Distribution of Net Assets*
As of December 31, 1999
U.S. Government & Agency Issues 57.7%
Cash Equivalents Net Other Assets & Liabilities 0.3%
Corporate Notes & Bonds 42.0%
Kent Income Fund
SEC 30-Day Yields
As of December 31, 1999
<TABLE>
<S> <C>
Institutional Class....................... 6.43%
Investment Class.......................... 6.18%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
December 31, 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 6.42% for Institutional Shares and 6.17% for Investment
Shares.
- --------------------------------------------------------------------------------
bond yields, should slow the economy and prevent an uptick in inflation. In
fact, we have already seen signs that the economy is slowing. For example,
housing starts have fallen considerably from their record levels in 1999. A
more moderate pace of economic growth and dampened inflationary pressures
should help the bond market.
We believe the Fund is positioned for a moderate-growth and a low-inflation
environment. Its relatively long average maturity could provide high levels of
current income, and should benefit the Fund in a period of falling interest
rates. Meanwhile, we will continue to look for chances to capture additional
yield for shareholders should yields rise in certain issuing sectors of the
market.
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
20
<PAGE>
Kent Income Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 3/20/95) (inception: 3/22/95)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year -4.41% -4.76%
...............................................................................
Three Years 4.91% 4.60%
...............................................................................
Life of Fund 6.37% 6.08%
- -------------------------------------------------------------------------------
</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
[CHART]
Institutional Class Shares
The Lehman The Lehman
Kent Brothers Long Brothers
Income Fund Government/ Government/
Institutional Corporate Corporate
Class Shares Bond Index Bond Index
3/20/95 10,000 10,000 10,000
12/95 11,506 11,358 12,190
12/96 11,643 11,688 12,207
12/97 12,828 12,871 13,979
12/98 14,063 14,043 15,624
12/99 13,443 14,098 14,429
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
The Lehman The Lehman
Brothers Long Brothers
Kent Income Government/ Government/
Fund Investment Corporate Corporate
Class Shares Bond Index Bond Index
3/22/95 10,000 10,000 10,000
12/95 11,464 11,358 12,190
12/96 11,597 11,688 12,207
12/97 12,779 12,871 13,979
12/98 13,933 14,043 15,624
12/99 13,270 14,098 14,429
- -------------------------------------------------------------------------------
The Fund's performance is measured against the Lehman Brothers
Government/Corporate Bond Index and the 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.
Investors cannot invest directly in an index, although they can invest in the
underlying securities.
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 Intermediate Tax-Free Fund+
By Michael Martin
Portfolio Manager
****
4 star
Morningstar
rating
(among 1,623
municipal bond
funds overall
as of
12/31/99)++
Yields rose across the bond market during 1999. Extremely strong growth in the
U.S. economy caused investors to fear that the Federal Reserve would increase
the federal funds rate to keep inflation tame. In fact, the Federal Reserve
raised rates in June, August and November, each time by 25 basis points.
Bonds performed poorly in that rising rate environment. The Federal Reserve's
rate hikes caused investors to shy away from the bond market, pushing yields up
and prices down. The yield on the ten-year Treasury increased 179 basis points
during the period. Municipal yields increased as well, though not as dramati-
cally as the yield on Treasury securities. The ten-year AAA-rated general obli-
gation municipal security ended the year at 5.07%, up 93 basis points. That
made 1999 the second-worst year ever for the municipal market, after 1994.
The Fund's Institutional and Investment shares posted total returns of -1.01%
and -1.27%, respectively, for the 12 months through December 31, 1999. That
compared to a 1.92% total return for the Lehman Brothers Three-Year General
Obligation Municipal Bond Index.
Increasing average maturity
We took advantage of rising yields by extending the average maturity of the
portfolio, capturing additional yield for shareholders. The Fund's average
maturity stood at 8.1 years at the end of 1999, up from 6.9 years at the begin-
ning of January. We purchased bonds such as Massachusetts State Port Authority
bonds with a 5.00% coupon due in 2028 (1.01% of the portfolio) to extend the
Fund's average maturity.*
The Fund also maintained its high credit quality, which stood at AA at the end
of the period. In our estimation, the extra yield available from lower-rated
securities was not enough to compensate for the additional risk in such
issues.*
Looking ahead
We believe the Federal Reserve will likely increase short-term interest rates
again in 2000, especially if economic
[CHART]
Kent Intermediate Tax-Free Fund
Distribution of Net Assets*
As of December 31, 1999
East 16.6%
Other 4.0%
Mountain 4.9%
Pacific 15.6%
South 20.0%
North Central 38.9%
Kent Intermediate Tax-Free Fund
SEC 30-Day Yields
As of December 31, 1999
<TABLE>
<S> <C>
Institutional Class....................... 4.36%
Investment Class.......................... 4.11%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
December 31, 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 4.35% for Institutional Shares and 4.10% for Investment
Shares.
- --------------------------------------------------------------------------------
growth stays robust and the equity market continues to post strong gains. We
still believe that inflation will remain low during 2000, however, making bonds
an attractive investment. That said, the municipal market continues to contend
with the strong performance in the equity market.
We will likely extend the Fund's average maturity further if yields continue
to rise, and reduce the average maturity if the market rallies. That approach
is consistent with our philosophy of buying into weakness and selling into
strength. Furthermore, we will continue to favor issues with very high 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.
++Morningstar proprietary ratings reflect risk-adjusted performance through
12/31/99. The ratings are subject to change every month. Past performance is no
guarantee of future results. Morningstar ratings are calculated from a fund's
three-, five-, and ten-year returns (with fee adjustments) on excess of 90-day
Treasury bill returns, and a risk factor that reflects performance below 90-day
Treasury bill returns. The Fund received 4 stars for the institutional class
for the three- and five-year periods and 4 and 3 stars for the investment class
for the three- and five-year periods. It was rated among 1,623 and 1,348
municipal bond funds for the three- and five-year periods, respectively. Ten
percent of the funds in a rating category receive 5 stars, 22.5% receive 4
stars, 35% receive 3 stars, 22.5% receive 2 stars and 10% receive 1 star.
22
<PAGE>
Kent Intermediate Tax-Free Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 12/16/92) (inception: 12/18/92)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year -1.01% -1.27%
...............................................................................
Three Years 3.74% 3.48%
...............................................................................
Five Years 5.46% 5.21%
...............................................................................
Life of Fund 4.67% 4.46%
- -------------------------------------------------------------------------------
</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
[CHART]
Institutional Class Shares
Kent Intermediate The Lehman Brothers The Lehman Brothers
Tax-Free Fund Three-Year General Five-Year General
Institutional Class Obligation Municipal Obligation Municipal
Date Shares Bond Index Bond Index
12/16/92 $10,000 $10,000 $10,000
12/92 10,060 10,300 10,500
12/93 10,895 10,673 10,930
12/94 10,567 10,755 10,779
12/95 11,941 11,705 12,032
12/96 12,349 12,243 12,589
12/97 13,222 12,905 13,406
12/98 13,929 13,572 13,521
12/99 13,788 13,833 14,290
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
Lehman Brothers Lehman Brothers
Kent Intermediate Three-Year General Five-Year General
Tax Free Fund Investment Obligation Municipal Obligation Municipal
Class Shares Bond Index Bond Index
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
12/31/99 13,591 13,833 14,290
- -----------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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 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. Investors
cannot invest directly in an index, although they can invest in the underlying
securities.
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.
23
<PAGE>
Portfolio
Reviews
Kent Tax-Free Income Fund+
By Michael Martin
Portfolio Manager
Municipal yields rose throughout 1999. Stronger-than-expected economic growth
caused investors to fear that the Federal Reserve would increase the federal
funds rate to cool the economy and prevent a rekindling of inflationary pres-
sures. The Federal Reserve, in fact, did raise interest rates three times, each
time by 25 basis points.
The bond market reacted negatively to the interest rate increases, with yields
on the thirty-year Treasury increasing 139 basis points. Municipal yields did
not increase as dramatically as yields on Treasury securities. The ratio of AAA
municipal yields to Treasury yields fell from 97.4% to 91.5% during the year -
that did not make it a good year for municipals on an absolute basis. The yield
on a thirty-year AAA-rated municipal security rose 89 basis points, ending the
year at 5.93% compared to 4.94% in January. The municipal market in 1999 deliv-
ered its second-worst performance in history, second only to 1994.
The municipal market suffered throughout the year from a lack of institutional
demand. As yields rose during the year, individual investors opted to purchase
individual municipal bonds rather than mutual funds. That factor reduced the
cash flow into municipal bond funds and dampened demand from institutional
investors. A second drag on the market unfolded near the end of 1999 as many
investors sold municipal securities for capital losses to offset capital gains
realized in the equity market.
The volume of new municipal issues declined 21% in 1999, but for the year it
was still the fourth busiest on record. The decline in volume during 1999 can
be attributed to the drop off in refunding activity, down 54 percent due to
rising rates.
The Fund's Institutional and Investment shares posted total returns of -3.26%
and -3.40%, respectively, for the 12 months through December 31, 1999. That
compared to a -2.06% total return for the Lehman Brothers Municipal Bond Index.
Managing the Fund
We increased the average maturity of the portfolio from 10.8 years at the
beginning of 1999 to 14.4 years at the end of the period. That strategy helped
the Fund capture attractive levels of current income for shareholders as yields
rose. We extended the Fund's average maturity by purchasing issues such as Min-
neapolis & St. Paul Airport bonds with a 5.13% coupon, due in 2025 (1.19% of
the portfolio); as well as Houston, Texas ISD PSF bonds with a 5.00% coupon,
due in 2024 (2.39%).*
[CHART]
Kent Tax-Free Income Fund
Distribution of Net Assets*
As of December 31, 1999
North Central 34.0%
South 24.5%
East 17.8%
Mountain 11.6%
Pacific 10.3%
Other 1.8%
Kent Tax-Free Income Fund
SEC 30-Day Yields
As of December 31, 1999
<TABLE>
<S> <C>
Institutional Class....................... 4.71%
Investment Class.......................... 4.45%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
December 31, 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 4.70% for Institutional Shares and 4.44% for Investment
Shares.
- --------------------------------------------------------------------------------
The Fund maintained its high average credit rating of AA. In our estimation,
the extra yield available on lower-rated issues was not enough to justify the
additional risk on such issues.*
Going forward
We believe the Federal Reserve will likely continue to increase short-term
interest rates in order to slow the growth of the domestic economy in 2000. We
still believe that inflation will remain under control and that municipal bonds
remain an attractive investment. However, the municipal market continues to
contend with the strong performance in the equity market.
As always, we will buy into weakness and sell into strength. If yields con-
tinue to rise, we will likely extend the Fund's average maturity to attempt to
capture even more attractive yields for shareholders. We will take advantage of
any rally in the municipal market by selling bonds at attractive prices. We
will concentrate our efforts on high-quality municipal issues.
- --------------------------------------------------------------------------------
+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 Tax-Free Income Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 3/20/95) (inception: 3/31/95)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year -3.26% -3.40%
...............................................................................
Three Years 3.55% 3.33%
...............................................................................
Life of Fund 4.83% 4.58%
- -------------------------------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Lehman Brothers Municipal Bond Index
[CHART]
Institutional Class Shares
KENT TAX-FREE INCOME FUND THE LEHMAN BROTHERS
DATE INSTITUTIONAL CLASS SHARES MUNICIPAL BOND INDEX
3/20/95 $10,000 $10,000
12/95 10,860 10,971
12/96 11,290 11,457
12/97 12,261 12,511
12/98 12,957 13,242
12/99 12,534 12,969
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
KENT TAX-FREE INCOME FUND THE LEHMAN BROTHERS
DATE INVESTMENT CLASS SHARES MUNICIPAL BOND INDEX
3/20/95 $10,000 $10,000
12/95 10,834 10,971
12/96 11,217 11,457
12/97 12,150 12,511
12/98 12,809 13,242
12/99 12,373 12,969
- -------------------------------------------------------------------------------
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 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. Investors cannot invest directly in an index, although
they can invest in the underlying securities.
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.
25
<PAGE>
Portfolio
Reviews
Kent Michigan Municipal Bond Fund+,++
By Michael Martin
Portfolio Manager
****
4 star
Morningstar
rating
(among 1,623
municipal bond
funds overall
as of
12/31/99)1
Yields rose steadily during the 12 months ended December 31, 1999. Investors
worried that strong economic growth would encourage the Federal Reserve to
increase short-term interest rates to head off inflation. In fact, the Federal
Reserve did raise rates three times -- in June, August and November -- each
time by 25 basis points.
Bonds suffered in that rising rate environment. For example, the yield on the
five year AAA-rated general obligation municipal security began the period at
3.75% and fell briefly to as low as 3.65% in January; it then rose to 4.68% by
the end of December. Although municipal bond yields did not rise as much as
yields on Treasury securities in 1999, that was a small consolation. The munic-
ipal bond market delivered one of its worst performances in history, second
only to 1994. Municipal bond prices were further hurt by a lack of institu-
tional demand throughout the year and by tax related selling near the end of
1999 as investors sold municipal securities for capital losses to offset capi-
tal gains realized in the equity market.
Managing the Fund
The Fund's Institutional and Investment Shares delivered total returns of
0.67% and 0.51%, respectively, during the twelve months ended December 31,
1999. The Fund's benchmark, the Lehman Brothers Three-Year General Obligation
Municipal Bond Index, posted a total return of 1.92% during the period.
The average maturity of the Fund ended the year at 4.0 years -- essentially
unchanged from where it began the year, but down from 4.2 years in November. We
expect to extend the average maturity back to 4.2 years after the first of the
year as the supply of new issue Michigan bonds increases.*
Last year, the supply of new Michigan issues fell 33% from 1998 levels. In
that environment, we continued to look for opportunities to increase the Fund's
yield without compromising the overall quality of the portfolio. We did this
during the period by purchasing bonds such as A-rated Bishop
[CHART]
Kent Michigan Municipal Bond Fund
Distribution of Net Assets*
As of December 31, 1999
Cash Equivalent Net Other Assets & Liabilities 1.8%
Municipal Securities 98.2%
Kent Michigan Municipal Bond Fund
SEC 30-Day Yields
As of December 31, 1999
<TABLE>
<S> <C>
Institutional Class....................... 4.21%
Investment Class.......................... 4.06%
</TABLE>
SEC 30-day yield is computed based on net income during the 30-day period ended
December 31, 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 4.20% for Institutional Shares and 3.95% for Investment
Shares.
- --------------------------------------------------------------------------------
International Airport Authority-ACA Insured with a 4.88% coupon maturing
12/1/01 (0.59% of the portfolio).*
The outlook
The Michigan economy continues to enjoy the benefits of the strong national
economy. The state's unemployment rate fell from 3.8% to 3.7% in 1999 -- below
the national average of 4.1%. The primary driver of the Michigan economy con-
tinues to be the strength of the automotive sector.
We will continue to seek out appealing investments throughout the Michigan
market, aiming to increase the Fund's yield while maintaining the portfolio's
strong average credit quality. In particular, we will likely extend the Fund's
average maturity if yields continue to rise.
- --------------------------------------------------------------------------------
+The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
++Regional funds may be subject to additional risk, since the companies they
invest in are located in one geographical location.
*The Fund's portfolio composition is subject to change.
/1/Morningstar proprietary ratings and reflect risk-adjusted performance
through 12/31/99. The ratings are subject to change every month. Past
performance is no guarantee of future results. Morningstar ratings are
calculated from a fund's three-, five-, and ten-year returns (with fee
adjustments) on excess of 90-day Treasury bill returns, and a risk factor that
reflects performance below 90-day Treasury bill returns. The Fund received 5
stars for the three-year period and 4 stars for the five-year period for
institutional and investment classes. It was rated among 1,623 and 1,348
municipal bond funds for the three- and five-year periods, respectively. Ten
percent of the funds in a rating category receive 5 stars, 22.5% receive 4
stars, 35% receive 3 stars, 22.5% receive 2 stars and 10% receive 1 star.
26
<PAGE>
Kent Michigan Municipal Bond Fund
Average Annual Returns as of December 31, 1999
<TABLE>
<CAPTION>
Institutional Class Investment Class
(inception: 5/3/93) (inception: 5/11/93)
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year 0.67% 0.51%
...............................................................................
Three Years 3.62% 3.48%
...............................................................................
Five Years 4.50% 4.34%
...............................................................................
Life of Fund 3.88% 3.72%
- -------------------------------------------------------------------------------
</TABLE>
Growth of a $10,000 Investment
As compared with the Lehman Brothers Three-Year General
Obligation Municipal Bond Index
[CHART]
Institutional Class Shares
Kent Michigan The Lehman Brothers
Municiapl Bond Fund Three-Year General
Institutional Class Obligation Municipal
Date Shares Bond Index
5/3/93 $10,000 $10,000
12/93 10,300 10,311
12/94 10,340 10,390
12/95 11,190 11,308
12/96 11,580 11,828
12/97 12,222 12,468
12/98 12.802 13,113
12/99 12,887 13,365
- -------------------------------------------------------------------------------
[CHART]
Investment Class Shares
Kent Michigan Municipal The Lehman Brothers Three-Year
Bond Fund Investment Class General Obligation
Date Shares Municipal Bond Index
5/11/93 $10,000 $10,000
12/93 10,285 10,311
12/94 10,301 10,390
12/95 11,126 11,308
12/96 11,500 11,828
12/97 12,119 12,468
12/98 12,676 13,113
12/99 12,741 13,365
- -------------------------------------------------------------------------------
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 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. Investors cannot invest
directly in an index, although they can invest in the underlying securities.
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.
27
<PAGE>
Growth and Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (96.0%):
Advertising (0.2%):
27,500 Interpublic Group Cos., Inc.......................... $ 1,586,406
------------
Aerospace & Defense (0.8%):
66,300 Boeing Co............................................ 2,755,594
70,412 Honeywell International, Inc......................... 4,061,892
29,900 Lockheed Martin Corp................................. 654,063
------------
7,471,549
------------
Agricultural Biotech (0.2%):
44,300 Monsanto Co.......................................... 1,578,188
------------
Auto/Truck -- Original Equipment (0.1%):
19,200 Dana Corp............................................ 574,800
42,200 Delphi Automotive Systems Corp....................... 664,650
------------
1,239,450
------------
Auto/Truck -- Replacement Equipment (0.1%):
24,800 Genuine Parts Co..................................... 615,350
------------
Automotive (1.0%):
92,800 Ford Motor Co........................................ 4,959,000
50,600 General Motors Corp.................................. 3,677,988
------------
8,636,988
------------
Banks -- Major Regional (3.2%):
67,600 Bank of New York Co., Inc............................ 2,704,000
92,500 Bank One Corp........................................ 2,965,780
12,500 Comerica, Inc........................................ 583,594
73,900 First Union Corp..................................... 2,424,844
69,800 FleetBoston Financial Corp........................... 2,429,913
30,000 KeyCorp.............................................. 663,750
49,700 Mellon Financial Corp................................ 1,692,906
53,400 National City Corp................................... 1,264,913
25,300 Northern Trust Corp.................................. 1,340,900
29,600 PNC Bank Corp........................................ 1,317,200
32,400 SunTrust Banks, Inc.................................. 2,229,525
59,200 U.S. Bancorp......................................... 1,409,700
24,600 Wachovia Corp........................................ 1,672,800
134,200 Wells Fargo Co....................................... 5,426,712
------------
28,126,537
------------
Banks -- Midwest (0.2%):
22,300 Fifth Third Bancorp.................................. 1,636,263
------------
Banks -- Money Center (1.6%):
139,800 Bank America Corp.................................... 7,016,212
69,400 Chase Manhattan Corp................................. 5,391,513
11,600 J.P. Morgan & Co., Inc............................... 1,468,850
------------
13,876,575
------------
Banks -- Northeast (0.1%):
13,000 State Street Corp.................................... 949,813
------------
Beverages -- Alcoholic (0.3%):
37,500 Anheuser-Busch Co., Inc.............................. 2,657,813
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Beverages -- Soft Drinks (1.6%):
169,500 Coca-Cola Co..................................... $ 9,873,375
111,600 PepsiCo, Inc..................................... 3,933,900
------------
13,807,275
------------
Broadcasting/Cable (0.9%):
21,250 Clear Channel Communications, Inc.*.............. 1,896,563
52,300 Comcast Corp., Special Class A................... 2,644,419
47,900 MediaOne Group, Inc.*............................ 3,679,318
------------
8,220,300
------------
Building & Construction -- Miscellaneous (0.2%):
54,900 Masco Corp....................................... 1,393,088
------------
Building Products -- Retail/Wholesale (1.5%):
165,000 Home Depot, Inc.................................. 11,312,813
25,500 Lowe's Cos., Inc................................. 1,523,625
------------
12,836,438
------------
Building Products -- Wood (0.1%):
16,900 Weyerhaeuser Co.................................. 1,213,631
------------
Chemicals -- Diversified (1.2%):
23,500 Dow Chemical Co.................................. 3,140,188
78,700 E.I. du Pont de Nemours & Co..................... 5,184,362
28,800 PPG Industries, Inc.............................. 1,801,800
9,500 Union Carbide Corp............................... 634,125
------------
10,760,475
------------
Chemicals -- Specialty (0.2%):
22,500 Great Lakes Chemical Corp........................ 859,219
18,300 Sigma-Aldrich Corp............................... 550,144
------------
1,409,363
------------
Commercial Services (0.2%):
69,400 Cendant Corp.*................................... 1,843,438
------------
Computer Software (7.0%):
53,000 Computer Associates International, Inc........... 3,706,688
395,100 Microsoft Corp.*................................. 46,127,924
112,400 Oracle Corp.*.................................... 12,595,825
------------
62,430,437
------------
Computers -- Local Area Network (3.1%):
258,400 Cisco Systems, Inc.*............................. 27,681,099
------------
Computers -- Mainframe (1.8%):
143,000 IBM Corp......................................... 15,443,999
------------
Computers -- Memory Devices (1.0%):
66,000 EMC Corp.*....................................... 7,210,500
26,800 Seagate Technology, Inc.*........................ 1,247,875
------------
8,458,375
------------
Computers -- Micro (1.4%):
60,200 Compaq Computer Corp............................. 1,629,163
175,600 Dell Computer Corp.*............................. 8,955,599
</TABLE>
Continued
28
<PAGE>
Growth and Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Computers -- Micro (continued)
21,100 Gateway 2000, Inc.*.................................. $ 1,520,519
------------
12,105,281
------------
Computers -- Mini (2.1%):
78,300 Hewlett-Packard Co................................... 8,921,306
119,200 Sun Microsystems, Inc.*.............................. 9,230,549
------------
18,151,855
------------
Computers -- Services (1.1%):
87,300 Automatic Data Processing, Inc....................... 4,703,288
13,400 Computer Sciences Corp.*............................. 1,267,975
35,100 Electronic Data Systems Corp......................... 2,349,506
30,000 First Data Corp...................................... 1,479,375
------------
9,800,144
------------
Cosmetics & Toiletries (0.8%):
22,300 Alberto-Culver Co., Class B.......................... 575,619
85,000 Gillette Co.......................................... 3,500,937
48,000 Kimberly-Clark Corp.................................. 3,132,000
------------
7,208,556
------------
Cruise Lines (0.2%):
41,000 Carnival Corp........................................ 1,960,313
------------
Diversified (5.3%):
249,700 General Electric Co.................................. 38,641,074
12,000 Johnson Controls, Inc................................ 682,500
29,600 Minnesota Mining & Manufacturing Co.................. 2,897,100
41,100 Seagram Co., Ltd..................................... 1,846,931
16,400 Textron, Inc......................................... 1,257,675
40,800 United Technologies Corp............................. 2,652,000
------------
47,977,280
------------
Electrical Components -- Semiconductors (3.7%):
14,200 Advanced Micro Devices, Inc.*........................ 410,913
25,900 Applied Materials, Inc.*............................. 3,281,206
263,600 Intel Corp........................................... 21,697,574
26,600 Rockwell International Corp.......................... 1,273,475
64,700 Texas Instruments, Inc............................... 6,267,812
------------
32,930,980
------------
Electronic -- Connectors (0.0%):
13,800 Thomas & Betts Corp.................................. 439,875
------------
Electronic Components/Instruments (0.1%):
11,000 Solectron Corp.*..................................... 1,046,375
------------
Electronic Measuring Equipment (0.1%):
13,600 Tektronix, Inc....................................... 528,700
------------
Finance (0.5%):
55,900 Associates First Capital Corp., Class A.............. 1,533,756
57,300 MBNA Corp............................................ 1,561,425
57,800 Washington Mutual, Inc............................... 1,502,800
------------
4,597,981
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Financial -- Consumer Loans (0.2%):
41,500 Household International, Inc......................... $ 1,545,875
------------
Financial -- Investment Bankers (0.4%):
42,200 Merrill Lynch & Co., Inc............................. 3,523,700
------------
Financial -- Miscellaneous Services (1.5%):
30,500 American Express Co.................................. 5,070,625
59,200 Morgan Stanley, Dean Witter & Co..................... 8,450,800
------------
13,521,425
------------
Financial -- Mortgage & Related Services (0.9%):
88,600 Fannie Mae........................................... 5,531,963
49,300 Freddie Mac.......................................... 2,320,181
------------
7,852,144
------------
Financial Services -- Diversified (1.6%):
249,000 Citigroup, Inc....................................... 13,835,063
------------
Food -- Canned (0.2%):
41,200 H.J. Heinz Co........................................ 1,640,275
------------
Food -- Diversified (1.3%):
24,100 Bestfoods............................................ 1,266,756
37,900 ConAgra, Inc......................................... 855,119
41,500 General Mills, Inc................................... 1,483,625
34,200 Kellogg Co........................................... 1,053,788
18,100 Quaker Oats Co....................................... 1,187,813
27,800 Ralston Purina Group................................. 774,925
82,200 Sara Lee Corp........................................ 1,813,537
49,700 Unilever NV.......................................... 2,705,543
------------
11,141,106
------------
Food Items -- Wholesale (0.1%):
42,900 SUPERVALU, Inc....................................... 858,000
------------
Food Products (0.2%):
38,900 Safeway, Inc.*....................................... 1,383,381
------------
Home Decoration Products (0.1%):
19,400 Newell Rubbermaid, Inc............................... 562,600
------------
Hotels & Lodging (0.1%):
38,400 Marriott International, Inc., Class A................ 1,212,000
------------
Insurance -- Accident & Health (0.1%):
29,300 Aon Corp............................................. 1,172,000
------------
Insurance -- Brokers (0.3%):
26,500 Marsh & McLennan Cos., Inc........................... 2,535,719
------------
Insurance -- Life (0.3%):
24,100 American General Corp................................ 1,828,588
17,700 Torchmark Corp....................................... 514,406
------------
2,342,994
------------
Insurance -- Multi-Line (0.3%):
11,400 Aetna, Inc........................................... 636,263
</TABLE>
Continued
29
<PAGE>
Growth and Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Insurance -- Multi-Line (continued)
14,500 CIGNA Corp......................................... $ 1,168,155
11,400 MBIA, Inc.......................................... 602,063
------------
2,406,481
------------
Insurance -- Property & Casualty (1.7%):
60,500 Allstate Corp...................................... 1,452,000
121,100 American International Group, Inc.................. 13,093,937
12,000 Safeco Corp........................................ 298,500
------------
14,844,437
------------
Internet Software (2.3%):
163,700 America Online, Inc.*.............................. 12,349,118
18,100 Yahoo, Inc.*....................................... 7,831,644
------------
20,180,762
------------
Machine Tools & Related Products (0.1%):
11,800 The Black & Decker Corp............................ 616,550
------------
Machinery & Equipment (0.1%):
42,200 Milacron, Inc...................................... 648,825
------------
Machinery -- Construction/Mining (0.3%):
32,400 Caterpillar, Inc................................... 1,524,825
17,500 Ingersoll-Rand Co.................................. 963,594
------------
2,488,419
------------
Machinery -- Electrical (0.3%):
43,900 Emerson Electric Co................................ 2,518,763
------------
Machinery -- General Industrial (0.1%):
7,600 Illinois Tool Works, Inc........................... 513,475
------------
Media Conglomerates (1.6%):
96,800 Time Warner, Inc................................... 7,011,950
47,000 Viacom, Inc., Class B*............................. 2,840,563
143,000 Walt Disney Co..................................... 4,182,750
------------
14,035,263
------------
Medical -- Biomedical/Genetic (0.5%):
76,100 Amgen, Inc.*....................................... 4,570,756
------------
Medical -- Drugs (6.4%):
110,000 Abbott Laboratories................................ 3,994,375
92,300 American Home Products Corp........................ 3,640,081
164,300 Bristol-Myers Squibb Co............................ 10,546,006
83,300 Eli Lilly & Co..................................... 5,539,450
181,900 Merck & Co., Inc................................... 12,198,668
295,200 Pfizer, Inc........................................ 9,575,550
35,000 Pharmacia & Upjohn, Inc............................ 1,575,000
114,700 Schering-Plough Corp............................... 4,838,906
67,400 Warner-Lambert Co.................................. 5,522,588
------------
57,430,624
------------
Medical -- Wholesale Drug (0.1%):
22,900 Cardinal Health, Inc............................... 1,096,338
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Medical Instruments (0.1%):
17,200 Biomet, Inc...................................... $ 688,000
------------
Medical Products (0.3%):
24,300 Baxter International, Inc........................ 1,526,344
31,500 Guidant Corp.*................................... 1,480,500
------------
3,006,844
------------
Medical/Dental Supplies (1.2%):
15,700 C.R. Bard, Inc................................... 832,100
102,200 Johnson & Johnson................................ 9,517,375
------------
10,349,475
------------
Metal -- Gold (0.1%):
52,600 Barrick Gold Corp................................ 930,362
27,800 Homestake Mining Co.............................. 217,188
------------
1,147,550
------------
Metal -- Non-Ferrous (0.1%):
27,100 Freeport-McMoran Copper & Gold, Inc., Class B*... 572,488
8,000 Reynolds Metals Co............................... 613,000
------------
1,185,488
------------
Metals (0.4%):
34,200 Alcoa, Inc....................................... 2,838,600
4,097 Phelps Dodge Corp................................ 275,011
------------
3,113,611
------------
Office Automation & Equipment (0.3%):
30,000 Pitney Bowes, Inc................................ 1,449,375
48,200 Xerox Corp....................................... 1,093,538
------------
2,542,913
------------
Oil & Gas (0.2%):
49,900 Conoco, Inc., Class B............................ 1,241,262
7,686 Transocean Sedco Forex, Inc...................... 258,916
------------
1,500,178
------------
Oil -- Field Services (0.5%):
46,800 Halliburton Co................................... 1,883,700
39,700 Schlumberger, Ltd................................ 2,233,125
------------
4,116,825
------------
Oil -- International Integrated (4.2%):
52,700 Chevron Corp..................................... 4,565,138
263,437 Exxon Mobil Corp................................. 21,223,142
156,800 Royal Dutch Petroleum Co., ADR................... 9,476,600
37,900 Texaco, Inc...................................... 2,058,444
------------
37,323,324
------------
Oil -- Production/Pipeline (0.3%):
54,900 Enron Corp....................................... 2,436,188
------------
Oil -- U.S. Integrated (0.4%):
27,700 Phillips Petroleum Co............................ 1,301,900
</TABLE>
Continued
30
<PAGE>
Growth and Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Oil -- U.S. Integrated (continued)
29,600 Unocal Corp.......................................... $ 993,450
33,100 USX-Marathon Group................................... 817,156
------------
3,112,506
------------
Paper & Related Products (0.4%):
40,500 International Paper Co............................... 2,285,719
27,300 Mead Corp............................................ 1,185,844
------------
3,471,563
------------
Photography (0.2%):
26,800 Eastman Kodak Co..................................... 1,775,500
------------
Pipelines (0.2%):
13,600 Consolidated Natural Gas Co.......................... 883,150
34,700 The Williams Companies, Inc.......................... 1,060,519
------------
1,943,669
------------
Printers & Related Products (0.1%):
9,500 Lexmark International Group, Inc.*................... 859,750
------------
Protection -- Safety (0.6%):
136,000 Tyco International, Ltd.............................. 5,287,000
------------
Publishing -- Books (0.1%):
20,500 McGraw-Hill Cos., Inc................................ 1,263,313
------------
Publishing -- Newspapers (0.5%):
28,100 Gannett, Inc......................................... 2,291,906
6,400 Knight-Ridder, Inc................................... 380,800
18,200 New York Times Co.................................... 894,075
23,000 Tribune Co........................................... 1,266,438
------------
4,833,219
------------
Restaurants (0.5%):
110,800 McDonald's Corp...................................... 4,466,625
------------
Retail (0.3%):
16,200 Best Buy Co.*........................................ 813,038
12,500 Kohl's Corp.*........................................ 902,343
35,100 Staples, Inc.*....................................... 728,325
------------
2,443,706
------------
Retail -- Apparel/Shoes (0.4%):
59,000 Gap, Inc............................................. 2,714,000
23,800 Limited, Inc......................................... 1,030,838
------------
3,744,838
------------
Retail -- Discount (3.4%):
47,200 Dayton-Hudson Corp................................... 3,466,250
39,500 Kmart Corp.*......................................... 397,469
372,200 Wal-Mart Stores, Inc.(b)............................. 25,728,324
------------
29,592,043
------------
Retail -- Drug Store (0.3%):
77,700 Walgreen Co.......................................... 2,272,725
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Retail -- Major Department Stores (0.3%):
21,100 J.C. Penney, Inc..................................... $ 420,681
31,400 May Department Stores Co............................. 1,012,651
28,700 Sears, Roebuck & Co.................................. 873,556
------------
2,306,888
------------
Retail -- Regional Department Stores (0.1%):
18,000 Federated Department Stores, Inc.*................... 910,125
------------
Retail -- Supermarkets (0.2%):
44,100 Albertson's, Inc..................................... 1,422,225
------------
Rubber -- Tires (0.0%):
13,800 The B.F. Goodrich Co................................. 379,500
------------
Soap & Cleaning Preparations (1.6%):
44,500 Colgate-Palmolive Co................................. 2,892,500
100,800 Procter & Gamble Co.................................. 11,043,900
------------
13,936,400
------------
Steel -- Producers (0.1%):
10,800 Nucor Corp........................................... 591,975
12,600 USX-U.S. Steel Group................................. 415,800
------------
1,007,775
------------
Telecom Equipment (0.5%):
23,600 QUALCOMM, Inc.*...................................... 4,159,500
------------
Telecommunications -- Equipment (4.2%):
5,200 Comverse Technology, Inc.*........................... 752,700
251,900 Lucent Technologies, Inc............................. 18,845,268
51,400 Motorola, Inc........................................ 7,568,650
94,800 Nortel Networks Corp................................. 9,574,800
23,100 Tellabs, Inc.*....................................... 1,482,731
------------
38,224,149
------------
Telecommunications -- Services and Equipment (0.5%):
17,000 CenturyTel, Inc...................................... 805,375
42,000 Global Crossing, Ltd*................................ 2,100,000
18,500 Nextel Communications, Inc, Class A*................. 1,907,813
------------
4,813,188
------------
Textile -- Apparel (0.1%):
19,200 VF Corp.............................................. 576,000
------------
Textile -- Home Furnishings (0.1%):
11,100 Springs Industries, Inc.............................. 443,306
------------
Tobacco (0.8%):
259,700 Philip Morris Cos., Inc.............................. 6,021,793
25,800 U.S.T., Inc.......................................... 649,838
------------
6,671,631
------------
Tools -- Hand Held (0.0%):
11,000 Snap-On, Inc......................................... 292,188
------------
</TABLE>
Continued
31
<PAGE>
Growth and Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Toys/Game/Hobby (0.1%):
30,700 Hasbro, Inc....................................... $ 585,219
------------
Transportation -- Air Freight (0.1%):
21,300 FDX Corp.*........................................ 871,969
------------
Transportation -- Airline (0.3%):
16,000 AMR Corp.*........................................ 1,072,000
13,700 Delta Air Lines, Inc.............................. 682,431
48,000 Southwest Airlines Co............................. 777,000
------------
2,531,431
------------
Transportation -- Railroad (0.3%):
18,500 CSX Corp.......................................... 580,438
30,200 Norfolk Southern Corp............................. 619,100
26,200 Union Pacific Corp................................ 1,142,975
------------
2,342,513
------------
Utilities -- Electric Power (1.6%):
31,300 Consolidated Edison, Inc.......................... 1,079,850
21,900 Detroit Edison Co................................. 687,113
23,000 Dominion Resources, Inc........................... 902,750
37,300 Duke Energy Corp.................................. 1,869,662
34,900 Entergy Corp...................................... 898,675
20,100 First Energy Corp................................. 456,019
22,800 Florida Power & Light, Inc........................ 976,125
35,100 Northern States Power Co.......................... 684,450
26,600 Peco Energy Corp.................................. 924,350
35,600 Public Service Enterprise Group, Inc.............. 1,239,325
46,400 Reliant Energy, Inc............................... 1,061,400
71,000 Southern Co....................................... 1,668,500
34,700 Texas Utilities Co................................ 1,234,019
------------
13,682,238
------------
Utilities -- Telephone (7.0%):
255,800 AT&T Corp......................................... 12,981,849
110,800 Bell Atlantic Corp................................ 6,821,125
134,500 BellSouth Corp.................................... 6,296,281
68,000 GTE Corp.......................................... 4,798,250
215,250 MCI Worldcom, Inc.*............................... 11,421,703
262,400 SBC Communications, Inc........................... 12,792,000
66,600 Sprint Corp....................................... 4,483,013
40,800 US West, Inc...................................... 2,937,600
------------
62,531,821
------------
Total Common Stocks............................... 845,262,084
------------
INVESTMENT COMPANIES (3.9%):
253 Dreyfus Cash Management Money Market Fund......... 253
34,063,525 Federated Prime Value Obligations Money Market
Fund.............................................. 34,063,525
------------
Total Investment Companies........................ 34,063,778
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security
Amount Description Market Value
--------- ----------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL (2.0%):
Certificate of Deposit (0.0%):
$ 258,000 Bank One Corp., 6.02%, 2/22/00...................... $ 255,466
------------
Commercial Paper (0.4%):
Beverages-Non-Alcoholic (0.1%):
500,000 Coca-Cola Co., 6.08%, 1/28/00....................... 497,764
------------
Chemical-Diversified (0.0%):
400,000 DuPont, 6.11%, 2/8/00............................... 397,505
------------
Diversified Financial Services (0.0%):
400,000 Citigroup, 6.48%, 1/24/00........................... 398,464
300,000 General Electric Capital Corp., 6.28%, 1/14/00...... 249,438
250,000 General Electric Capital Corp., 6.14%, 3/8/00....... 247,256
------------
895,158
------------
Finance (0.1%):
249,753 Ford Motor Credit Corp., 5.95%, 1/7/00.............. 249,753
250,000 General Motors Acceptance Corp., 6.34%, 1/18/00..... 249,203
------------
498,956
------------
Food-Canned (0.0%):
300,000 H.J. Heinz Co., 6.05%, 1/13/00...................... 249,478
------------
Medical-Drugs (0.1%):
500,000 Abbott Laboratories, 6.43%, 1/14/00................. 498,710
------------
Multi-Media (0.1%):
500,000 McGraw-Hill, 6.12%, 2/29/00......................... 495,172
------------
Oil Comp-Intergrated (0.0%):
250,000 Mobil Corp., 6.04%, 1/28/00......................... 248,882
------------
3,781,625
------------
Repurchase Agreements (1.2%):
2,778,309 Donaldson Lufkin & Jenrette, 4.00%, 1/3/00
(Collateralized by $4,063,666 various Government
Agency Securities, 6.00%-8.50%, 1/15/24-3/15/38,
market value $2,817,083)............................ 2,778,309
1,000,083 Morgan Stanley & Company Inc., 3.00%, 1/3/00
(Collateralized by $959,908 various Corporate Notes
& Bonds, 7.13%-7.25%, 5/15/19-2/15/23, market value
$1,005,197)......................................... 1,000,083
3,582,121 Prudential Securities, 3.68%, 1/3/00 (Collateralized
by $7,365,659 various Government Agency Securities,
5.00%-7.50%, 1/15/24-9/20/29, market value
$3,632,910)......................................... 3,582,121
</TABLE>
Continued
32
<PAGE>
Growth and Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal Security
Amount Description Market Value
--------- ----------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Repurchase Agreements (continued)
$2,900,342 Salomon Smith Barney, 4.25%, 1/3/00 (Collateralized
by $5,898,138 various Government Agency Securities,
6.00%-9.50%, 4/15/18-12/15/29, market value
$2,940,568)......................................... $ 2,900,342
------------
10,260,855
------------
Time Deposits (0.4%):
Foreign Banking (0.4%):
750,104 Comerica Cayman, 5.00%, 1/3/00...................... 750,104
750,130 Credit Suisse-First Boston Cayman, 6.25%, 1/3/00.... 750,130
750,104 National Westminster BK PLC Nassau, 5.00%, 1/3/00... 750,104
750,219 Societe Generale Cayman, 10.50%,1/3/00.............. 750,219
750,104 Union Bank of Switzerland Cayman, 5.00%, 1/3/00..... 750,104
------------
3,750,661
------------
Total Short-Term Securities Purchased With
Securities Lending Collateral....................... 18,048,607
------------
Total Investments (Cost $522,144,204) (a) -- 101.9% 897,374,469
Liabilities in excess of other assets -- (1.9)% (16,623,845)
------------
Total Net Assets -- 100.0% $880,750,624
============
</TABLE>
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$395,290. Cost for Federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................ $391,950,859
Unrealized depreciation........................................ (17,115,884)
------------
Net unrealized appreciation.................................... $374,834,975
============
</TABLE>
(b) Part of this security has been deposited as initial margin on open futures
contracts.
* Non-income producing security.
ADR -- American Depositary Receipt
NV -- Naamloze Vennootschap (Dutch Corporation)
PLC -- Public Limited Company (British)
At December 31, 1999 the Fund's open long futures contracts were as follows:
<TABLE>
<CAPTION>
Unrealized
# of Opening Notional Appreciation Market
Contracts Contract Type Amount on Futures Value
--------- ------------- -------- ------------ ------
<S> <C> <C> <C> <C>
90 Standard & Poor's $33,243,700 $150,800 $33,394,500
500, 3/16/00
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
Large Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (93.0%):
Advertising (0.4%):
7,000 Interpublic Group Cos., Inc........................ $ 403,813
3,200 Omnicom Group...................................... 320,000
------------
723,813
------------
Aerospace & Defense (0.7%):
13,600 Boeing Co.......................................... 565,250
13,400 Honeywell International, Inc....................... 773,013
------------
1,338,263
------------
Applications Software (0.1%):
1,100 Citrix Systems, Inc.*.............................. 135,300
------------
Automotive (0.9%):
17,500 Ford Motor Co...................................... 935,156
9,300 General Motors Corp................................ 675,994
------------
1,611,150
------------
Banks -- Central U.S. (0.2%):
13,400 Firstar Corp....................................... 283,075
------------
Banks -- Major Regional (1.7%):
10,700 Bank of New York Co., Inc.......................... 428,000
16,800 Bank One Corp...................................... 538,650
13,900 First Union Corp................................... 456,094
13,093 FleetBoston Financial Corp......................... 455,800
10,700 U.S. Bancorp....................................... 254,794
24,000 Wells Fargo Co..................................... 970,500
------------
3,103,838
------------
Banks -- Money Center (1.2%):
24,800 Bank of America Corp............................... 1,244,650
12,000 Chase Manhattan Corp............................... 932,250
------------
2,176,900
------------
Beverages -- Alcoholic (0.4%):
9,100 Anheuser-Busch Co., Inc............................ 644,963
------------
Beverages -- Soft Drinks (2.1%):
47,580 Coca-Cola Co....................................... 2,771,534
28,600 PepsiCo, Inc....................................... 1,008,150
------------
3,779,684
------------
Broadcasting/Cable (0.9%):
4,600 Clear Channel Communications, Inc.*................ 410,550
10,700 Comcast Corp., Special Class A..................... 541,019
9,000 MediaOne Group, Inc.*.............................. 691,312
------------
1,642,881
------------
Building Products -- Retail/Wholesale (1.4%):
38,100 Home Depot, Inc.................................... 2,612,231
------------
Business Equipment & Services (0.1%):
4,300 Paychex, Inc....................................... 172,000
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Chemicals -- Diversified (0.5%):
15,095 E.I. du Pont de Nemours & Co......................... $ 994,383
------------
Computer Software (8.0%):
2,300 Adobe Systems, Inc................................... 154,675
9,600 Computer Associates International, Inc............... 671,400
8,200 Compuware Corp.*..................................... 305,450
92,960 Microsoft Corp.*..................................... 10,853,079
24,600 Oracle Corp.*........................................ 2,756,738
------------
14,741,342
------------
Computers -- Local Area Network (3.3%):
56,460 Cisco Systems, Inc.*................................. 6,048,277
------------
Computers -- Mainframe (2.2%):
36,200 IBM Corp............................................. 3,909,599
5,400 Unisys Corp.*........................................ 172,463
------------
4,082,062
------------
Computers -- Memory Devices (0.9%):
15,900 EMC Corp.*........................................... 1,737,075
------------
Computers -- Micro (1.9%):
23,500 Compaq Computer Corp................................. 635,969
49,100 Dell Computer Corp.*................................. 2,504,100
5,700 Gateway 2000, Inc.*.................................. 410,756
------------
3,550,825
------------
Computers -- Mini (2.0%):
13,900 Hewlett-Packard Co................................... 1,583,731
26,600 Sun Microsystems, Inc.*.............................. 2,059,838
------------
3,643,569
------------
Computers -- Networking Products (0.1%):
2,000 Network Appliance, Inc.*............................. 166,125
------------
Computers -- Services (1.0%):
13,940 Automatic Data Processing, Inc....................... 751,017
2,300 Computer Sciences Corp.*............................. 217,638
6,900 Electronic Data Systems Corp......................... 461,869
6,400 First Data Corp...................................... 315,600
------------
1,746,124
------------
Cosmetics & Toiletries (1.0%):
4,800 Avon Products, Inc................................... 158,400
26,200 Gillette Co.......................................... 1,079,113
9,600 Kimberly-Clark Corp.................................. 626,400
------------
1,863,913
------------
Cruise Lines (0.2%):
8,800 Carnival Corp........................................ 420,750
------------
Diversified (5.4%):
56,300 General Electric Co. (b)............................. 8,712,424
5,500 IMS Health, Inc...................................... 149,531
5,800 Minnesota Mining & Manufacturing Co.................. 567,675
</TABLE>
Continued
34
<PAGE>
Large Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Diversified (continued)
6,900 United Technologies Corp............................. $ 448,500
------------
9,878,130
------------
Electrical Components -- Semiconductors (4.3%):
5,800 Applied Materials, Inc.*............................. 734,788
66,500 Intel Corp........................................... 5,473,780
15,300 Texas Instruments, Inc............................... 1,482,187
5,800 Xilinx, Inc.*........................................ 263,719
------------
7,954,474
------------
Electronic Components/Instruments (0.3%):
5,400 Solectron Corp.*..................................... 513,675
------------
Finance (0.3%):
10,200 Associates First Capital Corp., Class A.............. 279,863
4,700 Capital One Financial Corp........................... 226,481
3,000 SLM Holding Corp..................................... 126,750
------------
633,094
------------
Financial -- Consumer Loans (0.1%):
2,700 Providian Financial Corp............................. 245,869
------------
Financial -- Investment Bankers (0.6%):
5,500 Merrill Lynch & Co., Inc............................. 459,250
15,000 Schwab (Charles) Corp................................ 575,625
------------
1,034,875
------------
Financial -- Miscellaneous Services (1.2%):
6,000 American Express Co.................................. 997,500
7,800 Morgan Stanley, Dean Witter & Co..................... 1,113,450
------------
2,110,950
------------
Financial -- Mortgage & Related Services (0.8%):
14,900 Fannie Mae........................................... 930,319
10,000 Freddie Mac.......................................... 470,625
------------
1,400,944
------------
Financial Services -- Diversified (1.5%):
48,600 Citigroup, Inc....................................... 2,700,338
------------
Food -- Canned (0.3%):
5,500 Campbell Soup Co..................................... 212,781
7,100 H.J. Heinz Co........................................ 282,669
------------
495,450
------------
Food -- Confectionary (0.1%):
2,800 Hershey Foods Corp................................... 133,000
1,500 Wm. Wrigley Jr. Co................................... 124,406
------------
257,406
------------
Food -- Diversified (1.2%):
4,000 Bestfoods............................................ 210,250
6,200 General Mills, Inc................................... 221,650
8,100 Kellogg Co........................................... 249,581
2,400 Quaker Oats Co....................................... 157,500
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Food -- Diversified (continued)
4,700 Ralston Purina Group............................... $ 131,013
17,200 Sara Lee Corp...................................... 379,475
14,100 Unilever NV........................................ 767,569
------------
2,117,038
------------
Food Items -- Wholesale (0.1%):
4,400 Sysco Corp......................................... 174,075
------------
Food Products (0.2%):
12,600 Safeway, Inc.*..................................... 448,088
------------
Glass Products (0.3%):
4,400 Corning, Inc....................................... 567,325
------------
Home Decoration Products (0.1%):
7,100 Newell Rubbermaid, Inc............................. 205,900
------------
Instruments -- Scientific (0.1%):
2,200 PE Corp-PE Biosystems Group........................ 264,688
------------
Insurance -- Property & Casualty (1.3%):
22,225 American International Group, Inc.................. 2,403,078
------------
Internet Software (2.7%):
42,800 America Online, Inc.*.............................. 3,228,724
3,800 Yahoo, Inc.*....................................... 1,644,213
------------
4,872,937
------------
Machinery -- Electrical (0.2%):
6,300 Emerson Electric Co................................ 361,463
------------
Media Conglomerates (1.8%):
25,100 Time Warner, Inc................................... 1,818,181
10,400 Viacom, Inc., Class B*............................. 628,550
29,900 Walt Disney Co..................................... 874,575
------------
3,321,306
------------
Medical -- Biomedical/Genetic (0.6%):
19,800 Amgen, Inc.*....................................... 1,189,238
------------
Medical -- Drugs (7.9%):
29,400 Abbott Laboratories................................ 1,067,588
25,200 American Home Products Corp........................ 993,825
38,720 Bristol-Myers Squibb Co............................ 2,485,339
21,100 Eli Lilly & Co..................................... 1,403,150
45,500 Merck & Co., Inc................................... 3,051,343
81,800 Pfizer, Inc........................................ 2,653,387
7,100 Pharmacia & Upjohn, Inc............................ 319,500
28,600 Schering-Plough Corp............................... 1,206,563
15,800 Warner-Lambert Co.................................. 1,294,613
------------
14,475,308
------------
Medical Instruments (0.4%):
21,400 Medtronic, Inc..................................... 779,763
------------
Medical Products (0.5%):
5,700 Baxter International, Inc.......................... 358,031
</TABLE>
Continued
35
<PAGE>
Large Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Medical Products (continued)
7,200 Boston Scientific Corp.*......................... $ 157,500
7,800 Guidant Corp.*................................... 366,600
------------
882,131
------------
Medical/Dental Supplies (1.3%):
26,250 Johnson & Johnson................................ 2,444,531
------------
Multimedia (0.3%):
8,500 CBS Corp.*....................................... 543,469
------------
Office Automation & Equipment (0.3%):
5,500 Pitney Bowes, Inc................................ 265,719
16,500 Xerox Corp....................................... 374,344
------------
640,063
------------
Oil & Gas (0.0%):
1,568 Transocean Sedco Forex, Inc...................... 52,827
------------
Oil -- Field Services (0.2%):
8,100 Schlumberger, Ltd................................ 455,625
------------
Oil -- International Integrated (3.1%):
46,875 Exxon Mobil Corp................................. 3,776,366
30,800 Royal Dutch Petroleum Co., ADR................... 1,861,475
------------
5,637,841
------------
Oil -- Production/Pipeline (0.2%):
10,100 Enron Corp....................................... 448,188
------------
Photography (0.2%):
4,600 Eastman Kodak Co................................. 304,750
------------
Pollution Control (0.1%):
5,400 Waste Management, Inc............................ 92,813
------------
Printers & Related Products (0.2%):
3,300 Lexmark International Group, Inc.*............... 298,650
------------
Protection -- Safety (0.7%):
32,600 Tyco International, Ltd.......................... 1,267,325
------------
Publishing -- Books (0.2%):
5,000 McGraw-Hill Cos., Inc............................ 308,125
------------
Restaurants (0.4%):
19,700 McDonald's Corp.................................. 794,156
------------
Retail (0.4%):
5,100 Best Buy Co.*.................................... 255,956
3,300 Kohl's Corp.*.................................... 238,219
11,700 Staples, Inc.*................................... 242,775
------------
736,950
------------
Retail -- Apparel/Shoes (0.5%):
16,800 Gap, Inc......................................... 772,800
6,200 TJX Companies, Inc............................... 126,713
------------
899,513
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Retail -- Discount (3.5%):
6,400 Dayton-Hudson Corp............................... $ 470,000
86,900 Wal-Mart Stores, Inc............................. 6,006,962
------------
6,476,962
------------
Retail -- Drug Store (0.3%):
19,600 Walgreen Co...................................... 573,300
------------
Retail -- Supermarkets (0.2%):
16,500 Kroger Co.*...................................... 311,438
------------
Retail/Wholesale -- Computers (0.1%):
3,600 Tandy Corp....................................... 177,075
------------
Soap & Cleaning Preparations (2.0%):
4,200 Clorox, Inc...................................... 211,575
10,220 Colgate-Palmolive Co............................. 664,300
25,800 Procter & Gamble Co.............................. 2,826,713
------------
3,702,588
------------
Technology (0.2%):
4,500 BMC Software, Inc.*.............................. 359,719
------------
Telecom Equipment (1.0%):
10,800 QUALCOMM, Inc.*.................................. 1,903,500
------------
Telecommunications (0.3%):
5,500 Sprint Corp., PCS Group*......................... 563,750
------------
Telecommunications -- Equipment (4.4%):
1,300 Comverse Technology, Inc.*....................... 188,175
59,600 Lucent Technologies, Inc......................... 4,458,824
7,700 Motorola, Inc.................................... 1,133,825
16,400 Nortel Networks Corp............................. 1,656,400
9,300 Tellabs, Inc.*................................... 596,944
------------
8,034,168
------------
Telecommunications -- Services and Equipment (0.7%):
13,900 Global Crossing, Ltd*............................ 695,000
6,600 Nextel Communications, Inc, Class A*............. 680,625
------------
1,375,625
------------
Tobacco (0.4%):
35,100 Philip Morris Cos., Inc.......................... 813,881
------------
Utilities -- Telephone (8.3%):
62,000 AT&T Corp........................................ 3,146,499
30,000 Bell Atlantic Corp............................... 1,846,875
36,500 BellSouth Corp................................... 1,708,656
19,000 GTE Corp......................................... 1,340,688
41,250 MCI Worldcom, Inc.*.............................. 2,188,828
66,300 SBC Communications, Inc.......................... 3,232,124
13,400 Sprint Corp...................................... 901,988
9,800 US West, Inc..................................... 705,600
------------
15,071,258
------------
Total Common Stocks.............................. 170,794,176
------------
</TABLE>
Continued
36
<PAGE>
Large Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
INVESTMENT COMPANIES (6.9%):
2,513,469 Dreyfus Cash Management Money Market Fund........... $ 2,513,469
9,519,931 Federated Prime Value Obligations Money Market
Fund................................................ 9,519,931
3,820 S&P Depositary Receipt.............................. 561,063
------------
Total Investment Companies.......................... 12,594,463
------------
Total Investments (Cost $159,970,284) (a) -- 99.9% 183,388,639
Other assets in excess of liabilities -- 0.1% 123,241
------------
TOTAL NET ASSETS -- 100.0% $183,511,880
============
</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........................................ $ 27,732,398
Unrealized depreciation........................................ (4,314,043)
------------
Net unrealized appreciation.................................... $ 23,418,355
============
</TABLE>
(b) Part of this security has been deposited as initial margin on open futures
contract
* Non-income producing security.
ADR -- American Depositary Receipt
NV -- Naamloze Vennootschap (Dutch Corporation)
At December 31, 1999 the Fund's open long futures contracts were as follows:
<TABLE>
<CAPTION>
Unrealized
# of Opening Notional Appreciation Market
Contracts Contract Type Amount on Futures Value
--------- ------------- -------- ------------ ------
<S> <C> <C> <C> <C>
28 Standard & Poor's $10,090,692 $298,708 $10,389,400
500, 3/16/00
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (96.9%):
Advertising (1.1%):
50,000 Catalina Market Corp.*.............................. $ 5,787,500
81,900 Ha-Lo Industries, Inc.*............................. 614,250
40,000 True North Communications........................... 1,787,500
------------
8,189,250
------------
Aerospace & Defense (0.4%):
25,000 Alliant Techsystems, Inc.*.......................... 1,557,813
54,800 Newport News Shipbuilding........................... 1,507,000
------------
3,064,813
------------
Aerospace/Defense Equipment (0.2%):
43,150 AAR Corp. .......................................... 774,004
54,630 Fairchild Corp. -- Class A*........................ 495,084
------------
1,269,088
------------
Audio/Video Production (0.4%):
50,280 Harman International Industries, Inc. .............. 2,821,965
------------
Auto/Truck -- Original Equipment (0.6%):
46,800 Arvin Industries, Inc. ............................. 1,327,950
45,000 Detroit Diesel Corp. ............................... 863,438
23,000 Superior Industries International, Inc. ............ 616,688
100,000 Tower Automotive, Inc.*............................. 1,543,749
------------
4,351,825
------------
Banks -- Central U.S. (0.9%):
170,000 Community First Bankshares, Inc. ................... 2,677,500
122,700 MAF Bancorp, Inc.................................... 2,569,031
126,500 Republic Bancorp, Inc. ............................. 1,535,789
------------
6,782,320
------------
Banks -- East (1.4%):
65,000 Banknorth Group, Inc. .............................. 1,738,750
27,000 Community Bank System, Inc. ........................ 624,375
103,000 Hudson United Bancorp............................... 2,632,938
124,000 Roslyn Bancorp, Inc. ............................... 2,294,000
122,000 UST Corp. .......................................... 3,873,499
------------
11,163,562
------------
Banks -- Midwest (0.5%):
107,850 First Midwest Bancgroup, Inc. ...................... 2,858,025
45,000 Irwin Financial Corp. .............................. 801,563
------------
3,659,588
------------
Banks -- Northeast (0.8%):
77,286 Commerce Bancorp, Inc. ............................. 3,125,253
158,400 First Commonwealth Financial Corp. ................. 1,900,800
52,200 Independent Bank Corp. ............................. 652,500
26,565 Sterling Bancorp.................................... 425,040
------------
6,103,593
------------
Banks -- South (0.7%):
85,000 Firstbank Corp. .................................... 1,763,749
78,100 Premier Bancshares, Inc. ........................... 1,064,113
130,000 Republic Security Financial Corp. .................. 930,313
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Banks -- South (continued)
77,100 Triangle Bancorp, Inc. ........................... $ 1,493,813
------------
5,251,988
------------
Banks -- Southeast (0.6%):
139,000 BancorpSouth, Inc. ............................... 2,267,437
74,984 F & M National Corp. ............................. 2,066,747
------------
4,334,184
------------
Banks -- Southwest (0.2%):
46,800 Texas Regional Bancshares, Inc. .................. 1,357,200
------------
Banks -- West (1.1%):
33,326 First Republic Bancorp, Inc.*..................... 783,161
10,000 Greater Bay Bancorp............................... 428,750
143,200 Imperial Bancorp*................................. 3,454,700
72,500 Silicon Valley Bankshares*........................ 3,588,750
------------
8,255,361
------------
Building (0.2%):
37,400 Centex Construction Products, Inc. ............... 1,458,600
------------
Building & Construction -- Miscellaneous (0.4%):
70,900 Dal-Tile International, Inc.*..................... 717,863
55,575 Elcor Corp. ...................................... 1,674,196
27,800 Nortek, Inc.*..................................... 778,400
------------
3,170,459
------------
Building -- Heavy Construction (0.6%):
80,000 Dycom Industries, Inc.*........................... 3,525,000
42,700 Granite Construction, Inc. ....................... 787,281
------------
4,312,281
------------
Building -- Maintenance & Service (0.1%):
48,800 ABM Industries, Inc. ............................. 994,300
------------
Building -- Mobile/Manufacturing & Recreational Vehicles
(0.1%):
38,300 Winnebago Industries, Inc. ....................... 768,394
------------
Building -- Residential/Commercial (0.7%):
53,400 D. R. Horton, Inc. ............................... 737,588
63,200 Kaufman & Broad Home Corp. ....................... 1,528,649
35,400 Pulte Corp. ...................................... 796,500
21,800 Ryland Group, Inc. ............................... 502,763
59,500 Standard-Pacific Corp............................. 654,500
53,300 Toll Brothers, Inc.*.............................. 992,712
18,300 U.S. Home Corp.*.................................. 467,794
------------
5,680,506
------------
Building Products -- Air Conditioning/Heat (0.1%):
47,962 Watsco, Inc. ..................................... 554,561
------------
Building Products -- Retail/Wholesale (0.2%):
59,900 Hughes Supply, Inc. .............................. 1,291,594
------------
</TABLE>
Continued
38
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Business Information (0.3%):
70,000 Primark Corp.*...................................... $ 1,946,875
------------
Business Services (1.0%):
67,000 ADVO, Inc.*......................................... 1,591,250
38,300 Fair Issac & Co., Inc. ............................. 2,029,900
69,300 Franklin Covey Co.*................................. 519,750
150,000 Interim Services, Inc.*............................. 3,712,500
------------
7,853,400
------------
Chemicals -- Plastic (0.5%):
50,100 Geon Co. ........................................... 1,628,250
41,700 Spartech Corp. ..................................... 1,344,825
50,000 Wellman, Inc. ...................................... 931,250
------------
3,904,325
------------
Chemicals -- Specialty (0.4%):
19,800 Bush Boake Allen, Inc.*............................. 486,338
84,900 NL Industries, Inc. ................................ 1,278,806
47,300 OM Group, Inc. ..................................... 1,628,894
------------
3,394,038
------------
Circuits (0.3%):
75,000 Integrated Device Technology, Inc.*................. 2,175,000
------------
Commercial Services (0.8%):
35,000 CDI Corp.*.......................................... 844,375
100,000 Century Business Services, Inc.*.................... 843,750
60,000 Lason, Inc.*........................................ 660,000
35,000 Maximus, Inc.*...................................... 1,187,813
50,000 NOVA Corp.*......................................... 1,578,125
40,000 Prepaid Legal Services, Inc.*....................... 960,000
------------
6,074,063
------------
Computer Data Security (1.3%):
50,000 ISS Group, Inc.*.................................... 3,556,250
85,000 RSA Security, Inc.*................................. 6,587,499
------------
10,143,749
------------
Computer Hardware Manufacturing (0.2%):
75,000 Micron Electronics, Inc.*........................... 834,375
75,000 SpeedFam-IPEC, Inc.*................................ 970,313
------------
1,804,688
------------
Computer Software (6.7%):
45,000 Ardent Software, Inc.*.............................. 1,755,000
75,000 Broadvision, Inc.*.................................. 12,754,687
35,000 Documentum, Inc.*................................... 2,095,625
60,000 Excalibur Technologies Corp.*....................... 1,237,500
65,000 Hyperion Solutions Corp.*........................... 2,827,500
55,000 Mercury Interactive Corp.*.......................... 5,936,562
20,000 Micromuse, Inc.*.................................... 3,400,000
92,500 Midway Games, Inc.*................................. 2,214,219
100,000 MSC Software Corp.*................................. 1,012,500
50,000 Peregrine Systems, Inc.*............................ 4,209,374
35,000 Progress Software Corp.*............................ 1,986,250
73,200 Project Software & Development, Inc.*............... 4,062,600
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Computer Software (continued)
40,000 Rainbow Technologies, Inc.*......................... $ 930,000
150,000 Sybase, Inc.*....................................... 2,550,000
40,000 Transaction Systems Architects, Inc.*............... 1,120,000
25,000 Verity, Inc.*....................................... 1,064,063
90,000 Wind River Systems, Inc.*........................... 3,307,500
------------
52,463,380
------------
Computers -- Equipment (0.3%):
50,000 Insight Enterprises, Inc.*.......................... 2,031,250
53,000 Systemax Inc.*...................................... 450,500
------------
2,481,750
------------
Computers -- Integrated Systems (0.9%):
85,000 Cerner Corp.*....................................... 1,673,438
58,900 MICROS Systems, Inc.*............................... 4,358,600
75,000 Systems & Computer Technology Corp.*................ 1,218,750
------------
7,250,788
------------
Computers -- Local Area Network (0.2%):
81,000 Anixter International, Inc.*........................ 1,670,625
------------
Computers -- Memory Devices (0.7%):
72,700 Hutchinson Technology, Inc.*........................ 1,544,875
30,000 SanDisk Corp.*...................................... 2,887,500
250,000 Western Digital Corp.*.............................. 1,046,875
------------
5,479,250
------------
Computers -- Networking Products (0.6%):
60,000 Visual Networks, Inc.*.............................. 4,755,000
------------
Computers -- Peripheral Equipment (0.2%):
50,000 In Focus Systems, Inc.*............................. 1,159,375
30,800 Printronix, Inc.*................................... 700,700
------------
1,860,075
------------
Computers -- Services (3.3%):
83,800 Bell & Howell Co.*.................................. 2,665,888
25,000 CheckFree Holdings Corp.*........................... 2,612,500
100,000 CIBER, Inc.*........................................ 2,750,000
66,500 Computer Task Group, Inc. .......................... 985,031
67,600 DBT Online, Inc.*................................... 1,647,750
50,000 Factset Research Systems, Inc. ..................... 3,981,250
75,000 Mastech Corp.*...................................... 1,856,250
100,000 PSINet, Inc.*....................................... 6,174,999
60,000 Sykes Enterprises, Inc.*............................ 2,632,500
------------
25,306,168
------------
Construction (0.1%):
84,200 Morrison Knudsen Corp.*............................. 657,813
------------
Consulting Services (0.5%):
15,000 Diamond Technology Partners, Inc.*.................. 1,289,063
50,000 USWeb Corp.*........................................ 2,221,875
------------
3,510,938
------------
</TABLE>
Continued
39
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Consumer Non-Durable (0.2%):
107,900 Wolverine World Wide, Inc. ..................... $ 1,180,156
------------
Consumer Products -- Miscellaneous (0.3%):
50,000 Department 56, Inc.*............................ 1,131,250
43,500 Oneida, Ltd. ................................... 946,125
------------
2,077,375
------------
Containers -- Paper & Plastic (0.2%):
110,700 Longview Fibre Co. ............................. 1,577,475
------------
Cosmetics & Toiletries (0.2%):
105,000 Playtex Products, Inc.*......................... 1,614,375
------------
Data Processing & Reproduction (1.0%):
50,000 American Management Systems, Inc.*.............. 1,568,750
79,200 Choicepoint, Inc.*.............................. 3,276,900
50,000 CSG Systems International, Inc.*................ 1,993,750
85,200 Pegasystems, Inc.*.............................. 958,500
------------
7,797,900
------------
Diversified (1.0%):
38,400 Clarcor, Inc. .................................. 691,200
65,400 Federal Signal Corp. ........................... 1,050,488
60,800 Gencorp, Inc. .................................. 600,400
75,000 Imation Corp.*.................................. 2,517,187
35,025 Manitowoc Co., Inc. ............................ 1,190,850
45,900 MascoTech, Inc.................................. 582,356
50,000 Triarc Cos., Inc.*.............................. 918,750
------------
7,551,231
------------
Electrical & Electronic (0.1%):
40,400 Sigcorp, Inc. .................................. 919,100
------------
Electrical Components -- Semiconductors (3.3%):
300,000 Cypress Semiconductor Corp.*.................... 9,712,499
136,700 General Semiconductor, Inc.*.................... 1,939,431
189,500 International Rectifier Corp.*.................. 4,927,000
100,000 MEMC Electronic Materials, Inc.*................ 1,225,000
50,000 PMC-Sierra, Inc.*............................... 8,015,625
------------
25,819,555
------------
Electrical Equipment (0.6%):
40,500 C&D Technologies, Inc. ......................... 1,721,250
27,100 United Illuminating Co. ........................ 1,392,263
75,000 World Access, Inc.*............................. 1,443,750
------------
4,557,263
------------
Electronic -- Manufacturing & Machinery (1.1%):
80,000 Kulicke & Soffa Industries, Inc.*............... 3,405,000
55,600 PRI Automation, Inc.*........................... 3,732,150
25,000 Watkins-Johnson Co. ............................ 1,000,000
------------
8,137,150
------------
Electronic -- Miscellaneous Components (3.1%):
88,000 BMC Industries, Inc. ........................... 429,000
85,000 CTS Corp. ...................................... 6,406,874
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Electronic -- Miscellaneous Components (continued)
50,000 Hadco Corp.*...................................... $ 2,550,000
53,500 Innovex, Inc. .................................... 501,563
62,500 Littlefuse, Inc.*................................. 1,516,602
50,000 Oak Industries, Inc.*............................. 5,306,249
55,000 OEA, Inc. ........................................ 268,125
30,000 Park Electrochemical Corp. ....................... 796,875
70,000 Photronics Corp.*................................. 2,003,750
50,000 Plexus Corp.*..................................... 2,200,000
43,200 RadiSys Corp.*.................................... 2,203,200
------------
24,182,238
------------
Electronic Components/Instruments (3.7%):
50,000 Applied Micro Circuits Corp.*..................... 6,362,499
100,000 Artesyn Technologies, Inc.*....................... 2,100,000
85,000 Cable Design Technologies*........................ 1,955,000
70,000 Etec Systems, Inc.*............................... 3,141,250
50,000 Lam Research Corp.*............................... 5,578,125
75,000 Methode Electronics, Inc.- Class A................ 2,409,375
50,000 Pioneer Standard Electronics, Inc. ............... 721,875
25,000 QLogic Corp.*..................................... 3,996,875
46,000 Technitrol, Inc. ................................. 2,047,000
------------
28,311,999
------------
Electronic Measuring Equipment (0.6%):
125,000 Tektronix, Inc. .................................. 4,859,375
------------
Electronic Measuring Machines (0.2%):
99,100 Genrad, Inc.*..................................... 1,597,988
------------
Electronic Parts -- Distribution (0.5%):
20,000 Avnet, Inc. ...................................... 1,210,000
103,000 Kent Electronics Corp.*........................... 2,343,250
------------
3,553,250
------------
Electronic Products -- Miscellaneous (0.7%):
100,300 Allen Telecom, Inc.*.............................. 1,159,719
81,000 Kopin Corp.*...................................... 3,402,000
87,500 MagneTek, Inc.*................................... 672,656
------------
5,234,375
------------
Electronics (0.4%):
50,000 C-Cube Microsystems, Inc.*........................ 3,112,500
------------
Engineering (0.2%):
41,100 Jacobs Engineering Group, Inc.*................... 1,335,750
------------
Entertainment (0.3%):
125,000 Acclaim Entertainment, Inc.*...................... 640,625
78,900 Vail Resorts, Inc.*............................... 1,415,269
------------
2,055,894
------------
Fertilizers (0.2%):
39,900 The Scotts Company*............................... 1,605,975
------------
Financial -- Consumer Loans (0.5%):
190,000 AmeriCredit Corp.*................................ 3,515,000
</TABLE>
Continued
40
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Financial -- Consumer Loans (continued)
136,500 Arcadia Financial Ltd.* ...................... $ 605,719
------------
4,120,719
------------
Financial -- Investment Banker/Broker (1.7%):
23,500 Advest Group, Inc. ........................... 431,813
75,000 Ameritrade Holding Corp.- Class A*............ 1,626,563
40,000 Dain Rauscher Corp. .......................... 1,860,000
75,000 E*Trade Group, Inc.*.......................... 1,959,374
71,800 Investment Technology Group, Inc. ............ 2,064,249
60,000 Jefferies Group, Inc. ........................ 1,320,000
113,225 Morgan Keegan, Inc............................ 1,903,595
35,000 National Discount Brokers Group*.............. 923,125
38,093 Southwest Securities Group, Inc. ............. 1,042,796
------------
13,131,515
------------
Financial -- Investment Management Cos. (0.5%):
100,000 Eaton Vance Corp. ............................ 3,800,000
------------
Financial -- Leasing Company (0.2%):
43,300 Cort Business Services Corp.*................. 755,044
39,700 DVI, Inc.*.................................... 602,944
------------
1,357,988
------------
Financial -- Mortgage & Related Services (0.1%):
47,600 Triad Guaranty, Inc.*......................... 1,082,900
------------
Financial -- Savings & Loan (0.6%):
100,686 Downey Financial Corp. ....................... 2,032,599
70,000 FirstFed Financial Corp.*..................... 984,375
65,000 Staten Island Bancorp, Inc. .................. 1,170,000
40,000 Westcorp...................................... 580,000
------------
4,766,974
------------
Financial Services -- Diversified (0.1%):
130,000 Phoenix Investment Partners Ltd. ............. 1,056,250
------------
Food -- Diversified (0.3%):
83,200 Ralcorp Holding, Inc.*........................ 1,658,800
60,000 The Earthgrains Co. .......................... 967,500
------------
2,626,300
------------
Food -- Flour & Grain (0.1%):
50,600 International Multi-Foods Corp. .............. 670,450
------------
Glass Products (0.1%):
36,200 Libbey, Inc. ................................. 1,040,750
------------
Health Care (0.3%):
122,600 IDEXX Laboratories, Inc.*..................... 1,976,925
------------
Hotels & Lodging (0.1%):
100,000 Prime Hospitality Corp.*...................... 881,250
------------
Human Resources (0.0%):
46,200 Careerbuilder, Inc.*.......................... 297,413
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Industrial -- Automotive/Robotics
(0.3%):
56,000 Esterline Technologies
Corp.*.................. $ 647,500
86,700 Gerber Scientific,
Inc. ................... 1,901,981
------------
2,549,481
------------
Instruments -- Control (0.6%):
98,500 Roper Industries,
Inc. ................... 3,724,531
52,000 Watts Industries, Inc.-
Class A................. 767,000
------------
4,491,531
------------
Instruments -- Scientific (1.2%):
76,500 Dionex Corp.*........... 3,150,844
145,000 PerkinElmer, Inc. ...... 6,044,687
------------
9,195,531
------------
Insurance (0.1%):
45,000 StanCorp Financial
Group, Inc. ............ 1,133,438
------------
Insurance -- Accident & Health
(0.1%):
19,000 Penn Treaty American
Corp.*.................. 299,250
16,600 RLI Corp. .............. 564,400
------------
863,650
------------
Insurance -- Brokers (1.0%):
59,100 Arthur J. Gallagher &
Co. .................... 3,826,725
40,000 Blanch (E.W.) Holdings,
Inc. ................... 2,450,000
47,200 Hilb, Rogal & Hamilton
Co. .................... 1,333,400
------------
7,610,125
------------
Insurance -- Life (0.4%):
50,000 Amerus Life Holdings,
Inc. ................... 1,150,000
52,020 Delphi Financial
Group*.................. 1,560,600
------------
2,710,600
------------
Insurance -- Multi-Line (0.6%):
126,000 Enhance Financial
Services Group, Inc. ... 2,047,500
119,800 FBL Financial Group,
Inc.- Class A........... 2,396,000
------------
4,443,500
------------
Insurance -- Property & Casualty
(0.7%):
60,278 Fidelity National
Financial, Inc. ........ 866,496
60,000 First American Financial
Corp. .................. 746,250
65,000 Foremost Corporation of
America................. 1,844,375
30,000 Philadelphia
Consolidated Holding
Corp.*.................. 435,000
40,500 SCPIE Holdings, Inc. ... 1,301,063
------------
5,193,184
------------
Internet Content (1.2%):
25,000 DoubleClick, Inc.*...... 6,326,563
40,000 S1 Corp.*............... 3,125,000
------------
9,451,563
------------
</TABLE>
Continued
41
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Internet Software (1.1%):
75,000 Concentric Network
Corp.*.................... $ 2,310,938
25,000 EarthLink Network, Inc.*.. 1,062,500
60,000 Exodus Communications,
Inc.*..................... 5,328,750
--------------
8,702,188
--------------
Lasers -- Systems/Components (1.3%):
75,000 Coherent, Inc.*........... 2,006,250
36,900 Electro Scientific
Industries, Inc.*......... 2,693,700
100,000 VISX, Inc.*............... 5,175,000
--------------
9,874,950
--------------
Leisure & Recreation Products (0.3%):
55,000 Polaris Industries,
Inc. ..................... 1,993,750
--------------
Leisure & Recreation/Gaming (0.4%):
104,400 Aztar Corp.*.............. 1,135,350
44,900 Hollywood Park, Inc.*..... 1,007,444
56,000 Station Casinos, Inc.*.... 1,256,500
--------------
3,399,294
--------------
Machine Tools & Related Products (0.4%):
80,000 Applied Power, Inc. ...... 2,940,000
--------------
Machinery -- Construction/Mining (0.4%):
35,150 Commercial Intertech
Corp. .................... 448,163
92,500 JLG Industries, Inc. ..... 1,474,218
35,000 Terex Corp.*.............. 971,250
--------------
2,893,631
--------------
Machinery -- Electrical (0.3%):
76,000 Baldor Electric Co. ...... 1,377,500
45,000 Smith (A.O.) Corp. ....... 984,375
--------------
2,361,875
--------------
Machinery -- General Industrial (0.8%):
57,120 Albany International
Corp.- Class A*........... 885,360
42,725 Applied Industrial
Technology, Inc. ......... 710,303
52,900 Global Industrial
Technologies, Inc.*....... 681,088
46,500 Graco, Inc. .............. 1,668,188
62,425 Idex Corp. ............... 1,896,159
83,566 Paxar Corp.*.............. 705,088
--------------
6,546,186
--------------
Machinery -- Material Handling (0.1%):
15,000 Nacco Industries, Inc. ... 833,438
--------------
Medical -- Biomedical/Genetic (3.6%):
50,000 Affymetrix, Inc.*......... 8,484,375
75,000 Alkermes, Inc.*........... 3,684,375
107,300 Creative Biomolecules,
Inc.*..................... 529,794
50,000 IDEC Pharmaceuticals
Corp.*.................... 4,912,500
90,000 Millennium
Pharmaceuticals*.......... 10,979,999
--------------
28,591,043
--------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Medical -- Biotechnology (0.2%):
45,000 Biomatrix, Inc.*........ $ 866,250
31,900 Cryolife, Inc.*......... 374,825
------------
1,241,075
------------
Medical -- Drugs (2.0%):
60,000 Alpharma, Inc. ......... 1,845,000
100,000 Carter-Wallace, Inc. ... 1,793,750
105,000 Dura Pharmaceuticals,
Inc.*................... 1,463,438
62,700 Guilford
Pharmaceuticals, Inc.*.. 1,065,900
85,000 Jones Pharma, Inc. ..... 3,692,187
106,200 Ligand Pharmaceuticals,
Inc.*................... 1,367,325
85,000 Medicus Pharmaceuticals,
Inc.*................... 3,617,812
31,627 Priority Healthcare
Corp. -- Class A*....... 915,206
------------
15,760,618
------------
Medical -- Health Medical
Organization (0.2%):
149,800 Mid Atlantic Medical
Services, Inc.*......... 1,245,212
86,250 Sierra Health Services,
Inc.*................... 576,797
------------
1,822,009
------------
Medical -- Hospital (0.1%):
40,300 Curative Health
Services, Inc.*......... 312,325
10,500 Province Healthcare
Co.*.................... 199,500
------------
511,825
------------
Medical -- Hospital Services (0.5%):
92,800 Magellan Health
Services, Inc.*......... 585,800
100,000 Quest Diagnostics,
Inc.*................... 3,056,250
------------
3,642,050
------------
Medical -- Nursing Homes (0.2%):
36,700 American Retirement
Corp.*.................. 291,306
200,000 Beverly Enterprises,
Inc.*................... 875,000
------------
1,166,306
------------
Medical -- Outpatient/Home Care
(0.6%):
165,500 Apria Healthcare Group,
Inc.*................... 2,968,656
118,000 Orthodontic Centers of
America*................ 1,408,625
------------
4,377,281
------------
Medical -- Wholesale Drug (0.3%):
70,666 Bindley Western
Industries, Inc. ....... 1,064,407
20,000 Express Scripts, Inc.-
Class A*................ 1,280,000
------------
2,344,407
------------
Medical Equipment & Supplies (0.3%):
50,000 Conmed Corp.*........... 1,293,750
75,000 Laser Vision Centers,
Inc.*................... 792,188
63,800 Respironics, Inc.*...... 508,406
------------
2,594,344
------------
Medical Instruments (0.2%):
93,100 Acuson Corp.*........... 1,169,569
------------
</TABLE>
Continued
42
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Medical Products (0.7%):
44,000 Diagnostic Products
Corp. .................. $ 1,078,000
86,800 Haemonetics Corp.*...... 2,066,924
103,400 Owens & Minor, Inc. .... 924,138
53,000 West Pharmaceutical
Services, Inc. ......... 1,639,688
------------
5,708,750
------------
Medical Supplies (0.4%):
65,800 Ocular Sciences, Inc.*.. 1,241,975
78,500 Sola International,
Inc.*................... 1,089,188
100,000 STERIS Corp.*........... 1,031,250
------------
3,362,413
------------
Medical/Dental Supplies (0.2%):
46,500 Cooper Cos., Inc. ...... 1,400,812
62,200 Sunrise Medical, Inc.*.. 384,863
------------
1,785,675
------------
Metal -- Iron (0.1%):
14,200 Cleveland Cliffs,
Inc. ................... 441,975
------------
Metal -- Miscellaneous (0.1%):
37,400 Brush Wellman, Inc. .... 628,788
------------
Metal -- Non-Ferrous (0.1%):
100,000 Kaiser Aluminum Corp.*.. 768,750
------------
Metal -- Processing & Fabrication
(0.6%):
35,233 Commercial Metals Co. .. 1,195,720
77,700 Mueller Industries,
Inc.*................... 2,816,624
32,500 Wolverine Tube, Inc.*... 459,063
------------
4,471,407
------------
Metal Products -- Distribution
(0.1%):
37,500 Reliance Steel &
Aluminum Co. ........... 878,906
------------
Network Products (0.7%):
40,000 Apex Inc.*.............. 1,290,000
60,000 Computer Network
Technology Corp.*....... 1,376,250
75,000 MMC Networks, Inc.*..... 2,578,125
------------
5,244,375
------------
Office Supplies & Forms (0.4%):
38,400 American Business
Products, Inc. ......... 448,800
62,900 John H. Harland Co. .... 1,151,855
33,800 New England Business
Service, Inc. .......... 825,988
41,500 Standard Register Co. .. 804,063
------------
3,230,706
------------
Oil & Gas (0.1%):
100,000 Santa Fe Snyder Corp.*.. 800,000
------------
Oil & Gas -- Drilling (0.2%):
34,000 Atwood Oceanics, Inc.*.. 1,313,250
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Oil -- Field Services (0.7%):
57,700 Hanover Compressor Co.*............................. $ 2,178,175
49,600 Oceaneering International, Inc.*.................... 740,900
49,700 RPC Energy Services, Inc. .......................... 285,775
29,500 Seacor Holdings, Inc.*.............................. 1,526,625
54,600 Seitel, Inc.*....................................... 368,550
46,600 Veritas DGC, Inc.*.................................. 652,400
------------
5,752,425
------------
Oil -- U.S. Exploration & Production (1.3%):
48,200 Berry Petroleum Co. ................................ 729,025
44,600 Cabot Oil & Gas Corp. .............................. 716,388
83,850 Cross Timbers Oil Co. .............................. 759,891
64,700 Forest Oil Corp.*................................... 853,231
25,000 Houston Exploration Co.*............................ 495,313
28,700 HS Resources, Inc.*................................. 495,075
54,200 Louis Dreyfus Natural Gas*.......................... 982,375
76,100 Newfield Exploration Co.*........................... 2,035,674
32,000 Stone Energy Corp.*................................. 1,140,000
32,836 Swift Energy Co.*................................... 377,614
109,900 Vintage Petroleum, Inc. ............................ 1,325,668
------------
9,910,254
------------
Oil Refining (0.1%):
57,200 Tesoro Petroleum Corp.*............................. 661,375
------------
Paper & Related Products (0.3%):
76,500 Buckeye Technologies, Inc.*......................... 1,137,938
50,200 Chesapeake Corp. ................................... 1,531,100
------------
2,669,038
------------
Pollution Control (0.1%):
34,700 Imco Recycling, Inc. ............................... 438,088
20,700 Ionics, Inc.*....................................... 582,187
------------
1,020,275
------------
Printing -- Commercial (0.1%):
73,600 Mail-Well, Inc.*.................................... 993,600
------------
Protection -- Safety (0.1%):
48,400 Checkpoint Systems, Inc.*........................... 493,075
------------
Publishing -- Newspapers (0.1%):
36,000 Journal Register Co.*............................... 555,750
------------
Real Estate (0.2%):
44,000 CB Richard Ellis Services*.......................... 544,500
46,000 Webb (Del) Corp.*................................... 1,147,125
------------
1,691,625
------------
Restaurants (0.8%):
75,000 Applebee's International, Inc. ..................... 2,212,500
100,000 Jack in the Box, Inc.*.............................. 2,068,750
69,700 Luby's Cafeteria, Inc. ............................. 792,838
67,900 Ruby Tuesday, Inc. ................................. 1,234,931
------------
6,309,019
------------
</TABLE>
Continued
43
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Retail -- Apparel/Shoes (1.2%):
57,800 Ann Taylor Stores Corp.*.......................... $ 1,990,488
49,800 Brown Shoe Company, Inc........................... 703,425
55,500 Burlington Coat Factory Warehouse Corp. .......... 770,063
23,000 Cole (Kenneth) Productions, Inc.*................. 1,052,250
69,500 Footstar, Inc.*................................... 2,119,749
55,500 Genesco, Inc.*.................................... 721,500
40,000 Talbots, Inc. .................................... 1,785,000
------------
9,142,475
------------
Retail -- Consumer Electronics (0.1%):
73,900 Handleman Co.*.................................... 988,413
------------
Retail -- Discount (0.3%):
27,000 99 Cents Only Stores*............................. 1,032,750
58,000 Shopko Stores, Inc.*.............................. 1,334,000
------------
2,366,750
------------
Retail -- General Merchandise (0.2%):
55,900 Cash America Intl., Inc. ......................... 545,025
36,500 Russ Berrie & Co., Inc. .......................... 958,125
------------
1,503,150
------------
Retail -- Home Furnishings (0.5%):
79,000 Bombay Co., Inc.*................................. 355,500
149,300 La-Z-Boy, Inc. ................................... 2,510,106
40,000 Linens 'N Things, Inc.*........................... 1,185,000
------------
4,050,606
------------
Retail -- Jewelry (0.5%):
65,000 Claire's Stores, Inc. ............................ 1,454,375
50,000 Zale Corp.*....................................... 2,418,750
------------
3,873,125
------------
Retail -- Mail Order (0.1%):
51,500 Enesco Group, Inc. ............................... 569,719
------------
Retail -- Regional Department Stores (0.1%):
40,000 Value City Department Stores, Inc.*............... 605,000
------------
Retail -- Supermarkets (0.2%):
80,000 Ruddick Corp. .................................... 1,240,000
------------
Shoes & Related Apparel (0.5%):
75,000 Reebok International Ltd.*........................ 614,063
115,200 Stride Rite Corp. ................................ 748,800
40,000 Timberland Co. -- Class A*........................ 2,115,000
------------
3,477,863
------------
Soap & Cleaning Preparations (0.4%):
109,600 Church & Dwight Co., Inc. ........................ 2,924,950
------------
Steel -- Pipes & Tubes (0.1%):
31,900 Quanex Corp. ..................................... 813,450
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Steel -- Producers (0.5%):
80,000 AK Steel Holding Corp. ............................. $ 1,510,000
30,000 Carpenter Technology Corp. ......................... 823,125
39,300 Lone Star Technologies, Inc.*....................... 1,095,488
62,700 National Steel Corp. ............................... 466,331
------------
3,894,944
------------
Telecommunications (0.2%):
35,000 Viatel, Inc.*....................................... 1,876,875
------------
Telecommunications -- Cellular (1.4%):
93,500 American Mobile Satellite Corp.*.................... 1,969,344
60,000 VoiceStream Wireless Corp.*......................... 8,538,749
------------
10,508,093
------------
Telecommunications -- Equipment (1.8%):
120,200 InterVoice-Brite, Inc.*............................. 2,794,650
78,600 Network Equipment Technologies, Inc.*............... 928,463
50,000 Plantronics, Inc.*.................................. 3,578,124
50,000 Superior Telecom, Inc. ............................. 771,875
22,300 Tech-Sym Corp.*..................................... 459,938
35,000 Terayon Communications Systems, Inc.*............... 2,198,438
75,000 Titan Corp.*........................................ 3,534,374
------------
14,265,862
------------
Telecommunications -- Satellite (0.3%):
25,000 EchoStar Communications Corp., Class A*............. 2,437,500
------------
Telecommunications -- Services and
Equipment (2.0%):
125,000 ICG Communications, Inc.*........................... 2,343,750
75,000 ITC DeltaCom, Inc.*................................. 2,071,875
60,000 Mastec, Inc.*....................................... 2,670,000
60,000 Pacific Gateway Exchange, Inc.*..................... 1,023,750
125,000 Premiere Technologies, Inc.*........................ 875,000
15,000 Teligent, Inc., Class A*............................ 926,250
80,000 Western Wireless Corp. -- Class A*.................. 5,339,999
------------
15,250,624
------------
Textile -- Apparel (0.2%):
40,000 Kellwood Co. ....................................... 777,500
50,000 Phillips-Van Heusen Corp. .......................... 415,625
------------
1,193,125
------------
Textile -- Products (0.3%):
75,000 Collins & Aikman Corp. ............................. 431,250
47,550 Guilford Mills, Inc. ............................... 344,738
74,900 Polymer Group, Inc. ................................ 1,366,925
------------
2,142,913
------------
Therapeutics (0.1%):
20,000 ImClone Systems, Inc.*.............................. 792,500
------------
Tools -- Hand Held (0.2%):
35,200 Toro Co. ........................................... 1,313,400
------------
</TABLE>
Continued
44
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security
Shares Description Market Value
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Transportation -- Air Freight (0.2%):
45,000 Atlas Air, Inc.*.................................. $ 1,234,687
58,900 Pittston Burlington Group......................... 625,813
------------
1,860,500
------------
Transportation -- Airline (0.4%):
31,900 Alaska Airgroup, Inc.*............................ 1,120,488
95,300 America West Holding Corp. -- Class B*............ 1,977,475
------------
3,097,963
------------
Transportation -- Equipment & Leasing (0.5%):
146,650 Rollins Truck Leasing Corp. ...................... 1,750,634
49,800 Westinghouse Air Brake Co. ....................... 883,950
32,500 Xtra Corp.*....................................... 1,385,313
------------
4,019,897
------------
Transportation -- Railroad (0.2%):
37,000 Florida East Coast Industries, Inc. .............. 1,544,750
------------
Transportation -- Shipping (0.1%):
77,800 Overseas Shipholding Group, Inc. ................. 1,152,413
------------
Utilities -- Electric Power (1.1%):
29,900 Black Hills Corp. ................................ 663,406
29,400 CH Energy Group, Inc. ............................ 970,200
37,700 Cleco Corp. ...................................... 1,208,756
55,200 CMP Group, Inc. .................................. 1,521,450
26,200 Eastern Utilities Assoc. ......................... 794,188
32,800 Northwestern Corp. ............................... 721,600
23,300 TNP Enterprises, Inc. ............................ 961,125
55,320 UniSource Energy Corp.*........................... 618,893
40,000 WPS Resources Corp. .............................. 1,005,000
------------
8,464,618
------------
Utilities -- Gas Distribution (1.7%):
33,150 Atmos Energy Corp. ............................... 677,503
15,400 Connecticut Energy Corp. ......................... 598,675
27,800 Eastern Enterprises............................... 1,596,762
51,200 Energen Corp. .................................... 924,800
53,466 Indiana Energy, Inc. ............................. 949,022
30,400 Laclede Gas Co. .................................. 657,400
34,300 New Jersey Resources Corp. ....................... 1,339,843
38,900 Public Service Co. of North Carolina.............. 1,256,956
50,000 Southwest Gas Corp. .............................. 1,150,000
59,500 Southwestern Energy Co. .......................... 390,469
49,800 UGI Corp. ........................................ 1,017,788
62,600 Wicor, Inc. ...................................... 1,827,137
24,400 Yankee Energy System, Inc. ....................... 1,072,075
------------
13,458,430
------------
Utilities -- Water Supply (0.4%):
21,900 Aquarion Co. ..................................... 810,300
71,600 United Water Resources, Inc. ..................... 2,447,825
------------
3,258,125
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security
Amount Description Market Value
--------- ----------- ------------
<C> <S> <C>
COMMON STOCKS (continued)
Wire & Cable Products (0.3%):
42,100 Barnes Group, Inc. ................................ $ 686,756
45,100 Belden, Inc. ...................................... 947,100
77,800 General Cable Corp. ............................... 588,363
------------
2,222,219
------------
Wireless Equipment (1.7%):
150,000 Digital Microwave Corp.*........................... 3,515,625
100,000 InterDigital Communications Corp.*................. 7,499,999
20,900 Proxim, Inc.*...................................... 2,299,000
------------
13,314,624
------------
Total Common Stocks................................ 748,182,464
------------
U.S. GOVERNMENT OBLIGATIONS (0.1%):
U.S. Treasury Bills (0.1%):
$ 1,000,000 6/22/00, (b)....................................... 974,010
------------
Total U.S. Government Obligations.................. 974,010
------------
INVESTMENT COMPANIES (3.0%):
743 Dreyfus Cash Management Money Market Fund.......... 743
23,359,941 Federated Prime Value Obligations Money Market
Fund............................................... 23,359,941
------------
Total Investment Companies......................... 23,360,684
------------
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL (8.6%):
Certificate of Deposit (0.3%):
$ 2,575,000 Bank One Corp., 6.02%, 2/22/00..................... 2,554,656
------------
Commerical Paper (4.2%):
Banking (0.3%):
2,500,000 Deutsche Bank Financial Inc., 6.02%, 2/1/00........ 2,487,232
------------
Beverages-Non-Alcoholic (0.3%):
2,500,000 Coca-Cola Co., 6.08%, 1/28/00...................... 2,488,819
------------
Chemical-Diversified (0.4%):
3,201,000 DuPont, 6.11%, 2/8/00.............................. 3,180,040
------------
Diversified Financial Services (1.2%):
3,201,000 Citigroup, 6.48%, 1/24/00.......................... 3,187,714
750,000 General Electric Capital Corp., 6.14%, 3/8/00...... 741,767
2,000,000 General Electric Capital Corp., 6.00%, 2/7/00...... 1,987,598
2,500,000 National Australia Funding Inc., 6.02%, 2/4/00..... 2,486,022
------------
8,403,101
------------
</TABLE>
Continued
45
<PAGE>
Small Company Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security
Amount Description Market Value
--------- ----------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Finance (0.6%):
$ 2,497,533 Ford Motor Credit Corp., 5.95%, 1/7/00............. $ 2,497,533
2,500,000 General Motors Acceptance Corp., 6.07%, 2/14/00.... 2,481,975
------------
4,979,508
------------
Food-Canned (0.3%):
1,000,000 H.J. Heinz Co., 6.05%, 1/13/00..................... 997,912
1,700,000 H.J. Heinz Co., 5.90%,1/25/00...................... 1,692,775
------------
2,690,687
------------
Medical-Drugs (0.4%):
2,800,000 Abbott Laboratories, 6.43%, 1/14/00................ 2,792,776
------------
Multi-Media (0.4%):
3,500,000 McGraw-Hill, 6.12%, 2/29/00........................ 3,466,205
------------
Telecommunications (0.3%):
2,000,000 Bell South Telecommunications, 5.92%, 2/11/00...... 1,986,553
------------
32,474,921
------------
Corporate Note (0.3%):
2,540,000 Toyota Motor Credit, 6.18%, 1/25/00................ 2,529,152
------------
Repurchase Agreements (2.2%):
1,913,213 Donaldson Lufkin & Jenrette, 4.00%, 1/3/00
(Collateralized by $2,798,342 various Government
Agency Securities, 6.00%-8.50%, 1/15/24-3/15/38,
market value $1,939,914)........................... 1,913,213
12,507,407 Prudential Securities, 3.68%, 1/3/00
(Collateralized by $25,718,084 various Government
Agency Securities, 5.00%-7.50%, 1/15/24-9/20/29,
market value $12,684,742).......................... 12,507,407
2,216,262 Salomon Smith Barney, 4.25%, 1/3/00 (Collateralized
by $4,506,991 various Government Agency Securities,
6.00%-9.50%, 4/15/18-12/15/29, market value
$2,247,000)........................................ 2,216,262
------------
16,636,882
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security
Amount Description Market Value
--------- ----------- ------------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Time Deposits (1.6%):
Foreign Banking (1.6%):
$ 2,500,347 Comerica Cayman, 5.00%, 1/3/00.................... $ 2,500,347
2,500,434 Credit Suisse-First Boston Cayman, 6.25%, 1/3/00.. 2,500,434
2,500,347 National Westminster BK PLC Nassau, 5.00%,
1/3/00............................................ 2,500,347
2,500,729 Societe Generale Cayman, 10.50%, 1/3/00........... 2,500,729
2,500,347 Union Bank of Switzerland Cayman, 5.00%, 1/3/00... 2,500,347
------------
12,502,204
------------
Total Short-Term Securities Purchased With
Securities Lending Collateral..................... 66,697,815
------------
Total Investments (Cost $581,356,205) (a) -- 108.6%............ 839,214,973
------------
Liabilities in excess of other assets -- (8.6)%................ (66,505,318)
------------
Total Net Assets -- 100.0%..................................... $772,709,655
============
</TABLE>
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$351,223. Cost for Federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................ $316,026,201
Unrealized depreciation........................................ (58,518,656)
------------
Net unrealized appreciation.................................... $257,507,545
============
</TABLE>
(b) Security has been deposited as initial margin on open futures contracts.
* Non-income producing security.
PLC -- Public Limited Company (British)
At December 31, 1999 the Fund's open long futures contracts were as follows:
<TABLE>
<CAPTION>
Unrealized
# of Opening Notional Appreciation Market
Contracts Contract Type Amount on Futures Value
- --------- ------------- -------- ------------ ------
<S> <C> <C> <C> <C>
40 Russell 2000, 3/16/00 $9,908,950 $290,050 $10,199,000
20 Standard & Poor's 7,409,450 11,550 7,421,000
500, 3/16/00
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (96.2%):
Australia (2.1%):
Banking (0.4%):
87,114 National Australia Bank Ltd. ....................... $ 1,327,968
108,339 Westpac Banking Corp., Ltd. ........................ 744,744
------------
2,072,712
------------
Beverages & Tobacco (0.0%):
80,262 Coca-Cola Amatil Ltd. .............................. 218,447
------------
Brewery (0.0%):
101,336 Fosters Brewing Group Ltd. ......................... 289,727
------------
Broadcasting & Publishing (0.3%):
118,553 News Corp. Ltd. .................................... 1,147,161
------------
Building Products (0.0%):
80,788 Pioneer International Ltd. ......................... 242,607
------------
Diversified (0.1%):
56,346 Southcorp Holdings Ltd. ............................ 197,961
20,800 Wesfarmers Ltd. .................................... 171,058
------------
369,019
------------
Energy (0.3%):
102,147 Broken Hill Proprietary Co., Ltd. .................. 1,336,660
------------
Entertainment (0.0%):
31,138 TABCORP Holdings Ltd. .............................. 210,114
------------
Food Products (0.0%):
67,731 Woolworths Ltd. .................................... 232,200
------------
Gas Utility (0.0%):
26,533 Australian Gas Light Co., Ltd. ..................... 155,191
------------
Industrial Goods & Services (0.0%):
91,818 CSR Ltd. ........................................... 222,266
------------
Insurance (0.1%):
64,000 AMP Ltd. ........................................... 704,705
34,020 QBE Insurance Group Ltd. ........................... 158,029
------------
862,734
------------
Metals & Mining (0.1%):
66,046 North Ltd. ......................................... 155,126
17,073 Rio Tinto Ltd. ..................................... 365,494
67,271 WMC Ltd. ........................................... 369,701
------------
890,321
------------
Packaging (0.0%):
37,493 Amcor Ltd. ......................................... 174,996
------------
Property Trust (0.0%):
31,280 Stockland Trust Group............................... 65,488
------------
Real Estate (0.1%):
117,125 General Property Trust Units........................ 190,040
29,772 Lend Lease Corp., Ltd. ............................. 415,667
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Australia (continued)
Real Estate (continued)
90,273 Westfield Trust Units.............................. $ 176,593
------------
782,300
------------
Retail Stores (0.1%):
67,936 Coles Myer Ltd. ................................... 349,710
------------
Services (0.1%):
13,419 Brambles Industries Ltd. .......................... 369,814
------------
Telecom Equipment (0.5%):
453,000 Telstra Corporation Ltd. .......................... 2,453,987
------------
12,445,454
------------
Austria (0.2%):
Banking (0.2%):
7,585 Bank Austria AG.................................... 428,093
------------
Beverages & Tobacco (0.0%):
700 Oesterreichische Brau-Beteiligungs AG.............. 28,220
------------
Building Products (0.0%):
5,064 Wienerberger Baustoffindustrie AG.................. 110,190
------------
Chemicals (0.0%):
400 Lenzing AG......................................... 21,770
------------
Construction (0.0%):
1,355 Bau Holding AG..................................... 51,211
------------
Electric Utility (0.0%):
2,069 Oesterreichische Elektrizitaetswirtschafts AG,
Class A*........................................... 290,891
------------
Engineering (0.0%):
1,100 VA Technologie AG.................................. 72,616
------------
Insurance (0.0%):
580 EA-Generali AG..................................... 97,299
------------
Metals & Mining (0.0%):
175 Radex-Heraklith Industriebeteiligungs AG........... 5,043
------------
Oil & Gas (0.0%):
1,840 OMV AG............................................. 178,954
------------
Paper Products (0.0%):
900 Mayr-Melnhof Karton AG............................. 41,725
------------
Steel (0.0%):
800 Boehler-Uddeholm AG................................ 36,928
------------
</TABLE>
Continued
47
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Austria (continued)
Transportation (0.0%):
1,800 Austrian Airlines................................... $ 34,106
1,500 Flughafen Wien AG................................... 52,171
------------
86,277
------------
1,449,217
------------
Belgium (0.8%):
Banking (0.1%):
12,520 KBC Bancassurance Holding NV........................ 675,078
------------
Building Products (0.0%):
1,925 Cimenteries CBR Cementbedrijven..................... 200,220
------------
Chemicals (0.1%):
8,410 Solvay SA........................................... 695,034
------------
Electric Utility (0.0%):
5,840 Suez Lyonnaise Des Eaux SA*......................... 59
------------
Gas & Electric Utility (0.2%):
3,400 Electrabel SA....................................... 1,113,674
8,532 Total Fina SA*...................................... 86
------------
1,113,760
------------
Industrial Holding Company (0.1%):
2,000 Groupe Bruxelles Lambert SA......................... 403,140
------------
Insurance (0.2%):
35,600 Fortis (B).......................................... 1,285,202
------------
Merchandising (0.1%):
4,400 Delhaize-Le Lion SA................................. 331,704
------------
Pharmaceuticals (0.0%):
4,000 UCB SA.............................................. 173,552
------------
Technology (0.0%):
1,000 Barco NV............................................ 140,091
------------
5,017,840
------------
Denmark (0.8%):
Banking & Finance (0.1%):
3,247 Den Danske Bank..................................... 356,289
4,693 Unidanmark AS, Class A.............................. 330,589
------------
686,878
------------
Beverages & Tobacco (0.0%):
2,160 Carlsberg AS, Class A............................... 79,590
1,305 Carlsberg AS, Class B............................... 49,500
------------
129,090
------------
Commercial Services (0.0%):
2,390 ISS International Service System AS,
Series B*........................................... 160,912
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Denmark (continued)
Engineering (0.0%):
3,615 FLS Industries AS -- Class B........................ $ 91,087
------------
Food Products (0.0%):
3,595 Danisco AS.......................................... 140,258
------------
Pharmaceuticals (0.1%):
4,946 Novo Nordisk AS, Class B............................ 656,621
------------
Telecommunications (0.2%):
14,000 Tele Danmark AS Class B............................. 1,041,202
------------
Transportation & Shipping (0.4%):
70 D/S 1912, Class B................................... 824,996
53 D/S Svendborg AS, Class B........................... 883,112
------------
1,708,108
------------
4,614,156
------------
Finland (2.5%):
Building Products (0.0%):
785 Sanitec OYJ*........................................ 10,285
------------
Forest Products (0.1%):
13,860 UPM-Kymmene Corp. .................................. 558,752
------------
Telecommunications (2.4%):
74,000 Nokia OYJ........................................... 13,424,564
11,000 Sonera OYJ.......................................... 754,426
------------
14,178,990
------------
14,748,027
------------
France (10.5%):
Aluminum (0.0%):
2,000 Pechiney SA -- A Shares............................. 143,014
------------
Auto Parts (0.1%):
5,245 Valeo SA............................................ 404,921
------------
Automotive (0.1%):
3,162 PSA Peugeot Citroen................................. 718,310
------------
Banking (0.7%):
31,705 Banque Nationale de Paris........................... 2,926,977
4 Paribas............................................. 447
6,247 Societe Generale.................................... 1,454,385
------------
4,381,809
------------
Beverages & Tobacco (0.5%):
6,120 LVMH (Moet Hennessy Louis Vuitton).................. 2,742,928
5,400 Pernod Ricard....................................... 309,128
------------
3,052,056
------------
Broadcasting/Cable (0.2%):
8,544 Canal Plus.......................................... 1,244,300
------------
</TABLE>
Continued
48
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
France (continued)
Building Products (0.2%):
1,195 Imetal SA........................................... $ 178,248
6,721 Lafarge SA.......................................... 783,047
------------
961,295
------------
Chemicals (0.4%):
5,232 L'Air Liquide....................................... 876,385
24,814 Rhone-Poulenc SA.................................... 1,443,007
------------
2,319,392
------------
Commercial Services (0.1%):
2,840 Sodexho SA.......................................... 502,905
------------
Computer Software (0.0%):
3,000 Dassault Systems SA................................. 195,624
------------
Construction (0.2%):
1,466 Bouygues SA......................................... 932,308
------------
Defense (0.1%):
500 Sagem SA............................................ 347,708
12,325 Thomson CSF......................................... 407,310
------------
755,018
------------
Diversified (0.6%):
7,206 Lagardere S.C.A. ................................... 392,179
37,705 Vivendi............................................. 3,406,788
------------
3,798,967
------------
Electrical & Electronic (0.8%):
12,537 Alcatel Alsthom..................................... 2,880,875
9,900 Schneider SA........................................ 777,763
5,500 STMicroelectronics NV............................... 846,997
------------
4,505,635
------------
Energy (1.2%):
49,637 Total SA, Class B................................... 6,628,522
------------
Engineering (0.0%):
200 Groupe Gtm.......................................... 19,452
------------
Finance (0.0%):
201 Societe Eurafrance SA............................... 121,142
------------
Food & Household Products (0.0%):
1,600 Eridania Beghin-Say SA.............................. 172,221
------------
Food Products (1.1%):
24,018 Carrefour SA........................................ 4,432,218
6,600 Etablissements Economiques du Casino................ 756,311
4,821 Groupe Danone....................................... 1,136,970
------------
6,325,499
------------
Health & Personal Care (0.9%):
4,437 L'OREAL............................................. 3,561,813
47,992 Sanofi-Synthelabo SA*............................... 1,999,564
------------
5,561,377
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
France (continued)
Industrial Goods & Services (0.1%):
9,801 Michelin Class B, Registered...................... $ 385,240
------------
Industrial Holding Company (0.4%):
14,220 Lyonnaise des Eaux SA............................. 2,280,162
------------
Insurance (0.6%):
22,300 Axa -- UAP........................................ 3,110,549
2,000 Cap Gemini........................................ 507,956
------------
3,618,505
------------
Leisure (0.1%):
13,250 Accor SA.......................................... 640,592
541 Club Mediterranee SA*............................. 62,594
------------
703,186
------------
Machine -- Diversified (0.0%):
1,600 Sidel SA.......................................... 165,287
------------
Medical Supplies (0.0%):
500 Essilor International............................. 155,209
------------
Merchandising (0.3%):
7,085 Pinault Printemps Redoute......................... 1,870,842
------------
Miscellaneous Materials & Commodities (0.2%):
5,533 Compagnie de Saint Gobain......................... 1,041,120
------------
Office Equipment & Services (0.0%):
3,500 Bic............................................... 159,371
------------
Real Estate (0.0%):
855 Gecina............................................ 96,512
12 SEFIMEG........................................... 763
918 Simco SA.......................................... 74,340
800 Unibail........................................... 101,027
------------
272,642
------------
Steel (0.0%):
14,600 Unisor Sacilor SA................................. 274,428
------------
Telecommunications -- Services & Equipment (1.6%):
66,600 France Telecom.................................... 8,813,226
------------
62,482,985
------------
Germany (10.5%):
Automotive (1.1%):
65,987 DaimlerChrysler AG................................ 5,134,186
9,290 MAN AG............................................ 323,331
19,970 Volkswagen AG..................................... 1,126,093
------------
6,583,610
------------
Banking (1.1%):
25,168 Bayerische Vereinsbank AG......................... 1,719,786
32,260 Deutsche Bank AG.................................. 2,726,236
35,360 Dresdner Bank AG.................................. 1,924,429
------------
6,370,451
------------
</TABLE>
Continued
49
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Germany (continued)
Building Products (0.1%):
4,070 Heidelberger Zement AG............................ $ 319,952
------------
Chemicals (0.7%):
39,980 BASF AG........................................... 2,054,986
45,240 Bayer AG.......................................... 2,142,972
------------
4,197,958
------------
Clothing (0.0%):
2,800 Adidas AG......................................... 210,238
------------
Computer Software (0.3%):
4,003 SAP AG............................................ 1,972,833
------------
Construction (0.0%):
4,730 Hochtief AG....................................... 176,384
------------
Diversified (1.3%):
9,440 Preussag AG....................................... 526,130
34,770 Siemens AG........................................ 4,425,925
31,990 VEBA AG........................................... 1,555,634
52,182 Viag AG........................................... 957,168
------------
7,464,857
------------
Engineering (1.3%):
32,020 Mannesmann AG..................................... 7,728,991
------------
Gas & Electric Utility (0.2%):
29,050 RWE AG............................................ 1,138,916
------------
Health & Personal Care (0.1%):
7,860 Beiersdorf AG..................................... 528,061
------------
Health Care (0.1%):
5,300 Schering AG....................................... 640,993
------------
Insurance (1.3%):
16,870 Allianz AG........................................ 5,670,311
10,161 Muenchener Rueckver AG............................ 2,578,625
------------
8,248,936
------------
Machinery & Equipment (0.1%):
6,360 Linde AG.......................................... 348,059
------------
Metals & Mining (0.1%):
21,340 Thyssen Krupp AG*................................. 650,603
------------
Pharmaceuticals (0.1%):
13,100 Merck KGaA........................................ 406,647
------------
Retail -- Major Department Stores (0.2%):
17,073 Metro AG.......................................... 918,855
------------
Retail Stores (0.1%):
7,910 Karstadt AG....................................... 317,289
------------
Retail -- General Merchandise (0.0%):
1,630 Douglas Holding AG................................ 70,230
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Germany (continued)
Telecommunications (2.2%):
188,800 Deutsche Telekom AG................................. $ 13,452,944
------------
Tire & Rubber (0.0%):
4,870 Continental AG...................................... 97,428
------------
Transportation (0.1%):
23,580 Lufthansa AG........................................ 548,974
------------
62,393,209
------------
Hong Kong (2.5%):
Banking (0.3%):
97,973 Bank of East Asia Ltd. ............................. 272,205
108,800 Hang Seng Bank Ltd. ................................ 1,242,033
14,695 Wing Lung Bank...................................... 59,541
------------
1,573,779
------------
Diversified (0.2%):
94,500 Swire Pacific Ltd., Class A......................... 557,931
155,500 Wharf Holdings Ltd. ................................ 361,030
------------
918,961
------------
Electric Utility (0.1%):
141,400 CLP Holdings Ltd. .................................. 651,131
------------
Electrical & Electronic (0.1%):
67,900 Johnson Electric Holdings Ltd. ..................... 435,819
------------
Gas Utility (0.1%):
442,454 Hong Kong & China Gas Co., Ltd. .................... 606,113
------------
Hotels & Lodging (0.0%):
122,228 Shangri-La Asia Ltd. ............................... 139,925
------------
Industrial Holding Company (0.6%):
265,000 Hutchison Whampoa Ltd. ............................. 3,851,769
------------
Real Estate (0.6%):
133,000 Cheung Kong Holdings Ltd. .......................... 1,689,370
378,048 Hysan Development Co., Ltd. ........................ 478,982
118,542 New World Development Co., Ltd. .................... 266,837
135,136 Sun Hung Kai Properties Ltd. ....................... 1,407,965
------------
3,843,154
------------
Real Estate Investment Trust (0.0%):
91,100 Hang Lung Development Co. .......................... 103,119
------------
Telecommunications (0.4%):
864,674 Hong Kong Telecommunications Ltd. .................. 2,496,920
------------
Transportation (0.1%):
252,000 Cathay Pacific Airways.............................. 448,938
------------
15,069,628
------------
Ireland (0.4%):
Airlines (0.0%):
7,300 Ryanair Holdings PLC*............................... 77,987
------------
</TABLE>
Continued
50
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Ireland (continued)
Banking (0.2%):
59,879 Allied Irish Banks*................................. $ 683,151
------------
Building Products (0.1%):
26,219 C.R.H. PLC*......................................... 565,491
------------
Consumer Goods & Services (0.0%):
29,000 Waterford Wedgewood*................................ 29,520
------------
Diversified (0.0%):
3,227 DCC PLC*............................................ 24,067
------------
Finance (0.0%):
13,227 Irish Life & Permanent PLC*......................... 125,310
------------
Food Products (0.0%):
11,700 Fyffes PLC*......................................... 23,584
7,816 Greencore Group*.................................... 24,026
7,300 Kerry Group PLC*.................................... 87,552
------------
135,162
------------
Hotels & Lodging (0.0%):
1,900 Jurys Hotel Group PLC*.............................. 14,075
------------
Industrial Goods & Services (0.0%):
63,500 Smurfit (Jefferson) Group*.......................... 191,995
------------
Media (0.0%):
10,352 Independent News & Media PLC*....................... 67,921
------------
Oil & Gas (0.0%):
9,100 Tullow Oil PLC*..................................... 11,831
------------
Printing & Publishing (0.0%):
1,608 Clondalkin Group PLC*............................... 14,424
------------
Telecommunications - Services & Equipment (0.1%):
70,000 eircom PLC.......................................... 305,479
------------
Transportation & Shipping (0.0%):
1,000 Irish Continental Group PLC*........................ 10,280
------------
2,256,693
------------
Italy (4.1%):
Agriculture (0.0%):
94,400 Parmalat Finanziaria SpA............................ 120,829
------------
Auto Parts (0.0%):
36,260 Magneti Marelli SpA................................. 138,504
------------
Automotive (0.1%):
21,553 Fiat SpA............................................ 615,824
7,034 Fiat SpA di Risp., (Non-convertible)................ 103,503
9,082 Fiat SpA Preferred.................................. 131,350
------------
850,677
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Italy (continued)
Banking (0.4%):
178,829 Banca Ambrosiano Veneto SpA........................ $ 726,338
65,650 Banca Ambrosiano Veneto SpA di Risp., (Non-
convertible)....................................... 133,654
17,100 Banca Popolare de Milano........................... 133,221
314,600 Credito Italiano SpA............................... 1,547,300
------------
2,540,513
------------
Broadcasting & Publishing (0.2%):
75,600 Mediaset SpA....................................... 1,176,427
------------
Building Products (0.0%):
2,280 Cementir SpA....................................... 2,916
10,950 Italcementi SpA.................................... 132,431
900 Italcementi SpA di Risp.,
(Non-convertible).................................. 3,928
------------
139,275
------------
Chemicals (0.1%):
165,334 Montedison SpA..................................... 270,776
6,656 Montedison SpA di Risp.,
(Non-convertible).................................. 6,373
84,200 Snia BPD SpA....................................... 90,632
900 Snia BPD SpA di Risp.,
(Non-convertible).................................. 712
------------
368,493
------------
Electric Utility (0.1%):
110,000 Enel SpA*.......................................... 461,192
------------
Engineering (0.0%):
7,900 Impregilo SpA...................................... 4,873
------------
Finance (0.3%):
97,812 Banc San Paolo Torino.............................. 1,329,842
36,470 Mediobanca SpA..................................... 372,341
------------
1,702,183
------------
Gas Utility (0.0%):
44,500 Italgas SpA........................................ 168,633
------------
Insurance (0.5%):
66,463 Assicurazioni Generali............................. 2,197,099
38,785 Riuniune Adriatici de Sicurta SpA.................. 389,331
10,900 Societa Assicuratrice Industriale (SAI) SpA........ 122,050
------------
2,708,480
------------
Jewelry (0.0%):
21,300 Bulgari SpA........................................ 191,488
------------
Office Equipment & Services (0.1%):
282,296 Olivetti SpA*...................................... 817,972
------------
Oil & Gas (0.6%):
559,500 ENI SpA............................................ 3,078,852
------------
</TABLE>
Continued
51
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Italy (continued)
Paper Products (0.0%):
15,200 Burgo (Cartiere) SpA................................ $ 100,188
------------
Printing & Publishing (0.1%):
11,400 Mondadori (Arnoldo) Editore SpA..................... 361,919
------------
Real Estate (0.0%):
97,812 Beni Stabili SpA*................................... 34,503
------------
Retail Stores (0.0%):
14,200 La Rinascente SpA................................... 91,164
------------
Telecommunications (1.5%):
19,400 Sirti SpA........................................... 69,411
99,760 Telecom Italia Mobile SpA........................... 475,569
465,360 Telecom Italia Mobile SpA di Risp,
(Non-convertible)................................... 5,201,357
175,000 Telecom Italia SpA.................................. 2,469,233
57,260 Telecom Italia SpA-RNC.............................. 349,142
------------
8,564,712
------------
Textile Products (0.0%):
115,720 Benetton Group SpA.................................. 265,913
4,200 Marzotto (Gaetano) & Figli SpA...................... 30,054
------------
295,967
------------
Tire & Rubber (0.1%):
120,700 Pirelli SpA......................................... 331,489
10,600 Pirelli SpA di Risp, (Non-convertible).............. 19,230
------------
350,719
------------
24,267,563
------------
Japan (27.9%):
Appliances & Household Products (2.4%):
136,000 Matsushita Electric Industrial Co., Ltd. ........... 3,760,797
13,000 Pioneer Electronic Corp. ........................... 342,974
137,000 Sanyo Electric Co. ................................. 555,550
81,000 Sharp Corp. ........................................ 2,069,719
27,700 Sony Corp. ......................................... 8,201,192
------------
14,930,232
------------
Automotive (2.3%):
61,000 Honda Motor Co., Ltd. .............................. 2,264,999
183,000 Nissan Motor Co., Ltd.*............................. 718,839
234,000 Toyota Motor Corp. ................................. 11,318,155
------------
14,301,993
------------
Banking (3.0%):
32,000 77 Bank............................................. 334,884
180,000 Asahi Bank Ltd. .................................... 1,108,071
44,000 Ashikaga Bank Ltd.*................................. 87,708
325,000 Bank of Tokyo -- Mitsubishi Ltd. ................... 4,522,180
94,000 Bank of Yokohama Ltd. .............................. 432,617
235,000 Fuji Bank Ltd. ..................................... 2,280,193
43,000 Gunma Bank Ltd. .................................... 279,412
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Japan (continued)
Banking (continued)
57,000 Hokuriku Bank*...................................... $ 134,786
177,000 Industrial Bank of Japan............................ 1,703,586
73,000 Joyo Bank........................................... 335,255
95,000 Mitsubishi Trust & Banking Corp. ................... 835,450
99,000 Mitsui Trust & Banking Co., Ltd. ................... 223,461
283,000 Sakura Bank Ltd. ................................... 1,637,053
59,000 Shizuoka Bank....................................... 604,182
208,000 Sumitomo Bank Ltd. ................................. 2,843,385
152,000 Tokai Bank.......................................... 956,498
------------
18,318,721
------------
Beverages & Tobacco (0.0%):
11,000 Takara Shuzo Co., Ltd .............................. 173,158
------------
Brewery (0.2%):
37,000 Asahi Breweries Ltd. ............................... 404,202
76,000 Kirin Brewery Co., Ltd. ............................ 798,319
------------
1,202,521
------------
Broadcasting & Publishing (0.1%):
11,000 Tokyo Broadcasting System........................... 371,898
------------
Building Products (0.1%):
72,400 Taiheiyo Cement Corp. .............................. 137,952
14,000 Tostem Corp. ....................................... 251,026
------------
388,978
------------
Chemicals (1.1%):
105,000 Asahi Chemical Industry Co., Ltd. .................. 538,646
59,000 Dainippon Ink & Chemicals, Inc. .................... 174,682
26,000 Kaneka Corp. ....................................... 332,050
152,000 Mitsubishi Chemical Corp. .......................... 534,688
46,000 Sekisui Chemical Co., Ltd. ......................... 203,615
30,000 Shin-Etsu Chemical Co., Ltd. ....................... 1,289,819
118,000 Sumitomo Chemical Co. .............................. 553,449
60,000 Takeda Chemical Industries.......................... 2,960,720
------------
6,587,669
------------
Construction (0.2%):
39,000 Daiwa House Industry Co., Ltd. ..................... 289,623
53,000 Sekisui House Ltd. ................................. 468,683
59,000 Shimizu Corp. ...................................... 194,860
------------
953,166
------------
Consumer Goods & Services (0.1%):
22,000 Nippon Sheet Glass Co., Ltd. ....................... 113,934
31,000 Toto Ltd. .......................................... 187,199
------------
301,133
------------
Cosmetics/Personal Care (0.3%):
46,000 Kao Corp. .......................................... 1,310,240
31,000 Shiseido Co., Ltd. ................................. 451,339
------------
1,761,579
------------
</TABLE>
Continued
52
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Japan (continued)
Data Processing & Reproduction (0.9%):
117,000 Fujitsu Ltd. ....................................... $ 5,327,536
------------
Distribution (0.1%):
89,000 Itochu Corp.*....................................... 442,652
------------
Diversified (0.0%):
18,000 Yamaha Corp. ....................................... 116,787
------------
Electric Utility (0.7%):
71,800 Kansai Electric Power Co., Inc. .................... 1,249,519
37,500 Tohoku Electric Power............................... 556,967
81,900 Tokyo Electric Power Co. ........................... 2,192,750
------------
3,999,236
------------
Electrical & Electronic (1.4%):
14,000 Kyocera Corp. ...................................... 3,625,171
156,000 Mitsubishi Electric Corp. .......................... 1,006,058
22,000 Omron Corp. ........................................ 506,254
8,000 Rohm Co., Ltd. ..................................... 3,283,174
------------
8,420,657
------------
Electrical Equipment (0.4%):
16,000 Alps Electric Co., Ltd. ............................ 243,737
6,000 SMC Corp. .......................................... 1,325,581
10,000 Taiyo Yuden Co., Ltd. .............................. 592,144
------------
2,161,462
------------
Electronic Components/Instruments (2.0%):
7,600 Advantest Corp. .................................... 2,005,081
17,100 Fanuc Ltd. ......................................... 2,173,842
3,000 Hirose Electric Co., Ltd. .......................... 671,585
239,000 Hitachi Ltd. ....................................... 3,829,979
115,000 NEC Corp. .......................................... 2,736,222
10,000 Nitto Denko Corp. .................................. 499,316
23,000 Yokogawa Electric Corp. ............................ 162,038
------------
12,078,063
------------
Engineering (0.1%):
72,000 Kajima Corp. ....................................... 214,579
115,000 Kawasaki Heavy Industries Ltd. ..................... 152,824
23,000 Kinden Corp. ....................................... 176,422
56,000 Obayashi Corp. ..................................... 264,295
------------
808,120
------------
Entertainment (0.1%):
4,000 NAMCO............................................... 258,745
1,700 Toho Co. ........................................... 248,173
------------
506,918
------------
Finance (1.1%):
11,000 Acom Co., Ltd. ..................................... 1,075,923
97,000 Daiwa Securities Co., Ltd. ......................... 1,515,566
143,000 Nomura Securities Co., Ltd. ........................ 2,578,024
24,000 Orient Corp. ....................................... 69,416
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Japan (continued)
Finance (continued)
5,000 Orix Corp. ......................................... $ 1,124,682
------------
6,363,611
------------
Food & Household Products (0.2%):
48,000 Ajinomoto Co., Inc. ................................ 499,511
20,000 Nippon Meat Packers, Inc. .......................... 258,941
12,000 Nissin Food Products Co., Ltd. ..................... 282,001
------------
1,040,453
------------
Food Products (0.1%):
51,000 Daiei Inc.*......................................... 201,827
19,000 Yamazaki Baking Co., Ltd. .......................... 205,892
------------
407,719
------------
Forest Products (0.2%):
59,000 Nippon Paper Industries Co. ........................ 324,575
65,000 Oji Paper Co., Ltd. ................................ 390,609
6,000 Uni-Charm .......................................... 345,320
------------
1,060,504
------------
Gas Utility (0.2%):
184,000 Osaka Gas Co., Ltd. ................................ 442,290
204,000 Tokyo Gas Co., Ltd. ................................ 496,346
------------
938,636
------------
Health & Personal Care (0.2%):
33,000 Kyowa Hakko Kogyo Co. .............................. 197,665
34,000 Sankyo Co., Ltd. ................................... 697,674
------------
895,339
------------
Health Care (0.1%):
8,000 Hoya Corp. ......................................... 629,275
------------
Industrial Goods & Services (0.7%):
60,000 Bridgestone Corp. .................................. 1,319,132
65,000 Denso Corp. ........................................ 1,549,736
30,000 NGK Insulators Ltd. ................................ 222,494
19,000 NGK Spark Plug Co., Ltd. ........................... 173,588
54,000 Sumitomo Electric Industries Ltd. .................. 623,158
------------
3,888,108
------------
Insurance (0.3%):
50,000 Mitsui Marine & Fire Insurance Co., Ltd. ........... 296,072
55,000 Sumitomo Marine & Fire Insurance Co. ............... 338,577
113,000 Tokio Marine & Fire Insurance Co. .................. 1,319,475
------------
1,954,124
------------
Internet Content (0.4%):
2,500 Softbank Corp. ..................................... 2,389,095
------------
Jewelry (0.0%):
23,000 Citizen Watch Co., Ltd. ............................ 146,082
------------
</TABLE>
Continued
53
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Japan (continued)
Leasing (0.2%):
32,000 Yamato Transport Co., Ltd. ......................... $ 1,238,226
------------
Machine -- Diversified (0.0%):
10,000 Kurita Water Industries Ltd. ....................... 158,687
------------
Machinery & Equipment (0.8%):
14,000 Brother Industries Ltd. ............................ 32,148
23,000 Daikin Industries Ltd. ............................. 312,390
21,000 Ebara Corp. ........................................ 233,926
71,000 Komatsu Ltd. ....................................... 326,070
116,000 Kubota Corp. ....................................... 443,189
34,000 Minebea Co., Ltd. .................................. 582,392
245,000 Mitsubishi Heavy Industries Ltd. ................... 816,347
40,000 NSK Ltd. ........................................... 273,207
13,000 Tokyo Electron Ltd. ................................ 1,778,387
------------
4,798,056
------------
Manufacturing -- Capital Goods (0.7%):
31,000 Fujikura Ltd. ...................................... 122,982
8,000 Kokuyo Co. ......................................... 106,312
14,000 Makita Corp. ....................................... 125,855
17,000 Murata Manufacturing Co., Ltd. ..................... 3,986,711
8,000 Noritake Co., Ltd. ................................. 28,220
7,000 Takara Standard Co. ................................ 34,679
------------
4,404,759
------------
Manufacturing -- Consumer Goods (0.8%):
54,000 Canon, Inc. ........................................ 2,142,272
38,000 Fuji Photo Film Co., Ltd. .......................... 1,384,991
30,000 Konica Corp. ....................................... 111,393
27,000 Nikon Corp. ........................................ 791,479
8,700 Sega Enterprises Ltd. .............................. 276,285
12,000 Shimano Inc. ....................................... 211,061
------------
4,917,481
------------
Medical Supplies (0.1%):
23,000 Olympus Optical Co., Ltd. .......................... 324,751
------------
Merchandising (0.7%):
30,000 Ito-Yokado Co., Ltd. ............................... 3,253,860
24,000 JUSCO Co., Ltd. .................................... 417,667
28,000 Marui Co., Ltd. .................................... 417,510
------------
4,089,037
------------
Metals (0.3%):
236,000 Kawasaki Steel Corp.*............................... 422,005
80,000 Mitsubishi Materials Corp.*......................... 195,427
426,000 Nippon Steel Corp. ................................. 994,860
264,000 Sumitomo Metal Industries Ltd.*..................... 198,632
------------
1,810,924
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Japan (continued)
Metals & Mining (0.0%):
43,000 Mitsui Mining & Smelting Co. ..................... $ 202,941
41,000 Sumitomo Metal Mining Co.*........................ 91,343
------------
294,284
------------
Miscellaneous Materials & Commodities (0.1%):
86,000 Asahi Glass Co., Ltd. ............................ 664,706
------------
Oil & Gas (0.1%):
91,800 Nippon Oil Co., Ltd. ............................. 403,654
------------
Packaging (0.0%):
17,000 Toyo Seikan Kaisha Ltd. .......................... 245,847
------------
Pharmaceuticals (0.5%):
18,000 Chugai Pharmaceutical Co., Ltd. .................. 194,352
20,000 Dai-Ichi Pharmaceuticals.......................... 259,722
22,000 Eisai Co., Ltd. .................................. 422,415
29,000 Meiji Seika Co. .................................. 164,637
26,000 Shionogi & Co., Ltd. ............................. 315,282
26,000 Taisho Pharmacuetical Co. ........................ 762,166
25,000 Yamanouchi Pharmaceutical Co., Ltd. .............. 872,094
------------
2,990,668
------------
Printing & Publishing (0.2%):
47,000 Dai Nippon Printing Co., Ltd. .................... 748,584
43,000 Toppan Printing Co., Ltd. ........................ 428,571
------------
1,177,155
------------
Real Estate (0.2%):
81,000 Mitsubishi Estate Co., Ltd. ...................... 789,105
60,000 Mitsui Fudosan Co., Ltd. ......................... 405,706
------------
1,194,811
------------
Retail Stores (0.1%):
5,000 Aoyama Trading Co., Ltd. ......................... 106,996
34,000 Mitsukoshi Ltd.*.................................. 119,601
5,000 Skylark Co., Ltd. ................................ 117,500
22,000 Takashimaya Co., Ltd. ............................ 151,340
------------
495,437
------------
Retail -- General Merchandise (0.0%):
14,300 Credit Saison Co., Ltd. .......................... 248,720
------------
Retail -- Special Line (0.0%):
14,000 Uny Co., Ltd. .................................... 136,662
------------
Services (0.3%):
14,000 Secom Co., Ltd. .................................. 1,538,988
------------
Storage (0.0%):
10,000 Mitsubishi Logistics Corp. ....................... 63,709
------------
</TABLE>
Continued
54
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Japan (continued)
Telecommunications (2.4%):
11,000 Nippon Comsys Corp. ................................ $ 227,868
811 Nippon Telegraph & Telephone Corp. ................. 13,867,989
------------
14,095,857
------------
Textile Products (0.2%):
30,000 Kuraray Co., Ltd. .................................. 303,400
15,000 Onward Kashiyama Co., Ltd. ......................... 205,198
76,000 Teijin Ltd. ........................................ 279,969
102,000 Toray Industries, Inc. ............................. 394,685
14,000 Wacoal Corp. ....................................... 122,982
------------
1,306,234
------------
Transportation (0.5%):
296 East Japan Railway Co. ............................. 1,593,668
112,000 Japan Airlines Co. ................................. 331,601
118,000 Kinki Nippon Railway Co. ........................... 472,738
79,000 Nippon Express Co., Ltd. ........................... 436,144
64,000 Tobu Railway Co., Ltd. ............................. 187,610
82,000 Tokyu Corp. ........................................ 199,511
------------
3,221,272
------------
Transportation & Shipping (0.1%):
17,000 Kamigumi Co., Ltd. ................................. 71,429
89,000 Nippon Yusen Kabushiki Kaisha....................... 363,513
------------
434,942
------------
Wholesale & International Trade (0.5%):
93,000 Marubeni Corp. ..................................... 389,848
114,000 Mitsubishi Corp. ................................... 878,893
116,000 Mitsui & Co., Ltd. ................................. 810,436
66,000 Sumitomo Corp. ..................................... 639,105
------------
2,718,282
------------
Wire & Cable Products (0.1%):
47,000 Furukawa Electric Co., Ltd. ........................ 711,843
------------
166,550,417
Malaysia (0.0%):
Engineering (0.0%):
6,300 Silverstone Berhad*................................. 0
------------
Netherlands (4.8%):
Banking (0.4%):
91,835 ABN Amro Holding NV................................. 2,295,387
------------
Beverages & Tobacco (0.2%):
19,937 Heineken NV......................................... 972,928
------------
Chemicals (0.2%):
18,132 Akzo Nobel NV....................................... 910,062
------------
Electronics (0.5%):
21,380 Philips Electronics NV.............................. 2,908,958
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Netherlands (continued)
Finance (0.6%):
59,575 ING Groep NV........................................ $ 3,598,958
------------
Food Products (0.3%):
36,270 Unilever NV -- CVA.................................. 2,004,661
------------
Insurance (0.5%):
32,085 Aegon NV............................................ 3,101,106
------------
Oil & Gas (1.3%):
125,400 Royal Dutch Petroleum Co. .......................... 7,690,491
------------
Printing & Publishing (0.1%):
18,000 Wolters Kluwer CVA.................................. 609,548
------------
Retail -- Special Line (0.2%):
39,695 Ahold............................................... 1,175,794
------------
Telecommunications (0.5%):
30,605 KPN NV.............................................. 2,988,905
------------
28,256,798
------------
New Zealand (0.1%):
Beverages & Tobacco (0.0%):
41,300 Lion Nathan Ltd. ................................... 95,798
------------
Forest Products (0.0%):
130,281 Carter Holt Harvey Ltd. ............................ 169,772
------------
Telecommunications (0.1%):
131,965 Telecom Corp. of New Zealand Ltd. .................. 619,081
------------
884,651
------------
Norway (0.4%):
Banking (0.2%):
48,900 Christiania Bank Og Kreditkasse..................... 240,795
37,000 Den Norske Bank ASA................................. 151,754
------------
392,549
------------
Chemicals (0.0%):
1,000 Dyno Industrier ASA................................. 24,933
------------
Diversified (0.2%)
18,650 Norsk Hydro ASA..................................... 781,195
------------
Electric Utility (0.0%):
15,650 Hafslund ASA, Series A.............................. 94,428
10,326 Hafslund ASA, Series B.............................. 39,777
------------
134,205
------------
Forest Products (0.0%):
3,200 Norske Skogindustrier ASA -- Class A................ 166,751
------------
Industrial Goods & Services (0.0%):
1,200 Unitor ASA.......................................... 8,976
------------
</TABLE>
Continued
55
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Norway (continued)
Insurance (0.0%):
24,100 Storebrand ASA*..................................... $ 183,269
------------
Manufacturing-Consumer Goods (0.0%):
14,800 Orkla ASA -- Class A................................ 254,614
------------
Oil & Gas (0.0%):
9,700 Petroleum Geo-Services ASA*......................... 172,922
------------
Transportation (0.0%):
2,200 Leif Hoegh & Co. ASA................................ 26,055
------------
2,145,469
------------
Portugal (0.4%):
Banking (0.1%):
66,500 Banco Commercial Portuguese......................... 369,292
7,900 Banco Espirito Santo................................ 222,140
------------
591,432
------------
Electrical & Electronic (0.2%):
41,000 Electricidade De Portugal........................... 716,108
------------
Food Products (0.0%):
6,300 Jeronimo Martins, SGPS, SA.......................... 161,276
------------
Telecommunications (0.1%):
65,000 Portugal Telecom SA................................. 713,407
------------
Transportation (0.0%):
20,000 Brisa Auto-Estradas................................. 153,596
------------
2,335,819
------------
Singapore (1.2%):
Airlines (0.2%):
80,000 Singapore Airlines Ltd ............................. 907,917
------------
Banking (0.6%):
89,987 Development Bank of Singapore Ltd. ................. 1,475,153
68,959 Oversea-Chinese Banking Corp., Ltd. ................ 633,544
123,921 United Overseas Bank Ltd. .......................... 1,093,847
------------
3,202,544
------------
Finance (0.0%):
29,600 Haw Par Brothers International Ltd. ................ 54,033
------------
Printing & Publishing (0.1%):
31,472 Singapore Press Holdings Ltd.*...................... 684,112
------------
Real Estate (0.1%):
67,600 City Developments Ltd. ............................. 395,773
115,000 DBS Land Ltd. ...................................... 226,499
------------
622,272
------------
Steel (0.0%):
60,750 NatSteel Ltd. ...................................... 121,110
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Singapore (continued)
Telecommunications (0.2%):
519,000 Singapore Telecommunications Ltd. ................. $ 1,072,063
------------
Transportation & Shipping (0.0%):
79,000 Keppel Corp. ...................................... 206,827
------------
6,870,878
------------
Spain (2.9%):
Agriculture (0.0%):
4,500 Azucarera Ebro Agricolas SA........................ 65,672
------------
Banking (0.7%):
246,320 Banco Santander Central Hispanoamericano SA........ 2,790,371
32,700 Corporation Bancaria De Espana SA.................. 768,880
------------
3,559,251
------------
Banking & Finance (0.3%):
133,923 Banco Bilbao Vizcaya............................... 1,908,537
2,460 Portland Valoerrivass.............................. 64,214
------------
1,972,751
------------
Beverages & Tobacco (0.1%):
1,650 El Aguila SA*...................................... 13,470
22,457 Tabacalera SA -- Class A........................... 321,393
------------
334,863
------------
Building Products (0.0%):
5,400 Uralita SA......................................... 38,151
------------
Building-Heavy Construction (0.0%):
8,216 Fomento De Construc Y Contra....................... 167,266
------------
Chemicals (0.0%):
700 Ercros SA.......................................... 332
------------
Commercial Services (0.0%):
500 Prosegur, CIA de Seguridad SA...................... 4,480
------------
Construction (0.0%):
3,300 ACS, Actividades de Construccion y Servicios SA.... 78,325
------------
Engineering (0.0%):
16,863 Autopistas Concesionaria Espanola SA............... 164,005
11,700 Grupo Dragados SA.................................. 103,297
------------
267,302
------------
Food Products (0.0%):
14,400 Telepizza SA*...................................... 60,955
2,564 Viscofan Industria Navarra de Envolturas
Celulosicassa SA................................... 19,949
------------
80,904
------------
</TABLE>
Continued
56
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Spain (continued)
Gas & Electric Utility (0.6%):
63,480 Endesa SA........................................... $ 1,261,012
30,072 Gas Natural SGD, SA................................. 693,146
59,924 Iberdrola SA........................................ 831,027
20,366 Union Electrica Fenosa SA........................... 355,919
------------
3,141,104
------------
Hotels & Lodging (0.0%):
8,100 Sol Melia SA........................................ 91,840
------------
Industrial Holding Company (0.0%):
5,850 Corporacion Financiara Alba SA...................... 200,226
------------
Insurance (0.0%):
4,700 Corporacion Mapfre.................................. 77,306
------------
Machinery & Equipment (0.0%):
8,432 Zardoya Otis SA..................................... 83,027
------------
Metals (0.0%):
3,900 Acerinox SA......................................... 155,652
------------
Oil & Gas (0.2%):
59,994 Repsol SA........................................... 1,391,903
------------
Paper Products (0.0%):
3,493 Reno de Medici SpA*................................. 7,991
------------
Real Estate (0.0%):
4,268 Metrovacesa SA...................................... 73,986
8,683 Vallehermoso SA..................................... 61,083
------------
135,069
------------
Telecommunications (1.0%):
208,461 Telefonica De Espana*............................... 5,210,417
------------
Water Utility (0.0%):
9,441 Aquas De Barcelona.................................. 138,350
------------
17,202,182
------------
Sweden (2.7%):
Automotive (0.1%):
11,300 Volvo AB, Series A.................................. 285,972
18,300 Volvo AB, Series B.................................. 473,892
------------
759,864
------------
Banking & Finance (0.2%):
31,500 ForeningsSparbanken AB.............................. 463,475
35,400 Skandiaviska Enskilda Banken, Series A.............. 358,350
39,000 Svenska Handelsbanken, Series A..................... 491,196
------------
1,313,021
------------
Computer Hardware Manufacturing (0.1%):
5,800 WM-Data AB, Series B................................ 359,104
------------
Consumer Goods & Services (0.1%):
19,600 Securitas AB, Series B.............................. 355,290
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Sweden (continued)
Engineering (0.0%):
6,500 Skanska AB, Series B................................ $ 242,537
------------
Forest Products (0.1%):
11,900 Svenska Cellusoa AB, Series B....................... 352,983
------------
Health & Personal Care (0.0%):
196 TeleLarm Care AB*................................... 2,272
------------
Industrial Goods & Services (0.1%):
14,900 Sandvik AB, Series A................................ 467,401
------------
Insurance (0.2%):
30,800 Skandia Forsakrings AB.............................. 931,729
------------
Machinery & Equipment (0.1%):
10,050 Atlas Copco AB, Series A............................ 297,515
500 Atlas Copco AB, Series B............................ 14,243
------------
311,758
------------
Manufacturing-Consumer Goods (0.1%):
22,000 Electrolux AB, Series B............................. 554,169
------------
Metals & Mining (0.0%):
3,110 Boliden Ltd.*....................................... 9,554
7,960 Trelleborg AB, Series B............................. 71,678
------------
81,232
------------
Retail-Special Line (0.3%):
49,600 Hennes & Mauritz AB, Series B....................... 1,663,920
------------
Telecommunications (1.3%):
7,300 Netcom AB, Series B*................................ 513,842
123,800 Telefonaktiebolaget LM Ericsson,
Series B............................................ 7,971,021
------------
8,484,863
------------
15,880,143
------------
Switzerland (5.6%):
Airlines (0.0%):
1,100 SAirGroup........................................... 221,368
------------
Building Products (0.2%):
700 Holderbank Financiere Glarus AG -
Class A............................................. 248,336
542 Holderbank Financiere Glarus AG -
Class B............................................. 741,906
------------
990,242
------------
Commercial Services (0.1%):
1,144 Adecco SA........................................... 890,720
------------
Diversified (0.1%):
579 Alusuisse-Lonza Holding AG, Registered.............. 426,815
------------
</TABLE>
Continued
57
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Switzerland (continued)
Electronic Components/Instruments (0.1%):
285 The Swatch Group AG, Bearer......................... $ 328,199
1,100 The Swatch Group AG, Registered..................... 256,248
------------
584,447
------------
Engineering (0.5%):
22,398 ABB Ltd.*........................................... 2,738,924
------------
Finance (1.1%):
14,820 Credit Suisse Group, Registered..................... 2,945,203
12,842 UBS AG, Registered.................................. 3,467,324
------------
6,412,527
------------
Food Products (0.8%):
2,465 Nestle SA, Registered............................... 4,514,884
------------
Insurance (0.3%):
927 Swiss Reinsurance Co., Registered................... 1,903,941
------------
Manufacturing-Consumer Goods (0.0%):
281 Sulzer AG, Registered*.............................. 182,616
------------
Pharmaceuticals (2.2%):
3,990 Novartis AG, Registered............................. 5,858,066
436 Roche Holding AG.................................... 5,174,181
133 Roche Holding AG, Bearer............................ 2,171,292
------------
13,203,539
------------
Telecommunications (0.2%):
2,500 Swisscom AG, Registered............................. 1,010,926
------------
33,080,949
------------
United Kingdom (15.8%):
Aerospace & Military Technology (0.2%):
197,850 British Aerospace PLC............................... 1,308,547
------------
Banking (2.1%):
93,637 Abbey National PLC.................................. 1,492,670
102,720 Barclays PLC........................................ 2,963,027
495,964 HSBC Holdings PLC................................... 6,880,858
58,477 Royal Bank of Scotland Group PLC.................... 1,033,241
------------
12,369,796
------------
Beverages & Tobacco (0.3%):
240,212 Diageo PLC.......................................... 1,930,132
------------
Broadcasting/Cable (0.3%):
114,000 British Sky Broadcasting Group PLC.................. 1,835,689
------------
Building Products (0.0%):
376 Carillion PLC....................................... 689
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
United Kingdom (continued)
Distribution (0.4%):
231,474 BG PLC.............................................. $ 1,483,263
279,174 Centrica PLC........................................ 807,100
------------
2,290,363
------------
Diversified (0.3%):
219,492 Invensys PLC........................................ 1,194,670
120,000 Rentokil Initial PLC................................ 437,530
------------
1,632,200
------------
Electric Utility (0.2%):
101,653 National Grid Group PLC............................. 770,823
79,283 Scottish Power PLC.................................. 599,274
------------
1,370,097
------------
Energy (1.9%):
1,145,846 BP Amoco PLC........................................ 11,538,834
------------
Finance (0.9%):
123,210 Halifax PLC......................................... 1,366,110
322,806 Lloyds TSB Group PLC................................ 4,030,142
------------
5,396,252
------------
Food & Household Products (0.4%):
134,004 Cadbury Schweppes PLC............................... 786,722
192,810 Unilever PLC........................................ 1,346,837
------------
2,133,559
------------
Food Products (0.1%):
126,338 J Sainsbury PLC..................................... 710,088
------------
Health & Personal Care (1.8%):
211,685 Glaxo Wellcome PLC.................................. 5,996,791
110,132 Zeneca Group PLC.................................... 4,567,807
------------
10,564,598
------------
Insurance (1.3%):
102,941 Allied Zurich PLC................................... 1,220,348
57,041 Commercial Union PLC................................ 903,304
337,628 Legal & General Group PLC........................... 920,198
189,526 Marks & Spencer PLC................................. 903,005
128,433 Prudential Corp., PLC............................... 2,520,299
448,043 Tesco PLC........................................... 1,365,859
------------
7,833,013
------------
Leisure (0.2%):
120,862 Granada Group PLC................................... 1,218,074
------------
Metals (0.3%):
71,082 Rio Tinto PLC, Registered........................... 1,708,291
------------
Pharmaceuticals (0.7%):
337,963 SmithKline Beecham PLC.............................. 4,295,791
------------
</TABLE>
Continued
58
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
United Kingdom (continued)
Printing & Publishing (0.5%):
47,573 Pearson PLC........................................ $ 1,542,849
97,327 Reuters Group PLC.................................. 1,340,854
------------
2,883,703
------------
Retail-General Merchandise (0.2%):
90,385 Kingfisher PLC..................................... 996,319
------------
Telecommunications (3.1%):
393,388 British Telecommunications PLC..................... 9,530,409
1,804,565 Vodafone Group PLC................................. 8,896,669
------------
18,427,078
------------
Telecommunications-Equipment (0.5%):
180,203 Marconin PLC....................................... 3,184,040
------------
Tobacco (0.1%):
102,941 British American Tobacco........................... 575,675
------------
94,202,828
------------
Total Common Stocks................................ 572,154,906
------------
CORPORATE NOTES & BONDS (0.0%):
United Kingdom (0.0%):
Aerospace & Military Technology (0.0%):
$24,404 British Aerospace PLC, 7.45%, 11/29/03............. 38,430
------------
Total Corporate Notes & Bonds................................... 38,430
------------
INVESTMENT COMPANIES (2.8%):
16,614,530 Federated Prime Value Obligations Money Market
Fund............................................... 16,614,530
------------
Total Investment Companies......................... 16,614,530
------------
PREFERRED STOCKS (0.7%):
Australia (0.2%):
Printing & Publishing (0.2%):
124,929 News Corp., Ltd. .................................. 1,066,639
------------
Germany (0.5%):
Automotive (0.0%):
5,270 Volkswagen AG...................................... 168,902
------------
Computer Software (0.4%):
3,300 SAP AG............................................. 1,988,891
------------
Gas & Electric Utility (0.1%):
16,540 RWE AG............................................. 510,097
------------
2,667,890
------------
United Kingdom (0.0%):
Food & Household Products (0.0%):
40,624 Unilever NV........................................ 205,943
------------
Total Preferred Stocks............................. 3,940,472
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (0.2%):
U.S. Treasury Bills (0.2%):
$1,000,000 3/16/00 (b) $ 989,710
------------
Total U.S. Government Obligations................... 989,710
------------
WARRANTS (0.0%):
France (0.0%):
Banking (0.0%):
7,579 Banque Nationale De Paris*.......................... 34,984
------------
Germany (0.0%):
Insurance (0.0%):
209 Munchener Ruckversicherungs*........................ 11,164
------------
Hong Kong (0.0%):
Real Estate (0.0%):
11,529 Chinese Estates Ltd.*............................... 979
------------
Italy (0.0%):
Financial-Banking (0.0%):
8,395 Mediobanca*......................................... 12,903
------------
Total Warrants...................................... 60,030
------------
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL (4.8%):
Certificate of Deposit (0.2%):
$ 1,031,000 Bank One Corp., 6.02%, 2/22/00...................... 1,021,863
------------
Commercial Paper (1.8%):
Banking (0.1%):
750,000 Deutsche Bank Financial Inc., 6.02%, 2/1/00......... 746,170
------------
Beverages-Non-Alcoholic (0.2%):
1,000,000 Coca-Cola Co., 6.08%, 1/28/00....................... 995,527
------------
Chemicals-Diversified (0.1%):
800,000 DuPont (EI) De Nemours & Co., 6.11%, 2/8/00......... 795,010
------------
Diversified Financial Services (0.3%):
800,000 Citigroup, 6.48%, 1/24/00........................... 796,929
750,000 General Electric Capital Corp., 6.00%, 2/7/00....... 745,349
750,000 National Australia Funding Inc., 6.02%, 2/4/00...... 745,807
------------
2,288,085
------------
</TABLE>
Continued
59
<PAGE>
International Growth Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Commercial Paper (continued)
Finance (0.3%):
$ 999,013 Ford Motor Credit Corp., 5.95%, 1/7/00............. $ 999,013
1,000,000 General Motors Acceptance Corp., 6.07%, 2/14/00.... 992,790
------------
1,991,803
------------
Forest Products (0.2%):
1,000,000 H.J. Heinz Co., 6.05%, 1/13/00..................... 997,912
------------
Medical-Drugs (0.2%):
900,000 Abbott Laboratories, 6.43%,1/14/00................. 897,678
------------
Multi-Media (0.2%):
1,000,000 McGraw-Hill, 6.12%, 2/29/00........................ 990,344
------------
Oil-Comp Integrated (0.1%):
750,000 Mobil Corp., 6.04%, 1/28/00........................ 746,646
------------
Telecommunications (0.1%):
750,000 Bell South Telecommunications, 5.92%, 2/11/00...... 744,957
------------
11,194,132
------------
Corporate Note (0.2%):
1,016,000 Toyota Motor Credit, 6.18%, 1/25/00................ 1,011,661
------------
Repurchase Agreements (1.5%):
1,842,205 Donaldson Lufkin & Jenrette, 4.00%, 1/3/00
(Collateralized by $2,694,483 various Government
Agency Securities, 6.00%-8.50%, 1/15/24-3/15/38,
market value $1,867,915)........................... 1,842,205
5,503,260 Prudential Securities, 3.68%, 1/3/00
(Collateralized by $11,315,957 various Government
Agency Securities, 5.00%-7.50%, 1/15/24-9/20/29,
market value $5,581,286)........................... 5,503,260
1,889,223 Salomon Smith Barney, 4.25%, 1/3/00 (Collateralized
by $3,841,925 various Government Agency Securities,
6.00%-9.50%, 4/15/18-12/15/29, market value
$1,915,425)........................................ 1,889,223
------------
9,234,688
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Time Deposits (1.1%):
Foreign Banking (1.1%):
$ 1,250,174 Comerica Cayman, 5.00%, 1/3/00 $ 1,250,174
1,250,217 Credit Suisse-First Boston Cayman, 6.25%, 1/3/00 1,250,217
1,250,174 National Westminster BK PLC Nassau, 5.00%, 1/3/00 1,250,174
1,250,365 Societe Generale Cayman, 10.50%, 1/3/00 1,250,365
1,250,174 Union Bank of Switzerland Cayman, 5.00%, 1/3/00 1,250,174
------------
6,251,104
------------
Total Short-Term Securities Purchased With
Securities Lending Collateral..................... 28,713,448
------------
Total Investments (Cost $413,517,220) (a) -- 104.7%............ 622,511,526
Liabilities in excess of other assets -- (4.7)%................ (27,663,989)
------------
Total Net Assets -- 100.0%..................................... $594,847,537
============
</TABLE>
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$788,227 and by the amount of market to market adjustment for passive
foreign investment companies of $4,210,885. Cost for Federal income tax
purposes differs from value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation....................................... $ 230,027,867
Unrealized depreciation....................................... (26,032,673)
-------------
Net unrealized appreciation................................... $ 203,995,194
=============
</TABLE>
(b) Security has been deposited as initial margin on open futures contracts.
* Non-income producing security.
At December 31, 1999 the Fund's open long futures contracts were as follows:
<TABLE>
<CAPTION>
Unrealized
# of Opening Notional Appreciation Market
Contracts Contract Type Amount on Futures Value
- --------- ------------- -------- ------------ ------
<S> <C> <C> <C> <C>
40 Standard & Poor's $14,485,150 $356,850 $14,842,000
500, 3/16/00
</TABLE>
See Notes to Financial Statements.
60
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (98.4%):
Advertising (0.3%):
20,900 Interpublic Group Cos., Inc. ....................... $ 1,205,669
13,100 Omnicom Group....................................... 1,310,000
------------
2,515,669
------------
Aerospace & Defense (0.9%):
71,092 Boeing Co. ......................................... 2,954,761
14,700 General Dynamics Corp. ............................. 775,425
58,412 Honeywell International, Inc. ...................... 3,369,642
29,788 Lockheed Martin Corp. .............................. 651,613
5,200 Northrop Grumman Corp. ............................. 281,125
25,400 Raytheon Co., Class B............................... 674,688
------------
8,707,254
------------
Agricultural Biotech (0.2%):
46,900 Monsanto Co. ....................................... 1,670,813
------------
Appliances & Household Products (0.1%):
6,700 Maytag Corp. ....................................... 321,600
5,700 Whirlpool Corp. .................................... 370,856
------------
692,456
------------
Applications Software (0.1%):
6,500 Citrix Systems, Inc.*............................... 799,500
------------
Auto/Truck -- Original Equipment (0.3%):
3,200 Cummins Engine, Inc. ............................... 154,600
12,532 Dana Corp. ......................................... 375,177
41,784 Delphi Automotive Systems Corp. .................... 658,098
5,400 Eaton Corp. ........................................ 392,175
5,120 Navistar International Corp.*....................... 242,560
6,050 PACCAR, Inc. ....................................... 268,091
9,100 TRW, Inc. .......................................... 472,631
------------
2,563,332
------------
Auto/Truck -- Replacement Equipment (0.0%):
13,525 Genuine Parts Co. .................................. 335,589
------------
Automotive (0.9%):
89,500 Ford Motor Co. ..................................... 4,782,656
47,700 General Motors Corp. ............................... 3,467,194
------------
8,249,850
------------
Banks -- Central U.S. (0.2%):
73,382 Firstar Corp. ...................................... 1,550,195
9,000 Old Kent Financial Corp. (c)........................ 318,375
------------
1,868,570
------------
Banks -- Major Regional (2.6%):
54,400 Bank of New York Co., Inc. ......................... 2,176,000
86,811 Bank One Corp. ..................................... 2,783,377
11,750 Comerica, Inc. ..................................... 548,578
1,000 First Security Corp. ............................... 25,531
70,770 First Union Corp. .................................. 2,322,141
68,244 FleetBoston Financial Corp. ........................ 2,375,744
33,200 KeyCorp............................................. 734,550
38,100 Mellon Financial Corp. ............................. 1,297,781
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Banks -- Major Regional (continued)
45,700 National City Corp. ................................ $ 1,082,519
16,400 Northern Trust Corp. ............................... 869,200
22,500 PNC Bank Corp. ..................................... 1,001,250
12,900 Summit Bancorp...................................... 395,063
23,800 SunTrust Banks, Inc. ............................... 1,637,738
54,162 U.S. Bancorp........................................ 1,289,733
15,000 Wachovia Corp. ..................................... 1,020,000
120,000 Wells Fargo Co. .................................... 4,852,499
------------
24,411,704
------------
Banks -- Midwest (0.2%):
22,300 Fifth Third Bancorp................................. 1,636,263
17,447 Huntington Bancshares............................... 416,547
------------
2,052,810
------------
Banks -- Money Center (1.4%):
125,692 Bank of America Corp. .............................. 6,308,167
23,700 BB&T Corp. ......................................... 648,788
61,616 Chase Manhattan Corp. .............................. 4,786,793
13,000 J.P. Morgan & Co., Inc. ............................ 1,646,125
------------
13,389,873
------------
Banks -- Northeast (0.1%):
11,900 State Street Corp. ................................. 869,444
------------
Banks -- South (0.1%):
29,650 AmSouth Bancorporation.............................. 572,615
12,600 SouthTrust Corp. ................................... 476,438
------------
1,049,053
------------
Beverages -- Alcoholic (0.3%):
2,900 Adolph Coors Co. ................................... 152,250
34,570 Anheuser-Busch Co., Inc. ........................... 2,450,149
5,200 Brown-Forman Corp. ................................. 297,700
------------
2,900,099
------------
Beverages -- Soft Drinks (1.6%):
181,900 Coca-Cola Co. ...................................... 10,595,674
108,200 PepsiCo, Inc. ...................................... 3,814,050
------------
14,409,724
------------
Broadcasting/Cable (0.9%):
25,100 Clear Channel Communications, Inc.*................. 2,240,175
55,500 Comcast Corp., Special Class A...................... 2,806,219
44,900 MediaOne Group, Inc.*............................... 3,448,881
------------
8,495,275
------------
Building & Construction -- Miscellaneous (0.1%):
3,100 Armstrong World Industries, Inc. ................... 103,463
32,800 Masco Corp. ........................................ 832,300
4,100 Owens-Corning Fiberglass Corp. ..................... 79,181
7,600 Vulcan Materials Co. ............................... 303,525
------------
1,318,469
------------
</TABLE>
Continued
61
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Building -- Heavy Construction (0.0%):
5,800 Fluor Corp. ...................................... $ 266,075
------------
Building -- Maintenance & Service (0.0%):
9,800 Ecolab, Inc. ..................................... 383,425
------------
Building -- Mobile/Manufacturing & Recreational Vehicles
(0.0%):
2,800 Fleetwood Enterprises, Inc. ...................... 57,750
------------
Building -- Residential/Commercial (0.0%):
4,500 Centex Corp. ..................................... 111,094
3,840 Kaufman & Broad Home Corp. ....................... 92,880
3,500 Pulte Corp. ...................................... 78,750
------------
282,724
------------
Building Products -- Retail/Wholesale (1.4%):
169,143 Home Depot, Inc. ................................. 11,596,867
28,000 Lowe's Cos., Inc. ................................ 1,673,000
------------
13,269,867
------------
Building Products -- Wood (0.1%):
8,100 Louisiana-Pacific Corp. .......................... 115,425
17,450 Weyerhaeuser Co. ................................. 1,253,128
------------
1,368,553
------------
Business Equipment & Services (0.2%):
14,400 AES Corp.*........................................ 1,076,400
28,300 Office Depot, Inc.*............................... 309,531
18,200 Paychex, Inc. .................................... 728,000
------------
2,113,931
------------
Business Services (0.0%):
7,300 H & R Block, Inc. ................................ 319,375
------------
Chemicals -- Diversified (1.1%):
16,300 Dow Chemical Co. ................................. 2,178,088
77,220 E.I. du Pont de Nemours & Co. .................... 5,086,867
5,900 Eastman Chemical Co. ............................. 281,356
8,100 Hercules, Inc. ................................... 225,788
12,800 PPG Industries, Inc. ............................. 800,800
16,077 Rohm & Haas Co. .................................. 654,133
10,000 Union Carbide Corp. .............................. 667,500
5,200 W.R. Grace & Co.*................................. 72,150
------------
9,966,682
------------
Chemicals -- Specialty (0.2%):
17,300 Air Products & Chemical, Inc. .................... 580,631
9,637 Engelhard Corp. .................................. 181,898
4,400 Great Lakes Chemical Corp. ....................... 168,025
11,900 Praxair, Inc. .................................... 598,719
7,600 Sigma-Aldrich Corp. .............................. 228,475
------------
1,757,748
------------
Circuits (0.1%):
12,800 Analog Devices, Inc.*............................. 1,190,400
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Commercial Services (0.2%):
53,319 Cendant Corp.*...................................... $ 1,416,286
8,700 Quintiles Transnational Corp.*...................... 162,581
------------
1,578,867
------------
Computer Software (6.7%):
9,000 Adobe Systems, Inc. ................................ 605,250
39,818 Computer Associates International, Inc. ............ 2,784,771
26,400 Compuware Corp.*.................................... 983,400
380,700 Microsoft Corp.*.................................... 44,446,725
104,512 Oracle Corp.*....................................... 11,711,876
19,926 Parametric Technology Corp.*........................ 539,247
------------
61,071,269
------------
Computers -- Local Area Network (3.1%):
26,500 3Com Corp.*......................................... 1,245,500
13,400 Cabletron Systems*.................................. 348,400
241,000 Cisco Systems, Inc.*................................ 25,817,124
25,400 Novell, Inc.*....................................... 1,014,413
------------
28,425,437
------------
Computers -- Mainframe (1.6%):
132,750 IBM Corp. .......................................... 14,336,999
22,600 Unisys Corp.*....................................... 721,788
------------
15,058,787
------------
Computers -- Memory Devices (1.0%):
75,050 EMC Corp.*.......................................... 8,199,212
15,400 Seagate Technology, Inc.*........................... 717,063
------------
8,916,275
------------
Computers -- Micro (1.7%):
12,000 Apple Computer, Inc.*............................... 1,233,750
123,724 Compaq Computer Corp. .............................. 3,348,281
184,900 Dell Computer Corp.*................................ 9,429,899
23,200 Gateway 2000, Inc.*................................. 1,671,850
------------
15,683,780
------------
Computers -- Mini (1.9%):
75,000 Hewlett-Packard Co. ................................ 8,545,312
14,300 Silicon Graphics, Inc.*............................. 140,319
114,600 Sun Microsystems, Inc.*............................. 8,874,337
------------
17,559,968
------------
Computers -- Networking Products (0.1%):
6,000 Adaptec Inc.*....................................... 299,250
10,800 Network Appliance, Inc.*............................ 897,075
------------
1,196,325
------------
Computers -- Services (0.9%):
45,800 Automatic Data Processing, Inc. .................... 2,467,475
10,900 Ceridian Corp.*..................................... 235,031
11,800 Computer Sciences Corp.*............................ 1,116,575
34,600 Electronic Data Systems Corp. ...................... 2,316,038
10,900 Equifax, Inc. ...................................... 256,831
</TABLE>
Continued
62
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Computers -- Services (continued)
31,700 First Data Corp. ................................. $ 1,563,206
2,100 Shared Medical Systems Corp. ..................... 106,969
------------
8,062,125
------------
Consumer Durable (0.1%):
10,500 Danaher Corp. .................................... 506,625
------------
Consumer Non-Durable (0.1%):
31,400 Coca-Cola Enterprises, Inc. ...................... 631,925
------------
Consumer Products -- Miscellaneous (0.0%):
5,100 American Greetings Corp., Class A................. 120,488
2,795 Jostens, Inc. .................................... 67,953
4,500 Tupperware Corp. ................................. 76,219
------------
264,660
------------
Containers & Packaging (0.1%):
11,800 Owens-Illinois, Inc.*............................. 295,738
6,316 Sealed Air Corp.*................................. 327,247
------------
622,985
------------
Containers -- Metal & Glass (0.0%):
2,400 Ball Corp. ....................................... 94,500
9,400 Crown Cork & Seal Co., Inc. ...................... 210,325
------------
304,825
------------
Containers -- Paper & Plastic (0.0%):
4,100 Bemis Co. ........................................ 142,988
12,800 Pactiv Corp.*..................................... 136,000
------------
278,988
------------
Cosmetics & Toiletries (0.8%):
4,500 Alberto-Culver Co., Class B....................... 116,156
19,300 Avon Products, Inc. .............................. 636,900
80,264 Gillette Co. ..................................... 3,305,874
8,000 International Flavors & Fragrances, Inc. ......... 302,000
39,440 Kimberly-Clark Corp. ............................. 2,573,460
------------
6,934,390
------------
Cruise Lines (0.2%):
45,400 Carnival Corp. ................................... 2,170,688
------------
Distribution (0.2%):
16,350 Costco Wholesale Corp.*........................... 1,491,938
------------
Diversified (5.1%):
5,125 Crane Co. ........................................ 101,859
2,400 Freeport-McMoRan Copper Corp.*.................... 137,550
242,000 General Electric Co.(b)........................... 37,449,499
23,130 IMS Health, Inc. ................................. 628,847
6,600 ITT Industries, Inc. ............................. 220,688
6,400 Johnson Controls, Inc. ........................... 364,000
29,800 Minnesota Mining & Manufacturing Co. ............. 2,916,675
3,200 National Service Industries, Inc. ................ 94,400
32,000 Seagram Co., Ltd. ................................ 1,438,000
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Diversified (continued)
11,100 Textron, Inc. ...................................... $ 851,231
35,600 United Technologies Corp. .......................... 2,314,000
------------
46,516,749
------------
Electrical & Electronic (0.1%):
6,500 KLA-Tencor Corp.*................................... 723,937
11,400 Molex, Inc. ........................................ 646,238
------------
1,370,175
------------
Electrical Components -- Semiconductors (3.8%):
11,100 Advanced Micro Devices, Inc.*....................... 321,206
27,800 Applied Materials, Inc.*............................ 3,521,913
245,600 Intel Corp. ........................................ 20,215,949
10,800 LSI Logic Corp.*.................................... 729,000
18,500 Micron Technology, Inc.*............................ 1,438,375
12,400 National Semiconductor Corp.*....................... 530,875
14,400 Rockwell International Corp......................... 689,400
59,200 Texas Instruments, Inc. ............................ 5,735,000
23,800 Xilinx, Inc.*....................................... 1,082,156
------------
34,263,874
------------
Electronic -- Connectors (0.0%):
4,400 Thomas & Betts Corp. ............................... 140,250
------------
Electronic Components/Instruments (0.2%):
20,200 Solectron Corp.*.................................... 1,921,525
------------
Electronic Measuring Equipment (0.1%):
3,600 Tektronix, Inc. .................................... 139,950
12,900 Teradyne, Inc.*..................................... 851,400
------------
991,350
------------
Energy (0.0%):
14,100 Niagara Mohawk Holdings Inc.*....................... 196,519
------------
Finance (0.8%):
53,854 Associates First Capital Corp., Class A............. 1,477,619
9,187 Bear Stearns Companies, Inc. ....................... 392,744
14,600 Capital One Financial Corp. ........................ 703,538
19,000 Franklin Resources, Inc. ........................... 609,188
59,330 MBNA Corp. ......................................... 1,616,742
9,100 Price (T. Rowe) Associates.......................... 336,131
16,900 Regions Financial Corp. ............................ 424,613
11,900 SLM Holding Corp. .................................. 502,775
10,800 Union Planters Corp. ............................... 425,925
42,869 Washington Mutual, Inc. ............................ 1,114,594
------------
7,603,869
------------
Financial -- Banking (0.0%):
20,500 Synovus Financial Corp. ............................ 407,438
------------
Financial -- Consumer Loans (0.2%):
35,393 Household International, Inc. ...................... 1,318,389
10,450 Providian Financial Corp. .......................... 951,603
------------
2,269,992
------------
</TABLE>
Continued
63
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Financial -- Investment Banker/Broker (0.1%):
9,000 Lehman Brothers Holding, Inc. ................ $ 762,187
11,000 Paine Webber Group Inc. ...................... 426,938
------------
1,189,125
------------
Financial -- Investment Bankers (0.5%):
27,300 Merrill Lynch & Co., Inc. .................... 2,279,550
60,550 Schwab (Charles) Corp. ....................... 2,323,606
------------
4,603,156
------------
Financial -- Miscellaneous Services (1.2%):
33,200 American Express Co. ......................... 5,519,500
41,016 Morgan Stanley, Dean Witter & Co. ............ 5,855,034
------------
11,374,534
------------
Financial -- Mortgage & Related Services (0.8%):
8,500 Countrywide Credit Industries, Inc. .......... 214,625
75,900 Fannie Mae.................................... 4,739,006
51,400 Freddie Mac................................... 2,419,013
------------
7,372,644
------------
Financial -- Savings & Loan (0.0%):
12,600 Golden West Financial Corp. .................. 422,100
------------
Financial Services -- Diversified (1.5%):
248,366 Citigroup, Inc. .............................. 13,799,836
------------
Food -- Canned (0.2%):
32,100 Campbell Soup Co. ............................ 1,241,869
26,500 H.J. Heinz Co. ............................... 1,055,031
------------
2,296,900
------------
Food -- Confectionary (0.1%):
10,300 Hershey Foods Corp. .......................... 489,250
8,600 Wm. Wrigley Jr. Co. .......................... 713,263
------------
1,202,513
------------
Food -- Diversified (1.0%):
20,600 Bestfoods..................................... 1,082,788
36,150 ConAgra, Inc. ................................ 815,634
22,600 General Mills, Inc. .......................... 807,950
30,000 Kellogg Co. .................................. 924,375
24,500 Nabisco Group Holdings........................ 260,313
9,900 Quaker Oats Co. .............................. 649,688
23,940 Ralston Purina Group.......................... 667,328
66,900 Sara Lee Corp. ............................... 1,475,980
42,335 Unilever NV................................... 2,304,611
------------
8,988,667
------------
Food -- Flour & Grain (0.1%):
46,624 Archer-Daniels-Midland Co. ................... 568,230
------------
Food Items -- Wholesale (0.1%):
9,000 SUPERVALU, Inc. .............................. 180,000
24,500 Sysco Corp. .................................. 969,281
------------
1,149,281
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Food Products (0.1%):
37,500 Safeway, Inc.*...................................... $ 1,333,594
------------
Funeral Services (0.0%):
20,500 Service Corp. International......................... 142,219
------------
Gas & Electric Utility (0.1%):
28,400 PG & E Corp. ....................................... 582,200
------------
Glass Products (0.3%):
18,100 Corning, Inc. ...................................... 2,333,769
------------
Health Care (0.1%):
20,927 McKesson HBOC, Inc. ................................ 472,166
5,100 Wellpoint Health Networks*.......................... 336,281
------------
808,447
------------
Home Decoration Products (0.1%):
14,800 Leggett & Platt, Incorporated....................... 317,275
20,880 Newell Rubbermaid, Inc. ............................ 605,520
------------
922,795
------------
Hotels & Lodging (0.1%):
19,500 Hilton Hotels Corp. ................................ 187,688
18,400 Marriott International, Inc., Class A............... 580,750
------------
768,438
------------
Instruments -- Scientific (0.1%):
3,400 Millipore Corp. .................................... 131,325
7,500 PE Corp-PE Biosystems Group......................... 902,344
3,500 PerkinElmer, Inc. .................................. 145,906
------------
1,179,575
------------
Insurance (0.1%):
12,500 Cincinnati Financial Corp. ......................... 389,844
8,000 Loews Corp. ........................................ 485,499
5,500 Progressive Corp. .................................. 402,188
------------
1,277,531
------------
Insurance -- Accident & Health (0.1%):
19,300 Aon Corp. .......................................... 772,000
------------
Insurance -- Brokers (0.2%):
19,550 Marsh & McLennan Cos., Inc. ........................ 1,870,691
------------
Insurance -- Life (0.5%):
19,700 AFLAC, INC. ........................................ 929,594
18,398 American General Corp. ............................. 1,395,949
24,464 Conseco, Inc. ...................................... 437,294
7,825 Jefferson-Pilot Corp. .............................. 534,056
10,100 Torchmark Corp. .................................... 293,531
17,984 UNUM Corp. ......................................... 576,612
------------
4,167,036
------------
Insurance -- Multi-Line (0.4%):
10,670 Aetna, Inc. ........................................ 595,519
13,700 CIGNA Corp. ........................................ 1,103,705
</TABLE>
Continued
64
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Insurance -- Multi-Line (continued)
16,700 Hartford Financial Services Group, Inc. ........ $ 791,163
7,500 MBIA, Inc. ..................................... 396,094
8,200 MGIC Investment Corp. .......................... 493,538
------------
3,380,019
------------
Insurance -- Property & Casualty (1.7%):
59,098 Allstate Corp. ................................. 1,418,351
114,592 American International Group, Inc. ............. 12,390,259
13,000 Chubb Corp. .................................... 732,063
14,700 Lincoln National Corp. ......................... 588,000
9,700 Safeco Corp. ................................... 241,288
16,434 St. Paul Cos., Inc. ............................ 553,620
------------
15,923,581
------------
Internet Software (2.3%):
164,200 America Online, Inc.*........................... 12,386,837
19,450 Yahoo, Inc.*.................................... 8,415,771
------------
20,802,608
------------
Leisure & Recreation Products (0.0%):
7,100 Brunswick Corp. ................................ 157,975
------------
Leisure & Recreation/Gaming (0.1%):
9,800 Harrah's Entertainment, Inc.*................... 259,087
15,400 Mirage Resorts, Inc.*........................... 235,813
------------
494,900
------------
Machine Tools & Related Products (0.0%):
6,600 The Black & Decker Corp. ....................... 344,850
------------
Machinery & Equipment (0.0%):
2,800 Milacron, Inc. ................................. 43,050
------------
Machinery -- Construction/Mining (0.2%):
26,300 Caterpillar, Inc. .............................. 1,237,743
12,250 Ingersoll-Rand Co. ............................. 674,516
------------
1,912,259
------------
Machinery -- Electrical (0.2%):
32,200 Emerson Electric Co. ........................... 1,847,475
7,000 W.W. Grainger, Inc. ............................ 334,688
------------
2,182,163
------------
Machinery -- Farm (0.1%):
1,800 Briggs & Stratton Corp. ........................ 96,525
17,500 Deere & Co. .................................... 759,063
------------
855,588
------------
Machinery -- General Industrial (0.3%):
7,100 Cooper Industries, Inc. ........................ 287,106
15,400 Dover Corp. .................................... 698,775
22,200 Illinois Tool Works, Inc. ...................... 1,499,888
8,225 Parker Hannifin Corp. .......................... 422,045
------------
2,907,814
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Machinery -- Material Handling (0.0%):
600 Nacco Industries, Inc. ......................... $ 33,338
------------
Machinery -- Thermal Processor (0.0%):
11,900 Thermo Electron Corp.*.......................... 178,500
------------
Media Conglomerates (1.6%):
95,720 Time Warner, Inc. .............................. 6,933,717
51,600 Viacom, Inc., Class B*.......................... 3,118,575
150,050 Walt Disney Co. ................................ 4,388,962
------------
14,441,254
------------
Medical -- Biomedical/Genetic (0.5%):
75,500 Amgen, Inc.*.................................... 4,534,719
------------
Medical -- Drugs (6.1%):
112,600 Abbott Laboratories............................. 4,088,788
7,600 ALZA Corp.*..................................... 263,150
96,700 American Home Products Corp. ................... 3,813,606
146,100 Bristol-Myers Squibb Co. ....................... 9,377,793
80,900 Eli Lilly & Co. ................................ 5,379,850
170,750 Merck & Co., Inc. .............................. 11,450,921
285,200 Pfizer, Inc. ................................... 9,251,175
37,530 Pharmacia & Upjohn, Inc. ....................... 1,688,850
108,700 Schering-Plough Corp. .......................... 4,585,781
63,300 Warner-Lambert Co. ............................. 5,186,644
7,200 Watson Pharmaceutical, Inc.*.................... 257,850
------------
55,344,408
------------
Medical -- Health Medical Organization (0.1%):
12,700 Humana, Inc.*................................... 103,981
12,800 United Healthcare Corp. ........................ 680,000
------------
783,981
------------
Medical -- Hospital (0.2%):
41,749 Columbia HCA Healthcare Corp. .................. 1,223,768
23,500 Tenet Healthcare Corp.*......................... 552,250
------------
1,776,018
------------
Medical -- Nursing Homes (0.0%):
8,400 Manor Care, Inc.*............................... 134,400
------------
Medical -- Outpatient/Home Care (0.0%):
31,300 HEALTH SOUTH Corp.*............................. 168,238
------------
Medical -- Wholesale Drug (0.1%):
20,200 Cardinal Health, Inc. .......................... 967,075
------------
Medical Instruments (0.4%):
8,500 Biomet, Inc. ................................... 340,000
86,800 Medtronic, Inc. ................................ 3,162,775
6,400 St. Jude Medical, Inc.*......................... 196,400
------------
3,699,175
------------
Medical Products (0.4%):
10,000 Allergan, Inc. ................................. 497,500
21,500 Baxter International, Inc. ..................... 1,350,468
</TABLE>
Continued
65
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Medical Products (continued)
29,900 Boston Scientific Corp.*.......................... $ 654,063
22,400 Guidant Corp.*.................................... 1,052,800
5,500 Mallinckrodt, Inc. ............................... 174,969
------------
3,729,800
------------
Medical/Dental Supplies (1.1%):
4,300 Bausch & Lomb, Inc. .............................. 294,281
18,900 Becton, Dickinson & Co. .......................... 505,575
3,900 C.R. Bard, Inc. .................................. 206,700
102,100 Johnson & Johnson................................. 9,508,063
------------
10,514,619
------------
Metal -- Gold (0.1%):
29,400 Barrick Gold Corp. ............................... 520,012
19,600 Homestake Mining Co. ............................. 153,125
12,615 Newmont Mining Corp. ............................. 309,068
24,600 Placer Dome, Inc. ................................ 264,450
------------
1,246,655
------------
Metal -- Miscellaneous (0.0%):
14,500 Inco, Ltd.*....................................... 340,750
------------
Metal -- Non-Ferrous (0.1%):
17,050 Alcan Aluminum, Ltd. ............................. 702,246
12,300 Freeport-McMoran Copper & Gold, Inc., Class B*.... 259,838
4,700 Reynolds Metals Co. .............................. 360,138
------------
1,322,222
------------
Metal -- Processing & Fabrication (0.0%):
4,700 Timken Co......................................... 96,056
6,925 Worthington Industries, Inc....................... 114,696
------------
210,752
------------
Metals (0.3%):
27,100 Alcoa, Inc........................................ 2,249,300
5,217 Phelps Dodge Corp................................. 350,191
------------
2,599,491
------------
Multimedia (0.4%):
56,374 CBS Corp.*........................................ 3,604,413
------------
Non-Hazardous Waste Disposal (0.0%):
13,000 Allied Waste Industries, Inc.*.................... 114,563
------------
Office Automation & Equipment (0.2%):
11,244 IKON Office Solutions, Inc........................ 76,600
19,800 Pitney Bowes, Inc................................. 956,588
49,034 Xerox Corp........................................ 1,112,458
------------
2,145,646
------------
Office Supplies & Forms (0.1%):
8,300 Avery Dennison Corp............................... 604,863
5,900 Deluxe Corp....................................... 161,881
------------
766,744
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Oil & Gas (0.2%):
9,100 Anadarko Petroleum Corp............................. $ 310,538
8,400 Apache Corp......................................... 310,275
46,386 Conoco, Inc., Class B............................... 1,153,851
3,000 Transocean Offshore Inc. Caymon*.................... 98,813
7,841 Transocean Sedco Forex, Inc......................... 264,133
------------
2,137,610
------------
Oil & Gas -- Drilling (0.0%):
6,600 Rowan Cos., Inc.*................................... 143,138
------------
Oil -- Field Services (0.4%):
32,700 Halliburton Co...................................... 1,316,175
40,500 Schlumberger, Ltd................................... 2,278,125
------------
3,594,300
------------
Oil -- International Integrated (4.0%):
48,500 Chevron Corp........................................ 4,201,313
254,170 Exxon Mobil Corp.................................... 20,476,569
158,000 Royal Dutch Petroleum Co., ADR...................... 9,549,125
40,900 Texaco, Inc......................................... 2,221,381
------------
36,448,388
------------
Oil -- Production/Pipeline (0.4%):
16,100 Coastal Corp........................................ 570,544
6,250 Columbia Gas System, Inc............................ 395,313
52,800 Enron Corp.......................................... 2,342,999
------------
3,308,856
------------
Oil -- U.S. Exploration & Production (0.1%):
16,365 Burlington Resources, Inc........................... 541,068
19,023 Union Pacific Resources Group, Inc.................. 242,543
------------
783,611
------------
Oil -- U.S. Integrated (0.6%):
6,800 Amerada Hess Corp................................... 385,900
23,900 Atlantic Richfield Co............................... 2,067,349
6,473 Kerr-Mcgee Corp..................................... 401,326
26,300 Occidental Petroleum Corp........................... 568,738
18,700 Phillips Petroleum Co............................... 878,900
17,900 Unocal Corp......................................... 600,769
22,800 USX-Marathon Group.................................. 562,875
------------
5,465,857
------------
Oil Field Machinery & Equipment (0.1%):
24,680 Baker Hughes, Inc................................... 519,823
4,500 McDermott International, Inc........................ 40,781
------------
560,604
------------
Oil Refining (0.1%):
5,500 Ashland, Inc........................................ 181,156
6,874 Sunoco, Inc......................................... 161,539
11,500 Tosco Corp.......................................... 312,657
------------
655,352
------------
</TABLE>
Continued
66
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Paints & Related Products (0.0%):
12,800 Sherwin-Williams Co................................. $ 268,800
------------
Paper & Related Products (0.5%):
4,408 Boise Cascade Corp.................................. 178,524
7,200 Champion International Co........................... 445,950
16,700 Fort James Corp..................................... 457,163
12,500 Georgia Pacific Corp. .............................. 634,374
30,644 International Paper Co.............................. 1,729,470
7,700 Mead Corp........................................... 334,469
2,200 Potlatch Corp....................................... 98,175
4,200 Temple-Inland, Inc.................................. 276,938
7,550 Westvaco Corp....................................... 246,319
8,400 Williamette Industries, Inc......................... 390,075
------------
4,791,457
------------
Photography (0.2%):
23,400 Eastman Kodak Co. .................................. 1,550,250
3,289 Polaroid Corp....................................... 61,874
------------
1,612,124
------------
Pipelines (0.2%):
7,200 Consolidated Natural Gas Co......................... 467,550
17,200 El Paso Energy Corporation.......................... 667,575
32,100 The Williams Companies, Inc. ....................... 981,056
------------
2,116,181
------------
Pollution Control (0.1%):
9,399 Pall Corp. ......................................... 202,666
46,042 Waste Management, Inc. ............................. 791,347
------------
994,013
------------
Printers & Related Products (0.1%):
9,500 Lexmark International Group, Inc.*.................. 859,750
------------
Printing & Publishing (0.0%):
12,365 Dun & Bradstreet Corp. ............................. 364,768
------------
Printing -- Commercial (0.0%):
9,900 R.R. Donnelley & Sons Co. .......................... 245,644
------------
Protection -- Safety (0.5%):
121,820 Tyco International, Ltd. ........................... 4,735,753
------------
Publishing -- Books (0.1%):
14,600 McGraw-Hill Cos., Inc. ............................. 899,725
------------
Publishing -- Newspapers (0.5%):
6,600 Dow Jones & Co. .................................... 448,800
20,700 Gannett, Inc. ...................................... 1,688,344
6,100 Knight-Ridder, Inc. ................................ 362,950
13,200 New York Times Co. ................................. 648,450
4,400 Times Mirror Co. ................................... 294,800
17,500 Tribune Co. ........................................ 963,594
------------
4,406,938
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Publishing -- Periodicals (0.0%):
3,900 Meredith Corp. ..................................... $ 162,581
------------
Restaurants (0.5%):
10,100 Darden Restaurants, Inc. ........................... 183,063
100,300 McDonald's Corp. ................................... 4,043,343
11,610 Tricon Global Restaurants*.......................... 448,436
9,300 Wendy's International, Inc. ........................ 191,813
------------
4,866,655
------------
Retail (0.3%):
10,500 Bed Bath & Beyond, Inc.*............................ 364,875
15,000 Best Buy Co.*....................................... 752,813
8,600 Consolidated Stores*................................ 139,750
16,687 Dollar General Corp. ............................... 379,629
12,000 Kohl's Corp.*....................................... 866,250
34,400 Staples, Inc.*...................................... 713,800
------------
3,217,117
------------
Retail -- Apparel/Shoes (0.5%):
63,437 Gap, Inc. .......................................... 2,918,103
16,078 Limited, Inc. ...................................... 696,378
10,700 Nordstrom, Inc. .................................... 280,206
23,500 TJX Companies, Inc. ................................ 480,281
------------
4,374,968
------------
Retail -- Consumer Electronics (0.1%):
14,900 Circuit City Stores, Inc. .......................... 671,431
------------
Retail -- Discount (2.8%):
32,700 Dayton-Hudson Corp. ................................ 2,401,406
37,400 Kmart Corp.*........................................ 376,338
18,750 Toys 'R' Us, Inc.*.................................. 268,359
327,150 Wal-Mart Stores, Inc. .............................. 22,614,243
------------
25,660,346
------------
Retail -- Drug Store (0.4%):
29,000 CVS Corp. .......................................... 1,158,188
3,000 Longs Drug Stores Corp. ............................ 77,438
7,600 Rite Aid Corp. ..................................... 85,025
74,300 Walgreen Co. ....................................... 2,173,274
------------
3,493,925
------------
Retail -- Major Department Stores (0.2%):
5,516 Harcourt General, Inc. ............................. 222,019
19,900 J.C. Penney, Inc. .................................. 396,756
24,700 May Department Stores Co. .......................... 796,575
28,175 Sears, Roebuck & Co. ............................... 857,577
------------
2,272,927
------------
Retail -- Regional Department Stores (0.1%):
8,100 Dillards Department Stores, Inc. ................... 163,519
15,400 Federated Department Stores, Inc.*.................. 778,662
------------
942,181
------------
</TABLE>
Continued
67
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Retail -- Supermarkets (0.3%):
31,097 Albertson's, Inc. .............................. $ 1,002,878
2,900 Great Atlantic & Pacific Tea Co., Inc. ......... 80,838
61,400 Kroger Co.*..................................... 1,158,925
11,200 Winn-Dixie Stores, Inc. ........................ 268,100
------------
2,510,741
------------
Retail/Wholesale -- Auto Parts (0.0%):
11,300 AutoZone, Inc.*................................. 365,131
4,200 Pep Boys-Manny, Moe & Jack...................... 38,325
------------
403,456
------------
Retail/Wholesale -- Computers (0.1%):
14,256 Tandy Corp. .................................... 701,217
------------
Rubber -- Tires (0.1%):
5,700 Cooper Tire & Rubber Co. ....................... 88,706
11,800 Goodyear Tire & Rubber Co. ..................... 332,613
8,300 The B.F. Goodrich Co. .......................... 228,250
------------
649,569
------------
Shoes & Related Apparel (0.1%):
20,800 Nike, Inc., Class B............................. 1,030,900
4,600 Reebok International Ltd.*...................... 37,663
------------
1,068,563
------------
Soap & Cleaning Preparations (1.5%):
17,500 Clorox, Inc. ................................... 881,563
43,100 Colgate-Palmolive Co. .......................... 2,801,500
96,500 Procter & Gamble Co. ........................... 10,572,780
------------
14,255,843
------------
Steel -- Producers (0.1%):
10,500 Bethlehem Steel Corp.*.......................... 87,938
6,600 Nucor Corp. .................................... 361,762
6,640 USX-U.S. Steel Group............................ 219,120
------------
668,820
------------
Technology (0.3%):
10,200 ADC Telecommunications, Inc.*................... 740,138
17,800 BMC Software, Inc.*............................. 1,422,887
18,200 Peoplesoft, Inc.*............................... 387,888
------------
2,550,913
------------
Technology -- Software (0.0%):
4,700 AutoDesk, Inc. ................................. 158,625
------------
Telecom Equipment (0.9%):
48,800 QUALCOMM, Inc.*................................. 8,601,000
------------
Telecommunications (0.4%):
32,500 Sprint Corp., PCS Group*........................ 3,331,250
------------
Telecommunications -- Equipment (4.2%):
7,260 Allegheny Technologies Inc. .................... 162,896
6,555 Andrew Corp.*................................... 124,135
5,300 Comverse Technology, Inc.*...................... 767,175
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Telecommunications -- Equipment (continued)
12,800 General Instrument Corp.*......................... $ 1,088,000
230,637 Lucent Technologies, Inc. ........................ 17,254,530
44,900 Motorola, Inc. ................................... 6,611,525
98,200 Nortel Networks Corp. ............................ 9,918,200
5,600 Scientific-Atlanta, Inc. ......................... 311,500
29,000 Tellabs, Inc.*.................................... 1,861,438
------------
38,099,399
------------
Telecommunications -- Services and
Equipment (0.7%):
10,500 CenturyTel, Inc. ................................. 497,438
56,855 Global Crossing, Ltd*............................. 2,842,750
26,800 Nextel Communications, Inc, Class A*.............. 2,763,750
------------
6,103,938
------------
Textile -- Apparel (0.1%):
4,500 Liz Claiborne, Inc. .............................. 169,313
2,900 Russell Corp. .................................... 48,575
9,100 VF Corp. ......................................... 273,000
------------
490,888
------------
Textile -- Home Furnishings (0.0%):
1,300 Springs Industries, Inc. ......................... 51,919
------------
Tobacco (0.5%):
12,600 Fortune Brands, Inc. ............................. 416,588
174,000 Philip Morris Cos., Inc. ......................... 4,034,624
12,900 U.S.T., Inc. ..................................... 324,919
------------
4,776,131
------------
Tools -- Hand Held (0.0%):
5,050 Snap-On, Inc. .................................... 134,141
6,900 The Stanley Works................................. 207,862
------------
342,003
------------
Toys/Game/Hobby (0.1%):
14,800 Hasbro, Inc. ..................................... 282,125
31,447 Mattel, Inc. ..................................... 412,742
------------
694,867
------------
Transportation (0.1%):
8,300 Kansas City Southern Industries, Inc. ............ 619,388
------------
Transportation -- Air Freight (0.1%):
22,020 FDX Corp.*........................................ 901,444
------------
Transportation -- Airline (0.2%):
11,100 AMR Corp.*........................................ 743,699
10,600 Delta Air Lines, Inc. ............................ 528,013
38,037 Southwest Airlines Co. ........................... 615,724
5,600 US Airways Group, Inc.*........................... 179,550
------------
2,066,986
------------
Transportation -- Equipment & Leasing (0.0%):
5,300 Ryder Systems, Inc. .............................. 129,519
------------
</TABLE>
Continued
68
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Transportation -- Railroad (0.3%):
34,400 Burlington Northern Santa Fe Corp. ............... $ 834,200
16,408 CSX Corp. ........................................ 514,801
28,700 Norfolk Southern Corp. ........................... 588,350
18,300 Union Pacific Corp. .............................. 798,338
------------
2,735,689
------------
Utilities (0.1%):
8,900 CMS Energy Corp. ................................. 277,569
7,400 Florida Progress Corp. ........................... 313,112
6,400 Pinnacle West Capital Corp. ...................... 195,600
------------
786,281
------------
Utilities -- Electric Power (1.3%):
10,400 Ameren Corp. ..................................... 340,600
14,600 American Electric Power Co. ...................... 469,025
12,100 Carolina Power & Light Co. ....................... 368,294
16,100 Central & South West Corp. ....................... 322,000
12,035 CINergy Corp. .................................... 290,344
16,400 Consolidated Edison, Inc. ........................ 565,800
11,300 Constellation Energy Group........................ 327,700
11,000 Detroit Edison Co................................. 345,125
14,450 Dominion Resources, Inc. ......................... 567,163
27,006 Duke Energy Corp. ................................ 1,353,675
25,700 Edison International.............................. 673,019
18,600 Entergy Corp. .................................... 478,950
17,700 First Energy Corp. ............................... 401,569
13,300 Florida Power & Light, Inc. ...................... 569,406
9,500 General Public Utilities Corp. ................... 284,406
8,700 New Century Energies Inc. ........................ 264,263
11,600 Northern States Power Co. ........................ 226,200
13,800 Peco Energy Corp. ................................ 479,550
11,900 PP&L Resources, Inc. ............................. 272,213
16,200 Public Service Enterprise Group, Inc. ............ 563,963
22,344 Reliant Energy, Inc. ............................. 511,119
50,600 Southern Co. ..................................... 1,189,099
20,470 Texas Utilities Co. .............................. 727,964
16,400 Unicom Corp. ..................................... 549,400
------------
12,140,847
------------
Utilities -- Gas Distribution (0.1%):
1,700 Eastern Enterprises............................... 97,644
3,700 NICOR, Inc. ...................................... 120,250
2,400 ONEOK, Inc. ...................................... 60,300
2,700 People's Energy Corp. ............................ 90,450
18,125 Sempra Energy..................................... 314,922
------------
683,566
------------
Utilities -- Telephone (6.9%):
22,600 Alltel Corp. ..................................... 1,868,738
235,351 AT&T Corp. ....................................... 11,944,062
114,940 Bell Atlantic Corp. .............................. 7,075,994
137,200 BellSouth Corp. .................................. 6,422,675
72,600 GTE Corp. ........................................ 5,122,838
208,798 MCI Worldcom, Inc.*............................... 11,079,370
250,996 SBC Communications, Inc. ......................... 12,236,054
64,200 Sprint Corp. ..................................... 4,321,463
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
COMMON STOCKS (continued)
Utilities -- Telephone (continued)
37,360 US West, Inc. ............. $ 2,689,920
------------
62,761,114
------------
Total Common Stocks........ 908,843,437
------------
INVESTMENT COMPANIES (1.6%):
450,264 Dreyfus Cash Management
Money Market Fund.......... 450,264
14,344,670 Federated Prime Value
Obligations Money Market
Fund....................... 14,344,670
------------
Total Investment
Companies.................. 14,794,934
------------
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES
LENDING COLLATERAL (3.1%):
Certificate of Deposit (0.1%):
$ 515,000 Bank One Corp., 6.02%,
2/22/00.................... 510,931
------------
Commercial Paper (0.9%):
Beverages -- Non-Alcoholic (0.1%):
750,000 Coca-Cola Co., 6.08%,
1/28/00.................... 746,646
------------
Chemical -- Diversified (0.1%):
1,000,000 DuPont, 6.11%, 2/8/00...... 993,762
------------
Diversified Financial Services (0.1%):
1,000,000 Citigroup, 6.48%, 1/24/00.. 996,161
------------
Finance (0.2%):
499,507 Ford Motor Credit Corp.,
5.95%, 1/7/00.............. 499,507
1,000,000 General Electric Capital
Corp., 6.28%, 1/14/00...... 997,752
500,000 General Motors Acceptance
Corp., 6.34%, 1/18/00...... 498,407
------------
1,995,666
------------
Food -- Canned (0.1%):
1,000,000 H.J. Heinz Co., 6.05%,
1/13/00.................... 997,912
------------
Medical -- Drugs (0.1%):
700,000 Abbott Laboratories, 6.43%,
1/14/00.................... 698,194
------------
Multi-Media (0.1%):
1,000,000 McGraw-Hill, 6.12%,
2/29/00.................... 990,344
------------
Oil Comp-Intergrated (0.1%):
500,000 Mobil Corp., 6.04%,
1/28/00.................... 497,764
------------
7,916,449
------------
Repurchase Agreements (1.4%):
5,014,557 Donaldson Lufkin &
Jenrette, 4.00%, 1/3/00
(Collateralized by
$7,334,494 various
Government Agency
Securities, 6.00%-8.50%,
1/15/24-3/15/38, market
value $5,084,542)............. 5,014,557
</TABLE>
Continued
69
<PAGE>
Index Equity Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Repurchase Agreements (continued)
$ 4,788,836 Prudential Securities, 3.68%, 1/3/00
(Collateralized by $9,846,940 various Government
Agency Securities, 5.00%-7.50%, 1/15/24-9/20/29,
market value $4,856,735)........................... $ 4,788,836
4,500,531 Salomon Smith Barney, 4.25%, 1/3/00 (Collateralized
by $9,152,283 various Government Agency Securities,
6.00%-9.50%, 4/15/18-12/15/29, market value
$4,562,951)........................................ 4,500,531
------------
14,303,924
------------
Time Deposits (0.7%):
Foreign Banking (0.7%):
1,250,174 Comerica Cayman, 5.00%, 1/3/00..................... 1,250,174
1,250,217 Credit Suisse-First Boston Cayman,
6.25%, 1/3/00...................................... 1,250,217
1,250,174 National Westminster BK PLC Nassau, 5.00%, 1/3/00.. 1,250,174
1,250,365 Societe Generale Cayman, 10.50%, 1/3/00............ 1,250,365
1,250,174 Union Bank of Switzerland Cayman, 5.00%, 1/3/00.... 1,250,174
------------
6,251,104
------------
Total Short-Term Securities Purchased With
Securities Lending Collateral...................... 28,982,408
------------
Total Investments
(Cost $473,166,953) (a) -- 103.1%............................... 952,620,779
Liabilities in excess of other assets -- (3.1)%................. (29,005,123)
------------
Total Net Assets -- 100.0%...................................... $923,615,656
============
</TABLE>
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$1,897,339. Cost for Federal income tax purposes differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................ $503,615,491
Unrealized depreciation........................................ (26,059,004)
------------
Net unrealized appreciation.................................... $477,556,487
============
</TABLE>
(b) Part of this security has been deposited as initial margin on open
futures contracts.
(c) Investment in affiliate.
* Non-income producing security.
ADR -- American Depositary Receipt
NV -- Naamloze Vennootschap (Dutch Corporation)
PLC -- Public Limited Company (British)
At December 31, 1999, the Fund's open long futures contracts were as follows:
<TABLE>
<CAPTION>
Unrealized
# of Opening Notional Appreciation Market
Contracts Contract Type Amount on Futures Value
- --------- ------------- -------- ------------ ------
<S> <C> <C> <C> <C>
38 Standard & Poor's $13,717,218 $382,682 $14,099,900
500, 3/16/00
</TABLE>
See Notes to Financial Statements.
70
<PAGE>
Short Term Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (61.4%):
Aerospace (3.4%):
$6,000,000 Boeing Capital Corp., 6.83%, 5/21/01............... $ 5,962,500
------------
Asset Backed Security (2.7%):
4,794,499 Premier Auto Trust, 5.28%, 11/8/01................. 4,777,190
------------
Banking (11.6%):
5,000,000 ABN Amro Bank, 6.63%, 10/31/01..................... 4,954,290
5,000,000 Bankers Trust Corp., 5.85%, 5/11/00................ 4,987,500
3,000,000 Bear Stearns Co., 6.45%, 8/1/02.................... 2,940,000
4,000,000 First of America, 8.50%, 2/1/04.................... 4,210,000
3,500,000 Marshall & Ilsley Corp., 6.38%, 7/15/03............ 3,425,625
------------
20,517,415
------------
Brokers (6.2%):
5,000,000 Merrill Lynch & Co., Inc., 6.64%, 9/19/02.......... 4,943,750
6,000,000 Morgan Stanley Group, Inc., 6.50%, 3/30/01......... 5,970,000
------------
10,913,750
------------
Cable Television (2.9%):
5,000,000 Tele-Commun Inc., 8.25%, 1/15/03................... 5,143,750
------------
Diversified (1.7%):
3,000,000 Tyco International Group SA, 6.88%, 9/5/02 (b)..... 2,951,250
------------
Finance (26.5%):
5,000,000 Aristar, Inc., 6.00%, 8/1/01....................... 4,912,500
5,000,000 Associates Corp., 5.50%, 2/15/02................... 4,850,000
4,000,000 Beneficial Corp., 6.28%, 1/15/02................... 3,925,000
2,500,000 CIT Group, Inc., 5.92%, 1/15/03.................... 2,412,500
5,000,000 Ford Motor Credit Corp., 7.50%, 1/15/03............ 5,043,750
5,000,000 General Electric Capital Corp., Series A, 6.33%,
9/17/01............................................ 4,956,250
3,000,000 General Motors Acceptance Corp., 6.80%, 5/22/01.... 2,992,500
4,000,000 Household Netherlands BV, 6.20%, 12/1/03........... 3,840,000
5,000,000 MCN Investment Corp., 6.89%, 1/16/02............... 4,943,750
5,000,000 Norwest Financial, Inc., 7.88%, 2/15/02............ 5,081,251
1,500,000 Transamerica Financial Corp., 6.13%, 11/1/01....... 1,475,625
2,500,000 Transamerica Financial Corp., 7.25%, 8/15/02....... 2,503,125
------------
46,936,251
------------
Financial -- Consumer Loans (2.8%):
5,000,000 Chase Manhattan Credit Card Master Trust, 7.04%,
2/15/05............................................ 5,036,000
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (continued):
Industrial Goods & Services (3.6%):
$ 4,375,000 Enron Corp., 6.45%, 11/15/01....................... $ 4,331,250
2,000,000 Monsanto Co., 5.38%, 12/1/01 (b)................... 1,945,000
------------
6,276,250
------------
Total Corporate Notes & Bonds...................... 108,514,356
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (8.3%):
Freddie Mac (8.3%):
5,000,000 5.00%, 2/15/01..................................... 4,924,800
5,000,000 5.75%, 6/15/01..................................... 4,952,750
5,000,000 5.75%, 7/15/03..................................... 4,843,450
------------
Total U.S. Government Agency Obligations........... 14,721,000
------------
U.S. GOVERNMENT OBLIGATIONS (23.2%):
U.S. Treasury Notes (23.2%):
8,000,000 6.00%, 8/15/00..................................... 8,005,040
5,000,000 6.25%, 4/30/01..................................... 5,003,200
8,250,000 6.63%, 7/31/01..................................... 8,298,840
10,000,000 6.25%, 6/30/02..................................... 9,993,100
9,400,000 7.25%, 5/15/04..................................... 9,678,710
------------
Total U.S. Government Obligations.................. 40,978,890
------------
U.S. TREASURY INFLATION PROTECTION BONDS (3.5%):
6,301,020 Treasury Inflation Protection, 3.63%, 7/15/02...... 6,236,119
------------
Total U.S. Treasury Inflation Protection Bonds..... 6,236,119
------------
INVESTMENT COMPANIES (1.9%):
1,394,481 Dreyfus Cash Management Money Market Fund.......... 1,394,481
2,026,199 Federated Prime Value Obligations Money Market
Fund............................................... 2,026,198
------------
Total Investment Companies......................... 3,420,679
------------
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL (8.5%):
Commercial Paper (2.5%):
Banking (0.4%):
$750,000 Deutsche Bank Financial Inc., 6.02%, 2/1/00........ 746,170
------------
Diversified Financial Services (0.8%):
750,000 General Electric Capital Corp., 6.00%, 2/7/00...... 745,349
750,000 National Australia Funding Inc., 6.02%, 2/4/00..... 745,807
------------
1,491,156
------------
Finance (0.3%):
500,000 General Motors Acceptance Corp., 6.34%, 1/18/00.... 498,407
------------
</TABLE>
Continued
71
<PAGE>
Short Term Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Food -- Canned (0.3%):
$ 500,000 H.J. Heinz Co., 6.05%, 1/13/00..................... $ 498,956
------------
Oil Comp -- Intergrated (0.3%):
500,000 Mobil Corp., 6.04%, 1/28/00........................ 497,764
------------
Telecommunications (0.4%):
750,000 Bell South Telecommunications, 5.92%, 2/11/00...... 744,957
------------
4,477,410
------------
Repurchase Agreements (4.6%):
2,250,250 Donaldson Lufkin & Jenrette, 4.00%, 1/3/00
(Collateralized by $3,291,307 various Government
Agency Securities, 6.00%-8.50%, 1/15/24-3/15/38,
market value $2,281,655)........................... 2,250,250
3,499,072 Prudential Securities Inc., 3.68%, 1/4/00
(Collateralized by $7,194,891 various Government
Agency Securities, 5.00%-7.50%, 11/15/24-9/20/29,
market value $3,548,683)........................... 3,499,072
2,287,270 Salomon Smith Barney, 4.25%, 1/3/00 (Collateralized
by $4,651,393 various Government Agency Securities,
6.00%-9.50%, 4/15/18-12/15/29, market value
$2,318,993)........................................ 2,287,270
------------
8,036,592
------------
Time Deposits (1.4%):
Foreign Banking (1.4%):
500,069 Comerica Cayman, 5.00%, 1/3/00..................... 500,069
500,087 Credit Suisse-First Boston Cayman, 6.25%, 1/3/00... 500,087
500,069 National Westminster BK PLC Nassau, 5.00%, 1/3/00.. 500,069
500,146 Societe Generale Cayman, 10.50%, 1/3/00............ 500,146
500,069 Union Bank of Switzerland Cayman, 5.00%, 1/3/00.... 500,069
------------
2,500,440
------------
Total Short-Term Securities Purchased with
Securities Lending Collateral...................... 15,014,442
------------
Total Investments (Cost $192,266,232) (a) -- 106.8%............. 188,885,486
------------
Liabilities in excess of other assets -- (6.8)%................. (12,108,294)
------------
Total Net Assets -- 100.0%...................................... $176,777,192
============
</TABLE>
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$60,547. Cost for Federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation....................................... $ 24,658
Unrealized depreciation....................................... (3,465,951)
------------
Net unrealized depreciation................................... $ (3,441,293)
============
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This Security has been determined to be liquid by procedures approved by
the Board of Trustees.
PLC -- Public Limited Company (British)
See Notes to Financial Statements.
72
<PAGE>
Intermediate Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
COMMERCIAL PAPER (8.4%):
Finance (3.5%):
Diversified Financial Services (3.5%):
$30,000,000 General Electric Capital Corp., 4.91%, 1/24/00.... $ 29,877,333
--------------
Oil & Gas (4.9%):
42,000,000 Mobil Corp., 6.35%, 1/19/00....................... 41,899,620
--------------
Total Commercial Paper............................ 71,776,953
--------------
CORPORATE NOTES & BONDS (34.6%):
Banking (9.6%):
5,000,000 ABN-Amro Bank NV (Chicago), 7.25%, 5/31/05........ 4,925,000
8,000,000 Bank America, 5.88%, 2/15/09...................... 7,120,000
6,000,000 Bank of Montreal-Chicago, 7.80%, 4/1/07........... 6,037,500
10,000,000 BB&T Corp., 7.25%, 6/15/07........................ 9,762,500
10,000,000 Chase Manhattan Corp., 6.75%, 9/15/06............. 9,637,500
5,000,000 J.P. Morgan & Co., 7.63%, 9/15/04................. 5,050,000
5,270,000 Keycorp, 6.75%, 3/15/06........................... 4,980,150
5,000,000 MBNA American Bank NA, 7.25%, 9/15/02............. 4,968,750
5,000,000 MBNA Master Credit Card Trust, 5.52%**, 8/15/05... 5,004,500
5,000,000 National City Bank, 6.25%, 3/15/11................ 4,475,000
5,000,000 NCNB Corp., 9.38%, 9/15/09........................ 5,568,750
5,000,000 Northern Trust Corp., 7.10%, 8/1/09............... 4,856,250
10,000,000 Wachovia Corp., 6.38%, 2/1/09..................... 9,287,500
--------------
81,673,400
--------------
Beverages -- Alcoholic (0.6%):
5,000,000 Diageo Capital PLC, 7.25%, 11/1/09................ 4,918,750
--------------
Brokers (1.9%):
8,500,000 Donaldson Lufkin Jenrette, 5.88%, 4/1/02.......... 8,255,625
3,000,000 Goldman Sachs Group, 6.65%, 5/15/09............... 2,790,000
5,000,000 Salomon Smith Barney, 7.13%, 10/1/06.............. 4,856,250
--------------
15,901,875
--------------
Electronic Components/Instruments (1.1%):
10,000,000 Tandy Corp., 6.15%, 1/15/02....................... 9,800,000
--------------
Finance (11.4%):
5,000,000 Associates Corp., N.A., 6.52%, 10/11/02........... 4,937,500
5,000,000 Citigroup Capital II, 7.75%, 12/1/36.............. 4,712,500
5,000,000 Finova Capital Corp., 7.25%, 11/8/04.............. 4,943,750
5,000,000 Fleet Financial Group, 7.38%, 12/1/09............. 4,887,500
10,000,000 Ford Capital Guaranteed Notes, 9.88%, 5/15/02..... 10,587,501
8,000,000 Ford Motor Credit Corp., 5.80%, 1/12/09........... 7,110,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (continued)
Finance (continued)
$ 8,400,000 Ford Motor Credit Corp., 9.03%, 12/30/09,
Callable 12/30/04 @ 100.......................... $ 8,788,500
5,000,000 General Electric Capital Corp., 6.66%, 5/1/00,
Callable 5/1/00 @ 100............................ 5,000,000
5,000,000 General Electric Capital Corp., Series A, 6.33%,
9/17/01.......................................... 4,956,250
10,000,000 General Motors Acceptance Corp., 5.35%, 12/7/01.. 9,700,000
5,000,000 General Motors Acceptance Corp., 7.13%, 5/1/03... 4,981,250
5,000,000 General Motors Acceptance Corp., 6.15%, 4/5/07... 4,606,250
5,000,000 Household Finance Corp., 8.00%, 8/1/04........... 5,081,250
5,000,000 Norwest Corp., 6.50%, 6/1/05..................... 4,793,750
6,000,000 Norwest Finance, Inc., 5.38%, 9/30/03............ 5,647,500
8,000,000 PNC Funding Corp., 6.13%, 2/15/09................ 7,170,000
--------------
97,903,501
--------------
Industrial Goods & Services (3.7%):
5,500,000 Boston Scientific, 6.63%, 3/15/05................ 5,073,750
7,500,000 Comdisco, Inc., 6.13%, 8/1/06, Callable 8/1/01 @
100.............................................. 7,331,250
5,000,000 General Motors, 6.25%, 5/1/05.................... 4,781,250
5,000,000 Tyco International Group SA, 6.13%, 6/15/01...... 4,912,500
10,000,000 Tyco International Group SA, 5.88%, 11/1/04 (b).. 9,200,000
--------------
31,298,750
--------------
Insurance (1.7%):
5,000,000 American Annuity Group, 6.88%, 6/1/08............ 4,556,250
5,000,000 St. Paul Companies, Inc., 7.19%, 8/2/07.......... 4,818,750
5,100,000 Travelers Group, Inc., 6.88%, 12/15/03........... 5,036,250
--------------
14,411,250
--------------
Machinery & Equipment (0.6%):
6,000,000 Case Corp., 7.25%, 1/15/16....................... 5,460,000
--------------
Technology (1.2%):
10,000,000 MCI Worldcom, Inc., 7.55%, 4/1/04................ 10,100,000
--------------
Telecommunications (2.0%):
6,000,000 Bell Canada, 7.75%, 4/1/06....................... 6,037,500
8,000,000 Sprint Cap. Corp., 6.88%, 11/15/28............... 7,130,000
5,000,000 US West Capital Funding, Inc., 6.88%, 7/15/28.... 4,350,000
--------------
17,517,500
--------------
Transportation -- Railroad (0.8%):
7,000,000 Union Pacific Co., 6.34%, 11/25/03............... 6,711,250
--------------
</TABLE>
Continued
73
<PAGE>
Intermediate Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (continued)
Utilities (0.6%):
$ 5,000,000 Western Resources, Inc., 6.88%, 8/1/04............ $ 4,731,250
--------------
Total Corporate Notes & Bonds..................... 300,427,526
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (25.5%):
Fannie Mae (17.6%):
10,000,000 5.13%, 2/13/04.................................... 9,403,700
25,000,000 5.63%, 5/14/04.................................... 23,895,250
15,000,000 6.50%, 8/15/04.................................... 14,816,850
10,000,000 5.75%, 6/15/05.................................... 9,510,500
9,100,000 6.38%, 6/15/09.................................... 8,686,951
35,000,000 7.50%, 1/1/15(c).................................. 34,606,250
30,000,000 7.00%, 1/1/15(c).................................. 29,662,500
9,100,000 6.00%, 11/15/22................................... 8,667,841
12,000,000 6.25%, 11/18/23................................... 11,457,720
--------------
150,707,562
--------------
Federal Farm Credit Bank (1.1%):
10,000,000 6.30%, 9/23/04.................................... 9,776,200
--------------
Federal Home Loan Bank (1.9%):
11,000,000 5.73%**, 1/19/00.................................. 10,978,440
5,000,000 6.49%, 1/8/04..................................... 4,941,200
--------------
15,919,640
--------------
Freddie Mac (4.9%):
10,000,000 5.75%, 7/15/03.................................... 9,686,900
10,410,000 8.12%, 1/31/05.................................... 10,960,897
3,000,000 7.22%, 6/14/06.................................... 3,033,540
20,000,000 6.00%, 1/1/30..................................... 18,306,200
--------------
41,987,537
--------------
Total U.S. Government Agency Obligations.......... 218,390,939
--------------
U.S. GOVERNMENT OBLIGATIONS (30.0%):
U.S. Treasury Bonds (11.0%):
54,500,000 9.13%, 5/15/09.................................... 59,496,560
12,000,000 10.38%, 11/15/09.................................. 13,806,720
8,000,000 9.88%, 11/15/15................................... 10,340,560
10,000,000 7.50%, 11/15/16................................... 10,699,000
--------------
94,342,840
--------------
U.S. Treasury Notes (15.3%):
36,000,000 6.50%, 5/31/01.................................... 36,140,400
13,300,000 6.25%, 10/31/01................................... 13,298,537
37,000,000 6.38%, 8/15/02.................................... 37,071,410
2,000,000 6.25%, 2/15/03.................................... 1,993,680
10,350,000 7.50%, 2/15/05.................................... 10,791,324
2,100,000 6.88%, 5/15/06.................................... 2,135,679
21,800,000 7.00%, 7/15/06.................................... 22,323,200
7,000,000 6.00%, 8/15/09.................................... 6,781,530
--------------
130,535,760
--------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (continued)
U.S. Treasury Strips (3.7%):
$30,000,000 11/15/08......................................... $ 16,668,300
26,850,000 2/15/09.......................................... 14,645,601
--------------
31,313,901
--------------
Total U.S. Government Obligations................ 256,192,501
--------------
U.S. TREASURY INFLATION PROTECTION BONDS (4.1%):
36,444,450 Treasury Inflation Protection, 3.63%, 1/15/08.... 34,693,294
--------------
Total U.S. Treasury Inflation Protection Bonds... 34,693,294
--------------
YANKEE NOTES (1.1%):
10,000,000 Potash Corp. Saskatchewan, 7.13%, 6/15/07........ 9,500,000
--------------
Total Yankee Notes............................... 9,500,000
--------------
INVESTMENT COMPANIES (4.2%):
17,242,246 Dreyfus Cash Management Money Market Fund........ 17,242,246
19,067,563 Federated Prime Value Obligations Money Market
Fund............................................. 19,067,563
--------------
Total Investment Companies....................... 36,309,809
--------------
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL (12.4%):
Certificate of Deposit (0.3%):
$ 2,577,000 Bank One Corp., 6.02%, 2/22/00................... 2,554,656
--------------
Commercial Paper (5.1%):
Banking (0.4%):
3,500,000 Deutsche Bank Financial Inc., 6.02%, 2/1/00...... 3,482,125
--------------
Beverages -- Non-Alcoholic (0.3%):
2,500,000 Coca-Cola Co., 6.08%, 1/28/00.................... 2,488,819
--------------
Chemical -- Diversified (0.5%):
4,000,000 DuPont, 6.11%, 2/8/00............................ 3,975,050
--------------
Diversified Financial Services (1.3%):
4,000,000 Citigroup, 6.48%, 1/24/00........................ 3,984,643
4,000,000 General Electric Capital Corp., 6.00%, 2/7/00.... 3,975,196
3,690,000 National Australia Funding Inc., 6.02%, 2/4/00... 3,668,181
--------------
11,628,020
--------------
Finance (0.6%):
2,497,533 Ford Motor Credit Corp., 5.95%, 1/7/00........... 2,497,533
2,600,000 General Motor Acceptance Corp., 6.07%, 2/14/00... 2,581,254
--------------
5,078,787
--------------
</TABLE>
Continued
74
<PAGE>
Intermediate Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal Market
Amount Security Description Value
--------- -------------------- ------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Food -- Canned (0.2%):
$ 2,000,000 H.J. Heinz Co., 5.90%, 1/25/00.................. $ 1,991,500
--------------
Medical -- Drugs (0.5%):
4,200,000 Abbott Laboratories, 6.43%, 1/14/00............. 4,189,164
--------------
Multi-Media (0.5%):
4,000,000 McGraw-Hill, 6.12%, 2/29/00..................... 3,961,377
--------------
Oil Comp -- Intergrated (0.3%):
3,000,000 Mobil Corp., 6.04%, 1/28/00..................... 2,986,582
--------------
Telecommunications (0.5%):
4,000,000 Bell South Telecommunications, 5.92%, 2/11/00... 3,973,107
--------------
43,754,531
--------------
Corporate Note (0.3%):
2,540,000 Toyota Motor Credit, 6.18%, 1/25/00............. 2,529,152
--------------
Repurchase Agreements (3.8%):
3,904,434 Donaldson Lufkin & Jenrette, 4.00%, 1/3/00
(Collateralized by $5,710,783 various Government
Agency Securities, 6.00%-8.50%, 1/15/24-3/15/38,
market value $3,958,925)........................ 3,904,434
15,902,418 Prudential Securities, 3.68%, 1/3/00
(Collateralized by $32,699,001 various
Government Agency Securities, 5.00%-7.50%,
1/15/24-9/20/29, market value $16,127,889)...... 15,902,418
12,408,465 Salomon Smith Barney, 4.25%, 1/3/00
(Collateralized by $25,233,860 various
Government Agency Securities, 6.00%-9.50%,
4/15/18-12/15/29, market value $12,580,562)..... 12,408,465
--------------
32,215,317
--------------
Time Deposits (2.9%):
Foreign Banking (2.9%):
5,000,694 Comerica Cayman, 5.00%, 1/3/00.................. 5,000,694
5,000,868 Credit Suisse-First Boston Cayman, 6.25%,
1/3/00.......................................... 5,000,868
5,000,694 National Westminster BK PLC Nassau, 5.00%,
1/3/00.......................................... 5,000,694
5,001,458 Societe Generale Cayman, 10.50%, 1/3/00......... 5,001,458
5,000,694 Union Bank of Switzerland Cayman, 5.00%,
1/3/00.......................................... 5,000,694
--------------
25,004,408
--------------
Total Short-Term Securities Purchased with
Securities Lending Collateral................... 106,058,064
--------------
Total Investments (Cost $1,061,875,739) (a) -- 120.9%........ 1,033,349,086
Liabilities in excess of other assets -- (20.9)%............. (178,292,363)
--------------
Total Net Assets -- 100.0%................................... $ 855,056,723
==============
</TABLE>
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$1,348,750. Cost for Federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation....................................... $ 1,331,839
Unrealized depreciation....................................... (31,207,242)
------------
Net unrealized depreciation................................... $(29,875,403)
============
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
This security has been deemed liquid by the Board of Trustees.
(c) Represents security purchased on a when issued basis.
**Effective yield at purchase.
NV -- Naamloze Vennootschap (Dutch Corporation)
PLC -- Public Limited Company (British)
SA -- Sociedad Anonima (Spanish Corporation)
See Notes to Financial Statements.
75
<PAGE>
Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (42.1%):
Banking (13.3%):
$2,700,000 Bank of Montreal-Chicago, 7.80%, 4/1/07............ $ 2,716,875
2,000,000 Bank of New York, 8.50%, 12/15/04.................. 2,092,500
2,000,000 BankAmerica Corp., 7.20%, 4/15/06.................. 1,967,500
2,000,000 Chase Manhattan Corp., 7.13%, 3/1/05............... 1,975,000
5,000,000 First Union Corp., 8.13%, 6/24/02.................. 5,093,750
2,000,000 Fleet/Norstar Group, 8.63%, 1/15/07................ 2,090,000
2,000,000 Midland Bank PLC, 7.63%, 6/15/06................... 1,977,500
3,000,000 National City Bank of Cleveland, 7.25%, 7/15/10.... 2,936,250
5,000,000 NCNB Corp., 10.20%, 7/15/15........................ 6,068,749
5,000,000 Northern Trust Corp., 7.10%, 8/1/09................ 4,856,250
5,000,000 PNC Bank N.A., 7.88%, 4/15/05...................... 5,031,250
2,000,000 Republic New York Corp., 7.00%, 3/22/11............ 1,830,000
2,000,000 Swiss Bank Corp. -- New York, 7.38%, 7/15/15....... 1,942,500
------------
40,578,124
------------
Beverages & Tobacco (1.5%):
4,390,000 Seagram Co. Ltd., 8.35%, 1/15/22................... 4,433,900
------------
Brokers (2.4%):
5,000,000 Lehman Brothers Holdings, Inc., 8.75%, 3/15/05..... 5,218,750
2,000,000 Salomon, Inc., 6.75%, 2/15/03...................... 1,972,500
------------
7,191,250
------------
Finance (10.5%):
5,000,000 Associates Corp. NA, 7.95%, 2/15/10................ 5,106,250
3,500,000 British Gas Finance, 6.63%, 6/1/18................. 3,036,250
2,000,000 Discover Credit, 9.26%, 3/20/12.................... 2,182,500
5,000,000 Ford Motor Credit Corp., 5.80%, 1/12/09............ 4,443,750
5,000,000 Ford Motor Credit Corp., 9.03%, 12/30/09, Callable
12/30/04 @ 100..................................... 5,231,250
5,000,000 General Motors Acceptance Corp., 6.85%, 6/17/04.... 4,918,750
3,500,000 Great Western Financial Trust II, 8.21%, 2/1/27,
Callable 2/1/07 @ 104.............................. 3,259,375
4,000,000 St. Paul Cos., Inc., 7.25%, 8/9/07................. 3,870,000
------------
32,048,125
------------
Gas Transmission (0.8%):
2,500,000 Enserch Corp., 7.13%, 6/15/05...................... 2,450,000
------------
Industrial Goods & Services (4.0%):
5,000,000 Cyprus Amax, 7.38%, 5/15/07........................ 4,725,000
3,000,000 Engelhard Corp., 7.38%, 8/1/06..................... 2,932,500
5,000,000 Union Carbide Corp., 6.70%, 4/1/09................. 4,675,000
------------
12,332,500
------------
Insurance (0.6%):
2,000,000 Travelers Capital III, 7.63%, 12/1/36.............. 1,812,500
------------
Machinery & Equipment (0.6%):
2,000,000 Case Corp., 7.25%, 1/15/16......................... 1,820,000
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
CORPORATE NOTES & BONDS (continued)
Paper & Related Products (1.3%):
$ 4,000,000 Westvaco Corp., 7.10%, 11/15/09.................... $ 3,825,000
------------
Retail (1.5%):
4,573,296 Fred Meyer, Inc., Lease Trust, 8.50%, 7/15/17...... 4,539,728
------------
Telecommunications (5.1%):
3,500,000 GTE Florida, Inc., 6.86%, 2/1/28................... 3,123,750
4,000,000 Sprint Cap. Corp., 6.88%, 11/15/28................. 3,565,000
5,000,000 TCI Communications, Inc., 7.13%, 2/15/28........... 4,587,500
5,000,000 US West Capital Funding, Inc., 6.88%, 7/15/28...... 4,350,000
------------
15,626,250
------------
Utilities (0.6%):
2,000,000 Pacific Gas & Electric, 6.25%, 3/1/04.............. 1,917,500
------------
Total Corporate Notes & Bonds...................... 128,574,877
------------
FOREIGN GOVERNMENT AGENCIES (0.3%):
1,000,000 Hydro-Quebec, 9.41%, 3/23/00....................... 1,005,000
------------
Total Foreign Government Agencies.................. 1,005,000
------------
MUNICIPAL BOND -- TAXABLE (0.6%):
California (0.6%):
2,000,000 San Bernardino County, Financing Authority Pension
Obligation Revenue, 6.99%, 8/1/10 (Insured by
MBIA).............................................. 1,907,500
------------
Total Municipal Bond -- Taxable.................... 1,907,500
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (31.6%):
Fannie Mae (15.9%):
10,000,000 5.63%, 5/14/04..................................... 9,558,100
10,000,000 7.40%, 7/1/04...................................... 10,221,201
2,971,233 6.05%, 12/1/08..................................... 2,827,306
5,000,000 6.38%, 6/15/09..................................... 4,773,050
10,000,000 7.50%, 1/1/15 (b).................................. 9,887,501
3,500,000 6.25%, 11/18/23.................................... 3,341,835
19,636 7.50%, 9/1/28...................................... 19,457
894,013 7.50%, 3/1/29...................................... 885,037
203,239 7.50%, 6/1/29...................................... 201,026
1,366,627 7.50%, 7/1/29...................................... 1,352,058
49,829 7.50%, 8/1/28...................................... 49,269
2,043,034 7.50%, 8/1/29...................................... 2,020,487
1,996,323 7.50%, 9/1/29...................................... 1,973,885
1,389,854 7.50%, 11/1/29..................................... 1,374,228
------------
48,484,440
------------
Freddie Mac (15.7%):
2,500,000 7.22%, 6/14/06..................................... 2,527,950
10,000,000 5.75%, 3/15/09..................................... 9,137,500
14,982,783 6.00%, 4/1/29...................................... 13,738,763
14,476,627 7.00%, 9/1/29...................................... 14,012,681
</TABLE>
Continued
76
<PAGE>
Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (continued)
Freddie Mac (continued)
$ 1,981,359 7.00%, 10/1/29..................................... $ 1,917,995
6,991,970 7.00%, 11/1/29..................................... 6,767,077
------------
48,101,966
------------
Total U.S. Government Agency Obligations........... 96,586,406
------------
U.S. GOVERNMENT OBLIGATIONS (25.1%):
U.S. Treasury Bonds (16.3%):
15,500,000 11.75%, 11/15/14................................... 20,963,750
14,200,000 7.50%, 11/15/16.................................... 15,192,580
16,500,000 5.25%, 2/15/29..................................... 13,659,525
------------
49,815,855
------------
U.S. Treasury Notes (1.3%):
2,950,000 6.00%, 8/15/09..................................... 2,857,931
800,000 12.75%, 11/15/10................................... 1,032,272
------------
3,890,203
------------
U.S. Treasury Strips (7.5%):
36,250,000 5/15/10............................................ 18,070,625
15,000,000 5/15/16............................................ 4,926,900
------------
22,997,525
------------
Total U.S. Government Obligations.................. 76,703,583
------------
INVESTMENT COMPANIES (2.1%):
1,698,391 Dreyfus Cash Management Money Market Fund.......... 1,698,391
4,740,619 Federated Prime Value Obligations Money Market
Fund............................................... 4,740,619
------------
Total Investment Companies......................... 6,439,010
------------
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL (10.9%):
Certificate of Deposit (0.2%):
$515,000 Bank One Corp., 6.02%, 2/22/00..................... 510,931
------------
Commercial Paper (2.2%):
Beverages -- Non-Alcoholic (0.2%):
750,000 Coca-Cola Co., 6.08%, 1/28/00...................... 746,646
------------
Chemical -- Diversified (0.2%):
600,000 DuPont, 6.11%, 2/8/00.............................. 596,257
------------
Diversified Financial Services (0.2%):
600,000 Citigroup, 6.48%, 1/24/00.......................... 597,696
------------
Finance (0.6%):
499,507 Ford Motor Credit Corp., 5.95%, 1/7/00............. 499,507
500,000 General Motors Acceptance Corp., 6.34%, 1/18/00.... 498,407
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
SHORT-TERM SECURITIES PURCHASED WITH SECURITIES LENDING COLLATERAL
(continued)
Finance (continued)
$ 750,000 General Electric Capital Corp., 6.28%, 1/14/00..... $ 748,314
------------
1,746,228
------------
Food -- Canned (0.2%):
750,000 H.J. Heinz Co., 6.05%, 1/13/00..................... 748,434
------------
Medical -- Drugs (0.2%):
700,000 Abbott Laboratories, 6.43%, 1/14/00................ 698,194
------------
Multi-Media (0.4%):
1,000,000 McGraw-Hill, 6.12%, 2/29/00........................ 990,344
------------
Oil Comp -- Intergrated (0.2%):
500,000 Mobil Corp., 6.04%, 1/28/00........................ 497,764
------------
Repurchase Agreements (6.0%):
6,821,758 Donaldson Lufkin & Jenrette, 4.00%, 1/3/00
(Collateralized by $9,977,779 various Government
Agency Securities, 6.00%-8.50%, 1/15/24-3/15/38,
market value $6,916,964)........................... 6,821,758
4,818,854 Prudential Securities, 3.68%, 1/3/00
(Collateralized by $9,908,663 various Government
Agency Securities, 5.00%-7.50%, 1/15/24-9/20/29,
market value $4,887,177)........................... 4,818,854
6,907,815 Salomon Smith Barney, 4.25%, 1/3/00 (Collateralized
by $14,047,737 various Government Agency
Securities, 6.00%-9.50%, 4/15/18-12/15/29, market
value $7,003,623).................................. 6,907,815
------------
18,548,427
------------
Time Deposits (2.5%):
Foreign Banking (2.5%):
1,500,208 Comerica Cayman, 5.00%, 1/3/00..................... 1,500,208
1,500,260 Credit Suisse-First Boston Cayman, 6.25%, 1/3/00... 1,500,260
1,500,208 National Westminster BK PLC Nassau, 5.00%, 1/3/00.. 1,500,208
1,500,438 Societe Generale Cayman, 10.50%, 1/3/00............ 1,500,438
1,500,208 Union Bank of Switzerland Cayman, 5.00%, 1/3/00.... 1,500,208
------------
7,501,322
------------
Total Short-Term Securities Purchased with
Securities Lending Collateral...................... 33,182,243
------------
Total Investments (Cost $358,234,652) (a) -- 112.7%............. 344,398,619
Liabilities in excess of other assets -- (12.7)%................ (38,768,107)
------------
Total Net Assets -- 100.0%...................................... $305,630,512
============
</TABLE>
Continued
77
<PAGE>
Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
- -------
(a) Represents cost for financial reporting purposes and differs from cost
basis for Federal income tax purposes by the amount of losses recognized
for financial reporting in excess of Federal income tax reporting of
$469,983. Cost for Federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation....................................... $ 273,520
Unrealized depreciation....................................... (14,579,536)
------------
Net unrealized depreciation................................... $(14,306,016)
============
</TABLE>
(b) Represents security purchased on a when issued basis.
MBIA -- Municipal Bond Insurance Association
PLC -- Public Limited Company (British)
See Notes to Financial Statements.
78
<PAGE>
Intermediate Tax-Free Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (98.0%):
Alaska (0.3%):
$ 1,000,000 Anchorage Electric Utility, Revenue Bond, Senior
Lien, 5.50%, 12/1/03, Callable 6/1/03 @ 102
(Insured by MBIA).................................. $ 1,027,500
------------
Arizona (3.5%):
3,000,000 Maricopa County Arizona School District No. 48,
5.13%, 7/1/14, Callable 7/1/09 @ 101............... 2,857,500
1,050,000 Pima County Arizona University School District,
5.75%, 7/1/12, Callable 7/1/09 @ 100, (Insured by
FGIC).............................................. 1,072,313
1,740,000 Pima County Arizona University School District,
5.30%, 7/1/13, Callable 7/1/09 @ 100, (Insured by
FGIC).............................................. 1,692,150
5,000,000 Salt River Project Agricultural Improvement & Power
District Electric System, Series A, 5.63%, 1/1/06.. 5,175,000
------------
10,796,963
------------
Arkansas (0.3%):
1,000,000 Arkansas State Economic Development, 5.00%, 2/1/03
(Insured by AMBAC)................................. 1,005,000
------------
California (6.3%):
1,000,000 California Educational Facilities Authority, Santa
Clara University, 5.25%, 9/1/17 (Insured by
AMBAC)............................................. 945,000
500,000 California Educational Facilities Authority, Santa
Clara University, 5.25%, 9/1/18 (Insured by
AMBAC)............................................. 468,125
3,400,000 California State, GO, 6.60%, 2/1/10................ 3,778,250
3,000,000 Orange County, Series A, 6.00%, 6/1/10 (Insured by
MBIA).............................................. 3,198,750
2,000,000 Riverside County Transportation Commission, Sales
Tax Revenue, Series A, 5.60%, 6/1/05 (Insured by
AMBAC) ............................................ 2,077,500
2,000,000 Turlock Irrigation District Revenue, Series A,
6.00%, 1/1/06 (Insured by MBIA).................... 2,117,500
5,850,000 University of California Revenue, Multiple Purpose
Projects, Series B, 9.00%, 9/1/03 (Insured by
MBIA).............................................. 6,690,938
------------
19,276,063
------------
Colorado (3.5%):
2,000,000 Arapahoe County Colorado School District No. 005,
6.00%, 12/15/13, Callable 12/15/09 @ 100........... 2,067,500
4,000,000 Arapahoe County Colorado, School District No. 005,
Cherry Creek, Series A, GO, 5.25%, 12/15/02........ 4,075,000
445,000 Colorado Housing Finance Authority, 4.50%,
11/1/05............................................ 441,275
1,000,000 Colorado Housing Financial Authority, Single Family
Series 3, 4.70%, 10/1/22, Callable 10/1/09 @ 102... 996,250
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Colorado (continued)
$1,000,000 Colorado Springs Utility Revenue, Series A, 6.50%,
11/15/03, Callable 11/15/01 @ 102................... $ 1,050,000
2,000,000 Denver Colorado City and County Airport Facilities,
(AMT), 5.00%, 1/1/04 (Insured by MBIA).............. 2,015,000
100,000 Denver Colorado City and County, Series A, 5.25%,
8/1/04.............................................. 101,875
------------
10,746,900
------------
Connecticut (0.3%):
1,000,000 Connecticut State, GO, Series C, 5.38%, 8/15/02:.... 1,021,250
------------
Florida (2.1%)
1,000,000 Broward County School District, GO, 5.20%, 2/15/03.. 1,013,750
1,000,000 Hillsborough County Florida Development Authority
Revenue, 6.38%, 12/1/12, Prerefunded 12/1/03 @ 100,
(Insured by MBIA)................................... 1,060,000
2,000,000 Lakeland Electric & Water Revenue, 5.90%, 10/1/07... 2,115,000
2,060,000 St. Petersburgh Florida Health Authority, 7.00%,
12/1/15, Prerefunded 12/1/01 @ 102, (Insured by
MBIA)............................................... 2,193,900
------------
6,382,650
------------
Georgia (2.9%):
2,670,000 Atlanta Airport Facilities Revenue, (AMT), Series B,
5.50%, 1/1/03 (Insured by AMBAC).................... 2,720,063
2,000,000 Atlanta Georgia Water & Wastewater Revenue, 5.50%,
11/1/15 (Insured by FGIC)........................... 1,947,500
4,000,000 Georgia State, Series B, GO, 5.95%, 3/1/08.......... 4,245,000
------------
8,912,563
------------
Hawaii (0.3%):
855,000 Honolulu Hawaii City & County, 5.60%, 1/1/05........ 877,443
170,000 Honolulu Hawaii City & County, ETM, 5.60%, 1/1/05... 174,888
------------
1,052,331
------------
Idaho (1.1%):
1,500,000 Ada & Canyon Counties, Joint School District No. 2
Meridan, GO, 5.50%, 7/30/13......................... 1,509,375
1,915,000 Ada & Canyon Counties, Joint School District No. 2,
Meridan, GO, 5.50%, 7/30/14......................... 1,912,606
------------
3,421,981
------------
Illinois (7.7%):
3,000,000 Chicago Illinois Public Building Commission, Series
C, 5.50%, 2/1/06, (Insured by FGIC)................. 3,075,000
</TABLE>
Continued
79
<PAGE>
Intermediate Tax-Free Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Illinois (continued)
$1,000,000 Chicago Illinois Water Revenue, 5.13%, 11/1/16,
(Insured by FGIC)................................... $ 921,250
1,000,000 Chicago Illinois, GO, Emergency Telephone System,
5.25%, 1/1/15 (Insured by FGIC)..................... 935,000
1,000,000 Chicago Metropolitan Water Reclamation District,
Working Cash Fund, 5.90%, 12/1/04................... 1,042,500
3,000,000 Chicago Metropolitan Water Reclamation District,
Capital Improvement, GO, 5.50%, 12/1/10............. 3,033,750
305,000 Chicago, GO, 6.00%, 1/1/09, Callable 1/1/08 @ 102
(Insured by FGIC)................................... 319,488
1,770,000 Chicago, GO, Emergency Telephone System, 5.25%,
1/1/18 (Insured by FGIC)............................ 1,606,275
4,270,000 Du Page & Will Counties, Community School District
No. 204, GO, 4.95%, 12/30/01 (Insured by FGIC)...... 4,312,699
1,000,000 DuPage County Forest Preserve District, GO, 6.00%,
11/1/06............................................. 1,057,500
4,000,000 Illinois Development Finance Authority, Pollution
Control Revenue, Commonwealth Edison, 5.30%, 1/15/04
(Insured by MBIA)................................... 4,070,000
3,135,000 Northwest Suburban Municipal Joint Action, Water
Agency, Water Supply System, Series A, 5.25%, 5/1/04
(Insured by MBIA)................................... 3,185,944
------------
23,559,406
------------
Indiana (3.1%):
1,100,000 Greenwood Indiana School Building Corp., 4.75%,
7/15/07............................................. 1,075,250
2,000,000 Indiana Municipal Power Supply Agency, System
Revenue, Series B, 5.88%, 1/1/10 (Insured by MBIA).. 2,092,500
3,000,000 Indiana Municipal Power Supply Agency, System
Revenue, Series B, 6.00%, 1/1/13 (Insured by MBIA).. 3,086,250
1,000,000 Indiana Transportation Finance Authority, Highway
Revenue, Series A, 5.75%, 6/1/12 (Insured by
AMBAC).............................................. 1,018,750
1,565,000 Indianapolis Utilities District, Series B, 3.50%,
6/1/18 (Insured by FGIC)............................ 1,118,975
1,000,000 Purdue University Student Fee Revenue, Series D,
6.50%, 7/1/03, Prerefunded 1/1/00 @ 103............. 1,030,000
------------
9,421,725
------------
Iowa (0.6%):
2,000,000 Chillicothe Pollution Control Revenue Bond, 4.25%,
11/1/23, Mandatory Put 11/1/03 @ 100................ 1,942,500
------------
Kansas (0.6%):
1,000,000 Butler & Sedgwick Counties School District No. 385,
GO, 5.70%, 9/1/13, (Insured by FSA)................. 1,012,500
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Kansas (continued)
$1,000,000 Sedwick County University School District No. 267,
GO, 5.13%, 11/1/14, (Insured by AMBAC).............. $ 936,250
------------
1,948,750
------------
Kentucky (0.3%):
1,000,000 Louisville & Jefferson County Kentucky Sewer, 5.63%,
5/15/16, Callable 11/15/09 @ 101, (Insured by
FGIC)............................................... 976,250
------------
Louisiana (2.8%):
4,000,000 Louisiana State, Series A, GO, 5.30%, 8/1/04
(Insured by MBIA)................................... 4,085,000
3,000,000 Louisiana State, Series A, GO, 6.00%, 4/15/07
(Insured by FGIC)................................... 3,165,000
1,200,000 West Baton Rouge Parish Louisiana Industrial
District No. 3, Series A, Dow Chemical Co. Project,
5.45%*, 1/3/00...................................... 1,200,000
------------
8,450,000
------------
Maryland (0.0%):
50,000 Maryland State Refunding Bond, GO, 4.20%, 8/1/01.... 49,875
------------
Massachusetts (5.5%):
3,750,000 Massachusetts State Port Authority, 5.00%, 7/1/28,
Callable 7/1/08 @ 101............................... 3,112,500
5,000,000 Massachusetts State Port Authority Revenue, (AMT),
Series B, 5.00%, 7/1/07 (Insured by FSA)............ 4,931,250
5,000,000 Massachusetts State, GO, 5.25%, 9/1/08.............. 5,043,750
3,750,000 Massachusetts State, Special Obligation Revenue,
Series A, 5.25%, 6/1/08, Callable 6/1/06 @
101(Insured by AMBAC)............................... 3,773,438
------------
16,860,938
------------
Michigan (20.1%):
2,215,000 Battle Creek Downtown Development Authority, 6.00%,
5/1/07 (Insured by MBIA)............................ 2,325,750
4,000,000 Battle Creek Downtown Development Authority, Tax
Increment Revenue, 7.30%, 5/1/10, Prerefunded 5/1/04
@ 102............................................... 4,444,999
300,000 Cadillac Public Schools, GO, 7.25%, 5/1/05 (Insured
by FGIC)............................................ 331,500
2,100,000 Caledonia Community Schools, GO, 6.70%, 5/1/22,
Prerefunded 5/1/02 @ 102 (Insured by AMBAC)......... 2,233,875
1,525,000 Detroit Michigan GO, 4.10%, 4/1/03.................. 1,475,438
3,000,000 Detroit Sewage Disposal Revenue, Series B, 6.00%,
7/1/09 (Insured by MBIA)............................ 3,161,250
6,000,000 Detroit Water Supply System, Permanent Linked Bonds,
5.25%, 7/1/13, Callable 7/1/04 @ 102 (Insured by
FGIC)............................................... 5,804,999
1,000,000 Detroit Water Supply System, Second Lien, Series A,
5.20%, 7/1/08 (Insured by MBIA)..................... 997,500
2,840,000 Grand Ledge Public Schools District, GO, 5.35%,
5/1/10 (Insured by MBIA)............................ 2,843,550
</TABLE>
Continued
80
<PAGE>
Intermediate Tax-Free Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 205,000 Grand Rapids Charter Township, Porter Hills
Obligated, 4.20%, 7/1/03............................. $ 199,875
210,000 Grand Rapids Charter Township, Porter Hills
Obligated, 4.25%, 7/1/04............................. 202,913
200,000 Grand Rapids Charter Township, Porter Hills
Obligated, 4.35%, 7/1/05............................. 191,250
1,700,000 Greater Detroit Resource Recovery Authority, Series
A, 5.50%, 12/13/04 (Insured by AMBAC)................ 1,744,625
1,625,000 Jenison Michigan Public Schools, GO, 5.25%, 5/1/15
(Insured by FGIC).................................... 1,531,563
2,000,000 Kalamazoo Hospital Finance Authority, Refunding &
Improvement, Bronson Methodist Hospital, 5.35%,
5/15/06 (Insured by MBIA)............................ 2,022,500
250,000 Michigan Higher Education Facilities Authority,
4.50%, 10/1/07....................................... 235,938
590,000 Michigan Higher Education Facilities Authority,
4.80%, 10/1/10, Callable 10/1/09 @ 100............... 547,963
1,000,000 Michigan Higher Education Facilities Authority,
5.35%, 5/1/15, Callable 5/1/08 @ 101 (LOC: First of
America)............................................. 933,750
320,000 Michigan Higher Education Facilities Authority, Hope
College Project, 4.60%, 10/1/08...................... 300,400
200,000 Michigan Higher Education Facilities Authority, Hope
College Project, 4.70%, 10/1/09...................... 187,000
3,885,000 Michigan Higher Education Student Loan Authority,
(AMT), 5.05%, 9/1/08 (Insured by AMBAC).............. 3,807,299
1,000,000 Michigan Municipal Bond Authority, 3.65%, 11/1/01.... 983,750
2,000,000 Michigan State Comprehensive Transportation, Series
B, 5.50%, 5/15/02.................................... 2,037,500
1,600,000 Michigan State Hospital Finance Authority, Sisters of
Mercy Health Corp. Bond 1993, Series F, 4.60%,
8/15/02 (Insured by MBIA)............................ 1,598,000
1,450,000 Michigan State Hospital Finance Authority, St. John
Hospital & Medical Center, 5.00%, 5/15/06 (Insured by
AMBAC)............................................... 1,451,813
1,000,000 Michigan State South Central Power Agency, Power
Supply System Revenue, 5.80%, 11/1/05 (Insured by
MBIA)................................................ 1,042,500
1,000,000 Michigan State Strategic Fund, Hope Network Project,
Series B, 4.80%, 9/1/08, (LOC: First of America)..... 958,750
2,300,000 Michigan State Strategic Fund, Limited Obligation
Revenue, Ford Motor Co. Project, Series A, 7.10%,
2/1/06............................................... 2,521,375
2,500,000 Michigan State Trunk Line, Series A, 5.50%, 10/1/02.. 2,553,125
4,000,000 Michigan State Trunk Line, Series A, 5.25%, 11/1/15,
(Insured by MBIA).................................... 3,789,999
1,500,000 Michigan State Trunk Line, Series A, 5.25%, 11/1/15.. 1,410,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$3,500,000 Michigan State Underground Storage Tank Financial
Assurance Authority, Series I, 6.00%, 5/1/05
(Insured by AMBAC).................................. $ 3,670,625
2,000,000 Northville Public Schools, Series A, GO, 7.00%,
5/1/08, Callable 5/1/01 @ 102....................... 2,095,000
1,575,000 South Redford School District, 5.25%, 5/1/09,
Prerefunded 5/1/07 @ 100 (Insured by FGIC).......... 1,594,688
------------
61,231,062
------------
Minnesota (0.2%):
500,000 Maple Grove Minnesota Road Reconstruction, GO,
Series B, 5.40%, 2/1/17, Callable 2/1/07 @ 100...... 474,375
------------
Nebraska (0.3%):
915,000 Omaha Nebraska, GO, 5.13%, 11/15/14, Callable
11/15/09 @ 102...................................... 868,106
------------
New Jersey (3.3%):
6,000,000 New Jersey Economic Development Authority, Market
Transition Facility Revenue, Senior Lien, 7.00%,
7/1/04 (Insured by MBIA)............................ 6,525,000
1,000,000 New Jersey Economic Development Authority, Market
Transition Facility Revenue, Series A 1994, 7.00%,
7/1/03 (Insured by MBIA)............................ 1,072,500
2,500,000 Ocean County Utilities Authority, Wastewater
Revenue, Refunding, GO, 6.00%, 1/1/07............... 2,631,250
------------
10,228,750
------------
New Mexico (1.0%):
3,000,000 New Mexico State Highway Common Tax Revenue, 6.00%,
6/15/11, Callable 6/15/09 @ 100..................... 3,120,000
------------
New York (3.0%):
1,030,000 Metropolitan Transportation Authority, Series M,
5.50%, 7/1/08 (Insured by FGIC)..................... 1,053,175
1,000,000 New York State Local Government Assistance Corp.,
Series A, 5.38%, 4/1/19, Callable 4/1/07 @ 101,
(Insured by FSA).................................... 927,500
1,660,000 New York State Urban Development Corp., Refunding,
Syracuse University Center, 5.50%, 1/1/15........... 1,599,825
1,250,000 Triborough Bridge & Tunnel Authority, 5.00%, 1/1/16,
Callable 1/1/08 @ 101 (Insured by FGIC)............. 1,121,875
3,000,000 Triborough Bridge & Tunnel Authority, General
Purpose, Series Y, 5.50%, 1/1/17.................... 2,910,000
1,510,000 Westchester County New York, GO, 5.25%, 11/1/13,
Callable 11/1/09 @ 101.............................. 1,472,250
------------
9,084,625
------------
</TABLE>
Continued
81
<PAGE>
Intermediate Tax-Free Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
North Carolina (0.7%):
$2,000,000 North Carolina Municipal Power Agency No. 1, Catawba
Electric Revenue, 5.90%, 1/1/03..................... $ 2,017,500
------------
Ohio (4.0%):
500,000 Cleveland Airport System Revenue, Series A, 5.50%,
1/1/04, (Insured by FSA)............................ 510,625
500,000 Cleveland-Cuyahoga County Port Authority, Rock &
Roll Hall of Fame, Refunding, Subordinated Bonds,
4.90%, 12/1/00...................................... 498,755
2,000,000 Ohio State Building Authority Fund, Series A, 5.25%,
10/1/12, Callable 10/1/08 @ 101..................... 1,955,000
2,285,000 Ohio State Building Authority, Series A, 5.38%,
10/1/12, Callable 10/1/09 @ 101..................... 2,259,294
2,000,000 Ohio State Infrastructure, Series A, 5.75%, 2/1/11,
Callable 2/1/10 @ 101............................... 2,075,000
5,000,000 Ohio State Turnpike Commission, Series A, 5.50%,
2/15/16, (Insured by FGIC).......................... 4,850,000
------------
12,148,674
------------
Oklahoma (1.2%):
3,500,000 Tulsa Industrial Authority, University of Tulsa,
Series A, 6.00%, 10/1/16 (Insured by MBIA).......... 3,591,875
------------
Pennsylvania (3.2%):
2,000,000 Allegheny County Airport Revenue, (AMT), 5.00%,
1/1/02 (Insured by MBIA)............................ 2,010,000
4,230,000 Chartiers Valley Joint School, ETM, 6.15%, 3/1/07... 4,415,063
3,000,000 Philadelphia Parking Facility, Series A, 5.13%,
2/15/24, Callable 2/15/09 @ 101, (Insured by
AMBAC).............................................. 2,580,000
1,000,000 Southeastern Pennsylvania Transportation Authority,
Series B, 5.25%, 3/1/18, Callable 3/1/09 @ 101,
(Insured by FGIC)................................... 910,000
------------
9,915,063
------------
Puerto Rico (1.7%):
3,055,000 Puerto Rico Commonwealth Aqueduct & Sewer Authority,
6.00%, 7/1/06....................................... 3,219,206
2,000,000 Puerto Rico Commonwealth Highway & Transportation
Authority, Highway Revenue, Series X, 4.90%,
7/1/01.............................................. 2,010,000
------------
5,229,206
------------
Rhode Island (1.3%):
3,025,000 Rhode Island State, Series A, GO, 5.50%, 8/1/04
(Insured by MBIA)................................... 3,108,188
1,000,000 State Depositors Economic Protection Corp., Series
B, Special Obligation, 5.20%, 8/1/03 (Insured by
MBIA)............................................... 1,013,750
------------
4,121,938
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Tennessee (0.2%):
$ 600,000 Shelby County Tennessee Health & Education, St.
Jude's Children's Research, 4.65%, 7/1/04........... $ 589,500
------------
Texas (9.4%):
400,000 Arlington Permanent Improvements, GO, 5.38%,
8/15/08, Callable 8/15/06 @ 100..................... 405,000
400,000 Brownsville Texas Independent School District, GO,
7.25%, 8/15/04, PSF -- GTD.......................... 439,500
2,250,000 Central Texas Higher Education Authority, Inc.,
4.85%, 12/1/02, (Guaranteed Student Loans).......... 2,250,000
2,245,000 Dallas Independent School District, GO, 5.40%,
8/15/03, PSF -- GTD................................. 2,301,125
1,500,000 Houston Water & Sewer System Revenue, Junior Lien,
Series C, 5.75%, 12/1/03 (Insured by MBIA).......... 1,554,375
1,000,000 Houston Water & Sewer System Revenue, Prior Lien,
Series A, 7.00%, 12/1/01 (Insured by AMBAC)......... 1,046,250
2,700,000 Laredo Texas Independent School District, 6.00%,
8/1/12, Callable 8/1/09 @ 100,
PSF -- GTD.......................................... 2,801,250
1,050,000 Round Rock Independent School District, GO, 5.25%,
2/15/05, PSF -- GTD................................. 1,067,063
2,100,000 San Antonio Electric & Gas, 5.25%, 2/1/11, Callable
2/1/09 @ 101........................................ 2,071,125
2,980,000 San Antonio Texas Water Revenue, Unrefunded Balance,
6.30%, 5/15/04, Callable 5/15/02 @ 102 (Insured by
FGIC)............................................... 3,143,900
5,595,000 Texas State Public Finance Authority, Series A, GO,
6.50%, 10/1/04...................................... 5,993,643
4,450,000 Texas State, Series A, GO, 5.70%, 10/1/03........... 4,605,749
1,015,000 University of Texas, University Revenue, Series A,
6.60%, 8/15/02, Callable 8/15/01 @ 102.............. 1,065,750
------------
28,744,730
------------
Virginia (1.6%):
4,675,000 Metropolitan Washington DC Airports, 5.50%,
10/1/05............................................. 4,786,031
------------
Washington (4.5%):
1,010,000 Port Tacoma Washington, (AMT), 4.90%, 12/1/07,
(Insured by AMBAC).................................. 980,963
1,125,000 Tacoma Washington Electric Systems Revenue, 6.00%,
1/1/06, (Insured by AMBAC).......................... 1,182,656
1,570,000 Tacoma Washington Electric Systems Revenue, Pre-
Refunded, 6.00%, 1/1/06, (Insured by AMBAC)......... 1,652,425
1,000,000 Washington State, Motor Vehicle Fuel Tax, R-92D, GO,
6.25%, 9/1/07....................................... 1,072,500
8,000,000 Washington State, Series A, GO, 5.50%, 9/1/05,
Callable 9/1/04 @ 100............................... 8,199,999
</TABLE>
Continued
82
<PAGE>
Intermediate Tax-Free Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Washington (continued)
$ 850,000 Washington State, Series III-H, Motor Vehicle Fuel
Tax, 5.75%, 9/1/12.................................. $ 865,938
------------
13,954,481
------------
Wisconsin (0.8%):
2,500,000 Milwaukee County Revenue, Series B, 4.35%, 6/1/29,
Mandatory put 12/1/04 @ 100, (LOC: First National
Bank)............................................... 2,500,000
------------
Wyoming (0.3%):
1,000,000 Campbell County School District, No. 001 Gillette,
GO, 5.15%, 6/1/02................................... 1,015,000
------------
Total Municipal Bonds............................... 300,473,561
------------
INVESTMENT COMPANIES (0.4%):
1,297,334 Dreyfus Tax Exempt Money Market Fund................ 1,297,334
------------
Total Investment Companies.......................... 1,297,334
------------
Total Investments (Cost $297,771,256) (a) -- 98.4%.............. 301,770,895
Other assets in excess of liabilities -- 1.6%................... 4,922,823
------------
Total Net Assets -- 100.0%...................................... $306,693,718
============
</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......................................... $ 6,549,147
Unrealized depreciation......................................... (2,549,508)
-----------
Net unrealized appreciation..................................... $ 3,999,639
===========
</TABLE>
* Variable rate security. Rate presented represents rate in effect at December
31, 1999. Maturity date reflects next rate change date.
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
PSF -- GTD -- Permanent School Fund Guarantee
See Notes to Financial Statements.
83
<PAGE>
Tax-Free Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
ALTERNATIVE MINIMUM TAX PAPER (3.5%):
Colorado (1.8%):
$1,580,000 Denver City & County Airport Revenue, Series C,
(AMT), 6.75%, 11/15/22, Callable 11/15/02 @ 102..... $ 1,599,750
650,000 Denver City & County Airport Revenue, Series C,
(AMT), 6.75%, 11/15/22, Prerefunded 11/15/02 @ 102.. 695,500
------------
2,295,250
------------
Louisiana (0.9%):
1,000,000 Louisiana Housing Finance Agency, Single Family
Mortgage Revenue, 6.40%, 12/1/30, Callable 6/1/09 @
101, (GNMA/FNMA).................................... 1,041,250
------------
Oklahoma (0.8%):
1,000,000 Tulsa International Airport, 5.50%, 6/1/10, (Insured
by FGIC)............................................ 1,017,500
------------
Total Alternative Minimum Tax Paper................. 4,354,000
------------
MUNICIPAL BONDS (94.7%):
Arizona (1.0%):
1,305,000 Phoenix Arizona Civic Improvement Corporate Tax,
5.75%, 7/1/16, Callable 7/1/09 @ 101................ 1,293,581
------------
California (5.6%):
1,000,000 Anaheim Public Financing Authority, Lease Revenue,
Public Improvements Project, Series A,
6.00%, 9/1/24 (Insured by FSA)...................... 1,020,000
1,400,000 California State, GO, 7.00%, 6/1/05................. 1,540,000
2,000,000 California State, GO, 6.25%, 9/1/12................. 2,170,000
2,000,000 Orange County, Series A, 6.00%, 6/1/10 (Insured by
MBIA)............................................... 2,132,500
------------
6,862,500
------------
Colorado (3.5%):
3,000,000 Arapahoe County, Colorado School District, No. 5,
5.50%, 12/15/18, Callable 12/15/09 @ 100............ 2,857,500
400,000 Colorado Housing Finance Authority, 4.25%, 10/1/05.. 392,000
1,000,000 E-470 Public Highway Authority Revenue,
Series C, 6.00%, 9/1/07 (Insured by MBIA)........... 1,053,750
------------
4,303,250
------------
Georgia (10.6%):
5,000,000 Atlanta Water & Wastewater Revenue, 5.50%, 11/1/18
(Insured by FGIC)................................... 4,793,750
2,500,000 Forsyth County, Georgia School District, 5.75%,
2/1/18, Callable 2/1/10 @ 102 ...................... 2,475,000
1,000,000 Georgia State, Series B, GO, 5.95%, 3/1/08.......... 1,061,250
2,610,000 Georgia State, Series D, GO, 5.80%, 11/1/16,
Callable 11/1/09 @ 102.............................. 2,642,625
2,095,000 Private Colleges & Universities Authority, Emory
University Project, Series A, 5.38%, 11/1/17,
Callable 11/1/09 @ 101 ............................. 1,992,869
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Georgia (continued)
$ 175,000 Private Colleges & Universities Authority, Mercer
University Project, Series A, 4.75%, 10/1/11,
Callable 10/1/09 @ 101.............................. $ 160,781
------------
13,126,275
------------
Hawaii (0.8%):
200,000 Honolulu City & County, Series A, ETM, GO, 5.75%,
4/1/10.............................................. 207,750
800,000 Honolulu City & County, Series A, 5.75%, 4/1/10..... 823,000
------------
1,030,750
------------
Illinois (6.4%):
2,000,000 Chicago Metropolitan, Water Reclamation District,
Capital Improvement, GO, 5.50%, 12/1/10............. 2,022,500
1,000,000 Chicago Public Building Commission, Series A, ETM,
7.00%, 1/1/20 (Insured by MBIA)..................... 1,141,250
2,000,000 Chicago School Finance Authority, Series A, GO,
4.90%, 6/1/05, Callable 6/1/04 @ 102 (Insured by
MBIA)............................................... 1,995,000
1,750,000 Chicago Single Family Mortgage Revenue, Series A,
(AMT), 4.70%, 10/1/17, Callable 4/1/09 @ 102........ 1,710,625
1,000,000 Illinois State Sales Tax, Series S, 5.00%, 6/15/08.. 988,750
------------
7,858,125
------------
Indiana (2.5%):
2,000,000 Indiana Municipal Power Supply Agency, System
Revenue, Series B, 6.00%, 1/1/13 (Insured by MBIA).. 2,057,500
1,000,000 Indiana Transportation Finance Authority, Highway
Revenue, Series A, 5.75%, 6/1/12 (Insured by
AMBAC).............................................. 1,018,750
------------
3,076,250
------------
Iowa (1.8%):
2,055,000 Iowa Finance Authority, Private College Revenue,
Drake University Project, 6.50%, 12/1/11 (Insured by
MBIA)............................................... 2,255,363
------------
Kentucky (2.5%):
2,000,000 Louisville & Jefferson County Kentucky Sewer, 5.63%,
5/15/16, Callable 11/15/09 @ 101, (Insured by
FGIC)............................................... 1,952,500
1,315,000 Louisville & Jefferson County, Metropolitan Sewer
District, Sewer & Drain System Revenue, Series A,
5.25%, 5/15/27, Callable 5/15/07 @ 101 (Insured by
MBIA)............................................... 1,181,856
------------
3,134,356
------------
</TABLE>
Continued
84
<PAGE>
Tax-Free Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Louisiana (0.2%):
$ 315,000 Shreveport LA, GO, 4.00%, 2/1/08 (Insured by FGIC).. $ 289,013
------------
Massachusetts (3.1%):
2,370,000 Massachusetts State Port Authority, 5.00%, 7/1/28,
Callable 7/1/08 @ 101............................... 1,967,100
1,000,000 Massachusetts State Water, Resource Authority,
Series B, 5.00%, 12/1/25, Callable 12/1/05 @ 102
(Insured by MBIA)................................... 837,500
1,000,000 Massachusetts State, Series B, GO, 5.40%, 11/1/06... 1,023,750
------------
3,828,350
------------
Michigan (15.5%):
2,000,000 Battle Creek Downtown Development Authority, Tax
Increment Revenue, 7.30%, 5/1/10, Prerefunded 5/1/04
@ 102............................................... 2,222,500
1,300,000 Berkley School District, GO, 7.00%, 1/1/07 (Insured
by FGIC)............................................ 1,441,375
2,000,000 Detroit Sewage Disposal Revenue, Series B, 6.00%,
7/1/09 (Insured by MBIA)............................ 2,107,500
930,000 Kent County Airport Facility, Kent County
International Airport, (AMT), 5.50%, 1/1/07,
Prerefunded 1/1/05 @ 102............................ 963,713
2,000,000 Michigan State Hospital Finance Authority, Sisters
of Mercy, Series P, 5.25%, 8/15/21, Callable 8/15/03
@ 102 (Insured
by MBIA)............................................ 1,792,500
1,300,000 Michigan State Housing Development Authority, Rental
Housing Revenue, Series A, 5.15%, 4/1/02 (Insured by
AMBAC).............................................. 1,313,000
1,000,000 Michigan State South Central Power Agency, Power
Supply System Revenue, 5.80%, 11/1/05 (Insured by
MBIA)............................................... 1,042,500
1,000,000 Michigan State Strategic Fund, Hope Network Project,
Series B, 5.13%, 9/1/13, Callable 9/1/08 @ 102,
(LOC: First
of America)......................................... 942,500
2,000,000 Michigan State Trunk Line, 5.50%, 11/1/16,
Prerefunded 11/1/06 @ 101 (Insured
by FGIC)............................................ 2,075,000
2,000,000 Michigan State Trunk Line, Series A,
5.25%, 11/1/14...................................... 1,907,500
3,400,000 University of Michigan, Hospital Revenue, Series A,
4.80%*, 1/3/00...................................... 3,399,999
------------
19,208,087
------------
Minnesota (2.5%):
1,700,000 Minneapolis & St. Paul Airport, Series A, 5.13%,
1/1/25, Callable 1/1/09 @ 101, (Insured by FGIC).... 1,476,875
1,800,000 Minneapolis & St. Paul Airport, Series A, 5.00%,
1/1/19, Callable 1/1/08 @ 101....................... 1,579,500
------------
3,056,375
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Mississippi (0.3%):
$ 330,000 Mississippi Home Corp. Single Family Mortgage, Class
4, Series A, 4.80%, 6/1/19, Callable 6/1/09 @ 102... $ 319,688
------------
Missouri (0.4%):
335,000 Missouri State, Health & Education Facilities,
6.50%, 2/15/21, Prerefunded 2/15/06 @ 102........... 366,825
165,000 Missouri State, Health & Education Facilities, Lake
of Ozarks General Hospital, 6.50%, 2/15/21, Callable
2/15/06 @ 102....................................... 163,556
------------
530,381
------------
Nebraska (0.9%):
1,075,000 Omaha Public Power District,
5.10%, 2/1/08....................................... 1,070,969
------------
Nevada (3.4%):
1,805,000 Clark County School District, GO, 5.75%, 6/15/10,
Prerefunded 6/15/06 @ 101 (Insured by FGIC)......... 1,895,250
2,000,000 Nevada State, Nevada Municipal Bond Bank, Series A,
GO, 8.00%, 11/1/05.................................. 2,302,500
------------
4,197,750
------------
New Jersey (2.6%):
1,500,000 New Jersey Economic Development Authority, Market
Transition Facility Revenue, Senior Lien, 7.00%,
7/1/04 (Insured by MBIA)............................ 1,631,250
1,500,000 New Jersey State Transportation Trust Fund
Authority, Transportation System, Series A, 6.00%,
12/15/06 (Insured by MBIA).......................... 1,588,125
------------
3,219,375
------------
New York (11.3%):
2,000,000 Metropolitan Transnational Authority, New York,
Series A, 5.00%, 4/1/23, Callable 4/1/08 @ 101,
(Insured by FGIC)................................... 1,692,500
1,350,000 New York City, Municipal Water & Sewer Revenue,
5.50%, 6/15/24, Callable
6/15/06 @ 101....................................... 1,226,813
1,500,000 New York City, Tax Revenue Anticipation Note,
Livingston Plaza Project, 5.40%, 1/1/18 (Insured by
FSA)................................................ 1,430,625
2,525,000 New York State Dormatory Authority, 5.50%, 7/1/19,
Callable 7/1/09 @ 101, (Insured by FSA)............. 2,379,812
2,000,000 New York State Dormatory Authority, 5.13%, 5/15/21,
Callable 5/15/08 @ 101, (Insured by MBIA)........... 1,760,000
2,000,000 New York State Local Government Assistance Corp.,
Series A, 5.38%, 4/1/19, Callable 4/1/07 @ 101,
(Insured by FSA).................................... 1,854,999
1,000,000 New York State Thruway Authority, Series 1997 B,
6.00%, 4/1/07....................................... 1,043,750
</TABLE>
Continued
85
<PAGE>
Tax-Free Income Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
New York (continued)
$1,000,000 Triborough Bridge & Tunnel Authority, 5.00%, 1/1/16,
Callable 1/1/08 @ 101 (Insured by FGIC)............. $ 897,500
955,000 Westchester County, GO, 5.25%, 11/1/16, Callable
11/1/09 @ 101....................................... 894,119
845,000 Westchester County, GO, 5.25%, 11/1/17, Callable
11/1/09 @ 101....................................... 784,794
------------
13,964,912
------------
Ohio (1.5%):
2,000,000 Cleveland, Ohio Public Power System, Revenue, Series
1, 5.13%, 11/15/18, Callable 11/15/06 @ 102,
(Insured by MBIA)................................... 1,802,500
------------
Oklahoma (1.7%):
1,000,000 Grand River Dam Authority, 5.75%, 6/1/08 (Insured by
FSA)................................................ 1,050,000
1,000,000 Tulsa Industrial Authority, University of Tulsa,
Series A, 6.00%, 10/1/16
(Insured by MBIA)................................... 1,026,250
------------
2,076,250
------------
Rhode Island (0.8%):
1,000,000 Convention Center Authority, Series B, 5.00%,
5/15/09 (Insured by MBIA)........................... 978,750
------------
Tennessee (1.0%):
1,225,000 Tennessee Housing Development Agency, Mortgage
Finance, Series C, (AMT), 5.95%, 7/1/09, Callable
7/1/05 @ 102 (Insured by MBIA)...................... 1,249,500
------------
Texas (9.0%):
1,000,000 Brownsville Utility System, 6.25%, 9/1/11 (Insured
by AMBAC)........................................... 1,073,750
1,080,000 Denton Texas Independent School District, 5.50%,
8/15/13, PSF-GTD.................................... 1,084,050
1,000,000 Harris County, Certificates of Obligation, 6.00%,
12/15/11............................................ 1,058,750
3,500,000 Houston Texas Independent School District, Series A,
GO, 5.00%, 2/15/24, Callable 2/15/09 @ 100, PSF-
GTD................................................. 2,948,750
3,000,000 Laredo Texas Independent School District, GO, 5.25%,
8/1/24, Callable 8/1/09 @100, PSF-GTD............... 2,658,750
2,000,000 Texas City Industrial Development Corp., Marine
Terminal Revenue, Arco Pipeline Co. Project, 7.38%,
10/1/20............................................. 2,327,500
------------
11,151,550
------------
Utah (2.2%):
2,175,000 Intermountain Power Agency, Utah Power Supply,
Series D, 5.00%, 7/1/23, Callable 7/1/06 @ 102...... 1,835,156
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Utah (continued)
$1,000,000 St. George, Parks & Recreational Facilities, GO,
5.38%, 8/1/21, Callable 8/1/07 @ 101 (Insured by
FGIC)............................................... $ 923,750
------------
2,758,906
------------
Washington (2.9%):
1,000,000 Douglas County Public Utility District No. 001,
Electric Distribution System, 5.90%, 1/1/11,
Callable 1/1/05 @ 102 (Insured by MBIA)............. 1,026,250
2,500,000 Port Seattle Limited Tax, GO, (AMT), 5.35%, 5/1/04.. 2,534,375
------------
3,560,625
------------
Wyoming (0.7%):
925,000 Green River-Sweetwater County, Board Revenue, Series
B, 4.50%, 3/1/14, Callable 3/1/05 @ 100 (Insured by
FSA)................................................ 914,594
------------
Total Municipal Bonds............................... 117,118,025
------------
INVESTMENT COMPANIES (0.4%):
451,455 Dreyfus Tax Exempt Money Market Fund................ 451,455
------------
Total Investment Companies.......................... 451,455
------------
Total Investments (Cost $121,848,930) (a) -- 98.6%.............. 121,923,480
Other assets in excess of liabilities -- 1.4%................... 1,682,631
------------
Total Net Assets -- 100.0%...................................... $123,606,111
============
</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......................................... $ 1,569,684
Unrealized depreciation......................................... (1,495,134)
-----------
Net unrealized appreciation..................................... $ 74,550
===========
</TABLE>
* Variable rate security. Rate presented represents rate in effect at December
31, 1999. Maturity date reflects next rate change date.
AMBAC -- AMBAC Indemnity Corp.
AMT -- Alternative Minimum Tax Paper
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Corp.
FNMA -- Fannie Mae
FSA -- Financial Security Assurance
GNMA -- Ginnie Mae
GO -- General Obligation
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
PSF-GTD -- Permanent School Fund Guarantee
See Notes to Financial Statements.
86
<PAGE>
Michigan Municipal Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (98.3%):
Michigan (95.5%):
$1,130,000 Allegan Sanitary Sewer System, (AMT), 5.45%,
11/1/02............................................. $ 1,134,238
2,000,000 Battle Creek Downtown Development Authority, Tax
Increment Revenue, 6.90%, 5/1/04.................... 2,120,000
1,000,000 Bay City Electric Utility Revenue, 5.15%, 1/1/07
(Insured by AMBAC).................................. 998,750
635,000 Bishop International Airport Authority, 4.88%,
12/1/01............................................. 633,413
1,000,000 Brighton Michigan Area School District, GO, 4.30%,
5/1/07, (Insured by FSA)............................ 952,500
2,450,000 Brighton Michigan Area School District, 5.13%,
5/1/08, (Insured by FSA)............................ 2,443,874
260,000 Chippewa County Hospital Finance Authority, 4.60%,
11/1/00............................................. 259,672
1,000,000 Chippewa Valley School District, GO, 6.38%, 5/1/05,
Prerefunded 5/1/01 @ 101.5 (Insured by FGIC)........ 1,038,750
1,700,000 Clintondale Community School District GO, 4.65%,
5/1/03.............................................. 1,695,750
965,000 Dearborn Sewage Disposal System, 6.90%, 4/1/02
(Insured by MBIA)................................... 1,010,838
1,630,000 Detroit Michigan City School District, 3.90%, 5/1/03
(Insured by MBIA)................................... 1,587,213
1,000,000 Detroit Michigan City School District, 3.90%,
11/1/03 (Insured by MBIA)........................... 970,000
1,000,000 Detroit Michigan UTGO Series A, 3.90%, 4/1/02....... 975,000
1,000,000 Detroit, GO, 5.00%, 4/1/04 (Insured by FGIC)........ 1,008,750
750,000 Detroit, GO, 6.00%, 4/1/06 (Insured by FGIC)........ 789,375
1,570,000 Detroit, Local Development Finance Authority, Tax
Increment Revenue, 5.25%, 5/1/07.................... 1,556,263
1,730,000 Dexter Community School District, GO, 6.25%, 5/1/07
(Insured by FGIC)................................... 1,853,263
2,000,000 East China Township School District, GO, 6.00%,
5/1/02, Prerefunded 5/1/01 @ 102.................... 2,077,500
1,000,000 Eastern Michigan University, GO, 5.80%, 6/1/01
(Insured by AMBAC).................................. 1,018,750
445,000 Farmington Hills Economic Development Corp. Revenue,
Botsford Continuing Care, Series A, 5.10%, 2/15/04
(Insured by MBIA)................................... 448,338
470,000 Farmington Hills Economic Development Corp. Revenue,
Botsford Continuing Care, Series A, 5.20%, 2/15/05
(Insured by MBIA)................................... 472,938
740,000 Grand Haven Area Public Schools, 5.45%, 5/1/04,
Prerefunded 5/1/03 @ 102, (Insured by MBIA)......... 768,675
260,000 Grand Haven Area Public Schools, 5.45%, 5/1/04,
Callable 5/1/03 @ 102, (Insured by MBIA)............ 266,825
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 510,000 Grand Rapids Charter Township Michigan, 4.10%,
7/1/02............................................... $ 501,075
1,250,000 Greater Detroit Resource Recovery Authority, Series
B, 5.00%, 12/13/02 (Insured by AMBAC)................ 1,260,938
750,000 Howell Michigan Public School, GO, 5.50%, 5/1/08,
(Insured by MBIA).................................... 766,875
1,250,000 Huron Valley School District, GO, 7.10%, 5/1/08,
Prerefunded 5/1/01 @ 102 (Insured by FGIC)........... 1,315,625
750,000 Kalamazoo Hospital Finance Authority Revenue, Bronson
Methodist Hospital, 5.50%, 5/15/08 (Insured by
MBIA)................................................ 758,438
1,810,000 Kalamazoo Hospital Finance Authority, Refunding &
Improvement, Bronson Methodist Hospital, 4.95%,
5/15/02 (Insured by MBIA)............................ 1,821,313
1,000,000 Kalamazoo Hospital Finance Authority, Refunding &
Improvement, Bronson Methodist Hospital, 5.25%,
5/15/05 (Insured by MBIA)............................ 1,010,000
1,295,000 Kenowa Hills Public Schools, GO, 5.50%, 5/1/05....... 1,328,994
500,000 Kent County Airport Facility, Kent County
International Airport, (AMT), 5.25%, 1/1/04.......... 504,375
505,000 Kent County Airport Facility, Kent County
International Airport, (AMT), 5.30%, 1/1/05.......... 510,681
645,000 Kent County Airport Facility, Kent County
International Airport, (AMT), 4.30%, 1/1/05 (Insured
by MBIA)............................................. 620,813
1,150,000 Kent Hospital Finance Authority, Butterworth
Hospital, 4.90%, 1/15/05............................. 1,135,625
2,000,000 Lake Orion Community School District, GO, 6.20%,
5/1/04 (Insured by AMBAC)............................ 2,110,000
1,000,000 Lansing Board of Water & Light, Series A, 4.85%,
7/1/07............................................... 981,250
1,000,000 Lansing Board of Water & Light, Series A, 5.50%,
1/1/08............................................... 1,020,000
1,684,445 Michigan Department of State Police Lease, 4.95%,
3/10/02(b)........................................... 1,661,283
1,265,000 Michigan Higher Education Facility Authority --
Thomas M. Cooley Law School, 4.75%, 5/1/07, (LOC:
National City)....................................... 1,211,238
2,525,000 Michigan Higher Education Student Loan Authority
Revenue, (AMT), 5.00%, 3/1/07, (Insured by AMBAC).... 2,480,812
1,020,000 Michigan Municipal Bond Authority, Local Government
Loan Program, Qualified School, 6.35%, 5/15/01....... 1,044,225
1,000,000 Michigan Municipal Bond Authority, Pooled Projects,
Series B, 5.10%, 10/1/04............................. 1,012,500
2,000,000 Michigan Municipal Bond Authority, State Revolving
Fund, 5.50%, 10/1/06................................. 2,057,500
</TABLE>
Continued
87
<PAGE>
Michigan Municipal Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 750,000 Michigan Public Power Agency, Belle River Project,
Series A, 5.70%, 1/1/03............................. $ 770,625
1,000,000 Michigan State Building Authority, Series I, 4.25%,
10/15/05............................................ 957,500
1,010,000 Michigan State Building Authority, Series I, 4.75%,
10/15/08............................................ 974,650
1,000,000 Michigan State Building Authority, Series II, 6.10%,
10/1/01............................................. 1,027,500
3,000,000 Michigan State Comprehensive Transportation, Series
B, 5.63%, 5/15/03, Callable 5/15/02 @ 102........... 3,078,749
1,855,000 Michigan State Hospital Finance Authority, Bay
Medical Center, Series A, 5.38%, 7/1/06 (Insured by
FSA)................................................ 1,878,188
1,940,000 Michigan State Hospital Finance Authority, Daughters
of Charity National Health System, 4.80%, 11/1/17,
Prerefunded 11/1/04 @ 100........................... 1,930,300
2,000,000 Michigan State Hospital Finance Authority, McLaren
Obligated Group, Series A, 5.75%, 10/15/03.......... 2,037,500
370,000 Michigan State Hospital Finance Authority, Memorial
Healthcare Center, 4.40%, 11/15/01.................. 364,913
1,500,000 Michigan State Hospital Finance Authority, Mercy
Health Services, Series S, 6.00%, 8/15/06........... 1,554,375
1,000,000 Michigan State Hospital Finance Authority, Sisters
of Mercy Health Corp. Bond 1993, Series F, 4.60%,
8/15/02 (Insured by MBIA)........................... 998,750
1,000,000 Michigan State Hospital Finance Authority, St. John
Hospital & Medical Center, 5.00%, 5/15/05 (Insured
by AMBAC)........................................... 1,005,000
2,680,000 Michigan State Housing Development Authority, Rental
Housing Revenue, Series A, (AMT), 5.25%, 10/1/01
(Insured by MBIA)................................... 2,703,449
3,270,000 Michigan State Underground Storage, Tank Financial
Assurance Authority, Series I, 6.00%, 5/1/06
(Insured by AMBAC).................................. 3,437,587
505,000 Michigan Strategic Fund, Clark Retirement Community
Project, 4.50%, 6/1/03.............................. 490,481
520,000 Michigan Strategic Fund, Clark Retirement Community
Project, 4.60% 6/1/04 495,950
610,000 Michigan Strategic Fund, Clark Retirement Community
Project, 4.85%, 6/1/07.............................. 562,725
615,000 Michigan Strategic Fund, Hope Network Project,
Series B, 4.75%, 9/1/07, (LOC: First of America).... 591,938
1,000,000 Mount Clemens Community School District, GO, 6.60%,
5/1/20, Prerefunded 5/1/02 @ 102 (Insured by MBIA).. 1,061,250
1,405,000 Oakland County Economic Development Corp., Boardwalk
Shopping Center, 4.38%, 1/1/09, Mandatory Put,
7/1/03 @ 100, (LOC: Banc One)....................... 1,405,000
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------- ------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$1,040,000 Oakland County Economic Development Corp., Sugartree
Shopping Center, 4.38%, 1/1/14, Mandatory Put,
7/1/03 @ 100, (LOC: Banc One)....................... $ 1,040,000
2,000,000 Oakland County Michigan Development Corp, 6.38%,
11/1/14, Prerefunded 11/1/04 @ 100.................. 2,130,000
900,000 Oakland Washtenaw County Community College, 6.65%,
5/1/11, Callable 5/1/02 @ 102....................... 955,125
100,000 Oakland Washtenaw County Community College, 6.65%,
5/1/11, Prerefunded 5/1/02 @ 100.................... 106,125
3,000,000 Okemos Public School District, Series I, GO, 6.90%,
5/1/11, Prerefunded 5/1/01 @ 102.................... 3,149,999
735,000 Reeths-Puffer Schools, GO, 6.75%, 5/1/01 (Insured by
FGIC)............................................... 756,131
750,000 Reeths-Puffer Schools, GO, 6.25%, 5/1/02 (Insured by
FGIC)............................................... 777,188
2,000,000 Rockford Public Schools, GO, 7.38%, 5/1/19,
Prerefunded 5/1/00 @ 101............................ 2,040,880
1,330,000 Romulus Michigan Community Schools, GO, 5.63%,
5/1/08, (Insured by FGIC)........................... 1,369,900
2,500,000 University of Michigan, University Revenue, Series
A, 4.80%*, 1/3/00................................... 2,499,999
2,035,000 Walled Lake Consolidated School District, GO, 4.70%,
5/1/01.............................................. 2,042,631
2,235,000 Walled Lake Consolidated School District, GO, 4.80%,
5/1/02.............................................. 2,243,380
1,025,000 Washtenaw Community College, GO, 4.70%, 4/1/03
(Insured by FGIC)................................... 1,023,719
550,000 Wayne County Downriver System Sewer Disposal, GO,
3.75%, 5/1/00....................................... 548,779
1,750,000 Western Michigan University, Series A, 6.50%,
7/15/01, Prerefunded 7/15/01 @ 102 (Insured by
AMBAC).............................................. 1,835,313
1,000,000 Wyandotte Electric Revenue, 6.20%, 10/1/03 (Insured
by MBIA)............................................ 1,051,250
------------
102,091,084
------------
Puerto Rico (2.8%):
3,000,000 Puerto Rico Commonwealth Highway & Transportation
Authority, Highway Revenue, Series X, 4.90%,
7/1/01.............................................. 3,015,000
------------
Total Municipal Bonds............................... 105,106,084
------------
INVESTMENT COMPANIES (0.6%):
673,339 Dreyfus Tax Exempt Money Market Fund................ 673,339
------------
Total Investment Companies.......................... 673,339
------------
Total Investments (Cost $105,761,331) (a) -- 98.9%.............. 105,779,423
Other assets in excess of liabilities -- 1.1%................... 1,205,782
------------
TOTAL NET ASSETS -- 100.0%...................................... $106,985,205
============
</TABLE>
Continued
88
<PAGE>
Michigan Municipal Bond Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
- -------
(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......................................... $ 1,015,555
Unrealized depreciation......................................... (997,463)
-----------
Net unrealized appreciation..................................... $ 18,092
===========
</TABLE>
(b) Illiquid security.
* Variable rate security. Rate presented represents rate in effect at December
31, 1999. Maturity date reflects next rate change date.
AMBAC -- AMBAC Indemnity Corp.
AMT -- Alternative Minimum Tax Paper
FGIC -- Financial Guaranty Insurance Corp.
FSA -- Financial Security Assurance
GO -- General Obligation
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
See Notes to Financial Statements.
89
<PAGE>
Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
BANK NOTES (2.0%):
$ 5,000,000 Fifth Third Bank Notes, 5.97%, 1/28/00.............. $ 5,000,000
8,000,000 Wacovia, 4.90%, 1/10/00............................. 7,999,875
------------
Total Bank Notes.................................... 12,999,875
------------
CERTIFICATES OF DEPOSIT (4.6%):
Banking (4.6%):
5,000,000 First Union, 5.87%, 2/28/00......................... 5,000,000
10,000,000 First Union, 5.95%, 3/31/00......................... 10,000,000
5,000,000 First Union, 5.92%, 5/30/00......................... 5,000,000
5,000,000 LaSalle Bank NA, 4.97%, 2/1/00...................... 4,999,836
5,000,000 Mellon Bank, 5.85%, 3/23/00......................... 5,000,000
------------
Total Certificates of Deposit....................... 29,999,836
------------
COMMERCIAL PAPER (29.3%):
Agriculture (3.9%):
10,000,000 Cargill Inc., 5.70%, 1/13/00........................ 9,981,000
10,000,000 Cargill Inc., 5.92%, 1/14/00........................ 9,978,622
6,000,000 Cargill Inc., 5.40%, 1/14/00........................ 5,988,300
------------
25,947,922
------------
Automotive (8.7%):
5,000,000 Daimler Chrysler, 5.98%, 1/18/00.................... 4,985,881
5,000,000 Daimler Chrysler, 5.83%, 2/25/00.................... 4,955,465
5,000,000 Daimler Chrysler, 5.70%, 3/15/00.................... 4,941,417
5,000,000 Daimler Chrysler, 5.68%, 5/25/00.................... 4,885,611
5,000,000 Ford Motor Credit Co., 6.48%, 1/12/00............... 4,990,100
5,000,000 Ford Motor Credit Co., 5.74%, 1/14/00............... 4,989,636
6,000,000 General Motors Acceptance Corp., 5.95%, 1/27/00..... 5,974,217
5,000,000 General Motors Acceptance Corp., 5.50%, 2/8/00...... 4,970,972
7,423,000 General Motors Acceptance Corp., 5.72%, 2/11/00..... 7,374,643
5,000,000 General Motors Acceptance Corp., 5.82%, 2/18/00..... 4,961,200
5,000,000 General Motors Acceptance Corp., 5.70%, 3/30/00..... 4,929,542
------------
57,958,684
------------
Banking & Finance (6.1%):
5,000,000 J P Morgan, 5.44%, 1/19/00.......................... 4,986,400
5,000,000 J P Morgan, 5.57%, 2/1/00........................... 4,976,018
10,000,000 J P Morgan, 5.97%, 2/17/00.......................... 9,922,058
5,000,000 National Australia, 6.01%, 1/18/00.................. 4,985,810
5,000,000 National Australia, 5.75%, 1/19/00.................. 4,985,625
5,000,000 National Australia, 5.76%, 1/31/00.................. 4,976,000
5,000,000 National Australia, 5.94%, 2/4/00................... 4,971,950
------------
39,803,861
------------
Broadcasting/Cable (1.5%):
10,000,000 Gannett Company Inc., 5.95%, 1/21/00................ 9,966,944
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
COMMERCIAL PAPER (continued)
Electrical & Electronic (1.5%):
$10,000,000 Motorola, 5.00%, 1/5/00............................ $ 9,994,444
------------
Finance (5.0%):
5,000,000 General Electric Capital Corp., 4.91%, 1/24/00..... 4,984,316
5,000,000 General Electric Capital Corp., 5.48%, 1/25/00..... 4,981,733
5,000,000 General Electric Capital Corp., 5.78%, 2/18/00..... 4,961,467
5,000,000 General Electric Capital Corp., 5.82%, 2/23/00..... 4,957,158
5,000,000 General Electric Capital Corp., 5.83%, 3/21/00..... 4,935,222
5,000,000 General Electric Capital Corp., 5.70%, 4/10/00..... 4,920,833
3,000,000 Nestle Capital Corp., 4.45%, 1/4/00................ 2,998,888
------------
32,739,617
------------
Industrial Goods & Services (2.3%):
5,000,000 DuPont, 5.76%, 1/20/00............................. 4,984,800
5,000,000 DuPont, 5.76%, 1/25/00............................. 4,980,800
5,000,000 DuPont, 5.73%, 2/9/00.............................. 4,968,963
------------
14,934,563
------------
Pharmaceuticals (0.3%):
2,000,000 Abbott Laboratories, 5.25%, 1/20/00................ 1,994,458
------------
Total Commercial Paper............................. 193,340,493
------------
CORPORATE NOTES & BONDS (2.5%):
Automotive (0.8%):
5,000,000 Ford Motor Credit Co., 5.73%, 2/23/00.............. 5,004,788
------------
Industrial Goods & Services (0.5%):
3,505,000 DuPont, 9.15%, 4/15/00............................. 3,533,326
------------
Retail (1.2%):
8,000,000 Wal-Mart, 5.65%, 2/1/00............................ 7,996,173
------------
Total Corporate Notes & Bonds...................... 16,534,287
------------
DEMAND NOTES (25.2%):
Agriculture (0.1%):
975,000 The Economic Development Corp. of the County of
Marquette, 6.65%*, 1/5/00 (LOC: NBD Bank).......... 975,000
------------
Finance (6.9%):
20,027,000 Capital One Funding Corp., 6.60%*, 1/6/00, (LOC:
Bank One).......................................... 20,027,000
4,145,000 Labelle Capital Funding L.L.C., 6.55%*, 1/6/00
(LOC: First of America Bank -- Michigan)........... 4,145,000
</TABLE>
Continued
90
<PAGE>
Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
DEMAND NOTES (continued)
Finance (continued)
$ 3,740,000 Macroe Properties, Inc., 6.60%*,1/6/00 (LOC:
Huntington Bank)................................... $ 3,740,000
2,285,000 Patt's Enterprises L.L.C., 6.55%*, 1/5/00 (LOC:
Huntington National Bank).......................... 2,285,000
9,475,000 PRD Finance L.L.C., 6.77%*, 1/6/00 (LOC: First of
America Bank -- Michigan).......................... 9,475,000
5,000,000 Sheperd Capital L.L.C., 6.55%*, 1/6/00 (LOC:
Comerica Bank)..................................... 5,000,000
------------
44,672,000
------------
Health Care (4.6%):
3,930,000 Adena Health System, 6.75*, 1/5/00, (LOC: Fifth
Third Bank)........................................ 3,930,000
8,000,000 American Healthcare Funding L.L.C., 6.55%*,
1/6/00............................................. 8,000,000
1,950,000 Butler County Surgical Properties, 6.50%*, 1/6/00.. 1,950,000
3,750,000 Excel Health Services, Inc., 6.75%*, 1/6/00........ 3,750,000
3,350,000 Idaho Associates L.L.C., 6.55%*, 1/6/00 (LOC:
LaSalle National Bank)............................. 3,350,000
7,635,000 Reynolds Road Fitness Center, Inc, 6.50%*, 1/6/00
(LOC: Fifth Third Bank)............................ 7,635,000
1,810,000 Riverview Medical Office Building, 6.77%*, 1/6/00
(LOC: National City Bank).......................... 1,810,000
------------
30,425,000
------------
Machinery & Equipment (0.6%):
4,000,000 SGS Tool Co., 6.65%*, 1/6/00....................... 4,000,000
------------
Manufacturing -- Capital Goods (2.9%):
300,000 American Mfg. Co., Inc., Series 1997, 6.50%*,
1/6/00 (LOC: Mellon Bank).......................... 300,000
5,805,000 Buckeye Corrugated, Inc., 6.75%*, 1/5/00 (LOC:
Keybank)........................................... 5,805,000
3,100,000 City of Cloquet, Minnesota Taxable Industrial Bond,
6.60%*, 1/5/00 (LOC: Credit Suisse)................ 3,100,000
4,260,000 Jackson Tube Service, Inc., 6.75%*, 1/6/00......... 4,260,000
1,500,000 Laird's Auto Glass & Trim, Inc., 6.62%*, 1/6/00
(LOC: Michigan National Bank)...................... 1,500,000
1,500,000 Neenah Wisconsin Industrial Development, 6.60%*,
1/5/00 (LOC: Banc One Capital)..................... 1,500,000
165,000 Ordeal Properties L.L.C., 6.75%*, 1/5/00 (LOC:
Keybank)........................................... 165,000
2,540,000 White Mountain Imaging, 6.75%*, 1/5/00 (LOC:
Keybank)........................................... 2,540,000
------------
19,170,000
------------
Real Estate (8.3%):
4,000,000 Chesterwood Village Realty, 6.50%*, 1/6/00 (LOC:
Fifth Third Bank).................................. 4,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
DEMAND NOTES (continued)
Real Estate (continued)
$ 6,290,000 GTB Properties L.L.C., 6.65%*, 1/5/00 (LOC:
Michigan National Bank).......................... $ 6,290,000
4,325,000 Harry W. Albright, Jr., 6.55%*, 1/6/00........... 4,325,000
3,350,000 HWP Co., Ltd. Project, 6.80%*, 1/6/00 (LOC:
National City Bank Cleveland, Ohio).............. 3,350,000
1,265,000 Jefferson Land Development, 6.80%*, 1/6/00....... 1,265,000
11,650,000 Pittsburgh Technical Institute, 6.80%*, 1/5/00
(LOC: National City Bank)........................ 11,650,000
2,565,000 Rumpf Development Ltd., 6.75%*, 1/5/00 (LOC:
Keybank)......................................... 2,565,000
11,400,000 Sharonsville Realty Enterprises, 6.60%*, 1/6/00.. 11,400,000
1,800,000 South Bend MAC, L.P., 6.55%*, 1/6/00 (LOC:
LaSalle National Bank)........................... 1,800,000
2,500,000 Town of Caledonia, Wisconsin, 6.60%*, 1/5/00
(LOC: Banc One Capital).......................... 2,500,000
4,875,000 Zeigler Realty L.L.C, 6.60%*, 1/6/00 (LOC: First
of America Bank -- Michigan)..................... 4,875,000
------------
54,020,000
------------
Retail -- General Merchandise (0.6%):
4,000,000 Royal Town Center L.L.C. Project, 6.75%*, 1/5/00
(LOC: Comerica Bank)............................. 4,000,000
------------
Services (1.2%):
8,100,000 Mr. K Enterprises, 6.65%*, 1/5/00, (LOC: Bank
One)............................................. 8,100,000
------------
Total Demand Notes............................... 165,362,000
------------
MUNICIPAL BONDS -- TAXABLE (6.6%):
Agriculture (1.0%):
6,450,000 Port Vancouver WA -- United Grain Corp -- 84a,
5.10%*, 1/6/00, (LOC: Bank America).............. 6,450,000
------------
Health Care (2.7%):
8,070,000 Lee County Florida Industrial Development, Series
B, 6.53%*, 1/6/00................................ 8,070,000
4,400,000 Maryland State Health & Higher Educational
Facilities, Series D, 5.35%*, 1/5/00, (LOC: Bank
America)......................................... 4,400,000
1,970,000 Metropolitan Government, Nashville & Davidson
County, 5.40%*, 1/5/00, (LOC: Bank America)...... 1,970,000
1,060,000 North Carolina Medical Care Community, 5.40%*,
1/5/00........................................... 1,060,000
3,000,000 Snohomish County Washington Public Hospital,
5.15%*, 1/6/00, (LOC: Bank America).............. 3,000,000
------------
18,500,000
------------
</TABLE>
Continued
91
<PAGE>
Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS -- TAXABLE (continued)
Manufacturing -- Consumer Goods (0.6%):
$ 2,600,000 Polk County Florida, 6.25%*, 1/6/00, (LOC: Bank of
America)........................................... $ 2,600,000
1,250,000 Shelbyville Industrial Economic Development,
5.25%*, 1/5/00..................................... 1,250,000
------------
3,850,000
------------
Real Estate (0.3%):
2,000,000 Washington State Housing Financial Community,
5.25%*, 1/5/00..................................... 2,000,000
------------
Services (1.0%):
1,400,000 Savannah Georgia Economic Development, 5.40%*,
1/5/00, (LOC: Bank of America)..................... 1,400,000
5,000,000 South Carolina Jobs -- Economic Development,
5.50%*, 1/5/00, (LOC: Bank of America)............. 5,000,000
------------
6,400,000
------------
Utilities (1.0%):
1,100,000 Beltrami County Environmental Control, 5.10%*,
1/3/00............................................. 1,100,000
1,700,000 Brazos River Texas, 5.10%*, 1/3/00................. 1,700,000
1,100,000 Florence County, Solid Waste Disposal & Wastewater
Treatment, 5.40%*, 1/3/00.......................... 1,100,000
2,500,000 Iredell County North Carolina Facilities &
Pollution, 5.90%*, 1/6/00, (LOC: Bank of America).. 2,500,000
------------
6,400,000
------------
Total Municipal Bonds -- Taxable................... 43,600,000
------------
MUNICIPAL BONDS (0.4%):
1,150,000 Atlanta Georgia Urban Residential, 5.50%*, 1/5/00,
(LOC: Bank of America)............................. 1,150,000
1,300,000 Michigan State Strategic Fund, Phipps Emmett Assoc,
(AMT), 6.65%*, 1/5/00, (LOC: National Australia
Bank).............................................. 1,300,000
------------
Total Municipal Bonds.............................. 2,450,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (0.6%):
4,000,000 Federal Home Loan Bank, 5.01%, 2/3/00.............. 4,000,000
------------
Total U.S. Government Agency Obligations........... 4,000,000
------------
YANKEE CERTIFICATES OF DEPOSIT (18.4%):
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................ 5,000,356
5,000,000 Bank of Nova Scotia, 5.17%, 2/28/00................ 4,999,809
5,000,000 Bank of Nova Scotia, 5.33%, 3/3/00................. 4,993,191
5,000,000 Bayerische Landesbank, 5.91%, 1/19/00.............. 4,985,225
5,000,000 Bayerische Hypo-Und Vereinsbank AG, 5.01%, 2/7/00.. 4,999,805
5,000,000 Bayerische Landesbank, 5.82%, 8/3/00............... 4,999,014
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
YANKEE CERTIFICATES OF DEPOSIT (continued)
$ 5,000,000 Canadian Imperial Bank of Canada, 5.00%, 1/27/00... $ 4,999,966
6,000,000 Canadian Imperial Bank of Commerce, 6.48%,
1/24/00............................................ 6,005,524
5,000,000 Canadian Imperial Bank of Commerce, 5.20%,
2/29/00............................................ 4,999,844
10,000,000 Dresdner AG, 5.85%, 2/29/00........................ 10,000,000
5,000,000 Landesbank Hessen Thuringen Gironzentale, 5.22%,
2/29/00............................................ 4,999,961
15,000,000 Landesbank Hessen-Thuringen, 5.19%, 2/29/00........ 14,985,263
5,000,000 National Westminster Bank, 4.98%, 1/7/00........... 5,000,040
5,000,000 National Westminster Bank, 5.03%, 2/8/00........... 4,994,650
5,000,000 National Westminster Bank, 5.20%, 5/10/00.......... 4,999,117
5,000,000 Robobank Nederland, 5.03%, 1/13/00................. 4,999,968
5,000,000 Toronto Dominion, 5.06%, 2/10/00................... 4,999,842
9,700,000 Toronto Dominion, 5.05%, 2/14/00................... 9,687,511
5,000,000 Toronto Dominion, 5.13%, 4/28/00................... 4,999,822
------------
Total Yankee Certificates of Deposit............... 120,648,908
------------
INVESTMENT COMPANIES (9.7%):
59,483,729 Dreyfus Cash Management Money Market Fund.......... 59,483,729
3,955,661 Federated Prime Value Obligations Money Market
Fund............................................... 3,955,661
------------
Total Investment Companies......................... 63,439,390
------------
Total Investments
(Amortized Cost $652,374,789) (a) -- 99.3%...................... 652,374,789
Other assets in excess of liabilities -- 0.7%................... 4,537,003
------------
Total Net Assets -- 100.0%...................................... $656,911,792
============
</TABLE>
- -------
(a) Cost for Federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at December
31, 1999. Maturity date reflects next rate change date.
AMT -- Alternative Minimum Tax Paper
LOC -- Letter of Credit
PLC -- Public Limited Company
See Notes to Financial Statements.
92
<PAGE>
Michigan Municipal Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (87.8%):
Illinois (0.2%):
$ 710,000 McHenry Illinois Multifamily Housing Revenue,
(AMT), 5.70%*, 1/6/00, (LOC: Comerica Bank-
Illinois).......................................... $ 710,000
------------
Indiana (0.4%):
1,060,000 Indiana State Development Financial Authority,
Covenant High School, (AMT), 5.65%*, 1/6/00, (LOC:
National City)..................................... 1,060,000
------------
Michigan (82.1%):
1,090,000 Ann Arbor Public Schools, 7.00%, 5/1/00, Q-SBLF.... 1,103,363
560,000 Central Montcalm Michigan Public Schools, 3.85%,
5/1/00, QSBLF, (Insured by MBIA)................... 560,000
5,000,000 City of Dearborn Economic Development Corp., Henry
Ford Village, 5.55%*, 1/6/00, (LOC: Comerica
Bank).............................................. 5,000,000
910,000 Clinton Township Economic Development Corp., Pointe
Village Square, (AMT), 3.55%*, 2/1/00, (LOC:
National City)..................................... 910,000
1,600,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series D, 4.80%*, 1/3/00, (LOC: Credit
Suisse)............................................ 1,600,000
1,000,000 Detroit Michigan City School District, 4.00%,
6/1/00............................................. 1,003,217
7,530,000 Detroit Michigan Economic Development Corp.,
Waterfront Reclamation, (AMT), 5.40%*, 1/6/00,
(LOC: Bank of America)............................. 7,530,000
500,000 Detroit Michigan Water Supply System, 6.80%,
7/1/00, (Insured by FGIC).......................... 506,773
1,000,000 Detroit Michigan Water Supply System, Series A,
5.00%, 7/1/00, (Insured by MBIA)................... 1,007,507
400,000 Farmington Hills Michigan Education, Marketing
Displays, (AMT), 3.90%*, 3/1/00, (LOC: Comerica
Bank).............................................. 400,000
7,000,000 Genesee County Economic Development Corp., Rue
Properties, (AMT), 5.55%*, 1/6/00, (LOC:
Nationsbank)....................................... 7,000,000
520,000 Grand Rapids Michigan, 4.00%, 10/1/00.............. 520,000
625,000 Howell Michigan Public Schools, 3.85%, 5/1/00,
(Insured by MBIA).................................. 625,000
1,000,000 Kent County Hospital Authority, Butterworth
Hospital, 7.25%, 1/15/12, Prerefunded 1/15/00 @
102................................................ 1,021,527
800,000 Kent County Michigan Road Commission, 4.25%,
8/1/00............................................. 803,837
5,000,000 Kent Hospital Financial Authority, Spectrum Health,
5.25%*, 1/5/00, (Insured by MBIA).................. 5,000,000
1,875,000 Leelanau County Economic Development Corp.,
American Mutual Insurance Co., 4.10%*, 6/15/00,
(LOC: National City)............................... 1,875,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 4,030,000 Lenawee County Economic Development Corp., Rima
Mfg. Co. Project, (AMT), 5.70%*, 1/5/00, (LOC:
Keybank)........................................... $ 4,030,000
335,000 Livonia County Economic Development Corp., American
Community Mutual Insurance Co., 4.10%*, 5/15/00,
(LOC: American Mutual)............................. 335,000
1,400,000 Marquette County Economic Development Corp.,
Pioneer Labs, Inc., (AMT), 5.16%*, 1/5/00, (LOC:
Banc One).......................................... 1,400,000
1,800,000 Meridian Michigan Economic Development Corp.,
Hannah Technology, 3.90%*, 1/15/00, (LOC: Comerica
Bank).............................................. 1,800,000
5,000,000 Michigan Municipal Bond Authority, Series B-1,
4.25%, 8/25/00..................................... 5,020,291
5,000,000 Michigan Municipal Bond Authority, 4.25%, 8/25/00.. 5,021,233
1,000,000 Michigan Municipal Bond Authority, Series A-1,
4.00%, 6/30/00..................................... 1,002,722
9,000,000 Michigan Municipal Bond Authority, Series A-2,
4.00%, 6/30/00, (LOC: Morgan Guaranty Trust)....... 9,026,689
3,000,000 Michigan State Housing Development Authority,
Canton Club East, (AMT), 5.60%*, 1/6/00, (LOC:
Keybank)........................................... 3,000,000
6,000,000 Michigan State Housing Development Authority,
Mutlifamily Series A, (AMT), 3.65%*, 2/7/00, (LOC:
Helaba)............................................ 6,000,000
1,000,000 Michigan State Housing Development Authority,
Rental Housing Revenue, (AMT), 5.15%, 10/1/00,
(Insured by MBIA).................................. 1,007,794
1,000,000 Michigan State Strategic Fund, AACOA Extrusions,
Inc., (AMT), 5.60%*, 1/5/00, (LOC: Banc One)....... 1,000,000
1,040,000 Michigan State Strategic Fund, Advanced Tooling,
(AMT), 5.65%*, 1/6/00, (LOC: Banc One)............. 1,040,000
2,215,000 Michigan State Strategic Fund, Atmosphere
Annealing, (AMT), 5.70%*, 1/6/00................... 2,215,000
1,400,000 Michigan State Strategic Fund, B & C Leasing,
(AMT), 5.55%*, 1/6/00, (LOC: Bank of America)...... 1,400,000
1,160,000 Michigan State Strategic Fund, B.K. Hardwoods,
(AMT), 5.70%*, 1/6/00, (LOC: Huntington)........... 1,160,000
3,725,000 Michigan State Strategic Fund, Banks Hardwoods,
Inc., (AMT), 5.60%*, 1/6/00, (LOC: Bank One)....... 3,725,000
1,800,000 Michigan State Strategic Fund, Besser International
Sales, Inc., (AMT), 5.60%*, 1/5/00, (LOC: Banc
One)............................................... 1,800,000
2,830,000 Michigan State Strategic Fund, Biewer of Lansing,
(AMT), 5.70%*, 1/6/00, (LOC: National Australia)... 2,830,000
</TABLE>
Continued
93
<PAGE>
Michigan Municipal Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 3,600,000 Michigan State Strategic Fund, Brazing Concepts
Co., (AMT), 5.60%*, 1/5/00, (LOC: Banc One)........ $ 3,600,000
1,275,000 Michigan State Strategic Fund, C-1, (AMT), 5.36%*,
1/5/00, (LOC: Comerica Bank) 1,275,000
1,000,000 Michigan State Strategic Fund, C-Tec, Inc., (AMT),
5.65%*, 1/5/00, (LOC: SunTrust Bank)............... 1,000,000
2,500,000 Michigan State Strategic Fund, Cincinnati Milacron,
(AMT), 5.65%*, 1/6/00, (LOC: PNC Bank)............. 2,500,000
3,400,000 Michigan State Strategic Fund, Consumers Power,
4.90%*, 1/3/00, (Insured by AMBAC)................. 3,400,000
2,275,000 Michigan State Strategic Fund, Cyberplast, (AMT),
5.60%*, 1/6/00, (LOC: Banc One).................... 2,275,000
2,600,000 Michigan State Strategic Fund, Detroit Edison,
5.00%*, 1/3/00, (LOC: Barclays).................... 2,600,000
945,000 Michigan State Strategic Fund, Dickinson Press,
Inc., (AMT), 5.70%*, 1/6/00, (LOC: Huntington
Bank).............................................. 945,000
2,400,000 Michigan State Strategic Fund, Dixie Cut Stone,
(AMT), 5.16%*, 1/5/00, (LOC: National Australia)... 2,400,000
2,500,000 Michigan State Strategic Fund, Donnelly Corp.,
(AMT), 5.70%*, 1/5/00, (LOC: Dresdner Bank)........ 2,500,000
2,500,000 Michigan State Strategic Fund, Donnelly Corp.,
Series B, (AMT), 3.85%*, 4/1/00, (LOC: Dresdner
Bank).............................................. 2,500,000
2,700,000 Michigan State Strategic Fund, Dow Chemical Co.,
4.80%*, 1/3/00..................................... 2,700,000
3,800,000 Michigan State Strategic Fund, Dow Chemical Co.,
5.45%*, 1/3/00..................................... 3,800,000
900,000 Michigan State Strategic Fund, Dow Chemical Co.,
(AMT), 4.95%*, 1/3/00.............................. 900,000
3,000,000 Michigan State Strategic Fund, E & L Meat, (AMT),
5.16%*, 1/5/00, (LOC: National Australia).......... 3,000,000
1,065,000 Michigan State Strategic Fund, Environmental Powder
Co., (AMT), 5.70%*, 1/6/00, (LOC: National
Australia)......................................... 1,065,000
1,000,000 Michigan State Strategic Fund, Equad, (AMT),
5.70%*, 1/6/00, (LOC: National City)............... 1,000,000
1,000,000 Michigan State Strategic Fund, Frederick Wolfgang,
(AMT), 5.70%*, 1/6/00, (LOC: Firstar Bank)......... 1,000,000
1,300,000 Michigan State Strategic Fund, Gollin Block &
Supply Co., (AMT), 5.16%*, 1/5/00, (LOC: Northern
Trust)............................................. 1,299,989
1,510,000 Michigan State Strategic Fund, Hamilton Industrial
Products, Inc., (AMT), 5.70%*, 1/6/00, (LOC:
National Australia)................................ 1,510,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 1,430,000 Michigan State Strategic Fund, I.V.C. Industrial
Coatings, Inc., (AMT), 5.60%*, 1/6/00, (LOC: Bank
One)................................................ $ 1,430,000
4,420,000 Michigan State Strategic Fund, JB Laboratories,
Inc., (AMT), 5.70%*, 1/6/00, (LOC: Huntington
Bank)............................................... 4,420,000
2,300,000 Michigan State Strategic Fund, Jedco, Inc., 5.65%*,
1/6/00, (LOC: Banc One)............................. 2,300,000
1,130,000 Michigan State Strategic Fund, John A. Biewer Co.,
(AMT), 3.90%*, 3/1/00, (LOC: National Australia
Bank)............................................... 1,130,000
775,000 Michigan State Strategic Fund, Kay Screen Printing,
(AMT), 5.85%*, 1/6/00, (LOC: Comerica Bank)......... 775,000
555,000 Michigan State Strategic Fund, Kazoo, Inc., (AMT),
3.80%*, 3/15/00, (LOC: National City)............... 555,000
3,365,000 Michigan State Strategic Fund, Kerkstra Precast,
(AMT), 5.70%*, 1/6/00, (LOC: Huntington Bank)....... 3,365,000
1,380,000 Michigan State Strategic Fund, Kerkstra, (AMT),
5.70%*, 1/6/00, (LOC: Huntington Bank).............. 1,380,000
1,400,000 Michigan State Strategic Fund, Kundinger, (AMT),
5.65%*, 1/5/00, (LOC: Bank One)..................... 1,400,000
555,000 Michigan State Strategic Fund, LRV Enterprises, LLC,
(AMT), 5.70%*, 1/6/00, (LOC: National City)......... 555,000
400,000 Michigan State Strategic Fund, Martin Luther,
5.70%*, 1/5/00, (LOC: Bank One)..................... 400,000
1,025,000 Michigan State Strategic Fund, Midbrook Products,
Inc., (AMT), 5.70%*, 1/6/00, (LOC: Comerica Bank)... 1,025,000
4,000,000 Michigan State Strategic Fund, Middleville Tool &
Die, (AMT), 5.60%*, 1/5/00, (LOC: Banc One)......... 4,000,000
3,000,000 Michigan State Strategic Fund, Midwest Kellering
Co., (AMT), 5.60%*, 1/5/00, (LOC: Banc One)......... 3,000,000
1,215,000 Michigan State Strategic Fund, Molmec, Inc., (AMT),
5.70%*, 1/6/00, (LOC: Comerica Bank)................ 1,215,000
3,000,000 Michigan State Strategic Fund, Nicholas Plastics,
(AMT), 5.70%*, 1/6/00, (LOC: National City)......... 3,000,000
950,000 Michigan State Strategic Fund, Northern Pure Ice
Co., (AMT), 5.16%*, 1/5/00, (LOC: National
Australia).......................................... 950,000
1,615,000 Michigan State Strategic Fund, Omni Technical
Services, Inc., (AMT), 5.70%*, 1/6/00, (LOC:
National City)...................................... 1,615,000
1,030,000 Michigan State Strategic Fund, Patten Monument,
(AMT), 5.70%*, 1/6/00, (LOC: Huntington Bank)....... 1,030,000
</TABLE>
Continued
94
<PAGE>
Michigan Municipal Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 3,300,000 Michigan State Strategic Fund, Peckman, 5.16%*,
1/5/00, (LOC: National Australia)................... $ 3,300,000
2,000,000 Michigan State Strategic Fund, Phipps Emmett
Association, (AMT), 5.16%*, 1/5/00 (LOC: National
Australia).......................................... 2,000,000
6,000,000 Michigan State Strategic Fund, Pierce Foundation,
5.50%*, 1/6/00, (LOC: National Australia)........... 6,000,000
1,100,000 Michigan State Strategic Fund, Pilot Industries,
(AMT), 5.30%*, 1/6/00, (LOC: Banc One).............. 1,100,000
550,000 Michigan State Strategic Fund, Plascore, 5.36%*,
1/5/00, (LOC: Comerica Bank)........................ 550,000
780,000 Michigan State Strategic Fund, Plascore, Inc.,
(AMT), 5.70%*, 1/6/00, (LOC: Huntington Bank)....... 780,000
1,020,000 Michigan State Strategic Fund, Plascore, Inc.,
(AMT), 5.70%*, 1/6/00, (LOC: First Michigan Bank)... 1,020,000
4,000,000 Michigan State Strategic Fund, Proto-Techniques,
(AMT), 5.65%*, 1/5/00, (LOC: Comerica Bank)......... 4,000,000
615,000 Michigan State Strategic Fund, Pyper Tool, (AMT),
5.70%*, 1/6/00, (LOC: Huntington Bank).............. 615,000
2,200,000 Michigan State Strategic Fund, SFI Acquisition,
(AMT), 5.65%*, 1/5/00, (LOC: ABN/Amro).............. 2,200,000
4,500,000 Michigan State Strategic Fund, Stegner East
Investments, LLC, (AMT), 5.65%*, 1/5/00, (LOC:
Comerica Bank)...................................... 4,500,000
850,000 Michigan State Strategic Fund, Stephenson Land,
(AMT), 5.70%*, 1/6/00, (LOC: Comerica Bank)......... 850,000
1,960,000 Michigan State Strategic Fund, Sunrise Windows Ltd.,
(AMT), 5.70%*, 1/5/00, (LOC: Keybank)............... 1,960,000
340,000 Michigan State Strategic Fund, Tawas Bay Associates,
(AMT), 4.05%*, 6/1/00, (LOC: National City)......... 340,000
1,000,000 Michigan State Strategic Fund, Thompson Family
Holdings, (AMT), 5.70%*, 1/6/00, (LOC: National
City)............................................... 1,000,000
410,000 Michigan State Strategic Fund, Tom Miller, Inc.,
(AMT), 5.65%*, 1/6/00, (LOC: First Union)........... 410,000
1,700,000 Michigan State Strategic Fund, Trio Tool Co., (AMT),
5.16%*, 1/5/00, (LOC: National Australia)........... 1,700,000
1,425,000 Michigan State Strategic Fund, Ultra Tech Printing
Co., (AMT), 5.70%*, 1/6/00, (LOC: Firstar).......... 1,425,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 2,010,000 Michigan State Strategic Fund, Wayne Disposal,
(AMT), 5.60%*, 1/5/00, (LOC: Comerica Bank)........ $ 2,010,000
1,000,000 Michigan State Strategic Fund, Wright K Technology,
Inc., Series 1997, (AMT), 5.70%*, 1/6/00........... 1,000,000
2,000,000 Michigan State Strategic Fund, Xibitz, Inc., (AMT),
5.60%*, 1/5/00, (LOC: National City)............... 2,000,000
500,000 Michigan State Trunk Line, 5.30%, 10/1/00.......... 504,154
2,000,000 Michigan State Underground Storage, Tank Financial
Assurance Authority, Series I, 5.00%, 5/1/00,
(Insured by AMBAC)................................. 2,011,427
1,000,000 Michigan State University, 4.00%, 8/15/00.......... 1,000,811
2,000,000 Midland County Economic Development Corp., Dow
Chemical Co., Series A, (AMT), 5.15%*, 1/3/00...... 2,000,000
7,700,000 Midland County, Economic Development Corp., Dow
Chemical Co., Series B, 5.05%*, 1/3/00............. 7,700,000
2,000,000 Oakland County Economic Development Corp., North
America, (AMT), 5.65%*, 1/6/00, (LOC: Comerica
Bank).............................................. 2,000,000
800,000 Oakland County Economic Development Corp., Orchard
Maple Project, 4.10%*, 5/15/00, (LOC: National
City).............................................. 800,000
4,260,000 Pontiac Michigan City School District, 3.45%,
5/1/00, Q-SBLF, (Insured by FGIC).................. 4,260,000
245,000 Rochester Hills Economic Development Corp., BRG
Assoc., 4.20%*, 12/1/00, (LOC: Comerica Bank)...... 245,000
815,000 Romulus Michigan Community Schools, 3.85%, 5/1/00,
Q-SBLF, (Insured by FGIC).......................... 815,000
1,200,000 Scioto Township Economic Development Corp.,
Daycroft School Project, 5.16%*, 1/5/00, (LOC:
National Australia)................................ 1,200,000
985,000 St. Clair Shores, Michigan Education, Borman's,
Inc. Project, (AMT), 3.85%*, 4/15/00, (LOC:
National Australia)................................ 985,000
3,050,000 University of Michigan Hospital Revenue, Series A,
4.80%*, 1/3/00..................................... 3,050,000
2,175,000 University of Michigan, University Revenue, Series
A, 4.80%*, 1/3/00.................................. 2,175,000
1,610,000 Warren Economic Development Corp., CMX Corp.
Project, (AMT), 3.80%*, 3/15/00, (LOC: National
City).............................................. 1,610,000
1,195,000 Warren Economic Development Corp., Cross Country
Inn, (AMT), 4.00%*, 5/1/00, (LOC: Huntington
Bank).............................................. 1,195,000
495,000 Warren Economic Development Corp., Elias Brothers,
(AMT), 4.20%*, 6/1/00, (LOC: ABN/Amro)............. 495,000
</TABLE>
Continued
95
<PAGE>
Michigan Municipal Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
(continued)
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
MUNICIPAL BONDS (continued)
Michigan (continued)
$ 3,415,000 Wayne Co Airport Series B (Detroit Airport),
5.25%*, 1/3/00 (LOC: Landesbank Hessen)............ $ 3,415,000
1,460,000 Wayne County Michigan Transportation Fund, 4.00%*,
10/1/00............................................ 1,462,070
1,150,000 Ypsilanti School District, 4.50%, 5/1/00, (Insured
by FGIC)........................................... 1,154,722
------------
240,933,126
------------
Puerto Rico (4.9%):
4,695,000 Puerto Rico Industrial Medical & Environmental
Pollution Control, Facilities Financing Authority,
Abbott Labs, 2.90%*, 3/1/00........................ 4,695,000
4,200,000 Puerto Rico Industrial Medical & Environmental
Pollution Control, Facilities Financing Authority,
Merck, 3.80%*, 12/1/00............................. 4,200,000
5,350,000 Puerto Rico Industrial Medical & Environmental
Pollution Control, Facilities Financing Authority,
Reynolds Metal, 3.50%*, 3/1/00, (LOC: ABN/Amro).... 5,350,000
------------
14,245,000
------------
Wisconsin (0.2%):
515,000 Oak Creek Wisconsin Industrial Development Revenue,
(AMT), 5.70%*, 1/6/00, (LOC: ABN/Amro)............. 515,000
------------
Total Municipal Bonds.............................. 257,463,126
------------
TAX FREE COMMERCIAL PAPER (11.5%):
Michigan (11.5%):
1,400,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series A, 3.55%*, 1/19/00 (LOC: Morgan
Guaranty Trust).................................... 1,400,000
9,200,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series A, 3.50%*, 2/10/00, (LOC: Morgan
Guaranty Trust).................................... 9,200,000
1,900,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series A, 3.75%*, 2/16/00, (LOC: Morgan
Guaranty Trust).................................... 1,900,000
5,810,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series B, 3.60%*, 1/24/00, (LOC: Union
Bank of Switzerland)............................... 5,810,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
TAX FREE COMMERCIAL PAPER (continued)
Michigan (continued)
$ 2,490,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series B, 3.55%*, 1/19/00, (LOC: Union
Bank of Switzerland)............................... $ 2,490,000
1,000,000 Delta County Economic Development Corp.,
Environmental Improvement Revenue, Mead Escanaba
Paper Co., Series B, 3.75%*, 1/19/00 (LOC: Union
Bank of Switzerland)............................... 1,000,000
1,530,000 Detroit Michigan Waterfront Reclamation, 5.45%,
1/6/00, (LOC: ABN/Amro)............................ 1,530,000
10,540,000 Michigan State Building Authority, 3.90%, 1/12/00,
(LOC: CIBC)........................................ 10,540,000
------------
Total Tax Free Commercial Paper.................... 33,870,000
------------
INVESTMENT COMPANIES (0.4%):
95,020 Dreyfus Tax Exempt Money Market Fund............... 95,020
1,030,687 Federated Tax Exempt Money Market Fund............. 1,030,687
------------
Total Investment Companies......................... 1,125,707
------------
Total Investments
(Amortized Cost $292,458,833) (a) -- 99.7%...................... 292,458,833
Other assets in excess of liabilities -- 0.3%................... 818,126
------------
Total Net Assets -- 100.0%...................................... $293,276,959
============
</TABLE>
- --------
(a) Cost for Federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at December
31, 1999. Maturity date reflects next rate change date.
AMBAC -- AMBAC Indemnity Corp.
AMT -- Alternative Minimum Tax Paper
FGIC -- Financial Guaranty Insurance Corp.
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
Q-SBLF -- Qualified School Board Lending Fund
See Notes to Financial Statements.
96
<PAGE>
Government Money Market Fund
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (87.7%):
Fannie Mae (26.2%):
$ 4,000,000 4.83%, 1/11/00...................................... $ 3,999,927
4,000,000 5.34%**, 1/18/00.................................... 3,990,216
5,900,000 5.50%**, 1/19/00.................................... 5,883,888
5,939,000 5.67%**, 1/21/00.................................... 5,920,588
11,825,000 5.61%**, 1/24/00.................................... 11,783,200
5,000,000 5.51%**, 2/2/00..................................... 4,976,178
5,000,000 5.63%**, 2/14/00.................................... 4,966,175
5,000,000 5.68%**, 3/2/00..................................... 4,952,556
1,274,000 5.73%**, 3/7/00..................................... 1,260,944
1,055,000 5.82%**, 3/9/00..................................... 1,043,542
3,000,000 6.06%**, 5/25/00.................................... 2,931,004
5,000,000 5.79%**, 7/7/00..................................... 4,856,128
------------
56,564,346
------------
Federal Home Loan Bank (17.2%):
5,000,000 5.54%**, 1/21/00.................................... 4,984,777
3,000,000 5.22%**, 1/26/00.................................... 2,989,167
2,400,000 5.72%**, 1/27/00.................................... 2,390,155
5,000,000 5.56%**, 2/4/00..................................... 4,974,075
4,000,000 5.60%**, 2/16/00.................................... 3,972,042
4,000,000 5.17%*, 3/3/00...................................... 4,000,099
4,000,000 5.15%, 3/17/00...................................... 4,000,000
5,000,000 5.62%**, 3/22/00.................................... 4,938,463
4,750,000 5.08%, 4/28/00...................................... 4,750,221
------------
36,998,999
------------
Freddie Mac (44.3%):
975,000 4.25%**, 1/5/00..................................... 974,540
780,000 5.00%**, 1/11/00.................................... 778,919
1,501,000 5.01%**, 1/12/00.................................... 1,498,707
6,600,000 5.01%**, 1/13/00.................................... 6,589,000
5,000,000 5.52%**, 1/14/00.................................... 4,990,142
5,598,000 5.60%**, 1/18/00.................................... 5,583,381
10,000,000 5.50%**, 1/20/00.................................... 9,971,421
2,000,000 4.76%**, 1/21/00.................................... 1,994,722
5,511,000 5.48%**, 1/27/00.................................... 5,489,739
8,436,000 5.66%**, 2/4/00..................................... 8,391,619
4,034,000 5.65%**, 2/9/00..................................... 4,009,571
3,060,000 5.65%**, 2/10/00.................................... 3,041,164
6,500,000 5.65%**, 2/17/00.................................... 6,452,941
2,000,000 5.70%**, 2/24/00.................................... 1,983,260
5,000,000 5.70%**, 2/25/00.................................... 4,957,604
5,019,000 5.67%**, 3/1/00..................................... 4,972,825
5,000,000 5.69%**, 3/7/00..................................... 4,948,575
5,000,000 5.58%**, 3/9/00..................................... 4,948,244
4,000,000 5.62%**, 3/16/00.................................... 3,953,750
5,000,000 5.71%**, 3/23/00.................................... 4,936,678
5,000,000 5.63%**, 3/27/00.................................... 4,934,544
------------
95,401,346
------------
Total U.S. Government Agency Obligations............ 188,964,691
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Amortized
Amount Description Cost
--------- ----------- ---------
<C> <S> <C>
REPURCHASE AGREEMENTS (2.3%):
$ 5,000,000 Donaldson, Lufkin & Jenrette Capital Markets,
3.25%, dated 12/31/99, due 1/3/00 with a maturity
value of $5,001,354 (Collateralized by $5,000,000
Freddie Mac, 6.00%, 3/11/04, market value of
$5,105,000)........................................ $ 5,000,000
------------
Total Repurchase Agreements........................ 5,000,000
------------
INVESTMENT COMPANIES (10.5%):
22,543,259 Federated Treasury Money Market.................... 22,543,259
------------
Total Investment Companies......................... 22,543,259
------------
Total Investments (Cost $216,507,950) (a) -- 100.5%............. 216,507,950
Liabilities in excess of other assets -- (0.5)%................. (987,294)
------------
Total Net Assets -- 100.0%...................................... $215,520,656
============
</TABLE>
- -------
(a) Cost for Federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at December
31, 1999. Maturity date reflects next rate change date.
** Effective yield at purchase.
See Notes to Financial Statements.
97
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Growth and Large Company Small Company International Index
Income Fund Growth Fund Growth Fund Growth Fund Equity Fund
----------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost........ $511,883,349 $159,970,284 $564,719,323 $404,282,532 $458,863,029
Net unrealized
appreciation/
(depreciation)............ 375,230,265 23,418,355 257,858,768 208,994,306 479,453,826
Repurchase agreements, at
cost...................... 10,260,855 -- 16,636,882 9,234,688 14,303,924
------------ ------------ ------------ ------------ ------------
Total Investments at
value..................... 897,374,469 183,388,639 839,214,973 622,511,526 952,620,779
Foreign currency at value
(cost $0; $0; $0; $132,743;
$0, respectively).......... -- -- -- 138,663 --
Interest and dividends
receivable................. 821,953 171,954 536,019 602,121 870,617
Receivable for capital
shares issued.............. 20,000 -- 5,000 44,462 45,045
Receivable for investments
sold....................... 1,132,200 -- -- 28,739 102,522
Tax reclaim receivable...... 41,843 -- -- 709,176 35,449
Net receivable for variation
margin on futures
contracts.................. 76,500 23,800 186,715 34,000 32,300
Prepaid expenses and other
assets..................... 26,345 36,023 24,859 22,075 25,312
------------ ------------ ------------ ------------ ------------
Total Assets............... 899,493,310 183,620,416 839,967,566 624,090,762 953,732,024
------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments
purchased.................. -- -- -- -- 750,670
Payable for capital shares
redeemed................... 32,428 -- 13,561 3,658 62,267
Payable for return of
collateral received for
securities on loan......... 18,048,607 -- 66,697,815 28,713,448 28,982,408
Foreign withholding taxes
payable.................... -- -- -- 20,526 --
Payable to adviser.......... 514,869 102,746 429,627 366,277 190,021
Payable to administrator.... 17,300 3,566 14,777 11,567 11,988
Payable to distributor
(Investment Shares)........ 12,025 33 5,227 3,395 9,839
Accrued expenses and other
liabilities................ 117,457 2,191 96,904 124,354 109,175
------------ ------------ ------------ ------------ ------------
Total Liabilities.......... 18,742,686 108,536 67,257,911 29,243,225 30,116,368
------------ ------------ ------------ ------------ ------------
NET ASSETS................... $880,750,624 $183,511,880 $772,709,655 $594,847,537 $923,615,656
============ ============ ============ ============ ============
NET ASSETS consist of:
Paid-in capital............. $469,301,947 $159,649,689 $515,473,285 $380,717,987 $437,472,271
Accumulated undistributed
(distributions in excess
of) net investment income.. 10,850 -- 816 (2,648,600) 1,950
Accumulated undistributed
net realized gains/(losses)
on investments and foreign
currency................... 36,056,762 145,128 (924,814) 7,459,079 6,304,927
Net unrealized
appreciation/(depreciation)
of investments, futures and
translation of assets and
liabilities in foreign
currencies................. 375,381,065 23,717,063 258,160,368 209,319,071 479,836,508
------------ ------------ ------------ ------------ ------------
TOTAL NET ASSETS............. $880,750,624 $183,511,880 $772,709,655 $594,847,537 $923,615,656
============ ============ ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets.................. $822,414,413 $183,258,516 $746,427,783 $579,650,446 $875,779,949
Shares Outstanding.......... 40,275,747 15,439,811 38,688,501 29,804,788 30,938,561
Net Assets Value, offering
and redemption price per
share...................... $ 20.42 $ 11.87 $ 19.29 $ 19.45 $ 28.31
============ ============ ============ ============ ============
INVESTMENT SHARES:
Net Assets.................. $ 58,336,211 $ 253,364 $ 26,281,872 $ 15,197,091 $ 47,835,707
Shares Outstanding.......... 2,880,881 21,354 1,369,657 791,573 1,688,993
Net Assets Value, offering
and redemption price per
share...................... $ 20.25 $ 11.86 $ 19.19 $ 19.20 $ 28.32
============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
98
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
Short Term Intermediate
Bond Fund Bond Fund Income Fund
---------- ------------ -----------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at cost.............. $184,229,640 $1,029,660,422 $339,686,225
Net unrealized
appreciation/(depreciation)..... (3,380,746) (28,526,653) (13,836,033)
Repurchase agreements, at cost... 8,036,592 32,215,317 18,548,427
------------ -------------- ------------
Total investments at value....... 188,885,486 1,033,349,086 344,398,619
Interest and dividends
receivable....................... 2,986,742 11,411,027 4,522,925
Receivable for capital shares
issued........................... 5,000 1,936 --
Receivable for investments sold... -- -- 9,753,906
Prepaid expenses and other
assets........................... 17,628 27,036 19,794
------------ -------------- ------------
Total Assets..................... 191,894,856 1,044,789,085 358,695,244
------------ -------------- ------------
LIABILITIES:
Payable for capital shares
redeemed......................... 1,567 -- 12,526
Payable for investments
purchased........................ -- 82,826,953 9,995,312
Payable for forward sale
commitment....................... -- -- 9,678,100
Payable for return of collateral
received for securities on loan.. 15,014,441 106,058,064 33,182,243
Payable to adviser................ 74,497 398,723 156,526
Payable to administrator.......... 3,490 16,794 6,011
Payable to distributor (Investment
Shares).......................... 590 2,405 2,240
Accrued expenses and other
liabilities...................... 23,079 429,423 31,774
------------ -------------- ------------
Total Liabilities................ 15,117,664 189,732,362 53,064,732
------------ -------------- ------------
NET ASSETS......................... $176,777,192 $ 855,056,723 $305,630,512
============ ============== ============
NET ASSETS consist of:
Paid-in capital................... $187,244,608 $ 902,509,754 $326,182,107
Accumulated undistributed
(distributions in excess of) net
investment income................ 1,574 (11,105) (3,668)
Accumulated undistributed net
realized gains/(losses) on
investments sold................. (7,088,244) (18,915,273) (6,711,894)
Net unrealized
appreciation/(depreciation) of
investments...................... (3,380,746) (28,526,653) (13,836,033)
------------ -------------- ------------
TOTAL NET ASSETS................... $176,777,192 $ 855,056,723 $305,630,512
============ ============== ============
INSTITUTIONAL SHARES:
Net Assets........................ $172,203,796 $ 843,520,045 $295,016,961
Shares Outstanding................ 18,169,482 89,988,246 31,837,696
Net Assets Value, offering and
redemption price per share....... $ 9.48 $ 9.37 $ 9.27
============ ============== ============
INVESTMENT SHARES:
Net Assets........................ $ 4,573,396 $ 11,536,678 $ 10,613,551
Shares Outstanding................ 483,015 1,227,936 1,147,013
Net Assets Value, offering and
redemption price per share....... $ 9.47 $ 9.40 $ 9.25
============ ============== ============
</TABLE>
See Notes to Financial Statements.
99
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Michigan
Intermediate Tax-Free Municipal
Tax-Free Fund Income Fund Bond Fund
------------- ----------- ---------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at cost............... $297,771,256 $121,848,930 $105,761,331
Net unrealized
appreciation/(depreciation)...... 3,999,639 74,550 18,092
------------ ------------ ------------
Total investments at value........ 301,770,895 121,923,480 105,779,423
Interest and dividends receivable.. 5,065,358 1,743,819 1,258,374
Prepaid expenses and other assets.. 20,228 18,089 4,845
------------ ------------ ------------
Total Assets...................... 306,856,481 123,685,388 107,042,642
------------ ------------ ------------
LIABILITIES:
Payable to adviser................. 131,862 58,491 40,478
Payable to administrator........... 6,072 2,445 2,098
Payable to distributor (Investment
Shares)........................... 795 322 561
Accrued expenses and other
liabilities....................... 24,034 18,019 14,300
------------ ------------ ------------
Total Liabilities................. 162,763 79,277 57,437
------------ ------------ ------------
NET ASSETS.......................... $306,693,718 $123,606,111 $106,985,205
============ ============ ============
NET ASSETS consist of:
Paid-in capital.................... $304,143,449 $124,622,385 $106,938,098
Accumulated undistributed
(distributions in excess of) net
investment income................. 48,875 (196) 38,102
Accumulated undistributed net
realized gains/(losses) on
investments sold.................. (1,498,245) (1,090,628) (9,087)
Net unrealized
appreciation/(depreciation) of
investments....................... 3,999,639 74,550 18,092
------------ ------------ ------------
TOTAL NET ASSETS.................... $306,693,718 $123,606,111 $106,985,205
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets......................... $302,948,291 $122,052,255 $102,607,671
Shares Outstanding................. 29,696,194 12,262,537 10,333,160
Net Assets Value, offering and
redemption price per share........ $ 10.20 $ 9.95 $ 9.93
============ ============ ============
INVESTMENT SHARES:
Net Assets......................... $ 3,745,427 $ 1,553,856 $ 4,377,534
Shares Outstanding................. 367,043 155,754 441,358
Net Assets Value, offering and
redemption price per share........ $ 10.20 $ 9.98 $ 9.92
============ ============ ============
</TABLE>
See Notes to Financial Statements.
100
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
Michigan
Municipal Government
Money Market Money Market Money Market
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at amortized cost...... $652,374,789 $292,458,833 $211,507,950
Repurchase agreements, at cost..... -- -- 5,000,000
------------ ------------ ------------
Total investments at amortized
cost.............................. 652,374,789 292,458,833 216,507,950
Cash................................ 219,778 2,659 --
Interest and dividends receivable... 7,634,963 1,863,958 262,497
Prepaid expenses and other assets... 23,939 7,775 16,839
------------ ------------ ------------
Total Assets....................... 660,253,469 294,333,225 216,787,286
------------ ------------ ------------
LIABILITIES:
Dividends payable................... 3,017,325 909,132 998,185
Cash overdraft...................... -- -- 203,055
Payable to adviser.................. 226,576 107,274 38,666
Payable to administrator............ 12,812 6,077 2,854
Accrued expenses and other
liabilities........................ 84,964 33,783 23,870
------------ ------------ ------------
Total Liabilities.................. 3,341,677 1,056,266 1,266,630
------------ ------------ ------------
NET ASSETS........................... $656,911,792 $293,276,959 $215,520,656
============ ============ ============
NET ASSETS consist of:
Paid-in capital..................... $656,903,522 $293,286,773 $215,519,208
Accumulated undistributed
(distributions in excess of) net
investment income.................. 13,072 782 2,214
Accumulated undistributed net
realized gains/(losses) on
investments sold................... (4,802) (10,596) (766)
------------ ------------ ------------
TOTAL NET ASSETS..................... $656,911,792 $293,276,959 $215,520,656
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets.......................... $654,770,916 $292,619,165 $215,400,617
Shares Outstanding.................. 654,771,660 292,606,682 215,401,379
Net Assets Value, offering and
redemption price per share......... $ 1.00 $ 1.00 $ 1.00
============ ============ ============
INVESTMENT SHARES:
Net Assets.......................... $ 2,140,876 $ 657,794 $ 120,039
Shares Outstanding.................. 2,141,103 657,773 120,039
Net Assets Value, offering and
redemption price per share......... $ 1.00 $ 1.00 $ 1.00
============ ============ ============
</TABLE>
See Notes to Financial Statements.
101
<PAGE>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Growth and Large Company Small Company International Index
Income Fund Growth Fund (a) Growth Fund Growth Fund Equity Fund
----------- --------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................. $ 14,385,077 $ 421,481 $ 7,126,729 $ 9,965,848 $ 11,470,331
Interest................... 6,582 -- 92,940 2,621 3,209
Income from securities
lending................... 41,451 -- 241,011 134,064 42,959
Less: Net foreign taxes
withheld.................. (29,658) (921) (2,601) (731,471) (20,305)
------------ ----------- ------------ ------------ ------------
Total Investment Income... 14,403,452 420,560 7,458,079 9,371,062 11,496,194
------------ ----------- ------------ ------------ ------------
EXPENSES:
Investment advisory fees... 6,534,470 214,044 4,830,436 4,024,813 2,578,365
Administration fees........ 1,677,870 53,999 1,240,161 964,831 1,544,362
Distribution fees
(Investment Shares)....... 135,083 51 56,939 32,668 106,443
Fund accounting fees....... 152,203 6,127 130,099 116,210 152,612
Custodian fees............. 19,692 2,365 14,244 215,436 25,876
Other expenses............. 340,907 27,170 317,239 229,884 341,499
------------ ----------- ------------ ------------ ------------
Total expenses before
waivers.................. 8,860,225 303,756 6,589,118 5,583,842 4,749,157
Less: expenses voluntarily
waived................... (93,345) (3,396) (69,003) (53,662) (1,073,858)
------------ ----------- ------------ ------------ ------------
Net Expenses.............. 8,766,880 300,360 6,520,115 5,530,180 3,675,299
------------ ----------- ------------ ------------ ------------
NET INVESTMENT INCOME....... 5,636,572 120,200 937,964 3,840,882 7,820,895
------------ ----------- ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses)
on investments and foreign
currency transactions..... 62,171,224 (10,214) (3,554,306) 10,022,188 25,507,087
Net realized gains/(losses)
on futures contracts...... (3,007,540) 323,696 2,801,428 -- (329,602)
Net change in unrealized
appreciation/(depreciation)
of investments, futures
and translation of assets
and liabilities in foreign
currencies................ 83,278,426 23,613,404 169,748,364 123,104,119 128,549,533
------------ ----------- ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON
INVESTMENTS................ 142,442,110 23,926,886 168,995,486 133,126,307 153,727,018
------------ ----------- ------------ ------------ ------------
NET INCREASE/(DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS................. $148,078,682 $24,047,086 $169,933,450 $136,967,189 $161,547,913
============ =========== ============ ============ ============
</TABLE>
- -------
(a) For the period from October 19, 1999 (commencement of operations) to Decem-
ber 31, 1999.
See Notes to Financial Statements.
102
<PAGE>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<CAPTION>
Short Term Intermediate
Bond Fund Bond Fund Income Fund
---------- ------------ -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.............................. $ 9,465,615 $ 55,460,427 $ 19,361,607
Dividends............................. 263,856 1,338,712 351,729
Income from securities lending........ 15,068 128,670 44,021
----------- ------------ ------------
Total Investment Income.............. 9,744,539 56,927,809 19,757,357
----------- ------------ ------------
EXPENSES:
Investment advisory fees.............. 771,946 4,742,941 1,672,618
Administration fees................... 277,362 1,550,839 501,291
Distribution fees (Investment
Shares).............................. 13,059 29,280 27,107
Fund accounting fees.................. 28,036 139,271 49,893
Custodian fees........................ 2,158 22,458 5,917
Other expenses........................ 98,458 248,226 121,724
----------- ------------ ------------
Total expenses before waivers........ 1,191,019 6,733,015 2,378,550
Less: expenses voluntarily waived.... (20,661) (86,231) (27,875)
----------- ------------ ------------
Net Expenses......................... 1,170,358 6,646,784 2,350,675
----------- ------------ ------------
NET INVESTMENT INCOME.................. 8,574,181 50,281,025 17,406,682
----------- ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS:
Net realized gains/(losses) on
investments sold..................... (292,208) (14,169,768) (6,701,014)
Net change in unrealized
appreciation/(depreciation) of
investments.......................... (4,657,164) (47,446,428) (22,407,559)
----------- ------------ ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS......... (4,949,372) (61,616,196) (29,108,573)
----------- ------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 3,624,809 $(11,335,171) $(11,701,891)
=========== ============ ============
</TABLE>
See Notes to Financial Statements.
103
<PAGE>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1999
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Michigan
Intermediate Tax-Free Municipal
Tax-Free Fund Income Fund Bond Fund
------------- ----------- ---------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.............................. $ 15,240,625 $ 6,401,189 $ 5,374,922
Dividends............................. 176,425 76,722 65,687
------------ ----------- -----------
Total Investment Income.............. 15,417,050 6,477,911 5,440,609
------------ ----------- -----------
EXPENSES:
Investment advisory fees.............. 1,555,464 693,622 522,008
Administration fees................... 558,969 226,834 208,745
Distribution fees (Investment
Shares).............................. 10,408 4,689 12,886
Fund accounting fees.................. 64,620 30,119 28,724
Custodian fees........................ 6,439 1,524 2,543
Other expenses........................ 129,999 91,633 71,120
------------ ----------- -----------
Total expenses before waivers........ 2,325,899 1,048,421 846,026
Less: expenses voluntarily waived.... (31,108) (12,611) (16,755)
------------ ----------- -----------
Net Expenses......................... 2,294,791 1,035,810 829,271
------------ ----------- -----------
NET INVESTMENT INCOME.................. 13,122,259 5,442,101 4,611,338
------------ ----------- -----------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS:
Net realized gains/(losses) on
investments sold..................... (1,498,246) (1,090,627) 41,857
Net change in unrealized
appreciation/(depreciation) of
investments.......................... (14,931,504) (8,469,132) (3,892,509)
------------ ----------- -----------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS......... (16,429,750) (9,559,759) (3,850,652)
------------ ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ (3,307,491) $(4,117,658) $ 760,686
============ =========== ===========
</TABLE>
See Notes to Financial Statements.
104
<PAGE>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<CAPTION>
Michigan
Municipal Government
Money Market Money Market Money Market
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest............................ $32,432,929 $10,315,863 $ 9,645,741
Dividends........................... 2,719,447 172,928 548,726
----------- ----------- -----------
Total Investment Income............ 35,152,376 10,488,791 10,194,467
----------- ----------- -----------
EXPENSES:
Investment advisory fees............ 2,682,125 1,250,280 799,711
Administration fees................. 1,206,288 562,195 359,816
Fund accounting fees................ 107,417 51,194 32,000
Custodian fees...................... 8,786 6,437 5,391
Other expenses...................... 218,395 89,621 94,550
----------- ----------- -----------
Total expenses before waivers...... 4,223,011 1,959,727 1,291,468
Less: expenses voluntarily waived.. (570,080) (296,949) (550,669)
----------- ----------- -----------
Net Expenses....................... 3,652,931 1,662,778 740,799
----------- ----------- -----------
NET INVESTMENT INCOME................ 31,499,445 8,826,013 9,453,668
----------- ----------- -----------
NET REALIZED GAINS/(LOSSES) ON
INVESTMENTS......................... (162) -- --
----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS........... $31,499,283 $ 8,826,013 $ 9,453,668
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
105
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Large Company
Growth and Income Fund Growth Fund
--------------------------- -------------
Year ended Year ended Period ended
December 31, December 31, December 31,
1999 1998 1999 (a)
--------------------------- -------------
<S> <C> <C> <C>
NET ASSETS at beginning of period.... $ 878,285,832 $733,315,634 $ --
------------- ------------ ------------
Increase in net assets resulting from
operations:
Net investment income............... 5,636,572 5,881,760 120,200
Net realized gains/(losses) on
investments and foreign currency
transactions....................... 62,171,224 25,901,332 (10,214)
Net realized gains/(losses) on
futures contracts.................. (3,007,540) 3,481,810 323,696
Net change in unrealized
appreciation/(depreciation) of
investments, futures and
translation of assets and
liabilities in foreign currencies.. 83,278,426 164,789,723 23,613,404
------------- ------------ ------------
Net increase/(decrease) in net
assets resulting from operations... 148,078,682 200,054,625 24,047,086
------------- ------------ ------------
Dividends and distributions to
shareholders from:
Institutional:
Net investment income............... (5,416,138) (5,717,209) (133,404)
In excess of net investment income.. -- (497,079) --
Net realized gains on investments... (33,829,516) (67,102,370) (154,978)
------------- ------------ ------------
Total dividends and
distributions -- Institutional
Shares............................ (39,245,654) (73,316,658) (288,382)
------------- ------------ ------------
Investment:
Net investment income............... (205,647) (214,560) (62)
In excess of net investment income.. -- (46,210) --
Net realized gains on investments... (2,250,860) (3,959,835) (110)
------------- ------------ ------------
Total dividends and
distributions -- Investment
Shares............................ (2,456,507) (4,220,605) (172)
------------- ------------ ------------
Total dividends and distributions
to shareholders................... (41,702,161) (77,537,263) (288,554)
------------- ------------ ------------
Net increase/(decrease) from capital
transactions........................ (103,911,729) 22,452,836 159,753,348
------------- ------------ ------------
Net increase/(decrease) in net
assets............................. 2,464,792 144,970,198 183,511,880
------------- ------------ ------------
NET ASSETS at end of period.......... $ 880,750,624 $878,285,832 $183,511,880
============= ============ ============
</TABLE>
- -------
(a) For the period from October 19, 1999 (commencement of operations) to Decem-
ber 31, 1999.
See Notes to Financial Statements.
106
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Small Company Growth Fund International Growth Fund Index Equity Fund
--------------------------- -------------------------- --------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
--------------------------- -------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS at beginning of
period..................... $ 783,790,477 $742,781,688 $540,889,186 $502,378,709 $809,351,352 $618,163,526
------------- ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net
assets resulting from
operations:
Net investment income...... 937,964 1,303,294 3,840,882 4,592,271 7,820,895 7,736,080
Net realized gains/(losses)
on investments and foreign
currency transactions..... (3,554,306) 56,249,334 10,022,188 65,343,795 25,507,087 2,640,102
Net realized gains/(losses)
on futures contracts...... 2,801,428 3,370,391 -- -- (329,602) 226,836
Net change in unrealized
appreciation/(depreciation)
of investments, futures
and translation of assets
and liabilities in foreign
currencies................ 169,748,364 (99,658,205) 123,104,119 19,020,408 128,549,533 168,607,691
------------- ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in
net assets resulting from
operations................ 169,933,450 (38,735,186) 136,967,189 88,956,474 161,547,913 179,210,709
------------- ------------ ------------ ------------ ------------ ------------
Dividends and distributions
to shareholders from:
Institutional:
Net investment income...... (937,948) (1,316,803) (3,751,764) (2,352,718) (7,530,646) (7,447,316)
In excess of net investment
income.................... -- -- (32,244) (3,928,519) -- (5,750)
Net realized gains on
investments............... (14,995,703) (78,853,710) (21,132,304) (43,820,789) (18,771,791) (1,228,000)
In excess of net realized
gains on investments...... (596,642) -- -- -- -- --
------------- ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional Shares.... (16,530,293) (80,170,513) (24,916,312) (50,102,026) (26,302,437) (8,681,066)
------------- ------------ ------------ ------------ ------------ ------------
Investment:
Net investment income...... -- -- (89,117) -- (287,641) (284,041)
In excess of net investment
income.................... -- -- (766) (144,473) -- (7,182)
Net realized gains on
investments............... (467,806) (2,576,664) (495,222) (1,024,896) (999,490) (61,833)
In excess of net realized
gains on investments...... (18,613) -- -- -- -- --
------------- ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Investment Shares....... (486,419) (2,576,664) (585,105) (1,169,369) (1,287,131) (353,056)
------------- ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders............. (17,016,712) (82,747,177) (25,501,417) (51,271,395) (27,589,568) (9,034,122)
------------- ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) from
capital transactions....... (163,997,560) 162,491,152 (57,507,421) 825,398 (19,694,041) 21,011,239
------------- ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in
net assets................ (11,080,822) 41,008,789 53,958,351 38,510,477 114,264,304 191,187,826
------------- ------------ ------------ ------------ ------------ ------------
NET ASSETS at end of
period..................... $ 772,709,655 $783,790,477 $594,847,537 $540,889,186 $923,615,656 $809,351,352
============= ============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
107
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Short Term Bond Fund Intermediate Bond Fund Income Fund
-------------------------- -------------------------- --------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 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 (decrease) in net
assets resulting from
operations:
Net investment income...... 8,574,181 7,990,388 50,281,025 45,554,802 17,406,682 15,411,966
Net realized gains/(losses)
on investments sold....... (292,208) (96,072) (14,169,768) 5,947,686 (6,701,014) 5,514,294
Net change in unrealized
appreciation/(depreciation)
of investments............ (4,657,164) 489,306 (47,446,428) 5,377,857 (22,407,559) 1,312,791
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in
net assets resulting from
operations................ 3,624,809 8,383,622 (11,335,171) 56,880,345 (11,701,891) 22,239,051
------------ ------------ ------------ ------------ ------------ ------------
Dividends and distributions
to shareholders from:
Institutional:
Net investment income...... (8,295,526) (7,612,645) (49,870,692) (45,070,559) (16,763,277) (14,910,611)
In excess of net investment
income.................... -- -- (10,961) -- (3,048) (2,725)
Net realized gains on
investments............... -- -- -- -- -- (5,347,331)
In excess of net realized
gains on investments...... -- -- -- -- (278,297) --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional Shares.... (8,295,526) (7,612,645) (49,881,653) (45,070,559) (17,044,622) (20,260,667)
------------ ------------ ------------ ------------ ------------ ------------
Investment:
Net investment income...... (275,645) (364,391) (654,403) (541,970) (643,405) (514,425)
In excess of net investment
income.................... -- (17,935) (144) -- (117) (23,412)
Net realized gains on
investments............... -- -- -- -- -- (239,521)
In excess of net realized
gains on investments...... -- -- -- -- (12,034) --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Investment Shares....... (275,645) (382,326) (654,547) (541,970) (655,556) (777,358)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders............. (8,571,171) (7,994,971) (50,536,200) (45,612,529) (17,700,178) (21,038,025)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) from
capital transactions....... 36,368,498 (2,205,259) 19,035,219 116,913,558 93,386,235 5,057,015
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in
net assets................ 31,422,136 (1,816,608) (42,836,152) 128,181,374 63,984,166 6,258,041
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS at end of
period..................... $176,777,192 $145,355,056 $855,056,723 $897,892,875 $305,630,512 $241,646,346
============ ============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
108
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Intermediate Tax-Free Michigan Municipal
Tax-Free Fund Income Fund Bond Fund
-------------------------- -------------------------- --------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 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 (decrease) in net
assets resulting from
operations:
Net investment income...... 13,122,259 12,057,430 5,442,101 5,194,579 4,611,338 4,950,765
Net realized gains/(losses)
on investments sold....... (1,498,246) 1,069,994 (1,090,627) 628,871 41,857 174,981
Net change in unrealized
appreciation/(depreciation)
of investments............ (14,931,504) 1,761,120 (8,469,132) 1,185,845 (3,892,509) 568,378
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in
net assets resulting from
operations................ (3,307,491) 14,888,544 (4,117,658) 7,009,295 760,686 5,694,124
------------ ------------ ------------ ------------ ------------ ------------
Dividends and distributions
to shareholders from:
Institutional:
Net investment income...... (12,913,338) (11,933,893) (5,367,030) (5,118,923) (4,434,362) (4,809,973)
In excess of net investment
income.................... (2,699) (738,103) (1,169) -- (175) --
Net realized gains on
investments............... -- -- -- (600,924) (12,125) (80,492)
In excess of net realized
gains on investments...... (297,654) -- (108,848) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional Shares.... (13,213,691) (12,671,996) (5,477,047) (5,719,847) (4,446,662) (4,890,465)
------------ ------------ ------------ ------------ ------------ ------------
Investment:
Net investment income...... (163,183) (149,636) (75,485) (73,875) (197,142) (182,181)
In excess of net investment
income.................... (34) (10,299) (16) -- (8) --
Net realized gains on
investments............... -- -- -- (8,888) (534) (4,050)
In excess of net realized
gains on investments...... (3,898) -- (1,661) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Investment Shares....... (167,115) (159,935) (77,162) (82,763) (197,684) (186,231)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders............. (13,380,806) (12,831,931) (5,554,209) (5,802,610) (4,644,346) (5,076,696)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) from
capital transactions....... 22,860,111 19,289,539 3,107,748 10,599,386 (13,033,998) 7,137,136
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in
net assets................ 6,171,814 21,346,152 (6,564,119) 11,806,071 (16,917,658) 7,754,564
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS at end of
period..................... $306,693,718 $300,521,904 $123,606,111 $130,170,230 $106,985,205 $123,902,863
============ ============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
109
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
[LOGO OF KENT FUNDS]
<TABLE>
<CAPTION>
Michigan Municipal Government
Money Market Fund Money Market Fund Money Market Fund
-------------------------- -------------------------- --------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 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.. 31,499,445 28,254,914 8,826,013 9,607,143 9,453,668 5,863,503
Net realized
gains/(losses) on
investments........... (162) (3,030) -- 1,873 -- (766)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease)
in net assets
resulting from
operations............ 31,499,283 28,251,884 8,826,013 9,609,016 9,453,668 5,862,737
------------ ------------ ------------ ------------ ------------ ------------
Dividends and
distributions to
shareholders from:
Institutional:
Net investment income.. (31,404,991) (28,105,841) (8,806,391) (9,596,573) (9,447,725) (5,861,605)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional
Shares............... (31,404,991) (28,105,841) (8,806,391) (9,596,573) (9,447,725) (5,861,605)
------------ ------------ ------------ ------------ ------------ ------------
Investment:
Net investment income.. (94,454) (149,073) (19,621) (10,570) (5,943) (1,898)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Investment Shares... (94,454) (149,073) (19,621) (10,570) (5,943) (1,898)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders......... (31,499,445) (28,254,914) (8,826,012) (9,607,143) (9,453,668) (5,863,503)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease)
from capital
transactions........... (40,215,665) 221,573,434 (30,340,535) 111,644,427 48,505,112 72,389,849
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease)
in net assets......... (40,215,827) 221,570,404 (30,340,534) 111,646,300 48,505,112 72,389,083
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS at end of
period................. $656,911,792 $697,127,619 $293,276,959 $323,617,493 $215,520,656 $167,015,544
============ ============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
110
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1.Organization
The Kent Funds (the "Trust") was organized as a Massachusetts business trust
on May 9, 1986 and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company. As of
the date of this report, the Trust offered fourteen managed investment funds.
The accompanying financial statements and financial highlights are those of
the following: Kent Growth and Income Fund, Kent Large Company Growth 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 unlim-
ited number of shares of beneficial interest without par value.
The Trust may issue more than one series of shares and it may create one or
more classes of shares within each series. The Trust currently issues fourteen
series of shares with two separate classes in each series: Investment Shares
and Institutional Shares. Each share in each series or class has identical
voting, dividend, liquidation and other rights, except in matters affecting
only a particular series or class, in which case only shares of the affected
series or class are entitled to vote.
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.
Large Company Growth Fund--To seek long-term capital appreciation.
Small Company Growth Fund -- To seek long-term capital appreciation.
International Growth Fund -- To seek long-term capital appreciation.
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 fed-
eral 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 accor-
dance with Rule 2a-7 under the 1940 Act, which approximates market value. This
method involves valuing a security initially at its cost on the date of pur-
chase and thereafter assuming a constant amortization to maturity of the dif-
ference between the principal amount due at maturity and initial cost.
In the Short Term Bond Fund, Intermediate Bond Fund, Income Fund, Intermedi-
ate Tax-Free Fund, Tax-Free Income Fund and Michigan Municipal Bond Fund, cor-
porate 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 Asset Management Com-
pany 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 approved by
and under the general supervision of the Board of Trustees.
The Growth and Income Fund, Large Company Growth Fund, Small Company Growth
Fund, International Growth
111
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
Fund and Index Equity Fund value listed securities at the last sales price on
the principal exchange where such securities are traded. Listed securities for
which last sales prices are not available are valued at the last bid price.
Unlisted securities on the National Market System (NMS) are valued at the last
sale price or in the absence of any sales the high bid price 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 deter-
mine 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 for-
eign investments and foreign income and expenses are converted into U.S. dol-
lars 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 cur-
rency 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 to gain additional exposure to the market. This investment
involves, to varying degrees, elements of market risk and risks in excess of
the amount recognized in the Statements of Assets and Liabilities. The face or
contract amounts reflect the extent of the exposure the Funds have in the par-
ticular 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 if counterparties are unable to per-
form under the terms of the contract.
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. 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. Futures contracts are valued at the settlement
price established each day by the board of trade or exchange on which they are
traded.
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 cur-
rency of certain Fund investments. A forward foreign currency exchange con-
tract 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 recog-
nized when entering a closing or offsetting forward foreign currency exchange
contract with the same settlement date and broker.
Forward Commitments and When-Issued Securities: Each Fund may purchase securi-
ties on a "when-issued" basis or purchase or sell securities on a forward com-
mitment (sometimes called delayed delivery) basis. A Fund will purchase secu-
rities on a when-issued basis or purchase or sell securities on a forward com-
mitment basis only with the intention of completing the transaction and actu-
ally purchasing or selling the securities. If deemed advisable as a matter of
investment strategy, however, a Fund may dispose of or negotiate a commitment
after entering into it. A Fund also may sell securities it has committed to
purchase before those securities are delivered to the Fund on the settlement
date.
Securities purchased or sold on a when-issued or forward commitment basis
involve a risk of loss if the value of the
112
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
security to be purchased declines, or the value of the security to be sold
increases, before the settlement date. When a Fund engages in when-issued and
forward commitment transactions, it relies on the other party to consummate
the trade. Failure of such party to do so may result in the Fund incurring a
loss or missing an opportunity to obtain a price considered to be advanta-
geous.
When a Fund purchases securities on a when-issued or forward commitment
basis, the Trust's custodian will maintain in a segregated account cash, U.S.
Government securities or other liquid high-grade debt securities having a
value (determined daily) at least equal to the amount of the Fund's purchase
commitments. In the case of a forward commitment to sell portfolio securities,
the custodian will hold the portfolio securities themselves in a segregated
account while the commitment is outstanding. These procedures are designed to
ensure that the Fund will maintain sufficient assets at all times to cover its
obligations under when-issued and forward commitment transactions. The Inter-
mediate Bond Fund and Income Fund held when-issued securities as of December
31, 1999. On December 20, 1999, the Income Fund entered into a forward commit-
ment to sell $10 million par value of Freddie Mac bonds on January 19, 2000.
Securities Lending: To generate additional income, each Fund may lend portfo-
lio securities valued up to 33 1/3% of its total assets, pursuant to agree-
ments 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 100% 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. Col-
lateral 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 agree-
ments, 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 portfolio 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 financial-
ly. However, loans will be made only to borrowers deemed by Lyon Street Asset
Management Company ("Lyon Street" or the "Investment Adviser"), a wholly-owned
subsidiary of Old Kent Bank ("Old Kent") to be of good standing and credit-
worthy under guidelines established by the Board of Trustees and when, in the
judgment of the Investment Adviser, the consideration which can be earned cur-
rently 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 December 31, 1999,
the following Funds had securities on loan with the following market values
and collateral amounts (amounts in thousands):
<TABLE>
<CAPTION>
Market Value Market Value
of of Loaned
Collateral Securities
------------ ------------
<S> <C> <C>
Growth and Income Fund................................ $ 18,049 $ 18,032
Small Company Growth Fund............................. $ 66,698 $ 66,504
International Growth Fund............................. $ 28,713 $ 28,641
Index Equity Fund..................................... $ 28,982 $ 28,948
Short Term Bond Fund.................................. $ 15,014 $ 14,992
Intermediate Bond Fund................................ $106,058 $105,814
Income Fund........................................... $ 33,182 $ 33,151
</TABLE>
At December 31, 1999, the loaned securities were fully collateralized by
cash, which was reinvested in short-term securities.
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.
Dividends and Distributions to Shareholders: The Money Market Funds declare
dividends daily from net investment income and pay such dividends monthly. The
other Funds declare and distribute dividends from net investment income month-
ly, 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.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax regu-
lations which may differ from generally accepted accounting principles. These
113
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
"book/tax" differences are either considered temporary or permanent in nature.
To the extent these differences are permanent in nature, such amounts are
reclassified within the composition of net assets based on their federal tax-
basis treatment; temporary differences do not require reclassification. Divi-
dends and distributions to shareholders which exceed net investment income and
net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or dis-
tributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported
as distributions of paid-in-capital.
As of December 31, 1999, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments to paid-in-capi-
tal:
<TABLE>
<CAPTION>
Accumulated Accumulated
Undistributed Undistributed
(Distributions Net Realized
in Excess of) Gains/
Net Investment (Losses) on
Income Investments
-------------- -------------
<S> <C> <C>
Growth and Income Fund............................ $ 3,108 $ (852,468)
Large Company Growth Fund......................... 13,266 (13,266)
Small Company Growth Fund......................... 7,959 (7,959)
International Growth Fund......................... 1,219,487 (1,219,487)
Index Equity Fund................................. 5,301 (5,301)
Income Fund....................................... 6,107 (1,263)
Intermediate Tax-Free Fund........................ 1,488 (1,488)
Tax-Free Income Fund.............................. 989 (989)
Michigan Municipal Bond Fund...................... 38,285 (38,285)
Money Market Fund................................. -- 433
</TABLE>
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 regu-
lated investment company under the Internal Revenue Code (the "Code"). It is
the policy of each Fund to meet the requirements of the Code applicable to
regulated investment companies, including the requirement that it distribute
substantially all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
Withholding taxes on foreign dividends have been paid or provided for in
accordance with the applicable country's tax rules and rates.
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 attribut-
able to the Institutional Shares as a class.
3.Related Party Transactions
The Funds are advised by Lyon Street. The Investment Adviser is entitled to
receive a fee, computed daily and paid monthly, based on each Fund's average
daily net assets.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
served the Funds as Administrator and BISYS Fund Services, Inc. served the
Funds as Fund Accountant and Transfer Agent from January 1, 1999 to November
30, 1999. BISYS and BISYS Fund Services, Inc. are both wholly owned subsidiar-
ies of The BISYS Group Inc.
Prior to December 1, 1999, Old Kent provided certain administration services
to the Trust pursuant to a Sub-Administration Agreement between Old Kent and
BISYS. BISYS paid 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 administration services came out of BISYS'
administration fee and were not an additional charge to the Funds.
Effective December 1, 1999, Old Kent Securities Corporation, a wholly owned
subsidiary of Old Kent serves the Funds as Administrator, Fund Accountant and
Transfer Agent. 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 aver-
age daily net assets of the Trust. BISYS Fund Services Ohio, Inc. provides
certain services to the Trust pursuant to a Sub-Administration Agreement, a
Sub-Fund Accounting Agreement and a Sub-Transfer Agency Agreement and is enti-
tled to receive a fee, calculated daily and paid monthly, at an annual rate of
0.045% of each Funds' average daily net assets, plus out-of-pocket expenses.
The fees paid to BISYS Fund Services Ohio, Inc. for such services are not an
additional charge to the Funds and are paid from Old Kent Securities Corpora-
tion's fee.
Effective July 1, 1999, Kent Funds Distributors, Inc. (also a wholly-owned
subsidiary of The BISYS Group, Inc.) assumed the role of the Funds' Distribu-
tor from BISYS.
The Trust has adopted a distribution plan (the "Plan") on behalf of the
Investment Shares of the Funds pursuant to Rule
114
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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.
115
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
Information regarding these transactions is as follows for the year ended
December 31, 1999:
<TABLE>
<CAPTION>
Fund Distribution Sub-
Investment Advisory Administration Accounting Investment Class Administration
------------------------- -------------- ---------- ---------------- --------------
Annual fee
before voluntary
fee reductions Waived Waived Waived Waived Fees
---------------- -------- -------------- ---------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Growth and Income Fund.. 0.70% $ -- $ -- $ 93,345 $ -- $466,747
Large Company Growth
Fund (1)............... 0.70% -- 338 3,058 -- 11,669
Small Company Growth
Fund................... 0.70% -- -- 69,003 -- 345,030
International Growth
Fund................... 0.75% -- -- 53,662 -- 268,322
Index Equity Fund....... 0.30% 429,737 515,203 128,918 -- 429,726
Short Term Bond Fund.... 0.50% -- -- 15,438 5,223 77,194
Intermediate Bond Fund.. 0.55% -- -- 86,231 -- 431,176
Income Fund............. 0.60% -- -- 27,875 -- 139,384
Intermediate Tax-Free
Fund................... 0.50% -- -- 31,108 -- 155,546
Tax-Free Income Fund.... 0.55% -- -- 12,611 -- 63,056
Michigan Municipal Bond
Fund................... 0.45% -- -- 11,604 5,151 58,001
Money Market Fund....... 0.40% -- 469,499 100,581 -- 335,347
Michigan Municipal Money
Market Fund ........... 0.40% -- 250,062 46,887 -- 125,040
Government Money Market
Fund................... 0.40% 399,824 120,856 29,989 -- 99,922
</TABLE>
- -------
(1) For the period October 19, 1999 (commencement of operations) through
December 31, 1999.
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.
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.
116
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
4.Capital Share Transactions
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
Large Company
Growth and Income Fund Growth Fund
---------------------------- -------------
Year ended Year ended Period ended
December 31, December 31, December 31,
1999 1998 1999 (a)
------------- ------------- -------------
<S> <C> <C> <C>
DOLLAR AMOUNTS
Institutional:
Shares issued..................... $ 277,819,798 $ 227,159,369 $169,096,866
Shares issued in conversion....... -- -- 940,516
Reinvestment of distributions..... 15,842,666 32,729,339 166,586
Shares redeemed................... (398,650,525) (246,102,212) (10,690,724)
------------- ------------- ------------
Net increase (decrease) from
Institutional capital
transactions.................... (104,988,061) 13,786,496 159,513,244
------------- ------------- ------------
Investment:
Shares issued..................... 17,701,397 14,780,302 239,932
Reinvestment of distributions..... 2,410,451 4,118,060 172
Shares redeemed................... (19,035,516) (10,232,022) --
------------- ------------- ------------
Net increase (decrease) from
Investment capital
transactions.................... 1,076,332 8,666,340 240,104
------------- ------------- ------------
Total net increase (decrease)
from capital transactions....... $(103,911,729) $ 22,452,836 $159,753,348
============= ============= ============
SHARE ACTIVITY
Institutional:
Shares issued..................... 14,599,481 14,055,251 16,269,657
Shares issued in conversion....... -- -- 94,052
Reinvestment of distributions..... 826,101 1,992,365 14,463
Shares redeemed................... (21,073,132) (15,006,273) (938,361)
------------- ------------- ------------
Net increase (decrease) from
Institutional shares
transactions.................... (5,647,550) 1,041,343 15,439,811
------------- ------------- ------------
Investment:
Shares issued..................... 927,802 913,994 21,339
Reinvestment of distributions..... 126,161 252,348 15
Shares redeemed................... (994,683) (634,252) --
------------- ------------- ------------
Net increase (decrease) from
Investment shares transactions.. 59,280 532,090 21,354
------------- ------------- ------------
Total net increase (decrease)
from shares transactions........ (5,588,270) 1,573,433 15,461,165
============= ============= ============
</TABLE>
- -------
(a) For the period from October 19, 1999 (commencement of operations) to Decem-
ber 31, 1999.
117
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
Capital Share Transactions
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
Small Company Growth Fund International Growth Fund Index Equity Fund
---------------------------- ---------------------------- ----------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
Institutional:
Shares issued......... $ 154,201,918 $ 302,052,649 $ 126,955,671 $ 136,493,110 $ 199,778,408 $ 190,070,776
Reinvestment of
distributions........ 8,812,315 40,424,917 11,794,384 23,365,621 20,227,589 7,019,186
Shares redeemed....... (324,647,618) (184,973,716) (196,202,032) (161,041,176) (242,642,155) (178,461,700)
------------- ------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Institutional
capital
transactions........ (161,633,385) 157,503,850 (57,451,977) (1,182,445) (22,636,158) 18,628,262
------------- ------------- ------------- ------------- ------------- -------------
Investment:
Shares issued......... 13,329,530 8,768,844 22,160,970 7,181,444 13,670,782 8,289,279
Reinvestment of
distributions........ 479,211 2,517,754 574,449 1,132,738 1,267,722 344,605
Shares redeemed....... (16,172,916) (6,299,296) (22,790,863) (6,306,339) (11,996,387) (6,250,907)
------------- ------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Investment capital
transactions........ (2,364,175) 4,987,302 (55,444) 2,007,843 2,942,117 2,382,977
------------- ------------- ------------- ------------- ------------- -------------
Total net increase
(decrease) from
capital
transactions........ $(163,997,560) $ 162,491,152 $ (57,507,421) $ 825,398 $ (19,694,041) $ 21,011,239
============= ============= ============= ============= ============= =============
SHARE ACTIVITY
Institutional:
Shares issued......... 9,832,586 18,894,661 7,713,913 8,614,874 7,671,249 9,139,342
Reinvestment of
distributions........ 639,280 2,459,426 757,883 1,492,409 759,240 322,723
Shares redeemed....... (20,958,974) (11,327,584) (11,876,965) (9,986,982) (9,310,489) (8,478,378)
------------- ------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Institutional shares
transactions........ (10,487,108) 10,026,503 (3,405,169) 120,301 (880,000) 983,687
------------- ------------- ------------- ------------- ------------- -------------
Investment:
Shares issued......... 806,814 511,690 1,283,948 441,796 521,404 394,992
Reinvestment of
distributions........ 35,153 152,813 37,200 73,057 47,372 15,815
Shares redeemed....... (996,153) (383,678) (1,316,231) (389,582) (455,348) (293,283)
------------- ------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Investment shares
transactions........ (154,186) 280,825 4,917 125,271 113,428 117,524
------------- ------------- ------------- ------------- ------------- -------------
Total net increase
(decrease) from
shares
transactions........ (10,641,294) 10,307,328 (3,400,252) 245,572 (766,572) 1,101,211
============= ============= ============= ============= ============= =============
</TABLE>
118
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Capital Share Transactions
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
Short Term Bond Fund Intermediate Bond Fund Income Fund
-------------------------- ---------------------------- --------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
Institutional:
Shares issued......... $ 86,481,060 $ 46,983,304 $ 231,579,566 $ 338,390,247 $131,273,521 $ 72,628,587
Reinvestment of
distributions........ 5,027,496 4,494,488 26,576,542 23,782,242 4,471,773 4,483,402
Shares redeemed....... (53,745,218) (52,355,665) (239,190,951) (250,453,733) (43,505,533) (77,077,231)
------------ ------------ ------------- ------------- ------------ ------------
Net increase
(decrease) from
Institutional
capital
transactions........ 37,763,338 (877,873) 18,965,157 111,718,756 92,239,761 34,758
------------ ------------ ------------- ------------- ------------ ------------
Investment:
Shares issued......... 607,835 1,555,661 4,714,196 8,360,353 4,937,662 7,872,571
Reinvestment of
distributions........ 262,804 372,460 612,835 489,509 630,110 742,082
Shares redeemed....... (2,265,479) (3,255,507) (5,256,969) (3,655,060) (4,421,298) (3,592,396)
------------ ------------ ------------- ------------- ------------ ------------
Net increase
(decrease) from
Investment capital
transactions........ (1,394,840) (1,327,386) 70,062 5,194,802 1,146,474 5,022,257
------------ ------------ ------------- ------------- ------------ ------------
Total net increase
(decrease) from
capital
transactions........ $ 36,368,498 $ (2,205,259) $ 19,035,219 $ 116,913,558 $ 93,386,235 $ 5,057,015
============ ============ ============= ============= ============ ============
SHARE ACTIVITY
Institutional:
Shares issued......... 8,983,559 4,796,963 23,876,600 33,667,668 13,490,256 6,983,209
Reinvestment of
distributions........ 523,910 460,770 2,754,272 2,384,021 463,507 433,651
Shares redeemed....... (5,582,626) (5,351,943) (24,651,218) (25,053,433) (4,473,527) (7,372,911)
------------ ------------ ------------- ------------- ------------ ------------
Net increase
(decrease) from
Institutional shares
transactions........ 3,924,843 (94,210) 1,979,654 10,998,256 9,480,236 43,949
------------ ------------ ------------- ------------- ------------ ------------
Investment:
Shares issued......... 63,180 159,007 486,011 833,731 509,039 757,461
Reinvestment of
distributions........ 27,376 38,229 63,357 48,917 65,182 71,851
Shares redeemed....... (234,980) (333,161) (542,512) (364,011) (457,311) (344,684)
------------ ------------ ------------- ------------- ------------ ------------
Net increase
(decrease) from
Investment shares
transactions........ (144,424) (135,925) 6,856 518,637 116,910 484,628
------------ ------------ ------------- ------------- ------------ ------------
Total net increase
(decrease) from
shares
transactions........ 3,780,419 (230,135) 1,986,510 11,516,893 9,597,146 528,577
============ ============ ============= ============= ============ ============
</TABLE>
119
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
Capital Share Transactions
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
Intermediate Tax-Free Michigan Municipal Bond
Fund Tax-Free Income Fund Fund
-------------------------- -------------------------- --------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
Institutional:
Shares issued.......... $ 52,130,072 $ 66,076,832 $ 27,730,254 $ 32,537,497 $ 27,945,889 $ 40,230,617
Shares issued in
merger................ 31,650,596 -- -- -- -- --
Reinvestment of
distributions......... 377,994 208,477 200,624 111,411 102,580 47,874
Shares redeemed........ (61,229,574) (47,473,584) (24,585,537) (22,259,614) (39,680,824) (34,650,281)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) from
Institutional capital
transactions......... 22,929,088 18,811,725 3,345,341 10,389,294 (11,632,355) 5,628,210
------------ ------------ ------------ ------------ ------------ ------------
Investment:
Shares issued.......... 1,775,624 2,087,564 849,540 1,402,556 1,356,718 3,062,612
Shares issued in
merger................ 394,701 -- -- -- -- --
Reinvestment of
distributions......... 113,979 116,321 68,056 77,686 133,694 129,291
Shares redeemed........ (2,353,281) (1,726,071) (1,155,189) (1,270,150) (2,892,055) (1,682,977)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) from
Investment capital
transactions......... (68,977) 477,814 (237,593) 210,092 (1,401,643) 1,508,926
------------ ------------ ------------ ------------ ------------ ------------
Total net increase
(decrease) from
capital
transactions......... $ 22,860,111 $ 19,289,539 $ 3,107,748 $ 10,599,386 $(13,033,998) $ 7,137,136
============ ============ ============ ============ ============ ============
SHARE ACTIVITY
Institutional:
Shares issued.......... 4,957,817 6,151,853 2,666,079 3,037,158 2,761,659 3,919,445
Shares issued in
merger................ 2,959,418 -- -- -- -- --
Reinvestment of
distributions......... 36,136 19,474 19,427 10,424 10,176 4,681
Shares redeemed........ (5,815,118) (4,422,430) (2,351,884) (2,072,941) (3,924,536) (3,382,841)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) from
Institutional shares
transactions......... 2,138,253 1,748,897 333,622 974,641 (1,152,701) 541,285
------------ ------------ ------------ ------------ ------------ ------------
Investment:
Shares issued.......... 167,735 194,674 80,858 130,884 132,963 298,776
Shares issued in
merger................ 36,871 -- -- -- -- --
Reinvestment of
distributions......... 10,867 10,869 6,542 7,256 13,229 12,655
Shares redeemed........ (223,752) (161,174) (111,534) (118,616) (284,472) (164,507)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) from
Investment shares
transactions......... (8,279) 44,369 (24,134) 19,524 (138,280) 146,924
------------ ------------ ------------ ------------ ------------ ------------
Total net increase
(decrease) from share
transactions......... 2,129,974 1,793,266 309,488 994,165 (1,290,981) 688,209
============ ============ ============ ============ ============ ============
</TABLE>
120
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Capital Share Transactions
Transactions in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
Michigan Municipal Money Government Money Market
Money Market Fund Market Fund Fund
-------------------------------- ---------------------------- ----------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
Institutional:
Shares issued.......... $ 1,493,337,247 $ 1,330,695,260 $ 377,994,496 $ 559,420,529 $ 709,775,713 $ 525,385,514
Reinvestment of
distributions......... 3,427,735 2,064,457 346,566 358,257 5,906,319 5,375,385
Shares redeemed........ (1,535,393,344) (1,113,735,038) (408,993,597) (448,191,138) (667,203,871) (458,462,125)
--------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Institutional capital
transactions......... (38,628,362) 219,024,679 (30,652,535) 111,587,648 48,478,161 72,298,774
--------------- --------------- ------------- ------------- ------------- -------------
Investment:
Shares issued.......... 10,434,345 19,973,693 3,998,909 5,192,300 110,027 124,496
Reinvestment of
distributions......... 98,327 136,660 18,439 10,702 4,745 1,547
Shares redeemed........ (12,119,975) (17,561,598) (3,705,348) (5,146,223) (87,821) (34,968)
--------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Investment capital
transactions......... (1,587,303) 2,548,755 312,000 56,779 26,951 91,075
--------------- --------------- ------------- ------------- ------------- -------------
Total net increase
(decrease) from
capital
transactions......... $ (40,215,665) $ 221,573,434 $ (30,340,535) $ 111,644,427 $ 48,505,112 $ 72,389,849
=============== =============== ============= ============= ============= =============
SHARE ACTIVITY
Institutional:
Shares issued.......... 1,493,337,247 1,330,695,260 377,994,496 559,420,529 709,775,713 525,385,514
Reinvestment of
distributions......... 3,427,735 2,064,457 346,566 358,257 5,906,319 5,375,385
Shares redeemed........ (1,535,393,344) (1,113,735,038) (408,993,597) (448,191,138) (667,203,871) (458,462,125)
--------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Institutional shares
transactions......... (38,628,362) 219,024,679 (30,652,535) 111,587,648 48,478,161 72,298,774
--------------- --------------- ------------- ------------- ------------- -------------
Investment:
Shares issued.......... 10,434,345 19,973,693 3,998,909 5,192,299 110,027 124,496
Reinvestment of
distributions......... 98,327 136,660 18,439 10,702 4,745 1,547
Shares redeemed........ (12,119,975) (17,561,598) (3,705,348) (5,146,223) (87,821) (34,968)
--------------- --------------- ------------- ------------- ------------- -------------
Net increase
(decrease) from
Investment shares
transactions......... (1,587,303) 2,548,755 312,000 56,778 26,951 91,075
--------------- --------------- ------------- ------------- ------------- -------------
Total net increase
(decrease) from share
transactions......... (40,215,665) 221,573,434 (30,340,535) 111,644,426 48,505,112 72,389,849
=============== =============== ============= ============= ============= =============
</TABLE>
121
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
5.Purchases and Sales of Securities
The cost of purchases and proceeds from sales of securities, excluding short-
term investments, for the year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ---- --------- -----
<S> <C> <C>
Growth and Income Fund............................... $ 78,959,603 $241,057,956
Large Company Growth Fund (1)........................ 147,416,399 403,018
Small Company Growth Fund............................ 130,770,475 300,021,455
International Growth Fund............................ 43,220,807 136,987.522
Index Equity Fund.................................... 76,733,439 120,137,545
Short Term Bond Fund................................. 144,506,091 88,946,828
Intermediate Bond Fund............................... 684,654,667 764,588,697
Income Fund.......................................... 334,614,295 241,925,006
Intermediate Tax-Free Fund........................... 191,375,447 201,377,786
Tax-Free Income Fund................................. 145,838,715 132,295,622
Michigan Municipal Bond Fund......................... 15,236,229 28,908,175
</TABLE>
- -------
(1) For the period October 19, 1999 (commencement of operations) through
December 31, 1999.
6. Risks Associated with Foreign Securities and Currencies
The Growth and Income Fund, the Large Company Growth Fund and the Interna-
tional 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 secu-
rities of comparable U.S. issuers.
7.Concentration of Credit Risk
The Michigan Municipal Bond Fund and Michigan Municipal Money Market 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. These Funds are more susceptible to eco-
nomic 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 concentra-
tions by industry sector at December 31, 1999 (as a percentage of total
investments):
<TABLE>
<CAPTION>
Michigan Michigan
Intermediate Tax-Free Municipal Municipal Money
Tax-Free Fund Income Fund Bond Fund Market Fund
------------- ----------- --------- ---------------
<S> <C> <C> <C> <C>
Airport..................... 3.99% 6.01% 2.15% 1.17%
Development................. 3.61% 1.61% 7.70% 64.62%
Education................... 0.36% 0.94% -- 0.76%
Facilities.................. 7.04% 3.69% 4.80% --
General Obligation.......... 25.47% 22.29% 9.74% 11.83%
Higher Education............ 4.11% 9.80% 7.21% 2.13%
Law Enforcement............. -- -- 1.57% --
Medical..................... 2.95% 1.91% 13.95% 2.06%
Multi-family Housing........ -- 1.08% 2.56% 3.66%
Mutual Funds................ 0.43% 0.37% 0.64% 0.38%
Nursing Homes............... -- -- 1.46% --
Pollution................... 2.57% -- 1.19% 9.16%
Power....................... 6.41% 7.27% 2.67% --
School District............. 14.22% 14.23% 31.81% 3.26%
Single-family Housing....... 0.48% 3.87% -- --
Student Loan................ 2.01% -- 2.35% --
Transportation.............. 14.75% 15.28% 5.76% 0.45%
Utilities................... 6.94% 10.96% 4.44% --
Water....................... 4.66% 0.69% -- 0.52%
----- ----- ----- -----
100% 100% 100% 100%
===== ===== ===== =====
</TABLE>
8.Common Trust Fund Conversion
On October 19, 1999, the net assets of Evergreen Bank Equity Growth Fund for
Retirement Trust were exchanged in a tax-free conversion for Institutional
shares of the Kent Large Company Growth Fund. 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>
Net
Shares Assets Net Asset Value Unrealized
Issued Converted Per Share Issued Appreciation
------ --------- ---------------- ------------
<S> <C> <C> <C> <C>
Large Company Growth Fund....... 94,052 $940,516 $10.00 $103,659
</TABLE>
9.Fund Merger
Shareholders of the Limited Term Tax-Free Fund became shareholders of the
Intermediate Tax-Free Fund upon consummation of the Plan of Reorganization on
March 30, 1999. The assets and liabilities of the Limited Term Tax-Free Fund
were transferred to the Intermediate Tax-Free Fund.
<TABLE>
<CAPTION>
Before Reorganization After Reorganization
------------------------- --------------------
Limited Term Intermediate Intermediate
Tax-Free Tax-Free Tax-Free
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
Shares (000)..................... 3,152 27,137 30,133
Net Assets (000)................. $ 32,045 $ 290,269 $ 322,314
Net Asset Value.................. $ 10.17 $ 10.70 $ 10.70
Unrealized Appreciation.......... $667,311 $16,632,901 $17,300,212
</TABLE>
122
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
The reorganized Intermediate Tax-Free Fund retained the investment objective
and financial history of the Intermediate Tax-Free Fund.
10.Federal Income Tax Information
Capital Loss Carryforward: At December 31, 1999, the following Funds had net
capital loss carryforwards to offset future net capital gains, if any, to the
extent provided by the Treasury regulations:
<TABLE>
<CAPTION>
Fund Amount Year
- ---- ----------- ----
<S> <C> <C>
Short Term Bond Fund........................................... $ 656,100 2001
3,015,994 2002
467,881 2003
438,260 2004
1,927,928 2005
237,955 2006
219,707 2007
-----------
$ 6,963,825
===========
Intermediate Bond Fund......................................... $ 682,119 2004
4,043,228 2005
5,714,136 2007
-----------
$10,439,483
===========
Income Fund.................................................... $ 5,923,678 2007
===========
Intermediate Tax-Free Fund..................................... $ 1,269,545 2007
===========
Tax-Free Income Fund........................................... $ 1,090,627 2007
===========
Money Market Fund.............................................. $ 224 2002
194 2003
27 2004
432 2005
3,763 2006
162 2007
-----------
$ 4,802
===========
Michigan Municipal Money Market Fund........................... $ 10,595 2005
===========
Government Money Market Fund................................... $ 765 2006
===========
</TABLE>
Long Term Capital Gains Distributions: During the year ended December 31,
1999, the following Funds declared or paid long-term capital gain distribu-
tions in the following amounts:
<TABLE>
<CAPTION>
Fund Amount
- ---- -----------
<S> <C>
Growth and Income Fund............................................. $31,787,418
Large Company Growth Fund (1)...................................... 92,776
Small Company Growth Fund.......................................... 13,133,936
International Growth Fund.......................................... 20,933,585
Index Equity Fund.................................................. 16,658,167
Intermediate Tax-Free Fund......................................... 169,292
Michigan Municipal Bond Fund....................................... 12,659
</TABLE>
- -------
(1) For the period October 19, 1999 (commencement of operations) through
December 31, 1999.
Dividend Received Deduction (unaudited): For corporate shareholders, the fol-
lowing percentages of the total ordinary income distributions paid during the
fiscal year ended December 31, 1999 qualify for the corporate dividends
received deductions:
<TABLE>
<CAPTION>
Fund Percentage
- ---- ----------
<S> <C>
Growth and Income Fund............................................... 98.51%
Large Company Growth Fund (1)........................................ 72.96%
Small Company Growth Fund............................................ 91.06%
Index Equity Fund.................................................... 100.00%
</TABLE>
- -------
(1) For the period October 19, 1999 (commencement of operations) through
December 31, 1999.
Tax-Exempt Income Distributions (unaudited): During the fiscal year ended
December 31, 1999, the following Funds declared tax-exempt income distribu-
tions in the following amounts:
<TABLE>
<CAPTION>
Fund Amount
- ---- -----------
<S> <C>
Intermediate Tax-Free Fund......................................... $13,077,964
Tax-Free Income Fund............................................... 5,442,711
Michigan Municipal Bond Fund....................................... 4,598,604
Michigan Municipal Money Market Fund............................... 8,726,350
</TABLE>
123
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
[LOGO OF KENT FUNDS]
Post October Loss Deferral (unaudited): Capital (and foreign currency) losses
incurred after October 31, within a Fund's fiscal year are deemed to arise on
the first business day of the following fiscal year for tax purposes. The fol-
lowing Funds have incurred and will elect to defer such capital losses (and
foreign currency losses):
<TABLE>
<CAPTION>
Fund Amount
- ---- ------
<S> <C>
Small Company Growth Fund........................................... $ 271,992
Short Term Bond Fund................................................ 63,871
Intermediate Bond Fund.............................................. 7,127,042
Income Fund......................................................... 394,040
Intermediate Tax-Free Fund.......................................... 228,701
Michigan Municipal Bond Fund........................................ 9,087
</TABLE>
124
<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 Gains on
Investments, Investments,
Net Asset Futures Contracts Total Income In Excess Futures In Excess
Value, Net and Foreign (Loss) 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 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) --
Year ended 1999 $18.03 0.12 3.20 3.32 (0.12) -- (0.81) --
---------------------------------------------------------------------------------------------------------------------
LARGE COMPANY GROWTH FUND
Ticker Symbol: KLCGX
Period ended 1999(2) $10.00 0.01 1.88 1.89 (0.01) -- (0.01) --
---------------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND
Ticker Symbol: KNEEX
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) --
Year ended 1999 $15.46 0.02 4.16 4.18 (0.02) -- (0.32) (0.01)
---------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH FUND
Ticker Symbol: KNINX
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) --
Year ended 1999 $15.91 0.11 4.20 4.31 (0.12) -- (0.65) --
---------------------------------------------------------------------------------------------------------------------
INDEX EQUITY FUND
Ticker Symbol: KNIEX
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) --
Year ended 1999 $24.24 0.24 4.68 4.92 (0.24) -- (0.61) --
---------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------
Ratio of
Net
Total Net Net Asset Net Assets, Ratio of Investment Ratio of
Dividends Change in Value, End of Expenses Income to Expenses Portfolio
and Net Asset End of Total Period to Average 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 1995 (0.86) 2.75 $13.25 34.91% $401,371 0.94% 2.73% ** 58%
Year ended 1996 (1.81) 0.65 $13.90 19.47% $500,857 0.95% 2.18% 0.95% 39%
Year ended 1997 (1.64) 1.65 $15.55 24.14% $697,973 0.92% 1.61% 0.93% 88%
Year ended 1998 (1.68) 2.48 $18.03 28.07% $827,828 0.93% 0.77% 0.94% 20%
Year ended 1999 (0.93) 2.39 $20.42 18.79% $822,414 0.92% 0.62% 0.93% 9%
---------------------------------------------------------------------------------------------------------------------
LARGE COMPANY GROWTH FUND
Ticker Symbol: KLCGX
Period ended (0.02) 1.87 $11.87 18.91%dd $183,259 0.97%d 0.39%d 0.98%d --
---------------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND
Ticker Symbol: KNEEX
Year ended 1995 (0.91) 1.83 $13.82 23.75% $450,072 0.97% 0.83% ** 30%
Year ended 1996 (0.84) 1.83 $15.65 19.56% $544,081 0.96% 0.78% 0.96% 16%
Year ended 1997 (1.49) 2.74 $18.39 27.94% $719,998 0.93% 0.24% 0.94% 32%
Year ended 1998 (1.88) (2.93) $15.46 (6.15%) $760,335 0.94% 0.18% 0.95% 41%
Year ended 1999 (0.35) 3.83 $19.29 27.98% $746,428 0.94% 0.14% 0.95% 19%
---------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH FUND
Ticker Symbol: KNINX
Year ended 1995 (0.55) 1.12 $14.18 13.00% $286,545 1.17% 1.35% ** 6%
Year ended 1996 (0.26) 0.57 $14.75 5.87% $387,799 1.09% 0.97% 1.09% 13%
Year ended 1997 (0.23) 0.14 $14.89 2.54% $492,598 1.05% 0.80% 1.06% 3%
Year ended 1998 (1.60) 1.02 $15.91 17.92% $528,500 1.05% 0.87% 1.06% 22%
Year ended 1999 (0.77) 3.54 $19.45 28.30% $579,650 1.02% 0.72% 1.03% 8%
---------------------------------------------------------------------------------------------------------------------
INDEX EQUITY FUND
Ticker Symbol: KNIEX
Year ended 1995 (1.82) 1.88 $12.56 36.23% $183,877 0.56% 2.14% 0.56% 3%
Year ended 1996 (0.58) 2.15 $14.71 22.18% $243,438 0.49% 1.91% 0.59% 2%
Year ended 1997 (0.32) 4.43 $19.14 32.55% $590,241 0.43% 1.44% 0.54% 1%
Year ended 1998 (0.28) 5.10 $24.24 28.26% $771,147 0.42% 1.10% 0.55% 12%
Year ended 1999 (0.85) 4.07 $28.31 20.55% $875,780 0.42% 0.92% 0.54% 9%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
d Annualized.
dd Not Annualized.
(1) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(2) The Institutional Class of the Large Company Growth Fund commenced
operations on October 19, 1999.
125
<PAGE>
FINANCIAL HIGHLIGHTS
EQUITY FUNDS
INVESTMENT SHARES
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income (Loss) from
Investment Operations Less Dividends and Distributions from
--------------------------- -------------------------------------------
Net Realized and
Unrealized Gains Net Realized
(Losses) on Gains on
Investments, Total Investments,
Futures Income Futures In
Net Asset Net Contracts (Loss) In Excess Contracts Excess Total
Value, Investment and Foreign from Net of Net and Foreign of Net Dividends
Beginning Income Currency Investment Investment Investment Currency Realized and
of Period (Loss) Translations Operations Income Income Translations Gains Distributions
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH AND INCOME FUND
Ticker Symbol: KNVIX
Year ended 1995 $10.46 0.30 3.26 3.56 (0.30) -- (0.53) -- (0.83)
Year ended 1996 $13.19 0.26 2.15 2.41 (0.26) (0.02) (1.51) -- (1.79)
Year ended 1997 $13.81 0.21 3.02 3.23 (0.21) -- (1.39) -- (1.60)
Year ended 1998 $15.44 0.08 4.00 4.08 (0.08) (0.02) (1.54) -- (1.64)
Year ended 1999 $17.88 0.07 3.18 3.25 (0.07) -- (0.81) -- (0.88)
-------------------------------------------------------------------------------------------------------------------------------
LARGE COMPANY GROWTH FUND
Ticker Symbol:
Period ended 1999(3) $10.00 -- 1.88 1.88 (0.01) -- (0.01) -- (0.02)
-------------------------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND
Ticker Symbol: KNEMX
Year ended 1995 $11.98 0.07 2.64 2.71 (0.07) -- (0.81) -- (0.88)
Year ended 1996 $13.81 0.07 2.54 2.61 (0.08) (0.01) (0.72) -- (0.81)
Year ended 1997 $15.61 -- 4.19 4.19 -- (0.04) (1.43) -- (1.47)
Year ended 1998 $18.33 (0.01) (1.08) (1.09) -- -- (1.85) -- (1.85)
Year ended 1999 $15.39 (0.02) 4.15 4.13 -- -- (0.32) (0.01) (0.33)
-------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH FUND
Ticker Symbol: KNIVX
Year ended 1995 $13.00 0.14 1.50 1.64 (0.09) (0.11) (0.31) -- (0.51)
Year ended 1996 $14.13 0.12 0.66 0.78 (0.08) -- (0.14) -- (0.22)
Year ended 1997 $14.69 0.08 0.25 0.33 (0.06) (0.09) (0.07) (0.01) (0.23)
Year ended 1998 $14.79 0.10 2.46 2.56 -- (0.19) (1.41) -- (1.60)
Year ended 1999 $15.75 0.08 4.14 4.22 (0.12) -- (0.65) -- (0.77)
-------------------------------------------------------------------------------------------------------------------------------
INDEX EQUITY FUND
Ticker Symbol: KNIOX
Year ended 1995 $10.70 0.23 3.44 3.67 (0.23) -- (1.57) -- (1.80)
Year ended 1996 $12.57 0.22 2.48 2.70 (0.22) (0.01) (0.32) -- (0.55)
Year ended 1997 $14.72 0.20 4.51 4.71 (0.20) (0.01) (0.06) (0.01) (0.28)
Year ended 1998 $19.15 0.18 5.14 5.32 (0.18) -- (0.04) -- (0.22)
Year ended 1999 $24.25 0.18 4.68 4.86 (0.18) -- (0.61) -- (0.79)
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
----------------------------------------------
Ratio of
Net Ratio of Net Ratio of
Change Net Net Expenses Investment Expenses
in Asset Assets, to Income to
Net Value, End of Average (Loss) to Average Portfolio
Asset End of Total Period Net Average Net Turnover
Value Period Return (1) (000's) Assets Net Assets Assets* Rate (2)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH AND INCOME FUND
Ticker Symbol: KNVIX
Year ended 1995 2.73 $13.19 34.61% $11,079 1.18% 2.48% ** 58%
Year ended 1996 0.62 $13.81 19.14% $15,063 1.09% 1.77% 1.09% 39%
Year ended 1997 1.63 $15.44 23.89% $35,343 1.17% 1.31% 1.18% 88%
Year ended 1998 2.44 $17.88 27.68% $50,458 1.18% 0.50% 1.19% 20%
Year ended 1999 2.37 $20.25 18.53% $58,336 1.18% 0.36% 1.19% 9%
-------------------------------------------------------------------------------------------------------------------------------
LARGE COMPANY GROWTH FUND
Ticker Symbol:
Period ended 1.86 $11.86 18.87%dd $ 253 1.23%d 0.00%d 1.24%d --
-------------------------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND
Ticker Symbol: KNEMX
Year ended 1995 1.83 $13.81 23.47% $10,955 1.20% 0.59% ** 30%
Year ended 1996 1.80 $15.61 19.16% $14,436 1.21% 0.53% 1.21% 16%
Year ended 1997 2.72 $18.33 27.71% $22,784 1.18% (0.01%) 1.19% 32%
Year ended 1998(2.94) $15.39 (6.40%) $23,455 1.19% (0.07%) 1.20% 41%
Year ended 1999 3.80 $19.19 27.73% $26,282 1.19% (0.11%) 1.20% 19%
-------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH FUND
Ticker Symbol: KNIVX
Year ended 1995 1.13 $14.13 12.86% $ 7,548 1.40% 1.11% ** 6%
Year ended 1996 0.56 $14.69 5.57% $ 8,799 1.34% 0.74% 1.34% 13%
Year ended 1997 0.10 $14.79 2.25% $ 9,780 1.30% 0.53% 1.31% 3%
Year ended 1998 0.96 $15.75 17.60% $12,390 1.30% 0.59% 1.31% 22%
Year ended 1999 3.45 $19.20 27.95% $15,197 1.27% 0.47% 1.28% 8%
-------------------------------------------------------------------------------------------------------------------------------
INDEX EQUITY FUND
Ticker Symbol: KNIOX
Year ended 1995 1.87 $12.57 35.81% $ 6,612 0.80% 1.86% 0.81% 3%
Year ended 1996 2.15 $14.72 21.92% $ 9,925 0.74% 1.67% 0.84% 2%
Year ended 1997 4.43 $19.15 32.24% $27,922 0.68% 1.20% 0.79% 1%
Year ended 1998 5.10 $24.25 27.93% $38,205 0.67% 0.85% 0.80% 12%
Year ended 1999 4.07 $28.32 20.24% $47,836 0.67% 0.67% 0.79% 9%
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
d Annualized.
dd Not Annualized.
(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
without distinguishing between the classes of shares issued.
(3) The Investment Class of the Large Company Growth Fund commenced
operations on October 19, 1999.
126
<PAGE>
FINANCIAL HIGHLIGHTS
BOND FUNDS
INSTITUTIONAL SHARES
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income (Loss) from
Investment Operations Less Dividends and Distributions from
----------------------- ------------------------------------------
Net Realized
and Total
Unrealized Income In
Net Asset Gains (Loss) In Excess Net Excess Total
Value, Net (Losses) from Net of Net Realized of Net Dividends
Beginning Investment on Investment Investment Investment Gains on Realized and
of Period Income Investments Operations Income Income Investments Gains Distributions
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHORT TERM BOND FUND
Ticker Symbol: KNLMX
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)
Year ended 1999 $ 9.77 0.53 (0.29) 0.24 (0.53) -- -- -- (0.53)
--------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
Ticker Symbol: KNFIX
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)
Year ended 1999 $10.06 0.56 (0.68) (0.12) (0.57) -- -- -- (0.57)
--------------------------------------------------------------------------------------------------------------------------
INCOME FUND
Ticker Symbol: KNIIX
Period ended 1995(2) $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)
Year ended 1999 $10.33 0.60 (1.05) (0.45) (0.60) -- -- (0.01) (0.61)
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-----------------------------------------------
Net Ratio of Ratio of Ratio of
Change Net Net Expenses Net Expenses
in Asset Assets, to Investment to
Net Value, End of Average Income to Average Portfolio
Asset End of Total Period Net Average Net Turnover
Value Period Return (000's) Assets Net Assets Assets* Rate (1)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHORT TERM BOND FUND
Ticker Symbol: KNLMX
Year ended 1995 0.44 $ 9.96 10.53% $310,680 0.77% 5.60% ** 75%
Year ended 1996 (0.21) $ 9.75 4.22% $235,430 0.70% 6.17% 0.70% 32%
Year ended 1997 -- $ 9.75 6.42% $139,739 0.72% 6.04% 0.73% 89%
Year ended 1998 0.02 $ 9.77 6.14% $139,229 0.76% 5.74% 0.77% 72%
Year ended 1999 (0.29) $ 9.48 2.50% $172,204 0.75% 5.56% 0.76% 60%
--------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
Ticker Symbol: KNFIX
Year ended 1995 0.83 $10.12 16.18% $854,801 0.77% 6.50% ** 166%
Year ended 1996 (0.36) $ 9.76 3.01% $769,395 0.77% 6.18% 0.78% 135%
Year ended 1997 0.14 $ 9.90 7.80% $762,740 0.75% 6.03% 0.76% 114%
Year ended 1998 0.16 $10.06 7.65% $885,580 0.76% 5.77% 0.77% 106%
Year ended 1999 (0.69) $ 9.37 (1.22%) $843,520 0.77% 5.83% 0.78% 84%
--------------------------------------------------------------------------------------------------------------------------
INCOME FUND
Ticker Symbol: KNIIX
Period ended 1995(2) 0.84 $10.84 15.05%dd $126,056 0.91%d 6.65%d ** 50%dd
Year ended 1996 (0.68) $10.16 1.19% $240,060 0.83% 6.57% 0.83% 102%
Year ended 1997 0.14 $10.30 10.55% $229,778 0.82% 6.65% 0.83% 84%
Year ended 1998 0.03 $10.33 9.29% $231,017 0.83% 6.25% 0.84% 108%
Year ended 1999 (1.06) $ 9.27 (4.41%) $295,017 0.83% 6.25% 0.84% 90%
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
d Annualized.
dd Not Annualized.
(1) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(2) The Institutional Class of the Income Fund commenced operations on March
20,1995.
127
<PAGE>
FINANCIAL HIGHLIGHTS
BOND FUNDS
INVESTMENT SHARES
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income (Loss) from
Investment Operations Less Dividends and Distributions from
------------------------- ------------------------------------------
Total
Income In
Net Asset Net Realized (Loss) In Excess Net Excess Total
Value, Net and Unrealized from Net of Net Realized of Net Dividends
Beginning Investment Gains (Losses) Investment Investment Investment Gains on Realized and
of Period Income on Investments Operations Income Income Investments Gains Distributions
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHORT TERM BOND FUND
Ticker Symbol: KNLIX
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)
Year ended 1999 $ 9.76 0.52 (0.30) 0.22 (0.51) -- -- -- (0.51)
----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
Ticker Symbol: KNFVX
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)
Year ended 1999 $10.08 0.54 (0.68) (0.14) (0.54) -- -- -- (0.54)
----------------------------------------------------------------------------------------------------------------------------
INCOME FUND
Ticker Symbol: KIFIX
Period 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)
Year ended 1999 $10.32 0.58 (1.06) (0.48) (0.58) -- -- (0.01) (0.59)
----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------
Ratio of
Net Net Net
Net Asset Assets, Ratio of Investment Ratio of
Change in Value, End of Expenses Income to Expenses Portfolio
Net Asset End of Total Period to Average 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> <C>
SHORT TERM BOND FUND
Ticker Symbol: KNLIX
Year ended 1995 0.43 $ 9.95 10.30% $ 1,634 0.91% 5.40% ** 75%
Year ended 1996 (0.21) $ 9.74 4.06% $ 1,667 0.85% 6.02% 0.96% 32%
Year ended 1997 -- $ 9.74 6.26% $ 7,433 0.88% 5.75% 0.99% 89%
Year ended 1998 0.02 $ 9.76 6.00% $ 6,126 0.91% 5.60% 1.02% 72%
Year ended 1999 (0.29) $ 9.47 2.35% $ 4,573 0.90% 5.40% 1.01% 60%
----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
Ticker Symbol: KNFVX
Year ended 1995 0.82 $10.14 15.76% $ 6,862 1.01% 6.24% ** 166%
Year ended 1996 (0.36) $ 9.78 2.76% $ 7,327 1.02% 5.92% 1.03% 135%
Year ended 1997 0.15 $ 9.93 7.62% $ 6,972 1.00% 5.79% 1.01% 114%
Year ended 1998 0.15 $10.08 7.26% $12,313 1.01% 5.51% 1.02% 106%
Year ended 1999 (0.68) $ 9.40 (1.36%) $11,537 1.02% 5.58% 1.03% 84%
----------------------------------------------------------------------------------------------------------------------------
INCOME FUND
Ticker Symbol: KIFIX
Period ended 1995(3) 0.82 $10.82 14.63%dd $ 1,961 1.14%d 6.40%d ** 50%dd
Year ended 1996 (0.66) $10.16 1.16% $ 2,722 1.08% 6.31% 1.08% 102%
Year ended 1997 0.13 $10.29 10.19% $ 5,611 1.07% 6.38% 1.08% 84%
Year ended 1998 0.03 $10.32 9.04% $10,629 1.08% 5.97% 1.09% 108%
Year ended 1999 (1.07) $ 9.25 (4.76%) $10,614 1.08% 5.99% 1.09% 90%
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
d Annualized.
dd Not Annualized.
(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
without distinguishing between the classes of shares issued.
(3) The Investment Class of the Income Fund commenced operations on March 22,
1995.
128
<PAGE>
FINANCIAL HIGHLIGHTS
TAX-FREE BOND FUNDS
INSTITUTIONAL SHARES
<TABLE>
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Income (Loss) from Less Dividends and
Investment Operations Distributions from
------------------------- ---------------------------------------------------------
Net Realized
and Net
Unrealized Total Realized
Net Asset Gains (Losses) Income In Excess Gains on In Excess Total
Value, Net on Investments (Loss) from Net of Net Investments of Net Dividends
Beginning Investment and Futures Investment Investment Investment and Future Realized and
of Period Income Contracts Operations Income Income Contracts Gains Distributions
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE TAX-FREE FUND
Ticker Symbol: KNMTX
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)
Year ended 1999 $10.76 0.44 (0.55) (0.11) (0.44) -- -- (0.01) (0.45)
------------------------------------------------------------------------------------------------------------------------------
TAX-FREE INCOME FUND
Ticker Symbol: KNTIX
Period 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)
Year ended 1999 $10.75 0.45 (0.79) (0.34) (0.45) -- -- (0.01) (0.46)
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN MUNICIPAL BOND FUND
Ticker Symbol: KNMIX
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)
Year ended 1999 $10.27 0.41 (0.34) 0.07 (0.41) -- -- -- (0.41)
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------
Ratio of
Net
Net Net Asset Net Assets, Ratio of Investment Ratio of
Change in Value, End of Expenses Income to Expenses Portfolio
Net Asset End of Total Period to Average 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 1995 0.78 $10.52 12.90% $283,733 0.72% 4.39% 0.72% 6%
Year ended 1996 (0.10) $10.42 3.41% $285,674 0.73% 4.34% 0.73% 35%
Year ended 1997 0.26 $10.68 7.07% $275,641 0.72% 4.31% 0.73% 23%
Year ended 1998 0.08 $10.76 5.37% $296,484 0.73% 4.22% 0.74% 40%
Year ended 1999 (0.56) $10.20 (1.01%) $302,948 0.73% 4.22% 0.74% 63%
------------------------------------------------------------------------------------------------------------------------------
TAX-FREE INCOME FUND
Ticker Symbol: KNTIX
Period ended 1995(2) 0.49 $10.49 8.64%dd $121,855 0.73%d 4.44%d 0.91%d 10%dd
Year ended 1996 (0.22) $10.27 3.92% $109,948 0.82% 4.38% 0.82% 40%
Year ended 1997 0.38 $10.65 8.59% $116,652 0.79% 4.32% 0.80% 16%
Year ended 1998 0.10 $10.75 5.71% $128,232 0.81% 4.16% 0.82% 53%
Year ended 1999 (0.80) $ 9.95 (3.26%) $122,052 0.82% 4.32% 0.83% 109%
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN MUNICIPAL BOND FUND
Ticker Symbol: KNMIX
Year ended 1995 0.40 $10.12 8.20% $185,466 0.69% 3.81% 0.70% 42%
Year ended 1996 (0.04) $10.08 3.51% $152,623 0.70% 3.83% 0.70% 24%
Year ended 1997 0.13 $10.21 5.52% $111,735 0.69% 4.04% 0.70% 13%
Year ended 1998 0.06 $10.27 4.75% $117,957 0.69% 3.97% 0.70% 51%
Year ended 1999 (0.34) $ 9.93 0.67% $102,608 0.71% 3.98% 0.72% 14%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
d Annualized.
dd Not Annualized.
(1) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(2) The Institutional Class of the Tax-Free Income Fund commenced operations
on March 20, 1995.
129
<PAGE>
FINANCIAL HIGHLIGHTS
TAX-FREE BOND FUNDS
INVESTMENT SHARES
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income (Loss) from
Investment Operations Less Dividends and Distributions from
------------------------- ------------------------------------------
Net Realized Net
and Unrealized Total Realized In
Net Asset Gains (Losses) Income In Excess Gains on Excess
Value, Net on Investments (Loss) from Net of Net Investments of Net Total
Beginning Investment and Futures Investment Investment Investment and Future Realized Dividends and
of Period Income Contracts Operations Income Income Contracts Gains Distributions
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE TAX-FREE FUND
Ticker Symbol: KNMBX
Year ended 1995 $ 9.74 0.42 0.79 1.21 (0.42) (0.01) -- -- (0.43)
Year ended 1996 $10.52 0.42 (0.09) 0.33 (0.41) (0.02) -- -- (0.43)
Year ended 1997 $10.42 0.43 0.26 0.69 (0.43) -- -- -- (0.43)
Year ended 1998 $10.68 0.42 0.11 0.53 (0.42) -- (0.03) -- (0.45)
Year ended 1999 $10.76 0.43 (0.56) (0.13) (0.42) -- -- (0.01) (0.43)
-------------------------------------------------------------------------------------------------------------------------------
TAX-FREE INCOME FUND
Ticker Symbol: N/A
Period ended 1995(3) $10.00 0.31 0.51 0.82 (0.30) -- -- -- (0.30)
Year ended 1996 $10.52 0.41 (0.05) 0.36 (0.43) -- (0.12) (0.04) (0.59)
Year ended 1997 $10.29 0.42 0.42 0.84 (0.42) (0.01) (0.03) -- (0.46)
Year ended 1998 $10.67 0.42 0.15 0.57 (0.42) -- (0.05) -- (0.47)
Year ended 1999 $10.77 0.42 (0.78) (0.36) (0.42) -- -- (0.01) (0.43)
-------------------------------------------------------------------------------------------------------------------------------
MICHIGAN MUNICIPAL BOND FUND
Ticker Symbol: KNMVX
Year ended 1995 $ 9.72 0.37 0.40 0.77 (0.37) (0.01) -- -- (0.38)
Year ended 1996 $10.11 0.38 (0.05) 0.33 (0.35) (0.02) -- -- (0.37)
Year ended 1997 $10.07 0.39 0.14 0.53 (0.40) -- -- -- (0.40)
Year ended 1998 $10.20 0.39 0.07 0.46 (0.39) -- (0.01) -- (0.40)
Year ended 1999 $10.26 0.39 (0.34) 0.05 (0.39) -- -- -- (0.39)
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------
Ratio of Ratio of
Net Net Net Expenses Net
Change Asset Assets, to Investment Ratio of
in Net Value, End of Average Income to Expenses Portfolio
Asset End of Total Period Net Average to Average Turnover
Value Period Return (1) (000's) Assets Net Assets Net Assets* Rate (2)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE TAX-FREE FUND
Ticker Symbol: KNMBX
Year ended 1995 0.78 $10.52 12.66% $3,807 0.97% 4.13% 0.97% 6%
Year ended 1996 (0.10) $10.42 3.17% $3,368 0.98% 4.09% 0.98% 35%
Year ended 1997 0.26 $10.68 6.80% $3,534 0.97% 4.06% 0.98% 23%
Year ended 1998 0.08 $10.76 5.09% $4,038 0.98% 3.97% 0.99% 40%
Year ended 1999 (0.56) $10.20 (1.27%) $3,745 0.98% 3.97% 0.99% 63%
-------------------------------------------------------------------------------------------------------------------------------
TAX-FREE INCOME FUND
Ticker Symbol: N/A
Period ended 1995 0.52 $10.52 8.34%dd $ 529 0.95%d 4.25%d 1.17%d 10%dd
Year ended 1996 (0.23) $10.29 3.53% $ 936 1.07% 4.14% 1.07% 40%
Year ended 1997 0.38 $10.67 8.32% $1,712 1.04% 4.05% 1.05% 16%
Year ended 1998 0.10 $10.77 5.43% $1,938 1.06% 3.91% 1.07% 53%
Year ended 1999 (0.79) $ 9.98 (3.40%) $1,554 1.07% 4.05% 1.08% 109%
-------------------------------------------------------------------------------------------------------------------------------
MICHIGAN MUNICIPAL BOND FUND
Ticker Symbol: KNMVX
Year ended 1995 0.39 $10.11 8.01% $1,900 0.83% 3.68% 0.85% 42%
Year ended 1996 (0.04) $10.07 3.36% $2,422 0.85% 3.68% 0.95% 24%
Year ended 1997 0.13 $10.20 5.38% $4,413 0.84% 3.88% 0.95% 13%
Year ended 1998 0.06 $10.26 4.60% $5,946 0.84% 3.82% 0.95% 51%
Year ended 1999 (0.34) $ 9.92 0.51% $4,378 0.86% 3.83% 0.97% 14%
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratio would have been as
indicated.
d Annualized.
dd Not Annualized.
(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
without distinguishing between the classes of shares issued.
(3) The Investment Class of the Tax-Free Income Fund commenced operations on
March 31, 1995.
130
<PAGE>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUNDS
INSTITUTIONAL SHARES
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental Data
-------------------------------------
Income
(Loss) from Ratio of Ratio of Ratio of
Investment Less Net Net Net Expenses Net Expenses
Net Asset Operations: Dividends Change Asset Assets, to Investment to
Value, Net from Net in Net Value, End of Average Income to Average
Beginning Investment Investment Asset End of Total Period Net Average Net
of Period Income Income Value Period Return (000's) Assets Net Assets Assets*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
Ticker Symbol: KIMXX
Year ended 1995 $1.000 0.050 (0.050) -- $1.000 5.58% $424,815 0.55% 5.45% 0.63%
Year ended 1996 $1.000 0.050 (0.050) -- $1.000 5.06% $483,919 0.52% 4.95% 0.62%
Year ended 1997 $1.000 0.051 (0.051) -- $1.000 5.23% $474,378 0.52% 5.11% 0.62%
Year ended 1998 $1.000 0.050 (0.050) -- $1.000 5.13% $693,399 0.55% 5.00% 0.64%
Year ended 1999 $1.000 0.047 (0.047) -- $1.000 4.80% $654,771 0.54% 4.70% 0.63%
- ---------------------------------------------------------------------------------------------------------------------
MICHIGAN MUNICIPAL MONEY MARKET FUND
Ticker Symbol: KMIXX
Year ended 1995 $1.000 0.030 (0.030) -- $1.000 3.50% $145,215 0.56% 3.45% 0.65%
Year ended 1996 $1.000 0.030 (0.030) -- $1.000 3.11% $155,424 0.54% 3.06% 0.64%
Year ended 1997 $1.000 0.033 (0.033) -- $1.000 3.31% $211,682 0.52% 3.27% 0.63%
Year ended 1998 $1.000 0.030 (0.030) -- $1.000 3.06% $323,272 0.54% 3.00% 0.64%
Year ended 1999 $1.000 0.028 (0.028) -- $1.000 2.86% $292,619 0.53% 2.82% 0.63%
- ---------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
Ticker Symbol: KGIXX
Period ended 1997(1) $1.000 0.031 (0.031) -- $1.000 3.10%dd $ 94,624 0.35%d 5.23%d 0.69%d
Year ended 1998 $1.000 0.051 (0.051) -- $1.000 5.17% $166,922 0.38% 5.03% 0.69%
Year ended 1999 $1.000 0.047 (0.047) -- $1.000 4.81% $215,401 0.37% 4.73% 0.65%
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
d Annualized.
dd Not Annualized.
(1) The Institutional Class of the Government Money Market Fund commenced
operations on June 2, 1997.
131
<PAGE>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUNDS
INVESTMENT SHARES
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental Data
----------------------------
Income from Ratio of Ratio of Ratio of
Investment Less Net Expenses Net Expenses
Net Asset Operations: Dividends Change Net Asset Net Assets, to Investment to
Value, Net from Net in Net Value, End of Average Income to Average
Beginning Investment Investment Asset End of Total Period Net Average Net
of Period Income Income Value Period Return (000's) Assets Net Assets Assets*
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
Ticker Symbol: N/A
Year ended 1995 $1.000 0.050 (0.050) -- $1.000 5.56% $1,227 0.55% 5.41% 0.62%
Year ended 1996 $1.000 0.050 (0.050) -- $1.000 5.06% $ 804 0.52% 4.94% 0.62%
Year ended 1997 $1.000 0.051 (0.051) -- $1.000 5.23% $1,179 0.52% 5.11% 0.62%
Year ended 1998 $1.000 0.050 (0.050) -- $1.000 5.13% $3,728 0.55% 5.00% 0.64%
Year ended 1999 $1.000 0.047 (0.047) -- $1.000 4.80% $2,141 0.55% 4.71% 0.63%
--------------------------------------------------------------------------------------------------------------------------
MICHIGAN MUNICIPAL MONEY MARKET FUND
Ticker Symbol: N/A
Year ended 1995 $1.000 0.030 (0.030) -- $1.000 3.48% $1,603 0.54% 3.48% 0.62%
Year ended 1996 $1.000 0.030 (0.030) -- $1.000 3.11% $ 782 0.54% 3.06% 0.64%
Year ended 1997 $1.000 0.033 (0.033) -- $1.000 3.31% $ 289 0.52% 3.22% 0.63%
Year ended 1998 $1.000 0.030 (0.030) -- $1.000 3.06% $ 346 0.54% 3.02% 0.64%
Year ended 1999 $1.000 0.028 (0.028) -- $1.000 2.86% $ 658 0.53% 2.82% 0.63%
--------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
Ticker Symbol: N/A
Period ended 1997(1) $1.000 0.030 (0.030) -- $1.000 3.06%dd $ 2 0.43%d 5.17%d 0.77%d
Year ended 1998 $1.000 0.051 (0.051) -- $1.000 5.17% $ 93 0.38% 4.92% 0.69%
Year ended 1999 $1.000 0.047 (0.047) -- $1.000 4.81% $ 120 0.37% 4.71% 0.65%
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratio would have been as
indicated.
d Annualized.
dd Not Annualized.
(1) The Investment Class of the Government Money Market Fund commenced
operations on June 2, 1997.
132
<PAGE>
Independent Auditors' Report
The Shareholders and Board of Trustees of the Kent Funds:
We have audited the accompanying statements of assets and liabilities of the
Kent Funds--Growth and Income Fund, Large Company Growth Fund, Small Company
Growth Fund, International Growth Fund, Index Equity Fund, Short Term Bond
Fund, Intermediate Bond Fund, Income Fund, Intermediate Tax-Free Fund, Tax-
Free Income Fund, Michigan Municipal Bond Fund, Money Market Fund, Michigan
Municipal Money Market Fund, and Government Money Market Fund, including the
schedules of portfolio investments, as of December 31, 1999, and the related
statements of operations, statements of changes in net assets and the finan-
cial highlights for each of the periods indicated herein. These financial
statements and the financial highlights are the responsibility of the Kent
Funds' management. Our responsibility is to express an opinion on these finan-
cial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1999, by confirmation with the custodian, correspondence with
brokers and other appropriate audit procedures. An audit also includes assess-
ing the accounting principles used and significant estimates made by manage-
ment, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising the Kent Funds as of December 31, 1999,
the results of their operations, the changes in their net assets and the
financial highlights for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 18, 2000
133
<PAGE>
ADDITIONAL INFORMATION
[LOGO OF KENT FUNDS]
Shareholder Vote (unaudited):
A meeting of Shareholders was held on March 24, 1999, to consider the Plan of
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>
For............................................................... 3,125,329,848
Against........................................................... 0
Abstain........................................................... 0
</TABLE>
134
<PAGE>
[LOGO OF KENT FUNDS]
P.O. Box 182201
Columbus, Ohio 43218-2201
