<PAGE>
DEAR SHAREHOLDER:
We are pleased to enclose the semi-annual report on the operations of ND Tax-
Free Fund, Inc. for the period ended June 30, 1995. The bond portfolio and
related financial statements are presented within for your review.
Bond prices increased during the period subsequent to efforts by the Federal
Reserve to tighten short term interest rates and slow economic growth.
Tolerable rates of inflation have been reported as of late and it is expected
that restrictive monetary policy will not be required in this economic
environment.
Shares in the fund increased during the period from $8.83 to $8.88. During the
year the fund utilized a partial hedge to maintain share price stability.
Futures contracts and options in U.S. Treasury Bonds were employed. Hedging
affected values by retarding share appreciation during periods of rising bond
prices, and by buffering share depreciation during periods of receding bond
prices.
The adviser has invested primarily in high-grade North Dakota tax-exempt bonds.
Management intends to maintain the portfolio quality while diversifying
throughout the State. The adviser has been able to select suitable investments
from numerous offerings in both the primary and secondary municipal bond markets
We invite your personal calls and visits.
Sincerely,
Robert E. Walstad
President
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS June 30, 1995
NAME OF ISSUER
Percentages represent the market value of each RATING COUPON PRINCIPAL
investment category to total net assets MOODY'S/S&P RATE MATURITY AMOUNT MARKET VALUE
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NORTH DAKOTA MUNICIPAL BONDS(98.12%)
Bismarck (St. Alexius Med. Ctr.) Ref. AMBAC Aaa/AAA 6.900% 05/01/06 $1,400,000 $1,537,438
Bismarck (Marillac Manor) Ret. Facs. Rev. NR/NR 7.700 02/01/16 250,000 264,777
Bismarck (Marillac Manor II) Ret. Facs. Rev. NR/NR 8.625 02/01/10 675,000 722,581
*Bismarck (MedCenter. One) Ref. & Imp. (BIGI) Aaa/AAA 7.500 05/01/13 2,500,000 2,766,175
Bismarck (St. Vincent Nurs. Home) Hlth. Rev. NR/NR 8.500 06/01/09 175,000 186,184
Burleigh Cty. (Missouri Slope Care Fdn.) Rev. Ref. NR 7.250 06/01/12 500,000 523,180
Burleigh Cty. (Missouri Slope Ctr.) Rev. Ref. NR/NR 7.000 11/01/07 500,000 523,395
Burleigh Cty. (St. Vincent Nurs. Home) Rev. NR/NR 7.000 06/01/19 500,000 527,720
Carrington, Catholic Hlth. Corp. (Ctr.) Rev. A1/A+ 6.250 11/15/15 1,000,000 1,008,190
Cass Cty. (St. Lukes Hosp.) Facs. Rev. NR/A+ 7.500 06/01/06 300,000 321,402
Cass Cty., Catholic Hlth. Corp. (Vil. Naz.) Rev. A1/A+ 6.250 11/15/07 1,000,000 1,014,540
Cass Cty., Catholic Hlth. Corp. (Vil. Naz.) Rev. A1/A+ 6.250 11/15/14 2,545,000 2,567,600
Central Cass Cty., PSD#17 GO Sch. Bldg. (MBIA) Aaa/AAA 6.500 05/01/13 430,000 461,932
Central Cass Cty., PSD#17 GO Sch. Bldg. (MBIA) Aaa/AAA 6.500 05/01/14 460,000 494,463
Devils Lake (Lake Region Luth. Home) Rev. NR/NR 6.500 10/01/13 250,000 250,498
Devils Lake (Catholic Health Corp.) Rev. A1/A+ 6.250 11/15/07 1,125,000 1,152,349
Dickinson (BHS L/T Care) Hlth. Care Facs. Rev. A1/NR 7.500 02/15/10 600,000 654,360
Dickinson (BHS L/T Care) Hlth. Care Facs. Rev. A1/NR 7.625 02/15/20 1,210,000 1,323,123
Dickinson, Cath. Hlth. Corp. (St. Josephs) Rev. A1/A+ 7.200 06/01/14 1,015,000 1,076,813
Fargo (Dome Authority) Sub. Sales Tax. Rev. Baa1/NR 7.250 01/01/09 1,000,000 1,072,290
Fargo (Elim Homes) Nursing Home Rev. NR/NR 9.000 03/01/19 380,000 389,420
Fargo (Elim Homes) Nursing Home Ref. Rev. NR/NR 8.750 03/01/09 150,000 153,234
Fargo, Park District (Golf Course) Rev. NR/NR 7.250 11/01/10 190,000 200,788
Fargo, Park District (Golf Course) Rev. NR/NR 7.300 11/01/06 130,000 137,423
Fargo, Park District (Golf Course) Rev. NR/NR 7.350 11/01/07 110,000 116,403
Fargo (St. Lukes Hosp.) Facs. Ref. Rev. NR/A+ 6.500 06/01/15 4,000,000 4,177,480
Grand Forks Hsg. Auth. (Ryan Hse.) Multifam. Ref. Aa2/NR 6.300 03/01/22 500,000 512,635
Grand Forks Regional Airport Authority Rev. A2/NR 7.500 10/01/09 225,000 239,290
Grand Forks Regional Airport Authority Rev. A2/NR 7.500 10/01/10 240,000 255,242
Grand Forks (United Hosp.) Facs. Rev. MBIA Aaa/AAA 6.625 12/01/10 830,000 893,354
Grand Forks (United Hosp.) Facs. Rev. MBIA Aaa/AAA 6.500 12/01/06 750,000 807,330
Grand Forks (United Hosp.) Facs. Rev. MBIA Aaa/AAA 6.450 12/01/23 1,525,000 1,611,635
Grand Forks (United Hosp.) Facs. Rev. MBIA Aaa/AAA 6.250 12/01/19 1,000,000 1,050,350
Jamestown (Heritage Center) Cong. Hsg. Rev. NR/NR 8.500 09/01/06 200,000 212,094
Jamestown (College) Facility Rev. NR/NR 6.625 10/01/14 800,000 803,208
Lisbon (Parkside Luth. Home) Nurs. Home Rev. NR/NR 7.500 06/01/12 500,000 526,680
Mercer Cty. (Basin Electric) PCR A2/A 7.700 01/01/19 2,585,000 2,720,144
Mercer Cty. (Basin Electric) PCR A2/A 8.125 01/01/19 1,230,000 1,296,260
Mercer Cty. (Basin Electric) PCR A2/A 7.700 01/01/19 2,190,000 2,304,493
Mercer Cty. (Basin Electric) PCR A2/A 8.125 01/01/19 180,000 189,648
Mercer Cty. (Basin Electric) PCR A2/A 7.000 01/01/19 995,000 1,050,591
Mercer Cty. (Mont.-Dak. Utilities)) PCR (FGIC) Aaa/AAA 6.650 06/01/22 7,000,000 7,603,120
Mercer Cty. (NW Public. Service.) PCR Ref. (MBIA) Aaa/AAA 5.850 06/01/23 4,300,000 4,263,493
Mercer Cty. (Ottertail Power) PCR Ref. (MBIA) Aa3/AA- 6.900 02/01/19 450,000 489,875
Morton Cty. (Mont.-Dak. Utilities) PCR (FGIC) Aaa/AAA 6.650 06/01/22 350,000 380,156
*ND Building. Auth. (St. Bd. Hr. Ed.) (AMBAC) Aaa/AAA 7.400 06/01/10 1,140,000 1,286,923
ND Building Auth. Lease Rev. A2/A 5.450 08/15/11 1,000,000 945,070
ND Building Auth. Lease Rev. A2/A 5.500 08/15/14 1,300,000 1,231,477
ND Building Auth. Ref.Lease Rev. (AMBAC) Aaa/AAA 6.000 06/01/10 1,700,000 1,767,303
North Dakota (HFA) Finance Program Aa2/NR 6.750 01/01/25 3,470,000 3,665,326
North Dakota (HFA) Finance Program Aa2/NR 6.300 01/01/15 980,000 1,026,187
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 6.700 07/01/13 285,000 297,965
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.750 07/01/24 870,000 925,924
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 8.000 07/01/13 310,000 328,879
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 8.050 01/01/24 995,000 1,020,599
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.850 07/01/01 285,000 301,499
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 6.800 07/01/25 1,540,000 1,619,972
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 6.800 07/01/23 2,975,000 3,132,437
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.000 07/01/23 1,370,000 1,444,144
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.250 07/01/10 365,000 385,531
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.300 07/01/24 1,410,000 1,493,909
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.900 07/01/10 180,000 191,230
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 7.375 07/01/17 595,000 628,945
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 5.550 07/01/24 905,000 815,486
North Dakota (HFA) Single Family Mortgage Program. Aa2/A+ 5.950 07/01/25 3,205,000 3,021,770
North Dakota (HFA) Single Family Mortgage Program. Aa2/AA+ 6.950 07/01/25 2,000,000 2,125,700
ND Municipal Bond Bank A1/NR 6.300 10/01/15 530,000 546,139
ND Municipal Bond Bank NR/A 7.850 10/01/14 1,300,000 1,497,665
ND Municipal Bond Bank A1/NR 6.250 10/01/14 3,325,000 3,419,430
ND St. Brd of Hgr Ed. (MSU) Student Svcs. Ref. NR/NR 6.750 08/01/05 755,000 796,359
ND St. Brd of Hgr Ed. (MSU) Student Svcs. Ref. NR/NR 5.500 08/01/13 400,000 375,776
*North Dakota Student Loan Rev. (AMBAC) Aaa/AAA 7.750 07/01/02 1,060,000 1,154,881
University of ND (G.F.) Hsg. & Aux. Ref. (AMBAC) Aaa/AAA 7.850 04/01/14 340,000 375,367
University of ND (G.F.) Lease Financing COP A2/A- 7.300 09/01/10 1,425,000 1,520,204
Valley City, Western Hlth. Care Fac. Rev. (BIGI) Aaa/AAA 7.625 01/01/19 200,000 217,732
Wahpeton (Town Centre. Sqr.) Multi Fam. Hsg. Ref. NR/NR 8.500 02/01/14 250,000 263,423
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.500 11/01/15 1,000,000 1,069,380
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.250 11/01/06 1,000,000 1,057,530
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.250 11/01/06 1,000,000 1,057,530
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.500 11/01/15 1,450,000 1,550,601
Williston Cath. Hlth. Corp. (Mercy Hosp.) (MBIA) Aaa/AAA 7.200 06/01/14 600,000 643,926
-----------
TOTAL NORTH DAKOTA MUNICIPAL BONDS (COST:$91,099,243) $94,035,575
-----------
SHORT-TERM SECURITIES (.33%)
Goldman Sachs Institutional Liquid Assets Tax-Exempt Diversified Portfolio $146,480
September U.S. Treasury Bond Put Options 168,750
TOTAL SHORT-TERM SECURITIES (COST: $408,688) $315,230
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $91,507,931) $94,350,805
===========
*Indicates bonds are segregated by the custodian to cover when-issued or delayed-delivery purchases.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS June 30, 1995
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (Unaudited)
-------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at
value (cost: $91,507,931) $ 94,350,805
Accrued dividends receivable 263
Accrued interest receivable 1,774,253
Security sales receivable 240,000
-------------
Total Assets $ 96,365,321
-------------
LIABILITIES
Bank overdraft $ 6,853
Dividends payable 413,289
Accrued expenses 91,139
Payable for fund shares redeemed 15,396
-------------
Total Liabilities $ 526,677
-------------
NET ASSETS $ 95,838,644
=============
Net asset value per share,
10,791,395 shares outstanding $ 8.88
=============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS for the six months ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest $ 2,988,764
Dividends 39,266
-------------
Total Investment Income $ 3,028,030
-------------
EXPENSES
Distribution fees (12b-1) $ 119,805
Management fees 287,532
Custodian fees 6,474
Transfer agent fees 51,818
Audit and legal fees 7,250
Insurance 7,822
Directors fees 14,355
Printing and postage 11,153
License, fees, and registrations 5,836
-------------
Total expenses $ 512,045
Less expenses waived or absorbed
by the Fund's manager 8,864
-------------
Total Net Expenses $ 503,181
-------------
NET INVESTMENT INCOME $ 2,524,849
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FUTURES, AND OPTIONS
Net realized gain (loss) from:
Investment transactions $ 176,777
Futures transactions (4,132,727)
Net change in unrealized
appreciation (depreciation) of
</TABLE>
<PAGE>
<TABLE>
<S> <C>
investments 4,574,690
-------------
Net Realized and Unrealized Gain (Loss)
On Investments, Futures, And Options $ 618,740
-------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 3,143,589
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL STATEMENTS June 30, 1995
STATEMENT OF CHANGES IN NET ASSETS
for the six months ended June 30, 1995 and year ended December 31, 1994
-----------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months
Ended 6/30/95 For the Year Ended
(Unaudited) 12/31/94
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 2,524,849 $ 4,692,695
Net realized gain (loss) on
investment, futures, and option
transactions (3,955,950) 1,173,544
Net unrealized appreciation
(depreciation) on investments 4,574,690 (7,832,506)
----------------------------------
Net Increase (Decrease) in Net
Assets Resulting From Operations $ 3,143,589 (1,966,267)
----------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income $ (2,524,849) (4,692,695)
Distributions in excess of net
investment income (114,420) (226,026)
Distributions from net realized
gain on investments, futures,
and option transactions 0 0
----------------------------------
Total Dividends and Distributions $ (2,639,269) $ (4,918,721)
----------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 3,827,412 $ 13,739,580
Proceeds from reinvested dividends 1,685,428 3,061,970
Cost of shares redeemed (2,043,825) (3,093,650)
----------------------------------
Net Increase (Decrease) in Net
Assets Resulting From
Capital Share Transactions $ 3,469,015 $ 13,707,900
----------------------------------
TOTAL INCREASE IN NET ASSETS $ 3,973,335 $ 6,822,912
NET ASSETS, BEGINNING OF PERIOD 91,865,309 85,042,397
----------------------------------
NET ASSETS, END OF PERIOD $ 95,838,644 $ 91,865,309
==================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS June 30, 1995 (Unaudited)
Note 1. ORGANIZATION
ND Tax-Free Fund, Inc. (the Fund) is registered under the Investment
Company Act of 1940 as a non-diversified, open-end management investment
company. The Fund incorporated under the laws of the State of North
Dakota on October 7, 1988, and commenced operations on January 3, 1989.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT SECURITY VALUATION - Investments in securities traded on
national securities exchanges are valued at the last reported sales
price at the close of each business day. Securities for which market
quotations are not readily available are valued at fair value as
determined in good faith by the portfolio management team. The Fund
follows industry practice and records security transactions on the trade
date.
FEDERAL AND STATE INCOME TAXES - The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies, and to distribute all of its net
investment income and any net realized gain on investments, to its
shareholders. Therefore, no provision for income taxes is required.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income,
declared daily and payable monthly, are reinvested in additional shares
of the Fund at net asset value or payable in cash. Capital gains, when
available, are distributed along with the last income dividend of the
calendar year.
INVESTMENT INCOME - Dividend income is recognized on the ex-dividend
date and interest income is recognized on an accrual basis. Premiums on
securities purchased are amortized over the life of the respective
securities, unless callable, in which case they are amortized to the
earliest call date.
FUTURES CONTRACTS AND OPTIONS - The Fund may enter into financial
futures contracts. Upon entering into a futures contract, the Fund is
required to deposit with a broker an amount of cash or securities equal
to the minimum "initial margin" requirement of the futures exchange on
which the contract is traded. Subsequent payments ("variation margin")
are made or received by the Fund, dependent on the fluctuations in the
value of the underlying index. Daily fluctuations in value are recorded
for financial reporting purposes as unrealized gains or losses by the
fund. When entering into a closing transaction, the Fund will realize,
for book purposes, a gain or loss equal to the difference between the
value of the futures contracts sold and the futures contracts to buy.
Futures contracts are valued at the most recent settlement price, unless
such price does not reflect the fair market value of the contract, in
which case the position will be valued using methods approved by the
Board of Directors of the Company.
The Fund may purchase options on financial futures contracts. Daily
fluctuations in the value of the options are recorded for financial
reporting purposes as unrealized gains or losses by the fund. Upon sale
or expiration of the option, the Fund will realize, for book purposes, a
gain or loss equal to the difference between the cost of the option and
the value on sale or expiration date.
<PAGE>
Certain risks may arise upon entering into futures contracts and
options. These risks may include changes in the value of the futures
contracts or options that may not directly correlate with changes in
the value of the underlying securities.
Note 3. SHARE TRANSACTIONS
As of June 30, 1995, there were 100,000,000 shares of $.001 par
authorized; 10,791,395 and 10,408,547 were outstanding at June 30, 1995
and December 31, 1994, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
------ ------
For the Six Months For the Year Ended For the Six Months For the Year Ended
Ended June 30, Dec. 31, 1994 Ended June 30, Dec. 31, 1994
1995 1995
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 422,262 1,478,546 $ 3,827,412 $13,739,580
Shares issued on reinvestment of dividends 186,179 330,011 1,685,428 3,061,970
Shares redeemed (225,593) (337,033) (2,043,825) (3,093,650)
--------------------------------------------------------------------------------
Net increase 382,848 1,471,524 $ 3,469,015 $13,707,900
================================================================================
</TABLE>
Note 4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
ND Money Management, Inc., the Fund's investment adviser, ND Capital,
Inc., the Fund's underwriter, and ND Resources, Inc., the Fund's
transfer agent, are subsidiaries of ND Holdings, Inc., the Fund's
sponsor. As of June 30, 1995, ND Holdings, Inc., owns 100,430 shares of
the Fund, 10,000 which it purchased at $10 per share, and 90,430 which
it purchased at $9.68 per share.
The Fund has engaged ND Money Management, Inc., to provide investment
advisory and management services to the Fund. The Investment Advisory
Agreement provides for fees to be computed at an annual rate of 0.60% of
the Fund's average daily net assets. The Fund has recognized $287,532 of
investment advisory and management fees for the period ended June 30,
1995. The Fund has a payable to ND Money Management, Inc. of $47,731 at
June 30, 1995 for management fees. Certain officers and directors of the
Fund are also officers and directors of the investment adviser.
The Fund has adopted a distribution plan pursuant to Rule 12b-1 under
the 1940 Act (the Plan), whereby the Fund shall pay at the annual rate
of 0.75% of the average daily net assets of the Fund to ND Capital, Inc.
(Capital), its principal underwriter, for expenses incurred in the
distribution of the Fund's shares. Pursuant to the Plan, Capital is
entitled to reimbursement each month for its actual expenses incurred in
the distribution and promotion of the Fund's shares, including the
printing of prospectuses and reports used for sales purposes, expenses
of preparation and printing of sales literature and other such
distribution related expenses, including any distribution or service
fees paid to securities dealers who have executed a dealer sales
agreement with Capital. Capital will be reimbursed at a rate not to
exceed 0.75% of the average daily net assets of the Fund for the prior
month. The fund has recognized $119,805 of 12b-1 fee expenses for the
period ended June 30, 1995. The Fund has a payable to ND Capital, Inc.
of $19,888 at June 30, 1995 for 12b-1 fees.
<PAGE>
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment
securities (excluding short-term securities) aggregated $4,314,057 and
$5,527,699, respectively, for the period ended June 30, 1995.
Note 6. SPECIAL RISK CONSIDERATIONS
The Fund is registered as a non-diversified investment company, and
therefore will be able to invest a relatively high percentage of its
assets in a limited number of issuers, thus making the Fund more
susceptible to a single economic, political, or regulatory occurrence
than a diversified company. The Fund also is exposed to a certain degree
of market risk and liquidity risk in that as cash flow needs arise,
investment securities may have to be sold under unfavorable market
conditions.
Note 7. INVESTMENT IN SECURITIES
At June 30, 1995, the aggregate cost of securities for federal income
tax purposes was $91,507,931, and the net unrealized appreciation of
investments based on the cost was $2,842,874, which is comprised of
$3,456,606 aggregate gross unrealized appreciation and $613,732
aggregate gross unrealized depreciation.
Note 8. CERTAIN RECLASSIFICATIONS
In accordance with a recently approved accounting pronouncement
(Statement of Position 93-2), the Fund has reclassified certain items.
These reclassifications have no impact on the net asset value of the
Fund and are designed to present the Fund's capital accounts on a tax
basis.
Note 9. MATTERS SUBMITTED TO A VOTE OF SHAREHOLDERS
A special meeting of the shareholders of ND Tax-Free Fund, Inc. was held
on March 31, 1995. A quorum was declared present and voting for the
election of directors occurred with the following results:
<TABLE>
<CAPTION>
Votes Cast To Votes Cast To
Votes Cast Withhold All Withhold An
Nominee For Nominees Nominees Individual Nominee Abstentions
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lynn W. Aas 4,582,730.389 43,022.792 66,682.057 0
Orlin W. Backes 4,630,551.981 43,022.792 18,860.465 0
Arthur A. Link 4,587,064.882 43,022.792 62,347.564 0
Peter A. Quist 4,641,539.237 43,022.792 7,873.209 0
Robert E. Walstad 4,632,423.851 43,022.792 16,988.595 0
</TABLE>
In addition, Brady, Martz & Associates P.C. was ratified as the Fund's
independent public accountant with 4,536,806.904 votes cast for,
22,717.765 votes cast against, and 132,910.569 abstentions.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS Selected per share data and ratios for the year indicated
------------------------------------------------------------------------------
For the Year Ended December 31,
For the Six Months
ended June 30, 1995
(unaudited) 1994 1993 1992 1991 1990
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.83 $ 9.52 $ 9.49 $ 9.47 $ 9.36 $ 9.49
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income $ .24 $ .48 $ .52 $ .59 $ .61 $ .63
Net realized and unrealized gain
(loss) on investments, futures, and options .06 (.67) .05 .04 .11 (.13)
Total Income(Loss) From Investment Operations $ .30 $ (.19) $ .57 $ .63 $ .72 $ .50
LESS DISTRIBUTIONS:
Dividends from net investment income $ (.24) $ (.48) $ (.52) $ (.59) $ (.61) $ (.63)
Distributions in excess of net investment income (.01) (.02) (.02) (.02) .00 .00
Total Distributions $ (.25) $ (.50) $ (.54) $ (.61) $ (.61) $ (.63)
NET ASSET VALUE, END OF PERIOD $ 8.88 $ 8.83 $ 9.52 $ 9.49 $ 9.47 $ 9.36
TOTAL RETURN 6.71%(A)(C) (2.07)%(C) 5.94%(C) 6.62%(C) 7.86%(C) 7.96%(C)
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $95,839 $91,865 $85,042 $61,429 $31,243 $14,793
Ratio of net expenses (after expense assumption)
to average net assets 1.05%(A)(B) 1.06%(B) 1.01%(B) 0.95%(B) 0.72%(B) 0.49%(B)
Ratio of net investment income to average
net assets 5.28%(A) 5.19% 5.39% 5.91% 6.26% 6.68%
Portfolio turnover rate 4.59% 5.55% 18.59% 17.35% 14.11% 57.96%
</TABLE>
(A) Ratio was annualized.
(B) During the six month period ended June 30, 1995 and the years ended
December 31, 1994, 1993, 1992, 1991 and 1990, ND Holdings, Inc. assumed
expenses of $8,864, $31,115, $30,707, $66,030, $111,171, and $93,006,
respectively. If the expenses had not been assumed, the annualized ratios
of total expenses to average net assets would have been 1.07%, 1.10%,
1.05%, 1.08%, 1.18%,and 1.38%, respectively.
(C) Excludes contingent deferred sales charge of 4%.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 91507931
<INVESTMENTS-AT-VALUE> 94350815
<RECEIVABLES> 2014516
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
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<FN>
<F1> Ratio of net expenses to average net assets, annualized.
</FN>
</TABLE>
