<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
Percentages represent the market value
of each investment category to total net RATING COUPON PRINCIPAL MARKET
assets MOODY'S/S&P RATE MATURITY AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NORTH DAKOTA MUNICIPAL BONDS (98.5%)
FINANCIAL (7.3%)
ND Municipal Bond Bank A1/NR 6.300% 10/01/15 $ 530,000 $ 554,607
ND Municipal Bond Bank NR/A 7.850 10/01/14 1,300,000 1,470,872
ND Municipal Bond Bank A1/NR 6.250 10/01/14 3,325,000 3,490,652
ND Building Auth. Lease Rev. A/A 5.500 08/15/14 1,300,000 1,248,546
-----------
$ 6,764,677
-----------
HEALTH CARE (20.4%)
Bismarck (St. Vincent Nurs. Home) Hlth. Rev. NR/NR 8.500% 06/01/09 $ 175,000 $ 185,209
Bismarck (Marillac Manor II) Ret. Facs. Rev. NR/NR 8.625 02/01/10 675,000 729,661
Bismarck (Marillac Manor) Ret. Facs. Rev. NR/NR 7.700 02/01/16 250,000 275,905
Burleigh Cty. (St. Vincent Nurs. Home) Rev. NR/NR 7.000 06/01/19 500,000 542,090
Burleigh Cty. (Missouri Slope Ctr.) Rev. Ref. NR/NR 7.000 11/01/07 500,000 532,700
Burleigh Cty. (Missouri Slope Care Fdn.) Rev. Ref. NR/NR 7.250 06/01/12 500,000 529,930
Carrington, Catholic Hlth. Corp. (Ctr.) Rev. A1/A+ 6.250 11/15/15 500,000 518,605
Cass Cty. (St. Lukes Hosp.) Facs. Rev. NR/A+ 7.500 06/01/06 300,000 315,378
Devils Lake (Lake Region Luth. Home) Rev. NR/NR 6.500 10/01/13 250,000 257,500
Devils Lake (Catholic Health Corp.) Rev. A1/A+ 6.250 11/15/07 1,125,000 1,186,627
Dickinson, Cath. Hlth. Corp. (St. Josephs) Rev. A1/A+ 7.200 06/01/14 1,015,000 1,062,299
Dickinson (BHS L/T Care) Hlth. Care Facs. Rev. A1/NR 7.625 02/15/20 1,210,000 1,323,413
Dickinson (BHS L/T Care) Hlth. Care Facs. Rev. A1/NR 7.500 02/15/10 600,000 652,494
Fargo (St. Lukes Hosp.) Facs. Ref. Rev. NR/A+ 6.500 06/01/15 4,000,000 4,244,640
Fargo (Elim Homes) Nursing Home Ref. Rev. NR/NR 8.750 03/01/09 150,000 153,384
Fargo (Elim Homes) Nursing Home Rev. NR/NR 9.000 03/01/19 380,000 389,838
Hazen (Sakakawea Med. Ctr.) Hlth Care Facs. Rev. NR/NR 6.750 05/01/16 500,000 506,055
Jamestown (Heritage Center) Cong. Hsg. Rev. NR/NR 8.500 09/01/06 200,000 221,302
Lisbon (Parkside Luth. Home) Nurs. Home Rev. NR/NR 7.500 06/01/12 500,000 520,080
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.500 11/01/15 1,000,000 1,077,550
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.250 11/01/06 1,000,000 1,086,900
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.250 11/01/06 1,000,000 1,086,900
Ward Cty. (St. Joseph's Hosp.) Rev. NR/BBB- 7.500 11/01/15 1,450,000 1,562,448
-----------
$18,960,908
-----------
HOUSING (24.7%)
Grand Forks Hsg. Auth. (Ryan Hse.) Multifam. Ref. Aa/NR 6.300% 03/01/22 $ 500,000 $ 504,605
Morton Cty. Hsg. Auth. Multifamily Hsg. Rev. NR/NR 6.750 03/01/21 500,000 489,100
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.375 07/01/17 565,000 577,916
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.850 07/01/01 255,000 272,312
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 8.000 07/01/13 295,000 314,618
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.900 07/01/10 170,000 182,092
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 8.050 01/01/24 895,000 947,698
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.750 07/01/24 840,000 885,503
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.250 07/01/10 340,000 360,301
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.300 07/01/24 1,325,000 1,393,118
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 7.000 07/01/23 1,325,000 1,404,394
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 6.800 07/01/23 2,965,000 3,087,128
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 6.700 07/01/13 405,000 420,447
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 6.800 07/01/25 1,540,000 1,593,423
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 5.950 07/01/25 3,190,000 3,137,269
North Dakota (HFA) Single Family Mortgage Program Aa/A+ 6.950 07/01/25 1,995,000 2,097,563
North Dakota (HFA) Finance Program Mortgage Program Aa/NR 6.750 07/01/25 3,435,000 3,591,773
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
North Dakota (HFA) Finance Program Aa/NR 6.300 01/01/15 965,000 979,205
North Dakota (HFA) Finance Program Aa/NR 6.250 07/01/15 265,000 266,166
North Dakota (HFA) Home Mortgage Program Aa/NR 6.300 07/01/16 500,000 506,225
-----------
$23,010,856
-----------
POLLUTION CONTROL (1.6%)
Mercer Cty. (Basin Electric) PCR A/A 7.000% 01/01/19 $ 990,000 $ 1,048,212
Mercer Cty. (Ottertail Power) PCR Ref. Aa/AA- 6.900 02/01/19 450,000 485,609
-----------
$ 1,533,821
-----------
REAL ESTATE (8.4%)
Burleigh Co. (Univ. of Mary) Facs. Rev. NR/NR 5.750% 12/01/11 $1,000,000 $ 966,270
Burleigh Co. (Univ. of Mary) Facs. Rev. NR/NR 5.875 12/01/15 1,000,000 963,060
Fargo (Dome Authority) Sub. Sales Tax. Rev. Baa1/NR 7.250 01/01/09 1,000,000 1,106,920
Fargo, Park District (Golf Course) Rev. NR/NR 7.300 11/01/06 130,000 141,766
Fargo, Park District (Golf Course) Rev. NR/NR 7.350 11/01/07 110,000 120,054
Fargo, Park District (Golf Course) Rev. NR/NR 7.250 11/01/10 190,000 207,809
Grand Forks Regional Airport Authority Rev. A/NR 7.500 10/01/09 225,000 239,139
Grand Forks Regional Airport Authority Rev. A/NR 7.500 10/01/10 240,000 255,082
Jamestown (College) Facility Rev. NR/NR 6.625 10/01/14 800,000 827,608
ND St. Brd of Hgr Ed. (MSU) Student Svcs. Ref. NR/NR 6.750 08/01/05 755,000 809,179
ND St. Brd of Hgr Ed. (MSU) Student Svcs. Ref. NR/NR 5.500 08/01/13 400,000 388,988
University of ND (G.F.) Lease Financing COP A/A- 7.300 09/01/10 1,425,000 1,547,251
Wahpeton (Town Centre. Sqr.) MultiFam. Hsg. Ref. NR/NR 8.500 02/01/14 250,000 261,800
-----------
$ 7,834,926
-----------
INSURED/GUARANTEED (36.1%)
*Bismarck (MedCenter. One) Ref. & Imp. (BIGI) Aaa/AAA 7.500% 05/01/13 $2,500,000 $ 2,746,450
Bismarck (St. Alexius Med. Ctr.) Ref. (AMBAC) Aaa/AAA 6.900 05/01/06 1,400,000 1,546,692
Central Cass Cty., PSD#17 GO Sch. Bldg. (MBIA) Aaa/AAA 6.500 05/01/13 430,000 462,091
Central Cass Cty., PSD#17 GO Sch. Bldg. (MBIA) Aaa/AAA 6.500 05/01/14 460,000 493,741
Grand Forks (United Hosp.) Facs. Rev. (MBIA) Aaa/AAA 6.625 12/01/10 830,000 905,148
Grand Forks (United Hosp.) Facs. Rev. (MBIA) Aaa/AAA 6.500 12/01/06 750,000 816,090
Grand Forks (United Hosp.) Facs. Rev. (MBIA) Aaa/AAA 6.250 12/01/19 1,000,000 1,051,360
Grand Forks (United Hosp.) Facs. Rev.(MBIA) Aaa/AAA 6.450 12/01/23 1,525,000 1,628,624
Mercer Cty. (Mont.-Dak. Utilities) PCR (FGIC) Aaa/AAA 6.650 06/01/22 7,000,000 7,507,990
Mercer Cty. (NW Public. Service.) PCR Ref. (MBIA) Aaa/AAA 5.850 06/01/23 5,300,000 5,243,555
Mercer Cty. (Basin Electric) PCR (AMBAC) Aaa/AAA 6.050 01/01/19 3,000,000 3,052,260
Morton Cty. (Mont.-Dak. Utilities) PCR (FGIC) Aaa/AAA 6.650 06/01/22 600,000 643,542
ND (HFA) Muliti-family Ref. (FNMA guaranteed) Aaa/AAA 6.200 12/01/20 825,000 836,030
*ND Building. Auth. (St. Bd. Hr. Ed.) (AMBAC) Aaa/AAA 7.400 06/01/10 1,140,000 1,254,456
ND Building Auth. Ref.Lease Rev. (AMBAC) Aaa/AAA 6.000 06/01/10 1,700,000 1,792,667
ND Building Auth. Lease Rev. (CGIC) Aaa/AAA 6.000 12/01/13 500,000 516,335
*North Dakota Student Loan Rev. (AMBAC) Aaa/AAA 7.750 07/01/02 1,060,000 1,127,363
North Dakota Student Loan Rev. (AMBAC) Aaa/AAA 6.300 07/01/12 100,000 100,807
North Dakota Student Loan Rev. (AMBAC) Aaa/AAA 6.350 07/01/13 250,000 252,085
North Dakota Student Loan Rev. (AMBAC) Aaa/AAA 6.400 07/01/14 400,000 403,424
University of ND (GF) Hsg. & Aux. Rev. (AMBAC) Aaa/AAA 7.850 04/01/14 340,000 368,577
Valley City, Western Hlth. Care Fac. Rev. (BIGI) Aaa/AAA 7.625 01/01/19 200,000 213,406
Williston Cath. Hlth. Corp. (Mercy Hosp.) (MBIA) Aaa/AAA 7.200 06/01/14 600,000 632,544
-----------
$33,595,237
-----------
TOTAL NORTH DAKOTA MUNICIPAL BONDS (COST: $88,600,652) $91,700,425
SHORT-TERM SECURITIES (.3%)
Goldman Sachs Institutional Liquid Assets Tax-Exempt Diversified Portfolio (COST: $304,206) 304,206
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $88,904,858) $92,004,631
===========
</TABLE>
*Indicates bonds are segregated by the custodian to cover when-issued or
delayed-delivery purchases.
<PAGE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL STATEMENTS June 30, 1996
STATEMENT OF ASSETS AND LIABILITIES June 30, 1996 (Unaudited)
- -------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at $ 92,004,631
value (cost:$88,904,858)
Accrued dividends receivable 3,910
Accrued interest receivable 1,567,924
-------------
Total Assets $ 93,576,465
-------------
LIABILITIES
Bank overdraft $ 4,934
Dividends payable 388,146
Accrued expenses 86,209
Payable for fund shares redeemed 78,974
-------------
Total Liabilities $ 558,263
-------------
NET ASSETS $ 93,018,202
=============
Net asset value per share, $ 9.12
10,195,793 shares outstanding
=============
STATEMENT OF OPERATIONS for the six
months ended June 30, 1996 (Unaudited)
- ----------------------------------------
INVESTMENT INCOME
Interest $ 2,842,436
Dividends 20,520
-------------
Total Investment Income $ 2,862,956
-------------
EXPENSES
Investment advisory fees $ 281,322
Distribution fees (12b-1) 140,661
Custodian fees 4,193
Transfer agent fees 50,639
Accounting service fees 33,253
Audit and legal fees 8,700
Directors fees 14,355
Insurance 3,532
Printing and postage 7,110
License, fees, and registrations 4,587
-------------
Total expenses $ 548,352
Less expenses waived or absorbed
by the Fund's manager 32,594
-------------
Total Net Expenses $ 515,758
-------------
NET INVESTMENT INCOME $ 2,347,198
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investment transactions $ 84,223
Futures transactions 2,626,302
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Net change in unrealized
appreciation (depreciation) of
investments (2,203,632)
Net Realized and Unrealized -------------
Gain (Loss) On Investments And
Futures $ 506,893
-------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 2,854,091
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL STATEMENTS June 30, 1996
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the year ended December 31, 1995
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The For the Year
Six Months Ended Ended
June 30, 1996 December 31, 1995
(Unaudited)
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 2,347,198 $ 4,961,588
Net realized gain (loss) on investment and futures transactions 2,710,525 (4,107,844)
Net unrealized appreciation (depreciation) on investments (2,203,632) 7,035,220
----------------- -----------------
Net Increase (Decrease) in Net Assets Resulting From
Operations $ 2,854,091 $ 7,888,964
----------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $(2,347,198) $(4,961,588)
Distributions in excess of net investment income (140,661) (229,423)
Distributions from net realized gain on investment transactions 0 0
----------------- -----------------
Total Dividends and Distributions $ (2,487,859) $ (5,191,011)
----------------- -----------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 2,095,644 $ 5,471,316
Proceeds from reinvested dividends 1,610,101 3,322,041
Cost of shares redeemed (5,585,480) (8,824,914)
----------------- -----------------
Net Increase (Decrease) in Net Assets Resulting From
Capital Share Transactions $ (1,879,735) $ (31,557)
----------------- -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (1,513,503) $ 2,666,396
NET ASSETS, BEGINNING OF PERIOD 94,531,705 91,865,309
NET ASSETS, END OF PERIOD $ 93,018,202 $ 94,531,705
================= =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (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.
The Fund's objective is to provide as high a level of current income
exempt from federal and North Dakota income taxes as is consistent with
preservation of capital. The Fund will seek to achieve this by investing
primarily in a portfolio of North Dakota tax-exempt securities.
Shares of the Fund are offered with no initial sales charge. Shares may
be subject to a contingent deferred sales charge, if those shares are
redeemed within five years of purchase.
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.
The Fund concentrates its investments in a single state. This
concentration may result in the Fund investing a relatively high
percentage of its assets in a limited number of issuers.
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 daily on an accrual basis.
Premiums and discounts on securities purchased are amortized using the
effective interest method 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 purchase and sell financial
futures and option contracts to hedge against changes in the values of
tax-exempt municipal securities the Fund owns or expects to purchase.
A futures contract is an agreement between two parties to buy or sell
units of a particular index or a certain amount of U.S. Government or
municipal securities at a set price on a future date. Upon entering into
a futures contract, the Fund is required to deposit with a
<PAGE>
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.
Daily fluctuations in the value of 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.
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.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Note 3. SHARE TRANSACTIONS
As of June 30, 1996, there were 100,000,000 shares of $.001 par
authorized; 10,195,793 and 10,402,491 were outstanding at June 30, 1996
and December 31, 1995, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
------ ------
For The Six Months For the Year Ended For The Six Months Ended For the Year Ended
Ended June 30,1996 Dec. 31, 1995 June 30, 1996 Dec. 31, 1995
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares sold 230,869 605,360 $ 2,095,644 $ 5,471,316
Shares issued on 177,105 368,749 1,610,101 3,322,041
reinvestment of dividends
Shares redeemed (614,672) (980,165) (5,585,480) (8,824,914)
-------------------------------------------------------------------------------------------------------
Net increase (decrease) (206,698) (6,056) $(1,879,735) $ (31,557)
=======================================================================================================
</TABLE>
Note 4. INVESTMENT ADVISORY 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 and accounting services agent, are subsidiaries of ND Holdings,
Inc., the Fund's sponsor.
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 $281,322 of
investment advisory fees for the six months ended June 30, 1996. The
Fund has a payable to ND Money Management, Inc. of $43,425 at June 30,
1996 for investment advisory fees. Certain officers and directors of the
Fund are also officers and directors of the investment adviser.
<PAGE>
The Fund has adopted a distribution plan (the Plan) pursuant to Rule
12b-1 under the 1940 Act, whereby the Fund shall pay at the annual rate
of 0.85% 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 0.85% of the average daily net assets of the Fund for the prior
month. The Fund has recognized $140,661 of 12b-1 fee expenses for the
period ended June 30, 1996. The Fund has a payable to ND Capital, Inc.
of $21,713 at June 30, 1996 for 12b-1 fees.
ND Resources, Inc., (the transfer agent), provides shareholder services
for a monthly fee equal to an annual rate of 0.16% of the Fund's first
$10 million of net assets, 0.13% of the Fund's net assets on the next
$15 million, 0.11% of the Fund's net assets on the next $15 million,
0.10% of the Fund's net assets on the next $10 million, and 0.09% of the
Fund's net assets in excess of $50 million. The Fund has recognized
$50,639 of transfer agency fees for the six months ended June 30, 1996.
ND Resources, Inc. also acts as the Fund's accounting services agent for
a monthly fee equal to the sum of a fixed fee of $2,000, and a variable
fee equal to 0.05% of the Fund's average daily net assets on an annual
basis for the Fund's first $50 million and at a lower rate on the
average daily net assets in excess of $50 million. The Fund has
recognized $33,253 of accounting service fees for the six months ended
June 30, 1996.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment
securities (excluding short-term securities) aggregated $7,141,328 and
$7,442,258, respectively, for the six months ended June 30, 1996.
Note 6. INVESTMENT IN SECURITIES
At June 30, 1996, the aggregate cost of securities for federal income
tax purposes was $88,904,858, and the net unrealized appreciation of
investments based on the cost was $3,099,773, which is comprised of
$3,449,916 aggregate gross unrealized appreciation and $350,143
aggregate gross unrealized depreciation.
<PAGE>
FINANCIAL HIGHLIGHTS Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
For The
Six Months Ended
June 30, 1996
(Unaudited) 1995 1994 1993 1992
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.09 $ 8.83 $ 9.52 $ 9.49 $ 9.47
--------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income $ .23 $ .47 $ .48 $ .52 $ .59
Net realized and unrealized gain (loss)
on investments and futures transactions .04 .28 (.67) .05 .04
--------------------------------------------------------------------
Total Income (Loss) From Investment Operations $ .27 $ .75 $ (.19) $ .57 $ .63
--------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income $ (.23) $ (.47) $ (.48) $ (.52) $ (.59)
Distributions in excess of net investment income (.01) (.02) (.02) (.02) (.02)
--------------------------------------------------------------------
Total Distributions $ (.24) $ (.49) $ (.50) $ (.54) $ (.61)
--------------------------------------------------------------------
NET ASSET VALUE, END OFPERIOD $ 9.12 $ 9.09 $ 8.83 $ 9.52 $ 9.49
====================================================================
TOTAL RETURN 6.04% (A)(C) 8.68%(A) (2.07)%(A) 5.94%(A) 6.62%(A)
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $93,018 $94,532 $91,865 $85,042 $61,429
Ratio of net expenses (after expense assumption) to
average net assets 1.10%(B)(C) 1.05%(B) 1.06%(B) 1.01%(B) 0.95%(B)
Ratio of net investment income to average net assets 5.00%(C) 5.20% 5.19% 5.39% 5.91%
Portfolio turnover rate 7.76% 8.02% 5.55% 18.59% 17.35%
</TABLE>
(A) Excludes contingent deferred sales charge of 4%.
(A) During the periods indicated above, ND Holdings, Inc. assumed expenses of
$32,594, $3,799, $31,115, $30,707, and $66,030, respectively. If the
expenses had not been assumed, the annualized ratios of total expenses to
average net assets would have been 1.16%, 1.05%, 1.10%, 1.05%, and 1.08%,
respectively.
(C) Ratio was annualized.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 88904858
<INVESTMENTS-AT-VALUE> 92004631
<RECEIVABLES> 1571834
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 93576465
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 558263
<TOTAL-LIABILITIES> 558263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 10195793
<SHARES-COMMON-PRIOR> 10402491
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4871712)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3099773
<NET-ASSETS> 93018202
<DIVIDEND-INCOME> 20520
<INTEREST-INCOME> 2842436
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<FN>
<F1>Ratio of net expenses to average net assets, annualized
</FN>
</TABLE>
