(THE PRIMARY TREND FUNDS LOGO)
ANNUAL REPORT
THE PRIMARY
TREND FUND
THE PRIMARY
INCOME FUND
THE PRIMARY U.S.
GOVERNMENT FUND
MILWAUKEE, WISCONSIN
JUNE 30, 1999
MESSAGE TO SHAREHOLDERS . . .
"The current market environment seems to abhor value, yet reward
'instant gratification' . . . and hence, the Internet mania takes center
stage. We believe that this careless speculation run amuck is an
overriding negative and long-term investment rationale must return in order
for a new bull market to be born. . . . We expect 1999 to be a transition
year where new leadership takes hold and 'value' regains its lost luster."
THE PRIMARY TREND FUNDS
December 31, 1998 Semiannual Report
Greed and fear have long been residents on Wall Street over the course of
stock market history, with one emotion conspicuously in control over the other.
Over the past year, investors have witnessed both in action.
The tumultuous overseas markets (induced by currency devaluations as well as
potential whole country defaults), coupled with premium valuations in our own
domestic equity market, sent some short-term chills down the spines of
individual as well as institutional investors in the latter half of 1998. As
measured by the Dow Jones Industrial Average, (see chart on page 3), the U.S.
stock market declined 19.3% in less than two months, as the Dow went from 9300
in mid-July to its low near 7500 at the end of August. However, the broader
market and the average stock suffered a much worse fate than the popular Dow
Jones Industrial Average.
The fear that sprung eternal through late 1998 paved the way for a bona fide
rally, which continued into 1999. And as is typical, fear transformed itself
into greed . . . and greed begets more greed.
What we have witnessed here in 1999 can best be described as greed.com, with
the Internet hoopla not only grabbing the headlines, but taking its fair share
of investors' money as well. Mark Twain said it best, "There are two times in a
man's life when he should not speculate - when he can't afford it and when he
can."
Despite the near bear market decline of late 1998, we believe the stock
market's gains since those lows is a continuation of the old cyclical bull
market that began in 1990. Traditionally, new bull markets are born of new
stock market leadership. However, the rally to new all-time highs that
transpired over the past nine months was again very selective, with much of the
strong performance generated by the same cast of characters: technology, the
popular Nifty Fifty and, of course, the Internet sector.
For the 12 months ended June 30, 1999, The Primary Trend Funds generated the
following total returns for shareholders:
THE PRIMARY TREND FUND +4.7%
THE PRIMARY INCOME FUND +3.0%
THE PRIMARY U.S. GOVERNMENT FUND +3.8%
THE PRIMARY TREND FUND, despite its conservative posture, lagged the popular
large-capitalization indices in the final six months of 1998, due in large part
to our value orientation at a time when investors continued to crave growth
stocks. However, our continued commitment to the energy patch (approximately
18% of the portfolio) has helped us keep pace with those same benchmarks over
the first half of 1999.
Crude oil and natural gas experienced a major bear market that bottomed in
February of this year. Since then, those commodities have skyrocketed as have
our energy stocks that benefit from those higher prices. Our 14% exposure to
the interest-sensitive sector had helped the portfolio during the latter half of
1998 when interest rates were declining. However, for the first six months of
1999, interest rates have reversed course and climbed to 6% on the 30-year U.S.
Treasury bond. This not only dampens the prospects for stocks in general, but
it has had an even more damaging effect on the financial sector, or interest-
sensitive shares, that we own. Our newer portfolio purchases in the
broadcasting, entertainment and consumer industries during the last year have
contributed nicely to the portfolio. On the contrary, our lack of exposure to
the "hot" technology, Internet and telecommunications industries made it
difficult for the Primary Trend Fund portfolio to keep pace. The portfolio
contained a number of individual issues that did extremely well for the 12
months ended June 30, 1999: CBS Corp. (+82%); United Technologies (+56%), the
acquirer of our original Sundstrand position; BP Amoco (+40%); Darden
Restaurants (+37%); Wendy's International (+30%); and Seagram Co. (+23%).
THE PRIMARY INCOME FUND, with its conservative income-oriented securities and
heavy exposure to the utility industry (currently at 35% of total assets),
failed to participate fully in the stock market rally that ensued from the
October 1998 bottom. We have steadily committed more cash to the fixed-income
portion (currently at 19%) of the portfolio over the last year. However, the
gradual climb in interest rates in 1999 has hurt the Fund's bond exposure - yet
we continue to believe that the risk-reward in longer maturity bonds is better
than in cash or stocks at this stage. Top portfolio performers for the fiscal
year ended June 30, 1999 include: BP Amoco (+40%); GTE Corp. (+36%); Wendy's
International (+30%); Seagram Co. (+23%); and Aetna (+18%).
THE PRIMARY U.S. GOVERNMENT FUND had a very respectable fiscal year with much
of its outperformance coming in the first half of 1999. We expected interest
rates to rise as 1998 came to a close and so kept our maturities and duration in
the portfolio very short (approximately one to six years). However, now that
long bonds yields have jumped from a low of 4.75% to current levels of 6%, we
have gradually extended maturities and believe any further interest-rate hike by
the Fed could create an excellent buying opportunity for fixed-income investors.
Due to the premium yield spread, we have dedicated new purchases to agency bonds
as opposed to U.S. Treasury securities.
The stock market has powered ahead to new all-time highs as the Dow Jones
Industrial Average eclipsed the 11,000 mark for the first time on May 3 and
subsequently made a new record on July 16 at 11,209.84. The broader market has
since corrected by 8-12% (depending upon the benchmark index that is monitored)
and could be ripe for a late summer liquidity-driven rally. But it would also
be wise to pay attention to the lack of participation by most stocks in the
midst of these latest record-setting days on Wall Street.
Consensus opinion has Alan Greenspan and the Federal Reserve resting on their
laurels for the remainder of 1999. We believe the inclination is to raise rates
and that the yield on the 30-year U.S. Treasury bond could approach 6.5%. This
credit tightening, along with fears of a "Year 2000" snafu, could create a bona
fide buying opportunity in both the U.S. stock and bond markets over the next
six months.
With lofty valuations ever present in today's stock market environment, we
are diligently searching for those undervalued situations with conservative,
lower risk characteristics for the Funds' portfolios. We have taken some
profits, pruned some underperformers (PennzEnergy and York International) and
have been the beneficiary of a few takeovers (Amoco by British Petroleum,
Sundstrand by United Technologies and Snyder Oil by Santa Fe Energy Resources).
If interest rates continue to climb, we will likely use some of our cash
reserves to buy longer term U.S. Treasury and/or agency bonds. While our
intermediate term outlook necessitates a defensive posture, our long-term
outlook for the U.S. stock market is extremely optimistic.
Each of us at Arnold Investment Counsel values you as a shareholder in The
Primary Trend Funds - you are very important to us. The efforts of our entire
staff are dedicated to helping you achieve your financial goals, which we know
includes the generation of above-average investment returns commensurate with
below-average risk. As fellow shareholders, you have our pledge that we are
constantly striving to accomplish those objectives.
Sincerely,
/s/ Lilli Gust /s/ Barry S. Arnold
Lilli Gust, President Barry S. Arnold, Vice President
August 12, 1999
DOW JONES INDUSTRIAL AVERAGE - WEEKLY 08/06/99
Date High Low Close
- ---- ---- --- -----
1/5/90 2834.04 2732.51 2773.25
1/12/90 2810.79 2675.98 2689.21
1/19/90 2711.39 2625.85 2677.9
1/26/90 2683.33 2516.89 2559.23
2/2/90 2623.65 2513.97 2602.7
2/9/90 2674.32 2579.28 2648.2
2/16/90 2669.37 2592.57 2635.59
2/23/90 2622.3 2540.99 2564.19
3/2/90 2669.82 2560.14 2660.36
3/9/90 2705.63 2636.71 2683.33
3/16/90 2745.05 2657.88 2740.32
3/23/90 2775 2674.32 2704.28
3/30/90 2755.63 2691.89 2707.21
4/6/90 2755.86 2668.69 2717.12
4/12/90 2763.96 2701.35 2751.8
4/20/90 2793.47 2688.47 2695.95
4/27/90 2691.89 2639.41 2645.04
5/4/90 2718.92 2627.7 2710.36
5/11/90 2810.36 2698.87 2801.58
5/18/90 2857.87 2793.75 2819.91
5/25/90 2856.5 2806.69 2820.92
6/1/90 2919.9 2812.62 2900.97
6/8/90 2956.55 2850.73 2862.38
6/15/90 2956.93 2852.97 2935.89
6/22/90 2931.93 2848.02 2857.18
6/29/90 2901.98 2821.53 2880.69
7/6/90 2925.74 2863.61 2904.95
7/13/90 3012.38 2882.18 2980.2
7/20/90 3024.26 2948.27 2961.14
7/27/90 2946.53 2833.17 2898.51
8/3/90 2940.09 2722.03 2809.65
8/10/90 2774.26 2676.24 2716.58
8/17/90 2778.71 2598.02 2644.8
8/24/90 2679.21 2459.41 2532.92
8/31/90 2651.24 2569.31 2614.36
9/7/90 2643.07 2573.02 2619.55
9/14/90 2665.35 2545.54 2564.11
9/21/90 2594.55 2479.95 2512.38
9/28/90 2501.24 2367.82 2452.48
10/5/90 2565.35 2446.53 2510.64
10/12/90 2548.02 2344.31 2398.02
10/19/90 2536.88 2354.95 2520.79
10/26/90 2535.4 2429.21 2436.14
11/2/90 2501.73 2400.5 2490.84
11/9/90 2519.06 2415.84 2488.61
11/16/90 2581.19 2490.1 2550.25
11/23/90 2580.69 2502.72 2527.23
11/30/90 2577.23 2489.85 2559.65
12/7/90 2656.44 2534.65 2590.1
12/14/90 2640.59 2565.59 2593.81
12/21/90 2662.62 2563.61 2633.66
12/28/90 2653.96 2607.92 2629.21
1/4/91 2651.73 2540.84 2566.09
1/11/91 2563.37 2456.19 2501.49
1/18/91 2663.37 2447.03 2646.78
1/25/91 2679.46 2584.65 2659.41
2/1/91 2764.6 2627.23 2730.69
2/8/91 2875.5 2714.85 2830.69
2/15/91 2947.28 2822.52 2934.65
2/22/91 2955.2 2860.4 2889.36
3/1/91 2935.89 2839.85 2909.9
3/8/91 3017.82 2897.03 2955.2
3/15/91 3000 2906.68 2948.51
3/22/91 2960.64 2829.21 2858.91
3/28/91 2956.93 2837.87 2913.86
4/5/91 2970.54 2868.32 2896.78
4/12/91 2946.53 2848.51 2920.79
4/19/91 3030.45 2896.29 2965.59
4/26/91 2965.1 2888.61 2912.38
5/3/91 2966.34 2859.41 2938.86
5/10/91 2986.14 2898.7 2920.17
5/17/91 2945.44 2834.53 2886.63
5/24/91 2935.38 2872.76 2913.91
5/31/91 3044.5 2903.85 3027.5
6/7/91 3057.47 2954.61 2976.74
6/14/91 3014.98 2928.89 3000.45
6/21/91 3022.14 2927.33 2965.56
6/28/91 2957.29 2879.25 2906.75
7/5/91 2987.03 2911.67 2932.47
7/12/91 3003.35 2897.36 2980.77
7/19/91 3036.23 2961.54 3016.32
7/26/91 3038.24 2947.23 2972.5
8/2/91 3042.26 2957.07 3006.26
8/9/91 3050.54 2970.48 2996.2
8/16/91 3041.14 2945.89 2968.02
8/23/91 3065.97 2836.31 3040.25
8/30/91 3068.65 3007.83 3049.6
9/6/91 3066.64 2987.48 3011.63
9/13/91 3025.49 2963.1 2985.69
9/20/91 3050.76 2973.61 3019.23
9/27/91 3048.52 2989.49 3006.04
10/4/91 3043.6 2956.17 2961.54
10/11/91 3000.89 2925.54 2983.68
10/18/91 3089.45 2975.85 3077.15
10/25/91 3085.2 2983.01 3004.92
11/1/91 3091.91 3001.57 3056.35
11/8/91 3080.95 3010.51 3045.62
11/15/91 3084.97 2936.05 2943.2
11/22/91 2990.61 2880.81 2902.73
11/29/91 2942.31 2861.14 2894.68
12/6/91 2958.18 2854.65 2886.4
12/13/91 2936.72 2893.34 2914.36
12/20/91 2965.79 2870.3 2934.48
12/27/91 3125 2920 3101.52
1/3/92 3225 3090 3201.48
1/10/92 3246.64 3164.58 3199.46
1/17/92 3299.19 3161.67 3264.98
1/24/92 3283.32 3190.96 3232.78
1/31/92 3313.95 3200.58 3223.39
2/7/92 3299.86 3193.42 3225.4
2/14/92 3296.73 3208.63 3245.97
2/21/92 3307.46 3195.66 3280.19
2/28/92 3305.01 3226.74 3267.67
3/6/92 3318.54 3204.61 3221.6
3/13/92 3259.2 3176.2 3235.9
3/20/92 3292.48 3201.25 3276.39
3/27/92 3296.96 3218.91 3231.44
4/3/92 3277.05 3201.92 3249.11
4/10/92 3295.84 3141.77 3255.37
4/16/92 3387.97 3230.77 3366.5
4/24/92 3381.48 3298.52 3324.46
5/1/92 3377.01 3273.03 3336.09
5/8/92 3390.65 3340.79 3369.41
5/15/92 3397.46 3330.4 3353.1
5/22/92 3421.42 3349.93 3386.77
5/29/92 3433.98 3337.29 3396.88
6/5/92 3435.27 3356.98 3398.69
6/12/92 3422.83 3328.99 3354.36
6/19/92 3379.01 3245.53 3285.35
6/26/92 3319.62 3242.32 3282.41
7/2/92 3385.43 3278.16 3330.29
7/10/92 3363.77 3258.95 3330.56
7/17/92 3381.87 3308.14 3331.64
7/24/92 3335.94 3255.43 3285.71
7/31/92 3414.83 3265.99 3393.78
8/7/92 3413.21 3318.4 3332.18
8/14/92 3356.48 3294.07 3328.94
8/21/92 3350.26 3243.55 3254.09
8/28/92 3285.69 3200.86 3267.61
9/4/92 3325.95 3239.77 3281.93
9/11/92 3327.32 3244.92 3305.7
9/18/92 3391.35 3288.95 3327.05
9/25/92 3341.91 3226.82 3250.32
10/2/92 3295.98 3193.59 3200.61
10/9/92 3205.2 3087.41 3136.58
10/16/92 3225.74 3123.89 3174.41
10/23/92 3233.57 3154.14 3207.64
10/30/92 3270.31 3190.08 3226.28
11/6/92 3285.44 3203.58 3240.06
11/13/92 3268.69 3203.31 3233.03
11/20/92 3249.78 3176.84 3227.36
11/27/92 3304.62 3196.83 3282.2
12/4/92 3326.51 3252.48 3288.68
12/11/92 3345.42 3274.37 3304.08
12/18/92 3325.97 3229.79 3313.27
12/24/92 3350.55 3280.85 3326.24
12/31/92 3364.87 3294.36 3301.11
1/8/93 3338.12 3221.68 3251.67
1/15/93 3300.03 3225.47 3271.12
1/22/93 3299.49 3219.25 3256.81
1/29/93 3331.91 3243.84 3310.03
2/5/93 3463.21 3300.3 3442.14
2/12/93 3472.94 3378.11 3392.43
2/19/93 3391.62 3262.48 3322.18
2/26/93 3396.21 3296.79 3370.81
3/5/93 3447.81 3334.07 3404.58
3/12/93 3497.25 3385.4 3427.82
3/19/93 3493.2 3408.91 3471.58
3/26/93 3489.14 3417.55 3439.98
4/2/93 3487.52 3344.88 3370.81
4/8/93 3429.44 3338.39 3396.48
4/16/93 3498.6 3391.08 3478.61
4/23/93 3499.41 3385.67 3413.77
4/30/93 3466.18 3364.06 3427.55
5/7/93 3478.44 3402.42 3437.19
5/14/93 3501.69 3420.31 3443.01
5/21/93 3539.88 3405.09 3492.83
5/28/93 3582.23 3472.35 3527.43
6/4/93 3577.25 3516.08 3545.14
6/11/93 3570.33 3461.83 3505.01
6/18/93 3539.88 3460.17 3494.77
6/25/93 3531.86 3445.77 3490.89
7/2/93 3544.87 3468.47 3483.97
7/9/93 3544.03 3443.28 3521.06
7/16/93 3573.01 3491.13 3528.29
7/23/93 3573.84 3500.63 3546.74
7/30/93 3604.86 3515.72 3539.47
8/6/93 3588.1 3523.54 3560.43
8/13/93 3607.94 3537.24 3569.65
8/20/93 3638.96 3547.86 3615.48
8/27/93 3681.71 3578.87 3640.63
9/3/93 3667.46 3603.75 3633.93
9/10/93 3649.02 3556.52 3621.63
9/17/93 3655.16 3573.84 3613.25
9/24/93 3632.81 3501.47 3543.11
10/1/93 3605.14 3528.57 3581.11
10/8/93 3620.79 3550.37 3584.74
10/15/93 3664.66 3565.46 3629.73
10/22/93 3697.92 3595.92 3649.3
10/29/93 3713.57 3618.28 3680.59
11/5/93 3724.75 3585.86 3643.43
11/12/93 3707.42 3616.6 3684.51
11/19/93 3749.9 3640.07 3694.01
11/26/93 3709.94 3627.78 3683.95
12/3/93 3731.73 3654.33 3704.07
12/10/93 3764.43 3687.3 3740.67
12/17/93 3785.94 3689.82 3751.57
12/23/93 3791.81 3719.72 3757.72
12/31/93 3818.92 3745.15 3754.09
1/7/94 3843.84 3715.24 3820.77
1/14/94 3891.96 3804.72 3867.2
1/21/94 3933.33 3833.71 3914.48
1/28/94 3971.89 3863.82 3945.43
2/4/94 4002.84 3857.63 3871.42
2/11/94 3956.97 3840.75 3894.78
2/18/94 3975.82 3869.73 3887.46
2/25/94 3931.36 3811.76 3838.78
3/4/94 3874.52 3741.69 3832.3
3/11/94 3882.4 3801.63 3862.7
3/18/94 3911.78 3819.94 3895.65
3/25/94 3901.41 3764.66 3774.73
3/31/94 3793.45 3544.12 3635.96
4/8/94 3722.34 3520.8 3674.26
4/15/94 3722.14 3616.85 3661.47
4/22/94 3690.32 3546.65 3648.68
4/29/94 3733.15 3635.29 3681.69
5/6/94 3736.12 3625.77 3669.5
5/13/94 3690.32 3609.71 3659.68
5/20/94 3788.76 3628.52 3766.35
5/27/94 3786.3 3707.11 3757.14
6/3/94 3792.22 3717.76 3772.22
6/10/94 3812.83 3721.45 3773.45
6/17/94 3839.88 3741.26 3776.78
6/24/94 3771.07 3616.65 3636.94
7/1/94 3711.73 3603.92 3646.65
7/8/94 3728.56 3621.73 3709.14
7/15/94 3769.35 3660.9 3753.81
7/22/94 3779.39 3684.86 3735.04
7/29/94 3782.63 3693.27 3764.5
8/5/94 3829.25 3725 3747.02
8/12/94 3793.96 3728.56 3768.71
8/19/94 3812.09 3727.59 3755.11
8/26/94 3903.38 3722.41 3881.05
9/2/94 3954.54 3869.39 3885.58
9/9/94 3926.96 3844.2 3874.81
9/16/94 3959.93 3843.86 3933.35
9/23/94 3972.72 3806.51 3831.75
9/30/94 3904.76 3804.5 3843.19
10/7/94 3873.47 3736.2 3797.43
10/14/94 3944.12 3789.36 3910.47
10/21/94 3958.25 3861.35 3891.3
10/28/94 3953.54 3803.49 3930.66
11/4/94 3956.9 3802.81 3807.52
11/11/94 3882.89 3779.93 3801.47
11/18/94 3871.45 3773.21 3815.26
11/25/94 3845.2 3612.05 3708.27
12/2/94 3783.3 3680.68 3745.62
12/9/94 3779.93 3638.97 3691.11
12/16/94 3817.95 3667.9 3807.19
12/23/94 3860.01 3752.35 3833.43
12/30/94 3882.21 3812.91 3834.44
1/6/95 3902.4 3805.5 3867.41
1/13/95 3924.27 3824.68 3908.46
1/20/95 3955.56 3826.7 3869.43
1/27/95 3914.18 3815.26 3857.99
2/3/95 3959.6 3794.4 3928.64
2/10/95 3967.67 3900.04 3939.07
2/17/95 4019.15 3920.57 3953.54
2/24/95 4034.62 3930.66 4011.74
3/3/95 4033.19 3946.03 3989.61
3/10/95 4054.97 3935.31 4035.61
3/17/95 4101.66 3999.29 4073.65
3/24/95 4155.27 4039.07 4138.67
3/31/95 4213.71 4100.28 4157.69
4/7/95 4239.31 4129.68 4192.62
4/13/95 4243.46 4163.57 4208.18
4/21/95 4296.37 4143.51 4270.09
4/28/95 4348.94 4239.65 4321.27
5/5/95 4426.41 4278.73 4343.4
5/12/95 4463.07 4316.43 4430.56
5/19/95 4468.94 4287.38 4341.33
5/26/95 4480.7 4337.87 4369
6/2/95 4499.72 4334.41 4444.39
6/9/95 4520.47 4394.59 4423.99
6/16/95 4533.96 4415.69 4510.79
6/23/95 4614.2 4497.99 4585.84
6/30/95 4606.24 4510.45 4556.1
7/7/95 4740.77 4536.04 4702.73
7/14/95 4766.58 4647.74 4708.82
7/21/95 4767.63 4530.26 4641.55
7/28/95 4767.99 4620.42 4715.51
8/4/95 4772.56 4632.04 4683.46
8/11/95 4727.84 4584.85 4618.3
8/18/95 4677.12 4587.66 4617.6
8/25/95 4676.42 4552.8 4601.4
9/1/95 4672.19 4554.21 4647.54
9/8/95 4722.91 4625.7 4700.72
9/15/95 4839.48 4672.54 4797.57
9/22/95 4828.46 4706.35 4764.15
9/29/95 4834.96 4692.98 4789.08
10/6/95 4817.98 4689.01 4769.21
10/13/95 4845.08 4638.43 4793.78
10/20/95 4837.49 4744.28 4794.86
10/27/95 4824.49 4653.24 4741.75
11/3/95 4858.81 4716.46 4825.57
11/10/95 4902.52 4770.66 4870.37
11/17/95 5022.1 4821.23 4989.95
11/24/95 5096.17 4946.6 5048.84
12/1/95 5143.13 5006.21 5087.13
12/8/95 5234.53 5057.87 5156.86
12/15/95 5266.69 5122.18 5176.73
12/22/95 5173.48 5016.68 5097.97
12/29/95 5149.27 5062.21 5117.12
1/5/96 5259.46 5087.13 5181.43
1/12/96 5239.23 5000.07 5061.12
1/19/96 5214.66 5000.79 5184.68
1/26/96 5293.78 5133.02 5271.75
2/2/96 5442.99 5246.82 5373.99
2/9/96 5603.76 5319.43 5541.62
2/16/96 5644.94 5470.45 5503.32
2/23/96 5693.36 5393.5 5630.49
3/1/96 5647.83 5424.2 5536.56
3/8/96 5700.22 5395.3 5470.45
3/15/96 5662.29 5425.29 5584.97
3/22/96 5755.86 5573.41 5636.64
3/29/96 5712.14 5550.29 5587.14
4/4/96 5737.07 5562.57 5682.88
4/12/96 5644.58 5382.66 5532.59
4/19/96 5656.14 5493.93 5535.48
4/26/96 5621.82 5490.68 5567.99
5/3/96 5619.29 5439.74 5478.03
5/10/96 5559.68 5327.74 5518.14
5/17/96 5729.61 5495.42 5687.5
5/24/96 5833.04 5657.58 5762.86
5/31/96 5798.69 5614.36 5643.18
6/7/96 5750.67 5559.69 5697.11
6/14/96 5747.71 5609.93 5649.45
6/21/96 5722.22 5600.7 5705.23
6/28/96 5770.61 5616.21 5654.63
7/5/96 5769.88 5570.77 5588.14
7/12/96 5628.03 5447.77 5510.56
7/19/96 5527.93 5170.11 5426.82
7/26/96 5503.02 5244.83 5473.06
8/2/96 5703.51 5403.52 5679.83
8/9/96 5754.55 5630.26 5681.31
8/16/96 5746.04 5614.36 5689.45
8/23/96 5761.95 5648.76 5722.74
8/30/96 5747.89 5571.45 5616.21
9/6/96 5696.48 5550.37 5659.86
9/13/96 5871.44 5662.08 5838.52
9/20/96 5929.51 5818.17 5888.46
9/27/96 5952.08 5819.65 5872.92
10/4/96 6023.79 5833.72 5992.86
10/11/96 6032.36 5876.58 5969.38
10/18/96 6119.57 5943.66 6094.23
10/25/96 6162.8 5953.72 6007.02
11/1/96 6082.67 5938.82 6021.93
11/8/96 6247.4 5981.3 6219.82
11/15/96 6414.37 6198.58 6348.03
11/22/96 6498.22 6297.34 6471.76
11/29/96 6606.3 6443.44 6521.7
12/6/96 6577.23 6274.24 6381.94
12/13/96 6545.56 6227.59 6304.87
12/20/96 6597.43 6206.83 6484.4
12/27/96 6607.81 6428.27 6560.91
1/3/97 6623.96 6318.96 6544.09
1/10/97 6725.35 6481.75 6703.79
1/17/97 6863.88 6647.99 6833.1
1/24/97 6953.55 6629.91 6696.48
1/31/97 6912.37 6598.73 6813.09
2/7/97 6913.14 6683.4 6855.8
2/14/97 7074.77 6756.9 6988.96
2/21/97 7112.87 6869.27 6931.62
2/28/97 7099.79 6820.78 6877.74
3/7/97 7047.07 6798.46 7000.89
3/14/97 7158.28 6851.19 6935.46
3/21/97 7004.2 6742.85 6804.79
3/27/97 6984.94 6654.86 6740.59
4/4/97 6743.23 6376.9 6526.07
4/11/97 6662.41 6358.42 6391.69
4/18/97 6750.91 6315.84 6703.55
4/25/97 6923.9 6594.38 6738.87
5/2/97 7104.51 6691.51 7071.2
5/9/97 7299.98 7029.46 7169.53
5/16/97 7381.76 7156.35 7194.67
5/23/97 7385.47 7123.38 7345.91
5/30/97 7430.2 7203.99 7331.04
6/6/97 7473.98 7214.29 7435.78
6/13/97 7829.08 7412.44 7782.04
6/20/97 7868.44 7651.3 7796.51
6/27/97 7832.48 7581.64 7687.72
7/3/97 7952.35 7571.46 7895.81
7/11/97 8027.67 7775.48 7921.82
7/18/97 8136.67 7829.61 7890.46
7/25/97 8200.31 7783.85 8113.44
8/1/97 8328.99 8049.34 8194.04
8/8/97 8340.14 7961.07 8031.22
8/15/97 8132.49 7685.74 7694.66
8/22/97 8043.06 7588.28 7887.91
8/29/97 7944.12 7580.85 7622.42
9/5/97 7972.22 7650.99 7822.41
9/12/97 7922.05 7556.23 7742.96
9/19/97 8049.36 7680.95 7917.27
9/26/97 8078.36 7802.34 7922.18
10/3/97 8183.22 7862.99 8038.57
10/10/97 8218.34 7961.96 8045.21
10/17/97 8168.24 7731.12 7847.03
10/24/97 8124.78 7645.91 7715.41
10/31/97 7717.37 6936.45 7442.08
11/7/97 7791.78 7460.99 7581.32
11/14/97 7687.9 7334.77 7572.48
11/21/97 7934.53 7599.5 7881.07
11/28/97 7893.5 7706 7823.13
12/5/97 8209.56 7823.62 8149.13
12/12/97 8195.88 7756.73 7838.3
12/19/97 8069.06 7563.23 7756.29
12/26/97 7892.05 7624.26 7679.31
1/2/98 8001.41 7712.94 7965.04
1/9/98 8072.91 7513.41 7580.42
1/16/98 7846.47 7391.59 7753.55
1/23/98 7908 7609.31 7700.74
1/30/98 8062.94 7629.99 7906.5
2/6/98 8255.26 7987.46 8189.48
2/13/98 8416.43 8104.55 8370.1
2/20/98 8503.12 8291.88 8413.94
2/27/98 8616.72 8303.83 8545.72
3/6/98 8649.35 8377.32 8569.39
3/13/98 8740.52 8482.45 8602.52
3/20/98 8957.25 8573.37 8906.43
3/27/98 8997.11 8741.77 8796.08
4/3/98 9085.79 8701.66 8983.41
4/9/98 9170.74 8821.73 8994.86
4/17/98 9249.95 8870.31 9167.5
4/24/98 9287.32 8983.65 9064.62
5/1/98 9211.83 8796.07 9147.07
5/8/98 9311.98 8914.9 9055.15
5/15/98 9283.09 9023.51 9096
5/22/98 9248.96 8972.2 9114.44
5/29/98 9201.63 8760.95 8899.95
6/5/98 9057.39 8719.85 9037.71
6/12/98 9155.04 8660.56 8834.94
6/19/98 8932.34 8524.55 8712.87
6/26/98 9079.56 8639.38 8944.54
7/2/98 9103.23 8868.57 9025.26
7/10/98 9231.27 8965.97 9105.74
7/17/98 9412.64 9073.3 9337.97
7/24/98 9408.26 8814.29 8937.36
7/31/98 9113.2 8786.48 8883.29
8/7/98 8948.17 8316.1 8598.02
8/14/98 8689.16 8263.32 8425
8/21/98 8797.81 8307.6 8533.65
8/28/98 8740.91 7951.27 8051.68
9/4/98 8149 7379.7 7640.25
9/11/98 8103.69 7469.04 7795.5
9/18/98 8159.3 7759.97 7895.66
9/25/98 8227.53 7653.64 8028.77
10/2/98 8253.79 7496.84 7784.69
10/9/98 7976.76 7399.78 7899.52
10/16/98 8521.29 7805.29 8416.76
10/23/98 8713.62 8321.5 8452.29
10/30/98 8718.25 8271.55 8592.1
11/6/98 9042.4 8573.56 8975.46
11/13/98 9024.89 8733.7 8919.59
11/20/98 9161.35 8870.42 9159.55
11/27/98 9457.95 9137.92 9333.08
12/4/98 9348.53 8839.78 9016.14
12/11/98 9153.62 8680.41 8821.76
12/18/98 8959.76 8610.62 8903.62
12/24/98 9289.57 8874.28 9217.98
12/31/98 9390.75 9106.76 9181.42
1/8/99 9759.44 9089 9643.32
1/15/99 9751.46 9052.44 9340.55
1/22/99 9555.01 8998.89 9120.67
1/29/99 9461.03 8994.26 9358.82
2/5/99 9513.05 9141.26 9304.23
2/12/99 9437.35 9025.41 9274.89
2/19/99 9458.46 9124.03 9339.95
2/26/99 9662.76 9177.53 9306.57
3/5/99 9799.92 9163.41 9736.07
3/12/99 10042.57 9586.07 9876.35
3/19/99 10158.57 9776.17 9903.55
3/26/99 10005.94 9547.23 9822.23
4/1/99 10089.48 9708.19 9832.51
4/9/99 10298.71 9826.39 10173.84
4/16/99 10692.48 10042.02 10493.89
4/23/99 10896.42 10212.87 10689.67
4/30/99 11072.25 10540.46 10789.03
5/7/99 11140.12 10701.12 11031.59
5/14/99 11244.35 10759.53 10913.32
5/21/99 9999.99 9999.99 9999.99
5/28/99 10924.26 10372.96 10559.73
6/4/99 10892.6 10334.42 10799.84
6/11/99 11016.39 10386.98 10490.51
6/18/99 10978.09 10414.52 10855.55
6/25/99 10960.35 10404.07 10552.55
7/2/99 11205.41 10535.14 11139.23
7/9/99 11291.21 10985.67 11193.69
7/16/99 11314.64 11013.55 11209.83
7/23/99 11321.6 10796.57 10910.96
7/30/99 11090.48 10594.98 10655.14
8/6/99 10901.78 10509.19 10714.03
8/13/99 11049.64 10487.33 10973.64
8/20/99 11180.07 10809.64 11100.6
PORTFOLIOS OF INVESTMENTS
June 30, 1999
THE PRIMARY TREND FUND
<TABLE>
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCKS 82.7%
10,000 Aetna, Inc. (Managed care/Insurance) $ 770,304 $ 894,375
10,000 Albertson's, Inc. (Retail food stores) 371,000 515,625
15,000 Allstate Corporation (Insurance) 582,640 538,125
30,000 Archer-Daniels-Midland Co. (Food processing) 503,293 463,125
7,939 BP Amoco plc ADR (Integrated oil company) 325,909 861,382
5,000 Boeing Company (Aerospace) 186,025 220,937
22,000 CBS Corporation*<F1> (Multimedia) 539,129 955,625
10,000 Chubb Corporation (Insurance) 545,550 695,000
10,000 Compaq Computer Corporation (Computer hardware) 240,700 236,875
21,000 Crown Cork & Seal Co., Inc. (Packaging products) 672,944 598,500
30,000 Darden Restaurants, Inc. (Restaurant chains) 298,703 654,375
12,000 Eastman Kodak Company (Photographic equipment) 536,365 813,000
25,000 Enron Oil & Gas Company
(Domestic oil and gas exploration and production) 671,500 506,250
15,000 GreenPoint Financial Corp. (Financial services) 216,550 492,188
10,000 Louisiana-Pacific Corporation (Building materials) 178,300 237,500
8,000 Minnesota Mining & Manufacturing Co.
(Diversified manufacturing) 571,313 695,500
13,000 Mylan Laboratories, Inc. (Pharmaceutical products) 209,567 344,500
8,000 Newmont Mining Corporation (Gold mining) 195,830 159,000
25,000 Occidental Petroleum Corporation (Integrated oil company) 467,085 528,125
10,000 PNC Bank Corporation (Financial services) 499,550 576,250
10,000 PartnerRe Ltd. ADR (Insurance) 332,975 373,750
10,000 J.C. Penney Company, Inc. (Retail stores) 436,225 485,625
15,000 Pennzoil-Quaker State Co. (Automotive consumer products) 376,201 225,000
5,000 Phelps Dodge Corporation (Copper mining) 241,287 309,687
20,000 Philip Morris Companies, Inc. (Tobacco) 748,775 803,750
10,000 SLM Holding Corporation (Financial services) 126,155 458,125
20,000 Seagram Company Ltd. (Entertainment/Beverages) 681,315 1,007,500
22,000 UST, Inc. (Tobacco) 615,875 643,500
40,000 Union Pacific Resources Group Inc.
(Domestic oil and gas exploration and production) 756,038 652,500
5,580 United Technologies Corp. (Aerospace) 231,525 400,016
22,000 Wendy's International, Inc. (Restaurant chain) 493,848 622,875
43,200 Western Gas Resources, Inc.
(Natural gas gathering, transportation and marketing) 792,582 691,200
----------- -----------
Total Common Stocks 14,415,058 17,659,785
----------- -----------
PREFERRED STOCK 0.6%
5,000 WEC Capital Trust I 6.85% 125,000 115,938
----------- -----------
BONDS AND NOTES 6.9%
$150,000 Kimco Realty Corp., 6.83%, due 11/14/05 144,859 141,083
365,000 Federal Home Loan Bank, 6.35%, due 8/28/08 365,000 351,013
500,000 Federal National Mortgage Assoc., 6.42%, due 3/9/09 500,000 483,180
500,000 Federal Home Loan Mortgage Co., 7.00%, due 6/30/09 500,000 500,000
----------- -----------
Total Bonds and Notes 1,509,859 1,475,276
----------- -----------
Total Long-Term Investments 16,049,917 19,250,999
----------- -----------
SHORT-TERM INVESTMENTS 8.2%
VARIABLE RATE DEMAND NOTES
220,630 Firstar Bank, 4.59% 220,630 220,630
373,653 General Mills, Inc., 4.52% 373,653 373,653
219,695 Pitney Bowes Credit Corp., 4.52% 219,695 219,695
12,193 Sara Lee Corp., 4.52% 12,193 12,193
13,961 Warner-Lambert, Inc., 4.53% 13,961 13,961
251,413 Wisconsin Corporate Central Credit Union, 4.67% 251,413 251,413
661,859 Wisconsin Electric Power Co., 4.67% 661,859 661,859
----------- -----------
Total Variable Rate Demand Notes 1,753,404 1,753,404
----------- -----------
TOTAL INVESTMENTS 98.4% $17,803,321 21,004,403
-----------
-----------
Other Assets, less Liabilities 1.6% 346,496
-----------
Net Assets (equivalent to $12.64 per share based on
1,688,631 shares outstanding) 100.0% $21,350,899
-----------
-----------
</TABLE>
*<F1> Non-income producing security
See notes to financial statements.
THE PRIMARY INCOME FUND
<TABLE>
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- --------- ---------
<S> <C> <C> <C>
COMMON STOCKS 67.3%
1,500 Aetna, Inc. (Managed care/Insurance) $ 117,377 $ 134,156
1,500 Albertson's, Inc. (Retail food stores) 55,650 77,344
2,000 Alliant Energy Corporation (Electric and gas utility) 61,700 56,750
3,000 Allstate Corporation (Insurance) 116,528 107,625
1,637 Apartment Investment & Management Co.
(Real estate investment trust) 23,363 69,982
7,000 Archer-Daniels-Midland Co. (Food processing) 116,328 108,062
1,323 BP Amoco plc ADR (Integrated oil company) 55,706 143,546
2,000 Chubb Corporation (Insurance) 108,910 139,000
2,000 CINergy Corp. (Electric utility) 39,641 64,000
2,000 Consolidated Natural Gas Co. (Integrated natural gas systems) 87,325 121,500
3,000 Crown Cork & Seal Co., Inc. (Packaging products) 92,928 85,500
4,500 DPL, Inc. (Electric and gas utility) 45,124 82,688
1,000 Eastman Kodak Company (Photographic equipment) 69,100 67,750
2,000 GTE Corporation (Telephone utility) 62,995 151,375
2,000 Kellogg Company (Cereal products) 67,950 66,000
4,000 KeySpan Energy (Natural gas utility) 99,715 105,500
1,500 Minnesota Mining & Manufacturing Co.
(Diversified manufacturing) 107,121 130,406
4,000 Northern States Power Company (Electric utility) 74,513 96,750
4,000 Occidental Petroleum Corporation (Integrated oil company) 87,705 84,500
2,000 PNC Bank Corporation (Financial services) 99,660 115,250
2,000 J.C. Penney Company, Inc. (Retail stores) 87,073 97,125
1,500 Pennzoil-Quaker State Co. (Automotive consumer products) 35,227 22,500
2,000 Philip Morris Companies, INC. (Tobacco) 80,200 80,375
2,500 Seagram Company Ltd. (Entertainment/Beverages) 86,343 125,938
4,511 Sempra Energy (Natural gas utility) 70,329 102,061
2,000 Simon Property Group Inc. (Real estate investment trust) 39,144 50,750
4,000 UST, Inc. (Tobacco) 111,240 117,000
5,200 Union Pacific Resources Group Inc.
(Domestic oil and gas exploration and production) 110,510 84,825
4,000 Wendy's International, Inc. (Restaurant chain) 91,476 113,250
3,000 Wisconsin Energy Corporation (Electric and gas utility) 73,280 75,187
---------- ----------
Total Common Stocks 2,374,161 2,876,695
---------- ----------
PREFERRED STOCKS 12.3%
1,000 Central Maine Power $3.50 55,250 53,500
2,000 Conseco Financing Trust $3.50 Series F convertible 77,256 80,375
4,000 Conseco Financing Trust $2.175 100,000 100,250
2,000 MCN Energy Group 8.00% convertible 79,425 78,250
5,000 Tennessee Valley Authority 6.50% Series A 125,000 118,750
4,000 WEC Capital Trust I 6.85% 100,000 92,750
---------- ----------
Total Preferred Stocks 536,931 523,875
---------- ----------
BONDS AND NOTES 17.2%
CONVERTIBLE DEBENTURE
$ 50,000 Couer d'Alene Mines Corp., 6.375%, due 1/31/04 46,681 31,375
---------- ----------
CORPORATE NOTES
100,000 Developers Diversified Realty Corp., 7.01%, due 2/7/03 98,301 99,368
99,000 Philadelphia Electric Co., 6.625%, due 3/1/03 101,008 99,036
50,000 Peoples Gas Light Co., 6.37%, due 5/1/03 50,771 50,061
50,000 Northern Illinois Gas Co., 5.75%, due 6/1/03 49,767 48,923
100,000 Wisconsin Gas Company, 6.375%, due 11/1/05 100,841 99,450
100,000 Kimco Realty Corp., 6.83%, due 11/14/05 96,572 94,055
---------- ----------
Total Corporate Notes 497,260 490,893
---------- ----------
U.S. GOVERNMENT AGENCY NOTES
50,000 Federal Home Loan Bank, 7.01%, due 8/20/07 50,000 50,038
70,000 Federal Home Loan Bank, 6.35%, due 8/28/08 70,000 67,317
100,000 Federal National Mortgage Assoc., 6.42%, due 3/9/09 100,000 96,636
---------- ----------
Total U.S. Government Agency Notes 220,000 213,991
---------- ----------
Total Bonds and Notes 763,941 736,259
---------- ----------
Total Long-Term Investments 3,675,033 4,136,829
---------- ----------
SHORT-TERM INVESTMENTS 3.2%
VARIABLE RATE DEMAND NOTES
23,809 Firstar Bank, 4.59% 23,809 23,809
82,140 General Mills, Inc., 4.52% 82,140 82,140
32,040 Wisconsin Corporate Central Credit Union, 4.67% 32,040 32,040
---------- ----------
Total Variable Rate Demand Notes 137,989 137,989
---------- ----------
TOTAL INVESTMENTS 100.0% $3,813,022 4,274,818
----------
----------
Other Assets, less Liabilities 0.0% 750
----------
NET ASSETS (Equivalent to $12.24 per share based on
349,188 shares outstanding) 100.0% $4,275,568
----------
----------
Note to Portfolio of Investments -- As required by the Fund's investment policies, the
Fund has invested $1,496,531 (35% of its net assets) in securities issued by utilities.
</TABLE>
See notes to financial statements.
THE PRIMARY U.S. GOVERNMENT FUND
<TABLE>
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- -------- --------
<S> <C> <C> <C>
BONDS AND NOTES 71.0%
U.S. GOVERNMENT AGENCY NOTES
$ 50,000 Federal National Mortgage Association,
6.59%, due 7/15/02 $ 50,281 $ 50,001
100,000 Federal Home Loan Bank, 5.84%, due 3/5/03 100,000 98,983
100,000 Federal National Mortgage Association, 8.50%, due 2/1/05 99,531 101,702
50,000 Federal Home Loan Bank, 7.01%, due 8/20/07 50,000 50,038
25,000 Federal Home Loan Bank, 6.35%, due 8/28/08 25,000 24,042
100,000 Federal National Mortgage Association, 6.42%, due 3/9/09 100,000 96,636
50,000 Federal Home Loan Mortgage Co., 7.00%, due 6/30/09 50,000 50,000
-------- --------
Total U.S. Government Agency Notes 474,812 471,402
-------- --------
CORPORATE NOTES
25,000 Norwest Financial, 6.375%, due 11/15/01 25,504 25,070
50,000 Northern Illinois Gas, 5.75%, due 6/1/03 49,767 48,923
-------- --------
Total Corporate Notes 75,271 73,993
-------- --------
Total Bonds and Notes 550,083 545,395
-------- --------
SHORT-TERM INVESTMENTS 26.6%
VARIABLE RATE DEMAND NOTES
1,578 General Mills, Inc., 4.52% 1,578 1,578
26,832 Pitney Bowes Credit Corp., 4.52% 26,832 26,832
279 Wisconsin Electric Power Co., 4.67% 279 279
-------- --------
Total Variable Rate Demand Notes 28,689 28,689
-------- --------
U.S. GOVERNMENT AGENCY NOTE
100,000 Federal Farm Credit Bank, 6.49%, due 1/20/00 100,345 100,565
-------- --------
U.S. TREASURY NOTE
75,000 U.S. Treasury note, 6.375%, due 7/15/99 74,860 75,070
-------- --------
Total Short-Term Investments 203,894 204,324
-------- --------
TOTAL INVESTMENTS 97.6% $753,977 749,719
--------
--------
Other Assets, less Liabilities 2.4% 18,225
--------
NET ASSETS (Equivalent to $9.79 per share
based on 78,458 shares outstanding) 100.0% $767,944
--------
--------
</TABLE>
See notes to financial statements.
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
THE PRIMARY
THE PRIMARY THE PRIMARY U.S. GOVERNMENT
TREND FUND INCOME FUND FUND
----------- ----------- ---------------
<S> <C> <C> <C>
Assets:
Investments, at Value (Note 2a):
Common Stocks $17,659,785 $2,876,695 $ --
Preferred Stocks 115,938 523,875 --
Bonds and Notes 1,475,276 736,259 545,395
Short-Term Investments 1,753,404 137,989 204,324
----------- ---------- --------
Total Investments (Cost $17,803,321; 3,813,022
and 753,977, respectively) 21,004,403 4,274,818 749,719
Receivable for Investments Sold 307,765 -- --
Dividends Receivable 32,560 7,244 --
Interest Receivable 27,451 13,335 16,566
Prepaid Expenses 2,958 1,843 419
Cash 275 238 --
Due from Adviser -- -- 5,411
----------- ---------- --------
Total Assets 21,375,412 4,297,478 772,115
----------- ---------- --------
Liabilities
Accrued Investment Advisory Fees 13,017 15,972 --
Other 11,496 5,938 4,171
----------- ---------- --------
Total Liabilities 24,513 21,910 4,171
----------- ---------- --------
Net Assets $21,350,899 $4,275,568 $767,944
----------- ---------- --------
----------- ---------- --------
Shares Outstanding 1,688,631 349,188 78,458
Net Asset Value Per Share $ 12.64 $ 12.24 $ 9.79
----------- ---------- --------
----------- ---------- --------
Net Assets Consist of:
Capital Stock (30,000,000 shares authorized each) $17,004,486 $3,729,504 $803,975
Net Unrealized Appreciation (Depreciation)
of Investments 3,201,082 461,796 (4,258)
Undistributed Net Investment Income 156,007 85 230
Undistributed Net Realized Gains
(Accumulated Losses) 989,324 84,183 (32,003)
----------- ---------- --------
Net Assets $21,350,899 $4,275,568 $767,944
----------- ---------- --------
----------- ---------- --------
</TABLE>
See notes to financial statements.
STATEMENTS OF OPERATIONS
For the year ended June 30, 1999
<TABLE>
THE PRIMARY
THE PRIMARY THE PRIMARY U.S. GOVERNMENT
TREND FUND INCOME FUND FUND
------------ ----------- ---------------
<S> <C> <C> <C>
Income:
Interest $ 243,326 $ 62,284 $47,377
Dividends 347,225(a)<F2> 129,894(b)<F3> --
---------- -------- -------
Total Income 590,551 192,178 47,377
---------- -------- -------
Expenses:
Investment Advisory Fees (Note 3) 156,169 31,894 5,022
Administration and Accounting Fees 36,776 27,821 16,416
Shareholder Servicing Costs 29,061 11,329 9,400
Professional Fees 20,680 11,544 10,329
Registration Fees 5,900 3,000 2,550
Custodial Fees 5,569 2,158 918
Postage 4,989 857 287
Printing 3,980 1,252 360
Insurance 2,324 473 86
Other 3,216 1,075 772
---------- -------- -------
Total Expenses Before Reimbursement 268,664 91,403 46,140
Less Expenses Reimbursed By Adviser (Note 3) -- (48,302) (38,413)
---------- -------- -------
Net Expenses 268,664 43,101 7,727
---------- -------- -------
Net Investment Income 321,887 149,077 39,650
---------- -------- -------
Net Realized Gain (Loss) on Investments 1,426,084 168,129 (324)
Change in Net Unrealized Appreciation
(Depreciation) of Investments (968,823) (202,840) (10,318)
---------- -------- -------
Net Realized and Unrealized Gain (Loss) on Investments 457,261 (34,711) (10,642)
---------- -------- -------
Net Increase in Net Assets From Operations $ 779,148 $114,366 $29,008
---------- -------- -------
---------- -------- -------
</TABLE>
(a)<F2> Net of $3,452 in foreign withholding taxes.
(b)<F3> Net of $505 in foreign withholding taxes.
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 1999 and 1998
<TABLE>
THE PRIMARY
THE PRIMARY THE PRIMARY U.S. GOVERNMENT
TREND FUND INCOME FUND FUND
------------------------- ----------------------- ---------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income $ 321,887 $ 216,633 $ 149,077 $ 148,954 $ 39,650 $ 42,090
Net Realized Gain (Loss)
on Investments 1,426,084 3,350,856 168,129 543,724 (324) 538
Change in Net Unrealized
Appreciation (Depreciation)
of Investments (968,823) (572,297) (202,840) (59,402) (10,318) 2,339
----------- ----------- ---------- ---------- -------- --------
Net Increase in Net
Assets from Operations 779,148 2,995,192 114,366 633,276 29,008 44,967
----------- ----------- ---------- ---------- -------- --------
Distributions to Shareholders:
From Net Investment Income (285,475) (96,448) (152,497) (145,449) (39,642) (41,868)
From Net Realized Gain (2,700,933) (4,024,201) (484,432) (642,742) -- --
----------- ----------- ---------- ---------- -------- --------
Decrease in Net Assets from
Distributions (2,986,408) (4,120,649) (636,929) (788,191) (39,642) (41,868)
----------- ----------- ---------- ---------- -------- --------
Fund Share Transactions:
Proceeds from Shares Sold 391,965 667,691 192,540 199,259 89,102 69,909
Reinvested Distributions 2,830,285 3,955,376 620,704 754,261 32,951 31,786
Cost of Shares Redeemed (3,377,896) (2,989,448) (587,162) (533,135) (117,429) (65,041)
----------- ----------- ---------- ---------- -------- --------
Net Increase (Decrease) in
Net Assets from Fund
Share Transactions (155,646) 1,633,619 226,082 420,385 4,624 36,654
----------- ----------- ---------- ---------- -------- --------
Total Increase (Decrease) in
Net Assets (2,362,906) 508,162 (296,481) 265,470 (6,010) 39,753
----------- ----------- ---------- ---------- -------- --------
Net Assets:
Beginning of Year 23,713,805 23,205,643 4,572,049 4,306,579 773,954 734,201
----------- ----------- ---------- ---------- -------- --------
End of Year $21,350,899 $23,713,805 $4,275,568 $4,572,049 $767,944 $773,954
----------- ----------- ---------- ---------- -------- --------
----------- ----------- ---------- ---------- -------- --------
Undistributed Net Investment
Income at End of Year $ 156,007 $ 120,185 $ 85 $ 3,505 $ 230 $ 222
----------- ----------- ---------- ---------- -------- --------
----------- ----------- ---------- ---------- -------- --------
Transactions in Shares:
Sales 33,413 47,010 16,049 14,295 8,927 7,013
Reinvested Distributions 247,034 295,431 51,871 55,430 3,319 3,203
Redemptions (288,054) (212,540) (48,685) (37,768) (11,758) (6,548)
----------- ----------- ---------- ---------- -------- --------
Net Increase (Decrease) (7,607) 129,901 19,235 31,957 488 3,668
----------- ----------- ---------- ---------- -------- --------
----------- ----------- ---------- ---------- -------- --------
</TABLE>
See notes to financial statements.
FINANCIAL HIGHLIGHTS
The following table shows per share operating performance data, total investment
return, ratios and supplemental data for each of the years ended June 30:
<TABLE>
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
THE PRIMARY TREND FUND
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Year $ 13.98 $ 14.82 $ 12.59 $ 12.10 $ 10.98
------- ------- ------- ------- -------
Net Investment Income 0.19 0.13 0.12 0.21 0.23
Net Realized and Unrealized Gain on Investments 0.23 1.60 2.98 1.30 1.55
------- ------- ------- ------- -------
Total from Investment Operations 0.42 1.73 3.10 1.51 1.78
------- ------- ------- ------- -------
Less Distributions:
From Net Investment Income (0.16) (0.06) (0.14) (0.23) (0.26)
From Net Realized Gain (1.60) (2.51) (0.73) (0.79) (0.40)
------- ------- ------- ------- -------
Total Distributions (1.76) (2.57) (0.87) (1.02) (0.66)
------- ------- ------- ------- -------
Net Increase (Decrease) (1.34) (0.84) 2.23 0.49 1.12
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 12.64 $ 13.98 $ 14.82 $ 12.59 $ 12.10
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN +4.7% +13.1% +26.2% +11.7% +17.0%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Year (in thousands) $21,351 $23,714 $23,206 $21,123 $21,343
Ratio of Net Expenses to Average Net Assets 1.27% 1.24% 1.18% 1.19% 1.24%
Ratio of Net Investment Income to Average Net Assets 1.53% 0.89% 0.82% 1.68% 1.88%
Portfolio Turnover 47.9% 24.4% 63.5% 46.5% 37.1%
THE PRIMARY INCOME FUND
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Year $ 13.86 $ 14.45 $ 12.77 $ 12.07 $ 11.04
------- ------- ------- ------- -------
Net Investment Income 0.42 0.45 0.42 0.43 0.50
Net Realized and Unrealized Gain (Loss) on Investments (0.14) 1.50 2.44 1.28 1.10
------- ------- ------- ------- -------
Total from Investment Operations 0.28 1.95 2.86 1.71 1.60
------- ------- ------- ------- -------
Less Distributions:
From Net Investment Income (0.43) (0.44) (0.42) (0.43) (0.50)
From Net Realized Gain (1.47) (2.10) (0.76) (0.58) (0.07)
------- ------- ------- ------- -------
Total Distributions (1.90) (2.54) (1.18) (1.01) (0.57)
------- ------- ------- ------- -------
Net Increase (Decrease) (1.62) (0.59) 1.68 0.70 1.03
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 12.24 $ 13.86 $ 14.45 $ 12.77 $ 12.07
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN +3.0% +14.7% +24.1% +14.8% +14.8%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Year (in thousands) $ 4,276 $ 4,572 $ 4,307 $ 4,510 $ 4,221
Ratio of Net Expenses to Average Net Assets 1.00% 0.97% 0.84% 0.84% 0.84%
Ratio of Net Investment Income to Average Net Assets 3.46% 3.16% 3.19% 3.43% 4.35%
Ratio of Expenses Reimbursed to Average Net Assets 1.12% 1.05% 0.86% 0.73% 0.76%
Portfolio Turnover 46.9% 33.5% 48.4% 41.5% 40.9%
THE PRIMARY U.S. GOVERNMENT FUND
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Year $ 9.93 $ 9.88 $ 9.87 $10.09 $ 9.74
------- ------- ------- ------- -------
Net Investment Income 0.51 0.55 0.63 0.63 0.57
Net Realized and Unrealized Gain (Loss) on Investments (0.14) 0.05 0.01 (0.22) 0.38
------- ------- ------- ------- -------
Total from Investment Operations 0.37 0.60 0.64 0.41 0.95
------- ------- ------- ------- -------
Less Distributions:
From Net Investment Income (0.51) (0.55) (0.63) (0.63) (0.57)
From Net Realized Gain -- -- -- -- (0.03)
------- ------- ------- ------- -------
Total Distributions (0.51) (0.55) (0.63) (0.63) (0.60)
------- ------- ------- ------- -------
Net Increase (Decrease) (0.14) 0.05 0.01 (0.22) 0.35
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 9.79 $ 9.93 $ 9.88 $ 9.87 $10.09
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN +3.8% +6.2% +6.7% +4.1% +10.2%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Year (in thousands) $ 768 $ 774 $ 734 $ 799 $ 1,345
Ratio of Net Expenses to Average Net Assets 1.00% 0.95% 0.75% 0.75% 0.75%
Ratio of Net Investment Income to Average Net Assets 5.13% 5.55% 6.41% 6.24% 5.85%
Ratio of Expenses Reimbursed to Average Net Assets 4.97% 5.09% 3.84% 2.20% 1.92%
Portfolio Turnover 21.3% 62.6% 29.3% 46.6% 63.0%
</TABLE>
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
1. ORGANIZATION
The Primary Trend Fund, Inc. ("Trend Fund"), a growth and income fund, began
operations on September 15, 1986. The Primary Income Funds, Inc. ("Income
Funds") began operations on September 1, 1989. The Trend Fund and the Income
Funds, collectively, the "Funds," are registered under the Investment
Company Act of 1940 as open-end investment management companies. The Income
Funds is a "series" fund which consists of two portfolios: The Primary
Income Fund ("Income Fund") and The Primary U.S. Government Fund
("Government Fund").
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds:
a. Each security, excluding securities with 60 days or less remaining to
maturity, is valued at the last sale price, or if no sale is reported,
the average of the latest bid and asked prices. Other securities for
which market quotations are not readily available are valued under
procedures approved by the Boards of Directors. Securities with 60 days
or less remaining to maturity are valued at amortized cost, which
approximates market value.
b. Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded as earned,
and includes amortization of premiums and discounts. Securities gains and
losses are determined on the basis of identified cost, which is the same
basis used for federal income tax purposes.
c. No provision for federal income taxes has been made since the Funds have
elected to be taxed as regulated investment companies and intend to
distribute their net investment income and net realized gains to
shareholders and otherwise comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The cost basis
of investments for federal income tax purposes is the same as that for
financial statement purposes. The Government Fund's accumulated net
realized loss on sales of investments for federal income tax purposes at
June 30, 1999, is $31,679. This loss carryover is available to offset
future taxable gains in the Government Fund and, if not applied, $28,714
will expire in 2003 and $2,965 will expire in 2005.
d. Dividends from net investment income are declared and paid at least
annually by the Trend Fund and are declared and paid monthly by the
Income Fund and the Government Fund. Distributions of net realized
capital gains, if any, are declared and paid at least annually.
Distributions to shareholders are recorded on the ex-dividend date. The
character of distributions made during the year from net investment
income or net realized gains may differ from the characterization for
federal income tax purposes due to differences in the recognition of
income, expense and gain items for financial statement and tax purposes.
Where appropriate, reclassification between net asset accounts are made
for such differences. Accordingly, at June 30, 1999, a reclassification
was made to increase undistributed net realized gains and to decrease
undistributed net investment income by $590 for the Trend Fund.
e. 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 at
the date of the financial statements and the reported amounts of income
and expenses during the reporting period. Actual results could differ
from those estimates.
3. INVESTMENT ADVISORY FEES AND MANAGEMENT AGREEMENTS
The Funds have agreements with Arnold Investment Counsel, Inc. (the
"Adviser"), with whom certain officers and directors of the Funds are
affiliated, to serve as investment adviser. Under the terms of the
agreements, the Adviser receives from both the Trend Fund and the Income
Fund a monthly fee at an annual rate of 0.74% of their respective average
daily net assets; and from the Government Fund a monthly fee at an annual
rate of 0.65% of its average daily net assets. The agreements further
stipulate that the Adviser will reimburse the Funds for annual expenses
exceeding certain specified levels. In addition to the reimbursements
required under the agreements, the Adviser has voluntarily reimbursed the
Income Fund and the Government Fund for additional expenses incurred during
the year ended June 30, 1999. As of June 30, 1999, the Adviser was
reimbursing the Income Fund and the Government Fund for all expenses
exceeding 1.00% of their respective average daily net assets. These
additional voluntary reimbursements to the Funds may be modified or
discontinued at any time by the Adviser. The Adviser was not required to
reimburse the Trend Fund for the year ended June 30, 1999. For the year
ended June 30, 1999, the Funds incurred investment advisory fees, net of
expense reimbursements, totalling $106,370. The Trend Fund paid total
directors fees of $1,000 to its outside directors and the Income Funds paid
total directors fees of $1,000 to its outside directors during the year
ended June 30, 1999.
4. PURCHASES AND SALES OF SECURITIES
Total purchases and sales of securities, other than short-term investments,
for the Funds for the year ended June 30, 1999, were as follows:
THE PRIMARY
THE PRIMARY THE PRIMARY U.S. GOVERNMENT
TREND FUND INCOME FUND FUND
----------- ----------- ---------------
Purchases
U.S. Government $1,365,000 $ 170,000 $175,000
Other 6,895,289 1,783,889 51,313
Sales
U.S. Government -- 50,000 125,000
Other 8,934,259 1,824,924 25,063
For the year ended June 30, 1999, 86.3% and 79.2% of dividends paid from net
investment income, including short-term capital gains, qualified for the
dividends received deduction available to corporate shareholders of the
Trend Fund and Income Fund, respectively.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders,
The Primary Trend Fund, Inc.
The Primary Income Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of The Primary Trend Fund, Inc. and The
Primary Income Funds, Inc. (comprised of The Primary Income Fund and The Primary
U.S. Government Fund) as of June 30, 1999, and the related statements of
operations for the year then ended and changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 confirmation of securities owned as of June
30, 1999, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, 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 positions of The
Primary Trend Fund, Inc. and The Primary Income Funds, Inc. at June 30, 1999,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and their
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
July 23, 1999
FUND PERFORMANCE COMPARISON
FUND'S TOTAL RETURN PERFORMANCE
- --------------------------------------------------
1999 Year to Date +10.9%
12 Months Ended June 30, 1999 + 4.7%
5 Years (Annualized) +14.7%
10 Years (Annualized) +9.62%
Annualized Since Inception (9/15/86) +10.1%
Initial Investment of $10,000 on 9/30/86
Value as of 6/30/99
S&P 500 Composite $84,400
Primary Trend Fund $33,752
PRIMARY TREND FUND S&P 500 COMPOSITE
9/15/86 10000.00 10000.00
12/31/86 9940.15 10562.09
3/31/87 11009.23 12806.73
6/30/87 11504.58 13449.73
9/30/87 11774.46 14337.72
12/31/87 10301.89 11109.38
3/31/88 11607.94 11740.24
6/30/88 12152.02 12521.82
9/30/88 11815.32 12563.88
12/31/88 12194.64 12947.87
3/31/89 12958.08 13864.06
6/30/89 13471.28 15095.34
9/30/89 13728.98 16708.09
12/31/89 13280.64 17050.24
3/31/90 13338.30 16526.43
6/30/90 13281.72 17556.32
9/30/90 12215.54 15152.88
12/31/90 13052.61 16525.45
3/31/91 14803.96 18924.43
6/30/91 14701.49 18881.18
9/30/91 15501.53 19891.55
12/31/91 15603.23 21558.88
3/31/92 15506.10 21012.92
6/30/92 15766.31 21410.73
9/30/92 16033.68 22085.03
12/31/92 15635.34 23195.40
3/31/93 16593.21 24208.59
6/30/93 17049.47 24323.81
9/30/93 17265.82 24951.08
12/31/93 17419.16 25530.86
3/31/94 16908.22 24563.70
6/30/94 17001.07 24666.60
9/30/94 17914.60 25870.42
12/31/94 17396.33 25866.88
3/31/95 18401.45 28371.48
6/30/95 19900.00 31078.50
9/30/95 20062.04 33545.78
12/31/95 20217.06 35562.39
3/31/96 21922.32 37469.77
6/30/96 22586.54 39145.90
9/30/96 23360.17 40340.39
12/31/96 26276.95 43680.48
3/31/97 25930.92 44855.06
6/30/97 28518.00 52822.00
9/30/97 31356.00 56779.00
12/31/97 31066.00 58409.00
3/31/98 33188.00 66556.00
6/30/98 32242.00 68754.00
9/30/98 28918.00 61915.00
12/31/98 30441.00 75100.00
3/31/99 30788.00 78842.00
6/30/99 33752.00 84400.00
FUND'S TOTAL RETURN PERFORMANCE
- --------------------------------------------------
1999 Year to Date + 3.5%
12 Months Ended June 30, 1999 + 3.0%
5 Years (Annualized) +14.1%
Annualized Since Inception (9/1/89) +11.3%
Initial Investment of $10,000 on 9/1/89
Value as of 6/30/99
S&P 500 Composite $50,280
S&P Utilities Index $30,028
Primary Income Fund $28,733
PRIMARY INCOME FUND S&P 500 COMPOSITE S&P UTILITIES INDEX
9/1/89 10000.00 10000.00 10000.00
9/30/89 10051.00 9959.00 10374.00
12/31/89 10474.76 10165.00 11211.03
3/31/90 10226.95 9859.00 10283.01
6/30/90 10421.22 10469.00 10285.01
9/30/90 9915.58 9039.00 9781.23
12/31/90 10869.61 9849.00 11036.15
3/31/91 11467.60 11280.00 11189.42
6/30/91 11377.55 11254.00 10693.38
9/30/91 12590.33 11856.00 11537.75
12/31/91 13205.91 12850.00 12513.96
3/31/92 12617.35 12526.00 11347.28
6/30/92 13263.20 12764.00 12241.79
9/30/92 13753.22 13166.00 13207.17
12/31/92 13507.97 13829.00 13532.36
3/31/93 14632.48 14433.00 15004.10
6/30/93 14951.12 14504.00 15349.34
9/30/93 15671.30 14878.00 16423.18
12/31/93 15591.35 15223.00 15492.96
3/31/94 14985.09 14646.00 14212.86
6/30/94 14864.52 14707.00 14203.19
9/30/94 15512.73 15426.00 14275.99
12/31/94 15189.85 15424.00 14273.87
3/31/95 16251.81 16925.00 15259.71
6/30/95 17070.58 18541.00 16392.94
9/30/95 17622.29 20014.00 18233.01
12/31/95 18322.15 21220.00 20145.72
3/31/96 19092.45 22358.00 19187.97
6/30/96 19604.75 23362.00 20148.53
9/30/96 20035.27 24084.00 19440.34
12/31/96 22005.00 26091.00 20737.69
3/31/97 22456.01 26791.00 20038.13
6/30/97 24323.00 31468.00 21216.00
9/30/97 26739.00 33825.00 22235.00
12/31/97 27611.00 34796.00 25857.00
3/31/98 28658.00 39650.00 27310.00
6/30/98 27904.00 40959.00 27640.00
9/30/98 26838.00 36885.00 28921.00
12/31/98 27756.00 44740.00 29680.00
3/31/99 26652.00 46969.00 26903.00
6/30/99 28733.00 50280.00 30028.00
Past performance is not predictive of future performance. (You already know
that but we are required to say it anyway.)
FUND'S TOTAL RETURN PERFORMANCE
- --------------------------------------------------
1999 Year to Date +0.8%
12 Months Ended June 30, 1999 +3.8%
5 Years (Annualized) +6.2%
Annualized Since Inception (9/1/89) +6.6%
Initial Investment of $10,000 on 9/1/89
Value as of 6/30/99
Lehman Intermediate U.S. Government Bond Index $20,442
Primary U.S. Government Fund $18,688
PRIMARY U.S. LEHMAN INTERMEDIATE
GOVERNMENT FUND U.S. GOVERNMENT BOND INDEX
9/1/89 10000.00 10000.00
9/30/89 10026.00 10048.00
12/31/89 10336.37 10391.00
3/31/90 10276.34 10377.00
6/30/90 10623.74 10703.00
9/30/90 10581.55 10910.00
12/31/90 11190.57 11384.00
3/31/91 11449.86 11635.00
6/30/91 11525.33 11830.00
9/30/91 12181.27 12392.00
12/31/91 12837.12 12988.00
3/31/92 12519.94 12852.00
6/30/92 12911.74 13350.00
9/30/92 13418.70 13935.00
12/31/92 13293.04 13888.00
3/31/93 13775.18 14408.00
6/30/93 14080.96 14691.00
9/30/93 14465.99 15001.00
12/31/93 14418.84 15025.00
3/31/94 14037.93 14747.00
6/30/94 13841.96 14664.00
9/30/94 13917.69 14776.00
12/31/94 13966.28 14762.00
3/31/95 14600.10 15377.00
6/30/95 15254.17 16096.00
9/30/95 15545.67 16345.00
12/31/95 15924.90 16892.00
3/31/96 15964.28 16776.00
6/30/96 15887.39 16889.00
9/30/96 16196.67 17179.00
12/31/96 16525.06 17576.00
3/31/97 16540.91 17571.00
6/30/97 16954.00 18062.00
9/30/97 17275.00 18524.00
12/31/97 17540.00 18934.00
3/31/98 17740.00 19219.00
6/30/98 18006.00 19574.00
9/30/98 18454.00 20487.00
12/31/98 18547.00 20538.00
3/31/99 18671.00 20482.00
6/30/99 18688.00 20442.00
The Lehman Intermediate U.S. Government Bond Index is an unmanaged index
consisting of all U.S. Treasury and agency bonds having an effective maturity of
not less than one year or more than ten years weighted according to market
capitalization. The Fund believes this index more closely reflects the Fund's
investment strategy, and therefore, is a more appropriate performance comparator
than the Lehman Intermediate Treasury Composite. A hypothetical $10,000
investment in the Lehman Intermediate Treasury Composite on 9/1/89 would have a
value of $21,519 as of 6/30/99. A hypothetical investment at 6/30/98 of $10,000
in the Fund, the Lehman Intermediate U.S. Government Bond Index, and the Lehman
Intermediate Treasury Composite would have values of $10,379,
$10,443, and $11,011, respectively, as of 6/30/99.
Past performance is not predictive of future performance. (You already know
that but we are required to say it anyway.)
(THE PRIMARY TREND FUNDS LOGO)
WWW.PRIMARYTRENDFUNDS.COM
INVESTMENT ADVISER
Arnold Investment Counsel Incorporated
First Financial Centre
700 North Water Street
Milwaukee, Wisconsin 53202
1-800-443-6544
OFFICERS
Lilli Gust, President
Barry S. Arnold, Vice President and Assistant Secretary
James R. Arnold, Jr., Secretary and Treasurer
DIRECTORS
Barry S. Arnold
Lilli Gust
Clark J. Hillery
Harold L. Holtz
ADMINISTRATOR
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
CUSTODIAN
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-968-2122
INDEPENDENT AUDITORS
Ernst & Young LLP
111 East Kilbourn Avenue
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Founding member of
100% NO-LOAD TM MUTUAL FUND COUNCIL
