<PAGE>
Dear Shareholder:
We are pleased to submit the semi-annual report for The Kansas Municipal Fund.
Included with this report is a list of portfolio holdings, along with the
financial statements for the period ended January 31, 1997.
Management Discussion and Analysis:
Moderate economic growth and low inflation during the period allowed municipal
bond prices to advance generally until later in the period. Then bond values
began to move lower as concerns about possible Federal Reserve monetary policy
tightening settled into the market. The adviser employed a protective hedge by
using U.S. Treasury futures in anticipation of lower valuations. This had the
effect of stabilizing share price from erosion during periods when interest
rates were rising and tempering share price increases when interest rates
decreased.
The Kansas Municipal Fund turned in steady performance for the period. Net
asset value per share was $12.14 at the beginning of the period and increased
to $12.30 by January 31, 1997. The adviser continues to invest primarily in
high-grade Kansas tax-exempt bonds. More information on the portfolio makeup
and performance are included on the next page.
Economic Outlook and Municipal Bond Overview:
U.S. economic growth has continued at a moderate pace and inflation has not
been excessive. As 1997 unfolds we anticipate that the Federal Reserve will
remain vigilant and may possibly move to curb inflation by tightening credit.
Tax-exempt bonds should offer reasonable stability and liberal returns in the
months ahead.
We continue to be pleased with the performance of the Fund and would like to
take this opportunity to thank you for your support and look forward to serving
the shareholders of The Kansas Municipal Fund.
Sincerely,
Robert E. Walstad
President
<PAGE>
THE KANSAS MUNICIPAL FUND
January 31, 1997 (Unaudited)
The Kansas Municipal Fund
-------------------------
Performance and Composition
Portfolio Quality Ratings
- -------------------------
[pie chart]
AAA 57.8%
AA 15.6%
A 20.6%
NR 6.0%
(non-rated)
(Based on Total Long-Tern Investments)
Quality ratings reflect the financial strength of the issuer. They are
assigned by independent rating services such as Moody's Investors Service and
Standard & Poor's. Non-rated bonds have been determined to be of appropriate
quality for the portfolio by Ranson Capital Corporation, the investment
advisor.
Key Statistics
- --------------
7-31-96 NAV (share value) $12.14
1-31-97 NAV $12.30
Average Maturity 19.4 yrs.
Average Duration 6.3 yrs.
Number of Issues 133
Total Net Assets $130,903,480
Lipper Ranking
- --------------
1 yr. 5 yr. Since Inception
- -----------------------------------
#8 #8 N/A
- -----------------------------------
Lipper Analytical Services is an independent mutual fund ranking service.
Rankings are based on average annual total returns for the periods ending
1-31-97 for funds in the "Other States Municipal Debt Funds" category. The 1
yr. And 5 yr. Rankings are out of a total of 63 and 11 funds, respectively.
Average Annual Total Returns
- ----------------------------
For periods ending January 31, 1997
- -----------------------------------
Average Annual Total Returns
- -----------------------------------
1 yr. 5 yr. Since Inception
- -----------------------------------
3.86%* 6.74%* 7.18%*
- -----------------------------------
*The 1 yr., 5 yr., and Since Inception returns do not include the effect of the
4.25% maximum Sales Charge. They would have been (0.55%), 5.82%, and 6.44%
respectively, if they had. Returns are historical and are not a guarantee of
future results. The Fund's share price, yields and total returns will vary, so
that shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
Portfolio Market Sectors
- ------------------------
[pie chart]
Insured 50.7%
Housing 15.1%
Healthcare 10.1%
Utilities 7.1%
Other 4.2%
Gen. Obligation 3.9%
Education 3.9%
Transportation 2.7%
Real Estate 2.3%
(As a % of Net Assets)
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
Portfolio Manager's Comments
- ----------------------------
Moderate economic growth and low inflation in 1996 led to a good year for The
Kansas Municipal Fund. This was achieved by investing primarily in high
quality, double tax-exempt Kansas municipal bonds with areas of concentration
in healthcare, housing, and utility bond issues.
Looking forward in 1997, we expect the U.S. Economy will continue its expansion,
with real Gross Domestic Product (GDP) growing slightly stronger than in 1996.
This could lead to slightly higher inflation as is evident in wages, as well as
in consumer and industrial materaial prices.
The higher-than-expected growth and inflation should prompt the Federal Reserve
to raise rates sometime in 1997. However, we think the increases will be
gradual enough to prevent a major market decline, although some volatility is to
be expected.
With this in mind, our efforts will be to continue to provide a high level of
tax-free income, consistent with preservation of capital.
<PAGE>
<TABLE>
<CAPTION>
Schedule of Investments January 31, 1997 (Unaudited)
Name of Issuer
Ratings
Percentages represent the market value ----------------
of each investment category to net assets Std. & Coupon Principal Market
Moody's Poor's Rate Maturity Amount Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KANSAS MUNICIPAL BONDS (97.6%)
GENERAL OBLIGATION (3.9%)
Johnson Co., KS Int. Imp. & Rev. Aa-2 AA 6.125% 09/01/12 $ 2,410,000 $ 2,538,164
Park City, KS G.O. Ref. & Sewer NR NR 5.500 12/01/13 275,000 269,090
Shawnee, KS G.O. Int. Imp. A-1 NR 5.800 12/01/05 485,000 515,880
Shawnee, KS G.O. Int. Imp. A-1 NR 5.850 12/01/06 235,000 254,058
Topeka, KS G.O. Aa-2 NR 5.650 08/15/11 500,000 513,395
Wyandotte Co., KS USD #203 (Piper) G.O.
Ref. Imp. NR NR 6.600 09/01/13 1,000,000 1,074,100
------------
$ 5,164,687
------------
HOUSING (15.1%)
Ford Co., KS Single Family Mtg. Rev. Ref. A-1 NR 7.900% 08/01/10 $ 895,000 $ 940,994
Hutchinson, KS Single Family Mtg. Rev. Ref. A-1 NR 6.500 12/01/09 370,000 379,294
Hutchinson, KS Single Family Mtg. Rev. Ref. A-1 NR 8.875 12/01/12 3,120,000 3,270,634
Johnson Co., KS Single Family Mtg. Rev. A-1 NR 7.100 05/01/12 1,450,000 1,514,887
Kansas City, KS GNMA Coll. Mtg. Rev. SFMR NR AAA 7.350 12/01/23 745,000 763,141
Kansas City, KS GNMA Coll. Mtg. Rev. Hsg. Aaa NR 5.900 11/01/27 2,105,000 2,075,383
KS Dev. Finance Auth. (Martin Creek) Hsg.
Dev. Rev. Aa-2 NR 6.600 08/01/34 1,900,000 1,915,865
KS Dev. Finance Auth. (Martin Creek) Hsg.
Dev. Rev. Aa-2 NR 6.500 08/01/24 750,000 751,027
KS Dev. Finance Auth. Multi-Family Hsg.
Rev. NR AAA 6.000 12/01/21 1,375,000 1,378,905
Labette Co., KS Single Family Mtg. Rev.
Ref. A-1 NR 8.400 12/01/11 600,000 631,740
Lawrence, KS (Brandon Woods) Multi-Family
Hsg. Dev. Rev. Ref. NR AAA 6.625 04/01/12 2,000,000 2,036,820
Reno Co., KS Single Family Mtg. Rev. Ref. Aaa NR 8.700 09/01/11 385,000 405,690
Saline Co., KS Single Family Mtg. Rev. Ref. A-1 NR 9.500 10/01/11 140,000 146,889
Seward Co., KS Single Family Mtg. Rev. NR AA- 7.375 12/01/09 480,000 489,638
Seward Co., KS Single Family Mtg. Rev. Ref. A-1 NR 8.000 05/01/11 525,000 553,061
Wichita, KS Multi-Family Hsg. Rev. NR A 5.850 11/01/25 1,000,000 992,970
Wichita, KS Single Family Mtg. Rev. Ref. A-1 NR 7.100 09/01/09 1,460,000 1,516,648
------------
$ 19,763,586
------------
INSURED/GUARANTEED (50.7%)
*Allen Co., KS USD #258 (Humboldt) G.O.
School Bldg. AMBAC Insured Aaa AAA 7.000% 09/01/09 $ 630,000 $ 722,440
*Burlington, KS Gas and Electric PCR
MBIA Insured Aaa AAA 7.000 06/01/31 4,000,000 4,361,080
Butler Co., KS USD #402 (Augusta) G.O.
Ref. CGIC Insured Aaa AAA 5.250 10/01/12 2,000,000 1,980,160
Butler Co., KS USD #394 (Rose Hill) G.O.
Ref. & AMBAC Insured Aaa AAA 5.375 09/01/13 1,935,000 1,937,399
Garnett, KS Utility Ref. & Imp. Rev.
MBIA Insured Aaa AAA 6.000 10/01/17 500,000 520,920
Johnson Co., KS USD #232 (DeSoto) G.O.
School Bldg CGIC Insured Aaa AAA 6.000 03/01/12 500,000 524,030
Johnson Co., KS (Olathe) USD #233 G.O.
AMBAC Insured Aaa AAA 5.625 09/01/14 650,000 659,828
Kansas City, KS Comm. College Rev.
MBIA Insured Aaa AAA 5.000 05/15/16 1,150,000 1,086,911
Kansas City, KS (Rainbow Towers) Multi-
Family Hsg. FHA Gtd. NR AAA 6.600 07/01/14 250,000 253,583
Kansas City/Leavenworth Co./Lenexa, KS
GNMA Coll. Mtg. Rev. GNMA Gtd. NR AAA 8.400 05/01/15 215,000 225,410
Kansas City/Leavenworth Co./Lenexa, KS
GNMA Coll. Mtg. Rev. GNMA Gtd. NR AAA 7.850 11/01/10 620,000 654,832
Kansas City/Leavenworth Co./Lenexa, KS
GNMA Coll. Mtg. Rev. GNMA Gtd. NR AAA 8.000 11/01/20 155,000 164,342
KS Dev. Finance Auth. (Sec. 8 Asstd.
Proj.) Hsg. Dev. Rev. Ref. MBIA Insured Aaa AAA 6.000 07/01/12 200,000 202,412
Kansas City, KS Utility System Ref. & Imp.
AMBAC Insured Aaa AAA 6.300 09/01/16 2,000,000 2,141,380
Kansas City, KS Utility System Ref. & Imp.
FGIC Insured Aaa AAA 6.375 09/01/23 8,750,000 9,308,775
KS Dev. Finance Auth. (Sect. 8) Hsg. Dev.
Rev. Ref. MBIA Insured Aaa AAA 6.300 07/01/12 285,000 289,785
KS Dev. Finance Auth. (Sect. 8) Hsg. Dev.
Rev. Ref. MBIA Insured Aaa AAA 6.400 01/01/24 770,000 774,451
KS Dev. Finance Auth. (Brd. of Regents)
AMBAC Insured Aaa AAA 5.875 06/01/21 750,000 759,825
KS Dev. Finance Auth. (El Dorado/ Larned)
Ref. Rev. MBIA Insured Aaa AAA 6.000 02/01/12 2,000,000 2,111,680
KS Dev. Finance Auth. (Stormont Vail)
Hlth. Care Rev. MBIA Insured Aaa AAA 5.800 11/15/21 680,000 680,116
KS Dev. Finance Auth. (St. Luke's/Shawnee
Mission) Rev. MBIA Insd. Aaa AAA 5.375 11/15/26 1,500,000 1,436,985
KS St. Dev. Finance Auth. (Hays Med. Ctr.)
Hlth. Facs. Rev. MBIA Insd. Aaa NR 5.500 11/15/22 750,000 739,972
KS Turnpike Authority Rev. AMBAC Insured Aaa AAA 5.400 09/01/09 260,000 265,002
KS Turnpike Authority Rev. AMBAC Insured Aaa AAA 5.250 09/01/13 1,020,000 1,009,586
KS Turnpike Authority Rev. AMBAC Insured Aaa AAA 5.250 09/01/17 950,000 926,554
KS Turnpike Authority Rev. FGIC Insured Aaa AAA 5.550 09/01/17 1,000,000 994,980
Leavenworth Co., KS (Lansing) USD #469
G.O. AMBAC Insured Aaa AAA 5.750 09/01/14 875,000 889,578
Leavenworth Co., KS (Lansing) USD #469
G.O. CGIC Insured Aaa AAA 5.750 09/01/15 930,000 942,778
Lenexa, KS (Barrington Park) Multi-Family
Hsg. Rev. ASSET GUAR. Insured Aaa AAA 6.050 02/01/06 350,000 358,526
Lenexa, KS (Barrington Park) Multi-Family
Hsg. Rev. ASSET GUAR. Insured Aaa AAA 6.450 02/01/18 2,500,000 2,529,475
McPherson Co., KS (McPherson) USD #418
G.O. CGIC Insured Aaa AAA 5.750 09/01/13 350,000 361,613
Miami Co., KS Water Dist. #2 Ref. Rev.
ASSET GUAR. Insured Aaa AA 6.100 12/01/06 255,000 266,506
Miami Co., KS Water Dist. #2 Ref. Rev.
ASSET GUAR. Insured Aaa AA 6.150 06/01/07 245,000 255,662
Olathe, KS Health Care Ref. AMBAC Insured Aaa AAA 6.000 05/01/19 900,000 905,535
Olathe, KS Health Care Ref. AMBAC Insured Aaa AAA 6.000 09/01/11 1,000,000 1,026,040
Olathe, KS Health Care Ref. AMBAC Insured Aaa AAA 5.875 09/01/16 2,000,000 2,048,980
Olathe, KS (Medical Center) Hlth. Care
AMBAC Insured Aaa AAA 5.500 09/01/18 730,000 721,284
Olathe, KS (Medical Center) Hlth. Care
AMBAC Insured Aaa AAA 5.500 09/01/24 740,000 721,922
Olathe/Labette Co., KS GNMA Coll. Mtg.
Rev. MBIA Insured Aaa AAA 8.000 11/01/20 200,000 208,626
Olathe/Labette Co., KS GNMA Coll. Mtg.
Rev. GNMA Gtd. NR AAA 7.750 09/01/22 160,000 167,067
Pratt, KS Electric Utility Sys. Ref. &
Imp. Rev. AMBAC Insured Aaa AAA 6.600 11/01/07 1,000,000 1,113,500
Salina, KS (Asbury-Saline Regl. Med.
Ctr.) Rev. Ref. AMBAC Insured Aaa AAA 5.300 10/01/13 750,000 737,842
Salina, KS Comb. Water & Sewage Sys.
Imp. Rev. MBIA Insured Aaa AAA 6.250 10/01/12 500,000 531,750
Salina, KS Comb. Water & Sewage Sys.
Ref. Rev. MBIA Insured Aaa AAA 5.250 09/01/12 500,000 489,660
Sedgwick/Shawnee Cos., KS Single Family
Mtg. Ref. Rev. GNMA Gtd. Aaa NR 7.750 11/01/24 540,000 557,415
Sedgwick/Shawnee Cos., KS Single Family
Mtg. GNMA Gtd. Aaa NR 8.050 05/01/24 375,000 389,486
Sedgwick/Shawnee Cos., KS Single Family
Mtg. GNMA Gtd. Aaa NR 7.800 11/01/24 460,000 477,512
Sedgwick/Shawnee Cos., KS Coll. Mtg.
Rev. GNMA Gtd. NR AAA 8.250 11/01/20 350,000 365,162
Sedgwick/Shawnee Cos., KS Coll. Mtg.
Loan GNMA Gtd. NR AAA 7.875 04/01/11 380,000 398,339
Sedgwick/Shawnee Cos., KS Coll. Mtg.
Rev. MBIA Gtd. Aaa AAA 7.875 12/01/21 285,000 294,719
Sedgwick/Shawnee Cos., KS Coll. Mtg.
Loan GNMA Gtd. Aaa NR 7.000 12/01/98 130,000 129,912
Sedgwick Co., KS USD #260 (Derby) G.O.
AMBAC Insured Aaa AAA 6.000 10/01/10 500,000 527,525
Sedgwick Co., KS (Maize) USD #266 G.O.
FGIC Insured Aaa AAA 5.500 09/01/10 465,000 476,197
Sedgwick Co., KS (Maize) USD #266 G.O.
FGIC Insured Aaa AAA 5.250 09/01/13 2,805,000 2,788,563
Seward Co., KS G.O. Aaa AAA 6.000 08/15/13 750,000 790,342
Shawnee Co., KS (Meninger) Health Care
Rev. CGIC Insured Aaa AAA 5.000 08/15/16 1,400,000 1,309,546
Shawnee Co., KS (Auburn-Washburn) USD #437
G.O. FGIC Insured Aaa AAA 6.600 09/01/09 500,000 544,640
Shawnee Co., KS (Auburn-Washburn) G.O.
AMBAC Insured Aaa AAA 5.250 09/01/11 250,000 250,660
Shawnee Co., KS (Auburn-Washburn) G.O.
AMBAC Insured Aaa AAA 5.250 09/01/12 350,000 348,947
Shawnee Co., KS (Auburn-Washburn) G.O.
AMBAC Insured Aaa AAA 5.250 09/01/13 500,000 497,070
Sumner Co., KS USD #357 (Belle Plaine)
G.O. Ref. Imp. AMBAC Insured Aaa AAA 5.550 09/01/13 625,000 631,519
Wellington, KS Elect. Wtrwks. & Sew.
Util. Sys. Rev. AMBAC Insured Aaa AAA 6.250 05/01/12 1,250,000 1,330,275
Wichita, KS Airport Auth. Facilities Ref.
Rev. ASSET GUAR. Insured Aaa AAA 7.000 03/01/05 440,000 461,674
Wichita, KS (St. Francis Regl. Medl.
Ctr.) Facs. Imp. MBIA Insured Aaa AAA 6.250 10/01/10 250,000 272,013
Wichita, KS (St. Francis Regl. Medl.
Ctr.) Facs. Imp. Ref. MBIA Insured Aaa AAA 6.250 10/01/10 1,000,000 1,088,050
Wichita, KS Public Bldg. Comm. Rev.
WSU AMBAC Insured Aaa AAA 5.750 02/01/17 350,000 354,574
Wichita, KS Water & Sewer Utility Ref.
& Imp. FGIC Insured Aaa AAA 6.000 10/01/12 1,000,000 1,048,360
Wichita, KS Multi-Family Hsg. Rev.
Ref. GNMA Gtd. Aaa NR 6.125 08/20/28 1,900,000 1,909,177
Wyandotte Co., KS G.O. Ref. & Imp.
FGIC Insured Aaa AAA 7.000 09/01/05 125,000 132,681
------------
$ 66,383,140
------------
LEISURE & RECREATION (0.6%)
Blue Valley, KS Recreation Commission
COP's NR NR 6.600% 04/01/07 $ 245,000 $ 264,666
Johnson Co., KS Park & Rec. Rev. Ref. NR NR 7.200 01/01/09 500,000 529,325
------------
$ 793,991
------------
MEDICAL CARE (10.1%)
Kansas City, KS Hospital Rev. (Prov.
-St. Margaret) Hlth. Center NR A- 8.100% 12/01/04 $ 574,000 $ 585,807
Kansas City, KS (St. Margaret Hlth. Ctr.)
Hosp. Rev. Aa-2 NR 5.900 08/01/05 300,000 316,911
Lawrence, KS (Memorial Hosp.) Hosp. Rev. A-2 NR 6.000 07/01/09 2,000,000 2,072,420
Lawrence, KS (Memorial Hosp.) Hosp. Rev. A-2 NR 6.200 07/01/14 1,200,000 1,243,956
Lawrence, KS (Memorial Hosp.) Rev. A-2 NR 6.200 07/01/19 1,725,000 1,763,950
Merriam, KS (Shawnee Mission Medical
Ctr.) Rev. NR A- 7.250 09/01/21 1,000,000 1,078,970
Wichita, KS (St. Francis Hosp. & Sch.)
Hosp. Rev. ESCROWED NR AAA 6.750 10/01/07 595,000 617,045
Wichita KS (CSJ Hlth. Sys.) Rev. NR A- 7.000 11/15/08 640,000 694,458
Wichita KS (CSJ Hlth. Sys.) Rev. NR A- 7.200 10/01/15 2,225,000 2,395,880
Wichita KS (CSJ Hlth. Sys.) Rev. NR A- 7.000 11/15/18 2,350,000 2,507,615
------------
$ 13,277,012
------------
POLLUTION CONTROL (1.2%)
KS Dev. Finance Auth. (KS Water Fund) PCR Aa-2 AA+ 6.000% 11/01/14 $ 500,000 $ 518,960
KS Dev. Finance Auth. (KS Water Fund) PCR Aa-1 AA+ 5.600 05/01/17 1,000,000 1,008,620
------------
$ 1,527,580
------------
REAL ESTATE (2.3%)
Wichita, KS (Cessna Citation Svc. Ctr.)
Airport Rev. NR AA+ 7.250% 05/15/30 $ 100,000 $ 100,866
Hays, KS Sales Tax Rev. NR NR 6.875 09/01/12 500,000 528,335
Hiawatha, KS (Wal-Mart Stores) Industrial
Rev. Ref. NR AA 6.750 01/01/06 595,000 630,980
KS Dev. Fin. Auth. (KS Hwy. Patrol
Training Fac.) Rev. NR NR 6.300 12/01/05 450,000 482,395
Wichita, KS Public Bldg. Commission
Real Estate Rev. A-2 A+ 5.500 08/01/14 1,215,000 1,207,552
------------
$ 2,950,128
------------
TRANSPORTATION (2.7%)
KS Dept. of Transportation Hwy. Rev. Aa-2 AA 6.000% 09/01/09 $ 150,000 $ 159,696
KS Dept. of Transportation Hwy. Rev. Aa-2 AA 6.000 09/01/12 2,200,000 2,321,550
KS Dept. of Transportation Hwy. Rev. Aa-2 AA 5.375 03/01/13 1,000,000 998,280
------------
$ 3,479,526
------------
SCHOOL (3.9%)
Cowley Co., KS Community College COP's A-2 NR 7.000% 03/01/12 $ 900,000 $ 966,555
Douglas Co., KS USD # 497 (Lawrence) G.O. Aa-2 NR 6.000 09/01/15 1,000,000 1,054,170
Gray Co., KS (Cimmarron) USD #102 G.O. NR NR 6.800 09/01/15 500,000 547,405
Johnson Co., KS (Shawnee Mission) USD
#512 G.O. Aa-1 AA 5.300 10/01/14 900,000 884,385
KS Dev. Fin. Auth. (KS Brd. Rgts.-
Lewis Field Stadium) NR NR 6.000 04/01/08 500,000 518,725
KS Dev. Fin. Auth. (KS Brd. Rgts.)
Energy Cons. Rev. A-2 A+ 6.350 03/01/09 300,000 316,995
Lyon Co., KS USD #253 G.O. Ref. A-2 NR 5.600 10/01/10 800,000 817,320
------------
$ 5,105,555
------------
UTILITIES (7.1%)
Gardner, KS Electric Utility Rev. NR NR 7.000% 11/01/09 $ 1,000,000 $ 1,092,180
Atchison, KS Sewer System Rev. NR NR 6.700 09/01/12 115,000 123,454
Atchison, KS Sewer System Rev. NR NR 6.700 09/01/13 125,000 134,334
Johnson Co., KS Water Dist. #1 Water
Rev. Ref. Aa-2 AA+ 6.500 12/01/13 500,000 539,675
Johnson Co., KS Water Dist. #1 Rev. Aa-2 AA+ 6.250 12/01/11 700,000 747,306
Johnson Co., KS Water Dist. #1 Rev. Ref. Aa-2 AA+ 5.300 12/01/12 3,000,000 2,960,460
Johnson Co., KS Water Dist. #1 Rev. Ref. Aa-2 AA+ 5.250 12/01/15 1,000,000 967,200
Johnson Co., KS Water Dist. #1 Water Rev. Aa-2 AA+ 5.750 12/01/19 500,000 501,900
Miami Co., KS Water Dist. #2 Ref. Rev. Aaa AA 6.100 06/01/06 230,000 239,207
Park City, KS Sewer System Rev. NR NR 5.500 12/01/09 1,000,000 1,001,570
Sabetha, KS G.O. Ref. & Water NR NR 5.500 12/01/13 400,000 395,668
Scott City, KS G.O. Water System Ref. NR NR 6.100 09/01/14 625,000 652,544
------------
$ 9,355,498
------------
TOTAL KANSAS MUNICIPAL BONDS (COST: $124,003,776) $127,800,703
SHORT TERM SECURITIES (1.5%)
Federated Tax Free Trust (COST: $1,998,618) 1,998,618
------------
TOTAL INVESTMENTS IN SECURITIES (Cost: $126,002,394 ) $129,799,321
============
</TABLE>
*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.
<PAGE>
Financial Statements January 31, 1997(Unaudited)
Statement of Assets and Liabilities January 31, 1997 (Unaudited)
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (cost: $126,002,394) $129,799,321
Cash 312,183
Accrued dividends receivable 2,673
Accrued interest receivable 2,451,732
Receivable for fund shares sold 27,928
------------
Total Assets $132,593,837
------------
Liabilities
Dividends payable $ 541,014
Accrued expenses 104,825
Security purchases payable 1,005,133
Payable for fund shares redeemed 38,135
Variation margin on futures 1,250
------------
Total Liabilities $ 1,690,357
------------
Net Assets $130,903,480
============
Net asset value per share, 10,644,305 shares outstanding $ 12.30
============
Statement of Operations for the six months ended January 31, 1997(Unaudited)
- -----------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 3,874,814
Dividend 37,420
------------
Total Investment Income $ 3,912,234
------------
EXPENSES
Investment advisory fees $ 328,871
Distribution fees (12b-1) 164,435
Custodian fees 13,652
Transfer agent 67,573
Accounting service fees 39,226
Audit and legal fees 10,554
Directors fees 4,386
Printing and postage 9,645
License, fees, and registrations 2,836
------------
Total Expenses $ 641,178
Less expenses waived or absorbed
by the Fund's manager 44,320
------------
Total Net Expenses $ 596,858
------------
NET INVESTMENT INCOME $ 3,315,376
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investments $ (58,155)
Futures (280,395)
Net change in unrealized appreciation (depreciation) of:
Investments 2,076,856
Futures (1,250)
------------
Net Realized And Unrealized Gain (Loss) On Investments $ 1,737,056
------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 5,052,432
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements January 31, 1997
Statement of Changes in Net Assets
For the six months ended January 31, 1997 and year ended July 31, 1996
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Six Months For The Year
Ended January 31, Ended
1997 (Unaudited) July 31, 1996
-----------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
<S> <C> <C>
Net investment income $ 3,315,376 $ 6,881,050
Net realized gain (loss) on investment and futures transactions (338,550) 905,123
Net change in unrealized appreciation (depreciation) on investments and futures 2,075,606 (215,174)
-----------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ 5,052,432 $ 7,570,999
-----------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $ (3,315,376) $ (6,881,050)
Distributions from net realized gain on investment transactions 0 0
-----------------------------------
Total Dividends and Distributions $ (3,315,376) $ (6,881,050)
-----------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 3,319,278 $ 11,224,770
Proceeds from reinvested dividends 2,282,419 4,686,205
Cost of shares redeemed (8,784,224) (14,343,258)
-----------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ (3,182,527) $ 1,567,717
-----------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (1,445,471) $ 2,257,666
NET ASSETS, BEGINNING OF PERIOD 132,348,951 130,091,285
-----------------------------------
NET ASSETS, END OF PERIOD $ 130,903,480 $ 132,348,951
===================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Financial Statements January 31, 1997 (Unaudited)
Note 1. ORGANIZATION
Business Operations - The Kansas Municipal Fund (the "Fund") is an investment
portfolio of Ranson Managed Portfolios (the "Trust") registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Trust may offer multiple portfolios;
currently four portfolios are offered. Ranson Managed Portfolios is an
unincorporated business trust organized under Massachusetts law on August 10,
1990. The Fund had no operations from that date to November 15, 1990, other
than matters relating to organization and registration. On November 15, 1990,
the Fund commenced its Public Offering of capital shares to the public. The
investment objective of the Fund is to provide its shareholders with as high a
level of current income exempt from both federal and Kansas income tax as is
consistent with preservation of capital. The Fund will seek to achieve this
objective by investing primarily in a portfolio of Kansas municipal securities.
Shares of the Fund are offered at net asset value plus a maximum sales charge
of 4.25% of the offering price.
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. The Fund has available at January 31,
1997, a net capital loss carryforward totaling $2,058,350, which may be used to
offset capital gains realized during subsequent years through July 31, 2004.
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 paid in cash. Capital gains, when available, are
distributed at least annually.
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 - The Fund may purchase and sell financial futures 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
<PAGE>
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. Unrealized appreciation
(depreciation) related to open futures contracts is required to be treated as
realized gain (loss) for Federal income tax purposes.
Certain risks may arise upon entering into futures contracts. These risks may
include changes in the value of the futures contracts 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. CAPITAL SHARE TRANSACTIONS
As of January 31, 1997, there were unlimited shares of no par authorized;
10,644,305 and 10,905,053 shares were outstanding at January 31, 1997 and July
31, 1996, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
----------------------------------------------------------------------
For The For The For The For The
Six Months Ended Year Ended Six Months Ended Year Ended
January 31, 1997 July 31, 1996 January 31, 1997 July 31, 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 272,333 918,984 $ 3,319,278 $ 11,224,770
Shares issued on reinvestment
of dividends 187,364 383,410 2,282,419 4,686,205
Shares redeemed (720,445) (1,174,350) (8,784,224) (14,343,258)
----------------------------------------------------------------------
Net increase (260,748) 128,044 $ (3,182,527) $ 1,567,717
======================================================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and 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 Ranson Capital Corporation, 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 0.50% of the Fund's
average daily net assets. The Fund has recognized $328,871 of investment
<PAGE>
advisory fees for the six months ended January 31, 1997. The Fund has a
payable to Ranson Capital Corporation of $54,352 at January 31, 1997 for
investment advisory fees. Certain officers and trustees of the Fund are also
officers and directors of the investment adviser.
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 0.25% of
the average daily net assets of the Fund to Ranson Capital Corporation
(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 an annual
rate not to exceed 0.25% of the average daily net assets of the Fund for the
prior month. The Fund has recognized $164,435 of 12b-1 fee expenses for the
six months ended January 31, 1997. The Fund has a payable to Ranson Capital
Corporation of $27,176 at January 31, 1997 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 $67,573 of transfer agency fees for the six
months ended January 31, 1997. 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 $39,226 of accounting service fees for the six months ended January
31, 1997.
Note 5. INVESTMENT SECURITY TRANSACTIONS
Cost of purchases and proceeds from sale of investment securities (excluding
short-term securities) aggregated $5,552,495 and $7,644,161, respectively, for
the six months ended January 31, 1997.
Note 6. INVESTMENT IN SECURITIES
At January 31, 1997, the aggregate cost of securities for federal income tax
purposes was $126,002,394, and the net unrealized appreciation of investments
based on the cost was $3,796,927, which is comprised of $4,170,269 aggregate
gross unrealized appreciation and $373,342 aggregate gross unrealized
depreciation.
<PAGE>
Financial Highlights Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months For the Year For the Year For the Year For the Year For the Year
Ended January 31, 1997 Ended Ended Ended Ended Ended
(Unaudited) July 31, 1996 July 31, 1995 July 31, 1994 July 31, 1993 July 31, 1992
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 12.14 $ 12.07 $ 12.00 $ 12.67 $ 12.22 $ 11.54
------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net Investment Income $ .31 $ .69 $ .65 $ .66 $ .69 $ .72
Net realized and
unrealized gain (loss)
on investments .16 .07 .07 (.53) .50 .69
------------------------------------------------------------------------------------------------
Total From Investment
Operations $ .47 $ .76 $ .72 $ .13 $ 1.19 $ 1.41
------------------------------------------------------------------------------------------------
Less Distributions:
Dividends from net
investment income $ (.31) $ (.69) $ (.65) $ (.66) $ (.69) $ (.72)
Distributions from net
capital gains .00 .00 .00 (.14) (.05) (.01)
------------------------------------------------------------------------------------------------
Total Distributions $ (.31) $ (.69) $ (.65) $ (.80) $ (.74) $ (.73)
------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 12.30 $ 12.14 $ 12.07 $ 12.00 $ 12.67 $ 12.22
================================================================================================
Total Return 7.80%(A)(B) 5.90%(A) 6.23%(A) 0.91%(A) 10.08%(A) 13.31%(A)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $130,903 $132,349 $130,091 $127,337 $100,207 $52,010
Ratio of net expenses
(after expense assumption)
to average net assets 0.90%(B)(C) 0.85%(C) 0.82%(C) 0.70%(C) 0.75%(C) 0.70% (C)
Ratio of net investment
income to average net
assets 5.04%(B) 5.18% 5.46% 5.26% 5.53% 6.00%
Portfolio turnover rate 4.32% 20.14% 57.00% 55.00% 62.00% 51.00%
</TABLE>
(A) Excludes maximum sales charge of 4.25%.
(B) Ratio was annualized.
(C) During the periods indicated above, ND Holdings, Inc. or Ranson Capital
Corporation assumed expenses of $44,320, $212,056, $295,875, $419,129,
$282,407, and $231,617, respectively. If the expenses had not been
assumed, the annualized ratios of total expenses to average net assets
would have been 0.98%, 1.01%, 1.06%, 1.06%, 1.13%, and 1.25%,
respectively.
<PAGE>
Dear Shareholder:
We are pleased to submit the semi-annual report for The Kansas Insured
Intermediate Fund. Included with this report is a list of portfolio holdings,
along with the financial statements for the six months ended January 31, 1997.
Management Discussion and Analysis:
Moderate economic growth and low inflation during the six month period allowed
municipal bond prices to advance generally until later in the period. Then
bond values began to move lower as concerns about possible Federal Reserve
monetary policy tightening settled into the market. The adviser employed a
protective hedge by using U.S. Treasury Bond futures in anticipation of lower
valuations. This had the effect of stabilizing share price from erosion during
periods when interest rates were rising and tempering share price increases
when interest rates decreased.
The Kansas Insured Intermediate Fund turned in steady performance for the six
month period. Net asset value per share was $12.19 at the beginning of the
period and increased to $12.28 by January 31, 1997. The adviser continues to
invest primarily in insured Kansas tax-exempt bonds. More information on
portfolio makeup and performance are included on the next page.
Economic Outlook and Municipal Bond Overview:
U.S. economic growth has continued at a moderate pace and inflation has not
been excessive. As 1997 unfolds, we anticipate that the Federal Reserve will
remain vigilant and may possibly move to curb inflation by tightening credit.
Tax-exempt bonds should offer reasonable stability and liberal returns in the
months ahead.
We continue to be pleased with the performance of the Fund and would like to
take this opportunity to thank you for your support and look forward to serving
the shareholders of The Kansas Insured Intermediate Fund.
Sincerely,
Robert E. Walstad
President
<PAGE>
THE KANSAS INSURED INTERMEDIATE FUND
January 31, 1997 (Unaudited)
The Kansas Insured Intermediate Fund
------------------------------------
Performance and Composition
Portfolio Quality Ratings
- -------------------------
[pie chart]
AAA 100.0%
INSURED
(Based on Total Long-Term Investments)
Key Statistics
- --------------
7-31-96 NAV (share value) $12.19
1-31-97 NAV $12.28
Average Maturity 8.1 yrs.
Average Duration 6.0 yrs.
Number of Issues 68
Total Net Assets $27,019,132
Lipper Ranking
- --------------
1 yr. 5 yr. Since Inception
- -----------------------------------
#12 N/A N/A
- -----------------------------------
Lipper Analytical Services is an independent mutual fund ranking service.
Rankings are based on average annual total returns for the periods ending
1-31-97 for funds in the "Other States Municipal Debt Funds" category. The 1
yr. And 5 yr. Rankings are out of a total of 63 and 11 funds, respectively.
Average Annual Total Returns
- ----------------------------
1 yr. 5 yr. Since Inception
- -----------------------------------
3.66%* N/A 5.84%*
- -----------------------------------
*The 1 yr., 5 yr., and Since Inception returns do not include the effect of the
4.25% maximum Sales Charge. They would have been 0.80% and 5.14% respectively,
if they had. Returns are historical and are not a guarantee of future results.
The Fund's share price, yields and total returns will vary, so that shares, when
redeemed, may be worth more or less than their original cost.
Portfolio Market Sectors
- ------------------------
[pie chart]
Insured 97.6%
Other 2.4%
(As a % of Net Assets)
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
<PAGE>
Portfolio Manager's Comments
- ----------------------------
Moderate economic growth and low inflation in 1996 led to a good year for The
Kansas Insured Intermediate Fund. This was achieved by investing primarily in
high quality, double tax-exempt Kansas municipal bonds with areas of
concentration in healthcare, general obligation, and utility bond issues.
Looking forward in 1997, we expect the U.S. Economy will continue its expansion,
with real Gross Domestic Product (GDP) growing slightly stronger than in 1996.
This could lead to slightly higher inflation as is evident in wages, as well as
in consumer and industrial materaial prices.
The higher-than-expected growth and inflation should prompt the Federal Reserve
to raise rates sometime in 1997. However, we think the increases will be
gradual enough to prevent a major market decline, although some volatility is to
be expected.
With this in mind, our efforts will be to continue to provide a high level of
double tax-free income, consistent with preservation of capital.
<PAGE>
<TABLE>
<CAPTION>
Schedule of Investments January 31, 1997 (Unaudited)
Name of Issueer Ratings
Percentages represent the market value ------------------
of each investment category to total assets Std. & Coupon Principal Market
Moody's Poor's Rate Maturity Amount Value
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KANSAS MUNICIPAL BONDS (97.6%)
Anderson Co., KS (Garnett) USD #365 G.O. AMBAC Insured Aaa AAA 5.000% 09/01/04 $ 200,000 $ 203,918
Anderson Co., KS (Garnett) USD #365 G.O. AMBAC Insured Aaa AAA 5.200 03/01/05 210,000 216,638
Anderson Co., KS (Garnett) USD #365 G.O. AMBAC Insured Aaa AAA 5.200 09/01/05 210,000 217,648
Butler Co., KS (Augusta) USD #402 G.O. AMBAC Insured Aaa AAA 5.400 10/01/06 200,000 207,504
Chanute, KS Electric Light, Water & Gas Sys. Ref. Rev.
MBIA Insured Aaa AAA 5.875 05/01/04 500,000 527,835
Crawford Co., KS G.O. MBIA Insured NR AAA 5.000 11/01/06 175,000 175,858
Derby, KS Sewer Utility System Rev. AMBAC Insured Aaa AAA 5.000 08/01/08 340,000 333,798
Douglas Co., KS USD #491 (Eudora) G.O. School Bldg.
Ref. & Imp. AMBAC Insured Aaa AAA 7.750 03/01/01 190,000 211,880
*Douglas Co., KS USD #491 (Eudora) G.O. School Bldg.
Ref. & Imp. AMBAC Insured Aaa AAA 7.750 03/01/03 255,000 295,012
*Douglas Co., KS (Lawrence) USD #497 G.O. FGIC Insured Aaa AAA 7.200 09/01/02 1,370,000 1,535,071
Franklin Co., KS G.O. FGIC Insured Aaa AAA 6.100 09/01/02 100,000 104,453
Garden City, KS Hlth. Care Rev. MBIA Insured Aaa AAA 4.900 11/15/07 400,000 393,032
Johnson/Miami Cos., KS USD #230 G.O. FGIC Insured Aaa AAA 5.250 12/01/04 500,000 516,430
Johnson/Miami Cos., KS (Spring Hill) G.O. FGIC Insured Aaa AAA 5.250 12/01/05 350,000 363,202
Johnson Co., KS USD #229 (Blue Valley) FGIC Insured Aaa AAA 5.400 10/01/04 1,000,000 1,034,570
Johnson Co., KS (DeSoto) USD #232 G.O. CGIC Insured Aaa AAA 5.400 03/01/03 100,000 103,991
Johnson Co., KS (Olathe) USD #491 G.O. AMBAC Insured Aaa AAA 5.450 09/01/02 100,000 105,500
Johnson Co., KS (Olathe) USD #233 G.O. AMBAC Insured Aaa AAA 5.650 09/01/03 1,485,000 1,575,095
Johnson Co., KS (Olathe) USD #233 G.O. AMBAC Insured Aaa AAA 5.950 09/01/05 400,000 429,288
Johnson Co., KS (Olathe) USD #233 G.O. AMBAC Insured Aaa AAA 6.150 03/01/07 300,000 321,558
Kansas City, KS (Srs. of Prov.-St. Margaret Hlth. Ctr.)
AMBAC Insured Aaa AAA 5.700 08/01/03 250,000 261,438
KS Devl. Finance Auth. (Stormont Vail) Hlth. Rev.
MBIA Insured Aaa AAA 5.700 11/15/08 450,000 456,669
Kansas City, KS Special Obligation ESCROWED Aaa AAA 6.000 02/15/03 200,000 212,618
KS Devl. Finance Auth. Pooled Ref. Lease Rev. MBIA Insured Aaa AAA 5.500 10/01/05 250,000 261,125
KS Devl. Finance Auth. Multi-Family Hsg. Rev. NR AAA 5.700 12/01/09 325,000 326,082
KS Devl. Finance Auth. (St. Luke's/Shawnee Mission)
MBIA Insured Aaa AAA 4.875 11/15/07 400,000 393,496
KS Devl. Finance Auth. (Hays Med. Ctr.) Rev. MBIA Insured Aaa AAA 5.200 11/15/08 375,000 375,113
KS Devl. Finance Auth. (Hays Med. Ctr.) Rev. MBIA Insured Aaa AAA 5.300 11/15/09 375,000 374,647
Larned, KS (Catholic Hlth. Corp.) Hlth. Facs. Rev.
MBIA Insured Aaa AAA 5.200 11/15/02 160,000 164,579
Larned, KS (Catholic Hlth. Corp.) Hlth. Facs. Rev.
MBIA Insured Aaa AAA 5.300 11/15/03 170,000 175,068
Larned, KS (Catholic Hlth. Corp.) Hlth. Facs. Rev.
MBIA Insured Aaa AAA 5.400 11/15/04 155,000 160,569
Lenexa, KS (Barrington Park) Multi-Family Hsg. Rev. Ref.
ASSET GUAR. Insured Aaa AAA 5.875 02/01/04 500,000 512,515
Lenexa, KS (Barrington Park) Multi-Family Hsg. Rev. Ref.
ASSET GUAR. Insured Aaa AAA 5.950 02/01/05 250,000 258,505
Linn Co., KS (Prairie View) USD #362 G.O. ASSET GUAR.
Insured Aaa AA 5.500 11/01/09 500,000 506,425
McPherson Co., KS (McPherson) USD #418 G.O. CGIC Insured Aaa AAA 5.500 09/01/05 100,000 105,237
McPherson Co., KS (McPherson) USD #418 G.O. CGIC Insured Aaa AAA 5.700 09/01/06 400,000 424,816
Miami Co., KS Rural Water Dist. #2 Ref. Rev. ASSET GUAR.
Insured Aaa AA 5.750 12/01/04 225,000 229,498
Olathe, KS (Evang. Luth. Good Samaritan Soc.) AMBAC
Insured Aaa AAA 5.200 05/01/01 140,000 143,469
Olathe, KS (Evang. Luth. Good Samaritan Soc.) AMBAC
Insured Aaa AAA 5.400 05/01/02 150,000 155,278
Olathe, KS (Evang. Luth. Good Samaritan Soc.) AMBAC
Insured Aaa AAA 5.500 05/01/03 110,000 114,435
Olathe, KS (Medical Center) Hlth. Facs. Rev. Ref.
AMBAC Insured Aaa AAA 5.600 09/01/05 1,000,000 1,047,140
Reno Co., KS (Buhler) USD #313 G.O. FSA Insured Aaa AAA 4.700 09/01/06 260,000 259,366
Reno Co., KS (Buhler) USD #313 G.O. FSA Insured Aaa AAA 4.800 09/01/07 250,000 250,048
Salina, KS (Asbury-Salina Regl. Med. Ctr.) Hosp. Rev. Ref.
AMBAC Insured Aaa AAA 5.000 10/01/04 850,000 858,916
Salina, KS (Asbury-Salina Regl. Med. Ctr.) Hosp. Rev. Ref.
AMBAC Insured Aaa AAA 5.000 10/01/05 100,000 100,949
Sedgwick/Shawnee Cos., KS Coll. Single Family Mtg.
GNMA Gtd. Aaa AAA 5.250 11/01/04 215,000 215,692
Sedgwick Co., KS (Maize) USD #266 G.O. CGIC Insured Aaa AAA 5.500 09/01/05 300,000 314,847
Sedgwick Co., KS (Maize) USD #266 G.O. CGIC Insured Aaa AAA 5.600 09/01/06 200,000 210,892
Sedgwick Co., KS (Renwick) USD #267 G.O. AMBAC Insured Aaa AAA 5.850 11/01/06 290,000 309,906
Sedgwick Co., KS (Renwick) USD #267 G.O. AMBAC Insured Aaa AAA 6.000 11/01/07 570,000 608,475
Seward Co., KS G.O. Hospital Ref. AMBAC Insured Aaa AAA 5.600 08/15/04 100,000 104,769
Seward Co., KS G.O. Hospital Ref. AMBAC Insured Aaa AAA 5.600 08/15/04 150,000 157,154
Shawnee Co. KS USD #437 (Auburn-Wash) AMBAC Insured Aaa AAA 6.700 09/01/00 415,000 446,901
Shawnee Co. KS USD #437 (Auburn-Wash) AMBAC Insured Aaa AAA 6.625 09/01/01 475,000 515,004
Shawnee Co., KS (Shawnee Heights) USD #450 G.O.
CGIC Insured Aaa AAA 6.500 09/01/00 250,000 267,663
Shawnee Co., KS (Topeka) USD #501 G.O. FGIC Insured Aaa AAA 5.550 02/01/07 820,000 853,161
Sumner Co., KS (Belle Plaine) USD #357 G.O. AMBAC Insured Aaa AAA 6.250 09/01/02 230,000 248,152
Sumner Co., KS (Belle Plaine) USD #357 G.O. AMBAC Insured Aaa AAA 6.250 09/01/03 265,000 286,945
Wichita, KS Airport Auth. Facs Ref. Rev. ASSET GUAR.
Insured Aaa AAA 7.000 03/01/05 100,000 104,926
Wichita, KS (St. Francis Regl. Med. Ctr.) Hosp. Facs.
Imp. & Ref. Rev. MBIA Insured Aaa AAA 5.625 10/01/00 405,000 422,293
Wichita, KS (St. Francis Regl. Med. Ctr.) Hosp. Facs.
Imp. & Ref. MBIA Insured Aaa AAA 6.000 10/01/03 250,000 264,250
Wichita, KS (St. Francis Regl. Med. Ctr.) Hosp. Facs.
Imp. & Ref. MBIA Insured Aaa AAA 6.100 10/01/04 775,000 825,375
Wichita, KS Water & Sewer Util. Ref. & Imp. Rev. Bonds
FGIC Insured Aaa AAA 5.500 10/01/04 320,000 332,672
Wichita, KS Water & Sewer Util. Ref. & Imp. Rev.
FGIC Insured Aaa AAA 5.600 04/01/05 610,000 638,469
Wichita, KS Water & Sewer Util. Ref. & Imp. Ref.
FGIC Insured Aaa AAA 5.750 10/01/06 150,000 158,607
Winfield, KS Electric Sys. Ref. Rev. AMBAC Insured Aaa AAA 5.000 09/01/04 580,000 589,512
Wyandotte Co., KS G.O. Ref. & Imp. FGIC Insured Aaa AAA 7.000 09/01/05 1,020,000 1,082,679
Wyandotte Co., KS USD #204 (Bonner Springs) AMBAC Insured Aaa AAA 5.200 09/01/04 400,000 412,892
----------
TOTAL KANSAS MUNICIPAL BONDS (COST: $25,686,669) $26,371,518
-----------
SHORT TERM SECURITIES (0.8%)
Federated Tax-Free Trust (COST: $225,139) 225,139
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $25,911,808) $26,596,657
===========
</TABLE>
*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.
<PAGE>
Financial Statements January 31, 1997
Statement of Assets and Liabilities January 31, 1997 (Unaudited)
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (cost: $25,911,808) $26,596,657
Cash 35,781
Accrued dividends receivable 2,937
Accrued interest receivable 537,984
Deferred organization costs 5,387
-----------
Total Assets $27,178,746
-----------
Liabilities
Dividends payable $ 97,049
Accrued expenses 16,965
Payable for fund shares redeemed 45,600
-----------
Total Liabilities $ 159,614
-----------
Net Assets $27,019,132
===========
Net asset value per share, 2,199,940 shares outstanding $ 12.28
===========
Statement of Operations for the six months ended January 31, 1997 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 717,254
Dividends 10,971
-----------
Total Investment Income $ 728,225
-----------
EXPENSES
Investment advisory fees $ 72,289
Custodian fees 4,374
Transfer agent fees 19,706
Accounting service fees 19,220
Audit and legal fees 6,426
Trustees' fees 1,542
Printing & postage 8,083
License, fees & registrations 1,115
Amortization of organization costs 3,879
-----------
Total Expenses $ 136,634
Less expenses waived or absorbed
by the Fund's manager 30,527
-----------
Total Net Expenses $ 106,107
-----------
NET INVESTMENT INCOME $ 622,118
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investments $ 13,299
Futures (53,231)
Net change in unrealized appreciation
(depreciation) of investments 253,620
-----------
Net Realized and Unrealized Gain (Loss) on
Investments and Futures $ 213,688
-----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 835,806
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements January 31, 1997
Statement of Changes in Net Assets
For the six months ended January 31, 1997 and year ended July 31, 1996
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Six Months
Ended January 31, 1997 For The Year Ended
(Unaudited) July 31, 1996
------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
<S> <C> <C>
Net investment income $ 622,118 $ 1,366,829
Net realized gain (loss) on investment and futures transactions (39,932) 46,810
Net change in unrealized appreciation (depreciation) on investments 253,620 340,266
-------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ 835,806 $ 1,753,905
-------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $ (622,118) $ (1,366,829)
Distributions from net realized gain on investment transactions 0 0
-------------------------------------------
Total Dividends and Distributions $ (622,118) $ (1,366,829)
-------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 723,195 $ 2,780,585
Proceeds from reinvested dividends 370,022 811,269
Cost of Shares Redeemed (4,851,696) (4,093,311)
-------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ (3,758,479) $ (501,457)
-------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (3,544,791) $ (114,381)
NET ASSETS, BEGINNING OF PERIOD 30,563,923 30,678,304
-------------------------------------------
NET ASSETS, END OF PERIOD $ 27,019,132 $ 30,563,923
===========================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Financial Statements January 31, 1997 (Unaudited)
Note 1. ORGANIZATION
Business Operations -The Kansas Insured Intermediate Fund (the "Fund") is an
investment portfolio of Ranson Managed Portfolios (the "Trust") registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
open-end management investment company. The Trust may offer multiple
portfolios; currently four portfolios are offered. Ranson Managed Portfolios
is an unincorporated business trust organized under Massachusetts law on August
10, 1990. The Fund had no operations from that date to November 23, 1992,
other than matters relating to organization and registration. On November 23,
1992, the Fund commenced its Public Offering of capital shares to the public.
The investment objective of the Fund is to provide its shareholders with as
high a level of current income exempt from both federal and Kansas income tax
as is consistent with preservation of capital. The Fund will seek to achieve
this objective by investing primarily in a portfolio of Kansas insured
securities. Shares of the Fund are offered at net asset value plus a maximum
sales charge of 2.75% of the offering price.
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.
Deferred organization costs - Costs incurred by the Fund in connection with its
organization are being amortized over a 60-month period on the straight-line
basis. Accumulated amortization at January 31, 1997 totaled $32,112.
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. The Fund has available at January 31,
1997, a net capital loss carryforward totaling $305,774, which may be used to
offset capital gains realized during subsequent years through July 31, 2004.
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 paid in cash. Capital gains, when available, are
distributed at least annually.
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 - The Fund may purchase and sell financial futures to hedge
against changes in the values of tax-exempt municipal securities the Fund owns
or expects to purchase.
<PAGE>
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 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.
Certain risks may arise upon entering into futures contracts. These risks may
include changes in the value of the futures contracts 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. CAPITAL SHARE TRANSACTIONS
As of January 31, 1997, there were unlimited shares of no par authorized;
2,199,940 and 2,507,133 shares were outstanding at January 31, 1997 and July
31, 1996, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
-------------------------------------------------------------------
For The For The For The For The
Six Months Ended Year Ended Six Months Ended Year Ended
January 31, 1997 July 31, 1996 January 31, 1997 July 31, 1996
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 59,023 227,680 $ 723,195 $ 2,780,585
Shares issued on reinvestment
of dividends 30,268 66,410 370,022 811,269
Shares redeemed (396,484) (335,874) (4,851,696) (4,093,311)
-------------------------------------------------------------------
Net increase (decrease) (307,193) (41,784) $(3,758,479) $ (501,457)
===================================================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and 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 Ranson Capital Corporation, 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 0.50% of the Fund's
average daily net assets. The Fund has recognized $72,289 of investment
advisory fees for the six months ended January 31, 1997. The Fund has a payable
to Ranson Capital Corporation of $11,385 at January 31, 1997 for investment
<PAGE>
advisory fees. Certain officers and trustees of the Fund are also officers and
directors of the investment adviser.
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 $19,706 of transfer agency fees for the six
months ended January 31, 1997. 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 $19,220 of accounting service fees for the six months ended January
31, 1997.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment securities
(excluding short-term securities) aggregated $1,642,276 and $4,976,180,
respectively, for the six months ended January 31, 1997.
Note 6. INVESTMENT IN SECURITIES
At January 31, 1997, the aggregate cost of securities for federal income tax
purposes was $25,911,808, and the net unrealized appreciation of investments
based on the cost was $684,849, which is comprised of $709,682 aggregate gross
unrealized appreciation and $24,833 aggregate gross unrealized depreciation.
<PAGE>
Financial Highlights Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six For the Period Since
Months Ended For the Year For the Year For the Year Inception
January 31, 1997 Ended July 31, Ended July 31, Ended July 31, (Nov. 23, 1992) to
(Unaudited) 1996 1995 1994 July 31, 1993
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.19 $ 12.04 $ 11.92 $ 12.24 $ 11.59
----------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income $ .26 $ .53 $ .54 $ .52 $ .32
Net realized and unrealized gain (loss)
on investments .09 .15 .12 (.30) .65
----------------------------------------------------------------------------------
Total From Investment Operations $ .35 $ .68 $ .66 $ .22 $ .97
----------------------------------------------------------------------------------
Less Distributions:
Dividends from net investment income $ (.26) $ (.53) $ (.54) $ (.52) $ (.32)
Distributions from net capital gains .00 .00 .00 (.02) .00
----------------------------------------------------------------------------------
Total Distributions $ (.26) $ (.53) $ (.54) $ (.54) $ (.32)
----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.28 $ 12.19 $ 12.04 $ 11.92 $ 12.24
==================================================================================
Total Return 5.86%(A)(B) 5.75%(A) 5.72%(A) 1.81%(A) 13.50%(A)(B)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $27,019 $30,564 $30,678 $31,216 $22,110
Ratio of net expenses (after expense
assumption) to average net assets 0.74%(B)(C) 0.69%(C) 0.62% (C) 0.51% (C) 0.33%(B)(C)
Ratio of net investment income to
average net assets 4.32%(B) 4.37% 4.57% 4.26% 4.41%(B)
Portfolio turnover rate 5.89% 19.96% 63.00% 56.00% 152.00%
(A) Excludes maximum sales charge of 2.75%.
(B) Ratio was annualized.
(C) During the periods indicated above, ND Holdings, Inc. or Ranson Capital
Corporation assumed expenses of $30,527, $71,943, $112,745, $136,079 ,and
$68,286, respectively. If the expenses had not been assumed, the
annualized ratios of total expenses to average net assets would have been
0.94%, 0.92%, 0.98%, 0.99%, and 1.24%, respectively.
<PAGE>
Dear Shareholder:
We are pleased to submit the semi-annual report for The Nebraska Municipal
Fund. Included with this report is a list of portfolio holdings, along with
the unaudited financial statments for the period ended January 31, 1997.
Total assets of the Fund increased substantially in December when shares of
the fund were exchanged for shares of the Heartland Nebraska Tax Free Fund.
Benefits to shareholders include several economies of scale as well as
listing on the NASDAQ, a national quotation service. Quotations may now
be obtained using the symbol NEMUX and your daily share prices may be found
in the financial papers under Integrity Mutual Funds.
Management Discussion and Analysis:
Moderate economic growth and low inflation during the six month period allowed
municipal bond prices to advance generally until late in the period. Then bond
values began to move lower as concerns about possible Federal Reserve
monetary policy tightening settled into the market. The adviser employed a
protective hedge by using U.S. Treasury Bond futures in anticipation of lower
valuations. This had the effect of stablilizing share price from erosion
during periods when interest rates were rising and tempering share price
increases when interest rates decreased.
The Nebraska Municipal Fund turned in steady performance for the six month
period. Net asset value per share was $11.00 at the beginning of the period
and increased to $11.13 by January 31, 1997. The adviser continues to
invest primarily in high-grade Nebraska tax-exempt bonds. More information
on portfolio makeup and performance is included on the next page.
Economic Outlook and Municipal Bond Overview:
U.S. economic growth has continued at a moderate pace and inflation has not
been excessive. As 1997 unfolds, we aniticipate that the Federal Reserve
will remain vigilant and may possibly move to curb inflation by tightening
credit. Tax-exempt bonds should offer reasonable stability and liberal returns
in the months ahead.
We continue to be pleased with the performance of the Fund and would like to
take this opportunity to thank you for your support and look forward to
serving the shareholders of The Nebraska Municipal Fund.
Sincerely,
Robert E. Walstad
President
<PAGE>
THE NEBRASKA MUNICIPAL FUND
January 31, 1997 (Unaudited)
The Nebraska Municipal Fund
---------------------------
Performance and Composition
Portfolio Quality Ratings
- -------------------------
[pie chart]
AAA 37.2%
AA 25.6%
A 24.4%
BBB 0.3%
NR 12.5%
(non-rated)
(Based on Total Long-Term Investments)
Quality ratings reflect the financial strength of the issuer. They are assigned
by independent rating services such as Moody's Investors Service and Standard &
Poor's. Non-rated bonds have been determined to be of appropriate quality for
the portfolio by Ranson Capital Corporation, the investment advisor.
Key Statistics
- --------------
7-31-96 NAV (share value) $11.00
1-31-97 NAV $11.13
Average Maturity 18.8 yrs.
Average Duration 6.5 yrs.
Number of Issues 87
Total Net Assets $28,174,575
Lipper Ranking
- --------------
1 yr. 5 yr. Since Inception
- -----------------------------------
#23 N/A N/A
- -----------------------------------
Lipper analytical Services is an independent mutual fund ranking service.
Rankings are based on average annual total returns for the periods ending
1-31-97 for funds in the "Other States Municipal Debt Funds" category. The 1
yr. And 5 yr. Rankings are out of a total of 63 and 11 funds, respectively.
Average Annual Total Returns
- ----------------------------
For periods ending January 31, 1997
- -----------------------------------
1 yr. 5 yr. Since Inception
- -----------------------------------
3.28%* N/A 4.40%*
- -----------------------------------
*The 1 yr. And Since Inception returns do not include the effect of the 2.75%
maximum Sales Charge. They would have been (1.11)%, and 3.00% respectively, if
they had. Returns are historical and are not a guarantee of future results.
The Fund's share price, yields and total returns will vary, so that shares, when
redeemed, may be worth more or less than their original cost.
<PAGE>
Portfolio Market Sectors
- ------------------------
[pie chart]
Utilities 24.8%
Insured 23.4%
Education 20.6%
Gen. Obligation 12.5%
Housing 9.2%
Real Estate 4.2%
Healthcare 3.7%
Other 1.6%
(As a % of Net Assets)
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
Portfolio Manager's Comments
- ----------------------------
Moderate economic growth and low inflation in 1996 led to a good year for The
Nebraska Municipal Fund. This was achieved by investing primarily in insured,
double tax-exempt Nebraska municipal bonds with areas of concentration in
utility, education, and insured bond issues.
Looking forward in 1997, we expect the U.S. Economy will continue its expansion,
with real Gross Domestic Product (GDP) growing slightly stronger than in 1996.
This could lead to slightly higher inflation as is evident in wages, as well as
in consumer and industrial materaial prices.
The higher-than-expected growth and inflation should prompt the Federal Reserve
to raise rates sometime in 1997. However, we think the increases will be
gradual enough to prevent a major market decline, although some volatility is to
be expected.
With this in mind, our efforts will be to continue to provide a high level of
tax-free income, consistent with preservation of capital.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments January 31, 1997 (Unaudited)
Name of Issuer
Ratings
Percentages represent the market value ----------------
of each investment category to net assets Std. & Coupon Principal Market
Moody's Poor's Rate Maturity Amount Value
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NEBRASKA MUNICIPAL BONDS (98.4%)
GENERAL OBLIGATION (12.5%)
Dawson Co., NE San. & Impt. Dist. #1 (IBP Inc.) G.O. NR NR 6.950% 02/01/05 $ 125,000 $ 125,377
Douglas Co., NE (Law Enforcement Center) G.O. Aa AA+ 5.750 07/01/10 275,000 283,267
Hemingford, NE General Obligation NR NR 5.600 02/15/12 115,000 114,618
Lincoln, NE G.O. Storm Sewer & Drainage Aa AAA 5.500 06/01/14 200,000 202,288
Lincoln, NE G.O. Storm Sewer & Drainage Aa AAA 5.500 06/01/15 200,000 200,976
Lincoln, NE G.O. Various Purpose Aa AAA 5.500 12/01/15 200,000 199,244
Lincoln/Lancaster Counties, NE Pub. Bldg. Comm. Tax
Lease Rental Aa AA+ 5.800 10/15/18 725,000 746,721
Lincoln/Lancaster Counties, NE Pub. Bldg. Comm. Rev. Aa AA+ 5.875 10/15/23 850,000 854,242
Omaha, NE Various Purpose Aaa AAA 6.250 12/01/12 250,000 268,682
Omaha, NE Various Purpose Aaa AAA 6.250 12/01/14 250,000 266,643
Papillion, NE General Obligation NR NR 6.150 07/01/12 105,000 106,381
Washington Co., NE General Obligation NR NR 5.450 01/01/14 160,000 156,283
-----------
$ 3,524,722
-----------
HEALTH CARE (3.7%)
Hall Co., NE Hosp. Auth. (Regency Rtmt.) Rev. NR NR 6.000% 12/01/18 $ 85,000 $ 80,219
Lancaster Co., NE (Lincoln Med. Ed. Fdn. Hosp.) Hosp.
Auth. #1 NR NR 5.700 02/01/11 100,000 100,686
Lancaster Co., NE (Lincoln Med. Ed. Fdn. Hosp.) Hosp.
Auth. #1 NR NR 5.800 02/01/12 175,000 176,242
NE Invt. Finance Auth. (Great Plains Regl. Med. Ctr.) Rev. NR AA 6.500 05/15/14 150,000 156,426
Scotts Bluff Co., NE (Regional West Med. Ctr.) Hosp.
Auth. Rev. A A 6.450 12/15/04 275,000 291,225
Univ. of NE Facilities Corp. (U. of NE Med. Ctr.) Rev. Ref. A-1 AA- 5.250 07/01/11 250,000 246,590
-----------
$ 1,051,388
-----------
HOUSING (9.2%)
NE Invt. Finance Auth. (Muirfield Greens) Multifamily Rev. Aa NR 6.800% 12/01/15 $ 385,000 $ 399,445
NE Invt. Finance Auth. (Muirfield Greens) Multifamily Rev. Aa NR 6.850 12/01/25 525,000 549,418
*NE Invt. Finance Auth. Single Family Hsg. Rev. NR AAA 6.600 09/01/20 730,000 745,031
NE Invt. Finance Auth. Single Family Hsg. Rev. NR AAA 6.500 09/01/18 400,000 403,044
NE Invt. Finance Auth. Multifamily Hsg. Rev. NR AAA 6.200 06/01/28 500,000 489,800
-----------
$ 2,586,738
-----------
INSURED/GUARANTEED (23.4%)
Buffalo Co., NE (Srs. Charity Hlth. Care) Hosp. Auth.
MBIA Insured Aaa AAA 6.375% 05/15/04 $ 250,000 $ 269,377
*Buffalo Co., NE (Srs. Charity Hlth. Care) Hosp. Rev.
MBIA Insured Aaa AAA 6.625 05/15/09 300,000 325,887
Cass Co., NE SD #001 G.O. FGIC Insured Aaa AAA 6.250 12/01/14 300,000 314,103
Cass Co., NE USD #001 G.O. FGIC Insured Aaa AAA 6.350 12/01/19 300,000 315,648
Douglas Co., NE Hosp. Dist. #2 (Cath. Hlth. Corp.) Rev.
MBIA Insured Aaa AAA 5.500 11/15/21 340,000 332,415
Douglas Co., NE SD #17 (Millard) G.O. MBIA Insured Aaa AAA 5.650 12/15/05 400,000 416,564
Gage Co., NE SD #15 G.O. AMBAC Insured NR AAA 5.900 12/15/16 850,000 863,957
Lancaster Co., NE (Bryan Mem. Hosp.) Hosp. Auth. #1 Rev.
MBIA Insured Aaa AAA 6.600 06/01/12 100,000 109,412
*Lancaster Co., NE (Bryan Mem. Hosp.) Hosp. Auth. #1 Rev.
MBIA Insured Aaa AAA 6.700 06/01/22 250,000 270,440
Lincoln, NE (Lincoln Gen. Hosp.) Rev. & Ref. CGIC Insured Aaa AAA 6.200 12/01/14 100,000 104,947
Lincoln, NE (Lincoln Gen. Hosp.) Rev. & Ref. CGIC Insured Aaa AAA 6.200 12/01/14 50,000 52,473
Otoe Co., NE SD #111 (Nebraska City) Ref. AMBAC Insured Aaa AAA 5.800 11/15/14 400,000 410,736
Lancaster Co., NE (Waverly) SD #145 G.O. AMBAC Insured Aaa AAA 5.500 12/01/16 100,000 99,535
*NE Muni. Energy Agcy. Pwr. Supply System Rev. Ref.
AMBAC Insured Aaa AAA 6.000 04/01/17 1,000,000 1,037,310
NE Education Finance Auth. (Creighton Univ.) Rev.
AMBAC Insured Aaa AAA 5.950 01/01/11 300,000 308,109
NE Education Finance Auth. (Creighton Univ.) Rev.
MBIA Insured Aaa AAA 5.700 11/01/04 450,000 466,259
NE Public Power Dist. Power Supply System Rev. FSA Insured Aaa AAA 5.000 01/01/17 200,000 183,020
Northeast NE Solid Waste Facility Rev. MBIA Insured Aaa AAA 5.900 05/15/15 600,000 602,298
Omaha, NE Airport Auth. Rev. Ref. MBIA Insured Aaa AAA 5.250 01/01/13 100,000 98,724
-----------
$ 6,581,214
-----------
REAL ESTATE (4.2%)
David City, NE (Henningsen Foods) IDR NR NR 6.400% 12/15/02 $ 25,000 $ 26,104
LaVista, NE (Golf Course) Rec. Facilities Rev. NR NR 5.400 12/15/10 40,000 38,362
LaVista, NE (Golf Course) Rec. Facilities Rev. NR NR 5.400 12/15/11 65,000 62,209
Lincoln, NE Parking Revenue Refunding NR NR 5.200 08/15/14 215,000 201,651
Omaha, NE Parking Facilities Corp. (Omaha Park 4/5) Lse.
Rev. Aa-1 AAA 5.700 09/15/15 750,000 755,842
Sarpy Co., NE (Willow Springs) San. & Impt. Dist. #86 Ref. NR NR 6.250 01/15/17 100,000 99,549
-----------
$ 1,183,717
-----------
EDUCATION (20.6%)
Cedar Co., NE SD #45 General Obligation NR NR 5.350% 11/15/14 $ 100,000 $ 95,683
Chadron St. College, NE Student Fees & Facs. Rev. Ref. NR NR 5.700 07/01/11 300,000 296,019
Dawson Co., NE (Lexington) SD #1 General Obligation NR NR 5.400 12/15/12 135,000 133,616
Dawson Co., NE (Lexington) SD #1 General Obligation NR NR 5.450 12/15/13 115,000 113,595
Dawson Co., NE (Lexington) SD #1 General Obligation NR NR 5.450 12/15/14 140,000 138,201
Kearney Co., NE SD #503 General Obligation NR NR 6.150 12/15/12 100,000 100,830
Merrick Co., NE SD General Obligation NR NR 5.350 01/15/12 100,000 97,800
Merrick Co., NE SD #49 General Obligation NR NR 6.200 07/01/10 45,000 45,897
Merrick Co., NE SD #49 General Obligation NR NR 6.250 07/01/14 50,000 51,168
NE Education Finance Auth. (Midland Luth. College) Rev. NR NR 6.250 06/15/15 100,000 99,572
NE Higher Education Loan Pgm. Junior Subord. Term A NR 6.450 06/01/18 400,000 409,940
NE Higher Education Loan Pgm. Senior Subord. Term Aa NR 6.250 06/01/18 800,000 801,152
NE Higher Education Loan Pgm. (Student Loan) Rev. A NR 5.875 06/01/14 1,350,000 1,326,591
NE State Education Service Unit #3 Rev. NR NR 5.500 06/01/13 450,000 442,971
Douglas Co., NE SD #1 (Omaha) General Obligation Ref. Aa AAA 5.000 12/15/11 200,000 194,366
Saunders Co., NE SD #9 General Obligation NR NR 5.400 12/01/14 75,000 71,753
Saunders Co., NE SD #9 General Obligation NR NR 5.450 12/01/16 235,000 225,137
Saunders Co., NE SD #9 General Obligation NR NR 5.450 12/01/17 125,000 119,603
Univ. of NE (Omaha Student Ctr.) Brd. of Rgts. Rev. A-1 A+ 5.250 05/15/10 250,000 248,218
Univ. of NE (Student Ctr.) University Rev. A-1 A+ 5.350 05/15/13 350,000 347,938
Univ. of NE (Student Ctr.) University Rev. A-1 A+ 5.250 05/15/14 200,000 199,880
Washington Co., NE SD #1 General Obligation NR A 5.800 07/15/11 100,000 102,076
Washington Co., NE (Blair) SD #1 General Obligation NR A 5.900 07/15/15 135,000 138,318
------------
$ 5,800,324
------------
UTILITIES (24.8%)
Beatrice, NE Combined Utilities Rev. NR NR 5.600% 09/15/10 $ 120,000 $ 119,636
Beatrice, NE Combined Utilities Rev. NR NR 5.700 09/15/11 125,000 124,684
Grand Island, NE Sewer System Rev. A NR 6.000 04/01/14 250,000 262,085
Hastings, NE Electric Rev. A A 6.300 01/01/19 370,000 386,779
Hastings, NE Electric System Rev. Ref. A A 5.200 01/01/13 370,000 354,908
Kearney, NE Combined Utilities Rev. A-1 NR 6.100 06/01/14 600,000 616,350
Lincoln, NE Electric System Rev. Aa AA+ 5.750 09/01/16 750,000 759,135
Lincoln, NE Electric System Rev. Ref. Aa AA 5.250 09/01/15 960,000 909,850
Lincoln, NE Water Revenue & Refunding Aa AA+ 5.300 08/15/11 200,000 200,362
NE Public Power Dist. Power Supply System Rev. A-1 A+ 6.125 01/01/15 390,000 403,720
NE Public Power Dist. Power Supply System Rev. A-1 A+ 5.750 01/01/20 750,000 745,965
NE Public Power District Rev. A-1 A+ 5.000 01/01/17 1,000,000 919,560
Omaha, NE Public Power Dist. Electric System Rev. Aa AA+ 5.700 02/01/17 250,000 251,780
Omaha, NE Public Power Dist. Electric System Rev. Aa AA 5.600 02/01/12 80,000 80,646
Omaha, NE Public Power Dist. Electric System Rev. NR AA 6.000 02/01/15 330,000 333,257
Omaha, NE Public Power Dist. Electric System Rev. Aa AA 6.200 02/01/17 500,000 527,140
------------
$ 6,995,857
------------
TOTAL NEBRASKA MUNICIPAL BONDS (COST: $27,437,429) $ 27,723,960
SHORT TERM SECURITIES (0.5%)
Federated Tax-Free Trust (COST: $145,650) 145,650
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $27,583,079) $ 27,869,610
============
</TABLE>
*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.
<PAGE>
Financial Statements January 31, 1997
Statement of Assets and Liabilities January 31, 1997(Unaudited)
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (Cost: $27,583,079) $27,869,610
Cash 58,578
Accrued interest receivable 372,531
Accrued dividends receivable 1,217
Receivable for fund shares sold 25,000
Security sales receivable 432,988
Deferred organization costs 10,082
-----------
Total Assets $28,770,006
-----------
Liabilities
Dividends payable $ 115,380
Accrued expenses 21,784
Security purchases payable 457,917
Variation margin on futures 350
-----------
Total Liabilities $ 595,431
-----------
Net Assets $28,174,575
===========
Net asset value per share, 2,530,542 shares outstanding $ 11.13
===========
Statement of Operations for the six monthes ended January 31, 1997(Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 591,768
Dividends 9,551
-----------
Total Investment Income $ 601,319
-----------
EXPENSES
Investment advisory fees $ 53,235
Distribution fees (12b-1) 26,618
Custodian fees 2,452
Transfer agent fees 15,538
Accounting service fees 17,349
Audit and legal fees 6,186
Printing and postage 9,711
Trustees fees 1,344
License, fees, and registrations 5,034
Amortization of organization costs 2,778
-----------
Total Expenses $ 140,245
Less expenses waived or absorbed
by the Fund's manager 66,137
-----------
Total Net Expenses $ 74,108
-----------
NET INVESTMENT INCOME $ 527,211
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investment transactions $ (76,767)
Futures transactions (17,827)
Net change in unrealized appreciation (depreciation) of:
Investments 334,152
Futures (350)
-----------
Net Realized And Unrealized Gain (Loss) On
Investments And Futures $ 239,208
-----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 766,419
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements January 31, 1997
Statement of Changes in Net Assets
For the six months ended January 31, 1997 and year ended July 31, 1996
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Six Months For The Year
Ended January 31 Ended
1997 (Unaudited) July 31, 1996
---------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
<S> <C> <C>
Net investment income $ 527,211 $ 864,605
Net realized gain (loss) on investment and futures transactions (94,594) (15,386)
Net change in unrealized appreciation (depreciation) on investments and futures 333,802 23,173
--------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ 766,419 $ 872,392
--------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $ (527,211) $ (864,605)
Distributions from net realized gain on investment and futures transactions 0 0
--------------------------------
Total Dividends and Distributions $ (527,211) $ (864,605)
--------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 11,651,885 $ 4,757,147
Proceeds from reinvested dividends 321,647 543,019
Cost of shares redeemed (2,115,123) (1,675,710)
--------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ 9,858,409 $ 3,624,456
--------------------------------
TOTAL INCREASE IN NET ASSETS $ 10,097,617 $ 3,632,243
NET ASSETS, BEGINNING OF PERIOD 18,076,958 14,444,715
--------------------------------
NET ASSETS, END OF PERIOD $ 28,174,575 $ 18,076,958
================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Financial Statements January 31, 1997 (Unaudited)
Note 1. ORGANIZATION
Business Operations - The Nebraska Municipal Fund (the "Fund") is an
investment portfolio of Ranson Managed Portfolios (the "Trust") registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
open-end management investment company. The Trust may offer multiple
portfolios; currently four portfolios are offered. Ranson Managed Portfolios
is an unincorporated business trust organized under Massachusetts law on August
10, 1990. The Fund had no operations from that date to November 17, 1993,
other than matters relating to organization and registration. On November 17,
1993, the Fund commenced its Public Offering of capital shares to the public.
The investment objective of the Fund is to provide its shareholders with as
high a level of current income exempt from both federal and Nebraska income
taxes as is consistent with preservation of capital. The Fund will seek to
achieve this objective by investing primarily in a portfolio of Nebraska
municipal securities. Shares of the Fund are offered at net asset value plus a
maximum sales charge of 4.25% of the offering price.
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.
Deferred organization costs - Costs incurred by the Fund in connection with its
organization are being amortized over a 60-month period on the straight-line
basis. Accumulated amortization at January 31, 1997 totaled $16,972.
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. The Fund has available at January 31,
1997, a net capital loss carryforward totaling $542,174, which may be used to
offset capital gains realized during subsequent years through July 31, 2004.
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 paid in cash. Capital gains, when available, are
distributed at least annually.
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.
<PAGE>
Futures contracts - The Fund may purchase and sell financial futures 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 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.
<PAGE>
Certain risks may arise upon entering into futures contracts. These risks may
include changes in the value of the futures contracts 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. CAPITAL SHARE TRANSACTIONS
As of January 31, 1997, there were unlimited shares of no par authorized;
2,530,542 and 1,644,023 shares were outstanding at January 31, 1997 and July
31, 1996, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
-------------------------------------------------------------------
For The For The For The For The
Six Months Ended Year Ended Six Months Ended Year Ended
January 31, 1997 July 31, 1996 January 31, 1997 July 31, 1996
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,048,556 428,516 $ 11,651,885 $ 4,757,147
Shares issued on reinvestment
of dividends 29,096 48,978 321,647 543,019
Shares redeemed (191,133) (152,247) (2,115,123) (1,675,710)
-------------------------------------------------------------------
Net increase 886,519 325,247 $ 9,858,409 $ 3,624,456
===================================================================
</TABLE>
<PAGE>
Note 4. PLAN OF REORGANIZATION
An agreement and plan of reorganization was approved effective December 9, 1996
by the shareholders of the Heartland Nebraska Tax Free Fund (Heartland).
Pursuant to the agreement, the Fund, in exchange for the assets of Heartland,
assumed certain liabilities of Heartland and issued shares of the Fund to
shareholders of Heartland on a pro rata basis.
On the date of exchange, 926,218 shares of the Fund were issued to the
shareholders of Heartland for net assets of $10,299,543 at $11.12 per share.
Note 5. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and 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 Ranson Capital Corporation 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 0.50% of the Fund's average daily
net assets. The Fund has recognized $53,235 of investment advisory fees for the
six months ended January 31, 1997. The adviser elected to waive $8,524 of this
fee. The Fund has a payable to Ranson Capital Corporation of $11,574 at
January 31, 1997 for investment advisory fees. Certain officers and trustees
of the Fund are also officers and directors of the investment adviser.
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 0.25% of
the average daily net assets of the Fund to Ranson Capital Corporation
(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 an annual
rate not to exceed 0.25% of the average daily net assets of the Fund for the
prior month. The Fund has recognized $26,618 of 12b-1 fee expenses for the six
months ended January 31, 1997. The Fund has a payable to Ranson Capital
Corporation of $5,907 at January 31, 1997 for 12b-1 fees. In addition, the
Fund has engaged ND Capital, Inc. as agent for the purchase of certain
investment securities. For the six months ended January 31, 1997, commissions
earned by ND Capital, Inc. totaled $500 and are included in the cost basis of
the securities acquired.
ND Resources, Inc., (the transfer agent), provides shareholder services for a
montly 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 $15,538 of transfer agency fees for the six
months ended January 31, 1997. 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 $17,349 of accounting service fees for the six months ended January
31, 1997.
<PAGE>
Note 6. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment securities
(excluding short-term securities) aggregated $2,157,754 and $769,237
respectively, for the six months ended January 31, 1997.
Note 7. INVESTMENT IN SECURITIES
At January 31, 1997, the aggregate cost of securities for federal income tax
purposes was $27,583,079, and the net unrealized appreciation of investments
based on the cost was $286,531 which is comprised of $519,843 aggregate gross
unrealized appreciation and $233,312 aggregate gross unrealized depreciation.
<PAGE>
Financial Highlights Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Period
For the Six For The Year For The Year Since Inception
Months Ended Ended Ended (Nov. 17, 1993)
January 31,1997 July 31, July 31, Through
(Unaudited) 1996 1995 July 31, 1994
-------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.00 $ 10.95 $ 10.82 $ 11.49
-------------------------------------------------------------
Income from Investment Operations:
Net Investment Income $ .27 $ .57 $ .59 $ .45
Net realized and unrealized gain
(loss) on investments .13 .05 .13 (.67)
------------------------------------------------------------
Total From Investment Operations $ .40 $ .62 $ .72 $ (.22)
------------------------------------------------------------
Less Distributions:
Dividends from net investment income $ (.27) $ (.57) $ (.59) $ (.45)
Distributions from net capital gains .00 .00 .00 .00
------------------------------------------------------------
Total Distributions $ (.27) $ (.57) $ (.59) $ (.45)
------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.13 $ 11.00 $ 10.95 $ 10.82
============================================================
Total Return 7.42%(A)(B) 5.73%(A) 7.14%(A) (3.20)%(A)(B)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $28,175 $18,077 $14,445 $8,171
Ratio of net expenses (after expense
assumption) to average net assets 0.70%(B)(C) 0.62%(C) 0.35%(C) 0.19%(B)(C)
Ratio of net investment income to
average net assets 4.96%(B) 5.13% 5.63% 5.51%(B)
Portfolio turnover rate 4.28% 27.20% 140.00% 314.00%
</TABLE>
(A) Excludes maximum sales charge of 4.25%.
(B) Ratio was annualized.
(C) During the periods indicated above, ND Holdings, Inc. or Ranson
Capital Corporation assumed expenses of $66,137, $129,053, $146,913
and $70,186, respectively. If the expenses had not been assumed, the
annualized ratios of total expenses to average net assets would have
been 1.32%, 1.38%, 1.66%, and 2.25%, respectively.
<PAGE>
Dear Shareholder:
We are pleased to submit the first report to shareholders for the period ended
January 31, 1997. The Fund began operations on September 25, 1996 and the
promotion phase is in full swing. Included with this report is a list of
portfolio holdings along with the financial statements for the period.
Management Discussion and Analysis:
Moderate economic growth and low inflation during the period allowed municipal
bond prices to advance generally until later in the period. Then bond values
began to move lower as concerns about possible Federal Reserve monetary policy
tightening settled into the market.
The Oklahoma Municipal Fund turned in steady performance for the period. Net
asset value per share was $11.49 at inception and increased to $11.56 by
January 31, 1997. The adviser continues to invest primarily in high-grade
Oklahoma tax-exempt bonds. More information on the portfolio makeup and
performance are included on the next page.
Economic Outlook and Municipal Bond Overview:
U.S. economic growth has continued at a moderate pace and inflation has not
been excessive. As 1997 unfolds we anticipate that the Federal Reserve will
remain vigilant and may possibly move to curb inflation by tightening credit.
Tax-exempt bonds should offer reasonable stability and liberal returns in the
months ahead.
We continue to be pleased with the performance of the Fund and would like to
take this opportunity to thank you for your support and look forward to serving
the shareholders of The Oklahoma Municipal Fund.
Sincerely,
Robert E. Walstad
President
<PAGE>
THE OKLAHOMA MUNICIPAL FUND
January 31, 1997 (Unaudited)
The Oklahoma Municipal Fund
---------------------------
Performance and Composition
Portfolio Quality Ratings
- -------------------------
[pie chart]
AAA 79.9%
AA 1.7%
A 13.8%
BBB 0.0%
NR 4.6%
(non-rated)
(Based on Total Long-Term Investmentsts)
Quality ratings reflect the financial strength of the issuer. They are
assigned by independent rating services such as Moody's Investors Service and
Standard & Poor's. Non-rated bonds have been determined to be of appropriate
quality for the portfolio by Ranson Capital Corporation, the investment
advisor.
Key Statistics
- --------------
9-25-96 NAV (share value) $11.49
1-31-97 NAV $11.56
Average Maturity 15.8 yrs.
Average Duration 12.0 yrs.
Number of Issues 16
Total Net Assets $603,089
Average Annual Total Returns
- ----------------------------
For periods ending January 31, 1997
Average Annual Total Returns
- -----------------------------------
1 yr. 5 yr. Since Inception
- -----------------------------------
N/A N/A N/A
- -----------------------------------
No total return data is available for the Fund as it has not yet completed one
full year of operation. See the "Financial Highlights" section of the semi
- -annual report.
Portfolio Market Sectors
- ------------------------
[pie chart]
Insured 56.0%
Utilities 22.8%
Education 8.6%
Housing 4.2%
Real Estate 4.1%
Other 2.6%
Gen. Obligation 1.7%
(As a % of Net Assets)
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
<PAGE>
Portfolio Manager's Comments
- ----------------------------
Moderate economic growth and low inflation in 1996 led to a good beginning for
The Oklahoma Municipal Fund. This was achieved by investing primarily in high
quality, double tax-exempt Oklahoma municipal bonds with areas of concentration
in utility and insured bond issues.
Looking forward in 1997, we expect the U.S. Economy will continue its
expansion, with real Gross Domestic Product (GDP) growing slightly stronger
than in 1996. This could lead to slightly higher inflation as is evident in
wages, as well as in consumer and industrial material prices.
The higher-than-expected growth and inflation should prompt the Federal Reserve
to raise rates sometime in 1997. However, we think the increases will be
gradual enough to prevent a major market decline, although some volatility is
to be expected
With this in mind, our efforts will be to continue to provide a high level of
double tax-free income, consistent with preservation of capital.
<PAGE>
<TABLE>
<CAPTION>
Schedule of Investments Janurary 31, 1997 (Unaudited)
Name Gen. Obligation 1.7%of Issuer
Ratings
Percentages represent the market value ----------------
of each investment category to net assets Std. & Coupon Principal Market
Moody's Poor's Rate Maturity Amount Value
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OKLAHOMA MUNICIPAL BONDS (97.4%)
GENERAL OBLIGATION (1.7%)
OK General Obligation Limited Tax Building Aa-1 AA+ 5.000% 07-15-08 $ 10,000 $ 10,150
---------
HOUSING (4.2%)
OK Housing Finance Agcy. (Homeownership) Single
Family Rev. Aaa NR 6.100% 09-01-16 $ 25,000 $ 25,209
---------
INSURED/GUARANTEED (56.0%)
Central OK Transportation & Parking Auth. (Parking)
FSA Insured Aaa AAA 5.250% 07-01-16 $ 25,000 $ 24,102
Grand River Dam Auth., OK Rev. AMBAC Insured Aaa AAA 6.250 06-01-11 110,000 120,933
Langston University, OK (Student Housing) COP's MBIA
Insured Aaa AAA 5.125 02-01-17 20,000 18,458
OK Dev. Finance Auth. (OK State University) Rev.
AMBAC Insured Aaa AAA 5.600 07-01-11 35,000 37,038
OK State Municipal Power Auth. Rev. MBIA Insured Aaa AAA 5.875 01-01-15 25,000 26,720
OK State Turnpike Auth. Rev. AMBAC Insured Aaa AAA 6.000 01-01-12 25,000 27,201
OK State Turnpike Auth. Rev. AMBAC Insured Aaa AAA 6.100 01-01-15 30,000 33,025
Tulsa, OK (St. John's Med. Ctr.) Industrial Auth.
MBIA Insured Aaa AAA 5.375 02-15-11 25,000 24,548
Tulsa, OK Community College (Student Ctr.) Rev.
MBIA Insured Aaa AAA 5.500 07-01-16 25,000 25,494
---------
$ 337,519
---------
REAL ESTATE (4.1%)
OK Capital Improvement Auth. Rev. A NR 5.500% 10-01-16 $ 25,000 $ 24,919
---------
SCHOOL (8.6%)
OK Dev. Finance Auth. (Southern Nazarene Univ.) Rev. NR NR 6.500% 11-01-13 $ 25,000 $ 26,818
OK State Student Loan Rev. Ref. A-1 A 5.100 08-01-08 25,000 25,320
---------
$ 52,138
---------
UTILITIES (22.8%)
Grand River Dam Auth., OK Rev. Ref. A A- 5.500% 06-01-10 $ 30,000 $ 30,691
OK State Municipal Power Auth. Rev. Aaa AAA 5.875 01-01-12 100,000 106,974
---------
$ 137,665
---------
TOTAL OKLAHOMA MUNICIPAL BONDS (COST: $584,577) $ 587,600
---------
SHORT TERM SECURITIES (2.1%)
Federated Tax-Free Trust (COST: $12,936) 12,936
---------
TOTAL INVESTMENTS IN SECURITIES (COST: $597,513) $ 600,536
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements January 31, 1997 (Unaudited)
Statement of Assets and Liabilities Januay 31, 1997 (Unaudited)
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (Cost: $597,513) $ 600,536
Accrued interest receivable 5,588
Accrued dividends receivable 73
Receivable for fund shares sold 30,000
Deferred organization costs 26,550
---------
Total Assets $ 662,747
=========
Liabilities
Dividends payable $ 2,267
Security purchases payable 28,467
Organizational costs payable 26,550
Other Payables 2,374
---------
Total Liabilities $ 59,658
---------
Net Assets $ 603,089
=========
Net asset value per share, 52,173 shares outstanding $ 11.56
=========
Statement of Operations for the period since inception (September 25, 1996)
through January 31, 1997 (Unaudited)
- ----------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 6,474
Dividends 476
---------
Total Investment Income $ 6,950
----------
EXPENSES
Investment advisory fees $ 670
Distribution fees (12b-1) 350
Custodian fees 12
Transfer agent fees 273
Accounting service fees 8,072
Printing and postage 401
---------
Total Expenses $ 9,778
Less expenses waived or absorbed
by the Fund's manager 9,778
---------
Total Net Expenses $ 0
---------
NET INVESTMENT INCOME $ 6,950
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on
investment transactions $ (296)
Net change in unrealized appreciation
(depreciation) of investments 3,023
---------
Net Realized And Unrealized Gain (Loss) On
Investments $ 2,727
---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 9,677
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements January 31, 1997 (Unaudited)
Statement of Changes in Net Assets
For the period since inception (September 25, 1996) through January 31, 1997
(Unaudited)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Period
Since Inception
(September 25, 1996
Through January 31, 1997)
(Unaudited)
-------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
<S> <C>
Net investment income $ 6,950
Net realized gain (loss) on investment transactions (296)
Net change in unrealized appreciation (depreciation) on investments 3,023
-----------
Net Increase (Decrease) in Net Assets Resulting From Operations $ 9,677
-----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $ (6,950)
Distributions from net realized gain on investment transactions 0
-----------
Total Dividends and Distributions $ (6,950)
-----------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 597,894
Proceeds from reinvested dividends 2,529
Cost of shares redeemed (61)
-----------
Net Increase (Decrease) in Net Assets Resulting From Capital
Share Transactions $ 600,362
-----------
TOTAL INCREASE IN NET ASSETS $ 603,089
NET ASSETS, BEGINNING OF PERIOD $ 0
-----------
NET ASSETS, END OF PERIOD $ 603,089
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Financial Statements January 31, 1997 (Unaudited)
Note 1. ORGANIZATION
Business Operations - The Oklahoma Municipal Fund (the "Fund") is an investment
portfolio of Ranson Managed Portfolios (the "Trust") registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Trust may offer multiple portfolios;
currently four portfolios are offered. Ranson Managed Portfolios is an
unincorporated business trust organized under Massachusetts law on August 10,
1990. The Fund had no operations from that date to September 25, 1996, other
than matters relating to organization and registration. On September 25, 1996,
the Fund commenced its Public Offering of capital shares to the public. The
investment objective of the Fund is to provide its shareholders with as high a
level of current income exempt from both federal income tax and, to a certain
extent, Oklahoma income tax, as is consistent with preservation of capital.
Up to 30% of the Fund's total assets may be invested in Oklahoma municipal
securities which are subject to Oklahoma state income taxes. The Fund will
seek to achieve this objective by investing primarily in a portfolio of
Oklahoma municipal securities. Shares of the Fund are offered at net asset
value plus a maximum sales charge of 4.25% of the offering price.
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.
Deferred organization costs - Costs incurred by the Fund in connection with its
organization will be amortized over a 60-month period on the straight-line
basis.
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 paid in cash. Capital gains, when available, are
distributed at least annually.
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.
<PAGE>
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. CAPITAL SHARE TRANSACTIONS
As of January 31, 1997, there were unlimited shares of no par authorized;
52,173 shares were outstanding. Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
---------------------------------------------------------
For the Period Since For the Period Since
Inception (Sept. 25, 1996) Inception (Sept. 25, 1996)
Through Jan. 31, 1997 Through Jan. 31, 1997
---------------------------------------------------------
<S> <C> <C>
Shares sold 51,961 $ 597,894
Shares issued on reinvestment of dividends 217 2,529
Shares redeemed (5) (61)
---------------------------------------------------------
Net increase 52,173 $ 600,362
=========================================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and 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 Ranson Capital Corporation 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 0.50% of the Fund's
average daily net assets. The adviser elected to waive all investment advisory
fees for the period ended January 31, 1997. Certain officers and trustees of
the Fund are also officers and directors of the investment adviser.
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 0.25% of
the average daily net assets of the Fund to Ranson Capital Corporation
(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 an annual
rate not to exceed 0.25% of the average daily net assets of the Fund for the
prior month. Capital has elected to waive all 12b-1 fees for the period ended
January 31, 1997.
<PAGE>
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. 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. ND Holdings, Inc. has assumed all transfer
agent and accounting service fees for the period ended January 31, 1997.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment securities
(excluding short-term securities) aggregated $885,307 and $300,104
respectively, for the period ended January 31, 1997.
Note 6. INVESTMENT IN SECURITIES
At January 31, 1997, the aggregate cost of securities for federal income tax
purposes was $597,513, and the net unrealized appreciation of investments
based on the cost was $3,023 which is comprised of $4,010 aggregate gross
unrealized appreciation and $987 aggregate gross unrealized depreciation.
<PAGE>
Financial Highlights Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Period
Since Inception
(Sept. 25, 1996)
Through
January 31, 1997
----------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.49
----------------
Income from Investment Operations:
Net Investment Income $ .20
Net realized and unrealized gain (loss) on investments .07
----------------
Total From Investment Operations $ .27
----------------
Less Distributions:
Dividends from net investment income $ (.20)
Distributions from net capital gains .00
----------------
Total Distributions $ (.20)
----------------
NET ASSET VALUE, END OF PERIOD $ 11.56
================
Total Return 7.11%(A)(B)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $603
Ratio of net expenses (after expense assumption)
to average net assets 0.00%(C)
Ratio of net investment income to average net assets 5.10%(B)
Portfolio turnover rate 82.10%
</TABLE>
(A) Excludes maximum sales charge of 4.25%.
(B) Ratio was annualized.
(C) During the period ended January 31, 1997, ND Holdings, Inc. assumed
expenses of $9,778. If the expenses had not been assumed, the annualized
ratio of total expenses to average net assets would have been 7.17%.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> THE KANSAS MUNICIPAL FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 126002394
<INVESTMENTS-AT-VALUE> 129799321
<RECEIVABLES> 2482333
<ASSETS-OTHER> 312183
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 132593837
<PAYABLE-FOR-SECURITIES> 1005133
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 685224
<TOTAL-LIABILITIES> 1690357
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 10644305
<SHARES-COMMON-PRIOR> 10905053
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2398150)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3796927
<NET-ASSETS> 130903480
<DIVIDEND-INCOME> 37420
<INTEREST-INCOME> 3874814
<OTHER-INCOME> 0
<EXPENSES-NET> (596858)
<NET-INVESTMENT-INCOME> 3315376
<REALIZED-GAINS-CURRENT> (338550)
<APPREC-INCREASE-CURRENT> 2075606
<NET-CHANGE-FROM-OPS> 5052432
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3315376)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 272333
<NUMBER-OF-SHARES-REDEEMED> 720445
<SHARES-REINVESTED> 187364
<NET-CHANGE-IN-ASSETS> (1445471)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 328871
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 641178
<AVERAGE-NET-ASSETS> 131407586
<PER-SHARE-NAV-BEGIN> 12.14
<PER-SHARE-NII> .31
<PER-SHARE-GAIN-APPREC> .16
<PER-SHARE-DIVIDEND> (.31)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.30
<EXPENSE-RATIO> .90<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Ration of net expenses (after expense assumption) to average net assets,
(annualized).
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> THE KANSAS INSURED INTERMEDIATE FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 25911808
<INVESTMENTS-AT-VALUE> 26596657
<RECEIVABLES> 540921
<ASSETS-OTHER> 41168
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27178746
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 159614
<TOTAL-LIABILITIES> 159614
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2199940
<SHARES-COMMON-PRIOR> 2507133
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (345706)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 684849
<NET-ASSETS> 27019132
<DIVIDEND-INCOME> 10971
<INTEREST-INCOME> 717254
<OTHER-INCOME> 0
<EXPENSES-NET> (106107)
<NET-INVESTMENT-INCOME> 622118
<REALIZED-GAINS-CURRENT> (39932)
<APPREC-INCREASE-CURRENT> 253620
<NET-CHANGE-FROM-OPS> 835806
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (622118)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 59023
<NUMBER-OF-SHARES-REDEEMED> 396484
<SHARES-REINVESTED> 30268
<NET-CHANGE-IN-ASSETS> (3544791)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 72289
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 136634
<AVERAGE-NET-ASSETS> 28842691
<PER-SHARE-NAV-BEGIN> 12.19
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .09
<PER-SHARE-DIVIDEND> (.26)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.28
<EXPENSE-RATIO> .74<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Ratio of net expenses (after expense assumption) to average net assets,
annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> THE NEBRASKA MUNICIPAL FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 27583079
<INVESTMENTS-AT-VALUE> 27869610
<RECEIVABLES> 831736
<ASSETS-OTHER> 68660
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 28770006
<PAYABLE-FOR-SECURITIES> 457917
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 137514
<TOTAL-LIABILITIES> 595431
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2530542
<SHARES-COMMON-PRIOR> 1644023
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (636768)<F1>
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 286531
<NET-ASSETS> 28174575
<DIVIDEND-INCOME> 9551
<INTEREST-INCOME> 591768
<OTHER-INCOME> 0
<EXPENSES-NET> (74108)
<NET-INVESTMENT-INCOME> 527211
<REALIZED-GAINS-CURRENT> (94594)
<APPREC-INCREASE-CURRENT> 333802
<NET-CHANGE-FROM-OPS> 766419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (527211)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1048556<F2>
<NUMBER-OF-SHARES-REDEEMED> 191133
<SHARES-REINVESTED> 29096
<NET-CHANGE-IN-ASSETS> 10097617
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 53235
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 140245
<AVERAGE-NET-ASSETS> 21244102
<PER-SHARE-NAV-BEGIN> 11.00
<PER-SHARE-NII> .27
<PER-SHARE-GAIN-APPREC> .13
<PER-SHARE-DIVIDEND> (.27)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.13
<EXPENSE-RATIO> .70<F3>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Includes $322,399 of accumulated realized losses inherited from the Heartland
Nebraska Tax Free Fund pursuant to the agreement and plan of reorganization.
<F2>Includes 926,218 shares issued to the shareholders of the Heartland Nebraska
Tax Free Fund pursuant to the plan of reorganization in exchange for net assets
of $10,299,543.
<F3>Ratio of net expenses to average net assets, annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> THE OKLAHOMA MUNICIPAL FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 597513
<INVESTMENTS-AT-VALUE> 600536
<RECEIVABLES> 35661
<ASSETS-OTHER> 26550
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 662747
<PAYABLE-FOR-SECURITIES> 28467
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31191
<TOTAL-LIABILITIES> 59658
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 52173
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (296)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3023
<NET-ASSETS> 603089
<DIVIDEND-INCOME> 476
<INTEREST-INCOME> 6474
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 6950
<REALIZED-GAINS-CURRENT> (296)
<APPREC-INCREASE-CURRENT> 3023
<NET-CHANGE-FROM-OPS> 9677
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6950)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 51961
<NUMBER-OF-SHARES-REDEEMED> 5
<SHARES-REINVESTED> 217
<NET-CHANGE-IN-ASSETS> 603089
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 670
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9778
<AVERAGE-NET-ASSETS> 409754
<PER-SHARE-NAV-BEGIN> 11.49
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> .07
<PER-SHARE-DIVIDEND> (.20)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.56
<EXPENSE-RATIO> .00<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Ratio of net expenses (after expense assumption) to average net assets,
annualized.
</FN>
</TABLE>
