Dear Shareholder:
Enclosed is the semi-annual report of the operations of the Kansas Municipal
Fund, the "Fund," for the six months ended January 31, 2000. The Fund's
portfolio and related financial statements are presented within for your
review.
As we start the new millennium, 1999 will go down as one of the worst years in
bond market history. The benchmark 30-year Treasury bond has seen a value
loss of approximately 27%, as yields have risen from a January 1999 yield of
5.07% to a December 1999 yield of 6.48%. Stabilizing global economies and a
U.S. economy growing at what many economists believe is an unsustainable pace
has led the Federal Reserve to raise short-term interest rates three times in
1999 for a total increase of three quarters of one percent. Strong consumer
confidence, low unemployment, housing and retail sales at record levels, and
a doubling of crude oil prices contributed to the Federal Reserve's actions.
Tax-free municipal bonds haven't faired much better. A long-term tax-free
bond worth $1,000.00 on December 31, 1998 would be worth roughly $860.00
today, as yields have risen from a January 1999 yield of 4.94% to a December
1999 yield of 5.94% on AAA rated bonds. As a result, we are now seeing
Kansas municipal bonds paying 90% to as high as 100% of the 30-year Treasury
yield. Historically, municipals have averaged 85% of the 30-year Treasury
yield over the past ten years. In terms of real rates of return, this is a
very attractive opportunity.
The Fund began the year at $11.98 and closed the six month period at $11.50,
for a total return of (1.57)%*. In anticipation of stronger economic growth,
the Fund at times during the period utilized a defensive position in U.S.
Treasury futures. Share price was stabilized as yields on U.S. Treasuries
rose throughout the first six months. Stability of share price is the primary
objective of a defensive position.
Diversification remains an important strategy of the Fund. Throughout the
first half of the year, purchases in the primary and secondary market included
Wichita Via Christi Health System, University of Kansas Hospital Authority,
and Kansas Department of Administration issues.
The investment objective of the Fund is to provide as high a level of current
income exempt from both federal and Kansas income tax as is consistent with
preservation of capital.
Sincerely,
Monte L. Avery Robert E. Walstad
Chief Portfolio Strategist President
* Without Sales Charge
TERMS & DEFINITIONS
- -------------------
APPRECIATION
Increase in value of an asset.
AVERAGE ANNUAL TOTAL RETURN
A standardized measurement of the return (yield and appreciation) earned by
the fund on an annual basis, assuming all distributions are reinvested.
COUPON RATE OR FACE RATE
The rate of interest payable annually, based on the face amount of the bond;
expressed as a percentage.
DEPRECIATION
Decrease in value of an asset.
Lehman Brothers Municipal Bond Index
An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt
bonds representative of the municipal bond market. The index does not take
into account brokerage commissions or other costs, may include bonds different
from those in the fund, and may pose different risks than the fund.
MARKET VALUE
Actual (or estimated) price at which a bond trades in the market place.
MATURITY
A measure of the term or life of a bond in years. When a bond "matures,"
the issuer repays the principal.
NET ASSET VALUE (NAV)
The value of all your fund's assets, minus any liabilities, divided by the
number of outstanding shares, not including any initial sales charge.
QUALITY RATINGS
A designation assigned by independent rating companies to give a relative
indication of a bond's credit worthiness. "AAA," "AA," "A," and "BBB"
indicate investment grade securities. Ratings can range from a high of "AAA"
to a low of "D".
TOTAL RETURN
Measures both the net investment income and any realized and unrealized
appreciation or depreciation of the underlying investments in the fund's
portfolio for the period, assuming the reinvestment of all dividends. It
represents the aggregate percentage or dollar value change over the period.
Portfolio Quality Ratings
(based on Total Long-Term Investments)
- --------------------------------------
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
AAA 41.9
AA 14.2
A 22.4
BBB 8.1
NR 13.4
</TABLE>
Quality ratings reflect the financial strength of the issuer. They are
assigned by independent rating services such as Moody's Investors Services
and Standard & Poor's. Non-rated bonds have been determined to be of
appropriate quality for the portfolio by Ranson Capital Corporation, the
investment adviser.
Portfolio Market Sectors
(as a % of Net Assets)
- -------------------------
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
H-Housing 37.5
HC-Health Care 28.8
U-Utilities 13.9
Other 5.6
S-School 4.1
I-Industrial 3.9
GO-General Obligation 3.6
T-Transportation 2.6
</TABLE>
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
These percentages are subject to change.
COMPARATIVE INDEX GRAPH
- -----------------------
[line graph]
Comparison of change in value of a $10,000 investment in The Kansas Municipal
Fund and the Lehman Brothers Municipal Bond Index
<TABLE>
<CAPTION>
Kansas Municipal Kansas Municipal Lehman Brothers
Fund w/o sales charge Fund w/ max sales charge Municipal Bond Index
---------------------------------------------------------------------------------
<S> <C> <C> <C>
11/15/90 $10,000 $ 9,575 $10,000
1991 $10,524 $10,077 $10,724
1992 $11,855 $11,351 $12,199
1993 $13,050 $12,495 $13,276
1994 $13,168 $12,609 $13,525
1995 $13,988 $13,394 $14,591
1996 $14,814 $14,184 $15,553
1997 $15,933 $15,256 $17,150
1998 $16,372 $15,676 $18,177
1999 $16,936 $16,216 $18,700
01/31/2000 $16,670 $15,962 $18,334
</TABLE>
Average Annual Total Returns
<TABLE>
<CAPTION>
For periods ending January 31, 2000
-----------------------------------
Since Inception
1 year 5 year 10 year (November 15, 1990)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Without sales charge (1.14)% 4.88% N/A 5.70%
With sales charge (4.25%) (5.35)% 3.97% N/A 5.20%
</TABLE>
Putting Performance into Perspective
Returns are historical and are not a guarantee of future results. The graph
comparing your Fund's performance to a benchmark index provides you with a
general sense of how your Fund performed. To put this information in context,
it may be helpful to understand the special differences between the two. The
Lehman Brothers index is a national index representative of the national
municipal bond market whereas the Fund concentrates its investments in Kansas
municipal bonds. Your Fund's total return for the periods shown appears with
and without sales charges and includes Fund expenses and management fees. A
securities index measures the performance of a theoretical portfolio. Unlike
a fund, the index is unmanaged; there are no expenses that affect the
results. In addition, few investors could purchase all of the securities
necessary to match the index. And, if they could, they would incur
transaction costs and other expenses. All Fund and benchmark returns include
reinvested dividends. 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.
Key Statistics
07-30-1999 NAV (share value) $11.98
01-31-2000 NAV $11.50
Average Maturity 20.9 years
Number of Issues 79
Total Net Assets $108,177,213
<TABLE>
<CAPTION>
Schedule of Investments January 31, 2000 (Unaudited)
- -----------------------------------------------------
Name of Issuer
Percentages represent the market
value of each investment Rating Coupon Principal Market
category to total net assets Moody's/S&P Rate Maturity Amount Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
KANSAS MUNICIPAL BONDS (98.4%)
*Burlington, KS (Gas & Elec.) Rev. Ref. MBIA Aaa/AAA 7.000% 06/01/31 $ 4,000,000 $ 4,177,480
Douglas Cty., KS Indl. Rev. (Cottonwood Inc. Proj.) NR/NR 6.400 07/01/10 375,000 369,506
Douglas Cty., KS Indl. Rev. (Cottonwood Inc. Proj.) NR/NR 6.500 07/01/14 750,000 721,485
Douglas Cty., KS USD #497 (Lawrence) G.O. Aa-3/NR 6.000 09/01/15 1,000,000 1,043,170
Ford Cty., KS Single Family Mrtge. Rev. Ref. A-1/NR 7.900 08/01/10 310,000 323,296
Gardner, KS Elec. Util. Rev. NR/NR 7.000 11/01/09 1,000,000 1,038,680
Garnett, KS (Garnett Hsg. Auth. Project) Rev. NR/NR 5.900 10/01/18 500,000 479,930
Goddard, KS (IFR Syst., Inc.) Indl. Rev. Ref. & Impvt. NR/NR 6.250 05/01/12 500,000 498,925
Hiawatha, KS (WalMart Stores) Indl. Rev. Ref. NR/AA 6.750 01/01/06 430,000 434,794
Hutchinson, KS Single Family Mrtge. Rev. Ref. A/NR 8.875 12/01/12 1,365,000 1,417,034
Johnson Cty., KS Internal Impvt. & Ref. Aa-1/NR 6.125 09/01/12 1,370,000 1,379,796
Johnson Cty., KS Single Family Mrtge. Rev. A/NR 7.100 05/01/12 590,000 613,795
Johnson Cty., KS Water Dist. #1 Rev. Aa-1/AA+ 6.250 12/01/11 700,000 717,465
Johnson Cty., KS Water Dist. #1 Rev. Ref. Aa-1/AA+ 6.500 12/01/13 500,000 508,305
Kansas City, KS GNMA Mrtge. Rev. GNMA Aaa/NR 5.900 11/01/27 1,535,000 1,501,767
*Kansas City, KS Util. Syst. Ref. & Impvt. AMBAC Aaa/AAA 6.300 09/01/16 580,000 602,980
*Kansas City, KS Util. Syst. Ref. & Impvt. FGIC Aaa/AAA 6.375 09/01/23 2,525,000 2,643,953
*Kansas City, KS Util. Syst. Ref. & Impvt. FGIC Aaa/AAA 6.375 09/01/23 5,225,000 5,471,150
Kansas City\Leavenworth Cty.\Lenexa, KS Mrtge. NR/AAA 7.850 11/01/10 400,000 400,740
KS Department of Transportation Highway Rev. Aa/AA+ 6.000 09/01/12 2,200,000 2,317,876
KS Devl. Finance Auth. (Board of Regents) AMBAC Aaa/AAA 5.875 06/01/21 750,000 731,377
KS Devl. Finance Auth. (Dept. Adm. 7th & Harrison PJ) NR/AAA 5.750 12/01/27 2,000,000 1,910,500
KS Devl. Finance Auth. (Hays Medl. Ctr. Inc.) Facs. Aaa/AAA 5.500 11/15/17 500,000 477,370
KS Devl. Finance Auth. (Highway Patrol Train.) Facs. NR/NR 6.300 12/01/05 200,000 205,954
KS Devl. Finance Auth. (Indian Ridge Apts.) NR/NR 6.000 01/01/28 1,130,000 1,072,494
KS Devl. Finance Auth. (Jackson Co.) Hlth Rev. Aa-3/NR 5.375 09/01/27 1,000,000 917,190
KS Devl. Finance Auth. (Lewis Field Stadium) Rev. NR/NR 6.000 04/01/08 500,000 498,085
#KS Devl. Finance Auth. (Martin Creek Place) Rev. Aa/NR 6.600 08/01/34 1,900,000 1,872,032
KS Devl. Finance Auth. (Martin Creek Place) Rev. Aa/NR 6.500 08/01/24 750,000 743,265
KS Devl. Finance Auth. (Oak Ridge Park Apt.) NR/NR 6.500 02/01/18 2,065,000 2,073,673
KS Devl. Finance Auth. (Oak Ridge Park Apt.) NR/NR 6.625 08/01/29 1,875,000 1,872,375
KS Devl. Finance Auth. (Sec. 8) Rev. Ref. MBIA Aaa/AAA 6.400 01/01/24 770,000 765,488
KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev.Aaa/AAA 5.800 11/15/21 430,000 409,579
KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev.Aaa/AAA 5.800 11/15/16 550,000 553,146
KS Devl. Finance Auth. Multifamily Hsg. Rev. NR/AAA 6.000 12/01/21 1,975,000 1,969,904
KS Devl. Finance Auth. Water Fund Rev. Aa-1/AA+ 6.000 11/01/14 500,000 525,360
KS Water Finance Auth. (Public Water Supply Dist #6) NR/NR 6.000 05/01/17 255,000 249,081
Lawrence, KS (Brandon Woods) Multifamily Hsg. Devl. NR/A 6.625 04/01/12 2,000,000 2,002,480
Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.000 07/01/09 2,000,000 2,094,640
Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.200 07/01/14 1,200,000 1,213,692
Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.200 07/01/19 1,475,000 1,455,781
Lawrence, KS (Memorial Hospital) Rev. ASGUA A-3/AA 5.750 07/01/24 1,000,000 920,770
*Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. NR/AA 6.450 02/01/18 2,500,000 2,518,525
Lenexa, KS (Lakeview Village) Hlth. Care Facs. Rev. NR/BBB- 6.250 05/15/26 8,000,000 7,693,360
Newton, KS (Newton Healthcare) Hosp. Rev. NR/BBB- 5.700 11/15/18 1,000,000 946,900
Newton, KS (Newton Healthcare) Hosp. Rev. NR/A 5.750 11/15/24 500,000 471,085
Olathe, KS (Bristol Pointe) Multifamily Hsg. Rev. Ref. NR/AAA 5.700 11/01/27 2,210,000 2,126,086
Olathe, KS (Jefferson Place) Multifamily Hsg. Rev. Ref.NR/A- 5.950 07/01/22 5,060,000 4,957,586
Olathe, KS (Jefferson Place) Multifamily Hsg. Rev. Ref.NR/A- 6.100 07/01/22 785,000 773,029
Olathe, KS Hlth. Care Ref. (Luth. Gd. Sam.) AMBAC Aaa/AAA 6.000 05/01/19 900,000 897,849
Olathe, KS Hlth. Care Ref. (Luth. Gd. Sam.) AMBAC Aaa/AAA 5.875 09/01/16 2,000,000 1,930,900
Pratt, KS Elec. Util. Syst. Rev. Ref. & Impvt. AMBAC Aaa/AAA 6.600 11/01/07 1,000,000 1,107,230
Riley Cty. KS (Colbert Hills Golf Project) NR/NR 5.550 05/01/23 2,590,000 2,370,601
Sedgwick Cty, KS USD#267 (Renwick) G.O. AMBAC Aaa/AAA 5.000 11/01/19 1,000,000 886,650
Seward Cty., KS G.O. AMBAC Aaa/AAA 6.000 08/15/13 750,000 746,992
Seward Cty., KS Single Family Mrtge. Rev. Ref. Aa-1/NR 8.000 05/01/11 245,000 253,418
Shawnee Cty., KS (Auburn-Washburn) USD #437 G.O. Aaa/AAA 6.600 09/01/09 500,000 521,500
Shawnee, KS (Thomasbrooks Apts.) Multifamily Hsg NR/AAA 5.250 10/01/14 830,000 799,506
Shawnee, KS (Thomasbrooks Apts.) Multifamily Hsg NR/AAA 5.500 04/01/24 3,200,000 3,023,616
Shawnee, KS Int. Impvt. G.O. Aa-3/NR 5.850 12/01/06 235,000 240,739
University Kansas Hosp. Auth. KU Health AMBAC NR/AAA 5.700 09/01/20 830,000 799,049
University Kansas Hosp. Auth. KU Health AMBAC NR/AAA 5.550 09/01/26 1,355,000 1,257,440
Wichita, KS (Broadmoor Chelsea) Multifamily Hsg. NR/AAA 5.650 07/01/16 990,000 979,140
#Wichita, KS (Broadmoor Chelsea) Multifamily Hsg. NR/AAA 5.700 07/01/22 2,000,000 1,948,900
Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.000 11/15/08 640,000 673,005
Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.200 10/01/15 2,225,000 2,415,883
Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.000 11/15/18 2,350,000 2,400,666
Wichita, KS (Innes Station Apt. 5) Multifamily Hsg. NR/NR 6.250 03/01/28 1,750,000 1,658,388
Wichita, KS (St. Francis) Facs. Impvt. & Ref. MBIA Aaa/AAA 6.250 10/01/10 1,000,000 1,050,450
Wichita, KS Airport Auth. Facs. Rev. Ref. ASGUA NR/AA 7.000 03/01/05 440,000 467,786
Wichita, KS Hlth. Care (Masonic Home) Rev. NR/NR 6.375 12/01/22 1,275,000 1,189,498
Wichita, KS Hosp. Rev. (Via Christi Health System) NR/A+ 6.250 11/15/24 1,500,000 1,427,550
Wichita, KS Multifamily Hsg. (Brentwood Apts.) Rev. NR/A 5.850 12/01/25 1,000,000 969,450
Wichita, KS Multifamily Hsg. (Cimarron Apts.) FNMA Aa/AAA 5.550 10/01/22 1,000,000 960,880
Wichita, KS Multifamily Hsg. (Northpark II-A) Rev. Aaa/NR 6.125 08/20/28 1,900,000 1,856,604
Wichita, KS Public Building Commission Rev. A/AA- 5.500 08/01/14 715,000 697,218
Wichita, KS Public Building Commission Rev. Aaa/AAA 5.750 02/01/17 350,000 337,862
Wichita, KS Single Family Mrtge. Rev. Ref. A/NR 7.100 09/01/09 620,000 640,665
Wyandotte Cty, KS (KS Int'l. Speedway) Sales Tax Rev. Aaa/AAA 5.000 12/01/27 1,500,000 1,306,335
------------
KANSAS MUNICIPAL BONDS (COST: $108,069,012) $106,498,704
------------
SHORT-TERM SECURITIES (0.6%)
Federated Tax-Free Fund 73 (COST: $641,413) $ 641,413
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $108,710,425) $107,140,117
OTHER ASSETS LESS LIABILITIES 1,037,096
------------
NET ASSETS $108,177,213
============
</TABLE>
[FN]
* Indicates bonds are segregated by the custodian to cover when-issued
or delayed-delivery purchases.
# Indicates bonds are segregated by the custodian to cover initial
margin requirements
FOOTNOTE: Non-rated (NR) securities have been determined to be of investment
grade quality by the Fund's Manager.
The accompanying notes are an integral part of these financial statements.
</FN>
Financial Statements January 31, 2000 (Unaudited)
Statement of Assets and Liabilities January 31, 2000
- -----------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (cost: $108,710,425) $ 107,140,117
Accrued dividends receivable 3,308
Accrued interest receivable 1,889,355
Prepaid expenses 11,567
Receivable for fund shares sold 381
-------------
Total Assets $ 109,044,728
-------------
Liabilities
Dividends payable $ 462,716
Accrued expenses 88,638
Payable for fund shares redeemed 212,959
Bank overdraft 103,202
-------------
Total Liabilities $ 867,515
-------------
Net Assets $ 108,177,213
=============
Net assets are represented by:
Paid-in capital $ 114,528,242
Accumulated undistributed net realized gain (loss) on investments (4,780,721)
Unrealized depreciation on investments (1,570,308)
-------------
Total amount representing net assets applicable to
9,404,987 outstanding shares of no par common
stock (unlimited shares authorized) $ 108,177,213
=============
Net asset value per share $ 11.50
=============
The accompanying notes are an integral part of these financial statements.
Statement of Operations For the six months ended January 31, 2000 (Unaudited)
- ----------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 3,330,550
Dividends 17,149
------------
Total Investment Income $ 3,347,699
------------
EXPENSES
Investment advisory fees $ 281,016
Service fees 140,508
Transfer agent fees 58,844
Accounting service fees 36,387
Custodian fees 8,391
Transfer agent out-of-pockets 7,350
Professional fees 2,400
Trustees fees 3,469
Insurance expense 4,350
Reports to shareholders 3,450
Registration and filing fees 250
-------------
Total Expenses $ 546,415
Less expenses waived or absorbed
by the Fund's manager (12,485)
-------------
Total Net Expenses $ 533,930
-------------
NET INVESTMENT INCOME $ 2,813,769
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investment transactions $ 203,978
Futures transactions 192,544
Net change in unrealized appreciation (depreciation) of :
Investments (4,954,170)
-------------
Net Realized And Unrealized Gain (Loss) On
Investments and Futures $ (4,557,648)
-------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (1,743,879)
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Financial Statements January 31, 2000
Statement of Changes in Net Assets
For the six months ended January 31, 2000 and the year ended July 30, 1999
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The
Six Months Ended For The
January 31, 2000 Year Ended
(Unaudited) July 30, 1999
--------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 2,813,769 $ 5,683,003
Net realized gain (loss) on investment and
futures transactions 396,522 774,752
Net change in unrealized appreciation (depreciation) on
investments and futures (4,954,170) (2,483,703)
--------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From
Operations $ (1,743,879) $ 3,974,052
--------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ($.29 and $.58 per share,
respectively) $ (2,813,769) $ (5,683,003)
Distributions from net realized gain on investment and
futures transactions 0 0
--------------------------------------------
Total Dividends and Distributions $ (2,813,769) $ (5,683,003)
--------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 3,024,161 $ 7,216,537
Proceeds from reinvested dividends 1,861,344 3,847,350
Cost of shares redeemed (8,032,731) (13,496,584)
---------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ (3,147,226) $ (2,432,697)
---------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (7,704,874) $ (4,141,648)
NET ASSETS, BEGINNING OF PERIOD 115,882,087 120,023,735
---------------------------------------------
NET ASSETS, END OF PERIOD $ 108,177,213 $115,882,087
=============================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements January 31, 2000 (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. 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 - Securities for which quotations are not
readily available (which will constitute a majority of the securities held by
the Fund) are valued using a matrix system at fair value as determined by
Ranson Capital Corporation, ("Ranson"). The matrix system has been developed
based on procedures approved by the Board of Trustees which include
consideration of the following: yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating, and
indications as to value from dealers and general market conditions. Because
the market value of securities can only be established by agreement between
parties in a sales transaction, and because of the uncertainty inherent in the
valuation process, the fair values as determined may differ from the values
that would have been used had a ready market for the securities existed. 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,
2000, a net capital loss carryforward totaling $5,177,244, which may be used
to offset capital gains realized during subsequent years through July 31, 2006.
Distributions to shareholders - Dividends from net investment income, declared
daily and paid 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
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.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Schedule of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
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, 2000, there were unlimited shares of no par authorized;
9,404,987 and 9,675,452 shares were outstanding at January 31, 2000 and
July 30, 1999, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares
------------------------------------
<S> <C> <C>
For The Six For The
Months Ended Year Ended
January 31, 2000 July 30, 1999
------------------------------------
Shares sold 258,457 594,266
Shares issued on reinvestment of dividends 157,985 316,848
Shares redeemed (686,907) (1,110,974)
------------------------------------
Net increase (decrease) (270,465) (199,860)
====================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and underwriter; ND
Resources, Inc., the Fund's transfer and accounting services agent; and ND
Capital, Inc., the Fund's agent for the purchase of certain investment
securities; 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 $281,016 of investment
advisory fees for the six months ended January 31, 2000. The Fund has a
payable to Ranson Capital Corporation of $45,545 at January 31, 2000 for
investment advisory fees. Certain officers and trustees of the Fund are also
officers and directors of the investment adviser.
The Fund pays an annual service fee to Ranson Capital Corporation, (Ranson),
its principal underwriter, for certain expenses incurred by Ranson in
connection with the distribution of the Fund's shares. The annual fee paid to
Ranson is calculated daily and paid monthly by the Fund at the annual rate of
0.25% of the average daily net assets of the Fund. The Fund has recognized
$128,023 of service fee expenses after partial waiver for the six months ended
January 31, 2000. The Fund has a payable to Ranson of $20,523 at January 31,
2000 for service fees.
The Fund has engaged ND Capital, Inc. as agent for the purchase of certain
investment securities. For the six months ended January 31, 2000, no
commissions were earned by ND Capital, Inc.
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 $58,844 of transfer agency fees and
expenses for the six months ended January 31, 2000. The Fund has a payable
to ND Resources, Inc. of $9,657 at January 31, 2000 for transfer agency fees.
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 $36,387 of
accounting service fees for the six months ended January 31, 2000. The Fund
has a payable to ND Resources, Inc. of $6,022 at January 31, 2000 for
accounting service fees.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from sales of investment securities
(excluding short-term securities) aggregated $7,580,229 and $10,238,644,
respectively, for the six months ended January 31, 2000.
Note 6. INVESTMENT IN SECURITIES
At January 31, 2000, the aggregate cost of securities for federal income
tax purposes was $108,710,424, and the net unrealized depreciation of
investments based on the cost was $1,570,308, which is comprised of
$1,321,121 aggregate gross unrealized appreciation and $2,891,429 aggregate
gross unrealized depreciation.
<TABLE>
<CAPTION>
Financial Highlights Selected per share data and ratios for the period indicated
- ---------------------------------------------------------------------------------
For the For the For the For the For the For the
Six Months Ended Year Ended Year Ended Year Ended Year Ended Year Ended
January 31, 2000 July 30, July 31, July 31, July 31, July 31,
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.98 $ 12.15 $ 12.42 $ 12.14 $ 12.07 $ 12.00
----------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income $ .29 $ .58 $ .60 $ .61 $ .69 $ .65
Net realized and unrealized gain (loss)
on investment and futures transactions (.48) (.17) (.27) .28 .07 .07
----------------------------------------------------------------------------------
Total Income (Loss) From
Investment Operations $ (.19) $ .41 $ .33 $ .89 $ .76 $ .72
----------------------------------------------------------------------------------
Less Distributions:
Dividends from net investment
Income $ (.29) $ (.58) $ (.60) $ (.61) $ (.69) $ (.65)
Distributions from net capital
Gains .00 .00 .00 .00 .00 .00
----------------------------------------------------------------------------------
Total Distributions $ (.29) $ (.58) $ (.60) $ (.61) $ (.69) $ (.65)
-----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.50 $ 11.98 $ 12.15 $ 12.42 $ 12.14 $ 12.07
===================================================================================
Total Return (3.14)%(A)(C) 3.44%(A) 2.76%(A) 7.56%(A) 5.90%(A) 6.23%(A)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $ 108,177 $ 115,882 $ 120,024 $ 128,201 $ 132,349 $ 130,091
Ratio of net expenses (after
expense assumption) to average
net assets 0.95%(B)(C) 0.95%(B) 0.95%(B) 0.93%(B) 0.85%(B) 0.82%(B)
Ratio of net investment income
to average net assets 5.01%(C) 4.80% 4.93% 5.02% 5.18% 5.46%
Portfolio turnover rate 6.85% 13.54% 26.68% 18.64% 20.14% 57.00%
</TABLE>
[FN]
(A) Excludes maximum sales charge of 4.25%.
(B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital
Corporation assumed/waived expenses of $12,485, $23,429, $3,901, $46,741,
$212,056, and $295,875, respectively. If the expenses had not been assumed/
waived, the annualized ratios of total expenses to average net assets would
have been 0.97%, 0.97%, 0.95%, 0.97%, 1.01%, and 1.06%, respectively.
(C) Ratio was annualized.
</FN>
The accompanying notes are an integral part of these financial statements.
Dear Shareholder:
Enclosed is the semi-annual report of the operations of the Kansas Insured
Intermediate Fund, the "Fund," for the six months ended January 31, 2000. The
Fund's portfolio and related financial statements are presented within for your
review.
As we start the new millennium, 1999 will go down as one of the worst years in
bond market history. The benchmark 30-year Treasury bond has seen a value
loss of approximately 27%, as yields have risen from a January 1999 yield of
5.07% to a December 1999 yield of 6.48%. Stabilizing global economies and a
U.S. economy growing at what many economists believe is an unsustainable pace
has led the Federal Reserve to raise short-term interest rates three times in
1999 for a total increase of three quarters of one percent. Strong consumer
confidence, low unemployment, housing and retail sales at record levels, and
a doubling of crude oil prices contributed to the Federal Reserve's actions.
Tax-free municipal bonds haven't faired much better. A long-term tax-free
bond worth $1,000.00 on December 31, 1998 would be worth roughly $860.00
today, as yields have risen from a January 1999 yield of 4.94% to a December
1999 yield of 5.94% on AAA rated bonds. As a result, we are now seeing
Kansas municipal bonds paying 90% to as high as 100% of the 30-year Treasury
yield. Historically, municipals have averaged 85% of the 30-year Treasury
yield over the past ten years. In terms of real rates of return, this is a
very attractive opportunity.
The Fund began the year at $11.98 and closed the six month period at $11.67,
for a total return of (0.35)%*. In anticipation of stronger economic growth,
the Fund at times during the period utilized a defensive position in U.S.
Treasury futures. Share price was stabilized as yields on U.S. Treasuries
rose throughout the first six months. Stability of share price is the
primary objective of a defensive position.
Diversification remains an important strategy of the Fund. Throughout the
first half of the year, purchases in the primary and secondary markets
included Washburn University, University of Kansas Hospital Authority, and
Kansas Department of Administration issues.
The investment objective of the Fund is to provide as high a level of
current income exempt from both federal and Kansas income tax as is
consistent with preservation of capital.
Sincerely,
Monte L. Avery Robert E. Walstad
Chief Portfolio Strategist President
*Without Sales Charge
TERMS & DEFINITIONS
- -------------------
APPRECIATION
Increase in value of an asset.
AVERAGE ANNUAL TOTAL RETURN
A standardized measurement of the return (yield and appreciation) earned by
the fund on an annual basis, assuming all distributions are reinvested.
COUPON RATE OR FACE RATE
The rate of interest payable annually, based on the face amount of the bond;
expressed as a percentage.
DEPRECIATION
Decrease in value of an asset.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt bonds
representative of the municipal bond market. The index does not take into
account brokerage commissions or other costs, may include bonds different
from those in the fund, and may pose different risks than the fund.
MARKET VALUE
Actual (or estimated) price at which a bond trades in the market place.
MATURITY
A measure of the term or life of a bond in years. When a bond "matures,"
the issuer repays the principal.
NET ASSET VALUE (NAV)
The value of all your fund's assets, minus any liabilities, divided by the
number of outstanding shares, not including any initial sales charge.
QUALITY RATINGS
A designation assigned by independent rating companies to give a relative
indication of a bond's credit worthiness. "AAA," "AA," "A," and "BBB"
indicate investment grade securities. Ratings can range from a high of
"AAA" to a low of "D".
TOTAL RETURN
Measures both the net investment income and any realized and unrealized
appreciation or depreciation of the underlying investments in the fund's
portfolio for the period, assuming the reinvestment of all dividends.
It represents the aggregate percentage or dollar value change over the period.
PERFORMANCE AND COMPOSTION
- ---------------------------
Portfolio Quality Ratings
(based on Total Long-Term Investments)
- -------------------------------------
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
AAA 100
</TABLE>
Quality ratings reflect the financial strength of the issuer. They are
assigned by independent rating services such as Moody's Investors Services
and Standard & Poor's. Non-rated bonds have been determined to be of
appropriate quality for the portfolio by Ranson Capital Corporation, the
investment adviser.
Portfolio Market Sectors
(as a % of Net Assets)
- -------------------------------------
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
H-Housing 30.1
HC-Health Care 28.0
GO-General Obligation 23.7
W/S-Water/Sewer 6.1
O-Other 3.7
U-Utilities 2.6
S-Schools 2.5
G-Government 1.8
T-Transportation 1.5
</TABLE>
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
These percentages are subject to change.
COMPARATIVE INDEX GRAPH
<TABLE>
<CAPTION>
Comparison of change in value of $10,000 investment in
The Kansas Insured Intermediate Fund and the Lehman
Brothers Municipal 7 Year Maturity Bond Index
The Kansas Insured The Kansas Insured Lehman Bros. Municipal
Intermediate Fund Intermediate Fund 7 Year Maturity Bond Index
w/o sales charge w/ max sales charge
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
11/23/92 $10,000 $ 9,725 $10,000
1993 $10,829 $10,531 $10,694
1994 $11,025 $10,722 $10,982
1995 $11,656 $11,335 $11,868
1996 $12,326 $11,987 $12,471
1997 $12,912 $12,557 $13,548
1998 $13,321 $12,955 $14,260
1999 $13,815 $13,435 $14,729
01/31/2000 $13,766 $13,388 $14,700
</TABLE>
Average Annual Total Returns
<TABLE>
<CAPTION
For periods ending January 31, 2000
------------------------------------
Since Inception
1 year 5 year 10 year (November 23, 1992)
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Without sales charge 0.21% 4.64% N/A 4.54%
With sales charge (2.75%) (2.55)% 4.06% N/A 4.14%
</TABLE>
Putting Performance into Perspective
Returns are historical and are not a guarantee of future results. The graph
comparing your Fund's performance to a benchmark index provides you with a
general sense of how your Fund performed. To put this information in context,
it may be helpful to understand the special differences between the two. The
Lehman Brothers index is a national index representative of the national
municipal bond market whereas the Fund concentrates its investments in Kansas
municipal bonds. Your Fund's total return for the period shown appears with
and without sales charges and includes Fund expenses and management fees. A
securities index measures the performance of a theoretical portfolio. Unlike
a fund, the index is unmanaged; there are no expenses that affect the results.
In addition, few investors could purchase all of the securities necessary to
match the index. And, if they could, they would incur transaction costs and
other expenses. All Fund and benchmark returns include reinvested dividends.
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.
Key Statistics
07-30-1999 NAV (share value) $11.98
01-31-2000 NAV $11.67
Average Maturity 9.5 years
Number of Issues 46
Total Net Assets $20,458,768
<TABLE>
<CAPTION>
Schedule of Investments January 31, 2000 (Unaudited)
Name of Issuer
Percentages represent the
market value of each investment Rating Coupon Principal Market
category to total net assets Moodys/S&P Rate Maturity Amount Value
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
KANSAS MUNICIPAL BONDS (97.5%)
*Douglas Cty., KS USD #497 (Lawrence) G.O. FGIC Aaa/AAA 7.200% 09/01/02 $ 1,370,000 $ 1,461,968
Harvey Cty., KS USD #373 (Newton) FSA Aaa/AAA 5.000 09/01/16 250,000 234,408
Johnson Cty., KS USD #232 (Desoto) G.O. MBIA Aaa/AAA 5.200 09/01/10 480,000 482,520
Johnson Cty., KS USD #233 (Olathe) G.O. AMBAC Aaa/AAA 6.150 03/01/07 300,000 311,703
Kansas City, KS (St. Margaret Hlth. Ctr.) AMBAC Aaa/AAA 5.700 08/01/03 250,000 256,560
Kansas City, KS Special Obligation Escrowed NR/AAA 6.000 02/15/03 200,000 208,160
KS Devl. Finance Auth. (Dept. Admin. 7th & Harrison PJ) NR/AAA 5.500 12/01/13 375,000 371,768
KS Devl. Finance Auth. Pooled Ref. Lease Rev. MBIA Aaa/AAA 5.500 10/01/05 250,000 259,743
KS Devl. Finance Auth. Multifamily (Park Apts.) Hsg. NR/AAA 5.700 12/01/09 325,000 326,342
#KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Aaa/AAA 5.700 11/15/08 450,000 473,135
KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Aaa/AAA 5.800 11/15/11 300,000 306,993
KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Aaa/AAA 5.600 11/15/07 100,000 103,110
KS Devl. Finance Auth. (Hays Medl. Ctr.) Rev. Aaa/NR 5.200 11/15/08 375,000 379,196
KS Devl. Finance Auth. (Hays Medl. Ctr.) Rev. Aaa/NR 5.300 11/15/09 375,000 381,570
KS State Turnpike Auth. Rev. FGIC Aaa/AAA 5.450 09/01/10 200,000 201,678
Larned, KS (Cath. Hlth. Corp.) Hlth. Facs. Rev. Aaa/AAA 5.400 11/15/04 155,000 159,208
*Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. NR/AA 5.875 02/01/04 500,000 511,855
Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. NR/AA 5.950 02/01/05 250,000 254,203
Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. NR/AA 6.050 02/01/06 350,000 354,729
McPherson Cty., KS (McPherson) USD #418 G.O. FSA Aaa/AAA 5.700 09/01/06 400,000 419,584
Mission, KS (Lamar Place) Multifamily Hsg. Rev. NR/AAA 5.000 10/01/14 605,000 574,762
Mission, KS (Lamar Place) Multifamily Hsg. Rev. NR/AAA 5.180 10/01/23 945,000 876,771
Olathe, KS (Evangelical Lutheran Good Samaritan Soc.) Aaa/AAA 5.500 05/01/03 110,000 113,189
Olathe, KS (Medl. Ctr.) Hlth. Facs. Rev. Aaa/AAA 5.600 09/01/05 1,000,000 1,023,500
Olathe, KS (Medl. Ctr.) Hlth. Facs. Rev. Aaa/AAA 5.125 09/01/12 500,000 482,805
Olathe, KS (Bristol Pointe) MultiFamily Hsg. Rev. Ref. NR/AAA 5.250 11/01/12 485,000 475,790
Sedgwick\Shawnee Cty., KS Single Family Mrtge. Rev. Aaa/NR 5.200 12/01/08 475,000 472,245
Sedgwick Cty., KS (Maize) USD #266 G.O. FSA Aaa/AAA 5.500 09/01/05 300,000 309,723
Sedgwick Cty., KS (Maize) USD #266 G.O. FSA Aaa/AAA 5.600 09/01/06 200,000 206,710
Sedgwick Cty., KS (Renwick) USD #267 G.O. AMBAC Aaa/AAA 6.000 11/01/07 570,000 604,724
*Shawnee, KS (Topeka) USD #501 G.O. FGIC Aaa/AAA 5.550 02/01/07 820,000 844,887
Shawnee, KS (Thomasbroooks Apts.) Multifamily Hsg. NR/AAA 5.250 10/01/14 1,000,000 963,260
University Kansas Hosp. Auth. (KU Health) AMBAC NR/AAA 5.500 09/01/15 1,000,000 967,520
Washburn Univ. Bld. Rev. Living Learning Ctr. AMBAC NR/AAA 5.250 07/01/10 170,000 169,237
Washburn Univ. Bld. Rev. Living Learning Ctr. AMBAC NR/AAA 5.350 07/01/11 105,000 104,498
Wellington, KS Utility Rev. AMBAC Aaa/AAA 4.950 05/01/11 300,000 291,960
Wellington, KS Utility Rev. AMBAC NR/AAA 5.000 05/01/12 250,000 242,402
Wichita, KS Airport Auth. Facs. Rev. Ref. ASGUA NR/AA 7.000 03/01/05 100,000 106,315
Wichita, KS (St. Francis Regl. Medl. Ctr.) Impvt. & Ref. Aaa/AAA 6.000 10/01/03 250,000 262,947
Wichita, KS (St. Francis Regl. Medl. Ctr.) Impvt. & Ref. Aaa/AAA 6.100 10/01/04 775,000 817,857
#Wichita, KS Multifamily Hsg. (Broadmoor Chelsea) NR/AAA 5.375 07/01/10 625,000 624,231
*Wichita, KS Multifamily Hsg. (Cimarron Apartments) Aa/AAA 5.250 10/01/12 735,000 722,703
Wichita, KS Water & Sewer Util. Rev. FGIC Aaa/AAA 5.600 04/01/05 360,000 370,498
Wichita, KS Water & Sewer Util. Rev. FGIC Aaa/AAA 5.750 10/01/06 150,000 149,970
Wichita, KS Water & Sewer Util. Rev. FGIC Aaa/NR 5.000 10/01/11 500,000 487,725
Wichita, KS Water & Sewer Util. Rev. FGIG Aaa/AAA 5.000 10/01/15 250,000 230,620
------------
TOTAL KANSAS MUNICIPAL BONDS (COST: $19,939,516) $ 19,955,282
------------
SHORT-TERM SECURITIES (1.0%)
Federated Tax-Free Fund 73 $ 153,958
Federated Intermediate Municipal Trust 78 58,988
------------
TOTAL SHORT-TERM SECURITIES (COST: $213,958) $ 212,946
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $20,153,474) $ 20,168,228
OTHER ASSETS LESS LIABILITIES 290,540
------------
NET ASSETS $ 20,458,768
============
</TABLE>
[FN]
* Indicates bonds are segregated by the custodian to cover when-issued or
delayed-delivery purchases.
# Indicates bonds are segragated by the custodian to cover initial margin
requirements.
FOOTNOTE: Non-rated (NR) securities have been determined to be of
investment grade quality by the Funds Manager.
</FN>
The accompanying notes are an integral part of these financial statements.
Financial Statements January 31, 2000
Statement of Assets and Liabilities January 31, 2000 (Unaudited)
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (cost: $20,153,474) $ 20,168,228
Accrued interest receivable 382,039
Accrued dividends receivable 705
Prepaid expenses 2,770
------------
Total Assets $ 20,553,742
------------
Liabilities
Bank overdraft $ 1,235
Dividends payable 78,672
Accrued expenses 14,567
Payable for fund shares redeemed 500
------------
Total Liabilities $ 94,974
------------
Net Assets $ 20,458,768
============
Net assets are represented by:
Paid-in capital $ 21,256,203
Accumulated undistributed net realized gain (loss) on
Investments (812,189)
Unrealized appreciation on investments 14,754
------------
Total amount representing net assets applicable to
1,752,555 outstanding shares of no par common
stock (unlimited shares authorized) $ 20,458,768
============
Net asset value per share $ 11.67
============
The accompanying notes are an integral part of these financial statements.
Statement of Operations For the six months ended January 31, 2000 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 543,945
Dividends 5,601
------------
Total Investment Income $ 549,546
------------
EXPENSES
Investment advisory fees $ 51,923
Transfer agent fees 14,996
Accounting service fees 17,196
Custodian fees 1,557
Transfer agent out-of-pockets 1,150
Professional fees 2,000
Trustees fees 1,336
Reports to shareholders 1,144
Registration and filing fees 168
Insurance Expense 750
------------
Total Expenses $ 92,220
Less expenses waived or absorbed
by the Fund's manager (14,335)
------------
Total Net Expenses $ 77,885
------------
NET INVESTMENT INCOME $ 471,661
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investment transactions $ 30,454
Futures transactions 27,379
Net change in unrealized appreciation (depreciation) of:
Investments (591,775)
-----------
Net Realized and Unrealized Gain (Loss) On
Investments And Futures $ (533,942)
-----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (62,281)
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Financial Statements January 31, 2000 (Unaudited)
Statement of Changes in Net Assets
For the six months ended January 31, 2000 and the year ended July 30, 1999
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Six For The
Months Ended Year Ended
January 31, 2000 July 30,
(Unaudited) 1999
---------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 471,661 $ 927,674
Net realized gain (loss) on investment and futures transactions 57,833 (27,108)
Net change in unrealized appreciation (depreciation) on
investments and futures (591,775) (137,659)
-----------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ (62,281) $ 762,907
-----------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ($.27 and $.53 per share,
respectively) $ (471,661) $ (927,674)
Distributions from net realized gain on
investment and futures transactions 0 0
-----------------------------------------------
Total Dividends and Distributions $ (471,661) $ (927,674)
-----------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 543,253 $ 2,012,253
Proceeds from reinvested dividends 273,420 542,608
Cost of shares redeemed (1,157,389) (1,641,509)
-----------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ (340,716) $ 913,352
-----------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (874,658) $ 748,585
NET ASSETS, BEGINNING OF PERIOD 21,333,426 20,584,841
-----------------------------------------------
NET ASSETS, END OF PERIOD $ 20,458,768 $ 21,333,426
===============================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements January 31, 2000 (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.
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 - Securities for which quotations are not
readily available (which will constitute a majority of the securities held
by the Fund) are valued using a matrix system at fair value as determined by
Ranson Capital Corporation, ("Ranson"). The matrix system has been developed
based on procedures approved by the Board of Trustees which include
consideration of the following: yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating, and
indications as to value from dealers and general market conditions. Because
the market value of securities can only be established by agreement between
parties in a sales transaction, and because of the uncertainty inherent in the
valuation process, the fair values as determined may differ from the values
that would have been used had a ready market for the securities existed. 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,
2000, a net capital loss carryforward totaling $870,022, which may be used to
offset capital gains realized during subsequent years through July 31, 2007.
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.
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. Unrealized
appreciation (depreciation) related to open futures contracts is required
to be treated as realized gain (loss) for Federal income tax purposes.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Schedule of
Investments. The Statement of Assets and Liabilities reflects a receivable
or payable for the daily mark to market for variation margin.
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, 2000, there were unlimited shares of no par authorized;
1,752,555 and 1,781,247 shares were outstanding at January 31, 2000 and July
30, 1999, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares
-------------------------------------------------
For The Six For The
Months Ended Year Ended
January 31, 2000 July 30, 1999
-------------------------------------------------
<S> <C> <C>
Shares sold 45,957 166,145
Shares issued on reinvestment of dividends 23,080 44,820
Shares redeemed (97,729) (135,547)
-----------------------------------------------
Net increase (decrease) (28,692) 75,418
===============================================
</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; and ND
Capital, Inc., the Fund's agent for the purchase of certain investment
securities; 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 $37,588 of investment
advisory fees after partial waiver for the six months ended January 31,
2000. The Fund has a payable to Ranson Capital Corporation of $6,126 at
January 31, 2000 for investment advisory fees. Certain officers and
trustees of the Fund are also officers and directors of the investment adviser.
The Fund has engaged ND Capital, Inc. as agent for the purchase of certain
investment securities. For the six months ended January 31, 2000, no
commissions were earned by ND Capital, Inc.
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 $14,996 of transfer agency fees and
expenses for the six months ended January 31, 2000. The Fund has a payable
to ND Resources, Inc. of $2,475 at January 31, 2000 for transfer agency fees.
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 $17,196 of
accounting service fees for the six months ended January 31, 2000. The Fund
has a payable to ND Resources, Inc. of $2,856 at January 31, 2000 for
accounting service fees.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment securities
(excluding short-term securities) aggregated $2,796,380 and $2,586,827,
respectively, for the six months ended January 31, 2000.
Note 6. INVESTMENT IN SECURITIES
At January 31, 2000, the aggregate cost of securities for federal income tax
purposes was $20,153,474, and the net unrealized appreciation of investments
based on the cost was $14,754, which is comprised of $303,935 aggregate gross
unrealized appreciation and $289,181 aggregate gross unrealized depreciation.
<TABLE>
<CAPTION>
Financial Highlights Selected per share data and ratios for the period indicated
- ----------------------------------------------------------------------------------
For the For the For the For the For the For the
Six Months Ended Year Ended Year Ended Year Ended Year Ended Year Ended
January 31, 2000 July 30, July 31, July 31, July 31, July 31,
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.98 $ 12.07 $ 12.23 $ 12.19 $ 12.04 $ 11.92
------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income $ .27 $ .53 $ .54 $ .53 $ .53 $ .54
Net realized and unrealized gain (loss)
on investment and futures transactions (.31) (.09) (.16) .04 .15 .12
------------------------------------------------------------------------------
Total Income (Loss) From
Investment Operations $ (.04) $ .44 $ .38 $ .57 $ .68 $ .66
------------------------------------------------------------------------------
Less Distributions:
Dividends from net investment
Income $ (.27) $ (.53) $ (.54) $ (.53) $ (.53) $ (.54)
Distributions from net capital gains .00 .00 .00 .00 .00 .00
------------------------------------------------------------------------------
Total Distributions $ (.27) $ (.53) $ (.54) $ (.53) $ (.53) $ (.54)
------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.67 $ 11.98 $ 12.07 $ 12.23 $ 12.19 $ 12.04
==============================================================================
Total Return (0.70)%(A)(C) 3.70%(A) 3.17%(A) 4.76%(A) 5.75%(A) 5.72%(A)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $ 20,459 $ 21,333 $ 20,585 $ 25,533 $ 30,564 $ 30,678
Ratio of net expenses (after
expense assumption) to average
net assets 0.75%(B)(C) 0.75%(B) 0.75%(B) 0.76%(B) 0.69%(B) 0.62%(B)
Ratio of net investment income to
average net assets 4.54%(C) 4.39% 4.42% 4.33% 4.37% 4.57%
Portfolio turnover rate 12.60% 16.34% 25.46% 28.68% 19.96% 63.00%
<FN>
(A) Excludes maximum sales charge of 2.75%.
(B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital
Corporation assumed/waived expenses of $14,335, $29,229, $13,708, $40,608,
$71,943, and $112,745 respectively. If the expenses had not been assumed/
waived, the annualized ratios of total expenses to average net assets would
have been 0.89%, 0.89%, 0.82%, 0.90%, 0.92%, and 0.98% respectively.
(C) Ratio was annualized
</FN>
The accompanying notes are an integral part of these financial statements.
Dear Shareholder:
Enclosed is the semi-annual report of the operations of The Nebraska Municipal
Fund, the "Fund," for the six months ended January 31, 2000. The Fund's
portfolio and related financial statements are presented within for your
review.
As we start the new millennium, 1999 will go down as one of the worst years in
bond market history. The benchmark 30-year Treasury bond has seen a value
loss of approximately 27%, as yields have risen from a January 1999 yield of
5.07% to a December 1999 yield of 6.48%. Stabilizing global economies and a
U.S. economy growing at what many economists believe is an unsustainable pace
has led the Federal Reserve to raise short-term interest rates three times in
1999 for a total increase of three quarters of one percent. Strong consumer
confidence, low unemployment, housing and retail sales at record levels, and a
doubling of crude oil prices contributed to the Federal Reserve's actions.
Tax-free municipal bonds haven't faired much better. A long-term tax-free
bond worth $1,000.00 on December 31, 1998 would be worth roughly $860.00
today, as yields have risen from a January 1999 yield of 4.94% to a December
1999 yield of 5.94% on AAA rated bonds. As a result, we are now seeing
Nebraska municipal bonds paying 90% to as high as 100% of the 30-year Treasury
yield. Historically, municipals have averaged 85% of the 30-year Treasury
yield over the past ten years. In terms of real rates of return, this is a
very attractive opportunity.
The Fund began the year at $11.01 and closed the six month period at $10.57,
for a total return of (1.55)%*. In anticipation of stronger economic growth,
the Fund at times during the period utilized a defensive position in U.S.
Treasury futures. Share price was stabilized as yields on U.S. Treasuries
rose throughout the first six months. Stability of share price is the primary
objective of a defensive position.
Diversification remains an important strategy of the Fund. Throughout the
first half of the year, purchases in the primary and secondary market included
Nebraska Investment Finance Authority for Children's Healthcare, Lancaster
County Bryan Memorial Hospital, and Douglas County School District #1 issues.
The investment objective of the Fund is to provide as high level of current
income exempt from both federal and Nebraska income tax as is consistent with
preservation of capital.
Sincerely,
Monte L. Avery Robert E. Walstad
Chief Portfolio Strategist President
*Without sales charge
PERFORMANCE AND COMPOSITION
- ---------------------------
</TABLE>
<TABLE>
<CAPTION>
Portfolio Quality Ratings
(based on Total Long-Term Investments)
[pie chart]
<S> <C>
AAA 53.8
AA 17.9
A 11.5
BBB 2.0
NR 14.8
</TABLE>
Quality ratings reflect the financial strength of the issuer. They are
assigned by independent rating services such as Moody's Investors Services
and Standard & Poor's. Non-rated bonds have been determined to be of
appropriate quality for the portfolio by Ranson Capital Corporation, the
investment adviser.
<TABLE>
<CAPTION>
Portfolio Market Sectors
(as a % of Net Assets)
- ---------------------------
[pie chart]
<S> <C>
HC-Health Care 20.7
H-Housing 20.6
S-School 16.0
U-Utilities 14.3
GO-General Obligation 12.5
O-Other 6.7
I-Industrial 4.5
W/S-Water/Sewer 2.7
C/L-COP/Lease 2.0
</TABLE>
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
These percentages are subject to change.
COMPARATIVE INDEX GRAPH
- -----------------------
[line graph]
Comparison of change in value of a $10,000 investment in
The Nebraska Municipal Fund and the Lehman Brothers
Municipal Bond Index
<TABLE>
<CAPTION>
The Nebraska Municipal The Nebraska Municipal The Lehman Brothers
Fund w/o sales charge Fund w/ max sales charge Muni Bond Index
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
11/17/93 $10,000 $ 9,575 $10,000
1994 $ 9,773 $ 9,357 $ 9,892
1995 $10,471 $10,026 $10,672
1996 $11,071 $10,600 $11,376
1997 $11,909 $11,402 $12,544
1998 $12,380 $11,853 $13,295
1999 $12,853 $12,306 $13,677
01/31/2000 $12,653 $12,115 $13,410
</TABLE>
Average Annual Total Returns
- ----------------------------
<TABLE>
<CAPTION>
For periods ending January 31, 2000
- ------------------------------------
<S> <C> <C> <C> <C>
Since Inception
1 year 5 year 10 year (November 17, 1993)
-----------------------------------------------------------------
Without sales charge (2.31)% 5.25% N/A 3.86%
With sales charge (4.25%) (6.47)% 4.34% N/A 3.14%
</TABLE>
Putting Performance into Perspective
Returns are historical and are not a guarantee of future results. The graph
comparing your Fund's performance to a benchmark index provides you with a
general sense of how your Fund performed. To put this information in context,
it may be helpful to understand the special differences between the two. The
Lehman Brothers index is a national index representative of the national
municipal bond market whereas the Fund concentrates its investments in
Nebraska municipal bonds. Your Fund's total return for the period shown
appears with and without sales charges and includes Fund expenses and
management fees. A securities index measures the performance of a theoretical
portfolio. Unlike a fund, the index is unmanaged; there are no expenses that
affect the results. In addition, few investors could purchase all of the
securities necessary to match the index. And, if they could, they would
incur transaction costs and other expenses. All Fund and benchmark returns
include reinvested dividends. 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.
Key Statistics
07-30-1999 NAV (share value) $11.01
01-31-2000 NAV $10.57
Average Maturity 18.9 years
Number of Issues 112
Total Net Assets $38,069,794
<TABLE>
<CAPTION>
Schedule of Investments January 31, 2000
(Unaudited)
Name of Issuer
Percentages represent the market value of each Rating Coupon Principal Market
investment category to total net assets Moody's/S&P Rate Maturity Amount Value
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NEBRASKA MUNICIPAL BONDS (98.4%)
Adams Cty., NE Hosp. Auth. #1 (Mary Lanning Mem. Hosp.) ASGUA NR/AA 5.300% 12/15/18 $ 250,000 $ 237,525
NE Public Gas (American Public Energy Agency) AMBAC Aaa/AAA 4.700 06/01/11 200,000 190,400
Columbus, NE Combined Rev. NR/NR 5.100 12/15/16 125,000 115,118
Columbus, NE Combined Rev. NR/NR 5.200 12/15/17 100,000 92,481
Cuming Cty., NE School Dist. #020 (Bancraft-Rosalie) NR/NR 5.750 12/15/17 100,000 93,381
Dawson Cty., NE SID #1 (IBP, Inc. Proj.) Ref. G.O. A-3/A- 5.650 02/01/22 700,000 664,951
District Energy Corp., NE (County Bldg. & Correction) Fac. Rev. NR/NR 5.500 07/01/13 150,000 144,107
Douglas Cty., NE Hosp. Impvt. G.O. Aa/AA+ 5.100 07/01/04 150,000 154,615
Douglas Cty., NE Hosp. Auth. #001 (Alegent Hlth.) Rev. AMBAC Aaa/AAA 5.250 09/01/21 250,000 232,785
Douglas Cty., NE Hosp. Auth. #002 (Archbishop Bergan) Hlth. Facs. Aa-3/AA- 5.850 11/15/03 100,000 103,384
Douglas Cty., NE Hosp. Auth. #002 (Archbishop Bergan) Hlth. Facs. Aa-3/AA- 6.250 11/15/22 100,000 98,171
Douglas Cty., NE Hosp. Auth. #002 (Archbishop Bergan) Hlth. Facs. Aaa/AAA 6.000 11/15/15 125,000 125,806
Douglas Cty., NE Hosp. Auth. #002 (Lakeside Village) Hlth. Facs. Aaa/AAA 5.000 12/15/17 250,000 227,117
Douglas Cty., NE Hosp. Auth. #2 (Bethphage Project) Rev. NR/NR 5.400 02/01/13 120,000 113,510
Douglas Cty., NE (Catholic Health Corp.) Rev. MBIA Aaa/AAA 5.375 11/15/15 275,000 265,323
Douglas Cty., NE (Catholic Health Corp.) Rev. MBIA Aaa/AAA 5.500 11/15/21 340,000 326,658
Douglas Cty., NE SID #257 (Ramble Ridge) G.O. NR/NR 6.250 05/15/09 100,000 101,557
Douglas Cty., NE SID #295 G.O. NR/NR 6.500 06/01/17 800,000 751,448
Douglas Cty., NE SID #392 (Cinnamon Creek) G.O. NR/NR 5.750 08/15/17 200,000 186,176
Douglas Cty., NE SID #396 (First National Business Park) NR/NR 5.750 09/01/17 100,000 93,157
Douglas Cty., NE SID #240 (LeBea) Ref. G.O. NR/NR 5.900 10/15/16 100,000 96,366
Douglas Cty., NE SID #397 (Linden Estates II) NR/NR 5.600 07/15/18 265,000 249,643
Douglas Cty., NE SID #397 (Linden Estates II) NR/NR 5.600 07/15/19 280,000 263,309
Douglas Cty., NE SD #001 Aaa/AAA 5.625 12/15/19 250,000 242,140
Douglas Cty., NE SD #066 (Westside Comm. Schools) G.O. A-1/AA- 5.000 12/01/17 150,000 137,239
Gage Cty., NE Hosp. Auth. #01 (Beatrice Comm. Hosp.) Hosp. Rev. NR/NR 6.400 10/01/07 100,000 103,389
Gage Cty., NE Hosp. Auth. #01 (Beatrice Comm. Hosp.) Hosp. Rev. NR/NR 6.750 10/01/14 200,000 206,504
Gage Cty., NE (Beatrice) School Dist. #15 G.O. AMBAC Aaa/AAA 5.900 12/15/16 850,000 831,181
Grand Island, NE Sewer Syst. Rev. NR/A 6.000 04/01/14 550,000 548,806
Hastings, NE Elec. Rev. A-3/A 6.300 01/01/19 370,000 369,667
Lancaster Cty., NE Hosp. Auth. #001 (Sisters of Charity) Rev. Aaa/AAA 6.250 05/15/12 200,000 213,034
Lancaster Cty., NE (Lincoln Medl. Educ. Foundn.) Rev. NR/NR 5.700 02/01/11 100,000 97,293
Lancaster Cty., NE (Lincoln Medl. Educ. Foundn.) Rev. NR/NR 5.800 02/01/12 175,000 170,719
Lancaster Cty., NE (Bryan Memorial Hospital) Rev. MBIA Aaa/AAA 5.375 06/01/19 1,400,000 1,326,052
Lincoln-Lancaster Cty., NE Public Bldg. Comm. G.O. NR/NR 6.200 10/15/11 100,000 102,602
Lincoln/Lancaster Cty., NE Public Bldg. Community Tax Lease Rental Aa/AA+ 5.800 10/15/18 475,000 476,577
Lincoln/Lancaster Cty., NE Public Bldg. Community Rev. Aa/AA+ 5.875 10/15/23 850,000 831,096
Lincoln, NE Various Purpose Unlimited Tax G.O. Aa-1/AAA 4.750 08/15/19 750,000 658,500
Lincoln, NE Elec. Syst. Rev. Aa/AA+ 5.750 09/01/16 750,000 734,197
Madison Cty., NE Hosp. Auth. #1 (Faith Regl. Hlth. Svcs.) ASGUA NR/AA 5.350 07/01/18 250,000 236,205
NE Municipal Energy Agency Power Supply Syst. Rev. Ref. AMBAC Aaa/AAA 6.000 04/01/17 200,000 197,954
NE Hgr. Educ. Loan Program Senior Subord. Term MBIA Aaa/AAA 6.250 06/01/18 800,000 789,888
NE Hgr. Educ. Loan Program Junior Subord. Rev. MBIA Aaa/AAA 6.400 06/01/13 300,000 314,334
NE Hgr. Educ. Loan Program Junior Subord. Term MBIA Aaa/AAA 6.450 06/01/18 400,000 403,524
*NE Hgr. Educ. Loan Program Student Loan MBIA Aaa/AAA 5.875 06/01/14 1,350,000 1,324,458
NE Student Loan Program B Rev. MBIA Aaa/AAA 6.000 06/01/28 100,000 92,575
NE Educ. Finance Auth. (Concordia Teachers College) Rev. NR/NR 5.900 12/15/15 100,000 96,670
NE Educ. Finance Auth. (Dana College) Rev. G.O. NR/NR 6.750 06/01/14 100,000 107,307
NE Educ. Finance Auth. (Creighton Univ.) Rev. AMBAC Aaa/AAA 5.950 01/01/11 300,000 315,453
NE Educ. Finance Auth. (Midland Lutheran College) Rev. G.O. NR/NR 5.550 06/15/18 500,000 487,875
NE Educ. Finance Auth. (Grace Univ.) Rev. NR/NR 5.300 02/01/15 200,000 184,048
NE Educ. Finance Auth. (Grace Univ.) Rev. NR/NR 5.500 02/01/19 200,000 180,980
NE Invmt. Finance Auth. (Muirfield Greens) Multifamily Hsg. Rev. Aa/NR 6.800 12/01/15 355,000 360,925
NE Invmt. Finance Auth. (Muirfield Greens) Multifamily Hsg. Rev. Aa/NR 6.850 12/01/25 525,000 527,131
NE Invmt. Finance Auth. (Kings Gate Sr. Apts.) Multifamily Hsg. Rev.NR/AAA 5.350 03/01/29 290,000 268,221
NE Invmt. Finance Auth. (Catholic Hlth. Initiatives) Rev. Aa-3/AA- 5.125 12/01/17 200,000 186,380
NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.600 07/01/08 100,000 96,073
NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.700 07/01/09 100,000 96,145
NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.800 07/01/10 100,000 95,676
NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.900 07/01/11 100,000 95,315
NE Invmt. Finance Auth. Single Family Hsg. Rev. Coll. NR/AAA 6.300 03/01/17 165,000 168,752
*NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.600 09/01/20 630,000 635,179
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 7.300 09/01/26 345,000 346,925
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.150 03/01/09 100,000 101,217
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.200 09/01/10 100,000 100,566
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.500 09/01/18 400,000 403,696
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.400 09/01/26 250,000 248,983
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.950 03/01/27 95,000 93,046
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.250 09/01/28 210,000 207,008
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.850 09/01/17 95,000 94,136
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.200 09/01/17 250,000 253,103
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.250 03/01/21 300,000 302,793
*NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.300 09/01/28 1,105,000 1,108,094
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.850 09/01/28 460,000 447,033
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.250 09/01/28 250,000 228,368
NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.300 09/01/30 250,000 243,025
NE Invmt. Finance Auth. (Childrens Healthcare Svcs) Facs. Rev. Aaa/AAA 5.500 08/15/17 410,000 395,732
#NE Invmt. Finance Auth. (Children Healthcare Svcs.) Rev. AMBAC Aaa/AAA 5.500 08/15/27 1,000,000 941,790
NE Invmt. Finance Auth. Multifamily Hsg. Rev. NR/AAA 6.200 06/01/28 495,000 484,853
NE Invmt. Finance Auth. Multifamily Hsg. Rev. NR/AAA 6.000 06/01/17 500,000 500,835
NE Invmt. Finance Auth. Multifamily Hsg. Rev. NR/AAA 6.100 06/01/29 500,000 489,625
NE Invmt. Finance Auth. Multifamily Hsg. (Waterbrook) Rev. Aaa/AAA 5.600 04/01/07 210,000 215,985
NE Public Gas Agency (Gas Supply Sys.) Rev. Baa-1/NR 6.250 04/01/05 200,000 207,486
NE Public Gas Agency (Gas Supply Sys.) Rev. Baa-1/NR 5.650 04/01/06 200,000 203,384
NE Public Power Dist. (Power Supply Syst.) Rev. MBIA Aaa/AAA 5.000 01/01/28 250,000 221,683
NE Public Power Dist. (Power Supply Syst.) Rev. MBIA Aaa/AAA 5.000 01/01/28 700,000 620,711
NE Public Power Dist. (Power Supply Syst.) Rev. Aaa/AAA 5.125 01/01/19 750,000 694,898
NE Public Power Dist. (Elec. System) Rev. Coll. Govts. Aaa/AAA 6.250 01/01/12 150,000 158,202
NE Public Power Dist. (Power Supply Syst.) Rev. Aaa/AAA 6.125 01/01/15 390,000 412,347
NE Public Power Dist. (Power Supply Syst.) Rev. Aaa/AAA 5.750 01/01/20 250,000 247,450
NE State Colleges Facs. Deferred Maintenance Project NR/A 5.050 09/15/09 325,000 314,753
NE Invmt. Finance Auth. (Great Plains Regl. Medl. Ctr.) ASGUA NR/AAA 6.500 05/15/14 300,000 321,069
NE Invmt. Finance Auth. (Great Plains Regl. Medl. Ctr.) ASGUA NR/AA 5.450 11/15/17 400,000 380,816
NE Elem. & Secondary School Fin. Auth. (Creighton Prep) NR/BBB+ 5.000 07/15/09 250,000 237,710
Northeast NE Juvenile Svcs. (Detention) 1st Mrtge. Rev. NR/NR 6.375 06/01/17 770,000 734,364
Omaha, NE Various Purpose Aaa/AAA 6.250 12/01/12 250,000 267,210
Omaha, NE Various Purpose Aaa/AAA 6.250 12/01/14 250,000 262,885
Omaha, NE Parking Facs. Corp. (Omaha Park 4\5) Lease Rev. Aa-1/AA+ 5.700 09/15/15 750,000 752,925
Omaha, NE Public Power Dist. Elec. Syst. Rev. NR/AA 6.000 02/01/15 330,000 343,609
Omaha, NE Public Power Dist. Elec. Syst. Rev. Aa/NR 6.200 02/01/17 650,000 682,903
Omaha, NE (Rosenblatt Stadium) Facs. Rev. Aa-1/AA+ 5.000 11/01/18 500,000 459,275
Otoe Cty., NE School Dist. #111 (Nebraska City) Ref. Aaa/AAA 5.800 11/15/14 400,000 387,036
Platte Cty., NE (Columbus) SD #001 GO School Building Bonds A/NR 5.000 12/15/19 500,000 460,540
Sarpy Cty., NE SID #86 (Willow Springs) G.O. NR/NR 6.250 01/15/17 100,000 94,726
Sarpy Cty., NE SID #52 (Prairie Corners) G.O. NR/NR 6.000 10/01/17 300,000 281,151
Sarpy Cty., NE SID #142 (Fair Meadows) Ref. G.O. NR/NR 5.850 08/15/17 100,000 94,032
Scotts Bluff Cty., NE Hosp. Auth. #1 (Regl West Medl. Ctr.) A-3/A- 5.125 11/15/19 1,250,000 1,130,375
Scotts Bluff Cty., NE Hosp. Auth. #1 (Regl West Medl. Ctr.) A-3/A- 5.250 11/15/28 500,000 445,355
Western NE Community College COP's NR/NR 6.550 10/15/13 150,000 149,658
York, NE Water Rev. NR/NR 5.150 06/01/17 250,000 232,790
York, NE Sewer Syst. Rev. NR/NR 5.850 06/01/12 140,000 136,882
York, NE Sewer Syst. Rev. NR/NR 6.000 06/01/17 100,000 93,912
-----------
TOTAL NEBRASKA MUNICIPAL BONDS (COST: $38,420,747) $37,474,002
-----------
SHORT-TERM SECURITIES (0.7%)(COST: $277,822)
Federated Tax-Free Fund 73 $ 277,822
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $38,698,569) $37,751,824
OTHER ASSETS LESS LIABILITIES 317,970
-----------
NET ASSETS $38,069,794
===========
</TABLE>
[FN]
* Indicates bonds are segregated by the custodian to cover when-issued or
delayed-delivery purchases.
# Indicates bonds are segregated by the custodian to cover initial margin
requirements.
Footnote: Non-rated securities have been determined to be of investment grade
quality by the Fund's Manager.
</FN>
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities January 31, 2000 (Unaudited)
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment in securities, at value (Cost: $38,698,569) $ 37,751,824
Accrued interest receivable 590,305
Accrued dividends receivable 544
Prepaid expenses 8,311
Due from broker receivable 1,585
-------------
Total Assets $ 38,352,569
-------------
Liabilities
Dividends payable $ 164,138
Accrued expenses 24,335
Bank overdraft 43,886
Payable for fund shares redeemed 50,416
--------------
Total Liabilities $ 282,775
--------------
Net Assets $ 38,069,794
==============
Net assets are represented by:
Paid-in capital $ 40,652,098
Accumulated undistributed net realized gain (loss) on
Investments (1,635,559)
Unrealized depreciation on investments (946,745)
--------------
Total amount representing net assets applicable to
3,603,138 outstanding shares of no par common
stock (Unlimited shares authorized) $ 38,069,794
==============
Net asset value per share $ 10.57
==============
Statement of Operations For the six months ended January 31, 2000 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 1,145,724
Dividends 8,661
-------------
Total Investment Income $ 1,154,385
-------------
EXPENSES
Investment advisory fees $ 100,418
Service fees 50,209
Transfer agent fees 25,963
Accounting service fees 22,081
Custodian fees 2,998
Transfer agent out of pockets 2,250
Professional fees 1,692
Reports to shareholders 1,400
Trustees fees 1,836
Registration and filing fees 1,268
Insurance expense 1,000
-------------
Total Expenses $ 211,115
Less expenses waived or absorbed
by the Fund's manager (64,714)
-------------
Total Net Expenses $ 146,401
-------------
NET INVESTMENT INCOME $ 1,007,984
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investment transactions $ 24,739
Futures transactions 77,018
Net change in unrealized appreciation (depreciation) of:
Investments (1,776,002)
-------------
Net Realized And Unrealized Gain (Loss) On
Investments And Futures $ (1,674,245)
--------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (666,261)
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Financial Statements January 31, 2000 (Unaudited)
Statement of Changes in Net Assets
For the six months ended January 31, 2000 and the year ended July 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The
Six Months Ended For The
January 31, 2000 Year Ended
(Unaudited) July 30, 1999
------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,007,984 $ 1,467,043
Net realized gain (loss) on investment and futures transactions 101,757 181,611
Net change in unrealized appreciation (depreciation)
on investments and futures (1,776,002) (758,543)
------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ (666,261) $ 890,111
------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income
($.27 and $.54 per share, respectively) $ (1,007,984) $ (1,467,043)
Distributions from net realized gain on investment
and futures transactions 0 0
------------------------------------------------------
Total Dividends and Distributions $ (1,007,984) $ (1,467,043)
------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 875,034 $ 5,450,673
Shares issued in connection with the Fund reorganization 0 12,877,367
Proceeds from reinvested dividends 708,429 944,562
Cost of shares redeemed (3,782,072) (3,071,400)
------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ (2,198,609) $ 16,201,202
------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (3,872,854) $ 15,624,270
NET ASSETS, BEGINNING OF PERIOD 41,942,648 26,318,378
------------------------------------------------------
NET ASSETS, END OF PERIOD $ 38,069,794 $ 41,942,648
======================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements January 31, 2000 (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. 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 - Securities for which quotations are not readily
available (which will constitute a majority of the securities held by the Fund)
are valued using a matrix system at fair value as determined by Ranson Capital
Corporation, ("Ranson"). The matrix system has been developed based on
procedures approved by the Board of Trustees which include consideration of the
following: yields or prices of municipal bonds of comparable quality, type of
issue, coupon, maturity and rating, and indications as to value from dealers
and general market conditions. Because the market value of securities can only
be established by agreement between parties in a sales transaction, and because
of the uncertainty inherent in the valuation process, the fair values as
determined may differ from the values that would have been used had a ready
market for the securities existed. 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, 2000, a
net capital loss carryforward totaling $1,737,315, which may be used to offset
capital gains realized during subsequent years through July 31, 2006.
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
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.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Schedule of
Investments. The Statement of Assets and Liabilities reflects a receivable
or payable for the daily mark to market for variation margin.
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, 2000, there were unlimited shares of no par authorized;
3,603,138 and 3,808,712 shares were outstanding at January 31, 2000 and
July 30, 1999, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares
----------------------------------------
<S> <C> <C>
For The Six For The
Months Ended Year Ended
January 31, 2000 July 30, 1999
----------------------------------------
Shares sold 80,991 484,495
Shares issued in connection with the Fund
Reorganization 0 1,148,739
Shares issued on reinvestment of dividends 65,543 84,149
Shares redeemed (352,108) (273,842)
----------------------------------------
Net increase (decrease) (205,574) 1,443,541
========================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and underwriter; ND
Resources, Inc., the Fund's transfer and accounting services agent; and ND
Capital, Inc., the Fund's agent for the purchase of certain investment
securities; 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 $85,913 of investment
advisory fees after partial waiver for the six months ended January 31, 2000.
The Fund has a payable to Ranson Capital Corporation of $13,105 at January 31,
2000 for investment advisory fees. Certain officers and trustees of the Fund
are also officers and directors of the investment adviser.
The Fund has engaged ND Capital, Inc. as agent for the purchase of certain
investment securities. For the six months ended January 31, 2000, no
commissions were earned by ND Capital, Inc.
The Fund pays an annual service fee to Ranson Capital Corporation (Ranson),
its principal underwriter, in connection with the distribution of the Fund's
shares. The annual fee paid to Ranson is calculated daily and paid monthly by
the Fund at the annual rate of 0.25% of the average daily net assets of the
Fund. Ranson has elected to waive all operation service fees for the six
months ended January 31, 2000.
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 incurred $25,963 of transfer agency fees for the six
months ended January 31, 2000. The Fund has a payable to ND Resources, Inc.
of $4,246 at January 31, 2000 for transfer agency fees. 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 incurred $22,081 of accounting service fees for the six
months ended January 31, 2000. The Fund has a payable to ND Resources, Inc.
of $3,642 at January 31, 2000 for accounting service fees.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment securities
(excluding short-term securities) aggregated $1,020,800 and $3,029,598,
respectively, for the six months ended January 31, 2000.
Note 6. INVESTMENT IN SECURITIES
At January 31, 2000, the aggregate cost of securities for federal income tax
purposes was $38,698,569, and the net unrealized depreciation of investments
based on the cost was $946,745, which is comprised of $294,588 aggregate gross
unrealized appreciation and $1,241,333 aggregate gross unrealized depreciation.
<TABLE>
<CAPTION>
Financial Highlights Selected per share data and ratios for the period indicated
For the For the For the For the For The For The
Six Months Ended Year Ended Year Ended Year Ended Year Ended Year Ended
January 31, 2000 July 30, July 31, July 31, July 31, July 31,
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.01 $ 11.13 $ 11.26 $ 11.00 $ 10.95 $ 10.82
----------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income $ .27 $ .54 $ .56 $ .55 $ .57 $ .59
Net realized and unrealized gain (loss) on
investment and futures transactions (.44) (.12) (.13) .26 .05 .13
----------------------------------------------------------------------------------
Total Income (Loss) From Investment
Operations $ (.17) $ .42 $ .43 $ .81 $ .62 $ .72
----------------------------------------------------------------------------------
Less Distributions:
Dividends from net investment income $ (.27) $ (.54) $ (.56) $ (.55) $ (.57) $ (.59)
Distributions from net capital gains .00 .00 .00 .00 .00 .00
----------------------------------------------------------------------------------
Total Distributions $ (.27) $ (.54) $ (.56) $ (.55) $ (.57) $ (.59)
----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.57 $ 11.01 $ 11.13 $ 11.26 $ 11.00 $ 10.95
==================================================================================
Total Return (3.11)%(A)(C) 3.82%(A) 3.95%(A) 7.57%(A) 5.73%(A) 7.14%(A)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $ 38,070 $ 41,943 $ 26,318 $ 27,802 $ 18,077 $ 14,445
Ratio of net expenses (after expense
assumption) to average net assets 0.73%(B)(C) 0.70%(B) 0.63%(B) 0.71%(B) 0.62%(B) 0.35%(B)
Ratio of net investment income
to average Net assets 5.02%(C) 4.83% 5.06% 5.03% 5.13% 5.63%
Portfolio turnover rate 2.60% 12.58% 26.36% 42.84% 27.20% 140.00%
</TABLE>
[FN]
(A) Excludes maximum sales charge of 4.25%.
(B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital
Corporation assumed/waived expenses of $64,714, $119,949, $51,233, $124,394,
$129,053, and $146,913, respectively. If the expenses had not been assumed/
waived, the annualized ratios of total expenses to average net assets would
have been 1.05%, 1.10%, 0.81%, 1.22%, 1.38%, and 1.66%, respectively.
(C) Ratio was annualized
</FN)
The accompanying notes are an integral part of these financial statements.
Dear Shareholder:
Enclosed is the semi-annual report of the operations of The Oklahoma Municipal
Fund, the "Fund," for the six months ended January 31, 2000. The Fund's
portfolio and related financial statements are presented within for your
review.
As we start the new millennium, 1999 will go down as one of the worst years in
bond market history. The benchmark 30-year Treasury bond has seen a value loss
of approximately 27%, as yields have risen from a January 1999 yield of 5.07%
to a December 1999 yield of 6.48%. Stabilizing global economies and a U.S.
economy growing at what many economists believe is an unsustainable pace has
led the Federal Reserve to raise short-term interest rates three times in 1999
for a total increase of three quarters of one percent. Strong consumer
confidence, low unemployment, housing and retail sales at record levels, and a
doubling of crude oil prices contributed to the Federal Reserve's actions.
Tax-free municipal bonds haven't faired much better. A long-term tax-free bond
worth $1,000.00 on December 31, 1998 would be worth roughly $860.00 today, as
yields have risen from a January 1999 yield of 4.94% to a December 1999 yield
of 5.94% on AAA rated bonds. As a result, we are now seeing Oklahoma
municipal bonds paying 90% to as high as 100% of the 30-year Treasury yield.
Historically, municipals have averaged 85% of the 30-year Treasury yield over
the past ten years. In terms of real rates of return, this is a very
attractive opportunity.
The Fund began the year at $11.61 and closed the six month period at $10.97,
for a total return of (2.83)%*. In anticipation of stronger economic growth,
the Fund at times during the period utilized a defensive position in U.S.
Treasury futures. Share price was stabilized as yields on U.S. Treasuries
rose throughout the first six months. Stability of share price is the primary
objective of a defensive position.
Diversification remains an important strategy of the Fund. Throughout the
first half of the year, purchases in the primary and secondary markets included
Oklahoma State Capital Improvement and Oklahoma State Turnpike Authority
issues.
The investment objective of the Fund is to provide as high a level of current
income exempt from both federal income tax and, to the extent indicated in the
prospectus, Oklahoma income tax as is consistent with preservation of capital.
Sincerely,
Monte L. Avery Robert E. Walstad
Chief Portfolio Strategist President
* Without Sales Charge
TERMS & DEFINITIONS
- --------------------
APPRECIATION
Increase in value of an asset.
AVERAGE ANNUAL TOTAL RETURN
A standardized measurement of the return (yield and appreciation) earned by
the fund on an annual basis, assuming all distributions are reinvested.
COUPON RATE OR FACE RATE
The rate of interest payable annually, based on the face amount of the bond;
expressed as a percentage.
DEPRECIATION
Decrease in value of an asset.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt bonds
representative of the municipal bond market. The index does not take into
account brokerage commissions or other costs, may include bonds different from
those in the fund, and may pose different risks than the fund.
MARKET VALUE
Actual (or estimated) price at which a bond trades in the market place.
MATURITY
A measure of the term or life of a bond in years. When a bond "matures," the
issuer repays the principal.
NET ASSET VALUE (NAV)
The value of all your fund's assets, minus any liabilities, divided by the
number of outstanding shares, not including any initial sales charge.
QUALITY RATINGS
A designation assigned by independent rating companies to give a relative
indication of a bond's credit worthiness. "AAA," "AA," "A," and "BBB"
indicate investment grade securities. Ratings can range from a high of
"AAA" to a low of "D".
TOTAL RETURN
Measures both the net investment income and any realized and unrealized
appreciation or depreciation of the underlying investments in the fund's
portfolio for the period, assuming the reinvestment of all dividends. It
represents the aggregate percentage or dollar value change over the period.
PERFORMANCE AND COMPOSITION
- ---------------------------
Portfolio Quality Ratings
(based on Total Long-Term Investments)
- --------------------------------------
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
AAA 54.5
AA 11.3
A 4.6
BBB 16.1
NR 13.5
</TABLE>
Quality ratings reflect the financial strength of the issuer. They are
assigned by independent rating services such as Moody's Investors Services
and Standard & Poor's. Non-rated bonds have been determined to be of
appropriate quality for the portfolio by Ranson Capital Corporation, the
investment adviser.
Portfolio Market Sectors
(as a % of Net Assets)
- ------------------------
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
S-School 36.4
HC-Health Care 18.2
T-Transportation 10.4
H-Housing 9.0
U-Utilities 7.7
GO-General Obligation 6.5
O-Other 4.8
W/S-Water/Sewer 3.9
I-Industrial 3.1
</TABLE>
Market sectors are breakdowns of the Fund's portfolio holdings into specific
investment classes.
These percentages are subject to change
COMPARATIVE INDEX GRAPH
- -----------------------
[line graph]
<TABLE>
<CAPTION>
Comparison of change in value of a $10,000 investment in
The Oklahoma Municipal Fund and the Lehman
Brothers Municipal Bond Index
The Oklahoma Municipal The Oklahoma Municipal Lehman Brothers
Fund w/o sales charge Fund w/ max sales charge Municipal Bond Index
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
09/25/1996 $10,000 $ 9,575 $10,000
1997 $10,779 $10,321 $11,027
1998 $11,186 $10,711 $11,687
1999 $11,662 $11,166 $12,024
01/31/2000 $11,332 $10,850 $11,788
</TABLE>
Average Annual Total Returns
<TABLE>
<CAPTION>
For periods ending January 31, 2000
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Since Inception
1 year 5 year 10 year (September 25, 1996)
-----------------------------------------------------------------------
Without sales charge (3.35)% N/A N/A 3.80%
With sales charge (4.25%) (7.46)% N/A N/A 2.47%
</TABLE>
Putting Performance into Perspective
Returns are historical and are not a guarantee of future results. The graph
comparing your Fund's performance to a benchmark index provides you with a
general sense of how your Fund performed. To put this information in context,
it may be helpful to understand the special differences between the two. The
Lehman Brothers index is a national index representative of the national
municipal bond market, whereas the Fund concentrates its investments in
Oklahoma municipal bonds. Your Fund's total return for the period shown
appears with and without sales charges and includes Fund expenses and
management fees. A securities index measures the performance of a theoretical
portfolio. Unlike a fund, the index is unmanaged; there are no expenses that
affect the results. In addition, few investors could purchase all of the
securities necessary to match the index. And, if they could, they would incur
transaction costs and other expenses. All Fund and benchmark returns include
reinvested dividends. 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.
Key Statistics
07-30-1999 NAV (share value) $11.61
01-31-2000 NAV $10.97
Average Maturity 19.6 years
Number of Issues 49
Total Net Assets $15,986,199
<TABLE>
<CAPTION>
Schedule of Investments January 31, 2000 (Unaudited)
Name of Issuer
Percentages represent the market value of each Rating Coupon Principal Market
investment category to total net assets Moodys/S&P Rate Maturity Amount Value
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OKLAHOMA MUNICIPAL BONDS (98.1%)
Eastern OK Board of Regents (State College) Student Facs. Rev. NR/NR 6.100% 06/01/17 $ 150,000 $ 145,717
Edmond Economic Dev. Auth., OK Student Housing Rev. Baa-3/NR 5.375 12/01/19 100,000 92,944
Edmond Economic Dev. Auth., OK Student Housing Rev. Baa-3/NR 5.500 12/01/28 865,000 786,164
Grand River Dam Auth. Rev. Ref. A/A- 5.000 06/01/12 135,000 129,600
Grand River Dam Auth. Rev. Ref. FSA Aaa/AAA 5.000 06/01/12 130,000 124,800
*Grand River Dam Auth., OK Rev. AMBAC Aaa/AAA 6.250 06/01/11 210,000 231,393
Grand River Dam Auth., OK Rev. AMBAC Aaa/AAA 5.500 06/01/13 300,000 302,604
OK Agric. & Mech. Colleges (OK State Univ.) Util. Syst. FGIC Aaa/AAA 5.000 07/01/13 600,000 576,516
OK Agric. & Mech. Colleges (OK State Univ.) Athletic Facs. AMBAC Aaa/NR 5.000 08/01/24 400,000 365,440
OK Colleges Brd. of Regents (NE State Univ. Ctr.) Rev. FSA Aaa/AAA 5.100 03/01/16 140,000 133,118
OK Colleges Brd. of Regents (NE State Univ. Ctr.) Rev. FSA Aaa/AAA 5.150 03/01/21 100,000 93,530
Oklahoma Cnty., OK Finance Auth. (Epworth Villa) Rev. Ref. NR/NR 6.500 04/01/15 200,000 190,180
Oklahoma Cnty., OK Finance Auth. (Epworth Villa) Rev. Ref. NR/NR 7.000 04/01/22 200,000 188,360
Oklahoma Cnty., OK Indl. Auth. (Benevolent Association) Ref. Baa/NR 6.150 01/01/11 100,000 101,814
Oklahoma Cnty., OK Indl. Auth. (Benevolent Association) Ref. Baa/NR 5.500 02/01/29 500,000 430,005
OK Housing Finance Agency Single Family Homeownership GNMA Aaa/NR 5.375 03/01/20 780,000 738,949
OK Housing Finance Agency Single Family Homeownership GNMA Aaa/NR 5.150 09/01/20 750,000 698,108
OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.200 11/01/07 100,000 105,599
OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.500 11/01/13 75,000 79,945
OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 5.750 03/01/13 400,000 388,188
#OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.000 03/01/18 600,000 573,630
OK Devl. Finance Auth. (Central OK Univ.) Aa-3/NR 5.300 12/01/18 100,000 94,480
OK Devl. Finance Auth. (Univ. of OK-Norman) Rev. FSA Aaa/AAA 5.625 07/01/13 50,000 50,426
*OK Devl. Finance Auth. (Tulsa Vo Tech Dist. Proj. ) Rev. AMBAC Aaa/AAA 5.100 08/01/15 750,000 714,075
OK Devl. Finance Auth. (DHS Cty. Office Bldg.) Rev. A/NR 5.250 11/01/11 120,000 118,204
OK Devl. Finance Auth. (DHS Cty. Office Bldg.) Rev. A/NR 5.300 11/01/12 275,000 270,748
OK Devl. Finance. Auth. (St. Ann's Retirement Village) Rev. MBIA Aaa/NR 5.000 12/01/28 1,000,000 880,110
OK Devl. Finance Auth. (Langston Univ. Athletic Facs.) Rev. NR/NR 5.250 12/01/23 500,000 447,370
OK Devl. Finance Auth. (Hillcrest Healthcare Syst.) Rev. Ref. Baa/BBB 5.625 08/15/19 1,000,000 873,790
OK Devl. Finance Auth. (Hillcrest Healthcare Syst.) Rev. Ref. Baa/BBB 5.625 08/15/29 295,000 246,714
*OK Devl. Finance Auth. (Oklahoma City Univ.) Rev. Ref. AMBAC Aaa/AAA 5.125 06/01/17 555,000 521,162
OK State Unlimited Tax G.O. Aa-3/AA 5.200 07/15/16 450,000 429,768
OK State Unlimited Tax G.O. Aa-3/AA 5.200 07/15/18 145,000 136,138
OK Capital Impvt. Auth. (Dept. of Corrections) Rev. AMBAC Aaa/AAA 5.000 05/01/18 500,000 464,645
OK Capital Impvt. Auth. (State Office Building) Rev. A/NR 5.500 10/01/16 105,000 101,870
OK Capital Impvt. Auth. (State Fac.) Rev. MBIA Aaa/AAA 5.500 09/01/19 600,000 578,148
OK State Indl. Finance Auth. G.O. Aa-3/NR 5.300 09/01/11 50,000 49,130
OK State Indl. Finance Auth. G.O. Aa-3/NR 5.400 09/01/12 50,000 49,116
OK State Indl. Finance Auth. G.O. Aa-3/NR 5.000 04/01/13 400,000 379,124
OK State Municipal Power Auth. Rev. MBIA Aaa/AAA 5.875 01/01/12 100,000 104,297
OK State Municipal Power Auth. Rev. MBIA Aaa/AAA 5.750 01/01/24 340,000 342,798
OK State Student Loan Auth. A/NR 6.350 09/01/25 100,000 101,000
OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.000 01/01/14 250,000 240,680
OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.250 01/01/28 660,000 615,595
OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.000 01/01/28 250,000 221,682
OK State Water (Loan Program) Rev. NR/AA 6.250 10/01/12 125,000 132,014
OK State Water (Loan Program) Rev. NR/AA 5.400 09/01/15 105,000 103,570
*OK State Water (Loan Program) Rev. NR/AA 5.100 09/01/16 415,000 393,997
OK Agric. & Mech. Colleges (Univ. of OK) Mult. Facs. Rev. AMBAC Aaa/NR 4.900 05/01/17 590,000 550,901
------------
TOTAL OKLAHOMA MUNICIPAL BONDS (COST: $16,731,274) $ 15,688,156
------------
SHORT-TERM SECURITIES (0.6%)
Federated Tax-Free Fund 73 (COST: $99,899) $ 99,899
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $16,831,173) $ 15,788,055
OTHER ASSETS LESS LIABILITIES 198,144
------------
NET ASSETS $ 15,986,199
============
</TABLE>
[FN]
* Indicates bonds are segregated by the custodian to cover when-issued or
delayed delivery purchases.
# Indicates bonds are segregated by the custodian to cover initial margin
requirements.
Footnote: Non-rated (NR) investments have been determined to be of
investment grade quality by the Fund's Manager.
</FN>
The accompanying notes are an integral part of these financial statements.
Financial Statements January 31, 2000 (Unaudited)
Statement of Assets and Liabilities January 31, 2000
- -----------------------------------------------------
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment in securities, at value (cost: $16,831,173) $ 15,788,055
Accrued interest receivable 258,738
Accrued dividends receivable 483
Deferred organization costs 12,538
Prepaid expenses 2,039
------------
Total Assets $ 16,061,853
------------
Liabilities
Payable for fund shares redeemed $ 726
Dividends payable 69,756
Accrued expenses 5,172
------------
Total Liabilities $ 75,654
------------
Net Assets $ 15,986,199
============
Net assets are represented by:
Paid-in capital $ 17,064,683
Accumulated undistributed net realized gain (loss) on investments (35,366)
Unrealized depreciation on investments (1,043,118)
------------
Total amount representing net assets applicable to
1,457,465 outstanding shares of no par common
stock (unlimited shares authorized) $ 15,986,199
============
Net asset value per share $ 10.97
============
The accompanying notes are an integral part of these financial statements.
Statement of Operations For the six months ended January 31, 2000
- -----------------------------------------------------------------
INVESTMENT INCOME
Interest $ 455,694
Dividends 5,195
------------
Total Investment Income $ 460,889
------------
EXPENSES
Investment advisory fees $ 42,304
Service fees 21,152
Transfer agent fees 13,752
Accounting service fees 16,245
Custodian fees 1,273
Registration and filing fees 400
Transfer agent out-of-pocket expenses 500
Trustees fees 1,236
Reports to shareholders 850
Amortization of organizational costs 2,655
Professional fees 1,400
Insurance expense 300
------------
Total Expenses $ 102,067
Less expenses waived or absorbed
by the Fund's manager (67,343)
------------
Total Net Expenses $ 34,724
------------
NET INVESTMENT INCOME $ 426,165
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES
Net realized gain (loss) on:
Investment transactions $ (62,744)
Futures transactions 40,414
Net change in unrealized appreciation (depreciation) of:
Investments (895,403)
------------
Net Realized And Unrealized Gain (Loss) On
Investments And Futures $ (917,733)
------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (491,568)
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Financial Statements January 31, 2000
Statement of Changes in Net Assets
For the six months ended January 31, 2000 and the year ended July 30, 1999
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The
Six Months Ended For The
January 31,2000 Year Ended
(Unaudited) July 30, 1999
-------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 426,165 $ 718,295
Net realized gain (loss) on investment and futures transactions (22,330) 103,674
Net change in unrealized appreciation (depreciation)
on investments and futures (895,403) (256,903)
------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ (491,568) $ 565,066
------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ($.28 and $.56 per share,
respectively) $ (426,165) $ (718,295)
Distributions from net realized gain on investment and
futures transactions ($.03 and $.00 per share, respectively) (48,564) 0
------------------------------------------------
Total Dividends and Distributions $ (474,729) $ (718,295)
------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 2,558,897 $ 8,624,247
Proceeds from reinvested dividends 275,597 441,883
Cost of shares redeemed (2,017,189) (4,112,946)
-----------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ 817,305 $ 4,953,184
-----------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS $ (148,992) $ 4,799,955
NET ASSETS, BEGINNING OF PERIOD 16,135,191 11,335,236
-----------------------------------------------
NET ASSETS, END OF PERIOD $ 15,986,199 $ 16,135,191
===============================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements January 31, 2000 (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.
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 - Securities for which quotations are not
readily available (which will constitute a majority of the securities held by
the Fund) are valued using a matrix system at fair value as determined by
Ranson Capital Corporation ("Ranson"). The matrix system has been developed
based on procedures approved by the Board of Trustees which include
consideration of the following: yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating, and
indications as to value from dealers and general market conditions. Because
the market value of securities can only be established by agreement between
parties in a sales transaction, and because of the uncertainty inherent in
the valuation process, the fair values as determined may differ from the
values that would have been used had a ready market for the securities
existed. 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 beginning May 10, 1997. Accumulated amortization at January 31,
2000, totaled $14,012, leaving an unamortized balance of $12,538.
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.
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. Unrealized appreciation
(depreciation) related to open futures contracts is required to be treated
as realized gain (loss) for Federal income tax purposes.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Schedule of
Investments. The Statement of Assets and Liabilities reflects a receivable
or payable for the daily mark to market for variation margin.
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, 2000, there were unlimited shares of no par authorized; on
January 31, 2000, and July 30, 1999, there were 1,457,465 and 1,389,571 shares
outstanding, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares
-------------------------------------
<S> <C> <C>
For The Six For The
Months Ended Year Ended
January 31, 2000 July 30, 1999
--------------------------------------
Shares sold 224,125 730,053
Shares issued on reinvestment of dividends 24,379 37,403
Shares redeemed (180,610) (348,510)
---------------------------------------
Net increase (decrease) 67,894 418,946
=======================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Ranson Capital Corporation, the Fund's investment adviser and underwriter; ND
Resources, Inc., the Fund's transfer and accounting services agent; and ND
Capital, Inc., the Fund's agent for the purchase of certain investment
securities; 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 computed at an annual rate of 0.50% of the Fund's average
daily net assets. Ranson has elected to waive all investment advisory fees
for the six months ended January 31, 2000. Certain officers and trustees of
the Fund are also officers and directors of the investment adviser.
The Fund pays an annual service fee to Ranson Capital Corporation, (Ranson),
its principal underwriter, for certain expenses incurred by Ranson in
connection with the distribution of the Fund's shares. The annual fee paid to
Ranson under the Plan is calculated daily and paid monthly by the Fund at the
annual rate of 0.25% of the average daily net assets of the Fund. Ranson has
elected to waive all operation service fees for the six months ended January
31, 2000.
The Fund has engaged ND Capital, Inc. as agent for the purchase of certain
investment securities. For the six months ended January 31, 2000, no
commissions were earned by ND Capital, Inc.
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 $9,865 of transfer agent fees and
expenses after partial waiver for the six months ended January 31, 2000. The
Fund has a payable to ND Resources, Inc. of $1,460 at January 31, 2000 for
transfer agent fees. 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
$16,245 of accounting service fees for the six months ended January 31, 2000.
The Fund has a payable to ND Resources, Inc. of $2,696 at January 31, 2000 for
accounting service fees.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment securities
(excluding short-term securities) aggregated $5,762,162 and $1,369,081,
respectively, for the six months ended January 31, 2000.
Note 6. INVESTMENT IN SECURITIES
At January 31, 2000, the aggregate cost of securities for federal income
tax purposes was $16,831,173, and the net unrealized depreciation of
investments based on the cost was $1,043,118, which is comprised of $7,414
aggregate gross unrealized appreciation and $1,050,532 aggregate gross
unrealized depreciation.
<TABLE>
<CAPTION>
Financial Highlights Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
For the For the For the For The Period
Six Months Ended Year Ended Year Ended Since Inception
January 31, 2000 July 30, July 31, (September 25, 1996)
(Unaudited) 1999 1998 Through July 31, 1997
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.61 $ 11.68 $ 11.86 $ 11.49
-------------------------------------------------------------------------
Income from Investment Operations:
Net investment income $ .28 $ .56 $ .60 $ .50
Net realized and unrealized gain (loss) on
investment and futures transactions (.61) (.07) (.16) .37
-------------------------------------------------------------------------
Total Income (Loss) From Investment
Operations $ (.33) $ .49 $ .44 $ .87
--------------------------------------------------------------------------
Less Distributions:
Dividends from net investment income $ (.28) $ (.56) $ (.60) $ (.50)
Distributions from net capital gains (.03) .00 (.02) .00
--------------------------------------------------------------------------
Total Distributions $ (.31) $ (.56) $ (.62) $ (.50)
--------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.97 $ 11.61 $ 11.68 $ 11.86
==========================================================================
Total Return (5.66)%(A)(B) 4.25%(A) 3.81%(A) 7.79%(A)(B)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 15,986 $ 16,135 $ 11,335 $ 6,591
Ratio of net expenses (after expense assumption)
to average net assets 0.41%(B)(C) 0.36%(C) 0.20%(C) 0.11%(C)
Ratio of net investment income to
average net assets 5.04%(B) 4.74% 5.08% 3.70%
Portfolio turnover rate 8.30% 32.09% 53.32% 63.70%
</TABLE>
[FN]
(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/waived expenses of $67,343, $133,089, $53,180, and
$34,609, respectively. If the expenses had not been assumed/waived, the
annualized ratio of total expenses to average net assets would have been
1.21%, 1.23%, 0.71% and 2.01%, respectively.
</FN>
The accompanying notes are an integral part of these financial statements.
