<PAGE>
SCHEDULE OF INVESTMENTS December 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER RATING
Percentages represent the market value of each MOODY'S/S&P COUPON PRINCIPAL MARKET
investment category to total net assets (UNAUDITED) RATE MATURITY AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ENERGY (8.6%)
Anaconda-Deer River Cty. (Arco) Solid Waste Rev A/A 6.375% 10/01/16 $1,500,000 $ 1,583,445
MT (Broadwater Power) Coal Severance Tax Ref. A1/AA- 6.875 12/01/17 445,000 485,148
-----------
$ 2,068,593
-----------
HEALTH CARE (13.4%)
MT St. Hlth. Fac. Auth. (MT Devl. Ctr.) Rev. A/NR 6.300% 06/01/14 $ 500,000 $ 544,155
MT St. Hlth. Fac. Auth. (MT Devl. Ctr.) Rev. A/NR 6.400 06/01/19 1,000,000 1,064,820
MT Hlth. Fac. Auth. (Master Loan Pgm.) Rev. A/NR 6.400 10/01/14 450,000 485,154
MT Hlth. Fac. Auth. (Northern Montana Care Ctr.) Rev. Baa/NR 6.350 09/01/15 1,000,000 1,020,600
MT Hlth. Fac. Auth. (Bozeman Deaconess) Rev. Baa/NR 5.750 06/01/08 100,000 103,249
-----------
$ 3,217,978
-----------
HOUSING (23.1%)
MT Board of Housing, Single Family Program Aa/A+ 6.250% 12/01/17 $1,000,000 $ 1,019,420
MT Board of Housing, Single Family Program Aa/AA+ 6.350 06/01/27 1,500,000 1,570,665
MT Board of Housing, Single Family Program Aa/AA+ 6.550 12/01/25 95,000 98,308
MT Board of Housing, Single Family Program A/AA+ 6.400 12/01/35 500,000 512,625
MT Board of Housing, Single Family Program Aa/AA+ 6.400 12/01/27 310,000 318,996
MT Board of Housing, Single Family Program Aa/AA 6.500 12/01/32 150,000 154,510
MT Board of Housing, Single Family Program Aa/AA+ 6.100 12/01/24 715,000 731,988
MT Board of Housing, Single Family Program Aa/AA+ 6.300 06/01/08 240,000 253,042
MT Board of Housing, Single Family Program Aa/AA+ 6.750 12/01/14 235,000 251,671
MT Board of Housing, Single Family Program Aa/AA+ 6.900 06/01/25 95,000 100,936
MT Board of Housing, Single Family Program Aa/AA+ 6.700 12/01/26 510,000 547,016
-----------
$ 5,559,177
-----------
POLLUTION CONTROL (3.6%)
Forsyth (Montana Power) PCR Baa1/BBB+ 6.125% 05/01/23 $ 300,000 $ 314,118
Forsyth (Montana Power) PCR Baa1/BBB+ 5.900 12/01/23 300,000 305,445
Lewis & Clark Co. (Asarco Inc.) PCR Baa/BBB 6.750 12/01/06 240,000 241,553
-----------
$ 861,116
-----------
REAL ESTATE (2.9%)
Billings Tax Increment Urban Renewal Ref. Baa/NR 7.100% 03/01/08 $ 650,000 $ 705,425
-----------
$ 705,425
-----------
STATE EDUCATION (3.3%)
MT Hgr. Educ. Student Assistance Corp. Rev. A/NR 6.500% 12/01/12 $ 250,000 $ 262,347
MT Hgr. Educ. Student Assistance Corp. Rev. A/NR 6.500 12/01/14 500,000 528,810
-----------
$ 791,157
-----------
UTILITIES (1.1%)
Lewis & Clark Co. Solid Waste Fac. Rev. A/NR 6.100% 10/01/14 $ 250,000 $ 266,265
-----------
$ 266,265
-----------
INSURED (37.7%)
Forsyth (Puget Sound Pwr. & Lt.) PCR (AMBAC) Aaa/AAA 7.050% 08/01/21 $ 750,000 $ 846,398
Forsyth (Puget Sound Pwr. & Lt.) PCR (AMBAC) Aaa/AAA 6.800 03/01/22 1,125,000 1,252,058
Forsyth (Puget Sound Pwr. & Lt.) PCR (MBIA) Aaa/AAA 5.875 04/01/20 540,000 554,483
Forsyth (Montana Power) PCR Ref. (AMBAC) Aaa/AAA 6.125 05/01/23 1,500,000 1,660,605
Forsyth (Montana Power Co.) PCR (MBIA) Aaa/AAA 6.125 05/01/23 1,500,000 1,660,605
*Great Falls, Water & Sewerage Rev. (FGIC) Aaa/AAA 6.400 08/01/12 300,000 326,490
MT Hlth. Fac. Auth. (St. Pat's) Rev. (AMBAC) Aaa/AAA 6.625 09/01/12 195,000 213,771
MT Hlth. Fac. Auth. (Holy Rosary) Rev. (MBIA) Aaa/AAA 5.250 07/01/20 250,000 242,815
MT Hlth. Fac. Auth. (Deaconess Clinic) Rev. (AMBAC) Aaa/AAA 5.250 02/15/20 600,000 582,426
MT Board of Investments (Workers Comp.) (MBIA) Aaa/AAA 6.875 06/01/11 200,000 223,788
MT Board of Investments (Workers Comp.) (MBIA) Aaa/AAA 6.875 06/01/20 500,000 555,070
*Richland Cty. (Mon.-Dak. Utilities) PCR (FGIC) Aaa/AAA 6.650 06/01/22 300,000 330,540
Richland Cty. (Mon.-Dak. Utilities) PCR (FGIC) Aaa/AAA 6.650 06/01/22 300,000 330,540
Silver Bow, (Butte-Silver Bow) Water Rev. (FGIC) Aaa/AAA 6.650 11/01/14 275,000 300,952
-----------
$ 9,080,541
-----------
-----------
TOTAL MONTANA MUNICIPAL BONDS (COST: $21,427,455) $22,550,252
-----------
SHORT-TERM SECURITIES (5.7%)
Goldman Sachs Institutional Liquid Asset Tax Exempt
Diversified Portfolio $ 366,922
Federated Intermediate Muni Trust #078 1,005,188
-----------
TOTAL SHORT-TERM SECURITIES (COST: $1,366,922) $ 1,372,110
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $22,794,377) $23,922,362
===========
</TABLE>
*Indicates bonds are segregated by the custodian to cover when-issued or
delayed-delivery purchases.
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL STATEMENTS December 31, 1995
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- -----------------------------------------------------
<S> <C>
ASSETS
Investments in securities, at
value (cost: $22,794,377) $ 23,922,362
Accrued dividends receivable 6,018
Accrued interest receivable 242,692
Receivable for fund shares sold 15,000
Deferred organization costs 8,523
-------------
Total Assets $ 24,194,595
-------------
LIABILITIES
Bank overdraft $ 16,399
Dividends payable 99,508
Accrued expenses 23,299
-------------
Total Liabilities $ 139,206
-------------
NET ASSETS $ 24,055,389
=============
Net asset value per share,
2,395,706 shares outstanding $ 10.04
=============
STATEMENT OF OPERATIONS for the year ended December 31, 1995
- ------------------------------------------------------------
INVESTMENT INCOME
Interest $ 983,989
Dividends 45,099
-------------
Total Investment Income $ 1,029,088
-------------
EXPENSES
Distribution (12b-1 fees) $ 44,334
Investment advisory fees 106,401
Custodian fees 4,854
Transfer agent fees 26,816
Accounting service fees 2,324
Audit and legal fees 4,945
Insurance 1,834
Directors fees 83
Printing and postage 17,574
License, fees, and registrations 5,801
Amortization of organization costs 3,229
-------------
Total expenses $ 218,195
Less expenses waived or absorbed
by the Fund's manager 99,757
-------------
Total Net Expenses $ 118,438
-------------
NET INVESTMENT INCOME $ 910,650
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES:
Net realized gain (loss) from:
Investment transactions (71,153)
Futures transactions (642,925)
Net change in unrealized
appreciation (depreciation) of
investments 1,845,230
Net Realized And Unrealized
Gain (Loss) on Investments
and Futures $ 1,131,152
-------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 2,041,802
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL STATEMENTS December 31, 1995
STATEMENT OF CHANGES IN NET ASSETS
for the years ended December 31, 1995 and 1994
- -----------------------------------------------
<TABLE>
<CAPTION>
For the Year For the Year
Ended Ended
December 31, December 31,
1995 1994
----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 910,650 $ 444,730
Net realized gain (loss) on investment and futures transactions (714,078) (37,452)
Net unrealized appreciation (depreciation) on investments 1,845,230 (692,985)
----------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ 2,041,802 $ (285,707)
----------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $ (910,650) $ (444,730)
Distributions in excess of net investment income (42,685) (21,811)
Distributions from net realized gain on investment and futures transactions 0 0
----------------------------
Total Dividends and Distributions $ (953,335) $ (466,541)
----------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 10,719,956 $ 7,450,974
Proceeds from reinvested dividends 603,502 269,271
Cost of shares redeemed (312,363) (246,694)
----------------------------
Net Increase (Decrease) in Net Assets Resulting
From Capital Share Transactions $ 11,011,095 $ 7,473,551
----------------------------
TOTAL INCREASE IN NET ASSETS $ 12,099,562 $ 6,721,303
NET ASSETS, BEGINNING OF PERIOD 11,955,827 5,234,524
----------------------------
NET ASSETS, END OF PERIOD $ 24,055,389 $ 11,955,827
============================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS December 31, 1995
Note 1. ORGANIZATION
Montana Tax-Free Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The Fund incorporated under the laws of the State of
North Dakota on April 15, 1993 and commenced operations on August 12,
1993. The Funds objective is to provide as high a level of current
income exempt from federal and Montana income taxes as is consistent
with preservation of capital. The Fund will seek to achieve this by
investing primarily in a portfolio of Montana tax exempt securities.
Shares of the Fund are offered with no initial sales charge. Shares may
be subject to a contingent deferred sales charge, if those shares are
redeemed within five years of purchase.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT SECURITY VALUATION - Investments in securities traded on
national securities exchanges are valued at the last reported sales
price at the close of each business day. Securities for which market
quotations are not readily available are valued at fair value as
determined in good faith by the portfolio management team. The Fund
follows industry practice and records security transactions on the trade
date.
The Fund concentrates its investments in a single state. This
concentration may result in the Fund investing a relatively high
percentage of its assets in a limited number of issuers.
DEFERRED ORGANIZATION COSTS - Costs incurred in connection with initial
registration and public offering of the shares of the Fund amounted to
$16,187. These costs have been paid by ND Holdings, Inc. (the Fund's
sponsor) and may be reimbursed by the Fund. Repayment of these costs are
currently being waived by the fund's sponsor. These costs are being
amortized over a five year period. If the Manager redeems any or all of
its shares in the Fund representing initial capital prior to the end of
the 60-month amortization period, the manager will reimburse the Fund
for the unamortized balance in the same proportion as the number of
shares redeemed bear to the number of initial shares outstanding at the
time of redemption.
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.
DISTRIBUTION TO SHAREHOLDERS -Dividends from net investment income,
declared daily and payable monthly, are reinvested in additional shares
of the Fund at net asset value or payable in cash. Capital gains, when
available, are distributed along with the last income dividend of the
calendar year.
INVESTMENT INCOME - Dividend income is recognized on the ex-dividend
date and interest income is recognized daily on an accrual basis.
Premiums and discounts on securities purchased are amortized using the
effective interest method over the life of the respective securities,
unless callable, in which case they are amortized to the earliest call
date.
FUTURES CONTRACTS AND OPTIONS - The Fund may purchase and sell financial
futures and option contracts to hedge against changes in the values of
tax-exempt municipal securities the Fund owns or expects to purchase.
A futures contract is an agreement between two parties to buy or sell
units of a particular index or a certain amount of US Government or
Municipal securities at a set price on a future date.
<PAGE>
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, and 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.
The Fund may purchase options on financial futures contracts. Daily
fluctuations in the value of the options are recorded for financial
reporting purposes as unrealized gains or losses by the fund. Upon sale
or expiration of the option, the Fund will realize, for book purposes, a
gain or loss equal to the difference between the cost of the option and
the value on sale or expiration date.
Certain risks may arise upon entering into futures contracts and
options. These risks may include changes in the value of the futures
contracts or options that may not directly correlate with changes in the
value of the underlying securities.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Note 3. SHARE TRANSACTIONS
As of December 31, 1995, there were 200,000,000 shares of $.001 par
authorized; 2,395,706 and 1,272,951 were outstanding at December 31,
1995 and December 31, 1994, respectively.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
--------------------------- --------------------------
For the year For the year For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
-------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,093,033 751,657 $10,719,956 $7,450,974
Shares issued on reinvestment of dividends 61,616 27,230 603,502 269,271
Shares redeemed (31,894) (25,699) (312,363) (246,694)
-------------------------------------------------------
Net increase 1,122,755 753,188 $11,011,095 $7,473,551
=======================================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
ND Money Management, Inc., the Fund's investment adviser, ND Capital,
Inc., the Fund's underwriter, and ND Resources, Inc., the Fund's
transfer agent, are subsidiaries of ND Holdings, Inc., the Fund's
sponsor. As of December 31, 1995, ND Capital, Inc., owns 10,000 shares
of the Fund.
The Fund has engaged ND Money Management, Inc., to provide investment
advisory and management services to the Fund. The Investment Advisory
Agreement provides for fees to be computed at an annual rate of 0.60% of
the Fund's average daily net assets. The Fund has recognized $74,104 of
investment advisory and management fees for the period ended December
31, 1995. The Fund has a payable to ND Money Management, Inc. of $9,416
at December 31, 1995 for investment advisory fees. Certain officers and
directors of the Fund are also officers and directors of the investment
adviser.
<PAGE>
The Fund has adopted a distribution plan pursuant to Rule 12b-1 under
the 1940 Act (the Plan), whereby the Fund shall pay at the annual rate
of 0.75% of the average daily net assets of the Fund to ND Capital, Inc.
(Capital), its principal underwriter, for expenses incurred in the
distribution of the Fund's shares. Pursuant to the Plan, Capital is
entitled to reimbursement each month for its actual expenses incurred in
the distribution and promotion of the Fund's shares, including the
printing of prospectuses and reports used for sales purposes, expenses
of preparation and printing of sales literature and other such
distribution related expenses, including any distribution or service
fees paid to securities dealers who have executed a dealer sales
agreement with Capital. Capital will be reimbursed at a rate not to
exceed 0.75% of the average daily net assets of the Fund for the prior
month. The Fund has recognized $44,334 of 12b-1 fee expenses for the
year ended December 31, 1995. The Fund has a payable to ND Capital, Inc.
of $4,708 at December 31, 1995 for 12b-1 fees.
ND Holdings, Inc. has elected to reimburse certain administrative costs
incurred by the Fund to provide a fair return to the investors during
the growth stage of the Fund. As the Fund grows, these expenses will be
assumed gradually by the Fund. The expenses reimbursed by ND Holdings,
Inc. for the year ended December 31, 1995 amounted to $99,757. The Fund
has a payable to ND Holdings, Inc. of $8,523 at December 31, 1995 for
the unamortized cost incurred in connection with the initial
registration and public offering of the shares of the fund.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment
securities (excluding short-term securities) aggregated $10,439,000, and
$1,236,350, respectively, for the year ended December 31, 1995.
Note 6. INVESTMENT IN SECURITIES
At December 31, 1995, the aggregate cost of securities for federal
income tax purposes was $22,794,377, and the net unrealized appreciation
of investments based on the cost was $1,127,985, which is comprised of
$1,132,835 aggregate gross unrealized appreciation and $4,850 aggregate
gross unrealized depreciation.
<PAGE>
FINANCIAL HIGHLIGHTS Selected per share data and ratios for the period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
Since Inception
For the Year For the Year (August 12, 1993)
Ended Ended through
December 31, December 31, December 31,
1995 1994 1993
----------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.39 $ 10.07 $10.00
----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income $ .51 $ .50 $ .19
Net realized and unrealized gain (loss) on
investment and futures transactions .67 (.66) .09
----------------------------------------------
Total From Investment Operations $ 1.18 $ (.16) $ .28
----------------------------------------------
LESS DISTRIBUTIONS
Dividends from net investment income $ (.51) $ (.50) $ (.19)
Distributions in excess of net
investment income (.02) (.02) (.01)
Distributions from realized gains .00 .00 (.01)
----------------------------------------------
Total Distributions $ (.53) $ (.52) $ (.21)
----------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.04 $ 9.39 $10.07
==============================================
TOTAL RETURN 12.85%(C) (1.70)%(C) 7.00%(A)(C)
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $24,055 $11,956 $5,235
Ratio of net expenses (after expense
assumption) to average net assets .66%(B) .46%(B) .12%(A)(B)
Ratio of net investment income to
average net assets 5.11% 5.06% 4.84%(A)
Portfolio turnover rate 7.39% 12.46% 26.05%
</TABLE>
(A) Ratio was annualized.
(B) During the periods indicated above, ND Holdings, Inc. assumed expenses of
$99,757, $87,483, and $21,944. If the expenses had not been assumed, the
annualized ratio of total expenses to average net assets would have been
1.22%, 1.46% and 1.71%, respectively.
(C) Excludes contingent deferred sales charge of 4%.
[GRAPH APPEARS HERE]
Comparison of change in value of $10,000 investment in
Montana Tax-Free Fund, Inc. and Lehman Municipal Bond Index (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Montana Tax-Free Fund Montana Tax-Free Fund with Lehman Municipal
without CDSC maximum applicable CDSC Bond Index
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8/12/1993 $10,000 $10,000 $10,000
- --------------------------------------------------------------------------------------------------
1994 $10,268 $ 9,868 $10,548
- --------------------------------------------------------------------------------------------------
1995 $10,093 $ 9,718 $ 9,690
- --------------------------------------------------------------------------------------------------
1996 $11,390 $11,090 $11,821
- --------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of
Montana Tax Free Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Montana
Tax Free Fund, Inc. (the Fund), including the schedule of investments, as of
December 31, 1995, the related statement of operations for the year then ended,
the statements of changes in net assets and the financial highlights for each of
the two years in the period then ended, and the financial highlights for the
period from inception (August 12, 1993) through December 31, 1993. These
financial statements and financial highlights are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Montana Tax Free Fund, Inc. as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets, and the
financial highlights for each of the respective periods stated in the first
paragraph, in conformity with generally accepted accounting principles.
BRADY, MARTZ & ASSOCIATES, P.C.
February 12, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 22794377
<INVESTMENTS-AT-VALUE> 23922362
<RECEIVABLES> 263710
<ASSETS-OTHER> 8523
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 24194595
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 139206
<TOTAL-LIABILITIES> 139206
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2395706
<SHARES-COMMON-PRIOR> 1272951
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (772689)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1127985
<NET-ASSETS> 24055389
<DIVIDEND-INCOME> 45099
<INTEREST-INCOME> 983989
<OTHER-INCOME> 0
<EXPENSES-NET> 118438
<NET-INVESTMENT-INCOME> 910650
<REALIZED-GAINS-CURRENT> (714078)
<APPREC-INCREASE-CURRENT> 1845230
<NET-CHANGE-FROM-OPS> 2041802
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 910650
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 42685
<NUMBER-OF-SHARES-SOLD> 1093033
<NUMBER-OF-SHARES-REDEEMED> 31894
<SHARES-REINVESTED> 61616
<NET-CHANGE-IN-ASSETS> 12099562
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 106401
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 218195
<AVERAGE-NET-ASSETS> 17830529
<PER-SHARE-NAV-BEGIN> 9.39
<PER-SHARE-NII> .51
<PER-SHARE-GAIN-APPREC> .67
<PER-SHARE-DIVIDEND> .51
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> .02
<PER-SHARE-NAV-END> 10.04
<EXPENSE-RATIO> .66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .00
</TABLE>
