<PAGE>
DEAR SHAREHOLDER:
We are pleased to enclose the annual report on the operations of South Dakota
Tax-Free Fund, Inc. for the year ended December 31, 1996. The municipal bond
portfolio and related financial statements are presented within for your review.
Municipal bond prices began the year with a slight upward bias and then declined
in the February-March-April time frame. Federal Reserve monetary policy became
less accommodative in response to the growth picture in the American economy.
Bond prices then moved higher during the second half of 1996 except for late
December, when a correction took place.
Shares in the Fund increased during the period from $10.39 to $10.50. During
part of the year the Fund utilized a partial hedge to maintain share price
stability. Futures contracts in U.S. Treasury Bonds and Municipal Bonds were
employed. Hedging provided share price stability as interest rates increased and
bond prices declined.
The adviser has invested primarily in high-grade South Dakota tax-exempt bonds
(see next page). Management intends to maintain the portfolio quality while
diversifying throughout the State. The adviser has been able to select suitable
investments from numerous offerings in both the primary and secondary municipal
bond markets. Reasonable income and preservation of capital remain as the chief
objectives of the Fund.
We invite your personal calls and visits.
Sincerely,
Robert E. Walstad
President
<PAGE>
SCHEDULE OF INVESTMENTS December 31, 1996
<TABLE>
<CAPTION>
NAME OF ISSUER
Percentages represent the market value (UNAUDITED)
of each investment category to total RATING COUPON PRINCIPAL MARKET
net assets MOODY'S/S&P RATE MATURITY AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SOUTH DAKOTA MUNICIPAL BONDS (96.1%)
HEALTH CARE (5.8%)
SD Hlth. & Ed. Fac. Auth. (Huron Regional Ctr.) Rev. NR/BBB- 7.250% 04/01/20 $100,000 $ 107,089
*SD Hlth. & Ed. Auth. (Crippled Children's Hosp.) Rev. NR/A+ 7.100 07/01/09 260,000 263,900
-----------------
$ 370,989
-----------------
HOUSING (17.2%)
SD Hsing. Dev. Auth. Home Ownership Mtg. Aa1/AA+ 6.550% 05/01/14 $100,000 $ 104,907
SD Hsing. Dev. Auth. Home Ownership Mtg. Aa1/AA+ 6.600 05/01/17 195,000 204,635
SD Hsing. Dev. Auth. Home Ownership Mtg. Aa1/AA+ 6.250 05/01/15 200,000 204,892
SD Hsing. Dev. Auth. Rev. A1/A+ 6.700 04/01/20 370,000 384,682
SD Hsing. Dev. Auth. Home Ownership Mtg. Aa1/AA+ 6.000 05/01/21 200,000 199,654
-----------------
$1,098,770
-----------------
REAL ESTATE (7.3%)
Minnehaha Cty. C.O.P. Aa1/NR 6.000% 12/01/12 $100,000 $ 102,161
Pierre, SD Sales Tax Ref. Rev. NR/NR 6.000 10/01/14 200,000 204,428
SD Hlth. & Ed. Facs. Auth. (Univ. Sioux Falls) Rev. NR/NR 7.100 04/01/15 150,000 160,471
-----------------
$ 467,060
-----------------
SCHOOLS (18.7%)
Dakota Valley (N. Sioux City) S.D. #61-8 G.O. NR/NR 6.000% 07/01/12 $100,000 $ 102,514
Dakota Valley (N. Sioux City) S.D. #61-8 G.O. NR/NR 5.650 07/01/14 200,000 199,666
Hamlin SD #28-3 G.O. NR/NR 6.100 12/15/15 140,000 144,494
Hamlin SD #28-3 Capital Outlay C.O.P. NR/NR 5.700 10/01/15 120,000 121,403
Henry S.D. #14-2 G.O. School Building NR/NR 6.450 01/01/12 75,000 77,555
SD (Mitchell) S.D. #17-2 Capital Outlay C.O.P. NR/A 6.200 01/15/13 60,000 62,497
Newell, SD S.D. #09-2 Capital Outlay C.O.P. NR/NR 6.000 01/01/17 300,000 299,643
SD (Winner) S.D. #59-2 Capital Outlay C.O.P. NR/A 6.200 01/15/10 75,000 78,330
SD Northwestern S.D. #56-3 Capital Outlay C.O.P. NR/A 6.800 01/15/13 100,000 107,224
-----------------
$1,193,326
-----------------
STATE EDUCATION (13.9%)
SD Hlth. & Ed. Auth. (Vocational Educ.) Rev. A1/NR 6.700% 08/01/22 $150,000 $ 160,639
SD Student Loan Finance Corp. Rev. NR/A+ 6.750 08/01/10 400,000 420,748
SD Student Loan Finance Corp. Rev. A/NR 6.550 08/01/20 300,000 307,392
-----------------
$ 888,779
-----------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
UTILITIES (4.2%)
Deadwood Sewer, Water & Improvement C.O.P. NR/NR 6.750% 11/01/03 $250,000 $ 266,982
-----------------
INSURED (29.0%)
Grant County (Northwestern Public Svc.) PCR (MBIA) Aaa/AAA 5.900% 06/01/23 $400,000 $ 404,580
*Heartland Consumers Power Elec. Rev. (Escrowed) Aaa/AAA 7.000 01/01/16 200,000 227,608
Heartland Consumers Power Elec. Rev. (FSA) Aaa/AAA 6.000 01/01/09 200,000 213,044
Rapid City Area S.D. #51-4 Cap. Outlay (MBIA) Aaa/AAA 6.200 01/01/12 100,000 106,137
SD Hsing. Dev. Auth. Home Ownership Mtg. (MBIA) Aaa/AAA 6.150 05/01/26 250,000 259,913
SD Hlth. & Ed. Facs. Auth. (Rapid City Regl.) Rev. (MBIA) Aaa/AAA 7.000 09/01/14 90,000 97,962
SD Hlth. & Ed. Auth. (St. Luke's/Midland) Rev. (MBIA) Aaa/AAA 6.625 07/01/11 250,000 272,942
SD Student Loan Program Rev. (MBIA) Aaa/AAA 7.625 08/01/06 50,000 54,327
SD State Lease Rev. COP (CGIC) Aaa/AAA 6.500 09/01/08 200,000 221,734
-----------------
$1,858,247
-----------------
SOUTH DAKOTA MUNICIPAL BONDS (COST: $5,909,222) $6,144,153
-----------------
SHORT-TERM SECURITIES (6.6%)
Goldman Sachs Institutional Liquid Assets Tax-Exempt Diversified Portfolio (COST: $421,151) $ 421,151
-----------------
TOTAL INVESTMENTS IN SECURITIES (COST: $6,330,373) $6,565,304
=================
</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, 1996
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
- -----------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost: $6,330,373) $ 6,565,304
Accrued dividends receivable 651
Accrued interest receivable 118,515
Variation margin on futures 45,184
-----------
Total Assets $ 6,729,654
-------------
LIABILITIES
Bank overdraft $ 299,900
Dividends payable 27,561
Accrued expenses 5,366
-------------
Total Liabilities $ 332,827
-------------
NET ASSETS $ 6,396,827
=============
Net asset value per share, 609,039 shares outstanding $ 10.50
=============
</TABLE>
STATEMENT OF OPERATIONS for the year ended December 31, 1996
- ------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 334,122
Dividends 9,074
-----------
Total Investment Income $ 343,196
-------------
EXPENSES
Investment advisory fees $ 34,769
Distribution fees (12b-1) 17,384
Custodian fees 1,046
Transfer agent fees 9,321
Accounting service fees 26,892
Audit and legal fees 4,050
Insurance 2,952
Directors fees 1,210
Printing and postage 7,404
License, fees, and registrations 2,455
Amortization of organization costs 877
-----------
Total expenses $ 108,360
Less expenses waived or absorbed
by the Fund's manager 54,598
-----------
Total Net Expenses $ 53,762
-------------
NET INVESTMENT INCOME $ 289,434
-------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES
Net realized gain (loss) from:
Investment transactions $ (8,689)
Futures transactions 114,365
Net change in unrealized appreciation (depreciation) of:
Investments (15,156)
Futures (8,014)
-------------
Net Realized And Unrealized Gain (Loss) On
Investments and Futures $ 82,506
-------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 371,940
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL STATEMENTS December 31, 1996
STATEMENT OF CHANGES IN NET ASSETS for the years ended December 31, 1996 and
-----------------------------------------
1995
- -----
<TABLE>
<CAPTION>
For the Year For the Year
Ended Ended
December 31, 1996 December 31, 1995
---------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 289,434 $ 220,297
Net realized gain (loss) on investment and futures transactions 105,676 (108,899)
Net unrealized appreciation (depreciation) on investments and futures (23,170) 310,810
---------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations $ 371,940 $ 422,208
---------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income $ (289,434) $ (220,297)
Distributions in excess of net investment income (17,384) (9,859)
Distributions from net realized gain on investment transactions 0 0
---------------------------------------------
Total Dividends and Distributions $ (306,818) $ (230,156)
---------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares $ 1,387,696 $ 2,562,699
Proceeds from reinvested dividends 166,205 118,385
Cost of shares redeemed (385,225) (599,679)
---------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Capital
Share Transactions $ 1,168,676 $ 2,081,405
---------------------------------------------
TOTAL INCREASE IN NET ASSETS $ 1,233,798 $ 2,273,457
NET ASSETS, BEGINNING OF PERIOD 5,163,029 2,889,572
---------------------------------------------
NET ASSETS, END OF PERIOD $ 6,396,827 $ 5,163,029
=============================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS December 31,1996
Note 1. ORGANIZATION
South Dakota Tax-Free Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The Fund incorporated under the laws of
the State of North Dakota on October 1, 1993 and commenced operations
on April 5, 1994. The Fund's objective is to provide as high a level of
current income exempt from federal and any future South Dakota income
taxes as is consistent with preservation of capital. The Fund will seek
to achieve this by investing primarily in a portfolio of South Dakota
tax-exempt securities.
Shares of the Fund are offered with no initial sales charge. Shares may
be subject to a contingent deferred sales charge, if those shares are
redeemed within five years of purchase.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT SECURITY VALUATION - Investments in securities traded on
national securities exchanges are valued at the last reported sales
price at the close of each business day. Securities for which market
quotations are not readily available are valued at fair value as
determined in good faith by the portfolio management team. The Fund
follows industry practice and records security transactions on the
trade date.
The Fund concentrates its investments in a single state. This
concentration may result in the Fund investing a relatively high
percentage of its assets in a limited number of issuers.
FEDERAL INCOME TAXES - The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies, and to distribute all of its net
investment income and any net realized gain on investments, to its
shareholders. Therefore, no provision for income taxes is required.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income,
declared daily and payable monthly, are reinvested in additional shares
of the Fund at net asset value or payable in cash. Capital gains, when
available, are distributed along with the last income dividend of the
calendar year.
INVESTMENT INCOME - Dividend income is recognized on the ex-dividend
date and interest income is recognized daily on an accrual basis.
Premiums and discounts on securities purchased are amortized using the
effective interest method over the life of the respective securities,
unless callable, in which case they are amortized to the earliest call
date.
FUTURES CONTRACTS - 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
<PAGE>
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. Unrealized appreciation
(depreciation) related to open futures contracts is required to be
treated as realized gain (loss) for Federal income tax purposes.
Certain risks may arise upon entering into futures contracts. These
risks may include changes in the value of the futures contracts that
may not directly correlate with changes in the value of the underlying
securities.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 3. CAPITAL SHARE TRANSACTIONS
As of December 31, 1996, there were 200,000,000 shares of $.001 par
value authorized; 609,039 and 497,017 shares were outstanding at
December 31, 1996 and December 31, 1995, respectively. Transactions in
capital shares were as follows:
<TABLE>
<CAPTION>
Shares Amount
------------------ ------------------
For The Year For The Year Ended For The Year For The Year
Ended Ended Ended Ended
December 31, 1996 December 31,1995 December 31, 1996 December 31, 1995
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 133,378 251,922 $1,387,696 $2,562,699
Shares issued on reinvestment of dividends 16,005 11,653 166,205 118,385
Shares redeemed (37,361) (59,470) (385,225) (599,679)
-----------------------------------------------------------------------------------
Net increase 112,022 204,105 $1,168,676 $2,081,405
===================================================================================
</TABLE>
Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
ND Money Management, Inc., the Fund's investment adviser, ND Capital,
Inc., the Fund's underwriter, and ND Resources, Inc., the Fund's
transfer and accounting services agent, are subsidiaries of ND
Holdings, Inc., the Fund's sponsor.
The Fund has engaged ND Money Management, Inc., to provide investment
advisory and management services to the Fund. The Investment Advisory
Agreement provides for fees to be computed at an annual rate of 0.60%
of the Fund's average daily net assets. The Fund has recognized $33,385
of investment advisory fees for the year ended December 31, 1996. The
Fund has a payable to ND Money Management, Inc. of $3,220 at December
31, 1996 for investment advisory fees. Certain officers and directors
of the Fund are also officers and directors of the investment adviser.
The Fund has adopted a distribution plan (the Plan), pursuant to Rule
12b-1 under the 1940 Act, whereby the Fund shall pay at the annual rate
of 0.75% 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
<PAGE>
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 $17,384 of 12b-1 fee expenses for the
year ended December 31, 1996. The Fund has a payable to ND Capital,
Inc. of $1,610 at December 31, 1996 for 12b-1 fees.
ND Resources, Inc., (the transfer agent), provides shareholder services
for a monthly fee equal to an annual rate of 0.16% of the Fund's first
$10 million of net assets, 0.13% of the Fund's net assets on the next
$15 million, 0.11% of the Fund's net assets on the next $15 million,
0.10% of the Fund's net assets on the next $10 million, and 0.09% of
the Fund's net assets in excess of $50 million. The Fund has recognized
$9,321 of transfer agency fees for the year ended December 31, 1996. ND
Resources, Inc. also acts as the Fund's accounting services agent for a
monthly fee equal to the sum of a fixed fee of $2,000, and a variable
fee equal to 0.05% of the Fund's average daily net assets on an annual
basis for the Fund's first $50 million and at a lower rate on the
average daily net assets in excess of $50 million. The Fund has
recognized $26,892 of accounting service fees for the year ended
December 31, 1996.
Note 5. INVESTMENT SECURITY TRANSACTIONS
The cost of purchases and proceeds from the sales of investment
securities (excluding short-term securities) aggregated $1,525,402 and
$135,293, respectively, for the year ended December 31, 1996.
Note 6. INVESTMENT IN SECURITIES
At December 31, 1996, the aggregate cost of securities for federal
income tax purposes was $6,330,373 and the net unrealized appreciation
of investments based on the cost was $234,931, which is comprised of
$235,622 aggregate gross unrealized appreciation and $691 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 (April 5, 1994)
Ended Ended Through
December 31, 1996 December 31, 1995 December 31, 1994
-------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 9.86 $ 10.00
-------------------------------------------------------------------------
Income from Investment Operations:
Net investment income .52 $ .55 $ .39
Net realized and unrealized gain (loss) on
investment and futures transactions .14 .55 (.11)
-------------------------------------------------------------------------
Total From Investment Operations $ .66 $ 1.10 $ .28
-------------------------------------------------------------------------
Less Distributions:
Dividends from net investment income (.52) $ (.55) $ (.39)
Distributions in excess of net investment income (.03) (.02) (.02)
From net realized gain on investment transactions .00 .00 (.01)
-------------------------------------------------------------------------
Total Distributions (.55) $ (.57) $ (.42)
-------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.50 $ 10.39 $ 9.86
=========================================================================
Total Return 6.58% (A) 11.47% (A) 3.72% (A)(B)
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $ 6,397 $ 5,163 $ 2,890
Ratio of net expenses (after expense assumption) to
average net assets 0.93% (C) 0.61% (C) 0.46% (B)(C)
Ratio of net investment income to average net
assets 5.01% 5.35% 5.62% (B)
Portfolio turnover rate 2.47% 0.66% 31.32%
</TABLE>
(A) Excludes contingent deferred sales charge of 4%.
(B) Ratio was annualized.
(C) During the years ended December 31, 1996, December 31, 1995 and the period
ended December 31, 1994, ND Holdings, Inc. assumed expenses of $54,598,
$37,053, and $24,509. If the expenses had not been assumed, the annualized
ratio of total expenses to average net assets would have been 1.88%, 1.51%
and 2,15%, respectively.
<PAGE>
GRAPH APPEARS HERE
Comparison of change in value of $10,000 investment in South Dakota Tax-Free
Fund and Lehman Bros. Municipal Bond Index (Unaudited)
<TABLE>
<CAPTION>
South Dakota Tax-Free Fund South Dakota Tax-Free Fund Lehman Bros
w/o CDSC w/ max applicable CDSC Municipal Bond Index
----------------------------------------------------------------------------
<S> <C> <C> <C>
4/5/1994 $10,000 $10,000 $10,000
1994 $10,280 $ 9,885 $10,035
1995 $11,459 $11,059 $11,787
1996 $12,212 $11,912 $12,309
</TABLE>
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of
South Dakota Tax Free Fund, Inc.
We have audited the accompanying statement of assets and liabilities of South
Dakota Tax Free Fund, Inc. (the Fund), including the schedule of investments, as
of December 31, 1996, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the years ended December 31,
1996 and 1995 and for the period since inception (April 5,1994) through December
31,1994. 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 audit 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, 1996, 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
audit 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 South
Dakota Tax Free Fund, Inc. as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, 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 10, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 6,330,373
<INVESTMENTS-AT-VALUE> 6,565,304
<RECEIVABLES> 119,166
<ASSETS-OTHER> 45,184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,729,654
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 332,827
<TOTAL-LIABILITIES> 332,827
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 609,039
<SHARES-COMMON-PRIOR> 497,017
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4,338)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 234,931
<NET-ASSETS> 6,396,827
<DIVIDEND-INCOME> 9,074
<INTEREST-INCOME> 334,122
<OTHER-INCOME> 0
<EXPENSES-NET> 53,762
<NET-INVESTMENT-INCOME> 289,434
<REALIZED-GAINS-CURRENT> 105,676
<APPREC-INCREASE-CURRENT> (23,170)
<NET-CHANGE-FROM-OPS> 371,940
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 289,434
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 17,384
<NUMBER-OF-SHARES-SOLD> 133,378
<NUMBER-OF-SHARES-REDEEMED> 37,361
<SHARES-REINVESTED> 16,005
<NET-CHANGE-IN-ASSETS> 1,233,798
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,769
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 108,360
<AVERAGE-NET-ASSETS> 5,774,810
<PER-SHARE-NAV-BEGIN> 10.39
<PER-SHARE-NII> .52
<PER-SHARE-GAIN-APPREC> .14
<PER-SHARE-DIVIDEND> .52
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .03
<PER-SHARE-NAV-END> 10.50
<EXPENSE-RATIO> .93<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Ratio of net expenses to average net assets.
</FN>
</TABLE>
