KIEWIT MUTUAL FUND
MONEY MARKET PORTFOLIO
SHORT-TERM GOVERNMENT PORTFOLIO
INTERMEDIATE-TERM BOND PORTFOLIO
TAX-EXEMPT PORTFOLIO
EQUITY PORTFOLIO
KMF
SEMI-ANNUAL REPORT
DECEMBER 31, 1996
KMF
Dear Shareholder:
The management of Kiewit Mutual Fund is pleased to present its semiannual
report covering the period from July 1, 1996 through December 31, 1996.
Investment Results*
The Money Market Portfolio's total return for the six-month period was 2.69%.
That return consisted of income distributions (dividends) of $0.03 per share.
The Portfolio's return compares favorably with the 2.51% total return reported
for Donoghue's Money Market Fund Average over the same period.
The Short-Term Government Portfolio's total return for the six-month period
was 3.47%. That return consisted of an increase in net asset value of $0.01
per share (increasing from $2.00 to $2.01) and income distributions
(dividends) of $0.06 per share. The Portfolio's return falls short of the
3.59% total return reported for the unmanaged Lehman 1-3 Year Government Index
over the same period. The Lehman 1-3 Year Government Index is a total return
performance benchmark consisting of U.S. Government agency and Treasury
securities with maturities from one to three years.
The Intermediate-Term Bond Portfolio's total return for the six-month period
was 4.70%. That return consisted of an increase in net asset value of $0.03
per share (increasing from $2.01 to $2.04) and income distributions
(dividends) of $0.06 per share. The Portfolio's return falls short of the
4.93% total return reported for the unmanaged Lehman Intermediate Corporate
Index over the same period. The Lehman Intermediate Corporate Index is a
total return performance benchmark consisting of publicly issued corporate
debt issues rated at least investment grade with maturities from one to ten
years.
The Tax-Exempt Portfolio's total return for the six-month period was 3.37%.
That return consisted of an increase in net asset value of $0.02 per share
(increasing from $2.02 to $2.04) and income distributions (dividends) of $0.04
per share. The Portfolio's return falls short of the 3.67% total return
reported for the unmanaged Lehman 5-Year Municipal Bond Index. The Lehman 5-
Year Municipal Bond Index is a total return performance benchmark consisting
of tax-exempt municipal bonds rated at least investment grade with maturities
from four to six years.
The Equity Portfolio's total return for the six-month period was 9.10%. That
return consisted of an increase in net asset value per share of $1.27
(increasing from $16.58 to $17.85) and income and capital gain distributions
(dividends) of $0.24 per share. The Portfolio's return falls short of the
11.69% total return reported for the unmanaged Standard & Poor's 500 Index
(the "S&P 500"). The S&P 500 is an unmanaged capitalization weighted index of
five hundred publicly traded stocks.
* Past performance is not necessarily predictive of future results. There
can be no assurance that the Money Market Portfolio will be able to maintain a
stable net asset value of $1.00. An investment in the Money Market Portfolio
is neither insured nor guaranteed by the U.S. Government. The returns shown
above are higher due to the Adviser's maintenance of the Portfolio's expenses.
See Financial Highlights on pages 10, 16, 23, 32 and 38.
Please note that the Lehman indices and the S&P 500 are unmanaged statistical
compilations, and unlike the Kiewit Portfolios have no associated expenses.
Market Review and Preview
Since we issued our last report to shareholders during the middle of 1996, the
financial markets have been quite investor friendly. Modest economic growth,
low inflation and "status quo" November elections were all viewed positively
by investors.
Investor concern that the strength of the economy would lead to a pick-up in
inflation necessitating Federal Reserve Board (the "Fed") tightening held bond
prices down during the early part of the period. In reality, inflation failed
to become a problem and prices of fixed income securities rose to post
positive total returns for the last half of the year. This contrasted with
the flat to negative total returns earned by fixed income investors during the
first half of the year. 1996's price activity was ample evidence that the
price volatility that has roiled the fixed income markets over the last
several years was alive and well.
Also during the second half of the year, stocks continued as "the place to be"
in the minds of investors. Thanks to record inflows of money into equity
mutual funds, the stock market significantly outperformed the bond market
during the period, rising to new highs on multiple occasions. Despite that
record performance, the period was not without an occasional setback. The
most notable was the market activity exhibited the day following Fed Chairman
Alan Greenspan's comments about "irrational exuberance" in the financial
markets. There was even a 10-day period in July where the market lost 10% of
its value when measured on an intraday basis. Despite the volatility, market
retreats continued to lead to new market highs, much as they have for the past
six years. The stock market as measured by the S&P 500 realized a total
return of 10.80% for the period, assuming reinvestment of dividends. Although
the 1990's have given us one of the best stock market performances of all
time, investors need to remember that the day will come when a market drop
will not be followed by new market highs in a matter of weeks. When that
happens, they need to be patient and remember that investing is a long-term
endeavor.
Notwithstanding the performance of the indices, most individual stocks failed
to perform as spectacularly. The best returns were concentrated in large-cap
stocks such as Merck, Intel, Microsoft, 3M, Cisco Systems and IBM. In the
NASDAQ market, the 100 largest companies in the NASDAQ Industrial Index had an
average gain of more than 42% for the year. The remaining 3200 companies in
that Index had an average gain of only 3% for the period. As a stockholder of
several small and mid- cap companies, Kiewit Equity Portfolio's performance
was much closer to that of the remaining 3200 companies than the 100 largest
ones. Due to what we perceive as extreme price valuations for large-cap
companies, we do not expect their outperformance to continue during 1997 and
therefore continue to hold our small- and mid-cap companies.
At Kiewit Mutual Fund, we expect that the direction of interest rates in 1997
will be greatly influenced by foreign investors' willingness to continue
adding to their holdings of dollar-denominated bonds. If the U.S. bond market
continues to offer attractive investment opportunities relative to other world
markets (as it did in 1996), foreign participation should keep interest rates
from rising. If foreign investors are not motivated to continue purchasing
large amounts of dollar-denominated bonds, look for interest rates to move
higher.
As for equities, with the exception of continued demand for equity mutual
funds on the part of individual investors, we see no fundamental reason why
equity prices should come close to matching 1995 and 1996's returns. It is
more likely that 1997 will be just a break-even year for the stock market.
Despite our less than exuberant view of this year's market potential, we feel
that attempts at market timing would be detrimental to our shareholders.
Therefore, we will continue to search for and purchase shares of companies
that we believe offer opportunity for above average long-term returns.
We are pleased to report that beginning in March 1997, the Fund's Portfolios
will convert to a master fund/feeder fund arrangement whereby each Portfolio
will invest substantially all of its assets in a corresponding Series of
Kiewit Investment Trust. The Series of the Trust intend to invest in the same
types of securities, subject to the same policies and limitations, and under
the same management as each corresponding Portfolio. Each Series will
endeavor to attract other institutional investors for the purpose of achieving
potential economies of scale and gaining additional investment opportunities
such as increased diversification that might be available at higher asset
levels. You may rest assured that this new arrangement will not adversely
affect portfolio management techniques or the level of services that you have
come to expect from the Fund.
Sincerely,
Ann C. McCulloch
President
February 14, 1997
KIEWIT MUTUAL FUND/MONEY MARKET PORTFOLIO
- -----------------------------------------
Investments/December 31, 1996 (Unaudited)
(Showing Percentage of Total Value of Net Assets)
- ------------------------------------------------------------------------
Moody's/S&P Principal Value
Rating Amount (Note 2)
----------- --------- -------
Certificates of Deposit - 9.5%
Abbey National Treasury Services,
5.66%, 01/02/97 P1/A-1+ $9,000,000 $9,000,017
Australia & New Zealand Bank, Ltd.,
5.38%, 01/22/97 P1/A1+ 10,000,000 10,000,058
Bank of Nova Scotia, 5.60%, 02/27/96 P1/A1+ 2,000,000 1,999,386
Bank of Tokyo - Mitsubishi Ltd.,
5.52%, 02/05/97 P1/A1 5,000,000 5,000,048
Deutsche Bank AG, 5.57%, 02/03/97 P1/A1+ 2,000,000 2,000,230
Norinchukin Bank, 5.51%-5.53%,
01/09/97-01/15/97 P1/A1+ 10,000,000 10,000,069
----------
TOTAL CERTIFICATES OF DEPOSIT (COST $37,999,808) 37,999,808
----------
Commercial Paper - 81.9%
Aerospace - 0.6%
Lockheed Martin, 5.759%, 01/30/97 P2/A2 2,300,000 2,289,402
----------
Automobiles - 2.2%
Daimler-Benz North America Corp., 5.374%-5.398%,
01/22/97-03/07/97 P1/A1 9,000,000 8,939,739
----------
Banks - 9.9%
Commerzbank US Finance, Inc., 5.38%-5.558%,
01/08/97-02/18/97 P1/A1+ 19,750,000 19,710,142
Corporacion Andina De Fomento, 5.382%-5.398,
01/30/97-02/03/97 P1/A1+ 10,000,000 9,954,011
Suntrust Banks, 5.381%, 03/06/97 P1/A1 5,000,000 4,952,800
Westpac Capital Corp., 5.468%, 01/06/97 P1/A1+ 5,000,000 4,996,257
----------
39,613,210
----------
Chemicals - 4.9%
Hercules Inc., 5.55%-5.552%,
01/08/97-01/13/97 P1/A1 19,750,000 19,723,435
----------
Computers - 4.1%
International Business Machines, 5.362%-5.374%,
02/18/97-03/13/97 P1/A1 16,320,000 16,169,717
----------
Electronics - 4.2%
Siemens Capital, 5.368%-5.381%,
01/14/97-03/14/97 P1/A1+ 17,000,000 16,906,765
----------
Finance - 2.0%
Mitsubishi Motors Credit of America, Inc.,
5.739%, 01/07/97 P1/A1+ 3,041,000 3,038,101
Mitsubishi Motors Credit of America, Inc.,
5.472%, 01/14/97 P1/A1 5,000,000 4,990,250
----------
8,028,351
----------
Financial Services - 10.2%
BTM Capital Corp., 5.44%, 02/07/97 P1/A1 5,000,000 4,972,404
Ford Motor Credit Corp., 5.382%-5.567%,
01/06/97-01/21/97 P1/A1 9,500,000 9,481,781
General Electric Capital Corp., 5.393%-5.83%,
01/07/97-07/17/97 P1/A1+ 19,510,000 19,460,476
Towson Town Center, Inc., 5.558%-5.576%,
01/08/97-01/10/97 P1/A1 6,800,000 6,791,814
----------
40,706,475
----------
Food & Beverages - 3.3%
The Seagram Company, Ltd., 5.473%,
01/08/97 P1/A1 $10,000,000 $9,989,403
Ralston Purina Co., 5.53%, 01/17/97 P2/A2 3,000,000 2,992,707
----------
12,982,110
----------
Freight & Shipping - 0.8%
California & Hawaiian Sugar, 5.588%,
01/16/97 P2/A2 3,200,000 3,192,600
----------
Hardware & Tools - 2.5%
Ryobi Finance Corp., 5.456%, 01/22/97 P1/A1 3,000,000 2,990,532
Stanley Works, 5.377%-5.39%,
01/16/97-02/11/97 P1/A1 7,000,000 6,965,150
----------
9,955,682
----------
Leasing - 5.0%
Diamond Lease (USA), Inc., 5.449%, 01/17/97 P1/A1 5,000,000 4,988,000
Hertz Corp., 5.355%, 01/30/97 P1/A1 5,000,000 4,978,653
International Lease Finance Corp., 5.481%,
02/03/97 P1/A1 10,000,000 9,950,683
----------
19,917,336
----------
Machinery & Heavy Equipment - 5.0%
Dover Corp., 5.371%-5.374%,
01/24/97-01/29/97 F1/A1 13,000,000 12,952,120
Hosokawa Micron, 5.501%, 02/25/97 P1/A1 7,000,000 6,941,929
----------
19,894,049
----------
Natural Gas - 0.7%
Sonat Inc., 5.728%, 01/13/97 P2/A2 2,950,000 2,944,395
----------
Oil - 4.3%
Chevron Transport Corp., 5.426%, 02/19/97 P1/A1+ 5,000,000 4,963,726
Chevron U.K. Investment plc, 5.436%-5.60%,
01/17/97-04/15/97 P1/A1+ 10,000,000 9,910,423
Mapco, Inc., 5.489%, 01/17/97 P2/A2 2,200,000 2,194,691
----------
17,068,840
----------
Pharmaceuticals Preparations - 0.5%
Sandoz Corp., 5.397%, 01/31/97 P1/A1+ 1,900,000 1,891,529
----------
Printing & Publishing - 2.5%
Dow Jones & Co., 5.375%, 01/27/97 P1/A1+ 10,000,000 9,961,506
----------
Railroads - 0.7%
Union Pacific Corp., 5.533%-5.564%,
01/10/97-01/28/97 P2/A2 2,900,000 2,890,825
----------
Retail Merchandising - 2.0%
H.D. Real Estate Funding, 5.381%, 01/06/97 P1/A1+ 8,000,000 7,994,100
----------
Rubber & Plastic - 4.2%
Rubbermaid Inc., 5.387%-5.433%,
01/06/97-01/28/97 P1/A1 16,800,000 16,762,329
----------
Securities Dealers - 7.9%
CS First Boston Group, Inc., 5.381%-5.423%,
01/31/97-03/07/97 P1/A1 10,000,000 9,929,513
Merrill Lynch & Co., Inc., 5.396%-5.53%,
01/28/97-02/10/97 P1/A1+ 12,500,000 12,436,753
Merrill Lynch International (Australia),
5.401%-5.42%, 01/09/97-02/06/97 P1/A1+ 9,000,000 8,972,576
----------
31,338,842
----------
Telecommunications - 1.3%
AT&T Corp., 5.31%, 01/02/97 P-1/A-1+ 5,000,000 4,999,263
----------
Utilities - 3.1%
Hawaiian Electric Utilities, Inc., 5.596%-5.789%,
01/7/97-01/29/97 P2/A2 3,456,000 3,446,040
Rincon Securities, Inc., 5.385%-5.491%,
01/07/97-03/05/97 P1/A1+ 8,850,000 8,815,588
----------
12,261,628
----------
TOTAL COMMERCIAL PAPER (Cost $326,432,128) 326,432,128
-----------
U.S. Government Agency Obligations - 6.3%
Federal Farm Credit Banks, 5.56%, 01/02/97 Aaa/NR 4,000,000 3,999,990
Federal National Mtge. Assoc., 5.42%,
08/01/97 Aaa/N/R 10,000,000 9,997,774
Student Loan Marketing Assoc., 5.615%,
12/24/97, Callable 01/24/97 @ 100 Aaa/NR 5,000,000 5,000,000
Student Loan Marketing Assoc., 5.42%,
09/28/98 Aaa/NR 5,960,000 5,952,938
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $24,950,702) 24,950,702
----------
Repurchase Agreement - 2.6%
With Paine Webber Group, Inc.: At 6.50% dated 12/31/96,
to be repurchased at $10,473,781 on 01/02/97,
collateralized by $10,784,375 (original face $20,313,323)
Federal Home Loan Mortgage Corporation securities at
various rates and maturities to 02/01/25 (market
value $11,100,734) (COST $10,470,000) 10,470,000
----------
TOTAL INVESTMENTS (COST $399,852,638)+ - 100.3% 399,852,638
OTHER ASSETS AND LIABILITIES, NET - (0.3)% (1,218,091)
------------
NET ASSETS - 100.0% $398,634,547
============
+ Cost for federal income tax and financial reporting purposes.
NR Not Rated. While not rated by Moody's or S&P, U.S. Government Agency
Obligations and Mortgage Backed Securities are considered to be of the highest
quality, comparable to AAA.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996 (Unaudited)
Assets:
Investments in securities (including repurchase
agreement of $10,470,000), at value (amortized
cost $399,852,638)(Note 2) $399,852,638
Cash 810
Interest receivable 806,770
Unamortized organization costs (Note 2) 18,069
Other assets 7,994
------------
Total assets 400,686,281
Liabilities:
Dividends payable $ 1,967,036
Accrued management fee (Note 4) 52,374
Other accrued expenses (Note 4) 32,324
-----------
Total liabilities 2,051,734
------------
Net Assets $398,634,547
============
Net Assets consist of:
Shares of beneficial interest $ 3,986,361
Additional paid-in capital 394,649,781
Accumulated net realized loss on investment (1,595)
------------
Net Assets, for 398,636,142 shares outstanding $398,634,547
============
Net Asset Value, offering and redemption price per
share ($398,634,547 / 398,636,142 outstanding shares
of beneficial interest, $0.01 par value, unlimited
number of shares authorized) $1.00
=====
STATEMENT OF OPERATIONS
For the Six-Month Period Ended December 31, 1996 (Unaudited)
Interest income $ 13,519,283
Expenses:
Management fee (reflects $139,449 waiver) (Note 4) $ 354,870
Administration fee (Note 4) 25,206
Accounting fee (Note 4) 42,433
Transfer Agent fee (Note 4) 10,818
Custodian fee (Note 4) 25,525
Trustees' fees and expenses (Note 4) 2,017
Amortization of organizational expenses (Note 2) 3,435
Registration fee 6,259
Legal 5,647
Audit 7,758
Other 10,351
---------
Total expenses, net 494,319
-----------
Net investment income 13,024,964
-----------
Net increase in net assets resulting from operations $ 13,024,964
============
STATEMENTS OF CHANGES IN NET ASSETS
For the Six-Month
Period Ended For the Fiscal
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 13,024,964 $ 23,088,570
Net realized loss on investments 0 (704)
--------------- -------------
Net increase in net assets resulting
from operations 13,024,964 23,087,866
--------------- -------------
Distributions to shareholders from net
investment income ($0.027 and $0.055
per share, respectively) (13,024,964) (23,088,570)
--------------- -------------
Share transactions at net asset value of
$1.00 per share:
Proceeds from sale of shares 1,108,912,298 2,492,777,762
Shares issued to shareholders in reinvestment
of dividends from net investment income 12,561,821 22,304,714
Cost of shares redeemed (1,112,806,109) (2,505,823,180)
-------------- -------------
Net increase in net assets and shares
resulting from share transactions 8,668,010 9,259,296
-------------- -------------
Total increase in net assets 8,668,010 9,258,592
Net Assets:
Beginning of period 389,966,537 380,707,945
-------------- -------------
End of period $ 398,634,547 $ 389,966,537
=============== ===============
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period.
For the Period
For the Six-Month July 28, 1994
Period Ended For the Fiscal (Commencement of
December 31, 1996 Year Ended Operations through
(Unaudited) June 30, 1996 June 30, 1995
----------------- ------------- -------------------
Net Asset Value -
Beginning of Period $1.00 $1.00 $1.00
----- ----- -----
Investment Operations:
Net investment income 0.03 0.05 0.05
----- ----- -----
Distributions:
From net investment income (0.03) (0.05) (0.05)
----- ----- -----
Net Asset Value -
End of Period $1.00 $1.00 $1.00
===== ===== =====
Total Return 2.69%** 5.61% 5.04%**
Ratios (to average net
assets)/Supplemental Data:
Expenses+ 0.20%* 0.20% 0.30%*
Net investment income 5.27%* 5.47% 5.51%*
Net assets at end of period
(000's omitted) $398,635 $389,967 $380,708
* Annualized
** The total return has not been annualized.
+ Since inception, Kiewit Investment Management Corp. (the "Manager") agreed
to waive all or a portion of its fee. For the period from December 7, 1994
through June 30, 1995, the Manager further agreed to waive all or a portion of
its fee in an amount that will limit annual operating expenses to not more
than 0.30% of the average daily net assets of the Portfolio. Effective July
1, 1995 through June 30, 1997, the Manager agreed to waive all or a portion of
its fee in an amount that will limit annual operating expenses to not more
than 0.20% of the average daily net assets of the Portfolio. The annualized
expense ratio, had there been no fee waivers by the Manager, would have been
0.26%, 0.27% and 0.34% for the six-month period ended December 31, 1996, for
the year ended June 30, 1996 and for the period ended June 30, 1995,
respectively.
Kiewit Mutual Fund/Short-Term Government Portfolio
- --------------------------------------------------
Investments/December 31, 1996 (Unaudited)
(Showing Percentage of Total Value of Net Assets)
Principal Value
Amount (Note 2)
--------- --------
U.S. Government Agency Obligations - 63.6%
Federal Farm Credit Banks Notes - 6.4%
Federal Farm Credit Banks, 6.21%, 12/04/00,
Callable 12/04/97 @ 100 $ 4,250,000 $ 4,194,665
Federal Farm Credit Banks, 5.50%, 02/01/01 5,000,000 4,853,200
-----------
9,047,865
-----------
Federal Home Loan Banks Notes - 16.2%
Federal Home Loan Banks, 5.545%, 06/09/97 5,000,000 5,001,800
Federal Home Loan Banks, 5.215%, 07/08/98,
Callable 01/08/97 @ 100 5,000,000 4,946,650
Federal Home Loan Banks, 5.24%, 07/20/98,
Callable 01/20/97 @ 100 5,000,000 4,947,250
Federal Home Loan Banks, 5.86%, 01/25/99,
Callable 01/25/97 @ 100 5,000,000 4,959,649
Federal Home Loan Banks, 6.375%, 12/06/99,
Callable 03/06/97 @ 100 3,000,000 2,989,950
----------
22,845,299
----------
Federal Home Loan Mortgage Corporation Notes - 8.3%
Federal Home Loan Mtge. Corp., 8.20%, 01/16/98,
Callable 01/16/97 @ 100 3,000,000 3,000,000
Federal Home Loan Mtge. Corp., 5.825%, 08/11/98,
Callable 02/11/97 @ 100 4,195,000 4,177,255
Federal Home Loan Mtge. Corp., 5.37%, 12/07/98 4,500,000 4,448,790
----------
11,626,045
----------
Federal National Mortgage Association Notes - 29.1%
Federal National Mtge. Assoc., 6.84%, 10/03/97 5,000,000 5,038,951
Federal National Mtge. Assoc., 5.00%, 02/25/98,
Callable 11/25/96 @ 100 2,000,000 1,980,160
Federal National Mtge. Assoc., 5.20%, 07/10/98 2,310,000 2,287,060
Federal National Mtge. Assoc., 5.77%, 08/25/98 2,900,000 2,884,949
Federal National Mtge. Assoc., 4.875%, 10/15/98 2,850,000 2,796,191
Federal National Mtge. Assoc., 4.75%, 10/26/98 3,620,000 3,548,975
Federal National Mtge. Assoc., 5.23%, 11/25/19,
Callable 11/25/96 @ 100 5,000,000 4,938,599
Federal National Mtge. Assoc., 6.37%, 07/27/00,
Callable 07/27/98 @ 100 1,500,000 1,491,435
Federal National Mtge. Assoc., 5.84%, 03/15/01 3,000,000 2,944,560
Federal National Mtge. Assoc., 6.71%, 07/24/01 5,000,000 5,061,800
Federal National Mtge. Assoc., Ser. SM-1996-0,
6.70%, 08/10/01, Callable 08/10/99 @ 100 5,000,000 5,001,099
Federal National Mtge. Assoc., 6.87%, 10/02/01,
Callable 10/02/00 @ 100 3,000,000 3,032,039
----------
41,005,818
----------
Student Loan Marketing Association Notes - 3.6%
Student Loan Marketing Assoc., 6.365%, 08/12/98,
Callable 08/12/97 @ 100 5,000,000 5,024,900
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $89,434,056) 89,549,927
----------
U.S. Treasury Notes - 29.6%
U.S. Treasury Notes, 6.125%, 05/31/97 1,000,000 1,002,940
U.S. Treasury Notes, 5.875%, 07/31/97 4,000,000 4,010,240
U.S. Treasury Notes, 5.00%, 01/31/98 9,000,000 8,936,280
U.S. Treasury Notes, 7.25%, 02/15/98 2,000,000 2,032,760
U.S. Treasury Notes, 5.125%, 02/28/98 5,000,000 4,967,300
U.S. Treasury Notes, 7.75%, 01/31/00 2,000,000 2,092,380
U.S. Treasury Notes, 5.625%, 11/30/00 17,000,000 16,692,807
U.S. Treasury Notes, 5.875%, 11/30/01 2,000,000 1,970,600
----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $42,046,732) 41,705,307
----------
Repurchase Agreement - 5.8%
With Paine Webber Group, Inc.: At 6.50% dated 12/31/96,
to be repurchased at $8,088,920 on 01/02/97,
collateralized by $8,227,663 (original face $15,825,000)
Federal Home Loan Mortgage Corporation security, due
02/01/24 (market value $8,571,547) (COST $8,086,000) 8,086,000
----------
TOTAL INVESTMENTS (COST $139,566,788)+ - 99.0% 139,341,234
OTHER ASSETS AND LIABILITIES, NET - 1.0% 1,398,818
-----------
NET ASSETS - 100.0% $140,740,052
============
+ Cost for federal income tax and financial reporting purposes. At December
31, 1996, net unrealized depreciation was ($225,554). This consisted of
aggregate gross realized appreciation for all securities in which there was an
excess of market value over cost of $508,239 and aggregate gross unrealized
depreciation for all securities in which there was an excess of cost over
market value of $733,793.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996 (Unaudited)
Assets:
Investments in securities (including
repurchase agreement of $8,086,000), at
value (amortized cost $139,566,788) (Note 2) $139,341,234
Cash 945
Interest receivable 2,222,388
Unamortized organization costs (Note 2) 18,088
Other assets 3,111
------------
Total assets 141,585,766
Liabilities:
Dividends payable $784,845
Accrued management fee (Note 4) 24,798
Other accrued expenses (Note 4) 36,071
--------
Total liabilities 845,714
-----------
Net Assets $140,740,052
============
Net Assets consist of:
Shares of beneficial interest $ 699,999
Additional paid-in capital 139,958,904
Accumulated net realized gain on investments 306,703
Net unrealized depreciation of investments (225,554)
------------
Net Assets, for 69,999,878 shares outstanding $140,740,052
============
Net Asset Value, offering and redemption price per share
($140,740,052 / 69,999,878 outstanding shares
of beneficial interest, $0.01 par value) $2.01
=====
STATEMENT OF OPERATIONS
For the Six-Month Period Ended December 31, 1996 (Unaudited)
Interest income $ 5,470,845
Expenses:
Management fee (reflects $107,253 waiver)
(Note 4) $162,972
Administration fee (Note 4) 25,206
Accounting fee (Note 4) 28,277
Transfer Agent fee (Note 4) 10,417
Custodian fee (Note 4) 10,986
Trustees' fees and expenses (Note 4) 2,017
Amortization of organizational expenses
(Note 2) 3,435
Registration fees 12,545
Legal 1,803
Audit 7,568
Other 4,998
-------
Total expenses, net 270,224
-----------
Net investment income 5,200,621
-----------
Realized and unrealized gain on investments:
Net realized gain on investment transactions 408,224
Net unrealized appreciation of investments 112,490
-----------
Net gain on investments 520,714
-----------
Net increase in net assets resulting from operations $ 5,721,335
===========
STATEMENTS OF CHANGES IN NET ASSETS
For the Six-Month
Period Ended For the Fiscal
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
----------------- -------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 5,200,621 $ 9,936,739
Net realized gain on investment
transactions 408,224 325,356
Net unrealized appreciation (depreciation)
of investments 112,490 (2,131,628)
------------ ------------
Net increase in net assets resulting
from operations 5,721,335 8,130,467
------------ ------------
Distributions to shareholders from net
investment income ($0.059 and $0.123 per
share, respectively) (5,200,621) (9,936,739)
------------ ------------
Fund Share Transactions (a):
Receipt from shares sold 124,850 79,791,554
Receipt from shares issued on
reinvestment of distributions 5,199,315 9,617,201
Shares redeemed (48,420,849) (37,114,026)
------------ -----------
Net increase (decrease) in net assets
from Fund share transactions (43,096,684) 52,294,729
------------ -----------
Total increase (decrease) in net assets (42,575,970) 50,488,457
Net Assets:
Beginning of period 183,316,022 132,827,565
------------ ------------
End of period $140,740,052 $183,316,022
============ ============
(a) Transactions in capital stock were:
Shares sold 62,176 39,449,589
Shares issued on reinvestment
of distributions 2,589,056 4,746,836
Shares redeemed (24,108,516) (18,301,375)
------------ ------------
Net increase (decrease) in shares (21,457,284) 25,895,050
Shares outstanding - Beginning balance 91,457,162 65,562,112
------------ ------------
Shares outstanding - Ending balance 69,999,878 91,457,162
============ ============
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period.
For the Period
For the Six-Month July 28, 1994
Period Ended For the Fiscal (Commencement of
December 31, 1996 Year Ended Operations) through
(Unaudited) June 30, 1996 June 30, 1995
----------------- -------------- ------------------
Net Asset Value -
Beginning of Period $2.00 $2.03 $2.00
----- ----- -----
Investment Operations:
Net investment income 0.06 0.12 0.11
Net realized and unrealized
gain (loss) on investments 0.01 (0.03) 0.03
---- ---- ----
Total from investment
operations 0.07 0.09 0.14
---- ---- ----
Distributions:
From net investment income (0.06) (0.12) (0.11)
---- ---- ----
Net Asset Value -
End of Period $2.01 $2.00 $2.03
===== ===== =====
Total Return 3.47%** 4.66% 7.00%**
Ratios (to average net assets)/Supplemental Data:
Expenses + 0.30%* 0.30% 0.37%*
Net investment income 5.77%* 6.06% 5.75%*
Portfolio turnover 41.83%* 57.52% 122.58%*
Net assets at end of
period (000's omitted) $140,740 $183,316 $132,829
_________________________
* Annualized
** The total return has not been annualized.
+ Since inception, Kiewit Investment Management Corp. (the "Manager")
agreed to waive all or a portion of its fee. For the period from December 7,
1994 through June 30, 1995, the Manager further agreed to waive all or a
portion of its fee in an amount that will limit annual operating expenses to
not more than 0.40% of the average daily net assets of the Portfolio.
Effective July 1, 1995 through June 30, 1997, the Manager agreed to waive all
or a portion of its fee in an amount that will limit annual operating expenses
to not more than 0.30% of the average daily net assets of the Portfolio. The
annualized expense ratio, had there been no fee waivers by the Manager, would
have been 0.42%, 0.43% and 0.45% for the six-month period ended December 31,
1996, for the year ended June 30, 1996 and for the period ended June 30, 1995,
respectively.
Kiewit Mutual Fund/Intermediate-Term Bond Portfolio
- ---------------------------------------------------
Investments/December 31, 1996 (Unaudited)
(Showing Percentage of Total Value of Net Assets)
Moody's/S&P Principal Value
Rating Amount (Note 2)
----------- --------- -------
Corporate Bonds - 83.3%
Automobile Manufacturing - 3.3%
Chrysler Corp., 10.95%, 06/07/01, Callable
08/01/97 @ 105.48 A3/A- $ 2,000,000 $ 2,150,000
Ford Motor Co., 8.875%, 04/01/06 A1/A+ 1,500,000 1,689,375
-----------
3,839,375
-----------
Banks - 17.2%
ABN-Amro Bank - Global Note, 7.25%,
05/31/05 Aa2/AA- 3,000,000 3,048,750
Security Pacific Corp., 6.00%, 05/01/00 A1/A+ 2,825,000 2,775,563
Star Bank, N.A., 6.375%, 03/01/04 A3/A- 2,000,000 1,937,500
Suntrust Banks Inc., 6.00%, 02/15/26,
Putable 02/15/06 @ 100 A2/A 2,000,000 1,890,000
U.S. Bancorp, 7.50%, 06/01/26,
Putable 06/01/06 @ 100 A2/A- 2,000,000 2,080,000
United Postal Savings Assoc., 9.00%,
07/26/99 Aaa/NR 3,000,000 3,176,250
World Savings and Loan Assoc., 9.90%,
07/01/00, Callable 04/01/99 @ 100 A2/A 4,921,000 5,253,167
----------
20,161,230
----------
Chemicals - 7.0%
Hoechst-Celanese Corp., 6.125%, 02/01/04 A2/A+ 2,500,000 2,393,750
Monsanto Co., 8.13%, 12/15/06,
Sinking Fund 06/15/01 A1/A 2,000,000 2,142,500
Rohm & Haas Holdings, 9.80%, 04/15/20,
Sinking Fund 10/15/00 A1/A 3,040,000 3,737,589
----------
8,273,839
----------
Consumer Goods - 2.6%
Anheuser-Busch Cos. Inc., 7.00%,
09/01/05, Callable 09/01/02 @ 100 A1/AA- 3,000,000 3,015,000
----------
Financial - 8.8%
BHP Finance, USA, 6.69%, 03/01/06 A3/A- 2,500,000 2,446,875
Ford Motor Credit Corp., 8.00%, 06/15/02 A3/A- 5,000,000 5,318,750
General Motors Acceptance Corp., 8.875%,
06/01/10 Aa1/AA- 1,050,000 1,214,061
Grand Metropolitan Investment, 7.125%,
09/15/04 A2/A+ 1,350,000 1,370,250
----------
10,349,936
----------
Foreign - 8.4%
Hanson Overseas B.V., 7.375%, 01/15/03 A3/A+ 3,000,000 3,075,000
Republic of Finland, 9.625%, 04/01/28,
Callable 04/01/98 @ 104.31 Aa1/AA- 3,000,000 3,202,500
Swedish Export Credit, 9.875%, 03/15/38,
Callable 03/15/98 @ 104.94 Aa3/AA+ 2,000,000 2,165,000
WMC Finance USA, 6.50%, 11/15/03 A2/A 1,455,000 1,442,269
----------
9,884,769
----------
Industrial & Miscellaneous - 1.3%
Knight-Ridder Inc., Debs., 9.875%,
04/15/09 A1/AA- 1,240,000 1,529,850
----------
Insurance - 2.4%
Lincoln National Corp., 7.25%, 05/15/05 A2/A 2,850,000 2,871,375
----------
Manufacturing - 15.7%
Air Products & Chemicals, 8.50%, 04/01/06,
Callable 04/01/04 @ 100 A2/A 3,000,000 3,247,500
Alcan Aluminum, Inc., 9.625%, 07/15/19,
Callable 07/15/99 @ 104.64 A2/A- 5,000,000 5,518,750
Consolidated Coal, 8.21%, 06/21/04 A2/A- 3,250,000 3,481,010
Enclean Inc., 7.50%, 08/01/01, Callable
08/01/97 @ 102.50 A1/A+ 1,000,000 1,033,750
English China Clays Delaware Inc., 7.375%,
10/01/02 A3/A- 5,000,000 5,168,750
----------
18,449,760
----------
Merchandising & Retail - 3.4%
Mercantile Stores, Inc., 6.70%, 09/15/02,
Callable 09/15/97 @ 100 A1/A+ 4,000,000 4,005,000
----------
Security & Commodity Brokers, Dealers - 6.5%
Lehman Brothers Holdings Inc., 7.25%,
10/15/03 Baa1/A 3,000,000 3,011,250
Morgan Stanley Group, Inc., 7.50%, 09/01/99 A1/A+ 3,000,000 3,078,750
Salomon, Inc., 7.75%, 05/15/00 Baa1/BBB 1,500,000 1,539,375
----------
7,629,375
----------
Transportation - 6.5%
Canadian National Railway Co., 6.625%,
05/15/03 Baa2/BBB 3,000,000 2,958,750
Chicago & Northwestern, 6.25%, 07/30/12,
Sinking Fund Semi-Annually A1/A 2,838,385 2,689,370
Union Pacific Corp., 6.12%, 02/01/04,
Callable 02/01/01 @ 100 Aa3/A 2,080,000 1,999,400
----------
7,647,520
----------
Utilities - 0.1%
Indiana Michigan Power Co., Title XI, 8.05%,
01/15/98 NR/NR 103,000 103,129
----------
TOTAL CORPORATE BONDS (COST $96,979,294) 97,760,158
----------
Asset-Backed Securities - 1.9%
Export Funding Trust, Ser. 1994A, 7.89%,
02/15/05
(COST $2,135,498) Aaa/AAA 2,125,000 2,230,797
----------
Mortgage Backed Securities - 3.8%
Federal Home Loan Mtge. Corp., Ser. 124A
Plan C Remic, 8.50%, 03/15/97 NR/NR 758,586 756,743
Federal Home Loan Mtge. Corp., Ser. 143A
Plan C Remic, 8.50%, 06/15/97 NR/NR 113,631 113,354
Federal Home Loan Mtge. Corp., Ser. 125A
Plan C Remic, 8.75%, 03/15/00 NR/NR 716,069 736,134
Federal Home Loan Mtge. Corp., Pool
#380078, 9.00%, 04/01/05 NR/NR 1,209,859 1,258,253
Federal National Mtge. Assoc., Pool
#326277, 7.00%, 05/01/09 NR/NR 1,590,598 1,588,610
----------
TOTAL MORTGAGE BACKED SECURITIES (COST $4,460,033) 4,453,094
----------
U.S. Government Agency Obligations - 6.3%
Federal Home Loan Banks Notes - 2.5%
Federal Home Loan Banks, 7.20%, 09/25/01,
Callable 09/25/97 @100 Aaa/NR 3,000,000 2,991,030
----------
Student Loan Marketing Association Notes - 3.8%
Student Loan Marketing Assoc., 5.615%, 12/24/97,
Callable 01/24/97 @ 100 Aaa/NR 3,000,000 2,995,560
Student Loan Marketing Assoc., 5.52%,
02/17/98 Aaa/NR 1,500,000 1,499,985
----------
4,495,545
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $7,530,134) 7,486,575
----------
U.S. Treasury Notes - 1.7%
U.S. Treasury Notes, 5.75%, 10/31/00
(COST $1,932,783) NR/NR 2,000,000 1,974,860
----------
Repurchase Agreement - 1.3%
With Paine Webber Group, Inc.: At 6.50% dated 12/31/96,
to be repurchased at $1,514,547 on 01/02/97,
collateralized by $1,541,550 (original face $2,965,000)
Federal Home Loan Mortgage Corporation security due
02/01/24 (market value $1,605,980) (COST $1,514,000) 1,514,000
----------
TOTAL INVESTMENTS (COST $114,551,742)+ - 98.3% 115,419,484
OTHER ASSETS AND LIABILITIES, NET - 1.7% 2,011,146
-----------
NET ASSETS - 100.0% $117,430,630
============
+ Cost for federal income tax and financial reporting purposes. At December
31, 1996, net unrealized appreciation was $867,742. This consisted of
aggregate gross unrealized appreciation for all securities in which there was
an excess of market value over cost of $1,501,123 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
cost over market value of $633,381.
NR Not Rated. While not rated by Moody's or S&P, U.S. Government Agency
obligations and Mortgage Backed securities are considered to be of the highest
quality, comparable to AAA.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996 (Unaudited)
Assets:
Investments in securities (including
repurchase agreement of $1,514,000),
at value (amortized cost $114,551,742) (Note 2) $115,419,484
Cash 289
Receivable for investment securities sold 509,205
Receivable for Fund shares sold 2,451
Interest receivable 2,225,521
Unamortized organization costs (Note 2) 18,013
Other assets 2,370
------------
Total assets 118,177,333
Liabilities:
Dividends payable $ 671,397
Accrued management fee (Note 4) 36,979
Other accrued expenses 38,327
---------
Total liabilities 746,703
------------
Net Assets $117,430,630
============
Net Assets consist of:
Shares of beneficial interest $ 575,817
Additional paid-in capital 116,388,068
Accumulated net realized loss on investments (400,997)
Net unrealized appreciation of investments 867,742
------------
Net Assets, for 57,581,689 shares outstanding $117,430,630
============
Net Asset Value, offering and redemption price per share
($117,430,630 / 57,581,689 outstanding shares of beneficial
interest, $0.01 par value) $2.04
=====
STATEMENT OF OPERATIONS
For the Six-Month Period Ended December 31, 1996 (Unaudited)
Interest income $ 4,202,237
Expenses:
Management fee (reflects $39,688 waiver)
(Note 4) $ 211,437
Administration fee (Note 4) 25,206
Accounting fee (Note 4) 25,818
Transfer Agent fee (Note 4) 10,341
Custodian fee (Note 4) 9,357
Trustees' fees and expenses (Note 4) 2,017
Amortization of organizational expenses (Note 2) 3,435
Registration fee 11,342
Legal 1,789
Audit 7,543
Other 5,621
---------
Total expenses, net 313,906
------------
Net investment income 3,888,331
------------
Realized and unrealized gain on investments:
Net realized gain on investment transactions 61,636
Net unrealized appreciation of investments during the period 1,763,039
------------
Net gain on investments 1,824,675
------------
Net increase in net assets resulting from operations $ 5,713,006
============
STATEMENTS OF CHANGES IN NET ASSETS
For the Six-Month
Period Ended For the Fiscal
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
----------------- --------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 3,888,331 $ 7,964,153
Net realized gain on investment
transactions 61,636 244,623
Net unrealized appreciation (depreciation)
of investments 1,763,039 (2,952,477)
------------ -------------
Net increase in net assets resulting from
operations 5,713,006 5,256,299
------------ -------------
Distributions to shareholders from net
investment income
($0.063 and $0.131 per share, respectively) (3,888,331) (7,964,153)
------------ -------------
Fund Share Transactions (a):
Receipt from shares sold 940,869 27,470,121
Receipt from shares issued on reinvestment
of distributions 3,751,424 7,652,606
Shares redeemed (12,037,926) (14,483,654)
------------ -------------
Net increase (decrease) in net assets from
Fund share transactions (7,345,633) 20,639,073
------------ -------------
Total increase (decrease) in net assets (5,520,958) 17,931,219
Net Assets:
Beginning of period 122,951,588 105,020,369
------------ -------------
End of period $117,430,630 $122,951,588
============ =============
(a) Transactions in capital stock were:
Shares sold 465,300 13,385,046
Shares issued on reinvestment of
distributions 1,857,129 3,725,531
Shares redeemed (5,917,306) (7,133,718)
------------ -------------
Net increase (decrease) in shares (3,594,877) 9,976,859
Shares outstanding - Beginning balance 61,176,566 51,199,707
------------ -------------
Shares outstanding - Ending balance 57,581,689 61,176,566
============ =============
KIEWIT MUTUAL FUND/INTERMEDIATE-TERM BOND PORTFOLIO
- ---------------------------------------------------
Financial Highlights
- ----------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period.
For the Period
For the Six-Month July 28, 1994
Period Ended For the Fiscal (Commencement of)
December 31, 1996 Year Ended Operations) through
(Unaudited) June 30, 1996 June 30, 1995
----------------- -------------- -------------------
Net Asset Value - Beginning
of Period $2.01 $2.05 $2.00
----- ----- -----
Investment Operations:
Net investment income 0.06 0.13 0.12
Net realized and unrealized
gain (loss) on investments 0.03 (0.04) 0.05
----- ----- -----
Total from investment
operations 0.09 0.09 0.17
----- ----- -----
Distributions:
From net investment income (0.06) (0.13) (0.12)
----- ----- -----
Net Asset Value - End of
Period $2.04 $2.01 $2.05
===== ===== =====
Total Return 4.70%** 4.48% 8.88%**
Ratios (to average net assets)
/Supplemental Data:
Expenses + 0.50%* 0.50% 0.41%*
Net investment income 6.19%* 6.37% 6.41%*
Portfolio turnover 57.44%* 86.06% 128.95%*
Net assets at end of period
(000's omitted) $117,431 $122,952 $105,020
- ----------
*Annualized
**The total return has not been annualized.
+Since inception, Kiewit Investment Management Corp. (the "Manager") agreed to
waive all or a portion of its fee. For the period from December 7, 1994
through June 30, 1995, the Manager further agreed to waive all or a portion of
its fee in an amount that will limit annual operating expenses to not more
than 0.40% of the average daily net assets of the Portfolio. Effective July
1, 1995 through June 30, 1997, the Manager agreed to waive all or a portion of
its fee in an amount that will limit annual operating expenses to not more
than 0.50% of the average daily net assets of the Portfolio. The annualized
expense ratio, had there been no fee waivers by the Manager, would have been
0.56%, 0.57% and 0.53% for the six-month period ended December 31, 1996, for
the year ended June 30, 1996 and for the period ended June 30, 1995,
respectively.
KIEWIT MUTUAL FUND/TAX-EXEMPT PORTFOLIO
- ---------------------------------------
Investments/December 31, 1996 (Unaudited)
(Showing Percentage of Total Value of Net Assets)
- ------------------------------------------------------------------------------
Moody's/S&P Principal Value
Rating Amount (Note 2)
----------- --------- -------
Municipal Bonds - 97.3%
Arizona - 2.3%
Maricopa County, AZ Unified School Dist.
#41, Ser. E, 6.50%, 07/01/08, Prerefunded
07/01/02 @ 100 Aaa/AAA $1,000,000 $1,096,250
Phoenix, AZ Civic Imp. Corp. Airport Term
Excise Tax Rev., 7.80%, 07/01/11,
Partially Prerefunded 07/01/97 @ 102 NR/AA+ 2,000,000 2,065,080
----------
3,161,330
----------
California - 2.1%
Laguna Beach, CA Gen. Oblig., 6.60%,
08/15/09, Callable 08/15/01 @ 102 Aa/AA 1,230,000 1,323,788
San Francisco, CA (City & County Public
Safety Imp. Proj.), Ser. 1990C, 6.10%,
06/15/06, Callable 06/15/00 @ 102 A1/AA- 1,510,000 1,589,275
----------
2,913,063
----------
Colorado - 1.5%
Denver, CO City & County Gen. Oblig.,
6.375%, 08/01/02, Callable 08/01/01 @ 101 Aa/AA 1,920,000 2,090,400
----------
Connecticut - 3.7%
Connecticut State Gen. Oblig., 4.75%,
03/15/07, Callable 03/15/04 @ 101.50 Aa/AA- 5,200,000 5,050,500
----------
Florida - 6.0%
Jacksonville, FL Electric Auth. Ref. Rev.
(St. Johns River Power Park Service), 7.00%,
10/01/09, Callable 10/01/99 @ 101.5 Aa1/AA 2,690,000 2,888,388
Orange County, FL Solid Waste Fac. Rev.,
6.375%, 10/01/07, Callable 10/01/02 @ 102 Aaa/AAA 4,910,000 5,327,350
----------
8,215,738
----------
Georgia - 0.7%
Atlanta, GA Solid Waste Mgmt. Auth. Rev.
Gen. Oblig. Unltd. (Landfill Closure Proj.),
4.90%, 12/01/08, Callable 12/01/06 @100 Aa/AA 1,040,000 1,023,100
----------
Hawaii - 0.8%
Hawaii State Ref., Ser. BV, 6.00%,
11/01/04 Aaa/AAA 1,000,000 1,060,000
----------
Illinois - 3.5%
Illinois State Toll Highway Priority Rev.
Ref., Ser. A, 3.50%, 01/01/05, Callable
01/01/03 @ 100 A1/A 2,500,000 2,250,000
Illinois State Health Fac. Auth.
(LA Grange Memorial Hosp.), 5.50%,
05/15/23, Callable 05/15/03 @102 Aaa/AAA 2,445,000 2,594,756
----------
4,844,756
----------
Indiana - 4.5%
Indiana Bond Bank Special Prog., Ser. A,
6.25%, 08/01/09, Callable 02/01/98 @ 102 Aaa/AAA 2,450,000 2,514,313
Indiana Univ. (Student Fee), Ser. K, 6.50%,
08/01/05 Aa/AA- 1,935,000 2,145,431
Indianapolis, IN Local Public Imp. Bond
Bank, 5.30%, 01/10/00 Aa/AA 1,500,000 1,539,375
----------
6,199,119
----------
Kansas - 1.1%
Wichita, KS Sales Tax Gen. Oblig. Unltd.,
4.50%, 06/01/99 Aa/AA 1,500,000 1,507,500
----------
Massachusetts - 4.0%
Massachusetts State Health & Educ. Fac.,
(St. Joseph Hosp.), Ser. C, 9.50%, 10/01/20,
Prerefunded 10/01/99 @ 102 NR/NR 4,800,000 5,448,000
----------
Michigan - 7.2%
Kalamazoo, MI Hosp. Fin. Auth., 6.25%,
07/01/04, Callable 07/01/99 @100 Aaa/AAA 1,000,000 1,038,750
Kent County, MI Bldg. Auth. Gen. Oblig.,
Ltd., 6.00%, 12/01/09, Callable 12/01/98
@ 102 Aa/AAA 1,250,000 1,287,500
Michigan Municipal Bond Auth. Rev., 6.95%,
05/15/11, Partially Prerefunded 05/15/01
@ 102 Aa/AA 1,575,000 1,728,562
Michigan State Bldg. Auth. Rev. Ref. Bond,
Ser. 1, 6.20%, 10/01/02 A1/AA- 5,450,000 5,858,750
----------
9,913,562
----------
Minnesota - 10.5%
Metropolitan Council Minnesota Minneapolis -
St. Paul Metro Area Ref. Sewer, Ser. B,
4.90%, 09/01/06 Aaa/AAA 1,935,000 1,920,488
Minnesota State Gen. Oblig. Unltd., 4.75%,
05/01/01 Aaa/AA+ 5,000,000 5,068,750
Ramsey County, MN Gen. Oblig. Unltd., 4.75%,
02/01/05 Aaa/AA+ 1,000,000 1,055,000
Southern Minnesota Municipal Power Agency,
5.00%, 01/01/10, Callable 01/01/04 @ 102 Aaa/AAA 2,000,000 1,910,000
St. Paul, MN Sewer Rev., Ser. 1988A, 8.00%,
12/01/08, Subject to Crossover Refunding
12/01/98 @ 101 Aaa/AAA 1,250,000 1,342,187
Washington County, MN Housing & Redev. Auth.
Jail Fac. Rev., 7.00%, 02/01/12, Prerefunded
02/01/02 @ 100 Aaa/AAA 2,785,000 3,091,350
----------
14,387,775
----------
Mississippi - 0.8%
Mississippi State Gen. Oblig. Unltd., 5.80%,
12/15/07, Callable 12/15/02 @ 100 Aaa/AA 1,000,000 1,065,000
----------
Missouri - 1.5%
Springfield, MO Public Utility Rev., 5.25%,
03/01/07, Callable 09/01/97 @ 100.50 Aa/AA 2,000,000 2,009,540
----------
Nebraska - 12.8%
Douglas County, NE Zoo Fac. Rev. (Henry
Doorly Zoo Aquarium Proj.), 6.00%, 06/01/03,
Callable 06/01/97 @ 100 NR/NR 2,500,000 2,506,875
Lancaster County, NE Hosp. Auth. No. 1
(Sisters of Charity), 6.375%, 05/15/05,
Callable 05/15/01 @ 102 Aaa/AAA 2,530,000 2,729,237
Nebraska Public Power Dist. Nuclear Fac.,
5.40%, 07/01/01 Aaa/AAA 3,370,000 3,492,163
Nebraska Public Power Dist. Rev. Power
Supply Sys., Ser. C, 4.40%, 01/01/03 A1/A+ 2,120,000 2,080,250
Omaha Public Power Dist., Ser. B, 4.90%,
02/01/02 Aa/AA 1,175,000 1,194,094
Omaha Public Power Dist., Ser. E, 4.50%,
02/01/04 Aa/AA 1,925,000 1,898,531
Omaha, NE Ref. Rev., 4.15%, 10/15/97 Aaa/AAA 2,550,000 2,562,317
Omaha, NE Gen. Oblig., 4.75%, 12/01/01 Aaa/AAA 1,070,000 1,087,387
----------
17,550,854
----------
Nevada - 4.8%
Clark County, NV Sanitation District Sewer
Rev., 4.50%, 07/01/01 NR/AAA 1,385,000 1,383,269
Clark County, NV School Dist. Gen. Oblig.,
5.60%, 06/15/08, Callable 06/15/05 @ 101 Aaa/AAA 5,000,000 5,137,500
----------
6,520,769
----------
New Mexico - 3.3%
Farmington, NM Power Rev., 9.875%, 01/01/13,
Prerefunded 07/01/05 @ 100 Aaa/AAA 1,550,000 2,026,625
New Mexico State Severance Tax, Ser. 1992C,
5.60%, 07/01/02, Callable 07/01/97 @ 101.50 Aa/AA 2,400,000 2,448,192
----------
4,474,817
----------
New York - 1.0%
New York, NY Corpus M-Strips, 6.00%,
08/01/11, Callable 08/01/97 @ 100 NR/NR 1,400,000 1,356,250
----------
North Dakota - 0.9%
Lakota, ND (Cargill Proj.), Ser. 1996, 5.00%,
09/01/00 Aa3/NR 1,190,000 1,207,850
----------
Ohio - 0.7%
Ohio State Public Fac. (Community Higher
Educ. Cap. Fac.), Ser. II-A, 4.30%,
12/01/08 Aaa/AAA 1,000,000 917,500
----------
Oklahoma - 2.2%
Tulsa, OK Gen. Oblig. Unltd. Ref., Ser. B,
6.20%, 12/01/03, Callable 12/01/01 @ 100 Aa/AA 2,840,000 3,021,050
----------
Pennsylvania - 1.2%
Pennsylvania Intergovernmental Coop. Auth.
Special Tax Rev. (City of Philadelphia
Funding Proj.), 6.00%, 06/15/00 Aaa/AAA 1,500,000 1,578,750
----------
Rhode Island - 0.9%
Rhode Island State Health & Educ. Bldg.
Corp. (Brown Univ.), 6.625%, 09/01/07,
Callable 09/01/99 @ 102 Aa1/AA 1,205,000 1,283,325
----------
Tennessee - 0.8%
Kingsport, TN Gen. Oblig. Unltd., 6.20%,
12/01/05, Callable 12/01/02 @ 102 A1/NR 1,000,000 1,077,500
----------
Texas - 6.4%
Dallas County, TX, 6.30%, 08/15/02,
Callable 02/15/01 @ 100 Aaa/AAA 1,000,000 1,063,750
Houston, TX Housing Fin. Corp. Single
Family Mtge. Ref. Rev., Ser. 1993A, 4.70%,
06/01/98 Aaa/AAA 1,230,000 1,233,075
Houston, TX Independent School Dist.,
6.375%, 08/15/01 Aaa/AAA 3,925,000 4,234,094
Texas Municipal Power Agency Rev., 6.10%,
09/01/08 Aaa/AAA 2,000,000 2,157,500
----------
8,688,419
----------
Utah - 5.9%
Intermountain Power Agency Power Supply
Rev. Ref., Ser. C, 5.00%, 07/01/04,
Callable 07/01/03 @102 Aa/A+ 3,390,000 3,415,425
Provo City, UT Energy Sys. Rev., 5.50%,
11/15/11 Aaa/AAA 2,175,000 2,172,281
Utah State Gen. Oblig. Unltd., 4.40%,
07/01/99 Aaa/AAA 2,500,000 2,518,750
----------
8,106,456
----------
Virginia - 0.8%
Fairfax County, VA Public Imp., Ser. A,
5.40%, 06/01/07, Callable 06/01/02 @ 102 Aaa/AAA 1,000,000 1,030,000
----------
Washington - 4.3%
Seattle, WA Metropolitan Sewer Rev., Ser. T,
6.625%, 01/01/06, Prerefunded 01/01/00
@ 102 A1/AA- 1,240,000 1,326,800
Washington State, Ser. B, 6.375%, 08/01/10,
Prerefunded 08/01/00 @ 100 NR/AA 4,350,000 4,621,875
----------
5,948,675
----------
Wisconsin - 1.1%
Kenosha, WI BAN (Waterworks Rev.), 4.70%,
12/01/01, Callable 12/01/98 @100 A1/A+ 1,500,000 1,503,750
----------
TOTAL MUNICIPAL BONDS (COST $131,735,749) 133,155,348
-----------
Tax-Exempt Mutual Funds - 1.5%
Federated Tax Free Oblig. Fund Institutional
Shares
(COST $2,006,885) NR/NR 2,006,885 2,006,885
----------
TOTAL INVESTMENTS (COST $133,742,634)+ - 98.8% $135,162,233
OTHER ASSETS AND LIABILITIES, NET - 1.2% 1,626,517
------------
NET ASSETS - 100.0% $136,788,750
============
+ Cost for federal income tax and financial reporting purposes. At December
31, 1996, net unrealized appreciation was $1,419,599. This consisted of
aggregate gross unrealized appreciation for all securities in which there was
an excess of market value over cost of $1,543,580 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
cost over market value of $123,981.
NR Not Rated. While not rated by Moody's or S&P, U.S. Government Agency
obligations and Mortgage Backed securities are considered to be of the highest
quality, comparable to AAA.
KIEWIT MUTUAL FUND/TAX-EXEMPT PORTFOLIO
- ---------------------------------------
Financial Statements
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996 (Unaudited)
Assets:
Investments in securities, at value
(amortized cost $133,742,634) (Note 2) $135,162,233
Cash 496
Interest receivable 2,213,231
Unamortized organization costs (Note 2) 18,013
Other assets 2,669
------------
Total assets 137,396,642
Liabilities:
Dividends payable $ 535,412
Accrued management fees (Note 4) 46,148
Other accrued expenses (Note 4) 26,332
---------
Total liabilities 607,892
------------
Net Assets $136,788,750
============
Net Assets consist of:
Shares of beneficial interest $ 669,926
Additional paid-in capital 134,431,454
Accumulated net realized gain on investments 267,771
Net unrealized appreciation of investments 1,419,599
------------
Net Assets, for 66,992,590 shares outstanding $136,788,750
============
Net Asset Value, offering and redemption
price per share ($136,788,750 / 66,992,590
outstanding shares of beneficial interest,
$0.01 par value, unlimited number of shares
authorized) $2.04
=====
STATEMENT OF OPERATIONS
For the Six-Month Period Ended December 31,
1996 (Unaudited)
Interest income $ 3,549,616
Expenses:
Management fee (reflects $21,402 waiver)
(Note 4) $ 269,776
Administration fee (Note 4) 25,206
Accounting fee (Note 4) 26,720
Transfer Agent fee (Note 4) 10,363
Custodian fee (Note 4) 7,650
Trustees' fees and expenses (Note 4) 2,017
Amortization of organizational expenses (Note 2) 3,435
Registration fees 2,298
Legal 1,260
Audit 7,556
Other 7,690
---------
Total expenses, net 363,971
-----------
Net investment income 3,185,645
-----------
Realized and unrealized gain on investments:
Net realized gain on investment transactions 288,837
Net unrealized appreciation of investments 1,412,392
-----------
Net gain on investments 1,701,229
-----------
Net increase in net assets resulting from
operations $ 4,886,874
===========
STATEMENTS OF CHANGES IN NET ASSETS
For the Six-Month
Period Ended For the Fiscal
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
----------------- --------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 3,185,645 $ 6,287,025
Net realized gain on investment transactions 288,837 1,129,202
Net change in unrealized appreciation
(depreciation) of investments 1,412,392 (1,088,183)
----------- -----------
Net increase in net assets resulting from
operations 4,886,874 6,328,044
----------- -----------
Distributions to shareholders from:
Net investment income ($0.045 and $0.091
per share, respectively) (3,185,645) (6,287,025)
Net realized capital gain ($0.003 and
$0.000 per share, respectively) (173,959) 0
----------- -----------
Total distributions to shareholders (3,359,604) (6,287,025)
----------- -----------
Fund Share Transactions (a):
Receipt from shares sold 0 834,895
Receipt from shares issued on reinvestment
of distributions 3,076,411 6,294,106
Shares redeemed (10,000,000) (502,681)
----------- -----------
Net increase (decrease) in net assets from
Fund share transactions (6,923,589) 6,626,320
----------- -----------
Total increase (decrease) in net assets (5,396,319) 6,667,339
Net Assets:
Beginning of period 142,185,069 135,517,730
------------ -----------
End of period $136,788,750 142,185,069
============ ===========
(a) Transactions in capital stock were:
Shares sold 0 406,518
Shares issued on reinvestment of
distributions 1,513,171 3,075,446
Shares redeemed (4,901,961) (248,827)
------------ -----------
Net increase (decrease) in shares (3,388,790) 3,233,137
Shares outstanding - Beginning balance 70,381,380 67,148,243
------------ -----------
Shares outstanding - Ending balance 66,992,590 70,381,380
============ ===========
KIEWIT MUTUAL FUND/TAX-EXEMPT PORTFOLIO
- ---------------------------------------
Financial Highlights
- ------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period.
For the Period
For the Six-Month July 28, 1994
Period Ended For the Fiscal (Commencement of)
December 31, 1996 Year Ended Operations) through
(Unaudited) June 30, 1996 June 30, 1995
----------------- -------------- -------------------
Net Asset Value -
Beginning of Period $2.02 $2.02 $2.00
----- ----- -----
Investment Operations:
Net investment income 0.04 0.09 0.08
Net realized and unrealized
gain on investments 0.02 0.00 0.02
----- ----- -----
Total from investment
operations 0.06 0.09 0.10
----- ----- -----
Distributions:
From net investment income (0.04) (0.09) (0.08)
From net realized capital
gain (0.00)*** - -
----- ----- -----
Total distributions (0.04) (0.09) (0.08)
----- ----- -----
Net Asset Value - End of
Period $2.04 $2.02 $2.02
===== ===== =====
Total Return 3.37%** 4.55% 5.23%**
Ratios (to average net assets)
/Supplemental Data:
Expenses + 0.50%* 0.50% 0.39%*
Net investment income 4.38%* 4.47% 4.37%*
Portfolio turnover rate 45.97%* 100.61% 104.34%*
Net assets at end of period
(000's omitted) $136,789 $142,185 $135,518
- ----------
* Annualized
** The total return has not been annualized.
*** The fund declared a dividend from net realized long-term capital gain of
$0.0026 per share during the period.
+ Since inception, Kiewit Investment Management Corp. (the "Manager") agreed
to waive all or a portion of its fee. For the period December 7, 1994 through
June 30, 1995, the Manager further agreed to waive all or a portion of its fee
in an amount that will limit annual operating expenses to not more than 0.40%
of the average daily net assets of the Portfolio. Effective July 1, 1995
through June 30, 1997, the Manager has agreed to waive all or a portion of its
fee in an amount that will limit annual operating expenses to not more than
0.50% of the average daily net assets of the Portfolio. The annualized
expense ratio, had there been no fee waivers by the Manager, would have been
0.53%, 0.54% and 0.46% for the six-month period ended December 31, 1996, for
the year ended June 30, 1996 and for the period ended June 30, 1995,
respectively.
KIEWIT MUTUAL FUND/EQUITY PORTFOLIO
- -----------------------------------
Investments/December 31, 1996 (Unaudited)
(Showing Percentage of Total Value of Net Assets)
- ------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCK - 96.7%
Communications & Broadcasting - 1.9%
Heritage Media Corp.* 50,000 $ 562,500
Comcast UK Cable Partners Ltd.* 65,000 885,625
----------
1,448,125
----------
FINANCE, INSURANCE & REAL ESTATE - 4.3%
Crestar Financial Corp. 25,000 1,859,375
Federal National Mtge. Assoc. 15,000 558,750
Wells Fargo & Co. 3,000 809,250
----------
3,227,375
----------
MANUFACTURING - 64.6%
Chemicals & Allied Products - 5.6%
Great Lakes Chemical Corp. 10,000 467,500
Monsanto Co. 55,000 2,138,125
Morton International, Inc. 39,100 1,593,325
----------
4,198,950
----------
Computer & Office Equipment - 2.9%
Cisco Systems, Inc.* 14,000 890,750
3Com Corp. 18,000 1,320,750
----------
2,211,500
----------
Consumer Products - 10.6%
Avon Products, Inc. 42,000 2,399,250
Newell Co. 50,000 1,575,000
Procter & Gamble Co. 20,000 2,150,000
Whirlpool Corp. 40,000 1,865,000
----------
7,989,250
----------
Food & Beverage - 2.9%
Northland Cranberries (A Shares) 95,000 2,185,000
----------
Games & Toys - 0.8%
Hasbro, Inc. 15,000 583,125
----------
Iron & Steel - 2.8%
LTV Corp. 175,000 2,078,125
----------
Misc. Electrical Machinery, Equip. &
Supplies - 6.8%
Black & Decker Corp. 42,000 1,265,250
National Semiconductor Corp.* 80,000 1,950,000
Thomas & Betts Corp. 44,000 1,952,500
----------
5,167,750
----------
Miscellaneous Manufacturing Industries - 8.3%
Calgon Carbon Corp. 150,000 1,837,500
Flow International Corp.* 105,000 958,125
Litton Industries, Inc.* 26,500 1,262,062
Phelps Dodge Corp. 6,000 405,000
Tracor, Inc.* 85,000 1,806,250
----------
6,268,937
----------
Oil Field Machinery & Equipment - 3.1%
Schlumberger, Ltd. 23,500 2,347,063
----------
Petroleum Refining - 2.5%
Mobil Corp. 15,500 1,894,875
----------
Pharmaceutical Preparations - 3.8%
Pfizer, Inc. 35,000 2,900,625
----------
Precision Instruments & Medical Supplies
- - 5.3%
Medtronic, Inc. 30,000 2,040,000
Millipore Corp. 47,000 1,944,625
----------
3,984,625
----------
Telecommunications Equipment - 1.8%
Kemet Corp.* 60,000 1,395,000
----------
Textiles & Apparel - 2.6%
Warnaco Group, Inc. 67,500 1,999,688
----------
Transportation Equipment - 4.8%
Chrysler Corp. 52,000 1,716,000
OEA, Inc. 19,500 892,125
Superior Industries International, Inc. 45,000 1,040,625
----------
3,648,750
----------
Total Manufacturing 48,853,263
----------
SERVICES - 12.4%
Amusement & Recreation Services - 1.3%
Walt Disney Co. 13,641 949,755
----------
Business Services - 2.7%
Omnicom Group, Inc. 45,000 2,058,750
----------
Computer Services - 3.2%
Cerner Corp.* 80,000 1,240,000
Computer Associates International, Inc. 10,000 497,500
Phamis Inc.* 50,100 645,037
----------
2,382,537
----------
Medical & Health Services - 5.2%
Tenet Healthcare Corp.* 75,000 1,640,625
United Healthcare Corp. 50,000 2,250,000
----------
3,890,625
----------
Total Services 9,281,667
----------
WHOLESALE & RETAIL TRADE - 13.5%
Miscellaneous Retail Stores - 2.2%
Dayton Hudson Corp. 42,000 1,648,500
----------
Retail Building Materials - 4.9%
Home Depot, Inc. 60,000 3,007,500
Ply-Gem Industries, Inc. 55,000 680,625
----------
3,688,125
----------
Retail Eating & Drinking Places - 3.0%
Cracker Barrel Old Country Store, Inc. 90,000 2,283,750
----------
Retail Food Stores - 3.4%
Albertson's, Inc. 73,000 2,600,625
----------
Total Wholesale & Retail Trade 10,221,000
----------
TOTAL COMMON STOCK (COST $58,865,404) 73,031,430
----------
COMMERCIAL PAPER - 2.0%
Natural Gas - 2.0%
Sonat Inc., 5.724%, 01/08/97 (COST
$1,498,337) 1,500,000 1,498,337
----------
Repurchase Agreement - 2.5%
With Paine Webber Group, Inc.: At 6.50%
dated 12/31/96, to be repurchased at
$1,923,694 on 01/02/97, collateralized by
$1,957,482 (original face $3,765,000) Federal
Home Loan Mortgage Corporation security due
02/01/24 (market value $2,033,354)
(COST $1,923,000) $1,923,000
----------
TOTAL INVESTMENTS
(COST $62,286,741)+ - 101.2% 76,452,767
OTHER ASSETS AND LIABILITIES, NET
- - (1.2)% (928,808)
----------
NET ASSETS - 100.0% $75,523,959
===========
COVERED CALL OPTIONS WRITTEN AT
DECEMBER 31, 1996
Shares
Subject Value
to Call (Note 2)
------- --------
Common Stock/Exp. Date/Ex. Price
- --------------------------------
Chrysler Corp., Call Options April 1997
@ $27.50 200 $(117,500)
Crestar Financial Corp. Call Options June
1997 @ $70.00 50 (46,875)
Crestar Financial Corp. Call Options June
1997 @ $75.00 50 (36,250)
----------
TOTAL CALL OPTIONS(PREMIUMS RECEIVED $156,170) $ (200,625)
============
+ Cost for federal income tax and financial reporting purposes. At December
31, 1996, net unrealized appreciation was $14,166,026. This consisted of
aggregate gross unrealized appreciation for all securities in which there was
an excess of market value over cost of $16,581,090 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
cost over market value of $2,415,064.
* Non-income producing security.
KIEWIT MUTUAL FUND/EQUITY PORTFOLIO
- -----------------------------------
Financial Statements
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996 (Unaudited)
Assets:
Investments in securities (including
repurchase agreements of $1,923,000),
at value (amortized cost $62,286,741)
(Note 2) $76,452,767
Cash 837
Receivables for investment securities
sold 305,160
Receivable for Fund shares sold 52,043
Dividends and interest receivable 74,185
Other assets 959
-----------
Total assets 76,885,951
Liabilities:
Covered call options written, at value
(premiums received $156,170) $ 200,625
Payable for investment securities
purchased 1,089,220
Accrued management fee (Note 4) 36,951
Other accrued expenses (Note 4) 35,196
----------
Total liabilities 1,361,992
----------
Net Assets $75,523,959
===========
Net Assets consist of:
Shares of beneficial interest $ 42,319
Additional paid-in capital 60,809,346
Undistributed net investment income 7,383
Accumulated net realized gain 543,340
Net unrealized appreciation of investments
and call options (Note 3) 14,121,571
----------
Net Assets, for 4,231,930 shares outstanding $75,523,959
===========
Net Asset Value, offering and redemption price
per share ($75,523,959 / 4,231,930 outstanding
shares of beneficial interest, $0.01 par value,
unlimited number of shares) $17.85
======
STATEMENT OF OPERATIONS
For the Six-Month Period Ended December 31,
1996 (Unaudited)
Income:
Dividends $ 429,492
Interest 149,804
-----------
Total income 579,296
Expenses:
Management fee (reflects $53,948 waiver)
(Note 4) $192,281
Administration fee (Note 4) 25,206
Accounting fee (Note 4) 23,331
Transfer Agent fee (Note 4) 10,249
Custodian fee (Note 4) 7,202
Trustees' fees and expenses (Note 4) 2,017
Legal 1,115
Audit 7,477
Registration fees 11,178
Other 1,348
--------
Total expenses, net 281,404
----------
Net investment income 297,892
----------
Realized and unrealized gain on investments:
Net realized gain on investments 385,356
Net realized gain on call options written 385,333
Net change in unrealized appreciation of
investments and call options 5,283,198
----------
Net gain on investments 6,053,887
----------
Net increase in net assets resulting from
operations $ 6,351,779
===========
STATEMENTS OF CHANGES IN NET ASSETS
For the Six-Month
Period Ended For the Fiscal
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
----------------- --------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 297,892 $ 680,156
Net realized gain (loss) on investments 385,356 (396,620)
Net realized gain on call options written 385,333 571,222
Net change in unrealized appreciation of
investments and call options 5,283,198 7,557,053
----------- -----------
Net increase in net assets resulting from
operations 6,351,779 8,411,811
----------- -----------
Distributions to shareholders from:
Net investment income ($0.153 and $0.150 per
share, respectively) (642,027) (485,548)
Net realized capital gain ($0.088 and $0.000 per
share, respectively) (369,271) 0
----------- ----------
Total distributions to shareholders (1,011,298) (485,548)
----------- ----------
Fund Share Transactions (a):
Receipt from shares sold 5,092,374 39,179,945
Receipt from shares issued on reinvestment
of distributions 1,003,552 480,960
Shares redeemed (2,049,284) (2,315,274)
---------- ----------
Net increase in net assets from Fund share
transactions 4,046,642 37,345,631
---------- ----------
Total increase in net assets 9,387,123 45,271,894
Net Assets:
Beginning of period 66,136,836 20,864,942
---------- ----------
End of period (including undistributed net
investment income of $7,383 and $351,518,
respectively) $75,523,959 $66,136,836
=========== ===========
(a) Transactions in capital stock were:
Shares sold 307,471 2,617,366
Shares issued on reinvestment of
distributions 55,846 31,130
Shares redeemed (121,054) (145,226)
----------- -----------
Net increase in shares 242,263 2,503,270
Shares outstanding - Beginning balance 3,989,667 1,486,397
----------- -----------
Shares outstanding - Ending balance 4,231,930 3,989,667
=========== ===========
KIEWIT MUTUAL FUND/EQUITY PORTFOLIO
- -----------------------------------
Financial Highlights
- ------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period.
For the Period
For the Six-Month Jan. 5, 1995
Period Ended For the Fiscal (Commencement of)
December 31, 1996 Year Ended Operations) through
(Unaudited) June 30, 1996 June 30, 1995
----------------- -------------- -------------------
Net Asset Value -
Beginning of Period $16.58 $14.04 $12.50
------ ------ ------
Investment Operations:
Net investment income 0.04 0.13 0.11
Net realized and unrealized
gain on investments 1.47 2.56 1.43
------ ------ ------
Total from investment
operations 1.51 2.69 1.54
------ ------ ------
Distributions:
From net investment income (0.15) (0.15) -
From net realized capital
gain (0.09) - -
------ ------ ------
Total distributions (0.24) (0.15) -
------ ------ ------
Net Asset Value - End of
Period $17.85 $16.58 $14.04
====== ====== ======
Total Return 9.10%** 19.24% 12.32%**
Ratios (to average net
assets)/Supplemental Data:
Expenses+ 0.80%* 0.80% 0.80%*
Net investment income 0.85%* 1.34% 3.06%*
Portfolio turnover rate 9.18%* 16.95% 0.00%*
Average commission rate paid $0.0608 $0.0637 -
Net assets at end of period
(000's omitted) $75,524 $66,137 $20,865
- ----------
* Annualized
** The total return has not been annualized.
+ For the period from inception through June 30, 1997, Kiewit Investment
Management Corp. (the "Manager") has agreed to waive all or a portion of its
fee in an amount that will limit annual operating expenses to not more than
0.80% of the average daily net assets of the Portfolio. The annualized expense
ratio, had there been no fee waivers by the Manager, would have been 0.95%,
1.05% and 2.56% for the six-month period ended December 31,1996, for the year
ended June 30, 1996, and for the period ended June 30, 1995, respectively.
KIEWIT MUTUAL FUND
- ------------------
Notes to Financial Statements (Unaudited)
- ------------------------------------------------------------------------------
1. Description of the Fund. The Kiewit Mutual Fund (the "Fund") is
registered under the Investment Company Act of 1940 (the "1940 Act"), as an
open-end management investment company organized as a Delaware business trust
on June 1, 1994. The Declaration of Trust permits the Trustees to establish
additional series, each of which is a separate class of shares. As of
December 31. 1996 the Fund comprised five series of shares: Kiewit Money
Market Portfolio, Kiewit Short-Term Government Portfolio, Kiewit Intermediate-
Term Bond Portfolio, Kiewit Tax-Exempt Portfolio, and Kiewit Equity Portfolio
(each, a "Portfolio" and collectively, the "Portfolios"). Prior to December
6, 1994, the Fund was known as Kiewit Institutional Fund. The investment
objectives of the five Portfolios are as follows: Money Market Portfolio is
high current income, while maintaining a stable share price by investing in
short-term money market securities; Short-Term Government Portfolio is a high
level of current income, consistent with the maintenance of principal and
liquidity; Intermediate-Term Bond Portfolio is a high level of current income,
consistent with reasonable risk; Tax-Exempt Portfolio is a high level of
current income, exempt from federal income tax, consistent with reasonable
risk; Equity Portfolio is long-term capital appreciation.
2. Significant Accounting Policies. The following is a summary of the
significant accounting policies of the Fund:
Security Valuation. Securities held by the Portfolios which are listed on a
securities exchange and for which market quotations are available are valued
at the last quoted sale price of the day or, if there is no such reported
sale, securities are valued at the mean between the most recent quoted bid and
asked prices. Price information for listed securities is taken from the
exchange where the security is primarily traded. Unlisted securities for
which market quotations are readily available are valued at the most recent
bid prices. The Money Market Portfolio values securities utilizing the
amortized cost valuation method which is permitted under Rule 2a-7 under the
1940 Act. This method involves valuing a portfolio security initially at its
cost and thereafter adjusting for amortization of premium or accretion of
discount to maturity. Each money market instrument with a remaining maturity
of 60 days or less is valued at amortized cost, which approximates market
value, unless the Fund's Board of Trustees determines that this does not
represent fair value. The value of other assets and securities for which no
quotations are readily available (including restricted securities) are
determined in good faith at fair value in accordance with procedures adopted
by the Board of Trustees.
Federal Income Taxes. Each Portfolio is treated as a separate entity for
federal income tax purposes and each intends to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code and to
distribute all of its taxable and tax-exempt income to its shareholders.
Therefore, no federal income tax provision is required. At June 30, 1996, the
Money Market Portfolio, Short-Term Government Portfolio and Intermediate-Term
Bond Portfolio had a net tax basis capital loss carryforward available to
offset future net capital gains of approximately $2,000, $102,000, $463,000,
respectively. The capital loss carryforwards all expire in 2003 or 2004.
Interest Income and Distributions to Shareholders. Interest income is accrued
as earned. Distributions of net investment income consist of accrued interest
and earned discount (including both original issue and market discount) less
amortization of premium and accrued expenses. Distributions to shareholders
of each Portfolio, except the Kiewit Equity Portfolio, are declared daily from
net investment income and paid to shareholders monthly. The Fund's policy is
to distribute substantially all net income from the Kiewit Equity Portfolio
annually. Distributions of net capital gains realized by each Portfolio will
be made annually.
Deferred Organization Costs. Organization costs incurred by each Portfolio
have been deferred and are being amortized using the straight-line method
over a five-year period beginning on the date that each Portfolio commenced
operations. In the event that any of the initial shares of a Portfolio are
redeemed during the amortization period by any holder thereof, the
redemption proceeds will be reduced by any unamortized organization
expenses in the same proportion as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of
such redemption.
Use of Estimates in the Preparation of Financial Statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount of 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.
Repurchase Agreements. Each Portfolio, through the Fund's custodian,
receives delivery of the underlying securities used to collateralize the
repurchase agreements, the market value of which is required to be in an
amount at least equal to 102% of the resale price. Kiewit Investment
Management Corp. ("KIM"), the Fund Manager, is responsible for determining
that the market value of these underlying securities is maintained at a
level at least equal to 102% of the resale price. In the event of default
of the obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation.
Provisions of each agreement ensure that the market value of the collateral
is sufficient in the event of default; however, in the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
Call and Put Options. The Short-Term Government Portfolio, Intermediate-
Term Bond Portfolio and the Equity Portfolio each may sell and/or purchase
exchange-traded call options and purchase exchange traded put options on
securities in the Portfolio. When a Portfolio writes a call option an
amount equal to the premium received is reflected as a liability. The
amount of the liability is subsequently "marked to market" to reflect the
current market value of the option written. If an option which a Portfolio
has written either expires on its stipulated expiration date, or if a
Portfolio enters into a closing purchase transaction, the Portfolio
realizes a gain (or loss if the cost of the closing transaction exceeds the
premium received when the option is sold), and the liability related to
such option is extinguished. If a call option which a Portfolio has
written is exercised, the Portfolio realizes a gain or loss from the sale
of the underlying security and the proceeds from such a sale are increased
by the premium originally received. A Portfolio as writer of an option may
have no control over whether the underlying securities may be sold (call)
and as a result bears a market risk of an unfavorable change in the price
of the security underlying the written option.
The premium paid by a Portfolio for the purchase of a put option is
recorded as an investment and subsequently marked to market to reflect the
current market value of the option purchased. If an option which a
Portfolio has purchased expires on the stipulated expiration date, the
Portfolio realizes a loss in the amount of the cost of the option. If a
Portfolio enters into a closing transaction, it realizes a gain (loss) if
the proceeds from the sale are greater (less) than the cost of the option
purchased. If a Portfolio exercises a put option, it realizes a gain or
loss from the sale of the underlying security and the proceeds from such
sale are decreased by the premium originally paid.
Other. Investment security transactions are accounted for on a trade date
basis. Each Portfolio uses the specific identification method for
determining realized gain and loss on investments for both financial and
federal income tax reporting purposes.
3. Investment Securities. During the six-month period ended December 31,
1996, purchases and sales of investment securities (excluding short-term
investments) aggregated as follows:
Money Short-Term Intermediate-
Market Government Term Bond Tax-Exempt Equity
------ ---------- ------------ ---------- ------
Purchases - $27,266,875 $33,224,420 $32,289,151 $8,931,363
Sales - 100,244,288 51,342,636 43,493,259 3,010,263
Written options transactions for the Equity Portfolio during the six-month
period ended December 31, 1996 are summarized as follows:
Call/Put Options Written
Premiums Received
-----------------
Options Outstanding, beginning of period $ (248,642)
Options written (382,579)
Options closed 91,301
Options exercised 41,524
Options expired 342,226
----------
Options outstanding at December 31, 1996 (156,170)
Unrealized depreciation at December 31, 1996 (44,455)
----------
Market value of written options at December 31, 1996 $ (200,625)
==========
During the six-month period ended December 31, 1996, the Short-Term
Government Portfolio and the Intermediate-Term Bond Portfolio had not entered
into any option contracts.
4. Management Fee and Other Transactions with Affiliates. The Fund, on
behalf of each Portfolio, employs KIM, an indirect, wholly-owned subsidiary
of Peter Kiewit Sons', Inc., a construction, mining, and telecommunications
company, to furnish investment advisory and other services to the Fund.
Pursuant to an investment management agreement with the Fund with respect to
each Portfolio, KIM manages the investment and reinvestment of their assets,
provides the Fund with records concerning KIM's activities which the Fund is
required to maintain, and renders regular reports to the Fund's officers and
the Board of Trustees.
For its services under the investment management agreement for each
Portfolio, KIM receives fees from the Portfolios at the following annual
rates of their average monthly net assets: Money Market Portfolio - 0.20%;
Short-Term Government Portfolio - 0.30%; Intermediate-Term Bond Portfolio -
0.40%; Tax-Exempt Portfolio - 0.40%; and Equity Portfolio - 0.70%. Prior to
December 7, 1994, KIM received fees from the Portfolios at an annual rate of
0.30% of each Portfolio's average daily net assets. In addition, prior to
December 7, 1994, KIM agreed to waive one-half of its fee with respect to
each Portfolio.
Effective December 7, 1994 through June 30, 1995, KIM agreed to waive all or
a portion of its management fee and assume certain fund expenses in an amount
that limited annual operating expenses to not more than the following
percentage of the average daily net assets of each Portfolio: Money Market
Portfolio - 0.30%; Short-Term Government Portfolio - 0.40%; Intermediate-Term
Bond Portfolio - 0.50%; Tax-Exempt Portfolio - 0.50%; and Equity Portfolio -
0.80%.
Effective July 1, 1995 through June 30, 1997, KIM has agreed to waive all or
a portion of its management fee and assume certain fund expenses in an amount
that will limit annual operating expenses to not more than the following
percentage of the average daily net assets of each Portfolio: Money Market
Portfolio - 0.20%; Short-Term Government Portfolio - 0.30%; Intermediate-Term
Bond Portfolio - 0.50%; Tax-Exempt Portfolio - 0.50%; and Equity Portfolio -
0.80%. These undertakings may be amended or rescinded at any time in the
future.
The following table summarizes the management fees for the six-month period
ended December 31, 1996:
Gross Management Management
Fee Fees Waived
---------------- -----------
Money Market Portfolio $494,319 $139,449
Short-Term Government Portfolio 270,225 107,253
Intermediate-Term Bond Portfolio 251,125 39,688
Tax-Exempt Portfolio 291,178 21,402
Equity Portfolio 246,229 53,948
Rodney Square Management Corp. ("Rodney Square"),. a wholly owned
subsidiary of Wilmington Trust Company ("WTC"), which is wholly-owned by
Wilmington Trust Corporation, a publicly held bank holding company, serves
as Administrator to the Fund pursuant to an Administration Agreement with
the Fund on behalf of each Portfolio. As Administrator, Rodney Square is
responsible for services such as financial reporting, compliance monitoring
and corporate management. For the services provided, Rodney Square
receives a monthly administration fee from the Fund at an annual rate of
$50,000 per Portfolio, plus an amount equal to 0.02% of that portion of the
Fund's net assets in excess of S1.5 billion, plus out-of-pocket expenses.
WTC serves as Custodian of the assets of the Fund. For its services, WTC
is paid a monthly fee from the Fund at an annual rate of 0.009% of the
Fund's average daily net assets up to $ I billion, and 0.0075% of the
Fund's average daily net assets in excess of $ I billion, plus $ 12 per
purchase, sale or maturity of a portfolio security. The custodian fee is
subject to a minimum charge of $500 per Portfolio, per month, exclusive of
any transaction charges.
Rodney Square serves as Transfer Agent and Dividend Paying Agent of the
Fund pursuant to a separate Transfer Agency Agreement with the Fund on
behalf of each Portfolio. For its services, the Fund pays Rodney Square a
monthly fee of $7,500, plus out-of-pocket expenses.
Rodney Square determines the net asset value per share of each Portfolio
and provides accounting services to the Fund pursuant to an Accounting
Services Agreement with the Fund on behalf of each Portfolio. For its
services, Rodney Square receives an annual fee of $40,000 per Portfolio,
plus an amount equal to 0.01% of that portion of the Fund's average daily
net assets in excess of $100 million.
Independent Trustees are each paid an annual fee of $5,000 from the Fund,
plus $250 per Portfolio per meeting attended, plus travel expenses in
connection with meetings. Certain officers and trustees of the Fund are
also officers and/or directors of KIM.
KIEWIT MUTUAL FUND
1000 Kiewit Plaza
Omaha, NE 68131-3344
Telephone: (800) 2KIEWIT
(800) 254-3948
Investment Advisor
- ------------------
Kiewit Investment Management Corp.
1000 Kiewit Plaza
Omaha, NE 68131-3344
Custodian
- ---------
Wilmington Trust Company
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-0001
Administrator and Transfer Agent
- --------------------------------
Rodney Square Management Corporation
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-0001
Distributor
- -----------
Rodney Square Distributors, Inc.
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-00014
This report is submitted for the general information of the shareholders of
the Fund. The report is not authorized for distribution to prospective
investors in the Fund unless preceded or accompanied by an effective
Prospectus of the Fund.
February 1997
