As filed with the Securities and Exchange Commission on March 10, 2011
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09303 & 811-09923
Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust
(Exact name of registrant as specified in charter)
555 Taxter Road, Suite 175
Elmsford, NY 10523
(Address of principal executive offices) (Zip code)
U.S. Bancorp Fund Services, LLC
615 E. Michigan Street
Milwaukee, WI 53202
(Name and address of agent for service)
(800) 930-3828
Registrant’s telephone number, including area code
Date of fiscal year end: December 31, 2010
Date of reporting period: December 31, 2010
Item 1. Reports to Stockholders.
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| | | December 31, 2010 www.kineticsfunds.com |
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| | | Annual Report |
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| | | The Internet Fund
The Global Fund
The Paradigm Fund
The Medical Fund
The Small Cap Opportunities Fund
The Market Opportunities Fund
The Water Infrastructure Fund
The Multi-Disciplinary Fund
The Tactical Paradigm Fund
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| | | Each a series of Kinetics Mutual Funds, Inc. |
(Kinetics Mutual Funds, Inc. Logo)
KINETICS MUTUAL FUNDS, INC.
Table of Contents
December 31, 2010
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| Shareholders’ Letter | | | 2 | |
| Year 2010 Annual Investment Commentary | | | 5 | |
| KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS | | | | |
| Growth of 10,000 Investment | | | 13 | |
| Expense Example | | | 24 | |
| Allocation of The Tactical Paradigm Fund Assets | | | 34 | |
| Schedule of Investments — The Tactical Paradigm Fund | | | 35 | |
| Schedule of Future Contracts — The Tactical Paradigm Fund | | | 36 | |
| Statements of Assets & Liabilities | | | 37 | |
| Statements of Operations | | | 42 | |
| Statements of Changes in Net Assets | | | 47 | |
| Notes to Financial Statements | | | 60 | |
| Financial Highlights | | | 78 | |
| Report of Independent Registered Public Accounting Firm | | | 104 | |
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| Allocation of Portfolio Assets | | | 105 | |
| Portfolio of Investments — The Internet Portfolio | | | 109 | |
| Portfolio of Investments — The Global Portfolio | | | 116 | |
| Portfolio of Investments — The Paradigm Portfolio | | | 122 | |
| Portfolio of Investments — The Medical Portfolio | | | 129 | |
| Portfolio of Investments — The Small Cap Opportunities Portfolio | | | 133 | |
| Portfolio of Investments — The Market Opportunities Portfolio | | | 139 | |
| Portfolio of Investments — The Water Infrastructure Portfolio | | | 143 | |
| Portfolio of Investments — The Multi-Disciplinary Portfolio | | | 146 | |
| Portfolio of Options Written — The Water Infrastructure Portfolio | | | 150 | |
| Portfolio of Options Written — The Multi-Disciplinary Portfolio | | | 156 | |
| Statements of Assets & Liabilities | | | 175 | |
| Statements of Operations | | | 179 | |
| Statements of Changes in Net Assets | | | 183 | |
| Notes to Financial Statements | | | 187 | |
| Report of Independent Registered Public Accounting Firm | | | 209 | |
| Management of the Funds and the Portfolios | | | 211 | |
| Privacy Policy | | | 216 | |
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KINETICS MUTUAL FUNDS, INC.
Shareholders’ Letter
Dear Fellow Shareholders:
We are pleased to present the Kinetics Mutual Funds’ Annual Report for the fiscal year ended December 31, 2010. On balance, the Kinetics Family of Mutual Funds had solid investment results for 2010, with gains of 17.37% for The Paradigm Fund, 13.86% for the Small-Cap Opportunities Fund, 11.31% for The Market Opportunities Funds, 21.18% for The Internet Fund, 4.30% for The Medical Fund, 20.30% for The Global Fund, 3.47% for The Tactical Paradigm Fund, and 13.04% for The Multi-Disciplinary Fund. The Water Infrastructure Fund declined by 4.60% for the same period. This compares with the 2010 returns of 15.06% and 16.91% for the S&P 500 Index(1) and for the NASDAQ Composite Index(2), respectively. The comparison of our funds to these two indices is merely for illustrative purposes and is not an indication that we are trying to replicate or exceed the performance of a certain index during a discrete short timeframe. Our investment goal is to provide you with commendable investment results, without regard as to how an index is positioned in relationship to our funds. We encourage you to use whatever index you feel appropriate for your own comparison purposes.
We have always maintained that our long-term investment results will be driven by the underlying business operations of the companies we own. In this regard, nothing has changed. As global investors continue to re-assess risk, those companies that have, typically, rebounded the most in price have been those which performed well operationally throughout the crisis. We still believe our Funds offer noteworthy value for long-term investors, as we believe the price recovery for our holdings is still in the earlier stages. Markets will have down periods, sometimes extreme, such as seen during 2008 - early 2009, but if your focus is upon the business fundamentals, you should, and hopefully will, in the longer term, be rewarded for your steadfastness.
We continue to inform our shareholders through our website, www.kineticsfunds.com. This website provides a broad array of information, including recent portfolio holdings, quarterly investment commentaries, newsflashes, recent performance data, and online access to account information.
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Kinetics offers the following funds to investors:
The Paradigm Fund focuses on companies that currently have, or which should soon have, sustainable high returns on equity. The Fund has produced attractive returns since its inception in an environment that should be described as difficult for equity investors. The Paradigm Fund is Kinetics’ flagship fund. For those interested in potentially less volatility, we encourage you to examine our Multi-Disciplinary Fund, listed below.
The Tactical Paradigm Fund seeks to provide long-term growth of capital by generally investing all of its assets in the Paradigm Portfolio, while also dynamically hedging market risk with futures, options and short sales of ETFs. The Tactical Paradigm Fund may also purchase or write options, either separately or in combination with each other, to adjust the market risk and return of its overall investment positions. Broadmark Asset Management, LLC, serves as the sub-adviser for the hedged portion of the Fund. We expect to close this fund in early 2011.
The Small Cap Opportunities Fund focuses on undervalued and special situation small capitalization equities that have the potential for rewarding long-term investment results.
The Medical Fund is a sector fund, offering an investment in scientific discovery within the promising field of medical research, particularly in the development of cancer treatments and therapies.
The Internet Fund is a sector fund that focuses on companies engaged in the evolution of Internet-related developments. As such, this Fund has been, and is likely to continue to be, quite volatile. The Internet Fund is not designed to be a major component of one’s equity exposure. More recently, this fund has been focusing on content companies, which we believe will be the winners in the next generation of Internet development.
The Global Fund’s mandate was changed in early April 2008 to an emphasis on global investments. This fund is truly a go-anywhere-fund and is presently finding exciting opportunities in the more developed markets.
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The Market Opportunities Fund focuses on those companies that benefit from increasing transactional volume or throughput, such as publicly-traded exchanges, or that act as facilitators, such as airports and publicly-traded toll roads.
The Water Infrastructure Fund is a sector fund that invests in global companies engaged in water infrastructure and water-specific natural resources, as well as related activities. This fund is now being managed in-house and is using an investment strategy similar to that of the Multi-Disciplinary Fund. As such, we hope to achieve very attractive long-term results with muted volatility.
The Multi-Disciplinary Fund is a fund that seeks to utilize stock options and fixed-income investments in order to provide investors with equity-like returns, but with more muted volatility. At times, the options strategies of the fund may cause the manager to purchase equity securities.
Peter B. Doyle
President
Kinetics Mutual Funds, Inc.
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| (1) | | The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. You cannot invest directly in an index. |
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| (2) | | The NASDAQ Composite Index is a market capitalization-weighted index that is designed to represent the performance of the National Market System which includes over 5,000 stocks traded only over-the-counter and not on an exchange. You cannot invest directly in an index. |
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KINETICS MUTUAL FUNDS, INC.
Investment Commentary
Dear Shareholders:
Perhaps in defiance of the vocal cottage industry of financial doomsayers, 2010 was a satisfactory year for the majority of the Kinetics Mutual Funds. The Funds (No-Load Class) experienced gains of 17.37% in the Paradigm Fund, 13.86% in the Small Cap Opportunities Fund, 11.31% in the Market Opportunities Fund, 4.30% in the Medical Fund, 21.18% in the Internet Fund, 13.04% in the Multi-Disciplinary Fund, 20.30% in the Global Fund, and 3.47% in the Tactical Paradigm Fund. The Water Infrastructure Fund, which was managed by an outside sub-adviser for the majority of 2010, posted a loss of 4.60%. The Water Infrastructure Fund is now being managed in-house by the Kinetics investment staff. The S&P 500 Index and the NASDAQ Composite Index had respective returns of 15.06% and 16.91% during the same period.
During 2010, in general terms, stock prices rose until April, then declined until August, and then rose again until year end. For the greater part of the year, the daily gains or losses in stock prices had much to do with the news released on a particular day. For institutional investors, a crowd that needs no encouragement, the financial crisis apparently reinforced the idea that one has to trade the market, lest one be seen as sleeping at the wheel. It appears the new religion in financial management is that fundamental buy-and-hold investing has been invalidated.
The performance of The Paradigm Fund and The Tactical Paradigm Fund can be attributed to investments in financial exchanges, holding companies (owner operated), Chinese infrastructure companies, Canadian oil sands companies, real estate investment trusts and gaming/casino companies with exposure to Macao. Global economic growth, low interest rates, stable inflation and stability of financial system were underlying factors for the investments’ financial performance.
The Global Fund’s performance benefitted from rising expectations for economic growth in developed and developing markets. The Fund’s investments also benefitted in change in investor sentiment from the previous two years, as investors looked to value companies on the basis of earnings, rather than perceptions of the financial system’s stability.
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Decreasing option price volatility and narrowing corporate credit spreads generated a substantial portion of 2010 returns for The Multi-Disciplinary Fund. The Fund maintained a diverse option exposure across a variety of high quality corporations which was supplemented by income received from bonds of equally high quality companies in the energy, real estate and power generation industries. The Fund benefitted not only from the income of the options and bonds, but also price appreciation in the bonds as company fundamentals and the economy improved.
Performance for The Small Cap Opportunities Fund was largely driven by allocations to financial exchanges, holding companies, real estate developers, media companies and Chinese infrastructure businesses. Overall economic and stock market performance was heavily influenced by the fiscal and monetary policies implemented by the United States government. As a result of such low interest rates and high capital spending policies, domestic businesses experienced recovering earnings and increased margins.
The Market Opportunities Fund embraced a systemic financial recovery in 2010 as allocations to financial exchanges, asset management companies and various critical financial intermediary businesses dictated Fund performance for the year. Increases in investor confidence, financial activity and economic output are factors that underpinned the Fund’s returns.
The Water Infrastructure Fund’s performance was the result of premiums received on option positions, income and price appreciation in fixed income positions and price appreciation in equity positions. The exposure was diversified across water related industries including water utilities, water purification, water transportation (pipes and pumps) and water rights companies. The option and fixed income positions provided stability and income to the Fund during volatile periods of the year, while the equity positions provided additional upside when markets stabilized.
The performance of The Medical Fund for 2010 was driven by allocations into discounted pharmaceuticals and biotechnology companies. Gains came from both equity appreciation and strong dividend yields. In addition, due to discounts to intrinsic
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valuations, merger and acquisition activity within companies held by the Fund continued at a brisk pace, dramatically unlocking value.
For The Internet Fund, while the number of holdings that advanced for the year vastly exceeded those that fell, the performance of media companies and other content providers had a notable contribution to the Fund’s overall return during 2010. This was likely due to the market recognizing that such companies possess high earnings leverage, in which the marginal increase in revenue after development costs translates into pure profit. Additionally, a number of the Fund’s holdings in international Internet-related companies appreciated considerably, reflective of the vast growth potential that these companies possess.
Yogi Berra once quipped: “It’s tough to make predictions, especially about the future,” and this is a view to which we fully subscribe. Leaving aside the high frictional costs of trading, the idea that one can “out trade” other market participants defies all common sense and basic mathematics; yet, it is embraced by a majority of investors. For perspective, consider a 3x3 Rubik’s Cube, a seemingly simple puzzle. A 3x3 cube has six sides, with nine mini-cubes to a side. Thus, it has 54 mini-cubes in total. Without some basic instructions as to how to solve the puzzle, one can spend a fair amount of time coming up with a solution for a scrambled cube. Even with some instruction, the cube is not so simple. Just ask Erno Rubik, the cube’s inventor, who spent over a month trying to solve it the first time he scrambled his original cube in 1974. There are over 43 quintillion scrambled starting positions on a 3x3 Rubik’s Cube (a quintillion, which is a real number, is a billion times a billion). Serious mathematicians have spent the better part of 30 years trying to determine the minimum number of moves it would take to complete the cube from every starting position. With the help of Google’s computers, and over 35 years of computing power, they have come up with an answer, 20. Keep in mind that the faces of the mini-cubes on a Rubik’s Cube are fixed. The notion that an investor can out-guess all the other market participants, or that economists have great insight into the direction of the overall economy, defies all mathematical logic
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once you consider all the variables that need to be calculated, variables that are constantly shifting.
Domestic equity fund flows suggest that headlines and volatility (all of the daily guessing) continue to make investors hesitant to commit funds to developed market (U.S., Europe, Japan) equities. In accordance with current investor trends ( a good contrarian indicator), the reasons to own equities in 2011 are at least as compelling as they were at the start of 2010: generally attractive valuations, low interest rates, rising corporate profits and dividends, sizable stock buybacks, and, finally, accretive merger activity.
A recent cover of Barron’s Magazine (January 24, 2011) had a caricature of Warren Buffett under the headline, “Mr. Moneybags.” Mr. Buffett is seen smiling broadly as he clutches dollar bills, as more dollars seemingly fall from the sky all around him. The article on Berkshire Hathaway, the company headed by Mr. Buffet since 1965, is, for the most part, very positive. It goes into detail about the company’s attractive valuation (“shares trade at just 1.15 times projected year-end 2011 book”), its prodigious earnings (2011 after-tax profits may exceed $12 billion), and its masterstroke November 2009 acquisition of Burlington Northern, which may have added over $10 billion worth of value to Berkshire in little more than a year’s time. The article also notes that Berkshire’s stock price is little changed in the last year, despite its impressive and improving operating results. We have owned Berkshire for well over 10 years in various accounts, and it was an original position in our Paradigm Fund. While it is somewhat gratifying to read positive things about companies we own, we also found the article amusing, because Barron’s had another cover story on Berkshire Hathaway, in December of 1999. That article, which was not as flattering, was titled, “What’s Wrong, Warren?” The article goes on to say, “But there’s more to Berkshire’s weak showing than just operating and investment performance. To be blunt, Buffett, who turns 70 in 2000, is viewed by an increasing number of investors as too conservative, even passé. Buffett, Berkshire’s chairman and chief executive, may be the world’s greatest investor, but he hasn’t anticipated or capitalized on the boom in technology stocks in the past few years.” The article did quote a number of investors who
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liked the stock, then trading at 1.5 times book value and expected to earn $2 billion after tax. From the end of 1999, Berkshire’s stock price, which had higher valuation metrics than today, appreciated 118.8% through the end of 2010. Over the same time period, the S&P 500 Index rose just 4.59% and the tech-heavy NASDAQ Composite declined by 29.9%. Over the same time period our flagship fund, the Paradigm Fund, rose by 151.9%. Our success or failure is ultimately predicated on the underlying business operations of the companies we own. A perusal of our long-term results should encourage our investors.
We believe a very important dynamic is taking place in the financial industry, one that should ultimately benefit fundamental buy-and-hold investors such as Kinetics. Exchange traded funds (ETFs) are growing rapidly in popularity. It is estimated that ETFs now have close to $1 trillion invested in them, with close to a 1,000 different funds. ETFs were designed to be a passive investment strategy, but with so many choices they have become an active strategy, with high turnover among the owners, who are jumping from one ETF to another. Companies that are typically deemed desirable for inclusion in an ETF are those with great liquidity. For example, Berkshire would probably not be included in an ETF because Warren Buffett owns a significant stake, as do other long-term holders of the stock. Thus, it is not that “liquid”, even though it is massive in size. In effect, the designers of ETFs are bypassing companies that are largely owned by their original founders in favor of managements that are more transitory in nature. Basic psychology would suggest that owners make better decisions and take better care of their property than do agents brought in from the outside to run the business for a short time before moving on to their next career endeavor. We believe that it is not just a coincidence that ETFs have grown in popularity while companies comparable to Berkshire have become better values. Similarly to the response to the temporary underperformance in 1999, we believe this is likely to end poorly for those making that bet. We recently read that 67% of the world’s billionaires started from scratch, building up great enterprises over time through hard work and diligence. Most of the world’s billionaires still have
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sizable positions in the companies they control. These are the companies largely excluded from ETFs.
We thank you for your continued support and will continue to work diligently in helping you reach your financial goals.
The Kinetics Investment Team
Peter B. Doyle
Chief Investment Strategist
Disclosure
This material is intended to be reviewed in conjunction with a current prospectus, which includes all fees and expenses that apply to a continued investment program, as well as information regarding the risk factors, policies and objectives of the Funds. Read it carefully before investing.
Mutual Fund investing involves risk. Principal loss is possible. Because The Internet Fund, The Medical Fund and The Water Infrastructure Fund invest in a single industry, their shares are subject to a higher degree of risk than funds with a higher level of diversification. Internet and biotechnology stocks are subject to a rate of change in technology, obsolescence and competition that is generally higher than that of other industries and have experienced extreme price and volume fluctuations. International investing [for The Global Fund, The Water Infrastructure Fund, The Paradigm Fund, The Market Opportunities Fund, The Small Cap Opportunities Fund, The Internet Fund and The Tactical Paradigm Fund] presents special risks including currency exchange fluctuation, government regulations, and the potential for political and economic instability. Accordingly, the share price for these Funds is expected to be more volatile than that of a U.S.-only fund. Past performance is no guarantee of future performance.
Because smaller companies [for The Global Fund, The Small Cap Opportunities Fund and The Water Infrastructure Fund] often have narrower markets and limited financial resources, they present more risk than larger, more well established, companies.
Non-investment grade debt securities [for all Funds], i.e., junk bonds, are subject to greater credit risk, price volatility and risk of loss than investment grade securities. Further, options contain special risks including the imperfect correlation between the value of the option and the value of the underlying asset. Investments [for all Funds] in futures, swaps and other derivative instruments may result in loss as derivative instruments may be illiquid, difficult to price and leveraged so that small changes may produce disproportionate losses to the Fund. To the extent the Funds segregate assets to cover derivative positions, they may impair their ability to meet current obligations, to honor requests for redemption and to manage the Funds in a manner consistent with their respective investment objectives. Purchasing and writing put and call
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options and, in particular, writing “uncovered” options are highly specialized activities that entail greater than ordinary investment risk.
As non-diversified Funds, the value of Fund shares may fluctuate more than shares invested in a broader range of industries and companies.
Unlike other investment companies that directly acquire and manage their own portfolios of securities, The Kinetics Mutual Funds pursue their investment objectives by investing all or generally all of their investable assets in a corresponding portfolio series of Kinetics Portfolios Trust.
The information concerning the Funds included in the shareholder report contains certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.
The NASDAQ Composite (NASDAQ) and the Standard & Poor’s 500 Index (S&P 500) each represent an unmanaged, broad-basket of stocks. They are typically used as a proxy for overall market performance.
Distributor: Kinetics Funds Distributor, Inc. is not an affiliate of Kinetics Mutual Funds, Inc. Kinetics Funds Distributor, Inc. is an affiliate of Kinetics Asset Management, Inc., Investment Adviser to Kinetics Mutual Funds, Inc.
For more information, log onto www.kineticsfunds.com.
January 1, 2011 — Kinetics Asset Management, Inc.
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How a $10,000 Investment Has Grown:
The charts show the growth of a $10,000 investment in the Feeder Funds as compared to the performance of two or more representative market indices. The tables below the charts show the average annual total returns on an investment over various periods. Returns for periods greater than one year are average annual total returns. The annual returns assume the reinvestment of all dividends and distributions, however, the graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Past performance is not predictive of future performance. Current performance may be lower or higher than the returns quoted below. The performance data reflects voluntary fee waivers and expense reimbursements made by the Adviser and the returns would have been lower if these waivers and expense reimbursements were not in effect. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than their original costs.
S&P 500 Index — The S&P 500 Index is a capital-weighted index, representing the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange. The S&P 500 is unmanaged and includes the reinvestment of dividends and does not reflect the payments of transaction costs and advisory fees associated with an investment in the Funds. The securities that comprise the S&P 500 may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.
NASDAQ Composite Index — The NASDAQ Composite Index is a broad-based capitalization-weighted index of all NASDAQ stocks. The NASDAQ Composite is unmanaged and does not include the reinvestment of dividends and does not reflect the payment of transaction costs or advisory fees associated with an investment in the Funds. The securities that comprise the NASDAQ Composite may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.
S&P Global Water Index — The S&P Global Water Index is comprised of fifty of the largest publicly traded companies in water-related businesses that meet specific investability requirements. The index is designed to provide liquid exposure to the leading publicly listed companies in the global water industry, from both developed markets and emerging markets. The securities that comprise the S&P Global Water Index may differ substantially from the securities in The Water Infrastructure Fund’s portfolio. It is not possible to directly invest in an index.
CBOE S&P 500 BuyWrite Index (BXM) — The CBOE S&P 500 BuyWrite Index (BXM) is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. The securities that
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comprise the CBOE S&P 500 BuyWrite Index may differ substantially from the securities in The Multi-Disciplinary Fund’s portfolio. It is not possible to directly invest in an index.
CBOE S&P 500 PutWrite Index (PUT) — The CBOE S&P 500 Put-Write Index (PUT) is a benchmark index designed to track the performance of a passive program that sells near-term, at-the-money S&P 500 Index puts. The securities that comprise the CBOE S&P 500 Put-Write Index may differ substantially from the securities in The Multi-Disciplinary Fund’s portfolio. It is not possible to directly invest in an index.
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The Internet Fund
December 31, 2000 — December 31, 2010
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| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | | | NASDAQ
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| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | S&P 500 | | Composite |
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| One Year | | | 21.18 | % | | | 20.89 | % | | | 13.94 | % | | | 20.26 | % | | | 15.06 | % | | | 16.91 | % |
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| |
| Five Years | | | 8.97 | % | | | 8.84 | % | | | 7.56 | % | | | N/A | | | | 2.29 | % | | | 3.76 | % |
| |
| |
| Ten Years | | | 4.89 | % | | | N/A | | | | N/A | | | | N/A | | | | 1.41 | % | | | 0.71 | % |
| |
| |
| Since Inception No Load Class (10/21/96) | | | 15.55 | % | | | N/A | | | | N/A | | | | N/A | | | | 5.96 | % | | | 5.53 | % |
| |
| |
| Since Inception Advisor Class A (4/26/01) | | | N/A | | | | 5.04 | % | | | 4.40 | % | | | N/A | | | | 2.13 | % | | | 2.78 | % |
| |
| |
| Since Inception Advisor Class C (2/16/07) | | | N/A | | | | N/A | | | | N/A | | | | 6.23 | % | | | −1.58 | % | | | 1.58 | % |
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| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
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The Global Fund
December 31, 2000 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | | | NASDAQ
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | S&P 500 | | Composite |
| |
| |
| One Year | | | 20.30 | % | | | 20.04 | % | | | 19.24 | % | | | 20.26 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Five Years | | | 3.81 | % | | | N/A | | | | N/A | | | | N/A | | | | 2.29 | % | | | 3.76 | % |
| |
| |
| Ten Years | | | 4.57 | % | | | N/A | | | | N/A | | | | N/A | | | | 1.41 | % | | | 0.71 | % |
| |
| |
| Since Inception No Load Class (12/31/99) | | | −4.88 | % | | | N/A | | | | N/A | | | | N/A | | | | 0.41 | % | | | −3.81 | % |
| |
| |
| Since Inception Advisor Class A (5/19/08) | | | N/A | | | | 2.28 | % | | | −0.02 | % | | | N/A | | | | −2.49 | % | | | 2.04 | % |
| |
| |
| Since Inception Advisor Class C (5/19/08) | | | N/A | | | | N/A | | | | N/A | | | | 1.52 | % | | | −2.49 | % | | | 2.04 | % |
| |
| |
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| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
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The Paradigm Fund
December 31, 2000 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | Institutional
| | | | NASDAQ
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | Class | | S&P 500 | | Composite |
| |
| |
| One Year | | | 17.37 | % | | | 17.11 | % | | | 10.39 | % | | | 16.45 | % | | | 17.62 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Five Years | | | 3.71 | % | | | 3.44 | % | | | 2.22 | % | | | 2.91 | % | | | 3.89 | % | | | 2.29 | % | | | 3.76 | % |
| |
| |
| Ten years | | | 9.25 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 1.41 | % | | | 0.71 | % |
| |
| |
| Since Inception No Load Class (12/31/99) | | | 8.76 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 0.41 | % | | | −3.81 | % |
| |
| |
| Since Inception Advisor Class A (4/26/01) | | | N/A | | | | 9.24 | % | | | 8.57 | % | | | N/A | | | | N/A | | | | 2.13 | % | | | 2.78 | % |
| |
| |
| Since Inception Advisor Class C (6/28/02) | | | N/A | | | | N/A | | | | N/A | | | | 9.75 | % | | | N/A | | | | 4.91 | % | | | 7.24 | % |
| |
| |
Since Inception Institutional Class
(5/27/05) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 5.65 | % | | | 2.99 | % | | | 4.48 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
17
The Medical Fund
December 31, 2000 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | | | NASDAQ
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | S&P 500 | | Composite |
| |
| |
| One Year | | | 4.30 | % | | | 4.13 | % | | | −1.86 | % | | | 3.55 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Five Years | | | 6.49 | % | | | 6.27 | % | | | 5.01 | % | | | N/A | | | | 2.29 | % | | | 3.76 | % |
| |
| |
| Ten Years | | | 0.91 | % | | | N/A | | | | N/A | | | | N/A | | | | 1.41 | % | | | 0.71 | % |
| |
| |
| Since Inception No Load Class (9/30/99) | | | 7.67 | % | | | N/A | | | | N/A | | | | N/A | | | | 1.65 | % | | | −0.31 | % |
| |
| |
| Since Inception Advisor Class A (4/26/01) | | | N/A | | | | 2.11 | % | | | 1.49 | % | | | N/A | | | | 2.13 | % | | | 2.78 | % |
| |
| |
| Since Inception Advisor Class C (2/16/07) | | | N/A | | | | N/A | | | | N/A | | | | 2.66 | % | | | −1.58 | % | | | 1.58 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
18
The Small Cap Opportunities Fund
December 31, 2000 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | Institutional
| | | | NASDAQ
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | Class | | S&P 500 | | Composite |
| |
| |
| One Year | | | 13.86 | % | | | 13.56 | % | | | 7.04 | % | | | 13.00 | % | | | 14.10 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Five Years | | | 3.10 | % | | | 2.84 | % | | | 1.63 | % | | | N/A | | | | 3.28 | % | | | 2.29 | % | | | 3.76 | % |
| |
| |
| Ten Years | | | 8.81 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 1.41 | % | | | 0.71 | % |
| |
| |
| Since Inception No Load Class (3/20/00) | | | 9.20 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 0.47 | % | | | −5.00 | % |
| |
| |
| Since Inception Advisor Class A (12/31/01) | | | N/A | | | | 6.37 | % | | | 5.67 | % | | | N/A | | | | N/A | | | | 3.01 | % | | | 3.48 | % |
| |
| |
| Since Inception Advisor Class C (2/16/07) | | | N/A | | | | N/A | | | | N/A | | | | −4.93 | % | | | N/A | | | | −1.58 | % | | | 1.58 | % |
| |
| |
Since Inception Institutional Class
(8/12/05) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 3.65 | % | | | 2.54 | % | | | 3.92 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
19
The Market Opportunities Fund
January 31, 2006 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | Institutional
| | | | NASDAQ
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | Class | | S&P 500 | | Composite |
| |
| |
| One Year | | | 11.31 | % | | | 11.11 | % | | | 4.71 | % | | | 10.54 | % | | | 11.54 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Since Inception No Load Class (1/31/06) | | | 4.19 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 1.79 | % | | | 2.89 | % |
| |
| |
| Since Inception Advisor Class A (1/31/06) | | | N/A | | | | 3.92 | % | | | 2.68 | % | | | N/A | | | | N/A | | | | 1.79 | % | | | 2.89 | % |
| |
| |
| Since Inception Advisor Class C (2/16/07) | | | N/A | | | | N/A | | | | N/A | | | | −2.36 | % | | | N/A | | | | −1.58 | % | | | 1.58 | % |
| |
| |
Since Inception Institutional Class
(5/19/08) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | −4.16 | % | | | −2.49 | % | | | 2.04 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
20
The Water Infrastructure Fund
June 29, 2007 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | Institutional
| | | | S&P Global
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | Class | | S&P 500 | | Water Index |
| |
| |
| One Year | | | −4.60 | % | | | −4.80 | % | | | −10.29 | % | | | −5.15 | % | | | −4.38 | % | | | 15.05 | % | | | 15.95 | % |
| |
| |
| Since Inception No Load Class (6/29/07) | | | −4.42 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | −2.83 | % | | | −1.12 | % |
| |
| |
| Since Inception Advisor Class A (6/29/07) | | | N/A | | | | −4.64 | % | | | −6.23 | % | | | N/A | | | | N/A | | | | −2.83 | % | | | −1.12 | % |
| |
| |
| Since Inception Advisor Class C (6/29/07) | | | N/A | | | | N/A | | | | N/A | | | | −5.11 | % | | | N/A | | | | −2.83 | % | | | −1.12 | % |
| |
| |
| Since Inception Institutional Class (6/29/07) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | −4.17 | % | | | −2.83 | % | | | −1.12 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
21
The Multi-Disciplinary Fund
February 11, 2008 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | | | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | Institutional
| | | | NASDAQ
| | CBOE
| | CBOE
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | Class | | S&P 500 | | Composite | | Buy | | PUT |
| |
| |
| One Year | | | 13.04 | % | | | 12.64 | % | | | 6.17 | % | | | 12.13 | % | | | 13.19 | % | | | 15.06 | % | | | 16.91 | % | | | 5.86 | % | | | 9.02 | % |
| |
| |
Since Inception
No Load Class (2/11/08) | | | 4.72 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 0.11 | % | | | 4.75 | % | | | 0.43 | % | | | 3.60 | % |
| |
| |
| Since Inception Advisor Class A (2/11/08) | | | N/A | | | | 4.45 | % | | | 2.33 | % | | | N/A | | | | N/A | | | | 0.11 | % | | | 4.75 | % | | | 0.43 | % | | | 3.60 | % |
| |
| |
| Since Inception Advisor Class C (2/11/08) | | | N/A | | | | N/A | | | | N/A | | | | 3.94 | % | | | N/A | | | | 0.11 | % | | | 4.75 | % | | | 0.43 | % | | | 3.60 | % |
| |
| |
| Since Inception Institutional Class (2/11/08) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 4.92 | % | | | 0.11 | % | | | 4.75 | % | | | 0.43 | % | | | 3.60 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| | |
| * | | Effective 12/31/2010, The Multi-Disciplinary Fund has replaced the CBOE S&P 500 Buy Write Index (BXM) with the CBOE S&P 500 PutWrite Index (PUT). The portfolio management team believes that CBOE S&P 500 PutWrite Index (PUT) is more representative of the Fund than the CBOE S&P 500 Buy Write Index (BXM). |
22
The Tactical Paradigm Fund
December 31, 2009 — December 31, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended 12/31/2010 |
| | | | | Advisor
| | Advisor
| | | | | | | | |
| | | No Load
| | Class A
| | Class A
| | Advisor
| | Institutional
| | | | NASDAQ
|
| | | Class | | (No Load) | | (Load Adjusted)(1) | | Class C | | Class | | S&P 500 | | Composite |
| |
| |
| One Year | | | 3.47 | % | | | 3.08 | % | | | −2.85 | % | | | 2.53 | % | | | 3.51 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Since Inception No Load Class (12/31/09) | | | 3.47 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Since Inception Advisor Class A (12/31/09) | | | N/A | | | | 3.08 | % | | | −2.85 | % | | | N/A | | | | N/A | | | | 15.06 | % | | | 16.91 | % |
| |
| |
| Since Inception Advisor Class C (12/31/09) | | | N/A | | | | N/A | | | | N/A | | | | 2.53 | % | | | N/A | | | | 15.06 | % | | | 16.91 | % |
| |
| |
Since Inception Institutional Class
(12/31/09) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 3.51 | % | | | 15.06 | % | | | 16.91 | % |
| |
| |
| | |
| (1) | | Reflects front-end sales charge of 5.75%. |
23
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example
December 31, 2010
Shareholders incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvestments of dividends or other distributions made by a Fund, redemption fees, and exchange fees, and (2), ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help investors understand the ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested on July 1, 2010 and held for the entire period from July 1, 2010 to December 31, 2010.
Actual Expenses
The first line and second line items of the table below provide information about actual account values and actual expenses before and after expense reimbursement. Unlike other mutual funds that directly acquire and manage their own portfolio securities, each Fund invests all or generally all of its investable assets in a corresponding series of The Kinetics Portfolios Trust (each, a “Master Portfolio”, and together the “Master Portfolios”), a separately registered investment company. The Master Portfolio, in turn, invests in securities. With this type of organization, expenses can accrue specifically to the Master Portfolio or the Fund or both. The Adviser for the Master Portfolios has directed a certain amount of the Master Portfolio’s trades to brokers believed to provide the best execution and, as a result, the Master Portfolios have generated direct brokerage credits to reduce certain service provider fees. Each Fund records its proportionate share of the Master Portfolio’s expenses, including directed brokerage credits, on a daily basis. Any expense reductions include Fund-specific expenses as well as the expenses allocated from the Master Portfolio.
The Funds will charge shareholder fees for outgoing wire transfers, returned checks, and exchanges executed by telephone between the Fund and any other series of Kinetics Mutual Funds, Inc. The Funds’ transfer agent charges a $5.00 transaction fee to shareholder accounts for telephone exchanges between any two series of Kinetics Mutual Funds, Inc. The Funds’ transfer agent does not charge a transaction fee for written exchange requests. IRA accounts are assessed a $15.00 annual fee. Finally, as a disincentive to market-timing transactions, the Funds will assess a 2.00% fee on the redemption or exchange of Fund shares held for less than 30 days. These fees will be paid to the Funds to help offset transaction costs. The Funds reserve the right to waive the redemption fee, subject to their sole discretion, in instances
24
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
deemed not to be disadvantageous to the Funds or shareholders as described in the Funds’ prospectus.
You may use the information provided in the first line, together with the amounts you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The third and fourth line items of the table below provide information about hypothetical account values and hypothetical expenses before and after expense reimbursements based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses one paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight one’s ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help one determine the relative total costs of owning different funds. In if these transactional costs were included, one’s costs would have been higher.
25
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
The Internet Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,266.57 | | | | 1.94 | % | | $ | 11.08 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,266.57 | | | | 1.89 | % | | $ | 10.80 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.43 | | | | 1.94 | % | | $ | 9.86 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.68 | | | | 1.89 | % | | $ | 9.60 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,265.17 | | | | 2.19 | % | | $ | 12.50 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,265.17 | | | | 2.14 | % | | $ | 12.22 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.17 | | | | 2.19 | % | | $ | 11.12 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.42 | | | | 2.14 | % | | $ | 10.87 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,261.99 | | | | 2.69 | % | | $ | 15.34 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,261.99 | | | | 2.64 | % | | $ | 15.05 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,011.64 | | | | 2.69 | % | | $ | 13.64 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,011.90 | | | | 2.64 | % | | $ | 13.39 | |
The Global Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,295.51 | | | | 3.90 | % | | $ | 22.57 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,295.51 | | | | 1.39 | % | | $ | 8.04 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,005.55 | | | | 3.90 | % | | $ | 19.71 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,018.20 | | | | 1.39 | % | | $ | 7.07 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,292.50 | | | | 4.15 | % | | $ | 23.98 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,292.50 | | | | 1.64 | % | | $ | 9.48 | |
26
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,004.28 | | | | 4.15 | % | | $ | 20.97 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.94 | | | | 1.64 | % | | $ | 8.34 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,287.88 | | | | 4.65 | % | | $ | 26.82 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,287.88 | | | | 2.14 | % | | $ | 12.34 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,001.76 | | | | 4.65 | % | | $ | 23.46 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.42 | | | | 2.14 | % | | $ | 10.87 | |
The Paradigm Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,276.11 | | | | 1.76 | % | | $ | 10.10 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,276.11 | | | | 1.64 | % | | $ | 9.41 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.33 | | | | 1.76 | % | | $ | 8.94 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.94 | | | | 1.64 | % | | $ | 8.34 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,274.38 | | | | 2.01 | % | | $ | 11.52 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,274.38 | | | | 1.89 | % | | $ | 10.83 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.07 | | | | 2.01 | % | | $ | 10.21 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.68 | | | | 1.89 | % | | $ | 9.60 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,271.00 | | | | 2.51 | % | | $ | 14.37 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,271.00 | | | | 2.39 | % | | $ | 13.68 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,012.55 | | | | 2.51 | % | | $ | 12.73 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.16 | | | | 2.39 | % | | $ | 12.13 | |
27
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| Institutional Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,277.03 | | | | 1.71 | % | | $ | 9.81 | |
| Institutional Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,277.03 | | | | 1.44 | % | | $ | 8.26 | |
| Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.59 | | | | 1.71 | % | | $ | 8.69 | |
| Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,017.95 | | | | 1.44 | % | | $ | 7.32 | |
The Medical Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,118.64 | | | | 1.99 | % | | $ | 10.63 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,118.64 | | | | 1.39 | % | | $ | 7.42 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.17 | | | | 1.99 | % | | $ | 10.11 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,018.20 | | | | 1.39 | % | | $ | 7.07 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,117.34 | | | | 2.24 | % | | $ | 11.95 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,117.34 | | | | 1.64 | % | | $ | 8.75 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.91 | | | | 2.24 | % | | $ | 11.37 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.94 | | | | 1.64 | % | | $ | 8.34 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,114.18 | | | | 2.74 | % | | $ | 14.60 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,114.18 | | | | 2.14 | % | | $ | 11.40 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,011.39 | | | | 2.74 | % | | $ | 13.89 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.42 | | | | 2.14 | % | | $ | 10.87 | |
The Small Cap Opportunities Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,229.44 | | | | 1.84 | % | | $ | 10.34 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,229.44 | | | | 1.64 | % | | $ | 9.22 | |
28
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.93 | | | | 1.84 | % | | $ | 9.35 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.94 | | | | 1.64 | % | | $ | 8.34 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,227.68 | | | | 2.09 | % | | $ | 11.74 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,227.68 | | | | 1.89 | % | | $ | 10.61 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.67 | | | | 2.09 | % | | $ | 10.61 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.68 | | | | 1.89 | % | | $ | 9.60 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,224.81 | | | | 2.59 | % | | $ | 14.52 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,224.81 | | | | 2.39 | % | | $ | 13.40 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,012.15 | | | | 2.59 | % | | $ | 13.14 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.16 | | | | 2.39 | % | | $ | 12.13 | |
| Institutional Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,230.44 | | | | 1.79 | % | | $ | 10.06 | |
| Institutional Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,230.44 | | | | 1.44 | % | | $ | 8.10 | |
| Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.18 | | | | 1.79 | % | | $ | 9.10 | |
| Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,017.95 | | | | 1.44 | % | | $ | 7.32 | |
The Market Opportunities Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,219.99 | | | | 1.93 | % | | $ | 10.80 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,219.99 | | | | 1.64 | % | | $ | 9.18 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.48 | | | | 1.93 | % | | $ | 9.80 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.94 | | | | 1.64 | % | | $ | 8.34 | |
29
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,216.98 | | | | 2.18 | % | | $ | 12.18 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,216.98 | | | | 1.89 | % | | $ | 10.56 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.22 | | | | 2.18 | % | | $ | 11.07 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.68 | | | | 1.89 | % | | $ | 9.60 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,214.46 | | | | 2.68 | % | | $ | 14.96 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,214.46 | | | | 2.39 | % | | $ | 13.34 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,011.70 | | | | 2.68 | % | | $ | 13.59 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.16 | | | | 2.39 | % | | $ | 12.13 | |
| Institutional Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,221.06 | | | | 1.88 | % | | $ | 10.52 | |
| Institutional Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,221.06 | | | | 1.44 | % | | $ | 8.06 | |
| Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.73 | | | | 1.88 | % | | $ | 9.55 | |
| Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,017.95 | | | | 1.44 | % | | $ | 7.32 | |
The Water Infrastructure Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,115.10 | | | | 2.26 | % | | $ | 12.05 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,115.10 | | | | 1.64 | % | | $ | 8.74 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.81 | | | | 2.26 | % | | $ | 11.47 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.94 | | | | 1.64 | % | | $ | 8.34 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,113.63 | | | | 2.51 | % | | $ | 13.37 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,113.63 | | | | 1.89 | % | | $ | 10.07 | |
30
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,012.55 | | | | 2.51 | % | | $ | 12.73 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,015.68 | | | | 1.89 | % | | $ | 9.60 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,110.41 | | | | 3.01 | % | | $ | 16.01 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,110.41 | | | | 2.39 | % | | $ | 12.71 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,010.03 | | | | 3.01 | % | | $ | 15.25 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.16 | | | | 2.39 | % | | $ | 12.13 | |
| Institutional Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,115.34 | | | | 2.21 | % | | $ | 11.78 | |
| Institutional Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,115.34 | | | | 1.44 | % | | $ | 7.68 | |
| Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.06 | | | | 2.21 | % | | $ | 11.22 | |
| Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,017.95 | | | | 1.44 | % | | $ | 7.32 | |
The Multi-Disciplinary Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,129.40 | | | | 5.19 | % | | $ | 27.86 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,129.40 | | | | 1.49 | % | | $ | 8.00 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 999.04 | | | | 5.19 | % | | $ | 26.15 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,017.69 | | | | 1.49 | % | | $ | 7.58 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,126.51 | | | | 5.44 | % | | $ | 29.16 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,126.51 | | | | 1.74 | % | | $ | 9.33 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 997.78 | | | | 5.44 | % | | $ | 27.39 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,016.43 | | | | 1.74 | % | | $ | 8.84 | |
31
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,124.64 | | | | 5.94 | % | | $ | 31.81 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,124.64 | | | | 2.24 | % | | $ | 12.00 | |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 995.26 | | | | 5.94 | % | | $ | 29.87 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.91 | | | | 2.24 | % | | $ | 11.37 | |
| Institutional Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,128.75 | | | | 5.14 | % | | $ | 27.58 | |
| Institutional Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,128.75 | | | | 1.29 | % | | $ | 6.92 | |
| Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 999.29 | | | | 5.14 | % | | $ | 25.90 | |
| Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,018.70 | | | | 1.29 | % | | $ | 6.56 | |
The Tactical Paradigm Fund | | | | | | | | | | | | | | | | |
| No Load Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,122.24 | | | | 6.20 | % | | $ | 33.17 | |
| No Load Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,122.24 | | | | 2.29 | % | | $ | 12.25 | |
| No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 993.95 | | | | 6.20 | % | | $ | 31.16 | |
| No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,013.66 | | | | 2.29 | % | | $ | 11.62 | |
| Advisor Class A Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,120.43 | | | | 6.45 | % | | $ | 34.47 | |
| Advisor Class A Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,120.43 | | | | 2.54 | % | | $ | 13.58 | |
| Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 992.69 | | | | 6.45 | % | | $ | 32.40 | |
| Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,012.40 | | | | 2.54 | % | | $ | 12.88 | |
| Advisor Class C Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,116.93 | | | | 6.95 | % | | $ | 37.08 | |
| Advisor Class C Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,116.93 | | | | 3.04 | % | | $ | 16.22 | |
32
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Expense Example — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Beginning
| | Ending
| | | | |
| | | Account
| | Account
| | | | Expenses Paid
|
| | | Value
| | Value
| | Annualized
| | During Period*
|
| | | (7/1/10) | | (12/31/10) | | Expense Ratio | | (7/1/10 to 12/31/10) |
| Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 990.17 | | | | 6.95 | % | | $ | 34.86 | |
| Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,009.88 | | | | 3.04 | % | | $ | 15.40 | |
| Institutional Class Actual — before expense reimbursement | | $ | 1,000.00 | | | $ | 1,122.63 | | | | 6.15 | % | | $ | 32.90 | |
| Institutional Class Actual — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,122.63 | | | | 2.09 | % | | $ | 11.18 | |
| Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | | $ | 1,000.00 | | | $ | 994.20 | | | | 6.15 | % | | $ | 30.91 | |
| Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | | $ | 1,000.00 | | | $ | 1,014.67 | | | | 2.09 | % | | $ | 10.61 | |
| |
| Note: | Each Fund records its proportionate share of the respective Master Portfolio’s expenses, including directed brokerage credits, on a daily basis. Any expense reductions includes Feeder Fund-specific expenses as well as the expenses allocated for the Master Portfolio. |
| |
| * | Expenses are equal to the Fund’s annualized expense ratio before expense reimbursement and after expense reimbursement multiplied by the average account value over the period, multiplied by 184/365. |
33
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Allocation of The Tactical Paradigm Fund Assets
December 31, 2010
The Tactical Paradigm Fund
34
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
The Tactical Paradigm Fund
Schedule of Investments — December 31, 2010
| | | | | | | |
| Identifier | | OTHER INVESTMENTS — 95.91% | | Value | |
| | |
| | | Other Investments — 95.91% |
| | | Kinetics Paradigm Portfoliom | | | 1,531,791 | |
| | | | | | | |
| | | TOTAL OTHER INVESTMENTS | | | 1,531,791 | |
| | | | | | | |
| | | TOTAL INVESTMENTS — 95.91% | | $ | 1,531,791 | |
| | | | | | | |
Percentages are stated as a percent of net assets.
| |
| m — | Please see The Paradigm Portfolio’s Portfolio of Investments for a detailed schedule of investments. |
The accompanying notes are an integral part of these financial statements.
35
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
The Tactical Paradigm Fund
Schedule of Futures Contracts — December 31, 2010
| | | | | | | | | | | |
| | | | | | | | Unrealized
| |
| | | | | | | | Appreciation/
| |
| Identifier | | SHORT FUTURES CONTRACTS | | Contracts | | | (Depreciation) | |
| | |
| |
| ESH1 | | S&P 500 EMINI Futures Contract, Expiring March 2011
(Multiplier of 50, underlying Face Amount at Market Value $689,150) | | | 11 | | | $ | (12,387 | ) |
| | | | | | | | | | | |
| | | TOTAL SHORT FUTURES CONTRACTS | | | | | | $ | (12,387 | ) |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
36
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Internet
| | | The Global
| |
| | | Fund | | | Fund | |
| | |
| |
ASSETS: | | | | | | | | |
| Investments in the Master Portfolios, at value* | | $ | 115,255,930 | | | $ | 5,296,841 | |
| Receivable from Adviser | | | 4,846 | | | | 15,419 | |
| Receivable for Master Portfolio interest sold | | | 223,059 | | | | — | |
| Receivable for Fund shares sold | | | 10,918 | | | | 3,850 | |
| Prepaid expenses and other assets | | | 17,220 | | �� | | 14,434 | |
| | | | | | | | | |
| Total assets | | | 115,511,973 | | | | 5,330,544 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable for Master Portfolio interest purchased | | | — | | | | 3,850 | |
| Payable to Directors and Officers | | | 1,659 | | | | 86 | |
| Payable for Fund shares repurchased | | | 233,977 | | | | — | |
| Payable for service fees | | | 24,549 | | | | 1,105 | |
| Payable for distribution fees | | | 702 | | | | 179 | |
| Accrued expenses and other liabilities | | | 77,296 | | | | 12,814 | |
| | | | | | | | | |
| Total liabilities | | | 338,183 | | | | 18,034 | |
| | | | | | | | | |
| Net assets | | $ | 115,173,790 | | | $ | 5,312,510 | |
| | | | | | | | | |
NET ASSETS CONSIST OF: | | | | | | | | |
| Paid in capital | | $ | 92,326,294 | | | $ | 6,069,102 | |
| Accumulated net investment income (loss) | | | 54,100 | | | | (23,401 | ) |
| Accumulated net realized loss on investments and foreign currency | | | (23,778,966 | ) | | | (1,300,750 | ) |
| Net unrealized appreciation on: | | | | | | | | |
| Investments and foreign currency | | | 46,572,362 | | | | 567,559 | |
| | | | | | | | | |
| Net Assets | | $ | 115,173,790 | | | $ | 5,312,510 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | | | | | | | | |
| Net assets | | $ | 113,085,292 | | | $ | 4,541,173 | |
| Shares outstanding | | | 3,035,874 | | | | 971,739 | |
| Net asset value per share (offering and redemption price) | | $ | 37.25 | | | $ | 4.67 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | | | | | | | | |
| Net assets | | $ | 1,892,151 | | | $ | 707,176 | |
| Shares outstanding | | | 51,571 | | | | 151,095 | |
| Net asset value per share (redemption price) | | $ | 36.69 | | | $ | 4.68 | |
| | | | | | | | | |
| Offering price per share ($36.69 divided by .9425 and $4.68 divided by .9425) | | $ | 38.93 | | | $ | 4.97 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | | | | | | | | |
| Net assets | | $ | 196,347 | | | $ | 64,161 | |
| Shares outstanding | | | 5,486 | | | | 13,818 | |
| Net asset value per share (offering and redemption price) | | $ | 35.79 | | | $ | 4.64 | |
| | | | | | | | | |
| |
| * | Each Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
37
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Paradigm
| | | The Medical
| |
| | | Fund | | | Fund | |
| | |
| |
ASSETS: | | | | | | | | |
| Investments in the Master Portfolios, at value* | | $ | 1,208,791,332 | | | $ | 30,676,424 | |
| Receivable from Adviser | | | 115,672 | | | | 15,182 | |
| Receivable for Master Portfolio interest sold | | | 282,871 | | | | 21,655 | |
| Receivable for Fund shares sold | | | 2,143,090 | | | | 5,589 | |
| Prepaid expenses and other assets | | | 34,981 | | | | 15,568 | |
| | | | | | | | | |
| Total assets | | | 1,211,367,946 | | | | 30,734,418 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable to Directors and Officers | | | 18,867 | | | | 483 | |
| Payable for Fund shares repurchased | | | 2,425,961 | | | | 27,244 | |
| Payable for service fees | | | 230,235 | | | | 6,520 | |
| Payable for distribution fees | | | 189,310 | | | | 1,384 | |
| Accrued expenses and other liabilities | | | 351,918 | | | | 22,809 | |
| | | | | | | | | |
| Total liabilities | | | 3,216,291 | | | | 58,440 | |
| | | | | | | | | |
| Net assets | | $ | 1,208,151,655 | | | $ | 30,675,978 | |
| | | | | | | | | |
NET ASSETS CONSIST OF: | | | | | | | | |
| Paid in capital | | $ | 1,957,688,385 | | | $ | 30,643,234 | |
| Accumulated net investment income (loss) | | | (9,775,040 | ) | | | 28,164 | |
| Accumulated net realized loss on investments and foreign currency | | | (1,021,368,388 | ) | | | (677,876 | ) |
| Net unrealized appreciation on: | | | | | | | | |
| Investments and foreign currency | | | 281,606,698 | | | | 682,456 | |
| | | | | | | | | |
| Net Assets | | $ | 1,208,151,655 | | | $ | 30,675,978 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | | | | | | | | |
| Net assets | | $ | 687,056,274 | | | $ | 25,776,928 | |
| Shares outstanding | | | 29,478,131 | | | | 1,322,932 | |
| Net asset value per share (offering and redemption price) | | $ | 23.31 | | | $ | 19.48 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | | | | | | | | |
| Net assets | | $ | 226,263,752 | | | $ | 4,207,003 | |
| Shares outstanding | | | 9,860,177 | | | | 220,773 | |
| Net asset value per share (redemption price) | | $ | 22.95 | | | $ | 19.06 | |
| | | | | | | | | |
| Offering price per share ($22.95 divided by .9425 and $19.06 divided by .9425) | | $ | 24.35 | | | $ | 20.22 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | | | | | | | | |
| Net assets | | $ | 152,570,975 | | | $ | 692,047 | |
| Shares outstanding | | | 6,855,733 | | | | 36,613 | |
| Net asset value per share (offering and redemption price) | | $ | 22.25 | | | $ | 18.90 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — | | | | | | | | |
INSTITUTIONAL CLASS: | | | | | | | | |
| Net assets | | $ | 142,260,654 | | | | | |
| Shares outstanding | | | 6,119,270 | | | | | |
| Net asset value per share (offering and redemption price) | | $ | 23.25 | | | | | |
| | | | | | | | | |
| |
| * | Each Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
38
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Small Cap
| | | The Market
| |
| | | Opportunities
| | | Opportunities
| |
| | | Fund | | | Fund | |
| | |
| |
ASSETS: | | | | | | | | |
| Investments in the Master Portfolios, at value* | | $ | 155,118,505 | | | $ | 58,518,497 | |
| Receivable from Adviser | | | 16,799 | | | | 14,631 | |
| Receivable for Master Portfolio interest sold | | | 340,854 | | | | 78,889 | |
| Receivable for Fund shares sold | | | 44,761 | | | | 13,110 | |
| Prepaid expenses and other assets | | | 22,233 | | | | 24,724 | |
| | | | | | | | | |
| Total assets | | | 155,543,152 | | | | 58,649,851 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable to Directors and Officers | | | 2,562 | | | | 903 | |
| Payable for Fund shares repurchased | | | 385,615 | | | | 92,000 | |
| Payable for service fees | | | 31,518 | | | | 12,429 | |
| Payable for distribution fees | | | 5,518 | | | | 6,655 | |
| Accrued expenses and other liabilities | | | 71,877 | | | | 27,134 | |
| | | | | | | | | |
| Total liabilities | | | 497,090 | | | | 139,121 | |
| | | | | | | | | |
| Net assets | | $ | 155,046,062 | | | $ | 58,510,730 | |
| | | | | | | | | |
NET ASSETS CONSIST OF: | | | | | | | | |
| Paid in capital | | $ | 314,478,990 | | | $ | 88,209,920 | |
| Accumulated net investment loss | | | (1,089,215 | ) | | | (2,114,296 | ) |
| Accumulated net realized loss on investments and foreign currency | | | (188,919,026 | ) | | | (34,818,280 | ) |
| Net unrealized appreciation on: | | | | | | | | |
| Investments and foreign currency | | | 30,575,313 | | | | 7,233,386 | |
| | | | | | | | | |
| Net Assets | | $ | 155,046,062 | | | $ | 58,510,730 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | | | | | | | | |
| Net assets | | $ | 130,278,539 | | | $ | 38,562,142 | |
| Shares outstanding | | | 5,587,064 | | | | 3,366,208 | |
| Net asset value per share (offering and redemption price) | | $ | 23.32 | | | $ | 11.46 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | | | | | | | | |
| Net assets | | $ | 11,509,161 | | | $ | 14,167,453 | |
| Shares outstanding | | | 500,776 | | | | 1,239,468 | |
| Net asset value per share (redemption price) | | $ | 22.98 | | | $ | 11.43 | |
| | | | | | | | | |
| Offering price per share ($22.98 divided by .9425 and $11.43 divided by .9425) | | $ | 24.38 | | | $ | 12.13 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | | | | | | | | |
| Net assets | | $ | 3,450,477 | | | $ | 5,569,269 | |
| Shares outstanding | | | 152,152 | | | | 492,787 | |
| Net asset value per share (offering and redemption price) | | $ | 22.68 | | | $ | 11.30 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | | | | | | | | |
| Net assets | | $ | 9,807,885 | | | $ | 211,866 | |
| Shares outstanding | | | 418,279 | | | | 18,459 | |
| Net asset value per share (offering and redemption price) | | $ | 23.45 | | | $ | 11.48 | |
| | | | | | | | | |
| |
| * | Each Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
39
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Water
| | | The Multi-
| |
| | | Infrastructure
| | | Disciplinary
| |
| | | Fund | | | Fund | |
| | |
| |
ASSETS: | | | | | | | | |
| Investments in the Master Portfolios, at value* | | $ | 24,122,101 | | | $ | 4,097,779 | |
| Receivable from Adviser | | | 13,293 | | | | 6,662 | |
| Receivable for Master Portfolio interest sold | | | 146,515 | | | | — | |
| Receivable for Fund shares sold | | | 80,528 | | | | 8,000 | |
| Prepaid expenses and other assets | | | 15,425 | | | | 26,299 | |
| | | | | | | | | |
| Total assets | | | 24,377,862 | | | | 4,138,740 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable for Master Portfolio interest purchased | | | — | | | | 8,000 | |
| Payable to Directors and Officers | | | 399 | | | | 28 | |
| Payable for Fund shares repurchased | | | 227,043 | | | | — | |
| Payable for service fees | | | 4,471 | | | | 791 | |
| Payable for distribution fees | | | 3,938 | | | | 145 | |
| Accrued expenses and other liabilities | | | 18,049 | | | | 14,136 | |
| | | | | | | | | |
| Total liabilities | | | 253,900 | | | | 23,100 | |
| | | | | | | | | |
| Net assets | | $ | 24,123,962 | | | $ | 4,115,640 | |
| | | | | | | | | |
NET ASSETS CONSIST OF: | | | | | | | | |
| Paid in capital | | $ | 32,389,675 | | | $ | 3,890,144 | |
| Accumulated net investment loss | | | (33,240 | ) | | | (12,853 | ) |
| Accumulated net realized gain (loss) on investments, foreign currency and written option contracts | | | (9,416,641 | ) | | | 2,997 | |
| Net unrealized appreciation on: | | | | | | | | |
| Investments and foreign currency | | | 20,727 | | | | 69,225 | |
| Written option contracts | | | 1,163,441 | | | | 166,127 | |
| | | | | | | | | |
| Net Assets | | $ | 24,123,962 | | | $ | 4,115,640 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | | | | | | | | |
| Net assets | | $ | 7,001,497 | | | $ | 3,489,290 | |
| Shares outstanding | | | 835,279 | | | | 333,411 | |
| Net asset value per share (offering and redemption price) | | $ | 8.38 | | | $ | 10.47 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | | | | | | | | |
| Net assets | | $ | 10,100,308 | | | $ | 355,903 | |
| Shares outstanding | | | 1,209,401 | | | | 34,093 | |
| Net asset value per share (redemption price) | | $ | 8.35 | | | $ | 10.44 | |
| | | | | | | | | |
| Offering price per share ($8.35 divided by .9425 and $10.44 divided by .9425) | | $ | 8.86 | | | $ | 11.08 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | | | | | | | | |
| Net assets | | $ | 2,839,723 | | | $ | 128,001 | |
| Shares outstanding | | | 344,069 | | | | 12,309 | |
| Net asset value per share (offering and redemption price) | | $ | 8.25 | | | $ | 10.40 | |
| | | | | | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | | | | | | | | |
| Net assets | | $ | 4,182,434 | | | $ | 142,446 | |
| Shares outstanding | | | 496,582 | | | | 13,564 | |
| Net asset value per share (offering and redemption price) | | $ | 8.42 | | | $ | 10.50 | |
| | | | | | | | | |
| |
| * | Each Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
40
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Assets & Liabilities
December 31, 2010
| | | | | |
| | | The Tactical
| |
| | | Paradigm
| |
| | | Fund | |
| | |
| |
ASSETS: | | | | |
| Investments in the Master Portfolios, at value* | | $ | 1,531,791 | |
| Deposit at brokers for futures | | | 56,046 | |
| Receivable from Adviser | | | 3,910 | |
| Due from broker-variation margin | | | 825 | |
| Prepaid expenses and other assets | | | 24,152 | |
| | | | | |
| Total assets | | | 1,616,724 | |
| | | | | |
LIABILITIES: | | | | |
Payable to Sub-Adviser | | | 885 | |
| Payable to Directors and Officers | | | 19 | |
| Payable for service fees | | | 337 | |
| Payable for distribution fees | | | 2,636 | |
| Accrued expenses and other liabilities | | | 15,670 | |
| | | | | |
| Total liabilities | | | 19,547 | |
| | | | | |
| Net assets | | $ | 1,597,177 | |
| | | | | |
NET ASSETS CONSIST OF: | | | | |
| Paid in capital | | $ | 1,542,457 | |
| Accumulated net investment loss | | | (10,975 | ) |
| Accumulated net realized loss on investments, foreign currency, written option contracts and future contracts | | | (326,571 | ) |
| Net unrealized appreciation (depreciation) on: | | | | |
| Investments and foreign currency | | | 404,653 | |
| Futures contracts | | | (12,387 | ) |
| | | | | |
| Net Assets | | $ | 1,597,177 | |
| | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | | | | |
| Net assets | | $ | 49,847 | |
| Shares outstanding | | | 4,850 | |
| Net asset value per share (offering and redemption price) | | $ | 10.28 | |
| | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | | | | |
| Net assets | | $ | 502,267 | |
| Shares outstanding | | | 49,043 | |
| Net asset value per share (redemption price) | | $ | 10.24 | |
| | | | | |
| Offering price per share ($10.24 divided by .9425) | | $ | 10.86 | |
| | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | | | | |
| Net assets | | $ | 1,024,355 | |
| Shares outstanding | | | 100,210 | |
| Net asset value per share (offering and redemption price) | | $ | 10.22 | |
| | | | | |
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | | | | |
| Net assets | | $ | 20,708 | |
| Shares outstanding | | | 2,022 | |
| Net asset value per share (offering and redemption price) | | $ | 10.24 | |
| | | | | |
| |
| * | Each Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
41
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Internet
| | | The Global
| |
| | | Fund | | | Fund | |
| | |
| |
INVESTMENT LOSS ALLOCATED FROM MASTER | | | | | | | | |
PORTFOLIOS: | | | | | | | | |
| Dividends† | | $ | 850,831 | | | $ | 92,408 | |
| Interest | | | 54,676 | | | | 1 | |
| Income from securities lending | | | 106,235 | | | | 2,043 | |
| Other income | | | 99,868 | | | | — | |
| Expenses allocated from Master Portfolio | | | (1,461,843 | ) | | | (119,398 | ) |
| | | | | | | | | |
| Net investment loss from Master Portfolio | | | (350,233 | ) | | | (24,946 | ) |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Distribution fees — Advisor Class A | | | 2,841 | | | | 1,204 | |
| Distribution fees — Advisor Class C | | | 1,093 | | | | 322 | |
| Shareholder servicing fees — Advisor Class A | | | 2,841 | | | | 1,204 | |
| Shareholder servicing fees — Advisor Class C | | | 365 | | | | 107 | |
| Shareholder servicing fees — No Load Class | | | 264,081 | | | | 11,061 | |
| Transfer Agent fees and expenses | | | 172,690 | | | | 20,215 | |
| Reports to shareholders | | | 72,171 | | | | 3,501 | |
| Administration fees | | | 36,254 | | | | 1,669 | |
| Professional fees | | | 17,217 | | | | 7,625 | |
| Directors’ and Officers’ fees and expenses | | | 7,293 | | | | 355 | |
| Registration fees | | | 39,557 | | | | 40,711 | |
| Fund accounting fees | | | 5,256 | | | | 242 | |
| Other expenses | | | 5,327 | | | | 236 | |
| | | | | | | | | |
| Total expenses | | | 626,986 | | | | 88,452 | |
| Less, expense reimbursement | | | (64,197 | ) | | | (137,533 | ) |
| | | | | | | | | |
| Net expenses | | | 562,789 | | | | (49,081 | ) |
| | | | | | | | | |
| Net investment income (loss) | | | (913,022 | ) | | | 24,135 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | | | | | | | | |
| Net realized gain on: | | | | | | | | |
| Investments and foreign currency | | | 3,608,256 | | | | 621,170 | |
| Net change in unrealized appreciation (depreciation) of: | | | | | | | | |
| Investments and foreign currency | | | 18,108,751 | | | | 246,651 | |
| Written option contracts | | | (5,403 | ) | | | — | |
| | | | | | | | | |
| Net gain on investments | | | 21,711,604 | | | | 867,821 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | $ | 20,798,582 | | | $ | 891,956 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 33,821 | | | $ | 10,402 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
42
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Paradigm
| | | The Medical
| |
| | | Fund | | | Fund | |
| | |
| |
INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS: | | | | | | | | |
| Dividends† | | $ | 23,133,845 | | | $ | 581,765 | |
| Interest | | | 1,681,570 | | | | 58 | |
| Income from securities lending | | | 2,082,596 | | | | 24,147 | |
| Expenses allocated from Master Portfolio | | | (16,706,025 | ) | | | (434,646 | ) |
| | | | | | | | | |
| Net investment income from Master Portfolio | | | 10,191,986 | | | | 171,324 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Distribution fees — Advisor Class A | | | 563,355 | | | | 10,946 | |
| Distribution fees — Advisor Class C | | | 1,153,688 | | | | 5,099 | |
| Shareholder servicing fees — Advisor Class A | | | 563,355 | | | | 10,946 | |
| Shareholder servicing fees — Advisor Class C | | | 384,562 | | | | 1,703 | |
| Shareholder servicing fees — No Load Class | | | 1,794,385 | | | | 65,568 | |
| Shareholder servicing fees — Institutional Class | | | 257,319 | | | | — | |
| Transfer Agent fees and expenses | | | 696,038 | | | | 32,486 | |
| Reports to shareholders | | | 347,584 | | | | 11,576 | |
| Administration fees | | | 426,920 | | | | 11,005 | |
| Professional fees | | | 74,582 | | | | 11,363 | |
| Directors’ and Officers’ fees and expenses | | | 83,835 | | | | 2,163 | |
| Registration fees | | | 93,940 | | | | 39,882 | |
| Fund accounting fees | | | 59,730 | | | | 1,552 | |
| Other expenses | | | 71,038 | | | | 1,370 | |
| | | | | | | | | |
| Total expenses | | | 6,570,331 | | | | 205,659 | |
| Less, expense waiver for Institutional Class service fees | | | (192,989 | ) | | | — | |
| Less, expense reimbursement | | | (1,524,125 | ) | | | (189,372 | ) |
| | | | | | | | | |
| Net expenses | | | 4,853,217 | | | | 16,287 | |
| | | | | | | | | |
| Net investment income | | | 5,338,769 | | | | 155,037 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | | | | | | | | |
| Net realized loss on: | | | | | | | | |
| Investments and foreign currency | | | (106,442,949 | ) | | | (220,195 | ) |
| Net change in unrealized appreciation of: | | | | | | | | |
| Investments and foreign currency | | | 278,030,932 | | | | 1,376,200 | |
| | | | | | | | | |
| Net gain on investments | | | 171,587,983 | | | | 1,156,005 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | $ | 176,926,752 | | | $ | 1,311,042 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 1,193,928 | | | $ | 28,223 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
43
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Small Cap
| | | The Market
| |
| | | Opportunities
| | | Opportunities
| |
| | | Fund | | | Fund | |
| | |
| |
INVESTMENT INCOME ALLOCATED FROM MASTER | | | | | | | | |
PORTFOLIOS: | | | | | | | | |
| Dividends† | | $ | 2,249,570 | | | $ | 1,090,688 | |
| Interest | | | 20,973 | | | | 36 | |
| Income from securities lending | | | 100,654 | | | | 81,141 | |
| Expenses allocated from Master Portfolio | | | (2,336,881 | ) | | | (841,186 | ) |
| | | | | | | | | |
| Net investment income from Master Portfolio | | | 34,316 | | | | 330,679 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Distribution fees — Advisor Class A | | | 31,127 | | | | 39,161 | |
| Distribution fees — Advisor Class C | | | 28,274 | | | | 41,919 | |
| Shareholder servicing fees — Advisor Class A | | | 31,127 | | | | 39,161 | |
| Shareholder servicing fees — Advisor Class C | | | 9,425 | | | | 13,973 | |
| Shareholder servicing fees — No Load Class | | | 337,810 | | | | 94,441 | |
| Shareholder servicing fees — Institutional Class | | | 26,349 | | | | 171 | |
| Transfer Agent fees and expenses | | | 104,089 | | | | 41,861 | |
| Reports to shareholders | | | 41,150 | | | | 13,810 | |
| Administration fees | | | 56,967 | | | | 20,534 | |
| Professional fees | | | 21,999 | | | | 13,639 | |
| Directors’ and Officers’ fees and expenses | | | 11,001 | | | | 4,065 | |
| Registration fees | | | 52,988 | | | | 48,179 | |
| Fund accounting fees | | | 8,024 | | | | 2,884 | |
| Other expenses | | | 10,510 | | | | 3,375 | |
| | | | | | | | | |
| Total expenses | | | 770,840 | | | | 377,173 | |
| Less, expense waiver for Institutional Class service fees | | | (19,761 | ) | | | (129 | ) |
| Less, expense reimbursement | | | (356,797 | ) | | | (167,828 | ) |
| | | | | | | | | |
| Net expenses | | | 394,282 | | | | 209,216 | |
| | | | | | | | | |
| Net investment income (loss) | | | (359,966 | ) | | | 121,463 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | | | | | | | | |
| Net realized loss on: | | | | | | | | |
| Investments and foreign currency | | | (588,589 | ) | | | (336,643 | ) |
| Net change in unrealized appreciation (depreciation) of: | | | | | | | | |
| Investments and foreign currency | | | 20,471,453 | | | | 6,205,603 | |
| Written option contracts | | | — | | | | (37,822 | ) |
| | | | | | | | | |
| Net gain on investments | | | 19,882,864 | | | | 5,831,138 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | $ | 19,522,898 | | | $ | 5,952,601 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 66,129 | | | $ | 39,957 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
44
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Water
| | | The Multi-
| |
| | | Infrastructure
| | | Disciplinary
| |
| | | Fund | | | Fund | |
| | |
| |
INVESTMENT INCOME ALLOCATED FROM MASTER | | | | | | | | |
PORTFOLIOS: | | | | | | | | |
| Dividends† | | $ | 423,323 | | | $ | 85 | |
| Interest | | | 173,690 | | | | 111,245 | |
| Income from securities lending | | | 52,546 | | | | 54 | |
| Expenses allocated from Master Portfolio | | | (380,207 | ) | | | (53,600 | ) |
| | | | | | | | | |
| Net investment income from Master Portfolio | | | 269,352 | | | | 57,784 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Distribution fees — Advisor Class A | | | 28,794 | | | | 418 | |
| Distribution fees — Advisor Class C | | | 21,516 | | | | 892 | |
| Shareholder servicing fees — Advisor Class A | | | 28,794 | | | | 418 | |
| Shareholder servicing fees — Advisor Class C | | | 7,172 | | | | 297 | |
| Shareholder servicing fees — No Load Class | | | 18,216 | | | | 4,663 | |
| Shareholder servicing fees — Institutional Class | | | 8,643 | | | | 227 | |
| Transfer Agent fees and expenses | | | 31,734 | | | | 20,392 | |
| Reports to shareholders | | | 14,338 | | | | 158 | |
| Administration fees | | | 9,190 | | | | 2,192 | |
| Professional fees | | | 10,794 | | | | 9,460 | |
| Directors’ and Officers’ fees and expenses | | | 1,816 | | | | 100 | |
| Registration fees | | | 47,795 | | | | 46,603 | |
| Fund accounting fees | | | 1,299 | | | | 119 | |
| Other expenses | | | 1,175 | | | | 40 | |
| | | | | | | | | |
| Total expenses | | | 231,276 | | | | 85,979 | |
| | | | | | | | | |
| Less, expense waiver for Institutional Class service fees | | | (6,482 | ) | | | (170 | ) |
| Less, expense reimbursement | | | (137,029 | ) | | | (104,577 | ) |
| | | | | | | | | |
| Net expenses | | | 87,765 | | | | (18,768 | ) |
| | | | | | | | | |
| Net investment income | | | 181,587 | | | | 76,552 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | |
| Investments and foreign currency | | | (2,178,542 | ) | | | 3,717 | |
| Written option contracts expired or closed | | | (296,275 | ) | | | 98,444 | |
| Net change in unrealized appreciation (depreciation) of: | | | | | | | | |
| Investments and foreign currency | | | (357,260 | ) | | | 35,546 | |
| Written option contracts | | | 1,163,441 | | | | 115,719 | |
| | | | | | | | | |
| Net gain (loss) on investments | | | (1,668,636 | ) | | | 253,426 | |
| | | | | | | | | |
| Net increase (decrease) in net assets resulting from operations | | $ | (1,487,049 | ) | | $ | 329,978 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 31,416 | | | $ | — | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
45
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | |
| | | The Tactical
| |
| | | Paradigm
| |
| | | Fund | |
| | |
| |
INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIO: | | | | |
| Dividends† | | $ | 26,366 | |
| Interest | | | 1,784 | |
| Income from securities lending | | | 1,717 | |
| Expenses allocated from Master Portfolio | | | (17,220 | ) |
| | | | | |
| Net investment income from Master Portfolio | | | 12,647 | |
| | | | | |
EXPENSES: | | | | |
| Distribution fees — Advisor Class A | | | 1,165 | |
| Distribution fees — Advisor Class C | | | 6,176 | |
| Shareholder servicing fees — Advisor Class A | | | 1,165 | |
| Shareholder servicing fees — Advisor Class C | | | 2,058 | |
| Shareholder servicing fees — No Load Class | | | 235 | |
| Shareholder servicing fees — Institutional Class | | | 42 | |
Sub-Advisory fees | | | 9,119 | |
| Custodian fees and expenses | | | 3,276 | |
| Transfer Agent fees and expenses | | | 20,301 | |
| Reports to shareholders | | | 148 | |
| Administration fees | | | 2,412 | |
| Professional fees | | | 10,011 | |
| Directors’ and Officers’ fees and expenses | | | 90 | |
| Registration fees | | | 7,473 | |
| Fund accounting fees | | | 25,671 | |
| Interest expense | | | 54 | |
| | | | | |
| Total expenses | | | 89,396 | |
| Less, expense waiver for Institutional Class service fees | | | (32 | ) |
| Less, expense reimbursement | | | (67,156 | ) |
| | | | | |
| Net expenses | | | 22,208 | |
| | | | | |
| Net investment loss | | | (9,561 | ) |
| | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | | | | |
| Net realized gain (loss) on: | | | | |
| Investments and foreign currency allocated from Master Portfolio | | | (260,660 | ) |
| Written option contracts expired or closed | | | 30,716 | |
| Futures contracts | | | (97,336 | ) |
| Net change in unrealized appreciation (depreciation) of: | | | | |
| Investments and foreign currency allocated from Master Portfolio | | | 404,653 | |
| Futures contracts | | | (12,387 | ) |
| | | | | |
| Net gain on investments | | | 64,986 | |
| | | | | |
| Net increase in net assets resulting from operations | | $ | 55,425 | |
| | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 1,299 | |
| | | | | |
The accompanying notes are an integral part of these financial statements.
46
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Internet Fund | | | The Global Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | (913,022 | ) | | $ | (492,158 | ) | | $ | 24,135 | | | $ | 21,456 | |
| Net realized gain (loss) on sale of investments and foreign currency | | | 3,608,256 | | | | 3,597,660 | | | | 621,170 | | | | (418,155 | ) |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 18,103,348 | | | | 32,089,184 | | | | 246,651 | | | | 1,899,110 | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from operations | | | 20,798,582 | | | | 35,194,686 | | | | 891,956 | | | | 1,502,411 | |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (127,292 | ) | | | (43,877 | ) | | | (19,692 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | — | | | | (127,292 | ) | | | (43,877 | ) | | | (19,692 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (930 | ) | | | (5,645 | ) | | | (1,275 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | — | | | | (930 | ) | | | (5,645 | ) | | | (1,275 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (145 | ) | | | (303 | ) | | | (22 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | — | | | | (145 | ) | | | (303 | ) | | | (22 | ) |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 3,021,151 | | | | 4,869,857 | | | | 1,128,676 | | | | 2,868,282 | |
| Redemption fees | | | 170 | | | | 1,370 | | | | 102 | | | | 6,702 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | — | | | | 123,697 | | | | 43,193 | | | | 19,427 | |
| Cost of shares redeemed | | | (15,163,154 | ) | | | (10,313,179 | ) | | | (1,733,680 | ) | | | (1,808,229 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | (12,141,833 | ) | | | (5,318,255 | ) | | | (561,709 | ) | | | 1,086,182 | |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 1,362,470 | | | | 489,536 | | | | 289,022 | | | | 312,466 | |
| Redemption fees | | | 16 | | | | 201 | | | | 14 | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | — | | | | 825 | | | | 1,741 | | | | 417 | |
| Cost of shares redeemed | | | (412,504 | ) | | | (225,140 | ) | | | (50,310 | ) | | | (101,796 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 949,982 | | | | 265,422 | | | | 240,467 | | | | 211,087 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
47
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Internet Fund | | | The Global Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 43,167 | | | | 302 | | | | 24,258 | | | | 21,000 | |
| Redemption fees | | | — | | | | — | | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | — | | | | 43 | | | | 303 | | | | 22 | |
| Cost of shares redeemed | | | — | | | | (33,452 | ) | | | (6,489 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | 43,167 | | | | (33,107 | ) | | | 18,072 | | | | 21,022 | |
| | | | | | | | | | | | | | | | | |
TOTAL INCREASE IN NET ASSETS: | | | 9,649,898 | | | | 29,980,379 | | | | 538,961 | | | | 2,799,713 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 105,523,892 | | | | 75,543,513 | | | | 4,773,549 | | | | 1,973,836 | |
| | | | | | | | | | | | | | | | | |
| End of year* | | $ | 115,173,790 | | | $ | 105,523,892 | | | $ | 5,312,510 | | | $ | 4,773,549 | |
| | | | | | | | | | | | | | | | | |
| *Including undistributed net investment | | | | | | | | | �� | | | | | | | |
| income (loss) of: | | $ | 54,100 | | | $ | (912,146 | ) | | $ | (23,401 | ) | | $ | (8,321 | ) |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 92,334 | | | | 175,734 | | | | 281,577 | | | | 878,509 | |
| Shares issued in reinvestments of dividends and distributions | | | — | | | | 4,000 | | | | 9,289 | | | | 4,994 | |
| Shares redeemed | | | (461,380 | ) | | | (401,239 | ) | | | (433,433 | ) | | | (557,975 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | (369,046 | ) | | | (221,505 | ) | | | (142,567 | ) | | | 325,528 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Shares sold | | | 39,616 | | | | 17,431 | | | | 69,249 | | | | 84,996 | |
| Shares issued in reinvestments of dividends and distributions | | | — | | | | 27 | | | | 373 | | | | 107 | |
| Shares redeemed | | | (12,363 | ) | | | (8,671 | ) | | | (12,056 | ) | | | (36,346 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase in shares outstanding | | | 27,253 | | | | 8,787 | | | | 57,566 | | | | 48,757 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Shares sold | | | 1,472 | | | | 12 | | | | 6,225 | | | | 6,943 | |
| Shares issued in reinvestments of dividends and distributions | | | — | | | | 2 | | | | 65 | | | | 6 | |
| Shares redeemed | | | — | | | | (1,599 | ) | | | (1,651 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | 1,472 | | | | (1,585 | ) | | | 4,639 | | | | 6,949 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
48
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Paradigm Fund | | | The Medical Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 5,338,769 | | | $ | 9,664,271 | | | $ | 155,037 | | | $ | 234,571 | |
| Net realized loss on sale of investments, foreign currency | | | (106,442,949 | ) | | | (281,292,053 | ) | | | (220,195 | ) | | | (152,213 | ) |
| Net change in unrealized appreciation of investments and foreign currency | | | 278,030,932 | | | | 685,169,758 | | | | 1,376,200 | | | | 4,225,736 | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from operations | | | 176,926,752 | | | | 413,541,976 | | | | 1,311,042 | | | | 4,308,094 | |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | (10,863,592 | ) | | | (6,864,283 | ) | | | (141,862 | ) | | | (175,656 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | (22,795 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (10,863,592 | ) | | | (6,864,283 | ) | | | (141,862 | ) | | | (198,451 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Net investment income | | | (3,108,298 | ) | | | (741,228 | ) | | | (12,747 | ) | | | (28,347 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | (4,778 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (3,108,298 | ) | | | (741,228 | ) | | | (12,747 | ) | | | (33,125 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Net investment income | | | (1,760,303 | ) | | | — | | | | (688 | ) | | | (618 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | (507 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (1,760,303 | ) | | | — | | | | (688 | ) | | | (1,125 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | (2,558,528 | ) | | | (1,674,477 | ) | | | N/A | | | | N/A | |
| Net realized gains | | | — | | | | — | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (2,558,528 | ) | | | (1,674,477 | ) | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 102,887,659 | | | | 228,538,793 | | | | 10,282,693 | | | | 8,877,756 | |
| Redemption Fees | | | 13,160 | | | | 96,505 | | | | 132 | | | | 5,196 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 10,197,239 | | | | 6,669,240 | | | | 140,271 | | | | 196,171 | |
| Cost of shares redeemed | | | (340,164,186 | ) | | | (392,483,046 | ) | | | (6,758,118 | ) | | | (6,974,443 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | (227,066,128 | ) | | | (157,178,508 | ) | | | 3,664,978 | | | | 2,104,680 | |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 26,261,163 | | | | 52,590,755 | | | | 1,196,355 | | | | 2,336,497 | |
| Redemption Fees | | | 4,893 | | | | — | | | | 177 | | | | 1,395 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 2,635,918 | | | | 642,068 | | | | 7,167 | | | | 18,350 | |
| Cost of shares redeemed | | | (85,179,916 | ) | | | (123,719,278 | ) | | | (1,492,863 | ) | | | (1,638,705 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | (56,277,942 | ) | | | (70,486,455 | ) | | | (289,164 | ) | | | 717,537 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
49
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Paradigm Fund | | | The Medical Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 8,298,564 | | | | 15,759,105 | | | | 356,622 | | | | 354,523 | |
| Redemption Fees | | | 712 | | | | 532 | | | | — | | | | 4 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 1,536,819 | | | | — | | | | 441 | | | | 689 | |
| Cost of shares redeemed | | | (47,196,534 | ) | | | (44,568,229 | ) | | | (139,626 | ) | | | (307,788 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | (37,360,439 | ) | | | (28,808,592 | ) | | | 217,437 | | | | 47,428 | |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS : | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 49,106,216 | | | | 52,022,093 | | | | N/A | | | | N/A | |
| Redemption Fees | | | 541 | | | | 2,858 | | | | N/A | | | | N/A | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 2,167,870 | | | | 1,564,877 | | | | N/A | | | | N/A | |
| Cost of shares redeemed | | | (53,388,379 | ) | | | (95,494,884 | ) | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
| Net decrease in net assets resulting from capital share transactions | | | (2,113,752 | ) | | | (41,905,056 | ) | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS: | | | (164,182,230 | ) | | | 105,883,377 | | | | 4,748,996 | | | | 6,945,038 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 1,372,333,885 | | | | 1,266,450,508 | | | | 25,926,982 | | | | 18,981,944 | |
| | | | | | | | | | | | | | | | | |
| End of year* | | $ | 1,208,151,655 | | | $ | 1,372,333,885 | | | $ | 30,675,978 | | | $ | 25,926,982 | |
| | | | | | | | | | | | | | | | | |
| *Including undistributed net investment | | | | | | | | | | | | | | | | |
| income (loss) of: | | $ | (9,775,040 | ) | | $ | 2,487,370 | | | $ | 28,164 | | | $ | 29,613 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 4,985,324 | | | | 13,500,735 | | | | 545,733 | | | | 503,291 | |
| Shares issued in reinvestments of dividends and distributions | | | 439,158 | | | | 331,473 | | | | 7,182 | | | | 10,374 | |
| Shares redeemed | | | (16,845,311 | ) | | | (24,319,939 | ) | | | (355,336 | ) | | | (421,096 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | (11,420,829 | ) | | | (10,487,731 | ) | | | 197,579 | | | | 92,569 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Shares sold | | | 1,278,667 | | | | 3,318,616 | | | | 64,338 | | | | 140,646 | |
| Shares issued in reinvestments of dividends and distributions | | | 115,297 | | | | 32,395 | | | | 375 | | | | 993 | |
| Shares redeemed | | | (4,218,313 | ) | | | (8,280,037 | ) | | | (80,705 | ) | | | (102,207 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | (2,824,349 | ) | | | (4,929,026 | ) | | | (15,992 | ) | | | 39,432 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
50
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Paradigm Fund | | | The Medical Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Shares sold | | | 417,554 | | | | 1,011,821 | | | | 19,193 | | | | 22,768 | |
| Shares issued in reinvestments of dividends and distributions | | | 69,320 | | | | — | | | | 23 | | | | 37 | |
| Shares redeemed | | | (2,404,604 | ) | | | (2,955,060 | ) | | | (7,443 | ) | | | (19,133 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | (1,917,730 | ) | | | (1,943,239 | ) | | | 11,773 | | | | 3,672 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 2,381,963 | | | | 3,148,491 | | | | N/A | | | | N/A | |
| Shares issued in reinvestments of dividends and distributions | | | 93,604 | | | | 77,932 | | | | N/A | | | | N/A | |
| Shares redeemed | | | (2,583,750 | ) | | | (5,875,213 | ) | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
| Net decrease in shares outstanding | | | (108,183 | ) | | | (2,648,790 | ) | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
51
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Fund | | | The Market Opportunities Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | (359,966 | ) | | $ | (509,988 | ) | | $ | 121,463 | | | $ | (62,027 | ) |
| Net realized loss on sale of investments and foreign currency | | | (588,589 | ) | | | (45,656,563 | ) | | | (336,643 | ) | | | (7,399,154 | ) |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 20,471,453 | | | | 143,852,458 | | | | 6,167,781 | | | | 30,077,593 | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from operations | | | 19,522,898 | | | | 97,685,907 | | | | 5,952,601 | | | | 22,616,412 | |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | (2,187,430 | ) | | | — | | | | (1,939,475 | ) | | | (20,768 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (2,187,430 | ) | | | — | | | | (1,939,457 | ) | | | (20,768 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Net investment income | | | (165,531 | ) | | | — | | | | (677,980 | ) | | | (9,381 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (165,531 | ) | | | — | | | | (677,980 | ) | | | (9,381 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Net investment income | | | (35,675 | ) | | | — | | | | (243,526 | ) | | | (2,890 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (35,675 | ) | | | — | | | | (243,526 | ) | | | (2,890 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | (163,727 | ) | | | — | | | | (11,629 | ) | | | (10 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (163,727 | ) | | | — | | | | (11,629 | ) | | | (10 | ) |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 14,985,968 | | | | 36,310,875 | | | | 2,555,924 | | | | 7,876,163 | |
| Redemption fees | | | 3,294 | | | | 8,109 | | | | 309 | | | | 47,139 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 2,097,736 | | | | — | | | | 1,892,329 | | | | 20,440 | |
| Cost of shares redeemed | | | (62,304,199 | ) | | | (64,086,132 | ) | | | (9,242,637 | ) | | | (14,496,784 | ) |
| | | | | | | | | | | | | | | | | |
| Net decrease in net assets resulting from capital share transactions | | | (45,217,201 | ) | | | (27,767,148 | ) | | | (4,794,075 | ) | | | (6,553,042 | ) |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 2,116,520 | | | | 4,027,254 | | | | 2,148,005 | | | | 3,438,842 | |
| Redemption fees | | | 717 | | | | 472 | | | | 4,256 | | | | 8,744 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 132,990 | | | | — | | | | 533,060 | | | | 7,753 | |
| Cost of shares redeemed | | | (6,197,572 | ) | | | (7,399,034 | ) | | | (7,979,700 | ) | | | (10,299,115 | ) |
| | | | | | | | | | | | | | | | | |
| Net decrease in net assets resulting from capital share transactions | | | (3,947,345 | ) | | | (3,371,308 | ) | | | (5,294,379 | ) | | | (6,843,776 | ) |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
52
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Fund | | | The Market Opportunities Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 411,674 | | | | 1,109,508 | | | | 594,179 | | | | 1,574,137 | |
| Redemption fees | | | — | | | | 101 | | | | 2,058 | | | | 7 | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 21,022 | | | | — | | | | 208,569 | | | | 2,366 | |
| Cost of shares redeemed | | | (1,792,550 | ) | | | (1,004,506 | ) | | | (1,567,544 | ) | | | (2,210,676 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | (1,359,854 | ) | | | 105,103 | | | | (762,738 | ) | | | (634,166 | ) |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 1,069,997 | | | | 9,645,168 | | | | 193,362 | | | | 10,807 | |
| Redemption fees | | | 14 | | | | 269 | | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 111,423 | | | | — | | | | 603 | | | | 10 | |
| Cost of shares redeemed | | | (12,224,759 | ) | | | (86,994,949 | ) | | | (11,602 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | (11,043,325 | ) | | | (77,349,512 | ) | | | 182,363 | | | | 10,817 | |
| | | | | | | | | | | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS: | | | (44,597,190 | ) | | | (10,696,958 | ) | | | (7,588,838 | ) | | | 8,563,196 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 199,643,252 | | | | 210,340,210 | | | | 66,099,568 | | | | 57,536,372 | |
| | | | | | | | | | | | | | | | | |
| End of year* | | $ | 155,046,062 | | | $ | 199,643,252 | | | $ | 58,510,730 | | | $ | 66,099,568 | |
| | | | | | | | | | | | | | | | | |
| *Including undistributed net investment | | | | | | | | | | | | | | | | |
| income (loss) of: | | $ | (1,089,215 | ) | | $ | 870,062 | | | $ | (2,114,296 | ) | | $ | 57,267 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 663,539 | | | | 2,125,038 | | | | 234,324 | | | | 840,758 | |
| Shares issued in reinvestments of dividends and distributions | | | 90,071 | | | | — | | | | 165,414 | | | | 1,569 | |
| Shares redeemed | | | (2,905,365 | ) | | | (4,028,266 | ) | | | (841,037 | ) | | | (1,774,870 | ) |
| | | | | | | | | | | | | | | | | |
| Net decrease in shares outstanding | | | (2,151,755 | ) | | | (1,903,228 | ) | | | (441,299 | ) | | | (932,543 | ) |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Shares sold | | | 103,386 | | | | 229,236 | | | | 192,473 | | | | 407,710 | |
| Shares issued in reinvestments of dividends and distributions | | | 5,792 | | | | — | | | | 46,719 | | | | 657 | |
| Shares redeemed | | | (302,155 | ) | | | (464,677 | ) | | | (736,967 | ) | | | (1,235,063 | ) |
| | | | | | | | | | | | | | | | | |
| Net decrease in shares outstanding | | | (192,977 | ) | | | (235,441 | ) | | | (497,775 | ) | | | (826,696 | ) |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Shares sold | | | 19,435 | | | | 60,451 | | | | 54,608 | | | | 177,257 | |
| Shares issued in reinvestments of dividends and distributions | | | 928 | | | | — | | | | 18,490 | | | | 211 | |
| Shares redeemed | | | (87,406 | ) | | | (63,523 | ) | | | (146,542 | ) | | | (276,951 | ) |
| | | | | | | | | | | | | | | | | |
| Net decrease in shares outstanding | | | (67,043 | ) | | | (3,072 | ) | | | (73,444 | ) | | | (99,483 | ) |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
53
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Fund | | | The Market Opportunities Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 49,716 | | | | 659,244 | | | | 17,668 | | | | 1,019 | |
| Shares issued in reinvestments of dividends and distributions | | | 4,757 | | | | — | | | | 53 | | | | 1 | |
| Shares redeemed | | | (580,939 | ) | | | (4,901,031 | ) | | | (1,020 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | (526,466 | ) | | | (4,241,787 | ) | | | 16,701 | | | | 1,020 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
54
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Fund | | | The Multi-Disciplinary Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 181,587 | | | $ | 46,129 | | | $ | 76,552 | | | $ | 7,052 | |
| Net realized gain (loss) on sale of investments, foreign currency and written option contracts expired or closed | | | (2,474,817 | ) | | | (1,419,347 | ) | | | 102,161 | | | | 99,097 | |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 806,181 | | | | 3,683,013 | | | | 151,265 | | | | 99,028 | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from operations | | | (1,487,049 | ) | | | 2,309,795 | | | | 329,978 | | | | 205,177 | |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | (60,253 | ) | | | (1,817 | ) | | | (75,832 | ) | | | (7,818 | ) |
| Net realized gains | | | — | | | | — | | | | (97,584 | ) | | | (14,757 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (60,253 | ) | | | (1,817 | ) | | | (173,416 | ) | | | (22,575 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Net investment income | | | (56,524 | ) | | | — | | | | (7,026 | ) | | | (559 | ) |
| Net realized gains | | | — | | | | — | | | | (9,873 | ) | | | (1,623 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (56,524 | ) | | | — | | | | (16,899 | ) | | | (2,182 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Net investment income | | | (3,967 | ) | | | — | | | | (3,169 | ) | | | (116 | ) |
| Net realized gains | | | — | | | | — | | | | (3,569 | ) | | | (1,672 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (3,967 | ) | | | — | | | | (6,738 | ) | | | (1,788 | ) |
| | | | | | | | | | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Net investment income | | | (44,989 | ) | | | (7,282 | ) | | | (4,248 | ) | | | (947 | ) |
| Net realized gains | | | — | | | | — | | | | (3,925 | ) | | | (1,587 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (44,989 | ) | | | (7,282 | ) | | | (8,173 | ) | | | (2,534 | ) |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 3,810,415 | | | | 3,525,885 | | | | 2,878,206 | | | | 695,920 | |
| Redemption fees | | | 101 | | | | 635 | | | | 51 | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 54,002 | | | | 1,579 | | | | 122,312 | | | | 20,528 | |
| Cost of shares redeemed | | | (3,555,293 | ) | | | (3,951,117 | ) | | | (554,675 | ) | | | (3,410 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | 309,225 | | | | (423,018 | ) | | | 2,445,894 | | | | 713,038 | |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 6,375,421 | | | | 7,953,554 | | | | 309,589 | | | | — | |
| Redemption fees | | | 1,662 | | | | 997 | | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 50,605 | | | | — | | | | 16,899 | | | | 2,182 | |
| Cost of shares redeemed | | | (5,936,700 | ) | | | (6,109,558 | ) | | | (79,254 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 490,988 | | | | 1,844,993 | | | | 247,234 | | | | 2,182 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
55
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Fund | | | The Multi-Disciplinary Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 1,279,796 | | | | 1,341,247 | | | | 15,000 | | | | 5,000 | |
| Redemption fees | | | — | | | | 101 | | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 2,625 | | | | — | | | | 6,667 | | | | 1,696 | |
| Cost of shares redeemed | | | (943,226 | ) | | | (542,169 | ) | | | (5,570 | ) | | | (7,169 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from capital share transactions | | | 339,195 | | | | 799,179 | | | | 16,097 | | | | (473 | ) |
| | | | | | | | | | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 3,936,264 | | | | 2,665,048 | | | | 26,000 | | | | — | |
| Redemption fees | | | 278 | | | | 500 | | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 1,972 | | | | 4,823 | | | | 8,173 | | | | 2,534 | |
| Cost of shares redeemed | | | (2,421,527 | ) | | | (153,009 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 1,516,987 | | | | 2,517,362 | | | | 34,173 | | | | 2,534 | |
| | | | | | | | | | | | | | | | | |
TOTAL INCREASE IN NET ASSETS: | | | 1,003,613 | | | | 7,039,212 | | | | 2,868,150 | | | | 893,379 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 23,120,349 | | | | 16,081,137 | | | | 1,247,490 | | | | 354,111 | |
| | | | | | | | | | | | | | | | | |
| End of year* | | $ | 24,123,962 | | | $ | 23,120,349 | | | $ | 4,115,640 | | | $ | 1,247,490 | |
| | | | | | | | | | | | | | | | | |
| *Including undistributed net investment | | | | | | | | | | | | | | | | |
| income (loss) of: | | $ | (33,240 | ) | | $ | 3,244 | | | $ | (12,853 | ) | | $ | 705 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 448,551 | | | | 439,147 | | | | 278,898 | | | | 81,319 | |
| Shares issued in reinvestments of dividends and distributions | | | 6,441 | | | | 177 | | | | 11,816 | | | | 2,082 | |
| Shares redeemed | | | (429,862 | ) | | | (495,881 | ) | | | (52,420 | ) | | | (380 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | 25,130 | | | | (56,557 | ) | | | 238,294 | | | | 83,021 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | | | | | | | | | | | | | | | | |
| Shares sold | | | 752,587 | | | | 992,317 | | | | 29,903 | | | | — | |
| Shares issued in reinvestments of dividends and distributions | | | 6,068 | | | | — | | | | 1,635 | | | | 222 | |
| Shares redeemed | | | (721,854 | ) | | | (828,509 | ) | | | (7,901 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase in shares outstanding | | | 36,801 | | | | 163,808 | | | | 23,637 | | | | 222 | |
| | | | | | | | | | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | | | | | | | | | | | | | | | | |
| Shares sold | | | 151,009 | | | | 169,781 | | | | 1,486 | | | | 538 | |
| Shares issued in reinvestments of dividends and distributions | | | 318 | | | | — | | | | 650 | | | | 173 | |
| Shares redeemed | | | (117,149 | ) | | | (68,264 | ) | | | (538 | ) | | | (829 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in shares outstanding | | | 34,178 | | | | 101,517 | | | | 1,598 | | | | (118 | ) |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
56
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Fund | | | The Multi-Disciplinary Fund | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | | | | | | | | | | | | | | | | |
| Shares sold | | | 470,451 | | | | 311,808 | | | | 2,512 | | | | — | |
| Shares issued in reinvestments of dividends and distributions | | | 234 | | | | 540 | | | | 790 | | | | 256 | |
| Shares redeemed | | | (300,650 | ) | | | (18,661 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Net increase in shares outstanding | | | 170,035 | | | | 293,687 | | | | 3,302 | | | | 256 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
57
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets
| | | | | | | | | |
| | | The Tactical Paradigm Fund | |
| | | For the
| | | December 31, 2009ˆ
| |
| | | Year Ended
| | | through
| |
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | |
| Net investment income (loss) | | $ | (9,561 | ) | | $ | — | |
| Net realized gain (loss) on sale of investments, futures contracts and written option contracts expired or closed | | | (327,280 | ) | | | — | |
| Net change in unrealized appreciation (depreciation) of investments and futures contracts | | | 392,266 | | | | — | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | | 55,425 | | | | — | |
| | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | | | | | | | | |
| Net investment income | | | (322 | ) | | | — | |
| | | | | | | | | |
| Total distributions | | | (322 | ) | | | — | |
| | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | | | | | | | | |
| Net investment income | | | (3,297 | ) | | | — | |
| | | | | | | | | |
| Total distributions | | | (3,297 | ) | | | — | |
| | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | | | | | | | | |
| Net investment income | | | (3,330 | ) | | | — | |
| | | | | | | | | |
| Total distributions | | | (3,330 | ) | | | — | |
| | | | | | | | | |
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS: | | | | | | | | |
| Net investment income | | | (220 | ) | | | — | |
| | | | | | | | | |
| Total distributions | | | (220 | ) | | | — | |
| | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | | | | | | | | |
| Proceeds from shares sold | | | 175,120 | | | | 20,000 | |
| Redemption fees | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 322 | | | | — | |
| Cost of shares redeemed | | | (140,689 | ) | | | — | |
| | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 34,753 | | | | 20,000 | |
| | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | | | | | | | | |
| Proceeds from shares sold | | | 524,174 | | | | 20,000 | |
| Redemption fees | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 3,297 | | | | — | |
| Cost of shares redeemed | | | (69,714 | ) | | | — | |
| | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 457,757 | | | | 20,000 | |
| | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | | | | | | | | |
| Proceeds from shares sold | | | 1,237,717 | | | | 20,000 | |
| Redemption fees | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 783 | | | | — | |
| Cost of shares redeemed | | | (262,309 | ) | | | — | |
| | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 976,191 | | | | 20,000 | |
| | | | | | | | | |
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | | | | | | | | |
| Proceeds from shares sold | | | — | | | | 20,000 | |
| Redemption fees | | | — | | | | — | |
| Proceeds from shares issued to holders in reinvestment of dividends | | | 220 | | | | — | |
| Cost of shares redeemed | | | — | | | | — | |
| | | | | | | | | |
| Net increase in net assets resulting from capital share transactions | | | 220 | | | | 20,000 | |
| | | | | | | | | |
TOTAL INCREASE IN NET ASSETS: | | | 1,517,177 | | | | 80,000 | |
NET ASSETS: | | | | | | | | |
| Beginning of period | | | 80,000 | | | | — | |
| | | | | | | | | |
| End of period* | | $ | 1,597,177 | | | $ | 80,000 | |
| | | | | | | | | |
| *Including undistributed net investment | | | | | | | | |
| loss of: | | $ | (10,975 | ) | | $ | — | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
58
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Statements of Changes in Net Assets — (Continued)
| | | | | | | | | |
| | | The Tactical Paradigm Fund | |
| | | For the
| | | December 31, 2009ˆ
| |
| | | Year Ended
| | | through
| |
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | |
| | |
| |
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | | | | | | | | |
| Shares sold | | | 17,694 | | | | 2,000 | |
| Shares issued in reinvestments of dividends and distributions | | | 31 | | | | — | |
| Shares redeemed | | | (14,875 | ) | | | — | |
| | | | | | | | | |
| Net increase in shares outstanding | | | 2,850 | | | | 2,000 | |
| | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | | | | | | | | |
| Shares sold | | | 53,568 | | | | 2,000 | |
| Shares issued in reinvestments of dividends and distributions | | | 323 | | | | — | |
| Shares redeemed | | | (6,848 | ) | | | — | |
| | | | | | | | | |
| Net increase in shares outstanding | | | 47,043 | | | | 2,000 | |
| | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | | | | | | | | |
| Shares sold | | | 124,174 | | | | 2,000 | |
| Shares issued in reinvestments of dividends and distributions | | | 77 | | | | — | |
| Shares redeemed | | | (26,041 | ) | | | — | |
| | | | | | | | | |
| Net increase in shares outstanding | | | 98,210 | | | | 2,000 | |
| | | | | | | | | |
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | | | | | | | | |
| Shares sold | | | — | | | | 2,000 | |
| Shares issued in reinvestments of dividends and distributions | | | 22 | | | | — | |
| Shares redeemed | | | — | | | | — | |
| | | | | | | | | |
| Net increase in shares outstanding | | | 22 | | | | 2,000 | |
| | | | | | | | | |
| |
| ˆ | Commencement of operations. |
The accompanying notes are an integral part of these financial statements.
59
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements
December 31, 2010
1. Organization
Kinetics Mutual Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and is incorporated in the State of Maryland. The Company is an open-end management investment company issuing its shares in series. One billion shares are authorized for the Company with a par value of $0.001 per share. The series of the Company presently authorized are The Internet Fund (“Internet”), The Global Fund (“Global”), The Paradigm Fund (“Paradigm”), The Medical Fund (“Medical”), The Small Cap Opportunities Fund (“Small Cap”), The Market Opportunities Fund (“Market Opportunities”), The Water Infrastructure Fund (“Water Infrastructure”), The Multi-Disciplinary Fund (“Multi-Disciplinary”) and The Tactical Paradigm Fund (“Tactical Paradigm”). Investment operations of the Company began on October 21, 1996 (Internet), September 30, 1999 (Medical), December 31, 1999 (Global and Paradigm), March 20, 2000 (Small Cap), January 31, 2006 (Market Opportunities), June 29, 2007 (Water Infrastructure), February 11, 2008 (Multi-Disciplinary) and December 31, 2009 (Tactical Paradigm) (each, a “Fund” and together, the “Funds”). Each series (excluding Tactical Paradigm), unlike many other investment companies which directly acquire and manage their own portfolios of securities, seeks to achieve its investment objective by investing all of its investable assets in a corresponding portfolio series (each a “Master Portfolio” and collectively the “Master Portfolios”) of Kinetics Portfolios Trust (the “Trust”). Tactical Paradigm seeks its investment objective by investing generally all of its investable assets in the Paradigm Portfolio while also being permitted to hedge market risk with futures, options and short sales of ETFs. Tactical Paradigm may also purchase or write options in combination with each other to adjust market risk and return of its overall investment positions. Broadmark Asset Management, LLC, serves as the sub-adviser for the hedged portion of Tactical Paradigm.
On April 28, 2000 (January 31, 2006 with respect to Market Opportunities, June 29, 2007 with respect to Water Infrastructure and February 11, 2008 with respect to Multi-Disciplinary), each series (excluding Tactical Paradigm) in the Company entered into a master-feeder fund structure. By entering into this structure, each series (each a “Feeder Fund” and collectively, the “Feeder Funds”) invested all of its assets in a corresponding Master Portfolio (excluding Tactical Paradigm) which had the same investment objective as the Feeder Fund. Tactical Paradigm seeks its investment objective by investing generally all of its investable assets in the Paradigm Portfolio while also being permitted to hedge market risk with futures, options and short sales of ETFs. Each Master Portfolio has multiple feeder funds. Each Feeder Fund receives a proportionate
60
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
amount of interest in the Master Portfolio equal to its relative contribution of capital. Thus, each Feeder Fund is allocated its portion of income, gains (losses) and expenses from the Master Portfolio.
Each Feeder Fund’s respective interest in the corresponding Master Portfolio, and Tactical Paradigm’s interest in the Paradigm Portfolio, as of December 31, 2010 is as follows:
| | | | | |
| | | Interest in
|
| | | Master Portfolio |
| |
| Internet Fund | | | 99.990% | |
| Global Fund | | | 99.887% | |
| Paradigm Fund | | | 96.901% | |
| Medical Fund | | | 99.949% | |
| Small Cap Fund | | | 99.983% | |
| Market Opportunities Fund | | | 99.982% | |
| Water Infrastructure Fund | | | 99.583% | |
| Multi-Disciplinary Fund | | | 97.380% | |
| Tactical Paradigm Fund | | | 00.123% | |
Prior to the conversion to a master-feeder fund structure on April 28, 2000, each then existing series conducted its own investment operations.
As of December 31, 2010, each of the Funds offers Advisor Class A shares. Advisor Class A shares are subject to an annual Rule 12b-1 fee of 0.25% of average daily net assets and a service fee of 0.25% of average daily net assets. The Advisor Class A shares are also subject to a front-end sales charge of 5.75%.
As of December 31, 2010, each of the Funds offers Advisor Class C shares. Advisor Class C shares are subject to an annual Rule 12b-1 fee of 0.75% of average daily net assets and a service fee of 0.25% of average daily net assets. Advisor Class C shares do not have a sales charge.
As of December 31, 2010, each of the Funds offers No Load Class shares. No Load Class shares are subject to a service fee of 0.25% of average daily net assets but do not have 12b-1 fees or a sales charge.
As of December 31, 2010, the Paradigm, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm Funds offer Institutional Class shares. Institutional Class shares are subject to a service fee of 0.20% of average daily net assets but do not have 12b-1 fees or a sales charge.
Each class of shares for each Fund has identical rights and privileges except with respect to the Rule 12b-1 fees paid by the Advisor Class A and Advisor Class C shares, the sales charge on the Advisor Class A shares, the service fees paid by the Advisor Class A, Advisor Class C, No Load Class and Institutional Class shares, voting rights on matters pertaining to a single class of shares and
61
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
the exchange privileges of each class of shares. Shares of each Fund will assess a 2.00% redemption fee (with exceptions) on shares redeemed or exchanged within 30 days of purchase. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class based on its relative net assets.
Refer to the Master Portfolio’s financial statements to obtain information about the investment objective of the corresponding Feeder Funds. Tactical Paradigm seeks to provide long-term growth of capital. The financial statements of the Master Portfolios, including the portfolios of investments, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.
2. Significant Accounting Policies
Security Valuation
Master Portfolio securities and securities held directly by Tactical Paradigm that are listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. All equity securities that are traded using the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) are valued using the NASDAQ Official Closing Price (“NOCP”). Foreign securities are valued by an independent pricing service. In the event market quotations are not readily available or if events occur that may materially affect the value of a particular security between the time trading ends on a particular security and the close of regular trading on the New York Stock Exchange (“NYSE”), “fair value” will be determined. Purchased non-exchange traded options, futures, unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the mean of the most recent bid and asked prices. Exchange traded options are valued at the last reported sale price on an exchange on which the option is traded. If no sales are reported on a particular day, the mean between the highest bid and the lowest asked quotations at the close of the exchanges will be used. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued at the mean between the closing bid and asked prices provided by an independent pricing service. If the closing bid and ask are not readily available, the independent pricing service may provide a price determined by a matrix pricing method, which will take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.
62
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
Instruments with remaining maturities of 60 days or less are valued at amortized cost, which approximates fair value. Other assets and securities for which no quotations are readily available (including restricted securities) are valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. At December 31, 2010, 0.00%, 0.00% and 0.00% of the net assets of the Internet Portfolio, Paradigm Portfolio and Medical Portfolio, respectively, were fair valued securities. The other Master Portfolios and Tactical Paradigm did not hold any fair valued securities at December 31, 2010.
Repurchase Agreements
Each Master Portfolio and Tactical Paradigm may enter into repurchase agreements with banks that are members of the Federal Reserve System or securities dealers who are members of a national securities exchange or are primary dealers in U.S. Government Securities. In connection with transactions in repurchase agreements, it is the Trust and the Company’s policy that the Master Portfolio and Tactical Paradigm receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 100% of the amount invested by the Master Portfolio or Tactical Paradigm in each repurchase agreement. If the seller defaults and the value of the collateral declines, realization of the collateral by the Master Portfolio or Tactical Paradigm may be delayed or limited.
Written Option Accounting
The Master Portfolios and Tactical Paradigm may write (sell) call or put options for trading or hedging purposes. When the Master Portfolio or Tactical Paradigm writes an option, an amount equal to the premium received by the Master Portfolio or Tactical Paradigm is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. By writing the option, the Master Portfolio or Tactical Paradigm may become obligated during the term of the option to deliver or purchase the securities underlying the option at the exercise price if the option is exercised. When an option expires on its stipulated expiration date or the Master Portfolio or Tactical Paradigm enters into a closing purchase transaction, the Master Portfolio or Tactical Paradigm realizes a gain or loss if the cost of the closing transaction differs from the premium received when the option was sold, without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the underlying security (or increases the proceeds on the security sold short) and the Master Portfolio or Tactical Paradigm realizes a gain or loss from the sale of the security
63
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
(or closing of the short sale). As collateral for uncovered written options, the Master Portfolio and Tactical Paradigm are required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the exercise price of the purchase obligation for put options or the market value of the instrument underlying the contract for call options.
Futures Contracts
Each Master Portfolio and Tactical Paradigm may buy and sell stock index futures contracts traded on domestic stock exchanges to hedge the value of its portfolio against changes in market conditions. A stock index futures contract is an agreement between two parties to take or make delivery of an amount of cash equal to a specified dollar amount, times the difference between the stock index value at the close of the last trading day of the contract and the price at which the futures contract is originally struck. At the time a Master Portfolio or Tactical Paradigm purchases or sells a stock index futures contract, it must make a good faith deposit known as the “initial margin”. Thereafter, a the Master Portfolio or Tactical Paradigm may need to make subsequent deposits, known as “variation margin”, to reflect changes in the level of the stock index which are recorded for financial statement purposes as unrealized gains or losses.
Foreign Currency Translations
The books and records of the Master Portfolios and Tactical Paradigm are maintained in U.S. dollars. For the Master Portfolios and Tactical Paradigm, foreign currency transactions are translated into U.S. dollars on the following basis: (i) market values of investment securities and other assets and liabilities are translated at the exchange rate of such currencies against the U.S. dollar, as provided by an approved pricing service, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Master Portfolios and Tactical Paradigm do not isolate and treat as ordinary income that portion of the results of operations arising as a result of changes in the exchange rate from the fluctuations arising from changes in the market prices of securities held during the period. However, for federal income tax purposes, the Master Portfolios and Tactical Paradigm do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.
64
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
Restricted and Illiquid Securities
The Master Portfolios and Tactical Paradigm may invest in restricted securities. These securities are valued by the Master Portfolios and Tactical Paradigm after giving due consideration to pertinent factors including recent private sales, market conditions and the issuer’s financial performance. The Master Portfolios and Tactical Paradigm have no right to require registration of unregistered securities. At December 31, 2010 the following Master Portfolio held securities restricted to institutional investors (144A Securities):
| | | | | | | | | |
| | | | | Percentage of
|
Restricted Securities | | Market Value | | Net Assets |
| |
| The Multi-Disciplinary Portfolio | | $ | 106,750 | | | | 2.54 | % |
None of the other Master Portfolios or Tactical Paradigm held restricted Securities at December 31, 2010.
An illiquid asset is any asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Master Portfolio has valued the investment. At December 31, 2010, the following Master Portfolios held illiquid securities:
| | | | | | | | | |
| | | Market
| | Percentage of
|
| | | Value | | Net Assets |
| |
| The Internet Portfolio | | $ | 502 | | | | 0.00 | % |
| The Paradigm Portfolio | | | 0 | | | | 0.00 | |
| The Medical Portfolio | | | 0 | | | | 0.00 | |
When-Issued Securities
The Master Portfolios and Tactical Paradigm may purchase securities on a when-issued or delayed delivery basis. Although the purchase amounts of these securities are established at the time the purchaser enters into the agreement, these securities may be delivered and paid for at a future date. The Master Portfolios and Tactical Paradigm record purchases of when-issued securities and reflect the values of such securities in determining net asset value in the same manner as other portfolio securities. The Master Portfolios and Tactical Paradigm maintain at all times cash or other liquid assets in an amount at least equal to the amount of outstanding commitments for when-issued securities.
Securities Lending
Each Master Portfolio may lend its portfolio securities to broker-dealers by entering directly into lending arrangements with such broker-dealers or indirectly through repurchase agreements with respect to no more than 331/3% of the total assets of each Portfolio (including any collateral posted) or 50% of the total assets of each Portfolio (excluding any collateral posted). Securities
65
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
lending and repurchase transactions will be fully collateralized at all times with cash and/or short-term debt obligations. The Master Portfolios receive interest on the collateral received as well as a fee for the securities loaned.
Expense Allocation
Common expenses incurred by the Funds are allocated among the Funds (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Funds, depending on the nature of the expenditure.
Each Feeder Fund records its proportionate share of the corresponding Master Portfolio’s expenses on a daily basis. Tactical Paradigm also records its proportionate share of the Paradigm Portfolio’s expenses on a daily basis. In addition, each Fund accrues its own separate expenses. Any cap on expenses includes Fund-specific expenses as well as the expenses allocated from a Master Portfolio.
Federal Income Taxes
Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in the Portfolio will be subject to taxation on its share of the Portfolio’s ordinary income and capital gains. It is intended that the Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of subchapter M of the Internal Revenue Code.
It is the Funds’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and the Funds intend to distribute investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded. Dividends from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. The character of distributions made during the year from net investment income or net realized gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expenses and gain items for financial statement and tax purposes. Additionally, the Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes. Where appropriate, reclassifications between capital accounts are made for such differences that are permanent in nature.
There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. As of December 31, 2010, open tax years include the tax years ended December 31, 2007 through 2010. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
66
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
Other
Realized gains and losses on the sale of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recognized on the accrual basis. Other noncash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.
3. Investment Adviser
The Company has entered into an investment advisory agreement (the “Advisory Agreement”) with Kinetics Asset Management, Inc. (the “Adviser”), with whom certain officers and directors of the Company are affiliated, to furnish advisory services to Tactical Paradigm. The Trust has entered into Investment Advisory Agreements (the “Agreements”) with the Adviser, with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. For its advisory services, the Adviser is entitled to receive 0.65% of Tactical Paradigm’s average daily net assets and 1.25% of each Master Portfolio’s average daily net assets.
The former sub-adviser to the Water Infrastructure Portfolio, Brennan Investment Partners, LLC, received its compensation from the Adviser at the annual rate of 0.35% of the average daily net assets of the Water Infrastructure Portfolio. On July 16, 2010, Brennan Investment Partners, LLC ceased serving as sub-adviser for Water Infrastructure. The sub-adviser to Tactical Paradigm, Broadmark Asset Management, LLC (the “Sub-Adviser”), receives compensation from the Adviser at the annual rate of 0.65% of the average daily net assets of Tactical Paradigm pursuant to a sub-advisory agreement (the “Sub-Advisory Agreement”) with the Adviser.
For the year ended December 31, 2010, the Tactical Paradigm Fund incurred expenses of $9,119 pursuant to the Advisory Agreement.
The Adviser has voluntarily agreed to waive a portion of its advisory fee and/or reimburse certain operating expenses as deemed appropriate. The Adviser may discontinue the voluntary waiver/reimbursement at any time; these waivers/reimbursements are not subject to recapture.
67
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
For the year ended December 31, 2010, the rate earned by the Adviser from the Master Portfolios and from Tactical Paradigm and the waived fees/reimbursed expenses for the Funds are as follows:
| | | | | | | | | |
| | | Internet | | Global |
| |
| Annual Advisory Rate | | | 1.25% | | | | 1.25% | |
| Expenses Reimbursed by Adviser through voluntary waiver | | $ | 64,197 | | | $ | 137,533 | |
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | | $ | — | | | $ | — | |
| | | | | | | | | |
| | | | | | | | | |
| | | Paradigm | | Medical |
| |
| Annual Advisory Rate | | | 1.25% | | | | 1.25% | |
| Expenses Reimbursed by Adviser through voluntary waiver | | $ | 1,524,125 | | | $ | 189,372 | |
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | | $ | 192,989 | | | $ | — | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | Market
|
| | | Small Cap | | Opportunities |
| |
| Annual Advisory Rate | | | 1.25% | | | | 1.25% | |
| Expenses Reimbursed by Adviser through voluntary waiver | | $ | 356,797 | | | $ | 167,828 | |
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | | $ | 19,761 | | | $ | 129 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | Multi-
|
| | | Water Infrastructure | | Disciplinary |
| |
| Annual Advisory Rate | | | 1.25% | | | | 1.25% | |
| Expenses Reimbursed by Adviser through voluntary waiver | | $ | 137,029 | | | $ | 104,577 | |
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | | $ | 6,482 | | | $ | 170 | |
| | | | | | | | | |
| | | | | | | | | |
| | | Tactical
| | |
| | | Paradigm | | |
| |
| Annual Advisory Rate | | | 1.25% | | | | | |
Annual Sub-Advisory Rate | | | 0.65% | | | | | |
| Expenses Reimbursed by Adviser through voluntary waiver | | $ | 67,156 | | | | | |
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | | $ | 32 | | | | | |
The Adviser receives a shareholder servicing fee from the No Load Class, Class A and Class C shares of each Fund pursuant to a Shareholder Servicing Agreement in the amount equal to 0.25% of the Fund’s average daily net assets attributable to No Load Class, Class A and Class C shares, respectively.
68
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
For the Institutional Class, the Adviser receives a shareholder servicing fee pursuant to a shareholder servicing agreement in the amount equal to 0.20% of each Fund’s average daily net assets attributable to Institutional Class shares. At this time, the Adviser has contractually agreed to waive and/or reimburse the portion of the Institutional Class shareholder servicing fee in excess of 0.05% of a Fund’s average daily net assets attributable to Institutional Class shares until at least May 1, 2011. For the year ended December 31, 2010, the Adviser waived amounts depicted in the above table in shareholder servicing fees for the Institutional Class of Paradigm, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm. The Adviser is responsible for paying a portion of these shareholder servicing fees to various agents that have a written shareholder servicing agreement with the Adviser and that perform shareholder servicing functions and maintenance of shareholder accounts on behalf of their clients who own shares of the Funds.
For the year ended December 31, 2010, the Funds were allocated $24,000 for the services of the Chief Compliance Officer employed by the Adviser.
The Company, on behalf of the Funds, has adopted two Retail Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the “12b-1 Plans”). One Plan is for Advisor Class A shares, while the other Plan is for Advisor Class C shares. Under the first Plan, Advisor Class A shares may pay up to an annual rate of 0.50% of the average daily net asset value of Advisor Class A shares to the Distributor or other qualified recipients under the Plan. During the year ended December 31, 2010, payments under the 12b-1 Plan for the Advisor Class A shares of Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water, Multi-Disciplinary and Tactical Paradigm were limited to 0.25% of the average daily net asset value of such shares of such Funds. During the year ended December 31, 2010, the Advisor Class A shares of Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm incurred expenses of $2,841, $1,204, $563,355, $10,946, $31,127, $39,161, $28,794, $418 and $1,165, respectively, pursuant to the 12b-1 Plan. Under the second Plan, Advisor Class C shares pay an annual rate of 0.75% of the average daily net asset value of such shares. During the year ended December 31, 2010, Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm Advisor Class C Shares incurred expenses of $1,093, $322, $1,153,688, $5,099, $28,274, $41,919, $21,516, $892 and $6,176, respectively, pursuant to the 12b-1 Plan.
69
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
Kinetics Funds Distributor, Inc. (the “Distributor”) acts as the Funds’ principal underwriter in a continuous public offering of the Funds’ shares. The Distributor is an affiliate of the Adviser. For the year ended December 31, 2010, the Distributor received $1,646, $800, $40,499, $2,003, $2,074, $3,329, $12,605, $215 and $0 from sales loads from Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm, respectively.
4. Reclassification of Capital Accounts
Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended December 31, 2010, each Fund recorded the following reclassifications to the accounts listed below:
| | | | | | | | | | | | | |
| | | INCREASE (DECREASE) |
| | | | | Accumulated
| | |
| | | | | Net
| | Accumulated
|
| | | | | Investment
| | Net Realized
|
| | | Paid-in-Capital | | Income (Loss) | | Gain (Loss) |
| |
| The Internet Fund | | $ | (138,451,652 | ) | | $ | 1,879,268 | | | $ | 136,572,384 | |
| The Global Fund | | | (2,025,608 | ) | | | 10,610 | | | | 2,014,998 | |
| The Paradigm Fund | | | (3,181 | ) | | | 689,542 | | | | (686,361 | ) |
| The Medical Fund | | | — | | | | (1,189 | ) | | | 1,189 | |
| The Small Cap Opportunities Fund | | | — | | | | 953,052 | | | | (953,052 | ) |
| The Market Opportunities Fund | | | (78,705 | ) | | | 579,584 | | | | (500,879 | ) |
| The Water Infrastructure Fund | | | (4,029 | ) | | | (52,338 | ) | | | 56,367 | |
| The Multi-Disciplinary Fund | | | (53 | ) | | | 165 | | | | (112 | ) |
| The Tactical Paradigm Fund | | | (6,464 | ) | | | 5,755 | | | | 709 | |
5. Income Taxes
At December 31, 2010 Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary, and Tactical Paradigm had $0, $30,374, $8,405,276, $28,164, $1,730,963, $0, $0, $4,312 and $0, respectively, of undistributed net investment income on a tax basis.
At December 31, 2010 none of the Funds had accumulated gains on a tax basis.
70
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
At December 31, 2010, the Funds had accumulated net realized capital loss carryforwards expiring in the following years:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fund | | 2018 | | 2017 | | 2016 | | 2015 | | 2014 | | 2013 | | 2011 |
| |
| Internet | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 16,077,777 | | | $ | 6,777,871 | | | $ | — | |
| Global | | | — | | | | 408,711 | | | | — | | | | — | | | | — | | | | 4,885 | | | | 887,154 | |
| Paradigm | | | 115,811,157 | | | | 445,505,345 | | | | 417,659,386 | | | | — | | | | — | | | | — | | | | — | |
| Medical | | | 406,228 | | | | 116,113 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Small Cap | | | 8,371,154 | | | | 96,486,615 | | | | 78,193,634 | | | | — | | | | — | | | | — | | | | — | |
| Market Opportunities | | | 2,108,533 | | | | 6,623,055 | | | | 25,221,869 | | | | 40,803 | | | | 21 | | | | — | | | | — | |
| Water Infrastructure | | | 2,203,647 | | | | 4,868,599 | | | | 2,008,692 | | | | — | | | | — | | | | — | | | | — | |
| Multi-Disciplinary | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Tactical Paradigm | | | 317,091 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
To the extent that the Funds realize future net capital gains, those gains will be offset by any unused capital loss carryforwards. For the year ended December 31, 2010, Internet and Global utilized $2,812,299 and $609,896, respectively, of capital loss carryforwards.
At December 31, 2010, the following Funds deferred, on a tax basis, post-October losses and straddle losses of:
| | | | | | | | | |
| | | | | Post-October
|
Fund | | Post-October Losses | | Currency Losses |
| |
| Internet | | $ | — | | | $ | 5,825 | |
| Global | | | — | | | | 2,005 | |
| Paradigm | | | — | | | | 40,806 | |
| Medical | | | — | | | | — | |
| Small Cap | | | — | | | | 810 | |
| Market Opportunities | | | 100,268 | | | | — | |
| Water Infrastructure | | | 262,091 | | | | 11,042 | |
| Multi-Disciplinary | | | 1,228 | | | | 169 | |
| Tactical Paradigm | | | 20,870 | | | | 60 | |
The tax components of dividends paid during the years ended December 31, 2010 and December 31, 2009, are:
| | | | | | | | | | | | | | | | | |
| | | Internet | | Global |
| | | Ordinary
| | Long-Term
| | Ordinary
| | Long-Term
|
| | | Income
| | Capital Gains
| | Income
| | Capital Gains
|
| | | Distribution | | Distribution | | Distribution | | Distribution |
| |
| 2010 | | $ | — | | | $ | — | | | $ | 49,825 | | | $ | — | |
| 2009 | | $ | 128,367 | | | $ | — | | | $ | 20,989 | | | $ | — | |
71
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | |
| | | Paradigm | | Medical |
| | | Ordinary
| | Long-Term
| | Ordinary
| | Long-Term
|
| | | Income
| | Capital Gains
| | Income
| | Capital Gains
|
| | | Distribution | | Distribution | | Distribution | | Distribution |
| |
| 2010 | | $ | 18,290,721 | | | $ | — | | | $ | 155,297 | | | $ | — | |
| 2009 | | $ | 9,279,988 | | | $ | — | | | $ | 232,701 | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| | | Small Cap | | Market Opportunities |
| | | Ordinary
| | Long-Term
| | Ordinary
| | Long-Term
|
| | | Income
| | Capital Gains
| | Income
| | Capital Gains
|
| | | Distribution | | Distribution | | Distribution | | Distribution |
| |
| 2010 | | $ | 2,552,363 | | | $ | — | | | $ | 2,872,610 | | | $ | — | |
| 2009 | | $ | — | | | $ | — | | | $ | 33,049 | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| | | Water Infrastructure | | Multi-Disciplinary |
| | | Ordinary
| | Long-Term
| | Ordinary
| | Long-Term
|
| | | Income
| | Capital Gains
| | Income
| | Capital Gains
|
| | | Distribution | | Distribution | | Distribution | | Distribution |
| |
| 2010 | | $ | 165,733 | | | $ | — | | | $ | 196,148 | | | $ | 9,078 | |
| 2009 | | $ | 9,099 | | | $ | — | | | $ | 29,079 | | | $ | — | |
| | | | | | | | | |
| | | Tactical Paradigm |
| | | Ordinary
| | Long-Term
|
| | | Income
| | Capital Gains
|
| | | Distribution | | Distribution |
| |
| 2010 | | $ | 7,169 | | | $ | — | |
| 2009 | | $ | — | | | $ | — | |
6. Securities Transactions for Tactical Paradigm
Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2010 were as follows:
| | | | | | | | | | | | | | | | | |
| | | Purchases | | Sales |
| | | U.S.
| | | | U.S.
| | |
| | | Government | | Other | | Government | | Other |
| |
| Tactical Paradigm | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
For the year ended December 31, 2010, Tactical Paradigm wrote the following options:
| | | | | | | | | |
| | | Number
| | Premium
|
| | | of Contracts | | Amount |
| |
Tactical Paradigm
| | | | | | | | |
| Outstanding at the Beginning of Year | | | — | | | $ | — | |
| Options Written | | | 464 | | | | 96,399 | |
| Options Closed | | | (464 | ) | | | (96,399 | ) |
| | | | | | | | | |
| Outstanding at December 31, 2010 | | | — | | | $ | — | |
| | | | | | | | | |
72
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
7. Summary of Fair Value Exposure of Tactical Paradigm
Various inputs are used in determining the value of Tactical Paradigm’s investments. These inputs are summarized in the three broad levels listed below:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
Level 2 — Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Company’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Tactical Paradigm
The following is a summary of the inputs used to value the Tactical Paradigm net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Other Investments | | $ | 1,531,791 | | | $ | — | | | $ | — | | | $ | 1,531,791 | |
| Total Investments in Securities | | | 1,531,791 | | | | — | | | | — | | | | 1,531,791 | |
| Short Futures Contracts* | | $ | (12,387 | ) | | $ | — | | | $ | — | | | $ | (12,387 | ) |
| |
| * | Short futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
73
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
8. Disclosures about Derivative Instruments and Hedging Activities of Tactical Paradigm
Tactical Paradigm has adopted enhanced disclosure regarding derivatives and hedging activity intended to improve financial reporting of derivative instruments by enabling investors to understand how and why Tactical Paradigm uses derivatives, how derivatives are accounted for, and how derivative instruments affect Tactical Paradigm’s results of operations and financial position.
The Sub-Adviser will attempt to reduce market risk through its use of hedging activities, including use of derivatives. When equity market risk is perceived to be high, and opportunity low, net exposure will be reduced by selling futures, option combos or short-selling ETFs against the value of Tactical Paradigm’s investment in the Paradigm Portfolio. Conversely, when perceived risks are low and opportunities high, Tactical Paradigm will have a low to zero exposure to hedging vehicles.
Tactical Paradigm
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Assets | | Liabilities |
Equity Contracts | | Description | | Fair Value | | Description | | Fair Value |
| |
| Futures Contractsˆ | | | Due from broker-
variation margin(a | ) | | $ | 825 | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| | | | | | | $ | 825 | | | | | | | $ | — | |
| | | | | | | | | | | | | | | | | |
ˆ Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.
| |
| (a) | Represents variation margin on the last day of the reporting period. |
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010:
Amount of Realized Gain (Loss) on Derivatives
| | | | | |
Equity Contracts | | | |
| |
| Futures Contracts | | $ | (97,336 | ) |
| Purchased Options | | | (37,789 | ) |
| Written Options | | | 30,716 | |
| | | | | |
| Total | | $ | (104,409 | ) |
| | | | | |
74
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
Change in Unrealized Appreciation (Depreciation) on Derivatives
| | | | | |
Equity Contracts | | |
| |
| Futures Contracts | | $ | (12,387 | ) |
| | | | | |
| Total | | $ | (12,387 | ) |
| | | | | |
Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.
Tactical Paradigm has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Fund’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2010: written option contracts (464 contracts) were opened and $96,399 premiums were received and 124 short future contracts were opened during the period.
9. New Accounting Pronouncement
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update “Improving Disclosures about Fair Value Measurements” that requires additional disclosures regarding fair value measurements. Certain required disclosures are effective for interim and annual reporting periods beginning after December 15, 2010. Management is currently evaluating the impact the update will have on its financial statement disclosures.
10. Subsequent Events
In preparing these financial statements, management has evaluated Fund related events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no events or translations that occurred during the period that materially impacted the amounts or disclosures in the Funds’ financial statements.
On December 6, 2010, the Board of Directors/Trustees approved the liquidation of the Tactical Paradigm Fund, subject to shareholder approval.
11. Tax Information (Unaudited)
The Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted on December 22, 2010. The Act makes changes to several tax rules impacting the Funds. In general, the provisions of the Act will be effective for the Funds’ fiscal year ending December 31, 2011. Although the Act provides several benefits, including the unlimited carryover of future
75
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
capital losses, there may be a greater likelihood that all or a portion of each Fund’s pre-enactment capital loss carryovers may expire without being utilized due to the fact that post-enactment capital losses get utilized before pre-enactment capital loss carryovers. Relevant information regarding the impact of the Act on the Funds, if any, will be contained within the “Income Taxes” section of the financial statement notes for the fiscal year ending December 31, 2011.
Global, Paradigm, Medical, Market Opportunities, Water Infrastructure and Tactical Paradigm designate 100%, 100%, 100%, 33%, 100%, and 100%, respectively, of dividends declared after December 31, 2010 from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm hereby designate 100%, 100%, 100%, 100%, 100%, 100%, 96% and 100%, respectively, as ordinary income distributions and 4% for Multi-Disciplinary Fund as long-term capital gain distributions for the purposes of the dividends paid deduction, which include earnings and profits distributed to shareholders on redemptions of Fund shares.
For corporate shareholders in the Funds, the percentage of ordinary dividend income distributed for the year ended December 31, 2010, which is designated as qualifying for the dividends-received deduction, is as follows: Global 1%, Paradigm 43%, Medical 100%, Market Opportunities 17%, Water Infrastructure 82% and Tactical Paradigm 100%.
Paradigm, Water Infrastructure, Multi-Disciplinary and Tactical Paradigm designate 8%, 30%, 47% and 5%, respectively, of their ordinary income distributions for the fiscal year ended December 31, 2010 as interest-related dividends under Internal Revenue Code Section 871(k)(l)(C).
Multi-Disciplinary designates 56% of its ordinary income distribution as a short-term capital gain distribution under Internal Revenue Code Section 871(k)(2)(C).
12. Information about Proxy Voting (Unaudited)
Information regarding how Kinetics Mutual Funds, Inc. votes proxies relating to portfolio securities is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the Funds’ website at www.kineticsfunds.com and by accessing the SEC’s website at www.sec.gov.
76
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Notes to Financial Statements — (Continued)
December 31, 2010
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.
13. Information about the Portfolio Holdings (Unaudited)
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Funds’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov. Finally, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
77
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | |
| | | The Internet Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2009 | | | 2009 | |
| | |
| |
PER SHARE DATA:(1) | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, | | | | | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 30.74 | | | $ | 30.35 | | | $ | 29.76 | | | $ | 20.71 | | | $ | 20.50 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | (0.28 | ) | | | (0.36 | ) | | | (0.51 | ) | | | (0.14 | ) | | | (0.21 | ) |
| Net realized and unrealized gain (loss) on investments | | | 6.79 | | | | 6.70 | | | | 6.54 | | | | 10.21 | | | | 10.09 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 6.51 | | | | 6.34 | | | | 6.03 | | | | 10.07 | | | | 9.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.00 | (3) | | | 0.01 | |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | — | | | | — | | | | — | | | | (0.04 | ) | | | (0.04 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Total distributions | | | — | | | | — | | | | — | | | | (0.04 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 37.25 | | | $ | 36.69 | | | $ | 35.79 | | | $ | 30.74 | | | $ | 30.35 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Return(4) | | | 21.18 | % | | | 20.89 | % | | | 20.26 | % | | | 48.61 | % | | | 48.23 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 113,085 | | | $ | 1,892 | | | $ | 196 | | | $ | 104,666 | | | $ | 738 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 1.95 | % | | | 2.20 | % | | | 2.70 | % | | | 1.98 | % | | | 2.23 | % |
After expense reimbursement(7) | | | 1.89 | % | | | 2.14 | % | | | 2.64 | % | | | 1.89 | % | | | 2.14 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.91 | )% | | | (1.16 | )% | | | (1.66 | )% | | | (0.64 | )% | | | (0.89 | )% |
After expense reimbursement(7) | | | (0.85 | )% | | | (1.10 | )% | | | (1.60 | )% | | | (0.55 | )% | | | (0.80 | )% |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
ˆ Commencement of operations.
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
78
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Internet Fund | |
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | February 16, 2007ˆ
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | through
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2006 | | | 2006 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 20.20 | | | $ | 35.94 | | | $ | 35.66 | | | $ | 35.31 | | | $ | 28.62 | | | $ | 28.24 | | | $ | 28.66 | | | $ | 24.66 | | | $ | 24.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.31 | ) | | | 0.29 | | | | 0.22 | | | | 0.08 | | | | 0.30 | | | | 0.23 | | | | 0.07 | | | | (0.08 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 9.91 | | | | (15.47 | ) | | | (15.33 | ) | | | (15.15 | ) | | | 7.37 | | | | 7.49 | | | | 6.87 | | | | 4.15 | | | | 4.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 9.60 | | | | (15.18 | ) | | | (15.11 | ) | | | (15.07 | ) | | | 7.67 | | | | 7.72 | | | | 6.94 | | | | 4.07 | | | | 3.95 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.00 | (3) | | | — | | | | 0.00 | (3) | | | 0.00 | (3) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.04 | ) | | | (0.05 | ) | | | (0.05 | ) | | | (0.04 | ) | | | (0.35 | ) | | | (0.30 | ) | | | (0.29 | ) | | | (0.11 | ) | | | (0.11 | ) |
| | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | - | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.04 | ) | | | (0.05 | ) | | | (0.05 | ) | | | (0.04 | ) | | | (0.35 | ) | | | (0.30 | ) | | | (0.29 | ) | | | (0.11 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 29.76 | | | $ | 20.71 | | | $ | 20.50 | | | $ | 20.20 | | | $ | 35.94 | | | $ | 35.66 | | | $ | 35.31 | | | $ | 28.62 | | | $ | 28.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 47.51 | % | | | (42.24 | )% | | | (42.37 | )% | | | (42.67 | )% | | | 26.81 | % | | | 27.35 | % | | | 24.22 | %(5) | | | 16.50 | % | | | 16.18 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 120 | | | $ | 75,112 | | | $ | 318 | | | $ | 113 | | | $ | 166,787 | | | $ | 637 | | | $ | 294 | | | $ | 137,012 | | | $ | 235 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2.73 | % | | | 2.03 | % | | | 2.28 | % | | | 2.78 | % | | | 1.99 | % | | | 2.24 | % | | | 2.73 | %(6) | | | 1.98 | % | | | 2.23 | % |
| | | | 2.64 | % | | | 1.90 | % | | | 2.15 | % | | | 2.65 | % | | | 1.98 | % | | | 2.23 | % | | | 2.72 | %(6) | | | 1.85 | % | | | 2.10 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (1.39 | )% | | | 0.90 | % | | | 0.65 | % | | | 0.15 | % | | | 0.94 | % | | | 0.70 | % | | | 0.22 | %(6) | | | (0.42 | )% | | | (0.67 | )% |
| | | | (1.30 | )% | | | 1.03 | % | | | 0.78 | % | | | 0.28 | % | | | 0.95 | % | | | 0.71 | % | | | 0.23 | %(6) | | | (0.29 | )% | | | (0.54 | )% |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
79
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Global Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2009 | |
| | |
| |
PER SHARE DATA:(1) | | | | | | | | | | | | | | | | |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 3.92 | | | $ | 3.93 | | | $ | 3.90 | | | $ | 2.36 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.02 | (2) | | | 0.01 | (2) | | | (0.01 | )(2) | | | 0.02(2 | ) |
| Net realized and unrealized gain (loss) on investments | | | 0.78 | | | | 0.78 | | | | 0.77 | | | | 1.55 | |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 0.80 | | | | 0.79 | | | | 0.76 | | | | 1.57 | |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.01 | |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.05 | ) | | | (0.04 | ) | | | (0.02 | ) | | | (0.02 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.05 | ) | | | (0.04 | ) | | | (0.02 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.67 | | | $ | 4.68 | | | $ | 4.64 | | | $ | 3.92 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | 20.30 | % | | | 20.04 | % | | | 19.24 | % | | | 66.86 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 4,541 | | | $ | 707 | | | $ | 64 | | | $ | 4,370 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 4.17 | % | | | 4.42 | % | | | 4.92 | % | | | 5.32 | % |
After expense reimbursement(7) | | | 1.39 | % | | | 1.64 | % | | | 2.14 | % | | | 1.39 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (2.26 | )% | | | (2.51 | )% | | | (3.01 | )% | | | (3.27 | )% |
After expense reimbursement(7) | | | 0.52 | % | | | 0.27 | % | | | (0.23 | )% | | | 0.66 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| |
| ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
80
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Global Fund | |
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | No Load Class
| |
| | | For the
| | | For the
| | | For the
| | | May 19, 2008ˆ
| | | May 19, 2008ˆ
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | through
| | | through
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2007 | | | 2006 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 2.36 | | | $ | 2.37 | | | $ | 4.90 | | | $ | 4.56 | | | $ | 4.56 | | | $ | 5.00 | | | $ | 4.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.01 | (2) | | | (0.00 | )(2)(3) | | | 0.07 | (2) | | | 0.03 | (2) | | | 0.02 | (2) | | | 0.22 | | | | 0.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.57 | | | | 1.53 | | | | (2.56 | ) | | | (2.18 | ) | | | (2.17 | ) | | | (0.01 | ) | | | 0.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.58 | | | | 1.53 | | | | (2.49 | ) | | | (2.15 | ) | | | (2.15 | ) | | | 0.21 | | | | 0.75 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | 0.00 | (3) | | | — | | | | — | | | | 0.00 | (3) | | | 0.00 | (3) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.01 | ) | | | (0.00 | )(3) | | | (0.05 | ) | | | (0.05 | ) | | | (0.04 | ) | | | (0.31 | ) | | | (0.18 | ) |
| | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.01 | ) | | | (0.00 | )(3) | | | (0.05 | ) | | | (0.05 | ) | | | (0.04 | ) | | | (0.31 | ) | | | (0.18 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 3.93 | | | $ | 3.90 | | | $ | 2.36 | | | $ | 2.36 | | | $ | 2.37 | | | $ | 4.90 | | | $ | 5.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 67.11 | % | | | 65.08 | % | | | (50.72 | )% | | | (47.12 | )%(5) | | | (47.14 | )%(5) | | | 4.27 | % | | | 16.90 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 368 | | | $ | 36 | | | $ | 1,863 | | | $ | 106 | | | $ | 5 | | | $ | 3,138 | | | $ | 3,991 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 5.57 | % | | | 6.07 | % | | | 5.98 | % | | | 8.28 | %(6) | | | 8.78 | %(6) | | | 3.84 | % | | | 3.09 | % |
| | | | 1.64 | % | | | 2.14 | % | | | 1.41 | % | | | 1.65 | %(6) | | | 2.15 | %(6) | | | 1.48 | % | | | 1.39 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (3.52 | )% | | | (4.02 | )% | | | (2.72 | )% | | | (5.16 | )%(6) | | | (5.66 | )%(6) | | | 1.87 | % | | | 1.30 | % |
| | | | 0.41 | % | | | (0.09 | )% | | | 1.85 | % | | | 1.47 | %(6) | | | 0.97 | %(6) | | | 4.23 | % | | | 3.00 | % |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
81
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Paradigm Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Year | | $ | 20.18 | | | $ | 19.88 | | | $ | 19.33 | | | $ | 20.13 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | 0.11 | | | | 0.06 | | | | (0.04 | ) | | | 0.16 | |
| Net realized and unrealized gain (loss) on investments | | | 3.39 | | | | 3.33 | | | | 3.22 | | | | 3.38 | |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 3.50 | | | | 3.39 | | | | 3.18 | | | | 3.54 | |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.37 | ) | | | (0.32 | ) | | | (0.26 | ) | | | (0.42 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.37 | ) | | | (0.32 | ) | | | (0.26 | ) | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Year | | $ | 23.31 | | | $ | 22.95 | | | $ | 22.25 | | | $ | 23.25 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | 17.37 | % | | | 17.11 | % | | | 16.45 | % | | | 17.62 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of year (000’s) | | $ | 687,056 | | | $ | 226,264 | | | $ | 152,571 | | | $ | 142,261 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 1.76 | % | | | 2.01 | % | | | 2.51 | % | | | 1.71 | % |
After expense reimbursement(5) | | | 1.64 | % | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 0.43 | % | | | 0.18 | % | | | (0.32 | )% | | | 0.48 | % |
After expense reimbursement(5) | | | 0.55 | % | | | 0.30 | % | | | (0.20 | )% | | | 0.75 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | Includes adviser reimbursement from net realized losses on the disposal of investments in violation of restrictions and trading errors. This reimbursement comprises less than $0.005 of the NAVs for each class at the time of the reimbursement and 0.03% of the total return for the Institutional Class for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
The accompanying notes are an integral part of these financial statements.
82
| | | | | | | | | | | | | | | | | | | | | | | | | |
| The Paradigm Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2009 | | | 2009 | | | 2009 | | | 2008 | | | 2008 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 14.42 | | | $ | 14.16 | | | $ | 13.80 | | | $ | 14.44 | | | $ | 30.99 | | | $ | 30.52 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.15 | | | | 0.10 | | | | 0.02 | | | | 0.18 | | | | 0.12 | | | | 0.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 5.78 | | | | 5.68 | | | | 5.51 | | | | 5.78 | | | | (16.62 | )(6) | | | (16.34 | )(6) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 5.93 | | | | 5.78 | | | | 5.53 | | | | 5.96 | | | | (16.50 | ) | | | (16.28 | ) |
| | | | | | �� | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | (3) | | | — | | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.01 | | | | 0.00 | (3) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.17 | ) | | | (0.06 | ) | | | — | | | | (0.27 | ) | | | — | | | | — | |
| | | | — | | | | — | | | | — | | | | — | | | | (0.08 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.17 | ) | | | (0.06 | ) | | | — | | | | (0.27 | ) | | | (0.08 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 20.18 | | | $ | 19.88 | | | $ | 19.33 | | | $ | 20.13 | | | $ | 14.42 | | | $ | 14.16 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 41.02 | % | | | 40.64 | % | | | 39.97 | % | | | 41.31 | % | | | (53.17 | )%(6) | | | (53.30 | )%(6) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 825,278 | | | $ | 252,106 | | | $ | 169,578 | | | $ | 125,372 | | | $ | 740,983 | | | $ | 249,424 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.73 | % | | | 1.98 | % | | | 2.48 | % | | | 1.68 | % | | | 1.72 | % | | | 1.97 | % |
| | | | 1.64 | % | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % | | | 1.66 | % | | | 1.91 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.78 | % | | | 0.53 | % | | | 0.03 | % | | | 0.83 | % | | | 0.46 | % | | | 0.21 | % |
| | | | 0.87 | % | | | 0.62 | % | | | 0.12 | % | | | 1.07 | % | | | 0.52 | % | | | 0.27 | % |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
83
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Paradigm Fund | |
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Year | | $ | 29.90 | | | $ | 30.97 | | | $ | 25.79 | | | $ | 25.43 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | (0.05 | ) | | | 0.18 | | | | 0.11 | | | | 0.04 | |
| Net realized and unrealized gain (loss) on investments | | | (15.97 | )(6) | | | (16.63 | )(6) | | | 5.35 | | | | 5.27 | |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | (16.02 | ) | | | (16.45 | ) | | | 5.46 | | | | 5.31 | |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | — | | | | — | | | | (0.13 | ) | | | (0.09 | ) |
| From net realized gains | | | (0.08 | ) | | | (0.08 | ) | | | (0.13 | ) | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.08 | ) | | | (0.08 | ) | | | (0.26 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Year | | $ | 13.80 | | | $ | 14.44 | | | $ | 30.99 | | | $ | 30.52 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | (53.54 | )%(6) | | | (53.11 | )%(6) | | | 21.15 | % | | | 20.87 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of year (000’s) | | $ | 147,915 | | | $ | 128,129 | | | $ | 2,910,518 | | | $ | 544,046 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 2.47 | % | | | 1.67 | % | | | 1.68 | % | | | 1.93 | % |
After expense reimbursement(5) | | | 2.41 | % | | | 1.46 | % | | | 1.68 | % | | | 1.93 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.29 | )% | | | 0.51 | % | | | 0.39 | % | | | 0.14 | % |
After expense reimbursement(5) | | | (0.23 | )% | | | 0.72 | % | | | 0.39 | % | | | 0.14 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | Includes adviser reimbursement from net realized losses on the disposal of investments in violation of restrictions and trading errors. This reimbursement comprises less than $0.005 of the NAVs for each class at the time of the reimbursement and 0.03% of the total return for the Institutional Class for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
The accompanying notes are an integral part of these financial statements.
84
| | | | | | | | | | | | | | | | | | | | | | | | | |
| The Paradigm Fund | |
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2007 | | | 2007 | | | 2006 | | | 2006 | | | 2006 | | | 2006 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 24.98 | | | $ | 25.76 | | | $ | 20.33 | | | $ | 20.08 | | | $ | 19.76 | | | $ | 20.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.10 | ) | | | 0.17 | | | | 0.14 | | | | 0.08 | | | | (0.03 | ) | | | 0.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 5.15 | | | | 5.34 | | | | 5.52 | | | | 5.43 | | | | 5.33 | | | | 5.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 5.05 | | | | 5.51 | | | | 5.66 | | | | 5.51 | | | | 5.30 | | | | 5.68 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.00 | ) | | | (0.17 | ) | | | (0.16 | ) | | | (0.12 | ) | | | (0.04 | ) | | | (0.19 | ) |
| | | | (0.13 | ) | | | (0.13 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.13 | ) | | | (0.30 | ) | | | (0.20 | ) | | | (0.16 | ) | | | (0.08 | ) | | | (0.23 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 29.90 | | | $ | 30.97 | | | $ | 25.79 | | | $ | 25.43 | | | $ | 24.98 | | | $ | 25.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 20.20 | % | | | 21.37 | % | | | 27.81 | % | | | 27.42 | % | | | 26.82 | % | | | 27.96 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 320,962 | | | $ | 804,755 | | | $ | 1,337,761 | | | $ | 183,031 | | | $ | 116,226 | | | $ | 507,314 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2.43 | % | | | 1.63 | % | | | 1.79 | % | | | 2.04 | % | | | 2.54 | % | | | 1.74 | % |
| | | | 2.43 | % | | | 1.48 | % | | | 1.63 | % | | | 1.88 | % | | | 2.38 | % | | | 1.43 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.36 | )% | | | 0.44 | % | | | 0.44 | % | | | 0.19 | % | | | (0.31 | )% | | | 0.48 | % |
| | | | (0.36 | )% | | | 0.59 | % | | | 0.60 | % | | | 0.35 | % | | | (0.15 | )% | | | 0.79 | % |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
85
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | |
| | | The Medical Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2009 | | | 2009 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 18.77 | | | $ | 18.36 | | | $ | 18.27 | | | $ | 15.23 | | | $ | 14.90 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | 0.10 | | | | 0.05 | | | | (0.04 | ) | | | 0.20 | | | | 0.15 | |
| Net realized and unrealized gain (loss) on investments | | | 0.72 | | | | 0.71 | | | | 0.69 | | | | 3.51 | | | | 3.44 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 0.82 | | | | 0.76 | | | | 0.65 | | | | 3.71 | | | | 3.59 | |
| | | | | | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.01 | | | | 0.01 | |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.11 | ) | | | (0.06 | ) | | | (0.02 | ) | | | (0.16 | ) | | | (0.12 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | (0.02 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.11 | ) | | | (0.06 | ) | | | (0.02 | ) | | | (0.18 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 19.48 | | | $ | 19.06 | | | $ | 18.90 | | | $ | 18.77 | | | $ | 18.36 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Return(4) | | | 4.30 | % | | | 4.13 | % | | | 3.55 | % | | | 24.47 | % | | | 24.17 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 25,777 | | | $ | 4,207 | | | $ | 692 | | | $ | 21,126 | | | $ | 4,347 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 2.00 | % | | | 2.25 | % | | | 2.75 | % | | | 2.15 | % | | | 2.40 | % |
After expense reimbursement(7) | | | 1.39 | % | | | 1.64 | % | | | 2.14 | % | | | 1.39 | % | | | 1.64 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.06 | )% | | | (0.31 | )% | | | (0.81 | )% | | | 0.42 | % | | | 0.17 | % |
After expense reimbursement(7) | | | 0.55 | % | | | 0.30 | % | | | (0.20 | )% | | | 1.17 | % | | | 0.92 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
86
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Medical Fund | |
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | February 16, 2007ˆ
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | through
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2006 | | | 2006 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 14.83 | | | $ | 19.82 | | | $ | 19.39 | | | $ | 19.34 | | | $ | 17.83 | | | $ | 17.47 | | | $ | 18.29 | | | $ | 16.64 | | | $ | 16.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.07 | | | | 0.19 | | | | 0.13 | | | | 0.05 | | | | 0.10 | | | | 0.05 | | | | (0.04 | ) | | | 0.06 | | | | 0.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 3.41 | | | | (4.25 | ) | | | (4.15 | ) | | | (4.13 | ) | | | 2.67 | | | | 2.62 | | | | 1.79 | | | | 2.40 | | | | 2.35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 3.48 | | | | (4.06 | ) | | | (4.02 | ) | | | (4.08 | ) | | | 2.77 | | | | 2.67 | | | | 1.75 | | | | 2.46 | | | | 2.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | (3) | | | 0.01 | | | | 0.04 | | | | 0.02 | | | | 0.01 | | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.02 | ) | | | (0.16 | ) | | | (0.13 | ) | | | (0.07 | ) | | | (0.10 | ) | | | (0.06 | ) | | | (0.01 | ) | | | (0.04 | ) | | | — | |
| | | | (0.02 | ) | | | (0.38 | ) | | | (0.38 | ) | | | (0.38 | ) | | | (0.69 | ) | | | (0.69 | ) | | | (0.69 | ) | | | (1.23 | ) | | | (1.23 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.04 | ) | | | (0.54 | ) | | | (0.51 | ) | | | (0.45 | ) | | | (0.79 | ) | | | (0.75 | ) | | | (0.70 | ) | | | (1.27 | ) | | | (1.23 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 18.27 | | | $ | 15.23 | | | $ | 14.90 | | | $ | 14.83 | | | $ | 19.82 | | | $ | 19.39 | | | $ | 19.34 | | | $ | 17.83 | | | $ | 17.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 23.50 | % | | | (20.42 | )% | | | (20.49 | )% | | | (20.97 | )% | | | 15.47 | % | | | 15.16 | % | | | 9.55 | %(5) | | | 14.81 | % | | | 14.49 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 454 | | | $ | 15,727 | | | $ | 2,941 | | | $ | 314 | | | $ | 13,917 | | | $ | 1,427 | | | $ | 148 | | | $ | 15,527 | | | $ | 711 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2.90 | % | | | 2.26 | % | | | 2.51 | % | | | 3.01 | % | | | 2.41 | % | | | 2.66 | % | | | 3.19 | %(6) | | | 2.28 | % | | | 2.53 | % |
| | | | 2.14 | % | | | 1.41 | % | | | 1.66 | % | | | 2.16 | % | | | 1.40 | % | | | 1.65 | % | | | 2.15 | %(6) | | | 1.44 | % | | | 1.69 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.33 | )% | | | 0.18 | % | | | (0.07 | )% | | | (0.57 | )% | | | (0.51 | )% | | | (0.76 | )% | | | (1.30 | )%(6) | | | (0.51 | )% | | | (0.76 | )% |
| | | | 0.42 | % | | | 1.03 | % | | | 0.78 | % | | | 0.28 | % | | | 0.50 | % | | | 0.25 | % | | | (0.26 | )%(6) | | | 0.33 | % | | | 0.08 | % |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
87
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2009 | | | 2009 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning of Year | | $ | 20.83 | | | $ | 20.53 | | | $ | 20.28 | | | $ | 20.90 | | | $ | 13.17 | | | $ | 13.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | (0.04 | ) | | | (0.09 | ) | | | (0.20 | ) | | | 0.00 | (3) | | | (0.04 | ) | | | (0.08 | ) |
| Net realized and unrealized gain (loss) on investments | | | 2.93 | | | | 2.87 | | | | 2.84 | | | | 2.95 | | | | 7.70 | | | | 7.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 2.89 | | | | 2.78 | | | | 2.64 | | | | 2.95 | | | | 7.66 | | | | 7.52 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.40 | ) | | | (0.33 | ) | | | (0.24 | ) | | | (0.40 | ) | | | — | | | | — | |
| From net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.40 | ) | | | (0.33 | ) | | | (0.24 | ) | | | (0.40 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Year | | $ | 23.32 | | | $ | 22.98 | | | $ | 22.68 | | | $ | 23.45 | | | $ | 20.83 | | | $ | 20.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Return(4) | | | 13.86 | % | | | 13.56 | % | | | 13.00 | % | | | 14.10 | % | | | 58.16 | % | | | 57.80 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of year (000’s) | | $ | 130,279 | | | $ | 11,509 | | | $ | 3,450 | | | $ | 9,808 | | | $ | 161,205 | | | $ | 14,244 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 1.86 | % | | | 2.11 | % | | | 2.61 | % | | | 1.81 | % | | | 1.86 | % | | | 2.11 | % |
After expense reimbursement(5) | | | 1.64 | % | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % | | | 1.64 | % | | | 1.89 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.42 | )% | | | (0.67 | )% | | | (1.17 | )% | | | (0.37 | )% | | | (0.48 | )% | | | (0.73 | )% |
After expense reimbursement(5) | | | (0.20 | )% | | | (0.45 | )% | | | (0.95 | )% | | | 0.00 | % | | | (0.26 | )% | | | (0.51 | )% |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement comprises less than $0.005 of the NAVs for each class at the time of the reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
The accompanying notes are an integral part of these financial statements.
88
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Fund | |
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2008 | | | 2007 | | | 2007 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 12.92 | | | $ | 13.19 | | | $ | 31.92 | | | $ | 31.63 | | | $ | 31.57 | | | $ | 31.92 | | | $ | 26.92 | | | $ | 26.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.16 | ) | | | (0.01 | ) | | | 0.05 | | | | (0.01 | ) | | | (0.12 | ) | | | 0.10 | | | | 0.01 | | | | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 7.52 | | | | 7.72 | | | | (18.53 | )(6) | | | (18.34 | )(6) | | | (18.26 | )(6) | | | (18.56 | )(6) | | | 5.29 | | | | 5.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 7.36 | | | | 7.71 | | | | (18.48 | ) | | | (18.35 | ) | | | (18.38 | ) | | | (18.46 | ) | | | 5.30 | | | | 5.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (0.23 | ) | | | (0.19 | ) |
| | | | — | | | | — | | | | (0.27 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.07 | ) | | | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | (0.27 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.30 | ) | | | (0.26 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 20.28 | | | $ | 20.90 | | | $ | 13.17 | | | $ | 13.01 | | | $ | 12.92 | | | $ | 13.19 | | | $ | 31.92 | | | $ | 31.63 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 56.97 | % | | | 58.45 | % | | | (57.88 | )%(6) | | | (58.00 | )%(6) | | | (58.20 | )%(6) | | | (57.82 | )%(6) | | | 19.65 | % | | | 19.36 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 4,445 | | | $ | 19,749 | | | $ | 126,971 | | | $ | 12,090 | | | $ | 2,871 | | | $ | 68,408 | | | $ | 729,278 | | | $ | 36,390 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2.61 | % | | | 1.81 | % | | | 1.79 | % | | | 2.04 | % | | | 2.54 | % | | | 1.74 | % | | | 1.71 | % | | | 1.96 | % |
| | | | 2.39 | % | | | 1.44 | % | | | 1.67 | % | | | 1.92 | % | | | 2.42 | % | | | 1.47 | % | | | 1.69 | % | | | 1.94 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (1.23 | )% | | | (0.43 | )% | | | 0.09 | % | | | (0.16 | )% | | | (0.66 | )% | | | 0.14 | % | | | 0.00 | % | | | (0.25 | )% |
| | | | (1.01 | )% | | | (0.06 | )% | | | 0.21 | % | | | (0.04 | )% | | | (0.54 | )% | | | 0.41 | % | | | 0.02 | % | | | (0.23 | )% |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
89
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Fund | |
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| | | Institutional Class
| |
| | | February 16, 2007ˆ
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | through
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2007 | | | 2007 | | | 2006 | | | 2006 | | | 2006 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, Beginning of Period | | $ | 28.70 | | | $ | 26.91 | | | $ | 21.02 | | | $ | 20.89 | | | $ | 21.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | (0.21 | ) | | | 0.07 | | | | 0.03 | | | | (0.03 | ) | | | 0.08 | |
| Net realized and unrealized gain on investments | | | 3.33 | | | | 5.29 | | | | 5.92 | | | | 5.88 | | | | 5.91 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 3.12 | | | | 5.36 | | | | 5.95 | | | | 5.85 | | | | 5.99 | |
| | | | | | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.02 | | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.20 | ) | | | (0.28 | ) | | | (0.05 | ) | | | (0.03 | ) | | | (0.08 | ) |
| From net realized gains | | | (0.07 | ) | | | (0.07 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.27 | ) | | | (0.35 | ) | | | (0.05 | ) | | | (0.03 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 31.57 | | | $ | 31.92 | | | $ | 26.92 | | | $ | 26.71 | | | $ | 26.91 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Return(4) | | | 10.94 | %(5) | | | 19.91 | % | | | 28.37 | % | | | 28.03 | % | | | 28.52 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 4,942 | | | $ | 316,709 | | | $ | 268,875 | | | $ | 12,144 | | | $ | 209,592 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 2.47 | %(6) | | | 1.66 | % | | | 1.83 | % | | | 2.08 | % | | | 1.78 | % |
After expense reimbursement(7) | | | 2.45 | %(6) | | | 1.49 | % | | | 1.58 | % | | | 1.83 | % | | | 1.38 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.76 | )%(6) | | | 0.05 | % | | | (0.14 | )% | | | (0.39 | )% | | | (0.09 | )% |
After expense reimbursement(7) | | | (0.75 | )%(6) | | | 0.22 | % | | | 0.11 | % | | | (0.14 | )% | | | 0.31 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
90
(This page intentionally left blank)
91
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | |
| | | The Market Opportunities Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2009 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 10.84 | | | $ | 10.80 | | | $ | 10.69 | | | $ | 10.86 | | | $ | 7.22 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income from Investment Operations: |
Net investment income (loss)(2) | | | 0.04 | | | | 0.01 | | | | (0.04 | ) | | | 0.06 | | | | 0.00 | (3) |
| Net realized and unrealized gain (loss) on investments | | | 1.18 | | | | 1.19 | | | | 1.17 | | | | 1.19 | | | | 3.62 | |
Payment by adviser(8) | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 1.22 | | | | 1.20 | | | | 1.13 | | | | 1.25 | | | | 3.62 | |
| | | | | | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.01 | |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.60 | ) | | | (0.57 | ) | | | (0.52 | ) | | | (0.63 | ) | | | (0.01 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.60 | ) | | | (0.57 | ) | | | (0.52 | ) | | | (0.63 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 11.46 | | | $ | 11.43 | | | $ | 11.30 | | | $ | 11.48 | | | $ | 10.84 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Return(4) | | | 11.31 | % | | | 11.11 | % | | | 10.54 | % | | | 11.54 | % | | | 50.21 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 38,562 | | | $ | 14,167 | | | $ | 5,569 | | | $ | 212 | | | $ | 41,254 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 1.92 | % | | | 2.17 | % | | | 2.67 | % | | | 1.87 | % | | | 1.93 | % |
After expense reimbursement(7) | | | 1.64 | % | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % | | | 1.64 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 0.06 | % | | | (0.19 | )% | | | (0.69 | )% | | | 0.11 | % | | | (0.25 | )% |
After expense reimbursement(7) | | | 0.34 | % | | | 0.09 | % | | | (0.41 | )% | | | 0.54 | % | | | 0.04 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (8) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37%, 0.38% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C, and the Institutional Class, respectively, for the year ended December 31, 2008. |
The accompanying notes are an integral part of these financial statements.
92
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Market Opportunities Fund | |
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | May 19, 2008ˆ
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | through
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2009 | | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2008 | | | 2007 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 7.22 | | | $ | 7.17 | | | $ | 7.21 | | | $ | 16.12 | | | $ | 16.07 | | | $ | 16.01 | | | $ | 13.71 | | | $ | 12.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.02 | ) | | | (0.06 | ) | | | 0.02 | | | | 0.11 | | | | 0.08 | | | | 0.02 | | | | 0.08 | | | | 0.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 3.61 | | | | 3.59 | | | | 3.64 | | | | (9.02 | ) | | | (8.97 | ) | | | (8.91 | ) | | | (6.55 | ) | | | 4.05 | |
| | | | — | | | | — | | | | — | | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 3.59 | | | | 3.53 | | | | 3.66 | | | | (8.85 | ) | | | (8.83 | ) | | | (8.83 | ) | | | (6.41 | ) | | | 4.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.01 | | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.06 | ) | | | (0.02 | ) | | | (0.01 | ) | | | (0.09 | ) | | | (0.03 | ) |
| | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.06 | ) | | | (0.02 | ) | | | (0.01 | ) | | | (0.09 | ) | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 10.80 | | | $ | 10.69 | | | $ | 10.86 | | | $ | 7.22 | | | $ | 7.22 | | | $ | 7.17 | | | $ | 7.21 | | | $ | 16.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 49.66 | % | | | 49.17 | % | | | 50.70 | % | | | (54.82 | )%(8) | | | (54.91 | )%(8) | | | (55.13 | )%(8) | | | (46.77 | )%(5)(8) | | | 34.03 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 18,770 | | | $ | 6,055 | | | $ | 19 | | | $ | 34,246 | | | $ | 18,514 | | | $ | 771 | | | $ | 5 | | | $ | 63,004 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2.18 | % | | | 2.68 | % | | | 1.88 | % | | | 1.82 | % | | | 2.07 | % | | | 2.57 | % | | | 1.82 | %(6) | | | 1.91 | % |
| | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % | | | 1.66 | % | | | 1.91 | % | | | 2.41 | % | | | 1.44 | %(6) | | | 1.74 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.50 | )% | | | (1.00 | )% | | | (0.20 | )% | | | 0.78 | % | | | 0.53 | % | | | 0.03 | % | | | 0.94 | %(6) | | | 0.12 | % |
| | | | (0.21 | )% | | | (0.71 | )% | | | 0.24 | % | | | 0.94 | % | | | 0.69 | % | | | 0.19 | % | | | 1.32 | %(6) | | | 0.29 | % |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
93
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Market Opportunities Fund | |
| | | Advisor Class A
| | | Advisor Class C
| | | No Load Class
| | | Advisor Class A
| |
| | | For the
| | | February 16, 2007ˆ
| | | January 31, 2006ˆ
| | | January 31, 2006ˆ
| |
| | | Year Ended
| | | through
| | | through
| | | through
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2007 | | | 2007 | | | 2006 | | | 2006 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 12.04 | | | $ | 12.99 | | | $ | 10.00 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.00 | (2) | | | (0.05 | )(2) | | | 0.04 | | | | 0.02 | |
| Net realized and unrealized gain on investments | | | 4.04 | | | | 3.07 | | | | 2.05 | | | | 2.05 | |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 4.04 | | | | 3.02 | | | | 2.09 | | | | 2.07 | |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | — | |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.01 | ) | | | — | | | | (0.04 | ) | | | (0.03 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.01 | ) | | | — | | | | (0.04 | ) | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 16.07 | | | $ | 16.01 | | | $ | 12.05 | | | $ | 12.04 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | 33.54 | % | | | 23.25 | %(5) | | | 20.85 | %(5) | | | 20.68 | %(5) |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 43,907 | | | $ | 8,790 | | | $ | 7,994 | | | $ | 9,591 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 2.16 | % | | | 2.66 | %(6) | | | 2.68 | %(6) | | | 2.93 | %(6) |
After expense reimbursement(7) | | | 1.99 | % | | | 2.49 | %(6) | | | 1.46 | %(6) | | | 1.71 | %(6) |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.14 | )% | | | (0.60 | )%(6) | | | (0.76 | )%(6) | | | (1.01 | )%(6) |
After expense reimbursement(7) | | | 0.03 | % | | | (0.43 | )%(6) | | | 0.46 | %(6) | | | (0.21 | )%(6) |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
94
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95
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Year | | $ | 8.86 | | | $ | 8.82 | | | $ | 8.71 | | | $ | 8.90 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | 0.07 | | | | 0.05 | | | | 0.01 | | | | 0.09 | |
| Net realized and unrealized gain (loss) on investments | | | (0.48 | ) | | | (0.47 | ) | | | (0.46 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | (0.41 | ) | | | (0.42 | ) | | | (0.45 | ) | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.00 | (3) |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.07 | ) | | | (0.05 | ) | | | (0.01 | ) | | | (0.09 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.07 | ) | | | (0.05 | ) | | | (0.01 | ) | | | (0.09 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Year | | $ | 8.38 | | | $ | 8.35 | | | $ | 8.25 | | | $ | 8.42 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | (4.60 | )% | | | (4.80 | )% | | | (5.15 | )% | | | (4.38 | )% |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of year (000’s) | | $ | 7,001 | | | $ | 10,100 | | | $ | 2,840 | | | $ | 4,182 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 2.17 | % | | | 2.42 | % | | | 2.92 | % | | | 2.12 | % |
After expense reimbursement(5) | | | 1.64 | % | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 0.33 | % | | | 0.08 | % | | | (0.42 | )% | | | 0.38 | % |
After expense reimbursement(5) | | | 0.86 | % | | | 0.61 | % | | | 0.11 | % | | | 1.06 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
96
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2009 | | | 2009 | | | 2009 | | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2008 | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 7.61 | | | $ | 7.59 | | | $ | 7.54 | | | $ | 7.63 | | | $ | 10.17 | | | $ | 10.17 | | | $ | 10.16 | | | $ | 10.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.04 | | | | 0.02 | | | | (0.02 | ) | | | 0.05 | | | | 0.10 | | | | 0.07 | | | | 0.03 | | | | 0.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.21 | | | | 1.21 | | | | 1.19 | | | | 1.23 | | | | (2.66 | ) | | | (2.65 | ) | | | (2.65 | ) | | | (2.67 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.25 | | | | 1.23 | | | | 1.17 | | | | 1.28 | | | | (2.56 | ) | | | (2.58 | ) | | | (2.62 | ) | | | (2.55 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.00 | (3) | | | 0.01 | | | | 0.00 | (3) | | | 0.00 | (3) | | | — | | | | 0.00 | (3) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.00 | )(3) | | | — | | | | — | | | | (0.02 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.00 | )(3) | | | — | | | | — | | | | (0.02 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 8.86 | | | $ | 8.82 | | | $ | 8.71 | | | $ | 8.90 | | | $ | 7.61 | | | $ | 7.59 | | | $ | 7.54 | | | $ | 7.63 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 16.46 | % | | | 16.21 | % | | | 15.52 | % | | | 16.94 | % | | | (25.17 | )% | | | (25.37 | )% | | | (25.79 | )% | | | (25.05 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 7,176 | | | $ | 10,339 | | | $ | 2,700 | | | $ | 2,905 | | | $ | 6,598 | | | $ | 7,661 | | | $ | 1,571 | | | $ | 251 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2.36 | % | | | 2.61 | % | | | 3.11 | % | | | 2.31 | % | | | 2.20 | % | | | 2.45 | % | | | 2.95 | % | | | 2.15 | % |
| | | | 1.64 | % | | | 1.89 | % | | | 2.39 | % | | | 1.44 | % | | | 1.65 | % | | | 1.90 | % | | | 2.40 | % | | | 1.45 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.26 | )% | | | (0.51 | )% | | | (1.01 | )% | | | (0.21 | )% | | | 0.55 | % | | | 0.30 | % | | | (0.20 | )% | | | 0.60 | % |
| | | | 0.46 | % | | | 0.21 | % | | | (0.29 | )% | | | 0.66 | % | | | 1.10 | % | | | 0.85 | % | | | 0.35 | % | | | 1.30 | % |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
The accompanying notes are an integral part of these financial statements.
97
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| |
| | | June 29, 2007ˆ
| | | June 29, 2007ˆ
| | | June 29, 2007ˆ
| | | June 29, 2007ˆ
| |
| | | through
| | | through
| | | through
| | | through
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: |
Net investment income(2) | | | 0.06 | | | | 0.05 | | | | 0.02 | | | | 0.06 | |
| Net realized and unrealized gain on investments | | | 0.20 | | | | 0.20 | | | | 0.21 | | | | 0.21 | |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 0.26 | | | | 0.25 | | | | 0.23 | | | | 0.27 | |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | — | | | | 0.00 | (3) | | | 0.00 | (3) | | | — | |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.04 | ) | | | (0.03 | ) | | | (0.02 | ) | | | (0.04 | ) |
| From net realized gains | | | (0.05 | ) | | | (0.05 | ) | | | (0.05 | ) | | | (0.05 | ) |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.09 | ) | | | (0.08 | ) | | | (0.07 | ) | | | (0.09 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.17 | | | $ | 10.17 | | | $ | 10.16 | | | $ | 10.18 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | 2.64 | %(5) | | | 2.55 | %(5) | | | 2.33 | %(5) | | | 2.76 | %(5) |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 2,385 | | | $ | 2,459 | | | $ | 1,201 | | | $ | 103 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 3.62 | %(6) | | | 3.87 | %(6) | | | 4.37 | %(6) | | | 3.58 | %(6) |
After expense reimbursement(7) | | | 1.74 | %(6) | | | 1.99 | %(6) | | | 2.49 | %(6) | | | 1.54 | %(6) |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (0.73 | )%(6) | | | (0.98 | )%(6) | | | (1.48 | )%(6) | | | (0.69 | )%(6) |
After expense reimbursement(7) | | | 1.15 | %(6) | | | 0.90 | %(6) | | | 0.40 | %(6) | | | 1.35 | %(6) |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
98
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99
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | |
| | | The Multi-Disciplinary Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | No Load Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2009 | |
| | |
| |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 9.86 | | | $ | 9.85 | | | $ | 9.80 | | | $ | 9.89 | | | $ | 8.22 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | 0.35 | | | | 0.33 | | | | 0.27 | | | | 0.37 | | | | 0.09 | |
| Net realized and unrealized gain (loss) on investments | | | 0.91 | | | | 0.89 | | | | 0.90 | | | | 0.91 | | | | 1.79 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 1.26 | | | | 1.22 | | | | 1.17 | | | | 1.28 | | | | 1.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| Redemption Fees | | | 0.00 | (3) | | | — | | | | — | | | | — | | | | — | |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.35 | ) | | | (0.33 | ) | | | (0.27 | ) | | | (0.37 | ) | | | (0.08 | ) |
| From net realized gains | | | (0.30 | ) | | | (0.30 | ) | | | (0.30 | ) | | | (0.30 | ) | | | (0.16 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.65 | ) | | | (0.63 | ) | | | (0.57 | ) | | | (0.67 | ) | | | (0.24 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.47 | | | $ | 10.44 | | | $ | 10.40 | | | $ | 10.50 | | | $ | 9.86 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Return(4) | | | 13.04 | % | | | 12.64 | % | | | 12.13 | % | | | 13.19 | % | | | 22.90 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 3,489 | | | $ | 356 | | | $ | 128 | | | $ | 142 | | | $ | 938 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 6.11 | % | | | 6.36 | % | | | 6.86 | % | | | 6.06 | % | | | 13.11 | % |
After expense reimbursement(7) | | | 1.49 | % | | | 1.74 | % | | | 2.24 | % | | | 1.29 | % | | | 1.49 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (1.19 | )% | | | (1.44 | )% | | | (1.94 | )% | | | (1.14 | )% | | | (10.69 | )% |
After expense reimbursement(7) | | | 3.43 | % | | | 3.18 | % | | | 2.68 | % | | | 3.63 | % | | | 0.93 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
100
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The Multi-Disciplinary Fund | | | | |
| | | | | | | | | | | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | | |
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | For The Period
| | | For The Period
| | | For The Period
| | | For The Period
| | | | |
| | | For the
| | | For the
| | | For the
| | | February 11, 2008ˆ
| | | February 11, 2008ˆ
| | | February 11, 2008ˆ
| | | February 11, 2008ˆ
| | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | through
| | | through
| | | through
| | | through
| | | | |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | | |
| | | 2009 | | | 2009 | | | 2009 | | | 2008 | | | 2008 | | | 2008 | | | 2008 | | | | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 8.20 | | | $ | 8.17 | | | $ | 8.23 | | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 0.06 | | | | 0.02 | | | | 0.10 | | | | 0.01 | | | | (0.01 | ) | | | (0.05 | ) | | | 0.02 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.80 | | | | 1.78 | | | | 1.81 | | | | (1.79 | ) | | | (1.79 | ) | | | (1.78 | ) | | | (1.79 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 1.86 | | | | 1.80 | | | | 1.91 | | | | (1.78 | ) | | | (1.80 | ) | | | (1.83 | ) | | | (1.77 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.05 | ) | | | (0.01 | ) | | | (0.09 | ) | | | (0.00 | )(3) | | | (0.00 | )(3) | | | (0.00 | )(3) | | | (0.00 | )(3) | | | | |
| | | | (0.16 | ) | | | (0.16 | ) | | | (0.16 | ) | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (0.21 | ) | | | (0.17 | ) | | | (0.25 | ) | | | (0.00 | )(3) | | | (0.00 | )(3) | | | (0.00 | )(3) | | | (0.00 | )(3) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 9.85 | | | $ | 9.80 | | | $ | 9.89 | | | $ | 8.22 | | | $ | 8.20 | | | $ | 8.17 | | | $ | 8.23 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 22.73 | % | | | 22.03 | % | | | 23.25 | % | | | (17.76 | )%(5) | | | (17.97 | )%(5) | | | (18.30 | )%(5) | | | (17.65 | )%(5) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 103 | | | $ | 105 | | | $ | 101 | | | $ | 99 | | | $ | 84 | | | $ | 88 | | | $ | 82 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 13.36 | % | | | 13.86 | % | | | 13.06 | % | | | 17.58 | %(6) | | | 17.83 | %(6) | | | 18.33 | %(6) | | | 17.53 | %(6) | | | | |
| | | | 1.74 | % | | | 2.24 | % | | | 1.29 | % | | | 1.49 | %(6) | | | 1.74 | %(6) | | | 2.24 | %(6) | | | 1.29 | %(6) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (10.94 | )% | | | (11.44 | )% | | | (10.64 | )% | | | (15.99 | )%(6) | | | (16.24 | )%(6) | | | (16.74 | )%(6) | | | (15.94 | )%(6) | | | | |
| | | | 0.68 | % | | | 0.18 | % | | | 1.13 | % | | | 0.10 | %(6) | | | (0.15 | )%(6) | | | (0.65 | )%(6) | | | 0.30 | %(6) | | | | |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | | |
The accompanying notes are an integral part of these financial statements.
101
KINETICS MUTUAL FUNDS, INC. — THE FUNDS
Financial Highlights
| | | | | | | | | | | | | | | | | |
| | | The Tactical Paradigm Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | |
| | |
| |
| | | | | | | | | | | | | | | | | |
PER SHARE DATA:(1) |
| Net Asset Value, | | | | | | | | | | | | | | | | |
| Beginning of Period | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss)(2) | | | (0.02 | ) | | | (0.04 | ) | | | (0.09 | ) | | | 0.00 | (3) |
| Net realized and unrealized gain on investments | | | 0.37 | | | | 0.35 | | | | 0.34 | | | | 0.35 | |
| | | | | | | | | | | | | | | | | |
| Total from investment operations | | | 0.35 | | | | 0.31 | | | | 0.25 | | | | 0.35 | |
| | | | | | | | | | | | | | | | | |
| Redemption Fees | | | — | | | | — | | | | — | | | | — | |
| Less Distributions: | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.07 | ) | | | (0.07 | ) | | | (0.03 | ) | | | (0.11 | ) |
| From net realized gains | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total distributions | | | (0.07 | ) | | | (0.07 | ) | | | (0.03 | ) | | $ | (0.11 | ) |
| | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.28 | | | $ | 10.24 | | | $ | 10.22 | | | $ | 10.24 | |
| | | | | | | | | | | | | | | | | |
Total Return(4) | | | 3.47 | % | | | 3.08 | % | | | 2.53 | % | | | 3.51 | % |
| |
SUPPLEMENTAL DATA AND RATIOS |
| Net assets, end of period (000’s) | | $ | 50 | | | $ | 502 | | | $ | 1,024 | | | $ | 21 | |
| Ratio of operating expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | 7.08 | % | | | 7.33 | % | | | 7.83 | % | | | 7.03 | % |
After expense reimbursement(7) | | | 2.29 | % | | | 2.54 | % | | | 3.04 | % | | | 2.09 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reimbursement | | | (4.95 | )% | | | (5.20 | )% | | | (5.70 | )% | | | (4.90 | )% |
After expense reimbursement(7) | | | (0.16 | )% | | | (0.41 | )% | | | (0.91 | )% | | | 0.04 | % |
| Portfolio turnover rate | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| |
| ˆ | Commencement of operations. |
| |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
The accompanying notes are an integral part of these financial statements.
102
| | | | | | | | | | | | | | | | | | | | | |
| The Tactical Paradigm Fund | |
| | | No Load Class
| | | Advisor Class A
| | | Advisor Class C
| | | Institutional Class
| | | | |
| | | December 31, 2009ˆ
| | | December 31, 2009ˆ
| | | December 31, 2009ˆ
| | | December 31, 2009ˆ
| | | | |
| | | through
| | | through
| | | through
| | | through
| | | | |
| | | December 31, 2009 | | | December 31, 2009 | | | December 31, 2009 | | | December 31, 2009 | | | | |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | $ | 10.00 | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | %(5) | | | 0.00 | %(5) | | | 0.00 | %(5) | | | 0.00 | %(5) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | $ | 20 | | | $ | 20 | | | $ | 20 | | | $ | 20 | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | | |
| | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | | |
| | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | 0.00 | %(6) | | | | |
| | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | | |
The accompanying notes are an integral part of these financial statements.
103
KINETICS MUTUAL FUNDS, INC.
Report of Independent Registered
Public Accounting Firm
To the Shareholders of and Board of Directors
Kinetics Mutual Funds, Inc.
Elmsford, New York
We have audited the accompanying statements of assets and liabilities of The Internet Fund, The Global Fund, The Paradigm Fund, The Medical Fund, The Small Cap Opportunities Fund, The Market Opportunities Fund, The Water Infrastructure Fund, The Multi-Disciplinary Fund, and The Tactical Paradigm Fund, each a series of shares of Kinetics Mutual Funds, Inc. (the “Funds”), as of December 31, 2010, and the related statements of operations, the statements of changes in net assets and financial highlights for the periods indicated thereon. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. We were not engaged to perform, nor were the Funds required to have, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 the above mentioned Funds as of December 31, 2010, the results of their operations, the changes in their net assets and financial highlights for the periods indicated thereon, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
March 1, 2011
104
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2010
The Internet Portfolio
The Global Portfolio
105
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2010 — (Continued)
The Paradigm Portfolio
The Medical Portfolio
106
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2010 — (Continued)
The Small Cap Opportunities Portfolio
The Market Opportunities Portfolio
107
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2010 — (Continued)
The Water Infrastructure Portfolio
The Multi-Disciplinary Portfolio
108
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 99.09% | | Shares | | | Value | |
| | |
| |
| | | Administrative and Support Services — 0.42% |
| CTRP | | Ctrip.com International Ltd. — ADR* | | | 6,000 | | | $ | 242,700 | |
| IILG | | Interval Leisure Group, Inc.* | | | 200 | | | | 3,228 | |
| ID | | L-1 Identity Solutions, Inc.* | | | 20,000 | | | | 238,200 | |
| | | | | | | | | | | |
| | | | | | | | | | 484,128 | |
| | | | | | | | | | | |
| | | Amusement, Gambling, and Recreation Industries — 0.97% |
| DIS | | The Walt Disney Co.ˆ | | | 29,691 | | | | 1,113,709 | |
| | | | | | | | | | | |
| | | Asset Management — 0.26% |
| URB/A CN | | Urbana Corp. — Class A* | | | 240,000 | | | | 296,892 | |
| | | | | | | | | | | |
| | | Broadcasting (except Internet) — 11.09% |
| LBTYK | | Liberty Global, Inc. — Series C*ˆ | | | 100,707 | | | | 3,412,960 | |
| LCAPA | | Liberty Media Corp. — Capital Series A* | | | 23,580 | | | | 1,475,165 | |
| LINTA | | Liberty Media Corp. — Interactive — Class A* | | | 174,500 | | | | 2,751,865 | |
| 2008 HK | | Phoenix Satellite Television Holdings Limited | | | 5,006,000 | | | | 1,700,267 | |
| SNI | | Scripps Networks Interactive — Class A | | | 65,000 | | | | 3,363,750 | |
| SIRI | | Sirius XM Radio, Inc.*ˆ | | | 46,000 | | | | 75,440 | |
| | | | | | | | | | | |
| | | | | | | | | | 12,779,447 | |
| | | | | | | | | | | |
| | | Computer and Electronic Product Manufacturing — 6.59% |
| AAPL | | Apple, Inc.* | | | 5,000 | | | | 1,612,800 | |
| EMC | | EMC Corporation*ˆ | | | 95,530 | | | | 2,187,637 | |
| JDSU | | JDS Uniphase Corporation* | | | 40,260 | | | | 582,965 | |
| NTAP | | NetApp, Inc.*ˆ | | | 45,000 | | | | 2,473,200 | |
| QCOM | | QUALCOMM Inc. | | | 15,000 | | | | 742,350 | |
| | | | | | | | | | | |
| | | | | | | | | | 7,598,952 | |
| | | | | | | | | | | |
| | | Credit Intermediation and Related Activities — 2.48% |
| BR | | Broadridge Financial Solutions, Inc. | | | 100,000 | | | | 2,193,000 | |
| NTRS | | Northern Trust Corp. | | | 2,000 | | | | 110,820 | |
| TREE | | Tree.com, Inc.* | | | 10,033 | | | | 94,712 | |
| WU | | The Western Union Company | | | 25,000 | | | | 464,250 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,862,782 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
109
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Data Processing, Hosting and Related Services — 0.55% |
| ACXM | | Acxiom Corporation* | | | 30,150 | | | $ | 517,073 | |
| CSGP | | CoStar Group, Inc.*ˆ | | | 2,000 | | | | 115,120 | |
| | | | | | | | | | | |
| | | | | | | | | | 632,193 | |
| | | | | | | | | | | |
| | | Data Processor — 2.68% |
| MA | | Mastercard, Inc. — Class A | | | 6,000 | | | | 1,344,660 | |
| VRSK | | Verisk Analytics, Inc. — Class A*ˆ | | | 10,000 | | | | 340,800 | |
| V | | Visa, Inc. — Class Aˆ | | | 20,000 | | | | 1,407,600 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,093,060 | |
| | | | | | | | | | | |
| | | Defense — 5.42% |
| CACI | | CACI International, Inc. — Class A* | | | 55,000 | | | | 2,937,000 | |
| MANT | | ManTech International Corporation — Class A* | | | 80,000 | | | | 3,306,400 | |
| | | | | | | | | | | |
| | | | | | | | | | 6,243,400 | |
| | | | | | | | | | | |
| | | Educational Services — 0.32% |
| EDU | | New Oriental Education & Technology Group, Inc. — ADR*ˆ | | | 3,550 | | | | 373,566 | |
| | | | | | | | | | | |
| | | European Exchanges — 1.37% |
| NAT BB | | Compagnie Nationale a Portefeuille | | | 26,685 | | | | 1,305,134 | |
| DB1 GR | | Deutsche Boerse AG | | | 4,000 | | | | 276,883 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,582,017 | |
| | | | | | | | | | | |
| | | Gaming — 0.74% |
| 200 HK | | Melco International Development Limited | | | 1,500,000 | | | | 856,834 | |
| | | | | | | | | | | |
| | | Global Exchanges — 4.96% |
| 388 HK | | Hong Kong Exchanges & Clearing Limited | | | 68,800 | | | | 1,560,498 | |
| JSE SJ | | JSE Limited | | | 51,000 | | | | 611,613 | |
| 8697 JP | | Osaka Securities Exchange Co., Ltd. | | | 94 | | | | 474,110 | |
| SGX SP | | Singapore Exchange Limited | | | 468,200 | | | | 3,071,839 | |
| | | | | | | | | | | |
| | | | | | | | | | 5,718,060 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
110
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Holding Company — 0.54% |
| GBLS BB | | Groupe Bruxelles Lambert S.A. Strip VVPR* | | | 2,000 | | | $ | 21 | |
| IEP | | Icahn Enterprises LP | | | 17,900 | | | | 627,574 | |
| | | | | | | | | | | |
| | | | | | | | | | 627,595 | |
| | | | | | | | | | | |
| | | Management of Companies and Enterprises — 0.22% |
| SATS | | EchoStar Corporation — Class A* | | | 10,000 | | | | 249,700 | |
| | | | | | | | | | | |
| | | Motion Picture and Sound Recording Industries — 9.05% |
| DWA | | DreamWorks Animation SKG, Inc. — Class A* | | | 130,000 | | | | 3,831,100 | |
| SINA | | SINA Corporation*ˆ | | | 30,000 | | | | 2,064,600 | |
| TWX | | Time Warner, Inc. | | | 86,666 | | | | 2,788,045 | |
| WMG | | Warner Music Group Corp.*ˆ | | | 310,000 | | | | 1,745,300 | |
| | | | | | | | | | | |
| | | | | | | | | | 10,429,045 | |
| | | | | | | | | | | |
| | | Non-Store Retailers — 8.90% |
| EBAY | | eBay, Inc.* | | | 81,290 | | | | 2,262,301 | |
| HSNI | | HSN, Inc.*ˆ | | | 200 | | | | 6,128 | |
| IACI | | IAC/InterActiveCorp* | | | 60,740 | | | | 1,743,238 | |
| OSTK | | Overstock.com, Inc.*ˆ | | | 1,000 | | | | 16,480 | |
| RBA | | Ritchie Bros. Auctioneers, Incorporatedˆ | | | 162,000 | | | | 3,734,100 | |
| SOHU | | Sohu.com Inc.*ˆ | | | 18,000 | | | | 1,142,820 | |
| BID | | Sotheby’sˆ | | | 30,000 | | | | 1,350,000 | |
| | | | | | | | | | | |
| | | | | | | | | | 10,255,067 | |
| | | | | | | | | | | |
| | | Other Exchanges — 0.79% |
| ASX AU | | ASX Ltd. | | | 12,600 | | | | 485,592 | |
| FTIS LI | | Financial Technologies (India) Ltd. — GDR | | | 144,000 | | | | 421,920 | |
| | | | | | | | | | | |
| | | | | | | | | | 907,512 | |
| | | | | | | | | | | |
| | | Other Information Services — 10.64% |
| BIDU | | Baidu.com, Inc. — ADR* | | | 90,930 | | | | 8,777,473 | |
| EXPE | | Expedia, Inc.ˆ | | | 4,000 | | | | 100,360 | |
| GOOG | | Google Inc. — Class A* | | | 3,200 | | | | 1,900,704 | |
| NTES | | NetEase.com Inc. — ADR* | | | 11,320 | | | | 409,218 | |
The accompanying notes are an integral part of these financial statements.
111
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Other Information Services (Continued) |
| YHOO | | Yahoo! Inc.*ˆ | | | 60,000 | | | $ | 997,800 | |
| YOKU | | Youku.com, Inc. — ADR*ˆ | | | 2,160 | | | | 75,621 | |
| | | | | | | | | | | |
| | | | | | | | | | 12,261,176 | |
| | | | | | | | | | | |
| | | Performing Arts, Spectator Sports, and Related Industries — 0.10% |
| LYV | | Live Nation Entertainment, Inc.*ˆ | | | 10,294 | | | | 117,558 | |
| | | | | | | | | | | |
| | | Prepackaged Software — 0.84% |
| CHKP | | Check Point Software Technologies Ltd.* | | | 21,000 | | | | 971,460 | |
| | | | | | | | | | | |
| | | Professional, Scientific, and Technical Services — 5.23% |
| JRJC | | China Finance Online Company — ADR*ˆ | | | 10,000 | | | | 65,300 | |
| CTSH | | Cognizant Technology Solutions Corporation — Class A* | | | 39,000 | | | | 2,858,310 | |
| INFY | | Infosys Technologies Limited — ADRˆ | | | 30,000 | | | | 2,282,400 | |
| ICGE | | Internet Capital Group, Inc.* | | | 15,000 | | | | 213,300 | |
| MWW | | Monster Worldwide, Inc.*ˆ | | | 2,000 | | | | 47,260 | |
| PCLN | | Priceline.com Incorporated* | | | 500 | | | | 199,775 | |
| SAPE | | Sapient Corporation | | | 20,000 | | | | 242,000 | |
| UNTD | | United Online, Inc.ˆ | | | 10,000 | | | | 66,000 | |
| WYY | | WidePoint Corp.* | | | 39,062 | | | | 51,562 | |
| | | | | | | | | | | |
| | | | | | | | | | 6,025,907 | |
| | | | | | | | | | | |
| | | Publishing Industries (except Internet) — 14.30% |
| MFE | | McAfee, Inc.* | | | 15,000 | | | | 694,650 | |
| ROVI | | Rovi Corporation*ˆ | | | 109,350 | | | | 6,780,794 | |
| SYMC | | Symantec Corporation* | | | 30,000 | | | | 502,200 | |
| SSP | | The E.W. Scripps Company — Class A* | | | 752,000 | | | | 7,632,800 | |
| WPO | | The Washington Post Company — Class Bˆ | | | 2,000 | | | | 879,000 | |
| | | | | | | | | | | |
| | | | | | | | | | 16,489,444 | |
| | | | | | | | | | | |
| | | Rental and Leasing Services — 1.48% |
| CDCO | | Comdisco Holding Company, Inc.* | | | 194,400 | | | | 1,701,000 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
112
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 3.66% |
| CME | | CME Group, Inc.ˆ | | | 6,230 | | | $ | 2,004,503 | |
| ICE | | IntercontinentalExchange Inc.*ˆ | | | 11,670 | | | | 1,390,481 | |
| LAB | | LaBranche & Co. Inc.* | | | 193,490 | | | | 696,564 | |
| MKTX | | MarketAxess Holdings, Inc. | | | 6,000 | | | | 124,860 | |
| | | | | | | | | | | |
| | | | | | | | | | 4,216,408 | |
| | | | | | | | | | | |
| | | Special Purpose Entity — 0.00% |
| ADPAO | | Adelphia Contingent Value Vehicle CVV Services ACC-4 Int*+ | | | 250,827 | | | | 502 | |
| ADPAL | | Adelphia Recovery Trust Ser ACC-6 E/F Int*+ | | | 4,878,645 | | | | 0 | |
| | | | | | | | | | | |
| | | | | | | | | | 502 | |
| | | | | | | | | | | |
| | | Telecommunications — 3.56% |
| CHU | | China Unicom (Hong Kong) Limited — ADRˆ | | | 156,460 | | | | 2,229,555 | |
| 215 HK | | Hutchison Telecommunications Hong Kong Holdings Limited | | | 2,300,000 | | | | 704,251 | |
| HTHKY | | Hutchison Telecommunications Hong Kong Holdings Limited — ADRˆ | | | 45,000 | | | | 200,250 | |
| SNSH | | Sunshine PCS Corporation — Class A* | | | 149 | | | | 4,798 | |
| VOD | | Vodafone Group Plc — ADRˆ | | | 36,570 | | | | 966,545 | |
| | | | | | | | | | | |
| | | | | | | | | | 4,105,399 | |
| | | | | | | | | | | |
| | | U.S. Equity Exchanges — 1.12% |
| NDAQ | | The NASDAQ OMX Group, Inc.*ˆ | | | 29,440 | | | | 698,022 | |
| NYX | | NYSE Euronext | | | 19,830 | | | | 594,503 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,292,525 | |
| | | | | | | | | | | |
| | | Warehousing and Storage — 0.81% |
| IRM | | Iron Mountain Incorporated | | | 37,147 | | | | 929,046 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $65,916,697) | | | | | | | 114,214,384 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
113
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| Identifier | | ESCROW NOTES — 0.00% | | Amount | | | Value | |
| | |
| |
| | | Special Purpose Entity — 0.00% |
| 006ESCBG1 | | Adelphia Communications Corp.*+ | | $ | 200,000 | | | $ | 0 | |
| 006ESC958 | | Adelphia Communications Corp. Preferred*+ | | | 190,000 | | | | 0 | |
| | | | | | | | | | | |
| | | TOTAL ESCROW NOTES
(cost $0) | | | | | | | 0 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | RIGHTS — 1.33% | | Shares | | | | |
| | |
| |
| | | Rental and Leasing Services — 1.33% |
| CDCOR | | Comdisco Holding Company, Inc. | | | | | | | | |
| | | Expiration Date: 12/31/2050 | | | | | | | | |
| | | Strike Price: $1.00#*ˆ | | | 12,240,699 | | | | 1,530,087 | |
| | | | | | | | | | | |
| | | TOTAL RIGHTS
(cost $3,253,775) | | | | | | | 1,530,087 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | SHORT-TERM INVESTMENTS — 0.52% | | | | | | |
| | |
| |
| | | Money Market Funds — 0.52% | | | | | | | | |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%b | | | 600,620 | | | | 600,620 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS
(cost $600,620) | | | | | | | 600,620 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH
| | | | | | |
| | | THE CASH PROCEEDS FROM SECURITIES LENDING — 32.46% | | | | | | |
| | |
| |
| | | Investment Companies — 32.46% |
| | | Mount Vernon Securities Lending Trust — Prime Portfolio, 0.29%b | | | 37,416,974 | | | | 37,416,974 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $37,416,974) | | | | | | | 37,416,974 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 133.40%
(cost $107,188,066) | | | | | | $ | 153,762,065 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
114
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
Percentages are stated as a percent of net assets.
| |
| * — | Non-income producing security. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $35,839,537 at December 31, 2010. |
| |
| # — | Contingent value right (contingent upon profitability of company). |
| |
| + — | Security is considered illiquid and was fair valued. The aggregate value of such securities is $502 or 0.00% of net assets. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
| |
| ADR — | American Depository Receipt. |
| GDR — | Global Depository Receipt. |
The accompanying notes are an integral part of these financial statements.
115
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 99.75% | | Shares | | | Value | |
| | |
| |
| | | Asset Management — 1.70% |
| 8739 JP | | SPARX Group Co., Ltd.* | | | 800 | | | $ | 90,159 | |
| | | | | | | | | | | |
| | | Banks — 1.57% |
| 8053 JP | | Sumitomo Corp. | | | 5,900 | | | | 83,497 | |
| | | | | | | | | | | |
| | | Beverage and Tobacco Product Manufacturing — 1.19% |
| ZWC PW | | Grupa Zywiec S.A. | | | 200 | | | | 38,238 | |
| ZWACK HB | | Zwack Unicum Nyrt. | | | 400 | | | | 24,609 | |
| | | | | | | | | | | |
| | | | | | | | | | 62,847 | |
| | | | | | | | | | | |
| | | Chemical Manufacturing — 11.28% |
| GSK | | GlaxoSmithKline plc — ADRˆ | | | 3,000 | | | | 117,660 | |
| LYB | | LyondellBasell Industries NV — Class A* | | | 2,500 | | | | 86,000 | |
| MRK GR | | Merck KGaA | | | 500 | | | | 39,989 | |
| SNY | | Sanofi-Aventis — ADRˆ | | | 4,000 | | | | 128,920 | |
| SHPGY | | Shire PLC — ADRˆ | | | 1,500 | | | | 108,570 | |
| SQM | | Sociedad Quimica y Minera de Chile SA — ADRˆ | | | 2,000 | | | | 116,840 | |
| | | | | | | | | | | |
| | | | | | | | | | 597,979 | |
| | | | | | | | | | | |
| | | Commercial Banking — 0.53% |
| MFG | | Mizuho Financial Group, Inc. — ADRˆ | | | 7,500 | | | | 28,125 | |
| | | | | | | | | | | |
| | | Computer and Electronic Product Manufacturing — 3.67% |
| 6954 JP | | Fanuc Ltd. | | | 400 | | | | 61,436 | |
| 6592 JP | | Mabuchi Motor Co., Ltd. | | | 500 | | | | 25,773 | |
| 6594 JP | | Nidec Corporation | | | 500 | | | | 50,561 | |
| 6506 JP | | YASKAWA Electric Corporation | | | 6,000 | | | | 56,756 | |
| | | | | | | | | | | |
| | | | | | | | | | 194,526 | |
| | | | | | | | | | | |
| | | Consumer Retailing — 2.34% |
| BRK-U CN | | The Brick Group Income Fund — Class A* | | | 45,000 | | | | 124,007 | |
| | | | | | | | | | | |
| | | Credit Intermediation and Related Activities — 7.41% |
| 8309 JP | | Chuo Mitsui Trust Holdings, Inc. | | | 15,000 | | | | 62,261 | |
| 8511 JP | | Japan Securities Finance Co., Ltd. | | | 12,000 | | | | 88,090 | |
| MTU | | Mitsubishi UFJ Financial Group, Inc. — ADRˆ | | | 6,000 | | | | 32,460 | |
| 8512 JP | | Osaka Securities Finance Co. Ltd. | | | 11,800 | | | | 24,562 | |
| OTP HB | | OTP Bank Nyrt.* | | | 1,000 | | | | 24,128 | |
The accompanying notes are an integral part of these financial statements.
116
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Credit Intermediation and Related Activities (Continued) |
| SMFG | | Sumitomo Mitsui Financial Group, Inc. — ADRˆ | | | 5,000 | | | $ | 35,550 | |
| 8403 JP | | The Sumitomo Trust and Banking Co., Ltd. | | | 20,000 | | | | 126,124 | |
| | | | | | | | | | | |
| | | | | | | | | | 393,175 | |
| | | | | | | | | | | |
| | | Crop Production — 1.10% |
| KWS GR | | KWS Saat AG | | | 300 | | | | 58,270 | |
| | | | | | | | | | | |
| | | Data Processing, Hosting and Related Services — 0.72% |
| SUM CN | | Solium Capital Inc.* | | | 25,000 | | | | 38,343 | |
| | | | | | | | | | | |
| | | Food and Beverage Stores — 1.25% |
| TSCO LN | | Tesco plc | | | 10,000 | | | | 66,261 | |
| | | | | | | | | | | |
| | | Food Manufacturing — 2.55% |
| BARN SW | | Barry Callebaut AG | | | 100 | | | | 82,834 | |
| 1334 JP | | Maruha Nichiro Holdings, Inc. | | | 10,000 | | | | 16,628 | |
| 2897 JP | | Nissin Foods Holdings Co., Ltd. | | | 1,000 | | | | 35,842 | |
| | | | | | | | | | | |
| | | | | | | | | | 135,304 | |
| | | | | | | | | | | |
| | | Food Services and Drinking Places — 0.43% |
| LIQ-U CN | | Liquor Stores Income Fund* | | | 1,500 | | | | 22,900 | |
| | | | | | | | | | | |
| | | Funds, Trusts, and Other Financial Vehicles — 4.97% |
| AER CN | | Groupe Aeroplan, Inc. | | | 8,000 | | | | 109,987 | |
| 2337 JP | | Ichigo Group Holdings Co., Ltd.* | | | 200 | | | | 28,009 | |
| JAZ-U CN | | Jazz Air Income Fund* | | | 11,775 | | | | 61,581 | |
| 1615 JP | | TOPIX Banks ETF | | | 40,000 | | | | 64,047 | |
| | | | | | | | | | | |
| | | | | | | | | | 263,624 | |
| | | | | | | | | | | |
| | | Global Exchanges — 0.95% |
| 8697 JP | | Osaka Securities Exchange Co., Ltd. | | | 10 | | | | 50,437 | |
| | | | | | | | | | | |
| | | Insurance Carriers and Related Activities — 2.00% |
| MUV2 GR | | Muenchener Rueckversicherungs-Gesellschaft AG | | | 700 | | | | 106,123 | |
| | | | | | | | | | | |
| | | Machinery Manufacturing — 0.70% |
| KWG GR | | KHD Humboldt Wedag International AG | | | 3,978 | | | | 36,929 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
117
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Medical Equipment and Supplies Manufacturing — 1.68% |
| NOBN VX | | Nobel Biocare Holding AG | | | 3,500 | | | $ | 65,995 | |
| STMN SW | | Straumann Holding AG | | | 100 | | | | 22,888 | |
| | | | | | | | | | | |
| | | | | | | | | | 88,883 | |
| | | | | | | | | | | |
| | | Merchant Wholesalers, Durable Goods — 2.32% |
| CFAO FP | | CFAO | | | 1,000 | | | | 43,524 | |
| 1911 JP | | Sumitomo Forestry Co., Ltd. | | | 5,000 | | | | 43,909 | |
| 8113 JP | | Unicharm Corporation | | | 900 | | | | 35,805 | |
| | | | | | | | | | | |
| | | | | | | | | | 123,238 | |
| | | | | | | | | | | |
| | | Merchant Wholesalers, Nondurable Goods — 3.82% |
| EDEN FP | | Edenred* | | | 5,000 | | | | 118,364 | |
| 5002 JP | | Showa Shell Sekiyu K.K. | | | 4,000 | | | | 36,655 | |
| 3402 JP | | Toray Industries, Inc. | | | 8,000 | | | | 47,789 | |
| | | | | | | | | | | |
| | | | | | | | | | 202,808 | |
| | | | | | | | | | | |
| | | Mining (except Oil and Gas) — 2.99% |
| ELT AU | | Elementos Limited* | | | 7,424 | | | | 2,696 | |
| ORE AU | | Orocobre Ltd.* | | | 30,000 | | | | 100,950 | |
| TTT | | Terra Nova Realty Corp.* | | | 7,000 | | | | 54,670 | |
| | | | | | | | | | | |
| | | | | | | | | | 158,316 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction — 0.27% |
| MAU FP | | Establissements Maurel et Prom | | | 1,000 | | | | 14,098 | |
| | | | | | | | | | | |
| | | Other Information Services — 2.08% |
| CPU AU | | Computershare Limited | | | 10,000 | | | | 110,257 | |
| | | | | | | | | | | |
| | | Pharmaceutical and Biotechnology — 5.53% |
| AZN | | AstraZeneca PLC — ADRˆ | | | 1,000 | | | | 46,190 | |
| CSL AU | | CSL Limited | | | 3,100 | | | | 115,064 | |
| NVS | | Novartis AG — ADRˆ | | | 1,000 | | | | 58,950 | |
| ROG VX | | Roche Holding AG | | | 500 | | | | 73,262 | |
| | | | | | | | | | | |
| | | | | | | | | | 293,466 | |
| | | | | | | | | | | |
| | | Professional, Scientific, and Technical Services — 4.13% |
| ALKB DC | | Alk-Abello A/S | | | 800 | | | | 46,109 | |
| BSLN SW | | Basilea Pharmaceutica AG* | | | 750 | | | | 52,139 | |
| 8601 JP | | Daiwa Securities Group Inc. | | | 10,000 | | | | 51,484 | |
The accompanying notes are an integral part of these financial statements.
118
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Professional, Scientific, and Technical Services (Continued) |
| ICLL AV | | Intercell AG* | | | 2,000 | | | $ | 31,002 | |
| PTS CN | | Points International Ltd.* | | | 55,000 | | | | 38,168 | |
| | | | | | | | | | | |
| | | | | | | | | | 218,902 | |
| | | | | | | | | | | |
| | | Rail Transportation — 2.17% |
| CNI | | Canadian National Railway Company | | | 1,000 | | | | 66,470 | |
| CP | | Canadian Pacific Railway Limited | | | 750 | | | | 48,607 | |
| | | | | | | | | | | |
| | | | | | | | | | 115,077 | |
| | | | | | | | | | | |
| | | Real Estate — 3.48% |
| 4321 JP | | Kenedix, Inc.* | | | 100 | | | | 30,447 | |
| 8802 JP | | Mitsubishi Estate Company Ltd. | | | 4,000 | | | | 74,196 | |
| 8801 JP | | Mitsui Fudosan Co., Ltd. | | | 4,000 | | | | 79,764 | |
| | | | | | | | | | | |
| | | | | | | | | | 184,407 | |
| | | | | | | | | | | |
| | | Retail Trade — 3.81% |
| CA FP | | Carrefour SA | | | 1,200 | | | | 49,470 | |
| CO FP | | Casino Guichard-Perrachon SA | | | 500 | | | | 48,742 | |
| MEO GR | | Metro AG | | | 700 | | | | 50,400 | |
| 3382 JP | | Seven & I Holdings Co., Ltd. | | | 2,000 | | | | 53,455 | |
| | | | | | | | | | | |
| | | | | | | | | | 202,067 | |
| | | | | | | | | | | |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 1.02% |
| NMR | | Nomura Holdings, Inc. — ADRˆ | | | 8,500 | | | | 54,230 | |
| | | | | | | | | | | |
| | | Space Research and Technology — 0.97% |
| BA/ LN | | BAE Systems plc | | | 10,000 | | | | 51,450 | |
| | | | | | | | | | | |
| | | Support Activities for Transportation — 5.00% |
| AIO AU | | Asciano Group* | | | 45,000 | | | | 73,411 | |
| BXB AU | | Brambles Limited | | | 12,000 | | | | 87,388 | |
| 9706 JP | | Japan Airport Terminal Co., Ltd. | | | 4,500 | | | | 69,448 | |
| WTE-U CN | | Westshore Terminals Income Fund | | | 1,500 | | | | 34,668 | |
| | | | | | | | | | | |
| | | | | | | | | | 264,915 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
119
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Telecommunications — 3.57% |
| NTT | | Nippon Telegraph & Telephone Corporation — ADRˆ | | | 2,500 | | | $ | 57,350 | |
| VOD | | Vodafone Group Plc — ADR | | | 5,000 | | | | 132,150 | |
| | | | | | | | | | | |
| | | | | | | | | | 189,500 | |
| | | | | | | | | | | |
| | | Transportation Equipment — 0.78% |
| BRE IM | | Brembo S.p.A. | | | 4,000 | | | | 41,292 | |
| | | | | | | | | | | |
| | | Transportation Equipment Manufacturing — 1.19% |
| 1211 HK | | BYD Company Limited — Class H | | | 12,000 | | | | 63,066 | |
| | | | | | | | | | | |
| | | Utilities — 4.15% |
| EGPW IM | | Enel Green Power SpA* | | | 50,000 | | | | 105,635 | |
| SSE LN | | Scottish and Southern Energy plc | | | 6,000 | | | | 114,593 | |
| | | | | | | | | | | |
| | | | | | | | | | 220,228 | |
| | | | | | | | | | | |
| | | Wholesale Trade — 6.43% |
| 8001 JP | | ITOCHU Corporation | | | 7,100 | | | | 71,883 | |
| 8002 JP | | Marubeni Corporation | | | 10,500 | | | | 73,845 | |
| 8058 JP | | Mitsubishi Corporation | | | 3,050 | | | | 82,571 | |
| 8031 JP | | Mitsui & Co., Ltd. | | | 4,700 | | | | 77,629 | |
| 2768 JP | | Sojitz Corporation | | | 16,000 | | | | 35,078 | |
| | | | | | | | | | | |
| | | | | | | | | | 341,006 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $4,721,765) | | | | | | | 5,289,712 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | WARRANTS — 0.00% | | | | | | |
| | |
| |
| | | Oil and Gas and Consumable Fuels — 0.00% |
| B4PM666 | | Maurel Et Prom Cw14 | | | | | | | | |
| | | Expiration Date: 6/30/2014
Strike Price: $14.20* | | | 1,000 | | | | 231 | |
| | | | | | | | | | | |
| | | TOTAL WARRANTS
(cost $0) | | | | | | | 231 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
120
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH
| | | | | | |
| Identifier | | THE CASH PROCEEDS FROM SECURITIES LENDING — 10.40% | | Shares | | | Value | |
| | |
| |
| | | Investment Companies — 10.40% |
| | | Mount Vernon Securities Lending Trust — | | | | | | | | |
| | | Prime Portfolio, 0.29%b | | | 551,370 | | | $ | 551,370 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $551,370) | | | | | | | 551,370 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 110.15%
(cost $5,273,135) | | | | | | $ | 5,841,313 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
| |
| * — | Non-income producing security. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $533,095 at December 31, 2010. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
| |
| ADR — | American Depository Receipt. |
| |
| ETF — | Exchange Traded Fund. |
The accompanying notes are an integral part of these financial statements.
121
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 96.40% | | Shares | | | Value | |
| | |
| |
| | | Air Transportation — 0.86% |
| 670 HK | | China Eastern Airlines Corporation Limited — Class H* | | | 6,982,000 | | | $ | 3,539,147 | |
| 1055 HK | | China Southern Airlines Company Limited — Class H* | | | 11,685,000 | | | | 7,155,800 | |
| | | | | | | | | | | |
| | | | | | | | | | 10,694,947 | |
| | | | | | | | | | | |
| | | Asset Management — 5.14% |
| BX | | The Blackstone Group LP | | | 173,576 | | | | 2,456,100 | |
| BAM | | Brookfield Asset Management Inc. — Class Aˆ | | | 1,487,009 | | | | 49,502,530 | |
| CNS | | Cohen & Steers, Inc.ˆ | | | 148,608 | | | | 3,878,669 | |
| EV | | Eaton Vance Corp.ˆ | | | 176,518 | | | | 5,336,139 | |
| PZN | | Pzena Investment Management, Inc. — Class A | | | 166,825 | | | | 1,226,164 | |
| URB/A CN | | Urbana Corp. — Class A* | | | 398,178 | | | | 492,567 | |
| 806 HK | | Value Partners Group Limited | | | 1,194,000 | | | | 1,198,178 | |
| | | | | | | | | | | |
| | | | | | | | | | 64,090,347 | |
| | | | | | | | | | | |
| | | Beverage and Tobacco Product Manufacturing — 1.89% |
| 168 HK | | Tsingtao Brewery Co. Limited — Class H | | | 4,498,000 | | | | 23,552,465 | |
| | | | | | | | | | | |
| | | Broadcasting (except Internet) — 0.32% |
| SNI | | Scripps Networks Interactive — Class A | | | 75,973 | | | | 3,931,602 | |
| | | | | | | | | | | |
| | | Chemical Manufacturing — 2.45% |
| NVO | | Novo-Nordisk A/S — ADRˆ | | | 52,983 | | | | 5,964,296 | |
| SIAL | | Sigma-Aldrich Corp.ˆ | | | 369,705 | | | | 24,607,565 | |
| | | | | | | | | | | |
| | | | | | | | | | 30,571,861 | |
| | | | | | | | | | | |
| | | Credit Intermediation and Related Activities — 2.10% |
| BK | | The Bank of New York Mellon Corp. | | | 399,325 | | | | 12,059,615 | |
| FMCC | | Federal Home Loan Mortgage Corporation*ˆ | | | 5,499,770 | | | | 1,676,330 | |
| FNMA | | Federal National Mortgage Association*ˆ | | | 4,942,512 | | | | 1,482,754 | |
| NTRS | | Northern Trust Corp. | | | 18,118 | | | | 1,003,918 | |
| SBKFF | | State Bank of India — GDRˆ | | | 54,125 | | | | 6,807,296 | |
| STT | | State Street Corporation | | | 69,072 | | | | 3,200,796 | |
| UCBH | | UCBH Holdings, Inc.*ˆ | | | 112,751 | | | | 474 | |
| | | | | | | | | | | |
| | | | | | | | | | 26,231,183 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
122
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Data Processor — 0.90% |
| MA | | Mastercard, Inc. — Class A | | | 49,000 | | | $ | 10,981,390 | |
| V | | Visa, Inc. — Class Aˆ | | | 4,363 | | | | 307,068 | |
| | | | | | | | | | | |
| | | | | | | | | | 11,288,458 | |
| | | | | | | | | | | |
| | | Defense — 0.48% |
| CACI | | CACI International, Inc. — Class A*ˆ | | | 111,136 | | | | 5,934,662 | |
| | | | | | | | | | | |
| | | European Exchanges — 0.53% |
| BME SM | | Bolsas y Mercados Espanoles | | | 31,300 | | | | 745,766 | |
| DB1 GR | | Deutsche Boerse AG | | | 85,062 | | | | 5,888,059 | |
| | | | | | | | | | | |
| | | | | | | | | | 6,633,825 | |
| | | | | | | | | | | |
| | | Funds, Trusts, and Other Financial Vehicles — 0.54% |
| GDX | | Market Vectors Gold Miners ETFˆ | | | 109,201 | | | | 6,712,585 | |
| | | | | | | | | | | |
| | | Gaming — 7.93% |
| LVS | | Las Vegas Sands Corp.*ˆ | | | 1,015,241 | | | | 46,650,324 | |
| 200 HK | | Melco International Development Limited | | | 1,863,000 | | | | 1,064,188 | |
| MGM | | MGM Mirage*ˆ | | | 759,661 | | | | 11,280,966 | |
| WYNN | | Wynn Resorts Limited | | | 384,385 | | | | 39,914,539 | |
| | | | | | | | | | | |
| | | | | | | | | | 98,910,017 | |
| | | | | | | | | | | |
| | | General Merchandise Stores — 0.73% |
| SHLD | | Sears Holdings Corporation*ˆ | | | 124,047 | | | | 9,148,466 | |
| | | | | | | | | | | |
| | | Global Exchanges — 11.34% |
| 388 HK | | Hong Kong Exchanges & Clearing Limited | | | 3,748,190 | | | | 85,015,168 | |
| JSE SJ | | JSE Limited | | | 470,543 | | | | 5,642,944 | |
| 8697 JP | | Osaka Securities Exchange Co., Ltd. | | | 3,889 | | | | 19,615,045 | |
| SGX SP | | Singapore Exchange Limited | | | 4,758,003 | | | | 31,217,038 | |
| | | | | | | | | | | |
| | | | | | | | | | 141,490,195 | |
| | | | | | | | | | | |
| | | Holding Company — 8.77% |
| BRK/A | | Berkshire Hathaway Inc. — Class A* | | | 228 | | | | 27,462,600 | |
| BRK/B | | Berkshire Hathaway Inc. — Class B*ˆ | | | 191,111 | | | | 15,309,902 | |
| GBLS BB | | Groupe Bruxelles Lambert S.A. Strip VVPR* | | | 23,520 | | | | 251 | |
| IEP | | Icahn Enterprises LPˆ | | | 368,735 | | | | 12,927,849 | |
| LUK | | Leucadia National Corporation | | | 1,827,372 | | | | 53,322,715 | |
| WSC | | Wesco Financial Corporation | | | 1,191 | | | | 438,776 | |
| | | | | | | | | | | |
| | | | | | | | | | 109,462,093 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
123
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Insurance Carriers and Related Activities — 3.97% |
| LFC | | China Life Insurance Co., Limited — ADRˆ | | | 136,494 | | | $ | 8,349,338 | |
| MKL | | Markel Corporation* | | | 32,732 | | | | 12,376,951 | |
| MBI | | MBIA Inc.*ˆ | | | 475,800 | | | | 5,704,842 | |
| 2328 HK | | PICC Property & Casualty Co. Ltd. — Class H* | | | 2,538,000 | | | | 3,676,652 | |
| 2318 HK | | Ping An Insurance Group Company of China Limited — Class H | | | 1,084,745 | | | | 12,127,463 | |
| PWF CN | | Power Financial Corporation | | | 234,000 | | | | 7,232,043 | |
| | | | | | | | | | | |
| | | | | | | | | | 49,467,289 | |
| | | | | | | | | | | |
| | | Mining (except Oil and Gas) — 6.73% |
| AAUKY | | Anglo American PLC — ADRˆ | | | 1,298,013 | | | | 33,891,119 | |
| CCJ | | Cameco Corporationˆ | | | 110,146 | | | | 4,447,696 | |
| FNV CN | | Franco-Nevada Corporation | | | 922,362 | | | | 30,853,626 | |
| RIO | | Rio Tinto Plc — ADRˆ | | | 181,190 | | | | 12,984,075 | |
| 1171 HK | | Yanzhou Coal Mining Company Limited — Class H | | | 570,000 | | | | 1,741,650 | |
| | | | | | | | | | | |
| | | | | | | | | | 83,918,166 | |
| | | | | | | | | | | |
| | | Motion Picture and Sound Recording Industries — 1.59% |
| DWA | | DreamWorks Animation SKG, Inc. — Class A*ˆ | | | 272,086 | | | | 8,018,375 | |
| TWX | | Time Warner, Inc. | | | 151,702 | | | | 4,880,253 | |
| WMG | | Warner Music Group Corp.*ˆ | | | 1,232,967 | | | | 6,941,604 | |
| | | | | | | | | | | |
| | | | | | | | | | 19,840,232 | |
| | | | | | | | | | | |
| | | Non-Store Retailers — 0.77% |
| BID | | Sotheby’s | | | 214,505 | | | | 9,652,725 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction — 10.30% |
| CNQ | | Canadian Natural Resources Ltd.ˆ | | | 756,560 | | | | 33,606,395 | |
| COS-U CN | | Canadian Oil Sands Trust*ˆ | | | 1,186,924 | | | | 31,536,571 | |
| CVE | | Cenovus Energy Inc. | | | 209,469 | | | | 6,962,750 | |
| ECA | | EnCana Corporationˆ | | | 223,523 | | | | 6,508,990 | |
| IMO | | Imperial Oil Ltd.ˆ | | | 192,905 | | | | 7,816,511 | |
| NXY | | Nexen Inc. | | | 349,272 | | | | 7,998,329 | |
| SD | | SandRidge Energy, Inc.*ˆ | | | 102,397 | | | | 749,546 | |
| SU | | Suncor Energy, Inc. | | | 870,926 | | | | 33,347,756 | |
| | | | | | | | | | | |
| | | | | | | | | | 128,526,848 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
124
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Other Exchanges — 1.81% |
| ASX AU | | ASX Ltd. | | | 488,800 | | | $ | 18,837,880 | |
| X CN | | TMX Group Inc. | | | 100,355 | | | | 3,730,384 | |
| | | | | | | | | | | |
| | | | | | | | | | 22,568,264 | |
| | | | | | | | | | | |
| | | Pharmaceutical and Biotechnology — 0.11% |
| SNY | | Sanofi-Aventis — ADRˆ | | | 41,199 | | | | 1,327,844 | |
| | | | | | | | | | | |
| | | Pipeline Transportation — 0.10% |
| 135 HK | | Kunlun Energy Co., Ltd. | | | 800,200 | | | | 1,241,562 | |
| | | | | | | | | | | |
| | | Plastics and Rubber Products Manufacturing — 0.67% |
| JAH | | Jarden Corporation | | | 271,913 | | | | 8,393,954 | |
| | | | | | | | | | | |
| | | Port and Harbor Operations — 0.03% |
| 3382 HK | | Tianjin Port Development Holdings Ltd. | | | 1,512,000 | | | | 357,925 | |
| | | | | | | | | | | |
| | | Rail Transportation — 3.33% |
| CSX | | CSX Corp. | | | 235,029 | | | | 15,185,224 | |
| NSC | | Norfolk Southern Corp. | | | 191,030 | | | | 12,000,504 | |
| UNP | | Union Pacific Corp. | | | 155,277 | | | | 14,387,967 | |
| | | | | | | | | | | |
| | | | | | | | | | 41,573,695 | |
| | | | | | | | | | | |
| | | Real Estate — 10.98% |
| ALX | | Alexander’s, Inc. — REITˆ | | | 5,091 | | | | 2,098,918 | |
| 1 HK | | Cheung Kong (Holdings) Limited | | | 1,063,240 | | | | 16,401,101 | |
| FCE/A | | Forest City Enterprises, Inc. — Class A*ˆ | | | 829,561 | | | | 13,845,373 | |
| GGP | | General Growth Properties, Inc. — REITˆ | | | 2,676,870 | | | | 41,437,947 | |
| 10 HK | | Hang Lung Group Limited | | | 202,500 | | | | 1,331,277 | |
| 12 HK | | Henderson Land Development Company Limited | | | 2,700,000 | | | | 18,410,354 | |
| HHC | | The Howard Hughes Corporation*ˆ | | | 309,272 | | | | 16,830,582 | |
| 823 HK | | The Link — REIT | | | 4,453,000 | | | | 13,835,420 | |
| TPL | | Texas Pacific Land Trustˆ | | | 147,325 | | | | 5,374,416 | |
| VNO | | Vornado Realty Trust — REIT | | | 26,154 | | | | 2,179,413 | |
| 4 HK | | Wharf Holdings Ltd. | | | 673,000 | | | | 5,177,722 | |
| | | | | | | | | | | |
| | | | | | | | | | 136,922,523 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
125
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 5.70% |
| CBOE | | CBOE Holdings Inc.ˆ | | | 363,965 | | | $ | 8,320,240 | |
| CME | | CME Group, Inc. | | | 87,709 | | | | 28,220,371 | |
| ICE | | IntercontinentalExchange Inc.*ˆ | | | 286,211 | | | | 34,102,041 | |
| LAB | | LaBranche & Co. Inc.* | | | 140,000 | | | | 504,000 | |
| | | | | | | | | | | |
| | | | | | | | | | 71,146,652 | |
| | | | | | | | | | | |
| | | Support Activities for Transportation — 3.42% |
| 995 HK | | Anhui Expressway Co. Ltd. — Class H | | | 3,235,000 | | | | 2,838,450 | |
| 694 HK | | Beijing Capital International Airport Company Limited — Class H | | | 27,464,000 | | | | 14,663,390 | |
| 357 HK | | Hainan Meilan International Airport Company Limited — Class H | | | 2,587,720 | | | | 3,295,907 | |
| 177 HK | | Jiangsu Expressway Company Ltd. — Class H | | | 3,748,500 | | | | 4,292,102 | |
| 548 HK | | Shenzhen Expressway Company Limited — Class H | | | 5,602,000 | | | | 3,322,512 | |
| 107 HK | | Sichuan Expressway Co. Limited — Class H | | | 15,126,000 | | | | 9,730,084 | |
| 576 HK | | Zhejiang Expressway Co., Limited — Class H | | | 4,579,000 | | | | 4,512,549 | |
| | | | | | | | | | | |
| | | | | | | | | | 42,654,994 | |
| | | | | | | | | | | |
| | | Telecommunications — 0.53% |
| CHU | | China Unicom (Hong Kong) Limited — ADRˆ | | | 461,835 | | | | 6,581,149 | |
| | | | | | | | | | | |
| | | U.S. Equity Exchanges — 1.61% |
| NYX | | NYSE Euronextˆ | | | 668,732 | | | | 20,048,585 | |
| | | | | | | | | | | |
| | | Utilities — 0.77% |
| BIP | | Brookfield Infrastructure Partners LPˆ | | | 65,930 | | | | 1,387,826 | |
| CPN | | Calpine Corporation*ˆ | | | 349,889 | | | | 4,667,519 | |
| GEN | | GenOn Energy, Inc.*ˆ | | | 937,997 | | | | 3,573,769 | |
| | | | | | | | | | | |
| | | | | | | | | | 9,629,114 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $906,900,057) | | | | | | | 1,202,504,227 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
126
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| Identifier | | ESCROW NOTES — 0.00% | | Amount | | | Value | |
| | |
| |
| | | Special Purpose Entity — 0.00% |
| 13199ACT6 | | Calpine Corporation
(converted from Capline Corp.,
8.750%, 07/15/2008)*+ | | $ | 200,000 | | | $ | 0 | |
| 13199ACU3 | | Calpine Corporation
(converted from Capline Corp.,
7.875%, 04/01/2008)*+ | | | 200,000 | | | | 0 | |
| 13199ACV1 | | Calpine Corporation
(converted from Capline Corp.,
7.625%, 04/15/2050)*+ | | | 100,000 | | | | 0 | |
| | | | | | | | | | | |
| | | TOTAL ESCROW NOTES
(cost $0) | | | | | | | 0 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | CONVERTIBLE BONDS — 0.41% | | | | | | |
| | |
| |
| | | Real Estate — 0.41% |
| 345550AK3 | | Forest City Enterprises, Inc.
3.625%, 10/15/2014 | | | 4,000,000 | | | | 5,065,000 | |
| | | | | | | | | | | |
| | | TOTAL CONVERTIBLE BONDS
(cost $3,110,104) | | | | | | | 5,065,000 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | CORPORATE BONDS — 0.00% | | | | | | |
| | |
| |
| | | Credit Intermediation and Related Activities — 0.00% |
| 317928AA7 | | FINOVA Group, Inc. | | | | | | | | |
| | | 7.500%, 11/15/2009, Acquired 10/19/2006-3/29/2007 at $7,902,157 (Default Effective 4/29/2005)* | | | 9,503,880 | | | | 428 | |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(cost $7,356,219) | | | | | | | 428 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | WARRANTS — 0.01% | | Shares | | | | |
| | |
| |
| | | Real Estate — 0.01% |
| 879 HK | | Henderson Land Development Company Limited | | | | | | | | |
| | | Expiration Date: 6/01/2011
Strike Price: $58.00* | | | 569,400 | | | | 131,860 | |
| | | | | | | | | | | |
| | | TOTAL WARRANTS
(cost $0) | | | | | | | 131,860 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
127
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | SHORT-TERM INVESTMENTS — 3.08% | | Shares | | | Value | |
| | |
| |
| | | Money Market Funds — 3.08% |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%b | | | 38,460,062 | | | $ | 38,460,062 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS | | | | | | | | |
| | | (cost $38,460,062) | | | | | | | 38,460,062 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH
| | | | | | |
| | | THE CASH PROCEEDS FROM SECURITIES LENDING — 19.55% | | | | | | |
| | |
| |
| | | Investment Companies — 19.55% |
| | | Mount Vernon Securities Lending Trust — Prime Portfolio, 0.29%b | | | 243,932,317 | | | | 243,932,317 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $243,932,317) | | | | | | | 243,932,317 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 119.45%
(cost $1,199,758,759) | | | | | | $ | 1,490,093,894 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
| |
| * — | Non-income producing security. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $230,416,063 at December 31, 2010. |
| |
| + — | Security is considered illiquid and was fair valued. The aggregate value of such securities is $0 or 0.00% of net assets. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
| |
| ADR — | American Depository Receipt. |
| |
| ETF — | Exchange Traded Fund. |
| |
| GDR — | Global Depository Receipt. |
| |
| REIT — | Real Estate Investment Trust. |
The accompanying notes are an integral part of these financial statements.
128
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 98.43% | | Shares | | | Value | |
| | |
| |
| | | Ambulatory Health Care Services — 0.01% |
| AVXT | | AVAX Technologies, Inc.* | | | 50,000 | | | $ | 2,200 | |
| | | | | | | | | | | |
| | | Chemical Manufacturing — 3.93% |
| LONN VX | | Lonza Group AG | | | 15,000 | | | | 1,202,406 | |
| MMRF | | MMRGlobal Inc.* | | | 43,000 | | | | 3,913 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,206,319 | |
| | | | | | | | | | | |
| | | Computer and Electronic Product Manufacturing — 0.01% |
| TGX | | Theragenics Corporation* | | | 2,000 | | | | 3,020 | |
| | | | | | | | | | | |
| | | Funds, Trusts, and Other Financial Vehicles — 0.00% |
| IBLTZ | | IMPATH Bankruptcy Liquidating Trust — Class A | | | 26,000 | | | | 1,445 | |
| | | | | | | | | | | |
| | | Pharmaceutical and Biotechnology — 89.36% |
| ABT | | Abbott Laboratories | | | 28,000 | | | | 1,341,480 | |
| ATLN VX | | Actelion Ltd.* | | | 10,000 | | | | 547,594 | |
| AEZS | | AEterna Zentaris Inc.*ˆ | | | 102,500 | | | | 176,300 | |
| ALKS | | Alkermes, Inc.*ˆ | | | 31,000 | | | | 380,680 | |
| AGEN | | Antigenics, Inc.* | | | 892 | | | | 892 | |
| ARNA | | Arena Pharmaceuticals, Inc.*ˆ | | | 45,000 | | | | 77,400 | |
| AZN | | AstraZeneca PLC — ADRˆ | | | 17,000 | | | | 785,230 | |
| ATB CN | | Atrium Innovations Inc.*ˆ | | | 4,884 | | | | 74,761 | |
| BIIB | | Biogen Idec, Inc.* | | | 37,250 | | | | 2,497,613 | |
| BPAX | | BioSante Pharmaceuticals, Inc.*ˆ | | | 13,476 | | | | 22,101 | |
| BMY | | Bristol-Myers Squibb Company | | | 48,000 | | | | 1,271,040 | |
| CLDX | | Celldex Therapeutics Inc.*ˆ | | | 26,294 | | | | 108,331 | |
| CEPH | | Cephalon, Inc.*ˆ | | | 21,000 | | | | 1,296,120 | |
| 1093 HK | | China Pharmaceutical Group Limited | | | 1,640,000 | | | | 915,706 | |
| CBST | | Cubist Pharmaceuticals, Inc.*ˆ | | | 38,000 | | | | 813,200 | |
| DNDN | | Dendreon Corporation*ˆ | | | 29,000 | | | | 1,012,680 | |
| LLY | | Eli Lilly & Company | | | 36,000 | | | | 1,261,440 | |
| EPCT | | EpiCept Corporation*ˆ | | | 680 | | | | 564 | |
| GENZ | | Genzyme Corporation* | | | 28,538 | | | | 2,031,906 | |
| GSK | | GlaxoSmithKline plc — ADRˆ | | | 37,673 | | | | 1,477,535 | |
| HGSI | | Human Genome Sciences, Inc.*ˆ | | | 21,000 | | | | 501,690 | |
| IMGN | | ImmunoGen, Inc.*ˆ | | | 14,000 | | | | 129,640 | |
| ISIS | | Isis Pharmaceuticals, Inc.*ˆ | | | 27,000 | | | | 273,240 | |
The accompanying notes are an integral part of these financial statements.
129
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Pharmaceutical and Biotechnology (Continued) |
| ISA CN | | Isotechnika Pharma Inc.* | | | 40,000 | | | $ | 10,057 | |
| JNJ | | Johnson & Johnson | | | 30,000 | | | | 1,855,500 | |
| LIFE | | Life Technologies Corporation* | | | 36,000 | | | | 1,998,000 | |
| MAXY | | Maxygen, Inc. | | | 30,000 | | | | 117,900 | |
| MYRX | | Myrexis Inc.* | | | 63,000 | | | | 262,080 | |
| COX FP | | NicOx SA* | | | 41,535 | | | | 122,108 | |
| NVS | | Novartis AG — ADRˆ | | | 35,000 | | | | 2,063,250 | |
| ONTY | | Oncothyreon, Inc.*ˆ | | | 28,333 | | | | 92,082 | |
| PTIE | | Pain Therapeutics, Inc.ˆ | | | 38,000 | | | | 256,500 | |
| PFE | | Pfizer, Inc. | | | 56,000 | | | | 980,560 | |
| PGNX | | Progenics Pharmaceuticals, Inc.*ˆ | | | 65,200 | | | | 355,992 | |
| SNY | | Sanofi-Aventis — ADRˆ | | | 38,000 | | | | 1,224,740 | |
| SCR | | Simcere Pharmaceutical Group — ADR*ˆ | | | 58,000 | | | | 661,780 | |
| TGEN | | Targeted Genetics Corp.* | | | 1,000 | | | | 360 | |
| TELK | | Telik, Inc.*ˆ | | | 116,000 | | | | 88,160 | |
| VICL | | Vical Incorporated* | | | 82,500 | | | | 166,650 | |
| VPHM | | ViroPharma Incorporated* | | | 10,000 | | | | 173,200 | |
| | | | | | | | | | | |
| | | | | | | | | | 27,426,062 | |
| | | | | | | | | | | |
| | | Pharmaceutical and Medicine Manufacturing — 1.76% |
| 4508 JP | | Mitsubishi Tanabe Pharma Corporation | | | 32,000 | | | | 540,362 | |
| | | | | | | | | | | |
| | | Professional, Scientific, and Technical Services — 3.36% |
| AFFX | | Affymetrix, Inc.*ˆ | | | 134,000 | | | | 674,020 | |
| AMRI | | Albany Molecular Research, Inc.* | | | 53,000 | | | | 297,860 | |
| CDXS | | Codexis, Inc.* | | | 5,611 | | | | 59,477 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,031,357 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $29,531,253) | | | | | | | 30,210,765 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
130
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| Identifier | | ESCROW NOTES — 0.00% | | Amount | | | Value | |
| | |
| |
| | | Special Purpose Entity — 0.00% |
| 053ESC992 | | Avigen Inc. Escrow*+ | | $ | 51,000 | | | $ | 0 | |
| | | | | | | | | | | |
| | | TOTAL ESCROW NOTES
(cost $0) | | | | | | | 0 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Identifier | | RIGHTS — 0.01% | | Shares | | | Value | |
| | |
| |
| | | Funds, Trusts, and Other Financial Vehicles — 0.01% |
| LGNYZ | | Ligand Pharmaceuticals Incorporated General Contingent Value Right* | | | 44,000 | | | | 924 | |
| LGNXZ | | Ligand Pharmaceuticals Incorporated Glucagon Contingent Value Right* | | | 44,000 | | | | 836 | |
| LGNDZ | | Ligand Pharmaceuticals Incorporated Roche Contingent Value Right | | | 44,000 | | | | 1,056 | |
| LGNZZ | | Ligand Pharmaceuticals Incorporated TR Beta Contingent Value Right* | | | 44,000 | | | | 946 | |
| | | | | | | | | | | |
| | | TOTAL RIGHTS
(cost $0) | | | | | | | 3,762 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | SHORT-TERM INVESTMENTS — 1.58% | | | | | | |
| | |
| |
| | | Money Market Funds — 1.58% |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%b | | | 483,789 | | | | 483,789 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS
(cost $483,789) | | | | | | | 483,789 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
131
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH THE
| | | | | | |
| | | CASH PROCEEDS FROM SECURITIES
| | | | | | |
| Identifier | | LENDING — 35.17% | | Shares | | | Value | |
| | |
| |
| | | Investment Companies — 35.17% |
| | | Mount Vernon Securities Lending Trust — | | | | | | | | |
| | | Prime Portfolio, 0.29%b | | | 10,793,305 | | | $ | 10,793,305 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $10,793,305) | | | | | | | 10,793,305 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 135.19%
(cost $40,808,347) | | | | | | $ | 41,491,621 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
| |
| * — | Non-income producing security. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $10,283,709 at December 31, 2010. |
| |
| + — | Security is considered illiquid and was fair valued. The aggregate value of such securities is $0 or 0.00% of net assets. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
| |
| ADR — | American Depository Receipt. |
The accompanying notes are an integral part of these financial statements.
132
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 98.68% | | Shares | | | Value | |
| | |
| |
| | | Air Transportation — 6.76% |
| CEA | | China Eastern Airlines Corporation Limited — ADR*ˆ | | | 59,028 | | | $ | 1,500,492 | |
| 670 HK | | China Eastern Airlines Corporation Limited — Class H* | | | 3,051,000 | | | | 1,546,539 | |
| ZNH | | China Southern Airlines Company Limited — ADR*ˆ | | | 68,060 | | | | 2,076,510 | |
| 1055 HK | | China Southern Airlines Company Limited — Class H* | | | 8,750,000 | | | | 5,358,430 | |
| | | | | | | | | | | |
| | | | | | | | | | 10,481,971 | |
| | | | | | | | | | | |
| | | Asset Management — 6.77% |
| BNBMF | | BAM Investments Ltd.* | | | 125,540 | | | | 2,051,720 | |
| CNS | | Cohen & Steers, Inc.ˆ | | | 83,623 | | | | 2,182,560 | |
| EV | | Eaton Vance Corp.ˆ | | | 16,000 | | | | 483,680 | |
| PZN | | Pzena Investment Management, Inc. — Class A | | | 103,410 | | | | 760,064 | |
| SII CN | | Sprott, Inc. | | | 1,680 | | | | 13,619 | |
| URB/A CN | | Urbana Corp. — Class A* | | | 481,071 | | | | 595,109 | |
| GROW | | US Global Investors, Inc. — Class Aˆ | | | 73,940 | | | | 601,132 | �� |
| 806 HK | | Value Partners Group Limited | | | 608,000 | | | | 610,127 | |
| WSDT | | WisdomTree Investments, Inc.*ˆ | | | 771,080 | | | | 3,199,982 | |
| | | | | | | | | | | |
| | | | | | | | | | 10,497,993 | |
| | | | | | | | | | | |
| | | Beverage and Tobacco Product Manufacturing — 4.62% |
| 168 HK | | Tsingtao Brewery Co. Limited — Class H | | | 1,370,000 | | | | 7,173,605 | |
| | | | | | | | | | | |
| | | Commercial Banking — 1.34% | | | | | | | | |
| BLBD LI | | BLOM Bank s.a.l. — GDR | | | 199,240 | | | | 2,072,096 | |
| | | | | | | | | | | |
| | | Credit Intermediation and Related Activities — 3.39% |
| BR | | Broadridge Financial Solutions, Inc. | | | 73,300 | | | | 1,607,469 | |
| CATY | | Cathay General Bancorpˆ | | | 45,037 | | | | 752,118 | |
| CLFC | | Center Financial Corporation*ˆ | | | 85,100 | | | | 645,058 | |
| EWBC | | East West Bancorp, Inc.ˆ | | | 31,794 | | | | 621,573 | |
| FBOD | | First Bank of Delaware | | | 80,025 | | | | 134,442 | |
| NARA | | Nara Bancorp, Inc.* | | | 85,910 | | | | 843,636 | |
| PFBC | | Preferred Bank Los Angeles* | | | 46,803 | | | | 82,373 | |
The accompanying notes are an integral part of these financial statements.
133
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Credit Intermediation and Related Activities (Continued) |
| UCBH | | UCBH Holdings, Inc.* | | | 182,396 | | | $ | 766 | |
| WIBC | | Wilshire Bancorp, Inc.ˆ | | | 75,810 | | | | 577,672 | |
| | | | | | | | | | | |
| | | | | | | | | | 5,265,107 | |
| | | | | | | | | | | |
| | | Defense — 1.13% |
| CACI | | CACI International, Inc. — Class A*ˆ | | | 17,988 | | | | 960,559 | |
| MANT | | ManTech International Corporation — Class A* | | | 19,275 | | | | 796,636 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,757,195 | |
| | | | | | | | | | | |
| | | Food Services and Drinking Places — 0.49% |
| OCX CN | | Onex Corporation | | | 24,860 | | | | 755,826 | |
| | | | | | | | | | | |
| | | Gaming — 0.74% |
| 200 HK | | Melco International Development Limited | | | 1,999,000 | | | | 1,141,874 | |
| | | | | | | | | | | |
| | | Global Exchanges — 10.31% |
| JSE SJ | | JSE Limited | | | 385,739 | | | | 4,625,940 | |
| 8697 JP | | Osaka Securities Exchange Co., Ltd. | | | 810 | | | | 4,085,417 | |
| SGX SP | | Singapore Exchange Limited | | | 1,111,180 | | | | 7,290,401 | |
| | | | | | | | | | | |
| | | | | | | | | | 16,001,758 | |
| | | | | | | | | | | |
| | | Holding Company — 5.82% |
| IEP | | Icahn Enterprises LP | | | 249,700 | | | | 8,754,482 | |
| WSC | | Wesco Financial Corporation | | | 746 | | | | 274,834 | |
| | | | | | | | | | | |
| | | | | | | | | | 9,029,316 | |
| | | | | | | | | | | |
| | | Insurance Carriers and Related Activities — 2.56% |
| GLRE | | Greenlight Capital Re, Ltd. — Class A* | | | 51,000 | | | | 1,367,310 | |
| MBI | | MBIA Inc.*ˆ | | | 217,800 | | | | 2,611,422 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,978,732 | |
| | | | | | | | | | | |
| | | Mining (except Oil and Gas) — 7.65% |
| FNV CN | | Franco-Nevada Corporation | | | 183,416 | | | | 6,135,388 | |
| GLW CN | | Gold Wheaton Gold Corporation* | | | 40,450 | | | | 209,105 | |
| IMN CN | | Inmet Mining Corporation | | | 71,140 | | | | 5,527,785 | |
| | | | | | | | | | | |
| | | | | | | | | | 11,872,278 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
134
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Motion Picture and Sound Recording Industries — 5.25% |
| DWA | | DreamWorks Animation SKG, Inc. — Class A* | | | 114,144 | | | $ | 3,363,824 | |
| WMG | | Warner Music Group Corp.*ˆ | | | 847,890 | | | | 4,773,621 | |
| | | | | | | | | | | |
| | | | | | | | | | 8,137,445 | |
| | | | | | | | | | | |
| | | Non-Store Retailers — 2.84% |
| RBA | | Ritchie Bros. Auctioneers, Incorporatedˆ | | | 15,077 | | | | 347,525 | |
| BID | | Sotheby’sˆ | | | 90,299 | | | | 4,063,455 | |
| | | | | | | | | | | |
| | | | | | | | | | 4,410,980 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction — 1.13% |
| SEMUF | | Siem Industries Inc.* | | | 29,342 | | | | 1,760,520 | |
| | | | | | | | | | | |
| | | Other Exchanges — 0.75% |
| FTIS LI | | Financial Technologies (India) Ltd. — GDR | | | 208,390 | | | | 610,583 | |
| NZX NZ | | NZX Ltd. | | | 462,420 | | | | 551,285 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,161,868 | |
| | | | | | | | | | | |
| | | Pharmaceutical and Biotechnology — 0.40% |
| 1093 HK | | China Pharmaceutical Group Limited | | | 1,105,000 | | | | 616,985 | |
| | | | | | | | | | | |
| | | Pipeline Transportation — 2.16% |
| 135 HK | | Kunlun Energy Co., Ltd. | | | 911,000 | | | | 1,413,475 | |
| NEGI | | National Energy Group, Inc.* | | | 207,595 | | | | 871,899 | |
| PVG | | Penn Virginia GP Holdings LP | | | 40,634 | | | | 1,069,487 | |
| SUG | | Southern Union Company | | | 1 | | | | 12 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,354,873 | |
| | | | | | | | | | | |
| | | Plastics and Rubber Products Manufacturing — 2.83% |
| JAH | | Jarden Corporation | | | 142,210 | | | | 4,390,023 | |
| | | | | | | | | | | |
| | | Port and Harbor Operations — 0.07% |
| 3382 HK | | Tianjin Port Development Holdings Ltd. | | | 460,000 | | | | 108,892 | |
| | | | | | | | | | | |
| | | Publishing Industries (except Internet) — 1.26% |
| ROVI | | Rovi Corporation*ˆ | | | 29,770 | | | | 1,846,038 | |
| VALU | | Value Line, Inc.ˆ | | | 7,615 | | | | 110,037 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,956,075 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
135
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Rail Transportation — 0.01% |
| 525 HK | | Guangshen Railway Company Limited — Class H | | | 58,000 | | | $ | 22,834 | |
| | | | | | | | | | | |
| | | Real Estate — 7.46% |
| ALX | | Alexander’s, Inc.ˆ | | | 6,369 | | | | 2,625,811 | |
| BLMC | | Biloxi Marsh Lands Corporation | | | 100 | | | | 1,310 | |
| KEWL | | Keweenaw Land Association Ltd.* | | | 190 | | | | 35,245 | |
| 823 HK | | The Link REIT | | | 626,000 | | | | 1,944,975 | |
| TPL | | Texas Pacific Land Trustˆ | | | 190,800 | | | | 6,960,384 | |
| | | | | | | | | | | |
| | | | | | | | | | 11,567,725 | |
| | | | | | | | | | | |
| | | Rental and Leasing Services — 0.04% |
| CDCO | | Comdisco Holding Company, Inc.* | | | 7,560 | | | | 66,150 | |
| | | | | | | | | | | |
| | | Restaurants — 0.53% |
| WEN | | Wendy’s/Arby’s Group, Inc. — Class A | | | 177,496 | | | | 820,031 | |
| | | | | | | | | | | |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 5.22% |
| CBOE | | CBOE Holdings Inc.ˆ | | | 38,770 | | | | 886,282 | |
| ICE | | IntercontinentalExchange Inc.*ˆ | | | 13,010 | | | | 1,550,142 | |
| JEF | | Jefferies Group, Inc.ˆ | | | 202,940 | | | | 5,404,292 | |
| LAB | | LaBranche & Co. Inc.* | | | 67,582 | | | | 243,295 | |
| RHJI BB | | RHJ International* | | | 800 | | | | 6,628 | |
| SWS | | SWS Group, Inc. | | | 1,000 | | | | 5,050 | |
| | | | | | | | | | | |
| | | | | | | | | | 8,095,689 | |
| | | | | | | | | | | |
| | | Support Activities for Transportation — 11.98% |
| 694 HK | | Beijing Capital International Airport Company Limited — Class H | | | 9,014,000 | | | | 4,812,693 | |
| 357 HK | | Hainan Meilan International Airport Company Limited — Class H | | | 3,265,000 | | | | 4,158,540 | |
| 548 HK | | Shenzhen Expressway Company Limited — Class H | | | 539,000 | | | | 319,678 | |
| 107 HK | | Sichuan Expressway Co. Limited — Class H | | | 13,766,100 | | | | 8,855,303 | |
| 576 HK | | Zhejiang Expressway Co., Limited — Class H | | | 451,000 | | | | 444,455 | |
| | | | | | | | | | | |
| | | | | | | | | | 18,590,669 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
136
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Telecommunications — 0.04% |
| CIBY | | CIBL, Inc. | | | 18 | | | $ | 9,180 | |
| LICT | | Lynch Interactive Corporation* | | | 16 | | | | 42,400 | |
| SNSH | | Sunshine PCS Corporation — Class A* | | | 208 | | | | 6,697 | |
| | | | | | | | | | | |
| | | | | | | | | | 58,277 | |
| | | | | | | | | | | |
| | | Utilities — 2.57% |
| CPN | | Calpine Corporation* | | | 70,320 | | | | 938,069 | |
| GEN | | GenOn Energy, Inc.*ˆ | | | 516,630 | | | | 1,968,360 | |
| 1071 HK | | Huadian Power International Corporation — Class H | | | 800,000 | | | | 156,443 | |
| PICO | | PICO Holdings, Inc.* | | | 28,851 | | | | 917,462 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,980,334 | |
| | | | | | | | | | | |
| | | Waste Management and Remediation Services — 2.56% |
| CVA | | Covanta Holding Corporationˆ | | | 230,839 | | | | 3,968,122 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $120,406,175) | | | | | | | 153,095,243 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| | | CORPORATE BONDS — 0.00% | | Amount | | | | |
| | |
| |
| | | Credit Intermediation and Related Activities — 0.00% |
| 317928AA7 | | FINOVA Group, Inc. | | | | | | | | |
| | | 7.500%, 11/15/2009, Acquired
10/19/2006-5/17/2007 at $741,082
(Default Effective 4/29/2005)* | | $ | 2,783,965 | | | | 125 | |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS | | | | | | | | |
| | | (cost $1,236,720) | | | | | | | 125 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | RIGHTS — 0.46% | | Shares | | | | |
| | |
| |
| | | Rental and Leasing Services — 0.46% |
| CDCOR | | Comdisco Holding Company, Inc. | | | | | | | | |
| | | Expiration Date: 12/31/2050 | | | | | | | | |
| | | Strike Price: $1.00*# | | | 5,634,807 | | | | 704,351 | |
| | | | | | | | | | | |
| | | TOTAL RIGHTS
(cost $1,577,064) | | | | | | | 704,351 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
137
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | SHORT-TERM INVESTMENTS — 1.15% | | Shares | | | Value | |
| | |
| |
| | | Money Market Funds — 1.15% |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%b | | | 1,786,829 | | | $ | 1,786,829 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS
(cost $1,786,829) | | | | | | | 1,786,829 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH
| | | | | | |
| | | THE CASH PROCEEDS FROM
| | | | | | |
| | | SECURITIES LENDING — 25.82% | | | | | | |
| | |
| |
| | | Investment Companies — 25.82% |
| | | Mount Vernon Securities Lending Trust — Prime Portfolio, 0.29%b | | | 40,060,947 | | | | 40,060,947 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $40,060,947) | | | | | | | 40,060,947 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 126.11%
(cost $165,067,735) | | | | | | $ | 195,647,495 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
| |
| * — | Non-income producing security. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $38,006,161 at December 31, 2010. |
| |
| # — | Contingent value right (contingent upon profitability of company). |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
| |
| ADR — | American Depository Receipt. |
| GDR — | Global Depository Receipt. |
The accompanying notes are an integral part of these financial statements.
138
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 100.52% | | Shares | | | Value | |
| | |
| |
| | | Asset Management — 20.84% |
| AB | | AllianceBernstein Holding LPˆ | | | 7,172 | | | $ | 167,323 | |
| BNBMF | | BAM Investments Ltd.* | | | 31,090 | | | | 508,109 | |
| BX | | The Blackstone Group LPˆ | | | 68,399 | | | | 967,846 | |
| BAM | | Brookfield Asset Management Inc. — Class A | | | 41,875 | | | | 1,394,019 | |
| CNS | | Cohen & Steers, Inc.ˆ | | | 47,577 | | | | 1,241,759 | |
| EV | | Eaton Vance Corp. | | | 19,120 | | | | 577,998 | |
| BEN | | Franklin Resources, Inc. | | | 1,591 | | | | 176,935 | |
| LM | | Legg Mason, Inc. | | | 27,870 | | | | 1,010,845 | |
| PZN | | Pzena Investment Management, Inc. — Class A | | | 59,820 | | | | 439,677 | |
| SII CN | | Sprott, Inc. | | | 43,155 | | | | 349,823 | |
| TROW | | T. Rowe Price Group, Inc. | | | 5,979 | | | | 385,885 | |
| URB/A CN | | Urbana Corp. — Class A* | | | 356,004 | | | | 440,395 | |
| 806 HK | | Value Partners Group Limited | | | 1,712,000 | | | | 1,717,991 | |
| WSDT | | WisdomTree Investments, Inc.*ˆ | | | 679,007 | | | | 2,817,879 | |
| | | | | | | | | | | |
| | | | | | | | | | 12,196,484 | |
| | | | | | | | | | | |
| | | Commercial Banking — 1.12% |
| 3988 HK | | Bank of China Ltd. — Class H | | | 394,000 | | | | 207,827 | |
| 939 HK | | China Construction Bank Corp. — Class H | | | 232,000 | | | | 208,038 | |
| 1398 HK | | Industrial & Commercial Bank of China — Class H | | | 322,000 | | | | 239,860 | |
| | | | | | | | | | | |
| | | | | | | | | | 655,725 | |
| | | | | | | | | | | |
| | | Credit Intermediation and Related Activities — 7.20% |
| BK | | The Bank of New York Mellon Corp. | | | 28,310 | | | | 854,962 | |
| BR | | Broadridge Financial Solutions, Inc. | | | 61,501 | | | | 1,348,717 | |
| CATY | | Cathay General Bancorpˆ | | | 3,237 | | | | 54,058 | |
| CLFC | | Center Financial Corporation*ˆ | | | 5,454 | | | | 41,341 | |
| EWBC | | East West Bancorp, Inc. | | | 3,204 | | | | 62,638 | |
| FMCC | | Federal Home Loan Mortgage Corporation*ˆ | | | 399,985 | | | | 121,915 | |
| FNMA | | Federal National Mortgage Association*ˆ | | | 379,150 | | | | 113,745 | |
| HAFC | | Hanmi Financial Corporation* | | | 6,157 | | | | 7,081 | |
| NARA | | Nara Bancorp, Inc.* | | | 6,164 | | | | 60,530 | |
| NTRS | | Northern Trust Corp. | | | 15,354 | | | | 850,765 | |
| PFBC | | Preferred Bank Los Angeles* | | | 2,605 | | | | 4,585 | |
| STT | | State Street Corporation | | | 13,865 | | | | 642,504 | |
The accompanying notes are an integral part of these financial statements.
139
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Credit Intermediation and Related Activities (Continued) |
| UCBH | | UCBH Holdings, Inc.* | | | 6,803 | | | $ | 29 | |
| WIBC | | Wilshire Bancorp, Inc.ˆ | | | 6,341 | | | | 48,318 | |
| | | | | | | | | | | |
| | | | | | | | | | 4,211,188 | |
| | | | | | | | | | | |
| | | Data Processor — 6.05% |
| DST | | DST Systems, Inc. | | | 5,020 | | | | 222,637 | |
| FISV | | Fiserv, Inc.* | | | 3,606 | | | | 211,167 | |
| MA | | Mastercard, Inc. — Class A | | | 5,870 | | | | 1,315,526 | |
| MSCI | | MSCI Inc. — Class A* | | | 19,731 | | | | 768,720 | |
| VRSK | | Verisk Analytics, Inc. — Class A*ˆ | | | 5,117 | | | | 174,387 | |
| V | | Visa, Inc. — Class Aˆ | | | 12,020 | | | | 845,968 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,538,405 | |
| | | | | | | | | | | |
| | | European Exchanges — 1.24% |
| DB1 GR | | Deutsche Boerse AG | | | 10,508 | | | | 727,372 | |
| | | | | | | | | | | |
| | | Food Services and Drinking Places — 1.40% |
| OCX CN | | Onex Corporation | | | 26,930 | | | | 818,761 | |
| | | | | | | | | | | |
| | | Global Exchanges — 14.23% |
| 388 HK | | Hong Kong Exchanges & Clearing Limited | | | 160,850 | | | | 3,648,345 | |
| JSE SJ | | JSE Limited | | | 145,400 | | | | 1,743,696 | |
| 8697 JP | | Osaka Securities Exchange Co., Ltd. | | | 150 | | | | 756,559 | |
| SGX SP | | Singapore Exchange Limited | | | 332,727 | | | | 2,183,007 | |
| | | | | | | | | | | |
| | | | | | | | | | 8,331,607 | |
| | | | | | | | | | | |
| | | Holding Company — 3.30% |
| BRK/A | | Berkshire Hathaway Inc. — Class A* | | | 10 | | | | 1,204,500 | |
| IEP | | Icahn Enterprises LP | | | 20,728 | | | | 726,724 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,931,224 | |
| | | | | | | | | | | |
| | | Insurance Carriers and Related Activities — 7.80% |
| LFC | | China Life Insurance Co., Limited — ADRˆ | | | 7,460 | | | | 456,328 | |
| 2628 HK | | China Life Insurance Co., Limited — Class H | | | 114,000 | | | | 465,662 | |
| MKL | | Markel Corporation* | | | 523 | | | | 197,762 | |
| MBI | | MBIA Inc.*ˆ | | | 54,600 | | | | 654,654 | |
| 2318 HK | | Ping An Insurance Group Company of China Limited — Class H | | | 152,000 | | | | 1,699,362 | |
| PWF CN | | Power Financial Corporation | | | 35,240 | | | | 1,089,133 | |
| | | | | | | | | | | |
| | | | | | | | | | 4,562,901 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
140
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Mining (except Oil and Gas) — 6.89% |
| FNV CN | | Franco-Nevada Corporation | | | 120,630 | | | $ | 4,035,154 | |
| | | | | | | | | | | |
| | | Non-Store Retailers — 3.25% |
| BID | | Sotheby’sˆ | | | 42,278 | | | | 1,902,510 | |
| | | | | | | | | | | |
| | | Other Exchanges — 3.40% |
| ASX AU | | ASX Ltd. | | | 38,080 | | | | 1,467,566 | |
| FTIS LI | | Financial Technologies (India) Ltd. — GDR | | | 102,980 | | | | 301,731 | |
| IMAREX NO | | IMAREX ASA* | | | 1,850 | | | | 18,072 | |
| NZX NZ | | NZX Ltd. | | | 170,954 | | | | 203,807 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,991,176 | |
| | | | | | | | | | | |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 18.69% |
| CBOE | | CBOE Holdings Inc.ˆ | | | 106,208 | | | | 2,427,915 | |
| CME | | CME Group, Inc.ˆ | | | 10,121 | | | | 3,256,432 | |
| GFIG | | GFI Group, Inc. | | | 1,737 | | | | 8,146 | |
| ICE | | IntercontinentalExchange Inc.* | | | 26,747 | | | | 3,186,905 | |
| JEF | | Jefferies Group, Inc.ˆ | | | 68,020 | | | | 1,811,373 | |
| LSE LN | | London Stock Exchange Group plc | | | 16,538 | | | | 216,072 | |
| TLPR LN | | Tullett Prebon plc | | | 5,570 | | | | 33,243 | |
| | | | | | | | | | | |
| | | | | | | | | | 10,940,086 | |
| | | | | | | | | | | |
| | | Support Activities for Transportation — 0.34% |
| 995 HK | | Anhui Expressway Co. Ltd. — Class H | | | 54,000 | | | | 47,381 | |
| 177 HK | | Jiangsu Expressway Company Ltd. — Class H | | | 27,000 | | | | 30,915 | |
| 548 HK | | Shenzhen Expressway Company Limited — Class H | | | 24,000 | | | | 14,234 | |
| 107 HK | | Sichuan Expressway Co. Limited — Class H | | | 114,000 | | | | 73,333 | |
| 576 HK | | Zhejiang Expressway Co., Limited — Class H | | | 32,000 | | | | 31,536 | |
| | | | | | | | | | | |
| | | | | | | | | | 197,399 | |
| | | | | | | | | | | |
| | | Telecommunications — 0.02% |
| IRDM | | Iridium Communications, Inc.*ˆ | | | 1,672 | | | | 13,794 | |
| | | | | | | | | | | |
| | | U.S. Equity Exchanges — 4.65% |
| NDAQ | | The NASDAQ OMX Group, Inc.* | | | 20,300 | | | | 481,313 | |
| NYX | | NYSE Euronext | | | 74,740 | | | | 2,240,705 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,722,018 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
141
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Shares | | | Value | |
| | |
| |
| | | Utilities — 0.10% |
| BIP | | Brookfield Infrastructure Partners LPˆ | | | 2,816 | | | $ | 59,277 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $51,600,258) | | | | | | | 58,835,081 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | SHORT-TERM INVESTMENTS — 0.04% | | | | | | |
| | |
| |
| | | Money Market Funds — 0.04% |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%b | | | 20,282 | | | | 20,282 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS
(cost $20,282) | | | | | | | 20,282 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH
| | | | | | |
| | | THE CASH PROCEEDS FROM
| | | | | | |
| | | SECURITIES LENDING — 25.31% | | | | | | |
| | |
| |
| | | Investment Companies — 25.31% |
| | | Mount Vernon Securities Lending Trust — | | | | | | | | |
| | | Prime Portfolio, 0.29%b | | | 14,816,293 | | | | 14,816,293 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $14,816,293) | | | | | | | 14,816,293 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 125.87%
(cost $66,436,833) | | | | | | $ | 73,671,656 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
| |
| * — | Non-income producing security. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $13,653,346 at December 31, 2010. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
| |
| ADR — | American Depository Receipt. |
| GDR — | Global Depository Receipt. |
The accompanying notes are an integral part of these financial statements.
142
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 10.36% | | Shares | | | Value | |
| | |
| |
| | | Administrative and Support Services — 0.27% |
| TRIT | | Tri-Tech Holding Inc.*ˆ | | | 6,000 | | | $ | 64,560 | |
| | | | | | | | | | | |
| | | Machinery Manufacturing — 3.26% |
| AMN | | Ameron International Corporation | | | 5,246 | | | | 400,637 | |
| ARF-U CN | | Armtec Infrastructure Income Fund* | | | 12,650 | | | | 202,288 | |
| ERII | | Energy Recovery Inc.*ˆ | | | 51,108 | | | | 187,055 | |
| | | | | | | | | | | |
| | | | | | | | | | 789,980 | |
| | | | | | | | | | | |
| | | Professional, Scientific, and Technical Services — 1.98% |
| TTEK | | Tetra Tech, Inc.* | | | 19,194 | | | | 481,002 | |
| | | | | | | | | | | |
| | | Utilities — 4.85% |
| BRC-U CN | | Brookfield Renewable Power Fund | | | 11,250 | | | | 233,418 | |
| CDZI | | Cadiz Inc.*ˆ | | | 40,000 | | | | 497,599 | |
| CWCO | | Consolidated Water Co., Ltd.ˆ | | | 27,875 | | | | 255,614 | |
| PNH MK | | Puncak Niaga Holdings Berhad — EIS | | | 18,972 | | | | 3,255 | |
| UU/ LN | | United Utilities Group PLC | | | 20,000 | | | | 184,596 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,174,482 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS
(cost $2,466,384) | | | | | | | 2,510,024 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| | | CONVERTIBLE BONDS — 11.82% | | Amount | | | | |
| | |
| |
| | | Holding Company — 5.35% |
| 451102AB3 | | Icahn Enterprises LP
4.000%, 08/15/2013 | | $ | 1,370,000 | | | | 1,296,363 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction — 6.47% |
| 165167CB1 | | Chesapeake Energy Corp.
2.250%, 12/15/2038# | | | 2,000,000 | | | | 1,567,500 | |
| | | | | | | | | | | |
| | | TOTAL CONVERTIBLE BONDS
(cost $2,846,704) | | | | | | | 2,863,863 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | CORPORATE BONDS — 20.76% | | | | | | |
| | |
| |
| | | Fabricated Metal Product Manufacturing — 9.01% |
| 624758AB4 | | Mueller Water Products, Inc.
7.375%, 06/01/2017# | | | 2,250,000 | | | | 2,182,500 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
143
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| Identifier | | | | Amount | | | Value | |
| | |
| |
| | | Utilities — 11.75% |
| 7595554 | | Veolia Environnement SA
4.875%, 05/28/2013# | | $ | 2,000,000 | | | $ | 2,845,547 | |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(cost $5,028,486) | | | | | | | 5,028,047 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | WARRANTS — 0.05% | | Shares | | | | |
| | |
| |
| | | Utilities — 0.05% |
| CHC/WS | | China Hydroelectric Corporation | | | | | | | | |
| | | Expiration Date: 1/25/2014 | | | | | | | | |
| | | Strike Price: $15.00* | | | 40,000 | | | | 12,000 | |
| | | | | | | | | | | |
| | | TOTAL WARRANTS
(cost $48,000) | | | | | | | 12,000 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | SHORT-TERM INVESTMENTS — 34.72% | | | | | | |
| | |
| |
| | | Money Market Funds — 12.43% |
| FGVXX | | First American Government Obligations Fund — Class Y, 0.00%#b | | | 726,356 | | | | 726,356 | |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%#b | | | 726,395 | | | | 726,395 | |
| FAIXX | | First American Prime Obligations Fund — Class Y, 0.00%#b | | | 728,383 | | | | 728,383 | |
| FFCXX | | First American Tax Free Obligations Fund — Class Y, 0.00%#b | | | 102,625 | | | | 102,625 | |
| FOCXX | | First American Treasury Obligations Fund — Class Y, 0.00%#b | | | 726,317 | | | | 726,317 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,010,076 | |
| | | | | | | | | | | |
| | | U.S. Treasury Obligations — 22.29% |
| 912795X89 | | United States Treasury Bills
0.095%, 01/20/2011#c | | | 5,400,000 | | | | 5,399,997 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS
(cost $8,410,073) | | | | | | | 8,410,073 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
144
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED WITH
| | | | | | |
| | | THE CASH PROCEEDS FROM
| | | | | | |
| Identifier | | SECURITIES LENDING — 2.41% | | Shares | | | Value | |
| | |
| |
| | | Investment Companies — 2.41% |
| | | Mount Vernon Securities Lending Trust — Prime Portfolio, 0.29%b | | | 582,692 | | | $ | 582,692 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $582,692) | | | | | | | 582,692 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 80.12%
(cost $19,382,339) | | | | | | $ | 19,406,699 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
* — Non-income producing security.
| |
| EIS — | Enhanced Income Security. This exchange-traded security is composed of both an issuer’s common shares and its subordinated notes. |
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $544,028 at December 31, 2010. |
| |
| # — | All or a portion of the shares have been committed as collateral for written option contracts. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
c — The rate quoted is the effective yield.
The accompanying notes are an integral part of these financial statements.
145
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2010
| | | | | | | | | | | |
| Identifier | | COMMON STOCKS — 0.33% | | Shares | | | Value | |
| | |
| |
| | | Data Processor — 0.33% |
| V | | Visa, Inc. — Class A | | | 200 | | | $ | 14,076 | |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCKS (cost $16,915 ) | | | | | | | 14,076 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| | | CONVERTIBLE BONDS — 33.08% | | Amount | | | | |
| | |
| |
| | | Computer and Electronic Product Manufacturing — 2.39% |
| 502413AW7 | | L-3 Communications Holdings, Inc. | | | | | | | | |
| | | 3.000%, 08/01/2035 | | $ | 100,000 | | | $ | 100,750 | |
| | | | | | | | | | | |
| | | Holding Company — 9.22% |
| 451102AB3 | | Icahn Enterprises LP | | | | | | | | |
| | | 4.000%, 08/15/2013# | | | 410,000 | | | | 387,962 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction — 10.19% |
| 165167BW6 | | Chesapeake Energy Corp. | | | | | | | | |
| | | 2.750%, 11/15/2035 | | | 100,000 | | | | 99,750 | |
| 165167CB1 | | Chesapeake Energy Corp. | | | | | | | | |
| | | 2.250%, 12/15/2038 | | | 420,000 | | | | 329,175 | |
| | | | | | | | | | | |
| | | | | | | | | | 428,925 | |
| | | | | | | | | | | |
| | | Professional, Scientific, and Technical Services — 2.39% |
| 159864AB3 | | Charles River Laboratories International, Inc. | | | | | | | | |
| | | 2.250%, 06/15/2013 | | | 100,000 | | | | 100,500 | |
| | | | | | | | | | | |
| | | Real Estate — 6.52% |
| 10112RAK0 | | Boston Properties LP | | | | | | | | |
| | | 2.875%, 02/15/2037 | | | 100,000 | | | | 102,000 | |
| 345550AH0 | | Forest City Enterprises, Inc. | | | | | | | | |
| | | 3.625%, 10/15/2011ˆ | | | 175,000 | | | | 172,550 | |
| | | | | | | | | | | |
| | | | | | | | | | 274,550 | |
| | | | | | | | | | | |
| | | U.S. Equity Exchanges — 2.37% |
| 631103AA6 | | The NASDAQ OMX Group, Inc. | | | | | | | | |
| | | 2.500%, 08/15/2013 | | | 100,000 | | | | 99,500 | |
| | | | | | | | | | | |
| | | TOTAL CONVERTIBLE BONDS
(cost $1,350,079 ) | | | | | | | 1,392,187 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
146
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| Identifier | | CORPORATE BONDS — 54.62% | | Amount | | | Value | |
| | |
| |
| | | Administrative and Support Services — 2.43% |
| 22025YAJ9 | | Corrections Corp. of America | | | | | | | | |
| | | 6.750%, 01/31/2014# | | $ | 100,000 | | | $ | 102,125 | |
| | | | | | | | | | | |
| | | Amusement, Gambling, and Recreation Industries — 4.85% |
| 707569AL3 | | Penn National Gaming, Inc. | | | | | | | | |
| | | 6.750%, 03/01/2015# | | | 200,000 | | | | 204,000 | |
| | | | | | | | | | | |
| | | Chemical Manufacturing — 2.32% |
| 785583AC9 | | Sabine Pass LNG LP | | | | | | | | |
| | | 7.250%, 11/30/2013# | | | 100,000 | | | | 97,750 | |
| | | | | | | | | | | |
| | | Funds, Trusts, and Other Financial Vehicles — 9.59% |
| 779273AG6 | | The Rouse Company LP | | | | | | | | |
| | | 5.375%, 11/26/2013# | | | 400,000 | | | | 403,500 | |
| | | | | | | | | | | |
| | | Mining (except Oil and Gas) — 6.14% |
| 20854PAB5 | | CONSOL Energy, Inc. | | | | | | | | |
| | | 7.875%, 03/01/2012# | | | 100,000 | | | | 106,875 | |
| 704549AD6 | | Peabody Energy Corp. | | | | | | | | |
| | | 5.875%, 04/15/2016# | | | 150,000 | | | | 151,500 | |
| | | | | | | | | | | |
| | | | | | | | | | 258,375 | |
| | | | | | | | | | | |
| | | Non-Metallic Mineral Product Manufacturing — 3.40% |
| 69073TAL7 | | Owens-Brockway Glass Container | | | | | | | | |
| | | 6.750%, 12/01/2014# | | | 140,000 | | | | 143,150 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction — 10.68% |
| 41754WAE1 | | Harvest Operations Corp. | | | | | | | | |
| | | 7.250%, 09/30/2013# | | | 200,000 | | | | 206,376 | |
| 41754WAJ0 | | Harvest Operations Corp. | | | | | | | | |
| | | 7.500%, 05/31/2015# | | | 230,000 | | | | 242,885 | |
| | | | | | | | | | | |
| | | | | | | | | | 449,261 | |
| | | | | | | | | | | |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 1.72% |
| 52107QAC9 | | Lazard Group LLC | | | | | | | | |
| | | 7.125%, 05/15/2015# | | | 67,000 | | | | 72,213 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
147
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | | | Principal
| | | | |
| Identifier | | | | Amount | | | Value | |
| | |
| |
| | | Telecommunications — 2.45% |
| 27876GAQ1 | | Echostar DBS Corp. | | | | | | | | |
| | | 6.375%, 10/01/2011# | | $ | 100,000 | | | $ | 103,250 | |
| | | | | | | | | | | |
| | | Utilities — 11.04% |
| 13134YAD9 | | Calpine Construction Finance Company LP | | | | | | | | |
| | | 8.000%, 06/01/2016, Acquired | | | | | | | | |
| | | 10/25/2010 at $108,220#* | | | 100,000 | | | | 106,750 | |
| 629377AT9 | | NRG Energy, Inc. | | | | | | | | |
| | | 7.250%, 02/01/2014# | | | 350,000 | | | | 357,875 | |
| | | | | | | | | | | |
| | | | | | | | | | 464,625 | |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(cost $2,260,793 ) | | | | | | | 2,298,249 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | PUT OPTIONS PURCHASED — 0.00% | | Contracts | | | | |
| | |
| |
| | | Computer and Electronic Product Manufacturing — 0.00% |
| OOY 110122P00025000 | | L-3 Communications Holdings, Inc. | | | | | | | | |
| | | Expiration Date: 1/22/2011, | | | | | | | | |
| | | Exercise Price: $25.00 | | | 18 | | | | 45 | |
| | | | | | | | | | | |
| | | TOTAL PURCHASED OPTIONS
(cost $1,224 ) | | | | | | | 45 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | SHORT-TERM INVESTMENTS — 1.42% | | Shares | | | | |
| | |
| |
| | | Money Market Funds — 1.42% |
| FIUXX | | First American Prime Obligations Fund — Class I, 0.00%#b | | | 59,799 | | | | 59,799 | |
| | | | | | | | | | | |
| | | TOTAL SHORT-TERM INVESTMENTS
(cost $59,799 ) | | | | | | | 59,799 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
148
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| | | INVESTMENTS PURCHASED
| | | | | | |
| | | WITH THE CASH PROCEEDS
| | | | | | |
| | | FROM SECURITIES
| | | | | | |
| Identifier | | LENDING — 1.82% | | Shares | | | Value | |
| | |
| |
| | | Investment Companies — 1.82% |
| | | Mount Vernon Securities Lending Trust — Prime Portfolio, 0.29%b | | | 76,500 | | | $ | 76,500 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
(cost $76,500) | | | | | | | 76,500 | |
| | | | | | | | | | | |
| | | TOTAL INVESTMENTS — 91.27% (cost $3,765,310) | | | | | | $ | 3,840,856 | |
| | | | | | | | | | | |
Percentages are stated as a percent of net assets.
| |
| ˆ — | This security or a portion of this security was out on loan at December 31, 2010. Total loaned securities had a market value of $74,539 at December 31, 2010. |
| |
| # — | All or a portion of the shares have been committed as collateral for written option contracts. |
b — The rate quoted is the annualized seven-day yield as of December 31, 2010.
* — Restricted Security restricted to institutional investors (144A Securities).
The accompanying notes are an integral part of these financial statements.
149
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2010
| | | | | | | | | | | |
| Identifier | | PUT OPTIONS WRITTEN | | Contracts | | | Value | |
| | |
| |
| | | Administrative and Support Services |
| ACM 110319P00022500 | | Aecom Technology Corp. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $22.50 | | | 115 | | | $ | 1,725 | |
| ACM 110319P00025000 | | Aecom Technology Corp. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $25.00 | | | 170 | | | | 6,800 | |
| | | | | | | | | | | |
| | | | | | | | | | 8,525 | |
| | | | | | | | | | | |
| | | Beverage and Tobacco Products |
| HEK 110319P00005000 | | Heckmann Corporation | | | | | �� | | | |
| | | Expiration: March 2011, Exercise Price: $5.00 | | | 300 | | | | 9,000 | |
| HHO 110319P00070000 | | Puro Water Group, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $70.00 | | | 1 | | | | 38 | |
| | | | | | | | | | | |
| | | | | | | | | | 9,038 | |
| | | | | | | | | | | |
| | | Chemical Manufacturing |
| CCC 110122P00012500 | | Calgon Carbon Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $12.50 | | | 500 | | | | 2,500 | |
| CCC 110416P00012500 | | Calgon Carbon Corporation | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $12.50 | | | 100 | | | | 3,000 | |
| NLC 110319P00022500 | | Nalco Holding Co. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $22.50 | | | 200 | | | | 2,500 | |
| | | | | | | | | | | |
| | | | | | | | | | 8,000 | |
| | | | | | | | | | | |
| | | Computer and Electronic Product Manufacturing |
| DHR 110319P00037000 | | Danaher Corporation | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $37.00 | | | 145 | | | | 2,538 | |
| DHR 120121P00035000 | | Danaher Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $35.00 | | | 40 | | | | 4,600 | |
| | | | | | | | | | | |
| | | | | | | | | | 7,138 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
150
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Electrical Equipment, Appliance, and Component Manufacturing |
| FELE 110319P00030000 | | Franklin Electric Co., Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $30.00 | | | 190 | | | $ | 5,225 | |
| | | | | | | | | | | |
| | | Fabricated Metal Product Manufacturing |
| CVVT 110319P00010000 | | China Valves Technology, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $10.00 | | | 200 | | | | 21,000 | |
| INSU 110319P00020000 | | Insituform Technologies, Inc. — Class A | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 100 | | | | 1,000 | |
| NWPX 110319P00015000 | | Northwest Pipe Company | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $15.00 | | | 60 | | | | 450 | |
| NWPX 110319P00017500 | | Northwest Pipe Company | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $17.50 | | | 250 | | | | 5,625 | |
| PNR 110219P00030000 | | Pentair, Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $30.00 | | | 244 | | | | 3,050 | |
| | | | | | | | | | | |
| | | | | | | | | | 31,125 | |
| | | | | | | | | | | |
| | | Funds, Trusts, and Other Financial Vehicles |
| PHO 110319P00015000 | | PowerShares Water Resources ETF | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $15.00 | | | 580 | | | | 4,350 | |
| | | | | | | | | | | |
| | | Heavy and Civil Engineering Construction |
| STRL 110319P00010000 | | Sterling Construction Company, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $10.00 | | | 165 | | | | 5,775 | |
| STRL 110319P00012500 | | Sterling Construction Company, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $12.50 | | | 235 | | | | 16,450 | |
| | | | | | | | | | | |
| | | | | | | | | | 22,225 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
151
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Machinery Manufacturing |
| AMN 110319P00052000 | | Ameron International Corporation | | | | �� | | | | |
| | | Expiration: March 2011, Exercise Price: $52.00 | | | 60 | | | $ | 1,650 | |
| AMN 110319P00057000 | | Ameron International Corporation | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $57.00 | | | 70 | | | | 3,150 | |
| DCI 110219P00030000 | | Donaldson Company, Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $30.00 | | | 30 | | | | 150 | |
| DCI 110219P00040000 | | Donaldson Company, Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $40.00 | | | 65 | | | | 325 | |
| DCI 110219P00045000 | | Donaldson Company, Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $45.00 | | | 65 | | | | 488 | |
| DGW 110319P00020000 | | Duoyuan Global Water Inc. — ADR | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 240 | | | | 175,199 | |
| ERII 110219P00005000 | | Energy Recovery Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $5.00 | | | 110 | | | | 15,125 | |
| ESE 110319P00030000 | | ESCO Technologies, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $30.00 | | | 290 | | | | 11,600 | |
| ITT 110122P00045000 | | ITT Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 135 | | | | 945 | |
| LNN 110319P00030000 | | Lindsay Corporation | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $30.00 | | | 200 | | | | 1,500 | |
| PLL 110319P00035000 | | Pall Corporation | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $35.00 | | | 220 | | | | 2,200 | |
| ROP 110219P00060000 | | Roper Industries, Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $60.00 | | | 100 | | | | 1,250 | |
The accompanying notes are an integral part of these financial statements.
152
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Machinery Manufacturing (Continued) |
| HEAT 110319P00006000 | | SmartHeat, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $6.00 | | | 500 | | | $ | 56,249 | |
| VMI 110319P00065000 | | Valmont Industries, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $65.00 | | | 20 | | | | 800 | |
| VMI 110319P00070000 | | Valmont Industries, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $70.00 | | | 80 | | | | 5,000 | |
| | | | | | | | | | | |
| | | | | | | | | | 275,631 | |
| | | | | | | | | | | |
| | | Professional, Scientific, and Technical Services |
| TTEK 110319P00017500 | | Tetra Tech, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $17.50 | | | 100 | | | | 750 | |
| TTEK 110319P00020000 | | Tetra Tech, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 100 | | | | 2,000 | |
| URS 110122P00040000 | | URS Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $40.00 | | | 100 | | | | 4,250 | |
| URS 110416P00035000 | | URS Corporation | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $35.00 | | | 90 | | | | 4,950 | |
| | | | | | | | | | | |
| | | | | | | | | | 11,950 | |
| | | | | | | | | | | |
| | | Utilities |
| AWK 110319P00020000 | | American Water Works Co., Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 355 | | | | 3,550 | |
| WTR 110319P00017500 | | Aqua America, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $17.50 | | | 170 | | | | 1,275 | |
| WTR 110319P00020000 | | Aqua America, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 150 | | | | 2,625 | |
The accompanying notes are an integral part of these financial statements.
153
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Utilities (Continued) |
| SBS 110122P00035000 | | Cia de Saneamento Basico do Estado de Sao Paulo — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $35.00 | | | 145 | | | $ | 725 | |
| CIG 110319P00015000 | | Companhia Energetica de Minas Gerais — ADR | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $15.00 | | | 375 | | | | 93,749 | |
| EDE 110319P00020000 | | The Empire District Electric Company | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 250 | | | | 5,250 | |
| PICO 110122P00025000 | | PICO Holdings, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 75 | | | | 375 | |
| PICO 110122P00030000 | | PICO Holdings, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 150 | | | | 3,000 | |
| PICO 110416P00025000 | | PICO Holdings, Inc. | | | | | | | | |
| | | Expiration: April 2011,
Exercise Price: $25.00 | | | 30 | | | | 1,350 | |
| VE 110122P00025000 | | Veolia Environnement — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 200 | | | | 500 | |
| VE 110122P00030000 | | Veolia Environnement — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 100 | | | | 10,500 | |
| VE 110416P00022500 | | Veolia Environnement — ADR | | | | | | | | |
| | | Expiration: April 2011,
Exercise Price: $22.50 | | | 25 | | | | 563 | |
| | | | | | | | | | | |
| | | | | | | | | | 123,462 | |
| | | | | | | | | | | |
| | | Waste Management and Remediation Services |
| CLH 110122P00055000 | | Clean Harbors, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $55.00 | | | 85 | | | | 213 | |
| CLH 110416P00055000 | | Clean Harbors, Inc. | | | | | | | | |
| | | Expiration: April 2011,
Exercise Price: $55.00 | | | 25 | | | | 438 | |
The accompanying notes are an integral part of these financial statements.
154
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Waste Management and Remediation Services (Continued) |
| WCN 110319P00023330 | | Waste Connections, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $23.33 | | | 175 | | | $ | 3,938 | |
| WM 110122P00032500 | | Waste Management, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $32.50 | | | 160 | | | | 480 | |
| WM 120121P00032500 | | Waste Management, Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $32.50 | | | 40 | | | | 7,600 | |
| | | | | | | | | | | |
| | | | | | | | | | 12,669 | |
| | | | | | | | | | | |
| | | TOTAL PUT OPTIONS WRITTEN
(premiums received ($1,687,618)) | | | | | | $ | 519,338 | |
| | | | | | | | | | | |
| |
| ADR — | American Depository Receipt. |
| |
| ETF — | Exchange Traded Fund. |
The accompanying notes are an integral part of these financial statements.
155
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010
| | | | | | | | | | | |
| Identifier | | PUT OPTIONS WRITTEN | | Contracts | | | Value | |
| | |
| |
| | | Amusement, Gambling, and Recreation Industries |
| DIS 110122P00030000 | | The Walt Disney Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 7 | | | $ | 35 | |
| | | | | | | | | | | |
| | | Asset Management |
| BLK 110416P00155000 | | BlackRock, Inc. | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $155.00 | | | 2 | | | | 425 | |
| BEN 110122P00107000 | | Franklin Resources, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $107.00 | | | 2 | | | | 250 | |
| IVZ 110122P00020000 | | Invesco Limited | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $20.00 | | | 14 | | | | 70 | |
| GROW 110618P00007500 | | US Global Investors, Inc. — Class A | | | | | | | | |
| | | Expiration: June 2011, Exercise Price: $7.50 | | | 10 | | | | 1,025 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,770 | |
| | | | | | | | | | | |
| | | Beverage and Tobacco Product Manufacturing |
| VPM 110122P00020000 | | Altria Group, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $20.00 | | | 4 | | | | 8 | |
| DEO 110122P00065000 | | Diageo plc — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $65.00 | | | 5 | | | | 25 | |
| DEO 110716P00065000 | | Diageo plc — ADR | | | | | | | | |
| | | Expiration: July 2011,
Exercise Price: $65.00 | | | 4 | | | | 720 | |
| | | | | | | | | | | |
| | | | | | | | | | 753 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
156
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Building Material and Garden Equipment and Supplies Dealers |
| ZCR 110122P00075000 | | The Sherwin-Williams Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $75.00 | | | 2 | | | $ | 15 | |
| SHW 120121P00070000 | | The Sherwin-Williams Company | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $70.00 | | | 2 | | | | 720 | |
| | | | | | | | | | | |
| | | | | | | | | | 735 | |
| | | | | | | | | | | |
| | | Chemical Manufacturing |
| ZBK 110122P00030000 | | Cameco Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 2 | | | | 5 | |
| CCJ 120121P00025000 | | Cameco Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $25.00 | | | 15 | | | | 1,612 | |
| NVS 120121P00050000 | | Novartis AG — ADR | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $50.00 | | | 15 | | | | 4,050 | |
| SIAL 110122P00050000 | | Sigma-Aldrich Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $50.00 | | | 3 | | | | 8 | |
| SIAL 110416P00055000 | | Sigma-Aldrich Corp. | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $55.00 | | | 3 | | | | 188 | |
| | | | | | | | | | | |
| | | | | | | | | | 5,863 | |
| | | | | | | | | | | |
| | | Clothing and Clothing Accessories Stores |
| VFF 110122P00030000 | | Tiffany & Co. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 2 | | | | 3 | |
| VFF 110122P00040000 | | Tiffany & Co. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $40.00 | | | 2 | | | | 4 | |
| | | | | | | | | | | |
| | | | | | | | | | 7 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
157
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Computer and Electronic Product Manufacturing |
| COL 110416P00055000 | | Rockwell Collins, Inc. | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $55.00 | | | 3 | | | $ | 540 | |
| | | | | | | | | | | |
| | | Couriers and Messengers |
| FDX 110122P00070000 | | FedEx Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $70.00 | | | 4 | | | | 20 | |
| FDX 120121P00075000 | | FedEx Corp. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $75.00 | | | 2 | | | | 945 | |
| FDX 12012P00080000 | | FedEx Corp. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $80.00 | | | 4 | | | | 2,420 | |
| OPS 110122P00055000 | | United Parcel Service — Class B | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $55.00 | | | 2 | | | | 10 | |
| OPS 110122P00065000 | | United Parcel Service — Class B | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $65.00 | | | 2 | | | | 18 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,413 | |
| | | | | | | | | | | |
| | | Credit Intermediation and Related Activities |
| VAX 110122P00040000 | | American Express Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $40.00 | | | 2 | | | | 50 | |
| AXP 120121P00030000 | | American Express Company | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $30.00 | | | 10 | | | | 1,430 | |
| BAC 110219P00013000 | | Bank of America Corporation | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $13.00 | | | 12 | | | | 660 | |
| BAC 120121P00012500 | | Bank of America Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $12.50 | | | 15 | | | | 2,535 | |
The accompanying notes are an integral part of these financial statements.
158
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Credit Intermediation and Related Activities (Continued) |
| BK 110122P00024000 | | The Bank of New York Mellon Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $24.00 | | | 4 | | | $ | 12 | |
| OUY 110122P00025000 | | The Bank of New York Mellon Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 4 | | | | 16 | |
| BK 120121P00025000 | | The Bank of New York Mellon Corp. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $25.00 | | | 6 | | | | 1,086 | |
| BOKF 110319P00045000 | | BOK Financial Corporation | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $45.00 | | | 6 | | | | 1,470 | |
| XRF 110122P00012500 | | Discover Financial Services | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $12.50 | | | 2 | | | | 5 | |
| EWBC 110122P00015000 | | East West Bancorp, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $15.00 | | | 10 | | | | 50 | |
| EWBC 110416P00015000 | | East West Bancorp, Inc. | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $15.00 | | | 7 | | | | 175 | |
| FIS 110122P00025000 | | Fidelity National Information Services, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 6 | | | | 33 | |
| FIS 120121P00025000 | | Fidelity National Information Services, Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $25.00 | | | 6 | | | | 984 | |
| MTB 120121P00065000 | | M&T Bank Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $65.00 | | | 6 | | | | 2,550 | |
| MTB 120121P00075000 | | M&T Bank Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $75.00 | | | 3 | | | | 2,175 | |
| NARA 110618P00007500 | | Nara Bancorp, Inc. | | | | | | | | |
| | | Expiration: June 2011, Exercise Price: $7.50 | | | 8 | | | | 360 | |
The accompanying notes are an integral part of these financial statements.
159
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Credit Intermediation and Related Activities (Continued) |
| XGP 110122P00050000 | | Northern Trust Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $50.00 | | | 2 | | | $ | 50 | |
| XGP 110122P00055000 | | Northern Trust Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $55.00 | | | 4 | | | | 520 | |
| STT 110122P00035000 | | State Street Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $35.00 | | | 2 | | | | 12 | |
| OLD 110122P00045000 | | State Street Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 3 | | | | 264 | |
| USB 120121P00022500 | | U.S. Bancorp | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $22.50 | | | 20 | | | | 3,480 | |
| WFC 110122P00025000 | | Wells Fargo & Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 3 | | | | 15 | |
| ZZH 110122P00017500 | | The Western Union Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $17.50 | | | 4 | | | | 40 | |
| | | | | | | | | | | |
| | | | | | | | | | 17,972 | |
| | | | | | | | | | | |
| | | Data Processor |
| ZXV 110122P00240000 | | Mastercard Inc. — Class A | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $240.00 | | | 1 | | | | 1,690 | |
| | | | | | | | | | | |
| | | Defense |
| CACI 110319P00040000 | | CACI International Inc. — Class A | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $40.00 | | | 8 | | | | 80 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
160
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Depository Credit Intermediation |
| HDB 110416P00175000 | | HDFC Bank Ltd. — ADR | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $175.00 | | | 1 | | | $ | 1,650 | |
| VCD 110122P00030000 | | ICIC Bank Ltd. — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 2 | | | | 3 | |
| VCD 110122P00035000 | | ICIC Bank Ltd. — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $35.00 | | | 2 | | | | 3 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,656 | |
| | | | | | | | | | | |
| | | Equity Fund |
| UTH 110219P00090000 | | Utilities HOLDRs Trust | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $90.00 | | | 10 | | | | 300 | |
| UTH 110521P00095000 | | Utilities HOLDRs Trust | | | | | | | | |
| | | Expiration: May 2011, Exercise Price: $95.00 | | | 5 | | | | 1,375 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,675 | |
| | | | | | | | | | | |
| | | Fabricated Metal Product Manufacturing |
| CMC 110122P00015000 | | Commercial Metals Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $15.00 | | | 12 | | | | 150 | |
| FO 110319P00040000 | | Fortune Brands, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $40.00 | | | 4 | | | | 40 | |
| FO 110319P00045000 | | Fortune Brands, Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $45.00 | | | 6 | | | | 75 | |
| | | | | | | | | | | |
| | | | | | | | | | 265 | |
| | | | | | | | | | | |
| | | Food Manufacturing |
| ADM 110122P00025000 | | Archer-Daniels-Midland Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 10 | | | | 25 | |
| ADM 120121P00025000 | | Archer-Daniels-Midland Company | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $25.00 | | | 4 | | | | 724 | |
The accompanying notes are an integral part of these financial statements.
161
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Food Manufacturing (Continued) |
| BG 110122P00050000 | | Bunge Limited | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $50.00 | | | 3 | | | $ | 15 | |
| BG 120121P00050000 | | Bunge Limited | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $50.00 | | | 3 | | | | 1,020 | |
| UN 110219P00025000 | | Unilever NV | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $25.00 | | | 14 | | | | 182 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,966 | |
| | | | | | | | | | | |
| | | Gaming |
| VEG 110122P00060000 | | Wynn Resorts Limited | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $52.00 | | | 1 | | | | 1 | |
| | | | | | | | | | | |
| | | Holding Company |
| BRKB 120121P00070000 | | Berkshire Hathaway, Inc. — Class B | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $70.00 | | | 5 | | | | 2,075 | |
| OYD 110122P00020000 | | Leucadia National Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $20.00 | | | 2 | | | | 10 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,085 | |
| | | | | | | | | | | |
| | | Insurance Carriers and Related Activities |
| OOE 110122P00070000 | | China Life Insurance Co., Limited — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $70.00 | | | 1 | | | | 900 | |
| LFC 120121P00062500 | | China Life Insurance Co., Limited — ADR | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $62.50 | | | 6 | | | | 5,070 | |
The accompanying notes are an integral part of these financial statements.
162
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Insurance Carriers and Related Activities (Continued) |
| FNF 110618P00012500 | | Fidelity National Financial, Inc. — Class A | | | | | | | | |
| | | Expiration: June 2011, Exercise Price: $12.50 | | | 12 | | | $ | 780 | |
| PGR 110219P00019000 | | The Progressive Corporation | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $19.00 | | | 5 | | | | 100 | |
| PGR 110521P00020000 | | The Progressive Corporation | | | | | | | | |
| | | Expiration: May 2011, Exercise Price: $20.00 | | | 9 | | | | 787 | |
| | | | | | | | | | | |
| | | | | | | | | | 7,637 | |
| | | | | | | | | | | |
| | | Leather and Allied Product Manufacturing |
| VZF 110122P00025000 | | Coach, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 1 | | | | 2 | |
| | | | | | | | | | | |
| | | Management of Companies and Enterprises |
| GS 110122P00140000 | | The Goldman Sachs Group, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $140.00 | | | 1 | | | | 21 | |
| GS 120121P00140000 | | The Goldman Sachs Group, Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $140.00 | | | 1 | | | | 913 | |
| GS 120121P00150000 | | The Goldman Sachs Group, Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $150.00 | | | 1 | | | | 1,230 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,164 | |
| | | | | | | | | | | |
| | | Medical Laboratories |
| LH 110219P00075000 | | Laboratory Corporation of America Holdings | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $75.00 | | | 4 | | | | 90 | |
| | | | | | | | | | | |
| | | Merchant Wholesalers, Durable Goods |
| TTT 110122P000058600 | | Terra Nova Royalty Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $5.86 | | | 11 | | | | 55 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
163
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Mining (except Oil and Gas) |
| FCX 110122P00055000 | | Freeport-McMoRan Copper & Gold Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $55.00 | | | 1 | | | $ | 1 | |
| OBQ 110122P00080000 | | Freeport-McMoRan Copper & Gold Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $80.00 | | | 3 | | | | 15 | |
| GGP1 120121P00015000 | | Greatland Gold Plc | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $15.00 | | | 24 | | | | 2,892 | |
| HWD 110521P00012500 | | Harry Winston Diamond Corporation | | | | | | | | |
| | | Expiration: May 2011, Exercise Price: $12.50 | | | 25 | | | | 4,375 | |
| VIE 110122P00042500 | | Newmont Mining Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $42.50 | | | 2 | | | | 2 | |
| VIE 110122P00045000 | | Newmont Mining Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 2 | | | | 4 | |
| NEM 110122P00047500 | | Newmont Mining Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $47.50 | | | 2 | | | | 7 | |
| VIE 110122P00050000 | | Newmont Mining Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $50.00 | | | 2 | | | | 12 | |
| | | | | | | | | | | |
| | | | | | | | | | 7,308 | |
| | | | | | | | | | | |
| | | Miscellaneous Manufacturing |
| BDX 110319P00070000 | | Becton, Dickinson and Company | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $70.00 | | | 5 | | | | 150 | |
| IGT 110122P00014000 | | International Game Technology | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $14.00 | | | 13 | | | | 65 | |
The accompanying notes are an integral part of these financial statements.
164
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Miscellaneous Manufacturing (Continued) |
| VGG 110122P00015000 | | International Game Technology | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $15.00 | | | 3 | | | $ | 15 | |
| IGT 130119P00012500 | | International Game Technology | | | | | | | | |
| | | Expiration: January 2013, Exercise Price: $12.50 | | | 12 | | | | 1,890 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,120 | |
| | | | | | | | | | | |
| | | Motion Picture and Sound Recording Industries |
| DWA 110618P00030000 | | DreamWorks Animation SKG, Inc. — Class A | | | | | | | | |
| | | Expiration: June 2011, Exercise Price: $30.00 | | | 14 | | | | 4,025 | |
| | | | | | | | | | | |
| | | Non-Store Retailers |
| AMZN 110122P00095000 | | Amazon.com, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $95.00 | | | 2 | | | | 6 | |
| EBAY 110122P00017500 | | eBay, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $17.50 | | | 12 | | | | 6 | |
| EBAY 120121P00020000 | | eBay, Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $20.00 | | | 5 | | | | 555 | |
| BID 110122P00017500 | | Sotheby’s | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $17.50 | | | 9 | | | | 45 | |
| BID 110122P00025000 | | Sotheby’s | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 5 | | | | 13 | |
| | | | | | | | | | | |
| | | | | | | | | | 625 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
165
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Oil and Gas and Consumable Fuels |
| ZPJ 110122P00075000 | | China Petroleum & Chemical Corp. — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $75.00 | | | 3 | | | $ | 15 | |
| ZPJ 110122P00080000 | | China Petroleum & Chemical Corp. — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $80.00 | | | 1 | | | | 5 | |
| PTR 110122P00100000 | | PetroChina Company Limited — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $100.00 | | | 2 | | | | 10 | |
| PTR 120121P00105000 | | PetroChina Company Limited — ADR | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $105.00 | | | 2 | | | | 1,000 | |
| | | | | | | | | | | |
| | | | | | | | | | 1,030 | |
| | | | | | | | | | | |
| | | Oil and Gas Extraction |
| CNQ 110122P00032500 | | Canadian Natural Resources Ltd. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $32.50 | | | 14 | | | | 105 | |
| CEO 110319P00160000 | | CNOOC Limited — ADR | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $160.00 | | | 2 | | | | 40 | |
| ZBM 110122P00030000 | | EnCana Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 2 | | | | 240 | |
| ECA 110122P00031000 | | EnCana Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $31.00 | | | 4 | | | | 820 | |
| ECA 120121P00030000 | | EnCana Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $30.00 | | | 10 | | | | 4,300 | |
| NXY 110319P00017500 | | Nexen Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $17.50 | | | 7 | | | | 105 | |
The accompanying notes are an integral part of these financial statements.
166
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Oil and Gas Extraction (Continued) |
| NXY 110319P00020000 | | Nexen Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 10 | | | $ | 500 | |
| VDW 110122P00040000 | | Petroleo Brasileiro S.A. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $40.00 | | | 3 | | | | 744 | |
| PBR 110416P00034000 | | Petroleo Brasileiro S.A. | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $34.00 | | | 6 | | | | 654 | |
| PBR 120121P00030000 | | Petroleo Brasileiro S.A. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $30.00 | | | 6 | | | | 1,224 | |
| STO 110416P00020000 | | StatoilHydro ASA — ADR | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $20.00 | | | 15 | | | | 337 | |
| OYX 110122P00035000 | | Suncor Energy, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $35.00 | | | 6 | | | | 96 | |
| ZDT 110122P00055000 | | Total SA — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $55.00 | | | 2 | | | | 400 | |
| TOT 120121P00045000 | | Total SA — ADR | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $45.00 | | | 5 | | | | 1,550 | |
| TOT 120121P00050000 | | Total SA — ADR | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $50.00 | | | 3 | | | | 1,470 | |
| XOM1 110122P00045000 | | XTO Energy, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 4 | | | | 12 | |
| | | | | | | | | | | |
| | | | | | | | | | 12,597 | |
| | | | | | | | | | | |
| | | Other Investment Pools and Funds |
| ABX 110122P00041000 | | Barrick Gold Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $41.00 | | | 5 | | | | 13 | |
| ABX 120121P00045000 | | Barrick Gold Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $45.00 | | | 3 | | | | 1,068 | |
The accompanying notes are an integral part of these financial statements.
167
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Other Investment Pools and Funds (Continued) |
| SKF 110122P00020000 | | UltraShort Financials ProShares ETF | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $20.00 | | | 11 | | | $ | 4,758 | |
| SRS 110122P00025000 | | UltraShort Real Estate ProShares ETF | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 2 | | | | 1,375 | |
| SDS 110122P00029000 | | UltraShort S&P 500 ProShares ETF | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $29.00 | | | 7 | | | | 3,675 | |
| SDS 110319P00026000 | | UltraShort S&P 500 ProShares ETF | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $26.00 | | | 7 | | | | 2,205 | |
| | | | | | | | | | | |
| | | | | | | | | | 13,094 | |
| | | | | | | | | | | |
| | | Pharmaceutical & Biotechnology |
| BIIB 120121P00055000 | | Biogen Idec Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $55.00 | | | 5 | | | | 1,538 | |
| | | | | | | | | | | |
| | | Pharmaceutical and Medicine Manufacturing |
| GENZ 110122P00047500 | | Genzyme Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $47.50 | | | 3 | | | | 29 | |
| GENZ 110122P00052500 | | Genzyme Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $52.50 | | | 2 | | | | 31 | |
| MJN 110122P00045000 | | Mead Johnson Nutrition Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 4 | | | | 10 | |
| | | | | | | | | | | |
| | | | | | | | | | 70 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
168
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Professional, Scientific, and Technical Services |
| OLJ 110122P00037500 | | Automatic Data Processing, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $37.50 | | | 1 | | | $ | 3 | |
| OLJ 110122P00040000 | | Automatic Data Processing, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $40.00 | | | 2 | | | | 5 | |
| CRL 110219P00030000 | | Charles River Laboratories International, Inc. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $30.00 | | | 5 | | | | 150 | |
| FCN 120121P00030000 | | FTI Consulting, Inc. | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $30.00 | | | 12 | | | | 2,070 | |
| OWC 110122P00025000 | | Moody’s Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 1 | | | | 25 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,253 | |
| | | | | | | | | | | |
| | | Publishing Industries (except Internet) |
| MHP 110122P00025000 | | The McGraw-Hill Companies, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 4 | | | | 20 | |
| | | | | | | | | | | |
| | | Rail Transportation |
| CP 110319P00055000 | | Canadian Pacific Railway Limited | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $55.00 | | | 7 | | | | 297 | |
| OBC 110122P00045000 | | CSX Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 3 | | | | 6 | |
| CSX 110219P00045000 | | CSX Corp. | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $45.00 | | | 2 | | | | 19 | |
| OGO 110122P00045000 | | Norfolk Southern Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 3 | | | | 8 | |
| NSC 110122P00049000 | | Norfolk Southern Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $49.00 | | | 2 | | | | 5 | |
The accompanying notes are an integral part of these financial statements.
169
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Rail Transportation (Continued) |
| NSC 120121P00050000 | | Norfolk Southern Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $50.00 | | | 3 | | | $ | 885 | |
| NSC 120121P00055000 | | Norfolk Southern Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $55.00 | | | 4 | | | | 1,760 | |
| UNP 110122P00065000 | | Union Pacific Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $65.00 | | | 3 | | | | 18 | |
| UNP 120121P00072500 | | Union Pacific Corporation | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $72.50 | | | 2 | | | | 855 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,853 | |
| | | | | | | | | | | |
| | | Real Estate |
| PSA 110319P00085000 | | Public Storage | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $85.00 | | | 2 | | | | 170 | |
| PSA 110319P00090000 | | Public Storage | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $90.00 | | | 2 | | | | 285 | |
| FVJ 110122P00025000 | | The St. Joe Company | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 2 | | | | 690 | |
| JOE 120121P00022500 | | The St. Joe Company | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $22.50 | | | 10 | | | | 4,200 | |
| | | | | | | | | | | |
| | | | | | | | | | 5,345 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
170
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Securities, Commodity Contracts, and Other Financial Investments and Related Activities |
| VNB 110122P00070000 | | Affiliated Managers Group | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $70.00 | | | 2 | | | $ | 10 | |
| CBOE 110319P00020000 | | CBOE Holdings Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 16 | | | | 1,000 | |
| FII 110416P00022500 | | Federated Investors, Inc. — Class B | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $22.50 | | | 8 | | | | 360 | |
| FII 110716P00025000 | | Federated Investors, Inc. — Class B | | | | | | | | |
| | | Expiration: July 2011,
Exercise Price: $25.00 | | | 8 | | | | 1,320 | |
| GHL 110319P00060000 | | Greenhill & Co., Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $60.00 | | | 4 | | | | 120 | |
| GHL 110319P00070000 | | Greenhill & Co., Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $70.00 | | | 5 | | | | 488 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,298 | |
| | | | | | | | | | | |
| | | Telecommunications |
| CHU 110122P00012500 | | China Unicom (Hong Kong) Limited — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $12.50 | | | 7 | | | | 35 | |
| CHU 110416P00013000 | | China Unicom (Hong Kong) Limited — ADR | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $13.00 | | | 3 | | | | 127 | |
| | | | | | | | | | | |
| | | | | | | | | | 162 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
171
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Transportation Equipment Manufacturing |
| VBO 110122P00045000 | | Boeing Co. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 1 | | | $ | 1 | |
| VBO 110122P00050000 | | Boeing Co. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $50.00 | | | 1 | | | | 3 | |
| GD 110122P00070000 | | General Dynamics Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $70.00 | | | 3 | | | | 300 | |
| VOJ 110122P00045000 | | Northrop Grumman Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $45.00 | | | 1 | | | | 2 | |
| TM 120121P00070000 | | Toyota Motor Corporation — ADR | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $70.00 | | | 5 | | | | 2,025 | |
| | | | | | | | | | | |
| | | | | | | | | | 2,331 | |
| | | | | | | | | | | |
| | | U.S. Equity Exchanges |
| NYX 120121P00025000 | | NYSE Euronext | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $25.00 | | | 12 | | | | 2,388 | |
| XGV 110122P00020000 | | The NASDAQ OMX Group | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $20.00 | | | 5 | | | | 25 | |
| NDAQ 120121P00017500 | | The NASDAQ OMX Group | | | | | | | | |
| | | Expiration: January 2012, Exercise Price: $17.50 | | | 10 | | | | 875 | |
| | | | | | | | | | | |
| | | | | | | | | | 3,288 | |
| | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
172
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Utilities |
| AYE 110416P00022500 | | Allegheny Energy, Inc. | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $22.50 | | | 15 | | | $ | 563 | |
| AWK 110319P00020000 | | American Water Works Co., Inc. | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $20.00 | | | 6 | | | | 60 | |
| CPN 110122P00012500 | | Calpine Corp. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $12.50 | | | 20 | | | | 200 | |
| GXP 110319P00017500 | | Great Plains Energy Incorporated | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $17.50 | | | 10 | | | | 200 | |
| HNP 110219P00022500 | | Huaneng Power International, Inc. — ADR | | | | | | | | |
| | | Expiration: February 2011, Exercise Price: $22.50 | | | 8 | | | | 1,220 | |
| HNP 110521P00020000 | | Huaneng Power International, Inc. — ADR | | | | | | | | |
| | | Expiration: May 2011, Exercise Price: $20.00 | | | 9 | | | | 990 | |
| HNP 110521P00022500 | | Huaneng Power International, Inc. — ADR | | | | | | | | |
| | | Expiration: May 2011, Exercise Price: $22.50 | | | 7 | | | | 1,890 | |
| KEP 110319P00012500 | | Korea Electric Power Corporation — ADR | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $12.50 | | | 12 | | | | 480 | |
| KEP 110319P00015000 | | Korea Electric Power Corporation — ADR | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $15.00 | | | 10 | | | | 1,800 | |
| KEP 110618P00012500 | | Korea Electric Power Corporation — ADR | | | | | | | | |
| | | Expiration: June 2011, Exercise Price: $12.50 | | | 9 | | | | 652 | |
| GEN1 110122P00012500 | | Mirant Corporation | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $12.50 | | | 8 | | | | 1,380 | |
The accompanying notes are an integral part of these financial statements.
173
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2010 — (Continued)
| | | | | | | | | | | |
| Identifier | | | | Contracts | | | Value | |
| | |
| |
| | | Utilities (Continued) |
| OBD 110122P00025000 | | NRG Energy, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $25.00 | | | 6 | | | $ | 3,300 | |
| PICO 110122P00030000 | | PICO Holdings, Inc. | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $30.00 | | | 10 | | | | 200 | |
| PICO 110716P00030000 | | PICO Holdings, Inc. | | | | | | | | |
| | | Expiration: July 2011,
Exercise Price: $30.00 | | | 3 | | | | 585 | |
| UNS 110319P00030000 | | Unisource Energy Corporation | | | | | | | | |
| | | Expiration: March 2011, Exercise Price: $30.00 | | | 10 | | | | 2,500 | |
| VE 110416P00022500 | | Veolia Environnement — ADR | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $22.50 | | | 10 | | | | 225 | |
| VE 110416P00025000 | | Veolia Environnement — ADR | | | | | | | | |
| | | Expiration: April 2011, Exercise Price: $25.00 | | | 4 | | | | 180 | |
| | | | | | | | | | | |
| | | | | | | | | | 16,425 | |
| | | | | | | | | | | |
| | | Wireless Telecommunications Carriers (except Satellite) |
| VUX 110122P00020000 | | Vodafone Group PLC — ADR | | | | | | | | |
| | | Expiration: January 2011, Exercise Price: $20.00 | | | 11 | | | | 27 | |
| | | | | | | | | | | |
| | | TOTAL PUT OPTIONS WRITTEN
(premiums received ($300,469)) | | | | | | $ | 129,863 | |
| | | | | | | | | | | |
| |
| ADR — | American Depository Receipt. |
| |
| ETF — | Exchange Traded Fund. |
The accompanying notes are an integral part of these financial statements.
174
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Internet
| | | The Global
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
ASSETS: | | | | | | | | |
Investments, at value(1)(2) | | $ | 153,762,065 | | | $ | 5,841,313 | |
Foreign currencies, at value(3) | | | — | | | | 1,332 | |
| Receivable for contributed capital | | | 10,918 | | | | 3,850 | |
| Receivable for investments sold | | | — | | | | 80,500 | |
| Dividends and interest receivable | | | 57,814 | | | | 5,757 | |
| Other accounts receivable | | | 99,877 | | | | — | |
| Other assets | | | 9,290 | | | | 107 | |
| | | | | | | | | |
| Total assets | | | 153,939,964 | | | | 5,932,859 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable to Adviser | | | 122,827 | | | | 5,523 | |
| Payable to Broker | | | 870,731 | | | | — | |
| Payable to Custodian | | | — | | | | 16,678 | |
| Payable to Trustees and Officers | | | 1,273 | | | | 52 | |
| Payable for securities purchased | | | — | | | | 43,561 | |
| Payable for collateral received for securities loaned | | | 37,416,974 | | | | 551,370 | |
| Payable for withdrawn capital | | | 233,977 | | | | — | |
| Accrued expenses and other liabilities | | | 27,229 | | | | 12,841 | |
| | | | | | | | | |
| Total liabilities | | | 38,673,011 | | | | 630,025 | |
| | | | | | | | | |
| Net assets | | $ | 115,266,953 | | | $ | 5,302,834 | |
| | | | | | | | | |
(1)Cost of investments | | $ | 107,188,066 | | | $ | 5,273,135 | |
| | | | | | | | | |
(2)Includes loaned securities with a market value of | | $ | 35,839,537 | | | $ | 533,095 | |
| | | | | | | | | |
(3)Cost of foreign currencies | | $ | — | | | $ | 1,321 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
175
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The
| | | The
| |
| | | Paradigm
| | | Medical
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
ASSETS: | | | | | | | | |
Investments, at value(1)(2) | | $ | 1,490,093,894 | | | $ | 41,491,621 | |
Foreign currencies, at value(3) | | | 36,545 | | | | — | |
| Deposit at brokers for written options | | | 79,730 | | | | 40,986 | |
| Cash | | | 42,640 | | | | — | |
| Receivable for contributed capital | | | 2,143,090 | | | | 5,589 | |
| Receivable for investments sold | | | 1,165,367 | | | | — | |
| Dividends and interest receivable | | | 1,618,743 | | | | 19,114 | |
| Other assets | | | 129,303 | | | | 2,587 | |
| | | | | | | | | |
| Total assets | | | 1,495,309,312 | | | | 41,559,897 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable to Adviser | | | 1,311,050 | | | | 32,617 | |
| Payable to Trustees and Officers | | | 14,579 | | | | 355 | |
| Payable for collateral received for securities loaned | | | 243,932,317 | | | | 10,793,305 | |
| Payable for withdrawn capital | | | 2,425,961 | | | | 27,244 | |
| Accrued expenses and other liabilities | | | 174,623 | | | | 14,196 | |
| | | | | | | | | |
| Total liabilities | | | 247,858,530 | | | | 10,867,717 | |
| | | | | | | | | |
| Net assets | | $ | 1,247,450,782 | | | $ | 30,692,180 | |
| | | | | | | | | |
(1)Cost of investments | | $ | 1,199,758,759 | | | $ | 40,808,347 | |
| | | | | | | | | |
(2)Includes loaned securities with a market value of | | $ | 230,416,063 | | | $ | 10,283,709 | |
| | | | | | | | | |
(3)Cost of foreign currencies | | $ | 36,339 | | | $ | — | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
176
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Small Cap
| | | The Market
| |
| | | Opportunities
| | | Opportunities
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
ASSETS: | | | | | | | | |
Investments, at value(1)(2) | | $ | 195,647,495 | | | $ | 73,671,656 | |
| Receivable for contributed capital | | | 44,761 | | | | 13,110 | |
| Receivable for investments sold | | | 12,705 | | | | — | |
| Dividends and interest receivable | | | 69,167 | | | | 28,626 | |
| Other assets | | | 35,745 | | | | 11,359 | |
| | | | | | | | | |
| Total assets | | | 195,809,873 | | | | 73,724,751 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
| Payable to Adviser | | | 166,205 | | | | 62,497 | |
| Payable to Broker | | | 12,258 | | | | — | |
| Payable to Custodian | | | — | | | | 203,534 | |
| Payable to Trustees and Officers | | | 1,894 | | | | 685 | |
| Payable for collateral received for securities loaned | | | 40,060,947 | | | | 14,816,293 | |
| Payable for withdrawn capital | | | 385,616 | | | | 92,000 | |
| Accrued expenses and other liabilities | | | 38,801 | | | | 20,490 | |
| | | | | | | | | |
| Total liabilities | | | 40,665,721 | | | | 15,195,499 | |
| | | | | | | | | |
| Net assets | | $ | 155,144,152 | | | $ | 58,529,252 | |
| | | | | | | | | |
(1)Cost of investments | | $ | 165,067,735 | | | $ | 66,436,833 | |
| | | | | | | | | |
(2)Includes loaned securities with a market value of | | $ | 38,006,161 | | | $ | 13,653,346 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
177
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities
December 31, 2010
| | | | | | | | | |
| | | The Water
| | | The Multi-
| |
| | | Infrastructure
| | | Disciplinary
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
ASSETS: | | | | | | | | |
Investments, at value(1)(2) | | $ | 19,406,699 | | | $ | 3,840,856 | |
Foreign currencies, at value(3) | | | 16 | | | | — | |
| Deposit at brokers for written options | | | 5,980,900 | | | | 549,032 | |
| Receivable for contributed capital | | | 80,528 | | | | 8,000 | |
| Receivable for investments sold | | | 1,169 | | | | 9,398 | |
| Dividends and interest receivable | | | 124,121 | | | | 42,952 | |
| Other assets | | | 1,004 | | | | 33 | |
| | | | | | | | | |
| Total assets | | | 25,594,437 | | | | 4,450,271 | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
Written options, at value(4) | | | 519,338 | | | | 129,863 | |
| Payable to Adviser | | | 26,057 | | | | 4,142 | |
| Payable to Trustees and Officers | | | 292 | | | | 18 | |
| Payable for securities purchased | | | — | | | | 18,025 | |
| Payable for collateral received for securities loaned | | | 582,692 | | | | 76,500 | |
| Payable for withdrawn capital | | | 227,043 | | | | — | |
| Accrued expenses and other liabilities | | | 15,928 | | | | 13,674 | |
| | | | | | | | | |
| Total liabilities | | | 1,371,350 | | | | 242,222 | |
| | | | | | | | | |
| Net assets | | $ | 24,223,087 | | | $ | 4,208,049 | |
| | | | | | | | | |
(1)Cost of investments | | $ | 19,382,339 | | | $ | 3,765,310 | |
| | | | | | | | | |
(2)Includes loaned securities with a market value of | | $ | 544,028 | | | $ | 74,539 | |
| | | | | | | | | |
| | | | | | | | | |
(3)Cost of foreign currencies | | $ | 15 | | | $ | — | |
| | | | | | | | | |
(4)Premiums received | | $ | 1,687,618 | | | $ | 300,469 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
178
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Internet
| | | The Global
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
INVESTMENT INCOME: | | | | | | | | |
| Dividends† | | $ | 850,909 | | | $ | 92,506 | |
| Interest | | | 54,680 | | | | 1 | |
| Income from securities lending | | | 106,245 | | | | 2,045 | |
| Other income | | | 99,877 | | | | — | |
| | | | | | | | | |
| Total investment income | | | 1,111,711 | | | | 94,552 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Investment advisory fees | | | 1,337,259 | | | | 61,608 | |
| Administration fees | | | 46,329 | | | | 2,083 | |
| Professional fees | | | 16,393 | | | | 7,588 | |
| Fund accounting fees | | | 24,701 | | | | 11,495 | |
| Trustee and Officers’ fees and expenses | | | 7,957 | | | | 355 | |
| Custodian fees and expenses | | | 24,115 | | | | 36,159 | |
| Other expenses | | | 5,220 | | | | 235 | |
| | | | | | | | | |
| Total expenses | | | 1,461,974 | | | | 119,523 | |
| | | | | | | | | |
| Net investment loss | | | (350,263 | ) | | | (24,971 | ) |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | | | | | | | | |
| Net realized gain on: | | | | | | | | |
| Investments and foreign currency | | | 3,608,489 | | | | 621,908 | |
| Net change in unrealized appreciation (depreciation) of: | | | | | | | | |
| Investments and foreign currency | | | 18,110,430 | | | | 246,931 | |
| Written option contracts | | | (5,404 | ) | | | — | |
| | | | | | | | | |
| Net gain on investments | | | 21,713,515 | | | | 868,839 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | $ | 21,363,252 | | | $ | 843,868 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 33,824 | | | $ | 10,413 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
179
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The
| | | The
| |
| | | Paradigm
| | | Medical
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
INVESTMENT INCOME: | | | | | | | | |
| Dividends† | | $ | 23,793,585 | | | $ | 582,043 | |
| Interest | | | 1,728,632 | | | | 58 | |
| Income from securities lending | | | 2,138,549 | | | | 24,159 | |
| | | | | | | | | |
| Total investment income | | | 27,660,766 | | | | 606,260 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Investment advisory fees | | | 15,754,346 | | | | 390,729 | |
| Administration fees | | | 545,236 | | | | 13,644 | |
| Professional fees | | | 65,981 | | | | 11,098 | |
| Fund accounting fees | | | 223,168 | | | | 8,922 | |
| Trustee and Officers’ fees and expenses | | | 94,234 | | | | 2,357 | |
| Custodian fees and expenses | | | 413,729 | | | | 6,766 | |
| Other expenses | | | 73,834 | | | | 1,340 | |
| | | | | | | | | |
| Total expenses | | | 17,170,528 | | | | 434,856 | |
| | | | | | | | | |
| Net investment income | | | 10,490,238 | | | | 171,404 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | | | | | | | | |
| Net realized loss on: | | | | | | | | |
| Investments and foreign currency | | | (109,064,403 | ) | | | (219,849 | ) |
| Net change in unrealized appreciation of: | | | | | | | | |
| Investments and foreign currency | | | 286,372,800 | | | | 1,376,880 | |
| | | | | | | | | |
| Net gain on investments | | | 177,308,397 | | | | 1,157,031 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | $ | 187,798,635 | | | $ | 1,328,435 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 1,227,003 | | | $ | 28,236 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
180
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Small Cap
| | | The Market
| |
| | | Opportunities
| | | Opportunities
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
INVESTMENT INCOME: | | | | | | | | |
| Dividends† | | $ | 2,249,899 | | | $ | 1,090,864 | |
| Interest | | | — | | | | 36 | |
| Income from securities lending | | | 100,669 | | | | 81,154 | |
| Other income | | | 20,977 | | | | — | |
| | | | | | | | | |
| Total investment income | | | 2,371,545 | | | | 1,172,054 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Investment advisory fees | | | 2,057,923 | | | | 739,565 | |
| Administration fees | | | 71,053 | | | | 25,496 | |
| Professional fees | | | 20,704 | | | | 13,155 | |
| Fund accounting fees | | | 35,098 | | | | 16,763 | |
| Trustee and Officers’ fees and expenses | | | 12,092 | | | | 4,434 | |
| Custodian fees and expenses | | | 129,972 | | | | 38,551 | |
| Other expenses | | | 10,370 | | | | 3,355 | |
| | | | | | | | | |
| Total expenses | | | 2,337,212 | | | | 841,319 | |
| | | | | | | | | |
| Net investment income | | | 34,333 | | | | 330,735 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | | | | | | | | |
| Net realized loss on: | | | | | | | | |
| Investments and foreign currency | | | (589,161 | ) | | | (336,199 | ) |
| Net change in unrealized appreciation (depreciation) of: | | | | | | | | |
| Investments and foreign currency | | | 20,474,498 | | | | 6,206,744 | |
| Written option contracts | | | — | | | | (37,827 | ) |
| | | | | | | | | |
| Net gain on investments | | | 19,885,337 | | | | 5,832,718 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | $ | 19,919,670 | | | $ | 6,163,453 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 66,139 | | | $ | 39,963 | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
181
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations
For the Year Ended December 31, 2010
| | | | | | | | | |
| | | The Water
| | | The Multi-
| |
| | | Infrastructure
| | | Disciplinary
| |
| | | Portfolio | | | Portfolio | |
| | |
| |
INVESTMENT INCOME: | | | | | | | | |
| Dividends† | | $ | 424,723 | | | $ | 90 | |
| Interest | | | 174,364 | | | | 116,202 | |
| Income from securities lending | | | 52,714 | | | | 56 | |
| | | | | | | | | |
| Total investment income | | | 651,801 | | | | 116,348 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | |
| Investment advisory fees | | | 325,221 | | | | 29,141 | |
| Administration fees | | | 11,403 | | | | 3,963 | |
| Professional fees | | | 10,535 | | | | 9,460 | |
| Fund accounting fees | | | 9,788 | | | | 9,087 | |
| Trustee and Officers’ fees and expenses | | | 1,972 | | | | 150 | |
| Custodian fees and expenses | | | 21,477 | | | | 4,207 | |
| Other expenses | | | 1,155 | | | | 80 | |
| | | | | | | | | |
| Total expenses | | | 381,551 | | | | 56,088 | |
| | | | | | | | | |
| Net investment income | | | 270,250 | | | | 60,260 | |
| | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | |
| Investments and foreign currency | | | (2,165,582 | ) | | | 9,909 | |
| Written option contracts expired or closed | | | (297,569 | ) | | | 101,093 | |
| Net change in unrealized appreciation (depreciation) of: | | | | | | | | |
| Investments and foreign currency | | | (362,117 | ) | | | 39,125 | |
| Written option contracts | | | 1,168,280 | | | | 115,518 | |
| | | | | | | | | |
| Net gain (loss) on investments | | | (1,656,988 | ) | | | 265,645 | |
| | | | | | | | | |
| Net increase (decrease) in net assets resulting from operations | | $ | (1,386,738 | ) | | $ | 325,905 | |
| | | | | | | | | |
| † Net of Foreign Taxes Withheld of: | | $ | 31,520 | | | $ | — | |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
182
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Internet Portfolio | | | The Global Portfolio | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment loss | | $ | (350,263 | ) | | $ | (33,060 | ) | | $ | (24,971 | ) | | $ | (24,484 | ) |
| Net realized gain (loss) on sale of investments, foreign currency and written options | | | 3,608,489 | | | | 3,597,819 | | | | 621,908 | | | | (420,269 | ) |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 18,105,026 | | | | 32,092,041 | | | | 246,931 | | | | 1,903,249 | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from operations | | | 21,363,252 | | | | 35,656,800 | | | | 843,868 | | | | 1,458,496 | |
| | | | | | | | | | | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | | | | | | | | | | | | | | | | |
| Contributions | | | 1,346,460 | | | | 2,234,532 | | | | 1,327,460 | | | | 3,020,852 | |
| Withdrawals | | | (13,061,708 | ) | | | (7,912,207 | ) | | | (1,636,790 | ) | | | (1,672,795 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from beneficial interest transactions | | | (11,715,248 | ) | | | (5,677,675 | ) | | | (309,330 | ) | | | 1,348,057 | |
| | | | | | | | | | | | | | | | | |
| Total increase in net assets | | | 9,648,004 | | | | 29,979,125 | | | | 534,538 | | | | 2,806,553 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 105,618,949 | | | | 75,639,824 | | | | 4,768,296 | | | | 1,961,743 | |
| | | | | | | | | | | | | | | | | |
| End of year | | $ | 115,266,953 | | | $ | 105,618,949 | | | $ | 5,302,834 | | | $ | 4,768,296 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
183
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Paradigm Portfolio | | | The Medical Portfolio | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 10,490,238 | | | $ | 14,996,508 | | | $ | 171,404 | | | $ | 239,675 | |
| Net realized loss on sale of investments, foreign currency and written options | | | (109,064,403 | ) | | | (282,409,570 | ) | | | (219,849 | ) | | | (152,408 | ) |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 286,372,800 | | | | 696,152,858 | | | | 1,376,880 | | | | 4,228,652 | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from operations | | | 187,798,635 | | | | 428,739,796 | | | | 1,328,435 | | | | 4,315,919 | |
| | | | | | | | | | | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | | | | | | | | | | | | | | | | |
| Contributions | | | 12,611,540 | | | | 78,038,515 | | | | 8,554,289 | | | | 7,401,998 | |
| Withdrawals | | | (358,281,150 | ) | | | (393,931,544 | ) | | | (5,133,179 | ) | | | (4,767,975 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from beneficial interest transactions | | | (345,669,610 | ) | | | (315,893,029 | ) | | | 3,421,110 | | | | 2,634,023 | |
| | | | | | | | | | | | | | | | | |
| Total increase (decrease) in net assets | | | (157,870,975 | ) | | | 112,846,767 | | | | 4,749,545 | | | | 6,949,942 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 1,405,321,757 | | | | 1,292,474,990 | | | | 25,942,635 | | | | 18,992,693 | |
| | | | | | | | | | | | | | | | | |
| End of year | | $ | 1,247,450,782 | | | $ | 1,405,321,757 | | | $ | 30,692,180 | | | $ | 25,942,635 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
184
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Portfolio | | | The Market Opportunities Portfolio | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | 34,333 | | | $ | (97,708 | ) | | $ | 330,735 | | | $ | 153,008 | |
| Net realized loss on sale of investments, foreign currency and written options | | | (589,161 | ) | | | (45,656,070 | ) | | | (336,199 | ) | | | (7,399,123 | ) |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 20,474,498 | | | | 143,860,495 | | | | 6,168,917 | | | | 30,080,757 | |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from operations | | | 19,919,670 | | | | 98,106,717 | | | | 6,163,453 | | | | 22,834,642 | |
| | | | | | | | | | | | | | | | | |
NET DECREASE IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | | | | | | | | | | | | | | | | |
| Contributions | | | 8,900,395 | | | | 19,485,826 | | | | 1,707,965 | | | | 7,456,809 | |
| Withdrawals | | | (73,460,711 | ) | | | (128,333,657 | ) | | | (15,461,186 | ) | | | (21,721,577 | ) |
| | | | | | | | | | | | | | | | | |
| Net decrease in net assets resulting from beneficial interest transactions | | | (64,560,316 | ) | | | (108,847,831 | ) | | | (13,753,221 | ) | | | (14,264,768 | ) |
| | | | | | | | | | | | | | | | | |
| Total increase (decrease) in net assets | | | (44,640,646 | ) | | | (10,741,114 | ) | | | (7,589,768 | ) | | | 8,569,874 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 199,784,798 | | | | 210,525,912 | | | | 66,119,020 | | | | 57,549,146 | |
| | | | | | | | | | | | | | | | | |
| End of year | | $ | 155,144,152 | | | $ | 199,784,798 | | | $ | 58,529,252 | | | $ | 66,119,020 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
185
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | |
| | | | | | The Multi-Disciplinary
| |
| | | The Water Infrastructure Portfolio | | | Portfolio | |
| | | For the
| | | For the
| | | For the
| | | For the
| |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | |
| |
OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | 270,250 | | | $ | 107,684 | | | $ | 60,260 | | | $ | (10,867 | ) |
| Net realized gain (loss) on sale of investments, foreign currency and written options | | | (2,463,151 | ) | | | (1,421,220 | ) | | | 111,002 | | | | 105,539 | |
| Net change in unrealized appreciation of investments, foreign currency and written options | | | 806,163 | | | | 3,696,782 | | | | 154,643 | | | | 109,924 | |
| | | | | | | | | | | | | | | | | |
| Net increase (decrease) in net assets resulting from operations | | | (1,386,738 | ) | | | 2,383,246 | | | | 325,905 | | | | 204,596 | |
| | | | | | | | | | | | | | | | | |
NET INCREASE IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | | | | | | | | | | | | | | | | |
| Contributions | | | 10,339,696 | | | | 11,818,237 | | | | 3,080,316 | | | | 788,927 | |
| Withdrawals | | | (7,936,060 | ) | | | (7,147,014 | ) | | | (520,802 | ) | | | (89,179 | ) |
| | | | | | | | | | | | | | | | | |
| Net increase in net assets resulting from beneficial interest transactions | | | 2,403,636 | | | | 4,671,223 | | | | 2,559,514 | | | | 699,748 | |
| | | | | | | | | | | | | | | | | |
| Total increase in net assets | | | 1,016,898 | | | | 7,054,469 | | | | 2,885,419 | | | | 904,344 | |
NET ASSETS: | | | | | | | | | | | | | | | | |
| Beginning of year | | | 23,206,189 | | | | 16,151,720 | | | | 1,322,630 | | | | 418,286 | |
| | | | | | | | | | | | | | | | | |
| End of year | | $ | 24,223,087 | | | $ | 23,206,189 | | | $ | 4,208,049 | | | $ | 1,322,630 | |
| | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
186
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements
December 31, 2010
1. Organization
The Kinetics Portfolios Trust (the “Trust”) was organized as a Delaware Statutory Trust on March 14, 2000 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company issuing its beneficial interests in series, each series representing a distinct portfolio with its own investment objective and policies. The series currently authorized are: The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio and The Multi-Disciplinary Portfolio (collectively, the “Master Portfolios”). Pursuant to the 1940 Act, the Master Portfolios, are “non-diversified” series of the Trust. The Market Opportunities Portfolio commenced operations on January 31, 2006, The Water Infrastructure Portfolio commenced operations on June 29, 2007 and The Multi-Disciplinary Portfolio commenced operations on February 11, 2008. Each of the remaining Master Portfolios commenced operations on April 28, 2000.
Each Master Portfolio is a Master Investment Portfolio in a master-feeder fund structure. Each Master Portfolio has multiple feeder funds invested in the Master Portfolio. By contributing assets to the Master Portfolio, the feeder funds receive a beneficial interest in the Master Portfolio. The Master Portfolio then invests the contributed assets in portfolio securities and allocates income, gains (losses) and expenses to the feeder funds based on the feeder funds’ proportionate interests in the Master Portfolio.
Each of the Master Portfolios, except for the Multi-Disciplinary Portfolio, seeks to provide investors with long-term capital growth. The Multi-Disciplinary Portfolio seeks to provide investors with total return. The Internet Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in the Internet and Internet-related activities. The Global Portfolio generally invests in the equity securities of foreign companies that have the ability to facilitate an increase in the growth of their traditional business lines and in U.S. companies benefiting from international economic growth. The Paradigm Portfolio invests primarily in the equity securities of U.S. and foreign companies that the investment adviser believes are undervalued and that have high returns on equity and are well positioned to reduce their costs, extend the reach of their distribution channels and experience significant growth in their assets or revenues. The Medical Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in medical research, pharmaceutical treatments and related medical technology industries and related technology industries, generally, with a focus on companies engaged in cancer research and drug development. The Small Cap Opportunities Portfolio invests primarily in the equity securities of U.S. and
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December 31, 2010
foreign small capitalized companies that provide attractive valuation opportunities due to special situations such as lack of institutional ownership, lack of significant analyst coverage or companies with sound fundamentals that have experienced a short-term earnings shortfall. The Market Opportunities Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in capital markets or related to capital markets, as well as companies involved in the gaming industry. The Water Infrastructure Portfolio invests primarily in securities and derivatives issued by U.S. and foreign companies engaged in water infrastructure and natural resources with a specific water theme and related activities. The Multi-Disciplinary Portfolio utilizes a two-part investment strategy, which includes fixed income and derivatives components.
2. Significant Accounting Policies
Security Valuation
Master Portfolio securities that are listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. All equity securities that are traded using the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) are valued using the NASDAQ Official Closing Price (“NOCP”). In the event market quotations are not readily available or if events occur that may materially affect the value of a particular security between the time trading ends on a particular security and the close of regular trading on the NYSE, “fair value” will be determined. Purchased non-exchange traded options, futures, unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the mean of the most recent bid and asked prices. Exchange traded options are valued at the last reported sale price on an exchange on which the option is traded. If no sales are reported on a particular day, the mean between the highest bid and lowest asked quotations at the close of the exchanges will be used. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Other assets and securities for which no quotations are readily available (including restricted securities) will be valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. At December 31, 2010, 0.00%, 0.00%, and 0.00% of
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Notes to Financial Statements — (Continued)
December 31, 2010
the net assets of The Internet Portfolio, The Paradigm Portfolio, and The Medical Portfolio, respectively, were fair valued securities.
Repurchase Agreements
Each Master Portfolio may enter into repurchase agreements with banks that are members of the Federal Reserve System or securities dealers who are members of a national securities exchange or are primary dealers in U.S. Government Securities. In connection with transactions in repurchase agreements, it is the Trust’s policy that the Master Portfolio receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 100% of the amount invested by the Master Portfolio in each repurchase agreement. If the seller defaults, and the value of the collateral declines, realization of the collateral by the Master Portfolio may be delayed or limited.
Written Options
The Master Portfolios may write (sell) call or put options for trading or hedging purposes. When a Master Portfolio writes an option, an amount equal to the premium received by the Master Portfolio is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. By writing the option, the Master Portfolio may become obligated during the term of the option to deliver or purchase the securities underlying the option at the exercise price if the option is exercised. When an option expires on its stipulated expiration date or the Master Portfolio enters into a closing purchase transaction, the Master Portfolio realizes a gain or loss if the cost of the closing transaction differs from the premium received when the option was sold, without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the underlying security (or increases the proceeds on the security sold short) and the Master Portfolio realizes a gain or loss from the sale of the security (or closing of the short sale). As collateral for uncovered written options, the Master Portfolio is required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the exercise price of the purchase obligation for put options or the market value of the instrument underlying the contract for call options.
Foreign Currency Translations
The books and records of the Master Portfolios are maintained in U.S. dollars. For the Master Portfolios, foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities and other assets and liabilities are translated at the exchange rate of such
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Notes to Financial Statements — (Continued)
December 31, 2010
currencies against the U.S. dollar, as provided by an approved pricing service, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Master Portfolios do not isolate and treat as ordinary income that portion of the results of operations arising as a result of changes in the exchange rate from the fluctuations arising from changes in the market prices of securities held during the period. However, for federal income tax purposes, the Master Portfolios do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.
Restricted and Illiquid Securities
The Master Portfolios may invest in restricted securities. These securities are valued by the Master Portfolios after giving due consideration to pertinent factors including recent private sales, market conditions and the issuer’s financial performance. The Master Portfolios have no right to require registration of unregistered securities. At December 31, 2010 the following Master Portfolio held securities restricted to institutional investors (144A Securities):
| | | | | | | | | |
| | | | | Percentage
|
Restricted Securities | | Market Value | | of Net Assets |
| |
| The Multi-Disciplinary Portfolio | | $ | 106,750 | | | | 2.54 | % |
An illiquid asset is any asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Master Portfolio has valued the investment. At December 31, 2010, the following Master Portfolios held illiquid securities:
| | | | | | | | | |
| | | | | Percentage
|
Illiquid Securities | | Market Value | | of Net Assets |
| |
| The Internet Portfolio | | $ | 502 | | | | 0.00 | % |
| The Paradigm Portfolio | | | 0 | | | | 0.00 | |
| The Medical Portfolio | | | 0 | | | | 0.00 | |
When-Issued Securities
The Master Portfolios may purchase securities on a when-issued or delayed delivery basis. Although the purchase amounts of these securities are established at the time the purchaser enters into the agreement, these securities may be delivered and paid for at a future date. The Master Portfolios record purchases of when-issued securities and reflect the values of such securities in determining net asset value in the same manner as other portfolio securities. The Master Portfolios maintain at all times cash or other liquid assets in an amount at least equal to the amount of outstanding commitments for when-issued securities.
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Notes to Financial Statements — (Continued)
December 31, 2010
Securities Lending
Each Master Portfolio may lend its portfolio securities to broker-dealers by entering directly into lending arrangements with such broker-dealers or indirectly through repurchase agreements with respect to no more than 331/3% of the total assets of each Master Portfolio (including any collateral posted) or 50% of the total assets of each Master Portfolio (excluding any collateral posted). Securities lending and repurchase transactions will be fully collateralized at all times with cash and/or short-term debt obligations. The Master Portfolios receive interest on the collateral received as well as a fee for the securities loaned.
Expense Allocation
Common expenses incurred by the Master Portfolios are allocated among the Master Portfolios (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Master Portfolios, depending on the nature of the expenditure. All expenses incurred by the Master Portfolios are allocated to the feeder funds daily based on their proportionate interests in the respective Master Portfolios.
Federal Income Taxes
Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in a Master Portfolio will be subject to taxation on its share of the Master Portfolio’s ordinary income and capital gains. It is intended that each Master Portfolio’s assets will be managed so an investor in the Master Portfolio can satisfy the requirements of subchapter M of the Internal Revenue Code.
There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. As of December 31, 2010, open tax years include the tax years ended December 31, 2007 through 2010. The Master Portfolios are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
Other
Realized gains and losses on the sale of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recognized on the accrual basis. Other noncash dividends are recognized as investment income at the fair value of the property received.
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December 31, 2010
Withholding taxes on foreign dividends have been provided for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates.
3. Investment Adviser
The Trust has entered into Investment Advisory Agreements (the “Agreements”) with Kinetics Asset Management, Inc. (the “Adviser”), with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. Under the terms of the Agreements, the Master Portfolios compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio’s average daily net assets. The Sub-Adviser to The Water Infrastructure Portfolio, Brennan Investment Partners, LLC, received its compensation from the Adviser at the annual rate of 0.35% of the average daily net assets of The Water Infrastructure Portfolio. On July 16, 2010, Brennan Investment Partners, LLC ceased serving as sub-adviser for The Water Infrastructure Portfolio.
For the year ended December 31, 2010, The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio and The Multi-Disciplinary Portfolio incurred expenses of $1,337,259, $61,608, $15,754,346, $390,729, $2,057,923, $739,565, $325,221 and $29,141, respectively, pursuant to the Agreements.
For the year ended December 31, 2010, the Trust was allocated $24,000 for the services of the Chief Compliance Officer employed by the Adviser.
4. Securities Transactions
Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2010 were as follows:
| | | | | | | | | | | | | | | | | |
| | | Purchases | | Sales |
| | | U.S.
| | | | U.S.
| | |
| | | Government | | Other | | Government | | Other |
| |
| The Internet Portfolio | | $ | — | | | $ | 12,467,411 | | | $ | — | | | $ | 23,317,997 | |
| The Global Portfolio | | | — | | | | 5,870,035 | | | | — | | | | 6,126,927 | |
| The Paradigm Portfolio | | | — | | | | 90,826,091 | | | | — | | | | 463,111,095 | |
| The Medical Portfolio | | | — | | | | 5,461,875 | | | | — | | | | 753,454 | |
| The Small Cap Opportunities Portfolio | | | — | | | | 5,743,539 | | | | — | | | | 71,270,403 | |
| The Market Opportunities Portfolio | | | — | | | | 7,178,580 | | | | — | | | | 19,299,186 | |
| The Water Infrastructure Portfolio | | | — | | | | 20,157,995 | | | | — | | | | 28,093,151 | |
| The Multi-Disciplinary Portfolio | | | — | | | | 3,503,330 | | | | — | | | | 739,999 | |
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Notes to Financial Statements — (Continued)
December 31, 2010
As of December 31, 2010, the cost of investments and unrealized appreciation (depreciation) on investment securities for federal income tax purposes was as follows:
| | | | | | | | | | | | | | | | | |
| | | Net
| | | | | | |
| | | Unrealized
| | | | | | |
| | | Appreciation
| | Unrealized
| | Unrealized
| | Tax Cost of
|
| | | (Depreciation) | | Appreciation | | Depreciation | | Investments |
| |
| The Internet Portfolio | | $ | 45,780,455 | | | $ | 55,045,628 | | | $ | (9,265,173 | ) | | $ | 107,981,610 | |
| The Global Portfolio | | | 514,949 | | | | 626,963 | | | | (112,014 | ) | | | 5,326,364 | |
| The Paradigm Portfolio | | | 228,453,024 | | | | 360,791,025 | | | | (132,338,001 | ) | | | 1,261,640,870 | |
| The Medical Portfolio | | | 527,740 | | | | 5,989,204 | | | | (5,461,464 | ) | | | 40,963,881 | |
| The Small Cap Opportunities Portfolio | | | 22,538,214 | | | | 48,513,109 | | | | (25,974,895 | ) | | | 173,109,281 | |
| The Market Opportunities Portfolio | | | 4,483,119 | | | | 12,417,832 | | | | (7,934,713 | ) | | | 69,188,537 | |
| The Water Infrastructure Portfolio | | | 2,163 | | | | 551,721 | | | | (549,558 | ) | | | 19,404,536 | |
| The Multi-Disciplinary Portfolio | | | 62,862 | | | | 104,758 | | | | (41,896 | ) | | | 3,777,994 | |
For the year ended December 31, 2010, the Master Portfolios wrote the following options:
| | | | | | | | | |
| | | Number
| | Premium
|
| | | of Contracts | | Amount |
| |
The Internet Portfolio
| | | | | | | | |
| Outstanding at the Beginning of Year | | | 2 | | | $ | 18,054 | |
| Options Exercised | | | (2 | ) | | | (18,054 | ) |
| | | | | | | | | |
| Outstanding at December 31, 2010 | | | — | | | $ | — | |
| | | | | | | | | |
The Market Opportunities Portfolio
| | | | | | | | |
| Outstanding at the Beginning of Year | | | 14 | | | $ | 126,377 | |
| Options Exercised | | | (14 | ) | | | (126,377 | ) |
| | | | | | | | | |
| Outstanding at December 31, 2010 | | | — | | | $ | — | |
| | | | | | | | | |
The Water Infrastructure Portfolio
| | | | | | | | |
| Outstanding at the Beginning of Year | | | — | | | $ | — | |
| Options Written | | | 9,230 | | | | 1,837,464 | |
| Options Expired | | | (150 | ) | | | (29,603 | ) |
| Options Closed | | | (400 | ) | | | (120,243 | ) |
| | | | | | | | | |
| Outstanding at December 31, 2010 | | | 8,680 | | | $ | 1,687,618 | |
| | | | | | | | | |
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Notes to Financial Statements — (Continued)
December 31, 2010
| | | | | | | | | |
| | | Number
| | Premium
|
| | | of Contracts | | Amount |
| |
The Multi-Disciplinary Portfolio
| | | | | | | | |
| Outstanding at the Beginning of Year | | | 327 | | | $ | 114,271 | |
| Options Written | | | 1,211 | | | | 320,281 | |
| Options Split | | | 7 | | | | — | |
| Options Exercised | | | (147 | ) | | | (32,055 | ) |
| Options Expired | | | (368 | ) | | | (97,859 | ) |
| Options Closed | | | (3 | ) | | | (4,169 | ) |
| | | | | | | | | |
| Outstanding at December 31, 2010 | | | 1,027 | | | $ | 300,469 | |
| | | | | | | | | |
5. Portfolio Securities Loaned
As of December 31, 2010, the Master Portfolios had loaned securities that were collateralized by cash. The cash collateral is invested by the custodian in a money market pooled account approved by the Adviser. Although risk is mitigated by the collateral, a Master Portfolio could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. The Master Portfolio receives interest on the collateral received as well as a fee for the securities loaned. The Master Portfolios will continue to receive dividends and interest on all securities loaned. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be accounted for by the Master Portfolios. The value of the securities on loan and the value of the related collateral at December 31, 2010, were as follows:
| | | | | | | | | |
| | | Securities | | Collateral |
| |
| The Internet Portfolio | | $ | 35,839,537 | | | $ | 37,416,974 | |
| The Global Portfolio | | | 533,095 | | | | 551,370 | |
| The Paradigm Portfolio | | | 230,416,063 | | | | 243,932,317 | |
| The Medical Portfolio | | | 10,283,709 | | | | 10,793,305 | |
| The Small Cap Opportunities Portfolio | | | 38,006,161 | | | | 40,060,947 | |
| The Market Opportunities Portfolio | | | 13,653,346 | | | | 14,816,293 | |
| The Water Infrastructure Portfolio | | | 544,028 | | | | 582,692 | |
| The Multi-Disciplinary Portfolio | | | 74,539 | | | | 76,500 | |
6. Selected Financial Highlights
Financial highlights for the Master Portfolios were as follows:
| | | | | | | | | | | | | | | | | | | | | |
| | | The Internet Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | For the
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.37 | % | | | 1.37 | % | | | 1.34 | % | | | 1.34 | % | | | 1.39 | % |
| After expense reduction | | | 1.37 | % | | | 1.37 | % | | | 1.34 | % | | | 1.33 | % | | | 1.33 | % |
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Notes to Financial Statements — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | | | | | |
| | | The Internet Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | For the
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | (0.33 | )% | | | (0.04 | )% | | | 1.59 | % | | | 1.58 | % | | | 0.17 | % |
| After expense reduction | | | (0.33 | )% | | | (0.04 | )% | | | 1.59 | % | | | 1.59 | % | | | 0.23 | % |
| Portfolio turnover rate | | | 12 | % | | | 14 | % | | | 19 | % | | | 15 | % | | | 11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | The Global Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | For the
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 2.43 | % | | | 2.81 | % | | | 2.46 | % | | | 1.99 | % | | | 1.62 | % |
| After expense reduction | | | 2.43 | % | | | 2.81 | % | | | 2.46 | % | | | 1.98 | % | | | 1.46 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | (0.51 | )% | | | (0.74 | )% | | | 0.83 | % | | | 3.73 | % | | | 2.78 | % |
| After expense reduction | | | (0.51 | )% | | | (0.74 | )% | | | 0.83 | % | | | 3.74 | % | | | 2.94 | % |
| Portfolio turnover rate | | | 122 | % | | | 53 | % | | | 98 | % | | | 22 | % | | | 10 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | The Paradigm Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | For the
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.36 | % | | | 1.36 | % | | | 1.33 | % | | | 1.33 | % | | | 1.40 | % |
| After expense reduction | | | 1.36 | % | | | 1.36 | % | | | 1.33 | % | | | 1.33 | % | | | 1.32 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 0.83 | % | | | 1.15 | % | | | 0.86 | % | | | 0.75 | % | | | 0.85 | % |
| After expense reduction | | | 0.83 | % | | | 1.15 | % | | | 0.86 | % | | | 0.75 | % | | | 0.93 | % |
| Portfolio turnover rate | | | 7 | % | | | 15 | % | | | 34 | % | | | 8 | % | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | The Medical Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | For the
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.39 | % | | | 1.43 | % | | | 1.42 | % | | | 1.49 | % | | | 1.44 | % |
| After expense reduction | | | 1.39 | % | | | 1.43 | % | | | 1.42 | % | | | 1.40 | % | | | 1.34 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 0.55 | % | | | 1.14 | % | | | 1.02 | % | | | 0.42 | % | | | 0.33 | % |
| After expense reduction | | | 0.55 | % | | | 1.14 | % | | | 1.02 | % | | | 0.51 | % | | | 0.43 | % |
| Portfolio turnover rate | | | 3 | % | | | 13 | % | | | 28 | % | | | 38 | % | | | 20 | % |
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Notes to Financial Statements — (Continued)
December 31, 2010
| | | | | | | | | | | | | | | | | | | | | |
| | | The Small Cap Opportunities Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | For the
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.42 | % | | | 1.42 | % | | | 1.36 | % | | | 1.34 | % | | | 1.40 | % |
| After expense reduction | | | 1.42 | % | | | 1.42 | % | | | 1.36 | % | | | 1.31 | % | | | 1.27 | % |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 0.02 | % | | | (0.05 | )% | | | 0.51 | % | | | 0.38 | % | | | 0.30 | % |
| After expense reduction | | | 0.02 | % | | | (0.05 | )% | | | 0.51 | % | | | 0.41 | % | | | 0.43 | % |
| Portfolio turnover rate | | | 4 | % | | | 4 | % | | | 16 | % | | | 17 | % | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | The Market Opportunities Portfolio |
| | | For the
| | For the
| | For the
| | For the
| | January 31,
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | Year Ended
| | 2006ˆ through
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 | | 2006 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.42 | % | | | 1.42 | % | | | 1.36 | % | | | 1.44 | % | | | 1.81 | %(1) |
| After expense reduction | | | 1.42 | % | | | 1.42 | % | | | 1.36 | % | | | 1.44 | % | | | 1.61 | %(1) |
| Ratio of net investment income to average net assets: | | | | | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 0.56 | % | | | 0.26 | % | | | 1.25 | % | | | 0.61 | % | | | 0.16 | %(1) |
| After expense reduction | | | 0.56 | % | | | 0.26 | % | | | 1.25 | % | | | 0.61 | % | | | 0.36 | %(1) |
| Portfolio turnover rate | | | 12 | % | | | 14 | % | | | 77 | % | | | 14 | % | | | 0 | % |
| | |
| | ˆ | Commencement of operations. |
| | | | | | | | | | | | | | | | | |
| | | The Water Infrastructure Portfolio |
| | | For the
| | For the
| | For the
| | June 29,
|
| | | Year Ended
| | Year Ended
| | Year Ended
| | 2007ˆ through
|
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 | | 2007 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.47 | % | | | 1.49 | % | | | 1.49 | % | | | 2.01 | %(1) |
| After expense reduction | | | 1.47 | % | | | 1.49 | % | | | 1.49 | % | | | 2.01 | %(1) |
| Ratio of net investment income to average net assets: | | | | | | | | | | | | | | | | |
| Before expense reduction | | | 1.04 | % | | | 0.63 | % | | | 1.27 | % | | | 0.96 | %(1) |
| After expense reduction | | | 1.04 | % | | | 0.63 | % | | | 1.27 | % | | | 0.96 | %(1) |
| Portfolio turnover rate | | | 111 | % | | | 45 | % | | | 66 | % | | | 7 | % |
| | |
| | ˆ | Commencement of operations. |
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Notes to Financial Statements — (Continued)
December 31, 2010
| | | | | | | | | | | | | |
| | | The Multi-Disciplinary Portfolio |
| | | | | | | February 11,
|
| | | For the
| | For the
| | 2008ˆ
|
| | | Year Ended
| | Year Ended
| | through
|
| | | December 31,
| | December 31,
| | December 31,
|
| | | 2010 | | 2009 | | 2008 |
| |
| Ratio of expenses to average net assets: | | | | | | | | | | | | |
| Before expense reduction | | | 2.41% | | | | 3.66 | % | | | 5.09 | %(1) |
| After expense reduction | | | 2.41% | | | | 3.66 | % | | | 5.09 | %(1) |
| Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | |
| Before expense reduction | | | 2.58% | | | | (1.20 | )% | | | (3.49 | )%(1) |
| After expense reduction | | | 2.58% | | | | (1.20 | )% | | | (3.49 | )%(1) |
| Portfolio turnover rate | | | 38% | | | | 77 | % | | | N/A(2 | ) |
| | |
| | ˆ | Commencement of operations. |
| |
| (1) | Annualized. |
| (2) | The Portfolio did not hold any long-term securities during the period, therefore the portfolio turnover is not applicable. |
7. Summary of Fair Value Exposure
Various inputs are used in determining the value of the Master Portfolios’ investments. These inputs are summarized in the three broad levels listed below:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
Level 2 — Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The Internet Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 112,508,084 | | | $ | 1,705,798 | (1) | | $ | 502 | (2) | | $ | 114,214,384 | |
| Escrow Notes | | | — | | | | — | | | | — | * | | | — | * |
| Rights | | | 1,530,087 | | | | — | | | | — | | | | 1,530,087 | |
| Short-Term Investments | | | 600,620 | | | | — | | | | — | | | | 600,620 | |
| Investments Purchased with the Cash | | | | | | | | | | | | | | | | |
| Proceeds from Securities Lending | | | 37,416,974 | | | | — | | | | — | | | | 37,416,974 | |
| | | | | | | | | | | | | | | | | |
| Total Investments in Securities | | $ | 152,055,765 | | | $ | 1,705,798 | | | $ | 502 | | | $ | 153,762,065 | |
| | | | | | | | | | | | | | | | | |
| |
| * | The amount is less than $0.50 |
| |
| | See portfolio of Investments for breakout of common stocks by industry classification. |
| |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: |
| | | | | |
| Rental and Leasing Services | | $ | 1,701,000 | |
| Telecommunications | | | 4,798 | |
| | | | | |
| | | $ | 1,705,798 | |
| |
| (2) | The Common Stocks Level 3 balance consists of the market values of the associated Level 3 investments in the following industry: |
| | | | | |
| Special Purpose Entity | | $ | 502 | |
| | | | | |
| Transfers into Level 2 | | | 1,705,798 | |
| Transfers out of Level 2 | | | — | |
| | | | | |
Net transfers in and/or out of Level 2 | | $ | 1,705,798 | |
| | | | | |
Transfers were made into Level 2 due to a lack of market activity.
Transfers between levels are recognized at the end of the reporting period.
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
| | | | | |
| | | Investments in
|
Description | | Securities |
| |
| Balance as of December 31, 2009 | | $ | — | * |
| Accrued discounts/premiums | | | — | |
| Realized gain (loss) | | | — | |
| Change in unrealized appreciation (depreciation) | | | 502 | |
| Net purchases (sales) | | | — | |
Transfer in and/or out of Level 3 | | | — | |
| | | | | |
| Balance as of December 31, 2010 | | $ | 502 | |
| | | | | |
| |
| * | The amount is less than $0.50. |
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
The Global Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| |
| Common Stocks | | $ | 5,251,369 | | | $ | 38,343 | (1) | | $ | — | | | $ | 5,289,712 | |
| Warrants | | | 231 | | | | — | | | | — | | | | 231 | |
| Investments Purchased with the Cash Proceeds from Securities Lending | | | 551,370 | | | | — | | | | — | | | | 551,370 | |
| | | | | | | | | | | | | | | | | |
| Total Investments in Securities | | $ | 5,802,970 | | | $ | 38,343 | | | $ | — | | | $ | 5,841,313 | |
| | | | | | | | | | | | | | | | | |
| |
| | See Portfolio of Investments for breakout of common stocks by industry classification. |
| |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: |
| | | | | |
| Data Processing, Hosting and Related Services | | $ | 38,343 | |
The Paradigm Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 1,195,696,931 | | | $ | 6,807,296 | (1) | | $ | — | | | $ | 1,202,504,227 | |
| Escrow Notes | | | — | | | | — | | | | — | * | | | — | * |
| Convertible Bonds | | | — | | | | 5,065,000 | | | | — | | | | 5,065,000 | |
| Corporate Bonds | | | — | | | | 428 | | | | — | | | | 428 | |
| Warrants | | | 131,860 | | | | — | | | | — | | | | 131,860 | |
| Short-Term Investments | | | 38,460,062 | | | | — | | | | — | | | | 38,460,062 | |
| Proceeds from Securities Lending | | | 243,932,317 | | | | — | | | | — | | | | 243,932,317 | |
| | | | | | | | | | | | | | | | | |
| Total Investments in Securities | | $ | 1,478,221,170 | | | $ | 11,872,724 | | | | — | * | | $ | 1,490,093,894 | |
| | | | | | | | | | | | | | | | | |
| |
| * | Amount is less than $0.50. |
| |
| | See Portfolio of Investments for breakout of common stocks by industry classification. |
| |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: |
| | | | | |
| Credit Intermediation and Related Activities | | $ | 6,807,296 | |
| Transfers into Level 2 | | $ | 6,807,296 | |
| Transfers out of Level 2 | | | — | |
| | | | | |
Net transfers in and/or out of Level 2 | | | 6,807,296 | |
Transfers were made into and out of Level 2 due to a lack of market activity.
Transfers between levels are recognized at the end of the reporting period.
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Notes to Financial Statements — (Continued)
December 31, 2010
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
| | | | | |
| | | Investments in
|
Description | | Securities |
| |
| Balance as of December 31, 2009 | | $ | 2,620,751 | |
| Accrued discounts/premiums | | | — | |
| Realized gain (loss) | | | — | |
| Change in unrealized appreciation (depreciation) | | | — | |
| Net purchases (sales) | | | (2,620,751 | ) |
Transfer in and/or out of Level 3 | | | — | |
| | | | | |
| Balance as of December 31, 2010 | | $ | — | * |
| | | | | |
| |
| * | Amount is less than $0.50. |
The Medical Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 30,210,765 | | | $ | — | | | $ | — | | | $ | 30,210,765 | |
| Escrow Notes | | | — | | | | — | | | | — | * | | | — | * |
| Rights | | | 3,762 | | | | — | | | | — | | | | 3,762 | |
| Short-Term Investments | | | 483,789 | | | | — | | | | — | | | | 483,789 | |
| Investments Purchased with the Cash | | | | | | | | | | | | | | | | |
| Proceeds from Securities Lending | | | 10,793,305 | | | | — | | | | — | | | | 10,793,305 | |
| | | | | | | | | | | | | | | | | |
| Total Investment in Securities | | $ | 41,491,621 | | | $ | — | | | $ | — | * | | $ | 41,491,621 | |
| | | | | | | | | | | | | | | | | |
| |
| * | Amount is less than $0.50. |
| |
| | See Portfolio of Investments for breakout of common stocks by industry classification. |
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
| | | | | |
| | | Investments in
|
Description | | Securities |
| |
| Balance as of December 31, 2009 | | $ | — | |
| Accrued discounts/premiums | | | — | |
| Realized gain (loss) | | | — | |
| Change in unrealized appreciation (depreciation) | | | — | * |
| Net purchases (sales) | | | — | * |
Transfer in and/or out of Level 3 | | | — | |
| | | | | |
| Balance as of December 31, 2010 | | $ | — | * |
| | | | | |
| |
| * | Amount is less than $0.50. |
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
The Small Cap Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 150,960,186ˆ | | | $ | 2,135,057 | (1) | | $ | — | | | $ | 153,095,243 | |
| Corporate Bonds | | | — | | | | — | | | | 125 | | | | 125 | |
| Rights | | | 704,351 | | | | — | | | | — | | | | 704,351 | |
| Short-Term Investments | | | 1,786,829 | | | | — | | | | — | | | | 1,786,829 | |
| Investments Purchased with the Cash | | | | | | | | | | | | | | | | |
| Proceeds from Securities Lending | | | 40,060,947 | | | | — | | | | — | | | | 40,060,947 | |
| | | | | | | | | | | | | | | | | |
| Total Investments in Securities | | $ | 193,512,313 | | | $ | 2,135,057 | | | $ | 125 | | | $ | 195,647,495 | |
| | | | | | | | | | | | | | | | | |
| |
| ˆ | See Portfolio of Investments for breakout of common stocks by industry classification. |
| |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: |
| | | | | |
| Asset Management | | $ | 2,051,720 | |
| Real Estate | | | 1,310 | |
| Rental and Leasing Services | | | 66,150 | |
| Telecommunications | | | 15,877 | |
| | | | | |
| | | $ | 2,135,057 | |
| | | | | |
| Transfers into Level 2 | | $ | 2,135,057 | |
| Transfers out of Level 2 | | | (170,518 | ) |
| | | | | |
Net transfers in and/or out of Level 2 | | $ | 1,964,539 | |
| | | | | |
Transfers were made into Level 2 due to a lack of market activity. Transfers were made out of Level 2 and into Level 3 due to security becoming fair valued in accordance with procedures adopted by the Trust’s Board of Trustees.
Transfers between Levels are recognized at the end of the reporting period.
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
| | | | | |
| | | Investments in
|
Description | | Securities |
| |
| Balance as of December 31, 2009 | | $ | — | * |
| Accrued discounts/premiums | | | — | |
| Realized gain (loss) | | | 1,213,355 | |
| Change in unrealized appreciation (depreciation) | | | — | |
| Net purchases (sales) | | | (1,213,355 | ) |
Transfer in and/or out of Level 3 | | | — | |
| | | | | |
| Balance as of December 31, 2010 | | $ | — | |
| | | | | |
| |
| * | Amount is less than $0.50. |
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
The Market Opportunities Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 58,326,972 | ˆ | | $ | 508,109 | (1) | | $ | — | | | $ | 58,835,081 | |
| Short-Term Investments | | | 20,282 | | | | — | | | | — | | | | 20,282 | |
| Investments Purchased with the Cash | | | | | | | | | | | | | | | | |
| Proceeds from Securities Lending | | | 14,816,293 | | | | — | | | | — | | | | 14,816,293 | |
| | | | | | | | | | | | | | | | | |
| Total Investment in Securities | | $ | 73,163,547 | | | $ | 508,109 | | | $ | — | | | $ | 73,671,656 | |
| | | | | | | | | | | | | | | | | |
| |
| ˆ | See Portfolio of Investments for breakout of common stocks by industry classification. |
| |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: |
| | | | | |
| Asset Management | | $ | 508,109 | |
| | | | | |
| Transfers into Level 2 | | $ | 508,109 | |
| Transfers out of Level 2 | | | — | |
| | | | | |
Net transfers in and/or out of Level 2 | | $ | 508,109 | |
| | | | | |
Transfers were made into Level 2 due to a lack of market activity.
Transfers between levels are recognized at the end of the reporting period.
The Water Infrastructure Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 2,510,024 | ˆ | | $ | — | | | $ | — | | | $ | 2,510,024 | |
| Convertible Bonds | | | — | | | | 2,863,863 | | | | — | | | | 2,863,863 | |
| Corporate Bonds | | | — | | | | 5,028,047 | | | | — | | | | 5,028,047 | |
| Warrants | | | — | | | | 12,000 | | | | — | | | | 12,000 | |
| Short-Term Investments | | | 3,010,076 | | | | 5,399,997 | | | | — | | | | 8,410,073 | |
| Investments Purchased with the Cash | | | | | | | | | | | | | | | | |
| Proceeds from Securities Lending | | | 582,692 | | | | — | | | | — | | | | 582,692 | |
| | | | | | | | | | | | | | | | | |
| Total Investments in Securities | | $ | 6,102,792 | | | $ | 13,303,907 | | | $ | — | | | $ | 19,406,699 | |
| | | | | | | | | | | | | | | | | |
| Put Options Written | | $ | — | | | $ | (519,338 | ) | | $ | — | | | $ | (519,338 | ) |
| | | | | | | | | | | | | | | | | |
| |
| ˆ | See Portfolio of Investments for breakout of common stocks by industry classification. |
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Notes to Financial Statements — (Continued)
December 31, 2010
The Multi-Disciplinary Portfolio
The following is a summary of the inputs used to value the Portfolio’s net assets as of December 31, 2010:
| | | | | | | | | | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total |
| |
| Common Stocks | | $ | 14,076 | ˆ | | $ | — | | | $ | — | | | $ | 14,076 | |
| Convertible Bonds | | | — | | | | 1,392,187 | | | | — | | | | 1,392,187 | |
| Corporate Bonds | | | — | | | | 2,298,249 | | | | — | | | | 2,298,249 | |
| Put Options Purchased | | | — | | | | 45 | | | | — | | | | 45 | |
| Short-Term Investments | | | 59,799 | | | | — | | | | — | | | | 59,799 | |
| Investments Purchased with the Cash | | | | | | | | | | | | | | | | |
| Proceeds from Securities Lending | | | 76,500 | | | | — | | | | — | | | | 76,500 | |
| | | | | | | | | | | | | | | | | |
| Total Investments in Securities | | $ | 150,375 | | | $ | 3,690,481 | | | $ | — | | | $ | 3,840,856 | |
| | | | | | | | | | | | | | | | | |
| Put Options Written | | $ | — | | | $ | (129,863 | ) | | $ | — | | | $ | (129,863 | ) |
| | | | | | | | | | | | | | | | | |
| |
| ˆ | See Portfolio of Investments for breakout of common stocks by industry classification. |
8. Disclosures about Derivative Instruments and Hedging Activities
The Master Portfolios have adopted enhanced disclosure regarding derivatives and hedging activity intended to improve financial reporting of derivative instruments by enabling investors to understand how and why a Master Portfolio uses derivatives, how derivatives are accounted for by the Master Portfolios, and how derivative instruments affect a Master Portfolio’s results of operations and financial position. The Master Portfolios utilized options to implement or to gain further exposure to their respective investment strategies.
The Internet Portfolio
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2010:
| | | | | | | | | | | | | | | |
| | | Assets | | Liabilities |
Equity Contracts | | Description | | Fair Value | | Description | | Fair Value |
| |
| Purchased Options | | | Investments* | | | $ | — | | | | | | | |
| | | | | | | | | | | Written Options | | | | |
| Written option | | | | | | | | | | contracts, at value | | $ | — | |
| | | | | | | | | | | | | | | |
| Total | | | | | | $ | — | | | | | $ | — | |
| | | | | | | | | | | | | | | |
| |
| * | Purchased options are included in investments with other long positions. |
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010:
Amount of Realized Gain (Loss) on Equity Contracts
| | | | | |
Equity Contracts | | | |
| |
| Purchased Options | | $ | — | ** |
| Written Options | | | — | |
| | | | | |
| Total | | $ | — | |
| | | | | |
| |
| ** | Purchased options are included with investments. |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| | | | | |
Equity Contracts | | |
| |
| Purchased Options | | $ | — | *** |
| Written Options | | | (5,404 | )+ |
| | | | | |
| Total | | $ | (5,404 | ) |
| | | | | |
| |
| *** | Purchased options are included with investments. |
| |
| + | This change is a result of options being opened in a previous period and then held during the current period. |
The Internet Portfolio has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Portfolio’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2010: no long option contracts were purchased and $0 premiums were paid, no written option contracts were opened and $0 premiums were received during the period.
The Market Opportunities Portfolio
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2010:
| | | | | | | | | | | | | | | |
| | | Assets | | Liabilities |
Equity Contracts | | Description | | Fair Value | | Description | | Fair Value |
| |
| Purchased Options | | | Investments* | | | $ | — | | | | | | | |
| | | | | | | | | | | Written option | | | | |
| Written Options | | | | | | | | | | contracts, at value | | $ | — | |
| | | | | | | | | | | | | | | |
| Total | | | | | | $ | — | | | | | $ | — | |
| | | | | | | | | | | | | | | |
| |
| * | Purchased options are included in investments with other long positions. |
204
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010:
Amount of Realized Gain (Loss) on Equity Contracts
| | | | | |
Equity Contracts | | | |
| |
| Purchased Options | | $ | — | ** |
| Written Options | | | — | |
| | | | | |
| Total | | $ | — | |
| | | | | |
| |
| ** | Purchased options are included with investments. |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| | | | | |
Equity Contracts | | |
| |
| Purchased Options | | $ | — | *** |
| Written Options | | | (37,827 | )+ |
| | | | | |
| Total | | $ | (37,827 | ) |
| | | | | |
| |
| *** | Purchased options are included with investments. |
| |
| + | This change is a result of options being opened in a previous period and then held through the current period. |
The Market Opportunities Portfolio has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Portfolio’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2010: no long option contracts were purchased and $0 premiums were paid, no written option contracts were opened and $0 premiums were received during the period.
The Water Infrastructure Portfolio
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2010:
| | | | | | | | | | | | | | | |
| | | Assets | | | Liabilities | |
Equity Contracts | | Description | | | Fair Value | | | Description | | Fair Value | |
| |
| | | | | | | | | | | Written option | | | | |
| Written Options | | | | | | | | | | contracts, at value | | $ | 519,338 | |
| | | | | | | | | | | | | | | |
| Total | | | | | | $ | — | | | | | $ | 519,338 | |
| | | | | | | | | | | | | | | |
| |
| * | Purchased options are included in investments with other long positions. |
205
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010:
Amount of Realized Gain (Loss) on Equity Contracts
| | | | | |
Equity Contracts | | |
| |
| Written Options | | $ | (297,569 | ) |
| | | | | |
| Total | | $ | (297,569 | ) |
| | | | | |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| | | | | |
Equity Contracts | | |
| |
| Written Options | | $ | 1,168,280 | |
| | | | | |
| Total | | $ | 1,168,280 | |
| | | | | |
The Water Infrastructure Portfolio has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Portfolio’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2010: no long option contracts were purchased and $0 premiums were paid, written option contracts (9,230 contracts) were opened and $1,837,464 premiums were received during the period.
The Multi-Disciplinary Portfolio
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2010:
| | | | | | | | | | | | | | | |
| | | Assets | | | Liabilities | |
Equity Contracts | | Description | | | Fair Value | | | Description | | Fair Value | |
| |
| Purchased Options | | | Investments* | | | $ | 45 | | | | | | | |
| | | | | | | | | | | Written option | | | | |
| Written Options | | | | | | | | | | contracts, at value | | $ | 129,863 | |
| | | | | | | | | | | | | | | |
| Total | | | | | | $ | 45 | | | | | $ | 129,863 | |
| | | | | | | | | | | | | | | |
| |
| * | Purchased options are included in investments with other long positions. |
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010:
Amount of Realized Gain (Loss) on Equity Contracts
| | | | | |
Equity Contracts | | |
| |
| Purchased Options | | $ | — | ** |
| Written Options | | | 101,093 | |
| | | | | |
| Total | | $ | 101,093 | |
| | | | | |
| |
| ** | Purchased options are included with investments. |
206
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| | | | | |
Equity Contracts | | |
| |
| Purchased Options | | $ | (90 | )*** |
| Written Options | | | 115,518 | |
| | | | | |
| Total | | $ | 115,428 | |
| | | | | |
| |
| *** | Purchased options are included with investments. |
The Multi-Disciplinary Portfolio has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Portfolio’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2010: no long option contracts were purchased and $0 premiums were paid, written option contracts (1,211 contracts) were opened and $320,281 premiums were received during the period.
9. New Accounting Pronouncement
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update “Improving Disclosures about Fair Value Measurements” that requires additional disclosures regarding fair value measurements. Certain required disclosures are effective for interim and annual reporting periods beginning after December 15, 2010. Management is currently evaluating the impact the update will have on its financial statement disclosures.
10. Subsequent Events
In preparing these financial statements, management has evaluated Portfolio related events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no events or translations that occurred during the period that materially impacted the amounts or disclosures in the Portfolios’ financial statements.
11. Tax Information (Unaudited)
The Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted on December 22, 2010. The Act makes changes to several tax rules impacting the Portfolios. In general, the provisions of the Act will be effective for the Master Portfolios’ fiscal year ending December 31, 2011. Although the Act provides several benefits, including the unlimited carryover of future capital losses, there may be a greater likelihood that all or a portion of each Master Portfolio’s pre-enactment capital loss carryovers may expire without being utilized due to the fact that post-enactment capital losses get utilized before pre-enactment capital loss carryovers. Relevant information regarding the impact of the Act on the Master Portfolios, if any, will be
207
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2010
contained within the “Federal Taxes” section of the financial statement notes for the fiscal year ending December 31, 2011.
12. Information about Proxy Voting (Unaudited)
Information regarding how Kinetics Portfolios Trust votes proxies relating to portfolio securities is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the Funds’ website at www.kineticsfunds.com and by accessing the SEC’s website at www.sec.gov. Information regarding how the Portfolios voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.
13. Information about the Portfolio Holdings (Unaudited)
The Kinetics Portfolios Trust file its complete schedules of portfolio holdings for its first and third fiscal quarters with the SEC on Form N-Q. The Portfolios’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov. The Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
208
KINETICS PORTFOLIOS TRUST
Report of Independent Registered
Public Accounting Firm
To the Shareholders of and Board of Trustees
Kinetics Portfolios Trust
Elmsford, New York
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio, and The Multi-Disciplinary Portfolio, each a series of shares of Kinetics Portfolios Trust (the “Trust”), as of December 31, 2010, and the related statements of operations, the statements of changes in net assets and financial highlights for the periods indicated thereon. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. We were not engaged to perform, nor was the Trust required to have, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 2010, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 the above mentioned Portfolios as of December 31, 2010, the results of their operations, the changes in their net assets and financial highlights for the periods indicated thereon, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
March 1, 2011
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210
KINETICS PORTFOLIOS TRUST
Management of the Funds and the Master Portfolios
The management and affairs of the Funds and the Master Portfolios are supervised by the Board of Directors of the Company and the Board of Trustees of the Trust, respectively. Each Board consists of the same eight individuals, five of whom are not “interested persons” of the Company or the Trust as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Directors are fiduciaries for the Funds’ shareholders and are governed by the laws of the State of Maryland in this regard. The Trustees are fiduciaries for the Master Portfolios’ shareholders and are governed by the laws of the State of Delaware in this regard.
Each Board establishes policies for the operation of the Funds and the Master Portfolios and appoints the officers who conduct the daily business of the Funds and the Master Portfolios. Directors/Trustees of the Company and the Trust are listed below with their addresses, present positions with the Company and Trust, length of time served, principal occupations over at least the last five years, number of Funds and Master Portfolios overseen and any other Directorships held. The SAI includes additional information about the Funds’ officers and directors and is available, without charge, upon request by calling 1-800-930-3828.
211
KINETICS PORTFOLIOS TRUST
Management of the Funds and the Master Portfolios — (Continued)
Board of Directors/Board of Trustees
Independent Directors/Trustees
| | | | | | | | | |
| | | | | | | Number of
| |
| | | | | | | Portfolios/Funds in
| |
| | | | | Term of Office/
| | Fund Complex**
| |
| | | Position(s) with the
| | Length of
| | Overseen by
| |
| Name, Address and Year of Birth | | Company and Trust | | Time Served | | Trustee/Director | |
| |
| |
Steven T. Russell
Year Born: 1963
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523 | | Independent
Director/Trustee | | Indefinite/
Since 2000 | | | 17 | |
Douglas Cohen, C.P.A
Year Born: 1961
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523 | | Independent
Director/Trustee | | Indefinite/
Since 2000 | | | 17 | |
William J. Graham
Year Born: 1962
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523 | | Independent
Director/Trustee | | Indefinite/
Since
2000 | | | 17 | |
Joseph E. Breslin
Year Born: 1953
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523 | | Independent
Director/Trustee | | Indefinite/
Since 2000 | | | 17 | |
James M. Breen
Year Born: 1959
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523 | | Independent
Director/Trustee | | Indefinite/
Since 2008 | | | 17 | |
212
| | | |
| Principal Occupation During the Past Five Years | | Other Directorships Held by Trustee/Director |
|
| |
| Attorney and Counselor at Law, Partner, Law Firm of Russell and Fig (2002-2010); Steven Russell Law Firm (1994 to 2002); Professor of Business Law, Suffolk County Community College (1997 to Present). | | N/A |
Sunrise Credit Services, Inc. (2005 to Present); Wagner & Zwerman, LLP Certified Public Accountant (1997 to 2005).
| | Director, The Kinetics Fund
(a private investment company). |
Attorney, William J. Graham, PC (2001 to Present); Bracken & Margolin, LLP (1997 to 2001).
| | N/A |
| Chief Operating Officer, Central Park Credit Holdings, (2007-2009) Chief Operating Officer, Aladdin Capital Management (2005-2007); Independent Consultant, Independence Community Bank (2003-2004); Senior Managing Director of Whitehall Asset Management (1999-2003). | | Trustee, Hatteras Alternative Mutual Funds Trust (2 portfolios); Trustee, Underlying Funds Trust (4 portfolios). |
| Assistant Attaché Immigration & Customs Enforcement, Pretoria, South Africa (2008 to Present); Immigration & Customs Enforcement Representative, Athens, Greece (2006 to 2008); U.S. Homeland Security Office of Investigations, Senior Special Agent, Miami, FL (2000 to 2008). | | N/A |
213
KINETICS PORTFOLIOS TRUST
Management of the Funds and the Master Portfolios — (Continued)
Board of Directors/Board of Trustees (Continued)
Interested Directors/Trustees and Officers
| | | | | | | | | |
| | | | | | | Number of
| |
| | | | | | | Portfolios/Funds in
| |
| | | | | Term of Office/
| | Fund Complex**
| |
| | | Position(s) with the
| | Length of
| | Overseen by
| |
| Name, Address and Year of Birth | | Company and Trust | | Time Served | | Trustee/Director | |
| |
| |
Murray Stahl*
Year Born: 1953
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523
| | Director/Trustee
and Secretary | | Indefinite/
Since 2000 | | | 17 | |
Peter B. Doyle*
Year Born: 1962
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523
| | Director/Trustee,
President and
Chairman of the
Board | | Indefinite/
Since 2002 | | | 17 | |
Leonid Polyakov*
Year Born: 1959
c/o Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, New York, 10523 | | Director/Trustee
and Treasurer | | Indefinite/
Since 2002 | | | 17 | |
| |
| * | Directors/Trustees who are considered “interested persons” as defined in Section 2(a)(19) of the 1940 Act because of their association with the Adviser. |
214
| | | | | |
| | | Principal Occupation During the Past Five Years | | Other Directorships Held by Trustee/Director |
|
| |
| | | Chairman, The FRMO Corp. (2001 to Present) (provides consulting services to private investment funds and research services with respect to marketable securities); Chairman, Horizon Asset Management, an investment adviser (1994 to Present); Director of Research, Kinetics Asset Management and Kinetics Mutual Funds, Inc. (2002 to Present). | | Chairman of Horizon Asset Management; Chairman of FRMO Corporation. |
| | | President, Kinetics Asset Management, Inc. (2002 to Present); Director, Kinetics Advisers, LLC (2000 to Present); Director and Officer, Horizon Asset Management, Inc. (1994 to Present); Chief Investment Strategist, Kinetics Asset Management and Kinetics Mutual Funds, Inc. (1998 to Present). | | Director, The Kinetics Fund (a private investment company); Director and Officer of FRMO Corporation. |
| | | CFO, Kinetics Asset Management, Inc. (2000 to Present); President, Kinetics Funds Distributor, Inc. (2002 to Present); Director, Kinetics Advisers, LLC (2000 to Present); formerly CFO, KBD Securities, LLC (2000 to 2010). | | Director, The Kinetics Fund (a private investment company). |
| |
| ** | The term “fund complex” refers to the Company and the Trust, which hold themselves out as related for investment purposes. |
215
KINETICS MUTUAL FUNDS, INC. & KINETICS PORTFOLIOS TRUST
Privacy Policy
We collect the following nonpublic personal information about you:
| | |
| | • | Information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income and date of birth; and |
| |
| | • | Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and other financial information. |
We do not disclose any nonpublic personal information about our current or former shareholders to nonaffiliated third parties, except as permitted by law. For example, we are permitted by law to disclose all of the information we collect, as described above, to our transfer agent to process your transactions. Furthermore, we restrict access to your nonpublic personal information to those persons who require such information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
In the event that you hold shares of the fund(s) through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your nonpublic personal information would be shared with nonaffiliated third parties.
216
Kinetics Mutual
Funds, Inc.
615 East Michigan Street
Milwaukee, WI 53202
INVESTMENT ADVISER AND
SHAREHOLDER SERVICING AGENT
Kinetics Asset Management, Inc.
555 Taxter Road
Suite 175
Elmsford, NY 10523
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street
Suite 2400
Philadelphia, PA 19103
DISTRIBUTOR
Kinetics Funds Distributor, Inc.
555 Taxter Road
Suite 175
Elmsford, NY 10523
ADMINISTRATOR
FUND ACCOUNTANT AND
TRANSFER AGENT
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
CUSTODIAN
U.S. Bank, N.A.
Custody Operations
1555 River Center Drive, Suite 302
Milwaukee, WI 53212
THIS MATERIAL MUST BE PRECEDED OR
ACCOMPANIED BY A PROSPECTUS
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report. A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s board of trustees/directors has determined that there is at least one audit committee financial expert serving on its audit committee. Mr. Douglas Cohen and Mr. Joseph Breslin are the “audit committee financial experts” and are considered to be “independent” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “Other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
| | | | | | | | | | | | | | | | | |
| | | FYE 12/31/2010 | | FYE 12/31/2010 | | FYE 12/31/2009 | | FYE 12/31/2009 |
| | | Kinetics Portfolios | | Kinetics Mutual | | Kinetics Portfolios | | Kinetics Mutual |
| | | Trust | | Funds | | Trust | | Funds |
| |
| Audit Fees | | | 78,250 | | | | 78,250 | | | | 76,000 | | | | 76,000 | |
| Audit-Related Fees | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Tax Fees | | | 20,941 | | | | 23,559 | | | | 21,500 | | | | 21,500 | |
| All Other Fees | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.
1
The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
| | | | | | | | | |
| | | FYE 12/31/2010 | | FYE 12/31/2009 |
| |
| Audit-Related Fees | | | 0 | % | | | 0 | % |
| Tax Fees | | | 0 | % | | | 0 | % |
| All Other Fees | | | 0 | % | | | 0 | % |
All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years. The audit committee of the board of trustees/directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser is compatible with maintaining the principal accountant’s independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
| | | | | | | | | |
| Non-Audit Related Fees | | FYE 12/31/2010 | | FYE 12/31/2009 |
| |
| Registrant | | | 0 | | | | 0 | |
| Registrant’s Investment Adviser | | | 0 | | | | 0 | |
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
2
Item 10. Submission of Matters to a Vote of Security Holders.
| | 1. | | To approve the liquidation and termination of the Kinetics Government Money Market Fund as set forth in a Plan of Liquidation and Termination adopted by the Board of Directors of the Company. |
| | | | | | | | | | | | | |
| | | No. of Shares | | % of Outstanding Shares | | % of Shares voted |
| Affirmative | | | 1,391,666.290 | | | | 55.477 | % | | | 99.918 | % |
| Against | | | 1,142.770 | | | | 0.045 | % | | | 0.082 | % |
| Abstain | | | .000 | | | | 0.000 | % | | | 0.000 | % |
| TOTAL | | | 1,392,809.060 | | | | 55.522 | % | | | 100.000 | % |
Item 11. Controls and Procedures.
| (a) | | The Registrant’s President and Treasurer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
| |
| (b) | | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Exhibits.
| | (a) | | (1) Code of Ethics is filed herewith. |
| | (2) | | A separate certification for each principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. |
| |
| | (3) | | Not applicable to open-end investment companies. |
| | (b) | | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith. |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| (Registrant) | | Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust |
| | | | | |
|
| By (Signature and Title)* | | /s/ Peter B. Doyle | | |
| | | Peter B. Doyle, President | | |
| | | | | |
| Date March 10, 2011 | | | | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | |
|
| By (Signature and Title)* | | /s/ Peter B. Doyle | | |
| | | Peter B. Doyle, President | | |
| | | | | |
| Date March 10, 2011 | | | | |
| | | | | |
| By (Signature and Title)* | | /s/ Leonid Polyakov | | |
| | | Leonid Polyakov, Treasurer | | |
| | | | | |
| Date March 9, 2011 | | | | |
| | |
| * | | Print the name and title of each signing officer under his or her signature. |
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