As filed with the Securities and Exchange Commission on March 4, 2016
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
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)
470 Park Avenue South
New York, NY 10016
(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, 2015
Date of reporting period: December 31, 2015
Item 1. Report to Stockholders.
| KINETICS MUTUAL FUNDS, INC. |
| Table of Contents |
| December 31, 2015 |
| Page | |
| Shareholders' Letter | 2 |
| Year 2015 Annual Investment Commentary | 5 |
| KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS | |
| Growth of $10,000 Investment | 11 |
| Expense Example | 22 |
| Statements of Assets & Liabilities | 28 |
| Statements of Operations | 32 |
| Statements of Changes in Net Assets | 36 |
| Notes to Financial Statements | 47 |
| Financial Highlights | 64 |
| Report of Independent Registered Public Accounting Firm | 93 |
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS | |
| Allocation of Portfolio Assets | 94 |
| Portfolio of Investments — The Internet Portfolio | 102 |
| Portfolio of Investments — The Global Portfolio | 106 |
| Portfolio of Investments — The Paradigm Portfolio | 110 |
| Portfolio of Investments — The Medical Portfolio | 115 |
| Portfolio of Investments — The Small Cap Opportunities Portfolio | 118 |
| Portfolio of Investments — The Market Opportunities Portfolio | 123 |
| Portfolio of Investments — The Alternative Income Portfolio | 127 |
| Portfolio of Investments — The Multi-Disciplinary Income Portfolio | 133 |
| Portfolio of Options Written — The Alternative Income Portfolio | 140 |
| Statements of Assets & Liabilities | 149 |
| Statements of Operations | 153 |
| Statements of Changes in Net Assets | 157 |
| Notes to Financial Statements | 161 |
| Report of Independent Registered Public Accounting Firm | 190 |
| Management of the Funds and the Portfolios | 191 |
| Privacy Policy | 199 |
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| KINETICS MUTUAL FUNDS, INC. |
| Shareholders' Letter |
Dear Fellow Shareholders:
We are pleased to present the Kinetics Mutual Funds ("Funds") Annual Report for the twelve-month period ended December 31, 2015. The past year was a challenging environment for equity investors, particularly value investors with a focus on small and mid-capitalization companies. In fact, nearly all indexes that track small, mid and value companies experienced losses for the year, despite the narrow gain achieved by the S&P 500 Index ("S&P 500"). However, this does not paint the full picture, as the S&P 500's returns were driven primarily by its highest growth and largest constituents, with most other companies experiencing declines for the year. These market leading companies are generally not owned by the Funds, simply due to the commanding valuations. Proponents of investing in these companies cite fundamental improvement as a driver of returns for the year, but the metrics used to make this case are often non-GAAP or not even directly attributable to shareholder value, and the valuations are still intrepid even when applying these liberal metrics and extrapolating from trailing growth rates. Accordingly, the Funds generated suboptimal returns during the year (No-Load Class): The Internet Fund -5.42%, The Global Fund -13.83%, The Paradigm Fund -8.33%, The Medical Fund +6.59%, The Small Cap Opportunities Fund -12.26%, The Market Opportunities Fund -9.11%, The Alternative Income Fund +2.94% and The Multi-Disciplinary Income Fund -2.17%. This compares to returns of +1.38% for the S&P 500 and -2.36% for the MSCI All Country World Index.
We have maintained a constructive long-term stance on our portfolios dating back to the global financial crisis—our logic was simply that, based on the eventual resumption of normalized earnings, we believed that we could earn very attractive long-term returns from prevailing prices (valuations). This has largely come to fruition over the past seven years, resulting in attractive returns for those who remained invested and/or added capital. However, during the latter half of this year, we became far less constructive on the basis of the same logic. The potential for earnings growth is still encouraging for most of our companies, but future returns would be lower if current valuations are contingent upon these future figures. The projected cash flows for many companies are now using discounted rates that we believe are far too low to adequately compensate investors for the risk that those future cash flows would be below expectations. In other words, investors appear to be applying discount rates that imply a very high likelihood, even a certainty, that these future cash flows will be realized. This is not an environment for
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generating attractive long-term returns; therefore, we have raised cash balances across the Funds.
Cash balances are a vastly underappreciated tool of portfolio managers; in fact, many regard the practice of maintaining a cash position as undesirable, given the near zero returns currently offered on short-term deposits and in money market accounts. However, the point is not to achieve a return on the cash. Rather, we see the opportunity cost of holding cash to be minimal, particularly compared to future opportunities to deploy cash when valuations become more attractive. An inescapable truth of investing is that future returns are dependent on purchase prices and growth rates—only the former is within the control of the investor.
Despite what we see as widespread overvaluation in equity markets, which has even spread into the realm of the eclectic securities in which we invest, there continue to be companies that we believe will achieve excellent long-term returns. In most cases, the asset values and future cash flows of such companies are fairly visible and are not overly sensitive to external factors (macroeconomic, among others). Thus, if we apply reasonable discount rates to future values and arrive at prices that are well above current prices, we would be remiss in selling these companies at this time. However, we are dealing with public markets, which have a tendency to overshoot fair value on both the upside and downside, resulting in excess risk at one extreme and excess opportunity at the other. We believe that markets have largely already overshot on the downside on many of the companies that we own, but external factors lead us to believe that there is a reasonable chance that we have not yet reached a nadir.
In theory, public equity market transactions represent an exchange between a willing buyer and seller, both with equal access to information, and with the market setting the marginal transaction price based on all available information. In reality, this scenario more closely mirrors private market transactions, where investors assuming control positions set the marginal prices. We are convinced that our companies would never exchange hands at current levels in private markets. However, the "informed" buyers and sellers setting marginal prices in our companies are not control shareholders, and often act more due to emotion and superficial perception than due to reality. Thus, with current valuations in less widely held companies falling, this is enough for some marginal owners to
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sell. In and of itself, this is not a problem; volatility often shakes out the weakest holders. The larger issue has to do with the lack of near term buyers to compensate for the capitulating sellers. Owning companies that are outside of indexation and institutional coverage subjects us to this risk. We expect broad markets to re-adjust prices to reflect more realistic, lower future growth rates, and as a result near term buying interest for our companies may be limited. We view this potential volatility as an opportunity to add capital to our core positions.
In closing, we do not necessarily envision a GDP-defined recession in the foreseeable future. Rather, we expect a combination of a low growth and earnings recession, with nominal growth rates depressed and S&P 500 earnings perhaps declining year over year. This is not a calamity in and of itself, but equity investors must account for this potential when valuing businesses. Broad market valuations simply do not reconcile with this reality, hence our caution. Companies with niche growth potential are generally overpriced, but to the extent that we find such companies at attractive valuations, we continue to hold such positions. It will likely be rewarding to own/hold such companies at present, but the greater opportunity will be in deploying cash when prices become more attractive across a larger array of companies.
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| KINETICS MUTUAL FUNDS, INC. |
| Investment Commentary |
Dear Fellow Shareholders:
The investment team at Kinetics Asset Management LLC, the investment adviser to the Kinetics Mutual Funds, approaches equity investing with the mindset that we are purchasing an interest in an entire business, not simply a fractional ownership certificate that fluctuates in value along with the company and broader market. This results in a much higher hurdle rate for companies to meet our investment criteria, because we require a sustained rate of return over several years of ownership, which is consistent with the outright ownership of a company. Liquid public markets allow us the luxury of buying and selling quickly in the event that valuations or fundamentals change, but the preponderance of our investment performance will result from buying companies with depressed valuations on lower cash flow levels, then selling these companies years later when cash flows are optimized and reflected in the valuations. This is important, because an outright owner of a business isn't overly concerned with the market- determined valuations of assets, and instead focuses on the cash flows that are generated by the underlying business. We believe that many investors are losing focus on the intrinsic values of businesses in the current market, while being overly focused on current market prices.
We will discuss two extremes of dysfunctional investor behavior that are currently deeply influencing equity prices: growth at any price, and quality at any price. There will always be individual businesses and sectors that experience outsized growth relative to the local and global economies; such is the nature of business cycles. The higher growth businesses are subsequently valued at higher trailing valuation multiples to reflect this higher growth. However, almost without exception, these businesses are bid up in value to reflect totally unrealistic long-term growth rates. The valuations simply cannot be reconciled to any reasonable cash flow forecast. Many investors attempt to own these companies until the growth slows or disappoints and earn a return riding the valuation ever higher. This is not how we invest, but a small minority of investors have done this successfully over extended periods of time. The current valuations of growth stocks have taken this dynamic to an extreme, where investors seemingly aren't even concerned with shareholder value. For example, companies are evaluated based simply on the business model and the total addressable market; these factors are then extrapolated into infinity. The issue that we have is that while many of these companies are generating large sums of revenue, they are earning very little, if any, net income. This practice of
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valuing companies on their "potential" rather than on actual results was rather common slightly less than two decades ago, in the late 1990s.
Early warning signs emerged in late 2014, with confirming data points throughout the past year, indicating that global economic growth was slowing. In spite of this, many companies have sustained intrepid valuations that imply robust growth, much of which is contingent on growing global consumption and a continued flow of inexpensive capital. Throughout much of 2015, we witnessed a shake- out of valuations for more cyclical, leveraged and smaller companies. This was likely an appropriate revaluation for well over 95% of the companies; we hope to identify and benefit from the remaining 5%. As a result, investors flocked to growth companies, which are thought to be immune from the macroeconomic factors affecting other businesses (they aren't!). Other investors flocked to admittedly high quality, albeit, low growth companies with non-cyclical businesses (consumer staples). This would be prudent, except that, just as the growth crowd is ignoring shareholder value, so too are these quality investors when they are paying high growth multiples for low or no growth companies. Let's examine one example of such a company that generates over $50 billion of annual revenues and has grown profit margins to reach the high teens. This company is hardly growing, even if one accounts for currency impacts, and is currently trading at approximately 22x next year's estimated earnings (which are likely optimistic). These aren't encouraging data points, but the company pays a dividend yield of slightly greater than 3%. Therefore, investors (not, by our definition, long-term company owners) are buying these companies, hoping to earn the dividend and escape market turmoil. This rationale mirrors the logic of fixed income investing, not equity investing; in fact, some managers have compared investing in these companies to buying high quality bonds. Here is the problem: bonds have set maturity dates and coupons; therefore, even in an adverse environment, an investor can likely recoup the principal, while collecting the coupon. However, an equity dividend is at the discretion of the board of directors and can fluctuate significantly (said company pays out approximately 75% of free cash flow in dividends). Furthermore, the principal paid to acquire the stock can also fluctuate considerably, particularly if earnings decline and/or markets contract. This can be a permanent or very long-term contraction, with no maturity date to act as a floor. Collecting 3% dividends under these dynamics is not, in our view, analogous to buying "AA" rated bonds.
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Company "renters," as we refer to these types of investors, have decided to react to the market data with these variant short-term strategies intended to weather the storm. Meanwhile, we have raised cash in order to capitalize upon new opportunities as more company valuations revert to fundamentals, but we are not deterred by recent volatility or economic data when we believe in the ultimate values of our core holdings. We acknowledge that the prices of our holdings may fall further before rising, but the ultimate values appear to be stable despite external factors. Accordingly, we are not going to sell when the companies are inordinately inexpensive due to broader market malaise and investor/capital market behavior. This is exactly how a strategic owner of an entire business would react; you don't see high quality private businesses with attractive long-term prospects being sold at attractive valuations right now. Of course, there is capital raising seen in the markets that is bordering on desperation, and there are start-ups trying to catch the last breath of the IPO cycle, but the solid businesses with value drivers in place are not moving, and neither are we.
Shareholders can continue to access additional information from our website, www.kineticsfunds.com. This website provides a broad array of information, including recent portfolio holdings, quarterly investment commentaries, conference call transcripts, newsflashes, recent performance data, and online access to account information.
Kinetics offers the following funds to investors:
The Paradigm Fund focuses on companies that we believe are valued attractively and currently have, or are expected to soon have, sustainable high business returns. The Fund has produced attractive risk adjusted returns since its inception, while maintaining amongst the lowest turnover rates in the industry. The Paradigm Fund is Kinetics' flagship fund.
The Multi-Disciplinary Income Fund 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.
The Small Cap Opportunities Fund focuses on undervalued and special situation small capitalization equities that we believe have the potential for
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rewarding long-term investment results. The same investment fundamentals employed by The Paradigm Fund are used to identify such opportunities.
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. As a sector fund, The Medical Fund is likely to have heightened volatility.
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 is focused on selecting long life cycle international companies that we believe can generate long-term wealth through their business operations. This Fund is presently identifying exciting opportunities in the more developed markets.
The Market Opportunities Fund focuses on those companies that benefit from increasing transactional volume or throughput, such as publicly-traded exchanges and credit card processors, or companies that act as facilitators, such as gaming companies, airports and publicly-traded toll roads.
The Alternative Income Fund seeks to provide current income and gains, with a secondary objective of obtaining long-term growth of capital. The Fund utilizes stock options and fixed-income investments and seeks to generate a total return that exceeds most short-term U.S. fixed income indexes, with limited market value variability.
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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, 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 Market Opportunities Fund invest in a single industry or geographic region, their shares are subject to a higher degree of risk than funds with a higher level of diversification. Internet, biotechnology and certain capital markets or gaming stocks are subject to a rate of change in technology, obsolescence and competition that is generally higher than that of other industries, hence they may experience extreme price and volume fluctuations.
International investing [for all Funds] presents special risks including currency exchange fluctuation, government regulations, and the potential for political and economic instability. Accordingly, the share prices for these Funds are expected to be more volatile than that of U.S.-only funds. Past performance is no guarantee of future performance.
Because smaller companies [for The Small Cap Opportunities 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 The Multi- Disciplinary Income Fund and The Alternative Income Fund] 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 Funds. 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 investments 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, except The Global Fund, The Alternative Income Fund and The Multi-Disciplinary Income Fund, 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 of their investable assets in a corresponding portfolio series of the 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 MSCI All Country World Index (MSCI ACWI) 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 LLC is not an affiliate of Kinetics Mutual Funds, Inc. Kinetics Funds Distributor LLC is an affiliate of Kinetics Asset Management LLC, Investment Adviser to Kinetics Mutual Funds, Inc.
For more information, log onto www.kineticsfunds.com. January 1, 2016 — Kinetics Asset Management LLC®
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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.
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.
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.
The MSCI ACWI (All Country World Index) Index — is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. As of June 2, 2014, the MSCI ACWI consists of 46 country indices comprising 23 developed and 23 emerging market country indices. The developed market country indices included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom
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and the United States. The emerging market country indices included are: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates. The securities that compromise the MSCI ACWI may differ substantially from the securities in the Funds' portfolios. It is not possible to directly invest in an index.
The Russell 2000® Index — is a subset of the Russell 3000 Index® representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set. The securities that compromise the Russell 2000 may differ substantially from the securities in the Funds' portfolio. It is not possible to directly invest in an index.
The MSCI EAFE® Index (Europe, Australasia, Far East) — is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. As of June 2, 2014, the MSCI EAFE® Index consisted of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The securities that compromise the MSCI EAFE® may differ substantially from the securities in the Funds' portfolio. It is not possible to directly invest in an index.
The Barclays U.S. 1-3 Year Credit Index — measures the performance of investment grade corporate debt and sovereign, supranational, local authority and non-U.S. agency bonds that are U.S. dollar denominated and have a remaining maturity of greater than or equal to one year and less than three years. The securities that compromise the Barclays U.S. 1-3 Year Credit Index may differ substantially from the securities in the Funds' portfolio. It is not possible to directly invest in an index.
The Barclays U.S. Aggregate Bond Index — covers the USD-denominated, investment-grade, fixed-rate, taxable bond market of SEC-registered securities. The Index includes multiple types of government and corporate-issued bonds, some of which are asset-backed. The securities that
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compromise the Barclays U.S. Aggregate Bond Index may differ substantially from the securities in the Funds' portfolio. It is not possible to directly invest in an index.
The Barclays U.S. Corporate High Yield Bond Index — The Barclays U.S. Corporate High Yield Bond Index is composed of fixed-rate, publicly issued, non-investment grade debt. The securities that comprise the Barclays U.S. Corporate High Yield Bond Index may differ substantially from the securities in the Funds' portfolio. It is not possible to directly invest in an index.
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The Internet Fund
December 31, 2005 — December 31, 2015
December 31, 2005 — December 31, 2015
| Ended 12/31/2015 | |||||||||||||||||||
| Advisor | Advisor | ||||||||||||||||||
| No Load | Class A | Class A | Advisor | NASDAQ | |||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | S&P 500 | Composite | ||||||||||||||
| One Year | -5.42 | % | -5.65 | % | -11.08 | % | -6.14 | % | 1.38 | % | 5.73 | % | |||||||
| Five Years | 10.48 | % | 10.21 | % | 8.91 | % | 9.67 | % | 12.57 | % | 13.55 | % | |||||||
| Ten Years | 9.72 | % | 9.53 | % | 8.88 | % | N/A | 7.31 | % | 8.55 | % | ||||||||
| Since Inception | |||||||||||||||||||
| No Load Class | |||||||||||||||||||
| (10/21/96) | 14.21 | % | N/A | N/A | N/A | 7.64 | % | 7.56 | % | ||||||||||
| Since Inception | |||||||||||||||||||
| Advisor Class A | |||||||||||||||||||
| (4/26/01) | N/A | 6.77 | % | 6.35 | % | N/A | 5.57 | % | 6.33 | % | |||||||||
| Since Inception | |||||||||||||||||||
| Advisor Class C | |||||||||||||||||||
| (2/16/07) | N/A | N/A | N/A | 8.15 | % | 6.16 | % | 8.16 | % | ||||||||||
(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, 2005 — December 31, 2015
December 31, 2005 — December 31, 2015
| Ended 12/31/2015 | |||||||||||||||||||
| Advisor | Advisor | ||||||||||||||||||
| No Load | Class A | Class A | Advisor | MSCI | |||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | S&P 500 | ACWI | ||||||||||||||
| One Year | -13.83 | % | -13.89 | % | -18.78 | % | -14.48 | % | 1.38 | % | -2.36 | % | |||||||
| Five Years | 0.34 | % | 0.17 | % | -1.03 | % | -0.38 | % | 12.57 | % | 6.09 | % | |||||||
| Ten Years | 2.06 | % | N/A | N/A | N/A | 7.31 | % | 4.75 | % | ||||||||||
| Since Inception | |||||||||||||||||||
| No Load Class | |||||||||||||||||||
| (12/31/99) | -3.28 | % | N/A | N/A | N/A | 4.06 | % | 2.90 | % | ||||||||||
| Since Inception | |||||||||||||||||||
| Advisor Class A | |||||||||||||||||||
| (5/19/08) | N/A | 0.89 | % | 0.10 | % | N/A | 7.15 | % | 2.25 | % | |||||||||
| Since Inception | |||||||||||||||||||
| Advisor Class C | |||||||||||||||||||
| (5/19/08) | N/A | N/A | N/A | 0.27 | % | 7.15 | % | 2.25 | % | ||||||||||
(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, 2005 — December 31, 2015
December 31, 2005 — December 31, 2015
| Ended 12/31/2015 | ||||||||||||||||||||||
| Advisor | Advisor | |||||||||||||||||||||
| No Load | Class A | Class A | Advisor | Institutional | MSCI | |||||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | Class | S&P 500 | ACWI | ||||||||||||||||
| One Year | -8.33 | % | -8.57 | % | -13.83 | % | -9.00 | % | -8.16 | % | 1.38 | % | -2.36 | % | ||||||||
| Five Years | 6.47 | % | 6.20 | % | 4.95 | % | 5.67 | % | 6.67 | % | 12.57 | % | 6.09 | % | ||||||||
| Ten Years | 5.08 | % | 4.81 | % | 4.19 | % | 4.28 | % | 5.27 | % | 7.31 | % | 4.75 | % | ||||||||
| Since Inception | ||||||||||||||||||||||
| No Load Class | ||||||||||||||||||||||
| (12/31/99) | 8.04 | % | N/A | N/A | N/A | N/A | 4.06 | % | 2.90 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class A | ||||||||||||||||||||||
| (4/26/01) | N/A | 8.19 | % | 7.76 | % | N/A | N/A | 5.57 | % | 4.76 | % | |||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||||
| (6/28/02) | N/A | N/A | N/A | 8.23 | % | N/A | 7.68 | % | 6.68 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||
| (5/27/05) | N/A | N/A | N/A | N/A | 6.13 | % | 7.40 | % | 5.58 | % | ||||||||||||
(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 Medical Fund
December 31, 2005 — December 31, 2015
December 31, 2005 — December 31, 2015
| Ended 12/31/2015 | |||||||||||||||||||
| Advisor | Advisor | ||||||||||||||||||
| No Load | Class A | Class A | Advisor | NASDAQ | |||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | S&P 500 | Composite | ||||||||||||||
| One Year | 6.59 | % | 6.34 | % | 0.23 | % | 5.81 | % | 1.38 | % | 5.73 | % | |||||||
| Five Years | 16.21 | % | 15.92 | % | 14.56 | % | 15.34 | % | 12.57 | % | 13.55 | % | |||||||
| Ten Years | 11.25 | % | 10.99 | % | 10.33 | % | N/A | 7.31 | % | 8.55 | % | ||||||||
| Since Inception | |||||||||||||||||||
| No Load Class | |||||||||||||||||||
| (9/30/99) | 10.23 | % | N/A | N/A | N/A | 4.89 | % | 3.77 | % | ||||||||||
| Since Inception | |||||||||||||||||||
| Advisor Class A | |||||||||||||||||||
| (4/26/01) | N/A | 6.61 | % | 6.19 | % | N/A | 5.57 | % | 6.33 | % | |||||||||
| Since Inception | |||||||||||||||||||
| Advisor Class C | |||||||||||||||||||
| (2/16/07) | N/A | N/A | N/A | 9.62 | % | 6.16 | % | 8.16 | % | ||||||||||
(1) Reflects front-end sales charge of 5.75%.
Returns for periods greater than one year are average annual total returns.
17
The Small Cap Opportunities Fund
December 31, 2005 — December 31, 2015
December 31, 2005 — December 31, 2015
| Ended 12/31/2015 | ||||||||||||||||||||||
| Advisor | Advisor | |||||||||||||||||||||
| No Load | Class A | Class A | Advisor | Institutional | Russell | |||||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | Class | 2000 | S&P 500 | ||||||||||||||||
| One Year | -12.26 | % | -12.47 | % | -17.49 | % | -12.92 | % | -12.06 | % | -4.41 | % | 1.38 | % | ||||||||
| Five Years | 7.25 | % | 6.99 | % | 5.73 | % | 6.45 | % | 7.47 | % | 9.19 | % | 12.57 | % | ||||||||
| Ten Years | 5.16 | % | 4.89 | % | 4.28 | % | N/A | 5.35 | % | 6.80 | % | 7.31 | % | |||||||||
| Since Inception | ||||||||||||||||||||||
| No Load Class | ||||||||||||||||||||||
| (3/20/00) | 8.58 | % | N/A | N/A | N/A | N/A | 6.11 | % | 4.16 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class A | ||||||||||||||||||||||
| (12/31/01) | N/A | 6.59 | % | 6.14 | % | N/A | N/A | 7.63 | % | 6.33 | % | |||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||||
| (2/16/07) | N/A | N/A | N/A | 1.33 | % | N/A | 5.21 | % | 6.16 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||
| (8/12/05) | N/A | N/A | N/A | N/A | 5.47 | % | 6.80 | % | 7.25 | % | ||||||||||||
(1) Reflects front-end sales charge of 5.75%.
Returns for periods greater than one year are average annual total returns.
18
The Market Opportunities Fund
January 31, 2006 — December 31, 2015
January 31, 2006 — December 31, 2015
| Ended 12/31/2015 | ||||||||||||||||||||||
| Advisor | Advisor | |||||||||||||||||||||
| No Load | Class A | Class A | Advisor | Institutional | MSCI | |||||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | Class | S&P 500 | EAFE | ||||||||||||||||
| One Year | -9.11 | % | -9.34 | % | -14.55 | % | -9.79 | % | -8.93 | % | 1.38 | % | -0.81 | % | ||||||||
| Five Years | 6.41 | % | 6.16 | % | 4.90 | % | 5.63 | % | 6.64 | % | 12.57 | % | 3.60 | % | ||||||||
| Since Inception | ||||||||||||||||||||||
| No Load Class | ||||||||||||||||||||||
| (1/31/06) | 5.30 | % | N/A | N/A | N/A | N/A | 7.09 | % | 2.44 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class A | ||||||||||||||||||||||
| (1/31/06) | N/A | 5.04 | % | 4.42 | % | N/A | N/A | 7.09 | % | 2.44 | % | |||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||||
| (2/16/07) | N/A | N/A | N/A | 2.07 | % | N/A | 6.16 | % | 0.26 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||
| (5/19/08) | N/A | N/A | N/A | N/A | 2.80 | % | 7.15 | % | -0.47 | % | ||||||||||||
(1) Reflects front-end sales charge of 5.75%.
Returns for periods greater than one year are average total returns.
19
The Alternative Income Fund
June 29, 2007 — December 31, 2015
June 29, 2007 — December 31, 2015
| Ended 12/31/2015 | ||||||||||||||||||||||
| Barclays | Barclays | |||||||||||||||||||||
| Advisor | Advisor | U.S. 1-3 | U.S. | |||||||||||||||||||
| No Load | Class A | Class A | Advisor | Institutional | Year | Aggregate | ||||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | Class | Credit | Bond | ||||||||||||||||
| One Year | 2.94 | % | 2.63 | % | -3.27 | % | 2.15 | % | 3.09 | % | 0.85 | % | 0.55 | % | ||||||||
| Five years | 2.82 | % | 2.55 | % | 1.34 | % | 2.05 | % | 3.08 | % | 1.77 | % | 3.25 | % | ||||||||
| Since Inception | ||||||||||||||||||||||
| No Load Class | ||||||||||||||||||||||
| (6/29/07) | -0.23 | % | N/A | N/A | N/A | N/A | 3.31 | % | 4.68 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class A | ||||||||||||||||||||||
| (6/29/07) | N/A | -0.48 | % | -1.17 | % | N/A | N/A | 3.31 | % | 4.68 | % | |||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||||
| (6/29/07) | N/A | N/A | N/A | -0.96 | % | N/A | 3.31 | % | 4.68 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||
| (6/29/07) | N/A | N/A | N/A | N/A | 0.02 | % | 3.31 | % | 4.68 | % | ||||||||||||
(1) Reflects front-end sales charge of 5.75%.
Returns for periods greater than one year are average total returns.
20
The Multi-Disciplinary Income Fund
February 11, 2008 — December 31, 2015
February 11, 2008 — December 31, 2015
| Ended 12/31/2015 | ||||||||||||||||||||||
| Barclays | ||||||||||||||||||||||
| Barclays | U.S. | |||||||||||||||||||||
| Advisor | Advisor | U.S. | Corporate | |||||||||||||||||||
| No Load | Class A | Class A | Advisor | Institutional | Aggregate | High | ||||||||||||||||
| Class | (No Load) | (Load Adjusted)(1) | Class C | Class | Bond | Yield Bond | ||||||||||||||||
| One Year | -2.17 | % | -2.46 | % | -8.10 | % | -2.84 | % | -1.96 | % | 0.55 | % | -4.47 | % | ||||||||
| Five Years | 3.87 | % | 3.62 | % | 2.39 | % | 3.10 | % | 4.07 | % | 3.25 | % | 5.04 | % | ||||||||
| Since Inception | ||||||||||||||||||||||
| No Load Class | ||||||||||||||||||||||
| (2/11/08) | 4.18 | % | N/A | N/A | N/A | N/A | 4.07 | % | 7.47 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class A | ||||||||||||||||||||||
| (2/11/08) | N/A | 3.92 | % | 3.15 | % | N/A | N/A | 4.07 | % | 7.47 | % | |||||||||||
| Since Inception | ||||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||||
| (2/11/08) | N/A | N/A | N/A | 3.41 | % | N/A | 4.07 | % | 7.47 | % | ||||||||||||
| Since Inception | ||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||
| (2/11/08) | N/A | N/A | N/A | N/A | 4.38 | % | 4.07 | % | 7.47 | % | ||||||||||||
(1) Reflects front-end sales charge of 5.75%.
Returns for periods greater than one year are average total returns.
21
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
| Expense Example |
| December 31, 2015 |
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 a series of Kinetics Mutual Funds, Inc. (each a "Feeder Fund" and collectively the "Feeder 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, 2015 and held for the entire period from July 1, 2015 to December 31, 2015.
Actual Expenses
The first line items of the table below provides 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 Feeder 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 Feeder Fund or both. Each Feeder 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 Feeder Funds will charge shareholder fees for outgoing wire transfers, returned checks, and exchanges executed by telephone between a Feeder Fund and any other Feeder Fund. The Feeder Funds' transfer agent charges a $5.00 transaction fee to shareholder accounts for telephone exchanges between any two Feeder Funds. The Feeder 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 Feeder 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 Feeder Funds to help offset transaction costs. The Feeder Funds reserve the right to waive the redemption fee, subject to their sole discretion, in instances deemed not to be disadvantageous to the Feeder Funds or shareholders as described in the Feeder Funds' prospectus.
22
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Expense Example — (Continued) |
| December 31, 2015 |
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 second line item of the table below provides information about hypothetical account values and hypothetical expenses before and after expense reimbursements based on the Feeder Funds' actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Feeder 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 Feeder 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. If these transactional costs had been included, one's costs would have been higher.
23
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Expense Example — (Continued) |
| December 31, 2015 |
| Expenses Paid | |||||||||||||
| Beginning | Ending | During | |||||||||||
| Account | Account | Annualized | Period* | ||||||||||
| Value | Value | Expense | (7/1/15 to | ||||||||||
| (7/1/15) | (12/31/15) | Ratio | 12/31/15) | ||||||||||
| The Internet Fund | |||||||||||||
| No Load Class Actual | $ | 1,000.00 | $ | 940.00 | 1.83 | % | $ | 8.95 | |||||
| No Load Class Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,015.97 | 1.83 | % | $ | 9.30 | |||||
| Advisor Class A Actual | $ | 1,000.00 | $ | 938.70 | 2.08 | % | $ | 10.16 | |||||
| Advisor Class A Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,014.71 | 2.08 | % | $ | 10.56 | |||||
| Advisor Class C Actual | $ | 1,000.00 | $ | 936.30 | 2.58 | % | $ | 12.59 | |||||
| Advisor Class C Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,012.19 | 2.58 | % | $ | 13.09 | |||||
| The Global Fund | �� | ||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 838.10 | 1.39 | % | $ | 6.44 | |||||
| No Load Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,018.19 | 1.39 | % | $ | 7.07 | |||||
| Advisor Class A Actual - after expense reimbursement | $ | 1,000.00 | $ | 837.50 | 1.64 | % | $ | 7.60 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.93 | 1.64 | % | $ | 8.34 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 835.70 | 2.14 | % | $ | 9.90 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,014.41 | 2.14 | % | $ | 10.87 |
24
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Expense Example — (Continued) |
| December 31, 2015 |
| Expenses Paid | |||||||||||||
| Beginning | Ending | During | |||||||||||
| Account | Account | Annualized | Period* | ||||||||||
| Value | Value | Expense | (7/1/15 to | ||||||||||
| (7/1/15) | (12/31/15) | Ratio | 12/31/15) | ||||||||||
| The Paradigm Fund | |||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 888.00 | 1.64 | % | $ | 7.80 | |||||
| No Load Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.93 | 1.64 | % | $ | 8.34 | |||||
| Advisor Class A Actual - after expense reimbursement | $ | 1,000.00 | $ | 886.70 | 1.89 | % | $ | 8.99 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,015.67 | 1.89 | % | $ | 9.60 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 884.50 | 2.39 | % | $ | 11.35 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | |||||
| Institutional Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 888.40 | 1.44 | % | $ | 6.85 | |||||
| Institutional Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,017.94 | 1.44 | % | $ | 7.32 | |||||
| The Medical Fund | |||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 955.60 | 1.39 | % | $ | 6.85 | |||||
| No Load Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,018.19 | 1.39 | % | $ | 7.07 | |||||
| Advisor Class A Actual - after expense reimbursement | $ | 1,000.00 | $ | 954.50 | 1.64 | % | $ | 8.08 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.93 | 1.64 | % | $ | 8.34 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 951.90 | 2.14 | % | $ | 10.53 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,014.41 | 2.14 | % | $ | 10.87 |
25
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Expense Example — (Continued) |
| December 31, 2015 |
| Expenses Paid | |||||||||||||
| Beginning | Ending | During | |||||||||||
| Account | Account | Annualized | Period* | ||||||||||
| Value | Value | Expense | (7/1/15 to | ||||||||||
| (7/1/15) | (12/31/15) | Ratio | 12/31/15) | ||||||||||
| The Small Cap Opportunities Fund | |||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 836.50 | 1.64 | % | $ | 7.59 | |||||
| No Load Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.93 | 1.64 | % | $ | 8.34 | |||||
| Advisor Class A Actual - after expense reimbursement | $ | 1,000.00 | $ | 835.40 | 1.89 | % | $ | 8.74 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,015.67 | 1.89 | % | $ | 9.60 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 833.20 | 2.39 | % | $ | 11.04 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | |||||
| Institutional Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 837.50 | 1.44 | % | $ | 6.67 | |||||
| Institutional Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,017.94 | 1.44 | % | $ | 7.32 | |||||
| The Market Opportunities Fund | |||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 888.10 | 1.64 | % | $ | 7.80 | |||||
| No Load Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.93 | 1.64 | % | $ | 8.34 | |||||
| Advisor Class A Actual - after expense reimbursement | $ | 1,000.00 | $ | 886.80 | 1.89 | % | $ | 8.99 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,015.67 | 1.89 | % | $ | 9.60 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 884.70 | 2.39 | % | $ | 11.35 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | |||||
| Institutional Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 888.40 | 1.44 | % | $ | 6.85 | |||||
| Institutional Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,017.94 | 1.44 | % | $ | 7.32 |
26
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Expense Example — (Continued) |
| December 31, 2015 |
| Expenses Paid | |||||||||||||
| Beginning | Ending | During | |||||||||||
| Account | Account | Annualized | Period* | ||||||||||
| Value | Value | Expense | (7/1/15 to | ||||||||||
| (7/1/15) | (12/31/15) | Ratio | 12/31/15) | ||||||||||
| The Alternative Income Fund | |||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 1,003.50 | 0.95 | % | $ | 4.80 | |||||
| No Load Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,020.41 | 0.95 | % | $ | 4.84 | |||||
| Advisor Class A Actual - after expense reimbursement | $ | 1,000.00 | $ | 1,001.90 | 1.20 | % | $ | 6.06 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,019.15 | 1.20 | % | $ | 6.11 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 999.40 | 1.70 | % | $ | 8.57 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.63 | 1.70 | % | $ | 8.64 | |||||
| Institutional Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 1,004.30 | 0.75 | % | $ | 3.79 | |||||
| Institutional Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,021.42 | 0.75 | % | $ | 3.82 | |||||
| The Multi-Disciplinary Income Fund | |||||||||||||
| No Load Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 962.50 | 1.49 | % | $ | 7.37 | |||||
| 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 - after expense reimbursement | $ | 1,000.00 | $ | 960.80 | 1.74 | % | $ | 8.60 | |||||
| Advisor Class A Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,016.43 | 1.74 | % | $ | 8.84 | |||||
| Advisor Class C Actual - after expense reimbursement | $ | 1,000.00 | $ | 959.20 | 2.24 | % | $ | 11.06 | |||||
| Advisor Class C Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,013.91 | 2.24 | % | $ | 11.37 | |||||
| Institutional Class Actual - after expense reimbursement | $ | 1,000.00 | $ | 963.60 | 1.29 | % | $ | 6.38 | |||||
| Institutional Class Hypothetical (5% return before expenses) - after expense reimbursement | $ | 1,000.00 | $ | 1,018.70 | 1.29 | % | $ | 6.56 |
| Note: | Each Feeder Fund records its proportionate share of the respective Master Portfolio's expenses on a daily basis. Any expense reductions include Feeder Fund-specific expenses as well as the expenses allocated for the Master Portfolio. | |
| * | Expenses are equal to the Feeder Fund's annualized expense ratio after expense reimbursement multiplied by the average account value over the period, multiplied by 184/365. | |
27
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
| Statements of Assets & Liabilities |
| December 31, 2015 |
| The Internet | The Global | ||||||
| Fund | Fund | ||||||
| ASSETS: | |||||||
| Investments in the Master Portfolio, at value* | $ | 126,228,278 | $ | 6,727,661 | |||
| Receivable from Adviser | — | 9,657 | |||||
| Receivable for Master Portfolio interest sold | 141,775 | 17,095 | |||||
| Receivable for Fund shares sold | 24,775 | — | |||||
| Prepaid expenses and other assets | 19,145 | 16,766 | |||||
| Total Assets | 126,413,973 | 6,771,179 | |||||
| LIABILITIES: | |||||||
| Payable to Directors | 2,753 | 160 | |||||
| Payable to Chief Compliance Officer | 169 | 7 | |||||
| Payable for Fund shares repurchased | 166,550 | 17,094 | |||||
| Payable for shareholder servicing fees | 27,292 | 1,454 | |||||
| Payable for distribution fees | 1,160 | 1,042 | |||||
| Accrued expenses and other liabilities | 58,057 | 16,045 | |||||
| Total Liabilities | 255,981 | 35,802 | |||||
| Net Assets | $ | 126,157,992 | $ | 6,735,377 | |||
| NET ASSETS CONSIST OF: | |||||||
| Paid in capital | $ | 76,129,158 | $ | 6,572,894 | |||
| Accumulated net investment income | 169,841 | 20,652 | |||||
| Accumulated net realized gain (loss) on investments and foreign currency | 3,140,695 | (84,208 | ) | ||||
| Net unrealized appreciation on: | |||||||
| Investments and foreign currency | 46,718,298 | 226,039 | |||||
| Net Assets | $ | 126,157,992 | $ | 6,735,377 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | |||||||
| Net Assets | $ | 122,332,109 | $ | 4,745,471 | |||
| Shares outstanding | 2,935,071 | 1,033,844 | |||||
| Net asset value per share (offering price and redemption price) | $ | 41.68 | $ | 4.59 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | |||||||
| Net Assets | $ | 2,978,346 | $ | 376,384 | |||
| Shares outstanding | 74,334 | 82,448 | |||||
| Net asset value per share (redemption price) | $ | 40.07 | $ | 4.57 | |||
| Offering price per share ($40.07 divided by .9425 and $4.57 divided by .9425) | $ | 42.51 | $ | 4.85 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | |||||||
| Net Assets | $ | 847,537 | $ | 1,613,522 | |||
| Shares outstanding | 22,740 | 365,772 | |||||
| Net asset value per share (offering price and redemption price) | $ | 37.27 | $ | 4.41 |
| * | Each Feeder 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 Feeder Funds' financial statements. |
The accompanying notes are an integral part of these financial statements.
28
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Assets & Liabilities — (Continued) |
| December 31, 2015 |
| The Paradigm | The Medical | ||||||
| Fund | Fund | ||||||
| ASSETS: | |||||||
| Investments in the Master Portfolio, at value* | $ | 838,362,480 | $ | 29,104,821 | |||
| Receivable from Adviser | 24,332 | 14,725 | |||||
| Receivable for Master Portfolio interest sold | 1,663,324 | 48,590 | |||||
| Receivable for Fund shares sold | 799,606 | 9,711 | |||||
| Prepaid expenses and other assets | 38,817 | 16,683 | |||||
| Total Assets | 840,888,559 | 29,194,530 | |||||
| LIABILITIES: | |||||||
| Payable to Directors | 19,707 | 565 | |||||
| Payable to Chief Compliance Officer | 1,309 | 32 | |||||
| Payable for Fund shares repurchased | 2,462,930 | 58,301 | |||||
| Payable for shareholder servicing fees | 130,886 | 6,155 | |||||
| Payable for distribution fees | 189,716 | 3,032 | |||||
| Accrued expenses and other liabilities | 224,301 | 20,622 | |||||
| Total Liabilities | 3,028,849 | 88,707 | |||||
| Net Assets | $ | 837,859,710 | $ | 29,105,823 | |||
| NET ASSETS CONSIST OF: | |||||||
| Paid in capital | $ | 1,264,708,932 | $ | 18,644,443 | |||
| Accumulated net investment loss | (6,856,178 | ) | 22,011 | ||||
| Accumulated net realized loss on investments and foreign currency | (621,603,546 | ) | (66,811 | ) | |||
| Net unrealized appreciation on: | �� | ||||||
| Investments and foreign currency | 201,610,502 | 10,506,180 | |||||
| Net Assets | $ | 837,859,710 | $ | 29,105,823 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | |||||||
| Net Assets | $ | 292,014,316 | $ | 22,257,027 | |||
| Shares outstanding | 9,348,691 | 726,826 | |||||
| Net asset value per share (offering price and redemption price) | $ | 31.24 | $ | 30.62 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | |||||||
| Net Assets | $ | 129,707,471 | $ | 6,240,604 | |||
| Shares outstanding | 4,248,674 | 211,057 | |||||
| Net asset value per share (redemption price) | $ | 30.53 | $ | 29.57 | |||
| Offering price per share ($30.53 divided by .9425 and $29.57 divided by .9425) | $ | 32.39 | $ | 31.37 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | |||||||
| Net Assets | $ | 114,007,804 | $ | 608,192 | |||
| Shares outstanding | 3,930,368 | 21,104 | |||||
| Net asset value per share (offering price and redemption price) | $ | 29.01 | $ | 28.82 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | |||||||
| Net Assets | $ | 302,130,119 | N/A | ||||
| Shares outstanding | 9,651,365 | N/A | |||||
| Net asset value per share (offering price and redemption price) | $ | 31.30 | N/A |
| * | Each Feeder 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 Feeder Funds' financial statements. |
The accompanying notes are an integral part of these financial statements.
29
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Assets & Liabilities — (Continued) |
| December 31, 2015 |
| The Small Cap | The Market | ||||||
| Opportunities | Opportunities | ||||||
| Fund | Fund | ||||||
| ASSETS: | |||||||
| Investments in the Master Portfolio, at value* | $ | 220,077,553 | $ | 42,170,950 | |||
| Receivable from Adviser | 8,151 | 10,865 | |||||
| Receivable for Master Portfolio interest sold | 1,323,620 | 239,804 | |||||
| Receivable for Fund shares sold | 153,937 | — | |||||
| Prepaid expenses and other assets | 21,780 | 25,740 | |||||
| Total Assets | 221,585,041 | 42,447,359 | |||||
| LIABILITIES: | |||||||
| Payable to Directors | 5,749 | 946 | |||||
| Payable to Chief Compliance Officer | 404 | 63 | |||||
| Payable for Fund shares repurchased | 1,477,557 | 239,804 | |||||
| Payable for shareholder servicing fees | 39,935 | 8,783 | |||||
| Payable for distribution fees | 248 | 7,243 | |||||
| Accrued expenses and other liabilities | 73,748 | 24,242 | |||||
| Total Liabilities | 1,597,641 | 281,081 | |||||
| Net Assets | $ | 219,987,400 | $ | 42,166,278 | |||
| NET ASSETS CONSIST OF: | |||||||
| Paid in capital | $ | 357,384,483 | $ | 55,789,194 | |||
| Accumulated net investment loss | (4,080,361 | ) | (587,426 | ) | |||
| Accumulated net realized loss on investments and foreign currency | (97,615,963 | ) | (16,812,806 | ) | |||
| Net unrealized appreciation (depreciation) on: | |||||||
| Investments and foreign currency | (35,700,759 | ) | 3,777,316 | ||||
| Net Assets | $ | 219,987,400 | $ | 42,166,278 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | |||||||
| Net Assets | $ | 145,032,476 | $ | 31,230,073 | |||
| Shares outstanding | 4,443,185 | 2,060,015 | |||||
| Net asset value per share (offering price and redemption price) | $ | 32.64 | $ | 15.16 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | |||||||
| Net Assets | $ | 14,857,194 | $ | 4,502,241 | |||
| Shares outstanding | 465,994 | 299,332 | |||||
| Net asset value per share (redemption price) | $ | 31.88 | $ | 15.04 | |||
| Offering price per share ($31.88 divided by .9425 and $15.04 divided by .9425) | $ | 33.82 | $ | 15.96 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | |||||||
| Net Assets | $ | 8,839,984 | $ | 4,078,894 | |||
| Shares outstanding | 286,228 | 278,516 | |||||
| Net asset value per share (offering price and redemption price) | $ | 30.88 | $ | 14.65 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | |||||||
| Net Assets | $ | 51,257,746 | $ | 2,355,070 | |||
| Shares outstanding | 1,551,802 | 153,984 | |||||
| Net asset value per share (offering price and redemption price) | $ | 33.03 | $ | 15.29 |
| * | Each Feeder 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 Feeder Funds' financial statements. |
The accompanying notes are an integral part of these financial statements.
30
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Assets & Liabilities — (Continued) |
| December 31, 2015 |
| The Multi- | |||||||
| The Alternative | Disciplinary | ||||||
| Income | Income | ||||||
| Fund | Fund | ||||||
| ASSETS: | |||||||
| Investments in the Master Portfolio, at value* | $ | 27,739,822 | $ | 90,312,922 | |||
| Receivable from Adviser | 16,072 | 31,308 | |||||
| Receivable for Master Portfolio interest sold | — | 97,315 | |||||
| Receivable for Fund shares sold | 9,411 | 72,217 | |||||
| Prepaid expenses and other assets | 16,085 | 35,591 | |||||
| Total Assets | 27,781,390 | 90,549,353 | |||||
| LIABILITIES: | |||||||
| Payable for Master Portfolio interest purchased | 1,096 | — | |||||
| Payable to Directors | 642 | 2,312 | |||||
| Payable to Chief Compliance Officer | 42 | 178 | |||||
| Payable for Fund shares repurchased | 8,315 | 169,531 | |||||
| Payable for shareholder servicing fees | 2,461 | 8,484 | |||||
| Payable for distribution fees | 2,519 | 3,956 | |||||
| Accrued expenses and other liabilities | 20,946 | 38,090 | |||||
| Total Liabilities | 36,021 | 222,551 | |||||
| Net Assets | $ | 27,745,369 | $ | 90,326,802 | |||
| NET ASSETS CONSIST OF: | |||||||
| Paid in capital | $ | 33,967,893 | $ | 98,264,337 | |||
| Accumulated net investment income | 18,812 | 40,102 | |||||
| Accumulated net realized loss on investments, foreign currency and written option contracts | (6,346,435 | ) | (453,275 | ) | |||
| Net unrealized appreciation (depreciation) on: | |||||||
| Investments and foreign currency | (119,720 | ) | (7,524,362 | ) | |||
| Written option contracts | 224,819 | — | |||||
| Net Assets | $ | 27,745,369 | $ | 90,326,802 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | |||||||
| Net Assets | $ | 4,569,944 | $ | 6,108,026 | |||
| Shares outstanding | 49,844 | 591,838 | |||||
| Net asset value per share (offering price and redemption price) | $ | 91.68 | $ | 10.32 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | |||||||
| Net Assets | $ | 1,564,510 | $ | 8,753,632 | |||
| Shares outstanding | 17,189 | 852,204 | |||||
| Net asset value per share (redemption price) | $ | 91.02 | $ | 10.27 | |||
| Offering price per share ($91.02 divided by .9425 and $10.27 divided by .9425) | $ | 96.57 | $ | 10.90 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | |||||||
| Net Assets | $ | 1,355,897 | $ | 9,265,672 | |||
| Shares outstanding | 15,327 | 910,586 | |||||
| Net asset value per share (offering price and redemption price) | $ | 88.46 | $ | 10.18 | |||
| CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | |||||||
| Net Assets | $ | 20,255,018 | $ | 66,199,472 | |||
| Shares outstanding | 218,161 | 6,404,289 | |||||
| Net asset value per share (offering price and redemption price) | $ | 92.84 | $ | 10.34 | |||
| * | Each Feeder 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 Feeder Funds' financial statements. |
The accompanying notes are an integral part of these financial statements.
31
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
| Statements of Operations |
| For the Year Ended December 31, 2015 |
| The Internet | The Global | ||||||
| Fund | Fund | ||||||
| INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Dividends† | $ | 398,305 | $ | 70,299 | |||
| Interest | 3,706 | 3,326 | |||||
| Income from securities lending | 37,076 | 17,705 | |||||
| Expenses allocated from Master Portfolio | (1,948,361 | ) | (140,453 | ) | |||
| Net investment loss from Master Portfolio | (1,509,274 | ) | (49,123 | ) | |||
| EXPENSES: | |||||||
| Distribution fees — Advisor Class A | 10,544 | 1,149 | |||||
| Distribution fees — Advisor Class C | 7,558 | 13,095 | |||||
| Shareholder servicing fees — Advisor Class A | 10,544 | 1,149 | |||||
| Shareholder servicing fees — Advisor Class C | 2,519 | 4,365 | |||||
| Shareholder servicing fees — No Load Class | 346,195 | 15,278 | |||||
| Transfer agent fees and expenses | 135,978 | 19,726 | |||||
| Reports to shareholders | 29,725 | 2,019 | |||||
| Administration fees | 50,658 | 4,677 | |||||
| Professional fees | 16,658 | 8,419 | |||||
| Directors' fees | 10,471 | 602 | |||||
| Chief Compliance Officer fees | 2,113 | 116 | |||||
| Registration fees | 44,298 | 41,147 | |||||
| Fund accounting fees | 7,222 | 412 | |||||
| Other expenses | 5,884 | 357 | |||||
| Total expenses | 680,367 | 112,511 | |||||
| Less, expense reimbursement | — | (123,114 | ) | ||||
| Net expenses | 680,367 | (10,603 | ) | ||||
| Net investment loss | (2,189,641 | ) | (38,520 | ) | |||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Net realized gain (loss) on: | |||||||
| Investments and foreign currency | 29,301,430 | (13,187 | ) | ||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (34,664,097 | ) | (1,093,822 | ) | |||
| Net loss on investments | (5,362,667 | ) | (1,107,009 | ) | |||
| Net decrease in net assets resulting from operations | $ | (7,552,308 | ) | $ | (1,145,529 | ) | |
| † Net of foreign taxes withheld of: | $ | 986 | $ | 4,805 |
The accompanying notes are an integral part of these financial statements.
32
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Operations — (Continued) |
| For the Year Ended December 31, 2015 |
| The Paradigm | The Medical | ||||||
| Fund | Fund | ||||||
| INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Dividends† | $ | 5,543,973 | $ | 468,709 | |||
| Interest | 62,666 | 363 | |||||
| Income from securities lending | 1,853,915 | 16,105 | |||||
| Expenses allocated from Master Portfolio | (14,032,871 | ) | (413,704 | ) | |||
| Net investment income (loss) from Master Portfolio | (6,572,317 | ) | 71,473 | ||||
| EXPENSES: | |||||||
| Distribution fees — Advisor Class A | 401,417 | 13,989 | |||||
| Distribution fees — Advisor Class C | 983,241 | 4,938 | |||||
| Shareholder servicing fees — Advisor Class A | 401,417 | 13,989 | |||||
| Shareholder servicing fees — Advisor Class C | 327,747 | 1,646 | |||||
| Shareholder servicing fees — No Load Class | 1,024,473 | 58,257 | |||||
| Shareholder servicing fees — Institutional Class | 675,739 | — | |||||
| Transfer agent fees and expenses | 286,404 | 27,147 | |||||
| Reports to shareholders | 164,145 | 5,357 | |||||
| Administration fees | 369,943 | 10,348 | |||||
| Professional fees | 72,006 | 9,670 | |||||
| Directors' fees | 76,573 | 2,155 | |||||
| Chief Compliance Officer fees | 15,518 | 431 | |||||
| Registration fees | 71,652 | 41,943 | |||||
| Fund accounting fees | 52,085 | 1,481 | |||||
| Other expenses | 43,940 | 1,042 | |||||
| Total expenses | 4,966,300 | 192,393 | |||||
| Less, expense waiver for Institutional Class shareholder servicing fees | (506,804 | ) | — | ||||
| Less, expense reimbursement | (738,527 | ) | (176,332 | ) | |||
| Net expenses | 3,720,969 | 16,061 | |||||
| Net investment income (loss) | (10,293,286 | ) | 55,412 | ||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Net realized gain on: | |||||||
| Investments and foreign currency | 126,371,030 | 1,638,460 | |||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (195,382,777 | ) | (49,483 | ) | |||
| Net gain (loss) on investments | (69,011,747 | ) | 1,588,977 | ||||
| Net increase (decrease) in net assets resulting from operations | $ | (79,305,033 | ) | $ | 1,644,389 | ||
| † Net of foreign taxes withheld of: | $ | 170,651 | $ | 15,355 |
The accompanying notes are an integral part of these financial statements.
33
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Operations — (Continued) |
| For the Year Ended December 31, 2015 |
| The Small Cap | The Market | ||||||
| Opportunities | Opportunities | ||||||
| Fund | Fund | ||||||
| INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Dividends† | $ | 1,400,052 | $ | 342,510 | |||
| Interest | 9,227 | 1,853 | |||||
| Income from securities lending | 719,890 | 18,941 | |||||
| Expenses allocated from Master Portfolio | (4,104,675 | ) | (691,830 | ) | |||
| Net investment loss from Master Portfolio | (1,975,506 | ) | (328,526 | ) | |||
| EXPENSES: | |||||||
| Distribution fees — Advisor Class A | 51,953 | 16,292 | |||||
| Distribution fees — Advisor Class C | 89,611 | 36,141 | |||||
| Shareholder servicing fees — Advisor Class A | 51,953 | 16,292 | |||||
| Shareholder servicing fees — Advisor Class C | 29,870 | 12,047 | |||||
| Shareholder servicing fees — No Load Class | 505,042 | 88,497 | |||||
| Shareholder servicing fees — Institutional Class | 140,358 | 5,562 | |||||
| Transfer agent fees and expenses | 80,156 | 27,525 | |||||
| Reports to shareholders | 54,886 | 6,763 | |||||
| Administration fees | 108,463 | 19,248 | |||||
| Professional fees | 26,726 | 10,872 | |||||
| Directors' fees | 22,538 | 3,585 | |||||
| Chief Compliance Officer fees | 4,551 | 739 | |||||
| Registration fees | 90,403 | 51,718 | |||||
| Fund accounting fees | 15,376 | 2,457 | |||||
| Other expenses | 12,987 | 2,102 | |||||
| Total expenses | 1,284,873 | 299,840 | |||||
| Less, expense waiver for Institutional Class shareholder servicing fees | (105,268 | ) | (4,172 | ) | |||
| Less, expense reimbursement | (282,313 | ) | (128,541 | ) | |||
| Net expenses | 897,292 | 167,127 | |||||
| Net investment loss | (2,872,798 | ) | (495,653 | ) | |||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Net realized gain on: | |||||||
| Investments and foreign currency | 40,425,317 | 5,054,165 | |||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (72,350,360 | ) | (8,992,319 | ) | |||
| Net loss on investments | (31,925,043 | ) | (3,938,154 | ) | |||
| Net decrease in net assets resulting from operations | $ | (34,797,841 | ) | $ | (4,433,807 | ) | |
| † Net of foreign taxes withheld of: | $ | 24,541 | $ | 14,701 |
The accompanying notes are an integral part of these financial statements.
34
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Operations — (Continued) |
| For the Year Ended December 31, 2015 |
| The Multi- | |||||||
| The Alternative | Disciplinary | ||||||
| Income | Income | ||||||
| Fund | Fund | ||||||
| INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Dividends | $ | 101,594 | $ | 964,310 | |||
| Interest | 225,748 | 5,263,212 | |||||
| Income from securities lending | — | 18,691 | |||||
| Expenses allocated from Master Portfolio | (395,072 | ) | (1,755,569 | ) | |||
| Net investment income (loss) from Master Portfolio | (67,730 | ) | 4,490,644 | ||||
| EXPENSES: | |||||||
| Distribution fees — Advisor Class A | 3,952 | 29,003 | |||||
| Distribution fees — Advisor Class C | 10,730 | 76,021 | |||||
| Shareholder servicing fees — Advisor Class A | 3,952 | 29,003 | |||||
| Shareholder servicing fees — Advisor Class C | 3,577 | 25,340 | |||||
| Shareholder servicing fees — No Load Class | 15,185 | 21,615 | |||||
| Shareholder servicing fees — Institutional Class | 50,172 | 195,626 | |||||
| Transfer agent fees and expenses | 25,368 | 40,027 | |||||
| Reports to shareholders | 5,121 | 26,880 | |||||
| Administration fees | 13,728 | 47,587 | |||||
| Professional fees | 10,091 | 16,246 | |||||
| Directors' fees | 2,593 | 9,765 | |||||
| Chief Compliance Officer fees | 532 | 1,994 | |||||
| Registration fees | 54,534 | 62,618 | |||||
| Fund accounting fees | 1,821 | 6,838 | |||||
| Other expenses | 1,487 | 4,730 | |||||
| Total expenses | 202,843 | 593,293 | |||||
| Less, expense waiver for Institutional Class shareholder servicing fees | (37,629 | ) | (146,719 | ) | |||
| Less, expense reimbursement | (271,150 | ) | (382,621 | ) | |||
| Net expenses | (105,936 | ) | 63,953 | ||||
| Net investment income | 38,206 | 4,426,691 | |||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | |||||||
| ALLOCATED FROM MASTER PORTFOLIOS: | |||||||
| Net realized gain (loss) on: | |||||||
| Investments and foreign currency | (3,116 | ) | (2,803,110 | ) | |||
| Written option contracts expired or closed | 1,243,933 | 1,135,712 | |||||
| Long term realized gain distributions received from other investment companies | 1,275 | 116,836 | |||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (24,278 | ) | (3,898,716 | ) | |||
| Written option contracts | (307,063 | ) | (1,003,526 | ) | |||
| Net gain (loss) on investments | 910,751 | (6,452,804 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | $ | 948,957 | $ | (2,026,113 | ) | ||
The accompanying notes are an integral part of these financial statements.
35
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment loss | $ | (2,189,641 | ) | $ | (2,237,746 | ) | $ | (38,520 | ) | $ | (48,980 | ) | |
| Net realized gain (loss) on sale of investments and foreign currency | 29,301,430 | 10,595,537 | (13,187 | ) | 318,071 | ||||||||
| Net change in unrealized depreciation of investments and foreign currency | (34,664,097 | ) | (9,484,952 | ) | (1,093,822 | ) | (1,488,285 | ) | |||||
| Net decrease in net assets resulting from operations | (7,552,308 | ) | (1,127,161 | ) | (1,145,529 | ) | (1,219,194 | ) | |||||
| DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | |||||||||||||
| Net realized gains | (26,681,831 | ) | (8,004,471 | ) | (2,696 | ) | (712 | ) | |||||
| Total distributions | (26,681,831 | ) | (8,004,471 | ) | (2,696 | ) | (712 | ) | |||||
| DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | |||||||||||||
| Net realized gains | (694,561 | ) | (281,407 | ) | (214 | ) | (52 | ) | |||||
| Total distributions | (694,561 | ) | (281,407 | ) | (214 | ) | (52 | ) | |||||
| DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | |||||||||||||
| Net realized gains | (208,100 | ) | (63,160 | ) | (950 | ) | (175 | ) | |||||
| Total distributions | (208,100 | ) | (63,160 | ) | (950 | ) | (175 | ) | |||||
| CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | |||||||||||||
| Proceeds from shares sold | 2,001,938 | 13,300,316 | 629,971 | 1,083,377 | |||||||||
| Redemption fees | 280 | 14,113 | 16 | 77 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | 26,075,719 | 7,733,943 | 2,651 | 679 | |||||||||
| Cost of shares redeemed | (22,965,971 | ) | (33,117,579 | ) | (1,850,431 | ) | (2,073,922 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | 5,111,966 | (12,069,207 | ) | (1,217,793 | ) | (989,789 | ) | ||||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | |||||||||||||
| Proceeds from shares sold | 498,273 | 2,906,101 | 32,700 | 726,190 | |||||||||
| Redemption fees | — | 277 | — | 1,415 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | 486,647 | 149,179 | 144 | 30 | |||||||||
| Cost of shares redeemed | (2,255,954 | ) | (3,086,613 | ) | (88,790 | ) | (2,164,173 | ) | |||||
| Net decrease in net assets resulting from capital share transactions | (1,271,034 | ) | (31,056 | ) | (55,946 | ) | (1,436,538 | ) | |||||
The accompanying notes are an integral part of these financial statements.
36
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | |||||||||||||
| Proceeds from shares sold | $ | 64,898 | $ | 588,707 | $ | 376,565 | $ | 384,348 | |||||
| Redemption fees | — | 487 | — | 40 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | 184,873 | 54,872 | 913 | 168 | |||||||||
| Cost of shares redeemed | (244,020 | ) | (369,965 | ) | (95,637 | ) | (81,376 | ) | |||||
| Net increase in net assets resulting from capital share transactions | 5,751 | 274,101 | 281,841 | 303,180 | |||||||||
| TOTAL DECREASE IN NET ASSETS: | (31,290,117 | ) | (21,302,361 | ) | (2,141,287 | ) | (3,343,280 | ) | |||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 157,448,109 | 178,750,470 | 8,876,664 | 12,219,944 | |||||||||
| End of year* | $ | 126,157,992 | $ | 157,448,109 | $ | 6,735,377 | $ | 8,876,664 | |||||
| * Including undistributed net investment income of: | $ | 169,841 | $ | 153,826 | $ | 20,652 | $ | 15,403 | |||||
| CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | |||||||||||||
| Shares sold | 36,786 | 231,907 | 120,133 | 185,397 | |||||||||
| Shares issued in reinvestments of dividends and distributions | 626,220 | 136,932 | 579 | 128 | |||||||||
| Shares redeemed | (423,965 | ) | (580,533 | ) | (358,003 | ) | (352,745 | ) | |||||
| Net increase (decrease) in shares outstanding | 239,041 | (211,694 | ) | (237,291 | ) | (167,220 | ) | ||||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | |||||||||||||
| Shares sold | 10,165 | 51,935 | 5,948 | 123,524 | |||||||||
| Shares issued in reinvestments of dividends and distributions | 12,157 | 2,719 | 32 | 5 | |||||||||
| Shares redeemed | (42,328 | ) | (55,495 | ) | (17,182 | ) | (359,935 | ) | |||||
| Net decrease in shares outstanding | (20,006 | ) | (841 | ) | (11,202 | ) | (236,406 | ) | |||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | |||||||||||||
| Shares sold | 1,442 | 10,790 | 72,350 | 67,992 | |||||||||
| Shares issued in reinvestments of dividends and distributions | 4,964 | 1,052 | 208 | 32 | |||||||||
| Shares redeemed | (5,004 | ) | (6,992 | ) | (18,599 | ) | (14,611 | ) | |||||
| Net increase in shares outstanding | 1,402 | 4,850 | 53,959 | 53,413 | |||||||||
The accompanying notes are an integral part of these financial statements.
37
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment income (loss) | $ | (10,293,286 | ) | $ | (13,751,919 | ) | $ | 55,412 | $ | 106,318 | |||
| Net realized gain on sale of investments and foreign currency | 126,371,030 | 36,331,414 | 1,638,460 | 723,512 | |||||||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency | (195,382,777 | ) | (31,558,560 | ) | (49,483 | ) | 3,048,505 | ||||||
| Net increase (decrease) in net assets resulting from operations | (79,305,033 | ) | (8,979,065 | ) | 1,644,389 | 3,878,335 | |||||||
| DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | |||||||||||||
| Net investment income | — | — | (84,526 | ) | — | ||||||||
| Net realized gains | — | — | (1,347,587 | ) | (33,693 | ) | |||||||
| Total distributions | — | — | (1,432,113 | ) | (33,693 | ) | |||||||
| DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | |||||||||||||
| Net investment income | — | — | (15,037 | ) | — | ||||||||
| Net realized gains | — | — | (399,324 | ) | (7,270 | ) | |||||||
| Total distributions | — | — | (414,361 | ) | (7,270 | ) | |||||||
| DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | |||||||||||||
| Net investment income | — | — | (1,491 | ) | — | ||||||||
| Net realized gains | — | — | (39,592 | ) | (1,021 | ) | |||||||
| Total distributions | — | — | (41,083 | ) | (1,021 | ) | |||||||
| CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | |||||||||||||
| Proceeds from shares sold | 17,121,608 | 79,013,052 | 1,611,927 | 2,139,812 | |||||||||
| Redemption fees | 3,163 | 10,973 | 167 | 1,600 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | 1,415,177 | 33,284 | |||||||||
| Cost of shares redeemed | (219,664,621 | ) | (151,816,953 | ) | (2,631,095 | ) | (3,940,694 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (202,539,850 | ) | (72,792,928 | ) | 396,176 | (1,765,998 | ) | ||||||
The accompanying notes are an integral part of these financial statements.
38
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | |||||||||||||
| Proceeds from shares sold | $ | 12,953,817 | $ | 42,819,434 | $ | 2,509,621 | $ | 2,048,708 | |||||
| Redemption fees | 288 | 2,758 | 36 | 374 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | 342,177 | 5,220 | |||||||||
| Cost of shares redeemed | (42,179,329 | ) | (75,223,571 | ) | (965,699 | ) | (1,826,869 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (29,225,224 | ) | (32,401,379 | ) | 1,886,135 | 227,433 | |||||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | |||||||||||||
| Proceeds from shares sold | 9,780,718 | 13,393,108 | 124,759 | 141,764 | |||||||||
| Redemption fees | 14 | 603 | — | — | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | 26,746 | 647 | |||||||||
| Cost of shares redeemed | (19,394,054 | ) | (14,361,754 | ) | (169,942 | ) | (120,479 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (9,613,322 | ) | (968,043 | ) | (18,437 | ) | 21,932 | ||||||
| CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | |||||||||||||
| Proceeds from shares sold | 70,078,418 | 106,804,359 | N/A | N/A | |||||||||
| Redemption fees | 3,111 | 4,182 | N/A | N/A | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | N/A | N/A | |||||||||
| Cost of shares redeemed | (86,840,860 | ) | (90,695,882 | ) | N/A | N/A | |||||||
| Net increase (decrease) in net assets resulting from capital share transactions | (16,759,331 | ) | 16,112,659 | N/A | N/A | ||||||||
| TOTAL INCREASE (DECREASE) IN NET ASSETS: | (337,442,760 | ) | (99,028,756 | ) | 2,020,706 | 2,319,718 | |||||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 1,175,302,470 | 1,274,331,226 | 27,085,117 | 24,765,399 | |||||||||
| End of year* | $ | 837,859,710 | $ | 1,175,302,470 | $ | 29,105,823 | $ | 27,085,117 | |||||
| * Including undistributed net investment income (loss) of: | $ | (6,856,178 | ) | $ | (7,237,393 | ) | $ | 22,011 | $ | 67,272 | |||
The accompanying notes are an integral part of these financial statements.
39
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | |||||||||||||
| Shares sold | 493,728 | 2,290,400 | 48,158 | 74,948 | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | 45,725 | 1,084 | |||||||||
| Shares redeemed | (6,455,849 | ) | (4,383,030 | ) | (80,322 | ) | (139,467 | ) | |||||
| Net increase (decrease) in shares outstanding | (5,962,121 | ) | (2,092,630 | ) | 13,561 | (63,435 | ) | ||||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | |||||||||||||
| Shares sold | 383,607 | 1,259,055 | 76,179 | 74,488 | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | 11,452 | 176 | |||||||||
| Shares redeemed | (1,285,358 | ) | (2,171,775 | ) | (30,673 | ) | (66,773 | ) | |||||
| Net increase (decrease) in shares outstanding | (901,751 | ) | (912,720 | ) | 56,958 | 7,891 | |||||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | |||||||||||||
| Shares sold | 301,266 | 412,314 | 3,988 | 5,106 | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | 918 | 22 | |||||||||
| Shares redeemed | (615,520 | ) | (440,754 | ) | (5,439 | ) | (4,493 | ) | |||||
| Net increase (decrease) in shares outstanding | (314,254 | ) | (28,440 | ) | (533 | ) | 635 | ||||||
| CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | |||||||||||||
| Shares sold | 2,051,253 | 3,053,557 | N/A | N/A | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | N/A | N/A | |||||||||
| Shares redeemed | (2,559,551 | ) | (2,626,498 | ) | N/A | N/A | |||||||
| Net increase (decrease) in shares outstanding | (508,298 | ) | 427,059 | N/A | N/A | ||||||||
The accompanying notes are an integral part of these financial statements.
40
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Changes in Net Assets — (Continued) |
| The Small Cap | The Market | ||||||||||||
| Opportunities Fund | 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment loss | $ | (2,872,798 | ) | $ | (3,680,400 | ) | $ | (495,653 | ) | $ | (411,679 | ) | |
| Net realized gain on sale of investments and foreign currency | 40,425,317 | 22,542,735 | 5,054,165 | 4,069,744 | |||||||||
| Net change in unrealized depreciation of investments and foreign currency | (72,350,360 | ) | (47,300,796 | ) | (8,992,319 | ) | (7,185,651 | ) | |||||
| Net decrease in net assets resulting from operations | (34,797,841 | ) | (28,438,461 | ) | (4,433,807 | ) | (3,527,586 | ) | |||||
| CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | |||||||||||||
| Proceeds from shares sold | 6,489,018 | 194,445,896 | 452,522 | 8,010,235 | |||||||||
| Redemption fees | 5,582 | 41,304 | — | 2,251 | |||||||||
| Cost of shares redeemed | (90,933,245 | ) | (200,815,126 | ) | (3,387,672 | ) | (15,752,146 | ) | |||||
| Net decrease in net assets resulting from capital share transactions | (84,438,645 | ) | (6,327,926 | ) | (2,935,150 | ) | (7,739,660 | ) | |||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | |||||||||||||
| Proceeds from shares sold | 4,354,298 | 23,756,168 | 464,968 | 2,637,530 | |||||||||
| Redemption fees | 164 | 1,454 | 4 | — | |||||||||
| Cost of shares redeemed | (12,725,934 | ) | (18,170,301 | ) | (4,206,822 | ) | (4,968,036 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (8,371,472 | ) | 5,587,321 | (3,741,850 | ) | (2,330,506 | ) | ||||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | |||||||||||||
| Proceeds from shares sold | 1,540,034 | 9,629,115 | 147,771 | 697,027 | |||||||||
| Redemption fees | — | 2,106 | — | 61 | |||||||||
| Cost of shares redeemed | (4,144,013 | ) | (2,801,727 | ) | (727,287 | ) | (774,680 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (2,603,979 | ) | 6,829,494 | (579,516 | ) | (77,592 | ) | ||||||
The accompanying notes are an integral part of these financial statements.
41
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Changes in Net Assets — (Continued) |
| The Small Cap | The Market | ||||||||||||
| Opportunities Fund | 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | |||||||||||||
| Proceeds from shares sold | $ | 37,700,129 | $ | 69,362,018 | $ | 277,363 | $ | 2,345,012 | |||||
| Redemption fees | 5,630 | 1,007 | — | — | |||||||||
| Cost of shares redeemed | (40,526,909 | ) | (41,890,144 | ) | (772,372 | ) | (859,118 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (2,821,150 | ) | 27,472,881 | (495,009 | ) | 1,485,894 | |||||||
| TOTAL INCREASE (DECREASE) IN NET ASSETS: | (133,033,087 | ) | 5,123,309 | $ | (12,185,332 | ) | (12,189,450 | ) | |||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 353,020,487 | 347,897,178 | 54,351,610 | 66,541,060 | |||||||||
| End of year* | $ | 219,987,400 | $ | 353,020,487 | $ | 42,166,278 | $ | 54,351,610 | |||||
| * Including undistributed net investment loss of: | $ | (4,080,361 | ) | $ | (1,564,310 | ) | $ | (587,426 | ) | $ | (616,233 | ) | |
| CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | |||||||||||||
| Shares sold | 176,696 | 4,843,634 | 26,996 | 459,541 | |||||||||
| Shares redeemed | (2,482,816 | ) | (5,019,164 | ) | (204,096 | ) | (910,691 | ) | |||||
| Net decrease in shares outstanding | (2,306,120 | ) | (175,530 | ) | (177,100 | ) | (451,150 | ) | |||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | |||||||||||||
| Shares sold | 120,018 | 605,187 | 27,989 | 151,222 | |||||||||
| Shares redeemed | (356,455 | ) | (458,053 | ) | (260,043 | ) | (286,803 | ) | |||||
| Net increase (decrease) in shares outstanding | (236,437 | ) | 147,134 | (232,054 | ) | (135,581 | ) | ||||||
The accompanying notes are an integral part of these financial statements.
42
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Changes in Net Assets — (Continued) |
| The Small Cap | The Market | ||||||||||||
| Opportunities Fund | 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | |||||||||||||
| Shares sold | 44,364 | 251,012 | 9,142 | 40,997 | |||||||||
| Shares redeemed | (122,629 | ) | (72,816 | ) | (45,272 | ) | (45,433 | ) | |||||
| Net increase (decrease) in shares outstanding | (78,265 | ) | 178,196 | (36,130 | ) | (4,436 | ) | ||||||
| CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | |||||||||||||
| Shares sold | 999,079 | 1,719,477 | 16,350 | 133,749 | |||||||||
| Shares redeemed | (1,134,556 | ) | (1,046,919 | ) | (47,445 | ) | (50,621 | ) | |||||
| Net increase (decrease) in shares outstanding | (135,477 | ) | 672,558 | (31,095 | ) | 83,128 | |||||||
The accompanying notes are an integral part of these financial statements.
43
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Changes in Net Assets — (Continued) |
| The Alternative | The Multi- | ||||||||||||
| Income Fund | Disciplinary Income 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment income (loss) | $ | 38,206 | $ | (33,516 | ) | $ | 4,426,691 | $ | 3,337,411 | ||||
| Net realized gain (loss) on sale of investments, foreign currency and written options and distributions received from other investment companies | 1,242,092 | 470,836 | (1,550,562 | ) | 1,920,531 | ||||||||
| Net change in unrealized depreciation of investments, foreign currency and written options | (331,341 | ) | (108,927 | ) | (4,902,242 | ) | (3,227,523 | ) | |||||
| Net increase (decrease) in net assets resulting from operations | 948,957 | 328,393 | (2,026,113 | ) | 2,030,419 | ||||||||
| DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | |||||||||||||
| Net investment income | — | — | (191,179 | ) | (455,480 | ) | |||||||
| Net realized gains | — | — | (7,624 | ) | (248,972 | ) | |||||||
| Total distributions | — | — | (198,803 | ) | (704,452 | ) | |||||||
| DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | |||||||||||||
| Net investment income | — | — | (227,693 | ) | (395,670 | ) | |||||||
| Net realized gains | — | — | (9,565 | ) | (290,649 | ) | |||||||
| Total distributions | — | — | (237,258 | ) | (686,319 | ) | |||||||
| DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | |||||||||||||
| Net investment income | — | — | (157,175 | ) | (218,512 | ) | |||||||
| Net realized gains | — | — | (8,371 | ) | (209,535 | ) | |||||||
| Total distributions | — | — | (165,546 | ) | (428,047 | ) | |||||||
| DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS: | |||||||||||||
| Net investment income | (19,394 | ) | — | (2,377,868 | ) | (2,149,325 | ) | ||||||
| Net realized gains | �� | — | (85,793 | ) | (1,730,722 | ) | |||||||
| Total distributions | (19,394 | ) | — | (2,463,661 | ) | (3,880,047 | ) | ||||||
| CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS: | |||||||||||||
| Proceeds from shares sold | 1,687,199 | 3,393,314 | 471,133 | 3,708,727 | |||||||||
| Redemption fees | 3,409 | 446 | 40 | 37 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | 186,758 | 592,803 | |||||||||
| Cost of shares redeemed | (5,521,196 | ) | (7,189,252 | ) | (4,348,492 | ) | (13,631,910 | ) | |||||
| Net decrease in net assets resulting from capital share transactions | (3,830,588 | ) | (3,795,492 | ) | (3,690,561 | ) | (9,330,343 | ) | |||||
The accompanying notes are an integral part of these financial statements.
44
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Changes in Net Assets — (Continued) |
| The Alternative | The Multi- | ||||||||||||
| Income Fund | Disciplinary Income 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CAPITAL SHARE TRANSACTIONS —ADVISOR CLASS A: | |||||||||||||
| Proceeds from shares sold | $ | 761,205 | $ | 2,345,454 | $ | 886,482 | $ | 3,461,056 | |||||
| Redemption fees | — | 102 | 367 | 1,186 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | 215,606 | 630,746 | |||||||||
| Cost of shares redeemed | (775,056 | ) | (3,730,023 | ) | (4,138,991 | ) | (28,268,189 | ) | |||||
| Net decrease in net assets resulting from capital share transactions | (13,851 | ) | (1,384,467 | ) | (3,036,536 | ) | (24,175,201 | ) | |||||
| CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | |||||||||||||
| Proceeds from shares sold | 151,620 | 461,527 | 516,516 | 1,455,079 | |||||||||
| Redemption fees | 488 | — | — | 33 | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | — | — | 154,744 | 409,715 | |||||||||
| Cost of shares redeemed | (331,488 | ) | (827,335 | ) | (1,365,971 | ) | (2,414,816 | ) | |||||
| Net decrease in net assets resulting from capital share transactions | (179,380 | ) | (365,808 | ) | (694,711 | ) | (549,989 | ) | |||||
| CAPITAL SHARE TRANSACTIONS —INSTITUTIONAL CLASS: | |||||||||||||
| Proceeds from shares sold | 3,555,305 | 23,588,431 | 29,981,522 | 107,173,887 | |||||||||
| Redemption fees | 1,283 | 80 | 804 | — | |||||||||
| Proceeds from shares issued to holders in reinvestment of dividends | 19,163 | — | 2,462,293 | 3,872,607 | |||||||||
| Cost of shares redeemed | (10,871,931 | ) | (3,697,548 | ) | (64,984,222 | ) | (28,102,437 | ) | |||||
| Net increase (decrease) in net assets resulting from capital share transactions | (7,296,180 | ) | 19,890,963 | (32,539,603 | ) | 82,944,057 | |||||||
| TOTAL INCREASE (DECREASE) IN NET ASSETS: | (10,390,436 | ) | 14,673,589 | (45,052,792 | ) | 45,220,078 | |||||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 38,135,805 | 23,462,216 | 135,379,594 | 90,159,516 | |||||||||
| End of year* | $ | 27,745,369 | $ | 38,135,805 | $ | 90,326,802 | $ | 135,379,594 | |||||
| * Including undistributed net investment income (loss) of: | $ | 18,812 | $ | — | $ | 40,102 | $ | (845,286 | ) | ||||
The accompanying notes are an integral part of these financial statements.
45
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Statements of Changes in Net Assets — (Continued) |
| The Alternative | The Multi- | ||||||||||||
| Income Fund | Disciplinary Income 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | |||||||||||||
| Shares sold | 18,558 | 38,237 | 43,279 | 331,467 | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | 17,449 | 53,691 | |||||||||
| Shares redeemed | (60,805 | ) | (80,966 | ) | (405,296 | ) | (1,222,512 | ) | |||||
| Net decrease in shares outstanding | (42,247 | ) | (42,729 | ) | (344,568 | ) | (837,354 | ) | |||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | |||||||||||||
| Shares sold | 8,362 | 26,310 | 82,960 | 310,268 | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | 20,254 | 57,214 | |||||||||
| Shares redeemed | (8,696 | ) | (41,822 | ) | (393,862 | ) | (2,519,758 | ) | |||||
| Net decrease in shares outstanding | (334 | ) | (15,512 | ) | (290,648 | ) | (2,152,276 | ) | |||||
| CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | |||||||||||||
| Shares sold | 1,735 | 5,282 | 48,420 | 130,823 | |||||||||
| Shares issued in reinvestments of dividends and distributions | — | — | 14,642 | 37,746 | |||||||||
| Shares redeemed | (3,794 | ) | (9,522 | ) | (129,094 | ) | (220,662 | ) | |||||
| Net decrease in shares outstanding | (2,059 | ) | (4,240 | ) | (66,032 | ) | (52,093 | ) | |||||
| CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | |||||||||||||
| Shares sold | 38,472 | 261,887 | 2,758,151 | 9,538,510 | |||||||||
| Shares issued in reinvestments of dividends and distributions | 206 | — | 229,675 | 353,169 | |||||||||
| Shares redeemed | (118,650 | ) | (40,965 | ) | (6,066,130 | ) | (2,509,318 | ) | |||||
| Net increase (decrease) in shares outstanding | (79,972 | ) | 220,922 | (3,078,304 | ) | 7,382,361 | |||||||
The accompanying notes are an integral part of these financial statements.
46
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
| Notes to Financial Statements |
| December 31, 2015 |
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 Alternative Income Fund ("Alternative Income"), and The Multi-Disciplinary Income Fund ("Multi-Disciplinary Income"). 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 (Alternative Income), and February 11, 2008 (Multi-Disciplinary Income). Each series, 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").
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 Alternative Income Fund ("Alternative Income"), and The Multi-Disciplinary Income Fund ("Multi-Disciplinary Income"). 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 (Alternative Income), and February 11, 2008 (Multi-Disciplinary Income). Each series, 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").
On April 28, 2000 (January 31, 2006 with respect to Market Opportunities, June 29, 2007 with respect to Alternative Income, and February 11, 2008 with respect to Multi-Disciplinary Income), each series 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 which had the same investment objective as the Feeder Fund. Each Master Portfolio has multiple feeder funds. Each Feeder Fund receives a proportionate 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.
47
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
Each Feeder Fund's respective interest in the corresponding Master Portfolio as of December 31, 2015, is as follows:
| Interest in | ||||
| Master Portfolio | ||||
| The Internet Fund | 99.985 | % | ||
| The Global Fund | 99.907 | % | ||
| The Paradigm Fund | 98.815 | % | ||
| The Medical Fund | 99.881 | % | ||
| The Small Cap Opportunities Fund | 99.984 | % | ||
| The Market Opportunities Fund | 99.966 | % | ||
| The Alternative Income Fund | 99.576 | % | ||
| The Multi-Disciplinary Income Fund | 99.830 | % | ||
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, 2015, each of the Feeder 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 shareholder servicing 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, 2015, each of the Feeder 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 shareholder servicing fee of 0.25% of average daily net assets. If you sell your Advisor Class C shares within 12 months of purchase, you will have to pay a contingent deferred sales charge of 1.00%, which is applied to the NAV of the shares on the date of original purchase or on the date of redemption, whichever is less.
As of December 31, 2015, each of the Feeder Funds offers No Load Class shares. No Load Class shares are subject to a shareholder servicing fee of 0.25% of average daily net assets but do not have 12b-1 fees or a sales charge.
As of December 31, 2015, the Paradigm, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Income Funds offer Institutional Class shares. Institutional Class shares are subject to a shareholder servicing fee of 0.20% of average daily net assets but do not have 12b-1 fees or a sales charge. The Adviser has voluntarily agreed to waive the portion of the Institutional Class shareholder servicing fee in excess of 0.05%.
48
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
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 front-end sales charge on the Advisor Class A shares, the contingent deferred sales charge on Class C, the shareholder servicing 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 the exchange privileges of each class of shares. Shares of each Feeder 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 Portfolios' financial statements to obtain information about the investment objective of the corresponding Feeder Fund. 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 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, including exchange-traded funds, 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. 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 last bid price. Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes ("NBBO"). NBBO consists of the highest bid price and lowest ask price across any of the exchanges on which an option is quoted, thus providing a view across the entire U.S. options marketplace. Composite option pricing calculates
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, including exchange-traded funds, 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. 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 last bid price. Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes ("NBBO"). NBBO consists of the highest bid price and lowest ask price across any of the exchanges on which an option is quoted, thus providing a view across the entire U.S. options marketplace. Composite option pricing calculates
49
| KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
the mean of the highest bid price and the lowest ask price across the exchanges where the option is traded. If the composite option price is not available, the mean between the highest bid and the lowest asked quotations at the close of the exchanges will be used. If none of the above are available, exchange traded options are valued at a quote provided by third party pricing agents. Non-exchange traded options for which over-the-counter quotations are not readily available are valued at the mean of the current bid and asked prices. If none of the third party pricing agents publish a price and it is the day of expiration, expiring options will be priced at intrinsic value. Debt obligations (including convertible securities) that are either investment grade or non-investment grade and irrespective of days to maturity will be valued as follows: Debt securities are valued at evaluated mean by one of the authorized third party pricing agents which rely on various valuation methodologies such as matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. Investments in registered open-end investment companies other than exchange-traded funds are valued at their reported net asset value ("NAV"). Certain instruments, such as repurchase agreements and demand notes, do not have values from third parties and are valued at amortized cost.
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. In determining the fair value of a security, the Board of Trustees shall take into account the relevant factors and surrounding circumstances, which may include: (i) the nature and pricing history (if any) of the security; (ii) whether any dealer quotations for the security are available; (iii) possible valuation methodologies that could be used to determine the fair value of the security; (iv) the recommendation of the portfolio manager of the Portfolios with respect to the valuation of the security; (v) whether the same or similar securities are held by other funds managed by the Advisor or other funds and the method used to price the security in those funds; (vi) the extent to which the fair value to be determined for the security will result from the use of data or formula produced by third parties independent of the Advisor; and (vii) the liquidity or illiquidity of the market for the security; and (viii) the value of a foreign security traded on other foreign markets. At December 31, 2015, 0.00%, 0.00%, and 0.00% of the net assets of The Internet Portfolio, The Paradigm Portfolio and The Market Opportunities Portfolio, respectively, were fair valued securities. The other Master Portfolios did not hold any fair valued securities at December 31, 2015.
50
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
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 Portfolios receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 102% 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.
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 Portfolios receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 102% 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 Option Accounting
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.
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 values of investment securities and
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 values of investment securities and
51
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
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 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 year. Such fluctuations are included with the net realized and unrealized gain or loss from investments. 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, 2015, the following Master Portfolios held securities restricted to institutional investors (144A 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, 2015, the following Master Portfolios held securities restricted to institutional investors (144A securities):
| Percentage of | |||||||
| Market Value | Net Assets | ||||||
| The Alternative Income Portfolio | $ | 451,093 | 1.62 | % | |||
| The Multi-Disciplinary Income Portfolio | 22,686,464 | 25.08 | % |
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 a Master Portfolio has valued the investment. At December 31, 2015, the following Master Portfolios held illiquid securities:
| Percentage of | |||||||
| Market Value | Net Assets | ||||||
| The Internet Portfolio | $ | — | * | 0.00 | % | ||
| The Paradigm Portfolio | — | * | 0.00 | % | |||
| The Market Opportunities Portfolio | — | * | 0.00 | % | |||
| The Multi-Disciplinary Income Portfolio | 245,000 | 0.27 | % |
| * | Amount is less than $0.50. |
52
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
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.
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.
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 33 1/3% 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.
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 33 1/3% 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 Feeder Funds are allocated among the Feeder Funds (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Feeder Funds, depending on the nature of the expenditure.
Common expenses incurred by Feeder Funds are allocated among the Feeder Funds (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Feeder 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. In addition, each Feeder Fund accrues its own separate expenses. Any cap on expenses includes Feeder Fund-specific expenses as well as the expenses allocated from the 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 Master Portfolio via its investment in a Feeder Fund will be subject to taxation on its share of the Master Portfolio's ordinary income and capital gains. It is intended that the Master Portfolio's
Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in the Master Portfolio via its investment in a Feeder Fund will be subject to taxation on its share of the Master Portfolio's ordinary income and capital gains. It is intended that the Master Portfolio's
53
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
assets will be managed so an investor in the Master Portfolio via its investment in a Feeder Fund can satisfy the requirements of subchapter M of the Internal Revenue Code.
It is the Feeder Funds' policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and the Feeder 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 Feeder 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, 2015, open tax years include the tax years ended December 31, 2012, through 2015. 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.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") 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. Interest income is accounted for on the accrual basis and includes amortization of premiums and discounts on the effective interest method. Other noncash
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. Interest income is accounted for on the accrual basis and includes amortization of premiums and discounts on the effective interest method. Other noncash
54
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
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 Company'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 LLC (the "Adviser"), with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. The Adviser is a wholly-owned subsidiary of Horizon Kinetics LLC. Under the terms of the Agreements, the Master Portfolios, except the Alternative Income Portfolio, compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio's average daily net assets. The Alternative Income Portfolio compensates the Adviser for its management services at the annual rate of 0.90% of the Master Portfolio's average daily net assets.
The Trust has entered into Investment Advisory Agreements (the "Agreements") with Kinetics Asset Management LLC (the "Adviser"), with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. The Adviser is a wholly-owned subsidiary of Horizon Kinetics LLC. Under the terms of the Agreements, the Master Portfolios, except the Alternative Income Portfolio, compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio's average daily net assets. The Alternative Income Portfolio compensates the Adviser for its management services at the annual rate of 0.90% of the Master Portfolio's average daily net assets.
The Adviser has voluntarily agreed to waive a portion of its advisory fee and/or reimburse certain operating expenses as deemed appropriate through at least May 1, 2016. The Adviser may discontinue the voluntary waiver/reimbursement at any time after May 1, 2016; these waivers/reimbursements are not subject to recapture. Below are operating expense limitations by Feeder Fund and share class:
| The Internet | The Global | ||||||
| Fund | Fund | ||||||
| No Load Class | 1.89 | % | 1.39 | % | |||
| Class A | 2.14 | % | 1.64 | % | |||
| Class C | 2.64 | % | 2.14 | % | |||
| The Paradigm | The Medical | ||||||
| Fund | Fund | ||||||
| No Load Class | 1.64 | % | 1.39 | % | |||
| Class A | 1.89 | % | 1.64 | % | |||
| Class C | 2.39 | % | 2.14 | % | |||
| Institutional Class | 1.44 | % | N/A | ||||
55
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
| The Small Cap | The Market | ||||||
| Opportunities | Opportunities | ||||||
| Fund | Fund | ||||||
| No Load Class | 1.64 | % | 1.64 | % | |||
| Class A | 1.89 | % | 1.89 | % | |||
| Class C | 2.39 | % | 2.39 | % | |||
| Institutional Class | 1.44 | % | 1.44 | % | |||
| The Alternative | The Multi- | ||||||
| Income | Disciplinary Income | ||||||
| Fund | Fund | ||||||
| No Load Class | 0.95 | % | 1.49 | % | |||
| Class A | 1.20 | % | 1.74 | % | |||
| Class C | 1.70 | % | 2.24 | % | |||
| Institutional Class | 0.75 | % | 1.29 | % | |||
For the year ended December 31, 2015, the rate earned by the Adviser from the Master Portfolios and the waived fees/reimbursed expenses for the Feeder Funds are as follows:
| The Internet | The Global | |||||||
| Fund | Fund | |||||||
| Annual Advisory Rate | 1.25 | % | 1.25 | % | ||||
| Expenses Reimbursed by Adviser through voluntary waiver | $ | — | $ | 123,114 | ||||
| The Paradigm | The Medical | |||||||
| Fund | Fund | |||||||
| Annual Advisory Rate | 1.25 | % | 1.25 | % | ||||
| Expenses Reimbursed by Adviser through voluntary waiver | $ | 738,527 | $ | 176,332 | ||||
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | $ | 506,804 | N/A | |||||
| The Small Cap | The Market | |||||||
| Opportunities | Opportunities | |||||||
| Fund | Fund | |||||||
| Annual Advisory Rate | 1.25 | % | 1.25 | % | ||||
| Expenses Reimbursed by Adviser through voluntary waiver | $ | 282,313 | $ | 128,541 | ||||
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | $ | 105,268 | $ | 4,172 | ||||
56
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
| The Alternative | The Multi- | ||||||
| Income | Disciplinary Income | ||||||
| Fund | Fund | ||||||
| Annual Advisory Rate | 0.90 | % | 1.25 | % | |||
| Expenses Reimbursed by Adviser through voluntary waiver | $ | 271,150 | $ | 382,621 | |||
| Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver | $ | 37,629 | $ | 146,719 |
The Adviser receives the shareholder servicing fees from the No Load Class, Advisor Class A and Advisor Class C shares of a Feeder Fund pursuant to a Shareholder Servicing Agreement in the amount equal to 0.25% of the Feeder Fund's average daily net assets attributable to No Load Class, Advisor Class A and Advisor Class C shares, respectively. 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 a Feeder 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 Feeder Fund's average daily net assets attributable to Institutional Class shares until at least May 1, 2016. For the year ended December 31, 2015, the Adviser waived amounts depicted in the above table in shareholder servicing fees for the Institutional Class of the Paradigm, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Income Funds.
| Shareholder Servicing | ||||
| Expenses Incurred | ||||
| During 2015 | ||||
| The Internet Fund | $ | 359,258 | ||
| The Global Fund | 20,792 | |||
| The Paradigm Fund | 2,429,376 | |||
| The Medical Fund | 73,892 | |||
| The Small Cap Opportunities Fund | 727,223 | |||
| The Market Opportunities Fund | 122,398 | |||
| The Alternative Income Fund | 72,886 | |||
| The Multi-Disciplinary Income Fund | 271,584 |
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 Feeder Funds.
57
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
For the year ended December 31, 2015, the Feeder Funds were allocated $26,000 for the services of the Chief Compliance Officer employed by the Adviser.
The Company, on behalf of the Feeder 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 12b-1 Plan for Advisor Class A shares, 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 12b-1 Plan. During the year ended December 31, 2015, payments under the 12b-1 Plan for the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Income Funds were limited to 0.25% of the average daily net asset value of such shares of such Funds. Under the second 12b-1 Plan, Advisor Class C shares pay an annual rate of 0.75% of the average daily net asset value of such shares.
| 12b-1 Expenses | |||||||
| Incurred | |||||||
| During 2015 | |||||||
| Advisor Class A | Advisor Class C | ||||||
| The Internet Fund | $ | 10,544 | $ | 7,558 | |||
| The Global Fund | 1,149 | 13,095 | |||||
| The Paradigm Fund | 401,417 | 983,241 | |||||
| The Medical Fund | 13,989 | 4,938 | |||||
| The Small Cap Opportunities Fund | 51,953 | 89,611 | |||||
| The Market Opportunities Fund | 16,292 | 36,141 | |||||
| The Alternative Income Fund | 3,952 | 10,730 | |||||
| The Multi-Disciplinary Income Fund | 29,003 | 76,021 | |||||
Kinetics Funds Distributor, LLC (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.
58
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
| Distributor Sales | ||||
| Load Fees Received | ||||
| During the Year | ||||
| The Internet Fund | $ | 305 | ||
| The Global Fund | — | |||
| The Paradigm Fund | 21,753 | |||
| The Medical Fund | 3,912 | |||
| The Small Cap Opportunities Fund | 4,006 | |||
| The Market Opportunities Fund | 365 | |||
| The Alternative Income Fund | 1,793 | |||
| The Multi-Disciplinary Income Fund | 913 |
4. Reclassification of Capital Accounts
GAAP requires 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, 2015, each Feeder Fund recorded the following reclassifications to the accounts listed below:
GAAP requires 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, 2015, each Feeder Fund recorded the following reclassifications to the accounts listed below:
| INCREASE/(DECREASE) | ||||||||||
| Accumulated | ||||||||||
| Net | Accumulated | |||||||||
| Investment | Net Realized | |||||||||
| Income | Gain | |||||||||
| (Loss) | (Loss) | Paid In Capital | ||||||||
| The Internet Fund | $ | 2,205,656 | $ | (2,139,478 | ) | $ | (66,178 | ) | ||
| The Global Fund | 43,769 | 8,661 | (52,430 | ) | ||||||
| The Paradigm Fund | 10,674,501 | (192,848 | ) | (10,481,653 | ) | |||||
| The Medical Fund | 381 | (190,958 | ) | 190,577 | ||||||
| The Small Cap Opportunities Fund | 356,747 | (189,473 | ) | (167,274 | ) | |||||
| The Market Opportunities Fund | 524,460 | (314,309 | ) | (210,151 | ) | |||||
| The Alternative Income Fund | — | 2 | (2 | ) | ||||||
| The Multi-Disciplinary Income Fund | (587,388 | ) | 585,143 | 2,245 | ||||||
5. Income Taxes
At December 31, 2015, the components of accumulated earnings (losses) on a tax basis were as follows:
At December 31, 2015, the components of accumulated earnings (losses) on a tax basis were as follows:
| Internet | Global | Paradigm | Medical | ||||||||||
| Net Unrealized Appreciation | $ | 46,499,771 | $ | 211,369 | $ | 181,372,344 | $ | 10,439,369 | |||||
| Undistributed Ordinary Income | — | — | — | 22,011 | |||||||||
| Undistributed Long-Term Capital Gains | 3,753,798 | — | — | — | |||||||||
| Total Distributable Earnings | $ | 3,753,798 | $ | — | $ | — | $ | 22,011 | |||||
| Other Accumulated Loss | (224,735 | ) | (48,886 | ) | (608,221,566 | ) | — | ||||||
| Total Accumulated Gain (Loss) | $ | 50,028,834 | $ | 162,483 | $ | (426,849,222 | ) | $ | 10,461,380 |
59
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
| Multi- | |||||||||||||
| Small Cap | Market | Alternative | Disciplinary | ||||||||||
| Opportunities | Opportunities | Income | Income | ||||||||||
| Net Unrealized Appreciation (Depreciation) | $ | (38,966,793 | ) | $ | 3,405,512 | $ | 86,289 | $ | (6,841,228 | ) | |||
| Undistributed Ordinary Income | — | — | 18,812 | 40,102 | |||||||||
| Undistributed Long-Term Capital Gains | — | — | — | — | |||||||||
| Total Distributable Earnings | $ | — | $ | — | $ | 18,812 | $ | 40,102 | |||||
| Other Accumulated Loss | (98,430,290 | ) | (17,028,429 | ) | (6,327,625 | ) | (1,136,409 | ) | |||||
| Total Accumulated Loss | $ | (137,397,083 | ) | $ | (13,622,917 | ) | $ | (6,222,524 | ) | $ | (7,937,535 | ) |
At December 31, 2015, the Feeder Funds had accumulated net realized capital loss carryforwards expiring in the following years:
| 2018 | 2017 | 2016 | Total | ||||||||||
| The Internet Fund | $ | — | $ | — | $ | — | $ | — | |||||
| The Global Fund | — | (27,489 | ) | — | (27,489 | ) | |||||||
| The Paradigm Fund | (115,786,082 | ) | (445,505,345 | ) | (45,902,125 | ) | (607,193,552 | ) | |||||
| The Medical Fund | — | — | — | — | |||||||||
| The Small Cap Opportunities Fund | (8,224,702 | ) | (86,316,846 | ) | — | (94,541,548 | ) | ||||||
| The Market Opportunities Fund | (2,108,533 | ) | (6,623,055 | ) | (7,913,031 | ) | (16,644,619 | ) | |||||
| The Alternative Income Fund | (2,203,647 | ) | (4,123,978 | ) | — | (6,327,625 | ) | ||||||
| The Multi-Disciplinary Income Fund | — | — | — | — |
As a result of the Regulated Investment Company Modernization Act of 2010 (the "Modernization Act"), losses incurred in this fiscal year and beyond retain their character, short-term or long-term, have no expiration date and are utilized prior to capital loss carryforwards accumulated before the enactment of the Modernization Act.
At December 31, 2015, the Global Fund had $15,382 in short-term capital loss carryforwards without expiration and the Multi-Disciplinary Income Fund had $705,331 in long-term capital loss carryforwards without expiration.
60
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
For the year ended December 31, 2015, the following Feeder Funds utilized capital loss carryforwards:
| Capital Loss | ||||
| Carryforward | ||||
| The Internet Fund | $ | — | ||
| The Global Fund | — | |||
| The Paradigm Fund | 123,223,215 | |||
| The Medical Fund | — | |||
| The Small Cap Opportunities Fund | 40,234,429 | |||
| The Market Opportunities Fund | 4,689,935 | |||
| The Alternative Income Fund | 1,228,237 | |||
| The Multi-Disciplinary Income Fund | — |
At December 31, 2015, the following Feeder Funds deferred, on a tax basis, post-October losses:
| Late Year | Post-October | ||||||
| Ordinary | Capital Loss | ||||||
| Loss Deferral | Deferral | ||||||
| The Internet Fund | $ | — | $ | — | |||
| The Global Fund | (4,192 | ) | (1,823 | ) | |||
| The Paradigm Fund | (309,091 | ) | — | ||||
| The Medical Fund | — | — | |||||
| The Small Cap Opportunities Fund | (3,345,372 | ) | — | ||||
| The Market Opportunities Fund | (206,393 | ) | — | ||||
| The Alternative Income Fund | — | — | |||||
| The Multi-Disciplinary Income Fund | — | (431,078 | ) |
61
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
The tax components of dividends paid during the year ended December 31, 2015, and the year ended December 31, 2014, are:
| Internet | Global | ||||||||||||
| Ordinary | Long-Term | Ordinary | Long-Term | ||||||||||
| Income | Capital Gains | Income | Capital Gains | ||||||||||
| Distribution | Distribution | Distribution | Distribution | ||||||||||
| 2015 | $ | — | $ | 27,584,492 | $ | — | $ | 3,860 | |||||
| 2014 | $ | — | $ | 8,349,038 | $ | — | $ | 939 | |||||
| Paradigm | Medical | ||||||||||||
| Ordinary | Long-Term | Ordinary | Long-Term | ||||||||||
| Income | Capital Gains | Income | Capital Gains | ||||||||||
| Distribution | Distribution | Distribution | Distribution | ||||||||||
| 2015 | $ | — | $ | — | $ | 1,201,551 | $ | 686,006 | |||||
| 2014 | $ | — | $ | — | $ | — | $ | 41,984 | |||||
| Small Cap | Market Opportunities | ||||||||||||
| Ordinary | Long-Term | Ordinary | Long-Term | ||||||||||
| Income | Capital Gains | Income | Capital Gains | ||||||||||
| Distribution | Distribution | Distribution | Distribution | ||||||||||
| 2015 | $ | — | $ | — | $ | — | $ | — | |||||
| 2014 | $ | — | $ | — | $ | — | $ | — | |||||
| Alternative Income | Multi-Disciplinary Income | ||||||||||||
| Ordinary | Long-Term | Ordinary | Long-Term | ||||||||||
| Income | Capital Gains | Income | Capital Gains | ||||||||||
| Distribution | Distribution | Distribution | Distribution | ||||||||||
| 2015 | $ | 19,394 | $ | — | $ | 3,065,268 | $ | — | |||||
| 2014 | $ | — | $ | — | $ | 5,680,986 | $ | 17,879 | |||||
6. Tax Information (Unaudited)
The Medical Fund designates 54% of dividends declared after December 31, 2015, from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The Medical Fund designates 54% of dividends declared after December 31, 2015, from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The Medical, Alternative Income, and Multi-Disciplinary Income Funds hereby designate 64%, 100% and 100%, respectively, as ordinary income distributions and 100%, 100% and 36%, respectively, for the Internet, Global and Medical Funds 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.
62
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Notes to Financial Statements — (Continued) December 31, 2015 |
For corporate shareholders in the Feeder Funds, the percentage of ordinary dividend income distributed for the year ended December 31, 2015, which was designated as qualifying for the dividends-received deduction, is 35% for the Medical Fund. The Multi-Disciplinary Income Fund and the Alternative Income Fund designate 100% and 100%, respectively, of their ordinary income distributions for the fiscal year ended December 31, 2015, as interest-related dividends under Internal Revenue Code Section 871(k)(l)(C).
The Medical Fund designates 92% of its ordinary income distribution as a short-term capital gain distribution under Internal Revenue Code Section 871(k)(2)(C).
7. Information about Proxy Voting (Unaudited)
Information regarding how the Feeder Funds and the Master Portfolios vote proxies relating to portfolio securities is available without charge, upon request by calling toll-free at 1-800-930-3828 or by accessing the Company's website at www.kineticsfunds.com and by accessing the SEC's website at www.sec.gov. Information regarding how the Feeder Funds and the Master 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.
Information regarding how the Feeder Funds and the Master Portfolios vote proxies relating to portfolio securities is available without charge, upon request by calling toll-free at 1-800-930-3828 or by accessing the Company's website at www.kineticsfunds.com and by accessing the SEC's website at www.sec.gov. Information regarding how the Feeder Funds and the Master 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.
8. Information about the Portfolio Holdings (Unaudited)
The Feeder Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Feeder 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.
The Feeder Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Feeder 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.
9. 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 year that materially impacted the amounts or disclosures in the Funds' financial statements.
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 year that materially impacted the amounts or disclosures in the Funds' financial statements.
63
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights |
| The Internet Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 56.08 | $ | 59.27 | $ | 43.18 | $ | 36.26 | $ | 37.25 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.84 | ) | (0.77 | ) | (0.67 | ) | (0.15 | ) | (0.37 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (2.21 | ) | 0.69 | 19.78 | 8.56 | (0.37 | ) | |||||||||
| Total from investment operations | (3.05 | ) | (0.08 | ) | 19.11 | 8.41 | (0.74 | ) | ||||||||
| Redemption Fees | 0.00 | (3) | 0.01 | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net realized gains | (11.35 | ) | (3.12 | ) | (3.02 | ) | (1.49 | ) | (0.25 | ) | ||||||
| Total distributions | (11.35 | ) | (3.12 | ) | (3.02 | ) | (1.49 | ) | (0.25 | ) | ||||||
| Net Asset Value, End of Year | $ | 41.68 | $ | 56.08 | $ | 59.27 | $ | 43.18 | $ | 36.26 | ||||||
| Total return | (5.42 | )% | (0.16 | )% | 44.28 | % | 23.24 | % | (1.98 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 122,332 | $ | 151,200 | $ | 172,332 | $ | 155,036 | $ | 103,828 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.82 | % | 1.78 | % | 1.84 | % | 1.94 | % | 1.94 | % | ||||||
After expense reimbursement(4) | 1.82 | % | 1.78 | % | 1.84 | % | 1.89 | % | 1.89 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.51 | )% | (1.34 | )% | (1.30 | )% | (0.41 | )% | (0.99 | )% | ||||||
After expense reimbursement(4) | (1.51 | )% | (1.34 | )% | (1.30 | )% | (0.36 | )% | (0.94 | )% | ||||||
Portfolio turnover rate(5) | 1 | % | 1 | % | 8 | % | 9 | % | 32 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Internet Portfolio. |
The accompanying notes are an integral part of these financial statements.
64
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Internet Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 54.51 | $ | 57.84 | $ | 42.30 | $ | 35.63 | $ | 36.69 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.95 | ) | (0.89 | ) | (0.81 | ) | (0.24 | ) | (0.46 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (2.14 | ) | 0.68 | 19.36 | 8.40 | (0.36 | ) | |||||||||
| Total from investment operations | (3.09 | ) | (0.21 | ) | 18.55 | 8.16 | (0.82 | ) | ||||||||
| Redemption Fees | — | 0.00 | (3) | 0.01 | — | 0.01 | ||||||||||
| Less Distributions: | ||||||||||||||||
| From net realized gains | (11.35 | ) | (3.12 | ) | (3.02 | ) | (1.49 | ) | (0.25 | ) | ||||||
| Total distributions | (11.35 | ) | (3.12 | ) | (3.02 | ) | (1.49 | ) | (0.25 | ) | ||||||
| Net Asset Value, End of Year | $ | 40.07 | $ | 54.51 | $ | 57.84 | $ | 42.30 | $ | 35.63 | ||||||
Total return(4) | (5.65 | )% | (0.41 | )% | 43.94 | % | 22.92 | % | (2.20 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 2,978 | $ | 5,143 | $ | 5,506 | $ | 1,379 | $ | 1,050 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.07 | % | 2.03 | % | 2.09 | % | 2.19 | % | 2.19 | % | ||||||
After expense reimbursement(5) | 2.07 | % | 2.03 | % | 2.09 | % | 2.14 | % | 2.14 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.76 | )% | (1.59 | )% | (1.55 | )% | (0.66 | )% | (1.24 | )% | ||||||
After expense reimbursement(5) | (1.76 | )% | (1.59 | )% | (1.55 | )% | (0.61 | )% | (1.19 | )% | ||||||
Portfolio turnover rate(6) | 1 | % | 1 | % | 8 | % | 9 | % | 32 | % | ||||||
| (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) | Portfolio turnover of The Internet Portfolio. |
The accompanying notes are an integral part of these financial statements.
65
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Internet Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 51.81 | $ | 55.38 | $ | 40.79 | $ | 34.58 | $ | 35.79 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (1.15 | ) | (1.11 | ) | (1.03 | ) | (0.43 | ) | (0.63 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (2.04 | ) | 0.64 | 18.64 | 8.13 | (0.34 | ) | |||||||||
| Total from investment operations | (3.19 | ) | (0.47 | ) | 17.61 | 7.70 | (0.97 | ) | ||||||||
| Redemption Fees | — | 0.02 | — | — | 0.01 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net realized gains | (11.35 | ) | (3.12 | ) | (3.02 | ) | (1.49 | ) | (0.25 | ) | ||||||
| Total distributions | (11.35 | ) | (3.12 | ) | (3.02 | ) | (1.49 | ) | (0.25 | ) | ||||||
| Net Asset Value, End of Year | $ | 37.27 | $ | 51.81 | $ | 55.38 | $ | 40.79 | $ | 34.58 | ||||||
| Total return | (6.14 | )% | (0.86 | )% | 43.20 | % | 22.32 | % | (2.67 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 848 | $ | 1,105 | $ | 913 | $ | 185 | $ | 103 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.57 | % | 2.53 | % | 2.59 | % | 2.69 | % | 2.69 | % | ||||||
After expense reimbursement(3) | 2.57 | % | 2.53 | % | 2.59 | % | 2.64 | % | 2.64 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (2.26 | )% | (2.09 | )% | (2.05 | )% | (1.16 | )% | (1.74 | )% | ||||||
After expense reimbursement(3) | (2.26 | )% | (2.09 | )% | (2.05 | )% | (1.11 | )% | (1.69 | )% | ||||||
Portfolio turnover rate(4) | 1 | % | 1 | % | 8 | % | 9 | % | 32 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (4) | Portfolio turnover of The Internet Portfolio. |
The accompanying notes are an integral part of these financial statements.
66
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Global Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 5.33 | $ | 6.05 | $ | 4.71 | $ | 3.92 | $ | 4.67 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.02 | ) | (0.02 | ) | 0.01 | 0.03 | 0.06 | |||||||||
| Net realized and unrealized gain (loss) on investments | (0.72 | ) | (0.70 | ) | 1.34 | 0.88 | (0.78 | ) | ||||||||
| Total from investment operations | (0.74 | ) | (0.72 | ) | 1.35 | 0.91 | (0.72 | ) | ||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.01 | ) | (0.12 | ) | (0.03 | ) | ||||||||
| From net realized gains | (0.00 | )(3) | (0.00 | )(3) | — | — | — | |||||||||
| Total distributions | (0.00 | )(3) | (0.00 | )(3) | (0.01 | ) | (0.12 | ) | (0.03 | ) | ||||||
| Net Asset Value, End of Year | $ | 4.59 | $ | 5.33 | $ | 6.05 | $ | 4.71 | $ | 3.92 | ||||||
| Total return | (13.83 | )% | (11.89 | )% | 28.59 | % | 23.16 | % | (15.41 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 4,745 | $ | 6,771 | $ | 8,705 | $ | 5,069 | $ | 3,631 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.87 | % | 2.61 | % | 2.83 | % | 3.38 | % | 3.94 | % | ||||||
After expense reimbursement(4) | 1.39 | % | 1.39 | % | 1.39 | % | 1.39 | % | 1.39 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.77 | )% | (1.54 | )% | (1.22 | )% | (1.22 | )% | (1.11 | )% | ||||||
After expense reimbursement(4) | (0.29 | )% | (0.32 | )% | 0.22 | % | 0.77 | % | 1.44 | % | ||||||
Portfolio turnover rate(5) | 16 | % | 14 | % | 15 | % | 23 | % | 135 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Global Portfolio. |
The accompanying notes are an integral part of these financial statements.
67
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Global Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 5.31 | $ | 6.03 | $ | 4.71 | $ | 3.92 | $ | 4.68 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.03 | ) | (0.03 | ) | (0.00 | )(3) | 0.02 | 0.05 | ||||||||
| Net realized and unrealized gain (loss) on investments | (0.71 | ) | (0.70 | ) | 1.33 | 0.88 | (0.78 | ) | ||||||||
| Total from investment operations | (0.74 | ) | (0.73 | ) | 1.33 | 0.90 | (0.73 | ) | ||||||||
| Redemption Fees | — | 0.01 | (0.00 | )(3) | (0.00 | )(3) | (0.00 | )(3) | ||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.01 | ) | (0.11 | ) | (0.03 | ) | ||||||||
| From net realized gains | (0.00 | )(3) | (0.00 | )(3) | — | — | — | |||||||||
| Total distributions | (0.00 | )(3) | (0.00 | )(3) | (0.01 | ) | (0.11 | ) | (0.03 | ) | ||||||
| Net Asset Value, End of Year | $ | 4.57 | $ | 5.31 | $ | 6.03 | $ | 4.71 | $ | 3.92 | ||||||
Total return(4) | (13.89 | )% | (11.93 | )% | 28.16 | % | 22.94 | % | (15.59 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 376 | $ | 497 | $ | 1,992 | $ | 1,093 | $ | 392 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 3.12 | % | 2.86 | % | 3.08 | % | 3.63 | % | 4.19 | % | ||||||
After expense reimbursement(5) | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (2.02 | )% | (1.79 | )% | (1.47 | )% | (1.47 | )% | (1.36 | )% | ||||||
After expense reimbursement(5) | (0.54 | )% | (0.57 | )% | (0.03 | )% | 0.52 | % | 1.19 | % | ||||||
Portfolio turnover rate(6) | 16 | % | 14 | % | 15 | % | 23 | % | 135 | % | ||||||
| (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) | Portfolio turnover of The Global Portfolio. |
The accompanying notes are an integral part of these financial statements.
68
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Global Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 5.16 | $ | 5.90 | $ | 4.62 | $ | 3.87 | $ | 4.64 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.05 | ) | (0.06 | ) | (0.03 | ) | (0.00 | )(3) | 0.03 | |||||||
| Net realized and unrealized gain (loss) on investments | (0.70 | ) | (0.68 | ) | 1.32 | 0.85 | (0.77 | ) | ||||||||
| Total from investment operations | (0.75 | ) | (0.74 | ) | 1.29 | 0.85 | (0.74 | ) | ||||||||
| Redemption Fees | — | 0.00 | (3) | — | — | — | ||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.01 | ) | (0.10 | ) | (0.03 | ) | ||||||||
| From net realized gains | (0.00 | )(3) | (0.00 | )(3) | — | — | — | |||||||||
| Total distributions | (0.00 | )(3) | (0.00 | )(3) | (0.01 | ) | (0.10 | ) | (0.03 | ) | ||||||
| Net Asset Value, End of Year | $ | 4.41 | $ | 5.16 | $ | 5.90 | $ | 4.62 | $ | 3.87 | ||||||
| Total return | (14.48 | )% | (12.53 | )% | 27.84 | % | 22.04 | % | (15.94 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 1,614 | $ | 1,608 | $ | 1,523 | $ | 383 | $ | 111 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 3.62 | % | 3.36 | % | 3.58 | % | 4.13 | % | 4.69 | % | ||||||
After expense reimbursement(4) | 2.14 | % | 2.14 | % | 2.14 | % | 2.14 | % | 2.14 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (2.52 | )% | (2.29 | )% | (1.97 | )% | (1.97 | )% | (1.86 | )% | ||||||
After expense reimbursement(4) | (1.04 | )% | (1.07 | )% | (0.53 | )% | 0.02 | % | 0.69 | % | ||||||
Portfolio turnover rate(5) | 16 | % | 14 | % | 15 | % | 23 | % | 135 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Global Portfolio. |
The accompanying notes are an integral part of these financial statements.
69
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Paradigm Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 34.08 | $ | 34.35 | $ | 23.99 | $ | 19.81 | $ | 23.31 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.32 | ) | (0.36 | ) | (0.15 | ) | 0.05 | 0.02 | ||||||||
| Net realized and unrealized gain (loss) on investments | (2.52 | ) | 0.09 | 10.72 | 4.25 | (3.34 | ) | |||||||||
| Total from investment operations | (2.84 | ) | (0.27 | ) | 10.57 | 4.30 | (3.32 | ) | ||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.21 | ) | (0.12 | ) | (0.18 | ) | ||||||||
| Total distributions | — | — | (0.21 | ) | (0.12 | ) | (0.18 | ) | ||||||||
| Net Asset Value, End of Year | $ | 31.24 | $ | 34.08 | $ | 34.35 | $ | 23.99 | $ | 19.81 | ||||||
| Total return | (8.33 | )% | (0.79 | )% | 44.07 | % | 21.78 | % | (14.27 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 292,014 | $ | 521,738 | $ | 597,746 | $ | 416,696 | $ | 430,528 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.71 | % | 1.68 | % | 1.72 | % | 1.78 | % | 1.78 | % | ||||||
After expense reimbursement(4) | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.99 | )% | (1.06 | )% | (0.60 | )% | 0.08 | % | (0.03 | )% | ||||||
After expense reimbursement(4) | (0.92 | )% | (1.02 | )% | (0.52 | )% | 0.22 | % | 0.11 | % | ||||||
Portfolio turnover rate(5) | 2 | % | 7 | % | 4 | % | 6 | % | 58 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Paradigm Portfolio. |
The accompanying notes are an integral part of these financial statements.
70
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Paradigm Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 33.39 | $ | 33.74 | $ | 23.59 | $ | 19.45 | $ | 22.95 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.39 | ) | (0.43 | ) | (0.22 | ) | (0.01 | ) | (0.03 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (2.47 | ) | 0.08 | 10.53 | 4.18 | (3.29 | ) | |||||||||
| Total from investment operations | (2.86 | ) | (0.35 | ) | 10.31 | 4.17 | (3.32 | ) | ||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.16 | ) | (0.03 | ) | (0.18 | ) | ||||||||
| Total distributions | — | — | (0.16 | ) | (0.03 | ) | (0.18 | ) | ||||||||
| Net Asset Value, End of Year | $ | 30.53 | $ | 33.39 | $ | 33.74 | $ | 23.59 | $ | 19.45 | ||||||
Total return(4) | (8.57 | )% | (1.04 | )% | 43.70 | % | 21.49 | % | (14.49 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 129,707 | $ | 171,958 | $ | 204,548 | $ | 135,747 | $ | 146,939 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.96 | % | 1.93 | % | 1.97 | % | 2.03 | % | 2.03 | % | ||||||
After expense reimbursement(5) | 1.89 | % | 1.89 | % | 1.89 | % | 1.89 | % | 1.89 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.24 | )% | (1.31 | )% | (0.85 | )% | (0.17 | )% | (0.28 | )% | ||||||
After expense reimbursement(5) | (1.17 | )% | (1.27 | )% | (0.77 | )% | (0.03 | )% | (0.14 | )% | ||||||
Portfolio turnover rate(6) | 2 | % | 7 | % | 4 | % | 6 | % | 58 | % | ||||||
| (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) | Portfolio turnover of The Paradigm Portfolio. |
The accompanying notes are an integral part of these financial statements.
71
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Paradigm Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 31.88 | $ | 32.38 | $ | 22.66 | $ | 18.76 | $ | 22.25 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.53 | ) | (0.58 | ) | (0.35 | ) | (0.11 | ) | (0.14 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (2.34 | ) | 0.08 | 10.10 | 4.01 | (3.17 | ) | |||||||||
| Total from investment operations | (2.87 | ) | (0.50 | ) | 9.75 | 3.90 | (3.31 | ) | ||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.03 | ) | — | (0.18 | ) | |||||||||
| Total distributions | — | — | (0.03 | ) | — | (0.18 | ) | |||||||||
| Net Asset Value, End of Year | $ | 29.01 | $ | 31.88 | $ | 32.38 | $ | 22.66 | $ | 18.76 | ||||||
| Total return | (9.00 | )% | (1.54 | )% | 43.01 | % | 20.85 | % | (14.90 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 114,008 | $ | 135,333 | $ | 138,355 | $ | 101,405 | $ | 102,534 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.46 | % | 2.43 | % | 2.47 | % | 2.53 | % | 2.53 | % | ||||||
After expense reimbursement(4) | 2.39 | % | 2.39 | % | 2.39 | % | 2.39 | % | 2.39 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.74 | )% | (1.81 | )% | (1.35 | )% | (0.67 | )% | (0.78 | )% | ||||||
After expense reimbursement(4) | (1.67 | )% | (1.77 | )% | (1.27 | )% | (0.53 | )% | (0.64 | )% | ||||||
Portfolio turnover rate(5) | 2 | % | 7 | % | 4 | % | 6 | % | 58 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Paradigm Portfolio. |
The accompanying notes are an integral part of these financial statements.
72
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Paradigm Fund | ||||||||||||||||
| Institutional 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 34.08 | $ | 34.28 | $ | 23.93 | $ | 19.79 | $ | 23.25 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.25 | ) | (0.29 | ) | (0.09 | ) | 0.10 | 0.07 | ||||||||
| Net realized and unrealized gain (loss) on investments | (2.53 | ) | 0.09 | 10.70 | 4.24 | (3.35 | ) | |||||||||
| Total from investment operations | (2.78 | ) | (0.20 | ) | 10.61 | 4.34 | (3.28 | ) | ||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.26 | ) | (0.20 | ) | (0.18 | ) | ||||||||
| Total distributions | — | — | (0.26 | ) | (0.20 | ) | (0.18 | ) | ||||||||
| Net Asset Value, End of Year | $ | 31.30 | $ | 34.08 | $ | 34.28 | $ | 23.93 | $ | 19.79 | ||||||
| Total return | (8.16 | )% | (0.61 | )% | 44.40 | % | 21.99 | % | (14.13 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 302,130 | $ | 346,273 | $ | 333,682 | $ | 192,478 | $ | 134,309 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.66 | % | 1.63 | % | 1.67 | % | 1.73 | % | 1.73 | % | ||||||
After expense reimbursement(4) | 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.94 | )% | (1.01 | )% | (0.55 | )% | 0.13 | % | 0.02 | % | ||||||
After expense reimbursement(4) | (0.72 | )% | (0.82 | )% | (0.32 | )% | 0.42 | % | 0.31 | % | ||||||
Portfolio turnover rate(5) | 2 | % | 7 | % | 4 | % | 6 | % | 58 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Paradigm Portfolio. |
The accompanying notes are an integral part of these financial statements.
73
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Medical Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 30.67 | $ | 26.38 | $ | 17.82 | $ | 18.75 | $ | 19.48 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | 0.08 | 0.13 | (0.00 | )(3) | 0.33 | 0.18 | ||||||||||
| Net realized and unrealized gain on investments | 1.96 | 4.21 | 8.77 | 1.32 | 0.82 | |||||||||||
| Total from investment operations | 2.04 | 4.34 | 8.77 | 1.65 | 1.00 | |||||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.12 | ) | — | (0.06 | ) | (0.36 | ) | (0.25 | ) | |||||||
| From net realized gains | (1.97 | ) | (0.05 | ) | (0.15 | ) | (2.22 | ) | (1.48 | ) | ||||||
| Total distributions | (2.09 | ) | (0.05 | ) | (0.21 | ) | (2.58 | ) | (1.73 | ) | ||||||
| Net Asset Value, End of Year | $ | 30.62 | $ | 30.67 | $ | 26.38 | $ | 17.82 | $ | 18.75 | ||||||
| Total return | 6.59 | % | 16.44 | % | 49.25 | % | 8.86 | % | 5.11 | % | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 22,257 | $ | 21,876 | $ | 20,489 | $ | 14,254 | $ | 16,376 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.99 | % | 2.02 | % | 2.09 | % | 2.22 | % | 2.02 | % | ||||||
After expense reimbursement(4) | 1.39 | % | 1.39 | % | 1.39 | % | 1.39 | % | 1.39 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.35 | )% | (0.17 | )% | (0.70 | )% | 0.83 | % | 0.24 | % | ||||||
After expense reimbursement(4) | 0.25 | % | 0.46 | % | 0.00 | % | 1.66 | % | 0.87 | % | ||||||
Portfolio turnover rate(5) | 12 | % | 3 | % | 12 | % | 0 | % | 5 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Medical Portfolio. |
The accompanying notes are an integral part of these financial statements.
74
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Medical Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 29.71 | $ | 25.62 | $ | 17.33 | $ | 18.29 | $ | 19.06 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | 0.00 | (3) | 0.06 | (0.06 | ) | 0.27 | 0.12 | |||||||||
| Net realized and unrealized gain on investments | 1.90 | 4.08 | 8.52 | 1.29 | 0.80 | |||||||||||
| Total from investment operations | 1.90 | 4.14 | 8.46 | 1.56 | 0.92 | |||||||||||
| Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.01 | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.07 | ) | — | (0.03 | ) | (0.30 | ) | (0.21 | ) | |||||||
| From net realized gains | (1.97 | ) | (0.05 | ) | (0.15 | ) | (2.22 | ) | (1.48 | ) | ||||||
| Total distributions | (2.04 | ) | (0.05 | ) | (0.18 | ) | (2.52 | ) | (1.69 | ) | ||||||
| Net Asset Value, End of Year | $ | 29.57 | $ | 29.71 | $ | 25.62 | $ | 17.33 | $ | 18.29 | ||||||
Total return(4) | 6.34 | % | 16.15 | % | 48.90 | % | 8.60 | % | 4.79 | % | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 6,241 | $ | 4,578 | $ | 3,746 | $ | 2,583 | $ | 3,240 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.24 | % | 2.27 | % | 2.34 | % | 2.47 | % | 2.27 | % | ||||||
After expense reimbursement(5) | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.60 | )% | (0.42 | )% | (0.95 | )% | 0.58 | % | (0.01 | )% | ||||||
After expense reimbursement(5) | 0.00 | % | 0.21 | % | (0.25 | )% | 1.41 | % | 0.62 | % | ||||||
Portfolio turnover rate(6) | 12 | % | 3 | % | 12 | % | 0 | % | 5 | % | ||||||
| (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) | Portfolio turnover of The Medical Portfolio. |
The accompanying notes are an integral part of these financial statements.
75
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Medical Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 29.15 | $ | 25.27 | $ | 17.19 | $ | 18.15 | $ | 18.90 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.16 | ) | (0.08 | ) | (0.16 | ) | 0.17 | 0.02 | ||||||||
| Net realized and unrealized gain on investments | 1.87 | 4.01 | 8.42 | 1.29 | 0.80 | |||||||||||
| Total from investment operations | 1.71 | 3.93 | 8.26 | 1.46 | 0.82 | |||||||||||
| Redemption Fees | — | — | — | — | 0.00 | (3) | ||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.07 | ) | — | (0.03 | ) | (0.20 | ) | (0.09 | ) | |||||||
| From net realized gains | (1.97 | ) | (0.05 | ) | (0.15 | ) | (2.22 | ) | (1.48 | ) | ||||||
| Total distributions | (2.04 | ) | (0.05 | ) | (0.18 | ) | (2.42 | ) | (1.57 | ) | ||||||
| Net Asset Value, End of Year | $ | 28.82 | $ | 29.15 | $ | 25.27 | $ | 17.19 | $ | 18.15 | ||||||
| Total return | 5.81 | % | 15.54 | % | 48.08 | % | 8.08 | % | 4.32 | % | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 608 | $ | 631 | $ | 531 | $ | 450 | $ | 580 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.74 | % | 2.77 | % | 2.84 | % | 2.97 | % | 2.77 | % | ||||||
After expense reimbursement(4) | 2.14 | % | 2.14 | % | 2.14 | % | 2.14 | % | 2.14 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.10 | )% | (0.92 | )% | (1.45 | )% | 0.08 | % | (0.51 | )% | ||||||
After expense reimbursement(4) | (0.50 | )% | (0.29 | )% | (0.75 | )% | 0.91 | % | 0.12 | % | ||||||
Portfolio turnover rate(5) | 12 | % | 3 | % | 12 | % | 0 | % | 5 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Medical Portfolio. |
The accompanying notes are an integral part of these financial statements.
76
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Small Cap Opportunities Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 37.21 | $ | 40.12 | $ | 25.17 | $ | 19.85 | $ | 23.32 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.35 | ) | (0.36 | ) | (0.10 | ) | 0.01 | (0.04 | ) | |||||||
| Net realized and unrealized gain (loss) on investments | (4.22 | ) | (2.56 | ) | 15.05 | 5.31 | (3.15 | ) | ||||||||
| Total from investment operations | (4.57 | ) | (2.92 | ) | 14.95 | 5.32 | (3.19 | ) | ||||||||
| Redemption Fees | 0.00 | (3) | 0.01 | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | — | (0.28 | ) | ||||||||||
| Total distributions | — | — | — | — | (0.28 | ) | ||||||||||
| Net Asset Value, End of Year | $ | 32.64 | $ | 37.21 | $ | 40.12 | $ | 25.17 | $ | 19.85 | ||||||
| Total return | (12.26 | )% | (7.28 | )% | 59.40 | % | 26.74 | % | (13.65 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 145,032 | $ | 251,110 | $ | 277,816 | $ | 63,947 | $ | 67,798 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.73 | % | 1.71 | % | 1.73 | % | 1.96 | % | 1.90 | % | ||||||
After expense reimbursement(4) | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.03 | )% | (0.96 | )% | (0.38 | )% | (0.25 | )% | (0.44 | )% | ||||||
After expense reimbursement(4) | (0.94 | )% | (0.89 | )% | (0.29 | )% | 0.07 | % | (0.18 | )% | ||||||
Portfolio turnover rate(5) | 2 | % | 19 | % | 6 | % | 22 | % | 47 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Small Cap Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
77
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Small Cap Opportunities Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 36.43 | $ | 39.39 | $ | 24.77 | $ | 19.59 | $ | 22.98 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.43 | ) | (0.45 | ) | (0.18 | ) | (0.04 | ) | (0.10 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (4.12 | ) | (2.51 | ) | 14.79 | 5.22 | (3.08 | ) | ||||||||
| Total from investment operations | (4.55 | ) | (2.96 | ) | 14.61 | 5.18 | (3.18 | ) | ||||||||
| Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.01 | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | — | (0.21 | ) | ||||||||||
| Total distributions | — | — | — | — | (0.21 | ) | ||||||||||
Net Asset Value, End of Year | $ | 31.88 | $ | 36.43 | $ | 39.39 | $ | 24.77 | $ | 19.59 | ||||||
Total return(4) | (12.47 | )% | (7.54 | )% | 59.02 | % | 26.44 | % | (13.85 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 14,857 | $ | 25,591 | $ | 21,871 | $ | 7,558 | $ | 7,250 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.98 | % | 1.96 | % | 1.98 | % | 2.21 | % | 2.15 | % | ||||||
After expense reimbursement(5) | 1.89 | % | 1.89 | % | 1.89 | % | 1.89 | % | 1.89 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.28 | )% | (1.21 | )% | (0.63 | )% | (0.50 | )% | (0.69 | )% | ||||||
After expense reimbursement(5) | (1.19 | )% | (1.14 | )% | (0.54 | )% | (0.18 | )% | (0.43 | )% | ||||||
Portfolio turnover rate(6) | 2 | % | 19 | % | 6 | % | 22 | % | 47 | % | ||||||
| (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) | Portfolio turnover of The Small Cap Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
78
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Small Cap Opportunities Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 35.47 | $ | 38.53 | $ | 24.35 | $ | 19.36 | $ | 22.68 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.59 | ) | (0.63 | ) | (0.34 | ) | (0.15 | ) | (0.20 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (4.00 | ) | (2.44 | ) | 14.51 | 5.14 | (3.04 | ) | ||||||||
| Total from investment operations | (4.59 | ) | (3.07 | ) | 14.17 | 4.99 | (3.24 | ) | ||||||||
| Redemption Fees | — | 0.01 | 0.01 | — | — | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | — | (0.08 | ) | ||||||||||
| Total distributions | — | — | — | — | (0.08 | ) | ||||||||||
| Net Asset Value, End of Year | $ | 30.88 | $ | 35.47 | $ | 38.53 | $ | 24.35 | $ | 19.36 | ||||||
| Total return | (12.92 | )% | (7.97 | )% | 58.23 | % | 25.77 | % | (14.29 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 8,840 | $ | 12,928 | $ | 7,178 | $ | 2,536 | $ | 2,440 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.48 | % | 2.46 | % | 2.48 | % | 2.71 | % | 2.65 | % | ||||||
After expense reimbursement(3) | 2.39 | % | 2.39 | % | 2.39 | % | 2.39 | % | 2.39 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.78 | )% | (1.71 | )% | (1.13 | )% | (1.00 | )% | (1.19 | )% | ||||||
After expense reimbursement(3) | (1.69 | )% | (1.64 | )% | (1.04 | )% | (0.68 | )% | (0.93 | )% | ||||||
Portfolio turnover rate(4) | 2 | % | 19 | % | 6 | % | 22 | % | 47 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (4) | Portfolio turnover of The Small Cap Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
79
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Small Cap Opportunities Fund | ||||||||||||||||
| Institutional 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 37.57 | $ | 40.44 | $ | 25.32 | $ | 19.93 | $ | 23.45 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.28 | ) | (0.28 | ) | (0.03 | ) | 0.06 | 0.00 | (3) | |||||||
| Net realized and unrealized gain (loss) on investments | (4.26 | ) | (2.59 | ) | 15.15 | 5.33 | (3.17 | ) | ||||||||
| Total from investment operations | (4.54 | ) | (2.87 | ) | 15.12 | 5.39 | (3.17 | ) | ||||||||
| Redemption Fees | 0.00 | (3) | 0.00 | (3) | — | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | — | (0.35 | ) | ||||||||||
| Total distributions | — | — | — | — | (0.35 | ) | ||||||||||
| Net Asset Value, End of Year | $ | 33.03 | $ | 37.57 | $ | 40.44 | $ | 25.32 | $ | 19.93 | ||||||
| Total return | (12.06 | )% | (7.12 | )% | 59.72 | % | 27.04 | % | (13.51 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 51,258 | $ | 63,392 | $ | 41,032 | $ | 7,482 | $ | 5,498 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.68 | % | 1.66 | % | 1.68 | % | 1.91 | % | 1.85 | % | ||||||
After expense reimbursement(4) | 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.98 | )% | (0.91 | )% | (0.33 | )% | (0.20 | )% | (0.39 | )% | ||||||
After expense reimbursement(4) | (0.74 | )% | (0.69 | )% | (0.09 | )% | 0.27 | % | 0.02 | % | ||||||
Portfolio turnover rate(5) | 2 | % | 19 | % | 6 | % | 22 | % | 47 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Small Cap Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
80
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Market Opportunities Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 16.68 | $ | 17.66 | $ | 12.08 | $ | 10.45 | $ | 11.46 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.15 | ) | (0.10 | ) | 0.00 | (3) | 0.03 | 0.01 | ||||||||
| Net realized and unrealized gain (loss) on investments | (1.37 | ) | (0.88 | ) | 5.65 | 1.80 | (0.91 | ) | ||||||||
| Total from investment operations | (1.52 | ) | (0.98 | ) | 5.65 | 1.83 | (0.90 | ) | ||||||||
| Redemption Fees | — | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.07 | ) | (0.20 | ) | (0.11 | ) | ||||||||
| Total distributions | — | — | (0.07 | ) | (0.20 | ) | (0.11 | ) | ||||||||
| Net Asset Value, End of Year | $ | 15.16 | $ | 16.68 | $ | 17.66 | $ | 12.08 | $ | 10.45 | ||||||
| Total return | (9.11 | )% | (5.55 | )% | 46.74 | % | 17.52 | % | (7.85 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 31,230 | $ | 37,318 | $ | 47,466 | $ | 32,929 | $ | 30,191 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.90 | % | 1.86 | % | 1.88 | % | 1.97 | % | 1.93 | % | ||||||
After expense reimbursement(4) | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | 1.64 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.17 | )% | (0.77 | )% | (0.21 | )% | (0.10 | )% | (0.20 | )% | ||||||
After expense reimbursement(4) | (0.91 | )% | (0.55 | )% | 0.03 | % | 0.23 | % | 0.09 | % | ||||||
Portfolio turnover rate(5) | 2 | % | 18 | % | 21 | % | 26 | % | 14 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Market Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
81
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Market Opportunities Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | �� | |||||||||||||||
| Net Asset Value, Beginning of Year | $ | 16.59 | $ | 17.60 | $ | 12.07 | $ | 10.43 | $ | 11.43 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.19 | ) | (0.14 | ) | (0.03 | ) | 0.00 | (3) | (0.02 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (1.36 | ) | (0.87 | ) | 5.63 | 1.80 | (0.90 | ) | ||||||||
| Total from investment operations | (1.55 | ) | (1.01 | ) | 5.60 | 1.80 | (0.92 | ) | ||||||||
| Redemption Fees | 0.00 | (3) | — | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.07 | ) | (0.16 | ) | (0.08 | ) | ||||||||
| Total distributions | — | — | (0.07 | ) | (0.16 | ) | (0.08 | ) | ||||||||
| Net Asset Value, End of Year | $ | 15.04 | $ | 16.59 | $ | 17.60 | $ | 12.07 | $ | 10.43 | ||||||
Total return(4) | (9.34 | )% | (5.74 | )% | 46.36 | % | 17.26 | % | (8.08 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 4,502 | $ | 8,817 | $ | 11,742 | $ | 6,518 | $ | 8,600 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.15 | % | 2.11 | % | 2.13 | % | 2.22 | % | 2.18 | % | ||||||
After expense reimbursement(5) | 1.89 | % | 1.89 | % | 1.89 | % | 1.89 | % | 1.89 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.42 | )% | (1.02 | )% | (0.46 | )% | (0.35 | )% | (0.45 | )% | ||||||
After expense reimbursement(5) | (1.16 | )% | (0.80 | )% | (0.22 | )% | (0.02 | )% | (0.16 | )% | ||||||
Portfolio turnover rate(6) | 2 | % | 18 | % | 21 | % | 26 | % | 14 | % | ||||||
| (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) | Portfolio turnover of The Market Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
82
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Market Opportunities Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 16.24 | $ | 17.32 | $ | 11.94 | $ | 10.32 | $ | 11.30 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment loss(2) | (0.27 | ) | (0.22 | ) | (0.11 | ) | (0.06 | ) | (0.08 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (1.32 | ) | (0.86 | ) | 5.56 | 1.78 | (0.88 | ) | ||||||||
| Total from investment operations | (1.59 | ) | (1.08 | ) | 5.45 | 1.72 | (0.96 | ) | ||||||||
| Redemption Fees | — | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | — | ||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.07 | ) | (0.10 | ) | (0.02 | ) | ||||||||
| Total distributions | — | — | (0.07 | ) | (0.10 | ) | (0.02 | ) | ||||||||
| Net Asset Value, End of Year | $ | 14.65 | $ | 16.24 | $ | 17.32 | $ | 11.94 | $ | 10.32 | ||||||
| Total return | (9.79 | )% | (6.24 | )% | 45.61 | % | 16.70 | % | (8.51 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 4,079 | $ | 5,109 | $ | 5,525 | $ | 3,932 | $ | 4,233 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.65 | % | 2.61 | % | 2.63 | % | 2.72 | % | 2.68 | % | ||||||
After expense reimbursement(4) | 2.39 | % | 2.39 | % | 2.39 | % | 2.39 | % | 2.39 | % | ||||||
| Ratio of net investment loss to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.92 | )% | (1.52 | )% | (0.96 | )% | (0.85 | )% | (0.95 | )% | ||||||
After expense reimbursement(4) | (1.66 | )% | (1.30 | )% | (0.72 | )% | (0.52 | )% | (0.66 | )% | ||||||
Portfolio turnover rate(5) | 2 | % | 18 | % | 21 | % | 26 | % | 14 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (5) | Portfolio turnover of The Market Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
83
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Market Opportunities Fund | ||||||||||||||||
| Institutional 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 16.80 | $ | 17.74 | $ | 12.10 | $ | 10.46 | $ | 11.48 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | (0.12 | ) | (0.06 | ) | 0.03 | 0.05 | 0.03 | |||||||||
| Net realized and unrealized gain (loss) on investments | (1.39 | ) | (0.88 | ) | 5.67 | 1.81 | (0.92 | ) | ||||||||
| Total from investment operations | (1.51 | ) | (0.94 | ) | 5.70 | 1.86 | (0.89 | ) | ||||||||
| Redemption Fees | — | — | 0.01 | — | — | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | (0.07 | ) | (0.22 | ) | (0.13 | ) | ||||||||
| Total distributions | — | — | (0.07 | ) | (0.22 | ) | (0.13 | ) | ||||||||
| Net Asset Value, End of Year | $ | 15.29 | $ | 16.80 | $ | 17.74 | $ | 12.10 | $ | 10.46 | ||||||
| Total return | (8.93 | )% | (5.36 | )% | 47.15 | % | 17.83 | % | (7.71 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 2,355 | $ | 3,108 | $ | 1,809 | $ | 229 | $ | 186 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.85 | % | 1.81 | % | 1.83 | % | 1.92 | % | 1.88 | % | ||||||
After expense reimbursement(3) | 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.12 | )% | (0.72 | )% | (0.16 | )% | (0.05 | )% | (0.15 | )% | ||||||
After expense reimbursement(3) | (0.71 | )% | (0.35 | )% | 0.23 | % | 0.43 | % | 0.29 | % | ||||||
Portfolio turnover rate(4) | 2 | % | 18 | % | 21 | % | 26 | % | 14 | % | ||||||
| (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) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (4) | Portfolio turnover of The Market Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
84
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Alternative Income Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012(1) | 2011(1) | ||||||||||||
PER SHARE DATA:(2) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 89.06 | $ | 87.88 | $ | 83.31 | $ | 77.90 | $ | 83.82 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(3) | 0.01 | (0.12 | ) | (0.21 | ) | 1.53 | 1.03 | |||||||||
| Net realized and unrealized gain (loss) on investments | 2.56 | 1.30 | 4.78 | 6.09 | (5.13 | ) | ||||||||||
| Total from investment operations | 2.57 | 1.18 | 4.57 | 7.62 | (4.10 | ) | ||||||||||
| Redemption Fees | 0.05 | 0.00 | (4) | 0.00 | (4) | 0.00 | (4) | 0.00 | (4) | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | (2.21 | ) | (1.82 | ) | |||||||||
| Total distributions | — | — | — | (2.21 | ) | (1.82 | ) | |||||||||
| Net Asset Value, End of Year | $ | 91.68 | $ | 89.06 | $ | 87.88 | $ | 83.31 | $ | 77.90 | ||||||
| Total return | 2.94 | % | 1.50 | % | 5.22 | % | 9.90 | % | (4.88 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 4,570 | $ | 8,202 | $ | 11,848 | $ | 4,699 | $ | 5,613 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.74 | % | 1.80 | % | 2.23 | % | 2.55 | % | 2.29 | % | ||||||
After expense reimbursement(5) | 0.95 | % | 0.95 | % | 0.95 | % | 1.64 | % | 1.64 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.78 | )% | (0.99 | )% | (1.52 | )% | 0.93 | % | 0.59 | % | ||||||
After expense reimbursement(5) | 0.01 | % | (0.14 | )% | (0.24 | )% | 1.84 | % | 1.24 | % | ||||||
Portfolio turnover rate(6) | 6 | % | 17 | % | 19 | % | 56 | % | 69 | % | ||||||
| (1) | Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013. |
| (2) | Information presented relates to a share of capital stock outstanding for each period. |
| (3) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (4) | Amount calculated is less than $0.005. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | Portfolio turnover of The Alternative Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
85
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Alternative Income Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012(1) | 2011(1) | ||||||||||||
PER SHARE DATA:(2) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 88.69 | $ | 87.73 | $ | 83.38 | $ | 77.76 | $ | 83.52 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(3) | (0.22 | ) | (0.34 | ) | (0.43 | ) | 1.31 | 0.82 | ||||||||
| Net realized and unrealized gain (loss) on investments | 2.55 | 1.30 | 4.77 | 6.09 | (5.13 | ) | ||||||||||
| Total from investment operations | 2.33 | 0.96 | 4.34 | 7.40 | (4.31 | ) | ||||||||||
| Redemption Fees | — | 0.00 | (4) | 0.01 | 0.00 | (4) | 0.01 | |||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | (1.78 | ) | (1.46 | ) | |||||||||
| Total distributions | — | — | — | (1.78 | ) | (1.46 | ) | |||||||||
| Net Asset Value, End of Year | $ | 91.02 | $ | 88.69 | $ | 87.73 | $ | 83.38 | $ | 77.76 | ||||||
Total return(5) | 2.63 | % | 1.24 | % | 4.91 | % | 9.61 | % | (5.08 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 1,565 | $ | 1,554 | $ | 2,898 | $ | 2,597 | $ | 4,559 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.99 | % | 2.05 | % | 2.48 | % | 2.80 | % | 2.54 | % | ||||||
After expense reimbursement(6) | 1.20 | % | 1.20 | % | 1.20 | % | 1.89 | % | 1.89 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.03 | )% | (1.24 | )% | (1.77 | )% | 0.68 | % | 0.34 | % | ||||||
After expense reimbursement(6) | (0.24 | )% | (0.39 | )% | (0.49 | )% | 1.59 | % | 0.99 | % | ||||||
Portfolio turnover rate(7) | 6 | % | 17 | % | 19 | % | 56 | % | 69 | % | ||||||
| (1) | Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013. |
| (2) | Information presented relates to a share of capital stock outstanding for each period. |
| (3) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (4) | Amount calculated is less than $0.005. |
| (5) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | Portfolio turnover of The Alternative Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
86
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Alternative Income Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012(1) | 2011(1) | ||||||||||||
PER SHARE DATA:(2) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 86.60 | $ | 86.10 | $ | 82.26 | $ | 76.75 | $ | 82.53 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(3) | (0.65 | ) | (0.77 | ) | (0.84 | ) | 0.89 | 0.40 | ||||||||
| Net realized and unrealized gain (loss) on investments | 2.48 | 1.27 | 4.68 | 6.00 | (5.03 | ) | ||||||||||
| Total from investment operations | 1.83 | 0.50 | 3.84 | 6.89 | (4.63 | ) | ||||||||||
| Redemption Fees | 0.03 | — | — | 0.00 | (4) | 0.01 | ||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | — | — | — | (1.38 | ) | (1.16 | ) | |||||||||
| Total distributions | — | — | — | (1.38 | ) | (1.16 | ) | |||||||||
| Net Asset Value, End of Year | $ | 88.46 | $ | 86.60 | $ | 86.10 | $ | 82.26 | $ | 76.75 | ||||||
| Total return | 2.15 | % | 0.74 | % | 4.46 | % | 8.96 | % | (5.51 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 1,356 | $ | 1,506 | $ | 1,862 | $ | 1,763 | $ | 2,316 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.49 | % | 2.55 | % | 2.98 | % | 3.30 | % | 3.04 | % | ||||||
After expense reimbursement(5) | 1.70 | % | 1.70 | % | 1.70 | % | 2.39 | % | 2.39 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (1.53 | )% | (1.74 | )% | (2.27 | )% | 0.18 | % | (0.16 | )% | ||||||
After expense reimbursement(5) | (0.74 | )% | (0.89 | )% | (0.99 | )% | 1.09 | % | 0.49 | % | ||||||
Portfolio turnover rate(6) | 6 | % | 17 | % | 19 | % | 56 | % | 69 | % | ||||||
| (1) | Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013. |
| (2) | Information presented relates to a share of capital stock outstanding for each period. |
| (3) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (4) | Amount calculated is less than $0.005. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | Portfolio turnover of The Alternative Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
87
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Alternative Income Fund | ||||||||||||||||
| Institutional 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012(1) | 2011(1) | ||||||||||||
PER SHARE DATA:(2) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 90.14 | $ | 88.76 | $ | 84.00 | $ | 78.49 | $ | 84.22 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(3) | 0.19 | 0.06 | (0.04 | ) | 1.72 | 1.21 | ||||||||||
| Net realized and unrealized gain (loss) on investments | 2.60 | 1.32 | 4.80 | 6.16 | (5.13 | ) | ||||||||||
| Total from investment operations | 2.79 | 1.38 | 4.76 | 7.88 | (3.92 | ) | ||||||||||
| Redemption Fees | 0.00 | (4) | 0.00 | (4) | — | 0.01 | 0.17 | |||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.09 | ) | — | — | (2.38 | ) | (1.98 | ) | ||||||||
| Total distributions | (0.09 | ) | — | — | (2.38 | ) | (1.98 | ) | ||||||||
Net Asset Value, End of Year | $ | 92.84 | $ | 90.14 | $ | 88.76 | $ | 84.00 | $ | 78.49 | ||||||
| Total return | 3.09 | % | 1.72 | % | 5.39 | % | 10.17 | % | (4.43 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 20,255 | $ | 26,874 | $ | 6,854 | $ | 1,629 | $ | 798 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.69 | % | 1.75 | % | 2.18 | % | 2.50 | % | 2.24 | % | ||||||
After expense reimbursement(5) | 0.75 | % | 0.75 | % | 0.75 | % | 1.44 | % | 1.44 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
| Before expense reimbursement | (0.73 | )% | (0.94 | )% | (1.47 | )% | 0.98 | % | 0.64 | % | ||||||
After expense reimbursement(5) | 0.21 | % | 0.06 | % | (0.04 | )% | 2.04 | % | 1.44 | % | ||||||
Portfolio turnover rate(6) | 6 | % | 17 | % | 19 | % | 56 | % | 69 | % | ||||||
| (1) | Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013. |
| (2) | Information presented relates to a share of capital stock outstanding for each period. |
| (3) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
| (4) | Amount calculated is less than $0.005. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | Portfolio turnover of The Alternative Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
88
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Multi-Disciplinary Income Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 10.79 | $ | 11.02 | $ | 11.08 | $ | 10.09 | $ | 10.47 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income(2) | 0.37 | 0.33 | 0.20 | 0.34 | 0.83 | |||||||||||
| Net realized and unrealized gain (loss) on investments | (0.60 | ) | (0.06 | ) | 0.28 | 1.20 | (0.80 | ) | ||||||||
| Total from investment operations | (0.23 | ) | 0.27 | 0.48 | 1.54 | 0.03 | ||||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.23 | ) | (0.29 | ) | (0.28 | ) | (0.43 | ) | (0.36 | ) | ||||||
| From net realized gains | (0.01 | ) | (0.21 | ) | (0.26 | ) | (0.12 | ) | (0.05 | ) | ||||||
| Total distributions | (0.24 | ) | (0.50 | ) | (0.54 | ) | (0.55 | ) | (0.41 | ) | ||||||
Net Asset Value, End of Year | $ | 10.32 | $ | 10.79 | $ | 11.02 | $ | 11.08 | $ | 10.09 | ||||||
| Total return | (2.17 | )% | 2.46 | % | 4.28 | % | 15.38 | % | 0.24 | % | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 6,108 | $ | 10,105 | $ | 19,553 | $ | 19,566 | $ | 13,389 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.79 | % | 1.79 | % | 1.83 | %(4) | 2.00 | % | 2.38 | % | ||||||
After expense reimbursement(5) | 1.49 | % | 1.49 | % | 1.50 | %(4) | 1.49 | % | 1.49 | % | ||||||
| Ratio of net investment income to average net assets: | ||||||||||||||||
| Before expense reimbursement | 3.08 | % | 2.63 | % | 1.41% | (6) | 2.65 | % | 7.09 | % | ||||||
After expense reimbursement(5) | 3.38 | % | 2.93 | % | 1.74% | (6) | 3.16 | % | 7.98 | % | ||||||
Portfolio turnover rate(7) | 10 | % | 35 | % | 54 | % | 41 | % | 74 | % | ||||||
| (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 ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 1.82% before expense reimbursement and 1.49% after expense reimbursement. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | The ratio of net investment income includes borrowing expense on securities sold short. |
| (7) | Portfolio turnover of The Multi-Disciplinary Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
89
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Multi-Disciplinary Income Fund | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 10.75 | $ | 10.98 | $ | 11.03 | $ | 10.05 | $ | 10.44 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income(2) | 0.34 | 0.30 | 0.17 | 0.31 | 0.78 | |||||||||||
| Net realized and unrealized gain (loss) on investments | (0.60 | ) | (0.06 | ) | 0.29 | 1.20 | (0.78 | ) | ||||||||
| Total from investment operations | (0.26 | ) | 0.24 | 0.46 | 1.51 | — | ||||||||||
| Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | — | |||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.21 | ) | (0.26 | ) | (0.25 | ) | (0.41 | ) | (0.34 | ) | ||||||
| From net realized gains | (0.01 | ) | (0.21 | ) | (0.26 | ) | (0.12 | ) | (0.05 | ) | ||||||
| Total distributions | (0.22 | ) | (0.47 | ) | (0.51 | ) | (0.53 | ) | (0.39 | ) | ||||||
| Net Asset Value, End of Year | $ | 10.27 | $ | 10.75 | $ | 10.98 | $ | 11.03 | $ | 10.05 | ||||||
Total return(4) | (2.46 | )% | 2.17 | % | 4.15 | % | 15.12 | % | (0.01 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 8,754 | $ | 12,281 | $ | 36,170 | $ | 25,764 | $ | 4,726 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.04 | % | 2.04 | % | 2.08 | %(5) | 2.25 | % | 2.63 | % | ||||||
After expense reimbursement(6) | 1.74 | % | 1.74 | % | 1.75 | %(5) | 1.74 | % | 1.74 | % | ||||||
| Ratio of net investment income to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.83 | % | 2.38 | % | 1.16 | %(7) | 2.40 | % | 6.84 | % | ||||||
After expense reimbursement(6) | 3.13 | % | 2.68 | % | 1.49 | %(7) | 2.91 | % | 7.73 | % | ||||||
Portfolio turnover rate(8) | 10 | % | 35 | % | 54 | % | 41 | % | 74 | % | ||||||
| (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) | The ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 2.07% before expense reimbursement and 1.74% after expense reimbursement. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | The ratio of net investment income includes borrowing expense on securities sold short. |
| (8) | Portfolio turnover of The Multi-Disciplinary Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
90
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Multi-Disciplinary Income Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 10.65 | $ | 10.90 | $ | 10.96 | $ | 10.00 | $ | 10.40 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income(2) | 0.28 | 0.24 | 0.11 | 0.26 | 0.74 | |||||||||||
| Net realized and unrealized gain (loss) on investments | (0.58 | ) | (0.06 | ) | 0.29 | 1.18 | (0.78 | ) | ||||||||
| Total from investment operations | (0.30 | ) | 0.18 | 0.40 | 1.44 | (0.04 | ) | |||||||||
| Redemption Fees | — | 0.00 | (3) | — | — | — | ||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.16 | ) | (0.22 | ) | (0.20 | ) | (0.36 | ) | (0.31 | ) | ||||||
| From net realized gains | (0.01 | ) | (0.21 | ) | (0.26 | ) | (0.12 | ) | (0.05 | ) | ||||||
| Total distributions | (0.17 | ) | (0.43 | ) | (0.46 | ) | (0.48 | ) | (0.36 | ) | ||||||
| Net Asset Value, End of Year | $ | 10.18 | $ | 10.65 | $ | 10.90 | $ | 10.96 | $ | 10.00 | ||||||
| Total return | (2.84 | )% | 1.61 | % | 3.59 | % | 14.48 | % | (0.49 | )% | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 9,266 | $ | 10,403 | $ | 11,209 | $ | 7,485 | $ | 1,645 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.54 | % | 2.54 | % | 2.58 | %(4) | 2.75 | % | 3.13 | % | ||||||
After expense reimbursement(5) | 2.24 | % | 2.24 | % | 2.25 | %(4) | 2.24 | % | 2.24 | % | ||||||
| Ratio of net investment income to average net assets: | ||||||||||||||||
| Before expense reimbursement | 2.33 | % | 1.88 | % | 0.66 | %(6) | 1.90 | % | 6.34 | % | ||||||
After expense reimbursement(5) | 2.63 | % | 2.18 | % | 0.99 | %(6) | 2.41 | % | 7.23 | % | ||||||
Portfolio turnover rate(7) | 10 | % | 35 | % | 54 | % | 41 | % | 74 | % | ||||||
| (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 ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 2.57% before expense reimbursement and 2.24% after expense reimbursement. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | The ratio of net investment income includes borrowing expense on securities sold short. |
| (7) | Portfolio turnover of The Multi-Disciplinary Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
91
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS Financial Highlights — (Continued) |
| The Multi-Disciplinary Income Fund | ||||||||||||||||
| Institutional 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
| Net Asset Value, Beginning of Year | $ | 10.82 | $ | 11.06 | $ | 11.11 | $ | 10.12 | $ | 10.50 | ||||||
| Income from Investment Operations: | ||||||||||||||||
Net investment income(2) | 0.39 | 0.35 | 0.22 | 0.36 | 0.85 | |||||||||||
| Net realized and unrealized gain (loss) on investments | (0.59 | ) | (0.06 | ) | 0.29 | 1.20 | (0.80 | ) | ||||||||
| Total from investment operations | (0.20 | ) | 0.29 | 0.51 | 1.56 | 0.05 | ||||||||||
| Redemption Fees | 0.00 | (3) | — | — | — | — | ||||||||||
| Less Distributions: | ||||||||||||||||
| From net investment income | (0.27 | ) | (0.32 | ) | (0.30 | ) | (0.45 | ) | (0.38 | ) | ||||||
| From net realized gains | (0.01 | ) | (0.21 | ) | (0.26 | ) | (0.12 | ) | (0.05 | ) | ||||||
| Total distributions | (0.28 | ) | (0.53 | ) | (0.56 | ) | (0.57 | ) | (0.43 | ) | ||||||
| Net Asset Value, End of Year | $ | 10.34 | $ | 10.82 | $ | 11.06 | $ | 11.11 | $ | 10.12 | ||||||
| Total return | (1.96 | )% | 2.61 | % | 4.58 | % | 15.55 | % | 0.42 | % | ||||||
| SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
| Net assets, end of year (000's) | $ | 66,199 | $ | 102,590 | $ | 23,227 | $ | 6,576 | $ | 3,878 | ||||||
| Ratio of operating expenses to average net assets: | ||||||||||||||||
| Before expense reimbursement | 1.74 | % | 1.74 | % | 1.78 | %(4) | 1.95 | % | 2.33 | % | ||||||
After expense reimbursement(5) | 1.29 | % | 1.29 | % | 1.30 | %(4) | 1.29 | % | 1.29 | % | ||||||
| Ratio of net investment income to average net assets: | ||||||||||||||||
| Before expense reimbursement | 3.13 | % | 2.68 | % | 1.46 | %(6) | 2.70 | % | 7.14 | % | ||||||
After expense reimbursement(5) | 3.58 | % | 3.13 | % | 1.94 | %(6) | 3.36 | % | 8.18 | % | ||||||
Portfolio turnover rate(7) | 10 | % | 35 | % | 54 | % | 41 | % | 74 | % | ||||||
| (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 ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 1.77% before expense reimbursement and 1.29% after expense reimbursement. |
| (5) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (6) | The ratio of net investment income includes borrowing expense on securities sold short. |
| (7) | Portfolio turnover of The Multi-Disciplinary Income Portfolio. |
The accompanying notes are an integral part of these financial statements.
92
KINETICS MUTUAL FUNDS, INC. Report of Independent Registered Public Accounting Firm |
Board of Directors and Shareholders of
Kinetics Mutual Funds, Inc.
New York, NY
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 Alternative Income Fund and The Multi-Disciplinary Income Fund, each a series of shares of Kinetics Mutual Funds, Inc. (the "Funds"), as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and financial highlights for each of the five years in the period then ended. 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 each of the eight funds of the Kinetics Mutual Funds, Inc. as of December 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania
February 26, 2016
February 26, 2016
93
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 |
The Internet Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Information | $ | 50,959,355 | 40.4 | % | |||
| Retail Trade | 10,105,612 | 8.0 | % | ||||
| Management of Companies and Enterprises | 8,523,683 | 6.7 | % | ||||
| Finance and Insurance | 6,983,413 | 5.5 | % | ||||
| Manufacturing | 4,003,300 | 3.2 | % | ||||
| Administrative and Support and Waste Management and Remediation Services | 3,109,266 | 2.5 | % | ||||
| Arts, Entertainment, and Recreation | 1,444,716 | 1.1 | % | ||||
| Real Estate and Rental and Leasing | 376,200 | 0.3 | % | ||||
| Professional, Scientific, and Technical Services | 11,460 | 0.0 | % |
| * | Excludes Short-Term Investments |
94
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Global Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Country Allocation* | Value | Net Assets | |||||
| United States | $ | 2,186,457 | 32.5 | % | |||
| Canada | 1,886,825 | 28.0 | % | ||||
| France | 443,196 | 6.6 | % | ||||
| Cayman Islands | 330,000 | 4.9 | % | ||||
| United Kingdom | 66,320 | 1.0 | % | ||||
| Brazil | 26,067 | 0.4 | % | ||||
| Argentina | 23,027 | 0.3 | % | ||||
| Netherlands | 5,760 | 0.1 | % | ||||
| Spain | 4,792 | 0.1 | % | ||||
| Sweden | 3,703 | 0.0 | % | ||||
| Japan | 1,000 | 0.0 | % |
| * | Excludes Short-Term Investments |
95
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Paradigm Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Information | $ | 174,595,008 | 20.6 | % | |||
| Real Estate and Rental and Leasing | 119,975,060 | 14.1 | % | ||||
| Finance and Insurance | 103,848,371 | 12.2 | % | ||||
| Petroleum and Gas | 79,609,834 | 9.4 | % | ||||
| Management of Companies and Enterprises | 77,173,086 | 9.1 | % | ||||
| Retail Trade | 61,429,181 | 7.2 | % | ||||
| Manufacturing | 52,519,150 | 6.2 | % | ||||
| Arts, Entertainment, and Recreation | 38,547,707 | 4.6 | % | ||||
| Mining, Quarrying, and Oil and Gas Extraction | 23,059,942 | 2.7 | % | ||||
| Utilities | 2,221,526 | 0.3 | % | ||||
| Transportation and Warehousing | 60,696 | 0.0 | % |
| * | Excludes Short-Term Investments |
96
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Medical Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Manufacturing | $ | 24,845,999 | 85.3 | % | |||
| Professional, Scientific, and Technical Services | 2,365,218 | 8.1 | % | ||||
| Finance and Insurance | 6,274 | 0.0 | % |
| * | Excludes Short-Term Investments |
97
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Small Cap Opportunities Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Manufacturing | $ | 43,528,248 | 19.8 | % | |||
| Real Estate and Rental and Leasing | 34,644,661 | 15.7 | % | ||||
| Finance and Insurance | 26,961,607 | 12.3 | % | ||||
| Petroleum and Gas | 25,566,058 | 11.6 | % | ||||
| Management of Companies and Enterprises | 21,078,916 | 9.6 | % | ||||
| Information | 13,451,502 | 6.1 | % | ||||
| Retail Trade | 9,728,653 | 4.4 | % | ||||
| Arts, Entertainment, and Recreation | 7,506,135 | 3.4 | % | ||||
| Accommodation and Food Services | 4,426,350 | 2.0 | % | ||||
| Mining, Quarrying, and Oil and Gas Extraction | 3,666,373 | 1.7 | % | ||||
| Utilities | 2,754,885 | 1.3 | % | ||||
| Wholesale Trade | 750,026 | 0.3 | % |
| * | Excludes Short-Term Investments |
98
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Market Opportunities Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Finance and Insurance | $ | 16,779,148 | 39.8 | % | |||
| Real Estate and Rental and Leasing | 4,191,655 | 9.9 | % | ||||
| Petroleum and Gas | 3,940,692 | 9.4 | % | ||||
| Management of Companies and Enterprises | 3,486,574 | 8.3 | % | ||||
| Accommodation and Food Services | 1,352,400 | 3.2 | % | ||||
| Manufacturing | 44,704 | 0.1 | % | ||||
| Wholesale Trade | 30,720 | 0.1 | % | ||||
| Retail Trade | 7,183 | 0.0 | % | ||||
| Support Activities for Water Transportation | 7,126 | 0.0 | % | ||||
| Industrials | 6,637 | 0.0 | % | ||||
| Administrative and Support and Waste Management and Remediation Services | 6,034 | 0.0 | % | ||||
| Mining, Quarrying, and Oil and Gas Extraction | 1,242 | 0.0 | % |
| * | Excludes Short-Term Investments |
99
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Alternative Income Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Finance and Insurance | $ | 10,885,292 | 39.1 | % | |||
| Manufacturing | 6,532,998 | 23.5 | % | ||||
| Public Administration | 2,596,012 | 9.3 | % | ||||
| Retail Trade | 1,100,289 | 3.9 | % | ||||
| Mining, Quarrying, and Oil and Gas Extraction | 897,900 | 3.2 | % | ||||
| Information | 775,078 | 2.8 | % | ||||
| Utilities | 602,323 | 2.2 | % | ||||
| Wholesale Trade | 497,481 | 1.8 | % | ||||
| Professional, Scientific, and Technical Services | 429,504 | 1.5 | % | ||||
| Accommodation and Food Services | 399,340 | 1.4 | % | ||||
| Administrative and Support and Waste Management and | |||||||
| Remediation Services | 385,713 | 1.4 | % | ||||
| Transportation and Warehousing | 303,273 | 1.1 | % |
| * | Excludes Short-Term Investments & Written Options |
100
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Portfolio Assets December 31, 2015 — (Continued) |
The Multi-Disciplinary Income Portfolio
| Percentage | |||||||
| Market | of Total | ||||||
| Sector Allocation* | Value | Net Assets | |||||
| Information | $ | 19,073,799 | 21.1 | % | |||
| Real Estate and Rental and Leasing | 14,357,816 | 15.9 | % | ||||
| Manufacturing | 13,532,020 | 15.0 | % | ||||
| Finance and Insurance | 8,581,071 | 9.5 | % | ||||
| Construction | 8,472,278 | 9.4 | % | ||||
| Mining, Quarrying, and Oil and Gas Extraction | 6,669,710 | 7.4 | % | ||||
| Retail Trade | 6,653,625 | 7.3 | % | ||||
| Accommodation and Food Services | 4,347,307 | 4.8 | % | ||||
| Administrative and Support and Waste Management and Remediation Services | 4,049,790 | 4.5 | % | ||||
| Professional, Scientific, and Technical Services | 763,438 | 0.8 | % | ||||
| Health Care and Social Assistance | 510,375 | 0.6 | % | ||||
| Transportation and Warehousing | 474,375 | 0.5 | % | ||||
| Utilities | 305,925 | 0.3 | % | ||||
| Wholesale Trade | 278,125 | 0.3 | % |
| * | Excludes Short-Term Investments & Written Options |
101
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Internet Portfolio |
| Portfolio of Investments — December 31, 2015 |
| COMMON STOCKS — 67.64% | Shares | Value | |||||
| Administrative and Support Services — 2.46% | |||||||
| CreditRiskMonitor.com, Inc. | 780 | $ | 1,638 | ||||
| Ctrip.com International Limited — ADR*^ | 11,600 | 537,428 | |||||
| PayPal Holdings, Inc.* | 71,000 | 2,570,200 | |||||
| 3,109,266 | |||||||
| Broadcasting (except Internet) — 4.05% | |||||||
| The E.W. Scripps Company — Class A | 76,000 | 1,444,000 | |||||
| The Madison Square Garden Company — Class A* | 16,366 | 2,648,019 | |||||
| MSG Networks Inc. — Class A* | 49,100 | 1,021,280 | |||||
| 5,113,299 | |||||||
| Cable Distributor — 6.76% | |||||||
| Liberty Broadband Corporation — Series A* | 23,200 | 1,198,280 | |||||
| Liberty Broadband Corporation — Series C* | 57,200 | 2,966,392 | |||||
| Liberty Global plc — Series C* | 100,000 | 4,077,000 | |||||
| Liberty Global plc LiLAC — Series C*^ | 6,740 | 289,820 | |||||
| 8,531,492 | |||||||
| Credit Intermediation and Related Activities — 0.58% | |||||||
| LendingTree, Inc.*^ | 8,233 | 735,042 | |||||
| Data Processing, Hosting and Related Services — 0.33% | |||||||
| CoStar Group, Inc.*^ | 2,000 | 413,380 | |||||
| Data Processor — 3.90% | |||||||
| MasterCard, Inc. — Class A | 19,600 | 1,908,256 | |||||
| Verisk Analytics, Inc. — Class A* | 7,600 | 584,288 | |||||
| Visa, Inc. — Class A | 31,400 | 2,435,070 | |||||
| 4,927,614 | |||||||
| Defense — 3.17% | |||||||
| CACI International, Inc. — Class A* | 35,000 | 3,247,300 | |||||
| ManTech International Corporation — Class A | 25,000 | 756,000 | |||||
| 4,003,300 | |||||||
| E-Commerce — 6.40% | |||||||
| eBay, Inc.* | 72,000 | 1,978,560 | |||||
| Liberty Interactive Corporation — Class A* | 223,400 | 6,103,288 | |||||
| 8,081,848 |
The accompanying notes are an integral part of these financial statements.
102
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Internet Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Global Exchanges — 0.05% | |||||||
| JSE Limited | 8,000 | $ | 66,214 | ||||
| Holding Company — 0.85% | |||||||
| Icahn Enterprises LP | 17,444 | 1,069,317 | |||||
| Media — 15.82% | |||||||
| Liberty Media Corporation — Class A* | 99,000 | 3,885,750 | |||||
| Liberty Media Corporation — Class C* | 156,200 | 5,948,096 | |||||
| Liberty Ventures — Series A* | 144,000 | 6,495,840 | |||||
| Starz — Class A* | 97,000 | 3,249,500 | |||||
| Viacom Inc. — Class B | 9,600 | 395,136 | |||||
| 19,974,322 | |||||||
| Motor Vehicle and Parts Dealers — 0.20% | |||||||
| AutoNation, Inc.* | 4,200 | 250,572 | |||||
| Non-Store Retailers — 1.09% | |||||||
| Copart, Inc.* | 36,000 | 1,368,360 | |||||
| Overstock.com, Inc.* | 1,000 | 12,280 | |||||
| 1,380,640 | |||||||
| Other Information Services — 8.62% | |||||||
| Alphabet, Inc. — Class A* | 6,000 | 4,668,060 | |||||
| Alphabet, Inc. — Class C* | 6,000 | 4,553,280 | |||||
| Yahoo! Inc.* | 50,000 | 1,663,000 | |||||
| 10,884,340 | |||||||
| Performing Arts, Spectator Sports, and Related Industries — 1.15% | |||||||
| Live Nation Entertainment, Inc.* | 58,800 | 1,444,716 | |||||
| Professional, Scientific, and Technical Services — 0.01% | |||||||
| Monster Worldwide, Inc.* | 2,000 | 11,460 | |||||
| Publishing Industries (except Internet) — 0.19% | |||||||
| Journal Media Group Inc. | 19,375 | 232,888 | |||||
| Rental and Leasing Services — 0.20% | |||||||
| Comdisco Holding Company, Inc.* | 56,000 | 252,000 | |||||
| Satellite Telecommunications — 10.82% | |||||||
| DISH Network Corp. — Class A* | 108,400 | 6,198,312 | |||||
| EchoStar Corporation — Class A* | 190,600 | 7,454,366 | |||||
| 13,652,678 |
The accompanying notes are an integral part of these financial statements.
103
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Internet Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Securities, Commodity Contracts, and Other Financial Investments and | |||||||
| Related Activities — 0.99% | |||||||
| The Bitcoin Investment Trust* | 1,900 | $ | 119,700 | ||||
| MarketAxess Holdings, Inc. | 5,700 | 636,063 | |||||
| OTC Markets Group Inc. — Class A | 30,600 | 498,780 | |||||
| 1,254,543 | |||||||
| Telecommunications — 0.00% | |||||||
| ICTC Group Inc.* | 149 | 3,874 | |||||
| TOTAL COMMON STOCKS | |||||||
| (cost $38,773,094) | 85,392,805 | ||||||
| Principal | |||||||
| ESCROW NOTES — 0.00% | Amount | ||||||
| Special Purpose Entity — 0.00% | |||||||
| Adelphia Communications Corp. Preferred*+ | $ | 190,000 | — | ||||
| TOTAL ESCROW NOTES | |||||||
| (cost $0) | — | ||||||
| RIGHTS — 0.10% | Shares | ||||||
| Rental and Leasing Services — 0.10% | |||||||
| Comdisco Holding Company, Inc.*^# | 1,800,000 | 124,200 | |||||
| TOTAL RIGHTS | |||||||
| (cost $21,920) | 124,200 | ||||||
| SHORT-TERM INVESTMENTS — 20.40% | |||||||
| Money Market Funds — 20.40% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 6,440,000 | 6,440,000 | |||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 6,440,000 | 6,440,000 | |||||
Fidelity Institutional Tax-Exempt Portfolio — Class I, 0.01%b | 6,440,000 | 6,440,000 | |||||
First American Government Obligations Fund — Class Z, 0.10%b | 6,440,000 | 6,440,000 | |||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $25,760,000) | 25,760,000 |
The accompanying notes are an integral part of these financial statements.
104
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Internet Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| INVESTMENTS PURCHASED WITH THE CASH | |||||||
| PROCEEDS FROM SECURITIES LENDING — 0.53% | Shares | Value | |||||
| Money Market Funds — 0.53% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 669,576 | $ | 669,576 | ||||
| TOTAL INVESTMENTS PURCHASED WITH THE | |||||||
| CASH PROCEEDS FROM SECURITIES LENDING | |||||||
| (cost $669,576) | 669,576 | ||||||
| TOTAL INVESTMENTS — 88.67% | |||||||
| (cost $65,224,590) | $ | 111,946,581 |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $608,492 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
| + — | Security is considered illiquid and was fair valued. The aggregate value of such securities is $0 or 0.00% of net assets. |
| # — | Contingent value right (contingent upon profitability of company). |
b — | The rate quoted is the annualized seven-day yield as of December 31, 2015. |
| ADR — American Depository Receipt. | |
The accompanying notes are an integral part of these financial statements.
105
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Global Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| COMMON STOCKS — 73.02% | Shares | Value | |||||
| Asset Management — 10.36% | |||||||
| Brookfield Asset Management Inc. — Class A | 5,800 | $ | 182,874 | ||||
| JZ Capital Partners Limited | 10,000 | 56,462 | |||||
| Onex Corporation | 7,000 | 430,640 | |||||
| Partners Value Investments Inc.* | 1,200 | 27,370 | |||||
| 697,346 | |||||||
| Cable Distributor — 2.22% | |||||||
| Altice SA* | 400 | 5,760 | |||||
| Liberty Broadband Corporation — Series A* | 900 | 46,485 | |||||
| Liberty Broadband Corporation — Series C* | 1,800 | 93,348 | |||||
| Numericable Group SA | 100 | 3,640 | |||||
| 149,233 | |||||||
| Crop Production — 0.34% | |||||||
| Cresud S.A.C.I.F.y A. — ADR* | 1,785 | 23,027 | |||||
| Global Exchanges — 0.39% | |||||||
| BM&F Bovespa SA | 9,470 | 26,067 | |||||
| Holding Company — 16.33% | |||||||
| Bollore SA | 92,500 | 431,956 | |||||
| Clarke Inc. | 33,000 | 235,152 | |||||
| Dundee Corporation — Class A* | 17,800 | 58,918 | |||||
| HRG Group, Inc.* | 200 | 2,712 | |||||
| Icahn Enterprises LP | 5,994 | 367,432 | |||||
| Investor AB — B Shares | 100 | 3,703 | |||||
| 1,099,873 | |||||||
| Insurance Carriers and Related Activities — 5.00% | |||||||
| Fairfax Financial Holdings Limited | 715 | 336,765 | |||||
| Lessors of Nonresidential Buildings (except Miniwarehouses) — 4.87% | |||||||
| The Howard Hughes Corporation* | 2,900 | 328,164 | |||||
| Media — 9.35% | |||||||
| Liberty Media Corporation — Class A* | 3,600 | 141,300 | |||||
| Liberty Media Corporation — Class C* | 5,200 | 198,016 | |||||
| Liberty Ventures — Series A* | 6,432 | 290,148 | |||||
| 629,464 |
The accompanying notes are an integral part of these financial statements.
106
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Global Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Mining (except Oil and Gas) — 5.39% | |||||||
| Franco-Nevada Corporation | 1,200 | $ | 54,900 | ||||
| NovaCopper Inc.* | 666 | 188 | |||||
| NovaGold Resources Inc.*^ | 4,000 | 16,840 | |||||
| Sandstorm Gold Limited* | 3,600 | 9,468 | |||||
| Silver Wheaton Corporation | 22,650 | 281,313 | |||||
| 362,709 | |||||||
| Motion Picture and Sound Recording Industries — 0.31% | |||||||
| DreamWorks Animation SKG, Inc. — Class A* | 800 | 20,616 | |||||
| Oil and Gas — 5.57% | |||||||
| Texas Pacific Land Trust | 2,866 | 375,217 | |||||
| Oil and Gas Extraction — 0.68% | |||||||
| Continental Resources, Inc.* | 2,000 | 45,960 | |||||
| Oil and Gas Services — 4.90% | |||||||
| Siem Industries Inc. | 6,600 | 330,000 | |||||
| Other Information Services — 0.01% | |||||||
| Internet Initiative Japan Inc. — ADR | 100 | 1,000 | |||||
| Pipeline Transportation — 0.11% | |||||||
| Rubis SCA | 100 | 7,600 | |||||
| Publishing Industries (except Internet) — 0.07% | |||||||
| Promotora de Informaciones S.A. — ADR* | 240 | 1,332 | |||||
| Promotora de Informaciones S.A. — Class A* | 610 | 3,460 | |||||
| 4,792 | |||||||
| Real Estate — 3.28% | |||||||
| Brookfield Property Partners LP^ | 281 | 6,531 | |||||
| Dream Unlimited Corp. — Class A* | 40,800 | 214,364 | |||||
| 220,895 | |||||||
| Restaurants — 0.56% | |||||||
| Restaurant Brands International LP | 18 | 672 | |||||
| Restaurant Brands International, Inc. | 1,000 | 37,360 | |||||
| 38,032 | |||||||
| Satellite Telecommunications — 2.24% | |||||||
| DISH Network Corp. — Class A* | 1,000 | 57,180 | |||||
| EchoStar Corporation — Class A* | 2,400 | 93,864 | |||||
| 151,044 |
The accompanying notes are an integral part of these financial statements.
107
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Global Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Securities, Commodity Contracts, and Other Financial Investments and | |||||||
| Related Activities — 0.47% | |||||||
| The Bitcoin Investment Trust* | 500 | $ | 31,500 | ||||
| Telecommunications — 0.15% | |||||||
| Cable & Wireless Communications plc | 9,000 | 9,858 | |||||
| Transportation Equipment Manufacturing — 0.42% | |||||||
| HEICO Corporation — Class A | 575 | 28,290 | |||||
| TOTAL COMMON STOCKS | |||||||
| (cost $4,681,978) | 4,917,452 | ||||||
| Principal | |||||||
| CORPORATE BONDS — 0.54% | Amount | ||||||
| General Merchandise Stores — 0.54% | |||||||
| Sears Holdings Corporation, 8.000%, 12/15/2019 | $ | 39,500 | 36,340 | ||||
| TOTAL CORPORATE BONDS | |||||||
| (cost $39,500) | 36,340 | ||||||
| PURCHASED PUT OPTIONS — 0.12% | Contractsd | ||||||
| Funds, Trusts, and Other Financial Vehicles — 0.12% | |||||||
| ProShares Ultra VIX Short-Term Futures ETF* | |||||||
| Expiration Date: January 2017, Exercise Price: $20.00 | 2 | 2,195 | |||||
| Expiration Date: January 2017, Exercise Price: $25.00 | 4 | 5,870 | |||||
| TOTAL PURCHASED PUT OPTIONS | |||||||
| (cost $9,106) | 8,065 | ||||||
| WARRANTS — 0.23% | Shares | ||||||
| General Merchandise Stores — 0.23% | |||||||
| Sears Holdings Corporation*^ | 1,390 | 15,290 | |||||
| TOTAL WARRANTS | |||||||
| (cost $19,439) | 15,290 | ||||||
| SHORT-TERM INVESTMENTS — 20.00% | |||||||
| Money Market Funds — 20.00% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 336,062 | 336,062 | |||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 337,000 | 337,000 | |||||
Fidelity Institutional Tax-Exempt Portfolio — Class I, 0.01%b | 337,000 | 337,000 | |||||
First American Government Obligations Fund — Class Z, 0.10%b | 337,000 | 337,000 |
The accompanying notes are an integral part of these financial statements.
108
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Global Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $1,347,062) | $ | 1,347,062 | |||||
| INVESTMENTS PURCHASED WITH THE | |||||||
| CASH PROCEEDS FROM | |||||||
| SECURITIES LENDING — 0.55% | |||||||
| Money Market Funds — 0.55% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 36,852 | 36,852 | |||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS | |||||||
| FROM SECURITIES LENDING | |||||||
| (cost $36,852) | 36,852 | ||||||
| TOTAL INVESTMENTS — 94.46% | |||||||
| (cost $6,133,937) | $ | 6,361,061 |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $32,954 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
b — | The rate quoted is the annualized seven-day yield as of December 31, 2015. |
d — | 100 shares per contract. |
| ADR — American Depository Receipt. | |
| ETF — Exchange Traded Fund. | |
The accompanying notes are an integral part of these financial statements.
109
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Paradigm Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| COMMON STOCKS — 86.27% | Shares | Value | |||||
| Apparel Manufacturing — 0.20% | |||||||
| L Brands, Inc. | 18,000 | $ | 1,724,760 | ||||
| Asset Management — 6.63% | |||||||
| Brookfield Asset Management Inc. — Class A | 1,119,200 | 35,288,376 | |||||
| Onex Corporation | 332,500 | 20,455,400 | |||||
| Partners Value Investments Inc.* | 800 | 18,247 | |||||
| RIT Capital Partners plc | 20,600 | 510,498 | |||||
| 56,272,521 | |||||||
| Beverage and Tobacco Product Manufacturing — 0.14% | |||||||
| Brown-Forman Corporation — Class A^ | 450 | 49,550 | |||||
| Crimson Wine Group Limited* | 127,600 | 1,122,880 | |||||
| 1,172,430 | |||||||
| Broadcasting (except Internet) — 0.76% | |||||||
| CBS Corporation — Class B | 136,400 | 6,428,532 | |||||
| Cable Distributor — 2.28% | |||||||
| Liberty Broadband Corporation — Series A* | 99,200 | 5,123,680 | |||||
| Liberty Broadband Corporation — Series C* | 273,600 | 14,188,896 | |||||
| 19,312,576 | |||||||
| Chemical Manufacturing — 0.16% | |||||||
| Platform Specialty Products Corporation*^ | 106,400 | 1,365,112 | |||||
| Construction of Buildings — 0.04% | |||||||
| TRI Pointe Group, Inc.* | 23,400 | 296,478 | |||||
| E-Commerce — 2.64% | |||||||
| Liberty Interactive Corporation — Class A* | 724,600 | 19,796,072 | |||||
| Liberty TripAdvisor Holdings Inc. — Series A* | 85,300 | 2,588,002 | |||||
| 22,384,074 | |||||||
| Electrical Equipment, Appliance, and Component Manufacturing — 0.00% | |||||||
| Danaher Corporation | 100 | 9,288 | |||||
| Electronics and Appliance Stores — 0.04% | |||||||
| Sears Hometown and Outlet Stores Inc.* | 47,000 | 376,000 | |||||
| Food Manufacturing — 0.04% | |||||||
| The Kraft Heinz Company | 4,800 | 349,248 |
The accompanying notes are an integral part of these financial statements.
110
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Paradigm Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Gaming — 1.27% | |||||||
| Las Vegas Sands Corp. | 121,000 | $ | 5,304,640 | ||||
| MGM Resorts International* | 106,400 | 2,417,408 | |||||
| Wynn Resorts Limited^ | 44,000 | 3,044,360 | |||||
| 10,766,408 | |||||||
| General Merchandise Stores — 0.94% | |||||||
| Sears Canada Inc.*^ | 361,400 | 1,846,754 | |||||
| Sears Holdings Corporation*^ | 297,600 | 6,118,656 | |||||
| 7,965,410 | |||||||
| Global Exchanges — 0.09% | |||||||
| JSE Limited | 94,000 | 778,015 | |||||
| Holding Company — 7.43% | |||||||
| Bollore SA | 499,600 | 2,333,027 | |||||
| Dundee Corporation — Class A* | 149,800 | 495,838 | |||||
| Icahn Enterprises LP | 850,600 | 52,141,780 | |||||
| Leucadia National Corporation | 464,800 | 8,082,872 | |||||
| 63,053,517 | |||||||
| Insurance Carriers and Related Activities — 1.88% | |||||||
| Markel Corporation* | 18,100 | 15,988,635 | |||||
| Lessors of Nonresidential Buildings (except Miniwarehouses) — 11.38% | |||||||
| The Howard Hughes Corporation* | 833,400 | 94,307,544 | |||||
| Rouse Properties, Inc.^ | 151,400 | 2,204,384 | |||||
| 96,511,928 | |||||||
| Lessors of Residential Buildings and Dwellings — 0.86% | |||||||
| Equity Lifestyle Properties, Inc. — REIT | 108,900 | 7,260,363 | |||||
| Manufactured Brands — 3.44% | |||||||
| Jarden Corporation* | 510,700 | 29,171,184 | |||||
| Media — 10.20% | |||||||
| Discovery Communications, Inc. — Class A*^ | 211,000 | 5,629,480 | |||||
| Discovery Communications, Inc. — Class C* | 172,400 | 4,347,928 | |||||
| Liberty Media Corporation — Class A* | 464,800 | 18,243,400 | |||||
| Liberty Media Corporation — Class C* | 785,600 | 29,915,648 | |||||
| Liberty Ventures — Series A* | 258,400 | 11,656,424 | |||||
| Scripps Networks Interactive — Class A | 30,100 | 1,661,821 | |||||
| Starz — Class A* | 409,300 | 13,711,550 | |||||
| Viacom Inc. — Class B | 32,700 | 1,345,932 | |||||
| 86,512,183 |
The accompanying notes are an integral part of these financial statements.
111
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Paradigm Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Mining (except Oil and Gas) — 1.51% | |||||||
| Franco-Nevada Corporation^ | 278,000 | $ | 12,718,500 | ||||
| Silver Wheaton Corporation | 10,000 | 124,200 | |||||
| 12,842,700 | |||||||
| Motion Picture and Sound Recording Industries — 3.05% | |||||||
| DreamWorks Animation SKG, Inc. — Class A*^ | 1,003,500 | 25,860,195 | |||||
| Motor Vehicle and Parts Dealers — 4.56% | |||||||
| AutoNation, Inc.* | 648,100 | 38,665,646 | |||||
| Oil and Gas — 9.38% | |||||||
Texas Pacific Land Trustc | 608,080 | 79,609,834 | |||||
| Oil and Gas Extraction — 0.98% | |||||||
| Canadian Natural Resources Limited | 47,800 | 1,043,474 | |||||
| Continental Resources, Inc.* | 119,700 | 2,750,706 | |||||
| Tourmaline Oil Corp.* | 282,400 | 4,561,422 | |||||
| 8,355,602 | |||||||
| Oil and Gas Services — 0.18% | |||||||
| Siem Industries Inc. | 29,700 | 1,485,000 | |||||
| Oil Refining — 0.04% | |||||||
| Par Pacific Holdings, Inc.* | 16,000 | 376,640 | |||||
| Other Exchanges — 3.56% | |||||||
| CBOE Holdings Inc. | 456,500 | 29,626,850 | |||||
| Urbana Corporation — Class A | 364,178 | 539,542 | |||||
| 30,166,392 | |||||||
| Performing Arts, Spectator Sports, and Related Industries — 3.27% | |||||||
| Live Nation Entertainment, Inc.* | 1,130,700 | 27,781,299 | |||||
| Real Estate — 1.87% | |||||||
| Brookfield Property Partners LP^ | 71,064 | 1,651,527 | |||||
| Dream Unlimited Corp. — Class A* | 306,000 | 1,607,733 | |||||
| Forest City Enterprises, Inc. — Class A* | 576,700 | 12,647,031 | |||||
| 15,906,291 | |||||||
| Restaurants — 2.40% | |||||||
| The Wendy's Company | 1,894,400 | 20,402,688 |
The accompanying notes are an integral part of these financial statements.
112
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Paradigm Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Satellite Telecommunications — 4.76% | |||||||
| DISH Network Corp. — Class A* | 450,400 | $ | 25,753,872 | ||||
| EchoStar Corporation — Class A* | 373,700 | 14,615,407 | |||||
| 40,369,279 | |||||||
| Securities, Commodity Contracts, and Other Financial Investments and | |||||||
| Related Activities — 0.01% | |||||||
| The Bitcoin Investment Trust* | 1,600 | 100,800 | |||||
| Support Activities for Transportation — 0.01% | |||||||
| HNA Infrastructure Company Limited | 48,000 | 60,696 | |||||
| Transportation Equipment Manufacturing — 0.01% | |||||||
| HEICO Corporation — Class A | 1,000 | 49,200 | |||||
| Utilities — 0.26% | |||||||
| Brookfield Infrastructure Partners LP^ | 58,600 | 2,221,526 | |||||
| TOTAL COMMON STOCKS | |||||||
| (cost $518,222,728) | 731,952,450 | ||||||
| Principal | |||||||
| ESCROW NOTES — 0.00% | Amount | ||||||
| Special Purpose Entity — 0.00% | |||||||
| Adelphia Communications Corp.*+ | $ | 200,000 | — | ||||
| TOTAL ESCROW NOTES | |||||||
| (cost $0) | — | ||||||
| PURCHASED PUT OPTIONS — 0.01% | Contractsd | ||||||
| Funds, Trusts, and Other Financial Vehicles — 0.01% | |||||||
| ProShares Ultra VIX Short-Term Futures ETF* | |||||||
| Expiration Date: January 2017, Exercise Price: $20.00 | 18 | 19,755 | |||||
| Expiration Date: January 2017, Exercise Price: $25.00 | 18 | 26,415 | |||||
| TOTAL PURCHASED PUT OPTIONS | |||||||
| (cost $52,508) | 46,170 | ||||||
| WARRANTS — 0.12% | Shares | ||||||
| General Merchandise Stores — 0.12% | |||||||
| Sears Holdings Corporation*^ | 94,631 | 1,040,941 | |||||
| TOTAL WARRANTS | |||||||
| (cost $1,567,656) | 1,040,941 |
The accompanying notes are an integral part of these financial statements.
113
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Paradigm Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| SHORT-TERM INVESTMENTS — 13.75% | Shares | Value | |||||
| Money Market Funds — 13.48% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 42,374,489 | $ | 42,374,488 | ||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 42,390,000 | 42,390,000 | |||||
Fidelity Institutional Tax-Exempt Portfolio — Class I, 0.01%b | 29,590,964 | 29,590,964 | |||||
| 114,355,452 | |||||||
| Principal | |||||||
| Amount | |||||||
| U.S. Treasury Obligations — 0.27% | |||||||
| United States Treasury Bills, Maturity Date: 01/21/2016, | |||||||
| Yield to Maturity 0.12% | $ | 2,298,000 | 2,297,906 | ||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $116,653,305) | 116,653,358 | ||||||
| INVESTMENTS PURCHASED WITH | |||||||
| THE CASH PROCEEDS FROM | |||||||
| SECURITIES LENDING — 3.77% | Shares | ||||||
| Money Market Funds — 3.77% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 31,982,370 | 31,982,370 | |||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS | |||||||
| FROM SECURITIES LENDING | |||||||
| (cost $31,982,370) | 31,982,370 | ||||||
| TOTAL INVESTMENTS — 103.92% | |||||||
| (cost $668,478,567) | $ | 881,675,289 |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $30,148,648 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
| +— | 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, 2015. |
c — | Affiliated issuer. See Note 10. |
d — | 100 shares per contract. |
| ETF — Exchange Traded Fund. | |
| REIT — Real Estate Investment Trust. | |
The accompanying notes are an integral part of these financial statements.
114
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Medical Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| COMMON STOCKS — 93.38% | Shares | Value | |||||
| Chemical Manufacturing — 12.97% | |||||||
| Agenus, Inc.* | 148 | $ | 672 | ||||
| AmpliPhi Biosciences Corp.* | 20 | 80 | |||||
| Celgene Corporation* | 7,000 | 838,320 | |||||
| Gilead Sciences, Inc. | 9,000 | 910,710 | |||||
| Immune Pharmaceuticals Inc.* | 17 | 12 | |||||
| Ionis Pharmaceuticals, Inc.* | 17,000 | 1,052,810 | |||||
| Lonza Group AG* | 6,000 | 977,037 | |||||
| 3,779,641 | |||||||
| Pharmaceutical and Biotechnology — 72.37% | |||||||
| AbbVie Inc. | 14,000 | 829,360 | |||||
| Alkermes plc* | 25,000 | 1,984,500 | |||||
| Arena Pharmaceuticals, Inc.* | 45,000 | 85,500 | |||||
| AstraZeneca plc — ADR | 28,000 | 950,600 | |||||
| Biogen Inc.* | 6,750 | 2,067,862 | |||||
| Bristol-Myers Squibb Company | 34,000 | 2,338,860 | |||||
| Celldex Therapeutics Inc.*^ | 26,294 | 412,290 | |||||
| Eli Lilly & Company | 23,000 | 1,937,980 | |||||
| GlaxoSmithKline plc — ADR | 24,673 | 995,556 | |||||
| Johnson & Johnson | 15,000 | 1,540,800 | |||||
| Merck & Co., Inc. | 16,000 | 845,120 | |||||
| Merrimack Pharmaceuticals, Inc.*^ | 25,000 | 197,500 | |||||
| Novartis AG — ADR | 18,000 | 1,548,720 | |||||
| Onconova Therapeutics, Inc.*^ | 24,000 | 22,963 | |||||
| Osiris Therapeutics, Inc.^ | 21,000 | 217,980 | |||||
| Pfizer, Inc. | 46,000 | 1,484,880 | |||||
| Progenics Pharmaceuticals, Inc.* | 67,200 | 411,936 | |||||
| Roche Holding AG Limited — ADR | 24,000 | 827,280 | |||||
| Sanofi — ADR | 27,000 | 1,151,550 | |||||
| Shire plc — ADR | 6,000 | 1,230,000 | |||||
| Synta Pharmaceuticals Corp.* | 18,000 | 6,336 | |||||
| 21,087,573 |
The accompanying notes are an integral part of these financial statements.
115
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Medical Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Professional, Scientific, and Technical Services — 8.04% | |||||||
| Affymetrix, Inc.* | 104,000 | $ | 1,049,360 | ||||
| Albany Molecular Research, Inc.*^ | 56,000 | 1,111,600 | |||||
| Codexis, Inc.* | 5,611 | 23,735 | |||||
| Pacific Biosciences of California Inc.*^ | 12,000 | 157,560 | |||||
| 2,342,255 | |||||||
| TOTAL COMMON STOCKS | |||||||
| (cost $16,699,062) | 27,209,469 | ||||||
| RIGHTS — 0.03% | |||||||
| Funds, Trusts, and Other Financial Vehicles — 0.02% | |||||||
| Ligand Pharmaceuticals Inc. | 44,000 | 1,540 | |||||
| Ligand Pharmaceuticals Inc.* | 44,000 | 1,408 | |||||
| Ligand Pharmaceuticals Inc. | 44,000 | 3,168 | |||||
| Ligand Pharmaceuticals Inc.* | 44,000 | 158 | |||||
| 6,274 | |||||||
| Pharmaceutical and Biotechnology — 0.01% | |||||||
| Sanofi* | 15,538 | 1,748 | |||||
| TOTAL RIGHTS | |||||||
| (cost $0) | 8,022 | ||||||
| SHORT-TERM INVESTMENTS — 6.78% | |||||||
| Money Market Funds — 6.78% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 1,401,655 | 1,401,655 | |||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 574,333 | 574,333 | |||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $1,975,988) | 1,975,988 | ||||||
| INVESTMENTS PURCHASED WITH | |||||||
| THE CASH PROCEEDS FROM | |||||||
| SECURITIES LENDING — 5.12% | |||||||
| Money Market Funds — 5.12% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 1,492,308 | 1,492,308 | |||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS | |||||||
| FROM SECURITIES LENDING | |||||||
| (cost $1,492,308) | 1,492,308 | ||||||
| TOTAL INVESTMENTS — 105.31% | |||||||
| (cost $20,167,358) | $ | 30,685,787 |
The accompanying notes are an integral part of these financial statements.
116
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Medical Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $1,383,115 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
b — | The rate quoted is the annualized seven-day yield as of December 31, 2015. |
| ADR — American Depository Receipt. | |
The accompanying notes are an integral part of these financial statements.
117
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Small Cap Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| COMMON STOCKS — 87.94% | Shares | Value | |||||
| Asset Management — 8.12% | |||||||
| Associated Capital Group, Inc. — Class A* | 19,200 | $ | 585,600 | ||||
| GAMCO Investors, Inc. — Class A | 19,200 | 595,968 | |||||
| JZ Capital Partners Limited | 194,400 | 1,097,625 | |||||
| Onex Corporation | 143,100 | 8,771,946 | |||||
| Partners Value Investments Inc.* | 191,000 | 4,356,407 | |||||
| RIT Capital Partners plc | 99,200 | 2,458,320 | |||||
| Sprott, Inc. | 1,680 | 2,889 | |||||
| 17,868,755 | |||||||
| Chemical Manufacturing — 2.81% | |||||||
| Inter Parfums, Inc. | 106,900 | 2,546,358 | |||||
| Platform Specialty Products Corporation*^ | 283,600 | 3,638,588 | |||||
| 6,184,946 | |||||||
| Construction of Buildings — 2.00% | |||||||
| Green Brick Partners, Inc.*^ | 109,300 | 786,960 | |||||
| TRI Pointe Group, Inc.* | 286,200 | 3,626,154 | |||||
| 4,413,114 | |||||||
| Credit Intermediation and Related Activities — 1.23% | |||||||
| Emergent Capital, Inc.*^ | 735,250 | 2,713,072 | |||||
| Electronics and Appliance Stores — 1.37% | |||||||
| Sears Hometown and Outlet Stores Inc.* | 375,700 | 3,005,600 | |||||
| Forestry and Logging — 0.01% | |||||||
| Keweenaw Land Association Limited* | 380 | 30,780 | |||||
| Gaming — 2.01% | |||||||
| Tropicana Entertainment Inc.* | 256,600 | 4,426,350 | |||||
| General Merchandise Stores — 1.86% | |||||||
| Sears Canada Inc.*^ | 613,100 | 3,132,941 | |||||
| Sears Holdings Corporation*^ | 46,500 | 956,040 | |||||
| 4,088,981 | |||||||
| Holding Company — 10.65% | |||||||
| Dundee Corporation — Class A* | 854,700 | 2,829,057 | |||||
| Icahn Enterprises LP | 336,294 | 20,614,822 | |||||
| 23,443,879 |
The accompanying notes are an integral part of these financial statements.
118
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Small Cap Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Insurance Carriers and Related Activities — 1.14% | |||||||
| AmTrust Financial Services, Inc. | 28,400 | $ | 1,748,872 | ||||
| Greenlight Capital Re, Limited — Class A* | 41,000 | 767,110 | |||||
| 2,515,982 | |||||||
| Lessors of Nonresidential Buildings (except Miniwarehouses) — 8.21% | |||||||
| The Howard Hughes Corporation* | 159,600 | 18,060,336 | |||||
| Machinery Manufacturing — 0.37% | |||||||
| Colfax Corporation* | 34,500 | 805,575 | |||||
| Manufactured Brands — 9.16% | |||||||
| Jarden Corporation* | 332,000 | 18,963,840 | |||||
| Movado Group, Inc.^ | 46,700 | 1,200,657 | |||||
| 20,164,497 | |||||||
| Media — 1.53% | |||||||
| Liberty Ventures — Series A* | 26,300 | 1,186,393 | |||||
| Starz — Class A* | 65,000 | 2,177,500 | |||||
| 3,363,893 | |||||||
| Merchant Wholesalers, Durable Goods — 0.34% | |||||||
| Dorman Products, Inc.*^ | 15,800 | 750,026 | |||||
| Mining (except Oil and Gas) — 0.08% | |||||||
| McEwen Mining Inc.^ | 160,600 | 170,236 | |||||
| Motion Picture and Sound Recording Industries — 4.86% | |||||||
| DreamWorks Animation SKG, Inc. — Class A* | 415,000 | 10,694,550 | |||||
| Motor Vehicle and Parts Dealers — 0.61% | |||||||
| Penske Automotive Group, Inc. | 31,700 | 1,342,178 | |||||
| Oil and Gas — 11.61% | |||||||
| Texas Pacific Land Trust | 195,280 | 25,566,058 | |||||
| Oil and Gas Extraction — 0.00% | |||||||
| Biloxi Marsh Lands Corporation | 100 | 1,125 | |||||
| Oil Refining — 1.59% | |||||||
| Par Pacific Holdings, Inc.* | 148,519 | 3,496,137 | |||||
| Other Exchanges — 0.47% | |||||||
| Urbana Corporation — Class A | 695,071 | 1,029,772 |
The accompanying notes are an integral part of these financial statements.
119
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Small Cap Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Performing Arts, Spectator Sports, and Related Industries — 3.41% | |||||||
| Live Nation Entertainment, Inc.* | 305,500 | $ | 7,506,135 | ||||
| Pipeline Transportation — 1.25% | |||||||
| Rubis SCA | 36,250 | 2,754,885 | |||||
| Publishing Industries (except Internet) — 0.21% | |||||||
| Promotora de Informaciones S.A. — ADR | 64,644 | 358,774 | |||||
| Value Line, Inc. | 7,615 | 102,270 | |||||
| 461,044 | |||||||
| Real Estate — 5.32% | |||||||
| Dream Unlimited Corp. — Class A* | 2,230,000 | 11,716,485 | |||||
| Rental and Leasing Services — 0.02% | |||||||
| Comdisco Holding Company, Inc.* | 7,560 | 34,020 | |||||
| Restaurants — 5.58% | |||||||
| The Wendy's Company | 1,140,000 | 12,277,800 | |||||
| Satellite Telecommunications — 0.21% | |||||||
| Loral Space & Communications Inc.* | 11,400 | 464,094 | |||||
| Securities, Commodity Contracts, and Other Financial Investments | |||||||
| and Related Activities — 0.00% | |||||||
| BHF Kleinwort Benson Group SA* | 800 | 4,969 | |||||
| Telecommunications — 0.05% | |||||||
| CIBL, Inc.* | 18 | 23,400 | |||||
| ICTC Group Inc.* | 208 | 5,408 | |||||
| LICT Corporation* | 16 | 89,600 | |||||
| 118,408 | |||||||
| Transportation Equipment Manufacturing — 1.86% | |||||||
| American Railcar Industries, Inc.^ | 44,000 | 2,036,320 | |||||
| Federal-Mogul Holdings Corporation* | 300,600 | 2,059,110 | |||||
| 4,095,430 | |||||||
| TOTAL COMMON STOCKS | |||||||
| (cost $228,579,933) | 193,569,112 |
The accompanying notes are an integral part of these financial statements.
120
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Small Cap Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| RIGHTS — 0.18% | Shares | Value | |||||
| Rental and Leasing Services — 0.18% | |||||||
| Comdisco Holding Company, Inc.*# | 5,634,807 | $ | 388,801 | ||||
| TOTAL RIGHTS | |||||||
| (cost $1,088,543) | 388,801 | ||||||
| WARRANTS — 0.05% | |||||||
| General Merchandise Stores — 0.05% | |||||||
| Sears Holdings Corporation*^ | 9,591 | 105,501 | |||||
| TOTAL WARRANTS | |||||||
| (cost $97,553) | 105,501 | ||||||
| SHORT-TERM INVESTMENTS — 11.69% | |||||||
| Money Market Funds — 11.69% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 11,110,743 | 11,110,743 | |||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 11,110,000 | 11,110,000 | |||||
Fidelity Institutional Tax-Exempt Portfolio — Class I, 0.01%b | 3,517,359 | 3,517,359 | |||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $25,738,102) | 25,738,102 | ||||||
| INVESTMENTS PURCHASED WITH | |||||||
| THE CASH PROCEEDS FROM | |||||||
| SECURITIES LENDING — 5.32% | |||||||
| Money Market Funds — 5.32% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 11,712,925 | 11,712,925 | |||||
| TOTAL INVESTMENTS PURCHASED WITH THE | |||||||
| CASH PROCEEDS FROM SECURITIES LENDING | |||||||
| (cost $11,712,925) | 11,712,925 | ||||||
| TOTAL INVESTMENTS — 105.18% | |||||||
| (cost $267,217,056) | $ | 231,514,441 |
The accompanying notes are an integral part of these financial statements.
121
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Small Cap Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $10,619,444 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
| # — | Contingent value right (contingent upon profitability of company). |
b — | The rate quoted is the annualized seven-day yield as of December 31, 2015. |
| ADR — American Depository Receipt. | |
The accompanying notes are an integral part of these financial statements.
122
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Market Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| COMMON STOCKS — 70.71% | Shares | Value | |||||
| Administrative and Support Services — 0.02% | |||||||
| Markit Limited* | 200 | $ | 6,034 | ||||
| Asset Management — 12.65% | |||||||
| Associated Capital Group, Inc. — Class A* | 200 | 6,100 | |||||
| Brookfield Asset Management Inc. — Class A | 18,000 | 567,540 | |||||
| Federated Investors, Inc. — Class B | 3,600 | 103,140 | |||||
| JZ Capital Partners Limited | 47,800 | 269,889 | |||||
| Oaktree Capital Group LLC^ | 17,000 | 811,240 | |||||
| Onex Corporation | 40,800 | 2,510,016 | |||||
| Partners Value Investments Inc.* | 43,216 | 985,689 | |||||
| Senvest Capital Inc.* | 120 | 13,442 | |||||
| Sprott, Inc. | 41,155 | 70,788 | |||||
| 5,337,844 | |||||||
| Beverage and Tobacco Product Manufacturing — 0.11% | |||||||
| Crimson Wine Group Limited* | 5,080 | 44,704 | |||||
| Credit Intermediation and Related Activities — 2.11% | |||||||
| BBCN Bancorp, Inc. | 10 | 172 | |||||
| Emergent Capital, Inc. | 241,200 | 890,028 | |||||
| 890,200 | |||||||
| Data Processor — 6.35% | |||||||
| MasterCard, Inc. — Class A | 10,000 | 973,600 | |||||
| Visa, Inc. — Class A | 22,000 | 1,706,100 | |||||
| 2,679,700 | |||||||
| Gaming — 3.21% | |||||||
| Tropicana Entertainment Inc.* | 78,400 | 1,352,400 | |||||
| Global Exchanges — 2.27% | |||||||
| JSE Limited | 53,000 | 438,668 | |||||
| London Stock Exchange Group plc | 12,800 | 517,789 | |||||
| 956,457 | |||||||
| Holding Company — 9.53% | |||||||
| Clarke Inc. | 1,000 | 7,126 | |||||
| Dundee Corporation — Class A* | 161,000 | 532,910 | |||||
| Icahn Enterprises LP | 56,800 | 3,481,840 | |||||
| 4,021,876 |
The accompanying notes are an integral part of these financial statements.
123
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Market Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Shares | Value | ||||||
| Insurance Carriers and Related Activities — 1.53% | |||||||
| Fairfax Financial Holdings Limited | 60 | $ | 28,260 | ||||
| Markel Corporation* | 700 | 618,345 | |||||
| 646,605 | |||||||
| Lessors of Nonresidential Buildings (except Miniwarehouses) — 6.52% | |||||||
| The Howard Hughes Corporation* | 24,320 | 2,752,051 | |||||
| Merchant Wholesalers, Durable Goods — 0.07% | |||||||
| A-Mark Precious Metals, Inc. | 1,600 | 30,720 | |||||
| Mining (except Oil and Gas) — 0.01% | |||||||
| Sandstorm Gold Limited* | 1,800 | 4,734 | |||||
| Silver Wheaton Corporation | 100 | 1,242 | |||||
| 5,976 | |||||||
| Oil and Gas — 9.34% | |||||||
| Texas Pacific Land Trust | 30,100 | 3,940,692 | |||||
| Other Exchanges — 6.67% | |||||||
| CBOE Holdings Inc. | 31,200 | 2,024,880 | |||||
| NZX Limited | 359,002 | 262,726 | |||||
| Urbana Corporation — Class A | 356,004 | 527,433 | |||||
| 2,815,039 | |||||||
| Real Estate — 3.41% | |||||||
| Dream Unlimited Corp. — Class A* | 274,000 | 1,439,604 | |||||
| Securities, Commodity Contracts, and Other Financial Investments | |||||||
| and Related Activities — 6.56% | |||||||
| The Bitcoin Investment Trust* | 1,100 | 69,300 | |||||
| CME Group, Inc. | 5,000 | 453,000 | |||||
| IntercontinentalExchange Group, Inc. | 3,000 | 768,780 | |||||
| Ladenburg Thalmann Financial Services Inc.* | 24,000 | 66,240 | |||||
| OTC Markets Group Inc. — Class A | 86,385 | 1,408,075 | |||||
| 2,765,395 | |||||||
| Transportation — 0.02% | |||||||
| Clarkson plc | 200 | 6,637 | |||||
| U.S. Equity Exchanges — 0.33% | |||||||
| NASDAQ, Inc. | 2,400 | 139,608 | |||||
| TOTAL COMMON STOCKS | |||||||
| (cost $26,046,396) | 29,831,542 |
The accompanying notes are an integral part of these financial statements.
124
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Market Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| CORPORATE BONDS — 0.01% | Amount | Value | |||||
| General Merchandise Stores — 0.01% | |||||||
| Sears Holdings Corporation 8.000%, 12/15/2019 | $ | 5,500 | $ | 5,060 | |||
| TOTAL CORPORATE BONDS | |||||||
| (cost $5,500) | 5,060 | ||||||
| PURCHASED PUT OPTIONS — 0.04% | Contractsd | ||||||
| Funds, Trusts, and Other Financial Vehicles — 0.04% | |||||||
| ProShares Ultra VIX Short-Term Futures ETF* | |||||||
| Expiration Date: January 2017, Exercise Price: $20.00 | 6 | 6,585 | |||||
| Expiration Date: January 2017, Exercise Price: $25.00 | 6 | 8,805 | |||||
| TOTAL PURCHASED PUT OPTIONS | |||||||
| (cost $17,473) | 15,390 | ||||||
| RIGHTS — 0.00% | Shares | ||||||
| Asset Management — 0.00% | |||||||
| W.P. Stewart & Co., Limited*+ | 205 | — | |||||
| TOTAL RIGHTS | |||||||
| (cost $0) | — | ||||||
| WARRANTS — 0.01% | |||||||
| General Merchandise Stores — 0.01% | |||||||
| Sears Holdings Corporation*^ | 193 | 2,123 | |||||
| TOTAL WARRANTS | |||||||
| (cost $3,070) | 2,123 | ||||||
| SHORT-TERM INVESTMENTS — 20.11% | |||||||
| Money Market Funds — 20.11% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 2,120,926 | 2,120,926 | |||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 2,121,000 | 2,121,000 | |||||
Fidelity Institutional Tax-Exempt Portfolio — Class I, 0.01%b | 2,121,000 | 2,121,000 | |||||
First American Government Obligations Fund — Class Z, 0.10%b | 2,121,000 | 2,121,000 | |||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $8,483,926) | 8,483,926 |
The accompanying notes are an integral part of these financial statements.
125
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Market Opportunities Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| INVESTMENTS PURCHASED WITH THE CASH | |||||||
| PROCEEDS FROM SECURITIES LENDING — 2.00% | Shares | Value | |||||
| Money Market Funds — 2.00% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 843,792 | $ | 843,792 | ||||
| TOTAL INVESTMENTS PURCHASED WITH THE | |||||||
| CASH PROCEEDS FROM SECURITIES LENDING | |||||||
| (cost $843,792) | 843,792 | ||||||
| TOTAL INVESTMENTS — 92.88% | |||||||
| (cost $35,400,157) | $ | 39,181,833 |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $805,227 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
| + — | 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, 2015. |
The accompanying notes are an integral part of these financial statements.
126
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| CORPORATE BONDS — 59.28% | Amount | Value | |||||
| Beverage and Tobacco Product Manufacturing — 1.43% | |||||||
| Dr. Pepper Snapple Group, Inc., 2.900%, 01/15/2016 | $ | 200,000 | $ | 200,075 | |||
| PepsiCo, Inc., 0.950%, 02/22/2017# | 200,000 | 199,657 | |||||
| 399,732 | |||||||
| Computer and Electronic Product Manufacturing — 2.34% | |||||||
| Apple, Inc., 1.050%, 05/05/2017# | 250,000 | 250,196 | |||||
| Intel Corp., 1.950%, 10/01/2016 | 200,000 | 201,270 | |||||
| Texas Instruments Inc., 2.375%, 05/16/2016 | 200,000 | 201,118 | |||||
| 652,584 | |||||||
| Consumer Staples — 0.72% | |||||||
| The Procter & Gamble Company, 0.750%, 11/04/2016 | 200,000 | 199,528 | |||||
| Credit Intermediation and Related Activities — 9.98% | |||||||
| Bank of America Corporation, 1.250%, 01/11/2016 | 250,000 | 250,020 | |||||
| Bank of Nova Scotia, 0.950%, 03/15/2016 | 200,000 | 200,100 | |||||
| Branch Banking & Trust Company, 1.450%, 10/03/2016 | 180,000 | 180,678 | |||||
| Capital One Bank (USA), NA, 1.200%, 02/13/2017 | 250,000 | 248,836 | |||||
| Caterpillar Financial Services Corporation, 2.650%, 04/01/2016 | 200,000 | 200,945 | |||||
| Citigroup Inc., 1.300%, 11/15/2016 | 350,000 | 349,217 | |||||
| Fifth Third Bank, 0.900%, 02/26/2016 | 150,000 | 150,003 | |||||
| John Deere Capital Corporation, 1.050%, 12/15/2016 | 200,000 | 199,996 | |||||
| Key Bank NA, 1.100%, 11/25/2016 | 250,000 | 249,694 | |||||
| Manufacturers and Traders Trust Company, 1.400%, 07/25/2017# | 300,000 | 298,692 | |||||
| PNC Bank NA, 1.300%, 10/03/2016 | 250,000 | 250,558 | |||||
| Wells Fargo & Company, 1.250%, 07/20/2016 | 200,000 | 200,332 | |||||
| 2,779,071 | |||||||
| Diversified Financial Services — 1.08% | |||||||
| The Goldman Sachs Group, Inc., 3.625%, 02/07/2016 | 300,000 | 300,767 | |||||
| Electrical Equipment, Appliance, and Component Manufacturing — 1.08% | |||||||
| Danaher Corporation, 2.300%, 06/23/2016 | 200,000 | 201,138 | |||||
| Whirlpool Corporation, 1.350%, 03/01/2017 | 100,000 | 99,443 | |||||
| 300,581 | |||||||
| Food and Beverage Stores — 1.07% | |||||||
| The Kroger Co., 1.200%, 10/17/2016 | 300,000 | 299,462 |
The accompanying notes are an integral part of these financial statements.
127
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Food Manufacturing — 3.06% | |||||||
| ConAgra Foods, Inc., 1.300%, 01/25/2016 | $ | 200,000 | $ | 200,032 | |||
| General Mills, Inc., 0.875%, 01/29/2016 | 200,000 | 199,980 | |||||
| Kellogg Company, 1.875%, 11/17/2016 | 100,000 | 100,676 | |||||
| The Kraft Heinz Company, 2.000%, 09/12/2016 | 150,000 | 150,875 | |||||
| William Wrigley Jr. Company, 1.400%, 10/21/2016, | |||||||
| Acquired 10/28/2013 at $200,394■ | 200,000 | 199,833 | |||||
| 851,396 | |||||||
| Food Services and Drinking Places — 1.43% | |||||||
| Starbucks Corporation, 0.875%, 12/05/2016 | 400,000 | 399,340 | |||||
| General Merchandise Stores — 0.72% | |||||||
| Wal-Mart Stores, Inc., 0.600%, 04/11/2016 | 200,000 | 200,000 | |||||
| Health and Personal Care Stores — 0.72% | |||||||
| CVS Health Corporation, 1.200%, 12/05/2016 | 200,000 | 200,081 | |||||
| Holding Company — 0.90% | |||||||
| Berkshire Hathaway Finance Corp., 0.950%, 08/15/2016# | 250,000 | 250,163 | |||||
| Household and Personal Products — 0.72% | |||||||
| Colgate-Palmolive Company, 1.300%, 01/15/2017# | 200,000 | 200,399 | |||||
| Insurance Carriers and Related Activities — 3.62% | |||||||
| Aetna Inc., 1.750%, 05/15/2017# | 300,000 | 300,442 | |||||
| American International Group, Inc., 5.450%, 05/18/2017# | 400,000 | 420,356 | |||||
| UnitedHealth Group Inc., 1.875%, 11/15/2016 | 285,000 | 287,325 | |||||
| 1,008,123 | |||||||
| Machinery Manufacturing — 1.93% | |||||||
| Cameron International Corporation, 1.400%, 06/15/2017 | 242,000 | 238,653 | |||||
| Illinois Tool Works, Inc., 0.900%, 02/25/2017# | 300,000 | 299,157 | |||||
| 537,810 | |||||||
| Merchant Wholesalers, Nondurable Goods — 1.61% | |||||||
| AmerisourceBergen Corporation, 1.150%, 05/15/2017 | 300,000 | 297,953 | |||||
| Express Scripts Holding Company, 3.125%, 05/15/2016 | 150,000 | 151,015 | |||||
| 448,968 |
The accompanying notes are an integral part of these financial statements.
128
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Miscellaneous Manufacturing — 5.03% | |||||||
| 3M Co., 1.375%, 09/29/2016 | $ | 250,000 | $ | 250,666 | |||
| Baxter International Inc., 0.950%, 06/01/2016 | 200,000 | 199,898 | |||||
| Becton Dickinson & Co. | |||||||
| 1.450%, 05/15/2017 | 300,000 | 298,832 | |||||
| 1.800%, 12/15/2017 | 300,000 | 299,706 | |||||
| CR Bard, Inc., 2.875%, 01/15/2016 | 150,000 | 150,076 | |||||
| Stryker Corporation, 2.000%, 09/30/2016 | 200,000 | 201,538 | |||||
| 1,400,716 | |||||||
| Motor Vehicle and Parts Dealers — 0.90% | |||||||
| AutoZone, Inc., 1.300%, 01/13/2017 | 250,000 | 249,731 | |||||
| Oil and Gas Extraction — 0.72% | |||||||
| Occidental Petroleum Corporation, 1.750%, 02/15/2017# | 200,000 | 200,433 | |||||
| Other Information Services — 0.80% | |||||||
| Google, Inc., 2.125%, 05/19/2016 | 222,000 | 223,303 | |||||
| Petroleum and Coal Products Manufacturing — 3.94% | |||||||
| Chevron Corporation, 0.889%, 06/24/2016 | 200,000 | 200,064 | |||||
| Exxon Mobil Corporation, 0.921%, 03/15/2017# | 200,000 | 199,805 | |||||
| Hess Corporation, 1.300%, 06/15/2017 | 350,000 | 342,595 | |||||
| Phillips 66, 2.950%, 05/01/2017 | 350,000 | 354,872 | |||||
| 1,097,336 | |||||||
| Pharmaceutical and Biotechnology — 5.31% | |||||||
| Amgen Inc., 2.300%, 06/15/2016 | 427,000 | 429,504 | |||||
| GlaxoSmithKline Capital Inc., 0.700%, 03/18/2016 | 200,000 | 200,042 | |||||
| Johnson & Johnson, 0.700%, 11/28/2016# | 300,000 | 299,509 | |||||
| Medtronic, Inc., 0.875%, 02/27/2017# | 250,000 | 249,155 | |||||
| Pfizer, Inc., 1.100%, 05/15/2017# | 300,000 | 299,818 | |||||
| 1,478,028 | |||||||
| Pharmaceuticals — 0.72% | |||||||
| Mylan Inc., 1.800%, 06/24/2016 | 200,000 | 199,894 | |||||
| Publishing Industries (except Internet) — 0.36% | |||||||
| Thomson Reuters Corporation, 0.875%, 05/23/2016 | 100,000 | 99,931 | |||||
| Satellite Telecommunications — 0.90% | |||||||
| DIRECTV Holdings, LLC, 2.400%, 03/15/2017 | 250,000 | 252,086 |
The accompanying notes are an integral part of these financial statements.
129
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Support Activities for Mining — 0.90% | |||||||
| Schlumberger Investment SA, 1.950%, 09/14/2016, | |||||||
| Acquired 01/10/2014 at $251,778■ | $ | 250,000 | $ | 251,260 | |||
| Support Activities for Transportation — 1.09% | |||||||
| GATX Corporation, 3.500%, 07/15/2016 | 300,000 | 303,273 | |||||
| Telecommunications — 0.72% | |||||||
| Vodafone Group plc, 1.625%, 03/20/2017 | 200,000 | 199,758 | |||||
| Transportation Equipment Manufacturing — 1.94% | |||||||
| Lockheed Martin Corp., 2.125%, 09/15/2016 | 250,000 | 251,750 | |||||
| VW Credit, Inc., 1.875%, 10/13/2016 | 290,000 | 289,744 | |||||
| 541,494 | |||||||
| Utilities — 2.16% | |||||||
| Duke Energy Corporation, 2.150%, 11/15/2016 | 400,000 | 402,484 | |||||
| Xcel Energy, Inc., 0.750%, 05/09/2016 | 200,000 | 199,839 | |||||
| 602,323 | |||||||
| Waste Management and Remediation Services — 1.38% | |||||||
| Waste Management, Inc., 2.600%, 09/01/2016 | 383,000 | 385,712 | |||||
| TOTAL CORPORATE BONDS | |||||||
| (cost $16,556,013) | 16,513,283 | ||||||
U.S. GOVERNMENT AGENCY ISSUES — 1.79%1 | |||||||
| U.S. Government Agency Issues — 1.79% | |||||||
| Federal Home Loan Banks, 1.000%, 03/11/2016# | 200,000 | 200,257 | |||||
| Federal Home Loan Mortgage Corporation, 0.500%, 05/13/2016# | 300,000 | 300,041 | |||||
| TOTAL U.S. GOVERNMENT AGENCY ISSUES | |||||||
| (cost $500,212) | 500,298 | ||||||
| U.S. TREASURY OBLIGATIONS — 9.32% | |||||||
| United States Treasury Notes — 9.32% | |||||||
| 0.250%, 04/15/2016# | 500,000 | 499,951 | |||||
| 0.625%, 07/15/2016# | 250,000 | 250,049 | |||||
| 0.625%, 10/15/2016# | 300,000 | 299,760 | |||||
| 0.625%, 02/15/2017# | 200,000 | 199,523 | |||||
| 0.750%, 06/30/2017 | 500,000 | 498,506 | |||||
| 0.875%, 08/15/2017# | 850,000 | 848,223 |
The accompanying notes are an integral part of these financial statements.
130
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| TOTAL U.S. TREASURY OBLIGATIONS | |||||||
| (cost $2,596,462) | $ | 2,596,012 | |||||
| EXCHANGE TRADED FUNDS — 20.61% | Shares | ||||||
| Funds, Trusts, and Other Financial Vehicles — 20.61% | |||||||
| iShares 1-3 Year Credit Bond ETF | 27,000 | 2,824,200 | |||||
| PIMCO Enhanced Short Maturity ETF | 4,700 | 472,867 | |||||
| SPDR Barclays Short Term Corporate Bond ETF# | 24,000 | 729,600 | |||||
| Vanguard Short-Term Corporate Bond ETF | 21,700 | 1,714,083 | |||||
| TOTAL EXCHANGE TRADED FUNDS | |||||||
| (cost $5,804,792) | 5,740,750 | ||||||
| PURCHASED PUT OPTIONS — 0.20% | Contractsd | ||||||
| Credit Intermediation and Related Activities — 0.09% | |||||||
| iPath S&P 500 VIX Short-Term Futures ETN* | |||||||
| Expiration Date: January 2016, Exercise Price: $15.00 | 12 | 6 | |||||
| Expiration Date: January 2016, Exercise Price: $20.00 | 71 | 8,449 | |||||
| Expiration Date: January 2016, Exercise Price: $25.00 | 30 | 16,125 | |||||
| 24,580 | |||||||
| Funds, Trusts, and Other Financial Vehicles — 0.11% | |||||||
| ProShares Ultra VIX Short-Term Futures ETF* | |||||||
| Expiration Date: January 2016, Exercise Price: $10.00 | 6 | 2,730 | |||||
| Expiration Date: January 2016, Exercise Price: $15.00 | 29 | 27,550 | |||||
| 30,280 | |||||||
| TOTAL PURCHASED PUT OPTIONS | |||||||
| (cost $67,982) | 54,860 | ||||||
| SHORT-TERM INVESTMENTS — 8.95% | Shares | ||||||
| Money Market Funds — 8.95% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%#b | 1,492,769 | 1,492,769 | |||||
Fidelity Institutional Money Market Portfolio — Class I, 0.28%b | 1,001,248 | 1,001,248 | |||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $2,494,017) | 2,494,017 | ||||||
| TOTAL INVESTMENTS — 100.15% | |||||||
| (cost $28,019,478) | $ | 27,899,220 |
The accompanying notes are an integral part of these financial statements.
131
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| # — | All or a portion of the securities have been committed as collateral for written option contracts. |
■ — | Restricted security restricted to institutional investors (144a securities); the percentage of net assets comprised of 144a securities was 1.62%. |
1 — | The obligations of certain U.S. Government-Sponsored entities are neither issued nor guaranteed by the United States Treasury. |
b — | The rate quoted is the annualized seven-day yield as of December 31, 2015. |
d — | 100 shares per contract. |
| ETF — Exchange Traded Fund. | |
| ETN — Exchange Traded Note. | |
The accompanying notes are an integral part of these financial statements.
132
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| CONVERTIBLE BONDS — 6.12% | Amount | Value | |||||
| Computer and Electronic Product Manufacturing — 0.51% | |||||||
| Quantum Corp., 4.500%, 11/15/2017 | $ | 500,000 | $ | 460,000 | |||
| Mining (except Oil and Gas) — 5.04% | |||||||
| Detour Gold Corporation, 5.500%, 11/30/2017 | 1,000,000 | 971,250 | |||||
| Kirkland Lake Gold Inc., 6.000%, 06/30/2017 | CAD | 350,000 | 245,686 | ||||
| Royal Gold, Inc., 2.875%, 06/15/2019 | 3,664,000 | 3,343,400 | |||||
| 4,560,336 | |||||||
| Real Estate — 0.57% | |||||||
| Forest City Enterprises, Inc., 4.250%, 08/15/2018 | 446,000 | 517,081 | |||||
| TOTAL CONVERTIBLE BONDS | |||||||
| (cost $6,069,362) | 5,537,417 | ||||||
| CORPORATE BONDS — 84.43% | |||||||
| Ambulatory Health Care Services — 0.34% | |||||||
| DaVita HealthCare Partners Inc., 5.750%, 08/15/2022 | 300,000 | 310,125 | |||||
| Apparel Manufacturing — 3.30% | |||||||
| L Brands, Inc. | |||||||
| 6.625%, 04/01/2021 | 200,000 | 222,500 | |||||
| 5.625%, 02/15/2022 | 2,600,000 | 2,765,750 | |||||
| 2,988,250 | |||||||
| Broadcasting (except Internet) — 5.69% | |||||||
| AMC Networks, Inc., 7.750%, 07/15/2021 | 700,000 | 738,500 | |||||
| Cablevision Systems Corporation, 5.875%, 09/15/2022 | 200,000 | 170,500 | |||||
| CCO Holdings LLC/Capital Corporation, 5.250%, 09/30/2022 | 2,150,000 | 2,176,875 | |||||
| Sinclair Television Group, 5.375%, 04/01/2021 | 250,000 | 251,562 | |||||
| Sirius XM Radio, Inc. | |||||||
| 5.750%, 08/01/2021, Acquired 02/28/2014-03/20/2014 at $782,604■ | 750,000 | 775,313 | |||||
| 4.625%, 05/15/2023, Acquired 04/11/2014-07/14/2015 at $1,005,888■ | 1,050,000 | 1,032,937 | |||||
| 5,145,687 | |||||||
| Cable Distributor — 1.33% | |||||||
| Altice SA, 7.750%, 05/15/2022, Acquired 07/02/2014 at $266,519■ | 250,000 | 226,250 | |||||
| Numericable Group SA, 6.000%, 05/15/2022, | |||||||
| Acquired 06/11/2014-11/04/2014 at $1,041,553■ | 1,000,000 | 972,500 | |||||
| 1,198,750 |
The accompanying notes are an integral part of these financial statements.
133
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Chemical Manufacturing — 5.81% | |||||||
| Ashland Inc., 4.750%, 08/15/2022 | $ | 3,800,000 | $ | 3,709,750 | |||
| LSB Industries, Inc., 7.750%, 08/01/2019 | 1,850,000 | 1,544,750 | |||||
| 5,254,500 | |||||||
| Construction of Buildings — 9.26% | |||||||
| Lennar Corporation, 4.750%, 11/15/2022 | 5,160,000 | 5,141,940 | |||||
| TRI Pointe Holdings, Inc., 4.375%, 06/15/2019 | 3,295,000 | 3,237,338 | |||||
| 8,379,278 | |||||||
| Credit Intermediation and Related Activities — 1.11% | |||||||
| Ally Financial, Inc., 8.000%, 03/15/2020 | 161,000 | 183,942 | |||||
| Sprint Capital Corp., 6.900%, 05/01/2019 | 1,000,000 | 820,000 | |||||
| 1,003,942 | |||||||
| E-Commerce — 3.94% | |||||||
| IAC/InterActiveCorp, 4.750%, 12/15/2022 | 4,250,000 | 3,564,687 | |||||
| Food Manufacturing — 6.09% | |||||||
| Post Holdings, Inc. | |||||||
| 6.750%, 12/01/2021, Acquired 04/17/2014-07/14/2015 at $515,091■ | 500,000 | 511,250 | |||||
| 7.375%, 02/15/2022 | 4,775,000 | 4,995,844 | |||||
| 5,507,094 | |||||||
| Gaming — 4.81% | |||||||
| MGM Resorts International, 6.625%, 12/15/2021 | 756,000 | 777,735 | |||||
| Wynn Las Vegas LLC | |||||||
| 5.375%, 03/15/2022 | 3,300,000 | 3,139,884 | |||||
| 4.250%, 05/30/2023, Acquired 07/02/2014-07/29/2014 at $487,683^■ | 500,000 | 429,688 | |||||
| 4,347,307 | |||||||
| Holding Company — 1.90% | |||||||
| Icahn Enterprises, 5.875%, 02/01/2022 | 1,750,000 | 1,717,188 | |||||
| Hospitals — 0.22% | |||||||
| Community Health System, Inc., 7.125%, 07/15/2020 | 200,000 | 200,250 | |||||
| Lessors of Nonresidential Buildings (except Miniwarehouses) — 5.55% | |||||||
| The Howard Hughes Corporation, 6.875%, 10/01/2021, | |||||||
| Acquired 03/05/2014-06/19/2015 at $5,193,560■ | 4,900,000 | 5,022,500 | |||||
| Merchant Wholesalers, Durable Goods — 0.31% | |||||||
| HD Supply, Inc., 11.500%, 07/15/2020 | 250,000 | 278,125 |
The accompanying notes are an integral part of these financial statements.
134
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Mining (except Oil and Gas) — 0.97% | |||||||
| Freeport-McMoRan Copper & Gold Inc., 3.550%, 03/01/2022 | $ | 1,100,000 | $ | 643,500 | |||
| Vulcan Materials Co., 7.500%, 06/15/2021 | 200,000 | 234,000 | |||||
| 877,500 | |||||||
| Motor Vehicle and Parts Dealers — 4.05% | |||||||
| Penske Automotive Group, Inc., 5.750%, 10/01/2022 | 3,550,000 | 3,665,375 | |||||
| Nonmetallic Mineral Product Manufacturing — 0.31% | |||||||
| USG Corporation, 9.750%, 01/15/2018 | 250,000 | 279,375 | |||||
| Non-Store Retailers — 4.48% | |||||||
| Sotheby's, 5.250%, 10/01/2022, | |||||||
| Acquired 03/03/2014-10/03/2014 at $4,340,634■ | 4,426,000 | 4,049,790 | |||||
| Oil and Gas Extraction — 1.36% | |||||||
| Continental Resources, Inc., 5.000%, 09/15/2022 | 100,000 | 73,875 | |||||
| QEP Resources, Inc., 6.875%, 03/01/2021 | 250,000 | 206,250 | |||||
| WPX Energy Inc., 6.000%, 01/15/2022 | 1,350,000 | 951,750 | |||||
| 1,231,875 | |||||||
| Pharmaceuticals — 0.30% | |||||||
| Forest Laboratories, Inc., 5.000%, 12/15/2021, | |||||||
| Acquired 04/01/2014 at $262,920■ | 250,000 | 271,989 | |||||
| Professional, Scientific, and Technical Services — 0.84% | |||||||
| Lamar Media Corp., 5.000%, 05/01/2023 | 500,000 | 508,750 | |||||
| Nielsen Finance LLC, 4.500%, 10/01/2020 | 250,000 | 254,688 | |||||
| 763,438 | |||||||
| Publishing Industries (except Internet) — 0.57% | |||||||
| TEGNA, Inc. | |||||||
| 5.125%, 10/15/2019 | 250,000 | 259,375 | |||||
| 5.125%, 07/15/2020 | 250,000 | 260,000 | |||||
| 519,375 | |||||||
| Rail Transportation — 0.25% | |||||||
| Florida East Coast Holdings Corporation, 6.750%, 05/01/2019, | |||||||
| Acquired 07/09/2014 at $263,114■ | 250,000 | 229,375 |
The accompanying notes are an integral part of these financial statements.
135
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Real Estate — 7.20% | |||||||
| Brookfield Residential Properties | |||||||
| 6.500%, 12/15/2020, Acquired 07/14/2014-06/19/2015 at $6,259,816■ | $ | 6,000,000 | $ | 5,812,500 | |||
| 6.125%, 07/01/2022, Acquired 04/09/2015 at $103,750■ | 100,000 | 93,000 | |||||
| 6.375%, 05/15/2025, Acquired 06/19/2015 at $641,235■ | 651,000 | 608,685 | |||||
| 6,514,185 | |||||||
| Rental and Leasing Services — 2.65% | |||||||
| Hertz Corp., 6.750%, 04/15/2019 | 200,000 | 204,800 | |||||
| International Lease Finance Corp., 8.250%, 12/15/2020 | 1,850,000 | 2,192,250 | |||||
| 2,397,050 | |||||||
| Satellite Telecommunications — 3.51% | |||||||
| Dish DBS Corp. | |||||||
| 4.625%, 07/15/2017 | 3,000,000 | 3,067,500 | |||||
| 7.875%, 09/01/2019 | 100,000 | 109,000 | |||||
| 3,176,500 | |||||||
| Software and Services — 1.61% | |||||||
| Crown Castle International Corp., 4.875%, 04/15/2022 | 723,000 | 751,920 | |||||
| Nuance Communications, Inc., 5.375%, 08/15/2020, | |||||||
| Acquired 02/14/2014-07/29/2014 at $706,145■ | 700,000 | 704,424 | |||||
| 1,456,344 | |||||||
| Telecommunications — 4.42% | |||||||
| CenturyLink, Inc., 5.800%, 03/15/2022 | 500,000 | 460,125 | |||||
| Hughes Satellite Systems Corp. | |||||||
| 6.500%, 06/15/2019 | 450,000 | 486,562 | |||||
| 7.625%, 06/15/2021 | 500,000 | 531,875 | |||||
| Level 3 Financing, Inc., 7.000%, 06/01/2020 | 200,000 | 209,500 | |||||
| Millicom International Cellular SA, 4.750%, 05/22/2020, | |||||||
| Acquired 08/28/2014 at $390,975■ | 390,000 | 351,000 | |||||
| SoftBank Group Corp., 4.500%, 04/15/2020, | |||||||
| Acquired 04/24/2014-06/19/2015 at $1,414,406■ | 1,400,000 | 1,396,500 | |||||
| Sprint Communications Inc., 9.000%, 11/15/2018, | |||||||
| Acquired 12/30/2013 at $112,898■ | 100,000 | 105,500 | |||||
| T-Mobile USA, Inc., 6.633%, 04/28/2021 | 350,000 | 364,000 | |||||
| Virgin Media Secured Finance plc, 5.375%, 04/15/2021, | |||||||
| Acquired 02/11/2014 at $91,463■ | 90,000 | 93,263 | |||||
| 3,998,325 |
The accompanying notes are an integral part of these financial statements.
136
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| Principal | |||||||
| Amount | Value | ||||||
| Transportation Equipment Manufacturing — 1.95% | |||||||
| Dana Holding Corp., 5.375%, 09/15/2021 | $ | 250,000 | $ | 249,062 | |||
| Lear Corp., 4.750%, 01/15/2023 | 500,000 | 505,000 | |||||
| Navistar International Corp., 8.250%, 11/01/2021 | 1,500,000 | 1,005,000 | |||||
| 1,759,062 | |||||||
| Utilities — 0.30% | |||||||
| NRG Energy, Inc., 7.625%, 01/15/2018 | 100,000 | 104,750 | |||||
| ONEOK Inc., 4.250%, 02/01/2022 | 230,000 | 166,175 | |||||
| 270,925 | |||||||
| TOTAL CORPORATE BONDS | |||||||
| (cost $80,805,333) | 76,378,166 | ||||||
| MUNICIPAL BONDS — 0.27% | |||||||
| Air Transportation — 0.27% | |||||||
| Branson Missouri Regional Airport Transportation Development District | |||||||
6.000%, 07/01/2025a+ | 2,000,000 | 140,000 | |||||
6.000%, 07/01/2037a+ | 1,500,000 | 105,000 | |||||
| 245,000 | |||||||
| TOTAL MUNICIPAL BONDS | |||||||
| (cost $2,245,112) | 245,000 | ||||||
| ESCROW NOTES — 0.04% | |||||||
| Holding Company — 0.04% | |||||||
Energy Future Intermediate Holdings Co. LLCa | 1,000,000 | 35,000 | |||||
| TOTAL ESCROW NOTES | |||||||
| (cost $38,520) | 35,000 | ||||||
| EXCHANGE TRADED NOTES — 0.00% | Shares | ||||||
| Credit Intermediation and Related Activities — 0.00% | |||||||
| VelocityShares Daily Inverse VIX Medium Term ETN* | 100 | 4,131 | |||||
| TOTAL EXCHANGE TRADED NOTES | |||||||
| (cost $3,971) | 4,131 |
The accompanying notes are an integral part of these financial statements.
137
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| MUTUAL FUNDS — 6.47% | Shares | Value | |||||
| Funds, Trusts, and Other Financial Vehicles — 6.47% | |||||||
| AllianceBernstein Income Fund, Inc. | 130,600 | $ | 1,001,702 | ||||
| DoubleLine Opportunistic Credit Fund | 50,000 | 1,265,500 | |||||
| PIMCO Dynamic Income Fund | 89,000 | 2,435,040 | |||||
| PIMCO Income Opportunity Fund | 10,050 | 212,758 | |||||
| PIMCO Income Strategy Fund | 10,000 | 97,400 | |||||
| PIMCO Income Strategy Fund II | 10,000 | 87,700 | |||||
| Special Opportunities Fund Inc. | 20,000 | 264,000 | |||||
| Western Asset Mortgage Defined Opportunity Fund Inc.^ | 19,200 | 452,160 | |||||
| Western Asset/Claymore Inflation-Linked Opportunities & Income Fund | 2,200 | 22,638 | |||||
| Western Asset/Claymore Inflation-Linked Securities & Income Fund | 1,600 | 16,912 | |||||
| TOTAL MUTUAL FUNDS | |||||||
| (cost $6,430,937) | 5,855,810 | ||||||
| PURCHASED PUT OPTIONS — 0.02% | Contractsd | ||||||
| Motion Picture and Sound Recording Industries — 0.02% | |||||||
| DreamWorks Animation SKG, Inc. — Class A* | |||||||
| Expiration Date: January 2016, Exercise Price: $10.00 | 108 | 810 | |||||
| Expiration Date: January 2017, Exercise Price: $8.00 | 144 | 13,320 | |||||
| TOTAL PURCHASED PUT OPTIONS | |||||||
| (cost $10,718) | 14,130 | ||||||
| SHORT-TERM INVESTMENTS — 1.27% | Shares | ||||||
| Money Market Funds — 1.04% | |||||||
Fidelity Institutional Government Portfolio — Class I, 0.12%b | 943,735 | 943,735 | |||||
| U.S. Treasury Obligations — 0.23% | |||||||
| United States Treasury Bills, Maturity Date: 01/14/2016, | |||||||
| Yield to Maturity 0.040% | 207,000 | 207,080 | |||||
| TOTAL SHORT-TERM INVESTMENTS | |||||||
| (cost $1,150,818) | 1,150,815 |
The accompanying notes are an integral part of these financial statements.
138
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Multi-Disciplinary Income Portfolio |
Portfolio of Investments — December 31, 2015 — (Continued) |
| INVESTMENTS PURCHASED WITH THE CASH | |||||||
| PROCEEDS FROM SECURITIES LENDING — 0.53% | Shares | Value | |||||
| Money Market Funds — 0.53% | |||||||
Mount Vernon Securities Lending Trust — Prime Portfolio, 0.47%b | 475,000 | $ | 475,000 | ||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH | |||||||
| PROCEEDS FROM SECURITIES LENDING | |||||||
| (cost $475,000) | 475,000 | ||||||
| TOTAL INVESTMENTS — 99.15% | |||||||
| (cost $97,229,771) | $ | 89,695,469 |
| Percentages are stated as a percent of net assets. | |
| * — | Non-income producing security. |
| ^— | This security or a portion of this security was out on loan at December 31, 2015. Total loaned securities had a market value of $462,615 at December 31, 2015. The remaining contractual maturity of all of the securities lending transactions was overnight and continuous. |
■ — | Restricted security restricted to institutional investors (144a securities); the percentage of net assets comprised of 144a securities was 25.08%. |
a — | Default or other conditions exist and the security is not presently accruing income. |
| + — | Security is considered illiquid. The aggregate value of such securities is $245,000 or 0.27% of net assets. |
b — | The rate quoted is the annualized seven-day yield as of December 31, 2015. |
d — | 100 shares per contract. |
| CAD — Canadian Dollars. | |
| ETN — Exchange Traded Note. | |
The accompanying notes are an integral part of these financial statements.
139
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
| Portfolio of Options Written — December 31, 2015 |
| PUT OPTIONS WRITTEN | Contractsd | Value | |||||
| Accommodation | |||||||
| Marriott International Inc. — Class A | |||||||
| Expiration: January 2016, Exercise Price: $55.00 | 4 | $ | 50 | ||||
| Expiration: January 2017, Exercise Price: $50.00 | 4 | 790 | |||||
| Expiration: January 2017, Exercise Price: $55.00 | 9 | 2,768 | |||||
| Starwood Hotels & Resorts Worldwide, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $54.90 | 10 | 50 | |||||
| Expiration: January 2016, Exercise Price: $57.40 | 1 | 7 | |||||
| Expiration: January 2016, Exercise Price: $59.90 | 5 | 52 | |||||
| Expiration: January 2017, Exercise Price: $54.35 | 12 | 2,742 | |||||
| 6,459 | |||||||
| Administrative and Support Services | |||||||
| The Priceline Group Inc. | |||||||
| Expiration: January 2017, Exercise Price: $860.00 | 1 | 2,125 | |||||
| Beverage and Tobacco Product Manufacturing | |||||||
| The Coca-Cola Company | |||||||
| Expiration: January 2017, Exercise Price: $35.00 | 17 | 1,318 | |||||
| Molson Coors Brewing Company — Class B | |||||||
| Expiration: January 2017, Exercise Price: $60.00 | 2 | 220 | |||||
| PepsiCo, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $80.00 | 3 | 570 | |||||
| 2,108 | |||||||
| Broadcasting (except Internet) | |||||||
| CBS Corporation — Class B | |||||||
| Expiration: January 2016, Exercise Price: $40.00 | 36 | 252 | |||||
| Twenty-First Century Fox, Inc. — Class A | |||||||
| Expiration: January 2017, Exercise Price: $25.00 | 16 | 3,360 | |||||
| 3,612 | |||||||
| Building Material and Garden Equipment and Supplies Dealers | |||||||
| Fastenal Company | |||||||
| Expiration: January 2016, Exercise Price: $33.00 | 20 | 100 | |||||
| Expiration: January 2016, Exercise Price: $35.00 | 3 | 23 | |||||
| Expiration: January 2017, Exercise Price: $30.00 | 4 | 330 | |||||
| Expiration: January 2017, Exercise Price: $33.00 | 16 | 2,160 | |||||
| 2,613 |
The accompanying notes are an integral part of these financial statements.
140
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Chemical Manufacturing | |||||||
| Celgene Corporation | |||||||
| Expiration: January 2017, Exercise Price: $70.00 | 3 | $ | 634 | ||||
| CF Industries Holdings, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $39.00 | 10 | 5,550 | |||||
| Expiration: January 2017, Exercise Price: $40.00 | 5 | 3,037 | |||||
| The Dow Chemical Company | |||||||
| Expiration: January 2016, Exercise Price: $35.00 | 8 | 4 | |||||
| Expiration: January 2016, Exercise Price: $37.00 | 35 | 210 | |||||
| Expiration: January 2016, Exercise Price: $40.00 | 13 | 46 | |||||
| Eastman Chemical Company | |||||||
| Expiration: January 2016, Exercise Price: $55.00 | 6 | 30 | |||||
| Expiration: January 2016, Exercise Price: $60.00 | 18 | 180 | |||||
| Expiration: January 2016, Exercise Price: $65.00 | 6 | 315 | |||||
| Gilead Sciences, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $75.00 | 1 | 317 | |||||
| Expiration: January 2017, Exercise Price: $80.00 | 6 | 2,490 | |||||
| Expiration: January 2017, Exercise Price: $85.00 | 2 | 1,095 | |||||
| LyondellBasell Industries NV — Class A | |||||||
| Expiration: January 2016, Exercise Price: $65.00 | 7 | 140 | |||||
| Expiration: January 2016, Exercise Price: $67.50 | 12 | 90 | |||||
| Monsanto Company | |||||||
| Expiration: January 2016, Exercise Price: $85.00 | 7 | 60 | |||||
| 14,198 | |||||||
| Clothing and Clothing Accessories Stores | |||||||
| DSW Inc. — Class A | |||||||
| Expiration: January 2017, Exercise Price: $20.00 | 35 | 5,775 | |||||
| Expiration: January 2017, Exercise Price: $22.50 | 46 | 12,995 | |||||
| Nordstrom, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $50.15 | 8 | 5,260 | |||||
| Tiffany & Co. | |||||||
| Expiration: January 2016, Exercise Price: $67.50 | 7 | 77 | |||||
| Expiration: January 2016, Exercise Price: $70.00 | 2 | 42 | |||||
| Expiration: January 2016, Exercise Price: $72.50 | 7 | 343 | |||||
| Expiration: January 2016, Exercise Price: $75.00 | 8 | 932 | |||||
| Expiration: January 2017, Exercise Price: $65.00 | 2 | 950 | |||||
| Expiration: January 2017, Exercise Price: $70.00 | 4 | 2,620 | |||||
| Expiration: January 2017, Exercise Price: $75.00 | 3 | 2,632 | |||||
| 31,626 |
The accompanying notes are an integral part of these financial statements.
141
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Computer and Electronic Product Manufacturing | |||||||
| Agilent Technologies, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $30.00 | 6 | $ | 582 | ||||
| Apple, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $80.00 | 6 | 1,890 | |||||
| Cisco Systems, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $20.00 | 12 | 768 | |||||
| EMC Corporation | |||||||
| Expiration: January 2016, Exercise Price: $20.00 | 7 | 87 | |||||
| Expiration: January 2017, Exercise Price: $23.00 | 11 | 1,337 | |||||
| International Business Machines Corporation | |||||||
| Expiration: January 2016, Exercise Price: $130.00 | 1 | 33 | |||||
| Expiration: January 2017, Exercise Price: $125.00 | 1 | 813 | |||||
| Expiration: January 2017, Exercise Price: $130.00 | 4 | 4,010 | |||||
| Texas Instruments Inc. | |||||||
| Expiration: January 2017, Exercise Price: $38.00 | 7 | 812 | |||||
| 10,332 | |||||||
| Construction of Buildings | |||||||
| Lennar Corporation — Class A | |||||||
| Expiration: January 2017, Exercise Price: $30.00 | 21 | 1,911 | |||||
| Expiration: January 2017, Exercise Price: $33.00 | 6 | 750 | |||||
| Tri Pointe Group, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $10.00 | 75 | 4,875 | |||||
| 7,536 | |||||||
| Couriers and Messengers | |||||||
| FedEx Corp. | |||||||
| Expiration: January 2017, Exercise Price: $125.00 | 6 | 3,555 | |||||
| Expiration: January 2017, Exercise Price: $130.00 | 4 | 2,870 | |||||
| 6,425 | |||||||
| Credit Intermediation and Related Activities | |||||||
| American Express Company | |||||||
| Expiration: January 2016, Exercise Price: $65.00 | 12 | 258 | |||||
| Expiration: January 2016, Exercise Price: $67.50 | 6 | 318 | |||||
| Expiration: January 2017, Exercise Price: $65.00 | 5 | 2,225 | |||||
| Bank of America Corporation | |||||||
| Expiration: January 2017, Exercise Price: $13.00 | 15 | 705 |
The accompanying notes are an integral part of these financial statements.
142
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Credit Intermediation and Related Activities (Continued) | |||||||
| U.S. Bancorp | |||||||
| Expiration: January 2016, Exercise Price: $35.00 | 2 | $ | 13 | ||||
| Wells Fargo & Company | |||||||
| Expiration: January 2017, Exercise Price: $45.00 | 3 | 514 | |||||
| 4,033 | |||||||
| Diversified Financial Services | |||||||
| The Goldman Sachs Group, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $150.00 | 2 | 1,370 | |||||
| Electrical Equipment, Appliance, and Component Manufacturing | |||||||
| Corning Inc. | |||||||
| Expiration: January 2016, Exercise Price: $15.00 | 13 | 13 | |||||
| Expiration: January 2017, Exercise Price: $15.00 | 23 | 2,093 | |||||
| Emerson Electric Co. | |||||||
| Expiration: January 2016, Exercise Price: $45.00 | 2 | 40 | |||||
| Whirlpool Corporation | |||||||
| Expiration: January 2016, Exercise Price: $130.00 | 2 | 48 | |||||
| 2,194 | |||||||
| Equity Index | |||||||
| S&P 500 Index | |||||||
| Expiration: January 2016, Exercise Price: $1,955.00 | 1 | 223 | |||||
| Expiration: January 2016, Exercise Price: $1,960.00 | 5 | 3,150 | |||||
| Expiration: January 2016, Exercise Price: $1,990.00 | 6 | 11,850 | |||||
| Expiration: January 2016, Exercise Price: $1,995.00 | 28 | 39,880 | |||||
| Expiration: January 2016, Exercise Price: $2,000.00 | 5 | 3,525 | |||||
| Expiration: January 2016, Exercise Price: $2,005.00 | 1 | 840 | |||||
| Expiration: January 2016, Exercise Price: $2,010.00 | 4 | 8,350 | |||||
| Expiration: January 2016, Exercise Price: $2,015.00 | 8 | 17,580 | |||||
| Expiration: January 2016, Exercise Price: $2,025.00 | 6 | 7,620 | |||||
| 93,018 | |||||||
| Food and Beverage Stores | |||||||
| Whole Foods Market, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $28.00 | 25 | 5,300 | |||||
| Food Manufacturing | |||||||
| Tyson Foods, Inc. — Class A | |||||||
| Expiration: January 2017, Exercise Price: $28.00 | 55 | 2,475 | |||||
| Expiration: January 2017, Exercise Price: $30.00 | 34 | 1,955 | |||||
| 4,430 |
The accompanying notes are an integral part of these financial statements.
143
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Furniture and Home Furnishings Stores | |||||||
| Bed Bath & Beyond Inc. | |||||||
| Expiration: January 2016, Exercise Price: $50.00 | 10 | $ | 2,545 | ||||
| Heavy and Civil Engineering Construction | |||||||
| Chicago Bridge & Iron Company N.V. | |||||||
| Expiration: January 2016, Exercise Price: $32.50 | 7 | 35 | |||||
| Expiration: January 2016, Exercise Price: $35.00 | 3 | 45 | |||||
| Expiration: January 2017, Exercise Price: $35.00 | 8 | 3,560 | |||||
| Expiration: January 2017, Exercise Price: $37.50 | 19 | 9,975 | |||||
| 13,615 | |||||||
| Insurance Carriers and Related Activities | |||||||
| Aflac, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $47.50 | 4 | 632 | |||||
| Lincoln National Corporation | |||||||
| Expiration: January 2016, Exercise Price: $40.00 | 5 | 30 | |||||
| MetLife, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $38.00 | 27 | 445 | |||||
| Expiration: January 2016, Exercise Price: $40.00 | 19 | 323 | |||||
| Prudential Financial, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $65.00 | 30 | 75 | |||||
| 1,505 | |||||||
| Machinery Manufacturing | |||||||
| Baker Hughes Inc. | |||||||
| Expiration: January 2017, Exercise Price: $40.00 | 8 | 4,780 | |||||
| Caterpillar Inc. | |||||||
| Expiration: January 2016, Exercise Price: $65.00 | 8 | 468 | |||||
| Eaton Corporation plc | |||||||
| Expiration: January 2016, Exercise Price: $50.00 | 17 | 722 | |||||
| Expiration: January 2017, Exercise Price: $45.00 | 10 | 3,200 | |||||
| Ingersoll-Rand plc | |||||||
| Expiration: January 2016, Exercise Price: $47.50 | 2 | 15 | |||||
| 9,185 | |||||||
| Merchant Wholesalers, Nondurable Goods | |||||||
| Express Scripts Holding Company | |||||||
| Expiration: January 2017, Exercise Price: $60.00 | 4 | 448 | |||||
| Ralph Lauren Corporation | |||||||
| Expiration: January 2016, Exercise Price: $110.00 | 1 | 218 | |||||
| 666 |
The accompanying notes are an integral part of these financial statements.
144
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Miscellaneous Manufacturing | |||||||
| 3M Co. | |||||||
| Expiration: January 2017, Exercise Price: $125.00 | 2 | $ | 890 | ||||
| Intuitive Surgical, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $340.00 | 1 | 555 | |||||
| Expiration: January 2017, Exercise Price: $370.00 | 2 | 1,650 | |||||
| Expiration: January 2017, Exercise Price: $390.00 | 1 | 1,050 | |||||
| 4,145 | |||||||
| Motor Vehicle and Parts Dealers | |||||||
| CarMax, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $35.00 | 6 | 645 | |||||
| Expiration: January 2017, Exercise Price: $40.00 | 10 | 1,825 | |||||
| 2,470 | |||||||
| Nonmetallic Mineral Product Manufacturing | |||||||
| USG Corporation | |||||||
| Expiration: January 2017, Exercise Price: $20.00 | 9 | 1,305 | |||||
| Non-Store Retailers | |||||||
| Sotheby's | |||||||
| Expiration: January 2017, Exercise Price: $25.00 | 8 | 2,840 | |||||
| Expiration: January 2017, Exercise Price: $28.00 | 12 | 6,240 | |||||
| 9,080 | |||||||
| Oil and Gas Extraction | |||||||
| EOG Resources, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $60.00 | 2 | 31 | |||||
| Expiration: January 2016, Exercise Price: $65.00 | 2 | 99 | |||||
| Expiration: January 2016, Exercise Price: $67.50 | 14 | 1,323 | |||||
| Expiration: January 2017, Exercise Price: $65.00 | 5 | 3,887 | |||||
| 5,340 | |||||||
| Performing Arts, Spectator Sports, and Related Industries | |||||||
| Live Nation Entertainment, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $17.00 | 32 | 400 |
The accompanying notes are an integral part of these financial statements.
145
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Petroleum and Coal Products Manufacturing | |||||||
| Marathon Petroleum Corporation | |||||||
| Expiration: January 2017, Exercise Price: $32.50 | 18 | $ | 2,160 | ||||
| Phillips 66 | |||||||
| Expiration: January 2016, Exercise Price: $65.00 | 2 | 15 | |||||
| Expiration: January 2017, Exercise Price: $55.00 | 14 | 2,660 | |||||
| Expiration: January 2017, Exercise Price: $60.00 | 3 | 803 | |||||
| 5,638 | |||||||
| Pharmaceutical and Biotechnology | |||||||
| AbbVie Inc. | |||||||
| Expiration: January 2017, Exercise Price: $45.00 | 10 | 2,225 | |||||
| Expiration: January 2017, Exercise Price: $47.50 | 8 | 2,500 | |||||
| Amgen Inc. | |||||||
| Expiration: January 2017, Exercise Price: $95.00 | 1 | 203 | |||||
| Expiration: January 2017, Exercise Price: $100.00 | 2 | 467 | |||||
| Expiration: January 2017, Exercise Price: $105.00 | 1 | 282 | |||||
| Expiration: January 2017, Exercise Price: $110.00 | 2 | 695 | |||||
| Expiration: January 2017, Exercise Price: $115.00 | 2 | 830 | |||||
| Expiration: January 2017, Exercise Price: $120.00 | 5 | 2,475 | |||||
| Biogen Inc. | |||||||
| Expiration: January 2017, Exercise Price: $230.00 | 2 | 2,680 | |||||
| Expiration: January 2017, Exercise Price: $240.00 | 3 | 4,725 | |||||
| Bristol-Myers Squibb Company | |||||||
| Expiration: January 2016, Exercise Price: $45.00 | 4 | 6 | |||||
| Eli Lilly & Company | |||||||
| Expiration: January 2017, Exercise Price: $50.00 | 7 | 721 | |||||
| Merck & Co., Inc. | |||||||
| Expiration: January 2017, Exercise Price: $40.00 | 3 | 349 | |||||
| Expiration: January 2017, Exercise Price: $42.50 | 15 | 2,348 | |||||
| Expiration: January 2017, Exercise Price: $45.00 | 17 | 3,579 | |||||
| Expiration: January 2017, Exercise Price: $47.50 | 3 | 843 | |||||
| 24,928 |
The accompanying notes are an integral part of these financial statements.
146
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Professional, Scientific, and Technical Services | |||||||
| Computer Sciences Corporation | |||||||
| Expiration: January 2016, Exercise Price: $50.00 | 5 | $ | 12 | ||||
| Leidos Holdings Inc. | |||||||
| Expiration: January 2016, Exercise Price: $35.00 | 8 | 160 | |||||
| 172 | |||||||
| Publishing Industries (except Internet) | |||||||
| Autodesk, Inc. | |||||||
| Expiration: January 2017, Exercise Price: $40.00 | 17 | 2,176 | |||||
| Expiration: January 2017, Exercise Price: $42.50 | 4 | 688 | |||||
| 2,864 | |||||||
| Rail Transportation | |||||||
| Norfolk Southern Corporation | |||||||
| Expiration: January 2016, Exercise Price: $75.00 | 1 | 18 | |||||
| Securities, Commodity Contracts, and Other Financial Investments | |||||||
| and Related Activities | |||||||
| Morgan Stanley | |||||||
| Expiration: January 2017, Exercise Price: $25.00 | 20 | 2,340 | |||||
| Software Publishers | |||||||
| Oracle Corporation | |||||||
| Expiration: January 2016, Exercise Price: $32.00 | 12 | 66 | |||||
| Support Activities for Mining | |||||||
| Halliburton Company | |||||||
| Expiration: January 2016, Exercise Price: $33.00 | 6 | 348 | |||||
| Expiration: January 2016, Exercise Price: $35.00 | 10 | 1,495 | |||||
| Expiration: January 2017, Exercise Price: $35.00 | 2 | 1,100 | |||||
| Schlumberger Limited | |||||||
| Expiration: January 2016, Exercise Price: $65.00 | 9 | 279 | |||||
| Expiration: January 2016, Exercise Price: $70.00 | 12 | 1,926 | |||||
| Expiration: January 2017, Exercise Price: $65.00 | 2 | 1,175 | |||||
| Expiration: January 2017, Exercise Price: $70.00 | 12 | 9,810 | |||||
| 16,133 |
The accompanying notes are an integral part of these financial statements.
147
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| The Alternative Income Portfolio |
Portfolio of Options Written — December 31, 2015 — (Continued) |
Contractsd | Value | ||||||
| Transportation Equipment Manufacturing | |||||||
| Harley-Davidson, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $42.50 | 3 | $ | 43 | ||||
| Expiration: January 2016, Exercise Price: $45.00 | 3 | 207 | |||||
| Johnson Controls, Inc. | |||||||
| Expiration: January 2016, Exercise Price: $35.00 | 35 | 438 | |||||
| Expiration: January 2016, Exercise Price: $38.00 | 22 | 715 | |||||
| Expiration: January 2017, Exercise Price: $30.00 | 13 | 1,755 | |||||
| Expiration: January 2017, Exercise Price: $33.00 | 6 | 1,215 | |||||
| Textron Inc. | |||||||
| Expiration: January 2016, Exercise Price: $27.00 | 12 | 234 | |||||
| Expiration: January 2016, Exercise Price: $30.00 | 8 | 156 | |||||
| United Technologies Corporation | |||||||
| Expiration: January 2017, Exercise Price: $75.00 | 4 | 866 | |||||
| 5,629 | |||||||
| TOTAL PUT OPTIONS WRITTEN | |||||||
| (premiums received $531,242) | $ | 305,423 |
d — | 100 Shares Per Contract. | |
The accompanying notes are an integral part of these financial statements.
148
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| Statements of Assets & Liabilities |
| December 31, 2015 |
| The Internet | The Global | ||||||
| Portfolio | Portfolio | ||||||
| ASSETS: | |||||||
Investments, at value (1)(2) | $ | 111,946,581 | $ | 6,361,061 | |||
| Cash | 15,101,686 | 440,014 | |||||
| Receivable for contributed capital | 24,775 | — | |||||
| Receivable for investments sold | 95,697 | — | |||||
| Dividends and interest receivable | 5,701 | 9,294 | |||||
| Securities litigation receivable | 99,877 | — | |||||
| Prepaid expenses and other assets | 1,603 | 495 | |||||
| Total Assets | 127,275,920 | 6,810,864 | |||||
| LIABILITIES: | |||||||
| Payable to Adviser | 137,530 | 7,262 | |||||
| Payable to Trustees | 2,782 | 157 | |||||
| Payable to Chief Compliance Officer | 161 | 15 | |||||
| Payable for securities purchased | 18,655 | — | |||||
| Payable for collateral received for securities loaned | 669,576 | 36,852 | |||||
| Payable for withdrawn capital | 166,550 | 17,094 | |||||
| Accrued expenses and other liabilities | 34,049 | 15,586 | |||||
| Total Liabilities | 1,029,303 | 76,966 | |||||
| Net Assets | $ | 126,246,617 | $ | 6,733,898 | |||
(1) Cost of investments | $ | 65,224,590 | $ | 6,133,937 | |||
(2) Includes loaned securities with a market value of | $ | 608,492 | $ | 32,954 | |||
The accompanying notes are an integral part of these financial statements.
149
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Assets & Liabilities — (Continued) |
| December 31, 2015 |
| The Paradigm | The Medical | ||||||
| Portfolio | Portfolio | ||||||
| ASSETS: | |||||||
| Investments, at value | |||||||
Unaffiliated issuers(1) | $ | 802,065,455 | $ | 30,685,787 | |||
Affiliated issuers(2) | 79,609,834 | — | |||||
Total investments, at value(3)(4) | 881,675,289 | 30,685,787 | |||||
| Cash | 173,489 | — | |||||
| Receivable for contributed capital | 799,606 | 9,711 | |||||
| Receivable for investments sold | 1,100,873 | — | |||||
| Dividends and interest receivable | 81,029 | 40,934 | |||||
| Prepaid expenses and other assets | 164,231 | 2,090 | |||||
| Total Assets | 883,994,517 | 30,738,522 | |||||
| LIABILITIES: | |||||||
| Payable to Adviser | 928,849 | 30,876 | |||||
| Payable to Trustees | 19,778 | 585 | |||||
| Payable to Chief Compliance Officer | 1,322 | 30 | |||||
| Payable for collateral received for securities loaned | 31,982,370 | 1,492,308 | |||||
| Payable for withdrawn capital | 2,462,930 | 58,301 | |||||
| Accrued expenses and other liabilities | 179,693 | 16,949 | |||||
| Total Liabilities | 35,574,942 | 1,599,049 | |||||
| Net Assets | $ | 848,419,575 | $ | 29,139,473 | |||
(1) Unaffiliated issuers cost | $ | 613,969,915 | $ | 20,167,358 | |||
(2) Affiliated issuers cost | 54,508,652 | — | |||||
(3) Total issuers cost | $ | 668,478,567 | $ | 20,167,358 | |||
(4) Includes loaned securities with a market value of | $ | 30,148,648 | $ | 1,383,115 | |||
The accompanying notes are an integral part of these financial statements.
150
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Assets & Liabilities — (Continued) |
| December 31, 2015 |
| The Small Cap | The Market | ||||||
| Opportunities | Opportunities | ||||||
| Portfolio | Portfolio | ||||||
| ASSETS: | |||||||
Investments, at value (1)(2) | $ | 231,514,441 | $ | 39,181,833 | |||
| Cash | — | 4,124,365 | |||||
| Receivable for contributed capital | 153,937 | — | |||||
| Receivable for investments sold | 1,833,665 | — | |||||
| Dividends and interest receivable | 36,319 | 29,486 | |||||
| Securities litigation receivable | 20,977 | — | |||||
| Prepaid expenses and other assets | 51,769 | 1,658 | |||||
| Total Assets | 233,611,108 | 43,337,342 | |||||
| LIABILITIES: | |||||||
| Payable to Adviser | 247,021 | 46,007 | |||||
| Payable to Trustees | 5,662 | 947 | |||||
| Payable to Chief Compliance Officer | 401 | 60 | |||||
| Payable for collateral received for securities loaned | 11,712,925 | 843,792 | |||||
| Payable for withdrawn capital | 1,477,557 | 239,804 | |||||
| Accrued expenses and other liabilities | 54,389 | 21,456 | |||||
| Total Liabilities | 13,497,955 | 1,152,066 | |||||
| Net Assets | $ | 220,113,153 | $ | 42,185,276 | |||
(1) Cost of investments | $ | 267,217,056 | $ | 35,400,157 | |||
(2) Includes loaned securities with a market value of | $ | 10,619,444 | $ | 805,227 | |||
The accompanying notes are an integral part of these financial statements.
151
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Assets & Liabilities — (Continued) |
| December 31, 2015 |
| The Multi- | |||||||
| The Alternative | Disciplinary | ||||||
| Income | Income | ||||||
| Portfolio | Portfolio | ||||||
| ASSETS: | |||||||
Investments, at value (1)(2) | $ | 27,899,220 | $ | 89,695,469 | |||
| Cash | 232,629 | 8,281 | |||||
| Receivable for contributed capital | 9,411 | 72,217 | |||||
| Receivable for investments sold | 3,698 | 290,263 | |||||
| Dividends and interest receivable | 70,248 | 1,178,378 | |||||
| Prepaid expenses and other assets | 342 | 1,696 | |||||
| Total Assets | 28,215,548 | 91,246,304 | |||||
| LIABILITIES: | |||||||
Written options, at value (3) | 305,423 | — | |||||
| Payable to Adviser | 21,468 | 100,529 | |||||
| Payable to Trustees | 650 | 2,303 | |||||
| Payable to Chief Compliance Officer | 48 | 178 | |||||
| Payable for securities purchased | 51 | — | |||||
| Payable for collateral received for securities loaned | — | 475,000 | |||||
| Payable for withdrawn capital | 8,315 | 169,531 | |||||
| Accrued expenses and other liabilities | 21,534 | 32,209 | |||||
| Total Liabilities | 357,489 | 779,750 | |||||
| Net Assets | $ | 27,858,059 | $ | 90,466,554 | |||
(1) Cost of investments | $ | 28,019,478 | $ | 97,229,771 | |||
(2) Includes loaned securities with a market value of | $ | — | $ | 462,615 | |||
(3) Premiums received | $ | 531,242 | $ | — | |||
The accompanying notes are an integral part of these financial statements.
152
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| Statements of Operations |
| For the Year Ended December 31, 2015 |
| The Internet | The Global | ||||||
| Portfolio | Portfolio | ||||||
| INVESTMENT INCOME: | |||||||
| Dividends† | $ | 397,983 | $ | 70,838 | |||
| Interest | 3,702 | 3,329 | |||||
| Income from securities lending | 37,086 | 17,720 | |||||
| Total investment income | 438,771 | 91,887 | |||||
| EXPENSES: | |||||||
| Investment advisory fees | 1,798,481 | 103,877 | |||||
| Administration fees | 64,478 | 5,348 | |||||
| Professional fees | 16,526 | 8,405 | |||||
| Fund accounting fees | 26,890 | 6,723 | |||||
| Trustees' fees | 12,505 | 725 | |||||
| Chief Compliance Officer fees | 2,091 | 125 | |||||
| Custodian fees and expenses | 21,814 | 15,006 | |||||
| Other expenses | 5,833 | 364 | |||||
| Total expenses | 1,948,618 | 140,573 | |||||
| Net investment loss | (1,509,847 | ) | (48,686 | ) | |||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |||||||
| Net realized gain (loss) on: | |||||||
| Investments and foreign currency | 29,301,715 | (13,117 | ) | ||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (34,665,263 | ) | (1,094,934 | ) | |||
| Net realized and unrealized loss on investments | (5,363,548 | ) | (1,108,051 | ) | |||
| Net decrease in net assets resulting from operations | $ | (6,873,395 | ) | $ | (1,156,737 | ) | |
| † Net of foreign taxes withheld of: | $ | 986 | $ | 4,809 | |||
The accompanying notes are an integral part of these financial statements.
153
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Operations — (Continued) |
| For the Year Ended December 31, 2015 |
| The Paradigm | The Medical | ||||||
| Portfolio | Portfolio | ||||||
| INVESTMENT INCOME: | |||||||
| Dividends† | $ | 5,439,596 | $ | 469,340 | |||
| Interest | 63,505 | 296 | |||||
| Income from securities lending | 1,875,668 | 16,191 | |||||
| Dividends from affiliated issuer | 168,896 | — | |||||
| Total investment income | 7,547,665 | 485,827 | |||||
| EXPENSES: | |||||||
| Investment advisory fees | 13,151,361 | 369,584 | |||||
| Administration fees | 465,978 | 13,614 | |||||
| Professional fees | 71,780 | 9,659 | |||||
| Fund accounting fees | 177,213 | 7,050 | |||||
| Trustees' fees | 91,958 | 2,543 | |||||
| Chief Compliance Officer fees | 15,559 | 429 | |||||
| Custodian fees and expenses | 180,041 | 10,282 | |||||
| Other expenses | 44,309 | 1,032 | |||||
| Total expenses | 14,198,199 | 414,193 | |||||
| Net investment income (loss) | (6,650,534 | ) | 71,634 | ||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |||||||
| Net realized gain on: | |||||||
| Investments and foreign currency | 131,816,286 | 1,640,497 | |||||
| Affiliated issuer | 113,483 | — | |||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (202,056,024 | ) | (49,516 | ) | |||
| Net realized and unrealized gain (loss) on investments | (70,126,255 | ) | 1,590,981 | ||||
| Net increase (decrease) in net assets resulting from operations | $ | (76,776,789 | ) | $ | 1,662,615 | ||
| † Net of foreign taxes withheld of: | $ | 172,652 | $ | 15,373 | |||
The accompanying notes are an integral part of these financial statements.
154
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Operations — (Continued) |
| For the Year Ended December 31, 2015 |
| The Small Cap | The Market | ||||||
| Opportunities | Opportunities | ||||||
| Portfolio | Portfolio | ||||||
| INVESTMENT INCOME: | |||||||
| Dividends† | $ | 1,402,799 | $ | 344,898 | |||
| Interest | 9,219 | 1,843 | |||||
| Income from securities lending | 719,994 | 18,949 | |||||
| Total investment income | 2,132,012 | 365,690 | |||||
| EXPENSES: | |||||||
| Investment advisory fees | 3,811,318 | 619,651 | |||||
| Administration fees | 135,849 | 23,185 | |||||
| Professional fees | 26,516 | 10,857 | |||||
| Fund accounting fees | 53,586 | 12,309 | |||||
| Trustees' fees | 26,720 | 4,277 | |||||
| Chief Compliance Officer fees | 4,525 | 725 | |||||
| Custodian fees and expenses | 33,909 | 18,974 | |||||
| Other expenses | 12,791 | 2,070 | |||||
| Total expenses | 4,105,214 | 692,048 | |||||
| Net investment loss | (1,973,202 | ) | (326,358 | ) | |||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |||||||
| Net realized gain on: | |||||||
| Investments and foreign currency | 40,437,004 | 5,055,001 | |||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (72,366,337 | ) | (8,994,782 | ) | |||
| Net realized and unrealized loss on investments | (31,929,333 | ) | (3,939,781 | ) | |||
| Net decrease in net assets resulting from operations | $ | (33,902,535 | ) | $ | (4,266,139 | ) | |
| † Net of foreign taxes withheld of: | $ | 24,544 | $ | 14,706 | |||
The accompanying notes are an integral part of these financial statements.
155
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Operations — (Continued) |
| For the Year Ended December 31, 2015 |
| The Alternative | The Multi-Disciplinary | ||||||
| Income | Income | ||||||
| Portfolio | Portfolio | ||||||
| INVESTMENT INCOME: | |||||||
| Dividends | $ | 101,433 | $ | 965,741 | |||
| Interest | 227,077 | 5,269,780 | |||||
| Income from securities lending | — | 18,714 | |||||
| Total investment income | 328,510 | 6,254,235 | |||||
| EXPENSES: | |||||||
| Investment advisory fees | 308,226 | 1,603,658 | |||||
| Administration fees | 23,177 | 60,612 | |||||
| Professional fees | 10,070 | 16,146 | |||||
| Fund accounting fees | 40,104 | 42,921 | |||||
| Trustees' fees | 3,028 | 11,450 | |||||
| Chief Compliance Officer fees | 541 | 1,984 | |||||
| Custodian fees and expenses | 10,240 | 16,316 | |||||
| Other expenses | 1,253 | 4,668 | |||||
| Total expenses | 396,639 | 1,757,755 | |||||
| Net investment income (loss) | (68,129 | ) | 4,496,480 | ||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |||||||
| Net realized gain (loss) on: | |||||||
| Investments and foreign currency | (1,314 | ) | (2,805,443 | ) | |||
| Written option contracts expired or closed | 1,248,922 | 1,137,218 | |||||
| Long term realized gain distributions received from other investment companies | 1,280 | 117,027 | |||||
| Net change in unrealized depreciation of: | |||||||
| Investments and foreign currency | (26,926 | ) | (3,905,583 | ) | |||
| Written option contracts | (307,666 | ) | (1,004,687 | ) | |||
| Net realized and unrealized gain (loss) on investments | 914,296 | (6,461,468 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | $ | 846,167 | $ | (1,964,988 | ) | ||
The accompanying notes are an integral part of these financial statements.
156
| 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment loss | $ | (1,509,847 | ) | $ | (1,481,267 | ) | $ | (48,686 | ) | $ | (56,057 | ) | |
| Net realized gain (loss) on sale of investments and foreign currency | 29,301,715 | 10,596,602 | (13,117 | ) | 318,326 | ||||||||
| Net change in unrealized depreciation of investments and foreign currency | (34,665,263 | ) | (9,485,968 | ) | (1,094,934 | ) | (1,489,533 | ) | |||||
| Net decrease in net assets resulting from operations | (6,873,395 | ) | (370,633 | ) | (1,156,737 | ) | (1,227,264 | ) | |||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | |||||||||||||
| Contributions | 125,717 | 4,258,113 | 712,605 | 1,321,420 | |||||||||
| Withdrawals | (24,551,767 | ) | (25,200,462 | ) | (1,701,358 | ) | (3,431,883 | ) | |||||
| Net decrease in net assets resulting from beneficial interest transactions | (24,426,050 | ) | (20,942,349 | ) | (988,753 | ) | (2,110,463 | ) | |||||
| Total decrease in net assets | (31,299,445 | ) | (21,312,982 | ) | (2,145,490 | ) | (3,337,727 | ) | |||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 157,546,062 | 178,859,044 | 8,879,388 | 12,217,115 | |||||||||
| End of year | $ | 126,246,617 | $ | 157,546,062 | $ | 6,733,898 | $ | 8,879,388 | |||||
The accompanying notes are an integral part of these financial statements.
157
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Changes in Net Assets — (Continued) |
| 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment income (loss) | $ | (6,650,534 | ) | $ | (9,322,981 | ) | $ | 71,634 | $ | 116,887 | |||
| Net realized gain on sale of investments and foreign currency | 131,929,769 | 37,768,737 | 1,640,497 | 724,347 | |||||||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency | (202,056,024 | ) | (31,751,718 | ) | (49,516 | ) | 3,052,140 | ||||||
| Net increase (decrease) in net assets resulting from operations | (76,776,789 | ) | (3,305,962 | ) | 1,662,615 | 3,893,374 | |||||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | |||||||||||||
| Contributions | 2,767,699 | 41,918,037 | 3,148,519 | 2,943,930 | |||||||||
| Withdrawals | (269,901,615 | ) | (174,025,392 | ) | (2,788,288 | ) | (4,510,015 | ) | |||||
| Net increase (decrease) in net assets resulting from beneficial interest transactions | (267,133,916 | ) | (132,107,355 | ) | 360,231 | (1,566,085 | ) | ||||||
| Total increase (decrease) in net assets | (343,910,705 | ) | (135,413,317 | ) | 2,022,846 | 2,327,289 | |||||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 1,192,330,280 | 1,327,743,597 | 27,116,627 | 24,789,338 | |||||||||
| End of year | $ | 848,419,575 | $ | 1,192,330,280 | $ | 29,139,473 | $ | 27,116,627 | |||||
The accompanying notes are an integral part of these financial statements.
158
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Changes in Net Assets — (Continued) |
| The Small Cap | The Market | ||||||||||||
| Opportunities Portfolio | 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment loss | $ | (1,973,202 | ) | $ | (2,371,492 | ) | $ | (326,358 | ) | $ | (188,939 | ) | |
| Net realized gain on sale of investments and foreign currency | 40,437,004 | 22,546,457 | 5,055,001 | 4,070,775 | |||||||||
| Net change in unrealized depreciation of investments and foreign currency | (72,366,337 | ) | (47,310,333 | ) | (8,994,782 | ) | (7,187,539 | ) | |||||
| Net decrease in net assets resulting from operations | (33,902,535 | ) | (27,135,368 | ) | (4,266,139 | ) | (3,305,703 | ) | |||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | |||||||||||||
| Contributions | 4,181,520 | 137,470,247 | 626,085 | 7,541,435 | |||||||||
| Withdrawals | (103,323,128 | ) | (105,175,818 | ) | (8,550,561 | ) | (16,421,154 | ) | |||||
| Net increase (decrease) in net assets resulting from beneficial interest transactions | (99,141,608 | ) | 32,294,429 | (7,924,476 | ) | (8,879,719 | ) | ||||||
| Total increase (decrease) in net assets | (133,044,143 | ) | 5,159,061 | (12,190,615 | ) | (12,185,422 | ) | ||||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 353,157,296 | 347,998,235 | 54,375,891 | 66,561,313 | |||||||||
| End of year | $ | 220,113,153 | $ | 353,157,296 | $ | 42,185,276 | $ | 54,375,891 | |||||
The accompanying notes are an integral part of these financial statements.
159
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Statements of Changes in Net Assets — (Continued) |
| The Alternative | The Multi-Disciplinary | ||||||||||||
| Income Portfolio | Income 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, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| OPERATIONS: | |||||||||||||
| Net investment income (loss) | $ | (68,129 | ) | $ | (125,267 | ) | $ | 4,496,480 | $ | 3,503,350 | |||
| Net realized gain (loss) on sale of investments, foreign currency and written options and distributions received from other investment companies | 1,248,888 | 473,583 | (1,551,198 | ) | 1,923,890 | ||||||||
| Net change in unrealized depreciation of investments, foreign currency and written options | (334,592 | ) | (109,204 | ) | (4,910,270 | ) | (3,230,822 | ) | |||||
| Net increase (decrease) in net assets resulting from operations | 846,167 | 239,112 | (1,964,988 | ) | 2,196,418 | ||||||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | |||||||||||||
| Contributions | 3,765,782 | 21,281,441 | 11,325,447 | 67,848,185 | |||||||||
| Withdrawals | (14,984,082 | ) | (6,843,392 | ) | (54,428,755 | ) | (24,821,261 | ) | |||||
| Net increase (decrease) in net assets resulting from beneficial interest transactions | (11,218,300 | ) | 14,438,049 | (43,103,308 | ) | 43,026,924 | |||||||
| Total increase (decrease) in net assets | (10,372,133 | ) | 14,677,161 | (45,068,296 | ) | 45,223,342 | |||||||
| NET ASSETS: | |||||||||||||
| Beginning of year | 38,230,192 | 23,553,031 | 135,534,850 | 90,311,508 | |||||||||
| End of year | $ | 27,858,059 | $ | 38,230,192 | $ | 90,466,554 | $ | 135,534,850 | |||||
The accompanying notes are an integral part of these financial statements.
160
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
| Notes to Financial Statements |
| December 31, 2015 |
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 Alternative Income Portfolio and The Multi-Disciplinary Income Portfolio (collectively, the "Master Portfolios"). Pursuant to the 1940 Act, the Master Portfolios, are "non-diversified" series of the Trust, except The Global Portfolio, The Alternative Income Fund and The Multi-Disciplinary Income Portfolio. The Market Opportunities Portfolio commenced operations on January 31, 2006, The Alternative Income Portfolio commenced operations on June 29, 2007 and The Multi-Disciplinary Income Portfolio commenced operations on February 11, 2008. Each of the remaining Master Portfolios commenced operations on April 28, 2000.
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 Alternative Income Portfolio and The Multi-Disciplinary Income Portfolio (collectively, the "Master Portfolios"). Pursuant to the 1940 Act, the Master Portfolios, are "non-diversified" series of the Trust, except The Global Portfolio, The Alternative Income Fund and The Multi-Disciplinary Income Portfolio. The Market Opportunities Portfolio commenced operations on January 31, 2006, The Alternative Income Portfolio commenced operations on June 29, 2007 and The Multi-Disciplinary Income 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 Alternative Income Portfolio and The Multi-Disciplinary Income Portfolio, seeks to provide investors with long-term capital growth. The Alternative Income Portfolio seeks to provide current income and gains. The Multi-Disciplinary Income 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
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| December 31, 2015 |
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 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 Alternative Income and Multi-Disciplinary Income Portfolios 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, including exchange-traded funds, 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. 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 last bid price. Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes ("NBBO"). NBBO consists of the highest bid price and lowest ask price across any of the exchanges on which an option is quoted thus providing a view across the entire U.S. options marketplace. Composite option pricing calculates the mean of the highest bid price and the lowest asked price across the exchanges where the option is traded. If the composite option price is not
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, including exchange-traded funds, 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. 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 last bid price. Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes ("NBBO"). NBBO consists of the highest bid price and lowest ask price across any of the exchanges on which an option is quoted thus providing a view across the entire U.S. options marketplace. Composite option pricing calculates the mean of the highest bid price and the lowest asked price across the exchanges where the option is traded. If the composite option price is not
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| December 31, 2015 |
available, the mean between the highest bid and the lowest asked quotations at the close of the exchanges will be used. If none of the above are available, exchange traded options are valued at a quote provided by third party pricing agents. Non-exchange traded options for which over-the-counter quotations are not readily available are valued at the mean of the current bid and asked prices. If none of the third party pricing agents publish a price and it is the day of expiration, expiring options will be priced at intrinsic value. Debt obligations (including convertible securities) that are either investment grade or non-investment grade and irrespective of days to maturity will be valued as follows: Debt securities are valued at evaluated mean by one of the authorized third party pricing agents which rely on various valuation methodologies such as matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. Investments in registered open-end investment companies other than exchange-traded funds are valued at their reported net asset value ("NAV"). Certain instruments, such as repurchase agreements and demand notes, do not have values from third parties and are valued at amortized cost.
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. In determining the fair value of a security, the Board of Trustees shall take into account the relevant factors and surrounding circumstances, which may include: (i) the nature and pricing history (if any) of the security; (ii) whether any dealer quotations for the security are available; (iii) possible valuation methodologies that could be used to determine the fair value of the security; (iv) the recommendation of the portfolio manager of the Portfolios with respect to the valuation of the security; (v) whether the same or similar securities are held by other funds managed by the Adviser or other funds and the method used to price the security in those funds; (vi) the extent to which the fair value to be determined for the security will result from the use of data or formula produced by third parties independent of the Adviser; (vii) the liquidity or illiquidity of the market for the security; and (viii) the value of a foreign security traded on other foreign markets. At December 31, 2015, 0.00%, 0.00% and 0.00% of the net assets of The Internet Portfolio, The Paradigm Portfolio and The Market Opportunities Portfolio, respectively, were fair valued securities. The other Master Portfolios did not hold any fair valued securities at December 31, 2015.
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| December 31, 2015 |
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 102% 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.
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 102% 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.
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 values of investment securities and
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 values of investment securities and
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| December 31, 2015 |
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 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 year. Such fluctuations are included with the net realized and unrealized gain or loss from investments. 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, 2015, the following Master Portfolios held securities restricted to institutional investors (144A 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, 2015, the following Master Portfolios held securities restricted to institutional investors (144A Securities):
| Percentage of | |||||||
| Market Value | Net Assets | ||||||
| The Alternative Income Portfolio | $ | 451,093 | 1.62 | % | |||
| The Multi-Disciplinary Income Portfolio | 22,686,464 | 25.08 | % | ||||
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, 2015, the following Master Portfolios held illiquid securities:
| Percentage of | |||||||
| Market Value | Net Assets | ||||||
| The Internet Portfolio | $ | — | * | 0.00 | % | ||
| The Paradigm Portfolio | — | * | 0.00 | % | |||
| The Market Opportunities Portfolio | — | * | 0.00 | % | |||
| The Multi-Disciplinary Income Portfolio | 245,000 | 0.27 | % | ||||
| * | Amount is less than $0.50. |
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| December 31, 2015 |
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.
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.
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.
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.
Short-Term Investments
The Portfolios may invest in money market funds and short-term high quality debt securities such as commercial paper, repurchase agreements and certificates of deposit. Money market funds typically invest in short-term instruments and attempt to maintain a stable net asset value. While the risk is low, these funds may lose value. At December 31, 2015, The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, and The Multi-Disciplinary Income Portfolio invested approximately 1%, 1%, 4%, 5%, 5%, 2%, and 1%, respectively, of net assets in the Mount Vernon Securities Lending Trust-Prime Portfolio which normally invests in short-term instruments with an objective of maximizing current income to the extent consistent with the preservation of capital and liquidity. Mount Vernon Securities Lending Trust-Prime Portfolio's financial statements are available on the SEC website www.sec.gov.
The Portfolios may invest in money market funds and short-term high quality debt securities such as commercial paper, repurchase agreements and certificates of deposit. Money market funds typically invest in short-term instruments and attempt to maintain a stable net asset value. While the risk is low, these funds may lose value. At December 31, 2015, The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, and The Multi-Disciplinary Income Portfolio invested approximately 1%, 1%, 4%, 5%, 5%, 2%, and 1%, respectively, of net assets in the Mount Vernon Securities Lending Trust-Prime Portfolio which normally invests in short-term instruments with an objective of maximizing current income to the extent consistent with the preservation of capital and liquidity. Mount Vernon Securities Lending Trust-Prime Portfolio's financial statements are available on the SEC website www.sec.gov.
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| December 31, 2015 |
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.
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.
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, 2015, open tax years include the tax years ended December 31, 2012, through 2015. 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 U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") 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. Interest income is accounted for on the accrual basis and includes amortization of premiums and discounts on the effective interest method. 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 Trust's understanding of the applicable country's tax rules and rates.
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. Interest income is accounted for on the accrual basis and includes amortization of premiums and discounts on the effective interest method. 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 Trust's understanding of the applicable country's tax rules and rates.
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| December 31, 2015 |
3. Investment Adviser
The Trust has entered into Investment Advisory Agreements (the "Agreements") with Kinetics Asset Management LLC (the "Adviser"), with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. The Adviser is a wholly-owned subsidiary of Horizon Kinetics LLC. Under the terms of the Agreements, the Master Portfolios, except the Alternative Income Portfolio, compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio's average daily net assets. The Alternative Income Portfolio compensates the Adviser for its management services at the annual rate of 0.90% of the Master Portfolio's average daily net assets.
For the year ended December 31, 2015, Master Portfolios incurred the following expenses pursuant to the Agreements:
| Investment Advisory Fees | ||||
| The Internet Portfolio | $ | 1,798,481 | ||
| The Global Portfolio | 103,877 | |||
| The Paradigm Portfolio | 13,151,361 | |||
| The Medical Portfolio | 369,584 | |||
| The Small Cap Opportunities Portfolio | 3,811,318 | |||
| The Market Opportunities Portfolio | 619,651 | |||
| The Alternative Income Portfolio | 308,226 | |||
| The Multi-Disciplinary Income Portfolio | 1,603,658 | |||
For the year ended December 31, 2015, the Trust was allocated $26,000 for the services of the Chief Compliance Officer employed by the Adviser.
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| December 31, 2015 |
4. Securities Transactions
Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2015, were as follows:
Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2015, were as follows:
| Purchases | Sales | ||||||||||||
| U.S. | U.S. | ||||||||||||
| Government | Other | Government | Other | ||||||||||
| The Internet Portfolio | $ | — | $ | 800,631 | $ | — | $ | 64,842,028 | |||||
| The Global Portfolio | — | 1,178,945 | — | 3,715,294 | |||||||||
| The Paradigm Portfolio | — | 15,253,729 | — | 343,024,040 | |||||||||
| The Medical Portfolio | — | 3,340,342 | — | 4,116,565 | |||||||||
| The Small Cap Opportunities Portfolio | — | 5,671,225 | — | 127,940,186 | |||||||||
| The Market Opportunities Portfolio | — | 733,261 | — | 14,599,385 | |||||||||
| The Alternative Income Portfolio | 850,176 | 1,116,099 | 1,075,000 | 9,581,958 | |||||||||
| The Multi-Disciplinary Income Portfolio | — | 11,994,578 | — | 36,113,721 | |||||||||
As of December 31, 2015, the cost of investments and unrealized appreciation (depreciation) on investment securities for federal income tax purposes was as follows:
| Internet | Global | Paradigm | Medical | ||||||||||
| Tax Cost of Investments | $ | 65,443,117 | $ | 6,148,607 | $ | 688,716,725 | $ | 20,234,169 | |||||
| Unrealized Appreciation | 46,854,237 | 1,154,761 | 288,044,003 | 11,682,057 | |||||||||
| Unrealized Depreciation | (350,773 | ) | (942,307 | ) | (95,085,439 | ) | (1,230,439 | ) | |||||
| Net Unrealized Appreciation (Depreciation) | $ | 46,503,464 | $ | 212,454 | $ | 192,958,564 | $ | 10,451,618 | |||||
| Multi- | |||||||||||||
| Market | Alternative | Disciplinary | |||||||||||
| Small Cap | Opportunities | Income | Income | ||||||||||
| Tax Cost of Investments | $ | 270,483,090 | $ | 35,771,960 | $ | 28,019,478 | $ | 96,546,637 | |||||
| Unrealized Appreciation | 32,563,528 | 10,394,122 | 277,250 | 1,190,898 | |||||||||
| Unrealized Depreciation | (71,532,177 | ) | (6,984,249 | ) | (397,508 | ) | (8,042,066 | ) | |||||
| Net Unrealized Appreciation (Depreciation) | $ | (38,968,649 | ) | $ | 3,409,873 | $ | (120,258 | ) | $ | (6,851,168 | ) | ||
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| December 31, 2015 |
For the year ended December 31, 2015, the Master Portfolios wrote the following options:
| Number | Premium | ||||||
| of Contracts | Amount | ||||||
| The Alternative Income Portfolio | |||||||
| Outstanding at the Beginning of the Year | 8,473 | $ | 2,087,842 | ||||
| Options Written | 1,188 | 1,964,979 | |||||
| Options Exercised | (35 | ) | (32,853 | ) | |||
| Options Expired | (799 | ) | (151,905 | ) | |||
| Options Closed | (7,337 | ) | (3,336,821 | ) | |||
| Outstanding at December 31, 2015 | 1,490 | $ | 531,242 | ||||
| The Multi-Disciplinary Income Portfolio | |||||||
| Outstanding at the Beginning of the Year | 10,772 | $ | 3,234,528 | ||||
| Options Written | 306 | 42,246 | |||||
| Options Exercised | (166 | ) | (28,514 | ) | |||
| Options Expired | (2,465 | ) | (605,353 | ) | |||
| Options Closed | (8,447 | ) | (2,642,907 | ) | |||
| Outstanding at December 31, 2015 | — | $ | — |
5. Portfolio Securities Loaned
As of December 31, 2015, 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. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions. As the securities loans are subject to termination by the Funds or the borrower at any time, the remaining maturities of the outstanding securities lending transactions are considered to be overnight and continuous. The value
As of December 31, 2015, 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. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions. As the securities loans are subject to termination by the Funds or the borrower at any time, the remaining maturities of the outstanding securities lending transactions are considered to be overnight and continuous. The value
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| December 31, 2015 |
of the securities on loan and the value of the related collateral at December 31, 2015, were as follows:
| Securities | Collateral | ||||||
| The Internet Portfolio | $ | 608,492 | $ | 669,576 | |||
| The Global Portfolio | 32,954 | 36,852 | |||||
| The Paradigm Portfolio | 30,148,648 | 31,982,370 | |||||
| The Medical Portfolio | 1,383,115 | 1,492,308 | |||||
| The Small Cap Opportunities Portfolio | 10,619,444 | 11,712,925 | |||||
| The Market Opportunities Portfolio | 805,227 | 843,792 | |||||
| The Alternative Income Portfolio | — | — | |||||
| The Multi-Disciplinary Income Portfolio | 462,615 | 475,000 | |||||
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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | (4.95 | )% | 0.28 | % | 44.75 | % | 23.76 | % | (1.47 | )% | ||||||
| Ratio of expenses to average net assets: | 1.35 | % | 1.34 | % | 1.37 | % | 1.37 | % | 1.38 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | (1.05 | )% | (0.90 | )% | (0.84 | )% | 0.16 | % | (0.43 | )% | ||||||
| Portfolio turnover rate | 1 | % | 1 | % | 8 | % | 9 | % | 32 | % | ||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | (14.13 | )% | (12.10 | )% | 28.25 | % | 22.78 | % | (16.25 | )% | ||||||
| Ratio of expenses to average net assets: | 1.69 | % | 1.60 | % | 1.73 | % | 1.77 | % | 2.23 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | (0.59 | )% | (0.52 | )% | (0.12 | )% | 0.40 | % | 0.61 | % | ||||||
| Portfolio turnover rate | 16 | % | 14 | % | 15 | % | 23 | % | 135 | % | ||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | (8.04 | )% | (0.48 | )% | 44.36 | % | 22.06 | % | (14.00 | )% | ||||||
| Ratio of expenses to average net assets: | 1.35 | % | 1.33 | % | 1.35 | % | 1.36 | % | 1.37 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | (0.63 | )% | (0.72 | )% | (0.23 | )% | 0.50 | % | 0.37 | % | ||||||
| Portfolio turnover rate | 2 | % | 7 | % | 4 | % | 6 | % | 58 | % | ||||||
171
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | 6.58 | % | 16.42 | % | 49.23 | % | 8.81 | % | 5.10 | % | ||||||
| Ratio of expenses to average net assets: | 1.40 | % | 1.41 | % | 1.41 | % | 1.44 | % | 1.40 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | 0.24 | % | 0.44 | % | (0.02 | )% | 1.62 | % | 0.86 | % | ||||||
| Portfolio turnover rate | 12 | % | 3 | % | 12 | % | 0 | % | 5 | % | ||||||
| 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | (11.97 | )% | (6.98 | )% | 59.69 | % | 26.94 | % | (13.44 | )% | ||||||
| Ratio of expenses to average net assets: | 1.35 | % | 1.34 | % | 1.35 | % | 1.44 | % | 1.43 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | (0.65 | )% | (0.59 | )% | 0.01 | % | 0.27 | % | 0.03 | % | ||||||
| Portfolio turnover rate | 2 | % | 19 | % | 6 | % | 22 | % | 47 | % | ||||||
| The Market 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | (8.87 | )% | (5.30 | )% | 46.98 | % | 17.73 | % | (7.63 | )% | ||||||
| Ratio of expenses to average net assets: | 1.40 | % | 1.39 | % | 1.40 | % | 1.43 | % | 1.42 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | (0.66 | )% | (0.30 | )% | 0.27 | % | 0.44 | % | 0.30 | % | ||||||
| Portfolio turnover rate | 2 | % | 18 | % | 21 | % | 26 | % | 14 | % | ||||||
| The Alternative Income 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | 2.73 | % | 1.23 | % | 4.92 | % | 10.05 | % | (4.66 | )% | ||||||
| Ratio of expenses to average net assets: | 1.16 | % | 1.22 | % | 1.25 | % | 1.49 | % | 1.42 | % | ||||||
| Ratio of net investment income (loss) to average net assets: | (0.20 | )% | (0.40 | )% | (0.54 | )% | 1.99 | % | 1.47 | % | ||||||
| Portfolio turnover rate | 6 | % | 17 | % | 19 | % | 56 | % | 69 | % | ||||||
172
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
| The Multi-Disciplinary Income 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, | ||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||
| Total Return* | (2.05 | )% | 2.58 | % | 4.39 | % | 15.42 | % | 0.19 | % | ||||||
| Ratio of expenses to average net assets: | 1.37 | % | 1.37 | % | 1.39 | % | 1.45 | % | 1.54 | % | ||||||
| Ratio of net investment income to average net assets: | 3.50 | % | 3.06 | % | 1.87 | % | 3.23 | % | 8.00 | % | ||||||
| Portfolio turnover rate | 10 | % | 35 | % | 54 | % | 41 | % | 74 | % | ||||||
| * | The returns are calculated by adjusting the corresponding No-Load Feeder returns by Feeder expenses and reimbursements. |
7. Summary of Fair Value Exposure
Various inputs are used in determining the value of a Master Portfolio's investments. These inputs are summarized in the three broad levels listed below:
Various inputs are used in determining the value of a Master Portfolio'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 a Master Portfolio 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 a Master Portfolio'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.
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| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
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.
The Internet Portfolio
The following is a summary of the inputs used to value The Internet Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 85,135,293 | $ | 257,512 | (1) | $ | — | $ | 85,392,805 | ||||
| Escrow Notes | — | — | — | * | — | * | |||||||
| Rights | 124,200 | — | — | 124,200 | |||||||||
| Short-Term Investments | 25,760,000 | — | — | 25,760,000 | |||||||||
| Investments Purchased with the Cash | |||||||||||||
| Proceeds from Securities Lending | 669,576 | — | — | 669,576 | |||||||||
| Total Investments in Securities | $ | 111,689,069 | $ | 257,512 | $ | — | * | $ | 111,946,581 |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: |
| Administrative and Support Services | $ | 1,638 | ||
| Rental and Leasing Services | 252,000 | |||
| Telecommunications | 3,874 | |||
| $ | 257,512 | |||
| Transfers out of Level 1 into Level 2 | $ | 257,512 |
Transfers were made out of Level 1 into Level 2 due to a decrease in 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:
| Description | Investments in Securities | |||
| Balance as of December 31, 2014 | $ | — | * | |
| Accrued discounts/premiums | — | |||
| Realized gain (loss) | — | |||
| Change in unrealized appreciation (depreciation) | — | |||
| Net purchases | — | |||
| Net sales and/or write-offs | — | * | ||
| Transfer in and/or out of Level 3 | — | |||
| Balance as of December 31, 2015 | $ | — | * | |
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| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
| Fair Value at | Valuation | Unobservable | |||||||
| Description | 12/31/2015 | Techniques | Input | Range | |||||
| Escrow Notes | $—* | Conservative Value | No active | $0.00-$0.00 | |||||
| Assigned Pending | market | ||||||||
| Bankruptcy Litigation | |||||||||
| Proceedings/Market | |||||||||
| Comparables |
There is no active market for the Level 3 securities, so a conservative value is being assigned until such time as a market exists.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
| * | Amount is less than $0.50. |
The Global Portfolio
The following is a summary of the inputs used to value The Global Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 4,244,406 | $ | 673,046 | (1) | $ | — | $ | 4,917,452 | ||||
| Corporate Bonds | — | 36,340 | — | 36,340 | |||||||||
| Purchased Put Options | — | 8,065 | — | 8,065 | |||||||||
| Warrants | 15,290 | — | — | 15,290 | |||||||||
| Short-Term Investments | 1,347,062 | — | — | 1,347,062 | |||||||||
| Investments Purchased with the Cash Proceeds from Securities Lending | 36,852 | — | — | 36,852 | |||||||||
| Total Investments in Securities | $ | 5,643,610 | $ | 717,451 | $ | — | $ | 6,361,061 |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: |
| Asset Management | $ | 458,010 | ||
| Real Estate | 214,364 | |||
| Restaurants | 672 | |||
| $ | 673,046 | |||
| Transfers out of Level 1 into Level 2 | $ | 430,640 | ||
| Transfers out of Level 2 into Level 1 | $ | 3,703 |
Transfers were made out of Level 1 into Level 2 due to an decrease in market activity.
Transfers were made out of Level 2 into Level 1 due to an increase in market activity.
Transfers between levels are recognized at the end of the reporting period.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
175
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Paradigm Portfolio
The following is a summary of the inputs used to value The Paradigm Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 705,309,648 | $ | 26,642,802 | (1) | $ | — | $ | 731,952,450 | ||||
| Escrow Notes | — | — | — | * | — | * | |||||||
| Purchased Put Options | — | 46,170 | — | 46,170 | |||||||||
| Warrants | 1,040,941 | — | — | 1,040,941 | |||||||||
| Short-Term Investments | 114,355,452 | 2,297,906 | — | 116,653,358 | |||||||||
| Investments Purchased with the Cash Proceeds from Securities Lending | 31,982,370 | — | — | 31,982,370 | |||||||||
| Total Investments in Securities | $ | 852,688,411 | $ | 28,986,878 | $ | — | * | $ | 881,675,289 |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: |
| Asset Management | $ | 20,473,647 | ||
| Oil and Gas Extraction | 4,561,422 | |||
| Real Estate | 1,607,733 | |||
| $ | 26,642,802 | |||
| Transfers out of Level 1 into Level 2 | $ | 20,455,400 |
Transfers were made out of Level 1 into Level 2 due to a decrease in 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:
| Description | Investments in Securities | |||
| Balance as of December 31, 2014 | $ | — | * | |
| Accrued discounts/premiums | — | |||
| Realized gain (loss) | — | |||
| Change in unrealized appreciation (depreciation) | — | |||
| Net purchases | — | |||
| Net sales and/or write-offs | — | * | ||
| Transfer in and/or out of Level 3 | — | |||
| Balance as of December 31, 2015 | $ | — | * | |
| Fair Value at | Valuation | Unobservable | |||||||
| Description | 12/31/15 | Techniques | Input | Range | |||||
| Escrow Notes | $—* | Conservative Value | No active | $0.00-$0.00 | |||||
| Assigned Pending market | |||||||||
| Bankruptcy Litigation | |||||||||
| Proceedings/Market | |||||||||
| Comparables |
There is no active market for the Level 3 securities, so a conservative value is being assigned until such time as a market exists.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
| * | Amount is less than $0.50. |
176
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Medical Portfolio
The following is a summary of the inputs used to value The Medical Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 27,209,469 | $ | — | $ | — | $ | 27,209,469 | |||||
| Rights | 8,022 | — | — | 8,022 | |||||||||
| Short-Term Investments | 1,975,988 | — | — | 1,975,988 | |||||||||
| Investments Purchased with the Cash Proceeds from Securities Lending | 1,492,308 | — | — | 1,492,308 | |||||||||
| Total Investments in Securities | $ | 30,685,787 | $ | — | $ | — | $ | 30,685,787 |
For the year ended December 31, 2015, there were no transfers into or out of Level 1 or Level 2, or investments in Level 3 securities.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
The Small Cap Opportunities Portfolio
The following is a summary of the inputs used to value The Small Cap Opportunities Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 168,570,721 | $ | 24,998,391 | (1) | $ | — | $ | 193,569,112 | ||||
| Rights | 388,801 | — | — | 388,801 | |||||||||
| Warrants | 105,501 | — | — | 105,501 | |||||||||
| Short-Term Investments | 25,738,102 | — | — | 25,738,102 | |||||||||
| Investments Purchased with the Cash Proceeds from Securities Lending | 11,712,925 | — | — | 11,712,925 | |||||||||
| Total Investments in Securities | $ | 206,516,050 | $ | 24,998,391 | $ | — | $ | 231,514,441 |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: |
| Asset Management | $ | 13,128,353 | ||
| Oil and Gas Extraction | 1,125 | |||
| Real Estate | 11,716,485 | |||
| Rental and Leasing Services | 34,020 | |||
| Telecommunications | 118,408 | |||
| $ | 24,998,391 | |||
| Transfers out of Level 1 into Level 2 | $ | 130,153 |
Transfers were made out of Level 1 into Level 2 due to a decrease in market activity.
Transfers between levels are recognized at the end of the reporting period.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
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| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Market Opportunities Portfolio
The following is a summary of the inputs used to value The Market Opportunities Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 24,882,791 | $ | 4,948,751 | (1) | $ | — | $ | 29,831,542 | ||||
| Corporate Bonds | — | 5,060 | — | 5,060 | |||||||||
| Purchased Put Options | — | 15,390 | — | 15,390 | |||||||||
| Rights | — | — | — | * | — | * | |||||||
| Warrants | 2,123 | — | — | 2,123 | |||||||||
| Short-Term Investments | 8,483,926 | — | — | 8,483,926 | |||||||||
| Investments Purchased with the Cash Proceeds from Securities Lending | 843,792 | — | — | 843,792 | |||||||||
| Total Investments in Securities | $ | 34,212,632 | $ | 4,969,201 | $ | — | * | $ | 39,181,833 |
| (1) | The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: |
| Asset Management | $ | 3,509,147 | ||
| Real Estate | 1,439,604 | |||
| $ | 4,948,751 | |||
| Transfers out of Level 1 into Level 2 | $ | 2,510,016 |
Transfers were made out of Level 1 into Level 2 due to a decrease in 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:
| Description | Investments in Securities | |||
| Balance as of December 31, 2014 | $ | — | * | |
| Accrued discounts/premiums | — | |||
| Realized gain (loss) | — | |||
| Change in unrealized appreciation (depreciation) | — | |||
| Net purchases | — | |||
| Net sales and/or write-offs | — | |||
| Transfer in and/or out of Level 3 | — | |||
| Balance as of December 31, 2015 | $ | — | * | |
| Fair Value at | Valuation | Unobservable | |||||||
| Description | 12/31/15 | Techniques | Input | Range | |||||
| Rights | $— | Market | No active | $0.00-$0.00 | |||||
| Comparables | market |
There is no active market for the Level 3 securities, so a conservative value is being assigned until such time as a market exists.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
| * | Amount is less than $0.50. |
178
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Alternative Income Portfolio
The following is a summary of the inputs used to value The Alternative Income Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Corporate Bonds | $ | — | $ | 16,513,283 | $ | — | $ | 16,513,283 | |||||
| U.S. Government Agency Issues | — | 500,298 | — | 500,298 | |||||||||
| U.S. Treasury Obligations | — | 2,596,012 | — | 2,596,012 | |||||||||
| Exchange Traded Funds | 5,740,750 | — | — | 5,740,750 | |||||||||
| Purchased Put Options | — | 54,860 | — | 54,860 | |||||||||
| Short-Term Investments | 2,494,017 | — | — | 2,494,017 | |||||||||
| Total Investments in Securities | $ | 8,234,767 | $ | 19,664,453 | $ | — | $ | 27,899,220 | |||||
| Liabilities | |||||||||||||
| Put Options Written | $ | — | $ | 305,423 | $ | — | $ | 305,423 |
For the year ended December 31, 2015, there were no transfers into or out of Level 1 or Level 2, or investments in Level 3 securities.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
The Multi-Disciplinary Income Portfolio
The following is a summary of the inputs used to value The Multi-Disciplinary Income Portfolio's net assets as of December 31, 2015:
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Convertible Bonds | $ | — | $ | 5,537,417 | $ | — | $ | 5,537,417 | |||||
| Corporate Bonds | — | 76,378,166 | — | 76,378,166 | |||||||||
| Municipal Bonds | — | 245,000 | — | 245,000 | |||||||||
| Escrow Notes | — | 35,000 | — | 35,000 | |||||||||
| Exchange Traded Notes | 4,131 | — | — | 4,131 | |||||||||
| Mutual Funds | 5,855,810 | — | — | 5,855,810 | |||||||||
| Purchased Put Options | — | 14,130 | — | 14,130 | |||||||||
| Short-Term Investments | 943,735 | 207,080 | — | 1,150,815 | |||||||||
| Investments Purchased with the Cash Proceeds from Securities Lending | 475,000 | — | — | 475,000 | |||||||||
| Total Investments in Securities | $ | 7,278,676 | $ | 82,416,793 | $ | — | $ | 89,695,469 |
For the year ended December 31, 2015, there were no transfers into or out of Level 1 or Level 2, or investments in Level 3 securities.
| ^ | See Portfolio of Investments for breakout of investments by industry classification. |
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Notes to Financial Statements — (Continued) |
| December 31, 2015 |
8. Disclosures about Derivative Instruments and Hedging Activities
The Master Portfolios have adopted authoritative standards regarding disclosure of 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, 2015:
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||||
| Investments, | |||||||||||||
| Purchased Put Options | at value | $ | — | $ | — | ||||||||
| Total | $ | — | $ | — | |||||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (678,955 | ) | |
| Total | $ | (678,955 | ) |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | — | ||
| Total | $ | — |
There were 3,298 purchased option contracts opened and $959,444 premiums paid during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 69,169 |
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| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Global Portfolio
Statement of Assets and Liabilities
Fair values of derivative instruments as of December 31, 2015:
Fair values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||
| Investments, | |||||||||||
| Purchased Put Options | at value | $ | 8,065 | $ | — | ||||||
| Total | $ | 8,065 | $ | — | |||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (44,659 | ) | |
| Total | $ | (44,659 | ) |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (1,041 | ) | |
| Total | $ | (1,041 | ) |
There were 212 purchased option contracts opened and $57,278 premiums paid during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 6,896 |
The Paradigm Portfolio
Statement of Assets and Liabilities
Fair values of derivative instruments as of December 31, 2015:
Fair values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||
| Investments, | |||||||||||
| Purchased Put Options | at value | $ | 46,170 | $ | — | ||||||
| Total | $ | 46,170 | $ | — | |||||||
181
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (5,469,143 | ) | |
| Total | $ | (5,469,143 | ) |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (6,338 | ) | |
| Total | $ | (6,338 | ) |
There were 25,248 purchased option contracts opened and $6,694,238 premiums paid during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 522,566 |
The Small Cap Opportunities Portfolio Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||
| Investments, | |||||||||||
| Purchased Put Options | at value | $ | — | $ | — | ||||||
| Total | $ | — | $ | — | |||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (1,501,188 | ) | |
| Total | $ | (1,501,188 | ) |
182
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | — | ||
| Total | $ | — |
There were 4,750 purchased option contracts opened and $1,581,122 premiums paid during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 105,985 |
The Market Opportunities Portfolio
Statement of Assets and Liabilities
Fair values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||
| Investments, | |||||||||||
| Purchased Put Options | at value | $ | 15,390 | $ | — | ||||||
| Total | $ | 15,390 | $ | — | |||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (211,022 | ) | |
| Total | $ | (211,022 | ) |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (2,083 | ) | |
| Total | $ | (2,083 | ) |
There were 1,357 purchased option contracts opened and $369,672 premiums paid during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 31,761 |
183
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Alternative Income Portfolio Statement of Assets and Liabilities
Fair values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||
| Investments, | |||||||||||
| Purchased Put Options | at value | $ | 54,860 | $ | — | ||||||
| Total | $ | 54,860 | $ | — | |||||||
| Written put | |||||||||||
| Written Put Options | $ | — | options, at value | $ | 305,423 | ||||||
| Total | $ | — | $ | 305,423 | |||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (5,197 | ) | |
| Written Put Options | 1,248,922 | |||
| Total | $ | 1,243,725 |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | 2,862 | ||
| Written Put Options | (307,666 | ) | ||
| Total | $ | (304,804 | ) |
There were 1,188 written option contracts were opened and $1,964,979 premiums were received during the year. There were no purchased option contracts opened during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 61,095 | ||
| Put Options Written | $ | 747,627 |
184
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Multi-Disciplinary Income Portfolio
Statement of Assets and Liabilities
Fair values of derivative instruments as of December 31, 2015:
| Assets | Liabilities | ||||||||||
| Equity Contracts | Description | Fair Value | Description | Fair Value | |||||||
| Investments, | |||||||||||
| Purchased Put Options | at value | $ | 14,130 | $ | — | ||||||
| Total | $ | 14,130 | $ | — | |||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2015:
Amount of Realized Gain (Loss) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options | $ | (692,712 | ) | |
| Written Put Options | 1,137,218 | |||
| Total | $ | 444,506 |
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
| Equity Contracts | ||||
| Purchased Put Options. | $ | (29,885 | ) | |
| Written Put Options. | (1,004,687 | ) | ||
| Total | $ | (1,034,572 | ) |
There were 306 written option contracts were opened and $42,246 premiums were received during the year. There were 4,328 purchased option contracts opened and $1,435,239 premiums paid during the year.
Average quarterly market value of:
| Purchased Put Options | $ | 1,113,971 | ||
| Put Options Written | $ | 849,589 |
9. Offsetting Assets and Liabilities
The Master Portfolios are subject to various Master Netting Arrangements, which govern the terms of certain transactions with select counterparties. The Master Netting Arrangements allow a Portfolio to close out and net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. The Master Netting Arrangements also specify collateral posting arrangements at pre-
The Master Portfolios are subject to various Master Netting Arrangements, which govern the terms of certain transactions with select counterparties. The Master Netting Arrangements allow a Portfolio to close out and net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. The Master Netting Arrangements also specify collateral posting arrangements at pre-
185
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
arranged exposure levels. Under the Master Netting Arrangements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Netting Arrangement with a counterparty in a given account exceeds a specific threshold depending on the counterparty and the type of Master Netting Arrangement.
The following is a summary of the Assets and Liabilities subject to offsetting in the Portfolios as of December 31, 2015:
The Internet Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 669,576 | $ | — | $ | 669,576 | $ | 669,576 | $ | — | $ | — | |||||||
| $ | 669,576 | $ | — | $ | 669,576 | $ | 669,576 | $ | — | $ | — | ||||||||
The Global Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 36,852 | $ | — | $ | 36,852 | $ | 36,852 | $ | — | $ | — | |||||||
| $ | 36,852 | $ | — | $ | 36,852 | $ | 36,852 | $ | — | $ | — | ||||||||
The Paradigm Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 31,982,370 | $ | — | $ | 31,982,370 | $ | 31,982,370 | $ | — | $ | — | |||||||
| $ | 31,982,370 | $ | — | $ | 31,982,370 | $ | 31,982,370 | $ | — | $ | — | ||||||||
186
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Medical Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 1,492,308 | $ | — | $ | 1,492,308 | $ | 1,492,308 | $ | — | $ | — | |||||||
| $ | 1,492,308 | $ | — | $ | 1,492,308 | $ | 1,492,308 | $ | — | $ | — | ||||||||
The Small Cap Opportunities Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 11,712,925 | $ | — | $ | 11,712,925 | $ | 11,712,925 | $ | — | $ | — | |||||||
| $ | 11,712,925 | $ | — | $ | 11,712,925 | $ | 11,712,925 | $ | — | $ | — | ||||||||
The Market Opportunities Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 843,792 | $ | — | $ | 843,792 | $ | 843,792 | $ | — | $ | — | |||||||
| $ | 843,792 | $ | — | $ | 843,792 | $ | 843,792 | $ | — | $ | — | ||||||||
The Alternative Income Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Written | |||||||||||||||||||
| Options | $ | 305,423 | $ | — | $ | 305,423 | $ | — | $ | 305,423 | $ | — | |||||||
| $ | 305,423 | $ | — | $ | 305,423 | $ | — | $ | 305,423 | $ | — | ||||||||
187
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
The Multi-Disciplinary Income Portfolio
| Gross | Net | ||||||||||||||||||
| Amounts | Amounts | Gross Amounts not offset | |||||||||||||||||
| Liabilities: | Offset | Presented | in the statement | ||||||||||||||||
| in the | in the | of financial position | |||||||||||||||||
| Gross Amounts | Statement | Statement of | Collateral | ||||||||||||||||
| of Recognized | of Financial | Financial | Financial | Pledged | Net | ||||||||||||||
| Liabilities | Position | Position | Instruments | (Received) | Amount | ||||||||||||||
| Securities | |||||||||||||||||||
| Lending | $ | 475,000 | $ | — | $ | 475,000 | $ | 475,000 | $ | — | $ | — | |||||||
| $ | 475,000 | $ | — | $ | 475,000 | $ | 475,000 | $ | — | $ | — | ||||||||
10. Affiliated Issuers
Under section 2(a)(3) of the 1940 Act, an investment company is defined as being an affiliated person of a company if it owns five percent or more of a company's outstanding voting stock.
Under section 2(a)(3) of the 1940 Act, an investment company is defined as being an affiliated person of a company if it owns five percent or more of a company's outstanding voting stock.
Investments in affiliated companies for the Paradigm Portfolio as of December 31, 2015, are shown below:
| Number of | Number of | ||||||||||||
| shares held | shares held at | ||||||||||||
| at December 31, | Gross | Gross | December 31, | ||||||||||
| Name of Issuer | 2014 | Additions | Reductions | 2015 | |||||||||
| Texas Pacific Land Trust | 490,480 | 118,450 | (850 | ) | 608,080 |
| Fair value at | Realized | |||||||||
| December 31, | Dividend | Capital | ||||||||
| Name of Issuer | 2015 | Income | Gain/Loss | |||||||
| Texas Pacific Land Trust | $ | 79,609,834 | $ | 168,896 | $ | 113,483 |
11. Information about Proxy Voting (Unaudited)
Information regarding how the Feeder Funds and the Master Portfolios vote 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 Feeder Funds and the Master 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.
188
| KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS |
Notes to Financial Statements — (Continued) |
| December 31, 2015 |
12. Information about the Portfolio Holdings (Unaudited)
The Master Portfolios file their complete schedules of portfolio holdings for its first and third fiscal quarters with the SEC on Form N-Q. The Master 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. 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.
The Master Portfolios file their complete schedules of portfolio holdings for its first and third fiscal quarters with the SEC on Form N-Q. The Master 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. 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.
13. 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 year that materially impacted the amounts or disclosures in the Master Portfolios' financial statements.
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 year that materially impacted the amounts or disclosures in the Master Portfolios' financial statements.
189
| KINETICS PORTFOLIOS TRUST |
| Report of Independent Registered |
| Public Accounting Firm |
Board of Trustees and Shareholders of
Kinetics Portfolios Trust
New York, NY
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 Alternative Income Portfolio, and The Multi-Disciplinary Income Portfolio, each a series of shares of Kinetics Portfolios Trust (the "Trust"), as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trusts' 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, 2015, 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 each of the eight portfolios of the Kinetics Portfolios Trust as of December 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania February 26, 2016
190
| KINETICS PORTFOLIOS TRUST |
| Management of the Funds and the Portfolios |
| (Unaudited) |
Management of the Funds and the Portfolios
The management and affairs of the Funds and the 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 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 Portfolios and appoints the officers who conduct the daily business of the Funds and the 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 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.
Board of Directors/Board of Trustees
Independent Directors/Trustees
| Term of | |||||
| Position(s) | Office and | ||||
| Held with | Length of | ||||
| Name, Address and Year of Birth | Company/ Trust | Time Served | |||
| Steven T. Russell | Independent Director/ | Indefinite/ | |||
| Year Born: 1963 | Independent Trustee | 15 years | |||
| c/o Kinetics Asset Management LLC | |||||
| 470 Park Avenue South | |||||
| New York, New York 10016 | |||||
| Douglas Cohen, CPA | Independent Director/ | Indefinite/ | |||
| Year Born: 1961 | Independent Trustee | 15 years | |||
| c/o Kinetics Asset Management LLC | |||||
| 470 Park Avenue South | |||||
| New York, New York 10016 |
191
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
| # of Portfolios | ||||
in Fund Complex(1) | ||||
| Overseen by | ||||
| Principal Occupation(s) | Director/ | Other Directorships | ||
| During Past Five Years | Trustee | Held by Director/Trustee(2) | ||
| Steven Russell Law Firm (April 2010 to present); | 16 | N/A | ||
| Professor of Business Law and Finance, Suffolk | ||||
| County Community College (1997 to present). | ||||
| Chief Financial Officer, Sunrise Credit Services, | 16 | N/A | ||
| Inc. (2005 to present). |
192
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
Board of Directors/Board of Trustees (Continued)
Independent Directors/Trustees (Continued)
| Term of | ||||
| Position(s) | Office and | |||
| Held with | Length of | |||
| Name, Address and Year of Birth | Company/ Trust | Time Served | ||
| William J. Graham | Independent Director/ | Indefinite/ | ||
| Year Born: 1962 | Independent Trustee | 15 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York, New York 10016 | ||||
| Joseph E. Breslin | Independent Director/ | Indefinite/ | ||
| Year Born: 1953 | Independent Trustee | 15 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York, New York 10016 | ||||
| James M. Breen | Independent Director/ | Indefinite/ | ||
| Year Born: 1959 | Independent Trustee | 7 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York, New York 10016 |
193
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
| # of Portfolios | ||||
in Fund Complex(1) | ||||
| Overseen by | ||||
| Principal Occupation(s) | Director/ | Other Directorships | ||
| During Past Five Years | Trustee | Held by Director/Trustee(2) | ||
| Attorney, William J. Graham, PC (2001 to | 16 | N/A | ||
| present). | ||||
| J.E. Breslin & Co. – Consulting (2010 to | 16 | Trustee, Hatteras Alternative | ||
| present). | Mutual Funds Trust (5 | |||
| portfolios); Trustee, | ||||
| Underlying Funds Trust (5 | ||||
| portfolios); Trustee, HCIM | ||||
| Trust (2 portfolios); Manager, | ||||
| Hatteras Global Private Equity | ||||
| Partners Institutional LLC; | ||||
| Manager, Hatteras GPEP Fund | ||||
| II LLC; Manager, Hatteras VC | ||||
| Co-Investment Fund II LLC; | ||||
| Manager, Hatteras Master | ||||
| Fund, L.P.; Manager, Hatteras | ||||
| Core Alternatives TEI Fund, | ||||
| L.P.; Manager, Hatteras Core | ||||
| Alternatives Fund, L.P.; | ||||
| Manager, Hatteras Core | ||||
| Alternatives Institutional | ||||
| Fund, L.P.; Manager, Hatteras | ||||
| Core Alternatives TEI | ||||
| Institutional Fund, L.P.; | ||||
| Trustee, Forethought Variable | ||||
| Insurance Trust (5 portfolios); | ||||
| and Trustee, Hatteras Variable | ||||
| Trust (2012-2013). | ||||
| Vice President, HBES Consulting, Inc. | 16 | N/A | ||
| (2014 to present); Senior Special Agent, | ||||
| Homeland Security Investigations, Miami, | ||||
| FL (2011 to 2014); Assistant Attaché | ||||
| Immigration& Customs Enforcement, Pretoria, | ||||
| South Africa (2008 to 2011). |
194
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
Board of Directors/Board of Trustees (Continued)
Interested Directors/Trustees and Officers
| Term of | ||||
| Position(s) | Office and | |||
| Held with the | Length of | |||
| Name, Address and Year of Birth | Company/ Trust | Time Served | ||
Murray Stahl(3) | Director/Trustee | Indefinite/ | ||
| Year Born: 1953 | & Secretary | 15 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York, New York 10016 | ||||
Peter B. Doyle(3) | Director/Trustee, | Indefinite/ | ||
| Year Born: 1962 | President & Chairman | 13 years | ||
| c/o Kinetics Asset Management LLC | of the Board | |||
| 470 Park Avenue South | ||||
| New York, New York 10016 | ||||
Leonid Polyakov(3) | Director/Trustee | Indefinite/ | ||
| Year Born: 1959 | & Treasurer | 13 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York, New York 10016 |
| (1) | The term "fund complex" refers to the Company and the Trust, which hold themselves out as related for investment purposes. |
| (2) | "Other Directorships Held" includes only directorships of companies required to register or file reports with the SEC under the Securities Exchange Act of 1934, as amended, (that is, "public companies") or investment companies registered under the 1940 Act. |
195
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
| # of Portfolios | ||||
in Fund Complex(1) | ||||
| Overseen by | ||||
| Principal Occupation(s) | Director/ | Other Directorships | ||
| During Past Five Years | Trustee | Held by Director/Trustee(2) | ||
| Chairman, FRMO Corp. (2001 to present) | 16 | Director and Officer of | ||
| (provides consulting services to private | FRMO Corp. | |||
| investment funds and research services with | ||||
| respect to marketable securities); Chairman | ||||
| and Chief Investment Officer, Horizon Kinetics | ||||
| LLC, (including Horizon Asset Management | ||||
| LLC (an investment adviser) (1994 to present); | ||||
| Kinetics Asset Management LLC and Kinetics | ||||
| Advisers, LLC (2000 to present)); CEO, Horizon | ||||
| Kinetics LLC (2015 to present). | ||||
| Vice President, Horizon Asset Management LLC | 16 | Director and Officer, | ||
| (1997-2011); Vice President, FMRO Corp. (2001 | FRMO Corp. | |||
| to present)(provides consulting services to private | ||||
| investment funds and research services with | ||||
| respect to marketable securities); Managing | ||||
| Director, Horizon Kinetics LLC (including | ||||
| Horizon Asset Management LLC (an | ||||
| investment adviser) (1994 to present); Kinetics | ||||
| Asset Management LLC and Kinetics Advisers | ||||
| LLC (2000 to present); and President of | ||||
| Kinetics Mutual Funds, Inc. (1998 to present). | ||||
| CFO, Kinetics Asset Management LLC (2000 | 16 | N/A | ||
| to 2011); CFO and FINOP, Kinetics Funds | ||||
| Distributor LLC (2002 to 2011); Director, | ||||
| Kinetics Advisers LLC (2000 to 2011). |
| (3) | 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 and its affiliates. |
196
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
Board of Directors/Board of Trustees (Continued)
Officers
| Term of | ||||
| Position(s) | Office and | |||
| Held with the | Length of | |||
| Name, Address and Age | Company/ Trust | Time Served | ||
| Andrew M. Fishman | Chief Compliance | Indefinite/ | ||
| Year Born: 1950 | Officer | 11 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York 10016 | ||||
| Jay H. Kesslen | Vice President and | Indefinite/ | ||
| Year Born: 1973 | Assistant Secretary | 11 years | ||
| c/o Kinetics Asset Management LLC | ||||
| 470 Park Avenue South | ||||
| New York, New York 10016 |
197
| KINETICS PORTFOLIOS TRUST |
Management of the Funds and the Portfolios—(Continued) |
| (Unaudited) |
| Principal Occupation(s) | Other Directorships | |
| During Past Five Years | Held by Officer | |
| Associate General Counsel, Horizon Kinetics LLC | N/A | |
| (2011 to present); General Counsel, Horizon Asset | ||
| Management, Inc. (1997 to 2011); Secretary, Horizon | ||
| Asset Management, Inc. (2006 to 2011); Chief | ||
| Compliance Officer, Kinetics Asset Management LLC | ||
| (1999 to 2011); Chief Compliance Officer, Kinetics | ||
| Advisers, LLC (2000 to 2011). | ||
| General Counsel, Horizon Kinetics LLC (including Horizon | N/A | |
| Asset Management LLC (an investment adviser) (2011 to | ||
| present), Kinetics Asset Management LLC (2000 to present), | ||
| Kinetics Advisers LLC (2000 to present), Kinetics Funds | ||
| Distributor LLC (2000 to present), KBDSecurities LLC (2000 | ||
| to present)); FRMO Corp. (2014 to present); Chief Compliance | ||
| Officer, Horizon Kinetics LLC. |
198
| KINETICS MUTUAL FUNDS, INC. & KINETICS PORTFOLIOS TRUST |
Privacy Policy (Unaudited) |
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.
This privacy policy is not part of the annual report.
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Kinetics Mutual
Funds, Inc.
615 East Michigan Street
Milwaukee, WI 53202
Funds, Inc.
615 East Michigan Street
Milwaukee, WI 53202
INVESTMENT ADVISER AND
SHAREHOLDER SERVICING AGENT
Kinetics Asset Management LLC
470 Park Avenue South
New York, NY 10016
SHAREHOLDER SERVICING AGENT
Kinetics Asset Management LLC
470 Park Avenue South
New York, NY 10016
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street
Suite 2400
Philadelphia, PA 19103
PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street
Suite 2400
Philadelphia, PA 19103
DISTRIBUTOR
Kinetics Funds Distributor LLC
470 Park Avenue South
New York, NY 10016
Kinetics Funds Distributor LLC
470 Park Avenue South
New York, NY 10016
ADMINISTRATOR
FUND ACCOUNTANT AND
TRANSFER AGENT
U.S.Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
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
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
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 12/31/2015 Kinetics Portfolios Trust | FYE 12/31/2015 Kinetics Mutual Funds | FYE 12/31/2014 Kinetics Portfolios Trust | FYE 12/31/2014 Kinetics Mutual Funds | |
| Audit Fees | 87,000 | 87,000 | 84,450 | 84,450 |
| Audit-Related Fees | 0 | 0 | 0 | 0 |
| Tax Fees | 23,875 | 23,875 | 23,175 | 23,175 |
| 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.
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 12/31/2014 | FYE 12/31/2013 | |
| 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 12/31/2014 | FYE 12/31/2013 |
| 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. Schedule of 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.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
Item 11. Controls and Procedures.
| (a) | The Registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended. |
| (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) Filed herewith. |
(2) Certifications 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. Furnished herewith. |
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
Peter B. Doyle, President
Date 2/25/2016
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 2/25/2016
By (Signature and Title)* /s/ Leonid Polyakov
Leonid Polyakov, Treasurer
Date 2/24/2016
* Print the name and title of each signing officer under his or her signature.