As filed with the Securities and Exchange Commission on March 7, 2012
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09303 & 811-09923
Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust
(Exact name of registrant as specified in charter)
555 Taxter Road, Suite 175
Elmsford, NY 10523
(Address of principal executive offices) (Zip code)
U.S. Bancorp Fund Services, LLC
615 E. Michigan Street
Milwaukee, WI 53202
(Name and address of agent for service)
(800) 930-3828
Registrant’s telephone number, including area code
Date of fiscal year end: December 31, 2011
Date of reporting period: December 31, 2011
Item 1. Report to Stockholders.
December 31, 2011 www.kineticsfunds.com | ||
| Annual Report | ||
The Internet Fund | ||
The Global Fund | ||
The Paradigm Fund | ||
The Medical Fund | ||
The Small Cap Opportunities Fund | ||
The Market Opportunities Fund | ||
The Water Infrastructure Fund | ||
The Multi-Disciplinary Fund | ||
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KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS | ||||
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS | ||||
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Portfolio of Investments — The Small Cap Opportunities Portfolio | 124 | |||
Portfolio of Investments — The Market Opportunities Portfolio | 129 | |||
Portfolio of Investments — The Water Infrastructure Portfolio | 133 | |||
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Portfolio of Options Written — The Water Infrastructure Portfolio | 140 | |||
Portfolio of Options Written — The Multi-Disciplinary Portfolio | 143 | |||
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Dear Fellow Shareholders:
We are pleased to present the Kinetics Mutual Funds’ Annual Report for the fiscal year ended December 31, 2011. On balance, the Kinetics Family of Mutual Funds had disappointing investment results for 2011, with returns of (14.27)% for The Paradigm Fund, (13.65)% for the Small-Cap Opportunities Fund, (7.85)% for the Market Opportunities Funds, (1.98)% for the Internet Fund, 5.11% for the Medical Fund, (15.41)% for The Global Fund, 0.24% for the Multi-Disciplinary Fund, and (4.88)% for the Water Infrastructure Fund. This compares with the 2011 returns of 2.11% and (1.80)% for the S&P 500 Index(1) and for the NASDAQ Composite Index(2), respectively. The comparison of our funds to these two indices is merely for illustrative purposes and is not an indication that we are trying to replicate or exceed the performance of a specific index during a discrete short timeframe. Our investment goal is to provide you with commendable investment results, regardless of how an index is positioned relative to our Funds. We encourage you to use whatever index you feel appropriate for your own comparison purposes.
We have never strayed from our value based investment approach, dating back to the inception of the Funds. In most years, this has been advantageous and rewarding as measured by absolute performance. The past year is an example of a period during which value investing simply did not deliver the types of returns to which we and our shareholders have become accustomed. The fact that a strategy that has been successful for many investors over many years should underperform over a given calendar year should not come as a surprise. However it is never easy to endure the episodic irrationality that markets can display, as they did in 2011. We remain comforted by the strong operating results and heavily discounted trading prices of our portfolio companies. While it is impossible to prognosticate when markets will again appreciate the value of these securities, the margin of safety to invest is amongst the highest that we have encountered in markets that are not consumed by panic. In the fullness of time, we expect our Funds to revert to the rates of return that have been historically achieved.
We continue to inform our shareholders through our website, www.kineticsfunds.com. This website provides a broad array of information, including recent portfolio holdings, quarterly investment commentaries, news flashes, recent performance data, and online access to account information.
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Kinetics offers the following funds to investors:
The Paradigm Fund focuses on undervalued companies that currently have, or which should soon have, sustainable high returns on equity without the excessive use of leverage. The Fund has produced attractive returns since its inception in an environment that should be described as difficult for equity investors. The Paradigm Fund is Kinetics’ flagship fund. For those who are interested in a product with the potential for lower volatility, we encourage you to examine our Multi-Disciplinary Fund, listed below.
The Small Cap Opportunities Fund focuses on undervalued small capitalization companies that have the potential for rewarding long-term investment results. The investment and portfolio construction processes are similar to those of the Paradigm Fund, but are focused on small and mid capitalization businesses.
The Market Opportunities Fund focuses on those companies that benefit from increasing transactional volume or throughput, such as publicly-traded exchanges, or that act as facilitators, such as airports and publicly-traded toll roads. These businesses are often able to increase sales with no or low reinvestment costs, resulting in high margins and increasing free cash flow.
The Internet Fund is a sector fund that focuses on companies engaged in Internet-related developments. As such, the returns of this Fund have been, and are 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 digital content companies, which we believe will be amongst the beneficiaries in the next generation of Internet development.
The Medical Fund is a sector fund, offering an investment in scientific discovery within the promising field of medical research, particularly in the development of cancer treatments and therapies. The Fund may be invested across a variety of medical related companies including biotechnology and pharmaceuticals.
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The Global Fund’s mandate was changed in early April 2008 to an emphasis on global investments. This Fund is truly a go-anywhere fund designed to allocate capital to the markets with the best overall risk adjusted investment opportunities. As such, the Fund is presently positioned to benefit from opportunities in the more developed world markets. The investment and portfolio construction processes are similar to those of the Paradigm Fund, but are focused on global opportunities.
The Multi-Disciplinary 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 require the manager to temporarily hold equity securities.
The Water Infrastructure Fund is a sector fund that invests in global companies engaged in water infrastructure and water-specific natural resources, as well as related activities. To supplement the equity investments, the Fund also utilizes the Multi-Disciplinary Fund’s options strategy employed upon water businesses. This provides the Fund equity exposure and exposure to the water industry, complemented by income from put options.
Peter B. Doyle
President
Kinetics Mutual Funds, Inc.
| (1) | The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. You cannot invest directly in an index. |
| (2) | The NASDAQ Composite Index is a market capitalization-weighted index that is designed to represent the performance of the National Market System which includes over 5,000 stocks traded only over-the-counter and not on an exchange. You cannot invest directly in an index. |
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Dear Shareholders:
The S&P 500 Index completed 2011 returning 2.11%, while the NASDAQ Composite returned (1.80)% over the same period. However modest these returns may appear, when viewed in isolation, the annual changes in these primary indexes fail to accurately express the high levels of market volatility experienced episodically over the year. This volatility, and the reaction to it by investors, resulted in a year in which we believe business fundamentals were largely overlooked in terms of security price fluctuations. As such, the Funds suffered and experienced (No-Load Class) returns of (14.27)% in the Paradigm Fund, (13.65)% in the Small Cap Opportunities Fund, (7.85)% in the Market Opportunities Fund, 5.11% in the Medical Fund, (1.98)% in the Internet Fund, 0.24% in the Multi-Disciplinary Fund, (15.41)% in the Global Fund and (4.88)% in the Water Infrastructure Fund.
Over the past year, more than in any year in recent memory, markets were focused on political and macro events, while largely disregarding business fundamentals. Concerns over European nations’ sovereign debts escalated and resulted in the dismissal of incumbent leaders in Greece, Italy and Spain. Markets surged and retreated with increasing vigor depending on the latest statement, press release or rumor regarding the stability of the euro zone. Meanwhile, political gridlock in the United States took the country to the brink of default as the debt ceiling debate lasted into the final hours. Even these concerns pale in comparison to the political instability and upheaval experienced in various Middle Eastern countries including Libya and Egypt. While it is no surprise that investors and corporate leaders were generally hesitant to invest amid such uncertainty, we view the enthusiasm with which investors have embraced passive investment strategies (namely index ETFs) to re-enter the market as very surprising. This behavior, coupled with more generalized risk aversion, has resulted in a divergence between the prices of so called “popular” securities and “unpopular” securities. The investment team at Horizon Kinetics has historically benefitted from sourcing investment ideas from unique, idiosyncratic businesses. However, 2011 has left us with very disappointing price performance in such businesses, though even greater future potential.
The performance of the Paradigm Fund can be attributed in part to allocations to “owner-operator” businesses. These are companies where active management has a sizeable equity investment alongside shareholders. Owner-operator businesses can be found in every country and every sector, thus our exposures
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are not concentrated based on this emphasis. The Paradigm Fund suffered the largest negative contribution for the year from allocations to owner-operator holding companies and real estate companies based in the Unites States. Each of these businesses has a strong financial position and high net asset value relative to market capitalization. These underperforming businesses are scarcely included in any major indexes (hence ETFs) and are trading at a discount to or near book value. The Fund benefitted from unique, company specific allocations to energy, consumer and financial service companies.
The Small Cap Opportunities Fund also sources a variety of investment ideas from owner-operator businesses. Counter-intuitively, included in the largest performance detractors for the Fund are a real estate development company and a holding company that are traded at amongst the largest discounts to fair value that we have come across. Additional allocations in the Fund to businesses exposed to mainland China hampered performance as share prices slid in reaction to government tightening measures. We believe that substantial returns will be had in Hong Kong and China as this cycle concludes. An allocation to a gold royalty company was amongst the highest contributions, followed by a unique land trust and an ETF provider. These companies each continue to represent distinctive business models at attractive valuations.
The Market Opportunities Fund suffered as a result of exposures to the controversial financial sector in 2011. Market participants did little to differentiate between high risk, leveraged financial companies loathed by the media and the high return on equity, low debt load businesses owned by the Fund. We believe that these companies have considerable barriers to entry and long-term predictable cash flows with minimal reinvestment needs. Thus, the various exchanges, asset managers and banks that contributed negatively to the Fund over the past year are priced at increasingly attractive levels. The capital markets related companies that contributed positively to performance include financial service companies that serve niche markets and provide value added services.
Performance of the Internet Fund was primarily driven by media content and media distribution companies. Advances in the speed and capacity of the internet over the past several years have resulted
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in the ability to stream high definition video programming via a land based or wireless internet connection. As a result of this, the Fund increased investments in media companies that own the content that will be distributed to consumers. On an aggregate basis, this allocation detracted from performance for the year; however, included in this allocation was a company that was among the Fund’s top contributors. Media distribution companies experienced a volatile year, with satellite communications detracting from the Fund while web based search businesses in Asia contributed to performance.
The Global Fund maintained an overweight positioning in Asian securities through much of the year, resulting in a large portion of the negative Fund performance. In particular, consumer and financial businesses in Japan experienced sharp declines in share price, which more than offset the appreciation of the Japanese yen. Exposure to global gaming companies also negatively impacted performance despite the fact that these companies reported strong sequential revenues. In spite of broader declines across Asian financial companies and European industrials, Fund allocations to these areas produced positive contributions to performance.
The Multi-Disciplinary Fund succeeded in providing the downside protection that it was designed to achieve. However, despite high premiums embedded in the options prices of many portfolio companies, our value oriented investment philosophy suffered in 2011. Company specific options in consumer discretionary, financial and international businesses led to the Fund returning less than we anticipated. However, the Fund is now positioned with option premiums that are higher yet, despite more attractive values (share prices).
Various components of the medical field experienced strong investment returns for 2011 led by major pharmaceutical companies. The Medical Fund was overweight biotechnology companies, which included both the Funds’ top and bottom contributors for the year. Top detractors include a U.S. based biotechnology company involved in the research and development of cancer treatments, while top contributors included a U.S. based biotechnology company dedicated to the treatment of severe neurological diseases. We continue to view many investment opportunities as very attractive despite continued uncertainty regarding government regulations and federal spending.
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Performance of the Water Infrastructure Fund was disappointing relative to S&P 500 in 2011; however, it was strong when compared to various water indexes and water related ETFs. The Fund approached 2011 with a risk averse stance and utilized a put writing strategy similar to that of the Multi-Disciplinary Fund. Water utility companies created a performance drag on the Fund while water environmental service and pump companies contributed positively.
Peter B. Doyle
Chief Investment Strategist
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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 program, as well as information regarding the risk factors, policies and objectives of the Funds. Read it carefully before investing.
Mutual Fund investing involves risk. Principal loss is possible. Because The Internet Fund, The Medical Fund and The Water Infrastructure Fund invest in a single industry or geographic region, their shares are subject to a higher degree of risk than funds with a higher level of diversification. Internet and biotechnology stocks are subject to a rate of change in technology, obsolescence and competition that is generally higher than that of other industries and have experienced extreme price and volume fluctuations. International investing [for The Global Fund, The Water Infrastructure Fund, The Paradigm Fund, The Market Opportunities Fund, The Small Cap Opportunities Fund and The Internet Fund] presents special risks including currency exchange fluctuation, government regulations, and the potential for political and economic instability. Accordingly, the share price for these Funds is expected to be more volatile than that of a U.S.-only fund. Past performance is no guarantee of future performance.
Because smaller companies [for The Global Fund, The Small Cap Opportunities Fund and the Water Infrastructure Fund] often have narrower markets and limited financial resources, they present more risk than larger, more well established, companies.
Non-investment grade debt securities [for all Funds], i.e., junk bonds, are subject to greater credit risk, price volatility and risk of loss than investment grade securities. Further, options contain special risks including the imperfect correlation between the value of the option and the value of the underlying asset. Investments [for the Multi-Disciplinary 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 Fund. To the extent the Funds segregate assets to cover derivative positions,
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they may impair their ability to meet current obligations, to honor requests for redemption and to manage the Funds in a manner consistent with their respective investment objectives. Purchasing and writing put and call options and, in particular, writing “uncovered” options are highly specialized activities that entail greater than ordinary investment risk.
As non-diversified Funds, the value of Fund shares may fluctuate more than shares invested in a broader range of industries and companies.
Unlike other investment companies that directly acquire and manage their own portfolios of securities, The Kinetics Mutual Funds pursue their investment objectives by investing all of their investable assets in a corresponding portfolio series of Kinetics Portfolios Trust.
The information concerning the Funds included in the shareholder report contains certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.
The Nasdaq Composite (NASDAQ) and the Standard & Poor’s 500 Index (S&P 500) each represent an unmanaged, broad-basket of stocks. They are typically used as a proxy for overall market performance.
Distributor: Kinetics Funds Distributor 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, 2012 — 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.
S&P 500 Index — The S&P 500 Index is a capital-weighted index, representing the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange. The S&P 500 is unmanaged and includes the reinvestment of dividends and does not reflect the payments of transaction costs and advisory fees associated with an investment in the Funds. The securities that comprise the S&P 500 may differ substantially from the securities in the Funds��� portfolios. It is not possible to directly invest in an index.
NASDAQ Composite Index — The NASDAQ Composite Index is a broad-based capitalization-weighted index of all NASDAQ stocks. The NASDAQ Composite is unmanaged and does not include the reinvestment of dividends and does not reflect the payment of transaction costs or advisory fees associated with an investment in the Funds. The securities that comprise the NASDAQ Composite may differ substantially from the securities in the Funds’ portfolios. It is not possible to directly invest in an index.
CBOE S&P 500 BuyWrite Index (BXM) — The CBOE S&P 500 BuyWrite Index (BXM) is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. The securities that comprise the CBOE S&P 500 BuyWrite Index may differ substantially from the securities in The Multi-Disciplinary Fund’s portfolio. It is not possible to directly invest in an index.
CBOE S&P 500 PutWrite Index (PUT) — The CBOE S&P 500 Put-Write Index (PUT) is a benchmark index designed to track the performance of a
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passive program that sells near-term, at-the-money S&P 500 Index puts. The securities that comprise the CBOE S&P 500 Put-Write Index may differ substantially from the securities in The Multi-Disciplinary Fund’s portfolio. It is not possible to directly invest in an index.
MSCI ACWI Index — The MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 45 country indices comprising 24 developed and 21 emerging market country indices
MSCI EAFE Index — The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.
RUSSELL 2000 Index — The Russell 2000 Index is 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 measures the performance of the small-cap segment of the U.S. equity universe
ISE Water Index — The ISE Water Index includes companies engaged in water distribution, water filtration, flow technology, and other water solutions.
Palisades Water Index — The Palisades Water Index is a modified equal-dollar weighted index comprised of companies publicly traded in the United States that are positioned to benefit significantly from the escalating global demand for water and the ecological imperative of sustainable water resource governance. Accordingly, the Index serves as a proxy for measuring the increasing value of water resulting from the impact of temporal and spatial scarcity on the relationship between human health, ecological sustainability and economic growth.
S&P Global Water Index — The S&P Global Water Index is comprised of fifty of the largest publicly traded companies in water-related businesses that meet specific investability requirements. The index is designed to provide liquid exposure to the leading publicly listed companies in the global water industry, from both developed markets and emerging markets. The securities that comprise the S&P Global Water Index may differ substantially from the securities in The Water Infrastructure Fund’s portfolio. It is not possible to directly invest in an index.
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The Internet Fund
December 31, 2001 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A (Load Adjusted)(1) | Advisor Class C | S&P 500 | NASDAQ Composite | |||||||||||||||||||
One Year | –1.98 | % | –2.20 | % | –7.82 | % | –2.67 | % | 2.11 | % | –1.80 | % | ||||||||||||
Five Years | 5.28 | % | 5.16 | % | 3.92 | % | N/A | –0.25 | % | 1.52 | % | |||||||||||||
Ten Years | 5.75 | % | 5.45 | % | 4.83 | % | N/A | 2.92 | % | 2.94 | % | |||||||||||||
Since Inception | 14.31 | % | N/A | N/A | N/A | 5.70 | % | 5.03 | % | |||||||||||||||
Since Inception Advisor Class A | N/A | 4.34 | % | 3.77 | % | N/A | 2.13 | % | 2.34 | % | ||||||||||||||
Since Inception Advisor Class C (2/16/07) | N/A | N/A | N/A | 4.34 | % | –0.84 | % | 0.88 | % | |||||||||||||||
| (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, 2001 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A | Advisor Class C | S&P 500 | MSCI | NASDAQ Composite | ||||||||||||||||||||||
One Year | –15.41 | % | –15.59 | % | –20.52 | % | –15.94 | % | 2.11 | % | –7.35 | % | –1.80 | % | ||||||||||||||
Five Years | –2.69 | % | N/A | N/A | N/A | –0.25 | % | –1.93 | % | 1.52 | % | |||||||||||||||||
Ten Years | 1.27 | % | N/A | N/A | N/A | 2.92 | % | 4.24 | % | 2.94 | % | |||||||||||||||||
Since Inception | –5.81 | % | N/A | N/A | �� | N/A | 0.55 | % | 0.71 | % | –3.65 | % | ||||||||||||||||
Since Inception | N/A | –3.01 | % | –4.59 | % | N/A | –1.24 | % | –5.44 | % | 0.97 | % | ||||||||||||||||
Since Inception | N/A | N/A | N/A | –3.64 | % | –1.24 | % | –5.44 | % | 0.97 | % | |||||||||||||||||
| (1) | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| * | Effective April 30, 2011, the MSCI ACWI Index replaced the NASDAQ Composite Index as a more appropriate comparative benchmark for The Global Fund. |
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The Paradigm Fund
December 31, 2001 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Adjusted)(1) | Advisor Class C | Institutional Class | S&P 500 | MSCI ACWI* | NASDAQ Composite | |||||||||||||||||||||||||
One Year | –14.27 | % | –14.49 | % | –19.41 | % | –14.90 | % | –14.13 | % | 2.11 | % | –7.35 | % | –1.80 | % | ||||||||||||||||
Five Years | –4.25 | % | –4.49 | % | –5.61 | % | –4.98 | % | –4.07 | % | –0.25 | % | –1.93 | % | 1.52 | % | ||||||||||||||||
Ten Years | 7.37 | % | 7.07 | % | 6.43 | % | N/A | N/A | 2.92 | % | 4.24 | % | 2.94 | % | ||||||||||||||||||
Since Inception | 6.63 | % | N/A | N/A | N/A | N/A | 0.55 | % | 0.71 | % | –3.65 | % | ||||||||||||||||||||
Since Inception Advisor Class A (4/26/01) | N/A | 6.76 | % | 6.17 | % | N/A | N/A | 2.13 | % | 2.96 | % | 2.34 | % | |||||||||||||||||||
Since Inception Advisor Class C (6/28/02) | N/A | N/A | N/A | 6.86 | % | N/A | 4.61 | % | 5.42 | % | 6.25 | % | ||||||||||||||||||||
Since Inception Institutional Class | N/A | N/A | N/A | N/A | 2.38 | % | 2.85 | % | 3.13 | % | 3.50 | % | ||||||||||||||||||||
| (1) | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| * | Effective April 30, 2011, the MSCI ACWI Index replaced the NASDAQ Composite Index as a more appropriate comparative benchmark for The Paradigm Fund. |
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The Medical Fund
December 31, 2001 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A (Load Adjusted)(1) | Advisor Class C | S&P 500 | NASDAQ Composite | |||||||||||||||||||
One Year | 5.11 | % | 4.79 | % | –1.22 | % | 4.32 | % | 2.11 | % | –1.80 | % | ||||||||||||
Five Years | 4.63 | % | 4.40 | % | 3.17 | % | N/A | –0.25 | % | 1.52 | % | |||||||||||||
Ten Years | 2.93 | % | 2.63 | % | 2.02 | % | N/A | 2.92 | % | 2.94 | % | |||||||||||||
Since Inception | 7.46 | % | N/A | N/A | N/A | 1.68 | % | –0.43 | % | |||||||||||||||
Since Inception | N/A | 2.35 | % | 1.79 | % | N/A | 2.13 | % | 2.34 | % | ||||||||||||||
Since Inception | N/A | N/A | N/A | 3.00 | % | –0.84 | % | 0.88 | % | |||||||||||||||
| (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 Small Cap Opportunities Fund
December 31, 2001 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A (Load Adjusted)(1) | Advisor Class C | Institutional Class | S&P 500 | Russell 2000* | NASDAQ Composite | |||||||||||||||||||||||||
One Year | –13.65 | % | –13.85 | % | –18.80 | % | –14.29 | % | –13.51 | % | 2.11 | % | –4.18 | % | –1.80 | % | ||||||||||||||||
Five Years | –4.76 | % | –5.00 | % | –6.12 | % | N/A | –4.58 | % | –0.25 | % | 0.15 | % | 1.52 | % | |||||||||||||||||
Ten Years | 4.40 | % | 4.15 | % | 3.54 | % | N/A | N/A | 2.92 | % | 5.62 | % | 2.94 | % | ||||||||||||||||||
Since Inception | 7.05 | % | N/A | N/A | N/A | N/A | 0.61 | % | 3.93 | % | –4.73 | % | ||||||||||||||||||||
Since Inception Advisor Class A (12/31/01) | N/A | 4.15 | % | 3.54 | % | N/A | N/A | 2.92 | % | 5.62 | % | 2.94 | % | |||||||||||||||||||
Since Inception Advisor Class C (2/16/07) | N/A | N/A | N/A | –6.93 | % | N/A | –0.84 | % | –0.65 | % | 0.88 | % | ||||||||||||||||||||
Since Inception Institutional Class (8/12/05) | N/A | N/A | N/A | N/A | 0.76 | % | 2.47 | % | 3.19 | % | 3.00 | % | ||||||||||||||||||||
| (1) | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| * | Effective April 30, 2011, the Russell 2000 Index replaced the NASDAQ Composite Index as a more appropriate comparative benchmark for The Small Cap Opportunities Fund. |
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The Market Opportunities Fund
January 31, 2006 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A (Load Adjusted)(1) | Advisor Class C | Institutional Class | S&P 500 | MSCI EAFE | NASDAQ Composite* | |||||||||||||||||||||||||
One Year | –7.85 | % | –8.08 | –13.38 | % | –8.51 | % | –7.71 | % | 2.11 | % | –12.14 | % | –1.80 | % | |||||||||||||||||
Five Years | –1.38 | % | –1.65 | % | –2.80 | % | N/A | N/A | –0.25 | % | –4.72 | % | 1.52 | % | ||||||||||||||||||
Since Inception | 2.05 | % | N/A | N/A | N/A | N/A | 1.84 | % | –1.14 | % | 2.08 | % | ||||||||||||||||||||
Since Inception Advisor Class A (1/31/06) | N/A | 1.79 | % | 0.77 | % | N/A | N/A | 1.84 | % | –1.14 | % | 2.08 | % | |||||||||||||||||||
Since Inception Advisor Class C (2/16/07) | N/A | N/A | N/A | –3.65 | % | N/A | –0.84 | % | –5.66 | % | 0.88 | % | ||||||||||||||||||||
Since Inception Institutional Class (5/19/08) | N/A | N/A | N/A | N/A | –5.16 | % | –1.24 | % | –9.03 | % | 0.97 | % | ||||||||||||||||||||
| (1) | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| * | Effective December 31, 2011, the NASDAQ Composite Index is no longer an appropriate comparative benchmark for The Market Opportunities Fund. |
18
The Water Infrastructure Fund
June 29, 2007 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A (Load Adjusted)(1) | Advisor Class C | Institutional Class | S&P 500 | ISE Water | Palisades | S&P Global Water* | ||||||||||||||||||||||||||||
One Year | –4.88 | % | –5.08 | % | –10.55 | % | –5.51 | % | –4.43 | % | 2.11 | % | –6.27 | % | –10.94 | –6.74 | % | |||||||||||||||||||
Since Inception | –4.52 | % | N/A | N/A | N/A | N/A | –1.75 | % | –1.13 | % | –3.64 | % | –2.39 | % | ||||||||||||||||||||||
Since Inception Advisor Class A (6/29/07) | N/A | –4.74 | % | –5.98 | % | N/A | N/A | –1.75 | % | –1.13 | % | –3.64 | % | –2.39 | % | |||||||||||||||||||||
Since Inception Advisor Class C (6/29/07) | N/A | N/A | N/A | –5.20 | % | N/A | –1.75 | % | –1.13 | % | –3.64 | % | –2.39 | % | ||||||||||||||||||||||
Since Inception Institutional | N/A | N/A | N/A | N/A | –4.23 | % | –1.75 | % | –1.13 | % | –3.64 | % | –2.39 | % | ||||||||||||||||||||||
| (1) | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| * | Effective December 31, 2011, the ISE Water Index and the Palisades Water Index replaced the S&P Global Water Index as more appropriate comparative benchmarks for The Water Infrastructure Fund. |
19
The Multi-Disciplinary Fund
February 11, 2008 — December 31, 2011
| Ended 12/31/2011 | ||||||||||||||||||||||||||||||||||||
| No Load Class | Advisor Class A (No Load) | Advisor Class A (Load Adjusted)(1) | Advisor Class C | Institutional Class | S&P 500 | CBOE S&P 500 BuyWrite | CBOE S&P 500 Put/Write | NASDAQ Composite* | ||||||||||||||||||||||||||||
One Year | 0.24 | % | –0.01 | % | –5.79 | % | –0.49 | % | 0.42 | % | 2.11 | % | 5.72 | % | 6.17 | % | –1.80 | % | ||||||||||||||||||
Since Inception No Load Class (2/11/08) | 3.55 | % | N/A | N/A | N/A | N/A | 0.62 | % | 1.77 | % | 4.26 | % | 3.03 | % | ||||||||||||||||||||||
Since Inception Advisor Class A (2/11/08) | N/A | 3.28 | % | 1.72 | % | N/A | N/A | 0.62 | % | 1.77 | % | 4.26 | % | 3.03 | % | |||||||||||||||||||||
Since Inception Advisor Class C (2/11/08) | N/A | N/A | N/A | 2.78 | % | N/A | 0.62 | % | 1.77 | % | 4.26 | % | 3.03 | % | ||||||||||||||||||||||
Since Inception Institutional Class | N/A | N/A | N/A | N/A | 3.74 | % | 0.62 | % | 1.77 | % | 4.26 | % | 3.03 | % | ||||||||||||||||||||||
| (1) | Reflects front-end sales charge of 5.75%. |
Returns for periods greater than one year are average annual total returns.
| * | Effective December 31, 2011, the NASDAQ Composite Index is no longer an appropriate comparative benchmark for The Multi-Disciplinary Fund. |
20
Shareholders incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvestments of dividends or other distributions made by a Fund, redemption fees, and exchange fees, and (2), ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help investors understand the ongoing costs (in dollars) of investing in the Feeder Funds, as defined below, 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, 2011 and held for the entire period from July 1, 2011 to December 31, 2011.
Actual Expenses
The first line and second line items of the table below provide information about actual account values and actual expenses before and after expense reimbursement. Unlike other mutual funds that directly acquire and manage their own portfolio securities, each 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. The Adviser for the Master Portfolios has directed a certain amount of the Master Portfolio’s trades to brokers believed to provide the best execution and, as a result, the Master Portfolios have generated direct brokerage credits to reduce certain service provider fees. Each 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 the Feeder Fund and any other series of Kinetics Mutual Funds, Inc. The Feeder Funds’ transfer agent charges a $5.00 transaction fee to shareholder accounts for telephone exchanges between any two series of Kinetics Mutual Funds, Inc. The 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
21
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
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.
You may use the information provided in the first line, together with the amounts you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The third and fourth line items of the table below provide information about hypothetical account values and hypothetical expenses before and after expense reimbursements based on the Feeder Funds’ actual expense ratio 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. In if these transactional costs were included, one’s costs would have been higher.
22
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
The Internet Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 883.10 | 1.94 | % | $ | 9.21 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 883.10 | 1.89 | % | $ | 8.97 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,015.42 | 1.94 | % | $ | 9.86 | ||||||||
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,015.67 | 1.89 | % | $ | 9.60 | ||||||||
Advisor Class A Actual — before expense reimbursement | $ | 1,000.00 | $ | 882.10 | 2.19 | % | $ | 10.39 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 882.10 | 2.14 | % | $ | 10.15 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,014.16 | 2.19 | % | $ | 11.12 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,014.41 | 2.14 | % | $ | 10.87 | ||||||||
Advisor Class C Actual — before expense reimbursement | $ | 1,000.00 | $ | 880.10 | 2.69 | % | $ | 12.75 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 880.10 | 2.64 | % | $ | 12.51 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | �� | $ | 1,011.64 | 2.69 | % | $ | 13.64 | |||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,011.89 | 2.64 | % | $ | 13.39 | ||||||||
The Global Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 862.50 | 4.01 | % | $ | 18.83 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 862.50 | 1.39 | % | $ | 6.53 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,004.99 | 4.01 | % | $ | 20.27 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 862.50 | 4.26 | % | $ | 20.00 | ||||||||
23
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 862.50 | 1.64 | % | $ | 7.70 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,003.72 | 4.26 | % | $ | 21.52 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 861.00 | 4.76 | % | $ | 22.33 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 861.00 | 2.14 | % | $ | 10.04 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,001.20 | 4.76 | % | $ | 24.01 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,014.41 | 2.14 | % | $ | 10.87 | ||||||||
The Paradigm Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 845.00 | 1.78 | % | $ | 8.28 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 845.00 | 1.64 | % | $ | 7.63 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,016.23 | 1.78 | % | $ | 9.05 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 843.70 | 2.03 | % | $ | 9.43 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 843.70 | 1.89 | % | $ | 8.78 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,014.97 | 2.03 | % | $ | 10.31 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 841.50 | 2.53 | % | $ | 11.74 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 841.50 | 2.39 | % | $ | 11.09 | ||||||||
24
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,012.45 | 2.53 | % | $ | 12.83 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | ||||||||
Institutional Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 845.60 | 1.73 | % | $ | 8.05 | ||||||||
Institutional Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 845.60 | 1.44 | % | $ | 6.70 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,016.48 | 1.73 | % | $ | 8.79 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 907.60 | 2.07 | % | $ | 9.95 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 907.60 | 1.39 | % | $ | 6.68 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,014.76 | 2.07 | % | $ | 10.51 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 906.60 | 2.32 | % | $ | 11.15 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 906.60 | 1.64 | % | $ | 7.88 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,013.50 | 2.32 | % | $ | 11.77 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 904.40 | 2.82 | % | $ | 13.54 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 904.40 | 2.14 | % | $ | 10.27 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,010.98 | 2.82 | % | $ | 14.29 | ||||||||
25
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,014.41 | 2.14 | % | $ | 10.87 | ||||||||
The Small Cap Opportunities Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 869.10 | 1.91 | % | $ | 9.00 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 869.10 | 1.64 | % | $ | 7.73 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,015.57 | 1.91 | % | $ | 9.70 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 867.90 | 2.16 | % | $ | 10.17 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 867.90 | 1.89 | % | $ | 8.90 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) —before expense reimbursement | $ | 1,000.00 | $ | 1,014.31 | 2.16 | % | $ | 10.97 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 865.90 | 2.66 | % | $ | 12.51 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 865.90 | 2.39 | % | $ | 11.24 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,011.79 | 2.66 | % | $ | 13.49 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | ||||||||
Institutional Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 869.70 | 1.86 | % | $ | 8.77 | ||||||||
Institutional Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 869.70 | 1.44 | % | $ | 6.79 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,015.82 | 1.86 | % | $ | 9.45 | ||||||||
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, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
The Market Opportunities Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 895.00 | 1.92 | % | $ | 9.17 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 895.00 | 1.64 | % | $ | 7.83 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,015.52 | 1.92 | % | $ | 9.75 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 893.40 | 2.17 | % | $ | 10.36 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 893.40 | 1.89 | % | $ | 9.02 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,014.26 | 2.17 | % | $ | 11.02 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 891.20 | 2.67 | % | $ | 12.73 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 891.20 | 2.39 | % | $ | 11.39 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,011.74 | 2.67 | % | $ | 13.54 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | ||||||||
Institutional Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 895.60 | 1.88 | % | $ | 8.98 | ||||||||
Institutional Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 895.60 | 1.44 | % | $ | 6.88 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,015.72 | 1.88 | % | $ | 9.55 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,017.94 | 1.44 | % | $ | 7.32 | ||||||||
The Water Infrastructure Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 928.00 | 2.32 | % | $ | 11.27 | ||||||||
27
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 928.00 | 1.64 | % | $ | 7.97 | ||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,013.50 | 2.32 | % | $ | 11.77 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 927.00 | 2.57 | % | $ | 12.48 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 927.00 | 1.89 | % | $ | 9.18 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,012.24 | 2.57 | % | $ | 13.03 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 924.80 | 3.07 | % | $ | 14.89 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 924.80 | 2.39 | % | $ | 11.60 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,009.72 | 3.07 | % | $ | 15.55 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,013.15 | 2.39 | % | $ | 12.13 | ||||||||
Institutional Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 928.20 | 2.27 | % | $ | 11.03 | ||||||||
Institutional Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 928.20 | 1.44 | % | $ | 7.00 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,013.76 | 2.27 | % | $ | 11.52 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,017.94 | 1.44 | % | $ | 7.32 | ||||||||
The Multi-Disciplinary Fund | ||||||||||||||||
No Load Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 941.30 | 2.25 | % | $ | 11.01 | ||||||||
No Load Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 941.30 | 1.49 | % | $ | 7.29 | ||||||||
28
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Expense Example — (Continued)
December 31, 2011
| Beginning Account Value (7/1/11) | Ending Account Value (12/31/11) | Annualized Expense Ratio | Expenses Paid During Period* (7/1/11 to 12/31/11) | |||||||||||||
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,013.86 | 2.25 | % | $ | 11.42 | ||||||||
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,017.69 | 1.49 | % | $ | 7.58 | ||||||||
Advisor Class A Actual — before expense reimbursement | $ | 1,000.00 | $ | 940.40 | 2.50 | % | $ | 12.23 | ||||||||
Advisor Class A Actual — after expense reimbursement | $ | 1,000.00 | $ | 940.40 | 1.74 | % | $ | 8.51 | ||||||||
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,012.60 | 2.50 | % | $ | 12.68 | ||||||||
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 — before expense reimbursement | $ | 1,000.00 | $ | 937.60 | 3.00 | % | $ | 14.65 | ||||||||
Advisor Class C Actual — after expense reimbursement | $ | 1,000.00 | $ | 937.60 | 2.24 | % | $ | 10.94 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,010.08 | 3.00 | % | $ | 15.20 | ||||||||
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement | $ | 1,000.00 | $ | 1,013.91 | 2.24 | % | $ | 11.37 | ||||||||
Institutional Class Actual — before expense reimbursement | $ | 1,000.00 | $ | 942.40 | 2.20 | % | $ | 10.77 | ||||||||
Institutional Class Actual — after expense reimbursement | $ | 1,000.00 | $ | 942.40 | 1.29 | % | $ | 6.32 | ||||||||
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement | $ | 1,000.00 | $ | 1,014.11 | 2.20 | % | $ | 11.17 | ||||||||
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, including directed brokerage credits, on a daily basis. Any expense reductions includes Feeder Fund-specific expenses as well as the expenses allocated for the Master Portfolio. |
| * | Expenses are equal to the Feeder Fund’s annualzied expense ratio before expense reimbursement and after expense reimbursement multiplied by the average account value over the period, multiplied by 184/365. |
29
| The Internet Fund | The Global Fund | |||||||
ASSETS: | ||||||||
Investments in the Master Portfolio, at value* | $ | 105,045,572 | $ | 4,115,533 | ||||
Receivable from Adviser | 3,576 | 16,860 | ||||||
Receivable for Master Portfolio interest sold | 18,832 | 127,671 | ||||||
Receivable for Fund shares sold | 47,458 | 3,300 | ||||||
Prepaid expenses and other assets | 24,456 | 16,944 | ||||||
|
|
|
| |||||
Total Assets | 105,139,894 | 4,280,308 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable to Directors and Officers | 2,272 | 91 | ||||||
Payable for Fund shares repurchased | 66,290 | 130,971 | ||||||
Payable for shareholder servicing fees | 22,262 | 922 | ||||||
Payable for distribution fees | 392 | 153 | ||||||
Accrued expenses and other liabilities | 68,556 | 14,238 | ||||||
|
|
|
| |||||
Total Liabilities | 159,772 | 146,375 | ||||||
|
|
|
| |||||
Net Assets | $ | 104,980,122 | $ | 4,133,933 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Paid in capital | $ | 84,171,801 | $ | 4,983,145 | ||||
Accumulated net investment loss | (76,659 | ) | (14,339 | ) | ||||
Accumulated net realized gain (loss) on investments and foreign currency | 2,848,315 | (461,715 | ) | |||||
Net unrealized appreciation (depreciation) on: | ||||||||
Investments and foreign currency | 18,036,665 | (373,158 | ) | |||||
|
|
|
| |||||
Net Assets | $ | 104,980,122 | $ | 4,133,933 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | ||||||||
Net Assets | $ | 103,827,873 | $ | 3,631,076 | ||||
Shares outstanding | 2,863,528 | 925,864 | ||||||
Net asset value per share (offering price and redemption price) | $ | 36.26 | $ | 3.92 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | ||||||||
Net Assets | $ | 1,049,692 | $ | 392,189 | ||||
Shares outstanding | 29,460 | �� | 99,998 | |||||
Net asset value per share (redemption price) | $ | 35.63 | $ | 3.92 | ||||
|
|
|
| |||||
Offering price per share ($35.63 divided by .9425 and $3.92 divided by .9425) | $ | 37.80 | $ | 4.16 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | ||||||||
Net Assets | $ | 102,557 | $ | 110,668 | ||||
Shares outstanding | 2,966 | 28,613 | ||||||
Net asset value per share (offering price and redemption price) | $ | 34.58 | $ | 3.87 | ||||
|
|
|
| |||||
* 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 Fund’s 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, 2011
| The Paradigm Fund | The Medical Fund | |||||||
ASSETS: | ||||||||
Investments in the Master Portfolio, at value* | $ | 814,738,481 | $ | 20,189,751 | ||||
Receivable from Adviser | 113,776 | 16,972 | ||||||
Receivable for Master Portfolio interest sold | 1,903,347 | 18,548 | ||||||
Receivable for Fund shares sold | 607,442 | 8,899 | ||||||
Prepaid expenses and other assets | 87,012 | 18,437 | ||||||
|
|
|
| |||||
Total Assets | 817,450,058 | 20,252,607 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable to Directors and Officers | 21,060 | 567 | ||||||
Payable for Fund shares repurchased | 2,510,789 | 27,447 | ||||||
Payable for shareholder servicing fees | 156,464 | 5,099 | ||||||
Payable for distribution fees | 161,707 | 1,561 | ||||||
Accrued expenses and other liabilities | 289,136 | 20,951 | ||||||
|
|
|
| |||||
Total Liabilities | 3,139,156 | 55,625 | ||||||
|
|
|
| |||||
Net Assets | $ | 814,310,902 | $ | 20,196,982 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Paid in capital | $ | 1,724,451,476 | $ | 20,739,576 | ||||
Accumulated net investment income (loss) | (13,044,636 | ) | 27,668 | |||||
Accumulated net realized gain (loss) on investments and foreign currency | (813,392,233 | ) | 1,458,411 | |||||
Net unrealized depreciation on: | ||||||||
Investments and foreign currency | (83,703,705 | ) | (2,028,673 | ) | ||||
|
|
|
| |||||
Net Assets | $ | 814,310,902 | $ | 20,196,982 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | ||||||||
Net Assets | $ | 430,528,413 | $ | 16,376,374 | ||||
Shares outstanding | 21,737,811 | 873,430 | ||||||
Net asset value per share (offering price and redemption price) | $ | 19.81 | $ | 18.75 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: | ||||||||
Net Assets | $ | 146,939,353 | $ | 3,240,272 | ||||
Shares outstanding | 7,556,429 | 177,158 | ||||||
Net asset value per share (redemption price) | $ | 19.45 | $ | 18.29 | ||||
|
|
|
| |||||
Offering price per share ($19.45 divided by .9425 and $18.29 divided by .9425) | $ | 20.64 | $ | 19.41 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: | ||||||||
Net Assets | $ | 102,533,855 | $ | 580,336 | ||||
Shares outstanding | 5,466,256 | 31,978 | ||||||
Net asset value per share (offering price and redemption price) | $ | 18.76 | $ | 18.15 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: | ||||||||
Net Assets | $ | 134,309,281 | N/A | |||||
Shares outstanding | 6,788,251 | N/A | ||||||
Net asset value per share (offering price and redemption price) | $ | 19.79 | 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 Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
31
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Statements of Assets & Liabilities — (Continued)
December 31, 2011
| The Small Cap Opportunities Fund | The Market Opportunities Fund | |||||||
ASSETS: | ||||||||
Investments in the Master Portfolio, at value* | $ | 83,008,769 | $ | 43,205,029 | ||||
Receivable from Adviser | 20,074 | 10,515 | ||||||
Receivable for Master Portfolio interest sold | 298,875 | – | ||||||
Receivable for Fund shares sold | 10,553 | 240,572 | ||||||
Prepaid expenses and other assets | 26,164 | 29,357 | ||||||
|
|
|
| |||||
Total Assets | 83,364,435 | 43,485,473 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable for Master Portfolio interest purchased | – | 58,800 | ||||||
Payable to Directors and Officers | 2,173 | 953 | ||||||
Payable for Fund shares repurchased | 309,427 | 179,772 | ||||||
Payable for shareholder servicing fees | 17,342 | 9,208 | ||||||
Payable for distribution fees | 4,863 | 5,442 | ||||||
Accrued expenses and other liabilities | 45,112 | 22,270 | ||||||
|
|
|
| |||||
Total Liabilities | 378,917 | 276,445 | ||||||
|
|
|
| |||||
Net Assets | $ | 82,985,518 | $ | 43,209,028 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Paid in capital | $ | 255,149,084 | $ | 76,845,891 | ||||
Accumulated net investment loss | (810,693 | ) | (2,147,929 | ) | ||||
Accumulated net realized loss on investments and foreign currency | (168,967,873 | ) | (33,146,160 | ) | ||||
Net unrealized appreciation (depreciation) on: | ||||||||
Investments and foreign currency | (2,385,000 | ) | 1,657,226 | |||||
|
|
|
| |||||
Net Assets | $ | 82,985,518 | $ | 43,209,028 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: | ||||||||
Net Assets | $ | 67,797,750 | $ | 30,190,688 | ||||
Shares outstanding | 3,414,671 | 2,889,986 | ||||||
Net asset value per share (offering price and redemption price) | $ | 19.85 | $ | 10.45 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: |
| |||||||
Net Assets | $ | 7,249,668 | $ | 8,599,530 | ||||
Shares outstanding | 370,111 | 824,391 | ||||||
Net asset value per share (redemption price) | $ | 19.59 | $ | 10.43 | ||||
|
|
|
| |||||
Offering price per share ($19.59 divided by .9425 and $10.43 divided by .9425) | $ | 20.79 | $ | 11.07 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: |
| |||||||
Net Assets | $ | 2,440,323 | $ | 4,232,622 | ||||
Shares outstanding | 126,081 | 410,165 | ||||||
Net asset value per share (offering price and redemption price) | $ | 19.36 | $ | 10.32 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: |
| |||||||
Net Assets | $ | 5,497,777 | $ | 186,188 | ||||
Shares outstanding | 275,804 | 17,792 | ||||||
Net asset value per share (offering price and redemption price) | $ | 19.93 | $ | 10.46 | ||||
|
|
|
| |||||
| * | 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 Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
32
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Statements of Assets & Liabilities — (Continued)
December 31, 2011
| The Water Infrastructure Fund | The Multi- Fund | |||||||
ASSETS: | ||||||||
Investments in the Master Portfolio, at value* | $ | 13,283,272 | $ | 23,615,085 | ||||
Receivable from Adviser | 9,567 | 12,727 | ||||||
Receivable for Master Portfolio interest sold | 16,735 | 1,735 | ||||||
Receivable for Fund shares sold | 3,614 | 39,283 | ||||||
Prepaid expenses and other assets | 16,827 | 34,460 | ||||||
|
|
|
| |||||
Total Assets | 13,330,015 | 23,703,290 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable to Directors and Officers | 341 | 289 | ||||||
Payable for Fund shares repurchased | 20,349 | 41,018 | ||||||
Payable for shareholder servicing fees | 2,729 | 4,297 | ||||||
Payable for distribution fees | 3,442 | 1,795 | ||||||
Accrued expenses and other liabilities | 17,098 | 17,914 | ||||||
|
|
|
| |||||
Total Liabilities | 43,959 | 65,313 | ||||||
|
|
|
| |||||
Net Assets | $ | 13,286,056 | $ | 23,637,977 | ||||
|
|
|
| |||||
NET ASSETS CONSIST OF: | ||||||||
Paid in capital | $ | 22,676,292 | $ | 24,651,762 | ||||
Accumulated net investment loss | (108,858 | ) | (133,086 | ) | ||||
Accumulated net realized gain (loss) on investments, foreign currency and written option contracts | (8,627,123 | ) | 518,140 | |||||
Net unrealized appreciation (depreciation) on: | ||||||||
Investments and foreign currency | (725,331 | ) | (1,334,490 | ) | ||||
Written option contracts | 71,076 | (64,349 | ) | |||||
|
|
|
| |||||
Net Assets | $ | 13,286,056 | $ | 23,637,977 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS: |
| |||||||
Net Assets | $ | 5,613,439 | $ | 13,389,019 | ||||
Shares outstanding | 720,605 | 1,326,698 | ||||||
Net asset value per share (offering price and redemption price) | $ | 7.79 | $ | 10.09 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A: |
| |||||||
Net Assets | $ | 4,558,865 | $ | 4,725,528 | ||||
Shares outstanding | 586,256 | 470,035 | ||||||
Net asset value per share (redemption price) | $ | 7.78 | $ | 10.05 | ||||
|
|
|
| |||||
Offering price per share ($7.78 divided by .9425 and $10.05 divided by .9425) | $ | 8.25 | $ | 10.66 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C: |
| |||||||
Net Assets | $ | 2,315,804 | $ | 1,645,130 | ||||
Shares outstanding | 301,720 | 164,513 | ||||||
Net asset value per share (offering price and redemption price) | $ | 7.68 | $ | 10.00 | ||||
|
|
|
| |||||
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS: |
| |||||||
Net Assets | $ | 797,948 | $ | 3,878,300 | ||||
Shares outstanding | 101,659 | 383,178 | ||||||
Net asset value per share (offering price and redemption price) | $ | 7.85 | $ | 10.12 | ||||
|
|
|
| |||||
| * | 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 Fund’s financial statements. |
The accompanying notes are an integral part of these financial statements.
33
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
For the Year Ended December 31, 2011
| The Internet Fund | The Global Fund | |||||||
INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Dividends† | $ | 985,114 | $ | 133,750 | ||||
Interest | 165 | 23 | ||||||
Income from securities lending | 116,537 | 11,490 | ||||||
Expenses allocated from Master Portfolio | (1,605,460 | ) | (113,965 | ) | ||||
|
|
|
| |||||
Net investment income (loss) from Master Portfolio | (503,644 | ) | 31,298 | |||||
|
|
|
| |||||
EXPENSES: | ||||||||
Distribution fees — Advisor Class A | 3,268 | 1,940 | ||||||
Distribution fees — Advisor Class C | 1,012 | 647 | ||||||
Shareholder servicing fees — Advisor Class A | 3,268 | 1,940 | ||||||
Shareholder servicing fees — Advisor Class C | 338 | 216 | ||||||
Shareholder servicing fees — No Load Class | 286,584 | 10,679 | ||||||
Transfer agent fees and expenses | 164,978 | 19,503 | ||||||
Reports to shareholders | 67,770 | 3,548 | ||||||
Administration fees | 44,115 | 1,985 | ||||||
Professional fees | 14,948 | 8,579 | ||||||
Directors’ and Officers’ fees and expenses | 9,513 | 405 | ||||||
Registration fees | 44,102 | 41,053 | ||||||
Fund accounting fees | 5,824 | 256 | ||||||
Other expenses | 5,268 | 215 | ||||||
|
|
|
| |||||
Total expenses | 650,988 | 90,966 | ||||||
Less, expense reimbursement | (58,333 | ) | (130,978 | ) | ||||
|
|
|
| |||||
Net expenses | 592,655 | (40,012 | ) | |||||
|
|
|
| |||||
Net investment income (loss) | (1,096,299 | ) | 71,310 | |||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments and foreign currency | 27,593,691 | (78,534 | ) | |||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (28,535,697 | ) | (940,717 | ) | ||||
|
|
|
| |||||
Net loss on investments | (942,006 | ) | (1,019,251 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | $ | (2,038,305 | ) | $ | (947,941 | ) | ||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 15,002 | $ | 15,117 | ||||
|
|
|
| |||||
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, 2011
| The Paradigm Fund | The Medical Fund | |||||||
INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Dividends† | $ | 15,089,535 | $ | 616,665 | ||||
Interest | 368,450 | 125 | ||||||
Income from securities lending | 3,460,690 | 46,480 | ||||||
Expenses allocated from Master Portfolio | (14,865,260 | ) | (410,471 | ) | ||||
|
|
|
| |||||
Net investment income from Master Portfolio | 4,053,415 | 252,799 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Distribution fees — Advisor Class A | 491,316 | 9,949 | ||||||
Distribution fees — Advisor Class C | 1,010,991 | 5,283 | ||||||
Shareholder servicing fees — Advisor Class A | 491,316 | 9,949 | ||||||
Shareholder servicing fees — Advisor Class C | 336,997 | 1,761 | ||||||
Shareholder servicing fees — No Load Class | 1,502,522 | 61,758 | ||||||
Shareholder servicing fees — Institutional Class | 301,806 | – | ||||||
Transfer agent fees and expenses | 577,445 | 31,241 | ||||||
Reports to shareholders | 280,145 | 10,886 | ||||||
Administration fees | 413,148 | 11,021 | ||||||
Professional fees | 115,651 | 8,645 | ||||||
Directors’ and Officers’ fees and expenses | 88,836 | 2,400 | ||||||
Registration fees | 72,047 | 42,772 | ||||||
Fund accounting fees | 54,837 | 1,465 | ||||||
Other expenses | 55,795 | 1,384 | ||||||
|
|
|
| |||||
Total expenses | 5,792,852 | 198,514 | ||||||
Less, expense waiver for Institutional Class shareholder servicing fees | (226,355 | ) | — | |||||
Less, expense reimbursement | (1,466,172 | ) | (185,270 | ) | ||||
|
|
|
| |||||
Net expenses | 4,100,325 | 13,244 | ||||||
|
|
|
| |||||
Net investment income (loss) | (46,910 | ) | 239,555 | |||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Net realized gain on: | ||||||||
Investments and foreign currency | 212,398,422 | 3,617,656 | ||||||
Realized gain distributions received from other investment companies | 7,906 | — | ||||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (365,310,403 | ) | (2,711,129 | ) | ||||
|
|
|
| |||||
Net gain (loss) on investments | (152,904,075 | ) | 906,527 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | $ | (152,950,985 | ) | $ | 1,146,082 | |||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 604,111 | $ | 29,112 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
35
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Statements of Operations — (Continued)
For the Year Ended December 31, 2011
| The Small Cap Opportunities Fund | The Market Opportunities Fund | |||||||
INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Dividends† | $ | 1,563,302 | $ | 823,738 | ||||
Interest | 52 | 167 | ||||||
Income from securities lending | 72,693 | 35,521 | ||||||
Expenses allocated from Master Portfolio | (1,601,610 | ) | (710,168 | ) | ||||
|
|
|
| |||||
Net investment income from Master Portfolio | 34,437 | 149,258 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Distribution fees — Advisor Class A | 23,513 | 25,796 | ||||||
Distribution fees — Advisor Class C | 22,252 | 37,972 | ||||||
Shareholder servicing fees — Advisor Class A | 23,513 | 25,796 | ||||||
Shareholder servicing fees — Advisor Class C | 7,417 | 12,657 | ||||||
Shareholder servicing fees — No Load Class | 231,111 | 85,595 | ||||||
Shareholder servicing fees — Institutional Class | 14,953 | 390 | ||||||
Transfer agent fees and expenses | 77,937 | 32,854 | ||||||
Reports to shareholders | 39,027 | 5,452 | ||||||
Administration fees | 43,187 | 19,113 | ||||||
Professional fees | 14,112 | 9,960 | ||||||
Directors’ and Officers’ fees and expenses | 9,197 | 4,051 | ||||||
Registration fees | 53,497 | 50,311 | ||||||
Fund accounting fees | 5,704 | 2,490 | ||||||
Other expenses | 7,002 | 2,590 | ||||||
|
|
|
| |||||
Total expenses | 572,422 | 315,027 | ||||||
Less, expense waiver for Institutional Class shareholder servicing fees | (11,215 | ) | (293 | ) | ||||
Less, expense reimbursement | (290,398 | ) | (144,567 | ) | ||||
|
|
|
| |||||
Net expenses | 270,809 | 170,167 | ||||||
|
|
|
| |||||
Net investment loss | (236,372 | ) | (20,909 | ) | ||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Net realized gain on: | ||||||||
Investments and foreign currency | 18,650,142 | 2,021,315 | ||||||
Realized gain distributions received from other investment companies | — | 3,214 | ||||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (32,960,313 | ) | (5,576,160 | ) | ||||
|
|
|
| |||||
Net loss on investments | (14,310,171 | ) | (3,551,631 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | $ | (14,546,543 | ) | $ | (3,572,540 | ) | ||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 73,199 | $ | 43,120 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
36
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Statements of Operations — (Continued)
For the Year Ended December 31, 2011
| The Water Infrastructure Fund | The Multi- Disciplinary Fund | |||||||
INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Dividends† | $ | 42,745 | $ | — | ||||
Interest | 455,444 | 1,453,336 | ||||||
Income from securities lending | 3,372 | 778 | ||||||
Expenses allocated from Master Portfolio | (246,483 | ) | (233,881 | ) | ||||
|
|
|
| |||||
Net investment income from Master Portfolio | 255,078 | 1,220,233 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Distribution fees — Advisor Class A | 17,006 | 4,287 | ||||||
Distribution fees — Advisor Class C | 20,016 | 7,296 | ||||||
Shareholder servicing fees — Advisor Class A | 17,006 | 4,287 | ||||||
Shareholder servicing fees — Advisor Class C | 6,672 | 2,432 | ||||||
Shareholder servicing fees — No Load Class | 16,337 | 24,963 | ||||||
Shareholder servicing fees — Institutional Class | 2,784 | 5,368 | ||||||
Transfer agent fees and expenses | 25,105 | 22,865 | ||||||
Reports to shareholders | 9,597 | 1,630 | ||||||
Administration fees | 6,532 | 7,187 | ||||||
Professional fees | 9,409 | 7,134 | ||||||
Directors’ and Officers’ fees and expenses | 1,432 | 1,129 | ||||||
Registration fees | 54,271 | 53,021 | ||||||
Fund accounting fees | 867 | 792 | ||||||
Other expenses | 1,061 | 199 | ||||||
|
|
|
| |||||
Total expenses | 188,095 | 142,590 | ||||||
Less, expense waiver for Institutional Class shareholder servicing fees | (2,089 | ) | (4,026 | ) | ||||
Less, expense reimbursement | (112,918 | ) | (137,411 | ) | ||||
|
|
|
| |||||
Net expenses | 73,088 | 1,153 | ||||||
|
|
|
| |||||
Net investment income | 181,990 | 1,219,080 | ||||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments and foreign currency | (1,060,734 | ) | (350,245 | ) | ||||
Written option contracts expired or closed | 1,858,056 | 281,515 | ||||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (746,058 | ) | (1,403,715 | ) | ||||
Written option contracts | (1,092,365 | ) | (230,476 | ) | ||||
|
|
|
| |||||
Net loss on investments | (1,041,101 | ) | (1,702,921 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | $ | (859,111 | ) | $ | (483,841 | ) | ||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 3,574 | $ | — | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
37
| The Internet Fund | The Global Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (1,096,299 | ) | $ | (913,022 | ) | $ | 71,310 | $ | 24,135 | ||||||
Net realized gain (loss) on sale of investments and foreign currency | 27,593,691 | 3,608,256 | (78,534 | ) | 621,170 | |||||||||||
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options | (28,535,697 | ) | 18,103,348 | (940,717 | ) | 246,651 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (2,038,305 | ) | 20,798,582 | (947,941 | ) | 891,956 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — | ||||||||||||||||
Net investment income | — | — | (27,956 | ) | (43,877 | ) | ||||||||||
Net realized gains | (726,004 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (726,004 | ) | — | (27,956 | ) | (43,877 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | ||||||||||||||||
Net investment income | — | — | (3,015 | ) | (5,645 | ) | ||||||||||
Net realized gains | (7,458 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (7,458 | ) | — | (3,015 | ) | (5,645 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | ||||||||||||||||
Net investment income | — | — | (862 | ) | (303 | ) | ||||||||||
Net realized gains | (750 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (750 | ) | — | (862 | ) | (303 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | 9,007,831 | 3,021,151 | 854,112 | 1,128,676 | ||||||||||||
Redemption fees | 1,415 | 170 | 67 | 102 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 700,007 | — | 26,809 | 43,193 | ||||||||||||
Cost of shares redeemed | (16,207,678 | ) | (15,163,154 | ) | (1,074,958 | ) | (1,733,680 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from capital share transactions | (6,498,425 | ) | (12,141,833 | ) | (193,970 | ) | (561,709 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | 456,786 | 1,362,470 | 1,393,642 | 289,022 | ||||||||||||
Redemption fees | 472 | 16 | 24 | 14 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 6,259 | — | 2,535 | 1,741 | ||||||||||||
Cost of shares redeemed | (1,285,526 | ) | (412,504 | ) | (1,465,527 | ) | (50,310 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (822,009 | ) | 949,982 | (69,326 | ) | 240,467 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
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 Internet Fund | The Global Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | $ | 72,209 | $ | 43,167 | $ | 81,516 | $ | 24,258 | ||||||||
Redemption fees | 48 | — | — | — | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 587 | — | 690 | 303 | ||||||||||||
Cost of shares redeemed | (173,561 | ) | — | (17,713 | ) | (6,489 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (100,717 | ) | 43,167 | 64,493 | 18,072 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS: | (10,193,668 | ) | 9,649,898 | (1,178,577 | ) | 538,961 | ||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 115,173,790 | 105,523,892 | 5,312,510 | 4,773,549 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year* | $ | 104,980,122 | $ | 115,173,790 | $ | 4,133,933 | $ | 5,312,510 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Including undistributed net investment income (loss) of: | $ | (76,659 | ) | $ | 54,100 | $ | (14,339 | ) | $ | (23,401 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — | ||||||||||||||||
Shares sold | 230,227 | 92,334 | 187,091 | 281,577 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 19,268 | — | 6,839 | 9,289 | ||||||||||||
Shares redeemed | (421,841 | ) | (461,380 | ) | (239,805 | ) | (433,433 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (172,346 | ) | (369,046 | ) | (45,875 | ) | (142,567 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | ||||||||||||||||
Shares sold | 11,867 | 39,616 | 327,883 | 69,249 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 175 | — | 647 | 373 | ||||||||||||
Shares redeemed | (34,153 | ) | (12,363 | ) | (379,627 | ) | (12,056 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (22,111 | ) | 27,253 | (51,097 | ) | 57,566 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | ||||||||||||||||
Shares sold | 1,950 | 1,472 | 18,569 | 6,225 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 17 | — | 178 | 65 | ||||||||||||
Shares redeemed | (4,487 | ) | — | (3,952 | ) | (1,651 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (2,520 | ) | 1,472 | 14,795 | 4,639 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
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 Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (46,910 | ) | $ | 5,338,769 | $ | 239,555 | $ | 155,037 | |||||||
Net realized gain (loss) on sale of investments, foreign currency and distributions received from other investment companies | 212,406,328 | (106,442,949 | ) | 3,617,656 | (220,195 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) of investments and foreign currency | (365,310,403 | ) | 278,030,932 | (2,711,129 | ) | 1,376,200 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (152,950,985 | ) | 176,926,752 | 1,146,082 | 1,311,042 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — | ||||||||||||||||
Net investment income | (4,007,796 | ) | (10,863,592 | ) | (200,893 | ) | (141,862 | ) | ||||||||
Net realized gains | — | — | (1,192,805 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (4,007,796 | ) | (10,863,592 | ) | (1,393,698 | ) | (141,862 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | ||||||||||||||||
Net investment income | (1,391,271 | ) | (3,108,298 | ) | (34,435 | ) | (12,747 | ) | ||||||||
Net realized gains | — | — | (246,769 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (1,391,271 | ) | (3,108,298 | ) | (281,204 | ) | (12,747 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | ||||||||||||||||
Net investment income | (1,004,773 | ) | (1,760,303 | ) | (2,620 | ) | (688 | ) | ||||||||
Net realized gains | — | — | (43,898 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (1,004,773 | ) | (1,760,303 | ) | (46,518 | ) | (688 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — | ||||||||||||||||
Net investment income | (1,249,019 | ) | (2,558,528 | ) | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (1,249,019 | ) | (2,558,528 | ) | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | 81,461,468 | 102,887,659 | 5,372,018 | 10,282,693 | ||||||||||||
Redemption fees | 14,659 | 13,160 | 1,103 | 132 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 3,758,915 | 10,197,239 | 1,372,906 | 140,271 | ||||||||||||
Cost of shares redeemed | (255,358,638 | ) | (340,164,186 | ) | (15,711,342 | ) | (6,758,118 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (170,123,596 | ) | (227,066,128 | ) | (8,965,315 | ) | 3,664,978 | |||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | 19,748,265 | 26,261,163 | 556,628 | 1,196,355 | ||||||||||||
Redemption fees | 4,492 | 4,893 | 2 | 177 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 1,191,438 | 2,635,918 | 154,881 | 7,167 | ||||||||||||
Cost of shares redeemed | (71,780,253 | ) | (85,179,916 | ) | (1,561,750 | ) | (1,492,863 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from capital share transactions | (50,836,058 | ) | (56,277,942 | ) | (850,239 | ) | (289,164 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
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 Paradigm Fund | The Medical Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | ||||||||||||||||
Proceeds from shares sold | $ | 6,896,487 | $ | 8,298,564 | $ | 69,329 | $ | 356,622 | ||||||||
Redemption fees | 700 | 712 | 4 | — | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 888,903 | 1,536,819 | 27,593 | 441 | ||||||||||||
Cost of shares redeemed | (37,182,568 | ) | (47,196,534 | ) | (185,030 | ) | (139,626 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (29,396,478 | ) | (37,360,439 | ) | (88,104 | ) | 217,437 | |||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | ||||||||||||||||
Proceeds from shares sold | 56,872,249 | 49,106,216 | N/A | N/A | ||||||||||||
Redemption fees | 1,164 | 541 | N/A | N/A | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 1,124,859 | 2,167,870 | N/A | N/A | ||||||||||||
Cost of shares redeemed | (40,879,049 | ) | (53,388,379 | ) | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | 17,119,223 | (2,113,752 | ) | N/A | N/A | |||||||||||
|
|
|
|
|
|
|
| |||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS: | (393,840,753 | ) | (164,182,230 | ) | (10,478,996 | ) | 4,748,996 | |||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 1,208,151,655 | 1,372,333,885 | 30,675,978 | 25,926,982 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year* | $ | 814,310,902 | $ | 1,208,151,655 | $ | 20,196,982 | $ | 30,675,978 | ||||||||
|
|
|
|
|
|
|
| |||||||||
*Including undistributed net investment income (loss) of: | $ | (13,044,636 | ) | $ | (9,775,040 | ) | $ | 27,668 | $ | 28,164 | ||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — | ||||||||||||||||
Shares sold | 3,493,271 | 4,985,324 | 261,332 | 545,733 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 189,470 | 439,158 | 73,183 | 7,182 | ||||||||||||
Shares redeemed | (11,423,061 | ) | (16,845,311 | ) | (784,017 | ) | (355,336 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (7,740,320 | ) | (11,420,829 | ) | (449,502 | ) | 197,579 | |||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | ||||||||||||||||
Shares sold | 878,122 | 1,278,667 | 27,758 | 64,338 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 61,179 | 115,297 | 8,463 | 375 | ||||||||||||
Shares redeemed | (3,243,049 | ) | (4,218,313 | ) | (79,836 | ) | (80,705 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (2,303,748 | ) | (2,824,349 | ) | (43,615 | ) | (15,992 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
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 Paradigm Fund | The Medical Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | ||||||||||||||||
Shares sold | 309,869 | 417,554 | 3,452 | 19,193 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 47,307 | 69,320 | 1,519 | 23 | ||||||||||||
Shares redeemed | (1,746,653 | ) | (2,404,604 | ) | (9,606 | ) | (7,443 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (1,389,477 | ) | (1,917,730 | ) | (4,635 | ) | 11,773 | |||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | ||||||||||||||||
Shares sold | 2,493,278 | 2,381,963 | N/A | N/A | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 56,754 | 93,604 | N/A | N/A | ||||||||||||
Shares redeemed | (1,881,051 | ) | (2,583,750 | ) | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 668,981 | (108,183 | ) | N/A | N/A | |||||||||||
|
|
|
|
|
|
|
| |||||||||
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 Opportunities Fund | The Market Opportunities Fund | |||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (236,372 | ) | $ | (359,966 | ) | $ | (20,909 | ) | $ | 121,463 | |||||
Net realized gain (loss) on sale of investments, foreign currency and distributions received from other investment companies | 18,650,142 | (588,589 | ) | 2,024,529 | (336,643 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) of investments and foreign currency | (32,960,313 | ) | 20,471,453 | (5,576,160 | ) | 6,167,781 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (14,546,543 | ) | 19,522,898 | (3,572,540 | ) | 5,952,601 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS: | ||||||||||||||||
Net investment income | (952,070 | ) | (2,187,430 | ) | (315,801 | ) | (1,939,475 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (952,070 | ) | (2,187,430 | ) | (315,801 | ) | (1,939,475 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | ||||||||||||||||
Net investment income | (75,653 | ) | (165,531 | ) | (62,348 | ) | (677,980 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (75,653 | ) | (165,531 | ) | (62,348 | ) | (677,980 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | ||||||||||||||||
Net investment income | (9,932 | ) | (35,675 | ) | (7,494 | ) | (243,526 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (9,932 | ) | (35,675 | ) | (7,494 | ) | (243,526 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS —INSTITUTIONAL CLASS: | ||||||||||||||||
Net investment income | (95,993 | ) | (163,727 | ) | (2,363 | ) | (11,629 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (95,993 | ) | (163,727 | ) | (2,363 | ) | (11,629 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | 2,296,721 | 14,985,968 | 1,692,138 | 2,555,924 | ||||||||||||
Redemption fees | 362 | 3,294 | 562 | 309 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 911,472 | 2,097,736 | 314,608 | 1,892,329 | ||||||||||||
Cost of shares redeemed | (52,799,981 | ) | (62,304,199 | ) | (7,504,122 | ) | (9,242,637 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from capital share transactions | (49,591,426 | ) | (45,217,201 | ) | (5,496,814 | ) | (4,794,075 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | ||||||||||||||||
Proceeds from shares sold | 754,533 | 2,116,520 | 1,610,815 | 2,148,005 | ||||||||||||
Redemption fees | 203 | 717 | 30 | 4,256 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 67,489 | 132,990 | 50,424 | 533,060 | ||||||||||||
Cost of shares redeemed | (3,763,794 | ) | (6,197,572 | ) | (6,562,768 | ) | (7,979,700 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from capital share transactions | (2,941,569 | ) | (3,947,345 | ) | (4,901,499 | ) | (5,294,379 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
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 Small Cap Opportunities Fund | The Market Opportunities Fund | |||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
CAPITAL SHARE TRANSACTIONS —ADVISOR CLASS C: | ||||||||||||||||
Proceeds from shares sold | $ | 158,678 | $ | 411,674 | $ | 279,004 | $ | 594,179 | ||||||||
Redemption fees | — | — | — | 2,058 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 6,701 | 21,022 | 6,429 | 208,569 | ||||||||||||
Cost of shares redeemed | (741,964 | ) | (1,792,550 | ) | (1,222,668 | ) | (1,567,544 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from capital share transactions | (576,585 | ) | (1,359,854 | ) | (937,235 | ) | (762,738 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS —INSTITUTIONAL CLASS: | ||||||||||||||||
Proceeds from shares sold | 1,004,159 | 1,069,997 | 46,133 | 193,362 | ||||||||||||
Redemption fees | 17 | 14 | — | — | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 66,389 | 111,423 | 623 | 603 | ||||||||||||
Cost of shares redeemed | (4,341,338 | ) | (12,224,759 | ) | (52,364 | ) | (11,602 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (3,270,773 | ) | (11,043,325 | ) | (5,608 | ) | 182,363 | |||||||||
|
|
|
|
|
|
|
| |||||||||
TOTAL DECREASE IN NET ASSETS: | (72,060,544 | ) | (44,597,190 | ) | (15,301,702 | ) | (7,588,838 | ) | ||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 155,046,062 | 199,643,252 | 58,510,730 | 66,099,568 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year* | $ | 82,985,518 | $ | 155,046,062 | $ | 43,209,028 | $ | 58,510,730 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Including undistributed net investment loss of: | $ | (810,693 | ) | $ | (1,089,215 | ) | $ | (2,147,929 | ) | $ | (2,114,296 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS: | ||||||||||||||||
Shares sold | 102,256 | 663,539 | 152,217 | 234,324 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 45,964 | 90,071 | 30,106 | 165,414 | ||||||||||||
Shares redeemed | (2,320,613 | ) | (2,905,365 | ) | (658,545 | ) | (841,037 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (2,172,393 | ) | (2,151,755 | ) | (476,222 | ) | (441,299 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | ||||||||||||||||
Shares sold | 33,526 | 103,386 | 148,917 | 192,473 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 3,449 | 5,792 | 4,835 | 46,719 | ||||||||||||
Shares redeemed | (167,640 | ) | (302,155 | ) | (568,829 | ) | (736,967 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (130,665 | ) | (192,977 | ) | (415,077 | ) | (497,775 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
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 Small Cap Opportunities Fund | The Market Opportunities Fund | |||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | |||||||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | ||||||||||||||||
Shares sold | 7,423 | 19,435 | 25,770 | 54,608 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 346 | 928 | 623 | 18,490 | ||||||||||||
Shares redeemed | (33,840 | ) | (87,406 | ) | (109,015 | ) | (146,542 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in shares outstanding | (26,071 | ) | (67,043 | ) | (82,622 | ) | (73,444 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | ||||||||||||||||
Shares sold | 43,809 | 49,716 | 3,845 | 17,668 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 3,334 | 4,757 | 59 | 53 | ||||||||||||
Shares redeemed | (189,618 | ) | (580,939 | ) | (4,571 | ) | (1,020 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (142,475 | ) | (526,466 | ) | (667 | ) | 16,701 | |||||||||
|
|
|
|
|
|
|
| |||||||||
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 Water Infrastructure Fund | The Multi-Disciplinary Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 181,990 | $ | 181,587 | $ | 1,219,080 | $ | 76,552 | ||||||||
Net realized gain (loss) on sale of investments, foreign currency and written option contracts expired or closed | 797,322 | (2,474,817 | ) | (68,730 | ) | 102,161 | ||||||||||
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options | (1,838,423 | ) | 806,181 | (1,634,191 | ) | 151,265 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (859,111 | ) | (1,487,049 | ) | (483,841 | ) | 329,978 | |||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — | ||||||||||||||||
Net investment income | (129,304 | ) | (60,253 | ) | (400,588 | ) | (75,832 | ) | ||||||||
Net realized gains | — | — | (66,876 | ) | (97,584 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (129,304 | ) | (60,253 | ) | (467,464 | ) | (173,416 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A: | ||||||||||||||||
Net investment income | (84,275 | ) | (56,524 | ) | (82,135 | ) | (7,026 | ) | ||||||||
Net realized gains | — | — | (23,639 | ) | (9,873 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (84,275 | ) | (56,524 | ) | (105,774 | ) | (16,899 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C: | ||||||||||||||||
Net investment income | (34,810 | ) | (3,967 | ) | (36,526 | ) | (3,169 | ) | ||||||||
Net realized gains | — | — | (8,257 | ) | (3,569 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (34,810 | ) | (3,967 | ) | (44,783 | ) | (6,738 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS: | ||||||||||||||||
Net investment income | (20,174 | ) | (44,989 | ) | (131,145 | ) | (4,248 | ) | ||||||||
Net realized gains | — | — | (19,194 | ) | (3,925 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (20,174 | ) | (44,989 | ) | (150,339 | ) | (8,173 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — | ||||||||||||||||
Proceeds from shares sold | 1,132,460 | 3,810,415 | 12,347,701 | 2,878,206 | ||||||||||||
Redemption fees | 24 | 101 | 2,464 | 51 | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 117,685 | 54,002 | 293,827 | 122,312 | ||||||||||||
Cost of shares redeemed | (2,201,535 | ) | (3,555,293 | ) | (2,074,045 | ) | (554,675 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (951,366 | ) | 309,225 | 10,569,947 | 2,445,894 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
46
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Statements of Changes in Net Assets — (Continued)
| The Water Infrastructure Fund | The Multi-Disciplinary Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A: | ||||||||||||||||
Proceeds from shares sold | $ | 882,166 | $ | 6,375,421 | $ | 4,785,955 | $ | 309,589 | ||||||||
Redemption fees | 495 | 1,662 | — | — | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 73,772 | 50,605 | 90,577 | 16,899 | ||||||||||||
Cost of shares redeemed | (6,074,229 | ) | (5,936,700 | ) | (307,232 | ) | (79,254 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (5,117,796 | ) | 490,988 | 4,569,300 | 247,234 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C: | ||||||||||||||||
Proceeds from shares sold | 727,761 | 1,279,796 | 1,634,271 | 15,000 | ||||||||||||
Redemption fees | 222 | — | — | — | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 22,357 | 2,625 | 42,860 | 6,667 | ||||||||||||
Cost of shares redeemed | (1,079,180 | ) | (943,226 | ) | (72,488 | ) | (5,570 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (328,840 | ) | 339,195 | 1,604,643 | 16,097 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS: | ||||||||||||||||
Proceeds from shares sold | 587,279 | 3,936,264 | 3,926,500 | 26,000 | ||||||||||||
Redemption fees | 2,793 | 278 | — | — | ||||||||||||
Proceeds from shares issued to holders in reinvestment of dividends | 3,061 | 1,972 | 145,307 | 8,173 | ||||||||||||
Cost of shares redeemed | (3,905,363 | ) | (2,421,527 | ) | (41,159 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (3,312,230 | ) | 1,516,987 | 4,030,648 | 34,173 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS: | (10,837,906 | ) | 1,003,613 | 19,522,337 | 2,868,150 | |||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 24,123,962 | 23,120,349 | 4,115,640 | 1,247,490 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year* | $ | 13,286,056 | $ | 24,123,962 | $ | 23,637,977 | $ | 4,115,640 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Including undistributed net investment loss of: | $ | (108,858 | ) | $ | (33,240 | ) | $ | (133,086 | ) | $ | (12,853 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — | ||||||||||||||||
Shares sold | 137,875 | 448,551 | 1,162,165 | 278,898 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 15,049 | 6,441 | 28,689 | 11,816 | ||||||||||||
Shares redeemed | (267,598 | ) | (429,862 | ) | (197,567 | ) | (52,420 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (114,674 | ) | 25,130 | 993,287 | 238,294 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
47
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Statements of Changes in Net Assets — (Continued)
| The Water Infrastructure Fund | The Multi-Disciplinary Fund | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A: | ||||||||||||||||
Shares sold | 104,034 | 752,587 | 456,913 | 29,903 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 9,446 | 6,068 | 8,949 | 1,635 | ||||||||||||
Shares redeemed | (736,625 | ) | (721,854 | ) | (29,920 | ) | (7,901 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (623,145 | ) | 36,801 | 435,942 | 23,637 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C: | ||||||||||||||||
Shares sold | 87,295 | 151,009 | 155,056 | 1,486 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 2,903 | 318 | 4,155 | 650 | ||||||||||||
Shares redeemed | (132,547 | ) | (117,149 | ) | (7,007 | ) | (538 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (42,349 | ) | 34,178 | 152,204 | 1,598 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS: | ||||||||||||||||
Shares sold | 68,978 | 470,451 | 359,586 | 2,512 | ||||||||||||
Shares issued in reinvestments of dividends and distributions | 388 | 234 | 14,009 | 790 | ||||||||||||
Shares redeemed | (464,289 | ) | (300,650 | ) | (3,981 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (394,923 | ) | 170,035 | 369,614 | 3,302 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
48
1. Organization
Kinetics Mutual Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and is incorporated in the State of Maryland. The Company is an open-end management investment company issuing its shares in series. One billion shares are authorized for the Company with a par value of $0.001 per share. The series of the Company presently authorized are The Internet Fund (“Internet”), The Global Fund (“Global”), The Paradigm Fund (“Paradigm”), The Medical Fund (“Medical”), The Small Cap Opportunities Fund (“Small Cap”), The Market Opportunities Fund (“Market Opportunities”), The Water Infrastructure Fund (“Water Infrastructure”), and The Multi-Disciplinary Fund (“Multi-Disciplinary”). Investment operations of the Company began on October 21, 1996 (Internet), September 30, 1999 (Medical), December 31, 1999 (Global and Paradigm), March 20, 2000 (Small Cap), January 31, 2006 (Market Opportunities), June 29, 2007 (Water Infrastructure), and February 11, 2008 (Multi-Disciplinary). 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 Water Infrastructure, and February 11, 2008 with respect to Multi-Disciplinary), 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.
49
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
Each Feeder Fund’s respective interest in the corresponding Master Portfolio as of December 31, 2011 is as follows:
| Interest in Master Portfolio | ||||
Internet Fund | 99.989 | % | ||
Global Fund | 99.876 | % | ||
Paradigm Fund | 96.461 | % | ||
Medical Fund | 99.917 | % | ||
Small Cap Fund | 99.975 | % | ||
Market Opportunities Fund | 99.977 | % | ||
Water Infrastructure Fund | 99.283 | % | ||
Multi-Disciplinary Fund | 99.501 | % | ||
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, 2011 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, 2011, 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. Advisor Class C shares do not have a sales charge.
As of December 31, 2011, 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, 2011 the Paradigm, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary 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.
Each class of shares for each Fund has identical rights and privileges except with respect to the Rule 12b-1 fees paid by the Advisor Class A and Advisor Class C shares, the sales charge on the Advisor Class A shares, the 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
50
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
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 Portfolio’s 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 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 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 the last quoted sales price. Non-exchange traded options for which over-the-counter
51
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
quotations are not readily available are valued at the mean of the current bid and asked prices. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.
Instruments with remaining maturities of 60 days or less are valued at amortized cost, which approximates fair value. Other assets and securities for which no quotations are readily available (including restricted securities) are valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. 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; (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, 2011, 0.00%, 0.05%, 0.05%, 0.00%, 0.00%, 0.00% and (0.00%) of the net assets of the Internet Portfolio, Global Portfolio, Paradigm Portfolio, Medical Portfolio, Small Cap Opportunities Portfolio, Market Opportunities Portfolio and Multi-Disciplinary Portfolio, respectively, were fair valued securities. The Water Infrastructure Portfolio did not hold any fair valued securities at December 31, 2011.
Repurchase Agreements
Each Master Portfolio may enter into repurchase agreements with banks that are members of the Federal Reserve System or securities dealers who are members of a national securities exchange or are primary dealers in U.S. Government Securities. In connection with transactions in repurchase agreements, it is the Trust’s policy that the Master Portfolio receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 100% of the amount invested by the Master Portfolio in each repurchase agreement. If the seller defaults and the value of the collateral declines, realization of the collateral by the Master Portfolio may be delayed or limited.
52
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
Written Option Accounting
The Master Portfolios may write (sell) call or put options for trading or hedging purposes. When the 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 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 period. However, for federal income tax purposes, the Master Portfolios do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.
53
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
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, 2011 the following Master Portfolio held securities restricted to institutional shares (144A securities):
| Market Value | Percentage of Net Assets | |||||||
The Multi-Disciplinary Portfolio | $ | 6,321,700 | 26.64% | |||||
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, 2011, the following Master Portfolios held illiquid securities:
| Market Value | Percentage of Net Assets | |||||||
The Internet Portfolio | $ | 25 | 0.00 | % | ||||
The Global Portfolio | 2,226 | 0.05 | ||||||
The Paradigm Portfolio | 390,741 | 0.05 | ||||||
The Medical Portfolio | 0 | * | 0.00 | |||||
The Small Cap Portfolio | 3 | 0.00 | ||||||
The Market Opportunities Portfolio | 34 | 0.00 | ||||||
The Multi-Disciplinary Portfolio | (25 | ) | (0.00 | ) | ||||
| * | Amount is less than $0.50. |
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
54
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
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.
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 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.
55
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
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, 2011, open tax years include the tax years ended December 31, 2008 through 2011. 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 accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
Other
Realized gains and losses on the sale of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recognized on the accrual basis. Other noncash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Company’s understanding of the applicable country’s tax rules and rates.
3. Investment Adviser
Effective May 1, 2011, Kinetics Asset Management LLC, Kinetics Advisers, LLC, Horizon Asset Management, LLC, together with various affiliates, became wholly-owned subsidiaries of a newly-formed entity, Horizon Kinetics LLC. 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. Under the terms of the Agreements, the Master Portfolios compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio’s average daily net assets.
The Adviser has voluntarily agreed to waive a portion of its advisory fee and/or reimburse certain operating expenses as deemed appropriate. The Adviser may discontinue the voluntary waiver/reimbursement at any time; these waivers/reimbursements are not subject to recapture.
56
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
For the year ended December 31, 2011, 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 Fund | The Global Fund | |||||||
Annual Advisory Rate | 1.25% | 1.25% | ||||||
Expenses Reimbursed by Adviser through voluntary waiver | $ | 58,333 | $ | 130,978 | ||||
Expenses Reimbursed by Adviser through Institutional Class shareholder servicing fee waiver | $ | — | $ | — | ||||
| The Paradigm Fund | The Medical Fund | |||||||
Annual Advisory Rate | 1.25% | 1.25% | ||||||
Expenses Reimbursed by Adviser through voluntary waiver | $ | 1,466,172 | $ | 185,270 | ||||
Expenses Reimbursed by Adviser through Institutional Class shareholder servicing fee waiver | $ | 226,354 | $ | — | ||||
| The Small Cap Opportunities Fund | The Market Opportunities Fund | |||||||
Annual Advisory Rate | 1.25% | 1.25% | ||||||
Expenses Reimbursed by Adviser through voluntary waiver | $ | 290,398 | $ | 144,567 | ||||
Expenses Reimbursed by Adviser through Institutional Class shareholder servicing fee waiver | $ | 11,215 | $ | 293 | ||||
| The Water Infrastructure Fund | The Multi- Disciplinary Fund | |||||||
Annual Advisory Rate | 1.25% | 1.25% | ||||||
Expenses Reimbursed by Adviser through voluntary waiver | $ | 112,918 | $ | 137,411 | ||||
Expenses Reimbursed by Adviser through Institutional Class shareholder servicing fee waiver | $ | 2,089 | $ | 4,026 | ||||
The Adviser receives a shareholder servicing fee 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
57
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
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, 2012. For the year ended December 31, 2011, the Adviser waived amounts depicted in the above table in shareholder servicing fees for the Institutional Class of Paradigm, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary. 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.
For the year ended December 31, 2011, the Feeder Funds were allocated $24,000 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 first Plan, Advisor Class A shares may pay up to an annual rate of 0.50% of the average daily net asset value of Advisor Class A shares to the Distributor or other qualified recipients under the Plan. During the year ended December 31, 2011, payments under the 12b-1 Plan for the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary were limited to 0.25% of the average daily net asset value of such shares of such Funds. During the year ended December 31, 2011, the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary Funds incurred expenses of $3,268, $1,940, $491,316, $9,949, $23,513, $25,796, $17,006 and $4,287, respectively, pursuant to the 12b-1 Plan. Under the second Plan, Advisor Class C shares pay an annual rate of 0.75% of the average daily net asset value of such shares. During the year ended December 31, 2011, Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary Funds Advisor Class C Shares incurred expenses of $1,012, $647, $1,010,991, $5,283, $22,252, $37,972, $20,016 and $7,296, respectively, pursuant to the 12b-1 Plan.
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. For the year ended December 31, 2011, the Distributor received $1,112, $795, $21,231, $1,064, $1,114, $1,340, $2,650,
58
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
and $10,431 from sales loads from the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary.
4. Reclassification of Capital Accounts
Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended December 31, 2011, each Fund recorded the following reclassifications to the accounts listed below:
| INCREASE (DECREASE) | ||||||||||||
| Paid in capital | Accumulated Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) | ||||||||||
The Internet Fund | $ | (733,342 | ) | $ | 965,540 | $ | (232,198 | ) | ||||
The Global Fund | (887,154 | ) | (30,415 | ) | 917,569 | |||||||
The Paradigm Fund | — | 4,430,173 | (4,430,173 | ) | ||||||||
The Medical Fund | — | (2,103 | ) | 2,103 | ||||||||
The Small Cap Fund | (2,949,553 | ) | 1,648,542 | 1,301,011 | ||||||||
The Market Opportunities Fund | (22,873 | ) | 375,282 | (352,409 | ) | |||||||
The Water Infrastructure Fund | (3,151 | ) | 10,955 | (7,804 | ) | |||||||
The Multi-Disciplinary Fund | (12,920 | ) | (688,919 | ) | 701,839 | |||||||
5. Income Taxes
At December 31, 2011 the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary Funds had $0, $280, $4,794,907, $28,280, $0, $1,488, $0 and $0, respectively, of accumulated net investment income on a tax basis.
At December 31, 2011, Internet and Medical Funds had $3,641,822 and $1,540,963, respectively, of accumulated net realized gains on a tax basis.
59
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
At December 31, 2011, the Feeder Funds had accumulated net realized capital loss carryforwards expiring in the following years:
Feeder Fund | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
Global | $ | — | $ | 408,711 | $ | — | $ | — | $ | — | $ | 4,885 | ||||||||||||
Paradigm | 115,786,082 | 445,505,345 | 238,103,159 | — | — | — | ||||||||||||||||||
Small Cap | 8,224,702 | 96,486,615 | 63,545,720 | — | — | — | ||||||||||||||||||
Market Opportunities | 2,108,533 | 6,623,055 | 24,080,811 | — | — | — | ||||||||||||||||||
Water Infrastructure | 2,203,647 | 4,868,599 | 1,430,796 | — | — | — | ||||||||||||||||||
At December 31, 2011, as depicted below, the following Feeder Fund had accumulated net realized capital loss carryforwards without expiration dates but with the indicated tax character:
Feeder Fund | Long-Term | Short-Term | ||||||
Global | $ | — | $ | 38,848 | ||||
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.
For the year ended December 31, 2011, the following Feeder Funds utilized capital loss carryforwards:
Feeder Fund | Capital Loss Carryforward | |||
Internet | $ | 22,855,648 | ||
Paradigm | 179,556,227 | |||
Medical | 522,341 | |||
Small Cap | 14,647,914 | |||
Market Opportunities | 1,181,882 | |||
Water Infrastructure | 577,896 | |||
At December 31, 2011, the following Feeder Funds deferred, on a tax basis, post-October losses:
Feeder Fund | Post-October Losses | Post-October Currency Losses | ||||||
Internet | $ | — | $ | 6,805 | ||||
Global | 9,271 | 2,132 | ||||||
Paradigm | — | 22,679 | ||||||
Medical | — | 612 | ||||||
Small Cap | — | 73,389 | ||||||
Market Opportunities | — | 7,231 | ||||||
Water Infrastructure | 26,836 | 13 | ||||||
Multi-Disciplinary | 151,239 | 18,656 | ||||||
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KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
The tax components of dividends paid during the years ended December 31, 2011 and December 31, 2010, are:
| Internet | Global | |||||||||||||
| Ordinary Income Distribution | Long-Term Capital Gains Distribution | Ordinary Income Distribution | Long-Term Capital Gains Distribution | |||||||||||
2011 | $ | — | $ | 734,212 | $ | 31,833 | $ — | |||||||
2010 | $ | — | $ | — | $ | 49,825 | $ — | |||||||
| Paradigm | Medical | |||||||||||||||
| Ordinary Income Distribution | Long-Term Capital Gains Distribution | Ordinary Income Distribution | Long-Term Capital Gains Distribution | |||||||||||||
2011 | $ | 7,652,859 | $ | — | $ | 237,948 | $ | 1,483,472 | ||||||||
2010 | $ | 18,920,721 | $ | — | $ | 155,297 | $ | — | ||||||||
| Small Cap | Market Opportunities | |||||||||||||||
| Ordinary Income Distribution | Long-Term CapitalGains Distribution | Ordinary Income Distribution | Long-Term Capital Gains Distribution | |||||||||||||
2011 | $ | 1,133,648 | $ | — | $ | 388,006 | $ | — | ||||||||
2010 | $ | 2,552,363 | $ | — | $ | 2,872,610 | $ | — | ||||||||
| Water Infrastructure | Multi-Disciplinary | |||||||||||||||
| Ordinary Income Distribution | Long-Term Capital Gains Distribution | Ordinary Income Distribution | Long-Term Capital Gains Distribution | |||||||||||||
2011 | $ | 268,563 | $ | — | $ | 727,453 | $ | 40,907 | ||||||||
2010 | $ | 165,733 | $ | — | $ | 196,148 | $ | 9,078 | ||||||||
6. Recent Accounting Pronouncements
In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“IFRSs”). ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRSs. ASU No. 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years Management is currently evaluating the impact the update will have on its financial statement disclosures.
61
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires disclosures to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under IFRS. The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset in the statement of assets and liabilities as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, ASU 2011-11 requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. New disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Management is evaluating the impact of ASU 2011-11 on the financial statements and disclosures.
7. Subsequent Events
In preparing these financial statements, management has evaluated Fund related events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no events or translations that occurred during the period that materially impacted the amounts or disclosures in the Funds’ financial statements.
8. Tax Information (Unaudited)
Global, Paradigm, Medical, Small Cap, Market Opportunities, and Water Infrastructure designate 100%, 100%, 100%, 100%, 100%, and 14%, respectively, of dividends declared after December 31, 2011 from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary hereby designate 0%, 100%, 100%, 14%, 100%, 100%, 100%, and 95%, respectively, as ordinary income distributions and 100%, 86%, and 5% for Internet, Medical, and Multi-Disciplinary as long-term capital gain distributions for the purposes of the dividends paid deduction, which include earnings and profits distributed to shareholders on redemptions of Fund shares.
For corporate shareholders in the Funds, the percentage of ordinary dividend income distributed for the year ended December 31, 2011, which is designated
62
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Notes to Financial Statements — (Continued)
December 31, 2011
as qualifying for the dividends-received deduction, is as follows: Paradigm 65%, Medical 100%, Small Cap 54%, and Market Opportunities 78%.
Paradigm, Water Infrastructure, and Multi-Disciplinary designate 5%, 90%, and 87%, respectively, of their ordinary income distributions for the fiscal year ended December 31, 2011 as interest-related dividends under Internal Revenue Code Section 871(k)(l)(C).
Multi-Disciplinary designates 10% of its ordinary income distribution as a short-term capital gain distribution under Internal Revenue Code Section 871(k)(2)(C).
9. Information about Proxy Voting (Unaudited)
Information regarding how Kinetics Mutual Funds, Inc. votes proxies relating to portfolio securities is available without charge, upon request by calling toll-free at 1-800-930-3828 or by accessing the Funds’ website at www.kineticsfunds.com and by accessing the SEC’s website at www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.
10. Information about the Portfolio Holdings (Unaudited)
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Funds’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov. Finally, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
63
| The Internet Fund | ||||||||||||||||||||
| No Load Class | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 37.25 | $ | 30.74 | $ | 20.71 | $ | 35.94 | $ | 28.62 | ||||||||||
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Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | (0.37 | ) | (0.28 | ) | (0.14 | ) | 0.29 | 0.30 | ||||||||||||
Net realized and unrealized gain (loss) on investments | (0.37 | ) | 6.79 | 10.21 | (15.47 | ) | 7.37 | |||||||||||||
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| |||||||||||
Total from investment operations | (0.74 | ) | 6.51 | 10.07 | (15.18 | ) | 7.67 | |||||||||||||
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| |||||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | ||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | — | — | (0.04 | ) | (0.05 | ) | (0.35 | ) | ||||||||||||
From net realized gains | (0.25 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.25 | ) | — | (0.04 | ) | (0.05 | ) | (0.35 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Year | $ | 36.26 | $ | 37.25 | $ | 30.74 | $ | 20.71 | $ | 35.94 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(4) | (1.98 | )% | 21.18 | % | 48.61 | % | (42.24 | )% | 26.81 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of year (000’s) | $ | 103,828 | $ | 113,085 | $ | 104,666 | $ | 75,112 | $ | 166,787 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 1.94 | % | 1.95 | % | 1.98 | % | 2.03 | % | 1.99 | % | ||||||||||
After expense reimbursement(5) | 1.89 | % | 1.89 | % | 1.89 | % | 1.90 | % | 1.98 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.99 | )% | (0.91 | )% | (0.64 | )% | 0.90 | % | 0.94 | % | ||||||||||
After expense reimbursement(5) | (0.94 | )% | (0.85 | )% | (0.55 | )% | 1.03 | % | 0.95 | % | ||||||||||
Portfolio turnover rate(6) | 32 | % | 12 | % | 14 | % | 19 | % | 15 | % | ||||||||||
| (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 oustanding 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 is the annual turnover of The Internet Portfolio. |
The accompanying notes are an integral part of these financial statements.
64
| The Internet Fund | ||||||||||||||||||
| Advisor Class A | ||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||
| $ | 36.69 | | $ | 30.35 | $ | 20.50 | $ | 35.66 | $ | 28.24 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.46 | ) | (0.36 | ) | (0.21 | ) | 0.22 | 0.23 | |||||||||||
| (0.36 | ) | 6.70 | 10.09 | (15.33 | ) | 7.49 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.82 | ) | 6.34 | 9.88 | (15.11 | ) | 7.72 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.01 | 0.00 | (3) | 0.01 | 0.00 | (3) | — | ||||||||||||
| — | — | (0.04 | ) | (0.05 | ) | (0.30 | ) | |||||||||||
| (0.25 | ) | — | — | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.25 | ) | — | (0.04 | ) | (0.05 | ) | (0.30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 35.63 | $ | 36.69 | $ | 30.35 | $ | 20.50 | $ | 35.66 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (2.20 | )% | 20.89 | % | 48.23 | % | (42.37 | )% | 27.35 | % | |||||||||
| $ | 1,050 | $ | 1,892 | $ | 738 | $ | 318 | $ | 637 | |||||||||
| 2.19 | % | 2.20 | % | 2.23 | % | 2.28 | % | 2.24 | % | |||||||||
| 2.14 | % | 2.14 | % | 2.14 | % | 2.15 | % | 2.23 | % | |||||||||
| (1.24 | )% | (1.16 | )% | (0.89 | )% | 0.65 | % | 0.70 | % | |||||||||
| (1.19 | )% | (1.10 | )% | (0.80 | )% | 0.78 | % | 0.71 | % | |||||||||
| 32 | % | 12 | % | 14 | % | 19 | % | 15 | % | |||||||||
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 Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | February 16, 2007^ through December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 35.79 | $ | 29.76 | $ | 20.20 | $ | 35.31 | $ | 28.66 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | (0.63 | ) | (0.51 | ) | (0.31 | ) | 0.08 | 0.07 | ||||||||||||
Net realized and unrealized gain (loss) on investments | (0.34 | ) | 6.54 | 9.91 | (15.15 | ) | 6.87 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.97 | ) | 6.03 | 9.60 | (15.07 | ) | 6.94 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.01 | — | — | — | 0.00 | (3) | ||||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | — | — | (0.04 | ) | (0.04 | ) | (0.29 | ) | ||||||||||||
From net realized gains | (0.25 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.25 | ) | — | (0.04 | ) | (0.04 | ) | (0.29 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 34.58 | $ | 35.79 | $ | 29.76 | $ | 20.20 | $ | 35.31 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (2.67 | )% | 20.26 | % | 47.51 | % | (42.67 | )% | 24.22 | %(4) | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of period (000’s) | $ | 103 | $ | 196 | $ | 120 | $ | 113 | $ | 294 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.69 | % | 2.70 | % | 2.73 | % | 2.78 | % | 2.73 | %(5) | ||||||||||
After expense reimbursement(6) | 2.64 | % | 2.64 | % | 2.64 | % | 2.65 | % | 2.72 | %(5) | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (1.74 | )% | (1.66 | )% | (1.39 | )% | 0.15 | % | 0.22 | %(5) | ||||||||||
After expense reimbursement(6) | (1.69 | )% | (1.60 | )% | (1.30 | )% | 0.28 | % | 0.23 | %(5) | ||||||||||
Portfolio turnover rate(7) | 32 | % | 12 | % | 14 | % | 19 | % | 15 | % | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | Portfolio turnover is the annual turnover of The Internet Portfolio. |
The accompanying notes are an integral part of these financial statements.
66
(This page intentionally left blank)
67
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Global Fund | ||||||||||||||||||||
No Load Class | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 4.67 | $ | 3.92 | $ | 2.36 | $ | 4.90 | $ | 5.00 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income | 0.06 | (2) | 0.02 | (2) | 0.02 | (2) | 0.07 | (2) | 0.22 | |||||||||||
Net realized and unrealized gain (loss) on investments | (0.78 | ) | 0.78 | 1.55 | (2.56 | ) | (0.01 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.72 | ) | 0.80 | 1.57 | (2.49 | ) | 0.21 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.01 | 0.00 | (3) | 0.00 | (3) | |||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.03 | ) | (0.05 | ) | (0.02 | ) | (0.05 | ) | (0.31 | ) | ||||||||||
From net realized gains | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.03 | ) | (0.05 | ) | (0.02 | ) | (0.05 | ) | (0.31 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 3.92 | $ | 4.67 | $ | 3.92 | $ | 2.36 | $ | 4.90 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(4) | (15.41 | )% | 20.30 | % | 66.86 | % | (50.72 | )% | 4.27 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of period (000’s) | $ | 3,631 | $ | 4,541 | $ | 4,370 | $ | 1,863 | $ | 3,138 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 3.94 | % | 4.17 | % | 5.32 | % | 5.98 | % | 3.84 | % | ||||||||||
After expense reimbursement(7) | 1.39 | % | 1.39 | % | 1.39 | % | 1.41 | % | 1.48 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (1.11 | )% | (2.26 | )% | (3.27 | )% | (2.72 | )% | 1.87 | % | ||||||||||
After expense reimbursement(7) | 1.44 | % | 0.52 | % | 0.66 | % | 1.85 | % | 4.23 | % | ||||||||||
Portfolio turnover rate(8) | 135 | % | 122 | % | 53 | % | 98 | % | 22 | % | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (8) | Portfolio turnover is the annual turnover of The Global Portfolio. |
The accompanying notes are an integral part of these financial statements.
68
| The Global Fund | ||||||||||||||
| Advisor Class A | ||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | May 19, 2008^ through December 31, 2008 | |||||||||||
| $ | 4.68 | $ | 3.93 | $ | 2.36 | $ | 4.56 | |||||||
|
|
|
|
|
|
|
| |||||||
| 0.05 | (2) | 0.01 | (2) | 0.01 | (2) | 0.03 | (2) | |||||||
| (0.78 | ) | 0.78 | 1.57 | (2.18 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||
| (0.73 | ) | 0.79 | 1.58 | (2.15 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||
| 0.00 | (3) | 0.00 | (3) | — | — | |||||||||
| (0.03 | ) | (0.04 | ) | (0.01 | ) | (0.05 | ) | |||||||
| — | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||
| (0.03 | ) | (0.04 | ) | (0.01 | ) | (0.05 | ) | |||||||
|
|
|
|
|
|
|
| |||||||
| $ | 3.92 | $ | 4.68 | $ | 3.93 | $ | 2.36 | |||||||
|
|
|
|
|
|
|
| |||||||
| (15.59 | )% | 20.04 | % | 67.11 | % | (47.12 | )%(5) | |||||||
| $ | 392 | $ | 707 | $ | 368 | $ | 106 | |||||||
| 4.19 | % | 4.42 | % | 5.57 | % | 8.28 | %(6) | |||||||
| 1.64 | % | 1.64 | % | 1.64 | % | 1.65 | %(6) | |||||||
| (1.36 | )% | (2.51 | )% | (3.52 | )% | (5.16 | )%(6) | |||||||
| 1.19 | % | 0.27 | % | 0.41 | % | 1.47 | %(6) | |||||||
| 135 | % | 122 | % | 53 | % | 98 | % | |||||||
The accompanying notes are an integral part of these financial statements.
69
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Global Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | May 19, 2008^ through December 31, 2008 | |||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
Net Asset Value | $ | 4.64 | $ | 3.90 | $ | 2.37 | $ | 4.56 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | 0.03 | (0.01 | ) | 0.00 | (3) | 0.02 | ||||||||||
Net realized and unrealized gain (loss) on investments | (0.77 | ) | 0.77 | 1.53 | (2.17 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | (0.74 | ) | 0.76 | 1.53 | (2.15 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Redemption Fees | — | — | — | — | ||||||||||||
Less Distributions: | ||||||||||||||||
From net investment income | (0.03 | ) | (0.02 | ) | (0.00 | )(3) | (0.04 | ) | ||||||||
From net realized gains | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.03 | ) | (0.02 | ) | (0.00 | )(3) | (0.04 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Asset Value, End of Period | $ | 3.87 | $ | 4.64 | $ | 3.90 | $ | 2.37 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | (15.94 | )% | 19.24 | % | 65.08 | % | (47.14 | )%(4) | ||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
Net assets, end of period (000’s) | $ | 111 | $ | 64 | $ | 36 | $ | 5 | ||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||
Before expense reimbursement | 4.69 | % | 4.92 | % | 6.07 | % | 8.78 | %(5) | ||||||||
After expense reimbursement(6) | 2.14 | % | 2.14 | % | 2.14 | % | 2.15 | %(5) | ||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
Before expense reimbursement | (1.86 | )% | (3.01 | )% | (4.02 | )% | (5.66 | )%(5) | ||||||||
After expense reimbursement(6) | 0.69 | % | (0.23 | )% | (0.09 | )% | 0.97 | %(5) | ||||||||
Portfolio turnover rate(7) | 135 | % | 122 | % | 53 | % | 98 | % | ||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | Portfolio turnover is the annual turnover of The Global Portfolio. |
The accompanying notes are an integral part of these financial statements.
70
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71
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Paradigm Fund | ||||||||||||||||||||
No Load Class | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 23.31 | $ | 20.18 | $ | 14.42 | $ | 30.99 | $ | 25.79 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | 0.02 | 0.11 | 0.15 | 0.12 | 0.11 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | (3.34 | ) | 3.39 | 5.78 | (16.62 | )(7) | 5.35 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (3.32 | ) | 3.50 | 5.93 | 16.50 | 5.46 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.01 | 0.00 | (3) | |||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.18 | ) | (0.37 | ) | (0.17 | ) | — | (0.13 | ) | |||||||||||
From net realized gains | — | — | — | (0.08 | ) | (0.13 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.18 | ) | (0.37 | ) | (0.17 | ) | (0.08 | ) | (0.26 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Year | $ | 19.81 | $ | 23.31 | $ | 20.18 | $ | 14.42 | $ | 30.99 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(4) | (14.27 | )% | 17.37 | % | 41.02 | % | (53.17 | )%(7) | 21.15 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of year (000’s) | $ | 430,528 | $ | 687,056 | $ | 825,278 | $ | 740,983 | $ | 2,910,518 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 1.78 | % | 1.76 | % | 1.73 | % | 1.72 | % | 1.68 | % | ||||||||||
After expense reimbursement(5) | 1.64 | % | 1.64 | % | 1.64 | % | 1.66 | % | 1.68 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.03 | )% | 0.43 | % | 0.78 | % | 0.46 | % | 0.39 | % | ||||||||||
After expense reimbursement(5) | 0.11 | % | 0.55 | % | 0.87 | % | 0.52 | % | 0.39 | % | ||||||||||
Portfolio turnover rate(6) | 58 | % | 7 | % | 15 | % | 34 | % | 8 | % | ||||||||||
| (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 oustanding 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 is the annual turnover of The Paradigm Portfolio. |
| (7) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
The accompanying notes are an integral part of these financial statements.
72
| The Paradigm Fund | ||||||||||||||||||
| Advisor Class A | ||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||
| $ | 22.95 | $ | 19.88 | $ | 14.16 | $ | 30.52 | $ | 25.43 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.03 | ) | 0.06 | 0.10 | 0.06 | 0.04 | |||||||||||||
| (3.29 | ) | 3.33 | 5.68 | (16.34 | )(7) | 5.27 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (3.32 | ) | 3.39 | 5.78 | (16.28 | ) | 5.31 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | (3) | 0.00 | (3) | — | 0.00 | (3) | 0.00 | (3) | ||||||||||
| (0.18 | ) | (0.32 | ) | (0.06 | ) | — | (0.09 | ) | ||||||||||
| — | — | — | (0.08 | ) | (0.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.18 | ) | (0.32 | ) | (0.06 | ) | (0.08 | ) | (0.22 | ) | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 19.45 | $ | 22.95 | $ | 19.88 | $ | 14.16 | $ | 30.52 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (14.49 | )% | 17.11 | % | 40.64 | % | (53.30 | )%(7) | 20.87 | % | |||||||||
| $ | 146,939 | $ | 226,264 | $ | 252,106 | $ | 249,424 | $ | 544,046 | |||||||||
| 2.03 | % | 2.01 | % | 1.98 | % | 1.97 | % | 1.93 | % | |||||||||
| 1.89 | % | 1.89 | % | 1.89 | % | 1.91 | % | 1.93 | % | |||||||||
| (0.28 | )% | 0.18 | % | 0.53 | % | 0.21 | % | 0.14 | % | |||||||||
| (0.14 | )% | 0.30 | % | 0.62 | % | 0.27 | % | 0.14 | % | |||||||||
| 58 | % | 7 | % | 15 | % | 34 | % | 8 | % | |||||||||
The accompanying notes are an integral part of these financial statements.
73
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Paradigm Fund | ||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 22.25 | $ | 19.33 | $ | 13.80 | $ | 29.90 | $ | 24.98 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | (0.14 | ) | (0.04 | ) | 0.02 | (0.05 | ) | (0.10 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | (3.17 | ) | 3.22 | 5.51 | (15.97 | )(6) | 5.15 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (3.31 | ) | 3.18 | 5.53 | (16.02 | ) | 5.05 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.18 | ) | (0.26 | ) | — | — | (0.00 | )(3) | ||||||||||||
From net realized gains | — | — | — | (0.08 | ) | (0.13 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.18 | ) | (0.26 | ) | — | (0.08 | ) | (0.13 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Year | $ | 18.76 | $ | 22.25 | $ | 19.33 | $ | 13.80 | $ | 29.90 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (14.90 | )% | 16.45 | % | 39.97 | % | (53.54 | )%(6) | 20.20 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of year (000’s) | $ | 102,534 | $ | 152,571 | $ | 169,578 | $ | 147,915 | $ | 320,962 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.53 | % | 2.51 | % | 2.48 | % | 2.47 | % | 2.43 | % | ||||||||||
After expense reimbursement(4) | 2.39 | % | 2.39 | % | 2.39 | % | 2.41 | % | 2.43 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.78 | )% | (0.32 | )% | 0.03 | % | (0.29 | )% | (0.36 | )% | ||||||||||
After expense reimbursement(4) | (0.64 | )% | (0.20 | )% | 0.12 | % | (0.23 | )% | (0.36 | )% | ||||||||||
Portfolio turnover rate(5) | 58 | % | 7 | % | 15 | % | 34 | % | 8 | % | ||||||||||
| (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 oustanding 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 is the annual turnover of The Paradigm Portfolio. |
| (6) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
The accompanying notes are an integral part of these financial statements.
74
| The Paradigm Fund | ||||||||||||||||||
| Institutional Class | ||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||
| $ | 23.25 | $ | 20.13 | $ | 14.44 | $ | 30.97 | $ | 25.76 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.07 | 0.16 | 0.18 | 0.18 | 0.17 | ||||||||||||||
| (3.35 | ) | 3.38 | 5.78 | (16.63 | )(6) | 5.34 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (3.28 | ) | 3.54 | 5.96 | (16.45 | ) | 5.51 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
| (0.18 | ) | (0.42 | ) | (0.27 | ) | — | (0.17 | ) | ||||||||||
| — | — | — | (0.08 | ) | (0.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.18 | ) | (0.42 | ) | (0.27 | ) | (0.08 | ) | (0.30 | ) | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 19.79 | $ | 23.25 | $ | 20.13 | $ | 14.44 | $ | 30.97 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (14.13 | )% | 17.62 | % | 41.31 | % | (53.11 | )%(6) | 21.37 | % | |||||||||
| $ | 134,309 | $ | 142,261 | $ | 125,372 | $ | 128,129 | $ | 804,755 | |||||||||
| 1.73 | % | 1.71 | % | 1.68 | % | 1.67 | % | 1.63 | % | |||||||||
| 1.44 | % | 1.44 | % | 1.44 | % | 1.46 | % | 1.48 | % | |||||||||
| 0.02 | % | 0.48 | % | 0.83 | % | 0.51 | % | 0.44 | % | |||||||||
| 0.31 | % | 0.75 | % | 1.07 | % | 0.72 | % | 0.59 | % | |||||||||
| 58 | % | 7 | % | 15 | % | 34 | % | 8 | % | |||||||||
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 | ||||||||||||||||||||
| No Load Class | ||||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||||
PER SHARE DATA:(1) |
| |||||||||||||||||||
Net Asset Value | $ | 19.48 | $ | 18.77 | $ | 15.23 | $ | 19.82 | $ | 17.83 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: |
| |||||||||||||||||||
Net investment income(2) | 0.18 | 0.10 | 0.20 | 0.19 | | 0.10 | | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.82 | 0.72 | 3.51 | (4.25 | ) | 2.67 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.00 | 0.82 | 3.71 | (4.06 | ) | 2.77 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.01 | 0.01 | 0.01 | |||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.25 | ) | (0.11 | ) | (0.16 | ) | (0.16 | ) | (0.10 | ) | ||||||||||
From net realized gains | (1.48 | ) | — | (0.02 | ) | (0.38 | ) | (0.69 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.73 | ) | (0.11 | ) | (0.18 | ) | (0.54 | ) | (0.79 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Year | $ | 18.75 | $ | 19.48 | $ | 18.77 | $ | 15.23 | $ | 19.82 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(4) | 5.11 | % | 4.30 | % | 24.47 | % | (20.42 | )% | 15.47 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS |
| |||||||||||||||||||
Net assets, end of year (000’s) | $ | 16,376 | $ | 25,777 | $ | 21,126 | $ | 15,727 | $ | 13,917 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.02 | % | 2.00 | % | 2.15 | % | 2.26 | % | 2.41 | % | ||||||||||
After expense reimbursement(5) | 1.39 | % | 1.39 | % | 1.39 | % | 1.41 | % | 1.40 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 0.24 | % | (0.06 | )% | 0.42 | % | 0.18 | % | (0.51 | )% | ||||||||||
After expense reimbursement(5) | 0.87 | % | 0.55 | % | 1.17 | % | 1.03 | % | 0.50 | % | ||||||||||
Portfolio turnover rate(6) | 5 | % | 3 | % | 13 | % | 28 | % | 38 | % | ||||||||||
| (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 oustanding 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 is the annual turnover of The Medical Portfolio. |
The accompanying notes are an integral part of these financial statements.
76
| The Medical Fund | ||||||||||||||||||
| Advisor Class A | ||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||
| $ | 19.06 | $ | 18.36 | $ | 14.90 | $ | 19.39 | $ | 17.47 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.12 | 0.05 | 0.15 | 0.13 | 0.05 | ||||||||||||||
| 0.80 | 0.71 | 3.44 | (4.15 | ) | 2.62 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.92 | 0.76 | 3.59 | (4.02 | ) | 2.67 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | (3) | 0.00 | (3) | 0.01 | 0.04 | 0.00 | (3) | |||||||||||
| (0.21 | ) | (0.06 | ) | (0.12 | ) | (0.13 | ) | (0.06 | ) | |||||||||
| (1.48 | ) | — | (0.02 | ) | (0.38 | ) | (0.69 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (1.69 | ) | (0.06 | ) | (0.14 | ) | (0.51 | ) | (0.75 | ) | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 18.29 | $ | 19.06 | $ | 18.36 | $ | 14.90 | $ | 19.39 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 4.79 | % | 4.13 | % | 24.17 | % | (20.49 | )% | 15.16 | % | |||||||||
| $ | 3,240 | $ | 4,207 | $ | 4,347 | $ | 2,941 | $ | 1,427 | |||||||||
| 2.27 | % | 2.25 | % | 2.40 | % | 2.51 | % | 2.66 | % | |||||||||
| 1.64 | % | 1.64 | % | 1.64 | % | 1.66 | % | 1.65 | % | |||||||||
| (0.01 | )% | (0.31 | )% | 0.17 | % | (0.07 | )% | (0.76 | )% | |||||||||
| 0.62 | % | 0.30 | % | 0.92 | % | 0.78 | % | 0.25 | % | |||||||||
| 5 | % | 3 | % | 13 | % | 28 | % | 38 | % | |||||||||
The accompanying notes are an integral part of these financial statements.
77
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Medical Fund | ||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | February 16, 2007^ through December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) |
| |||||||||||||||||||
Net Asset Value | $ | 18.90 | $ | 18.27 | $ | 14.83 | $ | 19.34 | $ | 18.29 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: |
| |||||||||||||||||||
Net investment income (loss)(2) | 0.02 | (0.04 | ) | 0.07 | 0.05 | (0.04 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.80 | 0.69 | 3.41 | (4.13 | ) | 1.79 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.82 | 0.65 | 3.48 | (4.08 | ) | 1.75 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | — | 0.00 | (3) | 0.02 | 0.00 | (3) | ||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.09 | ) | (0.02 | ) | (0.02 | ) | (0.07 | ) | (0.01 | ) | ||||||||||
From net realized gains | (1.48 | ) | — | (0.02 | ) | (0.38 | ) | (0.69 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (1.57 | ) | (0.02 | ) | (0.04 | ) | (0.45 | ) | (0.70 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 18.15 | $ | 18.90 | $ | 18.27 | $ | 14.83 | $ | 19.34 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 4.32 | % | 3.55 | % | 23.50 | % | (20.97 | )% | 9.55 | %(4) | ||||||||||
SUPPLEMENTAL DATA AND RATIOS |
| |||||||||||||||||||
Net assets, end of period (000’s) | $ | 580 | $ | 692 | $ | 454 | $ | 314 | $ | 148 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.77 | % | 2.75 | % | 2.90 | % | 3.01 | % | 3.19 | %(5) | ||||||||||
After expense reimbursement(6) | 2.14 | % | 2.14 | % | 2.14 | % | 2.16 | % | 2.15 | %(5) | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.51 | )% | (0.81 | )% | (0.33 | )% | (0.57 | )% | (1.30 | )%(5) | ||||||||||
After expense reimbursement(6) | 0.12 | % | (0.20 | )% | 0.42 | % | 0.28 | % | (0.26 | )%(5) | ||||||||||
Portfolio turnover rate(7) | 5 | % | 3 | % | 13 | % | 28 | % | 38 | % | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | Portfolio turnover is the annual turnover of The Medical Portfolio. |
78
(This page intentionally left blank)
79
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Small Cap Opportunities Fund | ||||||||||||||||||||
No Load Class | ||||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 23.32 | $ | 20.83 | $ | 13.17 | $ | 31.92 | $ | 26.92 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: |
| |||||||||||||||||||
Net investment income (loss)(2) | (0.04 | ) | (0.04 | ) | (0.04 | ) | 0.05 | 0.01 | ||||||||||||
Net realized and unrealized gain (loss) on investments | (3.15 | ) | 2.93 | 7.70 | (18.53 | )(4) | 5.29 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (3.19 | ) | 2.89 | 7.66 | (18.48 | ) | 5.30 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees(3) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.28 | ) | (0.40 | ) | — | — | (0.23 | ) | ||||||||||||
From net realized gains | — | — | — | (0.27 | ) | (0.07 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.28 | ) | (0.40 | ) | — | (0.27 | ) | (0.30 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Year | $ | 19.85 | $ | 23.32 | $ | 20.83 | $ | 13.17 | $ | 31.92 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(5) | (13.65 | )% | 13.86 | % | 58.16 | % | (57.88 | )%(4) | 19.65 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of year (000’s) | $ | 67,798 | $ | 130,279 | $ | 161,205 | $ | 126,971 | $ | 729,278 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 1.90 | % | 1.86 | % | 1.86 | % | 1.79 | % | 1.71 | % | ||||||||||
After expense reimbursement(6) | 1.64 | % | 1.64 | % | 1.64 | % | 1.67 | % | 1.69 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.44 | )% | (0.42 | )% | (0.48 | )% | 0.09 | % | 0.00 | % | ||||||||||
After expense reimbursement(6) | (0.18 | )% | (0.20 | )% | (0.26 | )% | 0.21 | % | 0.02 | % | ||||||||||
Portfolio turnover rate(7) | 47 | % | 4 | % | 4 | % | 16 | % | 17 | % | ||||||||||
| (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 oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
| (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 is the annual turnover of The Small Cap Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
80
| The Small Cap Opportunities Fund | ||||||||||||||||||
| Advisor Class A | ||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||
| $ | 22.98 | $ | 20.53 | $ | 13.01 | $ | 31.63 | $ | 26.71 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.10 | ) | (0.09 | ) | (0.08 | ) | (0.01 | ) | (0.07 | ) | |||||||||
| (3.08 | ) | 2.87 | 7.60 | (18.34 | )(4) | 5.25 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (3.18 | ) | 2.78 | 7.52 | (18.35 | ) | 5.18 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | 0.00 | 0.00 | �� | 0.00 | 0.00 | |||||||||||||
| (0.21 | ) | (0.33 | ) | — | — | (0.19 | ) | |||||||||||
| — | — | — | (0.27 | ) | (0.07 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.21 | ) | (0.33 | ) | — | (0.27 | ) | (0.26 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 19.59 | $ | 22.98 | $ | 20.53 | $ | 13.01 | $ | 31.63 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (13.85 | )% | 13.56 | % | 57.80 | % | (58.00 | )%(4) | 19.36 | % | |||||||||
| $ | 7,250 | $ | 11,509 | $ | 14,244 | $ | 12,090 | $ | 36,390 | |||||||||
| 2.15 | % | 2.11 | % | 2.11 | % | 2.04 | % | 1.96 | % | |||||||||
| 1.89 | % | 1.89 | % | 1.89 | % | 1.92 | % | 1.94 | % | |||||||||
| (0.69 | )% | (0.67 | )% | (0.73 | )% | (0.16 | )% | (0.25 | )% | |||||||||
| (0.43 | )% | (0.45 | )% | (0.51 | )% | (0.04 | )% | (0.23 | )% | |||||||||
| 47 | % | 4 | % | 4 | % | 16 | % | 17 | % | |||||||||
The accompanying notes are an integral part of these financial statements.
81
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Small Cap Opportunities Fund | ||||||||||||||||||||
Advisor Class C | ||||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | February 16, 2007^ through December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | $ | 22.68 | $ | 20.28 | $ | 12.92 | $ | 31.57 | $ | 28.70 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: |
| |||||||||||||||||||
Net investment income (loss)(2) | (0.20 | ) | (0.20 | ) | (0.16 | ) | (0.12 | ) | (0.21 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | (3.04 | ) | 2.84 | 7.52 | (18.26 | )(4) | 3.33 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (3.24 | ) | 2.64 | 7.36 | 18.38 | 3.12 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | — | — | 0.00 | (3) | 0.00 | (3) | 0.02 | |||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.08 | ) | (0.24 | ) | — | — | (0.20 | ) | ||||||||||||
From net realized gains | — | — | — | (0.27 | ) | (0.07 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.08 | ) | (0.24 | ) | — | (0.27 | ) | (0.27 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 19.36 | $ | 22.68 | $ | 20.28 | $ | 12.92 | $ | 31.57 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (14.29 | )% | 13.00 | % | 56.97 | % | (58.20 | )%(4) | 10.94 | %(5) | ||||||||||
SUPPLEMENTAL DATA AND RATIOS |
| |||||||||||||||||||
Net assets, end of period (000’s) | $ | 2,440 | $ | 3,450 | $ | 4,445 | $ | 2,871 | $ | 4,942 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.65 | % | 2.61 | % | 2.61 | % | 2.54 | % | 2.47 | %(6) | ||||||||||
After expense reimbursement(7) | 2.39 | % | 2.39 | % | 2.39 | % | 2.42 | % | 2.45 | %(6) | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (1.19 | )% | (1.17 | )% | (1.23 | )% | (0.66 | )% | (0.76 | )%(6) | ||||||||||
After expense reimbursement(7) | (0.93 | )% | (0.95 | )% | (1.01 | )% | (0.54 | )% | (0.75 | )%(6) | ||||||||||
Portfolio turnover rate(8) | 47 | % | 4 | % | 4 | % | 16 | % | 17 | % | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (8) | Portfolio turnover is the annual turnover of The Small Cap Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
82
| The Small Cap Opportunities Fund | ||||||||||||||||||
| Institutional Class | ||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||
| $ | 23.45 | $ | 20.90 | $ | 13.19 | $ | 31.92 | $ | 26.91 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | (3) | 0.00 | (3) | (0.01 | ) | 0.10 | 0.07 | |||||||||||
| (3.17 | ) | 2.95 | 7.72 | (18.56 | )(4) | 5.29 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (3.17 | ) | 2.95 | 7.71 | (18.46 | ) | 5.36 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||||
| (0.35 | ) | (0.40 | ) | — | — | (0.28 | ) | |||||||||||
| — | — | — | (0.27 | ) | (0.07 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.35 | ) | (0.40 | ) | — | (0.27 | ) | (0.35 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 19.93 | $ | 23.45 | $ | 20.90 | $ | 13.19 | $ | 31.92 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (13.51 | )% | 14.10 | % | 58.45 | % | (57.82 | )%(4) | 19.91 | % | |||||||||
| $ | 5,498 | $ | 9,808 | $ | 19,749 | $ | 68,408 | $ | 316,709 | |||||||||
| 1.85 | % | 1.81 | % | 1.81 | % | 1.74 | % | 1.66 | % | |||||||||
| 1.44 | % | 1.44 | % | 1.44 | % | 1.47 | % | 1.49 | % | |||||||||
| (0.39 | )% | (0.37 | )% | (0.43 | )% | 0.14 | % | 0.05 | % | |||||||||
| 0.02 | % | 0.00 | % | (0.06 | )% | 0.41 | % | 0.22 | % | |||||||||
| 47 | % | 4 | % | 4 | % | 16 | % | 17 | % | |||||||||
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 | ||||||||||||||||||||
No Load Class | ||||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||
Beginning of Year | $ | 11.46 | $ | 10.84 | $ | 7.22 | $ | 16.12 | $ | 12.05 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | 0.01 | 0.04 | 0.00 | (3) | 0.11 | 0.04 | ||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.91 | ) | 1.18 | 3.62 | (9.02 | ) | 4.05 | |||||||||||||
Payment by adviser(4) | — | — | — | 0.06 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.90 | ) | 1.22 | 3.62 | (8.85 | ) | 4.09 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.01 | 0.01 | 0.01 | |||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.11 | ) | (0.60 | ) | (0.01 | ) | (0.06 | ) | (0.03 | ) | ||||||||||
From net realized gains | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.11 | ) | (0.60 | ) | (0.01 | ) | (0.06 | ) | (0.03 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Year | $ | 10.45 | $ | 11.46 | $ | 10.84 | $ | 7.22 | $ | 16.12 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(5) | (7.85 | )% | 11.31 | % | 50.21 | % | (54.82 | )%(4) | 34.03 | % | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of year (000’s) | $ | 30,191 | $ | 38,562 | $ | 41,254 | $ | 34,246 | $ | 63,004 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 1.93 | % | 1.92 | % | 1.93 | % | 1.82 | % | 1.91 | % | ||||||||||
After expense reimbursement(6) | 1.64 | % | 1.64 | % | 1.64 | % | 1.66 | % | 1.74 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.20 | )% | 0.06 | % | (0.25 | )% | 0.78 | % | 0.12 | % | ||||||||||
After expense reimbursement(6) | 0.09 | % | 0.34 | % | 0.04 | % | 0.94 | % | 0.29 | % | ||||||||||
Portfolio turnover rate(7) | 14 | % | 12 | % | 14 | % | 77 | % | 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 oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C and the Institutional Class, respectively, for the year ended December 31, 2008. |
| (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 is the annual turnover of The Market Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
84
| The Market Opportunities Fund | ||||||||||||||||||
| Advisor Class A | ||||||||||||||||||
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||
| $ | 11.43 | $ | 10.80 | $ | 7.22 | $ | 16.07 | $ | 12.04 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.02 | ) | 0.01 | (0.02 | ) | 0.08 | 0.00 | (3) | |||||||||||
| (0.90 | ) | 1.19 | 3.61 | (8.97 | ) | 4.04 | ||||||||||||
| — | — | — | 0.06 | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.92 | ) | 1.20 | 3.59 | (8.83 | ) | 4.04 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||||
| (0.08 | ) | (0.57 | ) | (0.01 | ) | (0.02 | ) | (0.01 | ) | |||||||||
| — | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.08 | ) | (0.57 | ) | (0.01 | ) | (0.02 | ) | (0.01 | ) | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 10.43 | $ | 11.43 | $ | 10.80 | $ | 7.22 | $ | 16.07 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (8.08 | )% | 11.11 | % | 49.66 | % | (54.91 | )%(4) | 33.54 | % | |||||||||
| $ | 8,600 | $ | 14,167 | $ | 18,770 | $ | 18,514 | $ | 43,907 | |||||||||
| 2.18 | % | 2.17 | % | 2.18 | % | 2.07 | % | 2.16 | % | |||||||||
| 1.89 | % | 1.89 | % | 1.89 | % | 1.91 | % | 1.99 | % | |||||||||
| (0.45 | )% | (0.19 | )% | (0.50 | )% | 0.53 | % | (0.14 | )% | |||||||||
| (0.16 | )% | 0.09 | % | (0.21 | )% | 0.69 | % | 0.03 | % | |||||||||
| 14 | % | 12 | % | 14 | % | 77 | % | 14 | % | |||||||||
The accompanying notes are an integral part of these financial statements.
85
KINETICS MUTUAL FUNDS, INC.—THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Market Opportunities Fund | ||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | February 16, 2007^ through December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||
Beginning of Period | $ | 11.30 | $ | 10.69 | $ | 7.17 | $ | 16.01 | $ | 12.99 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | (0.08 | ) | (0.04 | ) | (0.06 | ) | 0.02 | (0.05 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | (0.88 | ) | 1.17 | 3.59 | (8.91 | ) | 3.07 | |||||||||||||
Payment by adviser(4) | — | — | — | 0.06 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.96 | ) | 1.13 | 3.53 | (8.83 | ) | 3.02 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | — | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.02 | ) | (0.52 | ) | (0.01 | ) | (0.01 | ) | — | |||||||||||
From net realized gains | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.02 | ) | (0.52 | ) | (0.01 | ) | (0.01 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 10.32 | $ | 11.30 | $ | 10.69 | $ | 7.17 | $ | 16.01 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (8.51 | )% | 10.54 | % | 49.17 | % | (55.13 | )%(4) | 23.25 | %(5) | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of period (000’s) | $ | 4,233 | $ | 5,569 | $ | 6,055 | $ | 771 | $ | 8,790 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.68 | % | 2.67 | % | 2.68 | % | 2.57 | % | 2.66 | %(6) | ||||||||||
After expense reimbursement(7) | 2.39 | % | 2.39 | % | 2.39 | % | 2.41 | % | 2.49 | %(6) | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.95 | )% | (0.69 | )% | (1.00 | )% | 0.03 | % | (0.60 | )%(6) | ||||||||||
After expense reimbursement(7) | (0.66 | )% | (0.41 | )% | (0.71 | )% | 0.19 | % | (0.43 | )%(6) | ||||||||||
Portfolio turnover rate(8) | 14 | % | 12 | % | 14 | % | 77 | % | 14 | % | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C and the Institutional Class, respectively, for the year ended December 31, 2008. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (8) | Portfolio turnover is the annual turnover of The Market Opportunities Portfolio. |
The accompanying notes are an integral part of these financial statements.
86
| The Market Opportunities Fund | ||||||||||||||
| Institutional Class | ||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | May 19, 2008^ through December 31, 2008 | |||||||||||
| $ | 11.48 | $ | 10.86 | $ | 7.21 | $ | 13.71 | |||||||
|
|
|
|
|
|
|
| |||||||
| 0.03 | 0.06 | 0.02 | 0.08 | |||||||||||
| (0.92 | ) | 1.19 | 3.64 | (6.55 | ) | |||||||||
| — | — | — | 0.06 | |||||||||||
|
|
|
|
|
|
|
| |||||||
| (0.89 | ) | 1.25 | 3.66 | (6.41 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||
| — | — | — | — | |||||||||||
| (0.13 | ) | (0.63 | ) | (0.01 | ) | (0.09 | ) | |||||||
| — | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||
| (0.13 | ) | (0.63 | ) | (0.01 | ) | (0.09 | ) | |||||||
|
|
|
|
|
|
|
| |||||||
| $ | 10.46 | $ | 11.48 | $ | 10.86 | $ | 7.21 | |||||||
|
|
|
|
|
|
|
| |||||||
| (7.71 | )% | 11.54 | % | 50.70 | % | (46.77 | )%(4)(5) | |||||||
| $ | 186 | $ | 212 | $ | 19 | $ | 5 | |||||||
| 1.88 | % | 1.87 | % | 1.88 | % | 1.82 | %(6) | |||||||
| 1.44 | % | 1.44 | % | 1.44 | % | 1.44 | %(6) | |||||||
| (0.15 | )% | 0.11 | % | (0.20 | )% | 0.94 | %(6) | |||||||
| 0.29 | % | 0.54 | % | 0.24 | % | 1.32 | %(6) | |||||||
| 14 | % | 12 | % | 14 | % | 77 | % | |||||||
The accompanying notes are an integral part of these financial statements.
87
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Water Infrastructure Fund | ||||||||||||||||||||
No Load Class | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | June 29, 2007^ through December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||
Beginning of Period | $ | 8.38 | $ | 8.86 | $ | 7.61 | $ | 10.17 | $ | 10.00 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income(2) | 0.10 | 0.07 | 0.04 | 0.10 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.51 | ) | (0.48 | ) | 1.21 | (2.66 | ) | 0.20 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.41 | ) | (0.41 | ) | 1.25 | (2.56 | ) | 0.26 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | — | |||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.18 | ) | (0.07 | ) | (0.00 | )(3) | — | (0.04 | ) | |||||||||||
From net realized gains | — | — | — | — | (0.05 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.18 | ) | (0.07 | ) | (0.00 | )(3) | — | (0.09 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 7.79 | $ | 8.38 | $ | 8.86 | $ | 7.61 | $ | 10.17 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return(4) | (4.88 | )% | (4.60 | )% | 16.46 | % | (25.17 | )% | 2.64 | %(5) | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of period (000’s) | $ | 5,613 | $ | 7,001 | $ | 7,176 | $ | 6,598 | $ | 2,385 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 2.29 | % | 2.17 | % | 2.36 | % | 2.20 | % | 3.62 | %(6) | ||||||||||
After expense reimbursement(7) | 1.64 | % | 1.64 | % | 1.64 | % | 1.65 | % | 1.74 | %(6) | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 0.59 | % | 0.33 | % | (0.26 | )% | 0.55 | % | (0.73 | )%(6) | ||||||||||
After expense reimbursement(7) | 1.24 | % | 0.86 | % | 0.46 | % | 1.10 | % | 1.15 | %(6) | ||||||||||
Portfolio turnover rate | 69 | %(8) | 111 | %(8) | 45 | %(8) | 66 | %(8) | 7 | %(9) | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (8) | Portfolio turnover is the annual turnover of The Water Infrastructure Portfolio. |
| (9) | Portfolio turnover is the turnover from inception date through year end of The Water Infrastructure Portfolio. |
The accompanying notes are an integral part of these financial statements.
88
The Water Infrastructure Fund | ||||||||||||||||||
| Advisor Class A | ||||||||||||||||||
For the | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | June 29, 2007^ through December 31, 2007 | ||||||||||||||
| $ | 8.35 | $ | 8.82 | $ | 7.59 | $ | 10.17 | $ | 10.00 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.08 | 0.05 | 0.02 | 0.07 | 0.05 | ||||||||||||||
| (0.50 | ) | (0.47 | ) | 1.21 | (2.65 | ) | 0.20 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.42 | ) | (0.42 | ) | 1.23 | (2.58 | ) | 0.25 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||||
| (0.15 | ) | (0.05 | ) | — | — | (0.03 | ) | |||||||||||
| — | — | — | — | (0.05 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.15 | ) | (0.05 | ) | — | — | (0.08 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 7.78 | $ | 8.35 | $ | 8.82 | $ | 7.59 | $ | 10.17 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (5.08 | )% | (4.80 | )% | 16.21 | % | (25.37 | )% | 2.55 | %(5) | |||||||||
| $ | 4,559 | $ | 10,100 | $ | 10,339 | $ | 7,661 | $ | 2,459 | |||||||||
| 2.54 | % | 2.42 | % | 2.61 | % | 2.45 | % | 3.87 | %(6) | |||||||||
| 1.89 | % | 1.89 | % | 1.89 | % | 1.90 | % | 1.99 | %(6) | |||||||||
| 0.34 | % | 0.08 | % | (0.51 | )% | 0.30 | % | (0.98 | )%(6) | |||||||||
| 0.99 | % | 0.61 | % | 0.21 | % | 0.85 | % | 0.90 | %(6) | |||||||||
| 69 | %(8) | 111 | %(8) | 45 | %(8) | 66 | %(8) | 7 | %(9) | |||||||||
The accompanying notes are an integral part of these financial statements.
89
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Water Infrastructure Fund | ||||||||||||||||||||
| Advisor Class C | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | June 29, 2007^ through December 31, 2007 | ||||||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||
Beginning of Period | $ | 8.25 | $ | 8.71 | $ | 7.54 | $ | 10.16 | $ | 10.00 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from Investment Operations: | ||||||||||||||||||||
Net investment income (loss)(2) | 0.04 | 0.01 | (0.02 | ) | 0.03 | 0.02 | ||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.49 | ) | (0.46 | ) | 1.19 | (2.65 | ) | 0.21 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | (0.45 | ) | (0.45 | ) | 1.17 | (2.62 | ) | 0.23 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Redemption Fees | 0.00 | (3) | — | 0.00 | (3) | — | 0.00 | (3) | ||||||||||||
Less Distributions: | ||||||||||||||||||||
From net investment income | (0.12 | ) | (0.01 | ) | — | — | (0.02 | ) | ||||||||||||
From net realized gains | — | — | — | — | (0.05 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.12 | ) | (0.01 | ) | — | — | (0.07 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value, End of Period | $ | 7.68 | $ | 8.25 | $ | 8.71 | $ | 7.54 | $ | 10.16 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | (5.51 | )% | (5.15 | )% | 15.52 | % | (25.79 | )% | 2.33 | %(4) | ||||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||||||
Net assets, end of period (000’s) | $ | 2,316 | $ | 2,840 | $ | 2,700 | $ | 1,571 | $ | 1,201 | ||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||||
Before expense reimbursement | 3.04 | % | 2.92 | % | 3.11 | % | 2.95 | % | 4.37 | %(5) | ||||||||||
After expense reimbursement(6) | 2.39 | % | 2.39 | % | 2.39 | % | 2.40 | % | 2.49 | %(5) | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reimbursement | (0.16 | )% | (0.42 | )% | (1.01 | )% | (0.20 | )% | (1.48 | )%(5) | ||||||||||
After expense reimbursement(6) | 0.49 | % | 0.11 | % | (0.29 | )% | 0.35 | % | 0.40 | %(5) | ||||||||||
Portfolio turnover rate | 69 | %(7) | 111 | %(7) | 45 | %(7) | 66 | %(7) | 7 | %(8) | ||||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | Portfolio turnover is the annual turnover of The Water Infrastructure Portfolio. |
| (8) | Portfolio turnover is the turnover from inception date through year end of The Water Infrastructure Portfolio. |
The accompanying notes are an integral part of these financial statements.
90
| The Water Infrastructure Fund | ||||||||||||||||||
| Institutional Class | ||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | June 29, 2007^ through December 31, 2007 | ||||||||||||||
| $ | 8.42 | $ | 8.90 | $ | 7.63 | $ | 10.18 | $ | 10.00 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.12 | 0.09 | 0.05 | 0.12 | 0.06 | ||||||||||||||
| (0.51 | ) | (0.48 | ) | 1.23 | (2.67 | ) | 0.21 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.39 | ) | (0.39 | ) | 1.28 | (2.55 | ) | 0.27 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| 0.02 | 0.00 | (3) | 0.01 | 0.00 | (3) | — | ||||||||||||
| (0.20 | ) | (0.09 | ) | (0.02 | ) | — | (0.04 | ) | ||||||||||
| — | — | — | — | (0.05 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (0.20 | ) | (0.09 | ) | (0.02 | ) | — | (0.09 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| $ | 7.85 | $ | 8.42 | $ | 8.90 | $ | 7.63 | $ | 10.18 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
| (4.43 | )% | (4.38 | )% | 16.94 | % | (25.05 | )% | 2.76 | %(4) | |||||||||
| $ | 798 | $ | 4,182 | $ | 2,905 | $ | 251 | $ | 103 | |||||||||
| 2.24 | % | 2.12 | % | 2.31 | % | 2.15 | % | 3.58 | %(5) | |||||||||
| 1.44 | % | 1.44 | % | 1.44 | % | 1.45 | % | 1.54 | %(5) | |||||||||
| 0.64 | % | 0.38 | % | (0.21 | )% | 0.60 | % | (0.69 | )%(5) | |||||||||
| 1.44 | % | 1.06 | % | 0.66 | % | 1.30 | % | 1.35 | %(5) | |||||||||
| 69 | %(7) | 111 | %(7) | 45 | %(7) | 66 | %(7) | 7 | %(8) | |||||||||
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 Fund | ||||||||||||||||
| No Load Class | ||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | February 11, 2008^ through December 31, 2008 | |||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
Net Asset Value | ||||||||||||||||
Beginning of Period | $ | 10.47 | $ | 9.86 | $ | 8.22 | $ | 10.00 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from Investment Operations: |
| |||||||||||||||
Net investment income (loss)(2) | 0.83 | 0.35 | 0.09 | 0.01 | ||||||||||||
Net realized and unrealized gain (loss) on investments | (0.80 | ) | 0.91 | 1.79 | (1.79 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 0.03 | 1.26 | 1.88 | (1.78 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Redemption Fees | 0.00 | (3) | 0.00 | (3) | — | — | ||||||||||
Less Distributions: | ||||||||||||||||
From net investment income | (0.36 | ) | (0.35 | ) | (0.08 | ) | (0.00 | )(3) | ||||||||
From net realized gains | (0.05 | ) | (0.30 | ) | (0.16 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.41 | ) | (0.65 | ) | (0.24 | ) | (0.00 | )(3) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Asset Value, End of Period | $ | 10.09 | $ | 10.47 | $ | 9.86 | $ | 8.22 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return(4) | 0.24 | % | 13.04 | % | 22.90 | % | (17.76 | )%(5) | ||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
Net assets, end of period (000’s) | $ | 13,389 | $ | 3,489 | $ | 938 | $ | 99 | ||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||
Before expense reimbursement | 2.38 | % | 6.11 | % | 13.11 | % | 17.58 | %(6) | ||||||||
After expense reimbursement(7) | 1.49 | % | 1.49 | % | 1.49 | % | 1.49 | %(6) | ||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
Before expense reimbursement | 7.09 | % | (1.19 | )% | (10.69 | )% | (15.99 | )%(6) | ||||||||
After expense reimbursement(7) | 7.98 | % | 3.43 | % | 0.93 | % | 0.10 | %(6) | ||||||||
Portfolio turnover rate | 74 | %(8) | 38 | %(8) | 77 | %(8) | N/A | (9) | ||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares. |
| (5) | Not annualized. |
| (6) | Annualized. |
| (7) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (8) | Portfolio turnover is the annual turnover of The Multi-Disciplinary Portfolio. |
| (9) | Portfolio turnover is not applicable because The Multi-Disciplinary Portfolio did not hold any long-term securities from inception date through year end. |
The accompanying notes are an integral part of these financial statements.
92
| The Multi-Disciplinary Fund | ||||||||||||||
| Advisor Class A | ||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | February 11, 2008^ through December 31, 2008 | |||||||||||
| $ | 10.44 | $ | 9.85 | $ | 8.20 | $ | 10.00 | |||||||
|
|
|
|
|
|
|
| |||||||
| 0.78 | 0.33 | 0.06 | (0.01 | ) | ||||||||||
| (0.78 | ) | 0.89 | 1.80 | (1.79 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||
| 0.00 | 1.22 | 1.86 | (1.80 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||
| — | — | — | — | |||||||||||
| (0.34 | ) | (0.33 | ) | (0.05 | ) | (0.00 | )(3) | |||||||
| (0.05 | ) | (0.30 | ) | (0.16 | ) | – | ||||||||
|
|
|
|
|
|
|
| |||||||
| (0.39 | ) | (0.63 | ) | (0.21 | ) | (0.00 | )(3) | |||||||
|
|
|
|
|
|
|
| |||||||
| $ | 10.05 | $ | 10.44 | $ | 9.85 | $ | 8.20 | |||||||
|
|
|
|
|
|
|
| |||||||
| (0.01 | )% | 12.64 | % | 22.73 | % | (17.97 | )%(5) | |||||||
| $ | 4,726 | $ | 356 | $ | 103 | $ | 84 | |||||||
| 2.63 | % | 6.36 | % | 13.36 | % | 17.83 | %(6) | |||||||
| 1.74 | % | 1.74 | % | 1.74 | % | 1.74 | %(6) | |||||||
| 6.84 | % | (1.44 | )% | (10.94 | )% | (16.24 | )%(6) | |||||||
| 7.73 | % | 3.18 | % | 0.68 | % | (0.15 | )%(6) | |||||||
| 74 | %(8) | 38 | %(8) | 77 | %(8) | N/A | (9) | |||||||
The accompanying notes are an integral part of these financial statements.
93
KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS
Financial Highlights — (Continued)
| The Multi-Disciplinary Fund | ||||||||||||||||
| Advisor Class C | ||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | February 11, 2008^ through December 31, 2008 | |||||||||||||
PER SHARE DATA:(1) | ||||||||||||||||
Net Asset Value | ||||||||||||||||
Beginning of Period | $ | 10.40 | $ | 9.80 | $ | 8.17 | $ | 10.00 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from Investment Operations: | ||||||||||||||||
Net investment income (loss)(2) | 0.74 | 0.27 | 0.02 | (0.05 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | (0.78 | ) | 0.90 | 1.78 | (1.78 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | (0.04 | ) | 1.17 | 1.80 | (1.83 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Redemption Fees | — | — | — | — | ||||||||||||
Less Distributions: | ||||||||||||||||
From net investment income | (0.31 | ) | (0.27 | ) | (0.01 | ) | (0.00 | )(3) | ||||||||
From net realized gains | (0.05 | ) | (0.30 | ) | (0.16 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.36 | ) | (0.57 | ) | (0.17 | ) | (0.00 | )(3) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Asset Value, End of Period | $ | 10.00 | $ | 10.40 | $ | 9.80 | $ | 8.17 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | (0.49 | )% | 12.13 | % | 22.03 | % | (18.30 | )%(4) | ||||||||
SUPPLEMENTAL DATA AND RATIOS | ||||||||||||||||
Net assets, end of period (000’s) | $ | 1,645 | $ | 128 | $ | 105 | $ | 88 | ||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||
Before expense reimbursement | 3.13 | % | 6.86 | % | 13.86 | % | 18.33 | %(5) | ||||||||
After expense reimbursement(6) | 2.24 | % | 2.24 | % | 2.24 | % | 2.24 | %(5) | ||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
Before expense reimbursement | 6.34 | % | (1.94 | )% | (11.44 | )% | 16.74 | %(5) | ||||||||
After expense reimbursement(6) | 7.23 | % | 2.68 | % | 0.18 | % | 0.65 | %(5) | ||||||||
Portfolio turnover rate | 74 | %(7) | 38 | %(7) | 77 | %(7) | N/A | (8) | ||||||||
| ^ | Commencement of operations. |
| (1) | Information presented relates to a share of capital stock outstanding for each period. |
| (2) | Net investment income per share represents net investment income divided by the average shares oustanding throughout the period. |
| (3) | Amount calculated is less than $0.005. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. |
| (7) | Portfolio turnover is the annual turnover of The Multi-Disciplinary Portfolio. |
| (8) | Portfolio turnover is not applicable because The Multi-Disciplinary Portfolio did not hold any long-term securities from inception date through year end. |
The accompanying notes are an integral part of these financial statements.
94
| The Multi-Disciplinary Fund | ||||||||||||||
| Institutional Class | ||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | February 11, 2008^ through December 31, 2008 | |||||||||||
| $ | 10.50 | $ | 9.89 | $ | 8.23 | $ | 10.00 | |||||||
|
|
|
|
|
|
|
| |||||||
| 0.85 | 0.37 | 0.10 | 0.02 | |||||||||||
| (0.80 | ) | 0.91 | 1.81 | (1.79 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||
| 0.05 | 1.28 | 1.91 | (1.77 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||
| — | — | — | — | |||||||||||
| (0.38 | ) | (0.37 | ) | (0.09 | ) | (0.00 | )(3) | |||||||
| (0.05 | ) | (0.30 | ) | (0.16 | ) | — | ||||||||
|
|
|
|
|
|
|
| |||||||
| (0.43 | ) | (0.67 | ) | (0.25 | ) | (0.00 | )(3) | |||||||
|
|
|
|
|
|
|
| |||||||
| $ | 10.12 | $ | 10.50 | $ | 9.89 | $ | 8.23 | |||||||
|
|
|
|
|
|
|
| |||||||
| 0.42 | % | 13.19 | % | 23.25 | % | (17.65 | )%(4) | |||||||
| $ | 3,878 | $ | 142 | $ | 101 | $ | 82 | |||||||
| 2.33 | % | 6.06 | % | 13.06 | % | 17.53 | %(5) | |||||||
| 1.29 | % | 1.29 | % | 1.29 | % | 1.29 | %(5) | |||||||
| 7.14 | % | (1.14 | )% | (10.64 | )% | (15.94 | )%(5) | |||||||
| 8.18 | % | 3.63 | % | 1.13 | % | 0.30 | %(5) | |||||||
| 74 | %(7) | 38 | %(7) | 77 | %(7) | N/A | (8) | |||||||
95
To the Shareholders of and Board of Directors
Kinetics Mutual Funds, Inc.
Elmsford, New York
We have audited the accompanying statements of assets and liabilities of The Internet Fund, The Global Fund, The Paradigm Fund, The Medical Fund, The Small Cap Opportunities Fund, The Market Opportunities Fund, The Water Infrastructure Fund and The Multi-Disciplinary Fund, each a series of shares of Kinetics Mutual Funds, Inc. (the “Funds”), as of December 31, 2011, 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, except for The Water Infrastructure Fund in which the financial highlights were for each of the four years in the period then ended and the period June 29, 2007 (commencement of operations) through December 31, 2007 and The Multi-Disciplinary Fund in which the financial highlights were for each of the three years in the period then ended and the period February 11, 2008 (commencement of operations) through December 31, 2008. 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, 2011, 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 the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania
February 28, 2012
96
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011
The Internet Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Information | $ | 51,987,508 | 49.5 | % | ||||
Retail Trade | 12,499,153 | 11.9 | % | |||||
Finance and Insurance | 10,106,891 | 9.6 | % | |||||
Manufacturing | 8,420,300 | 8.0 | % | |||||
Arts, Entertainment, and Recreation | 5,622,278 | 5.4 | % | |||||
Professional, Scientific, and Technical Services | 4,132,896 | 3.9 | % | |||||
Management of Companies and Enterprises | 3,649,575 | 3.5 | % | |||||
Real Estate and Rental and Leasing | 2,003,809 | 1.9 | % | |||||
Administrative and Support and Waste Management and | 1,507,549 | 1.4 | % | |||||
Transportation and Warehousing | 1,144,127 | 1.1 | % | |||||
Educational Services | 341,510 | 0.3 | % | |||||
| * | Excludes Short-Term Investments |
97
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Global Portfolio
| Country Allocation* | Market Value | Percentage of Total Net Assets | ||||||
United States | $ | 950,905 | 23.1 | % | ||||
Canada | 603,247 | 14.6 | % | |||||
Switzerland | 295,246 | 7.2 | % | |||||
France | 278,454 | 6.8 | % | |||||
Hong Kong | 245,510 | 6.0 | % | |||||
Japan | 232,061 | 5.6 | % | |||||
Bermuda | 195,059 | 4.7 | % | |||||
Cayman Islands | 183,088 | 4.4 | % | |||||
Malaysia | 118,675 | 2.9 | % | |||||
China | 118,508 | 2.9 | % | |||||
Spain | 111,663 | 2.7 | % | |||||
Singapore | 93,631 | 2.3 | % | |||||
United Kingdom | 85,539 | 2.1 | % | |||||
Netherlands | 67,579 | 1.6 | % | |||||
Germany | 58,642 | 1.4 | % | |||||
Brazil | 49,755 | 1.2 | % | |||||
Poland | 48,496 | 1.2 | % | |||||
Hungary | 21,519 | 0.5 | % | |||||
Argentina | 20,103 | 0.5 | % | |||||
Austria | 9,836 | 0.2 | % | |||||
Australia | 929 | 0.0 | % | |||||
| * | Excludes Short-Term Investments |
98
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Paradigm Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Information | $ | 158,438,813 | 18.8 | % | ||||
Real Estate and Rental and Leasing | 122,230,129 | 14.5 | % | |||||
Finance and Insurance | 120,993,323 | 14.3 | % | |||||
Arts, Entertainment, and Recreation | 102,965,833 | 12.2 | % | |||||
Mining, Quarrying, and Oil and Gas Extraction | 92,426,865 | 10.9 | % | |||||
Retail Trade | 89,357,429 | 10.6 | % | |||||
Management of Companies and Enterprises | 75,803,688 | 9.0 | % | |||||
Manufacturing | 23,913,887 | 2.8 | % | |||||
Transportation and Warehousing | 15,822,660 | 1.9 | % | |||||
Petroleum & Gas | 8,434,450 | 1.0 | % | |||||
Utilities | 1,826,261 | 0.2 | % | |||||
| * | Excludes Short-Term Investments |
99
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Medical Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Manufacturing | $ | 19,388,758 | 96.0 | % | ||||
Professional, Scientific, and Technical Services | 652,778 | 3.2 | % | |||||
Finance & Insurance | 3,613 | 0.0 | % | |||||
Health Care and Social Assistance | 1,650 | 0.0 | % | |||||
| * | Excludes Short-Term Investments |
100
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Small Cap Opportunities Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Real Estate and Rental and Leasing | $ | 19,918,095 | 24.0 | % | ||||
Finance and Insurance | 17,852,440 | 21.7 | % | |||||
Manufacturing | 9,302,321 | 11.2 | % | |||||
Management of Companies and Enterprises | 9,065,724 | 10.9 | % | |||||
Information | 7,286,120 | 8.8 | % | |||||
Petroleum & Gas | 6,528,150 | 7.9 | % | |||||
Mining, Quarrying, and Oil and Gas Extraction | 6,157,584 | 7.4 | % | |||||
Arts, Entertainment, and Recreation | 2,526,050 | 3.0 | % | |||||
Transportation and Warehousing | 1,696,517 | 2.0 | % | |||||
Retail Trade | 776,160 | 0.9 | % | |||||
Transportation Equipment | 439,107 | 0.5 | % | |||||
Accommodation and Food Services | 429,000 | 0.5 | % | |||||
Administrative and Support and Waste Management and Remediation Services | 263,782 | 0.3 | % | |||||
| * | Excludes Short-Term Investments |
101
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Market Opportunities Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Finance and Insurance | $ | 31,234,005 | 72.3 | % | ||||
Mining, Quarrying, and Oil and Gas Extraction | 3,426,490 | 7.9 | % | |||||
Management of Companies and Enterprises | 1,682,418 | 3.9 | % | |||||
Arts, Entertainment, and Recreation | 1,499,396 | 3.5 | % | |||||
Retail Trade | 1,206,191 | 2.8 | % | |||||
Real Estate and Rental and Leasing | 308,230 | 0.7 | % | |||||
Information | 224,708 | 0.5 | % | |||||
Utilities | 78,003 | 0.2 | % | |||||
Transportation and Warehousing | 45,796 | 0.1 | % | |||||
| * | Excludes Short-Term Investments |
102
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Water Infrastructure Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Utilities | $ | 3,855,300 | 28.8 | % | ||||
Manufacturing | 2,259,234 | 16.9 | % | |||||
Mining, Quarrying, and Oil and Gas Extraction | 1,660,000 | 12.4 | % | |||||
Management of Companies and Enterprises | 1,287,800 | 9.6 | % | |||||
Professional, Scientific, and Technical Services | 474,102 | 3.5 | % | |||||
Administrative and Support and Waste Management and Remediation Services | 27,660 | 0.2 | % | |||||
| * | Excludes Short-Term Investments & Options |
103
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets
December 31, 2011 — (Continued)
The Multi-Disciplinary Portfolio
| Sector Allocation* | Market Value | Percentage of Total Net Assets | ||||||
Mining, Quarrying, and Oil and Gas Extraction | $ | 7,357,778 | 31.0 | % | ||||
Manufacturing | 3,532,575 | 14.9 | % | |||||
Real Estate and Rental and Leasing | 2,211,750 | 9.3 | % | |||||
Utilities | 1,783,000 | 7.5 | % | |||||
Management of Companies and Enterprises | 1,391,200 | 5.9 | % | |||||
Transportation and Warehousing | 1,295,000 | 5.5 | % | |||||
Health Care and Social Assistance | 1,241,762 | 5.2 | % | |||||
Finance and Insurance | 1,110,467 | 4.7 | % | |||||
Arts, Entertainment, and Recreation | 1,066,500 | 4.5 | % | |||||
Accommodation and Food Services | 507,500 | 2.1 | % | |||||
Administrative and Support and Waste Management and Remediation Services | 340,300 | 1.4 | % | |||||
Professional, Scientific, and Technical Services | 97,375 | 0.4 | % | |||||
| * | Excludes Short-Term Investments & Options |
104
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Portfolio of Investments — December 31, 2011
| Identifier | COMMON STOCKS — 95.72% | Shares | Value | |||||||
| Administrative and Support Services — 1.43% | ||||||||||
| CTRP | Ctrip.com International Ltd. — ADR*^ | 6,000 | $ | 140,400 | ||||||
| EXPE | Expedia, Inc.^ | 25,160 | 730,143 | |||||||
| IILG | Interval Leisure Group, Inc.* | 200 | 2,722 | |||||||
| TRIP | TripAdvisor Inc.*^ | 25,160 | 634,284 | |||||||
|
| |||||||||
| 1,507,549 | ||||||||||
|
| |||||||||
| Amusement, Gambling, and Recreation Industries — 1.06% | ||||||||||
| DIS | The Walt Disney Co.^ | 29,691 | 1,113,413 | |||||||
|
| |||||||||
| Broadcasting (except Internet) — 26.74% | ||||||||||
| CBS | CBS Corporation — Class B | 48,340 | 1,311,948 | |||||||
| DISCA | Discovery Communications, Inc. — Class A*^ | 90,412 | 3,704,180 | |||||||
| LBTYK | Liberty Global, Inc. — Series C*^ | 100,707 | 3,979,941 | |||||||
| LINTA | Liberty Interactive Corporation — Class A* | 174,500 | 2,829,517 | |||||||
| LMCA | Liberty Media Corporation — Liberty Capital — Series A* | 109,499 | 8,546,397 | |||||||
| SNI | Scripps Networks Interactive — Class A | 65,000 | 2,757,300 | |||||||
| SIRI | Sirius XM Radio, Inc.*^ | 46,000 | 83,720 | |||||||
| VIAB | Viacom Inc. — Class B | 107,440 | 4,878,850 | |||||||
|
| |||||||||
| 28,091,853 | ||||||||||
|
| |||||||||
| Computer and Electronic Product Manufacturing — 2.71% | ||||||||||
| AAPL | Apple, Inc.* | 5,000 | 2,025,000 | |||||||
| QCOM | QUALCOMM Inc. | 15,000 | 820,500 | |||||||
|
| |||||||||
| 2,845,500 | ||||||||||
|
| |||||||||
| Credit Intermediation and Related Activities — 0.05% | ||||||||||
| TREE | Tree.com, Inc.* | 10,033 | 56,084 | |||||||
|
| |||||||||
| Data Processing, Hosting and Related Services — 0.13% | ||||||||||
| CSGP | CoStar Group, Inc.*^ | 2,000 | 133,460 | |||||||
|
| |||||||||
| Data Processor — 4.31% | ||||||||||
| MA | Mastercard, Inc. — Class A | 5,620 | 2,095,248 | |||||||
| VRSK | Verisk Analytics, Inc. — Class A* | 10,000 | 401,300 | |||||||
| V | Visa, Inc. — Class A^ | 20,000 | 2,030,600 | |||||||
|
| |||||||||
| 4,527,148 | ||||||||||
|
| |||||||||
| Defense — 5.31% | ||||||||||
| CACI | CACI International, Inc. — Class A*^ | 55,000 | 3,075,600 | |||||||
| MANT | ManTech International Corporation — Class A^ | 80,000 | 2,499,200 | |||||||
|
| |||||||||
| 5,574,800 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
105
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Educational Services — 0.33% | ||||||||||
| EDU | New Oriental Education & Technology Group, Inc. — ADR* | 14,200 | $ | 341,510 | ||||||
|
| |||||||||
| Gaming — 1.06% | ||||||||||
| 200 HK | Melco International Development Limited* | 1,500,000 | 1,114,387 | |||||||
|
| |||||||||
| Global Exchanges — 2.41% | ||||||||||
| JSE SJ | JSE Limited | 51,000 | 448,557 | |||||||
| 8697 JP | Osaka Securities Exchange Co., Ltd. | 210 | 1,205,924 | |||||||
| SGX SP | Singapore Exchange Limited | 185,000 | 874,330 | |||||||
|
| |||||||||
| 2,528,811 | ||||||||||
|
| |||||||||
| Holding Company — 0.62% | ||||||||||
| GBLS BB | Groupe Bruxelles Lambert S.A. Strip VVPR* | 2,000 | 5 | |||||||
| IEP | Icahn Enterprises LP | 18,078 | 647,193 | |||||||
|
| |||||||||
| 647,198 | ||||||||||
|
| |||||||||
| Motion Picture and Sound Recording Industries — 5.42% | ||||||||||
| DWA | DreamWorks Animation SKG, Inc. — Class A*^ | 154,420 | 2,562,600 | |||||||
| TWX | Time Warner, Inc.^ | 86,666 | 3,132,109 | |||||||
|
| |||||||||
| 5,694,709 | ||||||||||
|
| |||||||||
| Motor Vehicle and Parts Dealers — 1.08% | ||||||||||
| AN | AutoNation, Inc.*^ | 30,890 | 1,138,914 | |||||||
|
| |||||||||
| Non-Store Retailers — 10.81% | ||||||||||
| CPRT | Copart, Inc.*^ | 20,030 | 959,237 | |||||||
| EBAY | eBay, Inc.* | 81,290 | 2,465,526 | |||||||
| HSNI | HSN, Inc. | 200 | 7,252 | |||||||
| IACI | IAC/InterActiveCorp | 60,740 | 2,587,524 | |||||||
| OSTK | Overstock.com, Inc.*^ | 1,000 | 7,840 | |||||||
| RBA | Ritchie Bros. Auctioneers, Incorporated^ | 162,000 | 3,576,960 | |||||||
| SOHU | Sohu.com Inc.*^ | 18,000 | 900,000 | |||||||
| BID | Sotheby’s^ | 30,000 | 855,900 | |||||||
|
| |||||||||
| 11,360,239 | ||||||||||
|
| |||||||||
| Other Exchanges — 0.37% | ||||||||||
| FTIS LI | Financial Technologies (India) Ltd. — GDR | 144,000 | 180,000 | |||||||
| URBA/A | Urbana Corporation — Class A* | 240,000 | 209,669 | |||||||
|
| |||||||||
| 389,669 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
106
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Other Information Services — 9.64% | ||||||||||
| GOOG | Google Inc. — Class A* | 9,970 | $ | 6,439,623 | ||||||
| NTES | NetEase.com Inc. — ADR* | 11,320 | 507,702 | |||||||
| SINA | SINA Corporation*^ | 41,980 | 2,182,960 | |||||||
| YHOO | Yahoo! Inc.* | 60,000 | 967,800 | |||||||
| YOKU | Youku.com, Inc. — ADR*^ | 2,160 | 33,847 | |||||||
|
| |||||||||
| 10,131,932 | ||||||||||
|
| |||||||||
| Performing Arts, Spectator Sports, and Related Industries — 3.23% | ||||||||||
| LYV | Live Nation Entertainment, Inc.* | 112,724 | 936,736 | |||||||
| MSG | The Madison Square Garden Company — Class A* | 85,815 | 2,457,742 | |||||||
|
| |||||||||
| 3,394,478 | ||||||||||
|
| |||||||||
| Professional, Scientific, and Technical Services — 3.93% | ||||||||||
| JRJC | China Finance Online Company — ADR*^ | 10,000 | 16,200 | |||||||
| CTSH | Cognizant Technology Solutions Corporation — Class A* | 39,000 | 2,508,090 | |||||||
| ICGE | ICG Group Inc.* | 15,000 | 115,800 | |||||||
| INFY | Infosys Technologies Limited — ADR^ | 27,185 | 1,396,765 | |||||||
| MWW | Monster Worldwide, Inc.*^ | 2,000 | 15,860 | |||||||
| UNTD | United Online, Inc. | 10,000 | 54,400 | |||||||
| WYY | WidePoint Corp.* | 39,062 | 25,781 | |||||||
|
| |||||||||
| 4,132,896 | ||||||||||
|
| |||||||||
| Rental and Leasing Services — 1.09% | ||||||||||
| CDCO | Comdisco Holding Company, Inc. | 194,400 | 1,146,960 | |||||||
|
| |||||||||
| Satellite Telecommunications — 7.16% | ||||||||||
| DISH | DISH Network Corp. — Class A | 114,200 | 3,252,416 | |||||||
| SATS | EchoStar Corporation — Class A* | 143,380 | 3,002,377 | |||||||
| 2008 HK | Phoenix Satellite Television Holdings Limited | 5,006,000 | 1,263,328 | |||||||
|
| |||||||||
| 7,518,121 | ||||||||||
|
| |||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 1.99% | ||||||||||
| COWN | Cowen Group, Inc. — Class A*^ | 193,103 | 500,137 | |||||||
| ICE | IntercontinentalExchange Inc.*^ | 11,670 | 1,406,819 | |||||||
| MKTX | MarketAxess Holdings, Inc. | 6,000 | 180,660 | |||||||
|
| |||||||||
| 2,087,616 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
107
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Special Purpose Entity — 0.00% | ||||||||||
| ADPAO | Adelphia Contingent Value Vehicle CVV Servies ACC-4 Int*+ | 250,827 | $ | 25 | ||||||
| ADPAL | Adelphia Recovery Trust Ser ACC-6 E/F Int*+ | 4,878,645 | 0 | |||||||
|
| |||||||||
| 25 | ||||||||||
|
| |||||||||
| Telecommunications — 3.26% | ||||||||||
| CHU | China Unicom (Hong Kong) Limited — ADR^ | 107,645 | 2,274,539 | |||||||
| 215 HK | Hutchison Telecommunications Hong Kong Holdings Limited | 2,300,000 | 885,458 | |||||||
| HTHKY | Hutchison Telecommunications Hong Kong Holdings Limited — ADR^ | 45,000 | 254,700 | |||||||
| ICTG | ICTC Group Inc.* | 149 | 5,088 | |||||||
|
| |||||||||
| 3,419,785 | ||||||||||
|
| |||||||||
| U.S. Equity Exchanges — 0.49% | ||||||||||
| NYX | NYSE Euronext | 19,830 | 517,563 | |||||||
|
| |||||||||
| Warehousing and Storage — 1.09% | ||||||||||
| IRM | Iron Mountain Incorporated | 37,147 | 1,144,127 | |||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $80,736,730 ) | 100,558,747 | |||||||||
|
| |||||||||
| ESCROW NOTES — 0.00% | Principal Amount | |||||||||
| Special Purpose Entity — 0.00% | ||||||||||
| 006ESCBG1 | Adelphia Communications Corp.*+ | $ | 200,000 | 0 | ||||||
| 006ESC958 | Adelphia Communications Corp. Preferred*+ | 190,000 | 0 | |||||||
|
| |||||||||
| TOTAL ESCROW NOTES (cost $0 ) | 0 | |||||||||
|
| |||||||||
| RIGHTS — 0.81% | Shares | |||||||||
| Rental and Leasing Services — 0.81% | ||||||||||
| CDCOR | Comdisco Holding Company, Inc. Expiration Date: 12/31/2050 Exercise Price: $1.00# | 12,240,699 | 856,849 | |||||||
|
| |||||||||
| TOTAL RIGHTS (cost $2,643,576 ) | 856,849 | |||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
108
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Internet Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | SHORT-TERM INVESTMENTS — 3.11% | Principal Amount | Value | |||||||
| Commerical Paper — 2.91% | ||||||||||
| 039711749 | U.S. Bank N.A. 0.010%, 01/03/2012 | $ | 3,059,000 | $ | 3,059,000 | |||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 0.20% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 208,251 | 208,251 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $3,267,251) | 3,267,251 | |||||||||
|
| |||||||||
| INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 32.77% | ||||||||||
| Investment Companies — 32.77% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 34,425,845 | 34,425,845 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $34,425,845) | 34,425,845 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 132.41% (cost $121,073,402) | $ | 139,108,692 | ||||||||
|
| |||||||||
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, 2011. Total loaned securities had a market value of $33,119,016 at December 31, 2011.
# — Contingent value right (contingent upon profitability of company).
+ — Security is considered illiquid and was fair valued. The aggregate value of such securities is $25 or 0.00% of net assets.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
ADR — American Depository Receipt.
GDR — Global Depository Receipt.
The accompanying notes are an integral part of these financial statements.
109
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 91.93% | Shares | Value | |||||||
| Arts, Entertainment, and Recreation — 0.59% | ||||||||||
| 585 HK | Imagi International Holdings Limited* | 1,000,000 | $ | 24,335 | ||||||
|
| |||||||||
| Asset Management — 7.59% | ||||||||||
| JZCP LN | JZ Capital Partners Ltd. | 9,000 | 47,522 | |||||||
| OCX CN | Onex Corporation | 4,175 | 135,977 | |||||||
| RCP LN | RIT Capital Partners plc | 2,000 | 38,017 | |||||||
| 806 HK | Value Partners Group Limited | 178,000 | 91,216 | |||||||
|
| |||||||||
| 312,732 | ||||||||||
|
| |||||||||
| Beverage and Tobacco Product Manufacturing — 1.25% | ||||||||||
| ZWC PW | Grupa Zywiec S.A. | 200 | 29,848 | |||||||
| ZWACK HB | Zwack Unicum Nyrt. | 400 | 21,520 | |||||||
|
| |||||||||
| 51,368 | ||||||||||
|
| |||||||||
| Broadcasting (except Internet) — 4.53% | ||||||||||
| LMCA | Liberty Media Corporation — Liberty Capital — Series A* | 2,394 | 186,852 | |||||||
|
| |||||||||
| Building Material and Garden Equipment and Supplies Dealers — 0.05% | ||||||||||
| OSH | Orchard Supply Hardware Stores Corporation — Class A*+ | 132 | 2,226 | |||||||
|
| |||||||||
| Chemical Manufacturing — 1.64% | ||||||||||
| LYB | LyondellBasell Industries NV — Class A | 2,080 | 67,579 | |||||||
|
| |||||||||
| Commercial Banking — 0.45% | ||||||||||
| BHW PW | Bank Handlowy w Warszawie S.A. | 500 | 9,838 | |||||||
| MIL PW | Bank Millennium S.A. | 8,000 | 8,810 | |||||||
|
| |||||||||
| 18,648 | ||||||||||
|
| |||||||||
| Construction of Buildings — 1.87% | ||||||||||
| BRP | Brookfield Residential Properties Inc.*^ | 9,865 | 77,046 | |||||||
|
| |||||||||
| Credit Intermediation and Related Activities — 1.45% | ||||||||||
| MFG | Mizuho Financial Group, Inc. — ADR | 10,620 | 28,462 | |||||||
| SMFG | Sumitomo Mitsui Financial Group, Inc. — ADR | 5,685 | 31,324 | |||||||
|
| |||||||||
| 59,786 | ||||||||||
|
| |||||||||
| Crop Production — 0.49% | ||||||||||
| CRESY | Cresud S.A.C.I.F.y A. — ADR | 1,765 | 20,103 | |||||||
|
| |||||||||
| European Exchanges — 2.05% | ||||||||||
| BME SM | Bolsas y Mercados Espanoles | 3,130 | 84,261 | |||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
110
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Food Manufacturing — 1.67% | ||||||||||
| BARN SW | Barry Callebaut AG* | 70 | $ | 68,971 | ||||||
|
| |||||||||
| Funds, Trusts, and Other Financial Vehicles — 0.91% | ||||||||||
| AIM CN | Groupe Aeroplan, Inc. | 3,215 | 37,680 | |||||||
|
| |||||||||
| Gaming — 7.00% | ||||||||||
| GENT MK | Genting Berhad | 34,200 | 118,675 | |||||||
| WYNN | Wynn Resorts Limited^ | 1,535 | 169,602 | |||||||
|
| |||||||||
| 288,277 | ||||||||||
|
| |||||||||
| General Merchandise Stores — 2.26% | ||||||||||
| SHLD | Sears Holdings Corporation*^ | 2,925 | 92,957 | |||||||
|
| |||||||||
| Global Exchanges — 5.39% | ||||||||||
| BVMF3 BZ | BM&FBOVESPA SA | 9,470 | 49,755 | |||||||
| 8697 JP | Osaka Securities Exchange Co., Ltd. | 30 | 172,275 | |||||||
|
| |||||||||
| 222,030 | ||||||||||
|
| |||||||||
| Holding Company — 11.35% | ||||||||||
| BOL FP | Bollore | 375 | 73,530 | |||||||
| IEP | Icahn Enterprises LP | 1,895 | 67,841 | |||||||
| JS SP | Jardine Strategic Holdings Limited | 6,170 | 170,724 | |||||||
| LUK | Leucadia National Corporation^ | 6,845 | 155,655 | |||||||
|
| |||||||||
| 467,750 | ||||||||||
|
| |||||||||
| Insurance Carriers and Related Activities — 4.44% | ||||||||||
| GLRE | Greenlight Capital Re, Ltd. — Class A*^ | 7,735 | 183,087 | |||||||
|
| |||||||||
| Machinery Manufacturing — 0.62% | ||||||||||
| KWG GR | KHD Humboldt Wedag International AG* | 3,978 | 25,743 | |||||||
|
| |||||||||
| Merchant Wholesalers, Durable Goods — 9.50% | ||||||||||
| CFR VX | Compagnie Financiere Richemont SA | 3,910 | 197,769 | |||||||
| DIA SM | Distribuidora International de Alimentacion SA* | 1,500 | 6,785 | |||||||
| MC FP | LVMH Moet Hennessy Louis Vuitton SA | 1,320 | 186,899 | |||||||
|
| |||||||||
| 391,453 | ||||||||||
|
| |||||||||
| Mining (except Oil and Gas) — 2.97% | ||||||||||
| ELT AU | Elementos Limited* | 9,081 | 929 | |||||||
| FNV | Franco-Nevada Corporation^ | 3,185 | 121,253 | |||||||
|
| |||||||||
| 122,182 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
111
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Oil and Gas Extraction — 6.23% | ||||||||||
| CLR | Continental Resources, Inc.*^ | 1,050 | $ | 70,045 | ||||||
| MAU FP | Establissements Maurel et Prom | 1,000 | 15,220 | |||||||
| MPNG FP | Maurel et Prom Nigeria* | 1,000 | 2,524 | |||||||
| POU CN | Paramount Resources Ltd. — Class A* | 1,410 | 58,822 | |||||||
| SBE CN | SilverBirch Energy Corp.* | 7,300 | 41,704 | |||||||
| TOU CN | Tourmaline Oil Corp.* | 2,615 | 68,356 | |||||||
|
| |||||||||
| 256,671 | ||||||||||
|
| |||||||||
| Pharmaceutical and Medicine Manufacturing — 0.80% | ||||||||||
| MRK GR | Merck KGaA | 330 | 32,900 | |||||||
|
| |||||||||
| Professional, Scientific, and Technical Services — 0.93% | ||||||||||
| BSLN SW | Basilea Pharmaceutica AG* | 750 | 28,505 | |||||||
| ICLL AV | Intercell AG* | 4,000 | 9,837 | |||||||
|
| |||||||||
| 38,342 | ||||||||||
|
| |||||||||
| Publishing Industries (except Internet) — 0.50% | ||||||||||
| PRS SM | Promotora de Informaciones S.A.* | 18,310 | 20,617 | |||||||
|
| |||||||||
| Real Estate — 12.52% | ||||||||||
| BRE CN | Brookfield Real Estate Services, Inc. | 5,050 | 62,409 | |||||||
| CIT SP | City Developments Limited | 10,715 | 73,524 | |||||||
| FCE/A | Forest City Enterprises, Inc. — Class A*^ | 17,405 | 205,727 | |||||||
| 823 HK | The Link REIT | 41,900 | 154,294 | |||||||
| UOL SP | UOL Group Limited | 6,520 | 20,107 | |||||||
|
| |||||||||
| 516,061 | ||||||||||
|
| |||||||||
| Support Activities for Transportation — 2.88% | ||||||||||
| 694 HK | Beijing Capital International Airport Company Limited — Class H | 236,000 | 118,507 | |||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $4,161,864 ) | 3,788,164 | |||||||||
|
| |||||||||
| PREFERRED STOCKS — 0.00% | ||||||||||
| Building Material and Garden Equipment and Supplies Dealers — 0.00% | ||||||||||
| 685691503 | Orchard Supply Hardware Stores Corporation — Series A*+ | 132 | 0 | |||||||
|
| |||||||||
| TOTAL PREFERRED STOCKS (cost $0) | 0 | |||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
112
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | WARRANTS — 0.01% | Shares | Value | |||||||
| Oil and Gas and Consumable Fuels — 0.01% | ||||||||||
| B4PM666 | Maurel Et Prom Cw14 Expiration Date: 6/30/2014 Exercise Price: $14.20* | 1,000 | $ | 281 | ||||||
|
| |||||||||
| TOTAL WARRANTS (cost $0) | 281 | |||||||||
|
| |||||||||
| SHORT-TERM INVESTMENTS —10.14% | Principal Amount | |||||||||
| Commerical Paper — 5.07% | ||||||||||
| 039711750 | U.S. Bank N.A. 0.010%, 01/03/2012 | $ | 209,000 | 209,000 | ||||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 5.07% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 209,000 | 209,000 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $418,000) | 418,000 | |||||||||
|
| |||||||||
| INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 18.21% | ||||||||||
| Investment Companies — 18.21% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 750,338 | 750,338 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $750,338) | 750,338 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 120.29% (cost $5,330,202) | $ | 4,956,783 | ||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
113
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Global Portfolio
Portfolio of Investments — December 31, 2011 — (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, 2011. Total loaned securities had a market value of $711,424 at December 31, 2011.
+ — Security is considered illiquid and was fair valued. The aggregate value of such securities is $2,226 or 0.05% of net assets.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
ADR — American Depository Receipt.
The accompanying notes are an integral part of these financial statements.
114
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 95.68% | Shares | Value | |||||||
| Asset Management — 5.63% | ||||||||||
| BAM | Brookfield Asset Management Inc. — Class A | 1,524,990 | $ | 41,906,725 | ||||||
| DDEJF | Dundee Corporation — Class A* | 300 | 6,960 | |||||||
| OCX CN | Onex Corporation | 113,500 | 3,696,618 | |||||||
| 806 HK | Value Partners Group Limited | 3,713,000 | 1,902,730 | |||||||
|
| |||||||||
| 47,513,033 | ||||||||||
|
| |||||||||
| Beverage and Tobacco Product Manufacturing — 0.01% | ||||||||||
| BF/A | Brown-Forman Corporation — Class A | 300 | 23,781 | |||||||
| PM | Philip Morris International, Inc. | 750 | 58,860 | |||||||
|
| |||||||||
| 82,641 | ||||||||||
|
| |||||||||
| Broadcasting (except Internet) — 12.65% | ||||||||||
| CBS | CBS Corporation — Class B | 573,720 | 15,570,761 | |||||||
| DISCA | Discovery Communications, Inc. — Class A*^ | 389,623 | 15,962,854 | |||||||
| LINTA | Liberty Interactive Corporation — Class A* | 1,132,192 | 18,358,493 | |||||||
| LMCA | Liberty Media Corporation — Liberty Capital — Series A* | 581,444 | 45,381,704 | |||||||
| SNI | Scripps Networks Interactive — Class A | 69,973 | 2,968,255 | |||||||
| VIAB | Viacom Inc. — Class B | 188,499 | 8,559,739 | |||||||
|
| |||||||||
| 106,801,806 | ||||||||||
|
| |||||||||
| Building Material and Garden Equipment and Supplies Dealers — 0.05% | ||||||||||
| OSH | Orchard Supply Hardware Stores Corporation — Class A*+ | 23,155 | 390,167 | |||||||
|
| |||||||||
| Chemical Manufacturing — 1.55% | ||||||||||
| SIAL | Sigma-Aldrich Corp.^ | 209,815 | 13,105,045 | |||||||
|
| |||||||||
| Clothing and Clothing Accessories Stores — 0.05% | ||||||||||
| LTD | Limited Brands, Inc.^ | 9,600 | 387,360 | |||||||
|
| |||||||||
| Credit Intermediation and Related Activities — 0.00% | ||||||||||
| UCBHQ | UCBH Holdings, Inc.*^+ | 112,751 | 564 | |||||||
|
| |||||||||
| Gaming — 10.07% | ||||||||||
| LVS | Las Vegas Sands Corp.* | 1,055,811 | 45,114,804 | |||||||
| MGM | MGM Resorts International* | 557,661 | 5,816,404 | |||||||
| WYNN | Wynn Resorts Limited^ | 308,695 | 34,107,711 | |||||||
|
| |||||||||
| 85,038,919 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
115
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| General Merchandise Stores — 3.46% | ||||||||||
| JCP | J.C. Penney Company, Inc.^ | 301,490 | $ | 10,597,374 | ||||||
| SCC CN | Sears Canada Inc.* | 306,219 | 3,138,087 | |||||||
| SHLD | Sears Holdings Corporation*^ | 488,300 | 15,518,174 | |||||||
|
| |||||||||
| 29,253,635 | ||||||||||
|
| |||||||||
| Global Exchanges — 2.97% | ||||||||||
| JSE SJ | JSE Limited | 448,000 | 3,940,267 | |||||||
| 8697 JP | Osaka Securities Exchange Co., Ltd. | 3,680 | 21,132,389 | |||||||
|
| |||||||||
| 25,072,656 | ||||||||||
|
| |||||||||
| Holding Company — 7.71% | ||||||||||
| GBLS BB | Groupe Bruxelles Lambert S.A. Strip VVPR* | 23,520 | 61 | |||||||
| IEP | Icahn Enterprises LP | 473,319 | 16,944,820 | |||||||
| JS SP | Jardine Strategic Holdings Limited | 64,800 | 1,793,016 | |||||||
| LUK | Leucadia National Corporation^ | 2,040,631 | 46,403,949 | |||||||
|
| |||||||||
| 65,141,846 | ||||||||||
|
| |||||||||
| Insurance Carriers and Related Activities — 1.12% | ||||||||||
| MKL | Markel Corporation* | 22,732 | 9,426,279 | |||||||
|
| |||||||||
| Machinery Manufacturing — 0.02% | ||||||||||
| CFX | Colfax Corporation*^ | 5,700 | 162,336 | |||||||
|
| |||||||||
| Manufactured Brands — 1.25% | ||||||||||
| JAH | Jarden Corporation^ | 353,543 | 10,563,865 | |||||||
|
| |||||||||
| Mining (except Oil and Gas) — 3.02% | ||||||||||
| FNV | Franco-Nevada Corporation | 670,252 | 25,516,494 | |||||||
|
| |||||||||
| Motion Picture and Sound Recording Industries — 3.73% | ||||||||||
| DWA | DreamWorks Animation SKG, Inc. — Class A*^ | 1,897,660 | 31,491,668 | |||||||
|
| |||||||||
| Motor Vehicle and Parts Dealers — 7.02% | ||||||||||
| AN | AutoNation, Inc.*^ | 1,104,230 | 40,712,960 | |||||||
| AZO | AutoZone, Inc.* | 57,277 | 18,613,307 | |||||||
|
| |||||||||
| 59,326,267 | ||||||||||
|
| |||||||||
| Oil and Gas — 1.00% | ||||||||||
| TPL | Texas Pacific Land Trust | 210,598 | 8,434,450 | |||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
116
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Oil and Gas Extraction — 7.92% | ||||||||||
| CNQ | Canadian Natural Resources Ltd.^ | 500,000 | $ | 18,685,000 | ||||||
| CLR | Continental Resources, Inc.*^ | 407,990 | 27,217,013 | |||||||
| TOU CN | Tourmaline Oil Corp.* | 803,690 | 21,008,358 | |||||||
|
| |||||||||
| 66,910,371 | ||||||||||
|
| |||||||||
| Other Exchanges — 0.04% | ||||||||||
| URB/A CN | Urbana Corporation — Class A* | 398,178 | 347,856 | |||||||
|
| |||||||||
| Other Information Services — 0.00% | ||||||||||
| GOOG | Google Inc. — Class A* | 30 | 19,377 | |||||||
|
| |||||||||
| Performing Arts, Spectator Sports, and Related Industries — 2.12% | ||||||||||
| LYV | Live Nation Entertainment, Inc.*^ | 2,157,270 | 17,926,913 | |||||||
|
| |||||||||
| Real Estate — 13.91% | ||||||||||
| ALX | Alexander’s, Inc. — REIT^ | 5,091 | 1,883,823 | |||||||
| 1 HK | Cheung Kong (Holdings) Limited | 700,240 | 8,330,824 | |||||||
| ELS | Equity Lifestyle Properties, Inc. — REIT^ | 416,870 | 27,801,060 | |||||||
| FCE/A | Forest City Enterprises, Inc. — Class A*^ | 1,614,842 | 19,087,433 | |||||||
| 10 HK | Hang Lung Group Limited | 1,176,000 | 6,442,819 | |||||||
| 12 HK | Henderson Land Development Company Limited | 2,314,000 | 11,500,579 | |||||||
| HHC | The Howard Hughes Corporation* | 776,580 | 34,301,539 | |||||||
| VNO | Vornado Realty Trust — REIT^ | 105,869 | 8,137,091 | |||||||
|
| |||||||||
| 117,485,168 | ||||||||||
|
| |||||||||
| Rental and Leasing Services — 0.08% | ||||||||||
| AL | Air Lease Corporation*^ | 29,100 | 689,961 | |||||||
|
| |||||||||
| Satellite Telecommunications — 3.64% | ||||||||||
| DISH | DISH Network Corp. — Class A | 706,670 | 20,125,962 | |||||||
| SATS | EchoStar Corporation — Class A* | 508,232 | 10,642,378 | |||||||
| LORL | Loral Space & Communications Inc.* | 300 | 19,464 | |||||||
|
| |||||||||
| 30,787,804 | ||||||||||
|
| |||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 4.57% | ||||||||||
| CBOE | CBOE Holdings Inc.^ | 1,493,926 | 38,632,926 | |||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
117
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Support Activities for Transportation — 1.87% | ||||||||||
| 694 HK | Beijing Capital International Airport Company Limited — Class H | 27,459,000 | $ | 13,788,543 | ||||||
| 357 HK | Hainan Meilan International Airport Company Limited — Class H | 2,578,720 | 1,759,742 | |||||||
| 107 HK | Sichuan Expressway Co. Limited — Class H | 683,000 | 274,375 | |||||||
|
| |||||||||
| 15,822,660 | ||||||||||
|
| |||||||||
| Utilities — 0.22% | ||||||||||
| BIP | Brookfield Infrastructure Partners LP^ | 65,930 | 1,826,261 | |||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $888,050,606) | 808,158,328 | |||||||||
|
| |||||||||
| PREFERRED STOCKS — 0.00% | ||||||||||
| Building Material and Garden Equipment and Supplies Dealers — 0.00% | ||||||||||
| 685691503 | Orchard Supply Hardware Stores Corporation — Series A*+ | 23,155 | 0 | |||||||
|
| |||||||||
| TOTAL PREFERRED STOCKS (cost $0) | 0 | |||||||||
|
| |||||||||
| CONVERTIBLE BONDS — 0.48% | Principal | |||||||||
| Real Estate — 0.48% | ||||||||||
| 345550AK3 | Forest City Enterprises, Inc. 3.625%, 10/15/2014 | $ | 4,000,000 | 4,055,000 | ||||||
|
| |||||||||
| TOTAL CONVERTIBLE BONDS (cost $3,344,965 ) | 4,055,000 | |||||||||
|
| |||||||||
| CORPORATE BONDS — 0.00% | ||||||||||
| Credit Intermediation and Related Activities — 0.00% | ||||||||||
| 317928AA7 | FINOVA Group, Inc. | |||||||||
| 7.500%, 11/15/2009, Acquired 10/19/2006-3/29/2007 at $7,902,157 (Default Effective | ||||||||||
| 4/29/2005)*+ | 9,503,880 | 10 | ||||||||
|
| |||||||||
| TOTAL CORPORATE BONDS (cost $7,341,784 ) | 10 | |||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
118
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Paradigm Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | SHORT-TERM INVESTMENTS —3.06% | Principal Amount | Value | |||||||
| Commerical Paper — 2.74% | ||||||||||
| 039711750 | U.S. Bank N.A. 0.010%, 01/03/2012 | $ | 23,116,000 | $ | 23,116,000 | |||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 0.32% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 2,737,242 | 2,737,242 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $25,853,242) | 25,853,242 | |||||||||
|
| |||||||||
| INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 28.76% | ||||||||||
| Investment Companies — 28.76% | ||||||||||
| Mount Vernon Securities Lending Trust — | ||||||||||
Prime Portfolio, 0.23%b | 242,874,993 | 242,874,993 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $242,874,993) | 242,874,993 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 127.98% (cost $1,167,465,590) | $ | 1,080,941,573 | ||||||||
|
| |||||||||
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, 2011. Total loaned securities had a market value of $232,636,732 at December 31, 2011.
+ — Security is considered illiquid and was fair valued. The aggregate value of such securities is $390,741 or 0.05% of net assets.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
REIT — Real Estate Investment Trust.
The accompanying notes are an integral part of these financial statements.
119
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 99.10% | Shares | Value | |||||||
| Ambulatory Health Care Services — 0.01% | ||||||||||
| AVXT | AVAX Technologies, Inc.* | 50,000 | $ | 1,650 | ||||||
|
| |||||||||
| Chemical Manufacturing — 2.16% | ||||||||||
| AGEN | Agenus, Inc.* | 148 | 296 | |||||||
| ALKS | Alkermes PLC*^ | 25,000 | 434,000 | |||||||
| APHB | Ampliphi Biosciences Corp.* | 1,000 | 107 | |||||||
| MMRF | MMRGlobal Inc.* | 43,000 | 1,836 | |||||||
|
| |||||||||
| 436,239 | ||||||||||
|
| |||||||||
| Computer and Electronic Product Manufacturing — 0.02% | ||||||||||
| TGX | Theragenics Corporation* | 2,000 | 3,360 | |||||||
|
| |||||||||
| Pharmaceutical and Biotechnology — 91.02% | ||||||||||
| ABT | Abbott Laboratories | 21,000 | 1,180,830 | |||||||
| ATLN VX | Actelion Ltd.* | 11,000 | 377,675 | |||||||
| AEZS | AEterna Zentaris Inc.*^ | 102,500 | 157,850 | |||||||
| ARNA | Arena Pharmaceuticals, Inc.*^ | 45,000 | 84,150 | |||||||
| ATB CN | Atrium Innovations Inc.*^ | 4,884 | 56,954 | |||||||
| BIIB | Biogen Idec, Inc.* | 15,250 | 1,678,263 | |||||||
| BPAX | BioSante Pharmaceuticals, Inc.*^ | 13,476 | 6,766 | |||||||
| BMY | Bristol-Myers Squibb Company^ | 37,000 | 1,303,880 | |||||||
| CLDX | Celldex Therapeutics Inc.* | 26,294 | 68,364 | |||||||
| 1093 HK | China Pharmaceutical Group Limited | 1,640,000 | 361,085 | |||||||
| CBST | Cubist Pharmaceuticals, Inc.*^ | 29,000 | 1,148,980 | |||||||
| DNDN | Dendreon Corporation*^ | 29,000 | 220,400 | |||||||
| LLY | Eli Lilly & Company | 30,000 | 1,246,800 | |||||||
| EPCT | EpiCept Corporation*^ | 680 | 238 | |||||||
| GSK | GlaxoSmithKline plc - ADR^ | 24,673 | 1,125,829 | |||||||
| HGSI | Human Genome Sciences, Inc.*^ | 21,000 | 155,190 | |||||||
| IMGN | ImmunoGen, Inc.*^ | 14,000 | 162,120 | |||||||
| ISIS | Isis Pharmaceuticals, Inc.*^ | 29,000 | 209,090 | |||||||
| ISA CN | Isotechnika Pharma Inc.* | 40,000 | 4,712 | |||||||
| JNJ | Johnson & Johnson^ | 19,000 | 1,246,020 | |||||||
| LIFE | Life Technologies Corporation*^ | 30,000 | 1,167,300 | |||||||
| MAXY | Maxygen, Inc.* | 41,000 | 230,830 | |||||||
| MRK | Merck & Co., Inc. | 11,000 | 414,700 | |||||||
| MYRX | Myrexis Inc.* | 74,000 | 198,320 | |||||||
| COX FP | NicOx SA* | 41,535 | 54,563 | |||||||
| NVS | Novartis AG — ADR^ | 23,000 | 1,314,910 | |||||||
The accompanying notes are an integral part of these financial statements.
120
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Pharmaceutical and Biotechnology — (Continued) | ||||||||||
| ONTY | Oncothyreon, Inc.*^ | 28,333 | $ | 214,764 | ||||||
| PTIE | Pain Therapeutics, Inc.*^ | 38,000 | 144,400 | |||||||
| PFE | Pfizer, Inc. | 46,000 | 995,440 | |||||||
| PGNX | Progenics Pharmaceuticals, Inc.*^ | 65,200 | 556,808 | |||||||
| SNY | Sanofi-Aventis — ADR | 29,000 | 1,059,660 | |||||||
| SCR | Simcere Pharmaceutical Group — ADR*^ | 48,000 | 451,200 | |||||||
| TELK | Telik, Incorporated Inc.*^ | 116,000 | 19,720 | |||||||
| VICL | Vical Incorporated*^ | 82,500 | 363,825 | |||||||
| VPHM | ViroPharma Incorporated*^ | 15,000 | 410,850 | |||||||
|
| |||||||||
| 18,392,486 | ||||||||||
|
| |||||||||
| Pharmaceutical and Medicine Manufacturing — 2.66% | ||||||||||
| 4508 JP | Mitsubishi Tanabe Pharma Corporation | 34,000 | 538,028 | |||||||
|
| |||||||||
| Professional, Scientific, and Technical Services — 3.23% | ||||||||||
| AFFX | Affymetrix, Inc.*^ | 104,000 | 425,360 | |||||||
| AMRI | Albany Molecular Research, Inc.*^ | 56,000 | 164,080 | |||||||
| CDXS | Codexis, Inc.* | 5,611 | 29,738 | |||||||
| PACB | Pacific Biosciences of California Inc.* | 12,000 | 33,600 | |||||||
|
| |||||||||
| 652,778 | ||||||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $22,076,221 ) | 20,024,541 | |||||||||
|
| |||||||||
| ESCROW NOTES — 0.00% | Principal Amount | |||||||||
| Special Purpose Entity — 0.00% | ||||||||||
| 053ESC992 | Avigen Inc. Escrow*+ | $ | 51,000 | 0 | ||||||
|
| |||||||||
| TOTAL ESCROW NOTES (cost $0 ) | 0 | |||||||||
|
| |||||||||
| RIGHTS — 0.11% | Shares | |||||||||
| Funds, Trusts, and Other Financial Vehicles — 0.02% | ||||||||||
| LGNYZ | Ligand Pharmaceuticals Incorporated General Contingent Value Right* | 44,000 | 1,188 | |||||||
| LGNXZ | Ligand Pharmaceuticals Incorporated Glucagon Contingent Value Right* | 44,000 | 660 | |||||||
| LGNDZ | Ligand Pharmaceuticals Incorporated Roche Contingent Value Right* | 44,000 | 1,135 | |||||||
The accompanying notes are an integral part of these financial statements.
121
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Funds, Trusts, and Other Financial Vehicles — (Continued) | ||||||||||
| LGNZZ | Ligand Pharmaceuticals Incorporated TR Beta Contingent Value Right* | 44,000 | $ | 629 | ||||||
|
| |||||||||
| 3,612 | ||||||||||
|
| |||||||||
| Pharmaceutical and Biotechnology — 0.09% | ||||||||||
| 80105N113 | Sanofi Contingent Value Right* | 15,538 | 18,646 | |||||||
|
| |||||||||
| TOTAL RIGHTS (cost $0 ) | 22,258 | |||||||||
|
| |||||||||
| SHORT-TERM INVESTMENTS — 0.93% | Principal Amount | |||||||||
| Commerical Paper — 0.93% | ||||||||||
| 039711750 | U.S. Bank N.A. | |||||||||
| 0.010%, 01/03/2012 | $ | 188,000 | 188,000 | |||||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 0.00% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 580 | 580 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $188,580 ) | 188,580 | |||||||||
|
| |||||||||
INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 43.02% | ||||||||||
| Investment Companies — 43.02% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 8,692,682 | 8,692,682 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $8,692,682) | 8,692,682 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 143.16% (cost $30,957,483) | $ | 28,928,061 | ||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
122
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Medical Portfolio
Portfolio of Investments — December 31, 2011 — (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, 2011. Total loaned securities had a market value of $8,226,952 at December 31, 2011.
+ — 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, 2011.
ADR — American Depository Receipt.
The accompanying notes are an integral part of these financial statements.
123
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 98.58% | Shares | Value | |||||||
| Accommodation — 0.52% | ||||||||||
| VAC | Marriott Vacations Worldwide Corporation*^ | 25,000 | $ | 429,000 | ||||||
|
| |||||||||
| Asset Management — 16.69% | ||||||||||
| BNBMF | BAM Investments Ltd.* | 99,000 | 1,321,134 | |||||||
| CNS | Cohen & Steers, Inc.^ | 44,023 | 1,272,265 | |||||||
| DDEJF | Dundee Corporation — Class A* | 44,800 | 1,039,360 | |||||||
| 53 HK | Guoco Group Limited | 90,000 | 837,239 | |||||||
| JZCP LN | JZ Capital Partners Ltd. | 88,000 | 464,654 | |||||||
| OCX CN | Onex Corporation | 24,860 | 809,673 | |||||||
| RCP LN | RIT Capital Partners plc | 66,000 | 1,254,566 | |||||||
| SII CN | Sprott, Inc. | 1,680 | 9,548 | |||||||
| 806 HK | Value Partners Group Limited | 4,265,000 | 2,185,603 | |||||||
| WETF | WisdomTree Investments, Inc.* | 771,080 | 4,665,034 | |||||||
|
| |||||||||
| 13,859,076 | ||||||||||
|
| |||||||||
| Automobile and Other Motor Vehicle Merchant Wholesalers — 0.53% | ||||||||||
| VTU LN | Vertu Motors PLC | 975,000 | 439,107 | |||||||
|
| |||||||||
| Chemical Manufacturing — 2.07% | ||||||||||
| IPAR | Inter Parfums, Inc. | 110,200 | 1,714,712 | |||||||
|
| |||||||||
| Commercial Banking — 0.40% | ||||||||||
| BLBD LI | BLOM Bank s.a.l. — GDR | 45,000 | 328,950 | |||||||
|
| |||||||||
| Construction of Buildings — 1.54% | ||||||||||
| BRP | Brookfield Residential Properties Inc.*^ | 163,441 | 1,276,474 | |||||||
|
| |||||||||
| Credit Intermediation and Related Activities — 1.35% | ||||||||||
| BOKF | BOK Financial Corporation^ | 11,600 | 637,188 | |||||||
| RBCAA | Republic Bancorp, Inc. — Class A | 21,000 | 480,900 | |||||||
|
| |||||||||
| 1,118,088 | ||||||||||
|
| |||||||||
| Gaming — 0.13% | ||||||||||
| 200 HK | Melco International Development Limited* | 150,000 | 111,439 | |||||||
|
| |||||||||
| Holding Company — 9.81% | ||||||||||
| IEP | Icahn Enterprises LP | 227,498 | 8,144,428 | |||||||
|
| |||||||||
| Insurance Carriers and Related Activities — 2.03% | ||||||||||
| GLRE | Greenlight Capital Re, Ltd. — Class A*^ | 71,105 | 1,683,055 | |||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
124
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Machinery Manufacturing — 1.12% | ||||||||||
| CFX | Colfax Corporation*^ | 32,600 | $ | 928,448 | ||||||
|
| |||||||||
| Manufactured Brands — 6.63% | ||||||||||
| JAH | Jarden Corporation^ | 184,310 | 5,507,183 | |||||||
|
| |||||||||
| Mining (except Oil and Gas) — 4.81% | ||||||||||
| IMN CN | Inmet Mining Corporation | 53,390 | 3,432,682 | |||||||
| UXG | U.S. Gold Corporation*^ | 168,000 | 564,480 | |||||||
|
| |||||||||
| 3,997,162 | ||||||||||
|
| |||||||||
| Miscellaneous Manufacturing — 1.39% | ||||||||||
| MOV | Movado Group, Inc. | 63,400 | 1,151,978 | |||||||
|
| |||||||||
| Motion Picture and Sound Recording Industries — 5.98% | ||||||||||
| ASCMA | Ascent Capital Group LLC — Class A* | 31,600 | 1,602,752 | |||||||
| DWA | DreamWorks Animation SKG, Inc. — Class A*^ | 202,394 | 3,358,729 | |||||||
|
| |||||||||
| 4,961,481 | ||||||||||
|
| |||||||||
| Motor Vehicle and Parts Dealers — 0.93% | ||||||||||
| PAG | Penske Automotive Group, Inc.^ | 40,320 | 776,160 | |||||||
|
| |||||||||
| Oil and Gas — 7.86% | ||||||||||
| TPL | Texas Pacific Land Trust^ | 163,000 | 6,528,150 | |||||||
|
| |||||||||
| Oil and Gas Extraction — 2.60% | ||||||||||
| SEMUF | Siem Industries Inc.* | 29,342 | 1,760,520 | |||||||
| SBE CN | SilverBirch Energy Corp.* | 70,000 | 399,902 | |||||||
|
| |||||||||
| 2,160,422 | ||||||||||
|
| |||||||||
| Other Exchanges — 0.51% | ||||||||||
| URB/A CN | Urbana Corporation — Class A* | 481,071 | 420,273 | |||||||
|
| |||||||||
| Performing Arts, Spectator Sports, and Related Industries —2.91% | ||||||||||
| LYV | Live Nation Entertainment, Inc.*^ | 290,567 | 2,414,612 | |||||||
|
| |||||||||
| Publishing Industries (except Internet) — 2.74% | ||||||||||
| JW/A | John Wiley & Sons, Inc. — Class A | 22,000 | 976,800 | |||||||
| PRIS/B US | Promotora de Informaciones S.A. — Class B — ADR | 251,600 | 1,217,744 | |||||||
| VALU | Value Line, Inc.^ | 7,615 | 78,282 | |||||||
|
| |||||||||
| 2,272,826 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
125
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Real Estate — 17.43% | ||||||||||
| ALX | Alexander’s, Inc. — REIT^ | 1,635 | $ | 604,999 | ||||||
| BLMC | Biloxi Marsh Lands Corporation | 100 | 990 | |||||||
| ELS | Equity Lifestyle Properties, Inc. — REIT^ | 75,350 | 5,025,092 | |||||||
| HHC | The Howard Hughes Corporation*^ | 136,253 | 6,018,295 | |||||||
| KEWL | Keweenaw Land Association Ltd.* | 380 | 28,500 | |||||||
| FUR | Winthrop Realty Trust — REIT | 275,073 | 2,797,492 | |||||||
|
| |||||||||
| 14,475,368 | ||||||||||
|
| |||||||||
| Rental and Leasing Services — 4.54% | ||||||||||
| AL | Air Lease Corporation*^ | 157,200 | 3,727,212 | |||||||
| CDCO | Comdisco Holding Company, Inc.* | 7,560 | 44,604 | |||||||
|
| |||||||||
| 3,771,816 | ||||||||||
|
| |||||||||
| Satellite Telecommunications — 1.11% | ||||||||||
| LORL | Loral Space & Communications Inc.*^ | 14,200 | 921,296 | |||||||
|
| |||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 0.53% | ||||||||||
| CBOE | CBOE Holdings Inc.^ | 16,990 | 439,362 | |||||||
| RHJI BB | RHJ International* | 800 | 3,634 | |||||||
|
| |||||||||
| 442,996 | ||||||||||
|
| |||||||||
| Support Activities for Transportation — 2.04% | ||||||||||
| 357 HK | Hainan Meilan International Airport Company Limited — Class H | 2,084,000 | 1,422,141 | |||||||
| 107 HK | Sichuan Expressway Co. Limited — Class H | 683,000 | 274,375 | |||||||
|
| |||||||||
| 1,696,516 | ||||||||||
|
| |||||||||
| Telecommunications — 0.06% | ||||||||||
| CIBY | CIBL, Inc. | 18 | 11,430 | |||||||
| ICTG | ICTC Group Inc.* | 208 | 7,103 | |||||||
| LICT | Lynch Interactive Corporation* | 16 | 33,280 | |||||||
|
| |||||||||
| 51,813 | ||||||||||
|
| |||||||||
| Waste Management and Remediation Services — 0.32% | ||||||||||
| SWSH | Swisher Hygiene, Inc.*^ | 70,530 | 263,782 | |||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $82,108,751) | 81,846,611 | |||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
126
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | CORPORATE BONDS — 0.00% | Principal Amount | Value | |||||||
| Credit Intermediation and Related Activities — 0.00% | ||||||||||
| 317928AA7 | FINOVA Group, Inc. 7.500%, 11/15/2009, Acquired 10/19/2006-5/17/2007 at $741,082 (Default Effective 4/29/2005)*+ | $ | 2,783,965 | $ | 3 | |||||
|
| |||||||||
| TOTAL CORPORATE BONDS (cost $1,232,811) | 3 | |||||||||
|
| |||||||||
| RIGHTS — 0.47% | Shares | |||||||||
| Rental and Leasing Services — 0.47% | ||||||||||
| 200334118 | Comdisco Holding Company, Inc. Expiration Date: 12/31/2050 Exercise Price: $1.00#* | 5,634,807 | 394,436 | |||||||
|
| |||||||||
| TOTAL RIGHTS (cost $1,296,169) | 394,436 | |||||||||
|
| |||||||||
| SHORT-TERM INVESTMENTS — 0.58% | Principal Amount | |||||||||
| Commerical Paper — 0.43% | ||||||||||
| 039711749 | U.S. Bank N.A. | |||||||||
| 0.010%, 01/03/2012 | $ | 358,000 | 358,000 | |||||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 0.15% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 127,310 | 127,310 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $485,310) | 485,310 | |||||||||
|
| |||||||||
| INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 23.64% | ||||||||||
| Investment Companies — 23.64% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 19,628,174 | 19,628,174 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $19,628,174) | 19,628,174 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 123.27% (cost $104,751,215) | $ | 102,354,534 | ||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
127
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Small Cap Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (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, 2011. Total loaned securities had a market value of $19,007,809 at December 31, 2011.
+ — Security is considered illiquid and was fair valued. The aggregate value of such securities is $3 or 0.00% of net assets.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
# — Contingent value right (contingent upon profitability of company).
ADR — American Depository Receipt.
GDR — Global Depository Receipt.
REIT — Real Estate Investment Trust.
The accompanying notes are an integral part of these financial statements.
128
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 91.79% | Shares | Value | |||||||
| Asset Management — 27.51% | ||||||||||
| BNBMF | BAM Investments Ltd.* | 31,090 | $ | 414,889 | ||||||
| BAM | Brookfield Asset Management Inc. — Class A | 71,540 | 1,965,919 | |||||||
| CNS | Cohen & Steers, Inc.^ | 45,822 | 1,324,256 | |||||||
| DDEJF | Dundee Corporation — Class A* | 2,300 | 53,360 | |||||||
| EV | Eaton Vance Corp.^ | 17,500 | 413,700 | |||||||
| JZCP LN | JZ Capital Partners Ltd. | 44,440 | 234,650 | |||||||
| OCX CN | Onex Corporation | 26,790 | 872,532 | |||||||
| RCP LN | RIT Capital Partners plc | 14,970 | 284,558 | |||||||
| SII CN | Sprott, Inc. | 43,155 | 245,269 | |||||||
| TROW | T. Rowe Price Group, Inc.^ | 3,490 | 198,755 | |||||||
| BX | The Blackstone Group LP^ | 68,399 | 958,270 | |||||||
| 806 HK | Value Partners Group Limited | 1,712,000 | 877,316 | |||||||
| WETF | WisdomTree Investments, Inc.*^ | 669,007 | 4,047,492 | |||||||
|
| |||||||||
| 11,890,966 | ||||||||||
|
| |||||||||
| Credit Intermediation and Related Activities — 0.50% | ||||||||||
| BBCN | BBCN Bancorp, Inc.*^ | 6,164 | 58,250 | |||||||
| CATY | Cathay General Bancorp^ | 3,237 | 48,328 | |||||||
| EWBC | East West Bancorp, Inc. | 3,204 | 63,279 | |||||||
| RBCAA | Republic Bancorp, Inc. — Class A^ | 2,000 | 45,800 | |||||||
| UCBHQ | UCBH Holdings, Inc.*+ | 6,803 | 34 | |||||||
|
| |||||||||
| 215,691 | ||||||||||
|
| |||||||||
| Data Processor — 6.92% | ||||||||||
| FISV | Fiserv, Inc.* | 3,606 | 211,817 | |||||||
| MA | Mastercard, Inc. — Class A | 4,555 | 1,698,195 | |||||||
| V | Visa, Inc. — Class A^ | 10,650 | 1,081,295 | |||||||
|
| |||||||||
| 2,991,307 | ||||||||||
|
| |||||||||
| European Exchanges — 1.18% | ||||||||||
| DB1 GR | Deutsche Boerse AG | 9,150 | 510,643 | |||||||
|
| |||||||||
| Gaming — 3.47% | ||||||||||
| LVS | Las Vegas Sands Corp.* | 35,090 | 1,499,396 | |||||||
|
| |||||||||
| Global Exchanges — 7.15% | ||||||||||
| JSE SJ | JSE Limited | 124,500 | 1,095,007 | |||||||
| 8697 JP | Osaka Securities Exchange Co., Ltd. | 150 | 861,375 | |||||||
| SGX SP | Singapore Exchange Limited | 240,000 | 1,134,266 | |||||||
|
| |||||||||
| 3,090,648 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
129
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Holding Company — 3.89% | ||||||||||
| BRK/A | Berkshire Hathaway Inc. — Class A* | 6 | $ | 688,530 | ||||||
| IEP | Icahn Enterprises LP | 27,000 | 966,600 | |||||||
| LUK | Leucadia National Corporation^ | 1,200 | 27,288 | |||||||
|
| |||||||||
| 1,682,418 | ||||||||||
|
| |||||||||
| Insurance Carriers and Related Activities — 2.46% | ||||||||||
| FFH CN | Fairfax Financial Holdings Limited | 260 | 111,531 | |||||||
| GLRE | Greenlight Capital Re, Ltd. — Class A*^ | 1,200 | 28,404 | |||||||
| MKL | Markel Corporation*^ | 523 | 216,873 | |||||||
| PWF CN | Power Financial Corporation | 28,200 | 706,972 | |||||||
|
| |||||||||
| 1,063,780 | ||||||||||
|
| |||||||||
| Mining (except Oil and Gas) — 7.93% | ||||||||||
| FNV | Franco-Nevada Corporation | 90,005 | 3,426,490 | |||||||
|
| |||||||||
| Non-Store Retailers — 2.79% | ||||||||||
| BID | Sotheby’s^ | 42,278 | 1,206,191 | |||||||
|
| |||||||||
| Other Exchanges — 1.71% | ||||||||||
| FTIS LI | Financial Technologies (India) Ltd. — GDR | 96,180 | 120,225 | |||||||
| IMAREX NO | IMAREX ASA* | 1,850 | 5,320 | |||||||
| NZX NZ | NZX Ltd. | 170,954 | 300,739 | |||||||
| URB/A CN | Urbana Corporation — Class A* | 356,004 | 311,012 | |||||||
|
| |||||||||
| 737,296 | ||||||||||
|
| |||||||||
| Rental and Leasing Services — 0.71% | ||||||||||
| AL | Air Lease Corporation*^ | 13,000 | 308,230 | |||||||
|
| |||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 23.09% | ||||||||||
| CBOE | CBOE Holdings Inc.^ | 162,471 | 4,201,500 | |||||||
| CME | CME Group, Inc. | 6,828 | 1,663,779 | |||||||
| ICE | IntercontinentalExchange Inc.*^ | 23,847 | 2,874,756 | |||||||
| IVZ | Invesco Limited | 16,415 | 329,777 | |||||||
| JEF | Jefferies Group, Inc.^ | 54,730 | 752,538 | |||||||
| LSE LN | London Stock Exchange Group plc | 12,800 | 158,032 | |||||||
|
| |||||||||
| 9,980,382 | ||||||||||
|
| |||||||||
| Support Activities for Transportation — 0.11% | ||||||||||
| 107 HK | Sichuan Expressway Co. Limited — Class H | 114,000 | 45,796 | |||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
130
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Shares | Value | ||||||||
| Telecommunications — 0.03% | ||||||||||
| IRDM | Iridium Communications, Inc.*^ | 1,672 | $ | 12,891 | ||||||
|
| |||||||||
| U.S. Equity Exchanges — 2.16% | ||||||||||
| NYX | NYSE Euronext^ | 28,720 | 749,592 | |||||||
| NDAQ | The NASDAQ OMX Group, Inc.* | 7,500 | 183,825 | |||||||
|
| |||||||||
| 933,417 | ||||||||||
|
| |||||||||
| Utilities — 0.18% | ||||||||||
| BIP | Brookfield Infrastructure Partners LP | 2,816 | 78,003 | |||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $38,019,609) | 39,673,545 | |||||||||
|
| |||||||||
| EXCHANGE TRADED NOTES — 0.06% | ||||||||||
| Credit Intermediation and Related Activities — 0.06% | ||||||||||
XIV | VelocityShares Daily Inverse VIX Short-Term ETN* | 3,800 | 24,738 | |||||||
|
| |||||||||
| TOTAL EXCHANGE TRADED NOTES (cost $21,443) | 24,738 | |||||||||
|
| |||||||||
| MUTUAL FUNDS — 0.02% | ||||||||||
| Funds, Trusts, and Other Financial Vehicles — 0.02% | ||||||||||
PFN | PIMCO Income Strategy Fund II | 760 | 6,954 | |||||||
|
| |||||||||
| TOTAL MUTUAL FUNDS (cost $6,726 ) | 6,954 | |||||||||
|
| |||||||||
| SHORT-TERM INVESTMENTS — 8.01% | Principal Amount | |||||||||
| Commerical Paper — 4.98% | ||||||||||
| 039711750 | U.S. Bank N.A. | |||||||||
| 0.010%, 01/03/2012 | $ | 2,153,000 | 2,153,000 | |||||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 3.03% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 1,310,181 | 1,310,181 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $3,463,181) | 3,463,181 | |||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
131
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Market Opportunities Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
INVESTMENTS PURCHASED WITH | Shares | Value | ||||||||
| Investment Companies — 29.63% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 12,803,608 | $ | 12,803,608 | |||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $12,803,608) | 12,803,608 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 129.51% (cost $54,314,567) | $ | 55,972,026 | ||||||||
|
| |||||||||
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, 2011. Total loaned securities had a market value of $12,252,215 at December 31, 2011.
+ — Security is considered illiquid and was fair valued. The aggregate value of such securities is $34 or 0.00% of net assets.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
GDR — Global Depository Receipt.
The accompanying notes are an integral part of these financial statements.
132
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 13.81% | Shares | Value | |||||||
| Administrative and Support Services — 0.21% | ||||||||||
| TRIT | Tri-Tech Holding Inc.*^ | 6,000 | $ | 27,660 | ||||||
|
| |||||||||
| Machinery Manufacturing — 1.50% | ||||||||||
| ARF CN | Armtec Infrastructure, Inc. | 12,650 | 25,455 | |||||||
| ERII | Energy Recovery Inc.*^ | 51,108 | 131,859 | |||||||
| ESE | ESCO Technologies, Inc. | 1,500 | 43,170 | |||||||
|
| |||||||||
| 200,484 | ||||||||||
|
| |||||||||
| Professional, Scientific, and Technical Services — 3.54% | ||||||||||
| TTEK | Tetra Tech, Inc.*^ | 19,194 | 414,398 | |||||||
| URS | URS Corporation* | 1,700 | 59,704 | |||||||
|
| |||||||||
| 474,102 | ||||||||||
|
| |||||||||
| Utilities — 8.56% | ||||||||||
| BEP-U CN | Brookfield Renewable Energy Partners LP | 11,250 | 299,926 | |||||||
| CDZI | Cadiz Inc.*^ | 40,000 | 385,200 | |||||||
| CWCO | Consolidated Water Co., Ltd.^ | 27,875 | 239,168 | |||||||
| PICO | PICO Holdings, Inc.* | 1,600 | 32,928 | |||||||
| UU/ LN | United Utilities Group PLC | 20,000 | 188,222 | |||||||
|
| |||||||||
| 1,145,444 | ||||||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $2,312,132 ) | 1,847,690 | |||||||||
|
| |||||||||
| CONVERTIBLE BONDS — 22.03% | Principal Amount | |||||||||
| Holding Company — 9.62% | ||||||||||
| 451102AB3 | Icahn Enterprises LP 4.000%, 08/15/2013# | $ | 1,370,000 | 1,287,800 | ||||||
|
| |||||||||
| Oil and Gas Extraction — 12.41% | ||||||||||
| 165167CB1 | Chesapeake Energy Corp. 2.250%, 12/15/2038# | 2,000,000 | 1,660,000 | |||||||
|
| |||||||||
| TOTAL CONVERTIBLE BONDS (cost $2,931,282) | 2,947,800 | |||||||||
|
| |||||||||
| CORPORATE BONDS — 35.63% | ||||||||||
| Fabricated Metal Product Manufacturing — 15.39% | ||||||||||
| 624758AB4 | Mueller Water Products, Inc. 7.375%, 06/01/2017# | 2,250,000 | 2,058,750 | |||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
133
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Principal | Value | ||||||||
| Utilities — 20.24% | ||||||||||
| 7595554 | Veolia Environnement SA 4.875%, 05/28/2013# | $ | 2,000,000 | $ | 2,708,176 | |||||
|
| |||||||||
| TOTAL CORPORATE BONDS (cost $4,996,778) | 4,766,926 | |||||||||
|
| |||||||||
| WARRANTS — 0.01% | Shares | |||||||||
| Utilities — 0.01% | ||||||||||
| CHC/WS | China Hydroelectric Corporation | |||||||||
| Expiration Date: 1/25/2014 Exercise Price: $15.00* | 40,000 | 1,680 | ||||||||
|
| |||||||||
TOTAL WARRANTS | 1,680 | |||||||||
|
| |||||||||
| SHORT-TERM INVESTMENTS — 5.53% | Principal Amount | |||||||||
| Commerical Paper — 1.78% | ||||||||||
| 039711750 | U.S. Bank N.A. 0.010%, 01/03/2012 | $ | 239,000 | 239,000 | ||||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 3.75% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%b | 501,000 | 501,000 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $740,000) | 740,000 | |||||||||
|
| |||||||||
| INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 6.74% | ||||||||||
| Investment Companies — 6.74% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 901,049 | 901,049 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $901,049) | 901,049 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 83.75% (cost $11,929,241) | $ | 11,205,145 | ||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
134
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Investments — December 31, 2011 — (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, 2011. Total loaned securities had a market value of $843,279 at December 31, 2011.
# — All or a portion of the shares have been committed as collateral for written option contracts.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
The accompanying notes are an integral part of these financial statements.
135
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | COMMON STOCKS — 0.07% | Shares | Value | |||||||
| Chemical Manufacturing — 0.01% | ||||||||||
| CCJ | Cameco Corp. | 100 | $ | 1,805 | ||||||
|
| |||||||||
| Credit Intermediation and Related Activities — 0.06% | ||||||||||
| BAC | Bank of America Corp. | 2,600 | 14,456 | |||||||
|
| |||||||||
| TOTAL COMMON STOCKS (cost $28,966) | 16,261 | |||||||||
|
| |||||||||
| CONVERTIBLE BONDS — 51.57% | Principal Amount | |||||||||
| Computer and Electronic Product Manufacturing — 5.07% | ||||||||||
| 502413AW7 | L-3 Communications Holdings, Inc. 3.000%, 08/01/2035# | $ | 1,250,000 | 1,203,125 | ||||||
|
| |||||||||
| Holding Company — 5.86% | ||||||||||
| 451102AB3 | Icahn Enterprises LP 4.000%, 08/15/2013# | 1,480,000 | 1,391,200 | |||||||
|
| |||||||||
| Mining (except Oil and Gas) — 5.40% | ||||||||||
| 608753AB5 | Molycorp Inc. | |||||||||
| 3.250%, 06/15/2016, Acquired 11/15/2011 –11/18/2011 at $1,390,338^#¦ | 1,500,000 | 1,282,500 | ||||||||
|
| |||||||||
| Nonmetallic Mineral Product Manufacturing — 8.75% | ||||||||||
| 69073TAQ6 | Owens-Brockway Glass Container 3.000%, 06/01/2015, Acquired 7/06/2011 –11/14/2011 at $2,175,589#¦ | 2,220,000 | 2,075,700 | |||||||
|
| |||||||||
| Oil and Gas Extraction — 13.12% | ||||||||||
| B4MT4X3 | Arcan Resources Ltd. 6.250%, 02/28/2016# | 987,000 | 948,973 | |||||||
| Chesapeake Energy Corp. | ||||||||||
| 165167BW6 | 2.750%, 11/15/2035# | 100,000 | 98,250 | |||||||
| 165167CB1 | 2.250%, 12/15/2038# | 2,490,000 | 2,066,700 | |||||||
|
| |||||||||
| 3,113,923 | ||||||||||
|
| |||||||||
| Performing Arts, Spectator Sports, and Related Industries — 4.49% | ||||||||||
| 538034AB5 | Live Nation Entertainment, Inc. | |||||||||
| 2.875%, 07/15/2027# | 1,200,000 | 1,066,500 | ||||||||
|
| |||||||||
| Professional, Scientific, and Technical Services — 0.41% | ||||||||||
| 159864AB3 | Charles River Laboratories International, Inc. | |||||||||
| 2.250%, 06/15/2013# | 100,000 | 97,375 | ||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
136
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Principal Amount | Value | ||||||||
| Real Estate — 8.47% | ||||||||||
| 029169AA7 | American Real Estate | |||||||||
| 4.000%, 08/15/2013, Acquired 6/24/2011 –10/26/2011 at $331,261#¦ | $ | 350,000 | $ | 329,000 | ||||||
| 10112RAK0 | Boston Properties LP 2.875%, 02/15/2037# | 100,000 | 100,500 | |||||||
| 345550AN7 | Forest City Enterprises, Inc. | |||||||||
| 4.250%, 08/15/2018, Acquired 10/25/2011 –11/14/2011 at $1,626,383#¦ | 1,800,000 | 1,579,500 | ||||||||
|
| |||||||||
| 2,009,000 | ||||||||||
|
| |||||||||
| TOTAL CONVERTIBLE BONDS (cost $12,735,907) | 12,239,323 | |||||||||
|
| |||||||||
| CORPORATE BONDS — 35.33% | ||||||||||
| Administrative and Support Services — 1.44% | ||||||||||
| Corrections Corp. of America | ||||||||||
22025YAJ9 | 6.750%, 01/31/2014# | 100,000 | 100,500 | |||||||
22025YAK6 | 7.750%, 06/01/2017# | 220,000 | 239,800 | |||||||
|
| |||||||||
| 340,300 | ||||||||||
|
| |||||||||
| Ambulatory Health Care Services — 5.23% | ||||||||||
| 23918KAL2 | Davita, Inc. | |||||||||
| 6.375%, 11/01/2018# | 1,210,000 | 1,241,763 | ||||||||
|
| |||||||||
| Amusement, Gambling, and Recreation Industries — 2.14% | ||||||||||
| 517834AB3 | Las Vegas Sands Corp. | |||||||||
| 6.375%, 02/15/2015# | 500,000 | 507,500 | ||||||||
|
| |||||||||
| Chemical Manufacturing — 1.07% | ||||||||||
| 785583AC9 | Sabine Pass LNG L P | |||||||||
| 7.250%, 11/30/2013# | 250,000 | 253,750 | ||||||||
|
| |||||||||
| Mining (except Oil and Gas) — 8.06% | ||||||||||
| 20854PAD1 | Consol Energy, Inc. | |||||||||
| 8.000%, 04/01/2017# | 1,500,000 | 1,650,000 | ||||||||
| 704549AH7 | Peabody Energy Corp. | |||||||||
| 6.500%, 09/15/2020# | 250,000 | 263,750 | ||||||||
|
| |||||||||
| 1,913,750 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
137
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
| Identifier | Principal Amount | Value | ||||||||
| Oil and Gas Extraction — 5.07% | ||||||||||
| 039252AB7 | Arcan Resources Ltd. | |||||||||
| 6.500%, 10/31/2018# | $ | 167,000 | $ | 157,369 | ||||||
| Harvest Operations Corp. | ||||||||||
| B45KCB7 | 7.250%, 09/30/2013# | 200,000 | 200,442 | |||||||
| B45H5R5 | 7.500%, 05/31/2015# | 830,000 | 845,357 | |||||||
|
| |||||||||
| 1,203,168 | ||||||||||
|
| |||||||||
| Real Estate — 4.51% | ||||||||||
| The Rouse Company LP | ||||||||||
| 779273AF8 | 7.200%, 09/15/2012# | 273,000 | 278,119 | |||||||
| V77928AA4 | 6.750%, 05/01/2013# | 200,000 | 202,750 | |||||||
| 779273AG6 | 5.375%, 11/26/2013# | 590,000 | 588,525 | |||||||
|
| |||||||||
| 1,069,394 | ||||||||||
|
| |||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities — 0.30% | ||||||||||
| 52107QAC9 | Lazard Group LLC | |||||||||
| 7.125%, 05/15/2015# | 67,000 | 71,998 | ||||||||
|
| |||||||||
| Utilities — 7.51% | ||||||||||
| 131347BP0 | Calpine Corp. | |||||||||
| 7.250%, 10/15/2017, Acquired 11/15/2011 at $1,020,000#¦ | 1,000,000 | 1,055,000 | ||||||||
| 629377AX0 | NRG Energy, Inc. | |||||||||
| 7.375%, 01/15/2017#^ | 700,000 | 728,000 | ||||||||
|
| |||||||||
| 1,783,000 | ||||||||||
|
| |||||||||
| TOTAL CORPORATE BONDS (cost $8,316,056) | 8,384,623 | |||||||||
|
| |||||||||
MUNICIPAL BONDS — 5.45% | ||||||||||
| Air Transportation — 5.45% | ||||||||||
| Branson Missouri Regional Airport Transportation Development District | ||||||||||
| 105459AB7 | 6.000%, 07/01/2025* | 2,000,000 | 740,000 | |||||||
| 105459AC5 | 6.000%, 07/01/2037* | 1,500,000 | 555,000 | |||||||
|
| |||||||||
| TOTAL MUNICIPAL BONDS (cost $2,189,298) | 1,295,000 | |||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
138
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Investments — December 31, 2011 — (Continued)
Identifier | SHORT-TERM INVESTMENTS — 6.84% | Principal | Value | |||||||
| Commerical Paper — 1.87% | ||||||||||
| 039711750 | U.S. Bank N.A. | |||||||||
| 0.010%, 01/03/2012 | $ | 443,000 | $ | 443,000 | ||||||
|
| |||||||||
| Shares | ||||||||||
| Money Market Funds — 4.97% | ||||||||||
| FIGXX | Fidelity Institutional Government Portfolio — Class I, 0.01%#b | 1,179,000 | 1,179,000 | |||||||
|
| |||||||||
| TOTAL SHORT-TERM INVESTMENTS (cost $1,622,000) | 1,622,000 | |||||||||
|
| |||||||||
| INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 5.17% | ||||||||||
| Investment Companies — 5.17% | ||||||||||
| Mount Vernon Securities Lending Trust — Prime Portfolio, 0.23%b | 1,226,400 | 1,226,400 | ||||||||
|
| |||||||||
| TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $1,226,400) | 1,226,400 | |||||||||
|
| |||||||||
| TOTAL INVESTMENTS — 104.43% (cost $26,118,627) | $ | 24,783,607 | ||||||||
|
| |||||||||
Percentages are stated as a percent of net assets.
^ — This security or a portion of this security was out on loan at December 31, 2011. Total loaned securities had a market value of $1,198,504 at December 31, 2011.
# — All or a portion of the shares have been committed as collateral for written option contracts.
b — The rate quoted is the annualized seven-day yield as of December 31, 2011.
¦ — Restricted Security restricted to institutional investors (144A Securities); the percentage of net assets comprised of 144a securities was 26.6%.
* — Subsequent to December 31, 2011, default occurred and the securities ceased to accrue income.
The accompanying notes are an integral part of these financial statements.
139
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2011
| Identifier | PUT OPTIONS WRITTEN | Contracts* | Value | |||||||
| Chemical Manufacturing | ||||||||||
| Calgon Carbon Corporation | ||||||||||
| CCC 120421P00012500 | Expiration: April 2012, Exercise Price: $12.50 | 120 | $ | 3,900 | ||||||
|
| |||||||||
| Computer and Electronic Product Manufacturing | ||||||||||
| Itron, Inc. | ||||||||||
| ITRI 130119P00030000 | Expiration: January 2013, Exercise Price: $30.00 | 100 | 38,500 | |||||||
|
| |||||||||
| Electrical Equipment, Appliance, and Component Manufacturing | ||||||||||
| Franklin Electric Co., Inc. | ||||||||||
| FELE 120616P00040000 | Expiration: June 2012, Exercise Price: $40.00 | 25 | 9,750 | |||||||
|
| |||||||||
| Fabricated Metal Product Manufacturing | ||||||||||
| Danaher Corporation | ||||||||||
| DHR 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 40 | 100 | |||||||
| DHR 120121P00045000 | Expiration: January 2012, Exercise Price: $45.00 | 145 | 7,250 | |||||||
| Pentair, Inc. | ||||||||||
| PNR 120519P00030000 | Expiration: May 2012, Exercise Price: $30.00 | 120 | 20,400 | |||||||
|
| |||||||||
| 27,750 | ||||||||||
|
| |||||||||
| Funds, Trusts, and Other Financial Vehicles | ||||||||||
| PowerShares Water Resources ETF | ||||||||||
| PHO 120317P00015000 | Expiration: March 2012, Exercise Price: $15.00 | 100 | 3,750 | |||||||
| PHO 120317P00016000 | Expiration: March 2012, Exercise Price: $16.00 | 775 | 46,500 | |||||||
| PHO 120317P00017000 | Expiration: March 2012, Exercise Price: $17.00 | 300 | 28,500 | |||||||
| PHO 120616P00015000 | Expiration: June 2012, Exercise Price: $15.00 | 600 | 45,000 | |||||||
| PHO 120616P00016000 | Expiration: June 2012, Exercise Price: $16.00 | 300 | 31,500 | |||||||
|
| |||||||||
| 155,250 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
140
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Heavy and Civil Engineering Construction | ||||||||||
| Aegion Corp. | ||||||||||
| AEGN 120616P00012500 | Expiration: June 2012, Exercise Price: $12.50 | 100 | $ | 8,000 | ||||||
|
| |||||||||
| Machinery Manufacturing | ||||||||||
| ESCO Technologies, Inc. | ||||||||||
| ESE 120317P00030000 | Expiration: March 2012, Exercise Price: $30.00 | 185 | 49,950 | |||||||
| ITT Corporation | ||||||||||
| ITT1 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 36 | 810 | |||||||
| ITT1 120121P00052500 | Expiration: January 2012, Exercise Price: $52.50 | 40 | 32,200 | |||||||
| Lindsay Corporation | ||||||||||
| LNN 120317P00045000 | Expiration: March 2012, Exercise Price: $45.00 | 50 | 6,875 | |||||||
| Pall Corporation | ||||||||||
| PLL 120317P00040000 | Expiration: March 2012, Exercise Price: $40.00 | 205 | 3,075 | |||||||
| PLL 120317P00045000 | Expiration: March 2012, Exercise Price: $45.00 | 25 | 1,062 | |||||||
|
| |||||||||
| 93,972 | ||||||||||
|
| |||||||||
| Professional, Scientific, and Technical Services | ||||||||||
| AECOM Technology Corp. | ||||||||||
| ACM 120317P00017500 | Expiration: March 2012, Exercise Price: $17.50 | 150 | 6,000 | |||||||
| ACM 120317P00020000 | Expiration: March 2012, Exercise Price: $20.00 | 20 | 2,150 | |||||||
| URS Corporation | ||||||||||
| URS 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 90 | 43,650 | |||||||
| URS 120421P00030000 | Expiration: April 2012, Exercise Price: $30.00 | 60 | 6,900 | |||||||
|
| |||||||||
| 58,700 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
141
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Water Infrastructure Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Utilities | ||||||||||
| Cadiz Inc. | ||||||||||
| CDZI 120218P00010000 | Expiration: February 2012, Exercise Price: $10.00 | 125 | $ | 13,750 | ||||||
| CDZI 120519P00007500 | Expiration: May 2012, Exercise Price: $7.50 | 100 | 5,500 | |||||||
| Cia de Saneamento Basico do Estado de Sao Pavlo — ADR | ||||||||||
| SBS 120421P00045000 | Expiration: April 2012, Exercise Price: $45.00 | 45 | 4,500 | |||||||
| Companhia Energetica de Minas Gerais — ADR | ||||||||||
| CIG1 120616P00015000 | Expiration: June 2012, Exercise Price: $15.00 | 100 | 25,000 | |||||||
| PICO Holdings, Inc. | ||||||||||
| PICO 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 318 | 138,330 | |||||||
| PICO 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 54 | 50,220 | |||||||
| Veolia Environnement — ADR | ||||||||||
| VE 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 15 | 5,925 | |||||||
| VE 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 14 | 19,530 | |||||||
| VE 120421P00015000 | Expiration: April 2012, Exercise Price: $15.00 | 300 | 123,000 | |||||||
|
| |||||||||
| 385,755 | ||||||||||
|
| |||||||||
| Waste Management and Remediation Services | ||||||||||
| Clean Harbors, Inc. | ||||||||||
| CLH 120421P00045000 | Expiration: April 2012, Exercise Price: $45.00 | 50 | 2,500 | |||||||
| Waste Management, Inc. | ||||||||||
| WM 120121P00032500 | Expiration: January 2012, Exercise Price: $32.50 | 200 | 12,000 | |||||||
|
| |||||||||
| 14,500 | ||||||||||
|
| |||||||||
TOTAL PUT OPTIONS WRITTEN | $ | 796,077 | ||||||||
|
| |||||||||
* — 100 Shares Per Contract.
ADR — American Depository Receipt.
ETF — Exchange Traded Fund.
The accompanying notes are an integral part of these financial statements.
142
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | PUT OPTIONS WRITTEN | Contracts* | Value | |||||||
| Administrative and Support Services | ||||||||||
| Expedia, Inc. | ||||||||||
| EXPE1 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 30 | $ | 225 | ||||||
| EXPE1 120121P00024000 | Expiration: January 2012, Exercise Price: $24.00 | 19 | 190 | |||||||
| EXPE1 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 45 | 14,175 | |||||||
|
| |||||||||
| 14,590 | ||||||||||
|
| |||||||||
| Amusement, Gambling, and Recreation Industries | ||||||||||
| Las Vegas Sands Corp. | ||||||||||
| LVS 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 8 | 28 | |||||||
| LVS 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 3 | 30 | |||||||
| The Walt Disney Company | ||||||||||
| DIS 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 36 | 1,062 | |||||||
| DIS 120121P00036000 | Expiration: January 2012, Exercise Price: $36.00 | 13 | 579 | |||||||
| DIS 130119P00030000 | Expiration: January 2013, Exercise Price: $30.00 | 15 | 3,210 | |||||||
|
| |||||||||
| 4,909 | ||||||||||
|
| |||||||||
| Asset Management | ||||||||||
| BlackRock, Inc. | ||||||||||
| BLK 120121P00170000 | Expiration: January 2012, Exercise Price: $170.00 | 3 | 712 | |||||||
| BLK 120421P00150000 | Expiration: April 2012, Exercise Price: $150.00 | 3 | 1,755 | |||||||
| BLK 130119P00150000 | Expiration: January 2013, Exercise Price: $150.00 | 5 | 8,700 | |||||||
| Brookfield Asset Management Inc. — Class A | ||||||||||
| BAM 120317P00025000 | Expiration: March 2012, Exercise Price: $25.00 | 41 | 2,255 | |||||||
| BAM 120317P00030000 | Expiration: March 2012, Exercise Price: $30.00 | 20 | 5,550 | |||||||
The accompanying notes are an integral part of these financial statements.
143
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Asset Management — (Continued) | ||||||||||
| Cohen & Steers, Inc. | ||||||||||
| CNS 120616P00020000 | Expiration: June 2012, Exercise Price: $20.00 | 50 | $ | 3,625 | ||||||
| CNS 120616P00025000 | Expiration: June 2012, Exercise Price: $25.00 | 30 | 5,625 | |||||||
| Franklin Resources, Inc. | ||||||||||
| BEN 120121P00103000 | Expiration: January 2012, Exercise Price: $103.00 | 7 | 5,040 | |||||||
| BEN 120121P00108000 | Expiration: January 2012, Exercise Price: $108.00 | 5 | 6,050 | |||||||
| Invesco Limited | ||||||||||
| IVZ 120121P00020000 | Expiration: January 2012, Exercise Price: $20.00 | 25 | 1,688 | |||||||
| IVZ 120421P00015000 | Expiration: April 2012, Exercise Price: $15.00 | 100 | 5,750 | |||||||
| IVZ 120421P00017500 | Expiration: April 2012, Exercise Price: $17.50 | 50 | 5,250 | |||||||
| T. Rowe Price Group, Inc. | ||||||||||
| TROW 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 30 | 600 | |||||||
|
| |||||||||
| 52,600 | ||||||||||
|
| |||||||||
| Beverage and Tobacco Product Manufacturing | ||||||||||
| Anheuser-Busch InBev NV — ADR | ||||||||||
| BUD 120616P00050000 | Expiration: June 2012, Exercise Price: $50.00 | 38 | 4,180 | |||||||
| Diageo plc — ADR | ||||||||||
| DEO 120121P00075000 | Expiration: January 2012, Exercise Price: $75.00 | 15 | 75 | |||||||
| DEO 120421P00075000 | Expiration: April 2012, Exercise Price: $75.00 | 10 | 1,225 | |||||||
|
| |||||||||
| 5,480 | ||||||||||
|
| |||||||||
| Broadcasting (except Internet) | ||||||||||
| Comcast Corp. — Class A | ||||||||||
| CMCSA 130119P00020000 | Expiration: January 2013, Exercise Price: $20.00 | 115 | 21,160 | |||||||
The accompanying notes are an integral part of these financial statements.
144
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Broadcasting (except Internet) — (Continued) | ||||||||||
| Discovery Communications Inc. — Class A | ||||||||||
| DISCA 120421P00035000 | Expiration: April 2012, Exercise Price: $35.00 | 37 | $ | 2,868 | ||||||
| DISCA 120421P00040000 | Expiration: April 2012, Exercise Price: $40.00 | 15 | 3,075 | |||||||
| Grupo Televisa S.A. | ||||||||||
| TV 120121P00020000 | Expiration: January 2012, Exercise Price: $20.00 | 95 | 1,900 | |||||||
| Time Warner Cable Inc. | ||||||||||
| TWC 130119P00050000 | Expiration: January 2013, Exercise Price: $50.00 | 17 | 6,290 | |||||||
| TWC 130119P00055000 | Expiration: January 2013, Exercise Price: $55.00 | 21 | 10,080 | |||||||
|
| |||||||||
| 45,373 | ||||||||||
|
| |||||||||
| Building Material and Garden Equipment and Supplies Dealers | ||||||||||
| The Sherwin-Williams Company | ||||||||||
| SHW 120121P00070000 | Expiration: January 2012, Exercise Price: $70.00 | 2 | 10 | |||||||
| SHW 120121P00075000 | Expiration: January 2012, Exercise Price: $75.00 | 26 | 130 | |||||||
| SHW 130119P00070000 | Expiration: January 2013, Exercise Price: $70.00 | 7 | 2,275 | |||||||
|
| |||||||||
| 2,415 | ||||||||||
|
| |||||||||
| Chemical Manufacturing | ||||||||||
| Cameco Corporation | ||||||||||
| CCJ 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 9 | 4,050 | |||||||
| CCJ 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 25 | 17,625 | |||||||
| CCJ 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 7 | 8,365 | |||||||
| CCJ 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 6 | 10,230 | |||||||
| CCJ 130119P00015000 | Expiration: January 2013, Exercise Price: $15.00 | 14 | 2,765 | |||||||
The accompanying notes are an integral part of these financial statements.
145
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Chemical Manufacturing — (Continued) | ||||||||||
| The Estee Lauder Companies Inc. — Class A | ||||||||||
| EL 130119P00080000 | Expiration: January 2013, Exercise Price: $80.00 | 27 | $ | 13,095 | ||||||
| LyondellBasell Industries NV — Class A | ||||||||||
| LYB 120121P00028500 | Expiration: January 2012, Exercise Price: $28.50 | 30 | 600 | |||||||
| LYB 120616P00028500 | Expiration: June 2012, Exercise Price: $28.50 | 30 | 7,875 | |||||||
| Novartis AG — ADR | ||||||||||
| NVS 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 15 | 37 | |||||||
| NVS 130119P00050000 | Expiration: January 2013, Exercise Price: $50.00 | 20 | 6,200 | |||||||
| Sanofi-Aventis — ADR | ||||||||||
| SNY 120317P00031000 | Expiration: March 2012, Exercise Price: $31.00 | 30 | 1,500 | |||||||
| SNY 120317P00035000 | Expiration: March 2012, Exercise Price: $35.00 | 14 | 1,855 | |||||||
| Sigma-Aldrich Corp. | ||||||||||
| SIAL 120121P00060000 | Expiration: January 2012, Exercise Price: $60.00 | 20 | 1,550 | |||||||
| SIAL 120421P00060000 | Expiration: April 2012, Exercise Price: $60.00 | 7 | 2,275 | |||||||
| SIAL 120421P00065000 | Expiration: April 2012, Exercise Price: $65.00 | 15 | 8,250 | |||||||
|
| |||||||||
| 86,272 | ||||||||||
|
| |||||||||
| Computer and Electronic Product Manufacturing | ||||||||||
| Rockwell Collins, Inc. | ||||||||||
| COL 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 50 | 1,375 | |||||||
| COL 120421P00050000 | Expiration: April 2012, Exercise Price: $50.00 | 5 | 838 | |||||||
|
| |||||||||
| 2,213 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
146
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Couriers and Messengers | ||||||||||
| FedEx Corp. | ||||||||||
| FDX 120121P00075000 | Expiration: January 2012, Exercise Price: $75.00 | 2 | $ | 59 | ||||||
| FDX 120121P00080000 | Expiration: January 2012, Exercise Price: $80.00 | 7 | 669 | |||||||
| FDX 120121P00085000 | Expiration: January 2012, Exercise Price: $85.00 | 2 | 577 | |||||||
| FDX 130119P00075000 | Expiration: January 2013, Exercise Price: $75.00 | 13 | 9,945 | |||||||
| FDX 140118P00075000 | Expiration: January 2014, Exercise Price: $75.00 | 4 | 4,790 | |||||||
| United Parcel Service — Class B | ||||||||||
| UPS 120121P00065000 | Expiration: January 2012, Exercise Price: $65.00 | 10 | 65 | |||||||
| UPS 120121P00067500 | Expiration: January 2012, Exercise Price: $67.50 | 8 | 124 | |||||||
| UPS 130119P00060000 | Expiration: January 2013, Exercise Price: $60.00 | 12 | 4,050 | |||||||
| UPS 130119P00065000 | Expiration: January 2013, Exercise Price: $65.00 | 12 | 5,610 | |||||||
|
| |||||||||
| 25,889 | ||||||||||
|
| |||||||||
| Credit Intermediation and Related Activities | ||||||||||
| American Express Company | ||||||||||
| AXP 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 15 | 113 | |||||||
| AXP 130119P00045000 | Expiration: January 2013, Exercise Price: $45.00 | 18 | 9,765 | |||||||
| Annaly Capital Management Inc. | ||||||||||
| NLY 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 43 | 193 | |||||||
| NLY 130119P00015000 | Expiration: January 2013, Exercise Price: $15.00 | 65 | 11,602 | |||||||
| Bank of America Corp. | ||||||||||
| BAC 120121P00010000 | Expiration: January 2012, Exercise Price: $10.00 | 11 | 4,895 | |||||||
| BAC 120121P00012500 | Expiration: January 2012, Exercise Price: $12.50 | 66 | 45,870 | |||||||
The accompanying notes are an integral part of these financial statements.
147
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Credit Intermediation and Related Activities — (Continued) | ||||||||||
| Bank of America Corp. — (Continued) | ||||||||||
| BAC 120218P00010000 | Expiration: February 2012, Exercise Price: $10.00 | 23 | $ | 10,235 | ||||||
| BAC 120519P00010000 | Expiration: May 2012, Exercise Price: $10.00 | 40 | 17,900 | |||||||
| BAC 130119P00005000 | Expiration: January 2013, Exercise Price: $5.00 | 60 | 5,670 | |||||||
| The Bank Of New York Mellon Corp. | ||||||||||
| BK 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 36 | 18,360 | |||||||
| BK 130119P00020000 | Expiration: January 2013, Exercise Price: $20.00 | 30 | 10,125 | |||||||
| Fidelity National Information Services, Inc. | ||||||||||
| FIS 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 6 | 111 | |||||||
| M&T Bank Corporation | ||||||||||
| MTB 120121P00065000 | Expiration: January 2012, Exercise Price: $65.00 | 6 | 135 | |||||||
| MTB 120121P00075000 | Expiration: January 2012, Exercise Price: $75.00 | 3 | 495 | |||||||
| MTB 120121P00080000 | Expiration: January 2012, Exercise Price: $80.00 | 7 | 3,010 | |||||||
| MTB 130119P00085000 | Expiration: January 2013, Exercise Price: $85.00 | 6 | 9,750 | |||||||
| Northern Trust Corp. | ||||||||||
| NTRS 120121P00045000 | Expiration: January 2012, Exercise Price: $45.00 | 28 | 14,980 | |||||||
| NTRS 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 8 | 8,280 | |||||||
| NTRS 130119P00035000 | Expiration: January 2013, Exercise Price: $35.00 | 6 | 2,160 | |||||||
| State Street Corporation | ||||||||||
| STT 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 36 | 4,446 | |||||||
| STT 130119P00030000 | Expiration: January 2013, Exercise Price: $30.00 | 10 | 2,715 | |||||||
| SunTrust Banks, Inc. | ||||||||||
| STI 120121P00021000 | Expiration: January 2012, Exercise Price: $21.00 | 15 | 5,062 | |||||||
The accompanying notes are an integral part of these financial statements.
148
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Credit Intermediation and Related Activities — (Continued) | ||||||||||
| U.S. Bancorp | ||||||||||
| USB 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 36 | $ | 234 | ||||||
| USB 120121P00024000 | Expiration: January 2012, Exercise Price: $24.00 | 10 | 120 | |||||||
| USB 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 8 | 176 | |||||||
| USB 130119P00020000 | Expiration: January 2013, Exercise Price: $20.00 | 40 | 5,640 | |||||||
|
| |||||||||
| 192,042 | ||||||||||
|
| |||||||||
| Data Processing, Hosting and Related Services | ||||||||||
| CoreLogic, Inc. | ||||||||||
| CLGX 120421P00010000 | Expiration: April 2012, Exercise Price: $10.00 | 185 | 9,250 | |||||||
| Google Inc. | ||||||||||
| GOOG 120121P00520000 | Expiration: January 2012, Exercise Price: $520.00 | 2 | 35 | |||||||
|
| |||||||||
| 9,285 | ||||||||||
|
| |||||||||
| Defense | ||||||||||
| CACI International Inc. — Class A | ||||||||||
| CACI 120317P00050000 | Expiration: March 2012, Exercise Price: $50.00 | 7 | 857 | |||||||
| Northrop Grumman Corp. | ||||||||||
| NOC 130119P00050000 | Expiration: January 2013, Exercise Price: $50.00 | 10 | 3,850 | |||||||
| NOC 130119P00052500 | Expiration: January 2013, Exercise Price: $52.50 | 5 | 2,325 | |||||||
| NOC 130119P00055000 | Expiration: January 2013, Exercise Price: $55.00 | 22 | 12,430 | |||||||
|
| |||||||||
| 19,462 | ||||||||||
|
| |||||||||
| Depository Credit Intermediation | ||||||||||
| HDFC Bank Ltd. — ADR | ||||||||||
| HDB 120121P00031000 | Expiration: January 2012, Exercise Price: $31.00 | 10 | 4,600 | |||||||
| HDB 120421P00025000 | Expiration: April 2012, Exercise Price: $25.00 | 9 | 1,507 | |||||||
The accompanying notes are an integral part of these financial statements.
149
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Depository Credit Intermediation — (Continued) | ||||||||||
| HDFC Bank Ltd. — (Continued) | ||||||||||
| HDB 120421P00030000 | Expiration: April 2012, Exercise Price: $30.00 | 6 | $ | 2,400 | ||||||
|
| |||||||||
| 8,507 | ||||||||||
|
| |||||||||
| Equity Fund | ||||||||||
| Utilities HOLDRs Trust | ||||||||||
| UTH 120218P00100000 | Expiration: February 2012, Exercise Price: $100.00+ | 5 | 25 | |||||||
|
| |||||||||
| Fabricated Metal Product Manufacturing | ||||||||||
| McDermott International, Inc. | ||||||||||
| MDR 130119P00007500 | Expiration: January 2013, Exercise Price: $7.50 | 200 | 17,000 | |||||||
|
| |||||||||
| Food Manufacturing | ||||||||||
| Archer–Daniels–Midland Company | ||||||||||
| ADM 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 13 | 85 | |||||||
| ADM 120121P00028000 | Expiration: January 2012, Exercise Price: $28.00 | 11 | 517 | |||||||
| ADM 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 33 | 5,214 | |||||||
| Bunge Limited | ||||||||||
| BG 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 3 | 45 | |||||||
| BG 120121P00060000 | Expiration: January 2012, Exercise Price: $60.00 | 14 | 4,410 | |||||||
| BG 120121P00065000 | Expiration: January 2012, Exercise Price: $65.00 | 5 | 3,900 | |||||||
| BG 130119P00065000 | Expiration: January 2013, Exercise Price: $65.00 | 6 | 7,350 | |||||||
| BG 140118P00055000 | Expiration: January 2014, Exercise Price: $55.00 | 10 | 9,900 | |||||||
| ConAgra Foods, Inc. | ||||||||||
| CAG 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 46 | 115 | |||||||
| CAG 120121P00024000 | Expiration: January 2012, Exercise Price: $24.00 | 20 | 50 | |||||||
| CAG 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 12 | 2,250 | |||||||
The accompanying notes are an integral part of these financial statements.
150
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Food Manufacturing — (Continued) | ||||||||||
| Dean Foods Company | ||||||||||
| DF 130119P00007500 | Expiration: January 2013, Exercise Price: $7.50 | 40 | $ | 2,400 | ||||||
| Unilever NV | ||||||||||
| UN 120218P00030000 | Expiration: February 2012, Exercise Price: $30.00 | 75 | 1,875 | |||||||
|
| |||||||||
| 38,111 | ||||||||||
|
| |||||||||
| Funds, Trusts, and Other Financial Vehicles | ||||||||||
| Market Vectors Gold Miners ETF | ||||||||||
| GDX 130119P00040000 | Expiration: January 2013, Exercise Price: $40.00 | 42 | 13,230 | |||||||
|
| |||||||||
| General Merchandise Stores | ||||||||||
| Sears Holdings Corporation | ||||||||||
| SHLD1 120121P00060000 | Expiration: January 2012, Exercise Price: $60.00 | 24 | 67,200 | |||||||
| SHLD1 130119P00055000 | Expiration: January 2013, Exercise Price: $55.00 | 12 | 37,200 | |||||||
|
| |||||||||
| 104,400 | ||||||||||
|
| |||||||||
| Holding Company | ||||||||||
| Berkshire Hathaway Inc. — Class B | ||||||||||
| BRKB 120121P00070000 | Expiration: January 2012, Exercise Price: $70.00 | 27 | 486 | |||||||
| BRKB 120121P00072500 | Expiration: January 2012, Exercise Price: $72.50 | 4 | 144 | |||||||
| BRKB 130119P00070000 | Expiration: January 2013, Exercise Price: $70.00 | 10 | 5,500 | |||||||
| Leucadia National Corporation | ||||||||||
| LUK 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 10 | 2,350 | |||||||
| LUK 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 10 | 7,300 | |||||||
| LUK 120317P00025000 | Expiration: March 2012, Exercise Price: $25.00 | 30 | 9,300 | |||||||
| LUK 120616P00022500 | Expiration: June 2012, Exercise Price: $22.50 | 50 | 13,250 | |||||||
|
| |||||||||
| 38,330 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
151
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Insurance Carriers and Related Activities | ||||||||||
| American International Group, Inc. | ||||||||||
| AIG 120121P00028000 | Expiration: January 2012, Exercise Price: $28.00 | 10 | $ | 4,850 | ||||||
| AIG 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 35 | 23,800 | |||||||
| AIG 120218P00028000 | Expiration: February 2012, Exercise Price: $28.00 | 12 | 5,910 | |||||||
| AIG 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 25 | 13,250 | |||||||
| China Life Insurance Co., Limited — ADR | ||||||||||
| LFC 120121P00047500 | Expiration: January 2012, Exercise Price: $47.50 | 4 | 4,240 | |||||||
| LFC 130119P00035000 | Expiration: January 2013, Exercise Price: $35.00 | 32 | 15,680 | |||||||
| Fidelity National Financial, Inc. — Class A | ||||||||||
| FNF 120317P00015000 | Expiration: March 2012, Exercise Price: $15.00 | 10 | 450 | |||||||
Greenlight Capital Re, Ltd. — Class A | ||||||||||
| GLRE 120519P00020000 | Expiration: May 2012, Exercise Price: $20.00 | 75 | 5,062 | |||||||
| GLRE 120519P00022500 | Expiration: May 2012, Exercise Price: $22.50 | 25 | 3,250 | |||||||
| Loews Corp. | ||||||||||
| L 120317P00035000 | Expiration: March 2012, Exercise Price: $35.00 | 14 | 1,295 | |||||||
| Marsh & McLennan Companies, Inc. | ||||||||||
| MMC 120121P00027500 | Expiration: January 2012, Exercise Price: $27.50 | 58 | 290 | |||||||
| MMC 140118P00025000 | Expiration: January 2014, Exercise Price: $25.00 | 16 | 4,040 | |||||||
| The Progressive Corporation | ||||||||||
| PGR 120121P00020000 | Expiration: January 2012, Exercise Price: $20.00 | 51 | 3,825 | |||||||
| PGR 120218P00020000 | Expiration: February 2012, Exercise Price: $20.00 | 25 | 2,938 | |||||||
| PGR 130119P00017500 | Expiration: January 2013, Exercise Price: $17.50 | 29 | 4,205 | |||||||
|
| |||||||||
| 93,085 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
152
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Management of Companies and Enterprises | ||||||||||
| JPMorgan Chase & Co. | ||||||||||
| JPM 120317P00038000 | Expiration: March 2012, Exercise Price: $38.00 | 46 | $ | 25,415 | ||||||
| JPM 130119P00028000 | Expiration: January 2013, Exercise Price: $28.00 | 15 | 5,325 | |||||||
| The Goldman Sachs Group, Inc. | ||||||||||
| GS 120121P00130000 | Expiration: January 2012, Exercise Price: $130.00 | 6 | 23,730 | |||||||
| GS 120121P00140000 | Expiration: January 2012, Exercise Price: $140.00 | 1 | 4,955 | |||||||
| GS 120121P00150000 | Expiration: January 2012, Exercise Price: $150.00 | 5 | 29,687 | |||||||
|
| |||||||||
| 89,112 | ||||||||||
|
| |||||||||
| Medical Equipment and Supplies Manufacturing | ||||||||||
| Becton, Dickinson and Company | ||||||||||
| BDX 120317P00070000 | Expiration: March 2012, Exercise Price: $70.00 | 10 | 1,375 | |||||||
|
| |||||||||
| Merchant Wholesalers, Nondurable Goods | ||||||||||
| Beam, Inc. | ||||||||||
| BEAM1 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 7 | 87 | |||||||
| Molson Coors Brewing Company — Class B | ||||||||||
| TAP 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 30 | 300 | |||||||
| TAP 120421P00040000 | Expiration: April 2012, Exercise Price: $40.00 | 22 | 2,365 | |||||||
|
| |||||||||
| 2,752 | ||||||||||
|
| |||||||||
| Mining (except Oil and Gas) | ||||||||||
| Barrick Gold Corporation | ||||||||||
| ABX 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 9 | 185 | |||||||
| ABX 120121P00045000 | Expiration: January 2012, Exercise Price: $45.00 | 10 | 1,340 | |||||||
| ABX 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 7 | 3,448 | |||||||
The accompanying notes are an integral part of these financial statements.
153
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Mining (except Oil and Gas) — (Continued) | ||||||||||
| Barrick Gold Corporation — (Continued) | ||||||||||
| ABX 130119P00040000 | Expiration: January 2013, Exercise Price: $40.00 | 12 | $ | 5,280 | ||||||
| ABX 140118P00045000 | Expiration: January 2014, Exercise Price: $45.00 | 9 | 8,483 | |||||||
| Franco-Nevada Corporation | ||||||||||
| FNV 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 12 | 2,820 | |||||||
| FNV 120721P00035000 | Expiration: July 2012, Exercise Price: $35.00 | 40 | 9,100 | |||||||
| Freeport-McMoRan Copper & Gold Inc. | ||||||||||
| FCX 130119P00029500 | Expiration: January 2013, Exercise Price: $29.50 | 30 | 12,300 | |||||||
| Harry Winston Diamond Corp. | ||||||||||
| HWD 120218P00012500 | Expiration: February 2012, Exercise Price: $12.50 | 110 | 22,275 | |||||||
| HWD 120818P00010000 | Expiration: August 2012, Exercise Price: $10.00 | 50 | 6,750 | |||||||
| Newmont Mining Corporation | ||||||||||
| NEM 120121P00052500 | Expiration: January 2012, Exercise Price: $52.50 | 20 | 400 | |||||||
| NEM 130119P00060000 | Expiration: January 2013, Exercise Price: $60.00 | 10 | 8,425 | |||||||
| Rio Tinto PLC — ADR | ||||||||||
| RIO 120121P00060000 | Expiration: January 2012, Exercise Price: $60.00 | 19 | 21,090 | |||||||
| RIO 130119P00060000 | Expiration: January 2013, Exercise Price: $60.00 | 12 | 20,280 | |||||||
| Royal Gold, Inc. | ||||||||||
| RGLD 130119P00060000 | Expiration: January 2013, Exercise Price: $60.00 | 4 | 2,880 | |||||||
| Vale SA | ||||||||||
| VALE 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 80 | 46,400 | |||||||
|
| |||||||||
| 171,456 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
154
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011— (Continued)
| Identifier | Contracts* | Value | ||||||||
| Miscellaneous Manufacturing | ||||||||||
| 3M Co. | ||||||||||
| MMM 130119P00065000 | Expiration: January 2013, Exercise Price: $65.00 | 10 | $ | 4,125 | ||||||
| MMM 130119P00067500 | Expiration: January 2013, Exercise Price: $67.50 | 23 | 10,982 | |||||||
| International Game Technology | ||||||||||
| IGT 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 74 | 740 | |||||||
| IGT 130119P00012500 | Expiration: January 2013, Exercise Price: $12.50 | 47 | 4,700 | |||||||
|
| |||||||||
| 20,547 | ||||||||||
|
| |||||||||
| Motion Picture and Sound Recording Industries | ||||||||||
| DreamWorks Animation SKG, Inc. — Class A | ||||||||||
| DWA 120317P00020000 | Expiration: March 2012, Exercise Price: $20.00 | 40 | 14,800 | |||||||
| DWA 120616P00015000 | Expiration: June 2012, Exercise Price: $15.00 | 80 | 8,800 | |||||||
| News Corporation | ||||||||||
| NWS 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 30 | 75 | |||||||
| NWS 120121P00016000 | Expiration: January 2012, Exercise Price: $16.00 | 125 | 625 | |||||||
|
| |||||||||
| 24,300 | ||||||||||
|
| |||||||||
| Nonmetallic Mineral Product Manufacturing | ||||||||||
| Owens–Illinois, Inc. | ||||||||||
| OI 130119P00015000 | Expiration: January 2013, Exercise Price: $15.00 | 100 | 18,000 | |||||||
|
| |||||||||
| Non-Store Retailers | ||||||||||
| Amazon.com, Inc. | ||||||||||
| AMZN 120121P00160000 | Expiration: January 2012, Exercise Price: $160.00 | 2 | 388 | |||||||
| AMZN 120121P00165000 | Expiration: January 2012, Exercise Price: $165.00 | 2 | 620 | |||||||
| AMZN 120121P00170000 | Expiration: January 2012, Exercise Price: $170.00 | 2 | 950 | |||||||
The accompanying notes are an integral part of these financial statements.
155
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Non-Store Retailers — (Continued) | ||||||||||
| Amazon.com, Inc. — (Continued) | ||||||||||
| AMZN 130119P00180000 | Expiration: January 2013, Exercise Price: $180.00 | 4 | $ | 12,860 | ||||||
| eBay, Inc. | ||||||||||
| EBAY 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 35 | 350 | |||||||
| Sotheby’s | ||||||||||
| BID 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 35 | 22,575 | |||||||
|
| |||||||||
| 37,743 | ||||||||||
|
| |||||||||
| Oil and Gas and Consumable Fuels | ||||||||||
| China Petroleum and Chemical Corporation — ADR | ||||||||||
| SNP 120121P00090000 | Expiration: January 2012, Exercise Price: $90.00 | 11 | 55 | |||||||
| SNP 120421P00080000 | Expiration: April 2012, Exercise Price: $80.00 | 9 | 878 | |||||||
| PetroChina Company Limited — ADR | ||||||||||
| PTR 120121P00105000 | Expiration: January 2012, Exercise Price: $105.00 | 2 | 35 | |||||||
| PTR 120121P00120000 | Expiration: January 2012, Exercise Price: $120.00 | 2 | 280 | |||||||
| PTR 130119P00115000 | Expiration: January 2013, Exercise Price: $115.00 | 5 | 6,375 | |||||||
| PTR 130119P00125000 | Expiration: January 2013, Exercise Price: $125.00 | 8 | 14,280 | |||||||
|
| |||||||||
| 21,903 | ||||||||||
|
| |||||||||
| Oil and Gas Extraction | ||||||||||
| Canadian Natural Resources Ltd. | ||||||||||
| CNQ 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 10 | 475 | |||||||
| CNQ 120121P00037500 | Expiration: January 2012, Exercise Price: $37.50 | 16 | 2,080 | |||||||
| CNQ 120121P00040000 | Expiration: January 2012, Exercise Price: $40.00 | 12 | 3,600 | |||||||
| CNQ 130119P00030000 | Expiration: January 2013, Exercise Price: $30.00 | 13 | 4,355 | |||||||
The accompanying notes are an integral part of these financial statements.
156
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Oil and Gas Extraction — (Continued) | ||||||||||
| CNOOC Limited — ADR | ||||||||||
| CEO 120317P00170000 | Expiration: March 2012, Exercise Price: $170.00 | 8 | $ | 8,120 | ||||||
| CEO 120317P00175000 | Expiration: March 2012, Exercise Price: $175.00 | 2 | 2,470 | |||||||
| Encana Corporation | ||||||||||
| ECA 120121P00029000 | Expiration: January 2012, Exercise Price: $29.00 | 4 | 4,200 | |||||||
| ECA 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 41 | 47,150 | |||||||
| ECA 130119P00017500 | Expiration: January 2013, Exercise Price: $17.50 | 25 | 6,812 | |||||||
| ECA 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 13 | 10,270 | |||||||
| Imperial Oil Ltd. | ||||||||||
| IMO 120218P00040000 | Expiration: February 2012, Exercise Price: $40.00 | 28 | 2,030 | |||||||
| Petroleo Brasileiro S.A. — ADR | ||||||||||
| PBR 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 47 | 25,028 | |||||||
| PBR 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 16 | 6,680 | |||||||
| PBR 130119P00035000 | Expiration: January 2013, Exercise Price: $35.00 | 8 | 8,920 | |||||||
| SandRidge Energy Inc. | ||||||||||
| SD 130119P00007500 | Expiration: January 2013, Exercise Price: $7.50 | 100 | 19,900 | |||||||
| Sasol Ltd. — ADR | ||||||||||
| SSL 120317P00040000 | Expiration: March 2012, Exercise Price: $40.00 | 12 | 1,200 | |||||||
| SSL 120317P00045000 | Expiration: March 2012, Exercise Price: $45.00 | 20 | 4,500 | |||||||
| SSL 120616P00035000 | Expiration: June 2012, Exercise Price: $35.00 | 10 | 1,400 | |||||||
| SSL 120616P00040000 | Expiration: June 2012, Exercise Price: $40.00 | 9 | 2,115 | |||||||
The accompanying notes are an integral part of these financial statements.
157
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Oil and Gas Extraction — (Continued) | ||||||||||
| StatoilHydro ASA — ADR | ||||||||||
| STO 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 60 | $ | 600 | ||||||
| STO 120421P00025000 | Expiration: April 2012, Exercise Price: $25.00 | 15 | 2,325 | |||||||
| Suncor Energy, Inc. | ||||||||||
| SU 120121P00035000 | Expiration: January 2012, Exercise Price: $35.00 | 83 | 51,460 | |||||||
| Total SA — ADR | ||||||||||
| TOT 120121P00045000 | Expiration: January 2012, Exercise Price: $45.00 | 5 | 75 | |||||||
| TOT 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 37 | 3,052 | |||||||
|
| |||||||||
| 218,817 | ||||||||||
|
| |||||||||
| Performing Arts, Spectator Sports, and Related Industries | ||||||||||
| Live Nation Entertainment, Inc. | ||||||||||
| LYV 120121P00010000 | Expiration: January 2012, Exercise Price: $10.00 | 100 | 17,250 | |||||||
|
| |||||||||
| Pipeline Transportation | ||||||||||
| The Williams Companies, Inc. | ||||||||||
| WMB 130119P00020000 | Expiration: January 2013, Exercise Price: $20.00 | 80 | 9,080 | |||||||
| WMB 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 15 | 2,010 | |||||||
|
| |||||||||
| 11,090 | ||||||||||
|
| |||||||||
| Primary Metal Manufacturing | ||||||||||
| Commercial Metals Company | ||||||||||
| CMC 120317P00010000 | Expiration: March 2012, Exercise Price: $10.00 | 32 | 240 | |||||||
| CMC 120317P00011000 | Expiration: March 2012, Exercise Price: $11.00 | 60 | 1,200 | |||||||
| Mueller Industries, Inc. | ||||||||||
| MLI 120616P00035000 | Expiration: June 2012, Exercise Price: $35.00 | 42 | 10,710 | |||||||
|
| |||||||||
| 12,150 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
158
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Professional, Scientific, and Technical Services | ||||||||||
| Automatic Data Processing, Inc. | ||||||||||
| ADP 120121P00045000 | Expiration: January 2012, Exercise Price: $45.00 | 20 | $ | 100 | ||||||
| ADP 130119P00050000 | Expiration: January 2013, Exercise Price: $50.00 | 16 | 6,320 | |||||||
| Charles River Laboratories International, Inc. | ||||||||||
| CRL 120218P00030000 | Expiration: February 2012, Exercise Price: $30.00 | 53 | 16,563 | |||||||
| FTI Consulting, Inc. | ||||||||||
| FCN 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 12 | 90 | |||||||
|
| |||||||||
| 23,073 | ||||||||||
|
| |||||||||
| Rail Transportation | ||||||||||
| Canadian National Railway Company | ||||||||||
| CNI 120421P00065000 | Expiration: April 2012, Exercise Price: $65.00 | 9 | 945 | |||||||
| CNI 120721P00065000 | Expiration: July 2012, Exercise Price: $65.00 | 29 | 6,525 | |||||||
| Canadian Pacific Railway Limited | ||||||||||
| CP 120317P00055000 | Expiration: March 2012, Exercise Price: $55.00 | 28 | 1,400 | |||||||
| CSX Corp. | ||||||||||
| CSX 120121P00019170 | Expiration: January 2012, Exercise Price: $19.17 | 21 | 189 | |||||||
| CSX 120121P00020000 | Expiration: January 2012, Exercise Price: $20.00 | 15 | 308 | |||||||
| CSX 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 9 | 1,364 | |||||||
| CSX 130119P00020000 | Expiration: January 2013, Exercise Price: $20.00 | 50 | 13,050 | |||||||
| Norfolk Southern Corporation | ||||||||||
| NSC 120121P00050000 | Expiration: January 2012, Exercise Price: $50.00 | 6 | 15 | |||||||
| NSC 120121P00055000 | Expiration: January 2012, Exercise Price: $55.00 | 4 | 10 | |||||||
| NSC 120121P00060000 | Expiration: January 2012, Exercise Price: $60.00 | 3 | 15 | |||||||
The accompanying notes are an integral part of these financial statements.
159
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
Rail Transportation — (Continued) | ||||||||||
| Norfolk Southern Corporation — (Continued) | ||||||||||
| NSC 120121P00065000 | Expiration: January 2012, Exercise Price: $65.00 | 7 | $ | 105 | ||||||
| NSC 130119P00062500 | Expiration: January 2013, Exercise Price: $62.50 | 13 | 6,760 | |||||||
Union Pacific Corporation | ||||||||||
| UNP 120121P00072500 | Expiration: January 2012, Exercise Price: $72.50 | 2 | 3 | |||||||
| UNP 120121P00080000 | Expiration: January 2012, Exercise Price: $80.00 | 1 | 2 | |||||||
| UNP 120121P00085000 | Expiration: January 2012, Exercise Price: $85.00 | 7 | 42 | |||||||
| UNP 120121P00087500 | Expiration: January 2012, Exercise Price: $87.50 | 5 | 47 | |||||||
| UNP 130119P00090000 | Expiration: January 2013, Exercise Price: $90.00 | 4 | 3,100 | |||||||
|
| |||||||||
| 33,880 | ||||||||||
|
| |||||||||
| Real Estate | ||||||||||
| CB Richard Ellis Group, Inc. — Class A | ||||||||||
| CBG 120317P00020000 | Expiration: March 2012, Exercise Price: $20.00 | 50 | 24,500 | |||||||
| Forest City Enterprises, Inc. — Class A | ||||||||||
| FCEA 120317P00010000 | Expiration: March 2012, Exercise Price: $10.00 | 80 | 2,200 | |||||||
| General Growth Properties, Inc. | ||||||||||
| GGP 120121P00012500 | Expiration: January 2012, Exercise Price: $12.50 | 20 | 100 | |||||||
| GGP 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 40 | 2,000 | |||||||
| GGP1 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 24 | 504 | |||||||
| iShares MSCI Japan Index Fund | ||||||||||
| EWJ 120121P00010000 | Expiration: January 2012, Exercise Price: $10.00 | 130 | 11,895 | |||||||
| EWJ 130119P00009000 | Expiration: January 2013, Exercise Price: $9.00 | 130 | 10,855 | |||||||
| Jones Lang LaSalle Incorporated | ||||||||||
| JLL 120317P00070000 | Expiration: March 2012, Exercise Price: $70.00 | 25 | 27,375 | |||||||
The accompanying notes are an integral part of these financial statements.
160
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
Real Estate — (Continued) | ||||||||||
| Jones Lang LaSalle Incorporated — (Continued) | ||||||||||
| JLL 120317P00080000 | Expiration: March 2012, Exercise Price: $80.00 | 6 | $ | 11,580 | ||||||
| JLL 120616P00050000 | Expiration: June 2012, Exercise Price: $50.00 | 4 | 1,460 | |||||||
| Public Storage | ||||||||||
| PSA 120317P00105000 | Expiration: March 2012, Exercise Price: $105.00 | 6 | 480 | |||||||
| The St. Joe Company | ||||||||||
| JOE 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 10 | 7,900 | |||||||
| Vornado Realty Trust | ||||||||||
| VNO 130119P00080000 | Expiration: January 2013, Exercise Price: $80.00 | 33 | 42,570 | |||||||
|
| |||||||||
| 143,419 | ||||||||||
|
| |||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities | ||||||||||
| AllianceBernstein Holding LP | ||||||||||
| AB 120121P00017500 | Expiration: January 2012, Exercise Price: $17.50 | 45 | 20,025 | |||||||
| AB 120421P00012500 | Expiration: April 2012, Exercise Price: $12.50 | 94 | 8,930 | |||||||
| CBOE Holdings Inc. | ||||||||||
| CBOE 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 47 | 1,410 | |||||||
| CBOE 120317P00024000 | Expiration: March 2012, Exercise Price: $24.00 | 22 | 1,650 | |||||||
| CBOE 120317P00025000 | Expiration: March 2012, Exercise Price: $25.00 | 12 | 1,290 | |||||||
| The Charles Schwab Corp. | ||||||||||
| SCHW 120121P00017500 | Expiration: January 2012, Exercise Price: $17.50 | 52 | 32,240 | |||||||
| SCHW 130119P00010000 | Expiration: January 2013, Exercise Price: $10.00 | 10 | 1,325 | |||||||
| SCHW 130119P00012500 | Expiration: January 2013, Exercise Price: $12.50 | 55 | 14,437 | |||||||
| SCHW 130119P00015000 | Expiration: January 2013, Exercise Price: $15.00 | 50 | 20,500 | |||||||
The accompanying notes are an integral part of these financial statements.
161
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities — (Continued) | ||||||||||
| CME Group Inc. | ||||||||||
| CME 120121P00260000 | Expiration: January 2012, Exercise Price: $260.00 | 2 | $ | 3,490 | ||||||
| CME 120121P00270000 | Expiration: January 2012, Exercise Price: $270.00 | 3 | 7,950 | |||||||
| CME 120121P00280000 | Expiration: January 2012, Exercise Price: $280.00 | 3 | 10,785 | |||||||
| Federated Investors, Inc. — Class B | ||||||||||
| FII 120121P00020000 | Expiration: January 2012, Exercise Price: $20.00 | 28 | 13,720 | |||||||
| FII 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 12 | 8,820 | |||||||
| FII 120421P00017500 | Expiration: April 2012, Exercise Price: $17.50 | 28 | 8,470 | |||||||
| FII 120421P00020000 | Expiration: April 2012, Exercise Price: $20.00 | 30 | 15,750 | |||||||
| Greenhill & Co., Inc. | ||||||||||
| GHL 120317P00030000 | Expiration: March 2012, Exercise Price: $30.00 | 16 | 1,560 | |||||||
| GHL 120616P00030000 | Expiration: June 2012, Exercise Price: $30.00 | 15 | 3,300 | |||||||
| Legg Mason, Inc. | ||||||||||
| LM 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 33 | 19,635 | |||||||
| LM 120218P00030000 | Expiration: February 2012, Exercise Price: $30.00 | 16 | 9,600 | |||||||
| LM 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 20 | 9,800 | |||||||
|
| |||||||||
| 214,687 | ||||||||||
|
| |||||||||
| Support Activities for Mining | ||||||||||
| Halliburton Company | ||||||||||
| HAL 130119P00035000 | Expiration: January 2013, Exercise Price: $35.00 | 70 | 48,825 | |||||||
|
| |||||||||
| Support Activities for Transportation | ||||||||||
| Grupo Aeroportuario del Pacifico SAB de CV — ADR | ||||||||||
| PAC 120721P00030000 | Expiration: July 2012, Exercise Price: $30.00 | 11 | 1,238 | |||||||
The accompanying notes are an integral part of these financial statements.
162
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Support Activities for Transportation — (Continued) | ||||||||||
| Grupo Aeroportuario del Sureste S.A.B. de C.V. — ADR | ||||||||||
| ASR 120317P00050000 | Expiration: March 2012, Exercise Price: $50.00 | 12 | $ | 1,140 | ||||||
|
| |||||||||
| 2,378 | ||||||||||
|
| |||||||||
| Telecommunications | ||||||||||
| Vodafone Group PLC — ADR | ||||||||||
| VOD 130119P00022500 | Expiration: January 2013, Exercise Price: $22.50 | 45 | 5,625 | |||||||
| VOD 130119P00023000 | Expiration: January 2013, Exercise Price: $23.00 | 18 | 2,385 | |||||||
| VOD 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 25 | 3,563 | |||||||
|
| |||||||||
| 11,573 | ||||||||||
|
| |||||||||
| Transportation Equipment Manufacturing | ||||||||||
| Boeing Co. | ||||||||||
| BA 120218P00070000 | Expiration: February 2012, Exercise Price: $70.00 | 22 | 4,411 | |||||||
| Federal-Mogul Corp. | ||||||||||
| FDML 120421P00015000 | Expiration: April 2012, Exercise Price: $15.00 | 100 | 15,750 | |||||||
| FDML 120721P00012500 | Expiration: July 2012, Exercise Price: $12.50 | 35 | 8,750 | |||||||
| Oshkosh Corporation | ||||||||||
| OSK 120121P00029000 | Expiration: January 2012, Exercise Price: $29.00 | 45 | 34,200 | |||||||
| OSK 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 40 | 25,800 | |||||||
| Toyota Motor Corporation — ADR | ||||||||||
| TM 120121P00070000 | Expiration: January 2012, Exercise Price: $70.00 | 8 | 3,260 | |||||||
| TM 120121P00080000 | Expiration: January 2012, Exercise Price: $80.00 | 11 | 15,235 | |||||||
| TM 130119P00067500 | Expiration: January 2013, Exercise Price: $67.50 | 5 | 4,050 | |||||||
| TM 130119P00070000 | Expiration: January 2013, Exercise Price: $70.00 | 7 | 6,702 | |||||||
|
| |||||||||
| 118,158 | ||||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
163
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| U.S. Equity Exchanges | ||||||||||
| The NASDAQ OMX Group, Inc. | ||||||||||
| NDAQ 120121P00017500 | Expiration: January 2012, Exercise Price: $17.50 | 10 | $ | 25 | ||||||
| NDAQ 120121P00020000 | Expiration: January 2012, Exercise Price: $20.00 | 28 | 140 | |||||||
| NDAQ 120121P00022500 | Expiration: January 2012, Exercise Price: $22.50 | 20 | 250 | |||||||
| NYSE Euronext | ||||||||||
| NYX 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 12 | 378 | |||||||
| NYX 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 10 | 3,925 | |||||||
| NYX 130119P00025000 | Expiration: January 2013, Exercise Price: $25.00 | 56 | 15,708 | |||||||
|
| |||||||||
| 20,426 | ||||||||||
|
| |||||||||
| Utilities | ||||||||||
| Cadiz Inc. | ||||||||||
| CDZI 120519P00010000 | Expiration: May 2012, Exercise Price: $10.00 | 160 | 26,400 | |||||||
| Calpine Corp. | ||||||||||
| CPN 120121P00012500 | Expiration: January 2012, Exercise Price: $12.50 | 30 | 75 | |||||||
| CPN 120121P00015000 | Expiration: January 2012, Exercise Price: $15.00 | 54 | 270 | |||||||
| Cia de Saneamento Basico do Estado de Sao Pavlo — ADR | ||||||||||
| SBS 120421P00045000 | Expiration: April 2012, Exercise Price: $45.00 | 6 | 600 | |||||||
| SBS 120721P00050000 | Expiration: July 2012, Exercise Price: $50.00 | 40 | 13,300 | |||||||
| FirstEnergy Corp. | ||||||||||
| FE 120421P00039000 | Expiration: April 2012, Exercise Price: $39.00 | 10 | 625 | |||||||
| GenOn Energy, Inc. | ||||||||||
| GEN 120218P00004000 | Expiration: February 2012, Exercise Price: $4.00 | 125 | 17,187 | |||||||
The accompanying notes are an integral part of these financial statements.
164
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
| Identifier | Contracts* | Value | ||||||||
| Utilities — (Continued) | ||||||||||
| Huaneng Power International, Inc. — ADR | ||||||||||
| HNP 120218P00020000 | Expiration: February 2012, Exercise Price: $20.00 | 82 | $ | 4,715 | ||||||
| Korea Electric Power Corp. — ADR | ||||||||||
| KEP 120317P00010000 | Expiration: March 2012, Exercise Price: $10.00 | 130 | 4,225 | |||||||
| National Grid PLC — ADR | ||||||||||
| NGG 120317P00045000 | Expiration: March 2012, Exercise Price: $45.00 | 19 | 1,092 | |||||||
| NRG Energy, Inc. | ||||||||||
| NRG 130119P00020000 | Expiration: January 2013, Exercise Price: $20.00 | 75 | 30,000 | |||||||
| Pepco Holdings, Inc. | ||||||||||
| POM 120218P00017500 | Expiration: February 2012, Exercise Price: $17.50 | 15 | 75 | |||||||
| PICO Holdings, Inc. | ||||||||||
| PICO 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 30 | 13,050 | |||||||
| PICO 120421P00022500 | Expiration: April 2012, Exercise Price: $22.50 | 25 | 6,500 | |||||||
| PICO 120421P00020000 | Expiration: April 2012, Exercise Price: $20.00 | 20 | 2,400 | |||||||
| Utilities Select Sector SPDR Fund | ||||||||||
| XLU 120121P00030000 | Expiration: January 2012, Exercise Price: $30.00 | 30 | 45 | |||||||
| XLU 120121P00031000 | Expiration: January 2012, Exercise Price: $31.00 | 35 | 53 | |||||||
| XLU 130119P00030000 | Expiration: January 2013, Exercise Price: $30.00 | 30 | 4,155 | |||||||
| Veolia Environnement — ADR | ||||||||||
| VE 120121P00025000 | Expiration: January 2012, Exercise Price: $25.00 | 26 | 36,270 | |||||||
| VE 120421P00015000 | Expiration: April 2012, Exercise Price: $15.00 | 58 | 23,780 | |||||||
|
| |||||||||
| 184,817 | ||||||||||
|
| |||||||||
| TOTAL PUT OPTIONS WRITTEN (premiums received ($2,156,278)) | $ | 2,220,949 | ||||||||
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
165
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
The Multi-Disciplinary Portfolio
Portfolio of Options Written — December 31, 2011 — (Continued)
* — 100 Shares Per Contract.
+ — Security is considered illiquid. The aggregate value of such securities is ($25) or (0.00%) of net assets.
ADR — American Depository Receipt.
ETF — Exchange Traded Fund.
The accompanying notes are an integral part of these financial statements.
166
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities
December 31, 2011
| The Internet Portfolio | The Global Portfolio | |||||||
ASSETS: | ||||||||
Investments, at value(1)(2) | $ | 139,108,692 | $ | 4,956,783 | ||||
Cash | — | 51,623 | ||||||
Receivable for contributed capital | 47,458 | 3,300 | ||||||
Receivable for investments sold | 360,186 | — | ||||||
Dividends and interest receivable | 58,798 | 4,797 | ||||||
Other accounts receivable | 99,877 | — | ||||||
Other assets | 13,231 | 2,845 | ||||||
|
|
|
| |||||
Total Assets | 139,688,242 | 5,019,348 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable to Adviser | 111,436 | 4,608 | ||||||
Payable to Trustees and Officers | 2,324 | 97 | ||||||
Payable for collateral received for securities loaned | 34,425,845 | 750,338 | ||||||
Payable for withdrawn capital | 66,290 | 130,971 | ||||||
Accrued expenses and other liabilities | 25,572 | 12,710 | ||||||
|
|
|
| |||||
Total Liabilities | 34,631,467 | 898,724 | ||||||
|
|
|
| |||||
Net Assets | $ | 105,056,775 | $ | 4,120,624 | ||||
|
|
|
| |||||
(1)Cost of investments | $ | 121,073,402 | $ | 5,330,202 | ||||
|
|
|
| |||||
(2)Includes loaned securities with a market value of | $ | 33,119,016 | $ | 711,424 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
167
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities — (Continued)
December 31, 2011
| The Paradigm Portfolio | The Medical Portfolio | |||||||
ASSETS: | ||||||||
Investments, at value(1)(2) | $ | 1,080,941,573 | $ | 28,928,061 | ||||
Receivable for contributed capital | 607,442 | 8,899 | ||||||
Receivable for investments sold | 8,875,214 | — | ||||||
Dividends and interest receivable | 360,075 | 22,366 | ||||||
Other assets | 516,971 | 5,751 | ||||||
|
|
|
| |||||
Total Assets | 1,091,301,275 | 28,965,077 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable to Adviser | 933,815 | 25,601 | ||||||
Payable to Trustees and Officers | 22,206 | 589 | ||||||
Payable for securities purchased | 152,992 | — | ||||||
Payable for collateral received for securities loaned | 242,874,993 | 8,692,682 | ||||||
Payable for withdrawn capital | 2,510,789 | 27,447 | ||||||
Accrued expenses and other liabilities | 179,670 | 12,241 | ||||||
|
|
|
| |||||
Total Liabilities | 246,674,465 | 8,758,560 | ||||||
|
|
|
| |||||
Net Assets | $ | 844,626,810 | $ | 20,206,517 | ||||
|
|
|
| |||||
(1)Cost of investments | $ | 1,167,465,590 | $ | 30,957,483 | ||||
|
|
|
| |||||
(2)Includes loaned securities with a market value of | $ | 232,636,732 | $ | 8,226,952 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
168
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities — (Continued)
December 31, 2011
| The Small Cap Opportunities Portfolio | The Market Opportunities Portfolio | |||||||
ASSETS: | ||||||||
Investments, at value(1)(2) | $ | 102,354,534 | $ | 55,972,026 | ||||
Receivable for contributed capital | 10,553 | 240,572 | ||||||
Receivable for investments sold | 1,620,023 | 62,524 | ||||||
Dividends and interest receivable | 103,483 | 10,451 | ||||||
Other accounts receivable | 20,977 | — | ||||||
Other assets | 25,502 | 6,267 | ||||||
|
|
|
| |||||
Total Assets | 104,135,072 | 56,291,840 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Payable to Adviser | 91,702 | 46,243 | ||||||
Payable to Trustees and Officers | 2,205 | 975 | ||||||
Payable for securities purchased | 1,052,649 | 27,881 | ||||||
Payable for collateral received for securities loaned | 19,628,174 | 12,803,608 | ||||||
Payable for withdrawn capital | 309,427 | 179,772 | ||||||
Accrued expenses and other liabilities | 21,346 | 16,439 | ||||||
|
|
|
| |||||
Total Liabilities | 21,105,503 | 13,074,918 | ||||||
|
|
|
| |||||
Net Assets | $ | 83,029,569 | $ | 43,216,922 | ||||
|
|
|
| |||||
(1)Cost of investments | $ | 104,751,215 | $ | 54,314,567 | ||||
|
|
|
| |||||
(2)Includes loaned securities with a market value of | $ | 19,007,809 | $ | 12,252,215 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
169
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Assets & Liabilities — (Continued)
December 31, 2011
| The Water Infrastructure Portfolio | The Multi- Disciplinary Portfolio | |||||||
ASSETS: | ||||||||
Investments, at value(1)(2) | $ | 11,205,145 | $ | 24,783,607 | ||||
Cash | 3,799,526 | 1,600,374 | ||||||
Receivable for contributed capital | 3,614 | 39,283 | ||||||
Receivable for investments sold | — | 511,677 | ||||||
Dividends and interest receivable | 111,195 | 356,752 | ||||||
Other assets | 2,129 | 2,133 | ||||||
|
|
|
| |||||
Total Assets | 15,121,609 | 27,293,826 | ||||||
|
|
|
| |||||
LIABILITIES: | ||||||||
Written options, at value(3) | 796,077 | 2,220,949 | ||||||
Payable to Adviser | 14,456 | 24,841 | ||||||
Payable to Trustees and Officers | 361 | 315 | ||||||
Payable for securities purchased | — | 30,600 | ||||||
Payable for collateral received for securities loaned | 901,049 | 1,226,400 | ||||||
Payable for withdrawn capital | 20,349 | 41,018 | ||||||
Accrued expenses and other liabilities | 10,126 | 16,246 | ||||||
|
|
|
| |||||
Total Liabilities | 1,742,418 | 3,560,369 | ||||||
|
|
|
| |||||
Net Assets | $ | 13,379,191 | $ | 23,733,457 | ||||
|
|
|
| |||||
(1)Cost of investments | $ | 11,929,241 | $ | 26,118,627 | ||||
|
|
|
| |||||
(2)Includes loaned securities with a market value of | $ | 843,279 | $ | 1,198,504 | ||||
|
|
|
| |||||
(3)Premiums received | $ | 867,666 | $ | 2,156,278 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
170
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
For the Year Ended December 31, 2011
| The Internet Portfolio | The Global Portfolio | |||||||
INVESTMENT INCOME: | ||||||||
Dividends† | $ | 985,218 | $ | 133,899 | ||||
Interest | 164 | 23 | ||||||
Income from securities lending | 116,549 | 11,503 | ||||||
|
|
|
| |||||
Total investment income | 1,101,931 | 145,425 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Investment advisory fees | 1,451,676 | 63,987 | ||||||
Administration fees | 53,149 | 2,361 | ||||||
Professional fees | 13,342 | 8,528 | ||||||
Fund accounting fees | 26,618 | 9,802 | ||||||
Trustees’ and Officers’ fees and expenses | 11,281 | 505 | ||||||
Custodian fees and expenses | 44,379 | 28,664 | ||||||
Other expenses | 5,180 | 245 | ||||||
|
|
|
| |||||
Total expenses | 1,605,625 | 114,092 | ||||||
|
|
|
| |||||
Net investment income (loss) | (503,694 | ) | 31,333 | |||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments and foreign currency | 27,594,634 | (78,538 | ) | |||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (28,538,710 | ) | (941,649 | ) | ||||
|
|
|
| |||||
Net loss on investments | (944,076 | ) | (1,020,187 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | $ | (1,447,770 | ) | $ | (988,854 | ) | ||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 15,004 | $ | 15,133 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
171
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations — (Continued)
For the Year Ended December 31, 2011
| The Paradigm Portfolio | The Medical Portfolio | |||||||
INVESTMENT INCOME: | ||||||||
Dividends† | $ | 15,586,990 | $ | 617,006 | ||||
Interest | 380,451 | 125 | ||||||
Income from securities lending | 3,575,152 | 46,508 | ||||||
|
|
|
| |||||
Total investment income | 19,542,593 | 663,639 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Investment advisory fees | 13,987,715 | 367,307 | ||||||
Administration fees | 515,227 | 13,200 | ||||||
Professional fees | 103,145 | 8,244 | ||||||
Fund accounting fees | 212,493 | 8,974 | ||||||
Trustees’ and Officers’ fees and expenses | 110,246 | 2,884 | ||||||
Custodian fees and expenses | 362,407 | 8,750 | ||||||
Other expenses | 56,235 | 1,345 | ||||||
|
|
|
| |||||
Total expenses | 15,347,468 | 410,704 | ||||||
|
|
|
| |||||
Net investment income | 4,195,125 | 252,935 | ||||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||||||||
Net realized gain on: | ||||||||
Investments and foreign currency | 218,210,349 | 3,620,097 | ||||||
Realized gain distributions received from other investment companies | 8,158 | — | ||||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (376,870,337 | ) | (2,712,697 | ) | ||||
|
|
|
| |||||
Net gain (loss) on investments | (158,651,830 | ) | 907,400 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | $ | (154,456,705 | ) | $ | 1,160,335 | |||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 623,560 | $ | 29,128 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
172
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations — (Continued)
For the Year Ended December 31, 2011
| The Small Cap Opportunities Portfolio | The Market Opportunities Portfolio | |||||||
INVESTMENT INCOME: | ||||||||
Dividends† | $ | 1,563,638 | $ | 823,917 | ||||
Interest | 54 | 169 | ||||||
Income from securities lending | 72,708 | 35,659 | ||||||
|
|
|
| |||||
Total investment income | 1,636,400 | 859,745 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Investment advisory fees | 1,405,090 | 623,318 | ||||||
Administration fees | 52,117 | 22,835 | ||||||
Professional fees | 12,411 | 9,257 | ||||||
Fund accounting fees | 26,159 | 14,632 | ||||||
Trustees’ and Officers’ fees and expenses | 11,272 | 4,880 | ||||||
Custodian fees and expenses | 88,080 | 32,866 | ||||||
Other expenses | 6,819 | 2,533 | ||||||
|
|
|
| |||||
Total expenses | 1,601,948 | 710,321 | ||||||
|
|
|
| |||||
Net investment income | 34,452 | 149,424 | ||||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||||||||
Net realized gain on: | ||||||||
Investments and foreign currency | 18,650,400 | 2,021,563 | ||||||
Realized gain distributions received from other investment companies | — | 3,215 | ||||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (32,965,432 | ) | (5,577,434 | ) | ||||
|
|
|
| |||||
Net loss on investments | (14,315,032 | ) | (3,552,656 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | $ | (14,280,580 | ) | $ | (3,403,232 | ) | ||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 73,214 | $ | 43,129 | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
173
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Operations — (Continued)
For the Year Ended December 31, 2011
| The Water Infrastructure Portfolio | The Multi- Disciplinary Portfolio | |||||||
INVESTMENT INCOME: | ||||||||
Dividends† | $ | 42,999 | $ | — | ||||
Interest | 458,091 | 1,463,413 | ||||||
Income from securities lending | 3,391 | 784 | ||||||
|
|
|
| |||||
Total investment income | 504,481 | 1,464,197 | ||||||
|
|
|
| |||||
EXPENSES: | ||||||||
Investment advisory fees | 218,799 | 191,840 | ||||||
Administration fees | 7,935 | 9,286 | ||||||
Professional fees | 9,055 | 6,999 | ||||||
Fund accounting fees | 6,415 | 19,047 | ||||||
Trustees’ and Officers’ fees and expenses | 1,785 | 1,315 | ||||||
Custodian fees and expenses | 2,869 | 7,029 | ||||||
Other expenses | 1,031 | 208 | ||||||
|
|
|
| |||||
Total expenses | 247,889 | 235,724 | ||||||
|
|
|
| |||||
Net investment income | 256,592 | 1,228,473 | ||||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments and foreign currency | (1,070,774 | ) | (339,894 | ) | ||||
Written option contracts expired or closed | 1,871,473 | 282,926 | ||||||
Net change in unrealized depreciation of: | ||||||||
Investments and foreign currency | (751,685 | ) | (1,410,813 | ) | ||||
Written option contracts | (1,096,692 | ) | (235,278 | ) | ||||
|
|
|
| |||||
Net loss on investments | (1,047,678 | ) | (1,703,059 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | $ | (791,086 | ) | $ | (474,586 | ) | ||
|
|
|
| |||||
† Net of Foreign Taxes Withheld of: | $ | 3,596 | $ | — | ||||
|
|
|
| |||||
The accompanying notes are an integral part of these financial statements.
174
| The Internet Portfolio | The Global Portfolio | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (503,694 | ) | $ | (350,263 | ) | $ | 31,333 | $ | (24,971 | ) | |||||
Net realized gain (loss) on sale of investments and foreign currency | 27,594,634 | 3,608,489 | (78,538 | ) | 621,908 | |||||||||||
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options | (28,538,710 | ) | 18,105,026 | (941,649 | ) | 246,931 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets reasulting from operations | (1,447,770 | ) | 21,363,252 | (988,854 | ) | 843,868 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET DECREASE IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | ||||||||||||||||
Contributions | 4,063,222 | 1,346,460 | 2,103,045 | 1,327,460 | ||||||||||||
Withdrawals | (12,825,630 | ) | (13,061,708 | ) | (2,296,401 | ) | (1,636,790 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from beneficial interest transactions | (8,762,408 | ) | (11,715,248 | ) | (193,356 | ) | (309,330 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | (10,210,178 | ) | 9,648,004 | (1,182,210 | ) | 534,538 | ||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 115,266,953 | 105,618,949 | 5,302,834 | 4,768,296 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 105,056,775 | $ | 115,266,953 | $ | 4,120,624 | $ | 5,302,834 | ||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
175
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets — (Continued)
| The Paradigm Portfolio | The Medical Portfolio | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 4,195,125 | $ | 10,490,238 | $ | 252,935 | $ | 171,404 | ||||||||
Net realized gain (loss) on sale of investments and foreign currency | 218,218,507 | (109,064,403 | ) | 3,620,097 | (219,849 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) of investments and foreign currency | (376,870,337 | ) | 286,372,800 | (2,712,697 | ) | 1,376,880 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (154,456,705 | ) | 187,798,635 | 1,160,335 | 1,328,435 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | ||||||||||||||||
Contributions | 9,416,012 | 12,611,540 | 4,518,994 | 8,554,289 | ||||||||||||
Withdrawals | (257,783,279 | ) | (358,281,150 | ) | (16,164,992 | ) | (5,133,179 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions | (248,367,267 | ) | (345,669,610 | ) | (11,645,998 | ) | 3,421,110 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | (402,823,972 | ) | (157,870,975 | ) | (10,485,663 | ) | 4,749,545 | |||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 1,247,450,782 | 1,405,321,757 | 30,692,180 | 25,942,635 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 844,626,810 | $ | 1,247,450,782 | $ | 20,206,517 | $ | 30,692,180 | ||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
176
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets — (Continued)
The Small Cap Opportunities Portfolio | The Market Opportunities Portfolio | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 34,452 | $ | 34,333 | $ | 149,424 | $ | 330,735 | ||||||||
Net realized gain (loss) on sale of investments, foreign currency, written options, and distributions received from other investment company | 18,650,400 | (589,161 | ) | 2,024,778 | (336,199 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options | (32,965,432 | ) | 20,474,498 | (5,577,434 | ) | 6,168,917 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (14,280,580 | ) | 19,919,670 | (3,403,232 | ) | 6,163,453 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET DECREASE IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | ||||||||||||||||
Contributions | — | 8,900,395 | 1,948,555 | 1,707,965 | ||||||||||||
Withdrawals | (57,834,003 | ) | (73,460,711 | ) | (13,857,653 | ) | (15,461,186 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease in net assets resulting from beneficial interest transactions | (57,834,003 | ) | (64,560,316 | ) | (11,909,098 | ) | (13,753,221 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total decrease in net assets | (72,114,583 | ) | (44,640,646 | ) | (15,312,330 | ) | (7,589,768 | ) | ||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 155,144,152 | 199,784,798 | 58,529,252 | 66,119,020 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 83,029,569 | $ | 155,144,152 | $ | 43,216,922 | $ | 58,529,252 | ||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
177
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Statements of Changes in Net Assets — (Continued)
| The Water Infrastructure Portfolio | The Multi-Disciplinary Portfolio | |||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | |||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 256,592 | $ | 270,250 | $ | 1,228,473 | $ | 60,260 | ||||||||
Net realized gain (loss) on sale of investments, foreign currency and written options | 800,699 | (2,463,151 | ) | (56,968 | ) | 111,002 | ||||||||||
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options | (1,848,377 | ) | 806,163 | (1,646,091 | ) | 154,643 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (791,086 | ) | (1,386,738 | ) | (474,586 | ) | 325,905 | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS: | ||||||||||||||||
Contributions | 1,421,834 | 10,339,696 | 21,350,865 | 3,080,316 | ||||||||||||
Withdrawals | (11,474,644 | ) | (7,936,060 | ) | (1,350,871 | ) | (520,802 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions | (10,052,810 | ) | 2,403,636 | 19,999,994 | 2,559,514 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase (decrease) in net assets | (10,843,896 | ) | 1,016,898 | 19,525,408 | 2,885,419 | |||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 24,223,087 | 23,206,189 | 4,208,049 | 1,322,630 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 13,379,191 | $ | 24,223,087 | $ | 23,733,457 | $ | 4,208,049 | ||||||||
|
|
|
|
|
|
|
| |||||||||
The accompanying notes are an integral part of these financial statements.
178
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
December 31, 2011
1. Organization
The Kinetics Portfolios Trust (the “Trust”) was organized as a Delaware Statutory Trust on March 14, 2000 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company issuing its beneficial interests in series, each series representing a distinct portfolio with its own investment objective and policies. The series currently authorized are: The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio and The Multi-Disciplinary Portfolio (collectively, the “Master Portfolios”). Pursuant to the 1940 Act, the Master Portfolios, are “non-diversified” series of the Trust. The Market Opportunities Portfolio commenced operations on January 31, 2006, The Water Infrastructure Portfolio commenced operations on June 29, 2007 and The Multi-Disciplinary Portfolio commenced operations on February 11, 2008. Each of the remaining Master Portfolios commenced operations on April 28, 2000.
Each Master Portfolio is a Master Investment Portfolio in a master-feeder fund structure. Each Master Portfolio has multiple feeder funds invested in the Master Portfolio. By contributing assets to the Master Portfolio, the feeder funds receive a beneficial interest in the Master Portfolio. The Master Portfolio then invests the contributed assets in portfolio securities and allocates income, gains (losses) and expenses to the feeder funds based on the feeder funds’ proportionate interests in the Master Portfolio.
Each of the Master Portfolios, except for The Multi-Disciplinary Portfolio, seeks to provide investors with long-term capital growth. The Multi-Disciplinary Portfolio seeks to provide investors with total return. The Internet Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in the Internet and Internet-related activities. The Global Portfolio generally invests in the equity securities of foreign companies that have the ability to facilitate an increase in the growth of their traditional business lines and in U.S. companies benefiting from international economic growth. The Paradigm Portfolio invests primarily in the equity securities of U.S. and foreign companies that the investment adviser believes are undervalued and that have high returns on equity and are well positioned to reduce their costs, extend the reach of their distribution channels and experience significant growth in their assets or revenues. The Medical Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in medical research, pharmaceutical treat-
179
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
ments 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 Water Infrastructure Portfolio invests primarily in securities and derivatives issued by U.S. and foreign companies engaged in water infrastructure and natural resources with a specific water theme and related activities. The Multi-Disciplinary Portfolio utilizes a two-part investment strategy, which includes fixed income and derivatives components.
2. Significant Accounting Policies
Security Valuation
Master Portfolio securities that are listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. All equity securities that are traded using the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) are valued using the NASDAQ Official Closing Price (“NOCP”). In the event market quotations are not readily available or if events occur that may materially affect the value of a particular security between the time trading ends on a particular security and the close of regular trading on the NYSE, “fair value” will be determined. 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 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 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 the last quoted sales price. Non-exchange traded options for which over-the-counter quotations are not readily available are valued at the
180
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
mean of the current bid and asked prices. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Other assets and securities for which no quotations are readily available (including restricted securities) will be valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. 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; (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, 2011, 0.00%, 0.05%, 0.05%, 0.00%, 0.00%, 0.00%, and (0.00%) of the net assets of 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 Portfolio, respectively, were fair valued securities.
Repurchase Agreements
Each Master Portfolio may enter into repurchase agreements with banks that are members of the Federal Reserve System or securities dealers who are members of a national securities exchange or are primary dealers in U.S. Government Securities. In connection with transactions in repurchase agreements, it is the Trust’s policy that the Master Portfolio receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 100% of the amount invested by the Master Portfolio in each repurchase agreement. If the seller defaults, and the value of the collateral declines, realization of the collateral by the Master Portfolio may be delayed or limited.
Written Options
The Master Portfolios may write (sell) call or put options for trading or hedging purposes. When a Master Portfolio writes an option, an amount equal to the premium received by the Master Portfolio is included in the Statement of Assets
181
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. By writing the option, the Master Portfolio may become obligated during the term of the option to deliver or purchase the securities underlying the option at the exercise price if the option is exercised. When an option expires on its stipulated expiration date or the Master Portfolio enters into a closing purchase transaction, the Master Portfolio realizes a gain or loss if the cost of the closing transaction differs from the premium received when the option was sold, without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the underlying security (or increases the proceeds on the security sold short) and the Master Portfolio realizes a gain or loss from the sale of the security (or closing of the short sale). As collateral for uncovered written options, the Master Portfolio is required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the exercise price of the purchase obligation for put options or the market value of the instrument underlying the contract for call options.
Foreign Currency Translations
The books and records of the Master Portfolios are maintained in U.S. dollars. For the Master Portfolios, foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities and other assets and liabilities are translated at the exchange rate of such currencies against the U.S. dollar, as provided by an approved pricing service, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Master Portfolios do not isolate and treat as ordinary income that portion of the results of operations arising as a result of changes in the exchange rate from the fluctuations arising from changes in the market prices of securities held during the period. However, for federal income tax purposes, the Master Portfolios do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.
Restricted and Illiquid Securities
The Master Portfolios may invest in restricted securities. These securities are valued by the Master Portfolios after giving due consideration to pertinent
182
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
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, 2011 the following Master Portfolios held securities restricted to institutional investors (144A Securities):
| Market Value | Percentage of Net Assets | |||||||
The Multi-Disciplinary Portfolio | $ | 6,321,700 | 26.64% | |||||
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, 2011, the following Master Portfolios held illiquid securities:
| Market Value | Percentage of Net Assets | |||||||
The Internet Portfolio | $ | 25 | 0.00 | % | ||||
The Global Portfolio | 2,226 | 0.05 | ||||||
The Paradigm Portfolio | 390,741 | 0.05 | ||||||
The Medical Portfolio | 0 | * | 0.00 | |||||
The Small Cap Opportunities Portfolio | 3 | 0.00 | ||||||
The Market Opportunities Portfolio | 34 | 0.00 | ||||||
The Multi-Disciplinary Portfolio | (25 | ) | (0.00 | ) | ||||
| * | Amount is less than $0.50. |
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
183
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
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, 2011, The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio, and The Multi-Disciplinary Portfolio invested approximately 33%, 18%, 29%, 43%, 24%, 30%, 7%, and 5%, 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.
Expense Allocation
Common expenses incurred by the Master Portfolios are allocated among the Master Portfolios (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Master Portfolios, depending on the nature of the expenditure. All expenses incurred by the Master Portfolios are allocated to the feeder funds daily based on their proportionate interests in the respective Master Portfolios.
Federal Income Taxes
Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in a Master Portfolio will be subject to taxation on its share of the Master Portfolio’s ordinary income and capital gains. It is intended that each Master Portfolio’s assets will be managed so an investor in the Master Portfolio can satisfy the requirements of subchapter M of the Internal Revenue Code.
There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax
184
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
returns. As of December 31, 2011, open tax years include the tax years ended December 31, 2008 through 2011. The Master Portfolios are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.
Other
Realized gains and losses on the sale of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recognized on the accrual basis. Other noncash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates.
3. Investment Adviser
Effective May 1, 2011, Kinetics Asset Management LLC, Kinetics Advisers, LLC, and Horizon Asset Management, LLC, together with various affiliates, became wholly-owned subsidiaries of a newly-formed entity, Horizon Kinetics LLC. 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. Under the terms of the Agreements, the Master Portfolios compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio’s average daily net assets.
For the year ended December 31, 2011, The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio and The Multi-Disciplinary Portfolio incurred expenses of $1,451,676, $63,987, $13,987,715, $367,307, $1,405,090, $623,318, $218,799 and $191,840, respectively, pursuant to the Agreements.
For the year ended December 31, 2011, the Trust was allocated $24,000 for the services of the Chief Compliance Officer employed by the Adviser.
185
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
4. Securities Transactions
Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2011 were as follows:
| Purchases | Sales | |||||||||||||||
| U.S. Government | Other | U.S. Government | Other | |||||||||||||
The Internet Portfolio | $ | — | $ | 36,610,679 | $ | — | $ | 47,623,832 | ||||||||
The Global Portfolio | — | 6,718,852 | — | 7,235,070 | ||||||||||||
The Paradigm Portfolio | — | 637,412,978 | — | 874,776,815 | ||||||||||||
The Medical Portfolio | — | 1,309,580 | — | 12,345,179 | ||||||||||||
The Small Cap Opportunities | — | 53,448,516 | — | 110,317,090 | ||||||||||||
The Market Opportunities Portfolio | — | 6,930,420 | — | 22,475,483 | ||||||||||||
The Water Infrastructure Portfolio | — | 8,641,120 | — | 7,235,009 | ||||||||||||
The Multi-Disciplinary Portfolio | — | 27,418,294 | — | 9,354,728 | ||||||||||||
As of December 31, 2011, the cost of investments and unrealized appreciation (depreciation) on investment securities for federal income tax purposes was as follows:
| Net Unrealized Appreciation (Depreciation) | Unrealized Appreciation | Unrealized Depreciation | Tax Cost of Investments | |||||||||||||
The Internet Portfolio | $ | 17,241,778 | $ | 29,946,987 | $ | (12,705,209 | ) | $ | 121,866,914 | |||||||
The Global Portfolio | (385,906 | ) | 136,005 | (521,911 | ) | 5,342,689 | ||||||||||
The Paradigm Portfolio | (118,510,304 | ) | 56,315,800 | (174,826,104 | ) | 1,199,451,877 | ||||||||||
The Medical Portfolio | (2,111,974 | ) | 3,378,592 | (5,490,566 | ) | 31,040,035 | ||||||||||
The Small Cap Opportunities Portfolio | (3,197,974 | ) | 9,626,395 | (12,824,369 | ) | 105,552,508 | ||||||||||
The Market Opportunities Portfolio | (697,630 | ) | 5,867,817 | (6,565,447 | ) | 56,669,656 | ||||||||||
The Water Infrastructure Portfolio | (832,941 | ) | 505,797 | (1,338,738 | ) | 12,041,086 | ||||||||||
The Multi-Disciplinary Portfolio | (766,316 | ) | 1,543,727 | (2,310,043 | ) | 25,555,923 | ||||||||||
186
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
For the year ended December 31, 2011, the Master Portfolios wrote the following options:
| Number of Contracts | Premium Amount | |||||||
The Water Infrastructure Portfolio | ||||||||
Outstanding at the Beginning of the Year | 8,680 | $ | 1,687,618 | |||||
Options Written | 9,503 | 1,608,649 | ||||||
Options Expired | (9,152 | ) | (1,806,260 | ) | ||||
Options Exercised | (3,889 | ) | (551,769 | ) | ||||
Options Closed | (235 | ) | (70,572 | ) | ||||
|
|
|
| |||||
Outstanding at December 31, 2011 | 4,907 | $ | 867,666 | |||||
|
|
|
| |||||
The Multi-Disciplinary Portfolio | ||||||||
Outstanding at the Beginning of the Year | 1,027 | $ | 300,469 | |||||
Options Written | 10,818 | 2,511,994 | ||||||
Options Split | 50 | — | ||||||
Options Exercised | (1,272 | ) | (219,536 | ) | ||||
Options Expired | (1,344 | ) | (275,971 | ) | ||||
Options Closed | (728 | ) | (160,678 | ) | ||||
|
|
|
| |||||
Outstanding at December 31, 2011 | 8,551 | $ | 2,156,278 | |||||
|
|
|
| |||||
5. Portfolio Securities Loaned
As of December 31, 2011, the Master Portfolios had loaned securities that were collateralized by cash. The cash collateral is invested by the custodian in a money market pooled account approved by the Adviser. Although risk is mitigated by the collateral, a Master Portfolio could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. The Master Portfolio receives interest on the collateral received as well as a fee for the securities loaned. The Master Portfolios will continue to receive dividends and interest on all securities loaned. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be accounted for by the Master Portfolios. The value of the securities on loan and the value of the related collateral at December 31, 2011, were as follows:
| Securities | Collateral | |||||||
The Internet Portfolio | $ | 33,119,016 | $ | 34,425,845 | ||||
The Global Portfolio | 711,424 | 750,338 | ||||||
The Paradigm Portfolio | 232,636,732 | 242,874,993 | ||||||
The Medical Portfolio | 8,226,952 | 8,692,682 | ||||||
The Small Cap Opportunities Portfolio | 19,007,809 | 19,628,174 | ||||||
The Market Opportunities Portfolio | 12,252,215 | 12,803,608 | ||||||
The Water Infrastructure Portfolio | 843,279 | 901,049 | ||||||
The Multi-Disciplinary Portfolio | 1,198,504 | 1,226,400 | ||||||
187
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
6. Selected Financial Highlights
Financial highlights for the Master Portfolios were as follows:
| The Internet Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.38 | % | 1.37 | % | 1.37 | % | 1.34 | % | 1.34 | % | ||||||||||
After expense reduction | 1.38 | % | 1.37 | % | 1.37 | % | 1.34 | % | 1.33 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reduction | (0.43 | )% | (0.33 | )% | (0.04 | )% | 1.59 | % | 1.58 | % | ||||||||||
After expense reduction | (0.43 | )% | (0.33 | )% | (0.04 | )% | 1.59 | % | 1.59 | % | ||||||||||
Portfolio turnover rate | 32 | % | 12 | % | 14 | % | 19 | % | 15 | % | ||||||||||
| The Global Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 2.23 | % | 2.43 | % | 2.81 | % | 2.46 | % | 1.99 | % | ||||||||||
After expense reduction | 2.23 | % | 2.43 | % | 2.81 | % | 2.46 | % | 1.98 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reduction | 0.61 | % | (0.51 | )% | (0.74 | )% | 0.83 | % | 3.73 | % | ||||||||||
After expense reduction | 0.61 | % | (0.51 | )% | (0.74 | )% | 0.83 | % | 3.74 | % | ||||||||||
Portfolio turnover rate | 135 | % | 122 | % | 53 | % | 98 | % | 22 | % | ||||||||||
| The Paradigm Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.37 | % | 1.36 | % | 1.36 | % | 1.33 | % | 1.33 | % | ||||||||||
After expense reduction | 1.37 | % | 1.36 | % | 1.36 | % | 1.33 | % | 1.33 | % | ||||||||||
Ratio of net investment income | ||||||||||||||||||||
Before expense reduction | 0.37 | % | 0.83 | % | 1.15 | % | 0.86 | % | 0.75 | % | ||||||||||
After expense reduction | 0.37 | % | 0.83 | % | 1.15 | % | 0.86 | % | 0.75 | % | ||||||||||
Portfolio turnover rate | 58 | % | 7 | % | 15 | % | 34 | % | 8 | % | ||||||||||
188
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
| The Medical Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.40 | % | 1.39 | % | 1.43 | % | 1.42 | % | 1.49 | % | ||||||||||
After expense reduction | 1.40 | % | 1.39 | % | 1.43 | % | 1.42 | % | 1.40 | % | ||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||
Before expense reduction | 0.86 | % | 0.55 | % | 1.14 | % | 1.02 | % | 0.42 | % | ||||||||||
After expense reduction | 0.86 | % | 0.55 | % | 1.14 | % | 1.02 | % | 0.51 | % | ||||||||||
Portfolio turnover rate | 5 | % | 3 | % | 13 | % | 28 | % | 38 | % | ||||||||||
| The Small Cap Opportunities Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.43 | % | 1.42 | % | 1.42 | % | 1.36 | % | 1.34 | % | ||||||||||
After expense reduction | 1.43 | % | 1.42 | % | 1.42 | % | 1.36 | % | 1.31 | % | ||||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||
Before expense reduction | 0.03 | % | 0.02 | % | (0.05 | )% | 0.51 | % | 0.38 | % | ||||||||||
After expense reduction | 0.03 | % | 0.02 | % | (0.05 | )% | 0.51 | % | 0.41 | % | ||||||||||
Portfolio turnover rate | 47 | % | 4 | % | 4 | % | 16 | % | 17 | % | ||||||||||
| The Market Opportunities Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.42 | % | 1.42 | % | 1.42 | % | 1.36 | % | 1.44 | % | ||||||||||
After expense reduction | 1.42 | % | 1.42 | % | 1.42 | % | 1.36 | % | 1.44 | % | ||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||
Before expense reduction | 0.30 | % | 0.56 | % | 0.26 | % | 1.25 | % | 0.61 | % | ||||||||||
After expense reduction | 0.30 | % | 0.56 | % | 0.26 | % | 1.25 | % | 0.61 | % | ||||||||||
Portfolio turnover rate | 14 | % | 12 | % | 14 | % | 77 | % | 14 | % | ||||||||||
189
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
| The Water Infrastructure Portfolio | ||||||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | For the Year Ended December 31, 2008 | June 29, 2007^ through December 31, 2007 | ||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.42 | % | 1.47 | % | 1.49 | % | 1.49 | % | 2.01 | %(1) | ||||||||||
After expense reduction | 1.42 | % | 1.47 | % | 1.49 | % | 1.49 | % | 2.01 | %(1) | ||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||
Before expense reduction | 1.47 | % | 1.04 | % | 0.63 | % | 1.27 | % | 0.96 | %(1) | ||||||||||
After expense reduction | 1.47 | % | 1.04 | % | 0.63 | % | 1.27 | % | 0.96 | %(1) | ||||||||||
Portfolio turnover rate | 69 | % | 111 | % | 45 | % | 66 | % | 7 | % | ||||||||||
| The Multi-Disciplinary Portfolio | ||||||||||||||||
| For the Year Ended December 31, 2011 | For the Year Ended December 31, 2010 | For the Year Ended December 31, 2009 | February 11, 2008^ through December 31, 2008 | |||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Before expense reduction | 1.54 | % | 2.41 | % | 3.66 | % | 5.09 | %(1) | ||||||||
After expense reduction | 1.54 | % | 2.41 | % | 3.66 | % | 5.09 | %(1) | ||||||||
Ratio of net investment income (loss) to average net assets: | ||||||||||||||||
Before expense reduction | 8.00 | % | 2.58 | % | (1.20 | )% | (3.49 | )%(1) | ||||||||
After expense reduction | 8.00 | % | 2.58 | % | (1.20 | )% | (3.49 | )%(1) | ||||||||
Portfolio turnover rate | 74 | % | 38 | % | 77 | % | N/A | (2) | ||||||||
| ^ | Commencement of operations. |
| (1) | Annualized. |
| (2) | The Portfolio did not hold any long-term securities during the period, therefore the portfolio turnover is not applicable. |
190
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
7. Summary of Fair Value Exposure
Various inputs are used in determining the value of the Master Portfolios’ investments. These inputs are summarized in the three broad levels listed below:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
Level 2 — Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair 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.
191
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
The Internet Portfolio
The following is a summary of the inputs used to value The Internet Portfolio’s net assets as of December 31, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Assets^ | ||||||||||||||||||||
Common Stocks | $ | 100,553,634 | $ | 5,088 | (1) | $ | 25 | (2) | $ | 100,558,747 | ||||||||||
Escrow Notes | — | — | — | * | — | * | ||||||||||||||
Rights | 856,849 | — | — | 856,849 | ||||||||||||||||
Short-Term Investments | 208,251 | 3,059,000 | — | 3,267,251 | ||||||||||||||||
Investments Purchased with the Cash | 34,425,845 | — | — | 34,425,845 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total Investments in Securities | $ | 136,044,579 | $ | 3,064,088 | $ | 25 | $ | 139,108,692 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
* Amount is less than $0.50. | ||||||||||||||||
^ See Portfolio of Investments for breakout of investments by industry classification. | ||||||||||||||||
(1) The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: | ||||||||||||||||
Telecommunications | $ | 5,088 | ||||||||||||||
(2) The Common Stocks Level 3 balance consists of the market value of the associated Level 3 investments in the following industry: | ||||||||||||||||
Special Purpose Entity | $ | 25 | ||||||||||||||
Transfers into Level 2 | $ | — | ||||||||||||||
Transfers out of Level 2 | (1,146,960 | ) | ||||||||||||||
|
| |||||||||||||||
Net transfers in and/or out of Level 2 | $ | (1,146,960 | ) | |||||||||||||
|
| |||||||||||||||
Transfers were made out of Level 2 and into Level 1 due to an increase 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, 2010 | $ | 502 | ||||||
Accrued discounts/premiums | — | |||||||
Realized gain (loss) | — | |||||||
Change in unrealized appreciation (depreciation) | (477 | ) | ||||||
Net purchases | — | |||||||
Net sales | — | |||||||
Transfer in and/or out of Level 3 | — | |||||||
|
| |||||||
Balance as of December 31, 2011 | $ | 25 | ||||||
|
| |||||||
192
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
The Global Portfolio
The following is a summary of the inputs used to value The Global Portfolio’s net assets as of December 31, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets^ | ||||||||||||||||
Common Stocks | $ | 3,785,938 | $ | — | $ | 2,226 | (1) | $ | 3,788,164 | |||||||
Preferred Stocks | — | — | — | * | — | * | ||||||||||
Warrants | 281 | — | — | 281 | ||||||||||||
Short-Term Investments | 209,000 | 209,000 | — | 418,000 | ||||||||||||
Investments Purchased with the Cash | 750,338 | — | — | 750,338 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 4,745,557 | $ | 209,000 | $ | 2,226 | $ | 4,956,783 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Amount is less than $0.50. ^ See Portfolio of Investments for breakout of investments by industry classification. | ||||||||||||
(1) The Common Stocks Level 3 balance consists of the market value of the associated Level 3 investments in the following industry: | ||||||||||||
Building Material and Garden Equipment and Supplies Dealers | $ | 2,226 | ||||||||||
For the period ended December 31, 2011, there were no transfers into or out of Level 1 or Level 2. | ||||||||||||
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, 2010 | $ | — | ||||||
Accrued discounts/premiums | — | |||||||
Realized gain (loss) | — | |||||||
Change in unrealized appreciation (depreciation) | 2,226 | |||||||
Net purchases | — | * | ||||||
Net sales | — | |||||||
Transfer in and/or out of Level 3 | — | |||||||
|
| |||||||
Balance as of December 31, 2011 | $ | 2,226 | ||||||
|
| |||||||
| * | Amount is less than $0.50. |
193
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
The Paradigm Portfolio
The following is a summary of the inputs used to value The Paradigm Portfolio’s net assets as of December 31, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets^ | ||||||||||||||||
Common Stocks | $ | 807,767,597 | $ | 564 | (1) | $ | 390,167 | (2) | $ | 808,158,328 | ||||||
Preferred Stocks | — | — | — | * | — | * | ||||||||||
Convertible Bonds | — | 4,055,000 | — | 4,055,000 | ||||||||||||
Corporate Bonds | — | — | 10 | 10 | ||||||||||||
Short-Term Investments | 2,737,242 | 23,116,000 | — | 25,853,242 | ||||||||||||
Investments Purchased with the Cash Proceeds from Securities Lending | 242,874,993 | — | — | 242,874,993 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 1,053,379,832 | $ | 27,171,564 | $ | 390,177 | $ | 1,080,941,573 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Amount is less than $0.50. ^ See Portfolio of Investments for breakout of investments by industry classification. |
| |||||||||||||||
(1) The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industry: |
| |||||||||||||||
Credit Intermediation and Related Activities | $ | 564 | ||
(2) The Common Stocks Level 3 balance consists of the market value of the associated Level 3 investments in the following industry: |
| |||
Building Material and Garden Equipment and Supplies Dealers | $ | 390,167 | ||
Transfers out of Level 1 and into Level 2 | $ | 564 | ||
Transfers out of Level 2 and into Level 3 | (10 | ) | ||
|
| |||
Net transfers in and/or out of Level 2 | $ | 554 | ||
|
| |||
| Transfers were made into Levels 2 and 3 due to a lack of market activity. | ||||
| Transfers between levels are recognized at the end of the reporting period. | ||||
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Description | Investments in Securities | |||
Balance as of December 31, 2010 | $ | — | * | |
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | 390,167 | |||
Net purchases | — | * | ||
Net sales | — | |||
Transfer in and/or out of Level 3 | 10 | |||
|
| |||
Balance as of December 31, 2011 | $ | 390,177 | ||
|
| |||
| * | Amount is less than $0.50. |
194
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
The Medical Portfolio
The following is a summary of the inputs used to value The Medical Portfolio’s net assets as of December 31, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets^ | ||||||||||||||||||||||
Common Stocks | $ | 20,024,541 | $ | — | $ | — | $ | 20,024,541 | ||||||||||||||
Escrow Notes | — | — | — | * | — | * | ||||||||||||||||
Rights | 22,258 | — | — | 22,258 | ||||||||||||||||||
Short-Term Investments | 580 | 188,000 | — | 188,580 | ||||||||||||||||||
Investments Purchased with the Cash | 8,692,682 | — | — | 8,692,682 | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
Total Investment in Securities | $ | 28,740,061 | $ | 188,000 | $ | — | * | $ | 28,928,061 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
| * Amount | is less than $0.50. |
^ See Portfolio of Investments for breakout of investments by industry classification.
For the period ended December 31, 2011, there were no transfers into or out of Level 1 or Level 2. | ||||||||
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, 2010 | $ | — | * | |
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Net purchases | — | |||
Net sales | — | |||
Transfer in and/or out of Level 3 | — | |||
|
| |||
Balance as of December 31, 2011 | $ | — | * | |
|
| |||
| * | Amount is less than $0.50. |
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, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets^ | ||||||||||||||||
Common Stocks | $ | 78,683,654 | $ | 3,162,957 | (1) | $ | — | $ | 81,846,611 | |||||||
Corporate Bonds | — | — | 3 | 3 | ||||||||||||
Rights | 394,436 | — | — | 394,436 | ||||||||||||
Short-Term Investments | 127,310 | 358,000 | — | 485,310 | ||||||||||||
Investments Purchased with the Cash Proceeds from Securities Lending | 19,628,174 | — | — | 19,628,174 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 98,833,574 | $ | 3,520,957 | $ | 3 | $ | 102,354,534 | ||||||||
|
|
|
|
|
|
|
| |||||||||
195
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
^ See Portfolio of Investments for breakout of investments by industry classification. | ||||||||
(1) The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: | ||||||||
Asset Management | $ | 1,321,134 | ||
Oil and Gas Extraction | 1,760,520 | |||
Real Estate | 29,490 | |||
Telecommunications | 51,813 | |||
|
| |||
| $ | 3,162,957 | |||
|
| |||
Transfers into Level 2 | $ | 1,822,300 | ||
Transfers out of Level 2 | (44,604 | ) | ||
|
| |||
Net transfers in and/or out of Level 2 | $ | 1,777,696 | ||
|
| |||
Transfers were made into Level 2 due to a lack of market activity. Transfers were made out of Level 2 and into Level 1 due to an increase 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, 2010 | $ | — | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Net purchases | — | |||
Net sales | — | |||
Transfer in and/or out of Level 3 | 3 | |||
|
| |||
Balance as of December 31, 2011 | $ | 3 | ||
|
| |||
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, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Assets^ | ||||||||||||||||||
Common Stocks | $ | 38,957,883 | $ | 715,662 | (1) | $ | — | $ | 39,673,545 | |||||||||
Exchange Traded Notes | 24,738 | — | — | 24,738 | ||||||||||||||
Mutual Funds | 6,954 | — | — | 6,954 | ||||||||||||||
Short-Term Investments | 1,310,181 | 2,153,000 | — | 3,463,181 | ||||||||||||||
Investments Purchased with the Cash | ||||||||||||||||||
Proceeds from Securities Lending | 12,803,608 | — | — | 12,803,608 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Total Investments in Securities | $ | 53,103,364 | $ | 2,868,662 | $ | — | $ | 55,972,026 | ||||||||||
|
|
|
|
|
|
|
| |||||||||||
196
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
^ See Portfolio of Investments for breakout of common stocks by industry classification | ||||||||||
(1) The Common Stocks Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: | ||||||||||
Asset Management | $ | 414,889 | ||
Credit Intermediation and Related Activities | 34 | |||
Other Exchanges | 300,739 | |||
|
| |||
| $ | 715,662 | |||
|
| |||
Transfers out of Level 1 and into Level 2 | $ | 300,773 | ||
|
| |||
Transfers were made out of Level 1 and into Level 2 due to a lack of market activity. |
| |||
Transfers between levels are recognized at the end of the reporting period. |
| |||
The Water Infrastructure Portfolio
The following is a summary of the inputs used to value The Water Infrastructure Portfolio’s net assets as of December 31, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets^ | ||||||||||||||||
Common Stocks | $ | 1,847,690 | $ | — | $ | — | $ | 1,847,690 | ||||||||
Convertible Bonds | — | 2,947,800 | — | 2,947,800 | ||||||||||||
Corporate Bonds | — | 4,766,926 | — | 4,766,926 | ||||||||||||
Warrants | — | 1,680 | — | 1,680 | ||||||||||||
Short-Term Investments | 501,000 | 239,000 | — | 740,000 | ||||||||||||
Investments Purchased with the Cash | ||||||||||||||||
Proceeds from Securities Lending | 901,049 | — | — | 901,049 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 3,249,739 | $ | 7,955,406 | $ | — | $ | 11,205,145 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities | ||||||||||||||||
Put Options Written | $ | — | $ | 796,077 | $ | — | $ | 796,077 | ||||||||
|
|
|
|
|
|
|
| |||||||||
^ See Portfolio of Investments for breakout of investments by industry classification. |
| |||||||||||||||
For the period ended December 31, 2011, there were no transfers into or out of Level 1 or Level 2 or transaction activity to report. |
| |||||||||||||||
Transfers between levels are recognized at the end of the reporting period. |
| |||||||||||||||
197
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
The Multi-Disciplinary Portfolio
The following is a summary of the inputs used to value The Multi-Disciplinary Portfolio’s net assets as of December 31, 2011:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets^ | ||||||||||||||||
Common Stocks | $ | 16,261 | $ | — | $ | — | $ | 16,261 | ||||||||
Convertible Bonds | — | 12,239,323 | — | 12,239,323 | ||||||||||||
Corporate Bonds | — | 8,384,623 | — | 8,384,623 | ||||||||||||
Municipal Bonds | 1,295,000 | — | 1,295,000 | |||||||||||||
Short-Term Investments | 1,179,000 | 443,000 | — | 1,622,000 | ||||||||||||
Investments Purchased with the Cash | ||||||||||||||||
Proceeds from Securities Lending | 1,226,400 | — | — | 1,226,400 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments in Securities | $ | 2,421,661 | $ | 22,361,946 | $ | — | $ | 24,783,607 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities | ||||||||||||||||
Put Options Written | $ | — | $ | 2,220,924 | $ | 25 | $ | 2,220,949 | ||||||||
|
|
|
|
|
|
|
| |||||||||
^ See Portfolio of Investments for breakout of investments by industry classification. |
| |||||||||||||||
| For the period ended December 31, 2011, there were no transfers into or out of Level 1 or Level 2 or transaction activity to report. | ||||||||||||||||
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, 2010 | $ | — | ||||||
Accrued discounts/premiums | — | |||||||
Realized gain (loss) | — | |||||||
Change in unrealized appreciation (depreciation) | — | |||||||
Net purchases | — | |||||||
Net sales | — | |||||||
Transfer in and/or out of Level 3 | (25 | ) | ||||||
|
| |||||||
Balance as of December 31, 2011 | $ | (25 | ) | |||||
|
| |||||||
8. Disclosures about Derivative Instruments and Hedging Activities
The Master Portfolios have adopted enhanced disclosure regarding derivatives and hedging activity intended to improve financial reporting of derivative
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
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 Water Infrastructure Portfolio
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2011:
| Assets | Liabilities | |||||||||||||
Equity Contracts | Description | Fair Value | Description | Fair Value | ||||||||||
| Written option | ||||||||||||||
Written Options | contracts, at value | $ | 796,077 | |||||||||||
|
|
|
|
| ||||||||||
Total | $ | — | $ | 796,077 | ||||||||||
|
|
|
|
| ||||||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2011:
Amount of Realized Gain (Loss) on Equity Contracts
Equity Contracts | ||||
Written Options | $ | 1,871,473 | ||
|
| |||
Total | $ | 1,871,473 | ||
|
| |||
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
Equity Contracts | ||||
Written Options | $ | (1,096,692 | ) | |
|
| |||
Total | $ | (1,096,692 | ) | |
|
| |||
The Water Infrastructure Portfolio has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Portfolio’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2011: no long option contracts were purchased and $0 premiums were paid, written option contracts (9,503 contracts) were opened and $1,608,649 premiums were received during the period.
199
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
The Multi-Disciplinary Portfolio
Statement of Assets and Liabilities
Fair Values of derivative instruments as of December 31, 2011:
| Assets | Liabilities | |||||||||||||
Equity Contracts | Description | Fair Value | Description | Fair Value | ||||||||||
| Written option | ||||||||||||||
Written Options | contracts, at value | $ | 2,220,949 | |||||||||||
|
|
|
| |||||||||||
Total | $ | — | $ | 2,220,949 | ||||||||||
|
|
|
|
| ||||||||||
Statement of Operations
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2011:
Amount of Realized Gain (Loss) on Equity Contracts
Equity Contracts | ||||
Written Options | $ | 282,926 | ||
|
| |||
Total | $ | 282,926 | ||
|
| |||
Change in Unrealized Appreciation (Depreciation) on Equity Contracts
Equity Contracts | ||||
Written Options | $ | (235,278 | ) | |
|
| |||
Total | $ | (235,278 | ) | |
|
| |||
The Multi-Disciplinary Portfolio has adopted authoritative standards regarding disclosure about derivatives and hedging activities and how they affect the Portfolio’s Statement of Assets and Liabilities and Statement of Operations. For the year ended December 31, 2011: no long option contracts were purchased and $0 premiums were paid, written option contracts (10,818 contracts) were opened and $2,511,994 premiums were received during the period.
9. Recent Accounting Pronouncement
In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“IFRSs”). ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRSs. ASU No. 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. Management is currently evaluating the impact the update will have on its financial statement disclosures.
200
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires disclosures to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under IFRS. The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset in the statement of assets and liabilities as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, ASU 2011-11 requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. New disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Management is evaluating the impact of ASU 2011-11 on the financial statements and disclosures.
10. Subsequent Events
In preparing these financial statements, management has evaluated Portfolio related events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no events or translations that occurred during the period that materially impacted the amounts or disclosures in the Portfolios’ financial statements.
11. Information about Proxy Voting (Unaudited)
Information regarding how Kinetics Portfolios Trust votes proxies relating to portfolio securities is available without charge upon request by calling toll-free at 1-800-930-3828 or by accessing the Funds’ website at www.kineticsfunds.com and by accessing the SEC’s website at www.sec.gov. Information regarding how the Portfolios voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.
12. Information about the Portfolio Holdings (Unaudited)
The Kinetics Portfolios Trust files its complete schedules of portfolio holdings for its first and third fiscal quarters with the SEC on Form N-Q. The Portfolios’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s
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KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Notes to Financial Statements — (Continued)
December 31, 2011
website at www.sec.gov. The Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
202
To the Shareholders of and Board of Trustees
Kinetics Portfolios Trust
Elmsford, New York
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio, and The Multi-Disciplinary Portfolio, each a series of shares of Kinetics Portfolios Trust (the “Trust”), as of December 31, 2011, 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, except for The Water Infrastructure Portfolio in which the financial highlights were for each of the four years in the period then ended and the period June 29, 2007 (commencement of operations) through December 31, 2007 and The Multi-Disciplinary Portfolio in which the financial highlights were for each of the three years in the period then ended and the period February 11, 2008 (commencement of operations) through December 31, 2008. 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, 2011, 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 funds of the Kinetics Portfolios Trust as of December 31, 2011, 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 the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania
February 28, 2012
203
[THIS PAGE INTENTIONALLY LEFT BLANK]
204
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.
205
KINETICS PORTFOLIOS TRUST
Management of the Funds and the Portfolios — (Continued)
Board of Directors/Board of Trustees
Independent Directors/Trustees
| Name, Address and Year of Birth | Position(s) with the Company and Trust | Term of Office/ Length of Time Served | Number of Portfolios/Funds in Fund Complex** Overseen by Trustee/Director | |||||
Steven T. Russell Year Born: 1963 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Independent Director/Trustee | Indefinite/ Since 2000 | 16 | |||||
Douglas Cohen, C.P.A Year Born: 1961 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Independent Director/Trustee | Indefinite/ Since 2000 | 16 | |||||
William J. Graham Year Born: 1961 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Independent Director/Trustee | Indefinite/ Since 2000 | 16 | |||||
Joseph E. Breslin Year Born: 1953 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Independent Director/Trustee | Indefinite/ Since 2000 | 16 | |||||
James M. Breen Year Born: 1959 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Independent | Indefinite/ Since 2008 |
| 16 |
| |||
206
| Principal Occupation During the Past Five Years | Other Directorships Held by Trustee/Director | |
| Attorney and Counselor at Law, Partner, Law Firm of Russell and Fig (2002-2010); Steven Russell Law Firm (1994 to 2002); Professor of Business Law, Suffolk County Community College (1997 to Present). | N/A | |
Sunrise Credit Services, Inc. (2005 to Present); Wagner & Zwerman, LLP Certified Public Accountant (1997 to 2005). | Director, Kinetics Fund, Inc. (a private fund). | |
Attorney, William J. Graham, PC (2001 to Present); Bracken & Margolin, LLP (1997 to 2001). | N/A | |
Chief Operating Officer, Central Park Credit Holdings, (2007-2009) Chief Operating Officer, Aladdin Capital Management (2005-2007). | Trustee, Hatteras Alternative Mutual Funds Trust (4 portfolios); Trustee, Underlying Funds Trust (5 portfolios). | |
Homeland Security Investigations, Senior Special Agent, Miami, FL (2011 to Present); Assistant Attaché Immigration & Customs Enforcement, Pretoria, South Africa (2008 to 2011); Immigration & Customs Enforcement Representative, Athens, Greece (2006 to 2008); Immigration & Customs Enforcement, Senior Special Agent, Miami, FL (2000 to 2008). | N/A | |
207
KINETICS PORTFOLIOS TRUST
Management of the Funds and the Portfolios — (Continued)
Board of Directors/Board of Trustees (Continued)
Interested Directors/Trustees and Officers
| Name, Address and Year of Birth | Position(s) with the Company and Trust | Term of Office/ Length of Time Served | Number of Portfolios/Funds in Fund Complex** Overseen by Trustee/Director | |||||
Murray Stahl* Year Born: 1953 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Director/Trustee and Secretary | Indefinite/ Since 2000 | 16 | |||||
Peter B. Doyle* Year Born: 1962 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Director/Trustee, President and Chairman of the Board | Indefinite/ Since 2002 | 16 | |||||
Leonid Polyakov* Year Born: 1959 c/o Kinetics Asset Management LLC 555 Taxter Road Suite 175 Elmsford, New York, 10523 | Director/Trustee and Treasurer | Indefinite/ Since 2002 | 16 | |||||
| * | 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. |
208
| Principal Occupation During the Past Five Years | Other Directorships Held by Trustee/Director | |
| Chairman, Co-Founder & Chief Investment Officer, Horizon Kinetics LLC, parent holding company to, among others, Horizon Asset Management LLC, Kinetics Asset Management LLC and Kinetics Advisers, LLC, registered investment advisers (1994 to Present); Director of Research, Kinetics Mutual Funds, Inc. (2002 to Present). | Chairman, FRMO Corp. (2001 to Present) (an intellectual capital firm engaged in the analysis of public companies within a framework of identifying investment strategies and techniques that reduce risk); Director Horizon Kinetics LLC (2011 to Present). | |
Co-Founder and Senior Member, Horizon Kinetics LLC, parent holding company to, among others, Horizon Asset Management LLC, Kinetics Asset Management LLC and Kinetics Advisers, LLC, registered investment advisers (1994 to Present); President & Chief Investment Strategist, Kinetics Mutual Funds, Inc. (1998 to Present). | Director, Kinetics Fund, Inc. (a private fund); Director and Officer, FRMO Corp. (2001 to Present); Director, Horizon Kinetics LLC (2011 to Present). | |
| Chief Financial Officer, Kinetics Asset Management LLC and Kinetics Advisers, LLC, registered investment advisers (2000 to 2011); President, Kinetics Funds Distributor LLC (2002 to Present); formerly CFO, KBD Securities, LLC (2000 to 2010). | Director, Kinetics Fund, Inc. (a private fund); Director, Horizon Kinetics LLC (2011 to Present). | |
| ** | The term “fund complex” refers to the Company and the Trust, which hold themselves out as related for investment purposes. |
209
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.
210
Kinetics Mutual
Funds, Inc.
615 East Michigan Street
Milwaukee, WI 53202
INVESTMENT ADVISER AND
SHAREHOLDER SERVICING AGENT
Kinetics Asset Management LLC
555 Taxter Road
Suite 175
Elmsford, NY 10523
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street
Suite 2400
Philadelphia, PA 19103
DISTRIBUTOR
Kinetics Funds Distributor LLC
555 Taxter Road
Suite 175
Elmsford, NY 10523
ADMINISTRATOR
FUND ACCOUNTANT AND
TRANSFER AGENT
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
CUSTODIAN
U.S. Bank, N.A.
Custody Operations
1555 River Center Drive, Suite 302
Milwaukee, WI 53212
THIS MATERIAL MUST BE PRECEDED OR
ACCOMPANIED BY A PROSPECTUS
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report. A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s board of trustees/directors has determined that there is at least one audit committee financial expert serving on its audit committee. Mr. Douglas Cohen and Mr. Joseph Breslin are the “audit committee financial experts” and are considered to be “independent” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “Other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
| FYE 12/31/2011 Kinetics Portfolios Trust | FYE 12/31/2011 Kinetics Mutual Funds | FYE 12/31/2010 Kinetics Portfolios Trust | FYE 12/31/2010 Kinetics Mutual Funds | |||||||||||||
Audit Fees | 77,000 | 77,000 | 78,250 | 78,250 | ||||||||||||
Audit-Related Fees | 0 | 0 | 0 | 0 | ||||||||||||
Tax Fees | 22,000 | 22,000 | 21,500 | 23,000 | ||||||||||||
All Other Fees | 0 | 0 | 0 | 0 | ||||||||||||
The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.
1
The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
| FYE 12/31/2011 | FYE 12/31/2010 | |||||||
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 12/31/2011 | FYE 12/31/2010 | ||||||
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.
2
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. |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust | ||||
By (Signature and Title)* | /s/ Peter B. Doyle | |||
| Peter B. Doyle, President | ||||
| Date March 6, 2012 | ||||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* | /s/ Peter B. Doyle | |||
| Peter B. Doyle, President | ||||
| Date March 6, 2012 | ||||
| By (Signature and Title)* | /s/ Leonid Polyakov | |||
| Leonid Polyakov, Treasurer | ||||
| Date March 6, 2012 | ||||
| * | Print the name and title of each signing officer under his or her signature. |