LKCM Funds N14 Registration statement for investment companies business combination | SEC 30 Jan 13

LKCM

FUNDS

LKCM Small Cap Equity Fund

LKCM Small-Mid Cap Equity Fund

LKCM Equity Fund

LKCM Balanced Fund

LKCM Fixed Income Fund

Annual Report

December 31, 2011

Dear Fellow Shareholders:

We report the following performance information for the LKCM Funds:


Funds	Inception Dates		NAV @ 12/31/11		Net Expense Ratio, *			Gross Expense Ratio**			One Year Total Return Ended 12/31/11			Five Year Average Annualized Return Ended 12/31/11			Ten Year Average Annualized Return Ended 12/31/11			Avg. Annual Total Return Since Incept.
LKCM Equity Fund -
Institutional Class		1/3/96	$	15.34		0.80	%		1.05	%		3.30	%		3.18	%		4.60	%		6.97	%
S&P 500 Index¹												2.11	%		-0.25	%		2.92	%		6.41	%
LKCM Small Cap Equity Fund -
Institutional Class		7/14/94	$	22.45		0.96	%		0.97	%		4.47	%		2.16	%		7.82	%		10.76	%
Russell 2000 Index²												-4.18	%		0.15	%		5.62	%		7.96	%
LKCM Small Cap Equity Fund -
Adviser Class		6/5/03	$	21.88		1.21	%		1.22	%		4.19	%		1.89	%		N/A			9.22	%
Russell 2000 Index²												-4.18	%		0.15	%		N/A			7.18	%
LKCM Small-Mid Cap Equity Fund -
Institutional Class		5/2/11	$	8.86		1.00	%		1.42	%		N/A			N/A			N/A			-11.40	%#
Russell 2500 Index³												N/A			N/A			N/A			-12.83	%#
LKCM Balanced Fund		12/30/97	$	14.53		0.80	%		1.26	%		3.16	%		3.98	%		4.64	%		4.99	%
S&P 500 Index¹												2.11	%		-0.25	%		2.92	%		3.69	%
Barclays Capital U.S. Intermediate Government/Credit Bond Index⁴												5.80	%		5.88	%		5.20	%		5.70	%
LKCM Fixed Income Fund		12/30/97	$	11.04		0.65	%		0.73	%		4.22	%		5.92	%		4.76	%		5.29	%
Barclays Capital U.S. Intermediate Government/Credit Bond Index⁴												5.80	%		5.88	%		5.20	%		5.70	%

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM. The Funds impose a 1.00% redemption fee on shares held less than 30 days. If reflected, the fee would reduce performance shown.

Excludes acquired fund fees and expenses. The Adviser has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund to maintain designated expense ratios through April 30, 2012. Investment performance reflects fee waivers, if any, in effect. In the absence of such waivers, total return would be reduced. Investment performance is based upon the net expense ratio.

**	Expense ratios above are as of December 31, 2010, the Funds’ prior fiscal year end, as reported in the Funds’ most recent prospectus. Expense ratios reported for other periods in the financial highlights of this report may differ.

#	Cumulative return since inception date of May 2, 2011.

1	The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

2	The Russell 2000 Index is an unmanaged index which measures the performance of the 2,000 smallest companies in the Russell 3000 Index.

3	The Russell 2500 Index is an unmanaged index which measures the performance of the 2,500 smallest companies in the Russell 3000 Index.

The Barclays Capital U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued.

Note: These indices defined above are not available for direct investment.

Economic Review and Outlook

The U.S. equity market, as measured by the S&P 500 Index, advanced 2.1% for the year ended December 31, 2011. Volatility was central to the story line of 2011. The Washington D.C. gridlock, U.S. debt downgrade, European sovereign debt issues and other geopolitical events weighed on the U.S. equity market. The offset to these headwinds was strong U.S. corporate balance sheets, lower equity valuations, higher corporate earnings, and improving economic data towards the end of the year.

The economy continued the expansion it began in the middle of 2009, and thus far economic growth has averaged 2.4% annually since the recovery began. In 2011, just as in 2010, markets experienced a scare over lack of growth prompting the U.S. Federal Reserve (Fed) to take action. Economic output continues to move up, particularly due to the strength in capital spending. In our view, investment in other areas of the economy, such as housing, remains well below a sustainable long-term rate. We believe that as the housing market continues to work through excess inventory and pricing seeks an appropriate level, construction related spending should increase later this year.

Europe continues to be a focal point for markets as leaders attempt to address both monetary and fiscal issues with an incomplete complement of solutions. We may not have seen the worst from Europe, as our view remains the European Central Bank (ECB) will be pressed to directly monetize sovereign debt, which it has thus far stridently resisted. While Europe will likely enter a recession in 2012, our view is that the U.S. will not experience a recession in 2012, although our forecast calls for tepid domestic economic growth.

A prominent event of 2012 will be the U.S. Presidential election. The bond rating agency, Standard & Poor’s, downgraded the U.S. this past year from AAA in part due to the political impasse in Washington D.C. and poor outcome of the national debt-ceiling debate. Interestingly, 2012 marks an election year in countries representing almost half of global GDP, including China, France, Russia, South Korea, Taiwan, Egypt, Greece, Slovakia, Finland, and Venezuela. This sets an interesting political backdrop for 2012.

The discussion of economics has devolved into a discussion of politics. In a revival of this summer’s debt-ceiling debate in our nation’s capital, Congress and the Administration were again recently embroiled, this time over how to address a Social Security tax break and unemployment benefits. Not to be outdone, European leaders continue to dash from one economic summit to another publishing communiqué after communiqué in a feverish attempt to placate markets and instill confidence.

The European Union, ECB and International Monetary Fund (IMF) have continued to offer incremental approaches in response to demands of sovereign debt investors for higher yields. It appears European stakeholders are attempting a supreme balancing act – provide that which the capital markets demand or face the inability to fund current spending. However, we believe that central European authorities must not alleviate the acute pressure being felt by member nations, lest their ability to extract concessions be compromised.

There lies ahead a great debate among all the European stakeholders. The question is whether or not austerity can unwind fiscal imbalances, or should leaders focus on pro-growth policies. The early indication is a heavy dose of austerity as the European nucleus of Germany and France appear to seek this course of action. However, austerity alone appears incapable of returning the continental economy to health.

Domestically, we believe economic data continue to remain favorable. The economy is currently expanding around 2% in real terms, which in our view is neither strong enough to buffer a global economic shock or weak enough to grow overly concerned of recession. We now find ourselves more optimistic about certain areas of the economy since prior to the recession, including housing and autos. We believe that the data are finally beginning to suggest 2012 could see a meaningful upgrade in the outlook for both sectors. Manufacturing data, both domestically and abroad, signaled strength at the end of the year, and corporate earnings are closely aligned with manufacturing activity.

The U.S. equity market endured a barrage of global shocks and ended the year up slightly. While emerging markets, particularly China, have received a great deal of attention recently, many of these markets declined significantly in 2011. We believe the ability of the U.S. equity market to absorb extraneous shocks is a testament to the underlying strength of corporate profits.

We remain positive in our outlook for the domestic equity market in 2012. It appears that core inflation remains tame with little pressure from wages. Low inflation allows the Fed to retain an extremely easy monetary stance, which has primed the economy with credit and liquidity. Unfortunately, while the money supply has risen sharply, the velocity of money, or rate at which money trades hands, has yet to increase meaningfully. We believe that favorable monetary policy will continue to lubricate the economy for some period and a pick-up in the velocity of money would be a welcome sign that the economy is responding.

The equity market is closely correlated with corporate earnings and while economic activity is not robust, GDP recorded a new high in the fourth quarter of 2011. We characterized the market decline in the summer of 2010 as a growth scare, but corporate earnings continued to grow, eventually leading the market higher. The summer of 2011 witnessed a similar growth scare, from which the market began recovering prior to the U.S. debt downgrade and concerns over European sovereign debt intensified. Although we expect corporate earnings growth to be tepid in the coming year, we do not anticipate compression in the market’s price/earnings multiple – rather, we expect the market’s price/earnings multiple will expand once the growth outlook is more favorable.

We believe we are beginning to see the stabilization of housing on the horizon. Several recent data points support our view that 2012 could bring a significant upgrade in the prospect for housing. Building permits reached a three-year high in October 2011. The National Association of Home Builders published Homebuilder Sentiment Index reached a four-year high in November 2011. The vacancy rate of homes recently fell to the lowest level since mid-2006. We may initially see a bifurcated housing market with some markets, such as Nevada and California, continuing to struggle, while other areas, such as Washington D.C./Virginia and Boston, experience home price appreciation.

We remain positive on the domestic economic outlook. We believe employment is showing early signs of improvement, with the unemployment rate continuing to drop in recent readings. Consumers continue to reduce their debt loads, while also continuing to increase spending year-over-year. Corporate profit margins remain extremely high, which we believe provide traction for incremental capital spending. The wide output gap between what the economy is currently producing and its capacity to produce suggests to us that broad-based inflation will continue to be held at bay.

We remain positive with regard to corporate profit growth and anticipate the equity market to continue to follow the trend of corporate profits. Given the historically high levels of cash on corporate balance sheets and fewer reinvestment opportunities, we expect many companies to remain focused on returning cash to shareholders through both dividends and share repurchases. We also would not be surprised to see an increase in merger activity. We believe the rate of corporate profit growth will be hampered by sluggish global demand and the potential reversal of domestic tailwinds which have included accelerated capital spending incentives and incremental fiscal stimulus.

We believe that the market volatility we experienced in 2011 will most likely remain a part of the environment in 2012. As investors this can be frustrating in the short-run, particularly when it is accompanied by high correlation among stocks. However, experience has taught us that patience can be a significant advantage when investing in such an environment. We continue to identify companies which we believe have the ability to reinvest internally generated cash flow back into the business at increasing rates of return. We believe the current environment is allowing us to build positions in high quality companies at attractive valuations.

LKCM Equity Fund

The LKCM Equity Fund outperformed the S&P 500 Index for the year ended December 31, 2011. The Fund benefited from stock selection in the Energy, Industrials, Consumer Discretionary, Information Technology and Financials sectors, while stock selection in the Healthcare and Consumer Staples sectors detracted from the Fund’s returns. Our decision to underweight the Financials sector also enhanced the Fund’s returns, but our underweight positions in the Utilities and Consumer Staples sectors and overweight position in the Materials sector detracted from the Fund’s returns. We believe the Fund is well positioned with a focus on quality companies that can continue to add value for the Fund’s shareholders in the upcoming year.


	Total Return Year Ended December 31, 2011
LKCM Equity Fund		3.30	%
S&P 500 Index		2.11	%

LKCM Small Cap Equity Fund

The LKCM Small Cap Equity Fund outperformed the Russell 2000 Index during the year ended December 31, 2011. The Fund’s outperformance relative to the benchmark resulted from our stock selection decisions, while sector allocation decisions slightly detracted from the Fund’s returns. We remained optimistic about the underlying economic trends during the year and were underweight the defensive sectors, Utilities and Consumer Staples, which were the two best performing sectors during 2011. Our stock selection, particularly in the Consumer Discretionary, Energy, Industrials, Financials and Materials sectors, drove the Fund’s outperformance relative to the benchmark during the year.


	Total Return Year Ended December 31, 2011
LKCM Small Cap Equity Fund		4.47	%
Russell 2000 Index		-4.18	%

LKCM Small-Mid Cap Equity Fund

The LKCM Small-Mid Cap Equity Fund outperformed the Russell 2500 Index for the period from May 2, 2011, the inception date of the Fund, through December 31, 2011. The Fund benefited from stock selection decisions while sector allocation decisions detracted from the Fund’s returns. We remained optimistic about the underlying economic trends during the year and were underweight the defensive sectors, Utilities and Consumer Staples, which were the two best performing sectors during 2011. Our stock selection, particularly in the Energy and Information Technology sectors, enhanced the Fund’s returns, while our stock selection decisions in the Financials, Telecommunications and Industrials sectors detracted from the Fund’s returns.


	Total Return Since Inception (May 2, 2011 through December 31, 2011)
LKCM Small-Mid Cap Equity Fund		-11.40	%
Russell 2500 Index		-12.83	%

LKCM Balanced Fund

The LKCM Balanced Fund’s blend of equity and fixed income securities, along with stock selection, benefited the Fund during the year ended December 31, 2011. Our stock selection decisions in the Energy, Consumer Discretionary, Information Technology and Materials sectors benefited the Fund’s returns, while stock selection decisions in the Healthcare and Consumer Staples sectors detracted from the Fund’s returns. The Fund continued to focus its holdings of fixed income securities on investment grade corporate bonds, which generated income for the Fund and dampened the overall volatility of the Fund’s returns during the year.


	Total Return Year Ended December 31, 2011
LKCM Balanced Fund		3.16	%
S&P 500 Index		2.11	%
Barclays Capital U.S. Intermediate Government/ Credit Bond Index		5.80	%

LKCM Fixed Income Fund

The LKCM Fixed Income Fund is managed to provide current income. The Fund primarily invests in a portfolio of investment grade corporate bonds as well as government securities with short and intermediate maturities. While the Fund’s overweight position in corporate bonds relative to government securities added to the Fund’s returns during the first half of the year, it detracted from the Fund’s returns during the second half of the year as the European debt crises triggered a flight to quality that resulted in the outperformance of U.S. Treasuries across the curve despite the historic downgrade of the U.S. sovereign debt rating for the first time in history. The Fund’s defensive average duration (3.3 years) relative to the average duration of the benchmark (4.0 years) also benefited the Fund’s returns during the first half year, although it detracted from the Fund’s returns during the second half of the year. The Fund benefited from overweight positions in the Energy and Information Technology sectors and an underweight position in the Financials sector.


	Total Return Year Ended December 31, 2011
LKCM Fixed Income Fund		4.22	%
Barclays Capital U.S. Intermediate Government/ Credit Bond Index		5.80	%

LOGO

J. Luther King, Jr., CFA

February 8, 2012

The information provided herein represents the opinion of J. Luther King, Jr. and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Please refer to the Schedule of Investments found on pages 15-27 of the report for more information on Fund holdings. Fund holdings and sector allocations are subject to change and are not recommendations to buy or sell any securities.

Mutual fund investing involves risk. Principal loss is possible. Past performance is not a guarantee of future results. Small and medium capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure, and, historically, their stocks have experienced a greater degree of market volatility than stocks on average. Investments in debt securities typically decrease in value when interest rates rise. This risk is greater for longer-term debt securities. These risks are discussed in the Fund’s summary and statutory prospectuses.

Current and future portfolio holdings are subject to risk.

Diversification does not assure a profit nor protect against loss in a declining market.

Earnings growth is not a measure of the Fund’s future performance.

Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

Earnings multiple: The earnings multiple of a stock, also called the price/earnings (P/E) ratio, is the share price divided by the earnings per share. The earnings multiple is often based on the prior twelve months of earnings data.

Must be preceded or accompanied by a prospectus.

Quasar Distributors, LLC, distributor.

PERFORMANCE:

The following information illustrates the historical performance of LKCM Small Cap Equity Fund as of December 31, 2011 compared to the Fund’s representative market indices.

Performance data quoted represents past performance; past performance does not guarantee future results. 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. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN


	Past 1 Year			Past 5 Years			Past 10 Years			Since Inception⁽¹⁾
LKCM Small Cap Equity Fund – Institutional Class		4.47	%		2.16	%		7.82	%		10.76	%
Russell 2000 Index		-4.18	%		0.15	%		5.62	%		7.96	%
Lipper Small-Cap Core Funds Index		-3.81	%		1.32	%		5.81	%		9.20	%

⁽¹⁾	July 14, 1994

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL CAP EQUITY FUND – INSTITUTIONAL CLASS

(for the ten years ended December 31, 2011)

LOGO

The Russell 2000 Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000 Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

AVERAGE ANNUAL TOTAL RETURN


	Past 1 Year			Past 3 Years			Past 5 Years			Since Inception⁽¹⁾
LKCM Small Cap Equity Fund – Adviser Class		4.19	%		22.10	%		1.89	%		9.22	%
Russell 2000 Index		-4.18	%		15.63	%		0.15	%		7.18	%
Lipper Small-Cap Core Funds Index		-3.81	%		17.60	%		1.32	%		8.09	%

⁽¹⁾	June 5, 2003

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL CAP EQUITY FUND – ADVISER CLASS

(for the period from June 5, 2003 through December 31, 2011)

LOGO

The Russell 2000 Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000 Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

PERFORMANCE:

The following information illustrates the historical performance of LKCM Small-Mid Cap Equity Fund as of December 31, 2011 compared to the Fund’s representative market indices.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN


	Since Inception⁽¹⁾
LKCM Small-Mid Cap Equity Fund		-11.40	%
Russell 2500 Index		-12.83	%
Lipper Small-Cap Core Funds Index		-12.77	%

⁽¹⁾	May 2, 2011

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL-MID CAP EQUITY FUND

(for the period from May 2, 2011 to December 31, 2011)

LOGO

The Russell 2500 Index is an unmanaged index consisting of the 2,500 smallest companies in the Russell 3000 Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

PERFORMANCE:

The following information illustrates the historical performance of LKCM Equity Fund as of December 31, 2011 compared to the Fund’s representative market indices.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN


	Past 1 Year			Past 5 Years			Past 10 Years			Since Inception⁽¹⁾
LKCM Equity Fund – Institutional Class		3.30	%		3.18	%		4.60	%		6.97	%
S&P 500 Index		2.11	%		-0.25	%		2.92	%		6.41	%
Lipper Large-Cap Core Funds Index		0.09	%		-0.60	%		2.16	%		5.48	%

⁽¹⁾	January 3, 1996

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM EQUITY FUND – INSTITUTIONAL CLASS

(for the ten years ended December 31, 2011)

LOGO

The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Lipper Large-Cap Core Funds Index is an index of large cap core mutual funds tracked by Lipper, Inc.

PERFORMANCE:

The following information illustrates the historical performance of LKCM Balanced Fund as of December 31, 2011 compared to the Fund’s representative market indices.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN


	Past 1 Year			Past 5 Years			Past 10 Years			Since Inception⁽¹⁾
LKCM Balanced Fund		3.16	%		3.98	%		4.64	%		4.99	%
Barclays Capital U.S. Intermediate Government/Credit Bond Index		5.80	%		5.88	%		5.20	%		5.70	%
S&P 500 Index		2.11	%		-0.25	%		2.92	%		3.69	%
Lipper Mixed-Asset Target Allocation Growth Funds Index		-0.54	%		1.32	%		4.44	%		4.72	%

⁽¹⁾	December 30, 1997

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM BALANCED FUND

(for the ten years ended December 31, 2011)

LOGO

The Lipper Mixed-Asset Target Allocation Growth Funds Index is an unmanaged index consisting of funds tracked by Lipper, Inc. that, by portfolio practice, maintain a mix of between 60%-80% equity securities, with the remainder invested in bonds, cash and cash equivalents.

PERFORMANCE:

The following information illustrates the historical performance of LKCM Fixed Income Fund as of December 31, 2011 compared to the Fund’s representative market indices.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN


	Past 1 Year			Past 5 Years			Past 10 Years			Since Inception⁽¹⁾
LKCM Fixed Income Fund		4.22	%		5.92	%		4.76	%		5.29	%
Barclays Capital U.S. Intermediate Government/Credit Bond Index		5.80	%		5.88	%		5.20	%		5.70	%
Lipper Short Intermediate Investment-Grade Debt Funds Index		3.99	%		4.80	%		4.29	%		4.87	%

⁽¹⁾	December 30, 1997

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM FIXED INCOME FUND

(for the ten years ended December 31, 2011)

LOGO

The Lipper Short Intermediate Investment-Grade Debt Funds Index is an index of short intermediate investment grade mutual funds tracked by Lipper, Inc.

LKCM Funds Expense Example — December 31, 2011

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption 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 you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (7/1/11-12/31/11).

ACTUAL EXPENSES

The first line of the tables below provides information about actual account values and actual expenses. Although the Funds charge no sales load, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently a $15.00 fee is charged by the Funds’ transfer agent. You will be charged a redemption fee equal to 1.00% of the net amount of the redemption if you redeem your shares of the LKCM Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced and Fixed Income Funds within 30 days of purchase. To the extent the Funds invest in shares of other investment companies as part of their investment strategies, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Funds invest in addition to the expenses of the Funds. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the example below. The example below includes management fees, registration fees and other expenses. However, the example below does not include portfolio trading commissions and related expenses and other extraordinary expenses as determined under generally accepted accounting principles. You may use the information in this line, together with the amount 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 EXAMPLES FOR COMPARISON PURPOSES

The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactions costs were included, your costs would have been higher.


	LKCM Small Cap Equity Fund – Institutional Class
	Beginning Account Value 7/1/11		Ending Account Value 12/31/11		Expenses Paid During Period* 7/1/11 – 12/31/11
Actual	$	1,000.00	$	905.20	$	4.56
Hypothetical (5% return before expense)	$	1,000.00	$	1,020.42	$	4.84

*	Expenses are equal to the Fund’s annualized net expense ratio of 0.95%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.


	LKCM Small Cap Equity Fund – Adviser Class
	Beginning Account Value 7/1/11		Ending Account Value 12/31/11		Expenses Paid During Period* 7/1/11 – 12/31/11
Actual	$	1,000.00	$	904.10		$	5.76
Hypothetical (5% return before expense)	$	1,000.00	$	1,019.16		$	6.11

*	Expenses are equal to the Fund’s annualized net expense ratio of 1.20%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.


	LKCM Small-Mid Cap Equity Fund
	Beginning Account Value 7/1/11		Ending Account Value 12/31/11		Expenses Paid During Period* 7/1/11 – 12/31/11
Actual	$	1,000.00	$	898.60	$	4.79
Hypothetical (5% return before expense)	$	1,000.00	$	1,020.16	$	5.09

* Expenses are equal to the Fund’s annualized net expense ratio of 1.00%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.


	LKCM Equity Fund
	Beginning Account Value 7/1/11		Ending Account Value 12/31/11		Expenses Paid During Period* 7/1/11 – 12/31/11
Actual	$	1,000.00	$	963.80	$	3.96
Hypothetical (5% return before expense)	$	1,000.00	$	1,021.17	$	4.08

* Expenses are equal to the Fund’s annualized net expense ratio of 0.80%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.


	LKCM Balanced Fund
	Beginning Account Value 7/1/11		Ending Account Value 12/31/11		Expenses Paid During Period* 7/1/11 – 12/31/11
Actual	$	1,000.00	$	975.70	$	3.98
Hypothetical (5% return before expense)	$	1,000.00	$	1,021.17	$	4.08

* Expenses are equal to the Fund’s annualized net expense ratio of 0.80%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.


	LKCM Fixed Income Fund
	Beginning Account Value 7/1/11		Ending Account Value 12/31/11		Expenses Paid During Period* 7/1/11 – 12/31/11
Actual	$	1,000.00	$	1,018.70	$	3.31
Hypothetical (5% return before expense)	$	1,000.00	$	1,021.93	$	3.31

*	Expenses are equal to the Fund’s annualized net expense ratio of 0.65%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

ALLOCATION OF PORTFOLIO HOLDINGS — LKCM Funds — December 31, 2011

Percentages represent market value as a percentage of total investments.

LOGO

LKCM SMALL CAP EQUITY FUND

SCHEDULEOF INVESTMENTS

December 31, 2011


	Shares		Value
COMMON STOCKS - 95.0%
Aerospace & Defense - 1.7%
Hexcel Corporation (a)		596,250	$	14,435,213

Air Freight & Logistics - 0.9%
UTI Worldwide, Inc. (b)		586,625		7,796,246

Auto Components - 1.6%
Group 1 Automotive, Inc.		256,550		13,289,290

Banks - 4.5%
Home Bancshares Inc.		278,725		7,221,765
Prosperity Bancshares, Inc.		249,700		10,075,395
Texas Capital Bancshares, Inc. (a)		320,975		9,825,045
Umpqua Holdings Corporation		812,550		10,067,494

				37,189,699

Capital Markets - 1.2%
Greenhill & Co., Inc.		275,900		10,034,483

Commercial Services & Supplies - 2.0%
Insperity, Inc.		371,525		9,418,159
Interface, Inc. - Class A		623,975		7,200,671

				16,618,830

Communications Equipment - 5.8%
Brocade Communications Systems, Inc. (a)		1,875,275		9,732,677
Ciena Corporation (a)		617,800		7,475,380
Infinera Corporation (a)		1,004,375		6,307,475
Ixia (a)		601,575		6,322,553
Loral Space & Communications Inc. (a)		116,150		7,535,812
NICE Systems Limited - ADR (a) (b)		306,450		10,557,203

				47,931,100

Consumer Finance - 2.4%
Cash America International, Inc.		224,625		10,474,264
First Cash Financial Services, Inc. (a)		279,151		9,795,408

				20,269,672

Containers & Packaging - 1.0%
Silgan Holdings Inc.		216,725		8,374,254

Distributors - 0.8%
LKQ Corporation (a)		219,100		6,590,528

Diversified Consumer Services - 0.9%
American Public Education Inc. (a)		180,900		7,829,352

Electrical Equipment & Instruments - 4.6%
Belden Inc.		287,725		9,575,488
Franklin Electric Co., Inc.		203,840		8,879,270
II-VI, Incorporated (a)		532,950		9,784,962
Woodward Inc.		250,275		10,243,756

				38,483,476

Electronic Equipment & Instruments - 2.7%
Anixter International Inc. (a)		128,950		7,690,578
National Instruments Corporation		323,025		8,382,499
Rofin-Sinar Technologies, Inc. (a)		274,700		6,276,895

				22,349,972


	Shares		Value
COMMON STOCKS
Energy Equipment & Services - 2.5%
Atwood Oceanics, Inc. (a)		151,800	$	6,040,122
CARBO Ceramics Inc.		60,925		7,513,880
Dril-Quip, Inc. (a)		104,075		6,850,217

				20,404,219

Food & Drug Retailing - 1.2%
Ruddick Corporation		224,000		9,551,360

Health Care Equipment & Supplies - 7.7%
Cyberonics, Inc. (a)		120,473		4,035,845
DexCom Inc. (a)		964,500		8,979,495
Endologix, Inc. (a)		625,900		7,185,332
GNC Holdings, Inc. - Class A (a)		375,925		10,883,029
MWI Veterinary Supply, Inc. (a)		187,200		12,437,568
PerkinElmer, Inc.		340,025		6,800,500
Zoll Medical Corporation (a)		211,700		13,375,206

				63,696,975

Health Care Providers & Services - 6.1%
Catalyst Health Solutions, Inc. (a)		178,120		9,262,240
Computer Programs and Systems, Inc.		91,700		4,686,787
Health Management Associates Inc. - Class A (a)		843,400		6,215,858
HMS Holdings Corporation (a)		426,150		13,628,277
PSS World Medical, Inc. (a)		290,625		7,030,219
Team Health Holdings, Inc. (a)		445,975		9,842,668

				50,666,049

Hotels, Restaurants & Leisure - 0.5%
BJ’s Restaurants, Inc. (a)		89,525		4,057,273

Household Durables - 1.5%
Select Comfort Corporation (a)		385,525		8,362,037
Tempur-Pedic International Inc. (a)		70,550		3,705,992

				12,068,029

Industrial Conglomerates - 1.0%
Raven Industries, Inc.		131,725		8,153,778

Insurance - 1.3%
AmTrust Financial Services, Inc.		445,139		10,572,051

Internet Software & Services - 2.6%
The Active Network, Inc. (a)		485,270		6,599,672
LivePerson, Inc. (a)		523,700		6,572,435
LogMeIn, Inc. (a)		210,625		8,119,594

				21,291,701

Machinery - 8.5%
Actuant Corporation - Class A		368,975		8,372,043
Albany International Corporation - Class A		343,375		7,938,830
Astec Industries, Inc. (a)		273,025		8,794,135
Chart Industries, Inc. (a)		116,300		6,288,341
CLARCOR Inc.		198,050		9,900,519
EnPro Industries, Inc. (a)		237,125		7,820,383
The Middleby Corporation (a)		109,550		10,302,082

The accompanying notes are an integral part of these financial statements.

LKCM SMALL CAP EQUITY FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Shares		Value
COMMON STOCKS
Machinery - 8.5%, Continued
Westport Innovations Inc. (a) (b)		338,146	$	11,239,973

				70,656,306

Marine - 1.2%
Kirby Corporation (a)		154,600		10,178,864

Media - 1.0%
Cinemark Holdings, Inc.		427,150		7,898,003

Metals & Mining - 2.9%
Carpenter Technology Corporation		278,725		14,348,763
Haynes International, Inc.		184,728		10,086,149

				24,434,912

Oil & Gas & Consumable Fuels - 6.6%
Approach Resources Inc. (a)		457,578		13,457,369
Gulfport Energy Corporation (a)		310,095		9,132,298
Kodiak Oil & Gas Corporation (a) (b)		453,975		4,312,762
Northern Oil & Gas, Inc. (a)		276,275		6,625,074
Oasis Petroleum Inc. (a)		300,950		8,754,636
Rosetta Resources, Inc. (a)		276,228		12,015,918

				54,298,057

Pharmaceuticals - 0.8%
Endo Pharmaceuticals Holdings Inc. (a)		187,750		6,483,007

Real Estate - 0.8%
FirstService Corporation (a) (b)		256,684		6,799,559

Semiconductor Equipment & Products - 1.1%
Cirrus Logic, Inc. (a)		556,600		8,822,110

Software - 4.4%
Aspen Technology, Inc. (a)		624,200		10,829,870
Interactive Intelligence Group, Inc. (a)		186,975		4,285,467
MicroStrategy Incorporated - Class A (a)		81,062		8,780,636
Pegasystems Inc.		303,233		8,915,050
TIBCO Software Inc. (a)		155,650		3,721,592

				36,532,615

Specialty Retail - 7.8%
bebe stores, inc.		274,738		2,288,567
DSW Inc. - Class A		224,200		9,911,882
Genesco Inc. (a)		173,900		10,736,586
Hibbett Sports Inc. (a)		241,753		10,922,401
Monro Muffler Brake, Inc.		256,783		9,960,613
Sonic Automotive, Inc. - Class A		672,125		9,954,171
Ulta Salon, Cosmetics & Fragrance, Inc. (a)		62,525		4,059,123
Vera Bradley, Inc. (a)		206,600		6,662,850

				64,496,193

Textiles, Apparel & Luxury Goods - 1.7%
Crocs, Inc. (a)		513,750		7,588,087
The Warnaco Group, Inc. (a)		125,825		6,296,283

				13,884,370

Thrifts & Mortgage Finance - 1.2%
Capitol Federal Financial Inc.		879,900		10,154,046


	Shares		Value
COMMON STOCKS
Trading Companies & Distributors - 1.6%
WESCO International, Inc. (a)		249,600	$	13,231,296

Wireless Telecommunication Services - 0.9%
Leap Wireless International, Inc. (a)		848,975		7,886,978

TOTAL COMMON STOCKS (Cost $621,000,056)				787,409,866

SHORT-TERM INVESTMENTS - 5.2%
Money Market Funds (c) - 5.2%
Dreyfus Government Cash Management Fund - Institutional Shares - 0.00%		19,130,969		19,130,969
Federated Government Obligations Fund - Institutional Shares - 0.01%		23,576,179		23,576,179

TOTAL SHORT-TERM INVESTMENTS (Cost $42,707,148)				42,707,148

Total Investments - 100.2% (Cost $663,707,204)				830,117,014
Liabilities in Excess of Other Assets - (0.2)%				(1,713,497	)

TOTAL NET ASSETS - 100.0%			$	828,403,517

ADR American Depository Receipt.

(a)	Non-income producing security.

(b)	U.S. Dollar-denominated foreign security.

(c)	The rate quoted is the annualized seven-day yield of the fund at period end.

The Global Industry Classification Standard (GICS^®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

LKCM SMALL-MID CAP EQUITY FUND

SCHEDULEOF INVESTMENTS

December 31, 2011


	Shares		Value
COMMON STOCKS - 96.8%
Aerospace & Defense - 4.7%
BE Aerospace, Inc. (a)		15,120	$	585,295
Hexcel Corporation (a)		21,955		531,531

				1,116,826

Air Freight & Logistics - 1.6%
UTI Worldwide, Inc. (b)		27,825		369,794

Auto Components - 2.1%
Gentex Corporation		16,510		488,531

Banks - 3.7%
Comerica Incorporated		16,200		417,960
Prosperity Bancshares, Inc.		11,675		471,086

				889,046

Capital Markets - 2.1%
Affiliated Managers Group, Inc. (a)		5,175		496,541

Chemicals - 2.0%
FMC Corporation		5,400		464,616

Commercial Services & Supplies - 1.6%
Waste Connections, Inc.		11,825		391,881

Communications Equipment - 4.3%
Brocade Communications
Systems, Inc. (a)		94,820		492,116
F5 Networks, Inc. (a)		4,925		522,641

				1,014,757

Consumer Finance - 1.7%
Cash America International, Inc.		8,675		404,515

Containers & Packaging - 1.7%
Silgan Holdings Inc.		10,575		408,618

Distributors - 2.6%
LKQ Corporation (a)		20,840		626,867

Diversified Financials - 1.8%
The NASDAQ OMX Group, Inc. (a)		17,700		433,827

Electrical Equipment & Instruments - 2.4%
AMETEK, Inc.		13,520		569,192

Electronic Equipment & Instruments - 5.3%
Anixter International Inc. (a)		6,850		408,534
National Instruments Corporation		15,750		408,713
Trimble Navigation Limited (a)		10,125		439,425

				1,256,672

Energy Equipment & Services - 3.4%
CARBO Ceramics Inc.		2,975		366,907
Core Laboratories N.V. (b)		3,890		443,265

				810,172

Health Care Equipment & Supplies - 3.2%
IDEXX Laboratories, Inc. (a)		5,350		411,736
PerkinElmer, Inc.		17,425		348,500

				760,236


	Shares		Value
COMMON STOCKS
Health Care Providers & Services - 7.4%
Allscripts Healthcare Solutions, Inc. (a)		20,900	$	395,846
Catalyst Health Solutions, Inc. (a)		8,800		457,600
Health Management Associates Inc. - Class A (a)		42,350		312,119
HMS Holdings Corporation (a)		18,400		588,432

				1,753,997

Household Durables - 2.0%
Williams-Sonoma, Inc.		12,450		479,325

Insurance - 1.8%
AmTrust Financial Services, Inc.		17,700		420,375

Leisure Equipment & Products - 2.0%
Polaris Industries Inc.		8,415		471,072

Machinery - 5.8%
Actuant Corporation - Class A		17,700		401,613
Gardner Denver Inc.		6,885		530,558
Valmont Industries, Inc.		4,890		443,963

				1,376,134

Marine - 2.0%
Kirby Corporation (a)		7,150		470,756

Metals & Mining - 1.8%
Carpenter Technology Corporation		8,275		425,997

Oil & Gas & Consumable Fuels - 6.2%
Oasis Petroleum Inc. (a)		13,975		406,533
Rosetta Resources, Inc. (a)		12,260		533,310
SM Energy Company		7,425		542,767

				1,482,610

Pharmaceuticals - 1.9%
Endo Pharmaceuticals Holdings Inc. (a)		13,125		453,206

Semiconductor Equipment & Products - 2.1%
Cirrus Logic, Inc. (a)		31,405		497,769

Software - 7.0%
ANSYS, Inc. (a)		8,025		459,672
Nuance Communications, Inc. (a)		28,325		712,657
TIBCO Software Inc. (a)		20,445		488,840

				1,661,169

Specialty Retail - 8.1%
Dick’s Sporting Goods, Inc. (a)		13,780		508,206
DSW Inc. - Class A		10,560		466,858
Tractor Supply Company		8,145		571,372
Ulta Salon, Cosmetics & Fragrance, Inc. (a)		5,950		386,274

				1,932,710

Textiles, Apparel & Luxury Goods - 1.3%
Deckers Outdoor Corporation (a)		3,950		298,502

Trading Companies & Distributors - 2.4%
WESCO International, Inc. (a)		10,600		561,906

The accompanying notes are an integral part of these financial statements.

LKCM SMALL-MID CAP EQUITY FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Shares		Value
COMMON STOCKS
Wireless Telecommunication Services - 0.8%
MetroPCS Communications, Inc. (a)		22,000	$	190,960

TOTAL COMMON STOCKS (Cost $21,931,550)				22,978,579

SHORT-TERM INVESTMENTS - 3.3%
Money Market Funds (c) - 3.3%
Dreyfus Government Cash Management Fund - Institutional Shares, 0.00%		80,358		80,358
Federated Government Obligations Fund - Institutional Shares, 0.01%		711,000		711,000

TOTAL SHORT-TERM INVESTMENTS (Cost $791,358)				791,358

Total Investments - 100.1% (Cost $22,722,908)				23,769,937
Liabilities in Excess of Other Assets - (0.1)%				(15,431	)

TOTAL NET ASSETS - 100.0%			$	23,754,506

(a)	Non-income producing security.

(b)	U.S. Dollar-denominated foreign security.

(c)	The rate quoted is the annualized seven-day yield of the fund at period end.

The accompanying notes are an integral part of these financial statements.

LKCM EQUITY FUND

SCHEDULEOF INVESTMENTS

December 31, 2011


	Shares		Value
COMMON STOCKS - 96.9%
Aerospace & Defense - 3.2%
Honeywell International Inc.		34,400	$	1,869,640
Rockwell Collins, Inc.		25,400		1,406,398

				3,276,038

Auto Components - 0.8%
Gentex Corporation		26,000		769,340

Banks - 8.0%
Comerica Incorporated		47,100		1,215,180
Cullen/Frost Bankers, Inc.		38,350		2,029,099
Glacier Bancorp, Inc.		28,000		336,840
Hancock Holding Company		47,830		1,529,125
Prosperity Bancshares, Inc.		26,000		1,049,100
Texas Capital Bancshares, Inc. (a)		18,000		550,980
Wells Fargo & Company		56,050		1,544,738

				8,255,062

Beverages - 2.9%
The Coca-Cola Company		20,000		1,399,400
PepsiCo, Inc.		24,000		1,592,400

				2,991,800

Biotechnology - 1.6%
Celgene Corporation (a)		25,000		1,690,000

Chemicals - 6.4%
Airgas, Inc.		13,000		1,015,040
E. I. du Pont de Nemours and Company		35,000		1,602,300
FMC Corporation		26,000		2,237,040
Monsanto Company		24,000		1,681,680

				6,536,060

Commercial Services & Supplies - 1.0%
Waste Connections, Inc.		30,000		994,200

Computers & Peripherals - 4.3%
Apple Inc. (a)		3,090		1,251,450
EMC Corporation (a)		59,400		1,279,476
International Business Machines Corporation		10,000		1,838,800

				4,369,726

Construction & Engineering - 0.5%
Foster Wheeler AG (a) (b)		29,000		555,060

Construction Materials - 1.7%
Martin Marietta Materials, Inc.		23,260		1,754,037

Containers & Packaging - 1.3%
Ball Corporation		36,550		1,305,200

Diversified Financial Services - 1.5%
JPMorgan Chase & Co.		45,630		1,517,197

Electrical Equipment & Instruments - 4.1%
Emerson Electric Co.		37,600		1,751,784
Franklin Electric Co., Inc.		24,000		1,045,440
Roper Industries, Inc.		15,990		1,389,051

				4,186,275


	Shares		Value
COMMON STOCKS
Electronic Equipment & Instruments - 2.7%
National Instruments Corporation		49,300	$	1,279,335
Trimble Navigation Limited (a)		35,000		1,519,000

				2,798,335

Energy Equipment & Services - 0.5%
National Oilwell Varco Inc.		8,000		543,920

Food & Drug Retailing - 1.1%
Walgreen Company		33,000		1,090,980

Health Care Equipment & Supplies - 5.0%
Covidien plc (b)		30,000		1,350,300
DENTSPLY International Inc.		40,000		1,399,600
PerkinElmer, Inc.		65,920		1,318,400
Thermo Fisher Scientific, Inc. (a)		23,000		1,034,310

				5,102,610

Hotels, Restaurants & Leisure - 0.8%
Yum! Brands, Inc.		14,000		826,140

Household Durables - 1.5%
Jarden Corporation		50,440		1,507,147

Household Products - 4.9%
Colgate-Palmolive Company		8,600		794,554
Kimberly-Clark Corporation		24,460		1,799,278
The Procter & Gamble Company		36,810		2,455,595

				5,049,427

Industrial Conglomerates - 0.8%
Raven Industries, Inc.		13,000		804,700

Insurance - 0.6%
Prudential Financial, Inc.		12,000		601,440

Internet Catalog & Retail - 1.0%
Amazon.com, Inc. (a)		6,000		1,038,600

Internet Software & Services - 2.9%
Akamai Technologies, Inc. (a)		45,000		1,452,600
Google Inc. - Class A (a)		2,300		1,485,570

				2,938,170

Machinery - 4.1%
Danaher Corporation		35,000		1,646,400
Pall Corporation		18,300		1,045,845
Valmont Industries, Inc.		17,000		1,543,430

				4,235,675

Marine - 2.2%
Kirby Corporation (a)		34,000		2,238,560

Media - 1.4%
Cinemark Holdings, Inc.		25,000		462,250
Time Warner Inc.		27,200		983,008

				1,445,258

Metals & Mining - 1.6%
Newmont Mining Corporation		13,000		780,130

The accompanying notes are an integral part of these financial statements.

LKCM EQUITY FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Shares		Value
COMMON STOCKS
Metals & Mining - 1.6%, Continued
Titanium Metals Corporation		60,000	$	898,800

				1,678,930

Oil & Gas & Consumable Fuels - 11.1%
Cabot Oil & Gas Corporation		19,650		1,491,435
ConocoPhillips		27,010		1,968,219
Encana Corporation (b)		40,000		741,200
EOG Resources, Inc.		13,000		1,280,630
Exxon Mobil Corporation		30,070		2,548,733
Noble Energy, Inc.		10,000		943,900
Range Resources Corporation		18,000		1,114,920
SM Energy Company		8,000		584,800
The Williams Companies, Inc.		20,000		660,400

				11,334,237

Pharmaceuticals - 6.0%
Abbott Laboratories		25,000		1,405,750
Allergan, Inc.		9,300		815,982
Johnson & Johnson		29,820		1,955,596
Pfizer Inc.		93,530		2,023,989

				6,201,317

Road & Rail - 1.7%
Kansas City Southern (a)		8,500		578,085
Union Pacific Corporation		11,000		1,165,340

				1,743,425

Software - 4.1%
Adobe Systems Incorporated (a)		45,000		1,272,150
Microsoft Corporation		22,000		571,120
Nuance Communications, Inc. (a)		45,000		1,132,200
Oracle Corporation		48,900		1,254,285

				4,229,755

Specialty Retail - 4.5%
PetSmart, Inc.		32,000		1,641,280
Tiffany & Co.		18,000		1,192,680
Tractor Supply Company		25,000		1,753,750

				4,587,710

Textiles, Apparel & Luxury Goods - 1.1%
VF Corporation		9,000		1,142,910

TOTAL COMMON STOCKS (Cost $82,109,814)				99,339,241


	Shares		Value
SHORT-TERM INVESTMENT - 2.7%
Money Market Fund (c) - 2.7%
Federated Government Obligations Fund - Institutional Shares, 0.01%		2,820,015	$	2,820,015

TOTAL SHORT-TERM INVESTMENT (Cost $2,820,015)				2,820,015

Total Investments - 99.6% (Cost $84,929,829)				102,159,256
Other Assets in Excess of Liabilities - 0.4%				388,345

TOTAL NET ASSETS - 100.0%			$	102,547,601

(a)	Non-income producing security.

(b)	U.S. Dollar-denominated foreign security.

(c)	The rate quoted is the annualized seven-day yield of the fund at period end.

The accompanying notes are an integral part of these financial statements.

LKCM BALANCED FUND

SCHEDULEOF INVESTMENTS

December 31, 2011


	Shares		Value
COMMON STOCKS - 72.1%
Aerospace & Defense - 1.6%
General Dynamics Corporation		1,400	$	92,974
Rockwell Collins, Inc.		3,600		199,332

				292,306

Air Freight & Logistics - 1.0%
United Parcel Service, Inc. - Class B		2,600		190,294

Banks - 3.7%
Comerica Incorporated		9,500		245,100
Cullen/Frost Bankers, Inc.		3,900		206,349
Wells Fargo & Company		8,471		233,461

				684,910

Beverages - 2.4%
The Coca-Cola Company		2,900		202,913
PepsiCo, Inc.		3,600		238,860

				441,773

Biotechnology - 1.7%
Celgene Corporation (a)		3,800		256,880
Charles River Laboratories International, Inc. (a)		2,000		54,660

				311,540

Chemicals - 4.8%
Air Products and Chemicals, Inc.		1,900		161,861
Airgas, Inc.		3,000		234,240
E. I. du Pont de Nemours and Company		3,200		146,496
FMC Corporation		2,400		206,496
Monsanto Company		1,900		133,133

				882,226

Commercial Services & Supplies - 1.1%
Waste Management, Inc.		6,100		199,531

Communications Equipment - 0.4%
Harris Corporation		2,200		79,288

Computers & Peripherals - 4.4%
Apple Inc. (a)		875		354,375
EMC Corporation (a)		8,600		185,244
International Business Machines Corporation		1,500		275,820

				815,439

Construction Materials - 1.1%
Martin Marietta Materials, Inc.		2,700		203,607

Containers & Packaging - 1.1%
Ball Corporation		5,700		203,547

Diversified Financial Services - 0.6%
JPMorgan Chase & Co.		3,500		116,375

Diversified Telecommunication Services - 1.2%
AT&T Inc.		7,400		223,776

Electrical Equipment & Instruments - 0.8%
Emerson Electric Co.		3,200		149,088


	Shares		Value
COMMON STOCKS
Electronic Equipment & Instruments - 1.1%
National Instruments Corporation		7,500	$	194,625

Energy Equipment & Services - 1.0%
Schlumberger Limited (b)		2,700		184,437

Food & Drug Retailing - 3.1%
CVS Caremark Corporation		4,700		191,666
Walgreen Company		4,100		135,546
Wal-Mart Stores, Inc.		4,300		256,968

				584,180

Health Care Equipment & Supplies - 2.2%
Covidien plc (b)		4,600		207,046
PerkinElmer, Inc.		3,400		68,000
Thermo Fisher Scientific, Inc. (a)		3,100		139,407

				414,453

Health Care Providers & Services - 2.2%
Catalyst Health Solutions, Inc. (a)		4,500		234,000
Express Scripts, Inc. (a)		3,800		169,822

				403,822

Household Products - 3.0%
Colgate-Palmolive Company		2,200		203,258
Kimberly-Clark Corporation		2,100		154,476
The Procter & Gamble Company		3,100		206,801

				564,535

Industrial Conglomerates - 0.6%
General Electric Company		5,900		105,669

Insurance - 0.7%
Prudential Financial, Inc.		2,600		130,312

Internet Catalog & Retail - 1.2%
Amazon.com, Inc. (a)		1,300		225,030

Internet Software & Services - 2.1%
Akamai Technologies, Inc. (a)		5,100		164,628
Google Inc. - Class A (a)		350		226,065

				390,693

IT Consulting & Services - 2.0%
Accenture plc - Class A (b)		3,200		170,336
Automatic Data Processing, Inc.		3,700		199,837

				370,173

Machinery - 2.4%
Danaher Corporation		4,900		230,496
Pall Corporation		3,800		217,170

				447,666

Media - 3.9%
CBS Corporation - Class B		8,500		230,690
DIRECTTV - Class A (a)		3,300		141,108
Time Warner Inc.		5,800		209,612
The Walt Disney Company		4,000		150,000

				731,410

The accompanying notes are an integral part of these financial statements.

LKCM BALANCED FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Shares		Value
COMMON STOCKS
Multiline Retail - 0.8%
Kohl’s Corporation		3,100	$	152,985

Oil & Gas & Consumable Fuels - 9.9%
Cabot Oil & Gas Corporation		2,500		189,750
Chevron Corporation		2,095		222,908
Devon Energy Corporation		2,400		148,800
EOG Resources, Inc.		1,900		187,169
Exxon Mobil Corporation		3,732		316,324
Pioneer Natural Resources Company		2,200		196,856
Range Resources Corporation		2,500		154,850
SM Energy Company		2,400		175,440
The Williams Companies, Inc.		7,700		254,254

				1,846,351

Personal Products - 0.9%
Avon Products, Inc.		9,700		169,459

Pharmaceuticals - 1.8%
Abbott Laboratories		4,100		230,543
Teva Pharmaceutical Industries Ltd. - ADR (b)		2,500		100,900

				331,443

Software - 3.1%
Adobe Systems Incorporated (a)		6,700		189,409
Nuance Communications, Inc. (a)		9,400		236,504
Oracle Corporation		5,500		141,075

				566,988

Specialty Retail - 2.0%
The Home Depot, Inc.		4,400		184,976
O’Reilly Automotive, Inc. (a)		2,300		183,885

				368,861

Textiles, Apparel & Luxury Goods - 1.0%
VF Corporation		1,400		177,786

Thrifts & Mortgage Finance - 1.2%
Capitol Federal Financial Inc.		19,500		225,030

TOTAL COMMON STOCKS (Cost $10,063,470)				13,379,608

	Principal Amount
CORPORATE BONDS - 27.7%
Air Freight & Logistics - 0.3%
United Parcel Service, Inc.
3.875%, 04/01/2014	$	50,000		53,378

Banks - 0.6%
Wells Fargo & Company
3.75%, 10/01/2014		100,000		105,641

Beverages - 1.2%
The Coca-Cola Company
5.35%, 11/15/2017		100,000		120,206


	Principal Amount		Value
CORPORATE BONDS
Beverages - 1.2%, Continued
PepsiCo, Inc.
4.65%, 02/15/2013	$	100,000	$	104,654

				224,860

Biotechnology - 1.1%
Celgene Corporation
2.45%, 10/15/2015		200,000		202,798

Capital Markets - 1.2%
The Bank of New York Mellon Corporation
3.10%, 01/15/2015		175,000		182,666
The Goldman Sachs Group, Inc.
5.50%, 11/15/2014		35,000		36,083

				218,749

Chemicals - 2.2%
Airgas, Inc.
3.25%, 10/01/2015		125,000		128,719
E. I. du Pont de Nemours and Company
3.25%, 01/15/2015		75,000		80,041
Eastman Chemical Company
3.00%, 12/15/2015		100,000		102,121
Praxair, Inc.
2.125%, 06/14/2013		100,000		102,035

				412,916

Computers & Peripherals - 1.4%
Hewlett-Packard Company
4.50%, 03/01/2013		100,000		102,874
International Business Machines Corporation
2.10%, 05/06/2013		150,000		153,145

				256,019

Containers & Packaging - 0.4%
Ball Corporation
7.125%, 09/01/2016
Callable 09/01/2013		75,000		81,937

Diversified Financial Services - 0.9%
JPMorgan Chase & Co.:
1.65%, 09/30/2013		100,000		100,761
2.05%, 01/24/2014		75,000		75,094

				175,855

Diversified Telecommunication Services - 1.3%
AT&T Inc.
5.10%, 09/15/2014		125,000		137,768
Verizon Communications Inc.
3.00%, 04/01/2016		100,000		104,824

				242,592

Electric Utilities - 1.3%
Duke Energy Corporation
3.95%, 09/15/2014		185,000		197,507

The accompanying notes are an integral part of these financial statements.

LKCM BALANCED FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Principal Amount		Value
CORPORATE BONDS
Electric Utilities - 1.3%, Continued
Georgia Power Company
1.30%, 09/15/2013	$	50,000	$	50,483

				247,990

Electrical Equipment & Instruments - 0.4%
Emerson Electric Co.
4.50%, 05/01/2013		75,000		78,461

Electronic Equipment & Instruments - 1.0%
Agilent Technologies, Inc.
2.50%, 07/15/2013		180,000		181,768

Food & Drug Retailing - 1.5%
CVS Caremark Corporation:
3.25%, 05/18/2015		50,000		52,760
5.75%, 06/01/2017		100,000		116,822
Wal-Mart Stores, Inc.
4.55%, 05/01/2013		100,000		105,580

				275,162

Food Products - 1.3%
Kraft Foods Inc.
2.625%, 05/08/2013		175,000		178,844
McCormick & Company, Incorporated
5.25%, 09/01/2013		50,000		53,556

				232,400

Health Care Equipment & Supplies - 0.9%
Covidien International Finance S.A. (b)
2.80%, 06/15/2015		50,000		51,948
Thermo Fisher Scientific, Inc.
3.20%, 05/01/2015		110,000		116,361

				168,309

Health Care Providers & Services - 0.6%
McKesson Corporation
3.25%, 03/01/2016		100,000		105,936

Industrial Conglomerates - 0.6%
General Electric Company
5.00%, 02/01/2013		100,000		104,237

Insurance - 1.0%
Berkshire Hathaway Inc.
4.85%, 01/15/2015		100,000		110,853
Prudential Financial, Inc.
2.75%, 01/14/2013		75,000		75,665

				186,518

Machinery - 0.7%
Danaher Corporation
1.30%, 06/23/2014		125,000		126,873

Media - 1.5%
DIRECTTV Holdings LLC
3.55%, 03/15/2015		100,000		104,166


	Principal Amount		Value
CORPORATE BONDS
Media - 1.5%, Continued
Time Warner Inc.
3.15%, 07/15/2015	$	175,000	$	182,173

				286,339

Oil & Gas & Consumable Fuels - 2.6%
Apache Corporation
5.625%, 01/15/2017		75,000		89,004
ConocoPhillips
5.50%, 04/15/2013		100,000		105,940
EOG Resources, Inc.
6.125%, 10/01/2013		100,000		108,596
Noble Energy, Inc.
5.25%, 04/15/2014		100,000		108,157
Occidental Petroleum Corporation
1.45%, 12/13/2013		75,000		76,337

				488,034

Pharmaceuticals - 1.1%
Teva Pharmaceutical Industries Ltd. (b):
1.70%, 03/21/2014		75,000		75,427
3.00%, 06/15/2015		125,000		130,277

				205,704

Semiconductor Equipment & Products - 0.6%
National Semiconductor Corporation
3.95%, 04/15/2015		100,000		108,103

Software - 2.0%
Adobe Systems Incorporated
3.25%, 02/01/2015		200,000		210,089
Oracle Corporation
3.75%, 07/08/2014		150,000		161,419

				371,508

TOTAL CORPORATE BONDS (Cost $4,968,881)				5,142,087

	Shares
SHORT-TERM INVESTMENT - 0.0%
Money Market Fund (c) - 0.0%
Federated Government Obligations Fund - Institutional Shares, 0.01%		2,038		2,038

TOTAL SHORT-TERM INVESTMENT (Cost $2,038)				2,038

Total Investments - 99.8% (Cost $15,034,389)				18,523,733
Other Assets in Excess of Liabilities - 0.2%				36,017

TOTAL NET ASSETS - 100.0%			$	18,559,750

ADR American Depository Receipt.

(a)	Non-income producing security.

(b)	U.S. Dollar-denominated foreign security.

(c)	The rate quoted is the annualized seven-day yield of the fund at period end.

The accompanying notes are an integral part of these financial statements.

LKCM FIXED INCOME FUND

SCHEDULEOF INVESTMENTS

December 31, 2011


	Principal Amount		Value
CORPORATE BONDS - 91.6%
Aerospace & Defense - 3.2%
General Dynamics Corporation:
4.25%, 05/15/2013	$	250,000	$	262,284
5.25%, 02/01/2014		225,000		245,626
5.375%, 08/15/2015		1,375,000		1,573,052
Honeywell International Inc.:
4.25%, 03/01/2013		1,300,000		1,356,599
3.875%, 02/15/2014		270,000		288,214
Lockheed Martin Corporation
7.65%, 05/01/2016		1,250,000		1,529,940
Rockwell Collins, Inc.
4.75%, 12/01/2013		430,000		456,222

				5,711,937

Air Freight & Logistics - 0.4%
United Parcel Service, Inc.
3.875%, 04/01/2014		625,000		667,221

Banks - 1.2%
Bank of America Corporation:
7.375%, 05/15/2014		1,000,000		1,037,418
5.375%, 06/15/2014		1,025,000		1,020,796

				2,058,214

Beverages - 3.2%
Anheuser-Busch Inbev Worldwide Inc.
3.00%, 10/15/2012		2,000,000		2,031,698
The Coca-Cola Company:
3.625%, 03/15/2014		400,000		426,034
5.35%, 11/15/2017		1,500,000		1,803,096
PepsiCo, Inc.:
4.65%, 02/15/2013		1,035,000		1,083,169
7.90%, 11/01/2018		214,000		289,317

				5,633,314

Biotechnology - 2.7%
Celgene Corporation
2.45%, 10/15/2015		3,619,000		3,669,630
Gilead Sciences, Inc.
4.50%, 04/01/2021		1,000,000		1,062,247

				4,731,877

Building Products - 1.7%
Masco Corporation:
5.875%, 07/15/2012		1,645,000		1,669,630
7.125%, 03/15/2020		1,350,000		1,364,548

				3,034,178

Capital Markets - 2.6%
The Bank of New York Mellon Corporation
3.10%, 01/15/2015		738,000		770,328
Goldman Sachs Group, Inc.
5.125%, 01/15/2015		1,000,000		1,022,822


	Principal Amount		Value
CORPORATE BONDS
Capital Markets - 2.6%, Continued
Morgan Stanley:
4.50%, 08/30/2015	$	1,000,000	$	933,208
5.00%, 08/31/2025
Callable 02/29/2012		2,000,000		1,834,164

				4,560,522

Chemicals - 5.3%
Airgas, Inc.:
2.85%, 10/01/2013		1,160,000		1,182,258
3.25%, 10/01/2015		1,669,000		1,718,653
E. I. du Pont de Nemours and Company
3.25%, 01/15/2015		1,775,000		1,894,305
Eastman Chemical Company
3.00%, 12/15/2015		2,625,000		2,680,671
The Lubrizol Corporation
5.50%, 10/01/2014		1,579,000		1,759,871
Praxair, Inc.
5.25%, 11/15/2014		200,000		224,619

				9,460,377

Commercial Services & Supplies - 0.6%
Republic Services, Inc.
5.50%, 09/15/2019		1,000,000		1,155,917

Communications Equipment - 2.6%
Cisco Systems, Inc.:
2.90%, 11/17/2014		340,000		359,944
5.50%, 02/22/2016		1,000,000		1,164,825
4.95%, 02/15/2019		700,000		812,701
Harris Corporation:
5.00%, 10/01/2015		1,088,000		1,181,984
6.375%, 06/15/2019		900,000		1,027,261

				4,546,715

Computers & Peripherals - 2.7%
Dell Inc.
5.625%, 04/15/2014		750,000		822,872
Hewlett-Packard Company:
4.25%, 02/24/2012		200,000		200,908
6.50%, 07/01/2012		700,000		719,130
4.50%, 03/01/2013		1,295,000		1,332,218
International Business Machines Corporation
5.70%, 09/14/2017		1,500,000		1,818,579

				4,893,707

Containers & Packaging - 4.3%
Ball Corporation:
7.125%, 09/01/2016
Callable 09/01/2013		1,825,000		1,993,812
6.625%, 03/15/2018
Callable 02/13/2012		1,900,000		1,957,000
5.75%, 05/15/2021
Callable 11/15/2015		2,000,000		2,105,000

The accompanying notes are an integral part of these financial statements.

LKCM FIXED INCOME FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Principal Amount		Value
CORPORATE BONDS
Containers & Packaging - 4.3%, Continued
Packaging Corp. of America
5.75%, 08/01/2013	$	1,500,000	$	1,581,338

				7,637,150

Diversified Financial Services - 1.3%
JPMorgan Chase & Co.
4.25%, 10/15/2020		2,325,000		2,345,590

Diversified Telecommunication Services - 5.8%
AT&T Inc.
5.10%, 09/15/2014		1,750,000		1,928,755
CenturyLink, Inc.:
5.15%, 06/15/2017		2,000,000		1,984,692
6.15%, 09/15/2019		1,402,000		1,410,544
6.45%, 06/15/2021		2,000,000		2,007,194
Verizon Communications Inc.:
5.25%, 04/15/2013		275,000		290,280
5.55%, 02/15/2016		1,000,000		1,145,339
3.00%, 04/01/2016		490,000		513,635
5.50%, 02/15/2018		875,000		1,021,433

				10,301,872

Electric Utilities - 0.6%
Southern Power Co.
4.875%, 07/15/2015		1,050,000		1,150,034

Electrical Equipment & Instruments - 0.2%
Emerson Electric Co.
4.50%, 05/01/2013		425,000		444,611

Electronic Equipment & Instruments - 0.8%
Agilent Technologies, Inc.
2.50%, 07/15/2013		1,400,000		1,413,751

Energy Equipment & Services - 1.0%
Weatherford International, Inc.
6.35%, 06/15/2017		1,550,000		1,733,658

Food & Drug Retailing - 5.3%
CVS Caremark Corporation:
4.875%, 09/15/2014		330,000		361,099
3.25%, 05/18/2015		1,000,000		1,055,194
5.75%, 06/01/2017		2,750,000		3,212,611
Sysco Corporation
4.20%, 02/12/2013		1,175,000		1,219,222
Walgreen Company
4.875%, 08/01/2013		1,955,000		2,086,575
Wal-Mart Stores, Inc.
4.55%, 05/01/2013		1,400,000		1,478,117

				9,412,818

Food Products - 1.3%
Kraft Foods Inc.
2.625%, 05/08/2013		750,000		766,474
McCormick & Company, Incorporated
5.25%, 09/01/2013		1,450,000		1,553,117

				2,319,591


	Principal Amount		Value
CORPORATE BONDS
Health Care Equipment & Supplies - 2.7%
Covidien International Finance S.A. (a)
1.875%, 06/15/2013	$	1,550,000	$	1,565,275
DENTSPLY International Inc.
2.75%, 08/15/2016		1,270,000		1,283,573
Medtronic, Inc.
4.50%, 03/15/2014		900,000		969,975
Thermo Fisher Scientific, Inc.
3.25%, 11/20/2014		900,000		953,683

				4,772,506

Health Care Providers & Services - 2.5%
Express Scripts, Inc.:
5.25%, 06/15/2012		1,000,000		1,019,019
6.25%, 06/15/2014		1,000,000		1,090,559
McKesson Corporation
3.25%, 03/01/2016		2,275,000		2,410,033

				4,519,611

Hotels, Restaurants & Leisure - 0.7%
McDonald’s Corporation
5.35%, 03/01/2018		1,000,000		1,196,500

Household Durables - 2.5%
Jarden Corporation:
8.00%, 05/01/2016
Callable 05/01/2013		1,000,000		1,085,000
7.50%, 05/01/2017		1,900,000		2,023,500
7.50%, 01/15/2020
Callable 01/15/2015		1,340,000		1,433,800

				4,542,300

Household Products - 0.6%
The Procter & Gamble Company
8.00%, 09/01/2024
Putable 09/1/2014		775,000		1,151,612

Industrial Conglomerates - 1.8%
3M Co.
4.375%, 08/15/2013		1,500,000		1,595,093
General Electric Company
5.00%, 02/01/2013		1,600,000		1,667,792

				3,262,885

Insurance - 2.5%
Berkshire Hathaway Inc.
4.85%, 01/15/2015		1,225,000		1,357,944
Prudential Financial, Inc.:
3.625%, 09/17/2012		1,375,000		1,396,559
2.75%, 01/14/2013		1,700,000		1,715,081

				4,469,584

IT Consulting & Services - 0.6%
Western Union Company
5.93%, 10/01/2016		1,000,000		1,127,938

The accompanying notes are an integral part of these financial statements.

LKCM FIXED INCOME FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Principal Amount		Value
CORPORATE BONDS
Media - 3.6%
DIRECTTV Holdings LLC
3.55%, 03/15/2015	$	1,265,000	$	1,317,696
Time Warner Inc.
3.15%, 07/15/2015		3,175,000		3,305,140
The Walt Disney Company
5.625%, 09/15/2016		1,500,000		1,778,616

				6,401,452

Metals & Mining - 0.3%
Alcoa Inc.
5.55%, 02/01/2017		500,000		533,770

Multiline Retail - 2.8%
Family Dollar Stores, Inc.
5.00%, 02/01/2021		4,500,000		4,639,572
Kohl’s Corporation
6.25%, 12/15/2017		282,000		336,436

				4,976,008

Oil & Gas & Consumable Fuels - 12.2%
Anadarko Petroleum Corporation:
5.95%, 09/15/2016		2,000,000		2,269,452
6.375%, 09/15/2017		2,000,000		2,321,086
Apache Corporation
6.25%, 04/15/2012		1,593,000		1,616,975
ConocoPhillips
4.75%, 10/15/2012		875,000		901,300
Devon Energy Corporation
2.40%, 07/15/2016
Callable 6/15/2016		1,630,000		1,670,711
Enterprise Products Operating LLC:
4.60%, 08/01/2012		1,525,000		1,547,657
3.20%, 02/01/2016		1,845,000		1,911,914
EOG Resources, Inc.:
6.125%, 10/01/2013		1,500,000		1,628,936
2.95%, 06/01/2015		1,200,000		1,255,025
Noble Energy, Inc.
5.25%, 04/15/2014		1,500,000		1,622,358
Noble Holding International Ltd (a)
3.45%, 08/01/2015		3,665,000		3,816,115
Peabody Energy Corporation
6.50%, 09/15/2020		500,000		527,500
Range Resources Corporation
8.00%, 05/15/2019
Callable 5/15/2014		500,000		560,000

				21,649,029

Pharmaceuticals - 3.2%
Eli Lilly & Company
4.20%, 03/06/2014		950,000		1,018,429
Teva Pharmaceutical Industries Ltd. (a):
1.70%, 03/21/2014		425,000		427,424
3.00%, 06/15/2015		2,030,000		2,115,694
5.55%, 02/01/2016		1,860,000		2,104,432

				5,665,979


	Principal Amount		Value
CORPORATE BONDS
Road & Rail - 0.6%
Burlington Northern
Santa Fe Corporation
5.65%, 05/01/2017	$	185,000	$	213,749
Norfolk Southern Corporation
5.257%, 09/17/2014		750,000		827,772

				1,0 41,521

Semiconductor Equipment & Products - 3.0%
Analog Devices, Inc.
3.00%, 04/15/2016		1,050,000		1,107,756
Applied Materials, Inc.
2.65%, 06/15/2016		1,717,000		1,759,607
National Semiconductor Corporation
3.95%, 04/15/2015		2,275,000		2,459,348

				5,326,711

Software - 3.4%
Adobe Systems Incorporated
3.25%, 02/01/2015		2,175,000		2,284,724
Microsoft Corporation
2.95%, 06/01/2014		1,910,000		2,030,128
Oracle Corporation
3.75%, 07/08/2014		1,650,000		1,775,606

				6,090,458

Specialty Retail - 1.8%
Lowe’s Companies, Inc.
5.00%, 10/15/2015		525,000		588,923
O’Reilly Automotive, Inc.
4.875%, 01/14/2021
Callable 10/14/2020		1,000,000		1,065,943
The Sherwin-Williams Company
3.125%, 12/15/2014		1,450,000		1,528,984

				3,183,850

TOTAL CORPORATE BONDS (Cost $154,501,026)				163,124,768

	Shares
PREFERRED STOCKS - 2.3%
Capital Markets - 1.2%
The Goldman Sachs Group, Inc.		40,000		666,800
Merrill Lynch Preferred Capital Trust III
Callable 02/10/2012		75,000		1,494,000

				2,160,800

Diversified Financial Services - 1.1%
JPMorgan Chase Capital XIV
Callable 02/10/2012		75,000		1,903,500

TOTAL PREFERRED STOCKS (Cost $4,701,733)				4,064,300

The accompanying notes are an integral part of these financial statements.

LKCM FIXED INCOME FUND

SCHEDULEOF INVESTMENTS, CONTINUED

December 31, 2011


	Principal Amount		Value
U.S. GOVERNMENT & AGENCY ISSUES - 3.6%
Fannie Mae - 0.6%
5.00%, 03/15/2016	$	1,000,000	$	1,166,448

Federal Home Loan Bank - 1.0%
5.50%, 08/13/2014		500,000		563,874
4.875%, 05/17/2017		1,000,000		1,187,849

				1,751,723

Freddie Mac - 0.3%
5.125%, 11/17/2017		500,000		602,827

U.S. Treasury Inflation Indexed Bonds - 0.7%
3.375%, 01/15/2012		1,275,150		1,276,346

U.S. Treasury Notes - 1.0%
4.25%, 11/15/2014		500,000		555,235
4.25%, 08/15/2015		500,000		566,680
4.50%, 02/15/2016		500,000		578,164

				1,700,079

TOTAL U.S. GOVERNMENT & AGENCY ISSUES (Cost $5,805,774)				6,497,423

SHORT-TERM INVESTMENTS - 1.3%
Corporate Bonds - 0.7%
Enterprise Products Operating LLC
4.60%, 08/01/2012		300,000		304,457
Goldman Sachs Group, Inc.
5.70%, 09/01/2012		1,000,000		1,017,770

				1,322,227

	Shares
Money Market Fund (b) - 0.6%
Federated Government Obligations Fund - Institutional Shares, 0.01%		1,024,156		1,024,156

TOTAL SHORT-TERM INVESTMENTS (Cost $2,344,309)				2,346,383

Total Investments - 98.8% (Cost $167,352,842)				176,032,874
Other Assets in Excess of Liabilities - 1.2%				2,082,970

TOTAL NET ASSETS - 100.0%			$	178,115,844

(a)	U.S. Dollar-denominated foreign security.

(b)	The rate quoted is the annualized seven-day yield of the fund at period end.

The accompanying notes are an integral part of these financial statements.

STATEMENTOF ASSETSAND LIABILITIES

December 31, 2011


	LKCM			LKCM			LKCM		LKCM			LKCM
	Small Cap			Small-Mid Cap			Equity		Balanced			Fixed
	Equity Fund			Equity Fund			Fund		Fund			Income Fund
Assets:
Investments, at value*	$	830,117,014		$	23,769,937		$	102,159,256	$	18,523,733		$	176,032,874
Cash		—			—			6,800		—			—
Dividends and interest receivable		275,586			7,184			68,564		63,409			2,047,568
Receivable from Adviser		—			5,349			—		—			—
Receivable for fund shares sold		1,144,537			12,500			467,398		1,280			275,282
Other assets		57,489			30			15,175		4,686			22,618

Total assets		831,594,626			23,795,000			102,717,193		18,593,108			178,378,342

Liabilities:
Payable for investment advisory fees		1,521,121			—			126,368		15,660			194,884
Payable for investments purchased		1,080,867			—			—		—			—
Payable for fund shares redeemed		276,208			77			95		76			74
Administration expense payable		110,296			7,580			14,657		3,441			23,662
Professional fees payable		69,745			4,487			10,783		5,185			17,943
Distribution expense payable		23,909			—			—		—			—
Accrued expenses and other liabilities		108,963			28,350			17,689		8,996			25,935

Total liabilities		3,191,109			40,494			169,592		33,358			262,498

Net assets	$	828,403,517		$	23,754,506		$	102,547,601	$	18,559,750		$	178,115,844

Net assets consist of:
Paid in capital	$	663,988,087		$	23,407,347		$	85,222,607	$	15,549,896		$	169,322,353
Undistributed net investment income		—			—			631		107			—
Accumulated net realized gain (loss) on securities		(1,994,380	)		(699,870	)		94,936		(479,597	)		113,459
Net unrealized appreciation on investments		166,409,810			1,047,029			17,229,427		3,489,344			8,680,032

Net assets	$	828,403,517		$	23,754,506		$	102,547,601	$	18,559,750		$	178,115,844

INSTITUTIONAL CLASS**
Net assets	$	785,279,919		$	23,754,506		$	102,547,601	$	18,559,750		$	178,115,844
Shares of beneficial interest outstanding (unlimited shares of no par value authorized)		34,981,117			2,682,025			6,685,460		1,277,271			16,136,186
Net asset value per share (offering and redemption price)	$	22.45		$	8.86		$	15.34	$	14.53		$	11.04

ADVISER CLASS
Net assets	$	43,123,598
Shares of beneficial interest outstanding (unlimited shares of no par value authorized)		1,970,863
Net asset value per share (offering and redemption price)	$	21.88


* Cost of Investments	$	663,707,204		$	22,722,908		$	84,929,829	$	15,034,389		$	167,352,842

**	Currently, only the Small Cap Equity , Small-Mid Cap Equity and Equity Funds offer a second class.

The accompanying notes are an integral part of these financial statements.

STATEMENTOF OPERATIONS

For the Year Ended December 31, 2011


	LKCM Small Cap Equity Fund			LKCM Small-Mid Cap Equity Fund⁽¹⁾			LKCM Equity Fund			LKCM Balanced Fund			LKCM Fixed Income Fund
Investment Income:
Dividends*	$	4,891,144		$	53,857		$	1,330,247		$	221,509		$	182,208
Interest		2,348			91			465			154,365			6,617,989

Total income		4,893,492			53,948			1,330,712			375,874			6,800,197

Expenses:
Investment advisory fees		5,981,096			68,556			607,186			123,676			843,965
Distribution expense - Adviser Class (Note B)		100,358			—			—			—			—
Administrative fees		658,074			29,706			80,627			20,325			135,595
Accounting and transfer agent fees and expenses		313,193			46,071			73,021			43,138			94,272
Professional fees		160,798			5,072			20,344			7,201			36,333
Custody fees and expenses		100,283			13,781			12,100			5,855			17,749
Trustees’ fees		91,210			280			8,800			2,150			22,058
Federal and state registration		87,136			30,095			41,242			10,840			26,754
Reports to shareholders		41,115			1,506			3,678			1,034			4,078
Other		144,215			905			14,852			3,314			30,138

Total expenses		7,677,478			195,972			861,850			217,533			1,210,942
Less, expense waiver and/or reimbursement (Note B)		—			(104,564	)		(167,923	)		(65,317	)		(113,787	)

Net expenses		7,677,478			91,408			693,927			152,216			1,097,155

Net investment income (loss)		(2 ,783,986	)		(37,460	)		636,785			223,658			5,703,042

Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments		69,601,456			(699,870	)		847,915			(4,518	)		917,718
Net change in unrealized appreciation/depreciation on investments		(35,091,526	)		1,047,029			1,370,417			271,728			230,560

Net Realized and Unrealized Gain on Investments		34,509,930			347,159			2,218,332			267,210			1,148,278

Net Increase in Net Assets Resulting from Operations	$	31,725,944		$	309,699		$	2,855,117		$	490,868		$	6,851,320


* Net of foreign taxes withheld	$	5,861		$	213		$	2,400		$	391		$	—

⁽¹⁾	For the period May 2, 2011 (commencement of operations) through December 31, 2011.

The accompanying notes are an integral part of these financial statements.

STATEMENTSOF CHANGESIN NET ASSETS


	LKCM						LKCM
	Small Cap						Small-Mid Cap
	Equity Fund						Equity Fund
							May 2, 2011⁽¹⁾
	Year Ended			Year Ended			through
	December 31,			December 31,			December 31,
	2011			2010			2011
Operations:
Net investment loss	$	(2,783,986	)	$	(2,412,517	)	$	(37,460	)
Net realized gain (loss) on investments		69,601,456			61,883,308			(699,870	)
Net change in unrealized appreciation/depreciation on investments		(35,091,526	)		123,384,121			1,047,029

Net increase in net assets resulting from operations		31,725,944			182,854,912			309,699

Net increase (decrease) in net assets from Fund share transactions (Note C)		62,042,933			(13,111,435	)		23,444,807

Total increase in net assets		93,768,877			169,743,477			23,754,506

Net Assets:
Beginning of period		734,634,640			564,891,163			—

End of period	$	828,403,517		$	734,634,640		$	23,754,506

⁽¹⁾	Commencement of operations.


	LKCM Equity Fund						LKCM Balanced Fund
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2011			2010			2011			2010
Operations:
Net investment income	$	636,785		$	356,369		$	223,658		$	193,174
Net realized gain (loss) on investments		847,915			2,560,907			(4,518	)		241,576
Net change in unrealized appreciation/depreciation on investments		1,370,417			7,275,495			271,728			1,014,807

Net increase in net assets resulting from operations		2,855,117			10,192,771			490,868			1,449,557

Dividends and Distributions to Shareholders:
Net investment income		(636,154	)		(363,260	)		(223,616	)		(194,657	)
Net realized gain on investments		(1,598,383	)		(361,522	)		—			—

		(2,234,537	)		(724,782	)		(223,616	)		(194,657	)

Net increase in net assets from Fund share transactions (Note C)		29,557,371			13,744,831			1,806,145			1,755,123

Total increase in net assets		30,177,951			23,212,820			2,073,397			3,010,023

Net Assets:
Beginning of period		72,369,650			49,156,830			16,486,353			13,476,330

End of period*	$	102,547,601		$	72,369,650		$	18,559,750		$	16,486,353


* Including undistributed net investment income of	$	631		$	—		$	107		$	2,456

The accompanying notes are an integral part of these financial statements.

STATEMENTSOF CHANGESIN NET ASSETS


	LKCM
	Fixed Income Fund
	Year Ended			Year Ended
	December 31,			December 31,
	2011			2010
Operations:
Net investment income	$	5,703,042		$	5,688,502
Net realized gain on investments		917,718			989,099
Net change in unrealized appreciation/depreciation		230,560			2,215,990

Net increase in net assets resulting from operations		6,851,320			8,893,591

Dividends and Distributions to Shareholders:
Net investment income		(5,721,525	)		(5,707,218	)
Net realized gain on investments		(1,206,565	)		(636,805	)

		(6,928,090	)		(6,344,023	)

Net increase in net assets from Fund share transactions (Note C)		15,840,038			10,584,768

Total increase in net assets		15,763,268			13,134,336

Net Assets:
Beginning of period		162,352,576			149,218,240

End of period	$	178,115,844		$	162,352,576

The accompanying notes are an integral part of these financial statements.

FINANCIAL HIGHLIGHTS

SELECTED DATAFOR EACH SHAREOF CAPITAL STOCK OUTSTANDING


	LKCM Small Cap Equity Fund – Institutional Class
	Year			Year			Year			Year			Year
	Ended			Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2011			2010			2009			2008			2007
Net Asset Value - Beginning of Period	$	21.49		$	16.16		$	12.24		$	20.03		$	21.98

Net investment income (loss)⁽¹⁾		(0.08	)		(0.07	)		(0.05	)		(0.03	)		0.01
Net realized and unrealized gain (loss) on investments		1.04			5.40			3.97			(7.75	)		(0.17	)

Total from investment operations		0.96			5.33			3.92			(7.78	)		(0.16	)

Dividends from net investment income		—			—			—			—			(0.00	)⁽²⁾
Distributions from net realized gains		—			—			—			(0.01	)		(1.79	)

Total dividends and distributions		—			—			—			(0.01	)		(1.79	)

Net Asset Value - End of Period	$	22.45		$	21.49		$	16.16		$	12.24		$	20.03

Total Return		4.47	%		32.98	%		32.03	%		(38.87	)%		(0.76	)%

Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	785,280		$	690,511		$	529,166		$	385,223		$	595,175
Ratio of expenses to average net assets:		0.95	%		0.96	%		1.00	%		0.97	%		0.94	%
Ratio of net investment income (loss) to average net assets:		(0.33	)%		(0.38	)%		(0.35	)%		(0.17	)%		0.04	%
Portfolio turnover rate⁽³⁾		50	%		57	%		59	%		61	%		60	%

⁽¹⁾	Net investment income (loss) per share represents net investment income (loss) divided by the average shares outstanding throughout the period.

⁽²⁾	Less than $(0.005).

⁽³⁾	Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.


	LKCM Small Cap Equity Fund – Adviser Class
	Year			Year			Year			Year			Year
	Ended			Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2011			2010			2009			2008			2007
Net Asset Value - Beginning of Period	$	21.00		$	15.83		$	12.02		$	19.72		$	21.73

Net investment loss⁽¹⁾		(0.13	)		(0.11	)		(0.08	)		(0.07	)		(0.05	)
Net realized and unrealized gain (loss) on investments		1.01			5.28			3.89			(7.62	)		(0.17	)

Total from investment operations		0.88			5.17			3.81			(7.69	)		(0.22	)

Distributions from net realized gains		—			—			—			(0.01	)		(1.79	)

Net Asset Value - End of Period	$	21.88		$	21.00		$	15.83		$	12.02		$	19.72

Total Return		4.19	%		32.66	%		31.70	%		(39.02	)%		(1.06	)%

Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	43,124		$	44,124		$	35,725		$	24,925		$	40,465
Ratio of expenses to average net assets:		1.20	%		1.21	%		1.25	%		1.22	%		1.19	%
Ratio of net investment loss to average net assets:		(0.58	)%		(0.63	)%		(0.60	)%		(0.42	)%		(0.21	)%
Portfolio turnover rate⁽²⁾		50	%		57	%		59	%		61	%		60	%

⁽¹⁾	Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the period.

⁽²⁾	Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

The accompanying notes are an integral part of these financial statements.

FINANCIAL HIGHLIGHTS

SELECTED DATAFOR EACH SHAREOF CAPITAL STOCK OUTSTANDING


	LKCM
	Small-Mid Cap
	Equity Fund
	May 2, 2011 ⁽¹⁾
	through
	December 31,
	2011
Net Asset Value - Beginning of Period	$	10.00

Net investment loss⁽²⁾		(0.02	)
Net realized and unrealized loss on investments⁽³⁾		(1.12	)

Total from investment operations		(1.14	)

Net Asset Value - End of Period	$	8.86

Total Return		(11.40	)%⁽⁴⁾

Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	23,755
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		2.14	%⁽⁵⁾
After expense waiver and/or reimbursement		1.00	%⁽⁵⁾
Ratio of net investment loss to average net assets:
Before expense waiver and/or reimbursement		(1.55	)%⁽⁵⁾
After expense waiver and/or reimbursement		(0.41	)%⁽⁵⁾
Portfolio turnover rate		36	%

⁽¹⁾	Commencement of operations.

⁽²⁾	Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the period.

⁽³⁾	Due to the timing of capital share transactions, the per share amount of net realized and unrealized loss on investments varies from the amounts shown in the statement of operations.

⁽⁴⁾	Not annualized.

⁽⁵⁾	Annualized.


	LKCM Equity Fund
	Year			Year			Year			Year			Year
	Ended			Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2011			2010			2009			2008			2007
Net Asset Value - Beginning of Period	$	15.18		$	13.02		$	10.33		$	15.38		$	14.43

Net investment income		0.11	⁽¹⁾		0.08			0.10			0.16			0.16
Net realized and unrealized gain (loss) on investments		0.39			2.24			2.69			(5.05	)		1.42

Total from investment operations		0.50			2.32			2.79			(4.89	)		1.58

Dividends from net investment income		(0.10	)		(0.08	)		(0.10	)		(0.16	)		(0.16	)
Distributions from net realized gains		(0.24	)		(0.08	)		—			—			(0.47	)

Total dividends and distributions		(0.34	)		(0.16	)		(0.10	)		(0.16	)		(0.63	)

Net Asset Value - End of Period	$	15.34		$	15.18		$	13.02		$	10.33		$	15.38

Total Return		3.30	%		17.77	%		27.01	%		(31.80	)%		10.96	%

Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	102,548		$	72,370		$	49,157		$	36,677		$	53,743
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		0.99	%		1.04	%		1.13	%		1.06	%		1.01	%
After expense waiver and/or reimbursement		0.80	%		0.80	%		0.80	%		0.80	%		0.80	%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		0.54	%		0.39	%		0.62	%		0.85	%		0.82	%
After expense waiver and/or reimbursement		0.73	%		0.63	%		0.95	%		1.11	%		1.03	%
Portfolio turnover rate		20	%		23	%		26	%		31	%		26	%

⁽¹⁾	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.

The accompanying notes are an integral part of these financial statements.

FINANCIAL HIGHLIGHTS

SELECTED DATAFOR EACH SHAREOF CAPITAL STOCK OUTSTANDING


	LKCM Balanced Fund
	Year			Year			Year			Year			Year
	Ended			Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2011			2010			2009			2008			2007
Net Asset Value - Beginning of Period	$	14.25		$	13.09		$	10.85		$	13.84		$	13.36

Net investment income		0.17			0.18			0.22			0.26			0.28
Net realized and unrealized gain (loss) on investments		0.28			1.16			2.24			(2.96	)		0.82

Total from investment operations		0.45			1.34			2.46			(2.70	)		1.10

Dividends from net investment income		(0.17	)		(0.18	)		(0.22	)		(0.28	)		(0.28	)
Distributions from net realized gains		—			—			—			(0.01	)		(0.34	)

Total dividends and distributions		(0.17	)		(0.18	)		(0.22	)		(0.29	)		(0.62	)

Net Asset Value - End of Period	$	14.53		$	14.25		$	13.09		$	10.85		$	13.84

Total Return		3.16	%		10.31	%		22.90	%		(19.70	)%		8.25	%

Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	18,560		$	16,486		$	13,476		$	10,156		$	12,191
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		1.14	%		1.25	%		1.41	%		1.38	%		1.35	%
After expense waiver and/or reimbursement		0.80	%		0.80	%		0.80	%		0.80	%		0.80	%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		0.83	%		0.89	%		1.28	%		1.51	%		1.51	%
After expense waiver and/or reimbursement		1.17	%		1.34	%		1.89	%		2.09	%		2.06	%
Portfolio turnover rate		34	%		13	%		22	%		38	%		27	%


	LKCM Fixed Income Fund
	Year			Year			Year			Year			Year
	Ended			Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2011			2010			2009			2008			2007
Net Asset Value - Beginning of Period	$	11.03		$	10.85		$	10.20		$	10.33		$	10.19

Net investment income		0.37			0.40			0.43			0.43			0.46
Net realized and unrealized gain (loss) on investments		0.09			0.22			0.65			(0.13	)		0.14

Total from investment operations		0.46			0.62			1.08			0.30			0.60

Dividends from net investment income		(0.37	)		(0.40	)		(0.43	)		(0.43	)		(0.46	)
Distributions from net realized gains		(0.08	)		(0.04	)		—			—			—

Total dividends and distributions		(0.45	)		(0.44	)		(0.43	)		(0.43	)		(0.46	)

Net Asset Value - End of Period	$	11.04		$	11.03		$	10.85		$	10.20		$	10.33

Total Return		4.22	%		5.82	%		10.77	%		2.99	%		5.96	%

Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	178,116		$	162,353		$	149,218		$	120,674		$	113,032
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement	��	0.72	%		0.73	%		0.76	%		0.73	%		0.72	%
After expense waiver and/or reimbursement		0.65	%		0.65	%		0.65	%		0.65	%		0.65	%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		3.31	%		3.55	%		4.00	%		4.15	%		4.39	%
After expense waiver and/or reimbursement		3.38	%		3.63	%		4.11	%		4.23	%		4.46	%
Portfolio turnover rate		24	%		20	%		30	%		23	%		31	%

The accompanying notes are an integral part of these financial statements.

LKCM FUNDS

NOTESTOTHE FINANCIAL STATEMENTS

A. Organization and Significant Accounting Policies: LKCM Funds (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end, management investment company. The Trust was organized as a Delaware business trust on February 10, 1994 and consists of eight diversified series, five of which are presented herein and include the LKCM Small Cap Equity Fund, LKCM Small-Mid Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund and LKCM Fixed Income Fund (collectively, the “Funds”), the assets of which are invested in separate, independently managed portfolios. Investment operations of the Funds began on July 14, 1994 (LKCM Small Cap Equity Fund), January 3, 1996 (LKCM Equity Fund), December 30, 1997 (LKCM Balanced Fund and LKCM Fixed Income Fund), and May 2, 2011 (LKCM Small-Mid Cap Equity Fund). The Small Cap Equity Fund and the Equity Fund issued a second class of shares, Adviser Class Shares, and renamed the initial class as Institutional Class Shares on May 1, 2003. The Small Cap Equity Adviser Class Shares were initially sold on June 5, 2003 and are subject to expenses pursuant to the Rule 12b-1 plan described in Note B. The Equity Fund and Small-Mid Cap Equity Fund Adviser Class Shares have not yet commenced sales. Each Fund charges a 1% redemption fee for redemptions on Fund shares held for less than 30 days.

The LKCM Small Cap Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of smaller companies (those with market capitalizations at the time of investment between $400 million and $2.5 billion) which Luther King Capital Management Corporation (the “Adviser”) believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. The LKCM Small-Mid Cap Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of small-mid capitalization companies (those with market capitalizations at the time of investment between $1 billion and $7 billion) which the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above average capital appreciation. The LKCM Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of companies which the Adviser believes are likely to have above-average growth in revenue and/or earnings, above-average returns on shareholders’ equity and under-leveraged balance sheets, and potential for above-average capital appreciation. The LKCM Balanced Fund seeks to provide investors with current income and long-term capital appreciation by investing under normal circumstances primarily in a portfolio of equity and fixed income securities with at least 25% of the Fund’s total assets invested in fixed income securities. The LKCM Fixed Income Fund seeks to provide investors with current income by investing under normal circumstances at least 80% of its net assets in a portfolio of investment grade corporate and government fixed income securities.

The following is a summary of significant accounting policies followed by the Funds in preparation of the financial statements.

1. Security Valuation: Securities listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price taken from the exchange where the security is primarily traded. Nasdaq National Market securities are valued at the Nasdaq Official Closing Price (“NOCP”). Unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the mean of the most recent quoted bid and asked price. Securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price available before the time when assets are valued. Debt securities (other than obligations having a maturity of 60 days or less) are normally valued at the mean of the bid and ask price and/or by using a combination of daily quotes or matrix evaluations provided by an independent pricing service. Debt securities purchased 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. The Board has adopted specific procedures for valuing portfolio securities and delegated the implementation of these procedures to the Adviser. The procedures authorize the Adviser to make all determinations regarding the fair value of a portfolio security and to report such determinations to the Board of Trustees. The Funds may also use independent pricing services to assist in pricing portfolio securities.

The Trust has adopted accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used in pricing the asset or liability. These standards state that “observable inputs” reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources and “unobservable inputs” reflect an entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. These inputs are summarized in the three broad levels listed below.

Level 1 -

Quoted unadjusted prices for identical instruments in active markets to which the Trust has access at the date of measurement.

Level 2 -

Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

Level 3 -

Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Trust’s own assumptions that market participants would use to price the asset or liability based on the best available information.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Funds’ investments as of December 31, 2011:


LKCM Small Cap Equity Fund

Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	787,409,866	$	—	$	—	$	787,409,866
Money Market Funds		42,707,148		—		—		42,707,148

Total Investments*	$	830,117,014	$	—	$	—	$	830,117,014


LKCM Small-Mid Cap Equity Fund

Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	22,978,579	$	—	$	—	$	22,978,579
Money Market Funds		791,358		—		—		791,358

Total Investments*	$	23,769,937	$	—	$	—	$	23,769,937


LKCM Equity Fund

Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	99,339,241	$	—	$	—	$	99,339,241
Money Market Fund		2,820,015		—		—		2,820,015

Total Investments*	$	102,159,256	$	—	$	—	$	102,159,256


LKCM Balanced Fund

Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	13,379,608	$	—	$	—	$	13,379,608
Corporate Bonds		—		5,142,087		—		5,142,087
Money Market Fund		2,038		—		—		2,038

Total Investments*	$	13,381,646	$	5,142,087	$	—	$	18,523,733


LKCM Fixed Income Fund

Description	Level 1		Level 2		Level 3		Total
Preferred Stocks	$	4,064,300	$	—	$	—	$	4,064,300
Corporate Bonds		—		164,446,995		—		164,446,995
U.S. Government & Agency Issues		—		6,497,423		—		6,497,423
Money Market Fund		1,024,156		—		—		1,024,156

Total Investments*	$	5,088,456	$	170,944,418	$	—	$	176,032,874

*	Additional information regarding the industry and/or geographical classifications of these investments is disclosed in the Schedule of Investments.

There were no significant transfers into or out of Level 1, Level 2 or Level 3 fair value measurements during the reporting period, as compared to their classification from the previous annual report.

In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“ IFRS”). 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 IFRS. 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 these amendments may have on the Funds’ financial statements.

In preparing these financial statements, the Trust has evaluated events after December 31, 2011 and determined that there were no significant subsequent events that would require adjustment to or additional disclosure in these financial statements.

2. Federal Income Taxes: The Funds have elected to be treated as “regulated investment companies” under Subchapter M of the Internal Revenue Code and each Fund intends to distribute all of its investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded.

3. Distributions to Shareholders: The LKCM Small Cap Equity, LKCM Small-Mid Cap Equity and LKCM Equity Funds generally intend to pay dividends and net capital gain distributions, if any, at least on an annual basis. The LKCM Balanced and LKCM Fixed Income Funds generally intend to pay dividends on a quarterly basis and net capital gain distributions, if any, at least on an annual basis.

4. Foreign Securities: Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include devaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and securities of the U.S. government.

5. Expense Allocation: Expenses incurred by the Funds are allocated among the Funds based upon (i) relative average net assets, (ii) a specific identification basis as incurred, or (iii) evenly among the Funds, depending on the nature of the expense. Expenses that are directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class. For multi- class Funds, income, unrealized and realized gains/losses are generally allocated between the Fund’s classes in proportion to their respective net assets.

6. 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 of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

7. Guarantees and Indemnifications: In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds expect the risk of loss to be remote.

8. Other: Security and shareholder transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income and dividends and distributions to shareholders are recorded on the ex-dividend date. Interest income is recognized on the accrual basis. All discounts and premiums are amortized on the effective interest method for tax and financial reporting purposes.

Generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. Accordingly, at December 31, 2011, reclassifications were recorded as follows.


	LKCM			LKCM			LKCM		LKCM			LKCM
	Small Cap			Small-Mid Cap			Equity		Balanced			Fixed
	Equity Fund			Equity Fund			Fund		Fund			Income Fund
Undistributed net investment income (loss)	$	2,783,986		$	37,460		$	—	$	(2,391	)	$	18,483
Accumulated gain (loss)		143,708			—			—		85			(18,483	)
Paid in capital		(2,927,694	)		(37,460	)		—		2,306			—

B. Investment Advisory and Other Agreements: Luther King Capital Management Corporation (the “Adviser”) serves as the investment adviser to the Funds under an Investment Advisory Agreement (the “Agreement”). The Adviser receives a fee, computed daily and payable quarterly , at the annual rates presented below as applied to each Fund’s average daily net assets. The Adviser has contractually agreed to waive all or a portion of its management fee and/or reimburse the Funds through April 30, 2012 in order to limit each Fund’s operating expenses to the annual cap rates presented below. For the year ended December 31, 2011, the Adviser reimbursed the following expenses:


	LKCM			LKCM			LKCM			LKCM			LKCM
	Small Cap			Small-Mid Cap			Equity			Balanced			Fixed
	Equity Fund			Equity Fund			Fund			Fund			Income Fund
Annual Advisory Rate		0.75	%		0.75	%		0.70	%		0.65	%		0.50	%
Annual Cap on Expenses		1.00	% (Inst.)		1.00	%		0.80	%		0.80	%		0.65	%
		1.25	% (Adviser)
Expenses Reimbursed in 2011		—		$	104,564		$	167,923		$	65,317		$	113,787

U.S. Bancorp Fund Services, LLC serves as transfer agent and administrator for the Trust and serves as accounting services agent for the Trust. U.S. Bank, N.A. serves as custodian for the Trust.

Distribution services are performed pursuant to a distribution contract with Quasar Distributors, LLC, the Trust’s principal underwriter.

The Small Cap Equity Fund, Small-Mid Cap Equity and the Equity Fund have adopted a Rule 12b-1 plan under which the Adviser Class of each Fund may pay up to 1.00% of its average daily net assets for distribution and other services. However, the Board of Trustees has currently only authorized a fee of 0.25% of each Fund’s average daily net assets. For the year ended December 31, 2011, fees accrued by the Small Cap Equity Fund pursuant to the 12b-1 Plan were $100,358.

C. Fund Shares: At December 31, 2011, there was an unlimited number of shares of beneficial interest, no par value, authorized. The following table summarizes the activity in shares of each Fund:

Small Cap Equity Fund


	Year Ended						Year Ended
	December 31, 2011						December 31, 2010
	Institutional Class						Institutional Class
	Shares			Amount			Shares			Amount
Shares sold		8,832,325		$	201,191,471			5,489,377		$	98,476,894
Shares redeemed		(5,987,585	)		(135,600,658	)		(6,092,221	)		(108,506,942	)
Redemption fee					7,239						5,068

Net increase (decrease)		2,844,740		$	65,598,052			(602,844	)	$	(10,024,980	)

Shares Outstanding:
Beginning of period		32,136,377						32,739,221

End of period		34,981,117						32,136,377


	Year Ended						Year Ended
	December 31, 2011						December 31, 2010
	Adviser Class						Adviser Class
	Shares			Amount			Shares			Amount
Shares sold		818,200		$	17,753,894			475,776		$	8,259,757
Shares redeemed		(948,884	)		(21,309,344	)		(630,622	)		(11,346,214	)
Redemption fee					331						2

Net decrease		(130,684	)	$	(3,555,119	)		(154,846	)	$	(3,086,455	)

Shares Outstanding:
Beginning of period		2,101,547						2,256,393

End of period		1,970,863						2,101,547

Total Net Increase (Decrease)				$	62,042,933					$	(13,111,435	)

Small-Mid Cap Equity Fund


	May 2, 2011⁽¹⁾through
	December 31, 2011
	Shares			Amount
Shares sold		2,908,059		$	25,500,659
Shares redeemed		(226,034	)		(2,055,865	)
Redemption fee					13

Net increase		2,682,025		$	23,444,807

Shares Outstanding:
Beginning of period		—

End of period		2,682,025

⁽¹⁾	Commencement of operations.

Equity Fund


	Year Ended						Year Ended
	December 31, 2011						December 31, 2010
	Shares			Amount			Shares			Amount
Shares sold		2,438,054		$	37,526,183			1,367,810		$	18,874,012
Shares issued to shareholders in reinvestment of distributions		141,992			2,188,102			46,790			711,682
Shares redeemed		(663,144	)		(10,157,406	)		(422,222	)		(5,841,007	)
Redemption fee					492						144

Net increase		1,916,902		$	29,557,371			992,378		$	13,744,831

Shares Outstanding:
Beginning of period		4,768,558						3,776,180

End of period		6,685,460						4,768,558

Balanced Fund


	Year Ended						Year Ended
	December 31, 2011						December 31, 2010
	Shares			Amount			Shares			Amount
Shares sold		387,905		$	5,695,753			190,039		$	2,590,842
Shares issued to shareholders in reinvestment of distributions		15,313			221,650			14,372			192,811
Shares redeemed		(282,945	)		(4,111,314	)		(76,967	)		(1,028,530	)
Redemption fee					56						—

Net increase		120,273		$	1,806,145			127,444		$	1,755,123

Shares Outstanding:
Beginning of period		1,156,998						1,029,554

End of period		1,277,271						1,156,998

Fixed Income Fund


	Year Ended						Year Ended
	December 31, 2011						December 31, 2010
	Shares			Amount			Shares			Amount
Shares sold		2,238,192		$	24,941,740			1,586,241		$	17,619,726
Shares issued to shareholders in reinvestment of distributions		557,529			6,158,736			498,201			5,506,025
Shares redeemed		(1,372,672	)		(15,260,453	)		(1,129,134	)		(12,541,025	)
Redemption fee					15						42

Net increase		1,423,049		$	15,840,038			955,308		$	10,584,768

Shares Outstanding:
Beginning of period		14,713,137						13,757,829

End of period		16,136,186						14,713,137

D. Security Transactions: Purchases and sales of investment securities, other than short-term investments, for the year (since inception for Small-Mid Cap Equity Fund) ended December 31, 2011 were as follows:


	Purchases				Sales
	U.S.				U.S.
	Government		Other		Government		Other
LKCM Small Cap Equity Fund	$	—	$	427,411,473	$	—	$	389,760,903
LKCM Small-Mid Cap Equity Fund		—		27,116,379		—		4,484,959
LKCM Equity Fund		—		47,032,547		—		16,329,917
LKCM Balanced Fund		—		8,471,957		—		6,276,516
LKCM Fixed Income Fund		—		57,930,885		2,000,427		38,076,564

E. Tax Information: At December 31, 2011, the components of accumulated earnings (losses) on a tax basis were as follows:


	LKCM Small Cap Equity Fund			LKCM Small-Mid Cap Equity Fund			LKCM Equity Fund			LKCM Balanced Fund			LKCM Fixed Income Fund
Cost of Investments	$	663,781,561		$	22,767,967		$	84,929,829		$	15,034,389		$	167,352,842

Gross Unrealized Appreciation		186,051,505			1,858,150			20,428,967			3,693,501			9,654,854
Gross Unrealized Depreciation		(19,716,052	)		(856,180	)		(3,199,540	)		(204,157	)		(974,822	)

Net Unrealized Appreciation	$	166,335,453		$	1,001,970		$	17,229,427		$	3,489,344		$	8,680,032

Undistributed Ordinary Income		—			—			631			107			1,992
Undistributed Long-Term Capital Gain		—			—			94,936			—			111,467

Total Distributable Earnings	$	—		$	—		$	95,567		$	107		$	113,459

Other Accumulated Losses	$	(1,920,023	)	$	(654,811	)	$	—		$	(479,597	)	$	—

Total Accumulated Gains	$	164,415,430		$	347,159		$	17,324,994		$	3,009,854		$	8,793,491

The difference between book-basis and tax-basis unrealized appreciation is attributable primarily to the tax deferral of losses on wash sales and partnerships.

At December 31, 2011, the capital loss carryforwards were as follows:


	Month/Year Realized		Month/Year Expiring	Short-Term
LKCM Small-Mid Cap Equity Fund		Unexpiring Losses		$	411,663

LKCM Balanced Fund		12/2009	12/2017	$	420,308

To the extent the Funds realize future net capital gains, taxable distributions will be reduced by any unused capital loss carryforwards as permitted by the Internal Revenue Code.

During the year ended December 31, 2011, the LKCM Small Cap Equity Fund and the LKCM Balanced Fund utilized capital loss carryforwards of $71,739,544 and $54,856, respectively.

At December 31, 2011, the following Funds deferred, on a tax basis, post-October losses of:


LKCM Small Cap Equity Fund	$	1,920,023
LKCM Small-Mid Cap Equity Fund	$	243,148
LKCM Balanced Fund	$	59,289

On December 22, 2010, the Regulated Investment Modernization Act of 2010 (the “RIC Act”) was enacted, and the provisions within the RIC Act are effective for the Fund for the year ended December 31, 2011. The RIC Act modernized several of the federal income and excise tax provisions related to regulated investments companies (“RICs”). Under the RIC Act, new capital losses may be carried forward indefinitely with the character of the original loss retained. Prior to the RIC Act, capital losses could be carried forward for eight years, and were carried forward as short-term capital losses regardless of the character of the original loss. The RIC Act also contains simplification provisions, which are aimed at preventing disqualification of a RIC for inadvertent failures to comply with asset diversification and/or qualifying income tests. The RIC Act exempts RICs from the preferential dividend rule and repeals the 60-day designation requirement for certain types of pay-through income and gains. In addition, the RIC Act contains provisions aimed at preserving the character of distributions made by a RIC during the portion of its taxable year ending after October 31 or December 31.

The tax components of dividends paid during the periods shown below were as follows:


	Year Ended December 31, 2011				Year Ended December 31, 2010
	Ordinary Income		Long-Term Capital Gains		Ordinary Income		Long-Term Capital Gains
LKCM Small Cap Equity Fund	$	—	$	—	$	—	$	—
LKCM Small-Mid Cap Equity Fund		—		—		N/A		N/A
LKCM Equity Fund		636,154		1,598,383		358,806		365,976
LKCM Balanced Fund		223,616		—		194,657		—
LKCM Fixed Income Fund		5,739,348		1,188,742		5,783,428		560,595

The Funds designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Funds related to net capital gain to zero for the tax years ended December 31, 2011 and December 31, 2010.

The Trust has adopted financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The Trust has reviewed all open tax years and major jurisdictions and concluded that there is no impact on the Funds’ financial position or results of operations. Tax years that remain open to examination by major tax jurisdictions include tax years ended December 31, 2008 through 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 on tax returns as of December 31, 2011. The Funds are 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. If applicable, the Funds would recognize interest accrued related to unrecognized tax benefits in “interest expense” and penalties in “other expense” on the statement of operations.

REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of LKCM Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the LKCM Funds (the “Funds”) comprising the LKCM Small Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund, LKCM Fixed Income Fund, and LKCM Small-Mid Cap Equity Fund 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 the financial highlights for each of the five years in the period then ended of LKCM Small Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund, and LKCM Fixed Income Fund; and the statements of operations, changes in net assets and financial highlights for the period from inception (May 2, 2011) to December 31, 2011 of the LKCM Small- Mid Cap Equity Fund. 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. The Funds are not required to have, nor were we engaged to perform, 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with the custodian and brokers. 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 portfolios constituting the LKCM Funds as of December 31, 2011, and the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated in the first paragraph, in conformity with accounting principles generally accepted in the United States of America.

LOGO

Milwaukee, Wisconsin

February 28, 2012

LKCM FUNDS

ADDITIONAL INFORMATION

December 31, 2011

Availability of Proxy Voting Information: A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, as well as the proxy voting record, is available without charge, upon request, by calling toll-free 1-800-688-LKCM or on the SEC website at http://www.sec.gov.

The actual voting records relating to portfolio securities during the twelve month period ended June 30 (as filed with the SEC on Form N-PX) are available without charge, upon request, by calling the Funds toll free at 1-800-688-LKCM or by accessing the SEC’s website at www.sec.gov.

Availability of Quarterly Portfolio Schedule: The Funds’ are required to file complete schedules of portfolio holdings with the SEC for the first and third fiscal quarters on Form N-Q. Once filed, the Funds’ Form N-Q is available without charge upon request on the SEC’s website(http://www.sec.gov) and may be available by calling 1-800-688-LKCM. You can also obtain copies of Form N-Q by (i) visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330); (ii) sending your request and a duplicating fee to the SEC’s Public Reference Room, Washington, DC 20549; or (iii) sending your request electronically to publicinfosec.gov.

Information about the Funds’ Trustees:

The business and affairs of the Funds are managed under the direction of the Funds’ Board of Trustees. Information pertaining to the Trustees of the Funds is set forth below. The Statement of Additional Information includes additional information about the Funds’ Trustees and officers and is available, without charge, upon request by calling 1-800-688-LKCM.


Name, Address and Age	Position(s) Held with the Trust	Term of Office & Length of Time Served⁽¹⁾	Principal Occupation During Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Disinterested Trustees:
H. Kirk Downey 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 69	Chairman of the Board of Trustees Trustee	Since 2005 Since 1994	President and CEO, Texas Systems, LLC and CEO, Texas learning systems LLC since 1999; Dean, M.J. Neeley School of Business, Texas Christian University Business School from 1987 to 1999.	8	Non-Executive Chairman of the Board of AZZ Incorporated, a manufacturing company.

Earle A. Shields, Jr. 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 91	Trustee	Since 1994	Consultant; formerly Consultant for NASDAQ Corp. and Vice President, Merrill Lynch & Co., Inc.	8	Priests Pension Fund of the Catholic Diocese of Fort Worth, Lay Workers Pension Fund of the Catholic Diocese of Fort Worth, St. Joseph Health Care Trust, Catholic Schools Trust and Catholic Foundation of North Texas.

Richard J. Howell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 69	Trustee Chairman of the Audit and Compliance Committee	Since 2005 Since 2008	CPA, Adjunct Faculty at SMU Cox School of Business from 2004 to 2009; Consulting Services, since 2002; Audit Partner, Arthur Andersen LLP from 1974-2002.	8	Red Robin Gourmet Burgers, Inc.

Interested Trustee:
J. Luther King, Jr.⁽²⁾ 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 71	Trustee, President and Chief Executive Officer	Since 1994	Chairman, President and Director, Luther King Capital Management Corporation since 1979.	8	Employee Retirement Systems of Texas, 4K Land & Cattle Company (ranching), Hunt Forest Products (lumber), Southwestern Exposition & Livestock (livestock), Southwest JLK Corporation (management company), Texas Christian University, Texas Southwestern Cattleraisers Foundation (livestock), Tyler Technologies (information management company for government agencies), and King Ranch, Inc. (ranching).

⁽¹⁾	Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

⁽²⁾	Mr. King is an “interested person” of the Trust (as defined in the 1940 Act) because of his affiliation with the Adviser.


Name, Address and Age	Position(s) Held with the Trust	Term of Office & Length of Time Served⁽¹⁾	Principal Occupation During Past Five Years
Officers:
J. Luther King, Jr. 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 71	Trustee, President and Chief Executive Officer	Since 1994	Chairman, President and Director, Luther King Capital Management Corporation since 1979.

Paul W. Greenwell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 61	Vice President	Since 1996	Principal, Luther King Capital Management since 1986, Vice President and Portfolio Manager, Luther King Capital Management since 1983.

Richard Lenart 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 45	Secretary and Treasurer	Since 2006	Luther King Capital Management since 2005.

Steven R. Purvis 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 46	Vice President	Since 2000	Principal, Luther King Capital Management since 2003, Vice President and Portfolio Manager, Luther King Capital Management since 1996.

Jacob D. Smith 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Age: 37	Chief Financial Officer Chief Compliance Officer	Since 2010 Since 2006	Chief Financial Officer since 2010, General Counsel and Chief Compliance Officer, Luther King Capital Management since 2006.

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U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, WI 53201-0701

LKCM FUNDS

P.O. Box 701

Milwaukee, WI 53201-0701


Officers and Trustees
J. Luther King, Jr., CFA Trustee, President	H. Kirk Downey Chairman of the Board	Richard Lenart Secretary & Treasurer

Paul W. Greenwell Vice President	Richard J. Howell Trustee	Jacob D. Smith Chief Financial Officer Chief Compliance Officer

Steven R. Purvis, CFA Vice President	Earle A. Shields, Jr. Trustee

Investment Adviser
Luther King Capital Management Corporation 301 Commerce Street, Suite 1600 Fort Worth , TX 76102

Administrator, Transfer Agent, Dividend
Paying Agent & Shareholder Servicing Agent
U.S. Bancorp Fund Services, LLC P.O. Box 701 Milwaukee, WI 53201- 0701

Custodian
U.S. Bank, N.A. 1555 N. River Center Drive, Suite 302 Milwaukee, WI 53212

Independent Registered Public Accounting Firm
Deloitte & Touche LLP 555 E. Wells St., Suite 14000 Milwaukee, WI 53202

Distributor
Quasar Distributors, LLC 615 E. Michigan Street Milwaukee, WI 53202

LKCM Funds N-14Registration statement for investment companies business combination