UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-07813 ---------------------- KOBREN INSIGHT FUNDS ----------------------------------------------------------------- (Exact name of registrant as specified in charter) 20 William Street, Suite 310 P.O. Box 9135 WELLESLEY HILLS, MA 02481 ----------------------------------------------------------------- (Address of principal executive offices) (Zip code) Gail A. Hanson, Esq. PFPC Inc. 99 High Street, 27th Floor BOSTON, MA 02110 ----------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 617-338-4057 ------------------ Date of fiscal year end: DECEMBER 31, 2004 ------------------------ Date of reporting period: JUNE 30, 2004 ----------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. DELPHI VALUE FUND - -------------------------------------------------------------------------------- SEMI-ANNUAL REPORT JUNE 30, 2004 [GRAPHIC OMITTED] KOBREN INSIGHT FUNDS [PIC] SCOTT M. BLACK Dear Fellow Shareholders, The performance of the U.S. equity markets in the first half of 2004 can be logically segmented into two phases. Prior to the tragic events in Madrid on March 11th, the S&P 500 and the small-cap Russell 2000 Value indices rallied to year-to-date highs of 1163.23 and 864.36, respectively, fueled by the combination of low nominal interest rates and rising corporate profits. Concomitantly, on March 5th, the Delphi Value Fund reached its record high of $16.78 ($16.99 institutional class) per share, up 6.3% versus 4.4% for the S&P 500. Unfortunately, the terrorist attack raised the risk premium on equities and triggered a major stock market reversal. In April, the combination of the strengthening U.S. employment figures and an incipient whiff of inflation roiled the domestic bond markets and pummelled "so called" interest rate sensitive stocks like housing and financial services. Despite these barrages, your Fund narrowly trailed the S&P 500, +3.1% (+3.3% institutional class) to +3.3% for the first six months. The Russell Midcap Value Index returned +7.2% for the same period. The irony of this underperformance is that over 85% of the Delphi Value holdings posted quarterly earnings advances over the previous year. Additionally, all of the fund's investments in homebuilders (D.R. Horton, Lennar, and Toll Brothers) registered record earnings and backlogs. Similarly, all of the bank, insurance, and miscellaneous finance holdings realized positive earnings comparisons in their latest reports. As Benjamin Graham was wont to say, "In the short-term, the stock market is a voting machine; in the long-term, a weighing machine." In reviewing the individual positions, you will find that the first half winners were concentrated in the energy sector, not surprising given the upsurge in oil prices to $40 per barrel. Domestic exploration companies like Denbury Resources (+50.6%), XTO Energy (+31.6%) and Whiting Petroleum (+29.9%) led the group. Oil tanker corporations like OMI (+33.3%) and Teekay Shipping (+31.1%) benefited from the worldwide pickup in oil demand. Special situations like Lamson & Sessions (+39.3%), a manufacturer of polyvinyl chloride pipe, and Pepsi Bottling Group (+26.3%), the largest independent U.S. Pepsi bottler, contributed favorably to the period performance. On the downside, the two disc drive manufacturers, Western Digital and Maxtor, both declined more than 25%. Unfortunately, their leading competitor, Seagate Technology, in an overinventoried position broke its pricing discipline causing severe industrywide earnings erosion. During the first half, the portfolio additions were rather eclectic. Two semiconductor companies, Applied Micro Circuits and Integrated Silicon Solutions, were acquired below 1.4x book value with essentially debt free balance sheets and earnings turnarounds in place. Two superior Bermuda reinsurers, Aspen Insurance and Montpelier Re Holdings, were purchased below 8x 2004's expected earnings. Whiting Petroleum, the Denver based independent producer of oil and gas, was acquired below 4x this year's forecast cash flow with anticipated drillbit production growth above 10%. Two names, Westport Resources and Local Financial, exited the portfolio because of takeovers. Three diverse businesses, Tidewater (oil service), Plum Creek (timber), and PepsiAmericas (bottling) were divested because of full valuations. At the June 30th close of 1140.75, in my opinion the S&P 500 is fairly valued at 18x 2004 estimated earnings. Given the confluence of two key factors, (i) the mounting accumulated U.S. federal deficit of $7.4 trillion and the relative unattractiveness of investing in medium or longterm treasuries; and (ii) the expectation that second quarter 2004 corporate earnings should accrete by 20% year over year, I expect that, barring another terrorist incident, U.S. equities should rally in the second half of this year. I thank you for your continued support. Very truly yours, /S/SCOTT M. BLACK Scott M. Black Portfolio Manager - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) SHARES VALUE (NOTE 1) COMMON STOCKS - 92.66% - -------------------------------------------------------------------------------- AEROSPACE/TECHNOLOGY - 6.92% - -------------------------------------------------------------------------------- 171,042 Applied Micro Circuits Corp. (1) $ 909,943 119,000 Cable Design Technologies Corp. (1) 1,261,400 20,600 General Cable Corp. (1) 176,130 38,400 Integrated Silicon Solution, Inc. (1) 468,864 86,075 Kemet Corp. (1) 1,051,837 135,000 LSI Logic Corp. (1) 1,028,700 122,300 Maxtor Corp. (1) 810,849 90,000 Micron Technology, Inc. (1) 1,377,900 108,000 Western Digital Corp. (1) 935,280 --------------- 8,020,903 BANKING - 9.11% - -------------------------------------------------------------------------------- 40,000 Banknorth Group, Inc. 1,299,200 35,000 BB&T Corp. 1,293,950 71,000 Colonial BancGroup, Inc. 1,290,070 50,400 Community Bank System, Inc. 1,148,616 31,850 North Fork Bancorporation, Inc. 1,211,893 73,500 Southwest Bancorp, Inc. 1,341,375 28,400 Webster Financial Corp. 1,335,368 28,615 Wells Fargo & Co. 1,637,637 --------------- 10,558,109 BASIC MATERIALS - 4.73% - -------------------------------------------------------------------------------- 37,600 Alcoa, Inc. 1,241,928 30,050 Cytec Industries, Inc. 1,365,772 32,400 Dow Chemical Co. 1,318,680 40,500 Inco, Ltd. (1) 1,399,680 19,000 Yara International ASA, ADR (1) 153,502 --------------- 5,479,562 CONGLOMERATES - 4.95% - -------------------------------------------------------------------------------- 1,081 Berkshire Hathaway, Inc., Class B (1) 3,194,355 19,000 Norsk Hydro ASA, SP ADR 1,243,550 21,800 Textron, Inc. 1,293,830 --------------- 5,731,735 CONSTRUCTION & REAL ESTATE - 4.89% - -------------------------------------------------------------------------------- 26,000 Boston Properties, Inc., REIT 1,302,080 49,627 D.R. Horton, Inc. 1,409,407 30,830 Lennar Corp., Class A 1,378,718 37,300 Toll Brothers, Inc. (1) 1,578,536 --------------- 5,668,741 CONSUMER RELATED - 2.34% - -------------------------------------------------------------------------------- 51,000 Disney (Walt) Co. 1,299,990 20,500 Whirlpool Corp. 1,406,300 --------------- 2,706,290 ENERGY - 8.01% - -------------------------------------------------------------------------------- 81,000 Denbury Resources, Inc. (1) 1,696,950 37,058 GlobalSantaFe Corp. 982,037 39,450 Nexen, Inc. 1,539,339 67,200 Talisman Energy, Inc. 1,460,928 56,500 Whiting Petroleum Corp. (1) 1,420,975 73,166 XTO Energy, Inc. 2,179,615 --------------- 9,279,844 FINANCIAL SERVICES - 9.23% - -------------------------------------------------------------------------------- 27,000 American Express Co. 1,387,260 17,084 Bear Stearns Cos., Inc. 1,440,352 33,000 Citigroup, Inc. 1,534,500 14,200 Goldman Sachs Group, Inc. 1,337,072 26,500 H&R Block, Inc. 1,263,520 25,615 iStar Financial, Inc., REIT 1,024,600 18,000 Lehman Brothers Holdings, Inc. 1,354,500 25,755 Morgan Stanley 1,359,091 --------------- 10,700,895 FOOD & BEVERAGE - 2.52% - -------------------------------------------------------------------------------- 52,300 Pepsi Bottling Group, Inc. 1,597,242 83,500 Ryan's Restaurant Group, Inc. (1) 1,319,300 --------------- 2,916,542 INSURANCE - 8.03% - -------------------------------------------------------------------------------- 60,000 Aspen Insurance Holdings, Ltd. 1,393,800 39,000 IPC Holdings, Ltd. 1,440,270 29,400 Montpelier Re Holdings, Ltd. 1,027,530 25,000 Radian Group, Inc. 1,197,500 32,200 RenaissanceRe Holdings, Ltd. 1,737,190 32,060 SAFECO Corp. 1,410,640 SHARES VALUE (NOTE 1) INSURANCE (CONTINUED) - -------------------------------------------------------------------------------- 14,600 XL Capital, Ltd., Class A $ 1,101,716 --------------- 9,308,646 MANUFACTURING - 5.46% - -------------------------------------------------------------------------------- 37,850 Amer. Axle & Manufacturing Holdings, Inc. 1,376,226 148,375 Lamson & Sessions Co. (1) 1,192,935 23,800 Lear Corp. 1,403,962 44,275 Masco Corp. 1,380,495 98,000 Polyair Inter Pack, Inc. (1) 975,100 --------------- 6,328,718 PHARMACEUTICALS - 1.16% - -------------------------------------------------------------------------------- 28,400 Merck & Co., Inc. 1,349,000 PUBLISHING & BROADCASTING - 14.87% - -------------------------------------------------------------------------------- 49,900 Comcast Corp., Class A (1) 1,377,739 48,350 Cox Communications, Inc., Class A (1) 1,343,647 23,800 Dow Jones & Co., Inc. 1,073,380 21,150 Gannett, Inc. 1,794,577 30,000 Lee Enterprises, Inc. 1,440,300 140,600 Liberty Media Corp., Class A (1) 1,263,994 20,600 McClatchy Co., Class A 1,445,090 14,700 McGraw-Hill Cos., Inc. 1,125,579 40,200 News Corp., Ltd., SP ADR 1,423,884 30,400 Pulitzer, Inc. 1,486,560 41,100 Viacom, Inc., Class B 1,468,092 2,135 Washington Post Co., Class B 1,985,571 --------------- 17,228,413 RETAIL - 3.87% - -------------------------------------------------------------------------------- 29,000 Ethan Allen Interiors, Inc. 1,041,390 28,300 Federated Department Stores, Inc. 1,389,530 29,225 May Department Stores Co. (The) 803,395 46,500 Ross Stores, Inc. 1,244,340 --------------- 4,478,655 TEXTILES & APPAREL - 3.48% - -------------------------------------------------------------------------------- 32,500 Jones Apparel Group, Inc. 1,283,100 42,400 Liz Claiborne, Inc. 1,525,552 35,500 Polo Ralph Lauren Corp. 1,222,975 --------------- 4,031,627 TRANSPORTATION - 3.09% - -------------------------------------------------------------------------------- 150,500 OMI Corp. 1,790,950 47,730 Teekay Shipping Corp. 1,784,147 --------------- 3,575,097 TOTAL COMMON STOCKS 107,362,777 (Cost $77,362,541) INVESTMENT COMPANY - 7.94% 9,205,789 Dreyfus Cash Management Plus Fund(2) 9,205,789 --------------- TOTAL INVESTMENT COMPANY 9,205,789 --------------- (Cost $9,205,789) TOTAL INVESTMENTS - 100.60% 116,568,566 (Cost $86,568,330*) LIABILITIES NET OF CASH & OTHER ASSETS - (0.60)% (697,765) --------------- TOTAL NET ASSETS - 100.00% $115,870,801 =============== - -------------------------------------------------------------------------------- (1) Non-income producing. (2) An affiliate of the Custodian. ADR American Depositary Receipt REIT Real Estate Investment Trust SP ADR Sponsored American Depositary Receipt * For Federal income tax purposes, cost is $86,568,330 and appreciation (depreciation) is as follows: Unrealized appreciation: $31,941,826 Unrealized depreciation: (1,941,590) -------------- Net unrealized appreciation: $30,000,236 ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2 DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) ASSETS: Investments, at value (Note 1) (See Portfolio of Investments) $ 116,568,566 Cash 6,285 Dividends receivable 111,113 Receivable for investments sold 617,119 Receivable for shares sold 460,000 Prepaid expenses and other assets 1,437 -------------- Total assets 117,764,520 -------------- LIABILITIES: Payable for investments purchased 1,736,464 Payable for shares redeemed 399 Investment advisory fee payable (Note 2) 93,246 Distribution fee payable (Note 2) 13,423 Accrued trustees' fees and expenses (Note 2) 11,554 Accrued expenses and other payables 38,633 -------------- Total liabilities 1,893,719 -------------- NET ASSETS $ 115,870,801 ============== Investments, at cost $ 86,568,330 ============== NET ASSETS CONSIST OF: Accumulated net investment loss $ (55,210) Accumulated net realized gain on investments sold 4,292,849 Net unrealized appreciation of investments 30,000,236 Par value 7,076 Paid-in capital in excess of par value 81,625,850 -------------- NET ASSETS $ 115,870,801 ============== COMPUTATION OF NET ASSET VALUE RETAIL CLASS SHARES: Net asset value, offering and redemption price per share ($65,677,515 / 4,034,076 shares) $ 16.28 ============== INSTITUTIONAL CLASS SHARES: Net asset value, offering and redemption price per share ($50,193,286 / 3,042,286 shares) $ 16.50 ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT 3 - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED) INVESTMENT INCOME: Dividends $ 744,388 -------------- Total investment income 744,388 -------------- EXPENSES: Investment advisory fee (Note 2) 554,887 Administration fee (Note 2) 41,657 Transfer agent fees (Note 2) 36,348 Sub-transfer agent fee (Retail Class) (Note 3) 14,644 Custodian fees (Note 2) 13,243 Professional fees 22,874 Trustees' fees and expenses (Note 2) 17,885 Registration and filing fees 11,500 Reports to shareholders 3,992 Distribution fees (Retail Class) (Note 2) 79,505 Other 3,063 -------------- Total expenses 799,598 -------------- NET INVESTMENT LOSS (55,210) -------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain from security transactions 3,293,411 Net increase in unrealized appreciation of securities 49,359 -------------- Net realized and unrealized gain on investments 3,342,770 -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,287,560 ============== - -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED JUNE 30, 2004 (UNAUDITED) DECEMBER 31, 2003 ------------------------ ----------------- Net investment loss $ (55,210) $ (76,385) Net realized gain from security transactions 3,293,411 2,118,228 Net change in unrealized appreciation of investments 49,359 23,629,068 ------------------------ ----------------- Net increase in net assets resulting from operations 3,287,560 25,670,911 Net increase in net assets from fund share transactions (Note 5) 6,207,723 3,300,452 ------------------------ ----------------- Net increase in net assets 9,495,283 28,971,363 NET ASSETS: Beginning of period 106,375,518 77,404,155 ------------------------ ----------------- End of period (including line A) $ 115,870,801 $ 106,375,518 ======================== ================= (A) Accumulated net investment loss $ (55,210) $ -- ======================== ================= SEE NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- 4 DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT - ------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------- FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD RETAIL CLASS SHARES -------------------------------------------------------------------- For the Six Months Ended 6/30/2004 ________________For the Year Ended____________________ (unaudited) 12/31/2003 12/31/2002 12/31/2001 12/31/2000 12/31/1999 ----------- ---------- ---------- ---------- ---------- ---------- Net asset value - beginning of period $ 15.79 $ 11.91 $ 13.18 $ 13.00 $ 11.19 $ 10.12 Net investment income (loss) (0.02) (0.03) (0.02) (0.02) (0.01) -- (b)(c)(d) Net realized and unrealized gain (loss) on investments 0.51 3.91 (1.25) 0.27 1.94 1.14 ----------- ---------- ---------- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from investment operations 0.49 3.88 (1.27) 0.25 1.93 1.14 Distributions from net investment income -- -- -- -- -- --(c) Distributions from net realized gains on investments -- -- -- (0.07) (0.12) (0.07) ----------- ---------- ---------- ---------- ---------- ---------- Total distributions -- -- -- (0.07) (0.12) (0.07) Net asset value - end of period $ 16.28 $ 15.79 $ 11.91 $ 13.18 $ 13.00 $ 11.19 =========== ========== ========== ========== ========== ========== Total return (a) 3.10%(e) 32.58% (9.64)% 1.90% 17.30% 11.30% =========== ========== ========== ========== ========== ========== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $ 65,678 $ 61,197 $ 43,808 $ 44,744 $ 45,312 $ 31,055 Ratio of net investment income (loss) to average net assets (0.23)% (0.21)% (0.13)% (0.12)% (0.12)% 0.00%(d) Ratio of operating expenses to average net assets before fees waived and/or expenses reimbursed by investment adviser and administrator 1.57% 1.64% 1.63% 1.64% 1.71% 1.86% Ratio of operating expenses to average net assets after waivers and/or expense reimbursements 1.57% 1.64% 1.63% 1.64% 1.71% 1.75% Portfolio turnover rate 13%(e) 22% 23% 29% 45% 17% <FN> - ------------------------------------------------------------------------------------------------------------------------------------ (a) Total return represents aggregate total return for the period indicated and would have been lower during periods in which fees werewaived and expenses reimbursed and assumes reinvestment of all distributions. (b) The selected per share data was calculated using the weighted average share method for the period. (c) The selected amounts are less than $0.005. (d) Net investment income would have been lower during periods in which fees were waived and expenses reimbursed. (e) Not annualized. </FN> SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT 5 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD INSTITUTIONAL CLASS SHARES -------------------------------------------------------------------- For the Six Months Ended 6/30/2004 ________________For the Year Ended____________________ (unaudited) 12/31/2003 12/31/2002 12/31/2001 12/31/2000 12/31/1999 ----------- ---------- ---------- ---------- ---------- ---------- Net asset value - beginning of period $ 15.98 $ 12.02 $ 13.26 $ 13.05 $ 11.20 $ 10.12 Net investment income 0.01 0.01 0.02 0.02 0.02 0.03(b)(c) Net realized and unrealized gain (loss) on investments 0.51 3.95 (1.26) 0.26 1.95 1.14 ----------- ---------- ---------- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from investment operations 0.52 3.96 (1.24) 0.28 1.97 1.17 Distributions from net investment income -- -- -- -- -- (0.02) Distributions from net realized gains on investments -- -- -- (0.07) (0.12) (0.07) ----------- ---------- ---------- ---------- ---------- ---------- Total distributions -- -- -- (0.07) (0.12) (0.09) Net asset value - end of period $ 16.50 $ 15.98 $ 12.02 $ 13.26 $ 13.05 $ 11.20 =========== ========== ========== ========== ========== ========== Total return (a) 3.25%(d) 32.95% (9.35)% 2.12% 17.64% 11.61% =========== ========== ========== ========== ========== ========== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $ 50,193 $ 45,179 $ 33,596 $ 27,938 $ 23,956 $ 22,763 Ratio of net investment income to average net assets 0.07% 0.08% 0.17% 0.18% 0.18% 0.25% (c) Ratio of operating expenses to average net assets before fees waived and/or expenses reimbursed by investment adviser and administrator 1.27% 1.35% 1.33% 1.34% 1.41% 1.57% Ratio of operating expenses to average net assets after waivers and/or expense reimbursements 1.27% 1.35% 1.33% 1.34% 1.41% 1.50% Portfolio turnover rate 13%(d) 22% 23% 29% 45% 17% <FN> - ------------------------------------------------------------------------------------------------------------------------------------ (a) Total return represents aggregate total return for the period indicated and would have been lower during periods in which fees were waived and expenses reimbursed and assumes reinvestment of all distributions. (b) The selected per share data was calculated using the weighted average share method for the period. (c) Net investment income would have been lower during periods in which fees were waived and expenses reimbursed. (d) Not annualized. </FN> SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 6 DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: Kobren Insight Funds (the "Trust") was organized on September 13, 1996, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a no-load, open-end diversified management investment company. As of June 30, 2004, the Trust offered shares of two funds, Kobren Growth Fund and Delphi Value Fund. Information presented in these financial statements pertains only to the Delphi Value Fund (the "Fund"). The Fund is authorized to issue two classes of shares - the Retail Class and the Institutional Class. Each class of shares outstanding bears the same voting, dividend, liquidation and other rights and conditions, except that the expenses incurred in the distribution and marketing of such shares are different for each class. Additionally, the Retail Class is subject to 12b-1 fees and sub-transfer agent fees. The Fund seeks to achieve its investment objective by investing primarily in equity securities of U.S. companies. Investment income, common expenses and realized and unrealized gains and losses are allocated among the share classes of the Fund based on the relative net assets of each class. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. USE OF ESTIMATES -- The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. PORTFOLIO VALUATION -- Investment securities are valued at the last sale price on the securities exchange or national securities market on which such securities primarily are traded or for NASDAQ traded securities, the NASDAQ Official Closing Price. Securities not listed on an exchange or national securities market, or securities in which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. Any securities or other assets for which recent market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Trustees. DIVIDENDS AND DISTRIBUTIONS -- It is the policy of the Fund to declare and pay dividends from net investment income annually. The Fund will distribute net realized capital gain (including net short-term capital gain), if any, annually, unless offset by any available capital loss carryforward. Additional distributions of net investment income and capital gains for the Fund may be made in order to avoid the application of a 4% non-deductible excise tax on certain undistributed amounts of ordinary income and capital gain. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are due primarily to differing treatments of income and gain on various investment securities held by the Fund. As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: CAPITAL LOSS UNDISTRIBUTED UNDISTRIBUTED UNREALIZED CARRYFORWARD ORDINARY INCOME LONG TERM GAIN APPRECIATION ------------ --------------- -------------- ------------ Delphi Value Fund $ -- $ -- $ 940,708 $ 30,009,607 These amounts are as of the most recent tax year end. Net investment income and realized gain and loss for federal income tax purposes may differ from that reported in the financial statements because of permanent book and tax basis differences. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the specific identified cost basis. Dividend income is recognized on the exdividend date. Dividend income on foreign securities is recognized as soon as the Fund is informed of the ex-dividend date. The Fund estimates the components of distributions received from Real Estate Investment Trusts (REITs). Distributions received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is recognized on the accrual basis. All discounts/premiums are accreted/amortized using the effective yield method. FEDERAL INCOME TAX -- The Fund has qualified and intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, applicable to regulated investment companies, by distributing substantially all of its earnings to its shareholders. Therefore, no federal income or excise tax provision is applicable. EXPENSES -- Expenses of the Trust which are directly identifiable to a specific fund are allocated to that fund. Other expenses of the Trust are allocated among the funds based upon relative net assets of each fund. Other expenses of the Trust are allocated equally to those funds in the Trust. COMMITMENTS AND CONTINGENCIES -- In the normal course of business, the Trust enters into contracts on behalf of the Fund that contain a variety of provisions for general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that are not known at this time. However, based on experience, the Fund believes the risk of loss is remote. - -------------------------------------------------------------------------------- DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT 7 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) 2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE, DISTRIBUTION AND SHAREHOLDER SERVICING FEES AND OTHER RELATED PARTY TRANSACTIONS The Trust has entered into an investment advisory agreement (the "Advisory Agreement") with Kobren Insight Management, Inc. ("KIM" or the "Adviser") who has engaged Delphi Management, Inc. ("Delphi") as the Fund's sub-adviser. The Advisory Agreement provides that the Fund pays KIM a fee, computed daily and paid monthly, at the annual rate of 1.00% of the Fund's average daily net assets. KIM is solely responsible for the payment of the sub-adviser fee to Delphi. KIM has voluntarily agreed to limit the Fund's total annual operating expenses of the Retail Class and Institutional Class to no more than 1.75% and 1.50%, respectively, of the Fund's average daily net assets. This voluntary agreement may be terminated at the discretion of the Adviser. The Trust has also entered into an administration agreement (the "Administration Agreement") with PFPC Inc. (the "Administrator"), a member of PNC Financial Services Group, Inc. The Administrator also serves as the Trust's transfer agent and dividend paying agent. Mellon Trust of New England, N.A., an indirectly wholly-owned subsidiary of Mellon Financial Corporation, serves as the Trust's custodian. Kobren Insight Brokerage, Inc. ("KIB"), an affiliate of KIM, serves as distributor of the Fund. The Retail Class of the Fund has adopted a Shareholder Servicing and Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Fund pays KIB a monthly 12b-1 fee for distribution services provided, at an annual rate of 0.25% of the average daily net assets attributable to the Retail Class of shares. No officer, director or employee of KIM, KIB, the Administrator, or any affiliate thereof, receives any compensation from the Trust for serving as a trustee or officer of the Trust. Each trustee who is not an "affiliated person" receives an annual retainer fee of $5,000 plus $1,000 for each board meeting attended and $500 for each committee meeting attended. The Trust also reimburses out-of-pocket expenses incurred by each trustee in attending such meetings. 3. SUB-TRANSFER AGENT FEES The Retail Class of the Fund is subject to sub-transfer agent fees consisting of broker-dealer and fund network fees. The Fund pays participating networks a monthly fee for maintaining shareholder accounts at an annual rate of 0.10% of the average daily balance of fund accounts invested through those networks. 4. PURCHASES AND SALES The aggregate amounts of purchases and sales of the Fund's investment securities, other than short-term securities, for the six months ended June 30, 2004, were $16,654,520 and $12,886,253 of non-governmental issues, respectively. 5. SHARES OF BENEFICIAL INTEREST As of June 30, 2004, an unlimited number of shares of beneficial interest, par value $0.001, was authorized for the Trust. Changes in shares of beneficial interest for the Fund were as follows: SIX MONTHS ENDED YEAR ENDED JUNE 30, 2004 (UNAUDITED) DECEMBER 31, 2003 ------------------------ ------------------------- RETAIL CLASS: SHARES AMOUNT SHARES AMOUNT ------- ------- ------- ------- Shares sold 468,915 $ 7,574,522 782,257 $ 10,512,019 Shares issued as reinvestment of distributions -- -- -- -- Shares redeemed (309,400) (5,014,229) (585,812) (7,536,897) -------- ---------- -------- ---------- Net increase 159,515 $ 2,560,293 196,445 $ 2,975,122 ======== ========== ======== ========== INSTITUTIONAL CLASS: Shares sold 421,344 $ 7,016,291 525,944 $ 7,000,814 Shares issued as reinvestment of distributions -- -- -- -- Shares redeemed (205,873) (3,368,861) (494,890) (6,675,484) -------- ---------- -------- ---------- Net increase 215,471 3,647,430 31,054 325,330 ======== ========== ======== ========== Total net increase from fund share transactions $ 6,207,723 $ 3,300,452 At June 30, 2004, KIM, Delphi and their affiliates owned 573,987 Retail Class shares of the Fund representing 14.2% of the outstanding shares. Discretionary accounts managed by KIM for management clients collectively held 1,826,787 shares of the Institutional Class representing 60.0% of the outstanding shares. - -------------------------------------------------------------------------------- Descriptions of Delphi Value Fund's Proxy Voting Policies and Procedures are available upon request and without charge on Delphi Value Fund's website at www.delphivalue.com or by calling toll free 1-800-4KOBREN (800-456-2736) or on the Securities and Exchange Commissions's website at www.sec.gov. - -------------------------------------------------------------------------------- 8 DELPHI VALUE FUND -- 2004 SEMI-ANNUAL REPORT KOBREN INSIGHT MANAGEMENT, INC. [GRAPHIC OMITTED] KOBREN INSIGHT FUNDS KOBREN GROWTH FUND - -------------------------------------------------------------------------------- SEMI-ANNUAL REPORT JUNE 30, 2004 [PHOTO] ERIC M. KOBREN MESSAGE TO SHAREHOLDERS STOCKS END A SEE-SAW FIRST HALF WITH MODEST GAINS The S&P 500's quarterly returns this year look like the very model of consistency: up 1.7% for the first quarter and 1.7% for the second. But that masks what has actually been a turbulent market. The market roared ahead in January and February, rising 3.3% in a continuation of 2003's solid performance. Then the specter of terrorism reared its ugly head with the Madrid bombings and the markets gave back about half of those gains in March. The second quarter was a near mirror image. The quarter started off weak as fears of rising inflation and interest rates scuttled both stock and bond prices in April. But in May and June, the markets rallied as very strong corporate earnings provided a solid foundation for stocks and investors gradually began to believe that inflation and interest rate fears were overdone. A TOUGH ENVIRONMENT TO NAVIGATE This environment with all its twists and turns proved difficult for most managers, as the average U.S. stock fund significantly trailed the broad market. We also trailed the broad market gaining 2.1% during the first six months of 2004, versus a 3.4% gain for the S&P 500 Index. The underperformance can be explained by our diversification into non-S&P 500 areas of the market, as well as some rough patches for some of our core holdings. One of our largest holdings, Oakmark Select (currently 14.5% of fund assets) was particularly hard hit as some of the fund's financial service holdings declined in the face of increasing interest rates and a drop in mortgage refinancings. Due to the fund's concentrated portfolio structure, wide swings up and down are to be expected. Our international diversification was also a drag on performance during the first half. SSgA Emerging Markets Fund is currently a modest 3.5% of Kobren Growth, but it contributed significantly to our performance in 2003 and during the first quarter of 2004. In the second quarter, this area of the securities market hit a pothole in the face of rising U.S. interest rates, a stronger U.S. dollar and China's attempts to slow down its overheated economy. While we are constantly reassessing our investments, we continue to maintain an exposure in emerging markets. We believe this area still offers greater growth prospects than developed markets, and many of these stocks are more reasonably valued. We also believe that the U.S. dollar will resume its decline against other currencies. There were some very nice bright spots in the portfolio, most notably Pimco Commodity RealReturn Strategy (representing 5.1% of the Fund). Despite a difficult second quarter, the fund was our best performer this year to date, with a gain of 8.2%. This unique fund is tied to commodity prices (a good portion of that is oil prices) and we purchased it last year to provide the portfolio a hedge against rising inflation, which is exactly what it did. SECOND HALF CHALLENGES Looking to the second half of the year, we expect continued market volatility as many uncertainties, from the presidential election (and the wild card of terrorism as we approach that election), to the fate of the new government in Iraq, lie ahead. Also, it is unclear what will happen to the economy now that the refinancing boom (which put a lot of cash in consumer's pockets) is over and the effects of the massive fiscal stimulus start to wane. At least one uncertainty has recently been removed with the Federal Reserve's 1/4 point rate hike on June 30. While uncertainty over the length and magnitude of this cycle of rising interest rates remains, at least the waiting game for the first hike is over. And market history suggests that things usually start to get better (for stocks and bonds) within a few months after the first hike. The second half of election years has also typically been a better time for the stock market than the first halves. KEEPING OUR EYE ON THE BALL We will remain vigilant in our review of changes in the general direction of the market during the second half as we contine to review our asset and style allocations. Nevertheless, shifts to different market areas will continue to be rather modest, as we generally avoid making major market calls. As always, our primary focus is on identifying the best fund managers in each area of the market. That is how we add the most value for our shareholders. Sincerely, /S/ ERIC M. KOBREN Eric M. Kobren President and Portfolio Manager - -------------------------------------------------------------------------------- KOBREN GROWTH FUND (6/30/04) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC VALUE OF $10,000 INVESTED 12/16/96 12/16/1996 10,000.00 12/31/1996 10,240.00 3/31/1997 10,420.00 6/30/1997 11,560.00 9/30/1997 12,170.00 12/31/1997 11,779.00 3/31/1998 13,089.00 6/30/1998 13,181.00 9/30/1998 11,226.00 12/31/1998 13,128.00 3/31/1999 13,965.00 6/30/1999 15,148.00 9/30/1999 14,133.00 12/31/1999 17,027.00 3/31/2000 17,693.00 6/30/2000 16,583.00 9/30/2000 16,383.00 12/31/2000 15,367.00 3/31/2001 14,219.00 6/30/2001 15,217.00 9/30/2001 12,885.00 12/31/2001 14,249.00 3/31/2002 14,650.00 6/30/2002 13,610.00 9/30/2002 12,006.00 12/31/2002 12,644.00 3/31/2003 12,328.00 6/30/2003 14,046.00 9/30/2003 14,475.00 12/31/2003 16,179.00 3/31/2004 16,664.00 6/30/2004 16,524.00 12 MONTHS ANNUALIZED YTD ENDED SINCE INCEPTION TOTAL RETURN (%) 6/30/04 6/30/04 (12/16/96) - ---------------- --------- ----------- ---------------- Kobren Growth 2.1% 17.6% 6.9% - -------------------------------------------------------------------------------- ASSET ALLOCATION* - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Cash & Net Other Assets and Liab. 1.8% International 20.5% U.S. Stocks 67.1% Bond 10.6% - -------------------------------------------------------------------------------- STYLE ALLOCATION (%) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Large Cap Growth 26.7% Mid Cap Value 21.8% International 20.5% Bond 5.5% Specialty 5.1% Large Cap Value 7.4% Small Cap Value 11.2% Cash & Net Other Assets and Liab. 1.8% KOBREN GROWTH FUND (Ticker: KOGRX): Your fund returned 2.1% for the first half of 2004, compared to the S&P 500's return of 3.4%. Though the Fund maintained a lower volatility profile relative to the S&P and peers, which accounts for some of the underperformance, we were not satisfied with our returns in the first half of 2004. Our asset allocation decisions added value in the first half of the year. Compared to our neutral weights, we overweighted international securities relative to domestic and underweighted large-caps relative to small and mid-cap stocks. Our non-equity allocations in the aggregate added value as the high yield bond and commodity combination also produced a superior return to the S&P 500. So what went wrong? Interestingly, it was the funds that did the best in absolute terms that did not perform as well as they should have. Our three best performing funds for the first half of the year - LONGLEAF PARTNERS SMALL CAP, ARTISAN INTERNATIONAL SMALL CAP, and PIMCO COMMODITY REALRETURN STRATEGY - all performed below average relative to peers. Our stalwart value funds: OAKMARK SELECT and LONGLEAF PARTNERS also did not help. Oakmark Select was hit hard in June due to a missed earnings report by a top holding. Longleaf was held back this year by its heavy cash position. We continue to expect that these funds will maintain prominent roles in Kobren Growth given their excellent management teams. - -------------------------------------------------------------------------------- TOP TEN HOLDINGS* - -------------------------------------------------------------------------------- KOBREN GROWTH STYLE ALLOC (%) - --------------- ------- ------------- Oakmark Select Mid Cap Value 14.5% T. Rowe Price Blue Chip Growth Large Cap Growth 12.4% Longleaf Partners Small Cap Small Cap Value 11.2% Fidelity Blue Chip Growth Large Cap Growth 10.9% Julius Baer Intl. Equity- I International 10.6% Fidelity Equity-Income Large Cap Value 7.5% Longleaf Partners Mid Cap Value 7.3% Artisan Int'l Small Cap International 6.0% Fidelity Advisor High Income - I High Yield Bond 5.4% PIMCO Commodity RealReturn Specialty 5.1% TOTAL FUND NET ASSETS $54,799,349 - -------------------------------------------------------------------------------- TOP SECTORS** - -------------------------------------------------------------------------------- (Totals may not equal 100%) Financial Services 20.9 Consumer Services 14.0 Industrial Materials 9.8 Healthcare 9.6 Consumer Goods 9.2 Media 8.9 Hardware 6.9 Business Services 6.9 Energy 5.8 Telecom 5.1 Software 2.1 Utilities 0.8 - -------------------------------------------------------------------------------- *Based on total net assets. **Equities only Kobren Insight Management, Inc. is the adviser for Kobren Insight Funds, and Kobren Insight Brokerage, Inc., a NASD broker/dealer, is the distributor for the Funds. PERFORMANCE DATA REFLECTS PAST PERFORMANCE AND IS NOT A GUARANTEE OF FUTURE RESULTS. PERFORMANCE DATA DOES NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON DISTRIBUTIONS OR THE REDEMPTION OF SHARES AND WOULD HAVE BEEN LOWER IN THE ABSENCE OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS. RETURN FIGURES INCLUDE REINVESTMENT OF DISTRIBUTIONS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET CONDITIONS AND SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. - -------------------------------------------------------------------------------- 2 KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) - -------------------------------------------------------------------------------- SHARES MUTUAL FUNDS - 100.08% VALUE (NOTE 1) - -------------------------------------------------------------------------------- LARGE CAP GROWTH - 26.68% - -------------------------------------------------------------------------------- 146,239 Fidelity Blue Chip Growth Fund $ 5,954,863 74,731 Fidelity Capital Appreciation Fund 1,898,915 231,166 T. Rowe Price Blue Chip Growth Fund 6,768,547 ------------ 14,622,325 MID CAP VALUE - 21.80% - -------------------------------------------------------------------------------- 129,761 Longleaf Partners Fund 4,009,617 256,926 Oakmark Select Fund - Class I 7,936,447 ------------ 11,946,064 INTERNATIONAL - 20.50% - -------------------------------------------------------------------------------- 200,281 Artisan International Small Cap Fund 3,296,618 210,098 Julius Baer Int'l Equity Fund - Class I 5,828,118 170,814 SSgA Emerging Markets Fund 2,109,551 ------------ 11,234,287 SMALL CAP VALUE - 11.17% - -------------------------------------------------------------------------------- 201,940 Longleaf Partners Small Cap Fund 6,120,813 LARGE CAP VALUE - 7.46% - -------------------------------------------------------------------------------- 80,869 Fidelity Equity-Income Fund 4,087,123 BOND - 5.45% - -------------------------------------------------------------------------------- 322,142 Fidelity Adv. High Inc. Fund - Class I 2,983,037 - -------------------------------------------------------------------------------- SHARES VALUE (NOTE 1) - -------------------------------------------------------------------------------- SPECIALTY - 5.13% - -------------------------------------------------------------------------------- 194,471 PIMCO Commodity RealReturn Strategy Fund - Class I $ 2,812,050 MONEY MARKET FUND - 1.89% - -------------------------------------------------------------------------------- 1,036,371 Dreyfus Cash Mgmt. Plus Fund (1) 1,036,371 TOTAL MUTUAL FUNDS (COST $43,973,754) 54,842,070 ------------ TOTAL INVESTMENTS (Cost $43,973,754*) 100.08% 54,842,070 LIABILITIES NET OF CASH AND OTHER ASSETS -0.08% (42,721) --------- ------------- TOTAL NET ASSETS 100.00% $ 54,799,349 ========= ============= - -------------------------------------------------------------------------------- (1) An affiliate of the Custodian. * For Federal income tax purposes, cost is $43,973,754 and appreciation (depreciation) is as follows: Unrealized appreciation: $ 10,938,449 Unrealized depreciation: (70,133) ------------ Net unrealized appreciation: $ 10,868,316 ============ - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) ASSETS: Investments, at value (Note 1) (See Portfolio of Investments) $ 54,842,070 Dividends receivable 18,725 Receivable for fund shares sold 4,327 Prepaid expenses and other assets 3,761 -------------- Total assets 54,868,883 -------------- LIABILITIES: Payable for fund shares redeemed 10,617 Investment advisory fee payable (Note 2) 25,118 Accrued Trustees' fees and expenses (Note 2) 5,571 Accrued expenses and other payables 28,228 -------------- Total liabilities 69,534 -------------- NET ASSETS: $ 54,799,349 ============== Investments, at cost $ 43,973,754 ============== NET ASSETS CONSIST OF: Accumulated net investment income $ 41,912 Accumulated net realized loss on investments sold (1,183,292) Net unrealized appreciation of investments 10,868,316 Par value 4,227 Paid-in capital in excess of par value 45,068,186 -------------- NET ASSETS $ 54,799,349 ============== SHARES OUTSTANDING 4,227,459 ============== Net asset value, offering and redemption price per share (Net Assets/Shares Outstanding) $ 12.96 ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- INTERNATIONAL INVESTING HAS SPECIAL RISKS, INCLUDING CURRENCY FLUCTUATION, POLITICAL AND ECONOMIC INSTABILITY, AND THE VOLATILITY OF EMERGING MARKETS. The Adviser absorbs certain expenses of each Kobren Insight Fund, without which total returns would have been lower. Portfolio holdings are also subject to change. Data sources: Kobren Insight Management, Inc. and Morningstar. This report must be preceded or accompanied by a prospectus. Please read it carefully before investing. You may obtain a prospectus or current performance information by calling 1-800-4KOBREN (1-800-456-2736) or by visiting www.kobren.com. Copyright (C)2004 - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT 3 - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED) INVESTMENT INCOME: Dividends $ 213,183 ------------ Total investment income 213,183 ------------ EXPENSES: Investment advisory fee (Note 2) 208,064 Administration fee (Note 2) 35,933 Transfer agent fees (Note 2) 25,623 Sub-transfer agent fees (Note 3) 7,618 Custodian fees (Note 2) 1,500 Professional fees 13,282 Trustees' fees and expenses (Note 2) 8,920 Registration and filing fees 7,500 Reports to shareholders 4,076 Other 2,506 ------------ Total expenses 315,022 Expenses waived by investment adviser (Note 2) (37,602) Other reductions (Note 2) (6,101) ------------ Net expenses 271,319 ------------ NET INVESTMENT LOSS (58,136) ------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain from security transactions 1,154,528 Net increase in unrealized appreciation of securities 133,631 ------------ Net realized and unrealized gain on investments 1,288,159 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,230,023 ============ - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2004 (UNAUDITED) DECEMBER 31, 2003 ------------------------ ----------------- Net investment income (loss) $ (58,136) $ 520,646 Net realized gain from security transactions 1,154,528 1,953,313 Short-term capital gain distributions received -- 94,991 Long-term capital gain distributions received -- 23,876 Net change in unrealized appreciation of investments 133,631 9,784,184 ------------- ------------ Net increase in net assets resulting from operations 1,230,023 12,377,010 Distribution to shareholders from: Net investment income -- (515,589) ------------- ------------ Total distributions -- (515,589) Net decrease in net assets from fund share transactions (Note 5) (1,078,501) (3,704,214) ------------- ------------ Net increase in net assets 151,522 8,157,207 NET ASSETS: Beginning of period 54,647,827 46,490,620 ------------- ------------ End of period (including line A) $ 54,799,349 $54,647,827 ============= ============ (A) Accumulated net investment income $ 41,912 $ 100,048 ============= ============ SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4 KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- - ----------------------------------------------------- FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD. - ----------------------------------------------------- FOR THE SIX MONTHS ENDED 6/30/2004 ------------------------ FOR THE YEAR ENDED--------------------------- (UNAUDITED) 12/31/2003 12/31/2002 12/31/2001 12/31/2000 12/31/1999 ----------- ---------- ---------- ---------- ---------- ---------- Net asset value - beginning of period $ 12.69 $ 10.01 $ 11.37 $ 12.32 $ 15.34 $ 12.54 Net investment income (loss) (a)(b) (0.01) 0.12 0.07 (0.04) (0.04) (0.04) Short-term capital gains distributions received -- 0.02 0.01 0.01 0.22 0.14 Net realized and unrealized gain (loss) on investments 0.28 2.66 (1.36) (0.87) (1.68) 3.63 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from investment operations 0.27 2.80 (1.28) (0.90) (1.50) 3.73 Distributions from net investment income -- (0.12) (0.07) -- -- -- Distributions from net realized short-term capital gain distributions received -- -- (0.01) -- (0.19) (0.10) Distributions from net realized capital gains on investments -- -- -- (0.05) (1.33) (0.83) -------- -------- -------- -------- -------- -------- Total distributions -- (0.12) (0.08) (0.05) (1.52) (0.93) Net asset value - end of period $ 12.96 $ 12.69 $ 10.01 $ 11.37 $ 12.32 $ 15.34 ======== ======== ======== ======== ======== ======== Total return (c) 2.13%(d) 27.96% (11.26)% (7.28)% (9.75)% 29.70% ======== ======== ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $54,799 $54,648 $46,491 $55,335 $63,105 $73,151 Ratio of net investment income (loss) to average net assets (b) (0.21)% 1.06% 0.61% (0.32)% (0.41)% (0.34)% Ratio of operating expenses to average net assets before fees waived by investment adviser and other reductions (e) 1.14% 1.18% 1.21% 1.08% 1.06% 1.07% Ratio of operating expenses to average net assets after fees waived by investment adviser and other reductions (e) 0.98% 0.96% 0.96% 0.96% 0.99% 0.98% Portfolio turnover rate 19%(d) 81% 143% 80% 93% 66% <FN> - -------------------------------------------------------------------------------------------------------- (a) Recogniti on of net investment income (loss) by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Net investment income (loss) would have been lower (greater) in the absence of fee waivers and expense reimbursements. (c) Total return represents aggregate total return for the period indicated and would have been lower in the absence of fee waivers and expense reimbursements and assumes reinvestment of all distributions. (d) Not annualized. (e) Does not include expenses of the investment companies in which the Fund invests. </FN> SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT 5 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: Kobren Insight Funds (the "Trust") was organized on September 13, 1996, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a no-load, open-end diversified management investment company. As of June 30, 2004, the Trust offered shares of two funds, Kobren Growth Fund and Delphi Value Fund. Information presented in these financial statements pertains only to Kobren Growth Fund (the "Fund"). The Fund seeks to achieve its investment objective by investing primarily in shares of other investment companies ("underlying funds"), but also may invest directly in securities that are suitable investments for the Fund. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. USE OF ESTIMATES -- The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. PORTFOLIO VALUATION -- The underlying funds are valued according to their stated net asset value. The Fund's other investment securities are valued at the last sale price on the securities exchange or national securities market on which such securities primarily are traded or for NASDAQ traded securities, the NASDAQ Official Closing Price. Securities not listed on an exchange or national securities market, or securities in which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. Short-term investments are carried at amortized cost, which approximates value. Any securities or other assets for which recent market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Trustees. DIVIDENDS AND DISTRIBUTIONS -- It is the policy of the Fund to declare and pay dividends from net investment income annually. The Fund will distribute net realized capital gain (including net short-term capital gain), if any, annually, unless offset by any available capital loss carryforward. Additional distributions of net investment income and capital gain for the Fund may be made in order to avoid the application of a 4% non-deductible excise tax on certain undistributed amounts of ordinary income and capital gain. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are due primarily to differing treatments of income and gain on various investment securities held by the Fund. The tax character of distributions paid during 2003 and 2002 was as follows: DISTRIBUTIONS PAID IN 2003 DISTRIBUTIONS PAID IN 2002 ----------------------------------------------- ------------------------------------------------ ORDINARY INCOME LONG-TERM CAPITAL GAINS ORDINARY INCOME LONG-TERM CAPITAL GAINS --------------- ----------------------- --------------- ------------------------ Kobren Growth Fund $ 515,589 $ -- $ 365,399 $ -- As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: CAPITAL LOSS UNDISTRIBUTED UNDISTRIBUTED UNREALIZED CARRYFORWARD ORDINARY INCOME LONG TERM APPRECIATION ------------ --------------- ----------- ------------ Kobren Growth Fund $ (2,277,310) $ 119,169 $ -- $ 10,674,175 These amounts are as of the most recent tax year end. Net investment income and realized gain and loss for federal income tax purposes may differ from that reported in the financial statements because of permanent book and tax basis differences. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the specific identified cost basis. Dividend income is recognized on the ex-dividend date. Interest income is recognized on the accrual basis. All discounts/premiums are accreted/amortized using the effective yield method. - -------------------------------------------------------------------------------- 6 KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) FEDERAL INCOME TAX -- The Fund has qualified and intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, applicable to regulated investment companies, by distributing substantially all of its earnings to its shareholders. Therefore, no federal income or excise tax provision is applicable. For the year ended December 31, 2003, the Fund had capital loss carryforwards of $326,295 expiring on December 31, 2008 from Kobren Moderate Growth Fund (which merged into the Fund on April 26, 2002) and $1,548,226 and $402,789 expiring on December 31, 2009 and 2011, respectively. EXPENSES -- Expenses of the Trust which are directly identifiable to a specific fund are allocated to that fund. Other expenses of the Trust are allocated among the funds based upon relative net assets of each fund. Other expenses of the Trust are allocated equally to those funds in the Trust. COMMITMENTS AND CONTINGENCIES -- In the normal course of business, the Trust enters into contracts on behalf of the Fund that contain a variety of provisions for general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that are not known at this time. However, based on experience, the Fund believes the risk of loss is remote. 2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS: The Trust has entered into an investment advisory agreement with Kobren Insight Management, Inc. ("KIM"). The Fund pays KIM a fee, computed daily and paid monthly, at the annual rate of 0.75% of the Fund's average daily net assets. KIM has voluntarily agreed to limit the Fund's other operating expenses, before other reductions, to 0.25% of the Fund's average daily net assets. This voluntary agreement may be terminated at the discretion of the Adviser. Kobren Insight Brokerage, Inc. ("KIB"), an affiliate of KIM, serves as distributor of the Fund's shares and bears all distribution costs. No distribution fees are paid by the Fund. The Fund also receives reimbursement of 12b-1 distribution fees paid to KIB by certain fund investments held in the portfolio of the Fund. For the six months ended June 30, 2004, expense reimbursements and other reductions were as follows: EXPENSES WAIVED BY INVESTMENT ADVISER OTHER REDUCTIONS (1) ------------------------------------- -------------------- Kobren Growth Fund $ 37,602 $ 6,101 <FN> (1) Reimbursements to the Fund from 12b-1 distribution fees. </FN> The Trust has also entered into an administration agreement with PFPC Inc. (the "Administrator"), a member of PNC Financial Services Group, Inc. The Administrator also serves as the Trust's transfer agent and dividend paying agent. Mellon Trust of New England, N.A., an indirectly wholly-owned subsidiary of Mellon Financial Corporation, serves as the Trust's custodian. No officer, director or employee of KIM, KIB, the Administrator, or any affiliate thereof, receives any compensation from the Trust for serving as a trustee or officer of the Trust. Each trustee who is not an "affiliated person" receives an annual retainer fee of $5,000 plus $1,000 for each board meeting attended and $500 for each committee meeting attended. The Trust also reimburses out-of-pocket expenses incurred by each trustee in attending such meetings. 3. SUB-TRANSFER AGENT FEES: The Fund is subject to sub-transfer agent fees consisting of broker-dealer and fund network fees. The Fund pays participating networks a monthly fee for maintaining shareholder accounts at an annual rate of 0.10% of the average daily balances of fund accounts invested through those networks. 4. PURCHASES AND SALES: The aggregate amounts of purchases and sales of the Fund's investment securities, other than short-term securities, for the six months ended June 30, 2004, were $10,258,584 and $12,862,187 of non-governmental issues, respectively. - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT 7 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- JUNE 30, 2004 (UNAUDITED) 5. SHARES OF BENEFICIAL INTEREST: As of June 30, 2004, an unlimited number of shares of beneficial interest, par value $0.001, were authorized for the Trust. Changes in shares of beneficial interest for the Fund were as follows: SIX MONTHS ENDED YEAR ENDED -------------------------- ---------------------------- JUNE 30, 2004 (UNAUDITED) DECEMBER 31, 2003 SHARES AMOUNT SHARES AMOUNT -------- -------- -------- -------- Shares sold 304,159 $ 3,934,191 458,246 $ 5,053,499 Shares issued as reinvestment of distributions -- -- 39,123 496,467 Shares redeemed (384,572) (5,012,692) (832,993) (9,254,180) -------- -------------- -------- ------------- Net decrease (80,413) $ (1,078,501) (335,624) $ (3,704,214) ======== ============== ======== ============= At June 30, 2004, KIM and its affiliates owned 431,435 shares of the Fund representing 10.2% of the total outstanding shares. 6. RISK FACTORS OF THE FUND: Indirectly investing in underlying funds through Kobren Growth Fund involves additional and duplicative expenses and certain tax results that would not be present if an investor were to make a direct investment in the underlying funds. The Fund, together with any "affiliated persons" (as such term is defined in the 1940 Act) may purchase only up to 3% of the total outstanding securities of an underlying fund. Accordingly, when the Trust, KIM or their affiliates hold shares of any of the underlying funds, the Fund's ability to invest fully in shares of such underlying funds may be restricted, and KIM must then, in some instances, select alternative investments for the Fund. - -------------------------------------------------------------------------------- Descriptions of Kobren Growth Fund's Proxy Voting Policies and Procedures are available upon request and without charge on Kobren Growth Fund's website at www.kobren.com or by calling toll free 1-800-4KOBREN (800-456-2736) or on the Securities and Exchange Commissions's website at www.sec.gov. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 8 KOBREN INSIGHT FUNDS -- 2004 SEMI-ANNUAL REPORT ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not yet applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Kobren Insight Funds (the "Trust") adopted a Nominating Committee Charter and approved a Nominating Committee at its April 28, 2004 Board Meeting. The Charter provides a governance structure for the Nominating Committee and sets forth the Committee's mandate from the Board. The Charter includes procedures for shareholders of each of the Funds in the Trust to nominate Independent Trustee candidates. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) KOBREN INSIGHT FUNDS ------------------------------------------------------------------- By (Signature and Title)* /S/ ERIC M. KOBREN ------------------------------------------------------- Eric M. Kobren, Chairman & President (principal executive officer) Date AUGUST 20, 2004 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /S/ ERIC M. KOBREN ------------------------------------------------------ Eric M. Kobren, Chairman & President (principal executive officer) Date AUGUST 20, 2004 ---------------------------------------------------------------------------- By (Signature and Title)* /S/ ERIC J. GODES ------------------------------------------------------- Eric J. Godes, Chief Financial Officer, Vice President, Treasurer & Secretary (principal financial officer) Date AUGUST 20, 2004 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.