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 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: 800-456-2736 ------------ Date of fiscal year end: December 31 ------------ Date of reporting period: June 30, 2005 -------------- 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. K O B R E N I N S I G H T F U N D S DELPHI VALUE FUND ----------------------------------------------------------------- SEMI-ANNUAL REPORT JUNE 30, 2005 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] SCOTT M. BLACK PHOTO Dear Shareholders, I am pleased to report that the Delphi Value Fund registered a 1.3% gain (institutional class, +1.5%) in the first half of 2005 while all of the popular indices - the S&P 500, the Dow Jones Industrials, and NASDAQ Composite - recorded losses. The year commenced propitiously as your Fund attained an all time high of $17.81 per share for the retail class (institutional class, $18.10) on March 4th. However, the confluence of three salient factors undermined our early success: (i) Skyrocketing oil prices threatened the discretionary purchasing power of the U.S. consumer; (ii) Core CPI (consumer price index) accelerated to an annualized 3.3% with the Federal Reserve raising rates; (iii) The U.S. dollar strengthened against the Euro sending metals stocks sharply lower. Consequently, the net asset value declined to a period low of $16.16 for the retail class (institutional class, $16.43), down 6.2% year-to-date on May 13th. With the subsequent rally in the overall stock market, the Fund surged 8.0% during the last six weeks of the period. With the S&P 500 at 1191.33, or 16.7x estimated 2005 earnings, it would appear that U.S. equities, as a whole, are fairly valued by historical standards. Nonetheless, given the environment of low nominal interest rates, approximately a 4% yield on the ten year U.S. Treasury, equities are a far more attractive homogeneous risk class than fixed income securities. Despite all of the naysayers in the financial media, the underpinnings of the U.S. economy are quite healthy. Growth in real Gross Domestic Product should average 3 1/2% to 4% for the remainder of 2005. Corporate profits climbed 13% year over year in the first quarter and are slated for continued pacings of 7% to 8%. Notwithstanding $60 per barrel oil, personal consumption has been resilient with nearly 4% growth. Mortgage rates are highly attractive in the 5 5/8% range for thirty-year conforming loans. Employment growth has averaged 150,000 new jobs per month lowering unemployment to 5.1% at the latest reading. Finally, overall economic growth has accelerated tax revenues shrinking the projected U.S. Federal budgetary deficit to $335 Billion. An analysis of the individual holdings indicates that energy, housing, and technology issues dominated the first half winners list. Nexen (+49.4%), Denbury Resources (+44.9%), Talisman Energy (+39.4%), and XTO Energy (+28.1%) benefited from the upsurge in global oil and gas prices. Toll Brothers (+48.0%) and D.R. Horton (+24.4%) profited from the continued housing boom. Finally, MEMC Electronics (+37.1%), a producer of silicon wafers, and Western Digital (+23.8%), a leading disc drive manufacturer, advanced on good fundamental earning power. Despite record first quarter earnings, two industrial companies, Cytec Industries (specialty chemicals) and Alcoa declined 22.6% and 16.8%, respectively. In reviewing portfolio activity, one finds that six positions were eliminated in the first half. Pulitzer was acquired by another portfolio holding, Lee Enterprises. Abercrombie & Fitch and Textron were divested with significant gains because they were fully valued with 20+ price/earnings multiples. Pier 1 Imports and Pogo Producing were disposed profitably despite weakening results. Finally, Lear, an OEM auto supplier, was sold with a loss concomitant with the reduced build rate for the U.S. automobile industry. The latest portfolio acquisitions were eclectic comprising retailing, energy, technology, industrial, and transportation equities. Foot Locker, the sporting goods chain, was acquired at 13x forecast 2005 earnings; Arrow Electronics, a leading electronics distribution company, at 11x estimated eps; POSCO, the Korean steel producer, at a 4x multiple; and Dryships, a bulk cargo concern, at 3.5x projected earnings. Marathon Oil, with a rising production profile, was bought at 4x forecast 2005 cash flow. While we foresee some economic headwinds in the second half of 2005; namely, a weak Eurozone, a burgeoning U.S. trade deficit above $600 Billion, and an overheated bicoastal housing market, we are sanguine about the prospects of the U.S. equity markets for the remainder of the year. We feel the Delphi Value Fund owns superior businesses (return on equity of 18.2%) at low valuations (11.7x forecast earnings per share), a combination with proven historical success. I thank you for your continued support. Best regards, /S/ SCOTT M. BLACK Scott M. Black President - -------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- JUNE 30, 2005 (UNAUDITED) SHARES VALUE (NOTE 1) - ---------------------------------------------------------------- COMMON STOCKS - 95.05% - ---------------------------------------------------------------- AEROSPACE/TECHNOLOGY - 4.44% - ---------------------------------------------------------------- 37,400 Arrow Electronics, Inc. (1) $ 1,015,784 107,000 MEMC Electronic Materials, Inc. (1) 1,687,390 118,400 Micron Technology, Inc. (1) 1,208,864 108,000 Western Digital Corp. (1) 1,449,360 ------------ 5,361,398 BANKING - 9.46% - ---------------------------------------------------------------- 35,500 Citigroup, Inc. 1,641,165 71,000 Colonial BancGroup, Inc. 1,566,260 50,400 Community Bank System, Inc. 1,229,256 51,525 North Fork Bancorporation, Inc. 1,447,337 61,500 Southwest Bancorp, Inc. 1,259,520 37,400 TD Banknorth, Inc. 1,114,520 29,700 Webster Financial Corp. 1,386,693 28,815 Wells Fargo & Co. 1,774,428 ------------ 11,419,179 BASIC MATERIALS - 6.56% - ---------------------------------------------------------------- 47,100 Alcoa, Inc. 1,230,723 30,050 Cytec Industries, Inc. 1,195,990 33,600 Dow Chemical Co. 1,496,208 41,500 Inco, Ltd. 1,566,625 69,000 Metals USA, Inc. (1) 1,312,380 25,475 POSCO, ADR 1,120,136 ------------ 7,922,062 CONGLOMERATES - 4.12% - ---------------------------------------------------------------- 1,164 Berkshire Hathaway, Inc., Class B (1) 3,239,994 19,200 Norsk Hydro ASA, SP ADR 1,741,824 ------------ 4,981,818 CONSTRUCTION & REAL ESTATE - 7.60% - ---------------------------------------------------------------- 24,700 Boston Properties, Inc., REIT 1,729,000 66,169 D.R. Horton, Inc. 2,488,616 30,330 Lennar Corp., Class A 1,924,438 16,100 Toll Brothers, Inc. (1) 1,634,955 73,400 U-Store-It Trust, REIT 1,398,270 ------------ 9,175,279 CONSUMER RELATED - 4.30% - ---------------------------------------------------------------- 58,000 Disney (Walt) Co. 1,460,440 45,096 Helen of Troy Ltd. (1) 1,148,144 88,700 La-Z-Boy, Inc. 1,292,359 18,100 Toyota Motor Corp., SP ADR 1,293,969 ------------ 5,194,912 ENERGY - 10.95% - ---------------------------------------------------------------- 74,000 Denbury Resources, Inc. (1) 2,942,980 29,000 Marathon Oil Corp. 1,547,730 70,000 Nexen, Inc. 2,125,200 57,300 Talisman Energy, Inc. 2,152,761 48,700 Whiting Petroleum Corp. (1) 1,768,297 78,888 XTO Energy, Inc. 2,681,403 ------------ 13,218,371 FINANCIAL SERVICES - 8.50% - ---------------------------------------------------------------- 26,800 American Express Co. 1,426,564 17,084 Bear Stearns Cos., Inc. 1,775,711 15,000 Goldman Sachs Group, Inc. 1,530,300 30,900 H&R Block, Inc. 1,803,015 11,015 iStar Financial, Inc., REIT 458,114 18,700 Lehman Brothers Holdings, Inc. 1,856,536 26,955 Morgan Stanley 1,414,329 ------------ 10,264,569 FOOD & BEVERAGE - 2.30% - ---------------------------------------------------------------- 52,000 Pepsi Bottling Group, Inc. 1,487,720 92,000 Ryan's Restaurant Group, Inc. (1) 1,288,920 ------------ 2,776,640 INSURANCE - 10.28% - ---------------------------------------------------------------- 64,500 Aspen Insurance Holdings, Ltd. 1,777,620 39,000 IPC Holdings, Ltd. 1,545,180 42,900 Montpelier Re Holdings, Ltd. 1,483,482 37,900 PMI Group, Inc. (The) 1,477,342 29,500 Radian Group, Inc. 1,392,990 31,200 RenaissanceRe Holdings, Ltd. 1,536,288 SHARES VALUE (NOTE 1) - -------------------------------------------------------------------- INSURANCE (CONT'D.) - -------------------------------------------------------------------- 32,060 SAFECO Corp. $ 1,742,140 19,600 XL Capital, Ltd., Class A 1,458,632 ------------ 12,413,674 MANUFACTURING - 4.78% - ---------------------------------------------------------------- 26,550 BorgWarner, Inc. 1,424,938 32,000 Briggs & Stratton Corp. 1,107,840 150,775 Lamson & Sessions Co. (1) 1,782,161 46,075 Masco Corp. 1,463,342 ------------ 5,778,281 PHARMACEUTICALS - 1.04% - ---------------------------------------------------------------- 45,400 Pfizer, Inc. 1,252,132 PUBLISHING & BROADCASTING - 9.96% - ---------------------------------------------------------------- 49,900 Comcast Corp., Class A (1) 1,494,505 21,800 Gannett, Inc. 1,550,634 33,500 Lee Enterprises, Inc. 1,343,015 140,600 Liberty Media Corp., Class A (1) 1,432,714 21,100 McClatchy Co., Class A 1,380,784 35,000 McGraw-Hill Cos., Inc. 1,548,750 88,800 News Corp., Ltd., SP ADR 1,497,168 2,135 Washington Post Co., Class B 1,782,789 ------------ 12,030,359 RETAIL - 3.74% - ---------------------------------------------------------------- 36,400 Ethan Allen Interiors, Inc. 1,219,764 28,300 Federated Department Stores, Inc. 2,073,824 45,000 Foot Locker, Inc. 1,224,900 ------------ 4,518,488 TEXTILES & APPAREL - 3.70% - ---------------------------------------------------------------- 42,500 Jones Apparel Group, Inc. 1,319,200 40,700 Liz Claiborne, Inc. 1,618,232 35,500 Polo Ralph Lauren Corp. 1,530,405 ------------ 4,467,837 TRANSPORTATION - 3.32% - ---------------------------------------------------------------- 70,000 Dryships, Inc. 1,155,700 77,400 OMI Corp. 1,471,374 31,430 Teekay Shipping Corp. 1,379,777 ------------ 4,006,851 TOTAL COMMON STOCKS 114,781,850 (Cost $76,722,080) INVESTMENT COMPANY - 4.98% 6,010,891 Dreyfus Cash Management Plus Fund (2) 6,010,891 ------------ TOTAL INVESTMENT COMPANY 6,010,891 ------------ (Cost $6,010,891) TOTAL INVESTMENTS - 100.03% 120,792,741 (Cost $82,732,971*) LIABILITIES NET OF CASH & OTHER ASSETS - (0.03)% (32,866) ------------ TOTAL NET ASSETS - 100.00% $120,759,875 ============ - ---------------------------------------------------------------- (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 $82,732,971 and appreciation (depreciation) is as follows: Unrealized appreciation: $ 39,041,148 Unrealized depreciation: (981,378) ------------ Net unrealized appreciation: $ 38,059,770 ============ SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2 DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- JUNE 30, 2005 (UNAUDITED) ASSETS: Investments, at value (Note 1) (See Portfolio of Investments) $ 120,792,741 Dividends receivable 153,276 Receivable for shares sold 8,631 Prepaid expenses and other assets 2,079 -------------- Total assets 120,956,727 -------------- LIABILITIES: Payable for investments purchased 33,154 Investment advisory fee payable (Note 2) 99,407 Distribution fee payable (Note 2) 13,261 Accrued Trustees' fees and expenses (Note 2) 7,834 Accrued expenses and other payables 43,196 -------------- Total liabilities 196,852 -------------- NET ASSETS $ 120,759,875 ============== Investments, at cost $ 82,732,971 ============== NET ASSETS CONSIST OF: Accumulated net investment income $ 263,222 Accumulated net realized gain on investments sold 4,346,527 Net unrealized appreciation of investments 38,059,770 Par value (Note 5) 6,866 Paid-in capital 78,083,490 -------------- NET ASSETS $ 120,759,875 ============== COMPUTATION OF NET ASSET VALUE RETAIL CLASS SHARES: Net asset value, offering and redemption price per share ($63,948,509 / 3,664,468 shares) $ 17.45 ============== INSTITUTIONAL CLASS SHARES: Net asset value, offering and redemption price per share ($56,811,366 / 3,201,315 shares) $ 17.75 ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT 3 - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED) INVESTMENT INCOME: Dividends $ 1,120,484 -------------- Total investment income 1,120,484 -------------- EXPENSES: Investment advisory fee (Note 2) 592,364 Administration fee (Note 2) 48,874 Transfer agent fees (Note 2) 34,834 Sub-transfer agent fee (Retail Class) (Note 3) 14,228 Custodian fees (Note 2) 12,656 Professional fees 32,439 Trustees' fees and expenses (Note 2) 17,006 Registration and filing fees 15,250 Reports to shareholders 3,820 Distribution fees (Retail Class) (Note 2) 79,596 Other 6,195 -------------- Total expenses 857,262 -------------- NET INVESTMENT INCOME 263,222 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain from security transactions 3,210,274 Net change in unrealized depreciation of investments (1,869,703) -------------- Net realized and unrealized gain on investments 1,340,571 -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,603,793 ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4 DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED JUNE 30, 2005 (UNAUDITED) DECEMBER 31, 2004 ------------------------ ------------------ Net investment income (loss) $ 263,222 $ (167,929) Net realized gain from security transactions 3,210,274 3,900,950 Net change in unrealized appreciation (depreciation) of investments (1,869,703) 9,919,259 --------------------- ------------------ Net increase in net assets resulting from operations 1,603,793 13,652,280 Distribution to shareholders from: Retail Shares: Net realized gains on investments -- (2,014,197) --------------------- ------------------ Total distributions -- (2,014,197) Institutional Shares: Net realized gains on investments -- (1,691,208) ---------------------- ------------------ Total distributions -- (1,691,208) Total distributions to shareholders -- (3,705,405) Net increase (decrease) in net assets from fund share transactions (Note 5) (1,680,616) 4,514,305 ---------------------- ------------------ Net increase (decrease) in net assets (76,823) 14,461,180 NET ASSETS: Beginning of period 120,836,698 106,375,518 ---------------------- ------------------ End of period (including line A) $ 120,759,875 $ 120,836,698 ====================== ================== (A) Accumulated undistributed net investment income $ 263,222 $ -- ====================== ================== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT 5 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD RETAIL CLASS SHARES -------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED 6/30/2005 ------------------ FOR THE YEAR ENDED --------------------------------- (UNAUDITED) 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000 ----------- ---------- ---------- ---------- ---------- ---------- Net asset value - beginning of period $ 17.23 $ 15.79 $ 11.91 $ 13.18 $ 13.00 $ 11.19 --------- --------- --------- --------- --------- --------- Net investment income (loss) 0.03 (0.05) (0.03) (0.02) (0.02) (0.01) Net realized and unrealized gain (loss) on investments 0.19 2.04 3.91 (1.25) 0.27 1.94 --------- --------- --------- --------- --------- --------- Net increase (decrease) in net assets resulting from investment operations 0.22 1.99 3.88 (1.27) 0.25 1.93 Distributions from net realized gains on investments -- (0.55) -- -- (0.07) (0.12) --------- --------- --------- --------- --------- --------- Total distributions -- (0.55) -- -- (0.07) (0.12) Net asset value - end of period $ 17.45 $ 17.23 $ 15.79 $ 11.91 $ 13.18 $ 13.00 ========= ========= ========= ========= ========= ========= Total return (a) 1.34% (b) 12.52% 32.58% (9.64)% 1.90% 17.30% ========= ========= ========= ========= ========= ========= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $63,949 $65,446 $61,197 $43,808 $44,744 $45,312 Ratio of net investment income (loss) to average net assets 0.31% (0.28)% (0.21)% (0.13)% (0.12)% (0.12)% Ratio of operating expenses to average net assets before fees waived and/or expenses reimbursed by investment adviser and administrator 1.58% 1.58% 1.64% 1.63% 1.64% 1.71% Ratio of operating expenses to average net assets after waivers and/or expense reimbursements 1.58% 1.58% 1.64% 1.63% 1.64% 1.71% Portfolio turnover rate 10% (b) 31% 22% 23% 29% 45% - ------------------------------------------------------------------------------------------------------------------------------------ (a) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions. (b) Not Annualized. SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 6 DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT INSTITUTIONAL CLASS SHARES -------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED 6/30/2005 ------------------ FOR THE YEAR ENDED --------------------------------- (UNAUDITED) 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000 ----------- ---------- ---------- ---------- ---------- ---------- Net asset value - beginning of period $ 17.49 $ 15.98 $ 12.02 $ 13.26 $ 13.05 $ 11.20 --------- --------- --------- --------- --------- --------- Net investment income 0.05 -- 0.01 0.02 0.02 0.02 Net realized and unrealized gain (loss) on investments 0.21 2.06 3.95 (1.26) 0.26 1.95 --------- --------- --------- --------- --------- --------- Net increase (decrease) in net assets resulting from investment operations 0.26 2.06 3.96 (1.24) 0.28 1.97 Distributions from net realized gains on investments -- (0.55) -- -- (0.07) (0.12) --------- --------- --------- --------- -------- -------- Total distributions -- (0.55) -- -- (0.07) (0.12) Net asset value - end of period $ 17.75 $ 17.49 $ 15.98 $ 12.02 $13.26 $13.05 ========= ========= ========= ========= ======== ======== Total return (a) 1.49% (b) 12.87% 32.95% (9.35)% 2.12% 17.64% ========= ========= ========= ========= ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $56,811 $55,390 $45,179 $33,596 $27,938 $23,956 Ratio of net investment income to average net assets 0.60% 0.02% 0.08% 0.17% 0.18% 0.18% Ratio of operating expenses to average net assets before fees waived and/or expenses reimbursed by investment adviser and administrator 1.29% 1.28% 1.35% 1.33% 1.34% 1.41% Ratio of operating expenses to average net assets after waivers and/or expense reimbursements 1.29% 1.28% 1.35% 1.33% 1.34% 1.41% Portfolio turnover rate 10% (b) 31% 22% 23% 29% 45% - ------------------------------------------------------------------------------------------------------------------------------------ (a) Total return represents aggregate total return for the period indicated and assumes reinvestment of all distributions. (b) Not Annualized. SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT 7 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 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, 2005, the Trust offered shares of two funds, Kobren Growth Fund and Delphi Value Fund (the "Funds"). 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. The tax character of distributions paid during 2004 and 2003 was as follows: DISTRIBUTIONS PAID IN 2004 DISTRIBUTIONS PAID IN 2003 -------------------------------- ------------------------------- ORDINARY LONG-TERM ORDINARY LONG-TERM INCOME CAPITAL GAINS INCOME CAPITAL GAINS ------------- ----------------- ------------- ---------------- Delphi Value Fund $ -- $ 3,705,405 $ -- $ -- As of December 31, 2004, 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 $ -- $ -- $ 1,136,253 $ 39,929,473 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 between the Funds based upon relative net assets of each Fund. Other expenses of the Trust are allocated equally to those Funds in the Trust. - -------------------------------------------------------------------------------- 8 DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 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, 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 up to 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, 2005, were $12,456,994 and $10,673,804 of non-governmental issues, respectively. 5. SHARES OF BENEFICIAL INTEREST: As of June 30, 2005, 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 JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004 ------------------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT ------------ ------------- ------------- ------------ Shares sold 163,431 $ 2,794,264 739,617 $ 12,001,530 Shares issued as reinvestment of distributions -- -- 105,381 1,814,669 Shares redeemed (298,223) (5,068,064) (920,299) (15,010,419) ------------ ------------- ------------ ------------- Net decrease (134,792) $ (2,273,800) (75,301) $ (1,194,220) ============ ============= ============ ============= Institutional Class: Shares sold 132,781 $ 2,289,375 651,692 $ 10,841,916 Shares issued as reinvestment of distributions -- -- 94,655 1,654,567 Shares redeemed (98,331) (1,696,191) (406,297) (6,787,958) ------------ ------------- ------------ ------------- Net increase 34,450 $ 593,184 340,050 $ 5,708,525 ============ ------------- ============ ------------- Total net increase (decrease) from fund share transactions $ (1,680,616) $ 4,514,305 ============= ============= At June 30, 2005, KIM, Delphi and their affiliates owned 592,195 Retail Class shares and 24,515 Institutional Class shares of the Fund representing 16.2% and 0.8%, respectively, of the outstanding shares. Discretionary accounts managed by KIM for management clients collectively held 1,859,388 shares of the Institutional Class representing 58.1% of the outstanding shares. - -------------------------------------------------------------------------------- DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT 9 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 6. SUBSEQUENT EVENT: As of August 1, 2005, Mr. Eric Kobren and E*Trade Financial Corporation ("E*Trade") have entered into a stock purchase agreement pursuant to which Mr. Kobren has agreed to sell to E*Trade all of the outstanding stock of Kobren Insight Management, Inc., the Fund's investment adviser. The closing of the transaction is expected to occur in the fourth quarter of 2005, subject to satisfaction of a number of customary closing conditions. The Board of Trustees of Kobren Insight Funds will call a special meeting of shareholders of the Fund to approve certain matters in connection with the proposed transaction. Shareholders of the Fund of record as of August 10, 2005 will receive a proxy statement and be entitled to vote at the special meeting of shareholders. - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 FORM N-Q: The Trust files complete Portfolio of Investments for the Fund with the Securities and Exchange Commission (the "SEC") for the Trust's first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the SEC's website at www.sec.gov and are available for review and copying at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. PROXY VOTING: Delphi Value Fund's Proxy Voting Policies and Procedures, used to determine how to vote proxies relating to portfolio securities, are included in the Trust's Statement of Additional Information, and are also available as of the following August 31 (i) upon request, without charge, by calling 1-800-4KOBREN (800-456-2736); (ii) on Delphi Value Fund's website at www.kobren.com; and (iii) on the SEC's website at www.sec.gov. Delphi Value Fund's Proxy Voting Record for the most recent twelve-month period ended June 30 is available (i) upon request, without charge, by calling 1-800-4KOBREN (800-456-2736); (ii) on Delphi Value Fund's website at www.kobren.com; and (iii) on the SEC's website at www.sec.gov. APPROVAL OF INVESTMENT ADVISORY CONTRACTS: The Investment Company Act of 1940 requires that the Fund's investment advisory agreement and the subadvisory agreement (the "Agreements") be approved annually by both the Board of Trustees and a majority of the Independent Trustees voting separately. The continuance of the Agreements was most recently considered and approved at a meeting of the Board of Trustees called for that purpose and held on May 3, 2005. The Board, including the Independent Trustees, determined that the terms of the Agreements are fair and reasonable and approved the continuance of the Agreements. In making such determinations, the Independent Trustees met independently from the interested Trustees of the Trust and officers of Kobren Insight Management, Inc. ("KIM" or the "Adviser"), Delphi Management, Inc. ("Delphi" or the "Subadviser"), and their affiliates. The Independent Trustees also relied upon the assistance of counsel to the Trust and KIM, but did not engage their own counsel. Both in meetings specifically addressed to continuance of the Agreements and at other meetings during the course of the year, the Board, including the Independent Trustees, received materials relating to KIM's and Delphi's investment and management services under the Agreements. These materials included: (i) information on the investment performance of the Fund, a peer group of funds and relevant indices over various time periods, (ii) sales and redemption data in respect of the Fund, (iii) the general investment outlook in the markets in which the Fund invests, (iv) arrangements in respect of the distribution of the Fund's shares, (v) the procedures employed to determine the value of the Fund's assets, (vi) the allocation of the Fund's brokerage, and (vii) the record of compliance with the Fund's investment policies and restrictions and with the Code of Ethics and the structure and responsibilities of KIM's and Delphi's compliance department. In evaluating the Agreements, the Board, including the Independent Trustees, requested, reviewed and considered materials furnished by KIM and Delphi, including without limitation information regarding their affiliates, personnel, operations and financial condition. The Board, including the Independent Trustees, discussed with representatives of KIM and Delphi (including the Fund portfolio manager) the operations of the Fund and the capabilities of KIM to provide advisory and other services to the Fund and to supervise Delphi and of Delphi to provide subadvisory services to the Fund. Among other written and oral information, the Board, including the Independent Trustees, requested and was provided specific information regarding: o the investment performance of the Fund over various time periods both by itself and in relation to its peer group and relevant indices; o the fees charged by KIM for investment advisory, as well as other compensation received by KIM and its affiliates; o the fees paid to Delphi by KIM; o the waivers of fees and reimbursements of expenses at times by KIM and current expense cap arrangements; o the total operating expenses of the Fund and comparison of current expenses to the previous year's expenses; o the investment performance, fees and total expenses of mutual funds with similar objectives and strategies managed by other investment advisers (prepared by a third party analytic firm); o investment management staffing and the experience of the investment advisory, administrative and other personnel (including the personnel of KIM and Delphi) providing services to the Fund and the historical quality of the services provided by KIM and Delphi; and o the profitability to KIM and Kobren Insight Brokerage, Inc., the Fund's principal underwriter ("KIB"), of managing, administering and distributing the Fund and the methodology in allocating expenses to the management of the Fund. - -------------------------------------------------------------------------------- 10 DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 The following is a summary of the Board's discussion and views regarding the factors it considered in evaluating the continuation of the Agreements: NATURE, EXTENT, AND QUALITY OF SERVICES -The Board, including the Independent Trustees, considered the nature, quality and extent of advisory services performed by the Adviser, including supervision of the Subadviser for the Fund, supervision of operations for the Fund and compliance and regulatory filings and disclosures to shareholders, general oversight of the Subadviser and other service providers, coordination of Fund marketing initiatives, review of Fund legal issues, assisting the Board, including the Independent Trustees, in their capacity as trustees and other services. The Board, including the Independent Trustees, noted the Fund's record of compliance with its investment policies and restrictions, and the quality of managerial services provided by the Adviser in an increasingly regulated industry. The Board, including the Independent Trustees, concluded that the services are extensive in nature and that the Adviser consistently delivered a high level of service for the Fund. With regard to the Subadviser, the Board, including the Independent Trustees, considered the nature, quality and extent of the services provided by Delphi, particularly portfolio management, and concluded that the services are appropriate and consistent with its agreement with the Fund. INVESTMENT PERFORMANCE OF THE FUND, THE ADVISER AND THE SUBADVISER -The Board, including the Independent Trustees, considered the investment performance for the Fund over various periods of time as compared to both relevant indices and the performance of the Fund's peer group, and concluded that KIM and Delphi were delivering solid performance results both over the long term and the short term consistent with the investment strategies being pursued by the Fund. COSTS OF SERVICES AND PROFITS REALIZED BY THE ADVISER: FEES AND EXPENSES - The Independent Trustees considered the Fund's management fee rate and expense ratio relative to industry averages for the Fund's peer group category and the advisory fees charged by KIM and Delphi to other accounts. The Board viewed favorably the current and historic willingness of KIM to limit the total expense ratios of the Fund. The Board, including the Independent Trustees, noted that while the fee is higher than the mean for the Fund's peer group, the Fund's performance is good and the standard management fee charged by Delphi is significantly higher than the fee that it receives with respect to the Fund. Recognizing this, the Board concluded that, for the Fund, the advisory fee is acceptable based upon qualifications, experience, reputation and performance of KIM and Delphi and that the overall expense ratio of the Fund reflects the relatively small size of the Fund and the Fund complex. PROFITABILITY AND COSTS OF SERVICES TO KIM - The Board, including the Independent Trustees, considered estimates of KIM's profitability and costs attributable to the Fund as part of the Kobren fund complex. The Board recognized that increased fixed costs, particularly legal and audit fees, have a greater impact on smaller fund families, such as the Kobren funds, than on larger fund complexes. Given this, the Board recognized that the Fund's expenses compare unfavorably to some funds identified as peers. The Board also considered whether the amount of KIM's profit is a fair entrepreneurial profit for the management of the Fund. The Board, including the Independent Trustees, concluded that KIM's profitability bore a reasonable relationship to the services rendered and is fair for the management of the Fund in light of the business risks involved. The Independent Trustees did not review profitability data for the Subadviser because this fee had been negotiated on an arm's-length basis by KIM and that the Fund is not directly responsible for paying the Subadviser's fees. EXTENT OF ECONOMIES OF SCALE AS FUND GROWS - The Board, including the Independent Trustees, considered whether there have been economies of scale with respect to the management of the Fund and whether the Fund has appropriately benefited from any economies of scale. The Independent Trustees noted the Fund does not have breakpoints on its advisory fees that would otherwise allow investors to benefit directly in the form of lower fees as Fund assets grow. However, given the relatively small size of the Fund and the fund complex, the Board did not believe that significant (if any) economies of scale have been achieved. WHETHER FEE LEVELS REFLECT ECONOMIES OF SCALE - The Board, including the Independent Trustees, also considered enhancements in personnel and services provided to the Fund by KIM, particularly in the area of administration, investor services and regulatory compliance, without an increase in fees. OTHER RELEVANT CONSIDERATIONS: PERSONNEL AND METHODS - The Board, including the Independent Trustees, considered the size, education and experience of the staff of KIM and Delphi, their fundamental research capabilities and approach to recruiting, training and retaining portfolio managers and other research and management personnel, and concluded that these enable them to provide a high level of services to the Fund. The Board also considered the favorable history, reputation, qualifications and background of KIM and Delphi, as well as the qualifications of their personnel. OTHER BENEFITS - The Board also considered the character and amount of other direct and incidental benefits received by KIM, Delphi and their affiliates from their association with the Fund, including the amount of 12b-1 fees retained by KIB. The Board concluded that potential "fall-out" benefits that KIM, Delphi and their affiliates may receive, such as greater name recognition, appear to be reasonable, and may in some cases benefit the Fund. - -------------------------------------------------------------------------------- DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT 11 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 CONCLUSIONS: In considering the Agreements, the Board, including the Independent Trustees, did not identify any factor as all-important or all-controlling and instead considered the above listed and other factors collectively in light of the Fund's surrounding circumstances. Based on this review, it was the judgment of the Board that shareholders had received favorable performance at reasonable fees for the Fund and, therefore, the continuance of the Agreements was in the best interests of the Fund and its shareholders. As a part of its decision-making process, the Board noted KIM and Dephi have long-standing relationships with the Fund they advise or subadvise, as applicable, and the Board believes that a long-term relationship with capable, conscientious advisers is in the best interests of the Fund. The Board considered, generally, that shareholders were invested in the Fund knowing that KIM and Delphi managed the Fund and knowing the Fund's investment management fee schedules. As such, the Board considered, in particular, whether KIM and Delphi managed the Fund in accordance with their investment objectives and policies as disclosed to shareholders and the Board was of the view that they were. DISCLOSURE OF FUND EXPENSES: We believe it is important for you to understand the impact of fees regarding your investment. All mutual funds have operating expenses. As a shareholder of a mutual fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund's gross income, directly reduce the investment return of the fund. A fund's expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing fees (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. This table illustrates your fund's costs in two ways: ACTUAL FUND RETURN: This section helps you to estimate the actual expenses, after any applicable fee waivers, that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return for the past six month period, the "Expense Ratio" column shows the period's annualized expense ratio, and the "Expenses Paid During Period" column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund at the beginning of the period. You may use the information here, together with your account value, to estimate the expenses that you paid over the period. To do so, 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 given for your Fund in the first line under the heading entitled "Expenses Paid During Period." HYPOTHETICAL 5% RETURN: This section is intended to help you compare your Fund's costs with those of other mutual funds. It assumes that the Fund had an annual return of 5% before expenses, but that the expense ratio is unchanged. In this case, because the return used is not the Fund's actual return, the results do not apply to your investment. This example is useful in making comparisons to other mutual funds because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on an assumed 5% annual return. You can assess your Fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Please note that the expense shown in the table are meant to highlight and help you compare your ongoing costs only and do not reflect any transactional costs such as sales charges (loads) and redemption fees, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. BEGINNING ACCOUNT ENDING ACCOUNT EXPENSE EXPENSES PAID VALUE 01/01/05 VALUE 06/30/05 RATIO (1) DURING PERIOD (2) -------------- -------------- --------- ----------------- ACTUAL FUND RETURN - ------------------ Retail Class $ 1,000 $ 1,013.40 1.58% $ 7.89 Institutional Class 1,000 1,014.90 1.29% 6.44 HYPOTHETICAL 5% RETURN - ---------------------- Retail Class $ 1,000 $ 1,016.96 1.58% $ 7.90 Institutional Class 1,000 1,018.40 1.29% 6.46 (1) Annualized, based on the Fund's most recent fiscal half-year expenses. (2) Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. - -------------------------------------------------------------------------------- 12 DELPHI VALUE FUND - 2005 SEMI-ANNUAL REPORT KOBREN INSIGHT MANAGEMENT, INC. K O B R E N KOBREN GROWTH FUND I N S I G H T --------------------------------------------- F U N D S SEMI-ANNUAL REPORT JUNE 30, 2005 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] ERIC M. KOBREN PIC Eric M. Kobren MESSAGE TO SHAREHOLDERS STOCKS STRUGGLE AGAINST A SEA OF QUESTIONS We're half-way through 2005, and the best way to describe the performance of the stock market so far might be "mediocre at best." The popular market gauge, the S&P 500 Index, ended the first half with a loss of 0.8%. The more narrowly focused Dow Jones Industrials were off 3.7%, and the technology-rich Nasdaq fell 5.1%. All was not bleak for stocks, however, as most of the damage occurred in the first part of the year, and the markets managed a mild rebound in the second quarter. The beginning months of the year were dominated by one thing investors hate: uncertainty. Back then, we wondered if oil prices would keep rising and, if they did, whether that would set off a new round of inflation and hurt consumer spending. If oil and commodity prices did keep going up, would the Federal Reserve (the "Fed") be able to maintain its "measured pace" of quarter percentage point (25 basis points) interest-rate hikes? Finally, how strong were corporate earnings? In the second quarter, some of that uncertainty started to lift. The Fed did, indeed, stick with 25-basis point rate hikes. In fact, following the Fed's ninth rate increase in a year on June 30, it appears that this round of increases may end later this year. Oil prices did keep going up, topping $60 a barrel at one point. However, consumer confidence stayed high, which seemed to suggest that Americans will keep spending in spite of higher oil prices. Outside of stocks, things were brighter. Despite the Fed raising interest rates another four times this year, bonds actually turned in pretty good returns. Commodities, largely on the back of oil which has soared more than 30% so far in 2005, were strong as well. And despite losses in the broad international market (largely the result of the U.S. dollar appreciating over 10% against a basket of major currencies), the emerging markets were a great destination for investors. DIVERSIFICATION PAYS DIVIDENDS Kobren Growth's diversification away from domestic stocks helped the fund to modestly outperform the S&P 500 Index with a first half loss of 0.1%. Around 30% of the portfolio was invested outside of domestic stocks. In particular, though a small portion of the portfolio, SSgA Emerging Markets Fund helped our performance with a gain of 7.4%. We were also aided by some commodity exposure through another relatively small holding, PIMCO Commodity RealReturn Strategy Fund which rose 8.0%. Both of these funds can be quite volatile which is why we have only modest exposures. On the negative side, with the exception of Longleaf Partners Small Cap Fund (which gained a solid 4.6%) and Oakmark Select Fund (which lost just 0.2%), the majority of our domestic stock funds trailed the S&P 500 Index. The silver lining, as noted before, is that most of these funds rebounded along with the stock market in the second quarter. REMAINING CAUTIOUS While some of the uncertainty has been lifted, there are still questions to be answered. While it appears that the Fed may be near the end of their tightening cycle, we don't know for sure when they will stop. They gave no indication of that at their last meeting in late June -- which caused the market to sell-off that day. And even if they do announce they are done later this year, that doesn't mean that will boost the stock market immediately. In fact, history suggests that the stock market is typically lower 6 months after the Fed's final rate hike. Will corporate profits succumb to the pressures of higher raw materials costs (i.e. oil)? Can longterm rates continue to "defy gravity" and remain low as short-term rates continue to rise? These and other concerns mean we are keeping Kobren Growth in a modestly defensive posture as we enter the second half of the year. Investments outside of domestic stocks still make up about 30% of the portfolio and international investments make up the lion's share of that (we don't expect the dollar to rise another 10% in the second half). We even have a small (4%) cash position. As conditions unfold (and some more questions get answered), we will make adjustments to the portfolio as necessary. By staying well diversified and making modest shifts (we generally avoid making major market calls) we believe we offer our investors a solid combination of return and risk control. Sincerely, [SIG] ERIC M. KOBREN Eric M. Kobren President and Portfolio Manager - -------------------------------------------------------------------------------- KOBREN GROWTH FUND (6/30/05) - -------------------------------------------------------------------------------- VALUE OF $10,000 INVESTED 12/16/96 [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC 12/16/1996 10,000 12/31/1996 10,240 03/31/1997 10,420 06/30/1997 11,560 09/30/1997 12,170 12/31/1997 11,779 03/31/1998 13,089 06/30/1998 13,181 09/30/1998 11,226 12/31/1998 13,128 03/31/1999 13,965 06/30/1999 15,148 09/30/1999 14,133 12/31/1999 17,027 03/31/2000 17,693 06/30/2000 16,583 09/30/2000 16,383 12/31/2000 15,367 03/31/2001 14,219 06/30/2001 15,217 09/30/2001 12,885 12/31/2001 14,249 03/31/2002 14,650 06/30/2002 13,610 09/30/2002 12,006 12/31/2002 12,644 03/31/2003 12,328 06/30/2003 14,046 09/30/2003 14,475 12/31/2003 16,179 03/31/2004 16,664 06/30/2004 16,524 09/30/2004 16,473 12/31/2004 17,968 03/31/2005 17,763 06/30/2005 17,942 - -------------------------------------------------------------------------------- 12 MONTHS ANNUALIZED ANNUALIZED YTD ENDED FIVE SINCE INCEPTION TOTAL RETURN (%) 6/30/05 6/30/05 YEARS (12/16/96) - ---------------- ------- ------- ------- --------- Kobren Growth -0.1% 8.6% 1.6% 7.1% - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSET ALLOCATION* - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC U.S. Stocks 69.0% International 21.3% Bond 5.9% Cash & Net Other Assets and Liab. 3.8% - -------------------------------------------------------------------------------- STYLE ALLOCATION* - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Large Cap Growth 34.6% Large Cap Value 26.1% International 21.3% Small Cap Value 8.3% Cash & Net Other Assets and Liab. 3.8% Bond 3.2% Specialty 2.7% *Based on total net assets. KOBREN GROWTH FUND (Ticker: KOGRX): Your Fund dropped slightly (-0.1%) for the first half of 2005, compared to the S&P 500 Index return of -0.8%. We continue to maintain a lower volatility profile relative to the S&P 500 Index, exhibiting 27% lower volatility than that broad-based index. On a total return basis we're quite pleased with our performance versus both the broad market indexes as well as the various peer groups we are measured against. Our two best performers for the first half were SSGA EMERGING MARKETS and PIMCO COMMODITY REAL RETURN. We continue to like these non-traditional funds moving forward, though we did tactically trim the PIMCO fund on price strength recently. We continue to favor international markets, despite the dollar rally in the first half of the year, as international markets still appear to offer superior earnings growth prospects at lower valuations. JULIUS BAER INTERNATIONAL EQUITY continues to perform quite well for us, particularly relative to other diversified equity funds. Another recent addition to our international holdings was THIRD AVENUE INTERNATIONAL VALUE. Some of our largest positions, large-cap funds like T. ROWE PRICE BLUE CHIP, FIDELITY BLUE CHIP, and OAKMARK SELECT, produced negative returns for the first half and middling performance relative to peers. These funds performed better in the second quarter, however, and we remain confident that they will provide the market exposure and return potential that we expect. - -------------------------------------------------------------------------------- TOP TEN HOLDINGS* - -------------------------------------------------------------------------------- KOBREN GROWTH STYLE ALLOC (%) - ------------- ----- --------- T. Rowe Price Blue Chip Growth Large Cap Growth 17.9% Fidelity Blue Chip Growth Large Cap Growth 13.6% Julius Baer Int'l Equity - Class I International 13.4% Oakmark Select - Class I Large Cap Value 12.8% Longleaf Partners Small Cap Small Cap Value 8.3% Fidelity Equity-Income Large Cap Value 6.9% Longleaf Partners Large Cap Value 6.5% SSgA Emerging Markets International 5.1% PIMCO Real Return - Class I Bond 3.2% Fidelity Capital Appreciation Large Cap Growth 3.1% TOTAL FUND NET ASSETS $63,280,149 - -------------------------------------------------------------------------------- TOP SECTORS** - -------------------------------------------------------------------------------- (TOTALS MAY NOT EQUAL 100%) [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC Financial Services 20.9 Consumer Services 11.3 Consumer Goods 10.1 Industrial Materials 10.1 Healthcare 9.4 Media 8.8 Business Services 7.6 Hardware 7.2 Energy 7.1 Telecom 3.9 Software 2.7 Utilities 0.9 **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 -- 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- JUNE 30, 2005 (UNAUDITED) - -------------------------------------------------------------------------------- SHARES VALUE (NOTE 1) - -------------------------------------------------------------------------------- MUTUAL FUNDS - 100.06% LARGE CAP GROWTH - 34.57% - ------------------------------------------------------------------------------ 210,587 Fidelity Blue Chip Growth Fund $ 8,600,383 78,291 Fidelity Capital Appreciation Fund 1,976,065 371,728 T. Rowe Price Blue Chip Growth Fund 11,300,530 ------------ 21,876,978 LARGE CAP VALUE - 26.13% - ------------------------------------------------------------------------------ 84,532 Fidelity Equity-Income Fund 4,339,861 133,076 Longleaf Partners Fund 4,122,690 242,421 Oakmark Select Fund - Class I 8,072,631 ------------ 16,535,182 INTERNATIONAL - 21.28% - ------------------------------------------------------------------------------ 263,244 Julius Baer International Equity Fund - Class I 8,463,280 201,101 SSgA Emerging Markets Fund 3,241,747 90,113 Third Avenue International Value Fund 1,759,011 ------------ 13,464,038 SMALL CAP VALUE - 8.26% - ------------------------------------------------------------------------------ 167,426 Longleaf Partners Small Cap Fund 5,225,352 BOND - 3.23% - ------------------------------------------------------------------------------ 177,161 PIMCO Real Return Fund - Class I 2,044,442 SPECIALTY - 2.70% - ------------------------------------------------------------------------------ 109,595 PIMCO Commodity RealReturn Strategy Fund - Class I 1,710,785 MONEY MARKET - 3.89% - ------------------------------------------------------------------------------ 2,463,172 Dreyfus Cash Management Plus Fund (1) 2,463,172 TOTAL MUTUAL FUNDS (COST $51,011,359) 63,319,949 ------------ TOTAL INVESTMENTS 100.06% 63,319,949 (Cost $51,011,359) * LIABILITIES NET OF CASH AND OTHER ASSETS -0.06% (39,800) ------ ------------ TOTAL NET ASSETS 100.00% $63,280,149 ====== ============ (1) An affiliate of the Custodian. * For Federal income tax purposes, cost is $51,011,359 and appreciation (depreciation) is as follows: Unrealized appreciation: $ 12,308,590 Unrealized depreciation: -- ------------ Net unrealized appreciation: $ 12,308,590 ============ 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 (COPYRIGHT)2005 - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT 3 - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- JUNE 30, 2005 (UNAUDITED) ASSETS: Investments, at value (Note 1) (See Portfolio of Investments) $ 63,319,949 Dividends receivable 19,445 Receivable for fund shares sold 1,774 Prepaid expenses and other assets 3,033 -------------- Total assets 63,344,201 -------------- LIABILITIES: Investment advisory fee payable (Note 2) 30,642 Accrued Trustees' fees and expenses (Note 2) 4,103 Accrued expenses and other payables 29,307 -------------- Total liabilities 64,052 -------------- NET ASSETS: $ 63,280,149 -------------- Investments, at cost $ 51,011,359 ============== NET ASSETS CONSIST OF: Accumulated net investment income $ 130,864 Accumulated net realized gain on investments sold 1,565,338 Net unrealized appreciation of investments 12,308,590 Par value (Note 5) 4,519 Paid-in capital 49,270,838 -------------- NET ASSETS $ 63,280,149 ============== SHARES OUTSTANDING 4,518,970 ============== Net asset value, offering and redemption price per share (Net Assets/Shares Outstanding) $ 14.00 ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4 KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED) INVESTMENT INCOME: Dividends $ 154,415 -------------- Total investment income 154,415 -------------- EXPENSES: Investment advisory fee (Note 2) 219,095 Administration fee (Note 2) 39,451 Transfer agent fees (Note 2) 22,935 Sub-transfer agent fees (Note 3) 8,058 Custodian fees (Note 2) 1,500 Professional fees 14,590 Trustees' fees and expenses (Note 2) 7,858 Registration and filing fees 10,250 Reports to shareholders 2,624 Other 3,145 -------------- Total expenses 329,506 Expenses waived by investment adviser (Note 2) (37,354) Other reductions (Note 2) (5,964) -------------- Net expenses 286,188 -------------- NET INVESTMENT LOSS (131,773) -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain from security transactions 362,676 Short-term capital gain distributions received 5,000 Long-term capital gain distributions received 41,670 Net decrease in unrealized appreciation of investments (283,710) -------------- Net realized and unrealized gain on investments 125,636 -------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (6,137) ============== SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT 5 - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED (UNAUDITED) DECEMBER 31, 2004 -------------- ----------------- Net investment income (loss) $ (131,773) $ 344,210 Net realized gain from security transactions 362,676 2,670,193 Short-term capital gain distributions received 5,000 111,433 Long-term capital gain distributions received 41,670 823,619 Net change in unrealized appreciation of investments (283,710) 1,857,615 ------------- ------------- Net increase (decrease) in net assets resulting from operations (6,137) 5,807,070 Distribution to shareholders from: Net investment income -- (293,054) ------------- ------------- Total distributions -- (293,054) ------------- ------------- Net increase (decrease) in net assets from fund share transactions (Note 5) 6,443,626 (3,319,183) ------------- ------------- Net increase in net assets 6,437,489 2,194,833 NET ASSETS: Beginning of period 56,842,660 54,647,827 ------------- ------------- End of period (including line A) $ 63,280,149 $ 56,842,660 ============= ============= (A) Accumulated undistributed net investment income $ 130,864 $ 262,637 ============= ============= SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 6 KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- - --------------------------------------------------- FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD. - --------------------------------------------------- FOR THE SIX MONTHS ENDED 6/30/2005 -----------------------FOR THE YEAR ENDED--------------------- (UNAUDITED) 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000 ---------- ---------- ---------- ---------- ---------- ---------- Net asset value - beginning of period $ 14.02 $ 12.69 $ 10.01 $ 11.37 $ 12.32 $ 15.34 Net investment income (loss) (a)(b) (0.04) 0.08 0.12 0.07 (0.04) (0.04) Short-term capital gains distributions received --(c) 0.03 0.02 0.01 0.01 0.22 Net realized and unrealized gain (loss) on investments 0.02 1.29 2.66 (1.36) (0.87) (1.68) -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from investment operations (0.02) 1.40 2.80 (1.28) (0.90) (1.50) Distributions from net investment income -- (0.07) (0.12) (0.07) -- -- Distributions from net realized short-term capital gain distributions received -- -- -- (0.01) -- (0.19) Distributions from net realized capital gains on investments -- -- -- -- 0.05) (1.33) -------- -------- -------- -------- -------- -------- Total distributions -- (0.07) (0.12) (0.08) (0.05) (1.52) Net asset value - end of period $ 14.00 $ 14.02 $ 12.69 $ 10.01 $ 11.37 $ 12.32 ======== ======== ======== ======== ======== ======== Total return (d) (0.14)%(e) 11.05% 27.96% (11.26)% (7.28)% (9.75)% ======== ======== ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $63,280 $56,843 $54,648 $46,491 $55,335 $63,105 Ratio of net investment income (loss) to average net assets (b) (0.45)% 0.63% 1.06% 0.61% (0.32)% (0.41)% Ratio of operating expenses to average net assets before fees waived and/or expenses reimbursed by investment adviser and other reductions (f) 1.13% 1.16% 1.18% 1.21% 1.08% 1.06% Ratio of operating expenses to average net assets after reimbursements and reductions (f) 0.98% 0.98% 0.96% 0.96% 0.96% 0.99% Portfolio turnover rate 9%(e) 30% 81% 143% 80% 93% - ------------------------------------------------------------------------------------------------------------------------------------ <FN> (a) Recognition 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) Represents less than $0.005 per share. (d) 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. (e) Not annualized. (f) Does not include expenses of the investment companies in which the Fund invests. </FN> SEE NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT 7 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 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, 2005, 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 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 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 2004 and 2003 was as follows: DISTRIBUTIONS PAID IN 2004 DISTRIBUTIONS PAID IN 2003 ------------------------------- -------------------------------- ORDINARY LONG-TERM ORDINARY LONG-TERM INCOME CAPITAL GAINS INCOME CAPITAL GAINS ------------- -------------- -------------- -------------- Kobren Growth Fund $ 293,054 $ -- $ 515,589 $ -- As of December 31, 2004, the components of distributable earnings on a tax basis were as follows: CAPITAL LOSS UNDISTRIBUTED UNDISTRIBUTED UNREALIZED CARRYFORWARD ORDINARY INCOME LONG-TERM GAIN APPRECIATION -------------- ---------------- ---------------- -------------- Kobren Growth Fund $ -- $ 268,174 $ 1,222,624 $ 12,525,668 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. 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 between 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. - -------------------------------------------------------------------------------- 8 KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 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, 2005, expense reimbursements and other reductions were as follows: EXPENSES REIMBURSED INVESTMENT ADVISER OTHER REDUCTIONS (1) ------------------- ------------------- Kobren Growth Fund $ 37,354 $ 5,964 (1) Reimbursements to the Fund from 12b-1 distribution fees. 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 up to 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, 2005, were $9,448,308 and $5,302,854 of non-governmental issues, respectively. 5. SHARES OF BENEFICIAL INTEREST: As of June 30, 2005, 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 JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004 ------------------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT -------- -------- -------- -------- Shares sold 790,471 $ 10,954,722 374,224 $ 4,846,804 Shares issued as reinvestment of distributions -- -- 20,508 287,517 Shares redeemed (325,658) (4,511,096) (648,447) (8,453,504) ---------- -------------- ---------- -------------- Net increase (decrease) 464,813 $ 6,443,626 (253,715) $ (3,319,183) ========== ============== ========== ============== At June 30, 2005, KIM and its affiliates owned 1,010,521 shares of the Fund representing 22.4% 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. 7. SUBSEQUENT EVENT: As of August 1, 2005, Mr. Eric Kobren and E*Trade Financial Corporation ("E*Trade") have entered into a stock purchase agreement pursuant to which Mr. Kobren has agreed to sell to E*Trade all of the outstanding stock of Kobren Insight Management, Inc., the Fund's investment adviser. The closing of the transaction is expected to occur in the fourth quarter of 2005, subject to satisfaction of a number of customary closing conditions. The Board of Trustees of Kobren Insight Funds will call a special meeting of shareholders of the Fund to approve certain matters in connection with the proposed transaction. Shareholders of the Fund of record as of August 10, 2005 will receive a proxy statement and be entitled to vote at the special meeting of shareholders. - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT 9 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 FORM N-Q: The Trust files complete Portfolio of Investments for the Fund with the Securities and Exchange Commission (the "SEC") for the Trust's first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the SEC's website at www.sec.gov and are available for review and copying at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. PROXY VOTING: Kobren Growth Fund's Proxy Voting Policies and Procedures, used to determine how to vote proxies relating to portfolio securities, are included in the Trust's Statement of Additional Information, and are also available as of the following August 31 (i) upon request, without charge, by calling 1-800-4KOBREN (800-456-2736); (ii) on Kobren Growth Fund's website at www.kobren.com; and (iii) on the SEC's website at www.sec.gov. Kobren Growth Fund's Proxy Voting Record for the most recent twelve-month period ended June 30 is available ( i) upon request, without charge, by calling 1-800-4KOBREN (800-456-2736); (ii) on Kobren Growth Fund's website at www.kobren.com; and (iii) on the SEC's website at www.sec.gov. APPROVAL OF INVESTMENT ADVISORY CONTRACT: The Investment Company Act of 1940 requires that the Fund's investment advisory agreement (the "Agreement") be approved annually by both the Board of Trustees and a majority of the Independent Trustees voting separately. The continuance of the Agreement was most recently considered and approved at a meeting of the Board of Trustees called for that purpose and held on May 3, 2005. The Board, including the Independent Trustees, determined that the terms of the Agreement are fair and reasonable and approved the continuance of the Agreement. In making such determinations, the Independent Trustees met independently from the interested Trustees of the Trust and officers of Kobren Insight Management, Inc. ("KIM" or the "Adviser") and its affiliates. The Independent Trustees also relied upon the assistance of counsel to the Trust and KIM, but did not engage their own counsel. Both in meetings specifically addressed to continuance of the Agreement and at other meetings during the course of the year, the Board, including the Independent Trustees, received materials relating to KIM's investment and management services under the Agreement. These materials included: (i) information on the investment performance of the Fund, a peer group of funds and relevant indices over various time periods, (ii) sales and redemption data in respect of the Fund, (iii) the general investment outlook in the markets in which the Fund invests, (iv) arrangements in respect of the distribution of the Fund's shares, (v) the procedures employed to determine the value of the Fund's assets, and (vi) the record of compliance with the Fund's investment policies and restrictions and with the Code of Ethics and the structure and responsibilities of KIM's compliance department. In evaluating the Agreement, the Board, including the Independent Trustees, requested, reviewed and considered materials furnished by KIM, including without limitation information regarding its affiliates, personnel, operations and financial condition. The Board, including the Independent Trustees, discussed with representatives of KIM (including the Fund portfolio managers) the operations of the Fund and the capabilities of KIM to provide advisory and other services to the Fund. Among other written and oral information, the Board, including the Independent Trustees, requested and was provided specific information regarding: o the investment performance of the Fund over various time periods both by itself and in relation to its peer group and relevant indices; o the fees charged by KIM for investment advisory, as well as other compensation received by KIM and its affiliates; o the waivers of fees and reimbursements of expenses at times by KIM and current expense cap arrangements; o the total operating expenses of the Fund and comparison of current expenses to the previous year's expenses; o the investment performance, fees and total expenses of mutual funds with similar objectives and strategies managed by other investment advisers (prepared by a third party analytic firm); o investment management staffing and the experience of the investment advisory, administrative and other personnel (including the personnel of KIM) providing services to the Fund and the historical quality of the services provided by KIM; and o the profitability to KIM and Kobren Insight Brokerage, Inc., the Fund's principal underwriter ("KIB"), of managing, administering and distributing the Fund and the methodology in allocating expenses to the management of the Fund. The following is a summary of the Board's discussion and views regarding the factors it considered in evaluating the continuation of the Agreement: NATURE, EXTENT, AND QUALITY OF SERVICES - The Board, including the Independent Trustees, considered the nature, quality and extent of advisory services performed by the Adviser, including portfolio management for the Fund, supervision of operations for the Fund and compliance and regulatory filings and disclosures to shareholders, general oversight of other service providers, coordination of Fund marketing initiatives, review of Fund legal issues, assisting the Board, including the Independent Trustees, in their capacity as trustees and other services. The Board, including the Independent Trustees, noted the Fund's record of compliance with its - -------------------------------------------------------------------------------- 10 KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 investment policies and restrictions, and the quality of managerial services provided by the Adviser in an increasingly regulated industry. The Board, including the Independent Trustees, concluded that the services are extensive in nature and that the Adviser consistently delivered a high level of service for the Fund. INVESTMENT PERFORMANCE OF THE FUND AND THE ADVISER - The Board, including the Independent Trustees, considered the investment performance for the Fund over various periods of time as compared to both relevant indices and the performance of the Fund's peer group, and concluded that KIM was delivering solid performance results both over the long term and the short term consistent with the investment strategies being pursued by the Fund. COSTS OF SERVICES AND PROFITS REALIZED BY THE ADVISER: FEES AND EXPENSES - The Independent Trustees considered the Fund's management fee rate and expense ratio relative to industry averages for the Fund's peer group category and the advisory fees charged by KIM to other accounts. The Board viewed favorably the current and historic willingness of KIM to limit the total expense ratio of the Fund. The Board, including the Independent Trustees, noted that the management fees and total expense ratio for the Fund were below the median management fees and total expense ratio for funds in its peer group. Recognizing this, the Board concluded that, for the Fund, the advisory fee is acceptable based upon qualifications, experience, reputation and performance of KIM and that the overall expense ratio of the Fund reflects the relatively small size of the Fund and the Fund complex. PROFITABILITY AND COSTS OF SERVICES TO KIM - The Board, including the Independent Trustees, considered estimates of KIM's profitability and costs attributable to the Fund as part of the Kobren fund complex. The Board recognized that increased fixed costs, particularly legal and audit fees, have a greater impact on smaller fund families, such as the Kobren funds, than on larger fund complexes. Given this, the Board recognized that the Fund's expenses generally compare favorably to funds identified as peers. The Board also considered whether the amount of KIM's profit is a fair entrepreneurial profit for the management of the Fund. The Board, including the Independent Trustees, concluded that KIM's profitability bore a reasonable relationship to the services rendered is fair for the management of the Fund in light of the business risks involved. EXTENT OF ECONOMIES OF SCALE AS FUND GROWS - The Board, including the Independent Trustees, considered whether there have been economies of scale with respect to the management of the Fund and whether the Fund has appropriately benefited from any economies of scale. The Independent Trustees noted the Fund does not have breakpoints on its advisory fees that would otherwise allow investors to benefit directly in the form of lower fees as Fund assets grow. However, given the relatively small size of the Fund and the fund complex, the Board did not believe that significant (if any) economies of scale have been achieved. WHETHER FEE LEVELS REFLECT ECONOMIES OF SCALE - The Board, including the Independent Trustees, also considered enhancements in personnel and services provided to the Fund by KIM, particularly in the area of administration, investor services and regulatory compliance, without an increase in fees. OTHER RELEVANT CONSIDERATIONS: PERSONNEL AND METHODS - The Board, including the Independent Trustees, considered the size, education and experience of the staff of KIM, its fundamental research capabilities and approach to recruiting, training and retaining portfolio managers and other research and management personnel, and concluded that these enable it to provide a high level of services to the Fund. The Board also considered the favorable history, reputation, qualifications and background of KIM, as well as the qualifications of its personnel. OTHER BENEFITS - The Board also considered the character and amount of other direct and incidental benefits received by KIM and its affiliates from its association with the Fund. The Board concluded that potential "fall-out" benefits that KIM and its affiliates may receive, such as greater name recognition, appear to be reasonable, and may in some cases benefit the Fund. CONCLUSIONS: In considering the Agreement, the Board, including the Independent Trustees, did not identify any factor as allimportant or all-controlling and instead considered the above listed and other factors collectively in light of the Fund's surrounding circumstances. Based on this review, it was the judgment of the Board that shareholders had received favorable performance at reasonable fees for the Fund and, therefore, the continuance of the Agreement was in the best interests of the Fund and its shareholders. As a part of its decision-making process, the Board noted KIM has a long-standing relationship with the Fund and the Board believes that a long-term relationship with capable, conscientious advisers is in the best interests of the Fund. The Board considered, generally, that shareholders were invested in the Fund knowing that KIM managed the Fund and knowing the Fund's investment management fee schedules. As such, the Board considered, in particular, whether the Fund was managed by KIM in accordance with its investment objectives and policies as disclosed to shareholders and the Board was of the view that it was. DISCLOSURE OF FUND EXPENSES: We believe it is important for you to understand the impact of fees regarding your investment. All mutual funds have operating expenses. As a shareholder of a mutual fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted - -------------------------------------------------------------------------------- KOBREN INSIGHT FUNDS -- 2005 SEMI-ANNUAL REPORT 11 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- JUNE 30, 2005 from a fund's gross income, directly reduce the investment return of the fund. A fund's expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing fees (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. This table illustrates your fund's costs in two ways: ACTUAL FUND RETURN: This section helps you to estimate the actual expenses, after any applicable fee waivers, that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return for the past six month period, the "Expense Ratio" column shows the period's annualized expense ratio, and the "Expenses Paid During Period" column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund at the beginning of the period. You may use the information here, together with your account value, to estimate the expenses that you paid over the period. To do so, 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 given for your Fund in the first line under the heading entitled "Expenses Paid During Period." HYPOTHETICAL 5% RETURN: This section is intended to help you compare your Fund's costs with those of other mutual funds. It assumes that the Fund had an annual return of 5% before expenses, but that the expense ratio is unchanged. In this case, because the return used is not the Fund's actual return, the results do not apply to your investment. This example is useful in making comparisons to other mutual funds because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on an assumed 5% annual return. You can assess your Fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Please note that the expense shown in the table are meant to highlight and help you compare your ongoing costs only and do not reflect any transactional costs such as sales charges (loads) and redemption fees, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. BEGINNING ACCOUNT ENDING ACCOUNT EXPENSE EXPENSES PAID VALUE 01/01/05 VALUE 06/30/05 RATIO(1) DURING PERIOD(2) -------------- -------------- -------- ---------------- ACTUAL FUND RETURN - ------------------ Retail Class $ 1,000 $ 998.60 1.00% $ 4.96 HYPOTHETICAL 5% RETURN - ---------------------- Retail Class $ 1,000 $ 1,019.84 1.00% $ 5.01 <FN> (1) Annualized, based on the Fund's most recent fiscal half-year expenses. (2) Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. </FN> - -------------------------------------------------------------------------------- 12 KOBREN INSIGHT FUNDS -- 2005 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 Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. ITEM 11. 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) 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(b) 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 23, 2005 ------------------------------------------------------------------------- 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 23, 2005 ------------------------------------------------------------------------ By (Signature and Title)* /s/ ERIC J. GODES --------------------------------------------------- Eric J. Godes, Chief Financial Officer, Vice President, Treasurer & Secretary (principal financial officer) Date August 23, 2005 ------------------------------------------------------------------------ * Print the name and title of each signing officer under his or her signature.