1
As filed with the Securities and Exchange Commission on January 27, 1999.
Registration No.:
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. ___ [ ] Post-Effective Amendment No. __
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
THE KENT FUNDS
Area Code and Telephone Number:
(614) 470-8000
Address of Principal Executive Offices:
3435 Stelzer Road
Columbus, Ohio 43219
Name and Address of Agent for Service:
W. Bruce McConnel, III
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration Nos. 33-8398; 811-4824) pursuant to Rule
24f-2 under the Investment Company Act of 1940. The Registrant's Rule 24f-2
Notice for the fiscal year ended December 31, 1997 was filed on or about March
23, 1998. Pursuant to Rule 429 under the Securities Act of 1933, this
Registration Statement relates to the shares previously registered on the
aforesaid Registration Statement on Form N-1A.
It is proposed that this filing will become effective on February 26, 1999
pursuant to Rule 488 under the Securities Act of 1933.
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KENT FUNDS
P.O. Box 182201
Columbus, Ohio 43218-2201
1-800-633-KENT (5368)
February 26, 1999
To the Shareholders of the
Limited Term Tax-Free Fund:
Enclosed you will find a proxy statement in connection with the
solicitation of proxies by the Board of Trustees of the Kent Funds (the "Trust")
for a Special Meeting of Shareholders of the Limited Term Tax-Free Fund to be
held on March 24, 1999.
The proxy statement relates to the approval or disapproval of a plan of
reorganization whereby the Limited Term Tax-Free Fund would be acquired by the
Trust's Intermediate Tax-Free Fund.
The Board of Trustees recommends that shareholders vote in favor of the
proposal.
James F. Duca, II
President
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KENT FUNDS
P.O. Box 182201
Columbus, Ohio 43218-2201
1-800-633-KENT (5368)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE
LIMITED TERM TAX-FREE FUND
To Be Held on March 24, 1999
To the Shareholders of the
Limited Term Tax-Free Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of Shareholders (the
"Meeting") of the Limited Term Tax-Free Fund, an investment portfolio offered by
the Kent Funds (the "Trust"), will be held on March 24, 1999 in the Board Room
at BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
Eastern Time. During the Meeting, the shareholders will vote on the following
proposals:
ITEM 1. To approve or disapprove a Plan of Reorganization and
the transactions contemplated thereby, including the
transfer of all of the assets and liabilities of the
Limited Term Tax-Free Fund to the Trust's Intermediate
Tax-Free Fund, in exchange for Investment Shares and
Institutional Shares of the Intermediate Tax-Free Fund and
a liquidating distribution of such Investment Shares and
Institutional Shares to the holders of Investment Shares
and Institutional Shares, respectively, of the Limited
Term Tax-Free Fund.
ITEM 2. To transact such other business as may properly come
before the Meeting or any adjournment(s) thereof.
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF EACH PROPOSAL.
The proposed reorganization and related matters are described in the
attached Combined Proxy Statement/Prospectus. Appendix A to the Combined Proxy
Statement/Prospectus is a copy of the Plan of Reorganization.
Shareholders of record as of the close of business on January 31, 1999
are entitled to notice of, and to vote at, the Meeting or any adjournment
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE
BOARD OF TRUSTEES OF THE TRUST. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY
ARE EXERCISED BY SUBMITTING TO THE TRUST A WRITTEN NOTICE OF REVOCATION OR A
SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE MEETING AND ELECTING TO VOTE IN
PERSON.
Robert L. Tuch
Secretary
February 26, 1999
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TABLE OF CONTENTS
PAGE
SUMMARY.................................................................................3
PROPOSED REORGANIZATION........................................................3
REASONS FOR REORGANIZATION.....................................................3
FEDERAL INCOME TAX CONSEQUENCES................................................4
COMPARISON OF THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS..............4
COMPARISON OF OTHER FEATURES OF THE FUNDS......................................4
COMPARATIVE FEE TABLE..........................................................4
EXPENSE RATIOS.................................................................6
THE INVESTMENT ADVISER.........................................................6
THE ADMINISTRATOR..............................................................7
THE DISTRIBUTOR AND OTHER SERVICE PROVIDERS....................................8
DISTRIBUTION PLAN..............................................................8
THE CUSTODIAN..................................................................8
PURCHASE AND REDEMPTION PROCEDURES; EXCHANGE PROCEDURES; DIVIDENDS,
DISTRIBUTIONS AND PRICING......................................................8
VOTING INFORMATION.............................................................9
RISK FACTORS...................................................................9
INFORMATION RELATING TO THE PROPOSED REORGANIZATION.....................................9
DESCRIPTION OF THE PLAN OF REORGANIZATION.....................................10
BOARD CONSIDERATION...........................................................11
CAPITALIZATION................................................................11
FEDERAL INCOME TAX CONSEQUENCES...............................................12
COMPARISON OF THE FUNDS................................................................13
INVESTMENT OBJECTIVES AND POLICIES............................................13
FUNDAMENTAL INVESTMENT LIMITATIONS............................................14
OTHER INFORMATION.............................................................14
INFORMATION RELATING TO VOTING MATTERS.................................................15
GENERAL INFORMATION...........................................................15
SHAREHOLDER AND BOARD APPROVAL................................................15
QUORUM........................................................................16
ANNUAL MEETINGS...............................................................16
ADDITIONAL INFORMATION ABOUT THE FUNDS.................................................17
FINANCIAL HIGHLIGHTS...................................................................17
FINANCIAL STATEMENTS...................................................................22
OTHER BUSINESS.........................................................................22
LITIGATION.............................................................................22
SHAREHOLDER INQUIRIES..................................................................22
APPENDIX A - PLAN OF REORGANIZATION
APPENDIX B - MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
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KENT FUNDS
P.O. Box 182201
Columbus, Ohio 43218-2201
1-800-633-KENT (5368)
COMBINED PROXY STATEMENT/PROSPECTUS
DATED FEBRUARY 26, 1999
This Combined Proxy Statement/Prospectus is furnished in connection
with the solicitation of proxies by the Board of Trustees of the Kent Funds (the
"Trust") for use at a Special Meeting of Shareholders of the Trust's Limited
Term Tax-Free Fund ("Transferor Fund") to be held on March 24, 1999 in the Board
Room at BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219 at 10:00
a.m. Eastern Time, or any adjournment thereof (the "Meeting"). At the Meeting,
shareholders of the Transferor Fund will be asked to consider and approve a
proposed Plan of Reorganization dated as of November 19, 1998 and the
transactions contemplated thereby. A copy of the Plan of Reorganization is
attached as Appendix A to this Combined Proxy Statement/Prospectus.
The Trust is an open-end management investment company registered under
the Investment Company Act of 1940 (the "1940 Act") and currently offers shares
in fifteen investment portfolios. The Transferor Fund and the Trust's
Intermediate Tax-Free Fund (the "Surviving Fund") are separate investment
portfolios of the Trust. Each of the Transferor Fund and the Surviving Fund
offers two classes of shares, Investment Shares and Institutional Shares. The
investment objective, policies and fundamental limitations of the Transferor
Fund are similar to those of the Surviving Fund. The Funds' investment adviser
has used similar investment strategies in managing the Transferor Fund and the
Surviving Fund, although the dollar-weighted average maturity of the Surviving
Fund is longer. The distribution and purchase procedures, exchange rights,
redemption procedures and the service providers of the Transferor Fund and the
Surviving Fund are the same.
The Plan of Reorganization provides that the Transferor Fund will
transfer all of its assets and liabilities to the Surviving Fund. In exchange
for the transfers of these assets and liabilities, the Trust will simultaneously
issue Investment and Institutional Shares in the Surviving Fund to the
Transferor Fund. The Transferor Fund will then make a liquidating distribution
of the Surviving Fund's Investment and Institutional Shares to the holders of
Investment and Institutional Shares of the Transferor Fund, respectively, so
that each holder of Investment and Institutional Shares of the Transferor Fund
will hold, immediately after the effective time of the reorganization, full and
fractional shares of the corresponding class of the Surviving Fund
("Corresponding Shares") with the same aggregate net asset value as the
shareholder had in the Transferor Fund immediately before the transaction.
This Combined Proxy Statement/Prospectus sets forth the information
that a shareholder of the Transferor Fund should know before voting on the Plan
of Reorganization and should be retained for future reference. Additional
information is set forth in the Prospectus relating to
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Investment Shares and Institutional Shares of the Transferor Fund and the
Surviving Fund (collectively, the "Funds") dated May 1, 1998 (as supplemented),
the Statement of Additional Information dated May 1, 1998 (as supplemented)
relating to the Funds and the Statement of Additional Information dated February
26, 1999 relating to this Combined Proxy Statement/Prospectus. Further
information about the Funds' performance is also available in the Trust's Annual
and Semi-Annual Reports dated December 31, 1997 and June 30, 1998, respectively.
Each of these documents is on file with the Securities and Exchange Commission
(the "SEC") and is available without charge upon oral or written request by
writing or calling the Trust at the address or telephone number indicated above.
The information contained in the aforesaid Prospectus and Statements of
Additional Information is incorporated herein by reference.
This Combined Proxy Statement/Prospectus constitutes the Transferor
Fund's Proxy Statement for the Meeting, and the Prospectus for the Corresponding
Shares of the Surviving Fund that have been registered with the SEC and are to
be issued in connection with the reorganization.
This Combined Proxy Statement/Prospectus is expected to be sent to
shareholders of the Transferor Funds on or about February 26, 1999.
SHARES OF THE TRANSFEROR FUND AND THE SURVIVING FUND ARE NOT DEPOSITS
OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, OLD KENT BANK OR ANY OF ITS
AFFILIATES AND THE SHARES ARE NOT INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR
OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY.
AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THE SHARES OF THE SURVIVING FUND OR PASSED UPON THE ADEQUACY OF THIS COMBINED
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT/PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY
REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST.
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SUMMARY
The following is a summary of certain information relating to the
proposed reorganization, the parties thereto and the related transactions, and
is qualified by reference to the more complete information contained elsewhere
in this Combined Proxy Statement/Prospectus, including the Plan of
Reorganization attached as Appendix A hereto, and in the Prospectus and
Statement of Additional Information of the Funds.
PROPOSED REORGANIZATION. Based upon their evaluation of the relevant
information presented to them, and in light of their fiduciary duties under
federal and state law, the Trust's Board of Trustees, including the trustees who
are not "interested persons" within the meaning of the 1940 Act, have determined
that the proposed Plan of Reorganization is in the best interests of the
Transferor Fund's shareholders.
THE TRUST'S BOARD OF TRUSTEES RECOMMENDS THE APPROVAL OF THE PLAN OF
REORGANIZATION BY THE SHAREHOLDERS OF THE TRANSFEROR FUND AT THE MEETING.
Subject to shareholder approval, the Plan of Reorganization provides
for the acquisition by the Surviving Fund of all of the assets and liabilities
of the Transferor Fund (such assets subject to such liabilities are called the
"Assets") in exchange for Corresponding Shares of the Surviving Fund. The
Transferor Fund will then make a liquidating distribution of the Corresponding
Shares to its shareholders.
As a result of the proposed reorganization, each shareholder of the
Transferor Fund will become a shareholder of the Surviving Fund and will hold,
immediately after the time the reorganization becomes effective (the "Effective
Time of the Reorganization"), the same aggregate dollar value of Corresponding
Shares of the Surviving Fund as the shareholder held in the Transferor Fund
immediately before the Effective Time of the Reorganization. The costs of the
proposed reorganization will be borne by the Transferor Fund.
For further information, see "INFORMATION RELATING TO THE PROPOSED
REORGANIZATION--Description of the Plan of Reorganization."
REASONS FOR REORGANIZATION. The primary reason for the reorganization
is to streamline and simplify the Trust's municipal securities products. In
connection with its approval of the Plan of Reorganization, the Trust's Board of
Trustees considered that the investment objective and policies of the Transferor
Fund were similar to those of the Surviving Fund, and that the service providers
for the Transferor Fund and Surviving Fund were the same. After consideration of
the reasons for the proposed reorganization and the proposed operations of the
Surviving Fund after the reorganization, and in consideration of the fact that
the reorganization will be tax-free and will not dilute the interests of the
shareholders of the Transferor Fund or the Surviving Fund, the Board of Trustees
authorized the Plan of Reorganization and recommended approval of the Plan of
Reorganization by the shareholders of the Transferor Fund. See "INFORMATION
RELATING TO THE PROPOSED REORGANIZATION--Board Consideration."
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FEDERAL INCOME TAX CONSEQUENCES. Consummation of the reorganization
will not give rise to tax liability for federal income tax purposes to the
Transferor Fund or the Surviving Fund or their respective shareholders. See
"INFORMATION RELATING TO THE PROPOSED REORGANIZATION--Federal Income Tax
Consequences."
COMPARISON OF THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS. The
investment objective of both the Transferor Fund and the Surviving Fund is to
seek current income exempt from federal income tax, while preserving capital.
Each Fund seeks to invest at least 80% of its net assets in federally tax-exempt
obligations, except during periods of unusual market conditions.
The principal distinction between investment policies of the Transferor
Fund and the Surviving Fund is the maturity range of the obligations held by the
Funds. The Transferor Fund maintains a dollar-weighted average portfolio
maturity between one and three years. In addition, no obligation held by the
Transferor Fund has a remaining maturity of more than ten years. The Surviving
Fund maintains a dollar-weighted average portfolio maturity between three and
ten years. For further information, see "COMPARISON OF THE FUNDS--Investment
Objectives and Policies."
COMPARISON OF OTHER FEATURES OF THE FUNDS. The distribution and
purchase procedures, exchange rights, redemption procedures and service
providers of the Funds are the same.
COMPARATIVE FEE TABLE. The following table sets forth: (1) the fees and
expenses of the Investment Shares and Institutional Shares of the Transferor
Fund; (2) the fees and expenses of the Investment Shares and Institutional
Shares of the Surviving Fund; and (3) the estimated fees and expenses of the
Investment Shares and Institutional Shares of the Surviving Fund on a pro forma
basis after giving effect to the proposed reorganization. Hypothetical examples
based on the table are shown following the table.
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PRO FORMA
LIMITED TERM INTERMEDIATE INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND TAX-FREE FUND
Investment Institutional Investment Institutional Investment Institutional
Shares Shares Shares Shares Shares Shares
------ ------ ------ ------ ------ ------
SHAREHOLDER
TRANSACTION
EXPENSES
Maximum Sales Charge
on Purchases None None None None None None
ANNUAL FUND
OPERATING
EXPENSES
(as a percentage of
average net assets)1
Management Fees 0.45% 0.45% 0.50% 0.50% 0.50% 0.50%
12b-1 Fees
(after fee waivers)2, 3 0.15% None 0.25% None 0.25% None
Other Expenses
(after fee waivers)3 0.33% 0.31% 0.22% 0.22% 0.22% 0.22%
----- ----- ----- ----- ----- -----
TOTAL FUND
OPERATING EXPENSES
(after fee waivers)3 0.93% 0.76% 0.97% 0.72% 0.97% 0.72%
===== ===== ===== ===== ===== =====
- --------------------------------------------------------------------------------
1 Expense ratios for each Fund are based on amounts incurred for the fiscal
year ended December 31, 1997. Sweep, trustee, agency, custody and certain
other fees charged by Old Kent Bank and its affiliates to their customers
who own shares of the Funds are not reflected in the fee table.
2 As a result of the payment of 12b-1 fees, long-term Investment class
shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the National Association of
Securities Dealers, Inc.
3 In the case of the Limited Term Tax-Free Fund, voluntary waivers of a
portion of the Fund's 12b-1 fee for the Investment Shares and administration
fee have been reflected. Absent such waivers, 12b-1 Fees, Other Expenses and
Total Fund Operating Expenses would be 0.25%, 0.34% and 1.04%, respectively,
for the Investment Shares of the Limited Term Tax-Free Fund, and Other
Expenses and Total Fund Operating Expenses would be 0.32% and 0.77%,
respectively, for the Institutional Shares of the Limited Term Tax-Free
Fund. In the case of the Intermediate Tax-Free Fund and pro forma
Intermediate Tax-Free Fund, a voluntary waiver of a portion of such Fund's
administration fee has been reflected. Absent such waiver, Other Expenses
and Total Fund Operating Expenses would be 0.23% and 0.98%, respectively,
for the Investment Shares of the Intermediate Tax-Free Fund, and 0.23% and
0.73%, respectively, for the Institutional Shares of the Intermediate
Tax-Free Fund.
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EXAMPLE: The following table illustrates the expenses on a $1,000
investment based on the fees and expenses stated in the above Fee Table,
assuming (1) a 5% annual return and (2) redemption at the end of each time
period.
LIMITED TERM INTERMEDIATE PRO FORMA INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND TAX-FREE FUND
Investment Institutional Investment Institutional Investment Institutional
Shares Shares Shares Shares Shares Shares
------ ------ ------ ------ ------ ------
One Year After Purchase $9 $8 $10 $7 $10 $7
Three Years After Purchase $30 $24 $31 $23 $31 $23
Five Years After Purchase $51 $42 $54 $40 $54 $40
Ten Years After Purchase $114 $94 $119 $89 $119 $89
THE PURPOSE OF THE FEE TABLE AND THE EXAMPLE IS TO ASSIST INVESTORS IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES OF INVESTING IN SHARES OF THE
FUNDS. AMOUNTS SHOWN IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RETURN OR EXPENSES. ACTUAL INVESTMENT RETURN AND
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
EXPENSE RATIOS. The following table sets forth the ratios of operating
expenses to average net assets of the Investment Shares and Institutional Shares
of the pro forma combined Surviving Fund, Investment Shares and Institutional
Shares of the Transferor Fund and Investment Shares and Institutional Shares of
the Surviving Fund for the year ended December 31, 1997 (a) after fee waivers
and (b) absent fee waivers:
RATIO OF OPERATING EXPENSES RATIO OF OPERATING EXPENSES
TO AVERAGE NET TO AVERAGE NET
ASSETS AFTER FEE WAIVERS ASSETS ABSENT FEE WAIVERS
------------------------ -------------------------
Pro Forma Combined
Intermediate Tax Free Fund:
Investment Shares 0.97% 0.98%
Institutional Shares 0.72% 0.73%
Limited Term Tax-Free Fund:
Investment Shares 0.93% 1.04%
Institutional Shares 0.76% 0.77%
Intermediate Tax-Free Fund:
Investment Shares 0.97% 0.98%
Institutional Shares 0.72% 0.73%
After taking into account current fee waivers, the ratio of expenses to
average net assets for the Investment Shares of the Transferor Fund is lower
than the ratio of expenses to average net assets for the Investment Shares of
the Surviving Fund. However, absent such fee waivers, the ratio of expenses to
average net assets for the Investment Shares of the Transferor Fund would be
higher than the ratio of expenses to average net assets for the Investment
Shares of the Surviving Fund.
THE INVESTMENT ADVISER. Lyon Street Asset Management Company ("Lyon
Street"), a wholly-owned subsidiary of Old Kent Bank ("Old Kent"), serves as
investment adviser for each Fund. Old Kent is a wholly-owned subsidiary of Old
Kent Financial Corporation, which is a financial services company with total
assets as of October 1, 1998 of approximately $15.4 billion. Lyon Street is
entitled to receive advisory fees from the Funds, computed daily and paid
monthly, at the annual rates set forth in the table below.
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The following table sets forth comparative data regarding the advisory
fees paid to Old Kent Bank (from which Lyon Street has assumed the investment
advisory responsibilities for the Trust) by the Surviving Fund and the
Transferor Fund for the year ended December 31, 1997:
Annual Advisory Fee as a
Percentage of Average
Advisory Fees Paid Daily Net Assets
------------------ ----------------
Limited Term Tax Free Fund $167,800 0.45%
Intermediate Tax-Free Fund $1,424,578 0.50%
Lyon Street manages each Fund, makes decisions with respect to and
places orders for all purchases and sales of portfolio securities, and maintains
records relating to such purchases and sales.
THE ADMINISTRATOR. Administrative services are provided to the
Transferor Fund and to the Surviving Fund by BISYS Fund Services Limited
Partnership ("BISYS" or the "Administrator"). The Administrator also provides
administrative services to the other investment portfolios of the Trust. For
services provided to all of the investment portfolios of the Trust, the
Administrator is entitled to fees, computed daily and paid monthly, based on the
combined aggregate average daily net assets of the Trust as follows:
Annual Administration
Fees as a Percentage of
Average Daily Net Assets
------------------------
First $5.0 billion 0.185%
$5.0-7.5 billion 0.165%
Over $7.5 billion 0.135%
The following table sets forth comparative data regarding the
administration fees paid by the Surviving Fund and the Transferor Funds for the
year ended December 31, 1997:
Administration Administration Fees as a Percentage
Fees Paid of Average Daily Net Assets
--------- ---------------------------
Limited Term Tax-Free Fund $ 66,670 0.179%
Intermediate Tax-Free Fund $509,532 0.179%
Old Kent provides certain administrative services to the Funds pursuant
to a Sub-Administration Agreement between Old Kent and BISYS. BISYS has agreed
to pay Old Kent a fee, calculated daily and paid monthly, at annual rate of up
to 0.05% of each Fund's average daily net assets. The fees paid to Old Kent by
BISYS for such administrative services come out of BISYS' administration fee and
are not an additional charge to the Funds.
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THE DISTRIBUTOR AND OTHER SERVICE PROVIDERS. BISYS is also the
distributor of the Funds' shares. BISYS Fund Services, Inc., an affiliate of
BISYS, acts as the fund accountant, transfer agent and dividend paying agent of
the Funds.
DISTRIBUTION PLAN. The Trust has adopted with respect to its Investment
Shares a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940
Act which regulates circumstances under which an investment company may bear
expenses associated with the distribution of its shares. The Plan provides that
the Investment Shares of a Fund may incur certain expenses which may not exceed
a maximum amount equal to 0.25% (on an annualized basis) of the average daily
net asset value of the Investment Shares.
The services under the Plan may include assistance in advertising and
marketing of Investment Shares, aggregating and processing purchase, exchange
and redemption requests for Investment Shares, maintaining account records,
issuing confirmations of transactions and providing sub-accounting with respect
to Investment Shares.
As required by Rule 12b-1, the Plan and the related Distribution and
Servicing Agreements have been approved, and are subject to annual approval, by
a majority of the Trust's Board of Trustees, and by a majority of the Trustees
who are not "interested" persons of the Trust (as defined by the 1940 Act) and
who have no direct or indirect interest in the operation of the Plan and the
agreements related thereto ("Independent Trustees"), by a vote cast in person at
a meeting called for the purpose of voting on the Plan and related agreements.
Currently, Investment Shares of the Limited Term Tax-Free Fund bear a
fee pursuant to the Plan at an annual rate of 0.15% of such Fund's average
Investment class net assets and Investment Shares of the Intermediate Tax-Free
Fund bear a fee pursuant to the Plan at an annual rate of 0.25% of such Fund's
average Investment class net assets.
THE CUSTODIAN. Bankers Trust Company, 16 Wall Street, 4th Floor, New
York, New York 10005, serves as custodian of the assets of both the Transferor
Fund and the Surviving Fund. The Trust has entered into a Custody Agreement with
The Bank of New York, 90 Washington Street, 22nd Floor, New York, New York
10286, pursuant to which The Bank of New York is expected to become custodian of
the assets of both the Transferor Fund and the Surviving Fund prior to March 31,
1999.
PURCHASE AND REDEMPTION PROCEDURES; EXCHANGE PROCEDURES; DIVIDENDS,
DISTRIBUTIONS AND PRICING. The procedures for purchasing, redeeming and
exchanging Investment Shares and Institutional Shares of the Transferor Fund are
the same as those of the Surviving Fund. Additionally, dividends are declared
and paid monthly for both the Transferor Fund and the Surviving Fund, and net
investment income and long-term capital gains (if any) for the Funds are
distributed at least annually. The net asset value per share of each Fund is
determined as of the close of regular trading hours on the New York Stock
Exchange. The procedures for valuing the assets of the Transferor Fund are the
same as for those of the Surviving Fund.
Additional information concerning each Fund's purchase, redemption,
exchange, dividends and distributions and pricing procedures is contained in the
Funds' Prospectus.
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VOTING INFORMATION. This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by the Trust's Board of
Trustees in connection with a Special Meeting of Shareholders to be held on
March 24, 1999 in the Board Room at BISYS Fund Services, 3435 Stelzer Road,
Columbus, Ohio 43219 at 10:00 a.m. Eastern Time. Only shareholders of record at
the close of business on January 31, 1999 will be entitled to notice of and to
vote at the Meeting or any adjournment thereof. Each share or fraction of a
share is entitled to one vote or a fractional vote, respectively. Shares
represented by a properly executed proxy will be voted in accordance with the
instructions thereon, or if no specification is made, the persons named as
proxies will vote in favor of each proposal set forth in the Notice of Meeting.
Proxies may be revoked at any time before they are exercised by submitting to
the Trust a written notice of revocation or a subsequently executed proxy or by
attending the Meeting and voting in person. In addition, as of January 31, 1999,
Old Kent and its affiliates held investment and/or voting power with respect to
a majority of the Transferor Fund's outstanding shares on behalf of their
customers. The Trust has been advised by Old Kent that Old Kent and its
affiliates intend to exercise their discretion to vote all shares over which
they have voting power in a manner consistent with their fiduciary
responsibilities. Old Kent and its affiliates have also advised the Trust that
they intend to vote the shares over which they have voting power in favor of
each proposal. If Old Kent and its affiliates cast their votes in favor of each
proposal, the proposals will be approved by a majority of the outstanding shares
of the Transferor Fund. For additional information, including a description of
the shareholder vote required for approval of the Plan of Reorganization and
related transactions contemplated thereby, see "INFORMATION RELATING TO VOTING
MATTERS."
RISK FACTORS. Because of the similarities of the investment objectives
and policies of the Transferor Fund and the Surviving Fund, Lyon Street believes
that an investment in the Surviving Fund involves risks that are similar to
those of the Transferor Fund. However, bonds with shorter maturities, such as
those held by the Transferor Fund, tend to be less affected by interest rate
changes than bonds with longer maturities, such as those held by the Surviving
Fund. Consequently, the net asset value per share of the Surviving Fund may be
more volatile than the net asset value per share of the Transferor Fund. The
prices of bonds and other debt instruments generally fluctuate inversely with
interest rate changes.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
The terms and conditions under which the reorganization may be
consummated are set forth in the Plan of Reorganization. Significant provisions
of the Plan of Reorganization are summarized below; however, this summary is
qualified in its entirety by reference to the Plan of Reorganization, a copy of
which is attached as Appendix A to this Combined Proxy Statement/Prospectus.
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DESCRIPTION OF THE PLAN OF REORGANIZATION. The Plan of Reorganization
provides that at the Effective Time of the Reorganization, all of the Assets of
the Transferor Fund will be transferred to the Surviving Fund, so that at and
after the Effective Time of the Reorganization, the Assets (and liabilities) of
the Transferor Fund will become and be the assets (and liabilities) of the
Surviving Fund. In exchange for the transfer of the Assets, the Surviving Fund
will assume all of the liabilities of the Transferor Fund and issue to the
Transferor Fund full and fractional Corresponding Shares of the Surviving Fund.
The number of Corresponding Shares of the Surviving Fund so issued will have an
aggregate net asset value equal to the aggregate net asset value of the
Investment and Institutional Shares of the Transferor Fund that are outstanding
immediately prior to the Effective Time of the Reorganization. The Transferor
Fund will then make a liquidating distribution of such shares to its
shareholders. At and after the Effective Time of the Reorganization, all debts,
liabilities and obligations of the Transferor Fund will attach to the Surviving
Fund and may thereafter be enforced against the Surviving Fund to the same
extent as if they had been incurred by it.
The Plan of Reorganization provides that the Board of Trustees of the
Trust will declare a dividend or dividends prior to the Effective Time of the
Reorganization which, together with all previous dividends, will have the effect
of distributing to the shareholders of the Transferor Fund all undistributed
ordinary income earned and net capital gains realized up to and including the
Effective Time of the Reorganization.
The stock transfer books of the Trust for the Transferor Fund will be
permanently closed as of the close of business on the day immediately preceding
the Effective Time of the Reorganization. Redemption requests received
thereafter by the Trust with respect to the Transferor Fund will be deemed to be
redemption requests for the Surviving Fund. If any Transferor Fund shares held
by a Transferor Fund shareholder are represented by a share certificate, the
certificate must be surrendered to the Company's transfer agent for cancellation
before the Surviving Fund shares issued to the shareholder in the reorganization
will be redeemed.
The reorganization is subject to a number of conditions, including
approval of the Plan of Reorganization and the transactions contemplated therein
by the shareholders of the Transferor Fund, and the receipt of certain legal
opinions described in the Plan of Reorganization including a legal opinion of
Drinker Biddle & Reath LLP that the Corresponding Shares of the Surviving Fund
issued to shareholders of the Transferor Fund in accordance with the terms of
the Plan of Reorganization will be validly issued, fully paid and nonassessable.
The Trust, by consent of its Board of Trustees, may waive any condition to the
obligations of the Transferor Fund or Surviving Fund under the Plan of
Reorganization if, in its judgment, such waiver will not have a material adverse
affect on the interests of the shareholders of the Transferor Fund or the
Surviving Fund.
-10-
15
The expenses incurred in connection with the reorganization will be
borne by the Transferor Fund.
Assuming satisfaction of the conditions in the Plan of Reorganization,
the Effective Time of the Reorganization will be on February 26, 1999, or such
other date as is scheduled by the Trust.
The Plan of Reorganization and the reorganization described therein may
be abandoned at any time for any reason prior to the Effective Time of the
Reorganization upon the vote of a majority of the Board of Trustees of the
Trust. The Plan of Reorganization provides further that at any time prior to or
(to the fullest extent permitted by law) after approval of the Plan of
Reorganization by the shareholders of the Transferor Fund the Trust may, upon
authorization by its Board of Trustees, and with or without the approval of the
shareholders, amend any of the provisions of the Plan of Reorganization.
BOARD CONSIDERATION. The Board of Trustees of the Trust considered the
proposed reorganization at a meeting held on November 19, 1998. In considering
the Plan of Reorganization, the Board of Trustees considered the terms of the
Plan of Reorganization; a comparison of the Transferor Fund's expense ratios
with those of the Surviving Fund; the recommendation of Lyon Street in favor of
the proposed reorganization; the fact that the proposed reorganization would be
conducted on a tax-free basis; and the fact that the interests of shareholders
would not be diluted as a result of the reorganization. In connection with its
approval of the Plan of Reorganization, the Trustees noted that the investment
objectives and investment limitations of the Transferor Fund were identical to
those of the Surviving Fund, although the dollar-weighted average maturity of
the Surviving Fund is longer. The Board considered that after taking into
account current fee waivers, the ratio of expenses to average net assets for the
Investment Shares of the Transferor Fund was lower than the ratio of expenses to
average net assets for the Investment Shares of the Surviving Fund. The Board
noted, however, that absent current fee waivers, the ratio of expenses to
average net assets for the Investment Shares of the Transferor Fund was higher
than the ratio of expenses to average net assets for the Investment Shares of
the Surviving Fund. In addition, the relatively small asset base of the
Transferor Fund made its continued viability questionable, and merging the
Transferor Fund into the Surviving Fund on a tax-free basis presented
substantial capital gains tax savings compared to simply liquidating the
Transferor Fund. Similarly, the Board noted that the costs to be borne by the
Transferor Fund associated with merging it into the Surviving Fund would be more
than offset by such tax savings.
Based upon their evaluation of the relevant information presented to
them, and in light of their fiduciary duties under federal and state law, the
Board of Trustees unanimously determined that (i) the proposed reorganization
was in the best interests of the Transferor Fund and the Surviving Fund, (ii)
that the interests of existing shareholders of the Funds will not be diluted as
a result of the transaction, and recommended the approval of the Plan of
Reorganization by shareholders of the Transferor Fund at the Meeting. The Plan
of Reorganization in the form attached hereto as Appendix A was approved by the
Board of Trustees on November 19, 1998.
CAPITALIZATION. Because the Transferor Fund will be combined with the
Surviving Fund in the reorganization, the total capitalization of the Surviving
Fund after the reorganization is expected to be greater than the current
capitalization of the Transferor Fund. The following table sets forth as of
November 30, 1998 (i) the capitalization of the Transferor Fund; (ii) the
capitalization of the Surviving Fund; and (iii) the pro forma capitalization of
the Surviving Fund as adjusted to give effect to the proposed reorganization of
the Transferor Fund. There is, of course, no assurance that the reorganization
will be consummated. Moreover, if consummated, the capitalization of each Fund
is likely to be different at the Effective Time of the Reorganization as a
result of daily share purchase and redemption activity in the Funds.
-11-
16
PRO FORMA
LIMITED TERM INTERMEDIATE INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND TAX-FREE FUND
------------- ------------- -------------
Total Net Assets:
Investment Shares $382,283 $4,011,594 $4,393,877
Institutional Shares $32,782,749 $297,975,519 $330,758,268
Shares Outstanding:
Investment Shares 37,153.550 371,040.835 406,404.644
Institutional Shares 3,198,189.503 27,559,695.315 30,592,327.007
Net Asset Value Per Shares:
Investment Shares $10.29 $10.81 $10.81
Institutional Shares $10.25 $10.81 $10.81
FEDERAL INCOME TAX CONSEQUENCES. Consummation of the transaction is
subject to the condition that the Trust receive an opinion from Drinker Biddle &
Reath LLP, subject to appropriate factual assumptions, to the effect that for
federal income tax purposes: (i) the transfer of all of the Assets of the
Transferor Fund to the Surviving Fund in exchange for shares of the Surviving
Fund and the liquidating distributions to shareholders of the Transferor Fund of
the shares of the Surviving Fund so received, as described in the Plan of
Reorganization, will constitute a reorganization within the meaning of Section
368(a)(1)(C) or Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as
amended, (the "Code") and the Transferor Fund and the Surviving Fund each will
be considered "a party to a reorganization" within the meaning of Section 368(b)
of the Code; (ii) no gain or loss will be recognized by the Transferor Fund as a
result of such transactions; (iii) no gain or loss will be recognized by the
Surviving Fund as a result of such transactions; (iv) no gain or loss will be
recognized by the shareholders of the Transferor Fund on the distribution to
them by the Trust of the Corresponding Shares of the Surviving Fund in exchange
for their Investment Shares or Institutional Shares of the Transferor Fund; (v)
the basis of the Corresponding Shares received by a shareholder of the
Transferor Fund will be the same as the basis of the shareholder's Investment
Shares or Institutional Shares of the Transferor Fund immediately prior to the
reorganization; (vi) the basis of the Surviving Fund in the Assets of the
Transferor Fund received pursuant to the reorganization will be the same as the
basis of the Assets in the hands of the Transferor Fund immediately before the
reorganization; (vii) a shareholder's holding period for the Corresponding
Shares will be determined by including the period for which the shareholder held
the Investment Shares or Institutional Shares of the Transferor Fund exchanged
therefor, provided that the shareholder held such Transferor Fund's Investment
Shares or Institutional Shares as a capital asset; and (viii) the Surviving
Fund's holding period with respect to the Assets of the Transferor Fund received
in the reorganization will include the period for which such Assets were held by
the Transferor Fund.
The Trust has not sought a tax ruling from the Internal Revenue Service
("IRS"). The tax opinion described in the preceding paragraph will not be
binding on the IRS and will not preclude the IRS from adopting a contrary
position. Shareholders should consult their own advisors concerning the
potential tax consequences to them, including state and local income tax
consequences.
-12-
17
COMPARISON OF THE FUNDS
INVESTMENT OBJECTIVES AND POLICIES. The investment objective of both
the Transferor Fund and the Surviving Fund is to seek current income exempt from
federal income tax, while preserving capital. This investment objective is
non-fundamental. The principal distinction between investment policies of the
Transferor Fund and the Surviving Fund is the maturity range of obligations held
by the Funds. The Transferor Fund maintains a dollar-weighted average portfolio
maturity between one and three years. In addition, no obligation held by the
Transferor Fund has a remaining maturity of more than ten years. The Surviving
Fund maintains a dollar-weighted average portfolio maturity of between three and
ten years. The Transferor Fund and the Surviving Fund have identical investment
limitations and invest in the same types of securities.
Each Fund intends to invest at least 80% of its net assets in federally
tax-exempt obligations, except during periods of unusual market conditions. This
policy is a fundamental policy which cannot be changed by a Fund without the
approval of its shareholders. In calculating the 80% limitation, a security
whose interest is treated as a specific tax preference item under the federal
alternative minimum tax is considered taxable. Federally tax-exempt obligations
consist of municipal bonds, notes and commercial paper issued by states,
territories or possessions of the United States, the District of Columbia and
their political subdivisions, agencies and instrumentalities, the interest on
which is, in the opinion of counsel to the issuer of such obligations, exempt
from federal income taxes.
The Funds will principally invest in municipal bonds which are issued
by state or local governments typically for general funding purposes or to
finance specific projects. General obligation securities are backed by the full
faith, credit and taxing power of the municipality. Revenue securities are
backed only by the revenues from a particular facility or facilities or other
specific revenue sources. Private activity bonds, which are revenue securities
issued by industrial development authorities, are issued to finance privately
owned facilities and are backed by private entities. The credit quality of
private activity bonds is usually related to the creditworthiness of the private
entity using the facility involved. Moral obligation securities, which are
typically issued by special purpose public authorities, are backed by a reserve
fund which the issuer may draw on if it is unable to pay its debt service
obligations, but the issuer and the state or municipality which created the
issuer have no legal obligation to restore the reserve fund.
The amount of information regarding the financial condition of issuers
of municipal obligations may be less extensive than the information for public
corporations, and the secondary market for municipal obligations may be less
liquid than that for taxable obligations. Accordingly, the ability of a Fund to
buy and sell municipal obligations may, at any particular time and with respect
to any particular securities, be limited. In addition, municipal obligations
purchased by the Funds include obligations backed by letters of credit and other
forms of credit enhancement issued by domestic and foreign banks, as well as
other financial institutions and corporations. Adverse changes in the credit
quality of these institutions could cause loss to a Fund and affect its share
price.
-13-
18
Municipal obligations purchased by the Funds will be rated in one of
the four highest rating categories by a nationally recognized statistical rating
organization ("NRSRO") (for example, BBB or higher by Standard & Poor's Ratings
Services ("S&P"), or Baa or higher by Moody's Investors Service, Inc.
("Moody's"), or, if unrated, will be deemed to be of comparable quality by Lyon
Street. Obligations rated in the fourth highest rating category are considered
to have speculative characteristics. See Appendix A to the Funds' Statement of
Additional Information for a description of applicable S&P, Moody's and other
NRSRO ratings.
FUNDAMENTAL INVESTMENT LIMITATIONS. The Funds have in place certain
fundamental investment limitations that cannot be changed for a Fund without
the approval of a "majority" of that Fund's outstanding shares. Some of these
limitations are summarized below. A complete list of the fundamental investment
limitations for the Funds is contained in the Funds' Statement of Additional
Information.
1. With respect to 75% of each Fund's total assets, a Fund cannot invest
more than 5% of its total assets in any one issuer (other than the U.S.
Government, its agencies and instrumentalities). In addition, a Fund
cannot invest more than 25% of its total assets in a single industry.
2. Each Fund may only borrow money for temporary or emergency purposes,
and such borrowing is limited to an amount not greater than one-third
of the Fund's net assets, provided that while borrowings from banks
exceed 5% of a Fund's net assets, any such borrowings will be repaid
before additional investments are made.
OTHER INFORMATION. The Trust was organized on May 9, 1986 as a
Massachusetts business trust. The Trust is governed by a Board of Trustees. The
Trustees are responsible for the overall management of the Trust and retain and
supervise the Funds' adviser, administrator, distributor, transfer agent and
custodian. Currently, the Trust has fifteen portfolios, each of which offers two
classes of shares: Investment Shares and Institutional Shares. The Trust has
also created an additional portfolio that will offer one class of shares and
that is expected to commence operations in March 1999.
Each share in a Fund represents an equal proportionate interest in the
particular Fund with other shares of the same class, and is entitled to such
dividends and distributions out of the income earned on the assets belonging to
such Fund as are declared in the discretion of the Board of Trustees. The
Declaration of Trust authorizes the issuance of an unlimited number of shares
with beneficial interest in one or more separate series, and the creation of one
or more classes of shares within each series. The Trust's shareholders are
entitled to one vote for each full share held and fractional votes for
fractional shares held and vote in the aggregate and not by class or series,
except as otherwise expressly required by law.
The foregoing is only a summary of certain material attributes of the
Funds and their shares. Shareholders may obtain copies of the Trust's
Restatement of Declaration of Trust upon written request at the address shown on
the cover page of this Combined Proxy Statement/Prospectus.
-14-
19
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION. This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by the Board of
Trustees of the Trust for use at the Meeting. It is expected that the
solicitation of proxies will be primarily by mail. The Trust's officers and
service contractors may also solicit proxies by telephone, telegraph or personal
interview. The cost of such solicitation will be borne by the Transferor Fund.
Only shareholders of record at the close of business on January 31,
1999 will be entitled to vote at the Meeting. On that date, there were
outstanding and entitled to be voted __________ Investment Shares and
______________ Institutional Shares of the Transferor Fund.
If the accompanying proxy is executed and returned in time for the
Meeting, the shares covered thereby will be voted in accordance with the proxy
on all matters that may properly come before the Meeting. Any shareholder giving
a proxy may revoke it at any time before it is exercised by submitting to the
Trust a written notice of revocation or a subsequently executed proxy or by
attending the Meeting and electing to vote in person.
SHAREHOLDER AND BOARD APPROVAL. The Plan of Reorganization and the
transactions contemplated therein are being submitted for approval at the
Meeting by the holders of a majority of the outstanding shares of the Transferor
Fund in accordance with the terms of the Plan. The term "majority of the
outstanding shares" as used herein means more than 50% of all the votes cast at
a meeting at which a quorum is present. The vote of the shareholders of the
Surviving Fund is not being solicited, because their approval or consent is not
required for the reorganization.
The approval of the Plan of Reorganization by the Board of Trustees is
discussed above under "INFORMATION RELATING TO THE PROPOSED
REORGANIZATION--Board Consideration."
As of January 31, 1999, Old Kent, the parent company of the Trust's
investment adviser, and its affiliates held of record approximately % and
% of the outstanding shares of the Transferor Fund and the Surviving Fund
respectively, as agent or custodian for their customers. In addition, as of
January 31, 1999, Old Kent and its affiliates held investment and/or voting
power with respect to a majority of the outstanding shares of the Transferor
Fund on behalf of their customers. The Trust has been advised by Old Kent that
Old Kent and its affiliates intend to exercise their discretion to vote all
shares over which they have voting power in a manner consistent with their
fiduciary responsibilities. Old Kent and its affiliates have also advised the
Trust that they intend to vote all shares over which they have voting power in
favor of each proposal. If Old Kent and its affiliates cast their votes in favor
of each proposal, the proposals will be approved by a majority of the
outstanding shares of the Transferor Fund.
-15-
20
For purposes of the 1940 Act, any person who owns directly or through
one or more controlled companies more than 25 percent of the voting securities
of a company is presumed to "control" such company. Under this definition, Old
Kent and its affiliates may be deemed to be controlling persons of the Trust.
At January 31, 1999, the name, address and share ownership of each
person who owned beneficially and/or of record 5% or more of the outstanding
shares of the Transferor Fund and the Surviving Fund are listed in the following
table. The table also shows the percentage of each Fund that would be owned by
these persons upon the consummation of the reorganization based on their
holdings at that date.
PERCENTAGE OF
OWNERSHIP OF CLASS
PERCENTAGE OF OF THE SURVIVING
OWNERSHIP OF FUND AFTER
NAME AND ADDRESS FUND/CLASS CLASS REORGANIZATION
- ---------------- ---------- ----------- -----------------
Trent & Co. Limited Term Tax-Free
Cash Account (Institutional Shares)
Attn.: Kent Fund Trader
4420 44th St., Ste. A
Kentwood, MI 49512
BHC Securities Inc. Limited Term Tax-Free
Trade House Acct. (Investment Shares)
Attn.: Mutual Fund Dept.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
Rose M. Black Limited Term Tax-Free
Trustee, Rose M. (Investment Shares)
Black Trust
1208 Baker Street
Kalamazoo, MI 49512
Trent & Co. Intermediate Tax-Free
Attn.: Kent Fund Trader (Institutional Shares)
4420 44th St., Ste. A
Kentwood, MI 49512
At the record date for the Meeting, the Trustees and officers of the
Trust as a group owned beneficially less than 1% of the outstanding shares of
the Transferor Fund and the Surviving Fund.
QUORUM. In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present at the Meeting but sufficient votes to
approve the Plan of Reorganization are not received, the persons named as
proxies, or their substitutes, may propose one or more adjournments of the
Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares represented at the
Meeting in
-16-
21
person or by proxy. If a quorum is not present, the persons named as proxies
will vote those proxies FOR adjournment. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to vote FOR the
Plan of Reorganization in favor of such adjournments, and will vote those
proxies required to be voted AGAINST such proposal against any adjournment. A
quorum is constituted with respect to the Transferor Fund by the presence in
person or by proxy of the holders of more than 50% of the outstanding shares of
the Fund entitled to vote at the Meeting. Shares represented by broker non-votes
are treated as being present at the meeting for purposes of determining a
quorum. A vote cast does not include an abstention or the failure to vote for or
against a proposal. Therefore, for purposes of determining the affirmative vote
of a "majority of the outstanding shares," an abstention or the failure to vote,
including a broker non-vote, will be the equivalent of voting against approval
of the Plan of Reorganization.
ANNUAL MEETINGS. The Trust does not presently intend to hold annual
meetings of shareholders except as required by the 1940 Act or other applicable
law. The Trust will call a meeting of shareholders for the purpose of voting
upon the question of removal of a member of the Board of Trustees upon written
request of shareholders owning at least 25% of the outstanding shares of the
Trust entitled to vote.
ADDITIONAL INFORMATION ABOUT THE FUNDS
Information about the Transferor Fund and the Surviving Fund is
included in the Prospectus dated May 1, 1998 (as supplemented) which is
incorporated by reference herein. Additional information about the Transferor
Fund and the Surviving Fund is included in the Statement of Additional
Information dated May 1, 1998 (as supplemented), which has been filed with the
SEC and is incorporated by reference herein. Copies of the Prospectus and the
Statement of Additional Information may be obtained without charge by calling
the Trust at 1-800-633-KENT (5368). The Trust is subject to the informational
requirements of the Securities Exchange Act of 1934 and the 1940 Act, as
applicable, and, in accordance with such requirements, files proxy materials,
reports and other information with the SEC. These materials can be inspected and
copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, these materials can be
inspected and copied at the SEC's Regional Offices at 7 World Trade Center,
Suite 1300, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates.
FINANCIAL HIGHLIGHTS
The tables set forth below present financial information for the
Investment Shares and Institutional Shares of the Transferor Fund and the
Surviving Fund. This information is derived from the Trust's unaudited financial
statements presented in the Semi-Annual Report for the period ended June 30,
1998, and should be read in conjunction with the unaudited financial statements
and related notes, which are included in the Statement of Additional Information
related to this Combined Proxy Statement/Prospectus. Financial highlights for
the Transferor
-17-
22
Fund and the Surviving Fund for prior periods are contained in the Prospectus
dated May 1, 1998 (as supplemented), and financial statements for the Transferor
Fund and the Surviving Fund for the prior periods are contained in the Trust's
Annual Report to Shareholders and are incorporated by reference into the
Transferor Funds' and the Surviving Fund's Statement of Additional Information
dated May 1, 1998 (as supplemented), 1999, which Prospectus and Statement of
Additional Information are incorporated herein by reference. Additional
information about the Funds' performance is included in Appendix B attached
hereto.
-18-
23
LIMITED TERM TAX-FREE FUND
(for a share outstanding throughout the period)
Investment Shares
-----------------
For the Six-Month
Period ended June 30, 1998
(unaudited)
--------------------------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $10.23
----------------------------------------------------------------------- -----------------------
Income (Loss) from Investment Operations:
Net investment income............................................ 0.19
Net realized and unrealized gains (losses)
on investments................................................ (0.02)
----------------------------------------------------------------------- -----------------------
Total Income (Loss) from Investment Operations:.................. 0.17
----------------------------------------------------------------------- -----------------------
Less Dividends and Distributions from:
Net investment income............................................ (0.19)
In excess of net investment income............................... --
Net realized gains on investments................................ --
----------------------------------------------------------------------- -----------------------
Total Dividends and Distributions:............................... (0.19)
----------------------------------------------------------------------- -----------------------
Net change in net asset value.................................... (0.02)
======================================================================= =======================
NET ASSET VALUE, END OF PERIOD................................... $10.21
======================================================================= =======================
TOTAL RETURN (1)................................................. 1.63%++
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of period (000's)................................ $292
Ratios to average net assets:
Ratio of expenses............................................. 0.90%+
Ratio of net investment income ............................... 3.70%+
Ratio of expenses*............................................ 1.01%+
Ratio of net investment income*............................... 3.59%+
Portfolio turnover rate(2)....................................... 24%
- --------------------------------------------------------------------------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had
not occurred, the ratios would have been as indicated.
(1) Calculation does not include sales charge that was previously
applicable for Investment Shares. Such sales charge was discontinued as
of May 1, 1997.
(2) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
-19-
24
LIMITED TERM TAX-FREE FUND
(for a share outstanding throughout the period)
Institutional Shares
--------------------
For the Six-Month
Period ended June 30, 1998
(unaudited)
--------------------------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $10.19
------------------------------------------------------------------ --------------------
Income (Loss) from Investment Operations:
Net investment income....................................... 0.19
Net realized and unrealized gains (losses)
on investments........................................... (0.02)
------------------------------------------------------------------ --------------------
Total Income (Loss) from Investment Operations:................ 0.17
------------------------------------------------------------------ --------------------
Less Dividends and Distributions from:
Net investment income....................................... (0.19)
In excess of net investment income.......................... --
Net realized gains on investments........................... --
------------------------------------------------------------------ --------------------
Total Dividends and Distributions:.......................... (0.19)
------------------------------------------------------------------ --------------------
Net change in net asset value............................... (0.02)
------------------------------------------------------------------ --------------------
NET ASSET VALUE, END OF PERIOD.............................. $10.17
================================================================== ====================
TOTAL RETURN................................................ 1.72%++
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of period (000's)........................... $37,205
Ratios to average net assets:
Ratio of expenses ....................................... 0.75%+
Ratio of net investment income .......................... 3.85%+
Ratio of expenses*....................................... 0.76%+
Ratio of net investment income*.......................... 3.84%+
Portfolio turnover rate(1).................................. 24%
- --------------------------------------------------------------------------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had
not occurred, the ratios would have been as indicated.
(1) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
-20-
25
INTERMEDIATE TAX-FREE FUND
(for a share outstanding throughout the period)
Investment Shares
-----------------
For the Six-Month Period
Ended June 30, 1998
(unaudited)
------------------------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $10.68
----------------------------------------------------------------- ---------------------------------------------------
Income(Loss) from Investment Operations:
Net investment income....................................... 0.21
Net realized and unrealized gains (losses)
on investments........................................... (0.02)
----------------------------------------------------------------- ---------------------------------------------------
Total Income (Loss) from Investment Operations:............... 0.19
----------------------------------------------------------------- ---------------------------------------------------
Less Dividends and Distributions from:
Net investment income....................................... (0.21)
In excess of net investment income.......................... --
Net realized gains on investments........................... --
----------------------------------------------------------------- ---------------------------------------------------
Total Dividends and Distributions:.......................... (0.21)
----------------------------------------------------------------- ---------------------------------------------------
Net change in net asset value............................... (0.02)
----------------------------------------------------------------- ---------------------------------------------------
NET ASSET VALUE, END OF PERIOD.............................. $10.66
================================================================= ===================================================
TOTAL RETURN(1)............................................. 1.80%++
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of period (000's)........................... $3,770
Ratios to average net assets:
Ratio of expenses ....................................... 0.98%+
Ratio of net investment income .......................... 4.03%+
Ratio of expenses*....................................... 0.99%+
Ratio of net investment income*.......................... 4.02%+
Portfolio turnover rate(2).................................. 12%
- --------------------------------------------------------------------------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had
not occurred, the ratios would have been as indicated.
(1) Calculation does not include sales charge that was previously
applicable for Investment Shares. Such sales charge was discontinued as
of May 1, 1997.
(2) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
-21-
26
INTERMEDIATE TAX-FREE FUND
(for a share outstanding throughout the period)
Institutional Shares
--------------------
For the Six-Month Period
Ended June 30, 1998
(unaudited)
------------------------
NET ASSET VALUE, BEGINNING OF PERIOD...................... $10.68
------------------------------------------------------------- ---------------------------------------------------
Income (Loss) from Investment Operations:
Net investment income..................................... 0.23
Net realized and unrealized gains (losses)
on investments......................................... (0.02)
------------------------------------------------------------- ---------------------------------------------------
Total Income (Loss) from Investment Operations: 0.21
------------------------------------------------------------- ---------------------------------------------------
Less Dividends and Distributions from:
Net investment income..................................... (0.23)
In excess of net investment income........................ --
Net realized gains on investments......................... --
------------------------------------------------------------- ---------------------------------------------------
Total Dividends and Distributions:........................ (0.23)
------------------------------------------------------------- ---------------------------------------------------
Net change in net asset value............................. (0.02)
------------------------------------------------------------- ---------------------------------------------------
NET ASSET VALUE, END OF PERIOD............................ $10.66
============================================================= ===================================================
TOTAL RETURN.............................................. 1.84%++
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of period (000's)......................... $284,980
Ratios to average net assets:.............................
Ratio of expenses ..................................... 0.73%+
Ratio of net investment income ........................ 4.28%+
Ratio of expenses*..................................... 0.74%+
Ratio of net investment income*........................ 4.27%+
Portfolio turnover rate(1)................................ 12%
- --------------------------------------------------------------------------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had
not occurred, the ratios would have been as indicated.
(1) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
-22-
27
FINANCIAL STATEMENTS
The audited financial statements and condensed financial information
for the Transferor Fund and the Surviving Fund for the annual period ended
December 31, 1997 are included in or incorporated by reference into the Funds'
Prospectus dated May 1, 1998 (as supplemented) and the Statement of Additional
Information dated May 1, 1998 (as supplemented). Such audited financial
statements and condensed financial information have been incorporated herein in
reliance on the report of KPMG LLP, independent auditors, given on the authority
of that firm as experts in accounting and auditing.
OTHER BUSINESS
The Trust's Board of Trustees knows of no other business to be brought
before the Meeting with respect to the Transferor Fund. However, if any other
matters come before the Meeting, it is the intention of the Board that proxies
that do not contain specific restrictions to the contrary will be voted on such
matters in accordance with the judgment of the persons named in the enclosed
form of proxy.
LITIGATION
The Trust is not involved in any litigation that would have any
material adverse financial effect upon the funds.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Trust in writing at the
address on the cover page of this Combined Proxy Statement/Prospectus or by
telephoning 1-800-633-KENT (5368).
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
-23-
28
APPENDIX A
PLAN OF REORGANIZATION
This PLAN OF REORGANIZATION (the "Plan") is dated as of the 19th day of
November, 1998, and has been adopted by the Board of Trustees of The Kent Funds
(the "Trust") to provide for the reorganization of The Kent Limited Term
Tax-Free Fund (the "Transferor Fund") into The Kent Intermediate Tax-Free Fund
(the "Surviving Fund").
A. BACKGROUND
The Transferor Fund and the Surviving Fund (individually, a "Fund" and
collectively, the "Funds") are separate investment portfolios of the Trust. The
Trust is organized as a Massachusetts business trust and is an open-end
management investment company registered with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940 (the "1940
Act"). The Board of Trustees of the Trust has determined that it is in the best
interests of the Transferor Fund and its shareholders to be reorganized through
the transfer of all of the Transferor Fund's assets and liabilities to the
Surviving Fund upon the terms set forth in this Plan (the "Reorganization").
B. THE REORGANIZATION
1. At the Effective Time of the Reorganization (as defined below in
Section 5 of this Article B), all property of every description, and all
interests, rights, privileges and powers of the Transferor Fund, subject to all
liabilities of the Transferor Fund, whether accrued, absolute, contingent or
otherwise (such assets subject to such liabilities are herein referred to as the
"Assets") will be transferred and conveyed by the Transferor Fund to the
Surviving Fund and will be assumed by the Surviving Fund, such that at and after
the Effective Time of the Reorganization, the Assets of the Transferor Fund will
become and be the Assets of the Surviving Fund. In exchange for the transfer of
the Assets of the Transferor Fund, the Surviving Fund will contemporaneously
issue to the Transferor Fund full and fractional Investment and Institutional
shares of the Surviving Fund (as contemplated by Section 3 of this Article B)
having an aggregate net asset value equal to the value of the Assets of the
Transferor Fund. For purposes of effecting such exchange, the value of the
Assets of the Transferor Fund and the net asset value of the shares of the
Surviving Fund shall be determined as of 4:00 p.m., Eastern time, on March 29,
1999, or at such other time as may be determined by the Board of Trustees or an
authorized officer of the Trust. Such values shall be computed in the manner set
forth in the Funds' then current prospectus under the Securities Act of 1933, as
amended. At and after the Effective Time of the Reorganization, all debts,
liabilities, obligations and duties of the Transferor Fund will attach to the
Surviving Fund as aforesaid and may thenceforth be enforced against the
Surviving Fund to the same extent as if the same had been incurred by the
Surviving Fund.
2. Prior to the Effective Time of the Reorganization, the Transferor
Fund shall declare a dividend, with a record date and ex-dividend date prior to
the Effective Time of the
29
Reorganization, which, together with all previous dividends, shall have the
effect of distributing to its shareholders all of the Transferor Fund's net
investment income, if any, for the taxable periods or years ended on or before
December 31, 1998 and for the period from said date to and including the
Effective Time of the Reorganization, and all of the Transferor Fund's net
capital gain, if any, realized in the taxable periods or years ended on or
before December 31, 1998 and in the period from said date to and including the
Effective Time of the Reorganization.
3. At the Effective Time of the Reorganization, the Transferor Fund
will make a liquidating distribution to its shareholders of full and fractional
shares of the Surviving Fund, such that (a) the shares of the Surviving Fund
that are distributed to a shareholder of the Transferor Fund will have an
aggregate net asset value equal to the aggregate net asset value of the shares
of the Transferor Fund held by such shareholder immediately prior to the
Effective Time of the Reorganization, and (b) the class of shares of the
Surviving Fund that are distributed to a shareholder of the Transferor Fund will
be the same as the class of shares of the Transferor Fund held by such
shareholder immediately prior to the Effective Time of the Reorganization. In
addition, each shareholder of the Transferor Fund will have the right to receive
any unpaid dividends or other distributions that were declared before the
Effective Time of the Reorganization with respect to the shares of the
Transferor Fund held by such shareholder immediately prior to the Effective Time
of the Reorganization.
4. The stock transfer books of the Trust with respect to the Transferor
Fund will be permanently closed as of the close of business on the day
immediately preceding the Effective Time of the Reorganization. Redemption
requests received thereafter by the Trust with respect to the Transferor Fund
will be deemed to be redemption requests for shares of the Surviving Fund issued
pursuant to this Plan. If any shares of the Transferor Fund are represented by a
share certificate, the certificate must be surrendered to the Trust's transfer
agent for cancellation before the Surviving Fund shares issuable to the
shareholder pursuant to this Plan will be redeemed.
5. The Effective Time of the Reorganization for purposes of this
Agreement shall be the opening of business on March 30, 1999, or at such other
time as may be determined by the Board of Trustees or an authorized officer of
the Trust.
C. ACTIONS BY SHAREHOLDERS OF THE TRANSFEROR FUND
Prior to the Effective Time of the Reorganization and as a condition
thereto, the Board of Trustees of the Trust will call, and the Trust will hold,
a meeting of the shareholders of the Transferor Fund to consider and vote upon:
1. Approval of this Plan and the transactions contemplated
hereby.
2. Such other matters as may be determined by the Board of
Trustees of the Trust.
-2-
30
D. CONDITIONS TO THE REORGANIZATION
Consummation of this Plan will be subject to:
1. The approval of the matters referred to in Article C of this Plan by
the shareholders of the Transferor Fund in the manner required by law and
otherwise deemed necessary or advisable by the Board of Trustees of the Trust;
and
2. The following additional conditions:
a. The Trust will have received an opinion of Drinker Biddle &
Reath LLP to the effect that:
(i) the shares of the Surviving Fund issued pursuant
to this Plan will, when issued in accordance with the provisions hereof, be
legally issued, fully paid and non-assessable; and
(ii) for federal income tax purposes: (i) the
acquisition of the assets and assumption of the liabilities of the Transferor
Fund by the Surviving Fund in return for Investment and Institutional shares of
the Surviving Fund followed by the distribution of such shares to the
shareholders of the Transferor Fund will constitute a "reorganization" within
the meaning of Section 368(a)(1)(C) or Section 368(a)(1)(D) of the Code and the
Surviving Fund and the Transferor Fund will be "a party to the reorganization"
within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be
recognized by the Transferor Fund upon the transfer of its assets and
liabilities to the Surviving Fund; (iii) no gain or loss will be recognized by
the Surviving Fund upon the receipt of the assets of the Transferor Fund in
exchange for Investment and Institutional shares of the Surviving Fund and the
assumption by the Surviving Fund of the liabilities of the Transferor Fund; (iv)
no gain or loss will be recognized by the shareholders of the Transferor Fund
upon the receipt of the Investment and Institutional shares of the Surviving
Fund in exchange for their Investment and Institutional shares in the Transferor
Fund; (v) the basis of the Investment and Institutional shares of the Surviving
Fund received by the shareholders of the Transferor Fund will be the same as the
basis of the Investment and Institutional shares of the Transferor Fund
exchanged therefor; (vi) the tax basis of the assets of the Transferor Fund in
the hands of the Surviving Fund will be the same as the tax basis of such assets
in the hands of the Transferor Fund immediately prior to the transfer; (vii) the
holding period of the Investment and Institutional shares of the Surviving Fund
received by the shareholders of the Transferor Fund will include the holding
period of the Investment and Institutional shares of the Transferor Fund
exchanged therefor, provided that at the time of the exchange the Investment and
Institutional shares of the Transferor Fund were held as capital assets; and
(viii) the holding period of the Surviving Fund for the assets of the Transfer
Fund transferred to it will include the period during which such assets were
held by the Transferor Fund.
b. All necessary approvals, registrations and exemptions
required under federal and state laws will have been obtained.
-3-
31
E. MISCELLANEOUS
1. This Plan and the transactions contemplated hereby will be governed
and construed in accordance with the laws of the Commonwealth of Massachusetts.
2. This Plan and the transactions contemplated hereby may be abandoned
at any time for any reason prior to the Effective Time of the Reorganization
upon the vote of a majority of the Board of Trustees of the Trust.
3. At any time prior to or (to the fullest extent permitted by law)
after approval of this Plan by the shareholders of the Transferor Fund, the
Trust may, upon authorization by the Board of Trustees and with or without the
approval of shareholders of the Transferor Fund, amend any of the provisions of
this Plan.
4. Notwithstanding Section 1 of Article B, unamortized organizational
expenses of the Transferor Fund shall not be transferred or assumed hereunder.
The Trust has been advised that such expenses will be paid to the Transferor
Fund by one or more third parties and will be eliminated from the balance sheet
of the Transferor Fund prior to the Effective Time of the Reorganization.
5. The Trust, by consent of its Board of Trustees, or an officer
authorized by such Board of Trustees, may waive any condition to the obligations
of the Transferor Fund or the Surviving Fund hereunder if, in its or such
officer's judgment, such waiver will not have a material adverse effect on the
interests of the shareholders of the Transferor Fund or the shareholders of the
Surviving Fund.
-4-
32
APPENDIX B
THE KENT LIMITED TERM TAX-FREE FUND
BY MICHAEL J. MARTIN
PORTFOLIO MANAGER
Municipal bond yields generally rose during the early months of 1997
due to stronger than expected economic growth and investor concerns about the
possibility of higher inflation. In March, the Federal Reserve increased
short-term interest rates in an effort to address concerns. Yields generally
declined during the remainder of the year, reflecting a slower pace of economic
activity and continued low inflation readings, as well as concerns that the
economic and financial market turmoil in Asia would slow our economy during
1998. Yields on three-year AAA-rated generally obligation municipal securities
began the year at 4.20%, rose to a peak of 4.60% in April and finished the
period at 3.95%.
Early in the year, we reduced the Fund's average maturity target range
from between one and one-half to five years to between one and three years. The
Fund's Institutional and Investment Shares posted total returns of 4.78% and
4.61%, respectively, for the 12 months through December 31, 1997. That compares
to a total return of 4.62% for the Lehman Brothers One-Year General Obligation
Municipal Bond Index and 5.41% for the Lehman Brothers Three-Year General
Obligation Municipal Bond.
TAKING ADVANTAGE OF FALLING YIELDS
The Fund's average maturity began the period at 3.84 years. The average
maturity fell to 3.0 years when we reduced the Fund's maturity target range.
However, the maturity of the Fund's portfolio remained near the high end of its
new target range, ending the period at 2.87 years. That strategy benefited the
Fund's performance as yields declined from their April peak.
- --------------------------------------------------------------------------------
THE KENT LIMITED TERM TAX-FREE FUND
DISTRIBUTION OF NET ASSETS
AS OF DECEMBER 31, 1997
-----------------------------------
Pacific 6.5%
Mountain 12.3%
South 20.6% [PIE CHART]
East 19.9%
North Central 36.2%
Other 4.5%
Portfolio composition is subject to change.
- --------------------------------------------------------------------------------
We maintained the Fund's AA credit quality. At the same time,
we increased the Fund's yield by boosting its investment in securities
that are subject to the federal alternative minimum tax.
33
LOOKING AHEAD
We will continue to hold a portfolio with an average maturity
near the long end of the Fund's target range, reflecting our view that
yields could fall further in the coming months. We also will maintain
the Fund's high credit quality. We will continue to look for any
decline in municipal yields as an opportunity to purchase higher
yielding securities for the Fund.
- --------------------------------------------------------------------------------
THE KENT LIMITED TERM TAX-FREE FUND
TAX EQUIVALENT YIELDS+ AS OF DECEMBER 31, 1997
----------------------------------------------
Tax Bracket Institutional Class Investment Class
- --------------------------------------------------------------------------------
28.0% 5.01% 4.81%
31.0% 5.23% 5.01%
36.0% 5.64% 5.41%
39.6% 5.98% 5.73%
+ Based on a SEC 30-day yield on 12/31/97 of 3.61% for the
Institutional Class and 3.46% for the Investment Class. SEC
30-day yield is computed based on net income during the 30-day
period ended December 31, 1997. Yield calculations represent
past performance and will fluctuate.
Certain fees were being waived. Had these waivers not been in
effect, the 30-day SEC yields would have been 3.60% for
Institutional Shares and 3.35% for Investment Shares.
- --------------------------------------------------------------------------------
THE KENT LIMITED TERM TAX-FREE FUND++
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1997
----------------------------------------------
Institutional Class Investment Class
(Inception: 9/1/94) (Inception: 11/1/94)
---------------------------------------------------------------------------------------------
One Year 4.78% 4.61%
Three Year 5.56% 5.49%
Life of Fund 4.74% 5.20%
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS ONE-YEAR GENERAL OBLIGATION MUNICIPAL BOND
INDEX
AND THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND
INDEX
-2-
34
$12,000 The Kent Limited Term Tax-Free Fund $11,931 The Lehman Brothers One-Year
Institutional Class Shares General Obligation
11,500 $11,762 Municipal Bond Index
11,000 [GRAPH] $11,672 The Lehman Brothers Three-Year
General Obligation Municipal
Bond Index
10,500
10,000
9,500
----------------------------------------------------------
9/1/94 12/31/94 12/31/95 12/31/96 12/31/97
$12,500 The Kent Limited Term Tax-Free Fund $12,158
Investment Class Shares
12,000 $11,867
11,500 $11,742
11,000 [GRAPH]
10,500
10,000
9,500
----------------------------------------------------------
11/1/94 12/31/94 12/31/95 12/31/96 12/31/97
++ The Fund's income may be subject to certain state and local taxes and
depending on your tax status, the federal alternative minimum tax. Past
performance is no guarantee of future performance. The investment
return and principal value will fluctuate, so that shares, when
redeemed, may be worth more or less than the original cost. Performance
for each class will differ based on differences in expenses for each
class of shares. Return figures and investment values are quoted after
deducting all expenses.
The Lehman Brothers One-Year General Obligation Municipal Bond Index
and the Lehman Brothers Three-Year General Obligation Municipal Bond
Index are unmanaged indices of debt instruments issued by
municipalities. Total return is based on changes in net asset value,
assuming reinvestment of all dividends and capital gains distributions.
Certain fees were waived. Had these waivers not been in effect, total
return would have been lower.
-3-
35
THE KENT INTERMEDIATE TAX-FREE FUND+
BY MICHAEL J. MARTIN
PORTFOLIO MANAGER
Yields in the municipal market rose during the first quarter of 1997,
before declining significantly over the remainder of the year. The rise in
municipal yields early in the year resulted from an unexpectedly strong surge in
economic growth and fears of higher inflation. The Federal Reserve raised
short-term interest rates in March in response to the unexpectedly strong pace
of economic growth. Yields generally declined during the spring as the pace of
economic activity moderated and inflation concerns subsided. Municipal yields
fell further later in the year as investors became concerned that the economic
and financial market turmoil in Southeast Asia would further slow the U.S.
economy during 1998.
The yield on a ten-year AAA-rated general obligation municipal bond
began the year at 4.80%, rose to a peak of 5.20% in mid-April and then declined
to 4.35% by the end of 1997. The Fund's Institutional and Investment Shares
posted total returns of 7.07% and 6.80%, respectively, for the 12 months ended
December 31, 1997. That compares to a total return of 5.41% for the Lehman
Brothers Three-Year General Obligation Municipal Bond Index and 6.49% for the
Lehman Brothers Five-Year General Obligation Municipal Bond Index.
A CONSISTENT STRATEGY
We maintained the Fund's average credit rating at AA during the period.
The Fund's average maturity began the year at 7.8 years and rose slightly to 8.1
years in April as municipal bond prices declined and yields rose. From there, we
allowed the Fund's average maturity to gradually decline along with municipal
bond yields. The average maturity ended 1997 at 7.1 years. The shifts in average
maturity were consistent with our strategy of increasing the Fund's average
maturity to lock in higher income when yields are rising, and letting the Fund's
average maturity decline as yields become less attractive.
- --------------------------------------------------------------------------------
THE KENT INTERMEDIATE TAX-FREE FUND
DISTRIBUTION OF NET ASSETS
AS OF DECEMBER 31, 1997
----------------------------------
East 19.0%
North Central 29.9%
South 20.0% [PIE CHART]
Pacific 16.3%
Mountain 4.8%
Other 10.0%
- --------------------------------------------------------------------------------
Portfolio composition is subject to change.
-4-
36
GOING FORWARD
The Fund is well positioned to take advantage of any additional
increases in municipal bond prices during 1998. Additionally, we will maintain
the Fund's high credit quality to reduce the impact of any detrimental effects
to the municipal bond market in the event concerns over the impact on the U.S.
economy from the events in Southeast Asia become even more of an investor focus
during 1998.
- --------------------------------------------------------------------------------
THE KENT INTERMEDIATE TAX-FREE FUND+
TAX EQUIVALENT YIELDS+ AS OF DECEMBER 31, 1997
----------------------------------------------
Tax Bracket Institutional Class Investment Class
---------------------------------------------------------------------------------------------------------
28.0% 5.19% 4.85%
31.0% 5.42% 5.06%
36.0% 5.84% 5.46%
39.6% 6.19% 5.78%
- --------------------------------------------------------------------------------
+ Based on a SEC 30-day yield on 12/31/97 of 3.74% for the
Institutional Class and 3.49% for the Investment Class. SEC
30-day yield is computed based on net income during the 30-day
period ended December 31, 1997. Yield calculations represent
past performance and will fluctuate.
Certain fees were being waived. Had these waivers not been in
effect, the 30-day SEC yields would have been 3.73% for
Institutional Shares and 3.48% for Investment Shares.
- --------------------------------------------------------------------------------
THE KENT INTERMEDIATE TAX-FREE FUND++
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1997
----------------------------------------------
Institutional Class Investment Class
(Inception: 12/16/92) (Inception: 12/18/92)
-------------------------------------------------------------------------------------------
One Year 7.07% 6.80%
Three Year 7.76% 7.51%
Five Years 5.62% 5.47%
Life of Fund 5.69% 5.50%
GROWTH OF $10,000 INVESTMENT COMPARISON
WITH THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND
INDEX
AND THE LEHMAN BROTHERS FIVE-YEAR GENERAL OBLIGATION MUNICIPAL BOND
INDEX
-5-
37
$14,000 The Kent Intermediate Tax-Free Fund $13,406 The Lehman Brothers Three-Year
Institutional Class Shares General Obligation
13,000 $13,222 Municipal Bond Index
12,000 [GRAPH] $12,905 The Lehman Brothers Five-Year
General Obligation Municipal
Bond Index
11,000
10,000
9,000
----------------------------------------------------------
12/16/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
$14,000 The Kent Intermediate Tax-Free Fund $13,406
Investment Class Shares
13,000 $13,100
12,000 $12,905
11,000 [GRAPH]
10,000
9,000
----------------------------------------------------------
12/18/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
++ The Fund's income may be subject to certain state and local taxes and
depending on your tax status, the federal alternative minimum tax. Past
performance is no guarantee of future performance. The investment
return and principal value will fluctuate, so that shares, when
redeemed, may be worth more or less than the original cost. Performance
for each class will differ based on differences in expenses for each
class of shares. Return figures and investment values are quoted after
deducting all expenses.
The Lehman Brothers Three-Year General Obligation Municipal Bond Index
and the Lehman Brothers Five-Year General Obligation Municipal Bond
Index are unmanaged indices of debt instruments issued by
municipalities. Total return is based on changes in net asset value,
assuming reinvestment of all dividends and capital gains distributions.
Certain fees were waived. Had these waivers not been in effect, total
return would have been lower.
-6-
38
KENT FUNDS
P.O. BOX 182201
COLUMBUS, OHIO 43218-2201
1-800-633-KENT (5368)
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF THE LIMITED TERM TAX-FREE FUND)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Proxy Statement/Prospectus dated
February 26, 1999 (the "Combined Proxy Statement/Prospectus") for the Special
Meeting of Shareholders of the Limited Term Tax-Free Fund (the "Transferor
Fund"), an investment portfolio offered by the Kent Funds (the "Trust"), to be
held on March 24, 1999. Copies of the Combined Proxy Statement/Prospectus may be
obtained at no charge by calling 1-800-633-KENT (5368).
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Proxy Statement/Prospectus.
Further information about the Transferor Fund and the Intermediate
Tax-Free Fund is contained in and incorporated by reference to said Funds'
Statement of Additional Information dated May 1, 1998 (as supplemented).
The date of this Statement of Additional Information is February 24,
1999.
39
TABLE OF CONTENTS
PAGE
----
General Information......................................................1
Pro Forma Financial Information.......................................PF-1
Unaudited Financial Statements for the Six Months Ended June 30, 1998
Audited Financial Statements for the Fiscal Year Ended December 31, 1997
40
GENERAL INFORMATION
The shareholders of the Transferor Fund are being asked to approve or
disapprove the Plan of Reorganization dated November 19, 1998 and the
transactions contemplated thereby. The Plan of Reorganization contemplates the
transfer of all of the assets and liabilities of the Transferor Fund to the
Intermediate Tax-Free Fund (the "Surviving Fund") in exchange for full and
fractional shares of the Surviving Fund. Following the exchange, the Transferor
Fund will make a liquidating distribution of the Surviving Fund's Investment and
Institutional Shares to the holders of the Investment and Institutional Shares
of the Transferor Fund, respectively, so that each holder of Investment and
Institutional Shares of the Transferor Fund will hold, immediately after the
effective time of the reorganization, full and fractional shares of the
corresponding class of the Surviving Fund with the same aggregate net asset
value as the shareholder had in the Transferor Fund immediately before the
transaction.
The Special Meeting of Shareholders of the Transferor Fund to consider
the Plan of Reorganization and the related transactions will be held at 10:00
a.m. Eastern Time on March 24, 1999 in the Board Room at BISYS Fund Services,
3435 Stelzer Road, Columbus, Ohio 43219. For further information about the
transaction, see the Combined Proxy Statement/Prospectus.
1
41
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma information set forth below for the period
ended June 30, 1998 is intended to present ratios and supplemental data as if
the merger of the Transferor Fund into the Surviving Fund (the "Funds") had been
consummated at December 31, 1997. The unaudited pro forma information set forth
below for the year ended December 31, 1997 is intended to present ratios and
supplemental data as if the merger of the Transferor Fund into the Surviving
Fund had been consummated at December 31, 1996. Each Fund offers two classes of
shares, Investment Shares and Institutional Shares. Pro forma information is
presented for both classes of shares.
The Funds have the same investment adviser, administrator, fund
accounting agent, transfer agent, distributor and custodian. Each of such
service providers has entered into an agreement with the Trust which governs the
provision of services to the Funds. Such agreements contain the same terms with
respect to each Fund except for a difference in the investment advisory fees
charged by the Funds' investment adviser. The Transferor Fund pays an advisory
fee at the annual rate of 0.45% of its average daily net assets while the
Surviving Fund pays an advisory fee at the annual rate of 0.50% of its average
daily net assets. Consequently, on a pro forma basis for the six months ended
June 30, 1998, the proposed reorganization would result in an increase of $9,457
in the advisory fees charged with respect to the assets of the Transferor Fund.
Similarly, on a pro forma basis for the year ended December 31, 1997, the
proposed reorganization would result in an increase of $18,637 in the advisory
fees charged with respect to the assets of the Transferor Fund. However, the
proposed reorganization would also result in a decrease in other operating
expenses (including audit fees, fund accounting fees and transfer agency fees)
of approximately $15,000 on a pro forma basis for the six months ended June 30,
1998 and $40,300 on a pro forma basis for the year ended December 31, 1997.
These pro forma adjustments are reflected in the information presented below.
PF-1
42
For the Six Months Ended June 30, 1998
--------------------------------------
Limited Pro Forma
Term Intermediate Intermediate
Tax-Free Tax-Free Tax-Free
Institutional Shares Fund Fund Fund
- -------------------- ---- ---- ----
Net Assets, end of period (000's) $37,205 $284,980 $322,191
Total Return(1) 1.72% 1.84% 1.83%
Ratio of Expenses to
Average Net Assets(2):
After Fee Waivers 0.75% 0.73% 0.73%
Absent Fee Waivers 0.76% 0.74% 0.74%
Ratio of Net Investment Income to
Average Net Assets(2):
After Fee Waivers 3.85% 4.28% 4.23%
Absent Fee Waivers 3.84% 4.27% 4.22%
Limited Pro Forma
Term Intermediate Intermediate
Tax-Free Tax-Free Tax-Free
Investment Shares Fund Fund Fund
- ----------------- ---- ---- ----
Net Assets, end of period (000's) $ 292 $ 3,770 $ 4,062
Total Return(1) 1.63% 1.80% 1.78%
Ratio of Expenses to
Average Net Assets(2):
After Fee Waivers 0.90% 0.98% 0.98%
Absent Fee Waivers 1.01% 0.99% 0.99%
Ratio of Net Investment Income to
Average Net Assets(2):
After Fee Waivers 3.70% 4.03% 3.98%
Absent Fee Waivers 3.59% 4.02% 3.97%
- --------------------------
(1) Not Annualized
(2) Annualized
PF-2
43
For the Year Ended December 31, 1997
------------------------------------
Limited Pro Forma
Term Intermediate Intermediate
Tax-Free Tax-Free Tax-Free
Institutional Shares Fund Fund Fund
- -------------------- ---- ---- ----
Net Assets, end of period (000's) $36,023 $275,641 $311,686
Total Return 4.78% 7.07% 6.79%
Ratio of Expenses to
Average Net Assets:
After Fee Waivers 0.76% 0.72% 0.72%
Absent Fee Waivers 0.77% 0.73% 0.73%
Ratio of Net Investment Income to
Average Net Assets:
After Fee Waivers 3.86% 4.31% 4.26%
Absent Fee Waivers 3.85% 4.30% 4.25%
Limited Pro Forma
Term Intermediate Intermediate
Tax-Free Tax-Free Tax-Free
Investment Shares Fund Fund Fund
- ----------------- ---- ---- ----
Net Assets, end of period (000's) $ 474 $ 3,534 $ 4,009
Total Return 4.61% 6.80% 6.73%
Ratio of Expenses to
Average Net Assets:
After Fee Waivers 0.93% 0.97% 0.97%
Absent Fee Waivers 1.04% 0.98% 0.98%
Ratio of Net Investment Income to
Average Net Assets:
After Fee Waivers 3.67% 4.06% 4.01%
Absent Fee Waivers 3.56% 4.05% 4.00%
The total return figures set forth above for the Intermediate Tax-Free
Fund on a pro forma basis are based on the weighted average total return of the
Surviving Fund and the Transferor Fund during the periods presented. Following
the reorganization, however, the Surviving Fund will be managed in accordance
with its investment policies which, although they provide the Surviving Fund
will invest in the same type of securities as the Transferor Fund, provide that
the Surviving Fund will maintain a longer weighted average maturity.
Consequently, the pro forma total return figures for the Intermediate Tax-Free
Fund may not be indicative of the total return the Intermediate Tax-Free Fund
would have achieved if the reorganization had been consummated at the beginning
of the periods presented.
PF-3
44
The unaudited pro forma information set forth above should be read in
conjunction with the semi-annual unaudited financial statements for the period
ended June 30, 1998 and the annual audited financial statements for the year
ended December 31, 1997.
PF-4
45
Unaudited Financial Statements
for the Six Months Ended June 30, 1998
46
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 97.5%
ADVERTISING -- 0.1%
15,000 Interpublic Group Cos., Inc..... $ 910,313
------------
AEROSPACE & DEFENSE -- 1.0%
95,900 Boeing Co....................... 4,273,544
21,000 Lockheed Martin Corp............ 2,223,375
28,600 Raytheon Co. -- Class B......... 1,690,975
------------
8,187,894
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.3%
24,800 Maytag Corp..................... 1,224,500
11,600 Whirlpool Corp.................. 797,500
------------
2,022,000
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.2%
14,800 Dana Corp....................... 791,800
16,600 TRW, Inc........................ 906,775
------------
1,698,575
------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.1%
12,200 Genuine Parts Co................ 421,663
------------
AUTOMOTIVE -- 1.6%
116,600 Ford Motor Co................... 6,879,400
88,100 General Motors Corp............. 5,886,181
------------
12,765,581
------------
BANKS -- MAJOR REGIONAL -- 5.7%
75,000 Banc One Corp................... 4,185,937
35,800 Bank of New York Co., Inc....... 2,172,613
33,800 BankBoston Corp................. 1,880,125
11,300 Comerica, Inc................... 748,625
27,500 First Chicago NBD Corp.......... 2,437,188
81,570 First Union Corp................ 4,751,452
23,200 Fleet Financial Group, Inc...... 1,937,200
62,000 KeyCorp......................... 2,208,750
29,500 Mellon Bank Corp................ 2,053,938
20,000 National City Corp.............. 1,420,000
62,000 NationsBank..................... 4,742,999
98,400 Norwest Corp.................... 3,677,700
41,900 PNC Bank Corp................... 2,254,744
13,600 Republic New York Corp.......... 855,950
20,500 SunTrust Banks, Inc............. 1,666,906
69,000 U.S. Bancorp.................... 2,967,000
23,700 Wachovia Corp................... 2,002,650
8,300 Wells Fargo & Co................ 3,062,700
------------
45,026,477
------------
BANKS -- MIDWEST -- 0.3%
25,100 Fifth Third Bancorp............. 1,581,300
19,000 Huntington Bancshares........... 636,500
------------
2,217,800
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BANKS -- MONEY CENTER -- 2.5%
63,700 BankAmerica Corp................ $ 5,506,069
8,800 Bankers Trust New York Corp..... 1,021,350
68,600 Chase Manhattan Corp............ 5,179,300
41,900 Citicorp........................ 6,253,575
16,200 J.P. Morgan & Co., Inc.......... 1,897,425
------------
19,857,719
------------
BANKS -- NORTHEAST -- 0.1%
15,700 State Street Corp............... 1,091,150
------------
BEVERAGES -- ALCOHOLIC -- 0.3%
45,800 Anheuser-Busch Co., Inc......... 2,161,188
------------
BEVERAGES -- SOFT DRINKS -- 3.2%
213,700 Coca-Cola Co.................... 18,271,349
178,700 PepsiCo, Inc.................... 7,360,206
------------
25,631,555
------------
BROADCASTING/CABLE -- 0.9%
14,000 Clear Channel Communications.... 1,527,750
31,200 Comcast Corp. Special........... 1,266,525
58,500 Media One Group*................ 2,570,344
54,900 Tele-Communications Inc.,
Class A*........................ 2,110,219
------------
7,474,838
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.3%
9,800 Armstrong World Industries,
Inc............................. 660,275
23,900 Masco Corp...................... 1,445,950
------------
2,106,225
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.2%
18,400 Centex Corp..................... 694,600
36,600 Pulte Corp...................... 1,093,425
------------
1,788,025
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.9%
68,100 Home Depot, Inc................. 5,656,556
34,200 Lowe's Cos., Inc................ 1,387,238
------------
7,043,794
------------
BUILDING PRODUCTS -- WOOD -- 0.1%
18,300 Weyerhaeuser Co................. 845,231
------------
CHEMICALS -- DIVERSIFIED -- 1.9%
25,600 Dow Chemical Co................. 2,475,200
107,500 E.I. du Pont de Nemours & Co.... 8,022,187
22,300 Hercules, Inc................... 917,088
36,500 PPG Industries, Inc............. 2,539,031
23,400 Union Carbide Corp.............. 1,248,975
------------
15,202,481
------------
Continued
28
47
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
CHEMICALS -- SPECIALTY -- 0.3%
25,300 Great Lakes Chemical Corp....... $ 997,768
27,100 Nalco Chemical Co............... 951,888
9,900 Sigma-Aldrich Corp.............. 347,738
------------
2,297,394
------------
COMMERCIAL SERVICES -- 0.2%
71,400 Cendant Corp.................... 1,490,475
------------
COMPUTER SOFTWARE -- 3.7%
29,600 Computer Associates
International, Inc.............. 1,644,650
235,400 Microsoft Corp.*................ 25,511,474
96,300 Oracle Corp.*................... 2,365,369
------------
29,521,493
------------
COMPUTERS -- LOCAL AREA NETWORK -- 1.3%
19,100 Cabletron Systems*.............. 256,656
106,050 Cisco Systems, Inc.*............ 9,763,228
------------
10,019,884
------------
COMPUTERS -- MAINFRAME -- 1.3%
93,300 International Business Machines
Corp............................ 10,712,006
------------
COMPUTERS -- MEMORY DEVICES -- 0.1%
30,800 Seagate Technology, Inc.*....... 733,425
------------
COMPUTERS -- MICRO -- 1.3%
154,574 Compaq Computer Corp............ 4,386,037
66,200 Dell Computer Corp.*............ 6,144,188
------------
10,530,225
------------
COMPUTERS -- MINI -- 0.9%
99,400 Hewlett-Packard Co.............. 5,951,575
35,600 Sun Microsystems, Inc.*......... 1,546,375
------------
7,497,950
------------
COMPUTERS -- SERVICES -- 0.6%
56,200 Automatic Data Processing,
Inc............................. 4,095,575
29,600 First Data Corp................. 986,050
------------
5,081,625
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.7%
13,300 American Greetings Corp......... 677,469
59,900 Unilever NV, ADR................ 4,728,356
------------
5,405,825
------------
CONTAINERS & PACKAGING -- 0.1%
20,200 Owens-Illinois*................. 903,950
------------
COSMETICS & TOILETRIES -- 1.0%
103,600 Gillette Co..................... 5,872,825
51,200 Kimberly-Clark Corp............. 2,348,800
------------
8,221,625
------------
DIVERSIFIED -- 5.1%
53,800 Allied Signal, Inc.............. 2,387,375
305,700 General Electric Co. (b)........ 27,818,699
23,600 Johnson Controls, Inc........... 1,346,675
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DIVERSIFIED (CONTINUED)
38,200 Minnesota Mining & Manufacturing
Co.............................. $ 3,139,563
45,500 Seagram Co., Ltd................ 1,862,656
24,500 Tenneco, Inc.................... 932,531
22,400 Textron, Inc.................... 1,605,800
22,200 United Technologies Corp........ 2,053,500
------------
41,146,799
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 2.1%
40,000 Applied Materials, Inc.*........ 1,180,000
141,800 Intel Corp...................... 10,510,924
18,600 Micron Technology, Inc.......... 461,513
48,900 Rockwell International Corp..... 2,350,256
38,600 Texas Instruments, Inc.......... 2,250,863
------------
16,753,556
------------
ELECTRONIC -- CONNECTORS -- 0.3%
45,800 AMP, Inc........................ 1,574,375
8,900 Thomas & Betts Corp............. 438,325
------------
2,012,700
------------
ELECTRONIC MEASURING EQUIPMENT -- 0.1%
30,400 Tektronix, Inc.................. 1,075,400
------------
FINANCE -- 0.3%
30,557 Associates First Capital,
Class A......................... 2,349,069
------------
FINANCIAL -- CONSUMER LOANS -- 0.3%
6,100 Beneficial Corp................. 934,444
22,200 Household International, Inc.... 1,104,450
------------
2,038,894
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.4%
38,200 Merrill Lynch & Co., Inc........ 3,523,950
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 1.4%
40,300 American Express Co............. 4,594,200
70,400 Morgan Stanley, Dean Witter,
Discover & Co................... 6,432,800
------------
11,027,000
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.1%
98,500 Fannie Mae...................... 5,983,875
61,300 Freddie Mac..................... 2,884,931
------------
8,868,806
------------
FINANCIAL -- SAVINGS & LOAN -- 0.1%
11,300 H.F. Ahmanson & Co.............. 802,300
------------
FOOD -- CANNED -- 0.6%
42,000 Campbell Soup Co................ 2,231,250
44,200 H.J. Heinz Co................... 2,480,725
------------
4,711,975
------------
FOOD -- CONFECTIONARY -- 0.1%
12,400 Hershey Foods Corp.............. 855,600
------------
Continued
29
48
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FOOD -- DIVERSIFIED -- 1.3%
26,200 Bestfoods....................... $ 1,521,238
44,800 ConAgra, Inc.................... 1,419,600
23,000 General Mills, Inc.............. 1,572,625
37,500 Kellogg Co...................... 1,408,594
20,000 Quaker Oats Co.................. 1,098,750
10,300 Ralston Purina Group............ 1,203,169
45,600 Sara Lee Corp................... 2,550,749
------------
10,774,725
------------
FOOD -- FLOUR & GRAIN -- 0.1%
53,200 Archer-Daniels-Midland Co....... 1,030,750
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
23,800 Supervalu, Inc.................. 1,056,125
------------
GAS & ELECTRIC UTILITY -- 0.4%
41,100 PG & E Corp..................... 1,297,219
57,000 Public Service Enterprises...... 1,962,937
------------
3,260,156
------------
HOTELS & LODGING -- 0.2%
39,400 Hilton Hotels Corp.............. 1,122,900
24,800 Marriott International,
Class A......................... 802,900
------------
1,925,800
------------
INSTRUMENTS -- CONTROL -- 0.2%
9,700 General Signal Corp............. 349,200
12,600 Honeywell, Inc.................. 1,052,888
------------
1,402,088
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.2%
19,300 Aon Corp........................ 1,355,825
------------
INSURANCE -- BROKERS -- 0.2%
22,350 Marsh & McLennan Cos., Inc...... 1,350,778
------------
INSURANCE -- LIFE -- 0.7%
43,700 American General Corp........... 3,110,894
19,800 Torchmark Corp.................. 905,850
12,200 TransAmerica Corp............... 1,404,525
------------
5,421,269
------------
INSURANCE -- MULTI-LINE -- 1.6%
14,900 Aetna, Inc...................... 1,134,263
30,300 CIGNA Corp...................... 2,090,699
19,700 Loews Corp...................... 1,716,363
10,700 MBIA, Inc....................... 801,163
110,300 Travelers Group, Inc............ 6,686,937
------------
12,429,425
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.6%
56,300 Allstate Corp................... 5,154,969
64,400 American International Group.... 9,402,399
16,100 Chubb Corp...................... 1,294,038
11,700 General Re Corp................. 2,965,950
21,400 Safeco Corp..................... 972,363
15,596 St. Paul Cos., Inc.............. 656,007
------------
20,445,726
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
LEISURE & RECREATION/GAMING -- 0.1%
11,600 Harrah's Entertainment, Inc..... $ 269,700
16,300 Mirage Resorts*................. 347,394
------------
617,094
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.1%
47,500 Cincinnati Milacron, Inc........ 1,154,844
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.2%
36,400 Caterpillar, Inc................ 1,924,650
------------
MACHINERY -- ELECTRICAL -- 0.4%
40,900 Emerson Electric Co............. 2,466,781
21,400 W.W. Grainger, Inc.............. 1,065,988
------------
3,532,769
------------
MACHINERY -- FARM -- 0.2%
33,000 Deere & Co...................... 1,744,875
------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.4%
34,000 Cooper Industries, Inc.......... 1,867,875
15,900 Illinois Tool Works, Inc........ 1,060,331
------------
2,928,206
------------
MACHINERY -- THERMAL PROCESSOR -- 0.1%
26,100 Thermo Electron Corp.*.......... 892,294
------------
MEDIA CONGLOMERATES -- 1.4%
55,200 Time Warner, Inc................ 4,716,150
63,700 Walt Disney Co.................. 6,692,481
------------
11,408,631
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
25,000 Amgen, Inc.*.................... 1,634,375
------------
MEDICAL -- DRUGS -- 9.4%
145,200 Abbott Laboratories............. 5,935,050
126,800 American Home Products Corp..... 6,561,900
116,600 Bristol-Myers Squibb Co......... 13,401,712
98,400 Eli Lilly & Co.................. 6,500,550
108,300 Merck & Co., Inc................ 14,485,124
116,000 Pfizer, Inc..................... 12,607,750
46,900 Pharmacia & Upjohn, Inc......... 2,163,263
71,800 Schering-Plough Corp............ 6,578,675
87,000 Warner-Lambert Co............... 6,035,625
------------
74,269,649
------------
MEDICAL -- HEALTH MEDICAL ORGANIZATION -- 0.1%
21,200 Humana, Inc.*................... 661,175
------------
MEDICAL -- WHOLESALE DRUG -- 0.2%
14,700 Cardinal Health, Inc............ 1,378,125
------------
MEDICAL INSTRUMENTS -- 0.2%
42,100 Biomet, Inc.*................... 1,391,931
------------
MEDICAL PRODUCTS -- 0.5%
37,400 Baxter International, Inc....... 2,012,588
27,700 Guidant Corp.................... 1,975,356
------------
3,987,944
------------
Continued
30
49
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL/DENTAL SUPPLIES -- 1.5%
19,700 Becton, Dickinson & Co.......... $ 1,529,213
34,300 C.R. Bard, Inc.................. 1,305,544
125,900 Johnson & Johnson............... 9,285,124
------------
12,119,881
------------
METAL -- GOLD -- 0.3%
57,400 Barrick Gold Corp............... 1,101,363
39,400 Newmont Mining Corp............. 930,825
------------
2,032,188
------------
METAL -- MISCELLANEOUS -- 0.1%
75,600 Cyprus Amax Minerals Co......... 1,001,700
------------
METAL -- NON-FERROUS -- 0.4%
23,300 Aluminum Co. of America......... 1,536,343
5,300 Phelps Dodge Corp............... 303,094
24,600 Reynolds Metals Co.............. 1,376,063
------------
3,215,500
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.7%
28,700 IKON Office Solutions, Inc...... 417,944
41,200 Pitney Bowes, Inc............... 1,982,750
29,800 Xerox Corp...................... 3,028,425
------------
5,429,119
------------
OIL & GAS -- DRILLING -- 0.4%
49,400 Schlumberger Ltd................ 3,374,638
------------
OIL -- INTERNATIONAL INTEGRATED -- 4.4%
63,000 Chevron Corp.................... 5,232,938
238,500 Exxon Corp...................... 17,008,030
76,000 Mobil Corp...................... 5,823,500
130,500 Royal Dutch Petroleum Co., ADR.. 7,153,031
------------
35,217,499
------------
OIL -- PRODUCTION/PIPELINE -- 0.1%
14,250 Columbia Gas System, Inc........ 792,656
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.0%
19,700 Union Pacific Resources Group,
Inc............................. 345,981
------------
OIL -- U.S. INTEGRATED -- 2.4%
109,600 Amoco Corp...................... 4,562,099
91,400 Atlantic Richfield Co........... 7,140,624
12,900 Kerr-Mcgee Corp................. 746,588
15,700 Pennzoil Co..................... 794,813
39,400 Phillips Petroleum Co........... 1,898,588
39,400 Unocal Corp..................... 1,408,550
87,100 USX-Marathon Group.............. 2,988,619
------------
19,539,881
------------
OIL REFINING -- 0.4%
30,400 Ashland, Inc.................... 1,569,400
35,100 Sun Co., Inc.................... 1,362,319
------------
2,931,719
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PAPER & RELATED PRODUCTS -- 0.6%
28,000 Fort James Corp................. $ 1,246,000
39,300 International Paper Co.......... 1,689,900
19,700 Mead Corp....................... 625,475
19,400 Union Camp Corp................. 962,725
9,900 Westvaco Corp................... 279,675
------------
4,803,775
------------
PHOTOGRAPHY -- 0.1%
26,100 Polaroid Corp................... 928,181
------------
PROTECTION -- SAFETY -- 0.6%
74,900 Tyco International Ltd.......... 4,718,700
------------
PUBLISHING -- BOOKS -- 0.1%
13,800 McGraw-Hill Cos., Inc........... 1,125,563
------------
PUBLISHING -- NEWSPAPERS -- 0.8%
9,100 Dow Jones & Co.................. 507,325
40,100 Gannett, Inc.................... 2,849,606
14,400 Knight-Ridder, Inc.............. 792,900
9,900 New York Times Co............... 784,575
9,300 Times Mirror Co................. 584,738
17,700 Tribune Co...................... 1,217,981
------------
6,737,125
------------
RESTAURANTS -- 0.6%
65,100 McDonald's Corp................. 4,491,900
------------
RETAIL -- APPAREL/SHOES -- 0.7%
58,200 Gap, Inc........................ 3,586,575
57,800 Limited, Inc.................... 1,914,625
------------
5,501,200
------------
RETAIL -- DISCOUNT -- 2.7%
61,600 Dayton-Hudson Corp.............. 2,987,600
39,400 Kmart Corp.*.................... 758,450
293,700 Wal-Mart Stores, Inc............ 17,842,274
------------
21,588,324
------------
RETAIL -- DRUG STORE -- 0.3%
48,500 Walgreen Co..................... 2,003,656
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.7%
30,000 J.C. Penney, Inc................ 2,169,375
22,800 May Department Stores Co........ 1,493,400
37,000 Sears, Roebuck & Co............. 2,259,313
------------
5,922,088
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.1%
20,200 Federated Department Stores,
Inc.*........................... 1,087,013
------------
RETAIL -- SUPERMARKETS -- 0.1%
34,100 American Stores Co.............. 824,794
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.2%
37,700 Autozone, Inc.*................. 1,204,044
------------
RUBBER -- TIRES -- 0.1%
17,200 Goodyear Tire & Rubber Co....... 1,108,325
------------
Continued
31
50
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SOAP & CLEANING PREPARATIONS -- 1.4%
125,200 Procter & Gamble Co............. $ 11,401,025
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.3%
45,700 Airtouch Communications,
Inc.*........................... 2,670,594
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 2.2%
27,300 General Instrument Corp.*....... 742,219
15,800 Harris Corp..................... 706,063
142,300 Lucent Technologies, Inc........ 11,837,580
82,700 Motorola, Inc................... 4,346,919
------------
17,632,781
------------
TEXTILE -- APPAREL -- 0.1%
19,700 VF Corp......................... 1,013,319
------------
TOBACCO -- 1.3%
243,500 Philip Morris Cos., Inc......... 9,587,813
28,600 U.S.T., Inc..................... 772,200
------------
10,360,013
------------
TOOLS -- HAND HELD -- 0.2%
9,300 Black & Decker Corp............. 567,300
12,300 Snap-On, Inc.................... 445,875
9,600 The Stanley Works............... 399,000
------------
1,412,175
------------
TOYS/GAME/HOBBY -- 0.3%
33,300 Hasbro, Inc..................... 1,309,107
30,900 Mattel, Inc..................... 1,307,456
------------
2,616,563
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
14,700 FDX Corp.*...................... 922,425
------------
TRANSPORTATION -- AIRLINE -- 0.5%
18,000 AMR Corp.*...................... 1,498,500
7,200 Delta Air Lines, Inc............ 930,600
43,200 Southwest Airlines Co........... 1,279,800
------------
3,708,900
------------
TRANSPORTATION -- EQUIPMENT &
LEASING -- 0.0%
9,900 Ryder Systems, Inc.............. 312,469
------------
TRANSPORTATION -- RAILROAD -- 0.5%
34,500 CSX Corp........................ 1,569,750
34,000 Norfolk Southern Corp........... 1,013,625
29,100 Union Pacific Corp.............. 1,284,038
------------
3,867,413
------------
UTILITIES -- ELECTRIC POWER -- 1.9%
9,600 Ameren Corp..................... 381,600
39,400 Baltimore Gas & Electric Co..... 1,223,863
47,900 Consolidated Edison, Inc........ 2,206,393
33,200 Detroit Edison Co............... 1,340,450
37,200 Dominion Resources, Inc......... 1,515,900
19,700 Entergy Corp.................... 566,375
49,800 First Energy Corp............... 1,531,350
16,600 Florida Power & Light, Inc...... 1,045,800
19,100 Houston Industries, Inc......... 589,713
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (CONTINUED)
30,400 Northern States Power Co........ $ 870,200
43,500 PacifiCorp...................... 984,188
43,900 Peco Energy Corp................ 1,281,331
34,600 Texas Utilities Co.............. 1,440,225
------------
14,977,388
------------
UTILITIES -- GAS DISTRIBUTION -- 0.1%
19,700 Eastern Enterprises............. 844,638
8,600 ONEOK, Inc...................... 342,925
------------
1,187,563
------------
UTILITIES -- TELEPHONE -- 6.0%
94,300 Ameritech Corp.................. 4,231,713
139,600 AT&T Corp....................... 7,974,649
160,400 Bell Atlantic Corp.............. 7,318,249
103,600 BellSouth Corp.................. 6,954,150
88,800 GTE Corp........................ 4,939,500
17,800 MCI Communications Corp......... 1,034,625
182,200 SBC Communications, Inc......... 7,288,000
40,200 Sprint Corp..................... 2,834,100
49,997 US West, Inc.................... 2,349,859
53,400 WorldCom, Inc.*................. 2,586,563
------------
47,511,408
------------
TOTAL COMMON STOCKS............. 779,653,150
------------
(Cost $574,851,717)
INVESTMENT COMPANIES -- 2.5%
10,029,788 Dreyfus Cash Management Money
Market Fund..................... 10,029,788
9,826,991 Federated Prime Value
Obligations Money Market Fund... 9,826,991
------------
TOTAL INVESTMENT COMPANIES...... 19,856,779
------------
(Cost $19,856,779)
TOTAL INVESTMENTS -- 100.0%................. 799,509,929
(Cost $594,708,496)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.0%....................... 303,909
------------
TOTAL NET ASSETS -- 100.0%.................. $799,813,838
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $215,160,344
Unrealized depreciation............... (10,358,911)
------------
Net unrealized appreciation........... $204,801,433
============
(b) Security has been deposited as initial margin on open futures contract.
* Non-income producing security
ADR American Depositary Receipt
At June 30, 1998 the Fund's open future contracts were as follows:
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ----------------- ----------- -----------
66... Standard & Poor's $18,615,835 $18,859,500
500, 9/17/98
See Notes to Financial Statements.
32
51
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 98.4%
ADVERTISING -- 0.9%
51,000 Catalina Market Corp. *......... $ 2,648,813
45,400 Ha-Lo Industries, Inc. *........ 1,413,075
163,400 Sitel Corp. *................... 1,082,525
66,300 True North Communications....... 1,939,275
------------
7,083,688
------------
AEROSPACE & DEFENSE -- 0.3%
20,200 Alliant Techsystems, Inc. *..... 1,277,650
39,100 Newport News Shipbuilding....... 1,045,925
------------
2,323,575
------------
AEROSPACE/DEFENSE EQUIPMENT -- 0.6%
42,250 AAR Corp. ...................... 1,249,016
42,800 Aviall, Inc. *.................. 585,825
39,100 Banner Aerospace, Inc. *........ 503,413
3,600 Ducommun, Inc. *................ 72,000
38,800 Fairchild Corp., Class A *...... 783,275
56,200 Hexcel Corp. *.................. 1,271,524
3,000 Simula, Inc. *.................. 49,313
------------
4,514,366
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
119,900 Fedders Corp. .................. 801,831
50,400 Royal Appliance Manufacturing
Co. *........................... 315,000
------------
1,116,831
------------
AUDIO/VIDEO PRODUCTION -- 0.2%
48,280 Harman International Industries,
Inc. ........................... 1,858,780
148,369 Zenith Electronics Corp. *...... 44,511
------------
1,903,291
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 1.0%
51,800 Arvin Industries, Inc. ......... 1,880,987
23,100 Breed Technologies, Inc. *...... 353,719
71,500 Detroit Diesel Corp. *.......... 1,541,718
3,100 Excel Industries, Inc........... 44,369
37,500 Miller Industries, Inc. *....... 290,625
27,700 Standard Products Co. .......... 779,063
23,000 Superior Industries
International................... 648,313
64,975 Titan International Inc. ....... 1,104,575
35,500 Tower Automotive, Inc. *........ 1,522,062
5,800 Wabash National Corp. .......... 149,350
------------
8,314,781
------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.3%
16,200 Exide Corp. .................... 272,363
38,000 Standard Motor Products, Inc. *. 845,500
61,837 Wynn's International, Inc. ..... 1,190,362
------------
2,308,225
------------
BANKS -- MIDWEST -- 0.9%
63,900 CNB Bancshares, Inc. ........... 3,067,199
57,200 First Midwest Bancgroup, Inc. .. 2,515,013
68,200 Irwin Financial Corp. .......... 1,982,063
------------
7,564,275
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BANKS -- NORTHEAST -- 1.1%
45,045 Commerce Bancorp, Inc. ......... $ 2,635,133
11,100 Commercial Bank of New York..... 294,150
72,600 First Commonwealth Financial.... 2,050,950
57,200 Hubco, Inc. .................... 2,048,475
43,200 Independent Bank Corp. ......... 837,000
21,800 Sterling Bancorp................ 566,800
------------
8,432,508
------------
BANKS -- SOUTHEAST -- 0.7%
115,600 BancorpSouth, Inc. ............. 2,427,600
62,300 F & M National Corp. ........... 1,806,700
28,700 Trans Financial, Inc. .......... 1,646,663
------------
5,880,963
------------
BANKS -- SOUTHWEST -- 0.1%
32,800 Texas Regional Bancshares....... 1,074,200
------------
BANKS -- WEST -- 0.1%
25,826 First Republic Bancorp, Inc. *.. 932,964
------------
BEVERAGES -- ALCOHOLIC -- 0.0%
31,000 Boston Beer Company, Inc.-
Class A *....................... 395,250
------------
BEVERAGES -- SOFT DRINKS -- 0.0%
2,145 Buenos Aires Embotella Doro-
ADR *........................... 0
8,000 Pepsi-Cola Puerto Rico
Bottling Co. *.................. 60,000
------------
60,000
------------
BROADCASTING/CABLE -- 0.5%
45,500 BET Holdings, Inc. *............ 2,863,656
130,300 Spelling Entertainment Group *.. 1,221,563
------------
4,085,219
------------
BUILDING -- 0.7%
65,400 Calmat Co. ..................... 1,438,800
37,400 Centex Construction Products,
Inc. ........................... 1,439,900
40,800 Dravo Corp. *................... 374,850
22,700 Lone Star Industries, Inc. ..... 1,749,319
12,000 Medusa Corp. ................... 753,000
------------
5,755,869
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.4%
2,200 Butler Manufacturing Co. ....... 74,938
45,900 Dal-Tile International, Inc. *.. 450,394
1,700 Dayton Superior Corp. .......... 30,600
37,050 Elcor Corp. .................... 935,513
32,800 Nortek, Inc. *.................. 1,008,599
33,760 Republic Gypsum Co. ............ 708,960
4,400 Willbros Group, Inc. *.......... 68,750
------------
3,277,754
------------
Continued
33
52
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BUILDING -- HEAVY CONSTRUCTION -- 0.6%
24,600 Dycom Industries, Inc. *........ $ 830,250
5,200 Granite Construction, Inc. ..... 159,250
18,400 Jacobs Engineering Group,
Inc. *.......................... 591,100
123,000 Morrison Knudsen Corp. *........ 1,729,687
37,700 Stone & Webster, Inc. .......... 1,493,863
------------
4,804,150
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.2%
57,800 ABM Industries, Inc............. 1,611,175
4,100 American Residential Services *. 46,125
9,700 Rollins, Inc. .................. 198,850
4,100 Service Experts, Inc. *......... 141,450
------------
1,997,600
------------
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES -- 0.2%
30,500 Cavalier Homes, Inc. ........... 394,594
25,100 Coachmen Industries, Inc. ...... 655,737
38,300 Winnebago Industries, Inc. ..... 478,750
------------
1,529,081
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 1.0%
10,000 Beazer Homes USA, Inc. *........ 259,375
46,000 D. R. Horton, Inc. ............. 960,250
54,400 Kaufman & Broad Home Corp. ..... 1,727,199
23,900 M/I Schottenstein Homes, Inc. .. 516,838
24,900 MDC Holdings, Inc. ............. 491,775
35,400 Pulte Corp. .................... 1,057,575
21,800 Ryland Group, Inc. ............. 572,250
64,500 Standard-Pacific Corp. ......... 1,330,313
31,000 Toll Brothers, Inc. *........... 889,313
3,300 U.S. Home Corp. *............... 136,125
------------
7,941,013
------------
BUILDING PRODUCTS -- AIR CONDITIONING/
HEAT -- 0.2%
41,975 Watsco, Inc. ................... 1,476,995
------------
BUILDING PRODUCTS -- LIGHTING/FIXTURES -- 0.1%
23,000 Thomas Industries, Inc. ........ 562,063
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.3%
71,400 HomeBase, Inc. *................ 566,738
59,900 Hughes Supply, Inc.............. 2,193,837
------------
2,760,575
------------
BUSINESS INFORMATION -- 0.3%
71,900 Primark Corp. *................. 2,251,369
------------
BUSINESS SERVICES -- 1.2%
61,600 ADVO, Inc. *.................... 1,736,349
37,400 Budget Group, Inc.-Class A *.... 1,194,463
56,400 Caribiner International, Inc. *. 987,000
38,300 Fair Issac & Co., Inc. ......... 1,455,400
66,700 Franklin Covey Co. *............ 1,283,975
45,200 Healthplan Services Corp. ...... 791,000
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BUSINESS SERVICES (CONTINUED)
51,200 Interim Services, Inc. *........ $ 1,644,800
64,100 Physicians Resource Group,
Inc. *.......................... 292,456
------------
9,385,443
------------
CHEMICALS -- DIVERSIFIED -- 0.2%
47,800 ChemFirst, Inc. ................ 1,206,950
------------
CHEMICALS -- PLASTIC -- 0.5%
12,600 Borden Chemicals & Plastics LP.. 72,450
44,100 Geon Co. ....................... 1,011,544
61,700 Spartech Corp. ................. 1,322,693
57,400 Wellman, Inc. .................. 1,302,263
------------
3,708,950
------------
CHEMICALS -- SPECIALTY -- 1.2%
40,000 Bush Boake Allen, Inc. *........ 1,172,500
45,800 General Chemical Group, Inc. ... 1,270,950
55,600 Lawter International, Inc. ..... 604,650
30,400 LeaRonal, Inc. ................. 725,800
53,000 Lilly Industries, Inc. ......... 1,146,125
45,300 Material Sciences Corp. *....... 526,613
24,000 McWhorter Technologies, Inc. *.. 634,500
91,400 NL Industries, Inc. ............ 1,827,999
40,800 OM Group, Inc................... 1,683,000
5,000 TETRA Technologies, Inc. *...... 83,750
------------
9,675,887
------------
COAL -- 0.1%
49,100 Zeigler Coal Holding Co. ....... 840,838
------------
COMMERCIAL SERVICES -- 1.2%
35,100 CDI Corp. *..................... 938,925
4,800 InaCom Corp. *.................. 152,400
24,500 Leasing Solutions, Inc. *....... 704,375
40,100 Maximus, Inc. *................. 1,170,419
140,400 National Processing, Inc. *..... 1,500,525
65,900 Norrell Corp. .................. 1,313,881
85,800 NOVA Corp. *.................... 3,067,349
54,200 Personnel Group of America,
Inc. *.......................... 1,084,000
------------
9,931,874
------------
COMPUTER SOFTWARE -- 1.6%
27,700 Ardent Software, Inc. *......... 380,875
60,000 Excalibur Technologies Corp. *.. 660,000
133,000 Learning Co., Inc. *............ 3,940,124
34,500 MacNeal-Schwendler Corp. *...... 338,531
17,400 Microprose, Inc. *.............. 77,213
138,208 Midway Games, Inc. *............ 2,159,500
63,200 Platinum Software, Inc. *....... 1,540,500
29,400 Project Software & Development,
Inc. *.......................... 589,838
25,100 Rainbow Technologies, Inc. *.... 514,550
15,800 Software Spectrum, Inc. *....... 319,950
135,700 Vanstar Corp. *................. 1,976,131
------------
12,497,212
------------
Continued
34
53
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
COMPUTERS -- GRAPHICS -- 0.1%
105,366 Chyron Corp. *.................. $ 388,537
28,800 STB Systems, Inc. *............. 360,000
------------
748,537
------------
COMPUTERS -- INTEGRATED SYSTEMS -- 0.6%
104,000 Cerner Corp. *.................. 2,944,500
48,600 MICROS Systems, Inc. *.......... 1,608,356
------------
4,552,856
------------
COMPUTERS -- LOCAL AREA NETWORK -- 0.4%
149,600 Anixter International, Inc. *... 2,851,750
------------
COMPUTERS -- MEMORY DEVICES -- 0.3%
74,911 Applied Magnetics Corp. *....... 571,196
57,100 Hutchinson Technology, Inc. *... 1,555,975
------------
2,127,171
------------
COMPUTERS -- MICRO -- 0.2%
128,100 Data General Corp. *............ 1,913,494
------------
COMPUTERS -- OPTICAL RECOGNITION -- 0.2%
65,900 BancTec, Inc. *................. 1,523,938
------------
COMPUTERS -- PERIPHERAL EQUIPMENT -- 0.4%
37,000 Analogic Corp. ................. 1,655,750
31,100 ENCAD, Inc. *................... 423,738
44,900 Media 100, Inc. *............... 171,181
69,500 Mylex Corp. *................... 469,125
24,200 Printronix, Inc. *.............. 387,200
18,362 TransAct Technologies, Inc. *... 162,963
12,400 Tridex Corp. *.................. 89,900
------------
3,359,857
------------
COMPUTERS -- SERVICES -- 2.2%
105,000 Affiliated Computer
Services--Class A *............. 4,042,499
70,500 Analysts International Corp. ... 2,000,438
44,000 BA Merchant Services, Inc. *.... 888,250
65,300 Bell & Howell Co. *............. 1,685,556
24,500 Broadway & Seymour, Inc. *...... 137,813
20,400 BTG, Inc. *..................... 183,600
57,600 Computer Task Group, Inc. ...... 1,929,600
52,500 DBT Online, Inc. *.............. 1,417,500
30,100 Factset Research Systems *...... 978,250
114,400 PSINet, Inc. *.................. 1,487,200
82,000 Safeguard Scientifics, Inc. *... 3,418,374
------------
18,169,080
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.8%
61,200 Department 56, Inc. *........... 2,172,599
49,900 Ekco Group, Inc. *.............. 392,963
67,500 Jenny Craig, Inc. *............. 409,219
71,500 Jostens, Inc. .................. 1,724,938
46,950 Oneida, Ltd. ................... 1,437,844
------------
6,137,563
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
CONTAINERS -- METAL & GLASS -- 0.3%
17,900 BWAY Corp. *.................... $ 384,850
37,400 United States Can Corp. *....... 549,313
43,700 Zero Corp. ..................... 1,250,912
------------
2,185,075
------------
CONTAINERS -- PAPER & PLASTIC -- 0.3%
58,700 ACX Technologies, Inc. *........ 1,276,725
95,400 Longview Fibre Co. ............. 1,359,450
------------
2,636,175
------------
COSMETICS & TOILETRIES -- 0.4%
118,000 Playtex Products, Inc. *........ 1,880,625
39,400 Windmere-Durable
Holding, Inc. *................. 1,411,013
------------
3,291,638
------------
DATA PROCESSING & REPRODUCTION -- 0.5%
38,400 Choicepoint, Inc. *............. 1,944,000
90,100 Pegasystems, Inc. *............. 2,443,963
------------
4,387,963
------------
DIVERSIFIED -- 1.4%
33,850 Allied Products Corp. .......... 717,197
17,700 Chemed Corp. ................... 602,906
38,400 Clarcor, Inc. .................. 806,400
45,100 Federal Signal Corp. ........... 1,096,494
60,800 Gencorp, Inc. .................. 1,535,200
41,700 Griffon Corp. *................. 534,281
17,200 Imation Corp. *................. 284,875
23,350 Manitowoc Co., Inc. ............ 942,756
38,000 MascoTech, Inc. ................ 912,000
31,500 Standex International Corp. .... 933,188
84,300 Triarc Cos., Inc. *............. 1,849,330
30,720 U.S. Industries, Inc. .......... 760,320
------------
10,974,947
------------
ELECTRICAL & ELECTRONIC -- 0.3%
36,600 MDU Resources Group, Inc. ...... 1,306,162
29,400 Sigcorp, Inc. .................. 942,638
------------
2,248,800
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 1.5%
279,700 Cypress Semiconductor Corp. *... 2,325,005
115,000 General Semiconductor, Inc. *... 1,135,625
36,900 Integrated Circuit Systems,
Inc. ........................... 613,463
158,500 International Rectifier Corp. *. 1,347,250
128,600 MEMC Electronic Materials,
Inc. *.......................... 1,334,225
86,900 PMC-Sierra, Inc. *.............. 4,073,437
72,700 Unitrode Corp. *................ 836,050
------------
11,665,055
------------
ELECTRICAL EQUIPMENT -- 0.3%
17,300 C&D Technologies, Inc. ......... 1,003,400
27,100 United Illuminating Co. ........ 1,371,938
------------
2,375,338
------------
Continued
35
54
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ELECTRONIC -- CONNECTORS -- 0.3%
131,400 Berg Electronics Corp. *........ $ 2,570,513
------------
ELECTRONIC -- MANUFACTURING &
MACHINERY -- 0.4%
70,300 Kulicke & Soffa Industries,
Inc. *.......................... 1,195,100
46,400 PRI Automation, Inc. *.......... 791,700
48,100 SpeedFam International, Inc. *.. 886,844
27,600 Watkins-Johnson Co.............. 717,600
------------
3,591,244
------------
ELECTRONIC -- MILITARY -- 0.1%
29,800 ESCO Electronics Corp. *........ 566,200
36,100 United Industrial Corp. ........ 469,300
------------
1,035,500
------------
ELECTRONIC -- MISCELLANEOUS
COMPONENTS -- 1.6%
24,100 ACT Manufacturing, Inc. *....... 228,950
83,600 BMC Industries, Inc. ........... 731,500
29,800 California Amplifier, Inc. *.... 55,875
46,056 CTS Corp. ...................... 1,358,652
24,100 Del Global Technologies
Corp. *......................... 241,000
32,500 Hadco Corp. *................... 757,656
44,800 Innovex, Inc. .................. 585,200
61,200 Littlefuse, Inc. *.............. 1,545,300
57,300 Oak Industries, Inc. *.......... 2,026,987
63,800 OEA, Inc. *..................... 1,020,800
37,700 Park Electrochemical Corp. ..... 796,413
73,700 Photronics Corp. *.............. 1,626,006
40,000 Plexus Corp. *.................. 795,000
23,500 RadiSys Corp. *................. 505,250
17,900 Reptron Electronics, Inc. *..... 200,256
------------
12,474,845
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.7%
74,000 Artesyn Technologies, Inc. *.... 1,184,000
87,200 Cable Design Technologies *..... 1,798,500
25,150 Dynatech Corporation-W/I *...... 78,468
50,900 Technitrol, Inc. ............... 2,032,819
3,200 Triumph Group, Inc. *........... 134,400
------------
5,228,187
------------
ELECTRONIC MEASURING MACHINES -- 0.5%
58,200 Fluke Corp. .................... 1,913,325
82,800 Genrad, Inc. *.................. 1,635,300
32,500 Microtest, Inc. *............... 148,281
------------
3,696,906
------------
ELECTRONIC PARTS -- DISTRIBUTION -- 0.4%
29,418 Bell Industries, Inc. *......... 334,630
86,200 Kent Electronics Corp. *........ 1,578,537
51,500 Marshall Industries *........... 1,403,375
29,200 Nu Horizons Electronics Corp. *. 175,200
------------
3,491,742
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ELECTRONIC PRODUCTS -- MISCELLANEOUS -- 1.3%
32,900 Aeroflex, Inc. *................ $ 341,338
83,900 Allen Telecom, Inc. *........... 975,338
23,500 American Precision Industries *. 358,375
104,600 Ametek, Inc. ................... 3,066,087
61,900 Electronic Retailing Systems
International, Inc. *........... 177,963
26,400 Franklin Electronic Publishers,
Inc. *.......................... 264,000
51,400 Integrated Process Equipment *.. 578,250
31,700 Kollmorgen Corp. ............... 635,981
34,100 Kopin Corp. *................... 656,425
96,500 MagneTek, Inc. *................ 1,519,874
39,900 Recoton Corp. *................. 1,336,649
25,300 Three-Five Systems, Inc. *...... 441,169
------------
10,351,449
------------
ENGINEERING -- RESEARCH & DEVELOPMENT
SERVICES -- 0.1%
26,490 URS Corp. *..................... 450,330
------------
ENTERTAINMENT -- 0.3%
31,430 Loews Cineplex Entertainment *.. 402,697
4,700 Scientific Games Holdings
Corp. *......................... 108,100
63,400 Vail Resorts, Inc. *............ 1,688,025
------------
2,198,822
------------
FERTILIZERS -- 0.4%
54,636 Mississippi Chemical Corp. ..... 898,079
138,300 Terra Industries, Inc. ......... 1,244,700
6,200 Terra Nitrogen Company LP....... 155,000
16,100 The Scotts Company *............ 599,725
------------
2,897,504
------------
FINANCIAL -- CONSUMER LOANS -- 0.8%
83,600 AmeriCredit Corp. *............. 2,983,474
113,500 Arcadia Financial Ltd. *........ 858,344
47,800 Student Loan Corp. ............. 2,249,588
------------
6,091,406
------------
FINANCIAL -- INVESTMENT BANKER/BROKER -- 1.2%
35,000 Ameritrade Holding Corp.-
Class A *....................... 945,000
38,750 Dain Rauscher Corp. ............ 2,121,563
126,700 E*Trade Group, Inc. *........... 2,906,180
100,600 Everen Capital Corp. ........... 2,816,800
28,600 Southwest Securities Group,
Inc. ........................... 643,500
------------
9,433,043
------------
FINANCIAL -- INVESTMENT BANKERS -- 1.1%
28,200 Advest Group, Inc. ............. 814,275
17,900 Interstate/Johnson Lane, Inc. .. 563,850
62,800 Jefferies Group, Inc. .......... 2,574,800
59,300 McDonald & Co. Investments,
Inc. ........................... 1,945,781
Continued
36
55
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FINANCIAL -- INVESTMENT BANKERS (CONTINUED)
100,325 Morgan Keegan, Inc. ............ $ 2,595,909
39,500 National Discount Brokers
Group *......................... 419,688
------------
8,914,303
------------
FINANCIAL -- LEASING COMPANY -- 0.9%
30,900 Cort Business Services Corp. *.. 973,350
36,200 DVI, Inc. *..................... 923,100
43,000 Rental Service Corp. *.......... 1,445,875
100,400 U S Rentals, Inc. *............. 3,959,525
------------
7,301,850
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.0%
82,800 Aames Financial Corp. .......... 1,138,500
34,100 Delta Financial Corp. *......... 626,588
109,100 Imperial Credit Industries,
Inc. *.......................... 2,563,849
56,700 Southern Pacific Funding
Corp. *......................... 889,481
31,000 Triad Guaranty, Inc. *.......... 1,054,000
88,100 United Cos. Financial Corp. .... 1,376,563
------------
7,648,981
------------
FINANCIAL -- SAVINGS & LOAN -- 1.2%
91,486 Downey Financial Corp. ......... 2,990,448
101,300 Firstbank Puerto Rico........... 2,633,799
34,700 Firstfed Financial Corp. *...... 1,804,400
17,700 Maryland Federal Bancorp........ 701,363
18,100 PonceBank....................... 467,206
80,273 Westcorp........................ 1,103,754
------------
9,700,970
------------
FINANCIAL -- SMALL BUSINESS INVESTMENT CO. &
COMMERCIAL -- 0.2%
66,000 Sirrom Capital Corp. ........... 1,716,000
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 0.6%
28,500 Healthcare Financial Partners *. 1,747,406
105,000 Paymentech, Inc. *.............. 2,159,063
144,500 Phoenix Investment Partners..... 1,255,344
------------
5,161,813
------------
FOOD -- DIVERSIFIED -- 0.7%
54,400 Earthgrains Co. ................ 3,039,599
4,400 Morrison Health Care, Inc....... 81,400
39,400 Ralcorp Holding, Inc. *......... 743,675
41,500 Smucker (J.M.) Co. ............. 1,011,563
2,900 Tasty Baking Co. ............... 45,131
64,020 Zapata Corp. ................... 632,198
------------
5,553,566
------------
FOOD -- FLOUR & GRAIN -- 0.2%
50,600 International Multi-Foods
Corp. .......................... 1,391,500
------------
FOOD -- MEAT PRODUCTS -- 0.2%
77,500 Pilgrim's Pride Corp. .......... 1,550,000
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FOOD ITEMS -- WHOLESALE -- 0.4%
42,500 Fleming Co., Inc. .............. $ 746,406
69,436 U.S. Foodservices *............. 2,434,600
------------
3,181,006
------------
FOREST PRODUCTS -- 0.1%
12,400 Crown Pacific Partners, LP...... 313,875
3,700 Deltic Timber Corp. ............ 92,731
------------
406,606
------------
FUNERAL SERVICES -- 0.1%
23,000 Equity Corp. International *.... 552,000
------------
FURNITURE -- 0.2%
40,387 Bush Industries, Inc. .......... 878,417
3,900 Falcon Products, Inc. .......... 49,238
47,700 O'Sullivan Industries *......... 667,800
24,900 Shelby Williams Industries,
Inc. ........................... 373,500
------------
1,968,955
------------
GLASS PRODUCTS -- 0.2%
36,200 Libbey, Inc. ................... 1,386,913
------------
HEALTH CARE -- 0.3%
108,000 IDEXX Laboratories, Inc. *...... 2,686,500
------------
HOTELS & LODGING -- 0.7%
37,800 Capstar Hotel Co. *............. 1,058,400
54,450 Marcus Corp. ................... 973,294
107,500 Prime Hospitality Corp. *....... 1,874,532
79,900 Red Roof Inns, Inc. *........... 1,353,306
15,500 Sunburst Hospitality Corp. *.... 107,531
------------
5,367,063
------------
INDUSTRIAL -- AUTOMOTIVE/ROBOTICS -- 0.4%
56,800 Esterline Technologies Corp. ... 1,167,950
76,000 Gerber Scientific, Inc. ........ 1,729,000
35,500 Medar, Inc. *................... 75,438
------------
2,972,388
------------
INSTRUMENTS -- CONTROL -- 0.5%
93,200 Roper Industries, Inc. ......... 2,434,850
85,500 Watts Industries, Inc.-Class A.. 1,784,813
------------
4,219,663
------------
INSTRUMENTS -- SCIENTIFIC -- 0.6%
73,400 Dionex Corp. *.................. 1,935,925
98,200 EG&G, Inc....................... 2,946,000
------------
4,881,925
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.6%
76,800 John Alden Financial Corp. ..... 1,689,600
18,600 Penn Treaty American Corp. *.... 585,900
79,200 Penncorp Financial Group, Inc. . 1,623,600
31,937 RLI Corp. ...................... 1,299,437
------------
5,198,537
------------
Continued
37
56
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
INSURANCE -- BROKERS -- 0.6%
58,500 Arthur J. Gallagher & Co. ...... $ 2,617,875
43,300 Blanch (E.W.) Holdings, Inc. ... 1,591,275
43,800 Hilb, Rogal & Hamilton Co. ..... 684,375
------------
4,893,525
------------
INSURANCE -- LIFE -- 2.2%
126,700 American Annuity Group, Inc. *.. 3,048,719
90,200 American Heritage Life
Investment Corp. ............... 2,085,875
51,554 Amerus Life Holdings, Inc. ..... 1,669,061
53,040 Delphi Financial Group *. ...... 2,986,815
41,800 Life Re Corp. .................. 3,464,174
47,300 Life USA Holding, Inc. ......... 611,944
73,500 Nationwide Financial Services... 3,748,499
------------
17,615,087
------------
INSURANCE -- MULTI-LINE -- 1.3%
99,300 Allied Group, Inc. ............. 4,648,480
91,600 Enhance Financial Services
Group, Inc. .................... 3,091,500
108,200 FBL Financial Group, Inc. --
Class A......................... 2,772,625
------------
10,512,605
------------
INSURANCE -- PROPERTY & CASUALTY -- 4.1%
49,600 Acceptance Insurance Cos. *..... 1,218,300
42,200 Capital Re Corp. ............... 3,022,574
25,600 Centris Group, Inc. ............ 316,800
21,300 Chartwell Re Corp. ............. 627,019
32,600 Executive Risk, Inc. ........... 2,404,250
51,599 Fidelity National Financial,
Inc. ........................... 2,054,285
45,950 First American Financial Corp. . 4,135,499
26,800 FPIC Insurance Group, Inc. *.... 901,150
85,118 Frontier Insurance Group, Inc. . 1,920,475
59,700 GAINSCO, Inc. .................. 402,975
9,500 Gryphon Holdings, Inc. *........ 156,750
103,500 HCC Insurance Holdings, Inc. ... 2,277,000
43,700 Highlands Insurance Group *..... 808,450
69,900 Lasalle Re Holdings Ltd. ....... 2,647,463
39,100 MMI Cos., Inc. ................. 904,188
59,900 NAC Re Corp. ................... 3,197,162
15,700 Penn--America Group, Inc. ...... 211,950
26,000 Philadelphia Consolidated
Holding Corp. *................. 546,000
40,400 PXRE Corp. ..................... 1,212,000
28,900 SCPIE Holdings, Inc. ........... 978,988
26,900 Symons International Group *.... 504,375
54,050 Vesta Insurance Group, Inc. .... 1,151,941
58,300 Zenith National Insurance Co. .. 1,643,331
------------
33,242,925
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
LASERS -- SYSTEMS/COMPONENTS -- 0.6%
64,900 Coherent, Inc. *................ $ 1,113,441
16,200 Cyberoptics Corp. *............. 232,875
30,800 Electro Scientific Industries,
Inc. *.......................... 972,125
47,500 VISX, Inc. *.................... 2,826,250
------------
5,144,691
------------
LEISURE & RECREATION PRODUCTS -- 0.9%
21,200 Coastcast Corp. *............... 381,600
38,000 Huffy Corp. .................... 688,750
47,530 K2, Inc. ....................... 837,716
112,500 Oakley, Inc. *.................. 1,462,500
42,400 Polaris Industries, Inc. ....... 1,595,300
21,900 Steinway Musical Instruments *.. 706,275
76,400 Sturm, Ruger & Co., Inc. ....... 1,279,700
------------
6,951,841
------------
LEISURE & RECREATION SERVICES -- 0.1%
32,100 Carmike Cinemas, Inc. *......... 864,694
------------
LEISURE & RECREATION/GAMING -- 0.9%
96,900 Aztar Corp. *................... 660,131
173,400 Boyd Gaming Corp. *............. 997,050
101,550 Grand Casinos, Inc. *........... 1,700,962
27,900 Harveys Casino Resorts.......... 756,788
37,200 Hollywood Park, Inc. *.......... 469,650
25,300 Jackpot Enterprises, Inc. *..... 317,831
48,100 Rio Hotel & Casino, Inc. *...... 907,888
56,300 Station Casinos, Inc. *......... 826,906
48,700 Trump Hotels & Casino Resorts,
Inc. *.......................... 343,944
52,800 WMS Industries, Inc. *.......... 221,100
------------
7,202,250
------------
LINEN SUPPLY & RELATED -- 0.2%
26,000 Angelica Corp. ................. 546,000
27,900 Unifirst Corp. ................. 704,475
------------
1,250,475
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.4%
60,000 Applied Power, Inc. ............ 2,062,500
23,600 Brown & Sharpe Manufacturing
Co. *........................... 283,200
20,400 Gleason Corp. .................. 573,750
------------
2,919,450
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.4%
40,400 CMI Corp., Class A.............. 287,850
35,150 Commercial Intertech Corp. ..... 637,094
62,300 JLG Industries, Inc. ........... 1,257,681
40,600 Terex Corp. *................... 1,157,100
------------
3,339,725
------------
Continued
38
57
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MACHINERY -- DIVERSIFIED -- 0.1%
22,500 Cascade Corp. .................. $ 410,625
3,800 Gardner Denver Machinery,
Inc. *.......................... 104,975
------------
515,600
------------
MACHINERY -- ELECTRICAL -- 0.6%
65,800 Baldor Electric Co. ............ 1,607,988
28,157 Kuhlman Corp. .................. 1,113,961
38,600 Smith (A.O.) Corp. ............. 1,995,137
------------
4,717,086
------------
MACHINERY -- GENERAL INDUSTRIAL -- 1.1%
48,466 Albany International Corp.,
Class A......................... 1,160,167
42,725 Applied Industrial Technology,
Inc. ........................... 878,533
35,400 Chart Industries, Inc. ......... 845,175
52,900 Global Industrial Technologies,
Inc. *.......................... 760,438
48,087 Graco, Inc. .................... 1,677,034
62,425 Idex Corp. ..................... 2,153,662
83,566 Paxar Corp. *................... 961,009
27,700 Scotsman Industries, Inc. ...... 768,675
------------
9,204,693
------------
MACHINERY -- MATERIAL HANDLING -- 0.3%
62,600 Interlake Corp. *............... 266,050
14,600 Nacco Industries, Inc. ......... 1,887,050
------------
2,153,100
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.6%
64,400 Affymetrix, Inc. *.............. 1,549,624
57,900 Alkermes, Inc. *................ 1,034,963
90,800 Creative Biomolecules, Inc. *... 436,975
81,400 Millennium Pharmaceuticals *.... 1,149,775
52,889 Molecular Biosystems, Inc. *.... 380,140
------------
4,551,477
------------
MEDICAL -- BIOTECHNOLOGY -- 0.1%
29,800 Cryolife, Inc. *................ 469,350
------------
MEDICAL -- DRUGS -- 1.1%
66,200 Alpharma, Inc. ................. 1,456,400
131,400 Carter-Wallace, Inc. ........... 2,373,412
54,000 Guilford Pharmaceuticals *...... 951,750
91,900 Ligand Pharmaceuticals *........ 1,183,213
39,900 Medicus Pharmaceuticals, Inc. *. 1,456,350
73,060 Vitalink Pharmacy Services,
Inc. *.......................... 1,611,886
------------
9,033,011
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.6%
131,900 Mid Atlantic Medical Services,
Inc. *.......................... 1,516,850
41,200 PHP Healthcare Corp. *.......... 303,850
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
1,100 Rightchoice Managed Care *...... $ 13,956
80,250 Sierra Health Services, Inc. *.. 2,021,297
44,900 United Wisconsin Services,
Inc. ........................... 1,274,038
------------
5,129,991
------------
MEDICAL -- HOSPITAL -- 0.4%
34,900 Curative Health Services, Inc. . 994,650
165,400 Paracelsus Health *............. 516,875
46,900 Pediatrix Medical Group, Inc. *. 1,744,094
------------
3,255,619
------------
MEDICAL -- HOSPITAL SERVICES -- 0.5%
81,700 Magellan Health Services,
Inc. *.......................... 2,073,138
89,400 Quest Diagnostics, Inc. *....... 1,955,625
------------
4,028,763
------------
MEDICAL -- NURSING HOMES -- 1.0%
25,000 American Retirement Corp. *..... 443,750
70,600 Integrated Health Services,
Inc. ........................... 2,647,500
166,292 Paragon Health Network *........ 2,681,459
35,100 Retirement Care Associates *.... 254,475
140,700 Sun Healthcare Group, Inc. *.... 2,066,531
------------
8,093,715
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 1.2%
144,400 Apria Healthcare Group, Inc. *.. 965,675
126,900 Coram Healthcare Corp. *........ 245,869
99,300 Genesis Health Ventures, Inc. *. 2,482,500
52,400 National Surgery Centers,
Inc. *.......................... 1,522,875
172,700 NovaCare, Inc. *................ 2,029,225
124,800 Orthodontic Centers of
America *....................... 2,612,999
------------
9,859,143
------------
MEDICAL -- WHOLESALE DRUG -- 0.3%
47,066 Bindley Western Industries,
Inc. ........................... 1,553,178
11,000 Express Scripts, Inc.-Class A *. 886,875
------------
2,440,053
------------
MEDICAL EQUIPMENT & SUPPLIES -- 0.2%
41,000 CONMED Corp. *.................. 943,000
55,200 Respironics, Inc. *............. 859,050
------------
1,802,050
------------
MEDICAL INSTRUMENTS -- 0.3%
82,000 Acuson Corp. *.................. 1,491,375
72,690 Graham-Field Health Products,
Inc. *.......................... 408,881
38,800 OEC Medical Systems, Inc. *..... 873,000
------------
2,773,256
------------
MEDICAL PRODUCTS -- 0.5%
41,600 Diagnostic Products Corp. ...... 1,198,600
83,200 Haemonetics Corp. *............. 1,331,200
24,800 Maxxim Medical, Inc. *.......... 719,200
96,200 Owens & Minor, Inc. ............ 962,000
------------
4,211,000
------------
Continued
39
58
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL SUPPLIES -- 0.5%
58,000 Ocular Sciences, Inc. *......... $ 1,885,000
69,200 Sola International, Inc. *...... 2,261,975
------------
4,146,975
------------
MEDICAL/DENTAL SUPPLIES -- 0.7%
82,000 Ballard Medical Products........ 1,476,000
41,000 Cooper Cos, Inc. *.............. 1,493,938
57,100 Sunrise Medical, Inc. *......... 856,500
50,000 West Co., Inc. ................. 1,415,625
------------
5,242,063
------------
METAL -- GOLD -- 0.1%
91,100 Hecla Mining Co. *.............. 483,969
10,000 Meridian Gold, Inc. *........... 21,250
------------
505,219
------------
METAL -- IRON -- 0.2%
24,000 Cleveland Cliffs, Inc. ......... 1,287,000
------------
METAL -- MISCELLANEOUS -- 0.1%
37,400 Brush Wellman, Inc. ............ 769,038
------------
METAL -- NON-FERROUS -- 0.2%
135,000 Kaiser Aluminum Corp. *......... 1,290,938
------------
METAL -- PROCESSING & FABRICATION -- 0.6%
25,000 Amcast Industrial Corp. ........ 465,625
30,300 Chase Industries, Inc. *........ 598,425
35,233 Commercial Metals Co. .......... 1,092,223
24,600 Huntco, Inc., Class A........... 292,125
40,000 Mueller Industries, Inc. *...... 1,485,000
32,500 Wolverine Tube, Inc. *.......... 1,235,000
------------
5,168,398
------------
METAL -- SILVER -- 0.0%
36,400 Coeur d'Alene Mines Corp. *..... 245,700
------------
METAL PRODUCTS -- DISTRIBUTION -- 0.2%
32,950 Reliance Steel & Aluminum Co. .. 1,272,694
------------
METAL PRODUCTS -- FASTENERS -- 0.2%
27,500 SPS Technologies, Inc. *........ 1,608,750
13,800 TransTechnology Corp. .......... 354,488
------------
1,963,238
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.1%
68,600 In Focus Systems, Inc. *........ 484,488
------------
OFFICE SUPPLIES & FORMS -- 0.9%
38,400 American Business Products,
Inc. ........................... 787,200
51,200 American Pad & Paper Co. *...... 230,400
58,300 BT Office Products
International *................. 787,050
34,000 Daisytek International Corp.
*............................... 864,875
29,700 Ennis Business Forms, Inc. ..... 345,263
32,200 Hunt Manufacturing Corp. ....... 762,738
39,900 John H. Harland Co. ............ 675,806
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OFFICE SUPPLIES & FORMS (CONTINUED)
33,800 New England Business Service,
Inc. ........................... $ 1,090,050
43,400 Standard Register Co. .......... 1,535,274
------------
7,078,656
------------
OIL & GAS -- DRILLING -- 0.2%
20,200 Atwood Oceanics, Inc. *......... 804,213
165,800 Parker Drilling Co. *........... 1,170,962
------------
1,975,175
------------
OIL -- FIELD SERVICES -- 0.8%
28,400 Hanover Compressor Co. *........ 768,575
47,800 Oceaneering International,
Inc. *.......................... 848,450
67,600 RPC Energy Services, Inc. ...... 845,000
23,600 Seacor Holdings, Inc. *......... 1,446,974
54,600 Seitel, Inc. *.................. 883,838
73,800 Unit Corp. *.................... 447,413
23,100 Veritas DGC, Inc. *............. 1,153,556
------------
6,393,806
------------
OIL -- PRODUCTION/PIPELINE -- 0.6%
46,800 Aquila Gas Pipeline Corp. ...... 573,300
101,200 Kaneb Services, Inc. *.......... 550,275
38,100 Leviathan Gas Pipe Line
Partners, LP.................... 1,114,425
31,600 Northern Border Partners, LP.... 1,007,250
13,200 TEPPCO Partners................. 712,800
65,000 Western Gas Resources, Inc. .... 950,625
------------
4,908,675
------------
OIL -- U.S. EXPLORATION &
PRODUCTION -- 2.1%
27,400 Barrett Resources Corp. *....... 1,025,788
31,300 Belco Oil & Gas Corp. *......... 269,963
30,600 Benton Oil & Gas Co. *.......... 325,125
66,000 Berry Petroleum Co. ............ 858,000
59,700 Cabot Oil & Gas Corp. .......... 1,194,000
100,800 Chesapeake Energy Corp. ........ 403,200
17,500 Comstock Resources, Inc. *...... 130,156
64,150 Cross Timbers Oil Co. .......... 1,222,859
27,000 Forcenergy, Inc. *.............. 480,938
30,100 Forest Oil Corp. *.............. 430,806
7,200 Houston Exploration Co. *....... 165,150
53,000 HS Resources, Inc. *............ 771,813
71,900 KCS Energy, Inc. ............... 822,356
3,800 Key Production Company,
Inc. *.......................... 45,125
6,300 Lomak Petroleum, Inc. .......... 65,756
71,500 Louis Dreyfus Natural Gas *..... 1,354,030
24,900 Meridian Resource Corp. *....... 175,856
57,700 Newfield Exploration Co. *...... 1,435,287
32,000 Nuevo Energy Co. *.............. 1,028,000
66,000 Snyder Oil Corp. ............... 1,315,875
24,000 Stone Energy Corp. *............ 853,500
50,036 Swift Energy Co. *.............. 797,449
Continued
40
59
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OIL -- U.S. EXPLORATION &
PRODUCTION (CONTINUED)
83,700 Vintage Petroleum, Inc. ........ $ 1,579,837
24,700 Wiser Oil Co. .................. 273,244
------------
17,024,113
------------
OIL -- U.S. INTEGRATED -- 0.0%
13,600 Howell Corp. ................... 147,900
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.1%
51,300 Daniel Industries, Inc. ........ 974,700
------------
OIL REFINING -- 0.5%
5,800 Eott Energy Partners, LP........ 86,638
77,400 Frontier Oil Corp. *............ 648,225
33,500 Giant Industries, Inc. ......... 582,063
63,500 Quaker State Corp. ............. 1,039,812
55,100 Tesoro Petroleum Corp. *........ 874,712
21,600 Tokheim Corp. *................. 442,800
27,050 World Fuel Services Corp. ...... 468,303
------------
4,142,553
------------
PAPER & RELATED PRODUCTS -- 0.5%
70,800 Buckeye Technologies, Inc. *.... 1,668,225
43,300 Chesapeake Corp. ............... 1,685,994
2,100 Fibermark, Inc. ................ 33,600
38,700 Pope & Talbot, Inc. ............ 452,306
12,200 Rock-Tenn Company............... 153,263
------------
3,993,388
------------
POLLUTION CONTROL -- 0.6%
78,700 Calgon Carbon Corp. ............ 782,080
47,500 Dames & Moore, Inc. ............ 611,563
34,700 Imco Recycling, Inc. ........... 641,950
51,239 International Technology
Corp. *......................... 486,771
15,700 Ionics, Inc. *.................. 578,938
200,000 Laidlaw Environmental Services,
Inc. *.......................... 724,999
41,000 Lydall, Inc. *.................. 597,063
28,200 Osmonics, Inc. *................ 338,400
------------
4,761,764
------------
PRINTING -- COMMERCIAL -- 0.3%
36,800 American Banknote Corp. *....... 112,700
14,300 Consolidated Graphics, Inc. *... 843,700
62,300 Mail-Well, Inc. *............... 1,351,131
------------
2,307,531
------------
PROTECTION -- SAFETY -- 0.3%
42,100 Borg-Warner Security Corp. *.... 952,513
28,400 Checkpoint Systems, Inc. *...... 401,150
46,900 Wackenhut Corrections Corp. *... 1,105,081
------------
2,458,744
------------
PUBLISHING -- BOOKS -- 0.1%
46,300 Thomas Nelson, Inc. ............ 619,263
------------
PUBLISHING -- NEWSPAPERS -- 0.2%
107,200 Journal Register Co. *.......... 1,795,600
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PUBLISHING -- PERIODICALS -- 0.3%
117,400 American Media, Inc. *.......... $ 777,775
26,600 Big Flower Holdings, Inc. *..... 798,000
41,100 Playboy Enterprises, Inc. *..... 729,525
------------
2,305,300
------------
REAL ESTATE -- 0.9%
46,300 Castle & Cooke, Inc. *.......... 879,700
32,100 CB Richard Ellis Services *..... 1,073,344
65,100 Grubb & Ellis Co. *............. 927,675
107,300 Insignia Financial Group,
Inc. *.......................... 2,628,850
58,300 Webb (Del) Corp. ............... 1,512,156
------------
7,021,725
------------
RESTAURANTS -- 1.0%
6,700 Consolidated Products, Inc. *... 141,538
30,600 Cooker Restaurant Corp. ........ 298,350
116,400 Foodmaker, Inc. *............... 1,964,249
54,300 Host Marriott Services Corp. *.. 790,744
69,700 Luby's Cafeteria, Inc. ......... 1,224,106
19,000 Morton's Restaurant Group,
Inc. *.......................... 457,188
45,000 Ruby Tuesday, Inc. ............. 697,500
60,200 Sbarro, Inc. *.................. 1,632,925
65,500 Shoney's, Inc. *................ 229,250
73,900 TCBY Enterprises, Inc. ......... 678,956
------------
8,114,806
------------
RETAIL -- APPAREL/SHOES -- 1.4%
60,700 Ann Taylor Stores Corp. *....... 1,286,081
132,480 Burlington Coat Factory
Warehouse Corp. *............... 2,980,799
107,000 CML Group, Inc. *............... 207,313
40,000 Cole (Kenneth) Productions,
Inc. *.......................... 1,035,000
56,100 Footstar, Inc. *................ 2,692,800
55,500 Genesco, Inc. *................. 905,344
52,200 Syms Corp. *.................... 743,850
42,400 Talbots Inc. ................... 1,110,350
18,150 The Buckle, Inc. *.............. 535,425
------------
11,496,962
------------
RETAIL -- AUTOMOBILE -- 0.1%
9,300 Circuit City Stores-Carmax *.... 94,744
6,000 Cross-Continent Auto Retailer *. 41,625
17,700 United Auto Group, Inc. *....... 387,187
------------
523,556
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
73,900 Handleman Co. *................. 849,850
------------
RETAIL -- DISCOUNT -- 0.5%
25,300 99 Cents Only Stores *.......... 1,049,950
57,000 Shopko Stores, Inc. *........... 1,938,000
62,600 Smart & Final, Inc. ............ 1,072,025
------------
4,059,975
------------
RETAIL -- GENERAL MERCHANDISE -- 1.1%
55,900 Cash America Intl., Inc. ....... 852,475
35,200 Cole National Corp. *........... 1,408,000
54,700 Fabri-Centers of America,
Inc. *.......................... 1,497,413
Continued
41
60
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
RETAIL -- GENERAL MERCHANDISE (CONTINUED)
63,500 Hancock Fabrics, Inc. .......... $ 793,750
69,000 Musicland Stores Corp. *........ 966,000
64,350 Russ Berrie & Co., Inc. ........ 1,608,750
95,550 The Sports Authority, Inc. *.... 1,427,278
------------
8,553,666
------------
RETAIL -- HOME FURNISHINGS -- 0.7%
96,500 Bombay Co., Inc. *.............. 458,375
104,000 Heilig Meyers Co. .............. 1,280,500
30,400 La-Z-Boy, Inc. ................. 1,717,600
44,200 Linens 'n Things, Inc. *........ 1,350,863
33,800 Maxim Group, Inc. *............. 671,775
------------
5,479,113
------------
RETAIL -- JEWELRY -- 0.6%
98,800 Claire's Stores, Inc. .......... 2,025,400
75,800 Zale Corp. *.................... 2,411,388
------------
4,436,788
------------
RETAIL -- MAIL ORDER -- 0.5%
32,100 Brylane, Inc. *................. 1,476,600
52,900 Enesco Group, Inc. ............. 1,626,675
65,900 Global Directmail, Inc. *....... 831,988
56,800 National Media Corp. *.......... 63,900
------------
3,999,163
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
73,500 Value City Department Stores,
Inc. *.......................... 1,543,500
------------
RETAIL -- SPECIAL LINE -- 0.0%
2,400 Heritage Propane Partners LP.... 57,450
3,500 National Propane Partners LP.... 54,469
------------
111,919
------------
RETAIL -- SUPERMARKETS -- 0.4%
39,500 Dominick's Supermarkets, Inc. *. 1,762,688
32,100 Penn Traffic Co. *.............. 106,331
86,000 Ruddick Corp. .................. 1,558,750
------------
3,427,769
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.2%
48,900 Discount Auto Parts, Inc. *..... 1,271,400
41,000 Tyler Corp. *................... 425,375
------------
1,696,775
------------
RUBBER & PLASTICS -- 0.1%
34,300 Furon Co. ...................... 621,688
------------
SHOES & RELATED APPAREL -- 0.6%
25,175 Barry (R.G.) Corp. *............ 415,388
49,800 Brown Group, Inc. .............. 989,775
45,300 Converse, Inc. *................ 249,150
80,400 Stride Rite Corp. .............. 1,211,025
29,900 Timberland Co., Class A *....... 2,150,931
------------
5,016,269
------------
SOAP & CLEANING PREPARATIONS -- 0.2%
54,800 Church & Dwight Co., Inc. ...... 1,774,150
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
STEEL -- PIPES & TUBES -- 0.2%
41,800 NS Group, Inc. *................ $ 423,225
31,900 Quanex Corp. ................... 966,969
12,300 Shaw Group, Inc. *.............. 319,800
------------
1,709,994
------------
STEEL -- PRODUCERS -- 0.9%
21,000 ACME Metals, Inc. *............. 105,000
197,600 Armco, Inc. *................... 1,259,700
2,600 Atchison Casting Corp. *........ 46,475
48,900 Birmingham Steel Corp. ......... 605,138
36,000 Carpenter Technology............ 1,809,000
31,300 Lone Star Technologies, Inc. *.. 477,325
78,800 National Steel Corp. ........... 935,750
50,200 Rouge Industries, Inc. ......... 640,050
76,700 Weirton Steel Corp. *........... 282,831
55,800 WHX Corp. *..................... 718,425
------------
6,879,694
------------
STEEL -- SPECIALTY -- 0.3%
88,900 J & L Specialty Steel, Inc. .... 527,844
60,000 Oregon Steel Mills, Inc. ....... 1,117,499
33,630 RMI Titanium Co. *.............. 765,083
------------
2,410,426
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.1%
70,300 American Mobile Satellite
Corp. * ........................ 685,425
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 1.3%
37,200 C-Cor Electronics, Inc. *....... 706,800
27,600 Centigram Communications
Corp. *......................... 310,500
35,550 Davox Corp. *................... 777,656
57,300 InterVoice, Inc. *.............. 1,017,075
69,400 Network Equipment Technologies,
Inc. *.......................... 1,088,713
57,800 Plantronics, Inc. *............. 2,976,699
51,100 Superior Telecom, Inc. ......... 2,127,037
20,300 Tech-Sym Corp. *................ 564,594
31,200 Telco Systems, Inc. *........... 442,650
100,500 Telular Corp. *................. 194,719
45,900 Titan Corp. *................... 275,400
------------
10,481,843
------------
TELECOMMUNICATIONS -- SERVICES AND
EQUIPMENT -- 0.3%
62,700 Mastec, Inc. *.................. 1,496,963
50,500 Smartalk Teleservices, Inc. *... 735,406
------------
2,232,369
------------
TEXTILE -- APPAREL -- 1.2%
63,000 Authentic Fitness Corp. ........ 996,188
104,300 Burlington Industries, Inc. *... 1,466,718
66,500 Delta Woodside Industries,
Inc. ........................... 344,969
8,000 Donna Karan International,
Inc. *.......................... 117,500
37,700 Guess ?, Inc. *................. 186,144
82,700 Hartmarx Corp. *................ 625,419
57,650 Kellwood Co. ................... 2,060,987
Continued
42
61
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
TEXTILE -- APPAREL (CONTINUED)
24,700 Oxford Industries, Inc. ........ $ 862,956
75,900 Phillips-Van Heusen Corp. ...... 1,119,525
33,500 St. John Knits, Inc. ........... 1,293,937
81,000 Tultex Corp. *.................. 197,438
------------
9,271,781
------------
TEXTILE -- HOME FURNISHINGS -- 0.2%
34,013 Pillowtex Corp. ................ 1,364,772
------------
TEXTILE -- PRODUCTS -- 0.4%
46,900 Collins & Aikman Corp. *........ 348,819
75,300 Cone Mills Corp. *.............. 649,463
4,800 Culp, Inc. ..................... 62,100
38,500 Dyersburg Corp. ................ 223,781
20,700 Galey & Lord, Inc. *............ 307,913
47,550 Guilford Mills, Inc. ........... 950,999
74,900 Polymer Group, Inc. *........... 870,713
------------
3,413,788
------------
TOBACCO -- 0.4%
38,300 Brooke Group, Ltd. ............. 430,875
60,700 Consolidated Cigar Holdings,
Inc. *.......................... 743,575
10,100 General Cigar Holdings *........ 99,738
53,346 General Cigar Holdings, Inc.-
Class B *....................... 526,792
45,100 Schweitzer-Mauduit
International................... 1,307,899
25,740 Standard Commercial Corp. *..... 283,140
------------
3,392,019
------------
TOOLS -- HAND HELD -- 0.2%
35,200 Toro Co. ....................... 1,205,600
------------
TOYS/GAME/HOBBY -- 0.1%
49,700 Galoob (Lewis) Toys, Inc. *..... 497,000
10,900 Toy Biz, Inc. *................. 100,825
------------
597,825
------------
TRANSPORTATION -- 0.3%
29,100 Coach USA, Inc. *............... 1,327,688
129,900 OMI Corp. *..................... 1,039,200
------------
2,366,888
------------
TRANSPORTATION -- AIR FREIGHT -- 0.3%
20,600 Airnet Systems, Inc. *.......... 332,175
22,700 Atlas Air, Inc. *............... 767,544
58,900 Pittston Burlington Group....... 916,631
------------
2,016,350
------------
TRANSPORTATION -- AIRLINE -- 0.4%
31,900 Alaska Airgroup, Inc. *......... 1,740,543
57,800 America West Holding Corp.--
Class B *....................... 1,650,913
5,550 Midwest Express Holdings........ 200,841
------------
3,592,297
------------
TRANSPORTATION -- EQUIPMENT &
LEASING -- 1.0%
43,000 Greenbrier Cos., Inc. .......... 741,750
71,250 Interpool, Inc. ................ 1,028,672
6,700 Motivepower Industries, Inc. *.. 164,150
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- EQUIPMENT &
LEASING (CONTINUED)
166,650 Rollins Truck Leasing Corp. .... $ 2,093,541
82,800 Westinghouse Air Brake Co. ..... 2,183,850
26,000 Xtra Corp....................... 1,573,000
------------
7,784,963
------------
TRANSPORTATION -- RAILROAD -- 0.2%
50,400 Florida East Coast Industries... 1,474,200
------------
TRANSPORTATION -- SHIPPING -- 0.1%
12,990 Marine Transport Corp. *........ 52,772
43,600 Overseas Shipholding Group...... 888,350
------------
941,122
------------
TRAVEL SERVICES -- 0.1%
26,800 Sabre Group Holdings, Inc. *.... 1,018,400
------------
UTILITIES -- ELECTRIC POWER -- 2.2%
39,900 Black Hills Corp. .............. 917,700
5,900 Calpine Corp. *................. 119,106
34,400 Central Hudson Gas & Electric
Corp. .......................... 1,578,100
55,200 Central Maine Power Co. ........ 1,076,400
31,500 Central Vermont Public Service
Corp. .......................... 470,531
28,200 CILCORP, Inc. .................. 1,353,600
31,700 Cleco Corp. .................... 943,075
41,600 Commonwealth Energy Systems
Co. ............................ 1,570,400
21,000 Eastern Utilities Association... 551,250
35,200 Empire District Electric Co. ... 734,800
64,681 Interstate Energy Corp. ........ 2,102,132
37,800 Northwestern Corp. ............. 945,000
25,900 Orange & Rockland Utilities..... 1,390,506
64,200 Public Service New Mexico....... 1,456,538
31,000 TNP Enterprises, Inc. .......... 957,125
70,320 UniSource Energy Corp. *........ 1,107,540
34,000 WPS Resources Corp. ............ 1,115,625
------------
18,389,428
------------
UTILITIES -- GAS DISTRIBUTION -- 2.3%
33,150 Atmos Energy Corp. ............. 1,011,075
25,800 Bay State Gas Co. .............. 988,463
25,400 Connecticut Energy Corp. ....... 708,025
29,900 Connecticut Natural Gas Corp. .. 702,650
22,400 Eastern Enterprises............. 960,400
59,200 Energen Corp. .................. 1,191,400
48,500 Indiana Energy, Inc. ........... 1,448,938
39,400 Laclede Gas Co. ................ 965,300
40,800 New Jersey Resources Corp. ..... 1,456,049
11,750 North Carolina Natural Gas...... 298,156
31,200 NUI Corp. ...................... 793,650
38,900 Public Service Co. of North
Carolina........................ 846,075
30,200 South Jersey Industries, Inc. .. 834,275
35,605 Southern Union Co. *............ 1,148,261
54,900 Southwest Gas Corp. ............ 1,341,619
69,500 Southwestern Energy Co. ........ 638,531
34,800 UGI Corp. ...................... 865,650
Continued
43
62
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UTILITIES -- GAS DISTRIBUTION (CONTINUED)
53,600 Wicor, Inc. .................... $ 1,239,500
29,400 Yankee Energy System, Inc. ..... 723,975
------------
18,161,992
------------
UTILITIES -- WATER SUPPLY -- 0.5%
19,600 Aquarion Co. ................... 670,075
43,700 Philadelphia Suburban Corp. .... 955,938
22,500 Southern California Water *..... 610,313
76,600 United Water Resources, Inc. ... 1,378,799
------------
3,615,125
------------
WHOLESALE DISTRIBUTION -- 0.0%
3,300 Aviation Sales Co. *............ 130,763
------------
WIRE & CABLE PRODUCTS -- 0.5%
6,900 Alpine Group, Inc. *............ 143,175
40,700 Barnes Group, Inc. ............. 1,101,444
37,100 Belden, Inc. ................... 1,136,188
67,400 General Cable Corp. *........... 1,946,174
------------
4,326,981
------------
TOTAL COMMON STOCKS............. 787,644,839
------------
(Cost $619,890,235)
INVESTMENT COMPANIES -- 2.7%
10,872,568 Dreyfus Cash Management Money
Market Fund..................... 10,872,568
10,885,705 Federated Prime Value
Obligations Money Market Fund... 10,885,705
------------
TOTAL INVESTMENT COMPANIES...... 21,758,273
------------
(Cost $21,758,273)
RIGHTS -- FOREIGN -- 0.0%
STEEL -- PRODUCERS -- 0.0%
99,400 WCI Steel, Inc.--Escrow A/C..... 0
------------
TOTAL RIGHTS -- FOREIGN......... 0
------------
(Cost $0)
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
U.S. GOVERNMENT OBLIGATIONS -- 0.1%
$840,000 U.S. Treasury Bill, Discount
Note, 9/24/98................... $ 830,399
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS..................... 830,399
------------
(Cost $830,480)
TOTAL INVESTMENTS -- 101.2%................. 810,233,511
(Cost $642,478,988) (a)
LIABILITIES IN EXCESS OF OTHER
ASSETS -- 1.2%............................ (9,626,758)
------------
TOTAL NET ASSETS -- 100.0%.................. $800,606,753
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation $218,556,030
Unrealized depreciation (50,801,507)
------------
Net unrealized appreciation $167,754,523
============
(b) Security has been deposited as initial margin on open futures contract
* Non-income producing security
At June 30, 1998 the Fund's open future contracts were as follows:
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ------------------ ----------- -----------
42 Standard & Poor's $11,724,995 $12,001,500
500, 9/17/98
See Notes to Financial Statements.
44
63
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 97.2%
AUSTRALIA -- 2.0%
BANKING -- 0.5%
106,087 National Australia Bank Ltd...... $ 1,399,285
142,912 Westpac Banking Corp., Ltd....... 871,704
------------
2,270,989
------------
BEVERAGES & TOBACCO -- 0.1%
70,676 Coca-Cola Amatil Ltd............. 458,798
------------
BREWERY -- 0.1%
178,336 Fosters Brewing Group Ltd........ 419,650
------------
BROADCASTING & PUBLISHING -- 0.2%
147,083 News Corp., Ltd.................. 1,200,445
------------
BUILDING PRODUCTS -- 0.1%
107,742 Boral Ltd........................ 202,158
34,780 Hardie (James) Industries Ltd.... 97,134
80,788 Pioneer International Ltd........ 192,607
------------
491,899
------------
CHEMICALS -- 0.0%
22,970 ICI Australia Ltd................ 135,840
------------
CLOSED END FUNDS -- 0.0%
29,241 Stockland Trust Group............ 66,816
------------
DIVERSIFIED -- 0.0%
16,044 Smith (Howard) Ltd............... 94,384
54,495 Southcorp Holdings Ltd........... 158,268
------------
252,652
------------
ENERGY -- 0.2%
156,213 Broken Hill Proprietary Co.,
Ltd.............................. 1,320,426
------------
ENGINEERING -- 0.0%
22,400 Leighton Holdings Ltd............ 78,441
------------
ENTERTAINMENT -- 0.0%
62,916 Crown Ltd.*...................... 18,896
40,300 Sydney Harbour Casino Holdings
Ltd.*............................ 23,458
26,100 TABCORP Holdings Ltd............. 133,339
------------
175,693
------------
FOOD PRODUCTS -- 0.0%
39,301 Burns, Philp & Co., Ltd.*........ 3,164
109,142 Goodman Fielder Ltd.............. 158,827
------------
161,991
------------
GAS UTILITY -- 0.0%
25,513 Australian Gas Light Co., Ltd.... 159,569
------------
INDUSTRIAL GOODS & SERVICES -- 0.1%
91,818 CSR Ltd.......................... 264,959
88,700 Pacific Dunlop Ltd............... 143,360
------------
408,319
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
AUSTRALIA (CONTINUED)
INSURANCE -- 0.0%
53,350 GIO Australia Holdings Ltd....... $ 136,905
32,565 QBE Insurance Group Ltd.......... 114,945
------------
251,850
------------
MANUFACTURING-CAPITAL GOODS -- 0.0%
26,212 Email Ltd........................ 45,449
------------
METALS -- 0.0%
145,238 M.I.M. Holdings Ltd.............. 70,152
15,796 RGC Ltd.......................... 15,651
------------
85,803
------------
METALS & MINING -- 0.2%
68,058 Australian National Industries
Ltd.............................. 39,195
16,431 Great Central Mines Ltd.......... 15,669
3,978 Homestake Mining Co.............. 38,182
17,377 Newcrest Mining Ltd..*........... 21,306
146,141 Normandy Mining Ltd.............. 119,457
62,696 North Ltd........................ 128,897
49,377 QCT Resources Ltd................ 32,717
29,836 Rio Tinto Ltd.................... 354,737
104,971 WMC Ltd.......................... 315,915
------------
1,066,075
------------
OIL & GAS -- 0.0%
52,241 Santos Ltd....................... 161,751
------------
PACKAGING -- 0.0%
58,093 Amcor Ltd........................ 254,336
------------
PHARMACEUTICALS -- 0.0%
10,510 Faulding (F.H.) & Co., Ltd....... 47,934
------------
REAL ESTATE -- 0.2%
109,430 General Property Trust Units..... 176,865
24,706 Lend Lease Corp., Ltd............ 499,517
104,347 Westfield Trust Units............ 200,312
------------
876,694
------------
REAL ESTATE INVESTMENT TRUST -- 0.0%
14,411 Schroders Property Fund.......... 21,775
------------
RETAIL STORES -- 0.1%
115,528 Coles Myer Ltd................... 450,705
------------
SERVICES -- 0.1%
20,119 Brambles Industries Ltd.......... 394,814
------------
TOBACCO -- 0.0%
8,400 Rothmans Holdings Ltd............ 51,653
------------
11,310,367
------------
AUSTRIA -- 0.7%
AIRLINES -- 0.0%
4,100 Austrian Airlines*............... 134,955
------------
Continued
45
64
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
AUSTRIA (CONTINUED)
BANKING -- 0.2%
10,550 Bank Austria AG.................. $ 858,106
100 Bank Austria AG, Participating
Certificates..................... 7,182
------------
865,288
------------
BEVERAGES & TOBACCO -- 0.0%
3,100 Oesterreichische
Brau-Beteiligungs AG............. 183,085
------------
BUILDING PRODUCTS -- 0.1%
1,433 Wienerberger Baustoffindustrie
AG............................... 346,655
------------
CHEMICALS -- 0.0%
600 Lenzing AG *..................... 45,830
------------
CONSTRUCTION -- 0.0%
1,455 Bau Holding AG*.................. 82,495
------------
ELECTRIC UTILITY -- 0.1%
4,769 Oesterreichische
Elektrizitaetswirtschafts AG,
Class A.......................... 570,822
------------
ELECTRICAL EQUIPMENT -- 0.0%
1,000 Austria Mikro Systeme
International AG................. 67,722
------------
ENGINEERING -- 0.1%
2,400 VA Technologie AG................ 298,606
------------
INSURANCE -- 0.1%
1,180 EA-Generali AG................... 346,594
------------
MANUFACTURING-CONSUMER GOODS -- 0.0%
100 Steyr-Daimler-Puch AG............ 2,740
------------
METALS & MINING -- 0.0%
2,575 Radex-Heraklith
Industriebeteiligungs AG......... 124,705
------------
OIL & GAS -- 0.1%
4,240 OMV AG........................... 567,937
------------
PAPER PRODUCTS -- 0.0%
1,900 Mayr-Melnhof Karton AG........... 124,183
------------
STEEL -- 0.0%
1,800 Boehler-Uddeholm AG.............. 118,923
------------
TRANSPORTATION -- 0.0%
3,300 Flughafen Wien AG................ 158,256
------------
4,038,796
------------
BELGIUM -- 1.4%
BANKING -- 0.3%
1,116 Generale de Banque SA............ 828,527
12,520 Kredietbank NV................... 1,120,441
------------
1,948,968
------------
BUILDING PRODUCTS -- 0.0%
1,925 Cimenteries CBR Cementbedrijven.. 215,728
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BELGIUM (CONTINUED)
CHEMICALS -- 0.1%
8,510 Solvay SA........................ $ 674,671
------------
ELECTRIC UTILITY -- 0.2%
5,840 Tractebel........................ 855,361
------------
ENERGY -- 0.1%
1,897 PetroFina SA..................... 778,733
------------
GAS & ELECTRIC UTILITY -- 0.2%
3,800 Electrabel SA.................... 1,077,398
------------
INDUSTRIAL HOLDING COMPANY -- 0.1%
2,000 Groupe Bruxelles Lambert SA...... 403,655
------------
INSURANCE -- 0.2%
2,900 Fortis AG........................ 740,392
1,350 Royale Belge..................... 513,370
------------
1,253,762
------------
MERCHANDISING -- 0.1%
4,400 Delhaize-Le Lion SA.............. 307,444
------------
TECHNOLOGY -- 0.1%
1,000 Barco NV......................... 279,495
------------
TRANSPORTATION -- 0.0%
1,422 Union Miniere SA*................ 87,896
------------
7,883,111
------------
DENMARK -- 1.0%
BANKING & FINANCE -- 0.2%
4,147 Den Danske Bank.................. 497,494
4,193 Unidanmark AS, Class A........... 376,802
------------
874,296
------------
BEVERAGES & TOBACCO -- 0.1%
2,760 Carlsberg AS, Class A*........... 200,668
2,305 Carlsberg AS, Class B*........... 167,587
------------
368,255
------------
COMMERCIAL SERVICES -- 0.0%
2,390 ISS International Service System
AS, Series B*.................... 139,014
------------
ENGINEERING -- 0.0%
3,615 FLS Industries AS, Class B....... 91,991
------------
FOOD PRODUCTS -- 0.1%
4,795 Danisco AS....................... 322,130
------------
PHARMACEUTICALS -- 0.2%
6,946 Novo Nordisk AS, Class B......... 957,510
------------
TELECOMMUNICATIONS -- 0.2%
11,300 Tele Danmark AS, Class B......... 1,084,482
------------
Continued
46
65
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DENMARK (CONTINUED)
TRANSPORTATION & SHIPPING -- 0.2%
85 D/S 1912, Class B................ $ 729,241
60 D/S Svendborg AS, Class B........ 732,876
------------
1,462,117
------------
5,299,795
------------
FINLAND -- 0.9%
BANKING & FINANCE -- 0.1%
57,106 Merita Ltd., Class A............. 376,787
------------
CHEMICALS -- 0.0%
8,900 Kemira........................... 91,977
------------
DIVERSIFIED -- 0.0%
800 Amer Group Ltd.*................. 15,456
1,500 Instrumentarium Group, Series B.. 95,690
------------
111,146
------------
ENGINEERING -- 0.0%
5,500 Metra AB......................... 180,443
------------
FOOD PRODUCTS -- 0.0%
5,200 Cultor-Series 1.................. 83,405
4,400 Cultor-Series 2.................. 71,375
------------
154,780
------------
FOREST PRODUCTS -- 0.1%
18,660 UPM-Kymmene Corp................. 513,564
------------
INSURANCE -- 0.0%
800 Pohjola Insurance Group, Class B. 39,807
4,300 Sampo Insurance Co............... 203,773
------------
243,580
------------
MACHINERY & EQUIPMENT -- 0.0%
500 Kone Corp.-Class B............... 70,172
------------
METALS -- 0.0%
8,700 Outokumpu........................ 111,000
------------
RETAIL-GENERAL MERCHANDISE -- 0.0%
6,300 Kesko............................ 99,326
2,250 Stockmann AB-B Share............. 52,493
------------
151,819
------------
TELECOMMUNICATIONS -- 0.6%
30,600 Nokia-Class A.................... 2,250,458
11,000 Nokia-Class K.................... 809,991
------------
3,060,449
------------
5,065,717
------------
FRANCE -- 8.0%
ADVERTISING -- 0.0%
3 Havas SA......................... 255
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0%
3,050 Moulinex*........................ 79,150
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
AUTO PARTS -- 0.1%
7,267 Valeo SA......................... $ 742,803
------------
AUTOMOTIVE -- 0.1%
3,662 PSA Peugeot Citroen.............. 787,393
------------
BANKING -- 0.8%
14,674 Banque Nationale de Paris........ 1,198,962
11,664 Paribas.......................... 1,248,192
6,847 Societe Generale................. 1,423,526
------------
3,870,680
------------
BEVERAGES & TOBACCO -- 0.3%
6,120 LVMH (Moet Hennessy Louis
Vuitton)......................... 1,224,804
5,400 Pernod Ricard.................... 374,229
------------
1,599,033
------------
BROADCASTING/CABLE -- 0.1%
3,136 Canal Plus....................... 586,117
------------
BUILDING PRODUCTS -- 0.2%
1,195 Imetal SA........................ 164,247
6,721 Lafarge SA....................... 694,774
------------
859,021
------------
CHEMICALS -- 0.4%
5,932 L'Air Liquide.................... 981,160
24,814 Rhone-Poulenc SA................. 1,399,526
------------
2,380,686
------------
COMMERCIAL SERVICES -- 0.1%
2,840 Sodexho SA....................... 536,901
------------
CONSTRUCTION -- 0.0%
1,466 Bouygues......................... 266,236
------------
DEFENSE -- 0.1%
200 Sagem SA......................... 155,606
12,325 Thomson CSF...................... 468,861
------------
624,467
------------
DIVERSIFIED -- 0.1%
498 Chargeurs International SA....... 41,143
12,106 Lagardere SCA.................... 503,980
1,350 Nord-Est SA...................... 29,697
------------
574,820
------------
ELECTRICAL & ELECTRONIC -- 0.6%
10,437 Alcatel Alsthom.................. 2,125,022
2,100 Legrand SA....................... 555,737
10,800 Schneider SA..................... 861,174
------------
3,541,933
------------
ENERGY -- 0.9%
17,367 Elf Aquitane SA.................. 2,441,594
15,800 Total SA, Class B................ 2,054,042
------------
4,495,636
------------
Continued
47
66
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
ENGINEERING -- 0.0%
200 Groupe Gtm....................... $ 20,774
------------
FINANCE -- 0.5%
11,988 Compagnie Generale des Eaux...... 2,559,781
523 CPR (Compagnie Parisenne de
Reescompte)...................... 42,127
844 Credit National.................. 53,046
192 Eurafrance*...................... 120,674
------------
2,775,628
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.1%
2,600 Eridania Beghin-Say SA........... 574,096
------------
FOOD PRODUCTS -- 0.3%
5,121 Groupe Danone.................... 1,411,953
------------
HEALTH & PERSONAL CARE -- 0.6%
4,266 L'OREAL.......................... 2,372,889
7,623 Sanofi SA........................ 896,448
------------
3,269,337
------------
INDUSTRIAL GOODS & SERVICES -- 0.1%
9,690 Michelin Class B, Registered..... 559,344
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
8,780 Lyonnaise des Eaux SA............ 1,444,932
------------
INSURANCE -- 0.4%
21,000 Axa-UAP.......................... 2,361,881
------------
LEISURE -- 0.1%
2,650 Accor SA......................... 741,611
541 Club Mediterranee SA*............ 46,709
------------
788,320
------------
MACHINE -- DIVERSIFIED -- 0.0%
1,600 Sidel SA......................... 116,440
------------
MEDIA -- 0.0%
498 Pathe SA......................... 97,606
------------
MEDICAL SUPPLIES -- 0.0%
500 Essilor International............ 211,461
------------
MERCHANDISING -- 0.9%
2,639 Carrefour SA..................... 1,669,555
6,600 Etablissements Economiques du
Casino Guichard-Perrachon........ 527,037
1,577 Pinault-Printemps-Redoute SA..... 1,319,812
1,450 Promodes......................... 803,420
------------
4,319,824
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.2%
6,333 Compagnie de Saint Gobain........ 1,174,208
------------
OFFICE EQUIPMENT & SERVICES -- 0.1%
5,700 Bic.............................. 405,390
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
OIL & GAS -- 0.0%
50 Cie Gen Geophysiq*............... $ 7,335
1,300 Primagaz Cie..................... 114,174
------------
121,509
------------
REAL ESTATE -- 0.1%
2,600 SEFIMEG.......................... 188,355
918 Simco SA......................... 75,310
800 Unibail.......................... 103,473
572 Union Immobiliere de France...... 45,128
------------
412,266
------------
RETAIL -- SPECIAL LINE -- 0.0%
352 Comptoirs Modernes............... 183,393
------------
STEEL -- 0.1%
25,100 Unisor Sacilor SA................ 387,749
------------
TELECOMMUNICATIONS -- SERVICES &
EQUIPMENT -- 0.4%
35,000 France Telecom*.................. 2,413,981
------------
TEXTILE PRODUCTS -- 0.0%
1,050 Dollfus-Mieg & Cie*.............. 28,308
------------
TOBACCO -- 0.0%
3,200 SEITA............................ 145,021
------------
44,168,552
------------
GERMANY -- 10.0%
AIRLINES -- 0.1%
28,980 Lufthansa AG*.................... 727,296
------------
AUTOMOTIVE -- 1.2%
39,170 Daimler-Benz AG.................. 3,840,975
761 MAN AG*.......................... 295,962
2,447 Volkswagen AG.................... 2,352,058
------------
6,488,995
------------
BANKING -- 1.8%
54,840 Bayer AG......................... 2,828,536
23,028 Bayerische Vereinsbank AG........ 1,958,300
40,260 Deutsche Bank AG................. 3,409,211
37,160 Dresdner Bank AG................. 2,003,102
------------
10,199,149
------------
BANKING & FINANCE -- 0.2%
19,520 Bayerische Hypotheken-und
Weschel-Bank AG.................. 1,237,145
------------
BUILDING PRODUCTS -- 0.1%
4,070 Heidelberger Zement AG........... 385,572
------------
CHEMICALS -- 0.5%
46,780 BASF AG.......................... 2,215,853
7,120 Degussa AG....................... 438,237
------------
2,654,090
------------
Continued
48
67
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
GERMANY (CONTINUED)
CLOTHING -- 0.1%
3,500 Adidas AG........................ $ 604,975
------------
COMPUTER SOFTWARE -- 0.5%
4,700 SAP AG........................... 2,851,193
------------
CONSTRUCTION -- 0.0%
4,730 Hochtief AG...................... 226,669
------------
DIVERSIFIED -- 0.8%
1,231 Preussag AG...................... 439,196
37,390 VEBA AG.......................... 2,547,858
2,007 Viag AG.......................... 1,356,506
------------
4,343,560
------------
ELECTRICAL & ELECTRONIC -- 0.5%
43,470 Siemens AG....................... 2,644,275
------------
ENGINEERING -- 0.5%
2,040 AGIV-AG*......................... 56,057
2,970 Bilfinger & Berger Bau AG........ 100,863
27,820 Mannesmann AG.................... 2,822,020
------------
2,978,940
------------
GAS & ELECTRIC UTILITY -- 0.3%
25,650 RWE AG *......................... 1,520,498
------------
HEALTH & PERSONAL CARE -- 0.1%
7,860 Beiersdorf AG, Series ABC........ 500,331
------------
HEALTH CARE -- 0.1%
5,300 Schering AG...................... 624,537
------------
INSURANCE -- 1.7%
1,780 Aachener & Muenchener............ 208,074
17,070 Allianz AG....................... 5,626,847
3,660 Amb Aachener & Muenchener........ 427,634
6,045 Muenchener Rueckver.............. 2,997,326
------------
9,259,881
------------
MACHINERY & EQUIPMENT -- 0.1%
3,830 Kloeckner-Humbolt-Deutz AG*...... 44,559
636 Linde AG......................... 445,720
------------
490,279
------------
METALS & MINING -- 0.1%
2,480 FAG Kugelfischer Georg Schaefer
AG............................... 36,959
2,734 Thyssen AG....................... 692,196
------------
729,155
------------
PHARMACEUTICALS -- 0.1%
13,100 Merck KGaA....................... 585,679
------------
RETAIL STORES -- 0.3%
791 Karstadt AG...................... 382,127
17,073 Metro AG*........................ 1,035,711
------------
1,417,838
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
GERMANY (CONTINUED)
RETAIL -- GENERAL MERCHANDISE -- 0.0%
1,630 Douglas Holding AG............... $ 86,239
------------
TELECOMMUNICATIONS -- 0.8%
158,800 Deutsche Telekom AG.............. 4,284,440
------------
TIRE & RUBBER -- 0.0%
4,870 Continental AG................... 151,628
------------
54,992,364
------------
HONG KONG -- 1.8%
AIRLINES -- 0.0%
12,600 Hong Kong Aircraft Engineering
Co., Ltd......................... 19,513
------------
BANKING -- 0.2%
356,630 Bank of East Asia Ltd.*.......... 386,612
108,800 Hang Seng Bank Ltd............... 615,008
------------
1,001,620
------------
BANKING & FINANCE -- 0.0%
14,695 Wing Lung Bank................... 34,137
------------
BROADCASTING & PUBLISHING -- 0.0%
96,000 South China Morning Post Holdings
Ltd.............................. 46,150
25,000 Television Broadcasts Ltd........ 66,141
------------
112,291
------------
DISTRIBUTION -- 0.0%
18,000 Dickson Concepts International... 25,088
------------
DIVERSIFIED -- 0.1%
94,500 Swire Pacific Ltd., Class A...... 356,727
250,000 Wharf Holdings Ltd............... 246,820
------------
603,547
------------
ELECTRIC UTILITY -- 0.1%
141,400 CLP Holdings Ltd................. 644,173
------------
ELECTRICAL & ELECTRONIC -- 0.1%
161,700 Johnson Electric Holdings Ltd.... 598,922
------------
ELECTRICAL EQUIPMENT -- 0.0%
65,000 Elec & Eltek International
Holdings Ltd..................... 12,415
------------
GAS UTILITY -- 0.1%
383,075 Hong Kong & China Gas Co., Ltd... 435,055
------------
HOTELS & LODGING -- 0.0%
65,500 Hong Kong & Shanghai Hotels Ltd.. 32,756
33,000 Miramar Hotel & Investment Ltd... 28,960
218,714 Regal Hotels International....... 26,251
------------
87,967
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
282,000 Hutchison Whampoa Ltd............ 1,488,506
------------
Continued
49
68
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
HONG KONG (CONTINUED)
MANUFACTURING -- CONSUMER GOODS -- 0.0%
20,000 Varitronix International Ltd..... $ 40,007
------------
PRINTING & PUBLISHING -- 0.0%
127,500 Oriental Press Group Ltd......... 11,847
------------
REAL ESTATE -- 0.4%
133,000 Cheung Kong Holdings Ltd. ....... 653,965
108,000 Chinese Estates Ltd. ............ 18,816
241,000 Hopewell Holdings Ltd. .......... 25,815
332,000 Hysan Development Co., Ltd. ..... 274,218
26,000 Kumagai Gumi (Hong Kong)......... 10,821
116,525 New World Development Co., Ltd. . 225,574
384,000 Shangri-La Asia Ltd. ............ 247,787
773,796 Sino Land Company................ 269,630
133,695 Sun Hung Kai Properties Ltd. .... 567,661
43,270 Tai Cheung Holdings Ltd. ........ 10,498
------------
2,304,785
------------
REAL ESTATE INVESTMENT TRUST -- 0.1%
455,100 Hang Lung Development Co. ....... 452,247
------------
RETAIL STORES -- 0.0%
50,000 Giordano International Ltd. ..... 10,131
------------
TELECOMMUNICATIONS -- 0.2%
677,343 Hong Kong Telecommunications
Ltd. ............................ 1,271,891
------------
TRANSPORTATION -- 0.1%
1,092,000 Cathay Pacific Airways........... 768,064
109,859 Shun Tak Holdings Ltd. .......... 10,775
------------
778,839
------------
9,932,981
------------
IRELAND -- 0.2%
BANKING -- 0.2%
33,900 Allied Irish Banks............... 489,399
------------
BUILDING PRODUCTS -- 0.0%
15,100 C.R.H. PLC....................... 214,201
------------
CONSUMER GOODS & SERVICES -- 0.0%
29,000 Waterford Wedgewood.............. 37,619
------------
DIVERSIFIED -- 0.0%
3,200 DCC PLC.......................... 28,566
------------
FINANCE -- 0.0%
3,700 Irish Permanent PLC.............. 43,610
------------
FOOD PRODUCTS -- 0.0%
11,700 Fyffes PLC....................... 28,396
7,600 Greencore Group.................. 41,343
6,500 Kerry Group PLC.................. 89,758
------------
159,497
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
IRELAND (CONTINUED)
INDUSTRIAL GOODS & SERVICES -- 0.0%
43,100 Smurfit (Jefferson) Group........ $ 128,050
------------
INSURANCE -- 0.0%
12,500 Irish Life PLC................... 115,074
------------
MEDIA -- 0.0%
9,800 Independent Newspapers PLC....... 52,627
------------
OIL & GAS -- 0.0%
9,100 Tullow Oil....................... 16,501
------------
PRINTING & PUBLISHING -- 0.0%
1,600 Clondalkin Group PLC............. 13,390
------------
TRANSPORTATION & SHIPPING -- 0.0%
1,000 Irish Continental Group PLC...... 16,041
------------
1,314,575
------------
ITALY -- 5.0%
AGRICULTURE -- 0.0%
130,300 Parmalat Finanziaria SpA......... 265,724
------------
AUTO PARTS -- 0.0%
72,520 Magneti Marelli SpA.............. 159,111
------------
AUTOMOTIVE -- 0.3%
322,938 Fiat SpA......................... 1,413,438
70,340 Fiat SpA di Risp.
(Non-convertible)*............... 174,114
90,820 Fiat SpA Preferred............... 226,086
------------
1,813,638
------------
BANKING -- 0.9%
157,800 Banca Commerciale Italiana....... 943,666
136,782 Banco Ambrosiano Veneto SpA...... 765,265
59,100 Banco Ambrosiano Veneto SpA di
Risp. (Non-convertible).......... 174,220
20,400 Banco Popolare de Milano......... 162,392
253,200 Credito Italiano SpA............. 1,325,434
71,800 Istituto Bancario San Paolo di
Torino........................... 1,036,072
12,523 Riunione Adriatica di Sicurta SpA
di Risp., (Non-convertible)...... 112,721
------------
4,519,770
------------
BROADCASTING & PUBLISHING -- 0.1%
103,400 Mediaset SpA..................... 659,938
------------
BUILDING PRODUCTS -- 0.0%
1,900 Cementir SpA..................... 2,159
15,050 Italcementi SpA.................. 135,298
900 Italcementi SpA di Risp.
(Non-convertible)................ 3,944
------------
141,401
------------
Continued
50
69
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ITALY (CONTINUED)
CHEMICALS -- 0.1%
438,762 Montedison SpA................... $ 544,272
12,800 Montedison SpA di Risp.
(Non-convertible)................ 9,901
84,200 Snia BPD SpA..................... 103,263
900 Snia BPD SpA di Risp.
(Non-convertible)................ 861
------------
658,297
------------
ENGINEERING -- 0.0%
7,900 Impregilo SpA*................... 6,978
------------
FINANCE -- 0.3%
52,800 Istituto Mobiliare Italiano SpA.. 831,707
50,370 Mediobanca SpA*.................. 638,994
------------
1,470,701
------------
GAS & ELECTRIC UTILITY -- 0.1%
55,800 Edison SpA....................... 447,800
------------
GAS UTILITY -- 0.0%
61,300 Italgas SpA...................... 249,676
------------
INSURANCE -- 0.8%
86,263 Assicurazioni Generali*.......... 2,804,985
351,600 Istituto Nazionale delle
Assicurazioni.................... 998,892
29,262 Riuniune Adriatici de Sicurta
SpA.............................. 381,095
10,900 Societa Assicuratrice Industriale
(SAI) SpA........................ 139,197
------------
4,324,169
------------
JEWELRY -- 0.0%
25,400 Bulgari SpA...................... 133,177
------------
OFFICE EQUIPMENT & SERVICES -- 0.1%
236,196 Olivetti SpA*.................... 351,460
------------
OIL & GAS -- 0.8%
674,000 ENI SpA.......................... 4,417,372
------------
PAPER PRODUCTS -- 0.0%
15,200 Burgo (Cartiere) SpA............. 121,725
------------
PRINTING & PUBLISHING -- 0.0%
11,400 Mondadori (Arnoldo) Editore SpA.. 134,680
------------
RETAIL STORES -- 0.0%
18,300 La Rinascente SpA................ 182,223
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ITALY (CONTINUED)
STEEL -- 0.0%
10,400 Falck, Acciaierie & Ferriere
Lombarde SpA..................... $ 67,284
------------
TELECOMMUNICATIONS -- 1.3%
19,400 Sirti SpA........................ 105,537
137,560 Telecom Italia Mobile SpA........ 464,324
559,460 Telecom Italia Mobile SpA di
Risp. (Non-convertible).......... 3,421,186
317,911 Telecom Italia SpA*.............. 2,340,224
80,060 Telecom Italia SpA--Rnc*......... 387,565
------------
6,718,836
------------
TEXTILE PRODUCTS -- 0.1%
160,320 Benetton Group Spa............... 332,807
4,200 Marzotto (Gaetano) & Figli SpA... 64,032
------------
396,839
------------
TIRE & RUBBER -- 0.1%
145,000 Pirelli SpA...................... 452,730
10,600 Pirelli SpA di Risp.
(Non-convertible)................ 25,344
------------
478,074
------------
27,718,873
------------
JAPAN -- 24.8%
ALUMINUM -- 0.0%
38,000 Nippon Light Metal Co., Ltd...... 43,809
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 1.6%
203,000 Matsushita Electric Industrial
Co., Ltd......................... 3,261,807
16,000 Pioneer Electronic Corp.......... 305,508
187,000 Sanyo Electric Co................ 565,911
108,000 Sharp Corp....................... 874,677
39,000 Sony Corp........................ 3,358,071
------------
8,365,974
------------
AUTOMOTIVE -- 2.7%
3,000 Autobacs Seven Co., Ltd.......... 85,816
93,000 Honda Motor Co., Ltd............. 3,310,300
241,000 Nissan Motor Co., Ltd............ 758,850
26,000... Toyoda Automatic Loom Works 458,983
367,000 Toyota Motor Corp................ 9,493,316
------------
14,107,265
------------
Continued
51
70
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
BANKING -- 3.1%
36,000 77 Bank.......................... $ 300,897
228,000 Asahi Bank Ltd................... 1,002,125
44,000 Ashikaga Bank Ltd................ 54,847
449,000 Bank of Tokyo -- Mitsubishi Ltd.. 4,752,538
104,000 Bank of Yokohama Ltd............. 254,783
71,000 Chiba Bank Ltd................... 245,560
300,000 Fuji Bank Ltd.................... 1,338,041
49,000 Gunma Bank Ltd................... 331,527
62,000 Hokuriku Bank.................... 80,412
265,000 Industrial Bank of Japan......... 1,661,202
85,000 Joyo Bank........................ 313,579
110,000 Mitsui Trust & Banking Co., Ltd.. 259,178
359,000 Sakura Bank Ltd.................. 931,224
77,000 Shizuoka Bank.................... 826,674
305,000 Sumitomo Bank Ltd................ 2,966,819
199,000 Tokai Bank....................... 1,095,478
18,000 Yamaguchi Bank................... 230,861
------------
16,645,745
------------
BEVERAGES & TOBACCO -- 0.3%
46,000 Asahi Breweries Ltd.............. 580,034
101,000 Kirin Brewery Co., Ltd........... 953,345
11,000 Takara Shuzo..................... 45,653
------------
1,579,032
------------
BREWERY -- 0.0%
31,000 Sapporo Breweries Ltd............ 118,608
------------
BROADCASTING & PUBLISHING -- 0.0%
16,000 Tokyo Broadcasting System........ 178,694
------------
BUILDING PRODUCTS -- 0.1%
52,000 Chichibu Onoda Cement Corp....... 94,045
17,000 Nihon Cement Co., Ltd............ 34,053
21,000 Sanwa Shutter Corp............... 92,301
23,000 Sumitomo Osaka Cement Co., Ltd... 29,499
20,000 Tostem Corp...................... 259,106
------------
509,004
------------
CHEMICALS -- 1.3%
138,000 Asahi Chemical Industry Co.,
Ltd.............................. 497,172
19,000 Daicel Chemical Industries Ltd... 40,249
72,000 Dainippon Ink & Chemicals Inc.... 220,485
27,000 Denki Kagaku Kogyo Kabushiki
Kaisha........................... 43,578
32,000 Kaneka Corp...................... 168,318
32,000 Konica Corp...................... 144,108
201,000 Mitsubishi Chemical Corp......... 363,519
45,000 Mitsubishi Gas Chemical Co....... 135,858
10,000 Nippon Shokubai Kabushiki Kaisha
Co............................... 53,680
50,000 Sekisui Chemical Co., Ltd........ 255,791
37,000 Shin-Etsu Chemical Co., Ltd...... 639,839
95,000 Showa Denko Kabushiki Kaisha..... 95,832
155,000 Sumitomo Chemical Co............. 478,005
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
89,000 Takeda Chemical Industries....... $ 2,366,322
134,000 Toray Industries Inc............. 695,176
54,000 Tosoh Corp.*..................... 93,771
76,000 Ube Industries Ltd............... 98,570
------------
6,390,273
------------
CLOTHING -- 0.0%
5,000 Tokyo Style...................... 48,997
------------
COMMERCIAL SERVICES -- 0.0%
100 Oyo Corp......................... 1,347
------------
COMPUTER SOFTWARE -- 0.0%
5,000 CSK Corp......................... 99,434
------------
CONSTRUCTION -- 0.3%
50,000 Daiwa House Industry Co., Ltd.... 441,330
35,000 Kumagai Gumi Co., Ltd............ 25,219
13,000 Okumura Corp..................... 45,617
18,000 Penta-Ocean Construction......... 41,503
68,000 Sekisui House Ltd................ 526,714
72,000 Shimizu Corp..................... 207,515
93,000 Taisei Corp...................... 201,030
------------
1,488,928
------------
CONSUMER GOODS & SERVICES -- 0.1%
22,000 Nippon Sheet Glass Co., Ltd...... 34,716
13,000 Shimano Inc...................... 329,719
34,000 Toto Ltd......................... 206,521
------------
570,956
------------
COSMETICS/PERSONAL CARE -- 0.1%
40,000 Shiseido Co., Ltd................ 454,228
------------
DATA PROCESSING & REPRODUCTION -- 0.4%
197,000 Fujitsu Ltd...................... 2,072,414
------------
DISTRIBUTION -- 0.1%
137,000 Itochu Corp...................... 296,141
------------
DIVERSIFIED -- 0.0%
18,000 Yamaha Corp...................... 175,091
------------
ELECTRIC UTILITY -- 0.9%
107,900 Kansai Electric Power Co.,
Inc.............................. 1,873,682
47,500 Tohoku Electric Power............ 699,913
132,000 Tokyo Electric Power Co.......... 2,587,023
------------
5,160,618
------------
ELECTRICAL & ELECTRONIC -- 0.6%
25,000 Casio Computer Co., Ltd.......... 232,194
18,000 Kyocera Corp..................... 879,346
206,000 Mitsubishi Electric Corp......... 473,495
35,000 Nikon Corp....................... 251,684
25,000 Omron Corp....................... 381,886
11,000 Rohm Co., Ltd.................... 1,129,445
------------
3,348,050
------------
Continued
52
71
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
ELECTRICAL EQUIPMENT -- 0.1%
16,000 Alps Electric Co., Ltd........... $ 190,222
6,000 SMC Corp......................... 456,101
10,000 Taiyo Yuden Co., Ltd............. 106,352
------------
752,675
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.9%
8,690 Advantest Corp................... 467,107
8,000 Dainippon Screen Manufacturing
Co., Ltd......................... 32,741
22,100 Fanuc Ltd........................ 764,348
3,000 Hirose Electric Co., Ltd......... 146,341
330,000 Hitachi Ltd...................... 2,151,889
153,000 NEC Corp......................... 1,425,435
23,000 Yokogawa Electric Corp........... 122,636
------------
5,110,497
------------
ELECTRONICS -- 0.0%
13,000 Nitto Denko Corp................. 195,302
------------
ENERGY -- 0.1%
57,000 Cosmo Oil Co., Ltd............... 102,677
100,000 Japan Energy Corp................ 105,919
118,000 Nippon Oil Co., Ltd.............. 380,906
------------
589,502
------------
ENGINEERING -- 0.3%
7,000 Daito Trust Construction Co.,
Ltd. ............................ 52,960
92,000 Kajima Corp. .................... 251,900
18,000 Kandenko Co., Ltd. .............. 111,410
127,000 Kawasaki Heavy Industries Ltd. .. 256,224
25,000 Kinden Corp. .................... 302,626
25,000 Nishimatsu Construction.......... 122,492
71,000 Obayashi Corp. .................. 300,811
------------
1,398,423
------------
ENTERTAINMENT -- 0.0%
1,700 Toho Co. ........................ 178,838
14,000 Tokyo Dome Corp. ................ 75,657
------------
254,495
------------
FINANCE -- 1.0%
14,000 Acom Co., Ltd. .................. 664,769
128,000 Daiwa Securities Co., Ltd. ...... 550,607
23,000 Higo Bank........................ 103,577
125,000 Mitsubishi Trust & Banking
Corp. ........................... 1,061,894
195,000 Nomura Securities Co., Ltd. ..... 2,269,157
24,000 Orient Corp. .................... 52,398
6,000 Orix Corp. ...................... 405,087
6,000 Uni-Charm........................ 222,214
100,000 Yasuda Trust & Banking........... 93,670
------------
5,423,373
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
FOOD & HOUSEHOLD PRODUCTS -- 0.3%
62,000 Ajinomoto Co., Inc. ............. $ 542,782
59,000 Kao Corp. ....................... 909,752
21,000 Nippon Meat Packers Inc. ........ 257,081
12,000 Nissin Food Products Co., Ltd. .. 214,865
------------
1,924,480
------------
FOOD PRODUCTS -- 0.1%
65,000 Daiei Inc. ...................... 152,214
10,000 House Foods Industry............. 128,328
12,000 Itoham Foods..................... 51,879
17,000 Kikkoman Corp. .................. 89,419
15,000 Meiji Milk Products Co., Ltd. ... 39,990
16,000 Nichirei Corp. .................. 32,857
8,000 QP Corp. ........................ 52,167
23,000 Snow Brand Milk Products Co.,
Ltd. ............................ 69,604
20,000 Yamazaki Baking Co., Ltd. ....... 177,253
------------
793,711
------------
FOREST PRODUCTS -- 0.2%
17,000 Mitsubishi Paper Mills........... 33,073
91,000 Nippon Paper Industries Co. ..... 378,989
99,000 Oji Paper Co., Ltd. ............. 430,853
12,000 Sumitomo Forestry Co., Ltd. ..... 67,356
------------
910,271
------------
GAS UTILITY -- 0.2%
243,000 Osaka Gas Co., Ltd. ............. 623,324
270,000 Tokyo Gas Co., Ltd. ............. 601,146
------------
1,224,470
------------
HEALTH & PERSONAL CARE -- 0.4%
22,000 Chugai Pharmaceutical Co., Ltd. . 143,935
40,000 Kyowa Hakko Kogyo Co. ........... 158,519
15,000 Lion Corp. ...................... 50,798
44,000 Sankyo Co., Ltd. ................ 1,001,837
32,000 Yamanouchi Pharmaceutical Co.,
Ltd. ............................ 666,354
------------
2,021,443
------------
HOTELS & LODGING -- 0.0%
11,000 Fujita Kanko Inc. ............... 89,563
------------
INDUSTRIAL GOODS & SERVICES -- 0.9%
88,000 Bridgestone Corp. ............... 2,079,763
97,000 Denso Corp. ..................... 1,607,522
17,000 Inax Corp. ...................... 58,429
58,000 Mitsui Engineering & Shipbuilding
Co., Ltd.*....................... 43,881
35,000 NGK Insulators Ltd. ............. 303,887
20,000 NGK Spark Plug Co., Ltd. ........ 170,047
70,000 Sumitomo Electric Industries
Ltd. ............................ 707,641
------------
4,971,170
------------
Continued
53
72
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
INSURANCE -- 0.5%
69,000 Mitsui Marine & Fire Insurance
Co., Ltd. ....................... $ 346,529
41,000 Nichido Fire & Marine Insurance
Co., Ltd. ....................... 214,180
53,000 Nippon Fire & Marine Insurance
Co. ............................. 216,529
64,000 Sumitomo Marine & Fire Insurance
Co. ............................. 357,848
170,000 Tokio Marine & Fire Insurance
Co. ............................. 1,746,730
------------
2,881,816
------------
JEWELRY -- 0.1%
29,000 Citizen Watch Co., Ltd. ......... 239,255
11,000 Hoya Corp. ...................... 311,489
------------
550,744
------------
LEASING -- 0.1%
7,000 Daiwa Kosho Lease Co., Ltd. ..... 29,405
38,000 Yamato Transport Co., Ltd. ...... 425,766
------------
455,171
------------
LEISURE -- 0.0%
4,000 Namco............................ 93,382
------------
MACHINE-DIVERSIFIED -- 0.0%
7,000 Komori Corp. .................... 132,903
12,000 Kurita Water Industries Ltd. .... 141,802
------------
274,705
------------
MACHINERY & EQUIPMENT -- 0.7%
27,000 Amada Co., Ltd. ................. 131,318
14,000 Brother Industries Ltd. ......... 52,253
24,000 Daikin Industries Ltd. .......... 154,599
26,000 Ebara Corp. ..................... 231,178
93,000 Komatsu Ltd. .................... 451,648
10,000 Koyo Seiko Co., Ltd. ............ 37,324
135,000 Kubota Corp. .................... 311,273
38,000 Minebea Co., Ltd. ............... 378,124
324,000 Mitsubishi Heavy Industries
Ltd. ............................ 1,223,302
5,000 Mori Seiki Co. .................. 61,210
51,000 NSK Ltd. ........................ 207,623
42,000 NTN Corp. ....................... 131,945
63,000 Sumitomo Heavy Industries Ltd. .. 143,899
16,000 Tokyo Electron Ltd. ............. 489,966
------------
4,005,662
------------
MANUFACTURING -- CAPITAL GOODS -- 0.2%
31,000 Fujikura Ltd. ................... 138,041
12,000 Kokuyo Co. ...................... 203,192
14,000 Makita Corp. .................... 161,300
23,000 Murata Manufacturing Co., Ltd. .. 745,758
8,000 Noritake Co., Ltd. .............. 37,468
7,000 Takara Standard Co. ............. 40,602
------------
1,326,361
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
MANUFACTURING -- CONSUMER GOODS -- 0.7%
88,000 Canon Inc. ...................... $ 1,997,334
54,000 Fuji Photo Film Co., Ltd. ....... 1,879,310
8,700 Sega Enterprises Ltd. ........... 150,135
------------
4,026,779
------------
MEDICAL SUPPLIES -- 0.0%
24,000 Olympus Optical Co., Ltd. ....... 208,553
------------
MERCHANDISING -- 0.5%
41,000 Ito-Yokado Co., Ltd. ............ 1,929,099
31,000 JUSCO Co., Ltd. ................. 568,469
35,000 Marui Co., Ltd. ................. 522,030
------------
3,019,598
------------
METALS -- 0.5%
42,000 Daido Steel Co., Ltd. ........... 75,354
312,000 Kawasaki Steel Corp. ............ 562,020
104,000 Mitsubishi Materials Corp. ...... 212,069
662,000 Nippon Steel Corp. .............. 1,163,872
338,000 NKK Corp. ....................... 323,911
302,000 Sumitomo Metal Industries Ltd. .. 485,254
11,000 Tokyo Steel Manufacturing Co. ... 56,591
------------
2,879,071
------------
METALS & MINING -- 0.1%
92,000 Hitachi Zosen Corp. ............. 148,489
46,000 Mitsui Mining & Smelting Co. .... 190,914
52,000 Sumitomo Metal Mining Co. ....... 210,945
------------
550,348
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.1%
113,000 Asahi Glass Co., Ltd. ........... 610,657
------------
OFFICE EQUIPMENT & SERVICES -- 0.2%
73,000 Dai Nippon Printing Co., Ltd. ... 1,165,075
------------
OIL & GAS -- 0.0%
3,100 Arabian Oil Co., Ltd. ........... 45,008
32,000 Mitsubishi Oil Co., Ltd. ........ 44,962
14,000 Teikoko Oil Co., Ltd. ........... 43,276
------------
133,246
------------
PACKAGING -- 0.0%
21,000 Toyo Seikan Kaisha Ltd. ......... 257,232
------------
PHARMACEUTICALS -- 0.3%
26,000 Dai-Ichi Pharmaceuticals......... 342,832
27,000 Eisai Co., Ltd. ................. 367,691
3,000 Kissei Pharmaceutical Co., Ltd. . 44,313
35,000 Meiji Seika Co. ................. 106,424
32,000 Shionogi & Co., Ltd. ............ 184,458
33,000 Taisho Pharmacuetical Co. ....... 615,845
------------
1,661,563
------------
Continued
54
73
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
REAL ESTATE -- 0.3%
124,000 Mitsubishi Estate Co., Ltd. ..... $ 1,090,031
78,000 Mitsui Fudosan Co., Ltd. ........ 615,974
------------
1,706,005
------------
RESTAURANTS -- 0.0%
5,000 Skylark Co., Ltd. ............... 49,357
------------
RETAIL STORES -- 0.1%
6,000 Aoyama Trading Co., Ltd. ........ 147,855
16,000 Hankyu Department Stores Co. .... 83,237
20,000 Isetan Co. ...................... 167,165
29,000 Mycal Corp. ..................... 183,882
28,000 Takashimaya Co., Ltd. ........... 211,031
------------
793,170
------------
RETAIL -- GENERAL MERCHANDISE -- 0.1%
15,300 Credit Saison Co., Ltd. ......... 303,167
14,000 Daimuru Inc. .................... 36,719
43,000 Mitsukoshi Ltd. ................. 123,623
------------
463,509
------------
RETAIL -- SPECIAL LINE -- 0.1%
15,000 Seiyu Ltd. ...................... 31,343
2,000 Shimachu Co. .................... 32,857
18,000 Uny Co., Ltd. ................... 291,818
------------
356,018
------------
SERVICES -- 0.2%
11,000 Secom Co., Ltd. ................. 634,867
67,000 Toppan Printing Co., Ltd. ....... 716,417
------------
1,351,284
------------
STORAGE -- 0.0%
15,000 Mitsubishi Logistics Corp. ...... 133,696
------------
TELECOMMUNICATIONS -- 2.0%
11,000 Nippon Comsys Corp. ............. 126,339
1,224 Nippon Telegraph & Telephone
Corp. ........................... 10,142,305
------------
10,268,644
------------
TEXTILE PRODUCTS -- 0.2%
12,000 Gunze Ltd. ...................... 27,409
33,000 Kuraray Co., Ltd. ............... 280,340
57,000 Mitsubishi Rayon Co., Ltd. ...... 159,354
21,000 Nisshinbo Industries Inc. ....... 83,979
15,000 Onward Kashiyama Co., Ltd. ...... 187,520
89,000 Teijin Ltd. ..................... 269,337
49,000 Toyobo Ltd. ..................... 64,258
14,000 Wacoal Corp. .................... 142,234
------------
1,214,431
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
TRANSPORTATION -- 0.9%
422 East Japan Railway Co. .......... $ 1,982,520
82,000 Hankyu Corp. .................... 336,189
171,000 Japan Airlines Co.*.............. 475,599
155,000 Kinki Nippon Railway Co. ........ 725,943
75,000 Nagoya Railroad Co., Ltd. ....... 226,970
46,000 Nankai Electric Railway Co. ..... 198,869
103,000 Nippon Express Co., Ltd. ........ 552,163
67,000 Odakyu Electric Railway Co. ..... 205,173
78,000 Tobu Railway Co., Ltd. .......... 206,261
105,000 Tokyu Corp. ..................... 318,514
------------
5,228,201
------------
TRANSPORTATION & SHIPPING -- 0.2%
25,000 Kamigumi Co., Ltd. .............. 104,478
30,000 Kawasaki Kisen Kaisha Ltd.*...... 51,879
47,000 Keihin Electric Express Railway
Co., Ltd. ....................... 136,139
101,000 Mitsui OSK Lines Ltd.*........... 171,748
113,000 Nippon Yusen Kabushiki Kaisha 382,678
8,000 Seino Transportation............. 44,385
------------
891,307
------------
WHOLESALE & INTERNATIONAL TRADE -- 0.5%
143,000 Marubeni Corp. .................. 285,413
150,000 Mitsubishi Corp. ................ 929,495
152,000 Mitsui & Co. .................... 821,414
102,000 Sumitomo Corp. .................. 490,211
------------
2,526,533
------------
WIRE & CABLE PRODUCTS -- 0.0%
60,000 Furukawa Electric Co., Ltd. ..... 201,895
------------
136,597,996
------------
MALAYSIA -- 0.6%
AGRICULTURE -- 0.1%
130,000 Golden Hope Plantations Berhad... 119,108
37,500 Highlands & Lowlands Berhad...... 26,492
52,000 IOI Corp. Berhad*................ 25,953
79,000 Kuala Lumpur Kepong Berhad....... 127,619
------------
299,172
------------
AIRLINES -- 0.0%
47,000 Malaysian Airlines............... 15,525
12,000 Malaysian Pacific................ 14,177
------------
29,702
------------
AUTOMOTIVE -- 0.0%
13,000 Ederan Otomobil.................. 12,538
19,200 Oriental Holdings................ 31,942
123,000 Tan Chong International Ltd.*.... 0
41,000 Tan Chong Motors................. 7,464
------------
51,944
------------
Continued
55
74
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MALAYSIA (CONTINUED)
AUTOMOTIVE PARTS -- REPLACEMENT -- 0.0%
33,000 Perusahaan Otomobil Nasional
Berhad........................... $ 21,085
------------
BANKING -- 0.2%
24,000 AMMB Holdings Berhad*............ 12,615
48,000 Commerce Asset Holdings Berhad... 17,939
343,000 Malayan Banking Berhad........... 345,688
213,600 Public Bank...................... 64,376
187,000 RHB Capital Berhad............... 76,198
------------
516,816
------------
BEVERAGES & TOBACCO -- 0.0%
18,000 Guinness Anchor.................. 19,096
------------
BUILDING PRODUCTS -- 0.0%
15,000 Jaya Tiasa Holdings Berhad....... 18,626
------------
CHEMICALS -- 0.0%
8,000 Malaysian Oxygen Berhad.......... 17,746
------------
CONSTRUCTION -- 0.0%
132,500 YTL Corp. Berhad................. 99,675
------------
DIVERSIFIED -- 0.0%
113,000 Malayan United Industries........ 13,078
58,000 Multi-Purpose Holdings Berhad*... 14,404
22,500 Perlis Plantations Berhad........ 19,530
247,040 Sime Darby Berhad................ 170,352
46,000 Time Engineering Berhard......... 6,322
------------
223,686
------------
ELECTRIC UTILITY -- 0.1%
327,000 Tenaga Nasional Berhad........... 394,214
------------
ENERGY -- 0.0%
16,000 Umw Holdings Berhard............. 7,175
------------
ENGINEERING -- 0.0%
180,000 Amsteel Corp. Berhad............. 18,228
6,300 Silverstone Berhad*.............. 0
49,326 United Engineers (Malaysia)
Ltd. ............................ 20,099
------------
38,327
------------
ENTERTAINMENT -- 0.0%
141,000 Magnum Corp. Berhad.............. 52,354
118,000 Resorts World Berhad............. 129,736
------------
182,090
------------
FINANCE -- 0.0%
48,000 MBf Capital Berhad*.............. 8,043
23,000 Rashid Hussain Berhad............ 11,313
------------
19,356
------------
FOOD PRODUCTS -- 0.0%
26,000 Nestle (Malaysia) Berhad......... 117,854
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MALAYSIA (CONTINUED)
HOME FURNISHINGS -- 0.0%
47,000 Technology Resources Industries
Berhad........................... $ 32,297
------------
LEISURE -- 0.0%
38,000 Berjaya Land Berhad.............. 20,890
------------
METALS & MINING -- 0.0%
92,400 Malaysia Mining Corp. Berhad..... 29,408
------------
OIL & GAS -- 0.0%
17,500 Shell Refining Co. (Malaysia)
Berhad........................... 24,895
------------
PRINTING & PUBLISHING -- 0.0%
11,000 New Straits Time Press........... 4,084
------------
REAL ESTATE -- 0.0%
60,000 Malaysian Resources.............. 15,190
------------
TELECOMMUNICATIONS -- 0.2%
351,000 Telekom Malaysia Berhad.......... 592,405
------------
TOBACCO -- 0.0%
15,000 RJ Reynolds...................... 20,796
29,300 Rothmans of Pall Mall (Malaysia)
Berhad........................... 203,104
------------
223,900
------------
TRANSPORTATION -- 0.0%
91,000 Malaysian International Shipping. 132,743
------------
3,132,376
------------
NETHERLANDS -- 5.2%
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.4%
24,740 Philips Electronics NV........... 2,079,685
------------
BANKING -- 0.4%
97,985 ABN Amro Holding NV.............. 2,292,811
------------
BEVERAGES & TOBACCO -- 0.1%
20,437 Heineken NV...................... 802,723
------------
BROADCASTING & PUBLISHING -- 0.1%
46,030 Elsevier NV...................... 694,674
------------
CHEMICALS -- 0.2%
5,283 Akzo Nobel NV.................... 1,174,391
------------
COMPUTER SOFTWARE -- 0.1%
6,165 Getronics NV..................... 319,733
------------
ENERGY -- 1.6%
150,288 Royal Dutch Petroleum Co. ....... 8,333,646
------------
FINANCE -- 0.8%
65,487 ING Groep NV..................... 4,288,061
------------
FOOD PRODUCTS -- 0.6%
45,024 Unilever NV-CVA.................. 3,572,311
------------
Continued
56
75
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
NETHERLANDS (CONTINUED)
INSURANCE -- 0.0%
2,123 Stad Rotterdam NV................ $ 180,133
------------
MANUFACTURING -- CONSUMER GOODS -- 0.0%
262 Stork NV......................... 8,346
------------
PACKAGING -- 0.0%
6,620 Koninklijke KNP BT NV............ 170,852
------------
PRINTING & PUBLISHING -- 0.2%
5,124 Oce NV........................... 218,137
4,911 Wolters Kluwer CVA............... 674,042
------------
892,179
------------
RETAIL -- SPECIAL LINE -- 0.2%
38,919 Ahold............................ 1,249,328
------------
SERVICES -- 0.2%
32,787 Koninklijke Royal PTT Nederland
NV............................... 1,262,017
------------
STEEL -- 0.0%
3,036 Koninklijke Hoogovens NV......... 131,337
------------
TRANSPORTATION -- 0.3%
1,950 IHC Caland NV.................... 109,759
9,809 KLM Royal Dutch Air Lines NV..... 398,296
1,133 Pakhoed NV Kon................... 36,760
32,787 TNT Post Group NV................ 838,121
------------
1,382,936
------------
28,835,163
------------
NEW ZEALAND -- 0.2%
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0%
8,949 Fisher & Paykel Industries Ltd. . 22,762
------------
BEVERAGES & TOBACCO -- 0.0%
41,300 Lion Nathan Ltd. ................ 91,756
------------
BUILDING PRODUCTS -- 0.0%
26,010 Fletcher Challenge Building*..... 32,403
------------
FINANCE -- 0.0%
201,800 Brierley Investments Ltd. ....... 100,562
------------
FOREST PRODUCTS -- 0.0%
130,281 Carter Holt Harvey Ltd. ......... 113,614
60,761 Fletcher Challenge Forests....... 34,063
49,122 Fletcher Challenge Paper......... 54,567
------------
202,244
------------
OIL & GAS -- 0.0%
25,761 Fletcher Challenge Energy........ 61,512
------------
TELECOMMUNICATIONS -- 0.2%
131,965 Telecom Corp. of New Zealand
Ltd. ............................ 543,900
------------
1,055,139
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
NORWAY -- 0.5%
BANKING -- 0.1%
49,100 Christiania Bank Og Kreditkasse.. $ 205,395
18,100 Den norske Bank ASA.............. 94,822
------------
300,217
------------
CHEMICALS -- 0.0%
1,000 Dyno Industrier ASA.............. 17,854
------------
ELECTRIC UTILITY -- 0.0%
15,650 Hafslund ASA, Series A........... 84,638
10,326 Hafslund ASA, Series B........... 40,774
------------
125,412
------------
ENGINEERING -- 0.0%
3,050 Kvaerner ASA, Series A........... 103,342
------------
FOREST PRODUCTS -- 0.0%
3,200 Norske Skogindustrier ASA-
Class A.......................... 98,833
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
1,200 Unitor ASA....................... 17,671
------------
INSURANCE -- 0.0%
24,700 Storebrand ASA................... 218,882
------------
MANUFACTURING -- CONSUMER GOODS -- 0.1%
14,400 Orkla ASA-Class A................ 334,969
------------
OIL & GAS -- 0.2%
10,500 Aker RGI ASA, Series A........... 164,885
2,100 Aker RGI ASA, Series B........... 29,967
16,850 Norsk Hydro ASA.................. 741,102
6,600 Petroleum Geo--Services ASA...... 205,564
------------
1,141,518
------------
TRANSPORTATION -- 0.0%
9,000 Bergesen d.y. ASA-Class A........ 171,238
1,400 Bergesen d.y. ASA-Class B........ 26,181
2,200 Leif Hoegh & Co. ASA............. 32,110
------------
229,529
------------
2,588,227
------------
SINGAPORE -- 0.7%
AUTOMOTIVE -- 0.0%
1,000 Cycle & Carriage................. 2,439
------------
BANKING -- 0.2%
77,375 Development Bank Of Singapore
Ltd. ............................ 428,212
114,042 Oversea-Chinese Banking Corp.,
Ltd. ............................ 388,132
117,350 United Overseas Bank Ltd. ....... 364,661
------------
1,181,005
------------
BEVERAGES & TOBACCO -- 0.0%
47,000 Fraser & Neave Ltd. ............. 126,299
------------
ELECTRICAL EQUIPMENT -- 0.0%
5,000 Creative Technology Ltd. *....... 60,670
------------
Continued
57
76
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SINGAPORE (CONTINUED)
FINANCE -- 0.0%
29,600 Haw Par Brothers International
Ltd. ............................ $ 31,011
------------
HOTELS & LODGING -- 0.0%
1,400 Overseas Union Enterprise Ltd. .. 2,063
1,100 Shangri-La Hotel Ltd. ........... 1,361
------------
3,424
------------
METALS & MINING -- 0.0%
7,000 Straits Trading Co., Ltd. ....... 4,123
------------
PRINTING & PUBLISHING -- 0.1%
45,136 Singapore Press Holdings Ltd. ... 301,892
------------
REAL ESTATE -- 0.1%
69,600 City Developments Ltd. .......... 194,446
115,000 DBS Land Ltd. ................... 95,296
8,000 United Industrial Corp., Ltd. ... 2,297
52,000 United Overseas Land Ltd. ....... 28,009
------------
320,048
------------
STEEL -- 0.0%
60,750 NatSteel Ltd. ................... 58,971
------------
TELECOMMUNICATIONS -- 0.2%
635,000 Singapore Telecommunications
Ltd. ............................ 902,052
------------
TRANSPORTATION -- 0.1%
59,000 Neptune Orient Lines Ltd. *...... 20,429
133,000 Singapore Airlines Ltd. ......... 621,907
------------
642,336
------------
TRANSPORTATION & SHIPPING -- 0.0%
79,000 Keppel Corp. .................... 118,770
------------
WHOLESALE DISTRIBUTION -- 0.0%
11,000 Inchcape Berhad.................. 7,553
------------
3,760,593
------------
SPAIN -- 3.6%
AGRICULTURE -- 0.0%
400 Azucarera Ebro Agricolas SA...... 11,915
------------
BANKING -- 0.8%
32,142 Banco Central Hispanoamericano
SA............................... 1,011,983
83,822 Banco Santander SA............... 2,149,071
42,800 Corporation Bancaria De Espana
SA............................... 961,735
------------
4,122,789
------------
BANKING & FINANCE -- 0.5%
58,941 Banco Bilbao Vizcaya SA.......... 3,030,019
------------
BEVERAGES & TOBACCO -- 0.1%
1,650 El Aguila SA *................... 15,413
16,530 Tabacalera SA-Class A............ 339,044
------------
354,457
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
BUILDING PRODUCTS -- 0.0%
820 Portland Valderrivas SA.......... $ 100,645
5,400 Uralita SA....................... 77,072
------------
177,717
------------
CHEMICALS -- 0.0%
700 Ercros SA *...................... 887
------------
COMMERCIAL SERVICES -- 0.0%
500 Prosegur, CIA de Seguridad SA.... 5,961
------------
ENERGY -- 0.3%
26,198 Repsol SA........................ 1,446,032
------------
ENGINEERING -- 0.1%
22,064 Autopistas Concesionaria Espanola
SA............................... 342,290
5,800 Dragados & Construcciones SA..... 186,021
200 Urbis SA *....................... 2,796
------------
531,107
------------
FOREST PRODUCTS -- 0.0%
100 Empresa Nacional de Celulosas
SA............................... 1,764
2,498 Sarrio SA *...................... 11,748
------------
13,512
------------
GAS & ELECTRIC UTILITY -- 0.8%
90,480 Endesa--Empresa Nac Elec......... 1,982,888
5,308 Fomento de Construcciones y
Contratas SA..................... 274,259
78,524 Iberdrola SA..................... 1,277,188
26,566 Union Electrica Fenosa SA........ 342,725
------------
3,877,060
------------
INDUSTRIAL HOLDING COMPANY -- 0.0%
1,475 Corporacion Financiara Alba SA... 162,347
------------
INSURANCE -- 0.0%
5,500 Corporacion Mapfre............... 193,285
------------
MACHINERY & EQUIPMENT -- 0.0%
6,417 Zardoya Otis SA.................. 191,129
------------
METALS -- 0.0%
1,200 Acerinox SA...................... 160,063
------------
MISCELLANEOUS MATERIALS &
COMMODITIES -- 0.0%
1,221 Viscofan Industria Navarra de
Envolturas Celulosicassa SA...... 56,946
------------
NATURAL GAS UTILITY -- 0.2%
13,124 Gas Natural SDG SA............... 949,859
------------
REAL ESTATE -- 0.0%
3,669 Metrovacesa SA................... 108,079
4,361 Vallehermoso SA.................. 160,664
------------
268,743
------------
Continued
58
77
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
TELECOMMUNICATIONS -- 0.8%
89,209 Telefonica de Espana............. $ 4,131,503
------------
WATER UTILITY -- 0.0%
4,700 Aquas De Barcelona............... 262,493
------------
19,947,824
------------
SWEDEN -- 2.8%
AUTOMOTIVE -- 0.2%
11,300 Volvo AB, Series A............... 328,729
24,100 Volvo AB, Series B............... 717,716
------------
1,046,445
------------
BANKING & FINANCE -- 0.5%
24,700 ForeningsSparbanken AB........... 743,328
46,600 Skandiaviska Enskilda Banken,
Series A......................... 797,610
17,200 Svenska Handelsbanken, Series A.. 797,999
6,300 Svenska Handlesbanken, Series B.. 276,491
------------
2,615,428
------------
CONSUMER GOODS & SERVICES -- 0.0%
3,000 Securitas AB, Series B........... 146,898
------------
ENGINEERING -- 0.3%
53,000 ABB AB, Series A................. 750,977
28,500 ABB AB, Series B................. 396,680
9,300 Skanska AB, Series B............. 417,482
------------
1,565,139
------------
FOREST PRODUCTS -- 0.1%
21,500 Stora Kopparbergs Bergslags
Aktiebolag, Series A............. 338,341
3,250 Stora Kopparbergs Bergslags
Aktiebolag, Series B............. 51,348
16,200 Svenska Cellusoa AB, Series B.... 419,476
------------
809,165
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
4,200 Sandvik AB, Series A............. 116,126
------------
INSURANCE -- 0.1%
45,500 Skandia Forsakrings AB........... 650,412
------------
MACHINERY & EQUIPMENT -- 0.1%
10,050 Atlas Copco AB, Series A......... 274,093
500 Atlas Copco AB, Series B......... 13,636
------------
287,729
------------
MANUFACTURING--CONSUMER GOODS -- 0.1%
30,000 Electrolux AB, Series B.......... 515,364
------------
METAL FABRICATE/HARDWARE -- 0.0%
9,300 SKF AB, Series A................. 165,011
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SWEDEN (CONTINUED)
METALS & MINING -- 0.1%
10,100 SKF AB, Series B................. $ 183,638
7,960 Trelleborg AB, Series B.......... 104,803
------------
288,441
------------
OFFICE EQUIPMENT & SERVICES -- 0.0%
300 Esselte AB, Series B 6,959
------------
PHARMACEUTICALS -- 0.4%
94,400 Astra AB, Series A............... 1,929,442
24,333 Astra AB, Series B............... 485,138
------------
2,414,580
------------
RETAIL--SPECIAL LINE -- 0.2%
16,500 Hennes & Mauritz AB, Series B.... 1,053,110
------------
TELECOMMUNICATIONS -- 0.7%
135,800 Telefonaktiebolaget LM Ericsson,
Series B......................... 3,967,600
------------
15,648,407
------------
SWITZERLAND -- 6.7%
AIRLINES -- 0.1%
1,100 SAirGroup........................ 361,878
------------
BUILDING PRODUCTS -- 0.2%
700 Holderbank Financiere Glarus AG-
Class A.......................... 176,060
542 Holderbank Financiere Glarus AG-
Class B.......................... 689,644
------------
865,704
------------
COMMERCIAL SERVICES -- 0.1%
1,690 Addeco SA........................ 762,099
------------
DIVERSIFIED -- 0.3%
704 ABB AG, Bearer Shares *.......... 1,039,655
579 Alusuisse-Lonza Holding AG,
Registered....................... 734,433
------------
1,774,088
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.1%
285 The Swatch Group AG, Bearer...... 220,212
1,100 The Swatch Group AG, Registered.. 183,477
------------
403,689
------------
FINANCE -- 1.7%
14,820 Credit Suisse Group, Registered.. 3,297,543
16,543 UBS AG, Registered............... 6,151,063
------------
9,448,606
------------
FOOD PRODUCTS -- 1.1%
2,813 Nestle SA, Registered............ 6,019,865
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
83 SGS Societe Generale de
Surveillance Holding SA.......... 140,685
------------
Continued
59
78
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SWITZERLAND (CONTINUED)
INSURANCE -- 0.8%
929 Swiss Reinsurance Co.,
Registered....................... $ 2,349,432
2,940 Zuerich Verichrng Gesellschft Rg. 1,876,252
------------
4,225,684
------------
MANUFACTURING--CONSUMER GOODS -- 0.0%
281 Sulzer AG, Registered............ 221,753
------------
PHARMACEUTICALS -- 2.3%
578 Novartis AG, Bearer.............. 962,564
3,315 Novartis AG, Registered.......... 5,516,884
418 Roche Holding AG................. 4,104,737
133 Roche Holding AG, Bearer......... 1,970,697
------------
12,554,882
------------
36,778,933
------------
UNITED KINGDOM -- 21.1%
AEROSPACE -- 0.1%
25,464 Smiths Industries PLC............ 356,039
------------
AEROSPACE & MILITARY TECHNOLOGY -- 0.2%
136,688 British Aerospace PLC............ 1,049,095
7,300 Cobham PLC....................... 127,891
------------
1,176,986
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
65,300 EMI Group PLC.................... 572,549
------------
AUTO PARTS -- 0.0%
34,514 BBA Group PLC.................... 260,292
------------
AUTOMOTIVE -- 0.1%
124,647 Rolls-Royce PLC.................. 515,255
------------
BANKING -- 2.4%
110,837 Abbey National PLC............... 1,975,071
119,828 Barclays PLC..................... 3,460,845
68,595 HSBC Holdings PLC................ 1,740,798
141,539 HSBC Holdings PLC (Hong Kong
Dollars)......................... 3,438,462
72,495 Royal Bank of Scotland Group
PLC.............................. 1,256,754
24,268 Schroders PLC.................... 623,173
------------
12,495,103
------------
BEVERAGES & TOBACCO -- 0.7%
279,142 Diageo PLC....................... 3,323,119
51,361 Scottish & Newcastle PLC......... 722,845
------------
4,045,964
------------
BREWERY -- 0.2%
62,127 Bass PLC......................... 1,160,981
73,727 Bass PLC, Class B................ 113,788
------------
1,274,769
------------
BROADCASTING/CABLE -- 0.3%
143,100 British Sky Broadcasting Group
PLC.............................. 1,030,858
48,242 Carlton Communications PLC....... 430,229
------------
1,461,087
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
BUILDING PRODUCTS -- 0.3%
61,602 Blue Circle Industries PLC....... $ 346,379
42,536 BPB PLC.......................... 260,465
21,454 RMC Group PLC.................... 372,637
50,900 Rugby Group PLC.................. 95,543
77,348 Tarmac PLC....................... 139,057
63,173 Williams PLC..................... 408,442
------------
1,622,523
------------
CHEMICALS -- 0.3%
40,448 BOC Group PLC.................... 552,048
33,804 Courtaulds PLC................... 251,271
28,860 Elementis PLC.................... 74,156
60,251 Imperial Chemical Industries
PLC.............................. 971,109
------------
1,848,584
------------
CONGLOMERATES -- 0.4%
243,883 B.A.T. Industries PLC............ 2,435,412
------------
CONSTRUCTION -- 0.0%
31,200 Taylor Woodrow PLC............... 104,635
------------
DISTRIBUTION -- 0.4%
308,609 BG PLC........................... 1,784,180
366,494 Centrica PLC *................... 620,668
------------
2,404,848
------------
ELECTRIC UTILITY -- 0.4%
121,353 National Grid Group PLC.......... 818,516
97,883 Scottish Power PLC............... 863,952
39,709 Southern Electric PLC............ 366,719
------------
2,049,187
------------
ELECTRICAL & ELECTRONIC -- 0.4%
15,800 Bowthorpe PLC.................... 138,007
35,374 Electrocomponents PLC............ 285,369
212,860 General Electric Co., PLC........ 1,834,388
------------
2,257,764
------------
ENERGY -- 1.2%
467,850 British Petroleum Co., PLC....... 6,810,811
FINANCE -- 1.2%
56,913 Cardon PLC....................... 176,625
434,219 Lloyds TSB Group PLC............. 6,064,025
22,109 Provident Financial PLC.......... 349,522
31,900 St. James's Place Capital PLC.... 173,248
------------
6,763,420
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.7%
83,202 Cadbury Schweppes PLC............ 1,288,275
255,848 Unilever PLC..................... 2,746,991
------------
4,035,266
------------
Continued
60
79
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
FOOD PRODUCTS -- 0.3%
74,900 Associated British Foods PLC..... $ 704,835
37,080 Tate & Lyle PLC.................. 294,337
19,834 Unigate PLC...................... 219,738
43,459 United Biscuits (Holdings) PLC... 174,390
------------
1,393,300
------------
FOREST PRODUCTS -- 0.0%
68,504 Arjo Wiggins Appleton PLC........ 232,027
------------
GAS & ELECTRIC UTILITY -- 0.2%
100,766 National Power PLC............... 948,243
------------
HEALTH & PERSONAL CARE -- 2.2%
283,559 Glaxo Wellcome PLC............... 8,535,063
74,469 Zeneca Group PLC................. 3,199,481
------------
11,734,544
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
314,244 BTR PLC.......................... 892,649
54,127 TI Group PLC..................... 328,506
------------
1,525,673
------------
INSURANCE -- 2.5%
74,068 Boots Co., PLC................... 1,232,119
57,041 Commercial Union PLC............. 1,064,986
83,616 Great Universal Stores PLC....... 1,102,854
71,949 Guardian Royal Exchange.......... 426,467
99,807... Legal & General Group PLC........ 1,064,115
223,326 Marks & Spencer PLC.............. 2,038,231
152,133 Prudential Corp., PLC............ 2,005,290
123,473 Royal & Sun Alliance insurance
Group PLC........................ 1,259,781
148,438 Sainsbury (J) PLC................ 1,317,600
43,500 Sedgwick Group PLC............... 92,902
171,337 Tesco PLC........................ 1,670,946
------------
13,275,291
------------
LEISURE -- 0.4%
69,592 Granada Group PLC................ 1,281,903
97,672 Ladbroke Group PLC............... 539,010
68,058 Rank Group PLC................... 370,473
------------
2,191,386
------------
MACHINE -- DIVERSIFIED -- 0.0%
44,496 FK1 PLC.......................... 129,552
------------
MACHINERY & EQUIPMENT -- 0.1%
58,800 GNK PLC.......................... 744,639
------------
MANUFACTURING -- CAPITAL GOODS -- 0.1%
28,784 IMI PLC.......................... 178,417
47,392 Wolseley PLC..................... 280,909
------------
459,326
------------
MERCHANDISING -- 0.1%
90,523 Safeway PLC...................... 595,089
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
METALS -- 0.2%
169,516 British Steel PLC................ $ 374,760
89,082 Rio Tinto PLC, Registered........ 1,004,019
------------
1,378,779
------------
METALS & MINING -- 0.0%
18,004 Johnson Matthey PLC.............. 161,914
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.0%
86,232 Pilkington PLC................... 159,705
------------
OIL & GAS -- 0.1%
17,571 Burmah Castrol PLC............... 314,574
80,282 LASMO PLC........................ 322,151
------------
636,725
------------
PAPER PRODUCTS -- 0.0%
41,858 Rexam PLC........................ 183,330
------------
PHARMACEUTICALS -- 1.0%
437,464 SmithKline Beecham PLC........... 5,324,690
------------
PRINTING & PUBLISHING -- 0.6%
4,808 De La Rue PLC.................... 24,026
47,573 Pearson PLC...................... 873,132
94,996 Reed International PLC........... 858,283
114,527 Reuters Group PLC 1,310,867
------------
3,066,308
------------
RAILROADS -- 0.2%
41,900 Railtrack Group PLC.............. 1,029,778
------------
REAL ESTATE -- 0.4%
42,809 British Land Co., PLC............ 440,704
31,336 Great Portland Estates PLC....... 130,188
35,421 Hammerson PLC.................... 288,704
44,495 Land Securities PLC.............. 695,540
34,849 MEPC PLC......................... 307,590
32,472 Slough Estates PLC............... 186,649
------------
2,049,375
------------
RETAIL STORES -- 0.0%
31,126 Nect PLC......................... 267,978
------------
RETAIL -- GENERAL MERCHANDISE -- 0.2%
23,736 Argos PLC........................ 247,522
56,751 Kingfisher PLC................... 919,432
119,900 Sears PLC........................ 106,528
------------
1,273,482
------------
RETAIL -- SPECIAL LINE -- 0.1%
119,041 Lucas Varity PLC................. 476,192
------------
TELECOMMUNICATIONS -- 2.1%
499,617 British Telecommunications PLC... 6,147,888
177,851 Cable & Wireless PLC............. 2,164,753
241,321 Vodafone Group PLC............... 3,064,125
------------
11,376,766
------------
Continued
61
80
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
TELECOMMUNICATIONS -- EQUIPMENT -- 0.0%
22,300 Racal Electronic PLC............. $ 125,948
------------
TRANSPORTATION -- 0.3%
86,272 British Airways PLC.............. 929,165
13,207 Ocean Group PLC.................. 166,702
51,346 Peninsular & Oriental Steam
Navigation Co.................... 740,625
------------
1,836,492
------------
WATER UTILITY -- 0.3%
22,457 Anglian Water PLC................ 316,056
12,000 BPS Hyder PLC.................... 188,007
31,499 Thames Water PLC................. 574,964
44,614 United Utilities PLC............. 650,965
------------
1,729,992
------------
116,797,018
------------
TOTAL COMMON STOCKS 536,866,807
------------
(Cost $444,495,517)
CORPORATE NOTES & BONDS -- 0.0%
UNITED KINGDOM -- 0.0%
COMPUTER HARDWARE MANUFACTURING -- 0.0%
$1,793 Viglen Technology PLC, 6.94%**,
9/1/98........................... 0
------------
TOTAL CORPORATE NOTES & BONDS 0
------------
(Cost $0)
INVESTMENT COMPANIES -- 1.3%
UNITED STATES -- 1.3%
3,994,955 Dreyfus Cash Management Money
Market Fund...................... 3,994,955
3,424,723 Federated Prime Value Obligations
Money Market Fund................ 3,424,723
------------
TOTAL INVESTMENT COMPANIES....... 7,419,678
------------
(Cost $7,419,678)
PREFERRED STOCKS -- 0.8%
AUSTRALIA -- 0.2%
PRINTING & PUBLISHING -- 0.2%
132,935 News Corp., Ltd.................. 941,737
------------
AUSTRIA -- 0.0%
BANKING -- 0.0%
2,600 Bank Austria AG.................. 211,087
------------
GERMANY -- 0.6%
AUTOMOTIVE -- 0.1%
168 MAN AG Preferred................. 45,513
527 Volkswagen AG Preferred.......... 359,112
------------
404,625
------------
COMPUTER SOFTWARE -- 0.4%
3,300 SP AG Preferred.................. 2,243,226
------------
GAS & ELECTRIC UTILITY -- 0.1%
16,540 RWE AG........................... 711,069
------------
3,358,920
------------
TOTAL PREFERRED STOCKS........... 4,511,744
------------
(Cost $1,742,550)
MARKET
SHARES VALUE
------ ------
RIGHTS -- FOREIGN -- 0.0%
AUSTRIA -- 0.0%
BANKING -- 0.0%
13,150 Bank Austria*.................... $ 0
------------
GERMANY -- 0.0%
AUTOMOTIVE -- 0.0%
39170 Daimler-Benz Rights*............. 43,401
------------
RETAIL STORES -- 0.0%
17,073 Metro Rights*.................... 662
------------
44,063
------------
NETHERLANDS -- 0.0%
MACHINERY & EQUIPMENT -- 0.0%
10 Stork Rights*.................... 9
------------
SWEDEN -- 0.0%
BANKING -- 0.0%
23,500 Handelsbanken Rights*............ 23,721
------------
BANKING & FINANCE -- 0.0%
24,700 Mandamus Units*.................. 7,743
------------
31,464
------------
TOTAL RIGHTS -- FOREIGN.......... 75,536
------------
(Cost $56,459)
WARRANTS -- 0.0%
HONG KONG -- 0.0%
GAS UTILITY -- 0.0%
17,412 Hong Kong & China Gas Warrants*.. 1,191
------------
REAL ESTATE -- 0.0%
33,200 Hysen Development Co.,
Warrants*........................ 274
12,500 Wharf Holdings Warrants*......... 0
------------
274
------------
TOTAL WARRANTS................... 1,465
------------
(Cost $0)
TOTAL INVESTMENTS -- 99.4%.................. 548,875,218
(Cost $453,714,204)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.6%....................... 3,513,031
------------
TOTAL NET ASSETS -- 100.0%.................. $552,388,249
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $165,238,695
Unrealized depreciation............... (70,122,681)
------------
Net unrealized appreciation........... $ 95,161,014
============
* Non-income producing security.
** Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
See Notes to Financial Statements
62
81
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 98.7%
ADVERTISING -- 0.2%
10,300 Interpublic Group Cos., Inc. ... $ 625,081
13,300 Omnicom Group................... 663,338
------------
1,288,419
------------
AEROSPACE & DEFENSE -- 1.1%
81,992 Boeing Co. ..................... 3,653,768
10,300 General Dynamics Corp. *........ 478,950
15,994 Lockheed Martin Corp. .......... 1,693,365
5,500 Northrop Grumman Corp. ......... 567,188
27,800 Raytheon Co. -- Class B......... 1,643,675
------------
8,036,946
------------
AGRICULTURE -- 0.1%
20,000 Pioneer Hi Bred, Inc. .......... 827,500
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
7,800 Maytag Corp. ................... 385,125
6,200 Whirlpool Corp. ................ 426,250
------------
811,375
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.3%
3,100 Cummins Engine, Inc. ........... 158,875
8,600 Dana Corp. ..................... 460,100
6,300 Eaton Corp. .................... 489,825
5,920 Navistar International Corp. *.. 170,940
6,350 PACCAR, Inc. ................... 331,788
10,100 TRW, Inc. ...................... 551,712
------------
2,163,240
------------
AUTO/TRUCK -- REPLACEMENT
EQUIPMENT -- 0.1%
5,200 Echlin, Inc. ................... 255,125
14,625 Genuine Parts Co. .............. 505,477
------------
760,602
------------
AUTOMOTIVE -- 1.7%
53,238 Chrysler Corp. ................. 3,001,292
98,400 Ford Motor Co. ................. 5,805,600
58,000 General Motors Corp. ........... 3,875,125
------------
12,682,017
------------
BANKS -- MAJOR REGIONAL -- 5.5%
52,998 Banc One Corp. ................. 2,957,950
30,900 Bank of New York Co., Inc. ..... 1,875,244
23,800 BankBoston Corp. ............... 1,323,875
12,950 Comerica, Inc. ................. 857,938
23,853 First Chicago NBD Corp. ........ 2,113,972
79,370 First Union Corp. .............. 4,623,302
22,407 Fleet Financial Group, Inc. .... 1,870,985
36,000 KeyCorp......................... 1,282,500
20,900 Mellon Bank Corp. .............. 1,455,163
26,800 National City Corp. ............ 1,902,800
77,169 NationsBank..................... 5,903,428
9,200 Northern Trust Corp. ........... 701,500
62,000 Norwest Corp. .................. 2,317,250
25,000 PNC Bank Corp. ................. 1,345,313
9,000 Republic New York Corp. ........ 566,438
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BANKS -- MAJOR REGIONAL (CONTINUED)
14,400 Summit Bancorp *................ $ 684,000
17,300 SunTrust Banks, Inc. ........... 1,406,706
60,362 U.S. Bancorp.................... 2,595,566
16,900 Wachovia Corp. ................. 1,428,050
7,100 Wells Fargo & Co. .............. 2,619,899
------------
39,831,879
------------
BANKS -- MIDWEST -- 0.2%
19,100 Fifth Third Bancorp............. 1,203,300
15,700 Huntington Bancshares........... 525,950
------------
1,729,250
------------
BANKS -- MONEY CENTER -- 2.6%
56,848 BankAmerica Corp. .............. 4,913,799
8,000 Bankers Trust New York Corp. ... 928,500
11,700 BB&T Corp. *.................... 791,213
69,116 Chase Manhattan Corp. .......... 5,218,258
37,500 Citicorp........................ 5,596,874
14,600 J.P. Morgan & Co., Inc. ........ 1,710,025
------------
19,158,669
------------
BANKS -- NORTHEAST -- 0.1%
13,200 State Street Corp. ............. 917,400
------------
BEVERAGES -- ALCOHOLIC -- 0.3%
3,000 Adolph Coors Co. ............... 102,000
40,170 Anheuser-Busch Co., Inc. ....... 1,895,522
5,700 Brown-Forman Corp. ............. 366,225
------------
2,363,747
------------
BEVERAGES -- SOFT DRINKS -- 3.0%
202,900 Coca-Cola Co. .................. 17,347,949
124,500 PepsiCo, Inc. .................. 5,127,844
------------
22,475,793
------------
BROADCASTING/CABLE -- 0.8%
10,100 Clear Channel Communications.... 1,102,163
28,600 Comcast Corp. Special........... 1,160,981
49,800 Media One Group *............... 2,188,087
41,646 Tele-Communications Inc.,
Class A *....................... 1,600,768
------------
6,051,999
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.2%
3,300 Armstrong World Industries,
Inc. ........................... 222,338
13,600 Masco Corp. .................... 822,800
4,400 Owens-Corning Fiberglas Corp. *. 179,575
------------
1,224,713
------------
BUILDING -- HEAVY CONSTRUCTION -- 0.1%
6,900 Fluor Corp. .................... 351,900
3,300 Foster Wheeler Corp. ........... 70,744
------------
422,644
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.0%
10,600 Ecolab, Inc. ................... 328,600
------------
Continued
63
82
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES -- 0.0%
3,000 Fleetwood Enterprises, Inc. *... $ 120,000
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.1%
4,900 Centex Corp. ................... 184,975
3,240 Kaufman & Broad Home Corp. ..... 102,870
3,500 Pulte Corp. .................... 104,563
------------
392,408
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.8%
60,031 Home Depot, Inc. ............... 4,986,324
28,600 Lowe's Cos., Inc. .............. 1,160,088
------------
6,146,412
------------
BUILDING PRODUCTS -- WOOD -- 0.1%
9,000 Louisiana-Pacific Corp. ........ 164,250
16,350 Weyerhaeuser Co. ............... 755,166
------------
919,416
------------
BUSINESS INFORMATION -- 0.2%
13,265 Cognizant Corp. *............... 835,695
13,965 Dun & Bradstreet Corp. ......... 504,486
------------
1,340,181
------------
BUSINESS SERVICES -- 0.0%
8,600 H & R Block *................... 362,275
------------
CAPITAL GOODS -- 0.2%
58,300 CBS Corp. ...................... 1,851,025
------------
CHEMICALS -- DIVERSIFIED -- 2.0%
5,900 B.F.Goodrich Co. ............... 292,788
18,600 Dow Chemical Co. ............... 1,798,387
92,800 E.I. du Pont de Nemours & Co. .. 6,925,199
6,400 Eastman Chemical Co. ........... 398,400
7,900 Hercules, Inc. ................. 324,888
48,600 Monsanto Co. ................... 2,715,524
14,600 PPG Industries, Inc. ........... 1,015,612
5,000 Rohm & Haas Co. ................ 519,688
10,100 Union Carbide Corp. ............ 539,088
6,100 W.R. Grace & Co. *.............. 104,081
------------
14,633,655
------------
CHEMICALS -- SPECIALTY -- 0.3%
19,400 Air Products & Chemical, Inc. .. 776,000
11,837 Engelhard Corp. ................ 239,699
4,900 Great Lakes Chemical Corp. ..... 193,244
10,700 Morton International, Inc. *.... 267,500
5,500 Nalco Chemical Co. ............. 193,188
12,900 Praxair, Inc. .................. 603,881
8,200 Sigma-Aldrich Corp. ............ 288,025
------------
2,561,537
------------
COMMERCIAL SERVICES -- 0.2%
66,519 Cendant Corp. .................. 1,388,584
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
COMPUTER SOFTWARE -- 3.6%
5,600 Adobe Systems, Inc. *........... $ 237,650
44,818 Computer Associates
International, Inc. ............ 2,490,199
199,700 Microsoft Corp. *............... 21,642,487
80,675 Oracle Corp. *.................. 1,981,580
21,100 Parametric Technology Corp. *... 572,338
------------
26,924,254
------------
COMPUTERS -- LOCAL AREA NETWORK -- 1.3%
29,100 3COM Corp. *.................... 893,006
18,000 Bay Networks, Inc. *............ 580,500
13,000 Cabletron Systems *............. 174,688
83,500 Cisco Systems, Inc. *........... 7,687,219
28,800 Novell, Inc. *.................. 367,200
------------
9,702,613
------------
COMPUTERS -- MAINFRAME -- 1.3%
79,800 International Business Machines
Corp. .......................... 9,162,038
20,500 Unisys Corp. ................... 579,125
------------
9,741,163
------------
COMPUTERS -- MEMORY DEVICES -- 0.3%
40,700 EMC Corp. *..................... 1,823,869
19,900 Seagate Technology, Inc. *...... 473,869
------------
2,297,738
------------
COMPUTERS -- MICRO -- 1.3%
10,900 Apple Computer, Inc. *.......... 312,694
135,574 Compaq Computer Corp. .......... 3,846,912
4,000 Data General Corp. *............ 59,750
53,600 Dell Computer Corp. *........... 4,974,750
12,700 Gateway 2000, Inc. *............ 642,938
------------
9,837,044
------------
COMPUTERS -- MINI -- 0.9%
85,300 Hewlett-Packard Co. ............ 5,107,337
15,400 Silicon Graphics, Inc. *........ 186,725
31,000 Sun Microsystems, Inc. *........ 1,346,563
------------
6,640,625
------------
COMPUTERS -- SERVICES -- 0.6%
24,500 Automatic Data Processing,
Inc. ........................... 1,785,437
6,200 Ceridian Corp. *................ 364,250
12,800 Computer Science *.............. 819,200
12,300 Equifax, Inc. .................. 446,644
35,100 First Data Corp. ............... 1,169,269
2,200 Shared Medical Systems Corp. ... 161,563
------------
4,746,363
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.8%
6,000 American Greetings Corp. ....... 305,625
3,195 Jostens, Inc. .................. 77,079
13,100 Newell Cos., Inc. .............. 652,544
12,300 Rubbermaid, Inc. *.............. 408,206
5,000 Tupperware Corp. ............... 140,625
Continued
64
83
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
CONSUMER PRODUCTS -- MISCELLANEOUS (CONTINUED)
52,500 Unilever NV, ADR................ $ 4,144,219
------------
5,728,298
------------
CONTAINERS & PACKAGING -- 0.1%
12,700 Owens-Illinois *................ 568,325
6,716 Sealed Air Corp. *.............. 246,813
------------
815,138
------------
CONTAINERS -- METAL & GLASS -- 0.1%
2,500 Ball Corp. ..................... 100,469
10,500 Crown Cork & Seal Co., Inc. .... 498,750
------------
599,219
------------
CONTAINERS -- PAPER & PLASTIC -- 0.0%
4,300 Bemis Co. ...................... 175,763
------------
COSMETICS & TOILETRIES -- 1.2%
4,700 Alberto Culver Co., Class B..... 136,300
10,800 Avon Products, Inc. ............ 837,000
91,864 Gillette Co. ................... 5,207,540
9,000 International Flavors &
Fragrances, Inc. ............... 390,938
45,640 Kimberly-Clark Corp. ........... 2,093,735
------------
8,665,513
------------
DIVERSIFIED -- 4.8%
16,020 Allegheny Teledyne, Inc. ....... 366,458
46,300 Allied Signal, Inc. ............ 2,054,563
3,750 Crane Co. ...................... 182,109
3,000 FMC Corp. *..................... 204,563
268,500 General Electric Co. (b)........ 24,433,499
9,700 ITT Industries, Inc. ........... 362,538
6,900 Johnson Controls, Inc. ......... 393,731
33,500 Minnesota Mining & Manufacturing
Co. ............................ 2,753,280
3,500 National Service Industries,
Inc. ........................... 178,063
29,200 Seagram Co., Ltd. .............. 1,195,375
14,000 Tenneco, Inc. .................. 532,875
13,500 Textron, Inc. .................. 967,781
19,100 United Technologies Corp. ...... 1,766,750
------------
35,391,585
------------
ELECTRICAL & ELECTRONIC -- 0.0%
6,900 KLA-Tencor Corp. *.............. 191,044
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 2.0%
11,600 Advanced Micro Devices, Inc. *.. 197,925
30,000 Applied Materials, Inc. *....... 885,000
134,200 Intel Corp. .................... 9,947,574
11,600 LSI Logic Corp. *............... 267,525
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ELECTRICAL COMPONENTS -- SEMICONDUCTORS
(CONTINUED)
17,400 Micron Technology, Inc. ........ $ 431,738
13,500 National Semiconductor Corp. *.. 178,031
16,500 Rockwell International Corp. ... 793,031
32,000 Texas Instruments, Inc. ........ 1,866,000
------------
14,566,824
------------
ELECTRONIC -- CONNECTORS -- 0.1%
18,036 AMP, Inc. ...................... 619,988
4,500 Thomas & Betts Corp. ........... 221,625
------------
841,613
------------
ELECTRONIC MEASURING EQUIPMENT -- 0.0%
4,100 Tektronix, Inc. ................ 145,038
------------
ELECTRONICS -- 0.0%
7,000 Raychem Corp. .................. 206,938
------------
ENERGY -- 0.0%
8,700 Orxy Energy Co. *............... 192,488
------------
FINANCE -- 0.8%
28,427 Associates First Capital,
Class A......................... 2,185,325
20,700 Franklin Resources, Inc. ....... 1,117,800
10,800 Mercantile Bancorporation....... 544,050
16,000 Sunamerica, Inc. ............... 919,000
31,645 Washington Mutual, Inc. ........ 1,374,580
------------
6,140,755
------------
FINANCIAL -- BANKING -- 0.1%
21,500 Synovus Financial Corp. ........ 510,625
FINANCIAL -- CONSUMER LOANS -- 0.4%
4,400 Beneficial Corp. ............... 674,025
26,300 Household International, Inc. .. 1,308,425
41,087 MBNA Corp. ..................... 1,355,871
------------
3,338,321
------------
FINANCIAL --
INVESTMENT BANKER/BROKER -- 0.1%
8,400 Lehman Brothers Holding, Inc. .. 651,525
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.4%
27,300 Merrill Lynch & Co., Inc. ...... 2,518,425
21,750 Schwab (Charles) Corp. ......... 706,875
------------
3,225,300
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 1.2%
38,100 American Express Co. ........... 4,343,400
48,616 Morgan Stanley, Dean Witter,
Discover & Co. ................. 4,442,287
------------
8,785,687
------------
Continued
65
84
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.2%
8,900 Country Wide Credit Industries,
Inc. *.......................... $ 451,675
87,000 Fannie Mae...................... 5,285,250
57,000 Freddie Mac..................... 2,682,563
11,200 Green Tree Financial Corp. ..... 479,500
------------
8,898,988
------------
FINANCIAL -- SAVINGS & LOAN -- 0.2%
4,700 Golden West Financial Corp. .... 499,669
9,000 H.F. Ahmanson & Co. ............ 639,000
------------
1,138,669
------------
FOOD -- CANNED -- 0.5%
37,400 Campbell Soup Co. .............. 1,986,875
30,000 H.J. Heinz Co. ................. 1,683,750
------------
3,670,625
------------
FOOD -- CONFECTIONARY -- 0.2%
11,700 Hershey Foods Corp. ............ 807,300
9,500 Wm. Wrigley Jr. Co. *........... 931,000
------------
1,738,300
------------
FOOD -- DIVERSIFIED -- 1.2%
23,600 Bestfoods....................... 1,370,275
39,050 ConAgra, Inc. .................. 1,237,397
13,000 General Mills, Inc. ............ 888,875
33,700 Kellogg Co. .................... 1,265,856
11,400 Quaker Oats Co. ................ 626,288
8,780 Ralston Purina Group............ 1,025,614
38,800 Sara Lee Corp. ................. 2,170,374
------------
8,584,679
------------
FOOD -- FLOUR & GRAIN -- 0.1%
46,863 Archer-Daniels-Midland Co. ..... 907,971
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
4,900 Supervalu, Inc. ................ 217,438
27,900 Sysco Corp. .................... 714,937
------------
932,375
------------
FUNERAL SERVICES -- 0.1%
20,700 Service Corp. International *... 887,513
------------
GAS & ELECTRIC UTILITY -- 0.2%
31,300 PG & E Corp..................... 987,906
19,000 Public Service Enterprises...... 654,313
------------
1,642,219
------------
GLASS PRODUCTS -- 0.1%
19,000 Corning, Inc. .................. 660,250
------------
HOTELS & LODGING -- 0.2%
20,500 Hilton Hotels Corp. ............ 584,250
20,900 Marriott International,
Class A......................... 676,638
------------
1,260,888
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
INSTRUMENTS -- CONTROL -- 0.1%
4,022 General Signal Corp. ........... $ 144,792
10,400 Honeywell, Inc. ................ 869,050
------------
1,013,842
------------
INSTRUMENTS -- SCIENTIFIC -- 0.1%
3,700 EG&G, Inc. ..................... 111,000
3,600 Millipore Corp. ................ 98,100
4,000 Perkin-Elmer Corp. ............. 248,750
------------
457,850
------------
INSURANCE -- 0.2%
13,500 Cincinnati Financial Corp. ..... 518,063
5,900 Progressive Corp. -- Ohio....... 831,900
------------
1,349,963
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.1%
13,800 Aon Corp. ...................... 969,450
------------
INSURANCE -- BROKERS -- 0.2%
20,850 Marsh & McLennan Cos., Inc. .... 1,260,122
------------
INSURANCE -- LIFE -- 0.7%
20,798 American General Corp. ......... 1,480,557
15,500 Conseco, Inc. .................. 724,625
8,725 Jefferson-Pilot Corp.*.......... 505,505
7,800 Providian Financial............. 612,788
11,500 Torchmark Corp. ................ 526,125
5,182 TransAmerica Corp. ............. 596,578
11,400 UNUM Corp. ..................... 632,700
------------
5,078,878
------------
INSURANCE -- MULTI-LINE -- 1.5%
12,170 Aetna, Inc. .................... 926,441
18,200 CIGNA Corp. .................... 1,255,800
9,700 Hartford Financial Services
Group, Inc. .................... 1,109,438
9,400 Loews Corp. .................... 818,975
8,000 MBIA, Inc. ..................... 599,000
9,400 MGIC Investment Corp. .......... 536,388
94,094 Travelers Group, Inc. .......... 5,704,448
------------
10,950,490
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.2%
35,199 Allstate Corp. ................. 3,222,908
57,520 American International Group.... 8,397,920
14,00 Chubb Corp. .................... 1,125,250
6,400 General Re Corp. ............... 1,622,400
8,400 Lincoln National Corp.*......... 767,550
11,600 Safeco Corp. ................... 527,075
18,934 St. Paul Cos., Inc. ............ 796,411
------------
16,459,514
------------
LEISURE & RECREATION PRODUCTS -- 0.0%
8,200 Brunswick Corp.................. 202,950
------------
Continued
66
85
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
LEISURE & RECREATION/GAMING -- 0.1%
8,300 Harrah's Entertainment, Inc. ... $ 192,975
14,700 Mirage Resorts *................ 313,294
------------
506,269
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.0%
3,300 Cincinnati Milacron, Inc. ...... 80,231
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.3%
30,500 Caterpillar, Inc. .............. 1,612,687
13,550 Ingersoll-Rand Co. ............. 597,047
------------
2,209,734
------------
MACHINERY -- ELECTRICAL -- 0.4%
36,400 Emerson Electric Co. ........... 2,195,375
8,200 W.W. Grainger, Inc. ............ 408,463
------------
2,603,838
------------
MACHINERY -- FARM -- 0.2%
2,000 Briggs & Stratton Corp. ........ 74,875
6,200 Case Corp. ..................... 299,150
20,500 Deere & Co. .................... 1,083,938
------------
1,457,963
------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.4%
2,300 Aeroquip-Vickers Inc. .......... 134,263
9,900 Cooper Industries, Inc. ........ 543,881
18,200 Dover Corp...................... 623,350
3,922 Harnischfeger Industries, Inc. . 111,042
20,500 Illinois Tool Works, Inc. ...... 1,367,093
9,125 Parker-Hannifin Corp. .......... 347,891
------------
3,127,520
------------
MACHINERY -- MATERIAL HANDLING -- 0.0%
700 Nacco Industries, Inc. ......... 90,475
------------
MACHINERY -- THERMAL PROCESSOR -- 0.1%
13,100 Thermo Electron Corp. *......... 447,856
------------
MEDIA CONGLOMERATES -- 1.6%
47,460 Time Warner, Inc. .............. 4,054,864
29,000 ViaCom, Inc., Class B *......... 1,689,250
55,400 Walt Disney Co. ................ 5,820,462
------------
11,564,576
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
21,600 Amgen, Inc. *................... 1,412,100
------------
MEDICAL -- DRUGS -- 8.6%
125,500 Abbott Laboratories............. 5,129,813
7,000 Alza Corp. ..................... 302,750
106,600 American Home Products Corp. ... 5,516,550
81,600 Bristol-Myers Squibb Co. ....... 9,378,899
91,000 Eli Lilly & Co. ................ 6,011,688
98,300 Merck & Co., Inc. .............. 13,147,624
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL -- DRUGS (CONTINUED)
106,100 Pfizer, Inc. ................... $ 11,531,743
41,630 Pharmacia & Upjohn, Inc. ....... 1,920,184
60,100 Schering-Plough Corp. .......... 5,506,663
67,000 Warner-Lambert Co. ............. 4,648,125
------------
63,094,039
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.2%
13,400 Humana, Inc. *.................. 417,913
15,500 United Healthcare Corp. ........ 984,250
------------
1,402,163
------------
MEDICAL -- HOSPITAL -- 0.3%
53,149 Columbia/HCA Healthcare Corp. .. 1,547,965
25,100 Tenet Healthcare Corp. *........ 784,375
------------
2,332,340
------------
MEDICAL -- NURSING HOMES -- 0.0%
5,200 Manor Care, Inc. *.............. 199,875
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 0.1%
32,300 HEALTHSOUTH Corp. *............. 862,006
------------
MEDICAL -- WHOLESALE DRUG -- 0.1%
9,000 Cardinal Health, Inc. .......... 843,750
------------
MEDICAL INSTRUMENTS -- 0.4%
9,200 Biomet, Inc. *.................. 304,175
38,400 Medtronic, Inc. ................ 2,448,000
6,900 St. Jude Medical, Inc. *........ 254,006
6,200 U.S. Surgical Corp. ............ 282,875
------------
3,289,056
------------
MEDICAL PRODUCTS -- 0.7%
5,400 Allergan, Inc. ................. 250,425
23,000 Baxter International, Inc. ..... 1,237,688
16,000 Boston Scientific Corp. *....... 1,146,000
12,400 Guidant Corp. .................. 884,275
34,600 HBO & Co. ...................... 1,219,650
6,000 Mallinckrodt, Inc. ............. 178,125
------------
4,916,163
------------
MEDICAL/DENTAL SUPPLIES -- 1.3%
4,500 Bausch & Lomb, Inc. ............ 225,563
10,000 Becton, Dickinson & Co. ........ 776,250
4,700 C.R. Bard, Inc. ................ 178,894
110,300 Johnson & Johnson............... 8,134,624
------------
9,315,331
------------
METAL -- GOLD -- 0.2%
30,600 Barrick Gold Corp. ............. 587,137
18,800 Battle Mountian Gold Co. ....... 111,625
17,300 Homestake Mining Co. ........... 179,488
12,815 Newmont Mining Corp. ........... 302,754
20,300 Placer Dome, Inc. .............. 238,525
------------
1,419,529
------------
Continued
67
86
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
METAL -- MISCELLANEOUS -- 0.0%
7,700 Cyprus Amax Minerals Co. ....... $ 102,025
13,700 Inco, Ltd. ..................... 186,663
------------
288,688
------------
METAL -- NON-FERROUS -- 0.3%
18,650 Alcan Aluminum, Ltd. ........... 515,206
14,100 Aluminum Co. of America......... 929,719
3,300 Asarco, Inc. ................... 73,425
15,900 Freeport-McMoran Copper & Gold,
Inc.-Class B.................... 241,481
4,800 Phelps Dodge Corp. ............. 274,500
6,100 Reynolds Metals Co. ............ 341,219
------------
2,375,550
------------
METAL -- PROCESSING & FABRICATION -- 0.0%
5,200 Timken Co....................... 160,225
7,925 Worthington Industries, Inc. ... 119,370
------------
279,595
------------
MOVIE/TELEVISION PRODUCTION &
DISTRIBUTION -- 0.0%
6,000 King World Productions, Inc. ... 153,000
------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.2%
37,300 Waste Management Inc. .......... 1,305,500
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.5%
11,044 IKON Office Solutions, Inc. .... 160,828
23,800 Pitney Bowes, Inc. ............. 1,145,375
26,767 Xerox Corp. .................... 2,720,197
------------
4,026,400
------------
OFFICE SUPPLIES & FORMS -- 0.1%
8,400 Avery Dennison Corp. ........... 451,500
6,700 Deluxe Corp. ................... 239,944
7,300 Moore Corp., Ltd. .............. 96,725
------------
788,169
------------
OIL & GAS -- 0.1%
4,900 Anadarko Petroleum Corp. ....... 329,219
7,800 Apache Corp. ................... 245,700
------------
574,919
------------
OIL & GAS -- DRILLING -- 0.4%
7,100 Rowan Cos., Inc. *.............. 138,006
40,800 Schlumberger Ltd. .............. 2,787,150
------------
2,925,156
------------
OIL -- FIELD SERVICES -- 0.2%
21,500 Halliburton Co. ................ 958,093
4,500 Western Atlas *................. 381,938
------------
1,340,031
------------
OIL -- INTERNATIONAL INTEGRATED -- 4.9%
53,900 Chevron Corp. .................. 4,477,069
202,300 Exxon Corp. .................... 14,426,518
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OIL -- INTERNATIONAL INTEGRATED (CONTINUED)
64,300 Mobil Corp. .................... $ 4,926,987
175,900 Royal Dutch Petroleum Co., ADR.. 9,641,518
45,000 Texaco, Inc. ................... 2,685,938
------------
36,158,030
------------
OIL -- PRODUCTION/PIPELINE -- 0.5%
8,750 Coastal Corp. .................. 610,859
6,750 Columbia Gas System, Inc. ...... 375,469
26,900 Enron Corp. .................... 1,454,281
9,000 Sonat, Inc. .................... 347,625
33,700 Williams Co. ................... 1,137,375
------------
3,925,609
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.1%
14,465 Burlington Resources, Inc. ..... 622,899
4,100 Helmerich & Payne, Inc. ........ 91,225
20,823 Union Pacific Resources Group,
Inc. ........................... 365,704
------------
1,079,828
------------
OIL -- U.S. INTEGRATED -- 1.3%
7,500 Amerada Hess Corp. ............. 407,344
79,900 Amoco Corp. .................... 3,325,837
26,300 Atlantic Richfield Co. ......... 2,054,687
3,900 Kerr-Mcgee Corp. ............... 225,713
27,800 Occidental Petroleum Corp. ..... 750,600
3,900 Pennzoil Co. ................... 197,438
21,600 Phillips Petroleum Co. ......... 1,040,850
20,200 Unocal Corp. ................... 722,150
23,700 USX-Marathon Group.............. 813,206
------------
9,537,825
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.2%
13,900 Baker Hughes, Inc. ............. 480,419
14,400 Dresser Industries, Inc. ....... 634,499
5,000 McDermott International, Inc. .. 172,188
------------
1,287,106
------------
OIL REFINING -- 0.1%
6,200 Ashland, Inc. .................. 320,075
7,774 Sun Co., Inc. .................. 301,728
------------
621,803
------------
PAINTS & RELATED PRODUCTS -- 0.1%
14,200 Sherwin-Williams Co. ........... 470,375
------------
PAPER & RELATED PRODUCTS -- 0.6%
4,608 Boise Cascade Corp. ............ 150,912
7,900 Champion International Co. ..... 388,581
17,100 Fort James Corp. ............... 760,950
7,600 Georgia Pacific Corp. .......... 447,925
24,824 International Paper Co. ........ 1,067,432
8,600 Mead Corp. ..................... 273,050
2,400 Potlatch Corp. ................. 100,800
8,146 Stone Container Corp. *......... 127,281
4,600 Temple-Inland, Inc. ............ 247,825
Continued
68
87
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PAPER & RELATED PRODUCTS (CONTINUED)
5,700 Union Camp Corp. ............... $ 282,863
8,350 Westvaco Corp. ................. 235,888
9,100 Williamette Industries, Inc. ... 291,200
------------
4,374,707
------------
PHOTOGRAPHY -- 0.3%
26,700 Eastman Kodak Co. .............. 1,950,769
3,689 Polaroid Corp. ................. 131,190
------------
2,081,959
------------
POLLUTION CONTROL -- 0.1%
15,900 Browning-Ferris Industries,
Inc. ........................... 552,524
27,000 Laidlaw, Inc. .................. 329,063
10,199 Pall Corp. ..................... 209,080
------------
1,090,667
------------
PRINTING -- COMMERCIAL -- 0.1%
12,000 R.R. Donnelley & Sons Co. ...... 549,000
------------
PROTECTION -- SAFETY -- 0.4%
46,900 Tyco International Ltd. ........ 2,954,700
------------
PUBLISHING -- BOOKS -- 0.1%
8,100 McGraw-Hill Cos., Inc. ......... 660,656
------------
PUBLISHING -- NEWSPAPERS -- 0.6%
7,900 Dow Jones & Co. ................ 440,425
23,300 Gannett, Inc. .................. 1,655,756
6,900 Knight-Ridder, Inc. ............ 379,931
7,900 New York Times Co. ............. 626,075
7,300 Times Mirror Co. ............... 458,988
10,100 Tribune Co. .................... 695,006
------------
4,256,181
------------
PUBLISHING -- PERIODICALS -- 0.0%
4,300 Meredith Corp. ................. 201,831
------------
RESTAURANTS -- 0.6%
12,200 Darden Restaurants, Inc. ....... 193,675
56,500 McDonald's Corp. ............... 3,898,500
12,410 Tricon Global Restaurants *..... 393,242
10,800 Wendy's International, Inc. .... 253,800
------------
4,739,217
------------
RETAIL -- 0.0%
8,800 Consolidated Stores *........... 319,000
------------
RETAIL -- APPAREL/SHOES -- 0.5%
32,450 Gap, Inc. ...................... 1,999,731
22,078 Limited, Inc. .................. 731,334
6,300 Nordstrom, Inc. ................ 486,675
26,400 TJX Companies, Inc. *........... 636,900
11,100 Venator Group, Inc. ............ 212,288
------------
4,066,928
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
8,100 Circuit City Stores, Inc. ...... 379,688
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
RETAIL -- DISCOUNT -- 2.1%
17,550 Costco. Cos., Inc. *............ $ 1,106,747
35,900 Dayton-Hudson Corp. ............ 1,741,150
40,000 Kmart Corp. *................... 770,000
23,250 Toys 'R' Us, Inc. *............. 547,828
184,200 Wal-Mart Stores, Inc. .......... 11,190,149
------------
15,355,874
------------
RETAIL -- DRUG STORE -- 0.5%
28,200 CVS Corp.*...................... 1,098,038
3,200 Longs Drug Stores Corp. ........ 92,400
21,200 Rite Aid Corp. *................ 796,325
40,600 Walgreen Co. ................... 1,677,287
------------
3,664,050
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.7%
5,816 Harcourt General, Inc. *........ 346,052
20,500 J.C. Penney, Inc. .............. 1,482,406
19,000 May Department Stores Co. ...... 1,244,500
32,175 Sears, Roebuck & Co. ........... 1,964,686
------------
5,037,644
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
9,100 Dillards Department Stores,
Inc. ........................... 377,081
17,200 Federated Department Stores,
Inc. *.......................... 925,575
3,000 Mercantile Stores Co. .......... 236,813
------------
1,539,469
------------
RETAIL -- SUPERMARKETS -- 0.5%
20,100 Albertsons, Inc. *.............. 1,041,430
22,400 American Stores Co. ............ 541,800
4,900 Giant Food Inc. ................ 211,006
3,100 Great Atlantic & Pacific Tea
Co., Inc. ...................... 102,494
20,900 Kroger Co. *.................... 896,088
12,200 Winn-Dixie Stores, Inc. *....... 624,488
------------
3,417,306
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.1%
12,500 Autozone, Inc. *................ 399,219
5,200 Pep Boys -- Manny, Moe & Jack *. 98,475
------------
497,694
------------
RETAIL/WHOLESALE -- COMPUTERS -- 0.1%
8,528 Tandy Corp. .................... 452,517
------------
RUBBER -- TIRES -- 0.1%
6,500 Cooper Tire & Rubber Co. ....... 134,063
12,800 Goodyear Tire & Rubber Co. ..... 824,800
------------
958,863
------------
Continued
69
88
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SHOES & RELATED APPAREL -- 0.2%
23,800 Nike, Inc., Class B............. $ 1,158,762
4,600 Reebok International Ltd. *..... 127,363
------------
1,286,125
------------
SOAP & CLEANING PREPARATIONS -- 1.7%
8,500 Clorox, Inc. ................... 810,688
24,300 Colgate-Palmolive Co. .......... 2,138,400
110,100 Procter & Gamble Co. ........... 10,025,980
------------
12,975,068
------------
STEEL -- PRODUCERS -- 0.1%
8,900 Armoc, Inc. *................... 56,738
10,500 Bethlehem Steel Corp. *......... 130,594
7,200 Nucor Corp. .................... 331,199
7,040 USX-U.S. Steel Group, Inc. ..... 232,320
------------
750,851
------------
TECHNOLOGY -- SOFTWARE -- 0.0%
3,800 Auto Desk *..................... 146,775
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.4%
46,300 Airtouch Communications, Inc. *. 2,705,656
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 2.2%
7,255 Andrew Corp. *.................. 131,043
5,800 Ascend Communications, Inc. *... 287,463
9,700 DSC Communications Corp. *...... 291,000
12,100 General Instrument Corp. *...... 328,969
6,600 Harris Corp. ................... 294,938
106,746 Lucent Technologies, Inc. ...... 8,879,932
49,000 Motorola, Inc. ................. 2,575,562
42,700 Northern TeleCom Ltd. .......... 2,423,224
6,500 Scientific-Atlanta, Inc. ....... 164,938
14,900 Tellabs, Inc. *................. 1,067,213
------------
16,444,282
------------
TEXTILE -- APPAREL -- 0.1%
6,000 Fruit of the Loom, Inc. *....... 199,125
5,500 Liz Claiborne, Inc. *........... 287,375
3,000 Russell Corp. .................. 90,563
10,000 VF Corp. ....................... 514,375
------------
1,091,438
------------
TEXTILE -- HOME FURNISHINGS -- 0.0%
1,700 Springs Industries, Inc. ....... 78,413
------------
TOBACCO -- 1.2%
14,100 Fortune Brands, Inc. ........... 541,969
198,900 Philip Morris Cos., Inc. ....... 7,831,687
15,100 U.S.T., Inc. ................... 407,700
------------
8,781,356
------------
TOOLS -- HAND HELD -- 0.1%
7,800 Black & Decker Corp. ........... 475,800
4,950 Snap-On, Inc. .................. 179,438
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
7,300 The Stanley Works............... $ 303,406
------------
958,644
------------
TOYS/GAME/HOBBY -- 0.2%
10,900 Hasbro, Inc. ................... 428,506
23,847 Mattel, Inc. ................... 1,009,026
------------
1,437,532
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
12,060 FDX Corp. *..................... 756,765
------------
TRANSPORTATION -- AIRLINE -- 0.4%
15,000 AMR Corp. *..................... 1,248,750
6,100 Delta Air Lines, Inc. .......... 788,425
18,150 Southwest Airlines Co. ......... 537,694
7,500 US Airways Group, Inc. *........ 594,375
------------
3,169,244
------------
TRANSPORTATION -- EQUIPMENT & LEASING -- 0.0%
6,300 Ryder Systems, Inc. ............ 198,844
------------
TRANSPORTATION -- RAILROAD -- 0.5%
12,800 Burlington Northern Santa Fe
Corp. .......................... 1,256,800
17,908 CSX Corp. ...................... 814,814
30,900 Norfolk Southern Corp. ......... 921,206
20,300 Union Pacific Corp. ............ 895,738
------------
3,888,558
------------
UTILITIES -- ELECTRIC POWER -- 2.1%
11,300 Ameren Corp. ................... 449,175
15,600 American Electric Power Co. .... 707,850
12,100 Baltimore Gas & Electric Co. ... 375,856
12,300 Carolina Power & Light Co. *.... 533,513
17,400 Central & South West Corp. ..... 467,625
12,935 CINergy Corp. .................. 452,725
19,300 Consolidated Edison, Inc. ...... 889,006
11,900 Detroit Edison Co. ............. 480,463
15,850 Dominion Resources, Inc. ....... 645,888
29,506 Duke Power Co. *................ 1,748,230
31,300 Edison International............ 925,305
20,000 Entergy Corp. .................. 575,000
18,900 First Energy Corp. ............. 581,175
14,900 Florida Power & Light, Inc. .... 938,699
10,400 General Public Utilities Corp.
*............................... 393,250
23,144 Houston Industries, Inc. ....... 714,571
11,800 Niagara Mohawk Power Corp. *.... 176,263
12,200 Northern States Power Co. ...... 349,225
24,300 PacifiCorp. .................... 549,788
18,300 Peco Energy Corp. .............. 534,131
13,600 PP&L Resources, Inc. ........... 308,550
56,600 Southern Co. ................... 1,567,112
20,170 Texas Utilities Co. ............ 839,576
17,800 Unicom Corp. ................... 624,113
------------
15,827,089
------------
Continued
70
89
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (CONTINUED)
UTILITIES -- GAS DISTRIBUTION -- 0.2%
7,800 Consolidated Natural Gas Co. *.. $ 459,224
1,700 Eastern Enterprises............. 72,888
4,000 Nicor, Inc. .................... 160,500
2,500 ONEOK, Inc. .................... 99,688
2,900 People's Energy Corp. .......... 112,013
10,226 Sempra Energy *................. 283,767
------------
1,188,080
------------
UTILITIES -- TELEPHONE -- 6.4%
15,100 Alltel Corp. ................... 702,150
89,800 Ameritech Corp. ................ 4,029,775
133,256 AT&T Corp. ..................... 7,612,248
127,440 Bell Atlantic Corp. ............ 5,814,450
81,300 BellSouth Corp. ................ 5,457,263
13,500 Frontier Corp. *................ 425,250
78,600 GTE Corp. ...................... 4,372,125
57,100 MCI Communications Corp. ....... 3,318,938
21,600 Nextel Communications, Inc. --
Class A *....................... 537,300
150,418 SBC Communications, Inc. ....... 6,016,719
35,300 Sprint Corp. ................... 2,488,650
40,960 US West, Inc. .................. 1,925,120
83,100 Worldcom, Inc. *................ 4,025,156
------------
46,725,144
------------
TOTAL COMMON STOCKS............. 732,237,509
------------
(Cost $445,894,497)
MARKET
SHARES VALUE
------ ------
INVESTMENT COMPANIES -- 1.2%
4,553,156 Dreyfus Cash Management Money
Market Fund..................... $ 4,553,156
4,594,644 Federated Prime Value
Obligations Money Market Fund... 4,594,644
------------
TOTAL INVESTMENT COMPANIES...... 9,147,800
------------
(Cost $9,147,800)
TOTAL INVESTMENTS -- 99.9%.................. 741,385,309
(Cost $455,042,297)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1%....................... 652,046
------------
TOTAL NET ASSETS -- 100.0%.................. $742,037,355
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $297,256,997
Unrealized depreciation............... (10,913,985)
------------
Net unrealized appreciation........... $286,343,012
============
(b) Security has been deposited as initial margin on open future contracts.
* Non-income producing security.
ADR American Depositary Receipt
At June 30, 1998, the Fund's open future contracts were as follows:
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------------------- ----------------- ---------- ----------
32 Standard & Poor's $8,848,570 $9,144,000
500, 9/17/98
See Notes to Financial Statements.
71
90
SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS -- 61.8%
AEROSPACE -- 4.5%
$ 6,000,000 Boeing Capital Corp., 6.83%,
05/21/01....................... $ 6,092,040
------------
AUTOMOTIVE PARTS -- REPLACEMENT -- 3.7%
5,000,000 Ford Motor Credit Co., 6.13%,
04/28/03....................... 5,000,350
------------
BANKING -- 7.4%
5,000,000 ABN Amro Bank, 6.63%,
10/31/01....................... 5,094,790
5,000,000 Bankers Trust Corp., 5.85%,
5/11/00........................ 4,995,100
------------
10,089,890
------------
BROKERS -- 7.3%
6,000,000 Morgan Stanley Group, Inc.,
6.50%, 3/30/01................. 6,092,100
3,750,000 Salomon, Inc., 6.50%, 3/1/00... 3,778,500
------------
9,870,600
------------
FINANCE -- 22.6%
5,000,000 Associates Corp. N.A., 8.19%,
11/10/99....................... 5,160,150
5,000,000 Bear Stearns Co., Inc., 6.50%,
7/5/00......................... 5,045,100
5,000,000 Household International, 7.28%,
7/22/99........................ 5,074,500
5,000,000 MCN Investment Corp., 6.89%,
1/16/02........................ 5,143,400
5,000,000 Merrill Lynch & Co., Inc.,
6.64%, 09/19/02................ 5,109,400
5,000,000 Norwest Financial, Inc., 7.88%,
2/15/02........................ 5,300,300
------------
30,832,850
------------
INDUSTRIAL GOODS & SERVICES -- 8.8%
4,375,000 Enron Corp., 6.45%, 11/15/01... 4,406,894
3,500,000 Pepsico, Inc., 6.25%, 9/1/99... 3,515,610
4,000,000 SuperValu, Inc., 7.25%,
7/15/99........................ 4,041,960
------------
11,964,464
------------
PHARMACEUTICALS -- 3.8%
5,000,000 American Home Products Corp.,
7.70%, 2/15/00................. 5,139,000
------------
UTILITIES -- 3.7%
5,000,000 Georgia Power Co., First
Mortgage, 6.13%, 9/1/99........ 5,011,750
------------
TOTAL CORPORATE NOTES & BONDS.. 84,000,944
------------
(Cost $83,433,308)
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.4%
$ 5,000,000 Federal Home Loan Bank, 5.81%,
11/4/99........................ $ 5,009,350
5,000,000 Federal National Mortgage
Assoc., 6.03%, 7/2/99.......... 5,021,850
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 10,031,200
------------
(Cost $9,993,758)
U.S. GOVERNMENT OBLIGATIONS -- 21.1%
U.S. TREASURY NOTES -- 21.1%
2,000,000 5.00%, 02/15/99................ 1,994,060
20,000,000 7.50%, 10/31/99................ 20,496,799
2,250,000 6.00%, 8/15/00................. 2,271,443
3,750,000 6.63%, 7/31/01................. 3,863,663
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 28,625,965
------------
(Cost $28,342,265)
INVESTMENT COMPANIES -- 8.1%
4,966,973 Dreyfus Cash Management Money
Market Fund.................... 4,966,973
6,091,612 Federated Prime Value
Obligations Money Market Fund.. 6,091,612
------------
TOTAL INVESTMENT COMPANIES.................. 11,058,585
------------
(Cost $11,058,585)
TOTAL INVESTMENTS -- 98.4%.................. 133,716,693
------------
(Cost $132,827,916)(a)
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6%.. 2,158,254
------------
TOTAL NET ASSETS -- 100.0%.................. $135,874,947
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $ 1,114,076
Unrealized depreciation............... (225,299)
------------
Net unrealized appreciation........... $ 888,777
============
See Notes to Financial Statements.
72
91
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS -- 27.9%
BANKING -- 9.5%
$6,000,000 Bank of Montreal-Chicago,
7.80%, 4/1/07.................. $ 6,599,160
10,000,000 Bankers Trust Corp., 5.85%,
5/11/00........................ 9,990,200
10,000,000 Chase Manhattan Corp., 6.75%,
9/15/06........................ 10,391,500
8,000,000 Chase Manhattan Corp.-New,
6.50%, 1/15/09................. 8,136,160
8,000,000 Dresdner Bank New York, 7.25%,
9/15/15........................ 8,467,040
5,000,000 J.P. Morgan & Co., 7.63%,
9/15/04........................ 5,348,800
5,000,000 MBNA American Bank NA, 7.25%,
9/15/02........................ 5,163,650
5,000,000 MBNA Master Credit Card Trust,
5.77%, 8/15/05................. 5,001,550
5,000,000 NCNB Corp., 9.38%, 9/15/09..... 6,176,650
7,000,000 Societe Generale New York,
9.88%, 7/15/03................. 8,061,060
------------
73,335,770
------------
BROKERS -- 0.6%
5,000,000 Salomon, Inc., 5.64%*, 2/15/99. 5,017,000
------------
FINANCE -- 10.2%
5,000,000 Associates Corp., N.A.,
6.52%,10/11/02................. 5,113,850
5,500,000 Bear Stearns Co., 6.75%,
4/15/03........................ 5,620,505
5,000,000 First Union Institutional
Capital I, 8.04%, 12/1/26,
Callable 12/1/06 @ 104.02...... 5,372,650
10,000,000 Ford Capital Guaranteed Notes,
9.88%, 5/15/02................. 11,237,000
8,400,000 Ford Motor Credit Corp., 9.03%,
12/30/09, Callable 12/30/04 @
100............................ 9,627,912
5,000,000 General Electric Capital Corp.,
6.66%*, 5/1/18, Putable 5/1/00
@ 100.......................... 5,063,650
5,000,000 Household Finance Corp., 8.00%,
8/1/04......................... 5,427,350
8,000,000 HSBC America Capital II, 8.38%,
5/15/27, Callable 5/15/07 @
104.19......................... 8,841,040
5,000,000 Lehman Brothers, Inc., 7.38%,
1/15/07........................ 5,268,000
7,000,000 Safeco, 6.88%, 7/15/07 (b)..... 7,314,720
5,000,000 Salomon Smith Barney, 7.13%,
10/1/06........................ 5,279,550
5,100,000 Travelers Group Inc, 6.88%,
12/15/03....................... 5,211,996
------------
79,378,223
------------
INDUSTRIAL GOODS & SERVICES -- 4.1%
4,000,000 Boston Scientific, 6.63%,
3/15/05........................ 4,042,320
11,500,000 Champion International Corp.,
7.70%, 12/15/99................ 11,758,175
6,000,000 ConAgra, Inc., 6.70%, 8/1/27... 6,190,620
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS (CONTINUED)
INDUSTRIAL GOODS & SERVICES (CONTINUED)
$10,000,000 SuperValue, Inc., 7.25%,
7/15/99........................ $ 10,104,900
------------
32,096,015
------------
INSURANCE -- 0.6%
5,000,000 American Annuity Group, 6.88%,
6/1/08......................... 5,015,400
------------
TELECOMMUNICATIONS -- 0.9%
6,000,000 Bell Canada, 7.75%, 4/1/06..... 6,603,120
------------
TRANSPORTATION -- AIRLINE -- 1.3%
10,000,000 Boeing Capital Corp., 6.30%,
10/20/99....................... 10,024,800
------------
UTILITIES -- 0.7%
5,000,000 Western Resorces, Inc., 6.88%,
8/1/04......................... 5,110,950
------------
TOTAL CORPORATE NOTES & BONDS.. 216,581,278
------------
(Cost $210,496,007)
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 9.7%
FEDERAL FARM CREDIT BANK -- 1.3%
10,000,000 6.30%, 9/23/04................. 10,278,100
------------
FEDERAL HOME LOAN BANK -- 0.7%
5,000,000 6.49%, 1/8/04.................. 5,182,800
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 1.9%
10,410,000 8.12%, 1/31/05................. 11,722,597
3,000,000 7.22%, 6/14/06................. 3,262,500
------------
14,985,097
------------
FANNIE MAE -- 5.1%
7,950,000 7.35%, 3/28/05................. 8,624,478
10,000,000 5.75%, 6/15/05................. 9,989,100
9,100,000 6.00%, 11/15/22................ 9,074,338
12,000,000 6.25%, 11/18/23................ 12,112,440
------------
39,800,356
------------
TENNESSEE VALLEY AUTHORITY: -- 0.7%
5,000,000 6.25%, 12/15/17................ 5,159,350
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 75,405,703
------------
(Cost $73,124,031)
U.S. GOVERNMENT OBLIGATIONS -- 58.0%
U.S. TREASURY BONDS -- 2.9%
19,500,000 9.13%, 5/15/09................. 22,839,375
------------
U.S. TREASURY NOTES -- 51.9%
5,800,000 5.13%, 11/30/98................ 5,795,476
5,000,000 8.88%, 2/15/99................. 5,101,550
33,000,000 6.25%, 3/31/99................. 33,190,740
62,000,000 6.38%, 5/15/99................. 62,445,780
28,250,000 7.75%, 1/31/00................. 29,185,640
23,050,000 6.88%, 3/31/00................. 23,561,480
24,000,000 8.75%, 8/15/00................. 25,530,000
33,500,000 6.25%, 8/31/00................. 33,992,115
56,000,000 6.50%, 5/31/01................. 57,434,720
13,300,000 6.25%, 10/31/01................ 13,576,374
Continued
73
92
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1997 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
U.S. GOVERNMENT OBLIGATIONS (CONTINUED)
U.S. TREASURY NOTES (CONTINUED)
$77,000,000 7.50%, 11/15/01................ $ 81,559,940
21,700,000 7.50%, 2/15/05................. 24,019,079
6,000,000 7.00%, 7/15/06................. 6,552,180
------------
401,945,074
------------
U.S. TREASURY STRIPS -- 3.2%
36,500,000 5/15/05........................ 25,055,425
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 449,839,874
(Cost $448,462,634) ------------
YANKEE CERTIFICATES OF DEPOSIT -- 1.3%
10,000,000 Potash Corp. Saskatchewan,
7.13%, 6/15/07................. 10,401,600
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT........................ 10,401,600
(Cost $10,026,500) ------------
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ----------- ------
INVESTMENT COMPANIES -- 1.6%
5,816,062 Dreyfus Cash Management Money
Market Fund.................... $ 5,816,062
6,705,230 Federated Prime Value
Obligations Money Market Fund.. 6,705,230
------------
TOTAL INVESTMENT COMPANIES..... 12,521,292
(Cost $12,521,292) ------------
TOTAL INVESTMENTS -- $98.6%................. 764,749,746
(Cost $754,630,464) (a)
OTHER ASSETS IN EXCESS OF LIABILITIES 1.4%.. 10,671,311
------------
TOTAL NET ASSETS -- 100.0%.................. $775,421,057
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................ $11,964,632
Unrealized depreciation................ (1,845,350)
-----------
Net unrealized appreciation............ $10,119,282
===========
(b) 144a security which is restricted as to resale to institutional investors.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
See Notes to Financial Statements.
74
93
INCOME FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS -- 38.8%
AUTOMOTIVE -- 1.5%
$4,000,000 Ford Motor Co., 6.63%,
2/15/28........................ $ 4,003,320
------------
BANKING -- 14.0%
2,700,000 Bank of Montreal-Chicago,
7.80%, 4/1/07.................. 2,969,622
2,000,000 Bank of New York, 8.50%,
12/15/04....................... 2,222,120
2,000,000 BankAmerica Corp., 7.20%,
4/15/06........................ 2,113,020
2,000,000 Chase Manhattan Corp., 7.13%,
3/1/05......................... 2,088,500
3,000,000 Dresdner Bank New York, 7.25%,
9/15/15........................ 3,175,140
2,000,000 Fleet/Norstar Group, 8.63%,
1/15/07........................ 2,299,600
2,000,000 Midland Bank PLC, 7.63%,
6/15/06........................ 2,138,480
3,000,000 National City Bank of
Cleveland, 7.25%, 7/15/10...... 3,276,870
5,000,000 NCNB Corp., 10.20%, 7/15/15.... 6,871,499
2,250,000 PNC Bank N.A., 7.88%,
4/15/05........................ 2,449,868
2,000,000 Republic New York Corp., 7.00%,
3/22/11........................ 2,109,420
2,000,000 Southtrust Bank NA, 6.57%,
12/15/27....................... 2,059,220
2,000,000 Swiss Bank Corp.-New York,
7.38%, 7/15/15................. 2,186,640
------------
35,959,999
------------
BROKERS -- 0.8%
2,000,000 Salomon, Inc., 6.75%,
2/15/03........................ 2,040,140
------------
FINANCE -- 8.1%
3,500,000 British Gas Finance, 6.63%,
06/01/18....................... 3,510,150
2,000,000 Discover Credit, 9.26%,
03/20/12....................... 2,548,720
2,000,000 Ford Motor Credit Corp., 9.03%,
12/30/09, Callable 12/30/04 @
100............................ 2,292,360
3,500,000 Great Western Financial Trust
II, 8.21%, 2/1/27, Callable
2/1/07 @ 104.1................. 3,822,980
2,000,000 HSBC America Capital II, 8.38%,
5/15/27, Callable 5/15/07 @
104.19......................... 2,210,260
2,000,000 Lehman Brothers Holdings, Inc.,
8.75%, 3/15/05................. 2,258,600
4,000,000 St. Paul Cos, Inc., 7.25%,
8/9/07......................... 4,347,320
------------
20,990,390
------------
GAS TRANSMISSION -- 1.0%
2,500,000 Enserch Corp., 7.13%,
6/15/05........................ 2,601,000
------------
INDUSTRIAL GOODS & SERVICES -- 6.0%
2,000,000 ConAgra, Inc., 6.70%, 8/1/27... 2,063,540
5,000,000 Cyprus Amax, 7.38%, 5/15/07.... 5,074,150
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS (CONTINUED)
INDUSTRIAL GOODS & SERVICES (CONTINUED)
$3,000,000 Engelhard Corp., 7.38%,
8/1/06......................... $ 3,198,660
2,000,000 General Motors Corp., 9.13%,
7/15/01........................ 2,158,200
2,950,000 Raytheon Co., 6.75%, 8/15/07... 3,025,019
------------
15,519,569
------------
INSURANCE -- 0.9%
2,000,000 Travelers Capital III, 7.63%,
12/1/36........................ 2,231,980
------------
OIL & GAS -- 2.4%
5,000,000 Phillips Petroleum, 9.38%,
2/15/11........................ 6,276,150
------------
RETAIL -- 1.9%
4,818,254 Fred Meyer, Inc., Lease Trust,
8.50%, 7/15/17................. 5,039,894
------------
TELECOMMUNICATIONS -- 1.4%
3,500,000 GTE Florida, Inc., 6.86%,
2/1/28......................... 3,670,100
------------
UTILITIES -- 0.8%
2,000,000 Pacific Gas & Electric, 6.25%,
3/1/04......................... 2,017,220
------------
TOTAL CORPORATE NOTES & BONDS.. 100,349,762
(Cost $95,019,530) ------------
FOREIGN GOVERNMENT AGENCIES -- 0.4%
1,000,000 Hydro-Quebec, 9.41%, 3/23/00... 1,056,300
------------
TOTAL FOREIGN GOVERNMENT
AGENCIES....................... 1,056,300
(Cost $1,059,483) ------------
MUNICIPAL BOND -- TAXABLE -- 0.8%
2,000,000 San Bernardino County,
Financing Authority Pension
Obligation Revenue, 6.99%,
8/1/10 (Insured by MBIA)....... 2,125,000
------------
TOTAL MUNICIPAL BOND --
TAXABLE........................ 2,125,000
(Cost $2,030,920) ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.5%
FEDERAL HOME LOAN MORTGAGE CORP. -- 1.1%
2,500,000 7.22%, 6/14/06................. 2,718,750
------------
FANNIE MAE -- 3.4%
5,000,000 7.40%, 7/1/04.................. 5,407,050
3,500,000 6.25%, 11/18/23................ 3,532,795
------------
8,939,845
------------
TENNESSEE VALLEY AUTHORITY -- 2.0%
5,000,000 6.25%, 12/15/17................ 5,159,350
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 16,817,945
(Cost $15,956,484) ------------
Continued
75
94
INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1997 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
U.S. GOVERNMENT OBLIGATIONS -- 46.7%
$29,500,000 U.S. Treasury Bond, 11.88%,
11/15/03....................... $ 38,018,125
9,500,000 U.S. Treasury Bond, 10.75%,
8/15/05........................ 12,360,355
6,230,000 U.S. Treasury Bond, 7.25%,
5/15/16........................ 7,298,819
11,000,000 U.S. Treasury Bond, 8.75%,
5/15/20........................ 15,104,320
12,200,000 U.S. Treasury Note, 6.75%,
6/30/99........................ 12,346,766
30,000,000 U.S. Treasury Note, 8.00%,
5/15/01........................ 31,940,700
7,300,000 U.S. Treasury Note, Zero
Coupon, 5/15/10................ 3,750,083
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 120,819,168
------------
(Cost $119,869,343)
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ------ ----------- ------
INVESTMENT COMPANIES -- 5.3%
6,135,328 Dreyfus Cash Management Money
Market Fund.................... $ 6,135,328
7,598,073 Federated Prime Value
Obligations Money Market Fund.. 7,598,073
------------
TOTAL INVESTMENT COMPANIES..... 13,733,401
(Cost $13,733,401) ------------
TOTAL INVESTMENTS -- $98.5%................. 254,901,575
(Cost $247,669,161) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5%....................... 3,928,204
------------
TOTAL NET ASSETS -- 100.0%.................. $258,829,779
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................ $7,433,591
Unrealized depreciation................ (201,177)
----------
Net unrealized appreciation............ $7,232,414
==========
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
76
95
LIMITED TERM TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS -- 97.6%
ALASKA -- 1.4%
$ 530,000 Alaska State Housing Finance
Corp., 4.60%, 12/1/00 (Insured
by MBIA)........................ $ 537,950
------------
ARIZONA -- 2.9%
1,000,000 Arizona State University
Revenue, 7.10%, 7/1/16,
Prerefunded 7/1/01 @ 102........ 1,103,750
------------
ARKANSAS -- 2.7%
1,000,000 Arkansas State Economic
Development, 5.00%, 2/01/03,
(Insured by AMBAC).............. 1,027,500
------------
CALIFORNIA -- 3.2%
1,000,000 University of California
Revenue, Multiple Purpose
Projects, Series B, 9.00%,
9/1/03 (Insured by MBIA)........ 1,216,250
------------
COLORADO -- 1.3%
500,000 Colorado Housing Finance
Authority, 4.50%, 11/1/05....... 498,125
------------
CONNECTICUT -- 2.8%
1,000,000 Connecticut State, GO, Series C,
5.38%, 8/15/02.................. 1,048,750
------------
DISTRICT OF COLUMBIA -- 2.7%
1,000,000 District of Columbia, GO, 5.10%,
12/1/99 (Insured by MBIA)....... 1,016,250
------------
ILLINOIS -- 7.7%
1,000,000 Chicago Metropolitan Water
Reclamation District, Working
Cash Fund, 5.90%, 12/1/04....... 1,086,250
1,000,000 Illinois Educational Facilities
Authority Revenue, Loyola
University, Series A, 6.30%,
7/1/98 (Insured by MBIA)........ 1,000,000
745,000 University of Illinois Revenue,
Health Service Facility, 4.90%,
10/1/01 (Insured by AMBAC)...... 762,694
------------
2,848,944
------------
INDIANA -- 3.0%
1,100,000 Greenwood Indiana School
Building Corp., 4.75%,
7/15/07......................... 1,122,000
------------
KENTUCKY -- 2.7%
1,000,000 Kentucky State Property &
Buildings Commission, Project
No. 53, 5.80%, 10/1/98.......... 1,005,140
------------
LOUISIANA -- 2.7%
1,000,000 Louisiana State Gas & Fuels Tax
Revenue, Series A, 7.00%,
11/15/98 (Insured by FGIC)...... 1,011,610
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN -- 19.1%
$1,235,000 Detroit, GO, 8.00%, 4/1/11,
Prerefunded 4/1/01 @ 102........ $ 1,383,200
1,050,000 Flint Michigan Hospital Building
Authority Revenue, 5.00%,
7/1/03.......................... 1,063,125
1,000,000 Michigan State Hospital Finance
Authority Revenue, Detroit
Medical Group, Series A, 5.00%,
8/15/06, (Insured by AMBAC)..... 1,030,000
1,600,000 Michigan State Hospital Finance
Authority Revenue, Sisters of
Mercy Health Corp. Bond 1993,
Series F, 4.60%, 8/15/02
(Insured by MBIA)............... 1,620,000
1,000,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, 5.15%, 10/1/00
(Insured by MBIA)............... 1,021,250
1,000,000 Michigan Strategic Fund, Dow
Chemical Project, 3.80%*,
2/1/09.......................... 1,000,000
------------
7,117,575
------------
NEVADA -- 2.9%
1,090,000 Las Vegas, GO, 6.75%, 8/1/98
(Insured by MBIA)............... 1,092,267
------------
NEW JERSEY -- 3.0%
1,000,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Series A 1994,
7.00%, 7/1/03 (Insured by
MBIA)........................... 1,125,000
------------
NEW MEXICO -- 2.7%
1,000,000 Albuquerque New Mexico Gross
Receipts Tax, 5.375%, 7/1/01,
Callable 7/1/99 @ 100 (Insured
by MBIA)........................ 1,013,930
------------
NEW YORK -- 2.7%
1,000,000 New York State Dormitory
Authority Revenue, State
University Educational
Facilities, 4.70%, 5/15/99...... 1,007,560
------------
OHIO -- 4.3%
500,000 Cleveland Airport System
Revenue, 5.50%, 1/1/04, (Insured
by FSA)......................... 528,125
565,000 Cleveland-Cuyahoga County Port
Authority, Rock & Roll Hall of
Fame, Refunding, Subordinated
Bonds, 4.30%, 12/1/98........... 566,396
500,000 Cleveland-Cuyahoga County Port
Authority, Rock & Roll Hall of
Fame, Refunding, Subordinated
Bonds, 4.90%, 12/1/00........... 507,500
------------
1,602,021
------------
Continued
77
96
LIMITED TERM TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
OKLAHOMA -- 3.1%
$1,115,000 Tulsa Industrial Authority
Revenue, University of Tulsa,
Series A, 5.50%, 10/1/00
(Insured by MBIA)............... $ 1,152,631
------------
PENNSYLVANIA -- 5.4%
1,000,000 Allegheny County Airport
Revenue, Pittsburgh
International Airport, 5.00%,
1/1/99 (Insured by MBIA)........ 1,005,090
1,000,000 Pennsylvania State, First
Series, GO, 5.00%, 5/1/99....... 1,011,470
------------
2,016,560
------------
TEXAS -- 5.6%
1,000,000 Houston Independent School
District, GO, Public Property
Finance Contractual Obligation,
6.25%, 7/15/99.................. 1,024,180
1,000,000 Pasadena Independent School
District, GO, 6.75%, 8/15/05,
Prerefunded 8/15/01 @ 100,
(Insured by FGIC)............... 1,077,500
------------
2,101,680
------------
UTAH -- 3.5%
1,310,000 Salt Lake City Redevelopment
Agency, Neighborhood
Redevelopment Tax, Inc.,
Series A, (AMT), 5.25%,
10/1/99......................... 1,329,650
------------
VIRGINIA -- 4.1%
1,500,000 Norfolk, GO, 5.13%, 6/1/01...... 1,541,250
------------
WISCONSIN -- 2.7%
1,000,000 Green Bay, GO, Series A, 5.10%,
4/1/00.......................... 1,020,000
------------
WYOMING -- 5.4%
1,000,000 Campbell County School District,
No. 001 Gillette, GO, 5.15%,
6/1/02.......................... 1,038,750
1,000,000 Wyoming Community Development,
(AMT), 4.45%, 6/1/99, Callable
9/1/98 @ 100, Mandatory Put
6/1/99 @ 100.................... 1,002,680
------------
2,041,430
------------
TOTAL MUNICIPAL BONDS........... 36,597,823
------------
(Cost $35,944,355)
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
INVESTMENT COMPANIES -- 0.9%
$ 350,610 Dreyfus Tax Exempt Money Market
Fund............................ $ 350,610
------------
TOTAL INVESTMENT COMPANIES...... 350,610
------------
(Cost $350,610)
TOTAL INVESTMENTS -- 98.5%.................. 36,948,432
(Cost $36,294,965) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5%....................... 549,143
------------
TOTAL NET ASSETS -- 100.0%.................. $ 37,497,575
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $ 660,390
Unrealized depreciation............... (6,923)
------------
Net unrealized appreciation........... $ 653,467
============
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
GO General Obligation
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
78
97
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS -- 95.6%
ALASKA -- 3.1%
$1,520,000 Alaska Municipal Bond Bank
Authority, Series A, GO, 4.75%,
10/1/99......................... $ 1,533,300
1,000,000 Anchorage Electric Utility,
Revenue Bond, Senior Lien,
5.50%, 12/1/03, Callable 6/1/03
@ 102 (Insured by MBIA)......... 1,058,750
1,000,000 Anchorage, GO, 6.30%, 7/1/99
(Insured by MBIA)............... 1,025,430
5,000,000 North Slope Boro, Series B, GO,
7.50%, 6/30/01 (Insured by
FSA)............................ 5,462,500
------------
9,079,980
------------
ARIZONA -- 4.2%
1,750,000 Phoenix, GO, Series A, 4.90%,
7/1/02.......................... 1,800,313
3,065,000 Phoenix, GO, Series A, 6.00%,
7/1/10.......................... 3,474,944
1,500,000 Pima County Unified School
District No. 1 Tucson, Series B,
GO, ETM, 6.80%, 7/1/00.......... 1,580,625
5,000,000 Salt River Project Agricultural
Improvement & Power District
Electric System, Series A,
5.63%, 1/1/06................... 5,399,999
------------
12,255,881
------------
CALIFORNIA -- 6.1%
3,400,000 California State, GO, 6.60%,
2/1/10.......................... 4,016,250
3,000,000 Orange County, Series A, 6.00%,
6/1/10 (Insured by MBIA)........ 3,382,500
2,000,000 Riverside County Transportation
Commission, Sales Tax Revenue,
Series A, 5.60%, 6/1/05 (Insured
by AMBAC)....................... 2,152,500
2,000,000 Turlock Irrigation District
Revenue, Series A, 6.00%, 1/1/06
(Insured by MBIA)............... 2,207,500
4,850,000 University of California
Revenue, Multiple Purpose
Projects, Series B, 9.00%,
9/1/03 (Insured by MBIA)........ 5,898,813
------------
17,657,563
------------
COLORADO -- 2.7%
4,000,000 Arapahoe County, School District
No. 005, Cherry Creek, Series A,
GO, 5.25%, 12/15/02............. 4,180,000
1,400,000 Boulder Valley School District,
5.50%, 12/1/07 (Insured by
FGIC)........................... 1,517,250
1,000,000 Colorado Springs Utility
Revenue, Series A, 6.50%,
11/15/03, Callable 11/15/01 @
102............................. 1,090,000
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
COLORADO (CONTINUED)
$1,000,000 E-470 Public Highway Authority
Revenue, Series C, 6.00%, 9/1/07
(Insured by MBIA)............... $ 1,113,750
------------
7,901,000
------------
CONNECTICUT -- 1.5%
4,000,000 Connecticut State, Series A,
6.00%, 5/15/02.................. 4,270,000
------------
FLORIDA -- 2.5%
1,000,000 Broward County School District,
GO, 5.20%, 2/15/03.............. 1,042,500
1,625,000 Florida State Board Of
Education, Series B, 6.50%,
06/01/06........................ 1,852,500
2,000,000 Lakeland Electric & Water
Revenue, 5.90%, 10/1/07......... 2,212,500
1,000,000 Tampa Guaranteed Entitlement
Revenue, 6.60%, 10/1/00 (Insured
by AMBAC)....................... 1,057,500
1,000,000 Tampa Utilities, Tax & Special
Revenue, 6.30%, 10/1/00 (Insured
by AMBAC)....................... 1,051,250
------------
7,216,250
------------
GEORGIA -- 2.9%
2,670,000 Atlanta Airport Facilities
Revenue, Series B, (AMT), 5.50%,
1/1/03 (Insured by AMBAC)....... 2,790,150
1,000,000 Georgia State Tollway Authority
Revenue, Georgia 400 Project,
6.25%, 7/1/00................... 1,045,000
4,000,000 Georgia State, Series B, GO,
5.95%, 3/1/08................... 4,485,000
------------
8,320,150
------------
HAWAII -- 1.2%
1,025,000 Honolulu City & County,
Series A, GO, 5.60%, 1/1/05..... 1,092,906
1,000,000 Honolulu City & County,
Series D, GO, ETM, 6.50%,
12/1/00......................... 1,058,750
1,150,000 Maui County, Series A, GO,
6.80%, 12/1/03, Prerefunded
12/1/00 @ 101 (Insured by
AMBAC).......................... 1,236,250
------------
3,387,906
------------
ILLINOIS -- 6.0%
2,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 6.80%, 1/1/03,
Prerefunded 1/1/00 @ 102........ 2,117,500
3,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 5.50%,
12/1/10......................... 3,236,250
4,270,000 Du Page & Will Counties,
Community School District No.
204, GO, 4.95%, 12/30/01
(Insured by FGIC)............... 4,382,087
Continued
79
98
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
$4,000,000 Illinois Development Finance
Authority, Pollution Control
Revenue, Commonwealth Edison,
5.30%, 1/15/04 (Insured by
MBIA)........................... $ 4,180,000
3,135,000 Northwest Suburban Municipal
Joint Action, Water Agency,
Water Supply System, Series A,
5.25%, 5/1/04 (Insured by
MBIA)........................... 3,279,994
------------
17,195,831
------------
INDIANA -- 3.6%
1,580,000 Elberfeld JH Castle School
Building Corp., 4.50%, 7/5/04,
(Insured by MBIA)............... 1,593,825
2,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 5.88%, 1/1/10 (Insured by
MBIA)........................... 2,205,000
3,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 6.00%, 1/1/13 (Insured by
MBIA)........................... 3,348,750
1,000,000 Indiana Transportation Finance
Authority, Highway Revenue,
Series A, 5.75%, 6/1/12 (Insured
by AMBAC)....................... 1,092,500
1,000,000 Purdue University Dormitory
System Revenue, Series A, 6.40%,
7/1/99 (Insured by AMBAC)....... 1,025,210
1,000,000 Purdue University Student Fee
Revenue, Series D, 6.50%,
7/1/03, Callable 1/1/00 @ 103... 1,065,000
------------
10,330,285
------------
KANSAS -- 1.1%
3,000,000 Kansas State Department of
Transportation Highway Revenue,
5.50%, 9/1/11................... 3,240,000
------------
LOUISIANA -- 2.6%
4,000,000 Louisiana State, Series A, GO,
5.30%, 8/1/04 (Insured by
MBIA)........................... 4,205,000
3,000,000 Louisiana State, Series A, GO,
6.00%, 4/15/07 (Insured by FGIC) 3,322,500
------------
7,527,500
------------
MASSACHUSETTS -- 3.1%
5,000,000 Massachusetts Bay Transportation
Authority, Series A, 5.00%,
3/1/02.......................... 5,137,500
3,750,000 Massachusetts State, Special
Obligation Revenue, Series A,
5.25%, 6/1/08 (Insured by
AMBAC).......................... 3,942,188
------------
9,079,688
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN -- 18.6%
$2,215,000 Battle Creek Downtown
Development Authority, 6.00%,
5/1/07 (Insured by MBIA)........ $ 2,455,881
4,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 7.30%,
5/1/10, Prerefunded 5/1/04 @
102............................. 4,685,000
2,100,000 Caledonia Community Schools, GO,
6.70%, 5/1/22, Prerefunded
5/1/02 @ 102 (Insured by
AMBAC).......................... 2,328,375
3,000,000 Detroit Sewage Disposal Revenue,
Series B, 6.00%, 7/1/09 (Insured
by MBIA)........................ 3,348,750
6,000,000 Detroit Water Supply System,
Permanent Linked Bonds, 5.25%,
7/1/13, Callable 7/1/04 @ 104
(Insured by FGIC)............... 6,134,999
1,000,000 Detroit Water Supply System,
Second Lien, Series A, 5.20%,
7/1/08 (Insured by MBIA)........ 1,048,750
3,000,000 Detroit, GO, Distributable State
Aid, 5.70%, 5/1/01 (Insured by
AMBAC).......................... 3,123,750
2,840,000 Grand Ledge Public Schools
District, GO, 5.35%, 5/1/10
(Insured by MBIA)............... 3,024,600
1,700,000 Greater Detroit Resource
Recovery Authority, Series A,
5.50%, 12/13/04 (Insured by
AMBAC).......................... 1,804,125
2,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.35%, 5/15/06
(Insured by MBIA)............... 2,105,000
2,000,000 Michigan State Comprehensive
Transportation, Series B, 5.50%,
5/15/02......................... 2,097,500
1,000,000 Michigan State Hospital Finance
Authority Revenue, Detroit
Medical Group, Series A, 5.00%,
8/15/06, (Insured by AMBAC)..... 1,030,000
1,450,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 5.00%, 5/15/06
(Insured by AMBAC).............. 1,493,500
1,000,000 Michigan State South Central
Power Agency, Power Supply
System Revenue, 5.80%, 11/1/05
(Insured by MBIA)............... 1,086,250
1,000,000 Michigan State Strategic Fund,
Detroit Edison, 4.10%*, 7/1/98
(LOC Barclays) 1,000,000
Continued
80
99
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,300,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Ford
Motor Co. Project, Series A,
7.10%, 2/1/06................... $ 2,682,375
2,500,000 Michigan State Trunk Line,
Series A, 5.50%, 10/1/02........ 2,634,375
3,500,000 Michigan State Underground
Storage Tank Financial Assurance
Authority, Series I, 6.00%,
5/1/05 (Insured by AMBAC)....... 3,828,125
2,000,000 Northville Public Schools,
Series A, GO, 7.00%, 5/1/08..... 2,175,000
1,575,000 South Redford School District,
5.25%, 5/1/09 (Insured by
FGIC)........................... 1,647,844
2,900,000 University of Michigan Hospital
Revenue, Series A, 3.80%*,
12/1/27......................... 2,900,000
1,000,000 Western Michigan University
Revenue, GO, 5.40%, 11/15/01
(Insured by FGIC)............... 1,041,250
------------
53,675,449
------------
MINNESOTA -- 0.4%
1,000,000 Minneapolis Community
Development Agency, Tax
Increment Revenue, 7.00%, 9/1/00
(Insured by MBIA)............... 1,062,500
------------
NEVADA -- 0.9%
2,500,000 Clark County School District,
Group 2, GO, 7.20%, 5/1/01,
Prerefunded 5/1/00 @ 102
(Insured by FGIC)............... 2,687,500
------------
NEW JERSEY -- 4.0%
6,000,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Senior Lien,
7.00%, 7/1/04 (Insured by
MBIA)........................... 6,840,000
1,375,000 New Jersey State, Series D, GO,
5.25%, 2/15/01.................. 1,417,969
3,000,000 Ocean County Utilities
Authority, Wastewater Revenue,
Refunding, GO, 6.00%, 1/1/07.... 3,333,750
------------
11,591,719
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
NEW YORK -- 2.1%
$1,130,000 Metropolitan Transportation
Authority, Series M, 5.50%,
7/1/08 (Insured by FGIC)........ $ 1,218,988
1,660,000 New York State Urban Development
Corp., Refunding, Syracuse
University Center, 5.50%,
1/1/15.......................... 1,759,600
3,000,000 Triborough Bridge & Tunnel
Authority, General Purpose,
Series Y, 5.50%, 1/1/17......... 3,165,000
------------
6,143,588
------------
NORTH CAROLINA -- 0.7%
2,000,000 North Carolina Municipal Power
Agency No. 1, Catawba Electric
Revenue, 5.90%, 1/1/03 2,117,500
------------
OHIO -- 0.8%
2,125,000 Columbus, Sewer Improvement, GO,
6.30%, 9/15/99.................. 2,191,406
------------
OKLAHOMA -- 2.1%
1,990,000 Oklahoma City, GO, 5.00%,
07/01/04........................ 2,064,625
3,500,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16 (Insured by
MBIA)........................... 3,950,625
------------
6,015,250
------------
OREGON -- 0.5%
1,400,000 Washington County School
District, 5.25%, 6/1/09......... 1,482,250
------------
PENNSYLVANIA -- 2.9%
2,000,000 Allegheny County Airport Revenue
(AMT), 5.00%, 1/1/02 (Insured by
MBIA)........................... 2,042,500
4,310,000 Chartiers Valley Joint School,
ETM, 6.15%, 3/1/07.............. 4,751,775
1,475,000 Pennsylvania State, Series A,
GO, 7.00%, 5/1/05, Prerefunded
5/1/00 @ 101.5.................. 1,574,563
------------
8,368,838
------------
PUERTO RICO -- 1.9%
3,055,000 Puerto Rico Commonwealth
Aquaduct & Sewer Authority,
6.00%, 7/1/06................... 3,360,500
2,000,000 Puerto Rico Commonwealth Highway
& Transportation Authority,
Highway Revenue, Series X,
4.90%, 7/1/01................... 2,040,000
------------
5,400,500
------------
Continued
81
100
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
RHODE ISLAND -- 2.6%
$1,000,000 Providence, GO, 6.70%, 1/15/02,
Prerefunded 1/15/00 @ 102
(Insured by MBIA)............... $ 1,060,000
3,025,000 Rhode Island State, Series A,
GO, 5.50%, 8/1/04 (Insured by
MBIA)........................... 3,221,625
2,000,000 State Depositors Economic
Protection Corp., Series A,
Special Obligation, 6.15%,
8/1/99 (Insured by MBIA)........ 2,050,420
1,000,000 State Depositors Economic
Protection Corp., Series B,
Special Obligation, 5.20%,
8/1/03 (Insured by MBIA)........ 1,041,250
------------
7,373,295
------------
TENNESSEE -- 0.5%
1,230,000 Tennessee State, Series B, GO,
6.20%, 6/1/01................... 1,303,800
------------
TEXAS -- 8.8%
1,000,000 Austin Independent School
District, GO, 6.20%, 8/1/99
(Insured by PSFG)............... 1,025,300
2,245,000 Dallas Independent School
District, GO, 5.40%, 8/15/03
(Insured by PSFG)............... 2,360,056
1,500,000 Houston Water & Sewer System
Revenue, Junior Lien, Series C,
5.75%, 12/1/03 (Insured by
MBIA)........................... 1,608,750
1,000,000 Houston Water & Sewer System
Revenue, Prior Lien, Series A,
7.00%, 12/1/01 (Insured by
AMBAC).......................... 1,091,250
3,000,000 Lower Colorado River Authority,
4.90%, 1/1/07, Callable 1/1/06 @
102............................. 3,093,750
1,050,000 Round Rock Independent School
District, GO, 5.25%, 2/15/05
(Insured by PSFG)............... 1,101,188
2,800,000 Texas Municipal Power Agency,
5.60%, 9/1/01 (Insured by
MBIA)........................... 2,926,000
5,595,000 Texas State Public Finance
Authority, Series A, GO, 6.50%,
10/1/04......................... 6,245,418
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
$4,450,000 Texas State, Series A, GO,
5.70%, 10/1/03.................. $ 4,767,062
1,015,000 University of Texas, University
Revenue, Series A, 6.60%,
8/15/02, Callable 8/15/01 @
102............................. 1,107,619
------------
25,326,393
------------
WASHINGTON -- 6.5%
1,000,000 King County School District,
4.60%, 12/1/03 (Insured by
FGIC)........................... 1,027,500
3,095,000 Snohomish County School District
No. 002, 5.50%, 12/1/10 (Insured
by MBIA)........................ 3,365,813
2,695,000 Tacoma Electric System,
Refunding, 6.00%, 1/1/06
(Insured by AMBAC).............. 2,940,919
2,000,000 Washington State Public Power
Supply System, Nuclear Project
No. 1 Bond Revenue, Series C,
7.25%, 7/1/00 (Insured by
FGIC)........................... 2,125,000
8,000,000 Washington State, Series A, GO,
5.50%, 9/1/05, Callable 9/1/04 @
100............................. 8,479,999
850,000 Washington State, Series III-H,
Motor Vehicle Fuel Tax, 5.75%,
9/1/12.......................... 936,063
------------
18,875,294
------------
WEST VIRGINIA -- 0.4%
1,095,000 West Virginia School Building
Authority Revenue, Capital
Improvement, Series A, 6.70%,
7/1/00 (Insured by MBIA)........ 1,151,119
------------
WISCONSIN -- 1.3%
1,025,000 Milwaukee Metropolitan Sewer
District, Series A, GO, 6.60%,
10/1/99......................... 1,059,594
1,500,000 Milwaukee Metropolitan Sewer
District, Series A, GO, 6.70%,
10/1/00......................... 1,584,375
1,000,000 Wisconsin State Public Power,
Inc., Supply System, Series A,
7.00%, 7/1/01, Callable 7/1/00 @
102 (Insured by AMBAC).......... 1,072,500
------------
3,716,469
------------
TOTAL MUNICIPAL BONDS........... 275,944,904
------------
(Cost $260,750,070)
Continued
82
101
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
INVESTMENT COMPANIES -- $2.9%
8,505,182 Dreyfus Tax Exempt Money Market
Fund............................ $ 8,505,182
------------
TOTAL INVESTMENT COMPANIES...... 8,505,182
------------
(Cost $8,505,182)
TOTAL INVESTMENTS -- 98.5%.................. 284,450,086
(Cost $269,255,252)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5% 4,299,785
------------
TOTAL NET ASSETS -- 100.0%.................. $288,749,871
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation $15,205,885
Unrealized depreciation (11,051)
-----------
Net unrealized appreciation $15,194,834
===========
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PSFG Permanent School Fund Guarantee
See Notes to Financial Statements.
83
102
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS -- 96.5%
ARIZONA -- 1.3%
$1,500,000 Arizona State University
Revenue, 7.00%, 7/1/15,
Prerefunded 7/1/02 @ 101
(Insured by AMBAC)............. $ 1,672,500
------------
CALIFORNIA -- 9.5%
1,000,000 Anaheim Public Financing
Authority, Lease Revenue,
Public Improvements Project,
Series A, 6.00%, 9/1/24
(Insured by FSA)............... 1,131,250
1,400,000 California State, GO, 7.00%,
6/1/05......................... 1,617,000
2,000,000 California State, GO, 6.25%,
9/1/12......................... 2,307,500
3,000,000 Northern California Power
Agency Revenue, Geothermal
Project, Series A, 5.50%,
7/1/05 (Insured by AMBAC)...... 3,209,999
2,000,000 Orange County, Series A, 6.00%,
6/1/10 (Insured by MBIA)....... 2,255,000
1,380,000 Turlock Irrigation District
Revenue, Series A, 6.00%,
1/1/07 (Insured by MBIA)....... 1,533,525
------------
12,054,274
------------
COLORADO -- 2.8%
1,000,000 Colorado Housing Financial
Authority, Single Family,
Series B-2, 6.40%, 11/1/24,
Callable 5/1/08 @ 105.......... 1,097,500
1,580,000 Denver City & County Airport
Revenue, (AMT), 6.75%,
11/15/22, Prerefunded 11/1/02 @
102............................ 1,706,400
650,000 Denver City & County Airport
Revenue, Series C, (AMT),
6.75%, 11/15/22, Callable
11/15/02 @ 102................. 725,563
------------
3,529,463
------------
FLORIDA -- 2.3%
1,080,000 Lee County Florida, Revenue
Bond, Series A, 5.50%,
10/1/09........................ 1,169,100
1,400,000 Port Everglades Authority, Port
Improvement, ETM, 7.13%,
11/1/16........................ 1,697,500
------------
2,866,600
------------
GEORGIA -- 0.9%
1,000,000 Georgia State, Series B, GO,
5.95%, 3/1/08.................. 1,121,250
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
HAWAII -- 2.6%
$2,000,000 Hawaii State, Series CB, GO,
5.75%, 1/1/07.................. $ 2,167,500
1,000,000 Honolulu City & County, Series
A, GO, 5.75%, 4/1/10........... 1,096,250
------------
3,263,750
------------
ILLINOIS -- 9.2%
2,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 5.50%,
12/1/10........................ 2,157,500
1,000,000 Chicago Public Building
Commission, Series A, ETM,
7.00%, 1/1/20 (Insured by
MBIA).......................... 1,257,500
2,000,000 Chicago School Finance
Authority, Series A, GO, 4.90%,
6/1/05, Callable 6/1/04 @ 102
(Insured by MBIA).............. 2,057,500
2,000,000 Du Page & Will Counties,
Community School District No.
204, GO, 4.95%, 12/30/01
(Insured by FGIC).............. 2,052,500
2,000,000 Illinois State Civic Center,
5.25%, 12/15/10, Special State
Obligation 12/30/01 (Insured by
FGIC)(Insured by AMBAC)........ 2,112,500
1,000,000 Illinois State Sales Tax,
Series S, 5.00%, 6/15/08....... 1,037,500
1,000,000 Will County Forest Preserve
District, GO, 5.90%, 12/1/03,
Callable 12/1/02 @ 100 (Insured
by AMBAC)...................... 1,063,750
------------
11,738,750
------------
INDIANA -- 5.3%
2,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 6.00%, 1/1/13 (Insured by
MBIA).......................... 2,232,500
2,250,000 Indiana State Office Building
Commission, Capital Complex,
Government Center Parking
Facilities, Series A, 4.80%,
7/1/03 (Insured by AMBAC)...... 2,297,813
1,000,000 Indiana Transportation Finance
Authority, Highway Revenue,
Series A, 5.75%, 6/1/12
(Insured by AMBAC)............. 1,092,500
1,000,000 Marion County Hospital
Authority Revenue, Community
Hospital, Indianapolis Project,
ETM, 6.00%, 5/1/06............. 1,083,750
------------
6,706,563
------------
Continued
84
103
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
IOWA -- 1.9%
$2,055,000 Iowa Finance Authority, Private
College Revenue, Drake
University Project, 6.50%,
12/1/11 (Insured by MBIA)...... $ 2,412,056
------------
KANSAS -- 2.1%
1,000,000 Kansas State Department of
Transportation Highway Revenue,
5.50%, 9/1/11.................. 1,080,000
1,600,000 Kansas State Development
Financial Authority Revenue,
4.40%, 5/1/06, Series I
Municipal Bond................. 1,596,000
------------
2,676,000
------------
KENTUCKY -- 1.0%
1,315,000 Louisville & Jefferson County,
Metropolitan Sewer District,
Sewer & Drain System Revenue,
Series A, 5.25%, 5/15/27,
Callable 5/15/07 @ 101 (Insured
by MBIA)....................... 1,324,863
------------
LOUISIANA -- 2.5%
3,000,000 Louisiana State Gas & Fuels Tax
Revenue, Series A, 7.25%,
11/15/00, Callable 11/15/99 @
102............................ 3,187,500
------------
MARYLAND -- 1.6%
2,000,000 Prince Georges County,
Consolidated Public
Improvement, GO, 5.00%, 1/1/02
(Insured by MBIA).............. 2,060,000
------------
MASSACHUSETTS -- 2.4%
1,000,000 Massachusetts State Industrial
Finance Agency, Resource
Recovery Revenue, Refusetech,
Inc. Project, Series A, 5.25%,
7/1/99 (Insured by FSA)........ 1,013,310
1,000,000 Massachusetts State Water,
Resource Authority, Series B,
5.00%, 12/1/25, Callable
12/1/05 @ 102 (Insured by
MBIA).......................... 972,500
1,000,000 Massachusetts State, Series B,
GO, 5.40%, 11/1/06............. 1,067,500
------------
3,053,310
------------
MICHIGAN -- 19.8%
2,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 7.30%,
5/1/10, Prerefunded 5/1/04 @
102............................ 2,342,500
1,300,000 Berkley School District, GO,
7.00%, 1/1/07 (Insured by
FGIC).......................... 1,525,875
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,000,000 Detroit Sewage Disposal
Revenue, Series B, 6.00%,
7/1/09 (Insured by MBIA)....... $ 2,232,500
1,000,000 Detroit Water Supply System,
Series B, 5.10%, 7/1/07
(Insured by MBIA).............. 1,040,000
930,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.50%, 1/1/07,
Callable 1/1/05 @ 102.......... 995,100
1,000,000 Michigan Higher Education
Facilities Authority, 5.35%,
05/1/15, Thomas................ 1,002,500
2,000,000 Michigan State Hospital Finance
Authority, Sisters of Mercy,
Series P, 5.25%, 8/15/21,
Callable 8/15/03 @ 102 (Insured
by MBIA)....................... 2,000,000
2,365,000 Michigan State Hospital Finance
Authority, Detroit Medical
Center, Series B, 5.00%,
8/15/06 (Insured by AMBAC)..... 2,435,949
2,000,000 Michigan State Hospital Finance
Authority, Henry Ford Health,
Series A, 5.25%, 11/15/20,
Callable 11/15/06 @ 102
(Insured by AMBAC)............. 2,000,000
1,300,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, Series A,
5.15%, 4/1/02 (Insured by
AMBAC)......................... 1,340,625
1,000,000 Michigan State South Central
Power Agency, Power Supply
System Revenue, 5.80%, 11/1/05
(Insured by MBIA).............. 1,086,250
2,000,000 Michigan State Trunk Line,
5.50%, 11/1/16, Callable
11/1/06 @ 101 (Insured by
FGIC).......................... 2,090,000
1,000,000 Michigan State Underground
Storage Tank Financial
Assurance Authority, Series I,
6.00%, 5/1/05 (Insured by
AMBAC)......................... 1,093,750
2,000,000 Michigan State University
Revenue, Series A, 5.50%,
8/15/22, Callable 8/15/02 @
100............................ 2,037,500
2,000,000 University of Michigan Hospital
Revenue, Series A, 3.80%*,
12/1/27........................ 2,000,000
------------
25,222,549
------------
MISSOURI -- 0.4%
500,000 Missouri State, Health &
Education Facilities, Lake of
Ozarks General Hospital, 6.50%,
2/15/21, Callable 2/15/06 @
102............................ 540,625
------------
Continued
85
104
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
NEBRASKA -- 0.9%
$1,075,000 Omaha Public Power District,
5.10%, 2/1/08.................. $ 1,130,094
------------
NEVADA -- 3.4%
1,805,000 Clark County School District,
GO, 5.75%, 6/15/10, Callable
6/15/06 @ 101 (Insured by
FGIC).......................... 1,949,400
2,000,000 Nevada State, Nevada Municipal
Bond Bank, Series A, GO, 8.00%,
11/1/05........................ 2,442,500
------------
4,391,900
------------
NEW JERSEY -- 2.6%
1,500,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Senior Lien,
7.00%, 7/1/04 (Insured by
MBIA).......................... 1,710,000
1,500,000 New Jersey State Transportation
Trust Fund Authority,
Transportation System, Series
A, 6.00%, 12/15/06 (Insured by
MBIA).......................... 1,659,375
------------
3,369,375
------------
NEW YORK -- 4.6%
1,350,000 New York City, Municipal Water
& Sewer Revenue, 5.50%,
6/15/24, Callable 6/15/06 @
101............................ 1,390,500
1,500,000 New York City, Tax Revenue
Anticipation Note, Livingston
Plaza Project, 5.40%, 1/1/18... 1,593,750
1,250,000 New York Dorm Authority
Revenue, 5.00%, 2/15/01........ 1,270,313
1,000,000 New York State Thruway
Authority, Series 1997 B,
6.00%, 4/1/07.................. 1,098,750
500,000 New York State Urban
Development Corp., 7.50%,
4/1/11, Prerefunded 4/1/01 @
102............................ 553,750
------------
5,907,063
------------
OKLAHOMA -- 1.8%
1,000,000 Grand River Dam Authority,
5.75%, 6/1/08 (Insured by
FSA)........................... 1,107,500
1,000,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16 (Insured by
MBIA).......................... 1,128,750
------------
2,236,250
------------
PENNSYLVANIA -- 1.6%
2,000,000 Pennsylvania State, First
Series, GO, 5.38%, 5/15/16,
Callable 5/15/06 @ 101.5
(Insured by FGIC).............. 2,040,000
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO -- 0.8%
$1,000,000 Puerto Rico Commonwealth
Highway & Transportation
Authority, Highway Revenue,
Series X, 4.90%, 7/1/01........ $ 1,020,000
------------
RHODE ISLAND -- 0.8%
1,000,000 Convention Center Authority,
Series B, 5.00%, 5/15/09
(Insured by MBIA).............. 1,036,250
------------
SOUTH CAROLINA -- 1.0%
1,200,000 Myrtle Beach Water & Sewer
Revenue, 4.90%, 3/1/02 (Insured
by MBIA)....................... 1,230,000
------------
TENNESSEE -- 1.0%
1,225,000 Tennessee Housing Development
Agency, Mortgage Finance,
Series C, (AMT), 5.95%, 7/1/09,
Callable 7/1/05 @ 102 (Insured
by MBIA)....................... 1,309,219
------------
TEXAS -- 6.1%
1,000,000 Brownsville Utility System,
6.25%, 9/1/11 (Insured by
AMBAC)......................... 1,147,500
1,000,000 Clear Creek Texas, Zero Coupon,
2/15/03........................ 818,750
1,000,000 Harris County, Certificates of
Obligation, 6.00%, 12/15/11.... 1,136,250
2,000,000 Texas City Industrial
Development Corp., Marine
Terminal Revenue, Arco Pipeline
Co. Project, 7.38%, 10/1/20.... 2,575,000
2,000,000 Texas State, Series A, GO,
5.70%, 10/1/03................. 2,142,500
------------
7,820,000
------------
UTAH -- 2.4%
2,175,000 Intermountain Power Agency,
Utah Power Supply, Series D,
5.00%, 7/1/23, Callable 7/1/06
@ 100.......................... 2,098,875
1,000,000 St. George, Parks &
Recreational Facilities, GO,
5.38%, 8/1/21, Callable 8/1/07
@ 101 (Insured by FGIC)........ 1,020,000
------------
3,118,875
------------
Continued
86
105
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
WASHINGTON -- 3.8%
$1,000,000 Douglas County Public Utility
District No. 001, Electric
Distribution System, 5.90%,
1/1/11, Callable 1/1/05 @ 102
(Insured by MBIA).............. $ 1,077,500
2,500,000 Port Seattle Limited, GO,
(AMT), 5.35%, 5/1/04........... 2,612,500
1,000,000 Washington State, Motor Vehicle
Fuel Tax, R-92D, GO, 6.25%,
9/1/07......................... 1,132,500
------------
4,822,500
------------
TOTAL MUNICIPAL BONDS.......... 122,861,579
------------
(Cost $115,773,078)
SECURITY MARKET
DESCRIPTION VALUE
SHARES ----------- ------
INVESTMENT COMPANIES -- 2.8%
3,576,699 Dreyfus Tax Exempt Money Market
Fund........................... $ 3,576,699
------------
TOTAL INVESTMENT COMPANIES..... 3,576,699
------------
(Cost $3,576,699)
TOTAL INVESTMENTS -- 99.3%.................. 126,438,278
(Cost $119,349,777)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.7%....................... 874,835
------------
TOTAL NET ASSETS -- 100.0%.................. $127,313,113
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................. $7,092,378
Unrealized depreciation................. (3,877)
----------
Net unrealized appreciation............. $7,088,501
==========
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
87
106
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS -- 99.1%
MICHIGAN -- 96.6%
$1,785,000 Allegan Sanitary Sewer System,
(AMT), 5.45%, 11/1/02........... $ 1,838,550
2,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 6.90%,
5/1/04.......................... 2,217,500
1,000,000 Bay City Electric Utility
Revenue, 5.15%, 1/1/07 (Insured
by AMBAC)....................... 1,045,000
560,000 Chippewa County Hospital Finance
Authority, 4.20%, 11/1/98....... 560,616
290,000 Chippewa County Hospital Finance
Authority, 4.40%, 11/1/99....... 290,725
585,000 Chippewa County Hospital Finance
Authority, 4.40%, 11/1/99....... 586,463
260,000 Chippewa County Hospital Finance
Authority, 4.60%, 11/1/00....... 260,975
1,000,000 Chippewa Valley School District,
GO, 6.38%, 5/1/05, Prerefunded
5/1/01 @ 101.5 (Insured by
FGIC)........................... 1,076,250
745,000 Chippewa Valley School District,
Series A, GO, 5.60%, 5/1/99..... 757,300
1,700,000 Clintondale Community School
District GO, 4.65%, 5/1/03...... 1,731,875
2,000,000 Dearborn School District, GO,
6.63%, 5/1/09, Prerefunded
5/1/00 @ 102 (Insured by
MBIA)........................... 2,132,500
1,000,000 Dearborn School District, GO,
6.38%, 5/1/10, Prerefunded
5/1/00 @ 102 (Insured by
MBIA)........................... 1,062,500
965,000 Dearborn Sewage Disposal System,
6.90%, 4/1/02 (Insured by
MBIA)........................... 1,055,469
2,800,000 Detroit Sewage Disposal, Series
A, 4.85%, 7/1/01 (Insured by
FGIC)........................... 2,855,999
580,000 Detroit, Distributable State
Aid, GO, 5.60%, 5/1/00 (Insured
by AMBAC)....................... 595,950
1,000,000 Detroit, GO, 5.00%, 4/1/04,
(Insured by FGIC)............... 1,032,500
750,000 Detroit, GO, 6.00%, 4/1/06,
(Insured by FGIC)............... 825,000
1,730,000 Dexter Community School
District, GO, 6.25%, 5/1/07,
(Insured by FGIC)............... 1,939,763
2,000,000 East China Township School
District, GO, 6.00%, 5/1/02,
Callable 5/1/01 @ 102........... 2,127,500
1,000,000 Eastern Michigan University, GO,
5.80%, 6/1/01 (Insured by
AMBAC).......................... 1,046,250
445,000 Farmington Hills Economic
Development Corp. Revenue,
Botsford Continuing Care, Series
A, 5.10%, 2/15/04 (Insured by
MBIA)........................... 460,019
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 470,000 Farmington Hills Economic
Development Corp. Revenue,
Botsford Continuing Care, Series
A, 5.20%, 2/15/05 (Insured by
MBIA)........................... $ 488,800
465,000 Flint Hospital Building
Authority, Hurley Medical
Center, 4.00%, 7/1/99........... 463,707
1,600,000 Flint Hospital Building
Authority, Hurley Medical
Center, Series A, 5.00%,
7/1/03.......................... 1,620,000
305,000 Flint Hospital Building
Authority, Hurley Medical
Center, Series B, 4.00%,
7/1/99.......................... 304,152
1,000,000 Grand Haven Area Public Schools,
GO, 5.45%, 5/1/04 (Insured by
MBIA)........................... 1,058,750
1,000,000 Grand Rapids Sanitary Sewer
System, Refunding & Improvement,
Series A, 4.38%, 1/1/06,
(Insured by FGIC)............... 996,250
1,250,000 Greater Detroit Resource
Recovery Authority, Series B,
5.00%, 12/13/02 (Insured by
AMBAC).......................... 1,287,500
435,000 Highland Park School District,
GO, 3.90%, 5/1/99, (Insured by
FSA)............................ 436,166
445,000 Highland Park School District,
GO, 4.00%, 5/1/00, (Insured by
FSA)............................ 445,556
485,000 Highland Park School District,
GO, 4.05%, 5/1/01, (Insured by
FSA)............................ 485,000
460,000 Highland Park School District,
GO, 4.15%, 5/1/02, (Insured by
FSA)............................ 460,575
1,000,000 Holland Electric Revenue, 6.40%,
7/1/02, Prerefunded 7/1/99 @
100............................. 1,026,880
1,100,000 Holland Electric Revenue, 6.50%,
7/1/03, Prerefunded 7/1/99 @
100............................. 1,130,085
1,250,000 Huron Valley School District,
GO, 7.10%, 5/1/08, Prerefunded
5/1/01 @ 102 (Insured by
FGIC)........................... 1,375,000
750,000 Kalamazoo Hospital Finance
Authority Revenue, Bronson
Methodist Hospital, 5.50%,
5/15/08, (Insured by MBIA)...... 800,625
1,810,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 4.95%, 5/15/02
(Insured by MBIA)............... 1,852,988
1,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.25%, 5/15/05
(Insured by MBIA)............... 1,043,750
1,295,000 Kenowa Hills Public Schools, GO,
5.50%, 5/1/05................... 1,382,413
Continued
88
107
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 500,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.25%, 1/1/04... $ 523,125
515,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 4.20%, 1/1/04,
(Insured by MBIA)............... 508,563
505,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.30%, 1/1/05... 530,250
645,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 4.30%, 1/1/05,
(Insured by MBIA)............... 636,131
1,150,000 Kent Hospital Finance Authority,
Butterworth Hospital, 4.90%,
1/15/05......................... 1,177,313
1,050,000 Kent Hospital Finance Authority,
Spectrum Health, Series A,
4.40%, 1/15/05.................. 1,044,078
2,000,000 Lake Orion Community School
District, GO, 6.20%, 5/1/04
(Insured by AMBAC).............. 2,192,500
2,707,776 Michigan Department of State
Police Lease, 4.95%, 3/10/02.... 2,731,469
1,265,000 Michigan Higher
Education--Thomas A. Cooley,
4.75%, 5/1/07, (LOC: First of
America)........................ 1,268,163
1,000,000 Michigan Hospital Finance
Authority, Sisters Of Mercy,
7.5%, 2/15/18, Prerefunded
2/15/01
@ 102........................... 1,103,750
1,020,000 Michigan Municipal Bond
Authority, Local Government Loan
Program, Qualified School,
6.35%, 5/15/01.................. 1,083,750
1,000,000 Michigan Municipal Bond
Authority, Pooled Projects,
Series B, 5.10%, 10/1/04........ 1,053,750
1,000,000 Michigan Municipal Bond
Authority, State Revolving Fund,
5.50%, 10/1/99.................. 1,021,250
2,000,000 Michigan Municipal Bond
Authority, State Revolving Fund,
5.50%, 10/1/06 2,170,000
2,000,000 Michigan Public Power Agency,
Belle River Project, Series A,
5.30%, 1/1/00................... 2,040,000
750,000 Michigan Public Power Agency,
Belle River Project, Series A,
5.70%, 1/1/03................... 795,938
1,000,000 Michigan State Building
Authority, Series II, 6.10%,
10/1/01......................... 1,062,500
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$3,000,000 Michigan State Comprehensive
Transportation, Series B, 5.63%,
5/15/03......................... $ 3,187,499
1,000,000 Michigan State Hospital Finance
Authority Revenue, Sisters of
Mercy Health Corp. Bond 1993,
Series F, 4.60%, 8/15/02
(Insured by MBIA)............... 1,012,500
1,855,000 Michigan State Hospital Finance
Authority, Bay Medical Center,
Series A, 5.38%, 7/1/06 (Insured
by FSA)......................... 1,957,025
750,000 Michigan State Hospital Finance
Authority, GO, Detroit Medical
Center Group A, 5.00%, 8/15/04
(Insured by AMBAC).............. 773,438
2,000,000 Michigan State Hospital Finance
Authority, Mclaren Obligated
Group, Series A, 5.75%,
10/15/03........................ 2,132,500
1,500,000 Michigan State Hospital Finance
Authority, Mercy Health
Services, Series S, 6.00%,
8/15/06......................... 1,640,625
1,060,000 Michigan State Hospital Finance
Authority, Sisters of Mercy
Health Corp., Series J, 7.15%,
2/15/99......................... 1,079,928
2,800,000 Michigan State Hospital Finance
Authority, Sisters of Mercy
Health Corp., Series J, 7.38%,
2/15/11
Prerefunded 2/15/01 @ 102....... 3,083,499
1,150,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 4.50%, 5/15/01
(Insured by AMBAC).............. 1,160,063
1,000,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 5.00%, 5/15/05
(Insured by AMBAC).............. 1,028,750
2,680,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, Series A,
(AMT), 5.25%, 10/1/01 (Insured
by MBIA)........................ 2,757,049
415,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Lutheran Social Services
Project, 4.40%, 9/1/98 (LOC:
First of America)............... 415,398
2,000,000 Michigan State Underground
Storage, Tank Financial
Assurance Authority, Series I,
5.00%, 5/1/00 (Insured by
AMBAC).......................... 2,035,000
3,270,000 Michigan State Underground
Storage, Tank Financial
Assurance Authority, Series I,
6.00%, 5/1/06 (Insured by
AMBAC).......................... 3,601,087
Continued
89
108
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,000,000 Mount Clemens Community School
District, GO, 6.60%, 5/1/20,
Prerefunded 5/1/02 @ 102
(Insured by MBIA)............... $ 1,106,250
1,495,000 Oakland County Economic
Development Corp. Revenue,
Boardwalk Shopping Center,
Limited Obligation Revenue,
4.38%*, 7/1/98, Mandatory Put
(LOC: NBD)...................... 1,495,000
580,000 Oakland County Economic
Development Corp., Sugartree
Shopping Center, 4.38%*, 7/1/98,
Mandatory Put (LOC: NBD)........ 580,000
500,000 Oakland County Economic
Development Corp., Sugartree
Shopping Center, 4.38%*, 7/1/98,
Mandatory Put (LOC: NBD)........ 500,000
1,000,000 Oakland Washtenaw County
Community College, 6.65%,
5/1/11, Prerefunded 5/1/02 @
100............................. 1,105,000
3,000,000 Okemos Public School District,
Series I, GO, 6.90%, 5/1/11,
Prerefunded 5/1/01 @ 102........ 3,277,499
3,200,000 Plymouth--Canton Community
School District, Series B, GO,
6.80%, 5/1/17, Prerefunded
5/1/01 @ 101.................... 3,459,999
735,000 Reeths--Puffer Schools, GO,
6.75%, 5/1/01 (Insured by
FGIC)........................... 786,450
750,000 Reeths--Puffer Schools, GO,
6.25%, 5/1/02 (Insured by FGIC) 804,375
2,000,000 Rockford Public Schools, GO,
7.38%, 5/1/19, Prerefunded
5/1/00 @ 101.................... 2,137,500
1,500,000 Royal Oak Hospital Finance
Authority, 5.75%, 11/15/03 1,595,625
1,530,000 Taylor Tax Increment Finance
Authority, 4.40%, 5/1/04,
(Insured by FSA)................ 1,537,650
1,660,000 Taylor Tax Increment Finance
Authority, 4.50%, 5/1/05,
(Insured by FSA)................ 1,670,375
2,035,000 Walled Lake Consolidated School
District, GO, 4.70%, 5/1/01..... 2,070,613
2,235,000 Walled Lake Consolidated School
District, GO, 4.80%, 5/1/02..... 2,285,288
2,000,000 Walled Lake Consolidated School
District, Series II, GO, 7.10%,
5/1/05, Prerefunded 5/1/00 @
102............................. 2,147,500
1,025,000 Washtenaw Community College, GO,
4.70%, 4/1/03 (Insured by
FGIC)........................... 1,046,781
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/99.......................... $ 549,274
550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/00.......................... 545,875
1,750,000 Western Michigan University,
Series A, 6.50%, 7/15/21,
Prerefunded 7/15/01 @ 102
(Insured by AMBAC).............. 1,905,313
1,000,000 Wyandotte Electric Revenue,
6.20%, 10/1/03 (Insured by
MBIA)........................... 1,093,750
1,150,000 Ypsilanti School District,
4.50%, 5/1/00 (Insured by
FGIC)........................... 1,160,063
------------
121,823,972
------------
PUERTO RICO -- 2.4%
3,000,000 Puerto Rico Commonwealth Highway
& Transportation Authority,
Highway Revenue, Series X,
4.90%, 7/1/01................... 3,060,000
------------
TOTAL MUNICIPAL BONDS........... 124,883,972
(Cost $121,759,373) ------------
INVESTMENT COMPANIES -- 0.9%
1,105,236.. Dreyfus Tax Exempt Money Market
Fund............................ 1,105,236
------------
TOTAL INVESTMENT COMPANIES...... 1,105,236
(Cost $1,105,236) ------------
TOTAL INVESTMENTS -- 100.0%................. 125,989,208
(Cost $122,864,609)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.0%....................... 60,426
------------
TOTAL NET ASSETS -- 100.0%.................. $126,049,634
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation.......... $3,165,737
Unrealized depreciation.......... (41,138)
----------
Net unrealized appreciation...... $3,124,599
==========
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
90
109
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
BANK NOTES -- 1.9%
$5,000,000 First Union National Bank of
North Carolina, 5.50%,
7/8/98......................... $ 5,000,000
5,000,000 First Union National Bank of
North Carolina, 5.52%,
10/30/98....................... 5,000,000
------------
TOTAL BANK NOTES............... 10,000,000
(Amortized Cost $10,000,000) ------------
BANKERS ACCEPTANCES -- 1.0%
5,000,000 Corestates Bank N.A., 5.35%,
7/21/98........................ 4,985,139
------------
TOTAL BANKERS ACCEPTANCES...... 4,985,139
(Amortized Cost $4,985,139) ------------
CERTIFICATES OF DEPOSIT -- 6.4%
5,000,000 Bank Of Nova Scotia, 5.65%,
3/23/99........................ 4,994,367
3,000,000 Bankers Trust, 6.00%, 7/7/98... 3,000,142
5,000,000 Bankers Trust, 5.84%,
4/30/99........................ 4,998,411
5,000,000 Mellon Bank, 5.57%, 7/1/98..... 5,000,000
5,000,000 Mellon Bank, 5.50%, 9/21/98.... 5,000,000
5,000,000 Mellon Bank, 5.71%, 3/5/99..... 5,000,000
5,000,000 Mellon Bank, 5.75%, 6/3/99..... 5,000,000
------------
TOTAL CERTIFICATES OF
DEPOSIT........................ 32,992,920
(Amortized Cost $32,992,920) ------------
COMMERCIAL PAPER -- 31.7%
4,300,000 Armstrong World Industries,
5.60%, 7/1/98.................. 4,300,000
5,000,000 Banque National de Paris
Canada, 5.39%, 7/21/98......... 4,985,028
5,000,000 Bell South Telecommunications,
5.50%, 8/21/98................. 4,961,042
5,000,000 Cargill, Inc., 5.47%, 7/1/98... 5,000,000
5,000,000 Commonwealth Bank of Australia,
5.42%, 10/13/98................ 4,921,711
10,400,000 Daimler Benz, 6.15%, 7/1/98.... 10,399,999
5,000,000 Daimler Benz, 5.53%, 8/21/98... 4,960,829
5,000,000 Deutsche Bank Financial, 5.52%,
8/14/98........................ 4,966,267
5,000,000 Dresdner US Finance, 5.51%,
8/4/98......................... 4,973,981
5,000,000 Du Pont De Nemours & Co.,
5.36%, 8/14/98................. 4,967,244
10,000,000 Ford Motor Credit Corp., 6.0%,
7/1/98......................... 9,999,999
10,000,000 Ford Motor Credit Corp., 6.0%,
7/2/98......................... 9,998,333
5,000,000 General Electric Capital Corp.,
5.38%, 8/7/98.................. 4,972,353
5,000,000 General Electric Capital Corp.,
5.36%, 8/17/98................. 4,965,011
5,000,000 General Electric Capital Corp.,
5.43%, 8/27/98................. 4,957,013
5,000,000 GMAC, 5.43%, 8/27/98........... 4,957,013
5,000,000 GTE Corp., 5.56%, 7/2/98....... 4,999,228
5,000,000 GTE Corp., 5.53%, 7/10/98...... 4,993,088
5,000,000 GTE Funding, 5.56%, 7/22/98.... 4,983,783
5,000,000 Household Finance, 5.51%,
8/6/98......................... 4,972,450
10,000,000 JP Morgan & Co, 5.52%,
7/6/98......................... 9,992,333
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
COMMERCIAL PAPER (CONTINUED)
$6,875,000 Morgan Guaranty, 5.50%,
10/19/98....................... $ 6,759,462
6,500,000 Novartis Finance Corp., 5.50%,
7/8/98......................... 6,493,049
8,300,000 Novartis Finance Corp., 5.50%,
8/4/98......................... 8,256,855
5,000,000 Southern New England
Telecommunication, 5.55%,
7/20/98........................ 4,985,354
5,000,000 Toyota Motor Credit Corp.,
5.50%, 7/29/98................. 4,978,611
8,000,000 UBS Finance, Inc., 5.58%,
7/6/98......................... 7,993,800
------------
TOTAL COMMERCIAL PAPER......... 163,693,836
(Amortized Cost $163,693,836) ------------
DEMAND NOTES -- 21.9%
6,000,000 American Healthcare Funding
L.L.C., 5.70%*, 7/1/98 (LOC:
LaSalle National Bank)......... 6,000,000
4,000,000 American Mfg. Co., Inc., Series
1997, 5.70%*, 7/2/98 (LOC:
Mellon Bank)................... 4,000,000
7,500,000 Arboretum Properties, L.L.C.,
5.67%*, 7/1/98 (LOC: Michigan
National Bank)................. 7,500,000
2,400,000 Buckeye Corrugated, Inc.,
5.67%*, 7/1/98 (LOC:
Keybank)....................... 2,400,000
4,400,000 City of Cloquet, Minnesota
Taxable Industrial Bond, Series
1996B, 5.80%*, 4/1/26 (LOC:
Credit Suisse)................. 4,400,000
5,915,000 FC Bellevue, Inc., 5.69%*,
7/2/98 (LOC: National City Bank
Cleveland, Ohio)............... 5,915,000
4,830,000 First Metro Title Co., 5.68%*,
7/2/98 (LOC: Michigan National
Bank).......................... 4,830,000
4,565,000 Harry W. Albright, Jr., 5.70%*,
7/2/98......................... 4,565,000
3,500,000 HWP Co., Ltd. Project, 5.69%*,
7/2/98 (LOC: National City Bank
Cleveland, Ohio)............... 3,500,000
7,500,000 Katz Capital Corp., 5.69%*,
7/2/98 (LOC: Citizens Bank).... 7,500,000
4,730,000 Labelle Capital Funding L.L.C.,
5.70%*, 7/2/98 (LOC: First of
America Bank -- Michigan)...... 4,730,000
1,575,000 Laird's Auto Glass & Trim,
Inc., 5.75%*, 7/2/98 (LOC:
Michigan National Bank)........ 1,575,000
4,000,000 Macroe Properties, Inc.,
5.70%*, 7/2/98 (LOC: Huntington
Bank).......................... 4,000,000
5,000,000 Mississippi Business Finance
Corp., 5.70%*, 1/1/23 (LOC:
First National Bank of
Chicago)....................... 5,000,000
8,545,000 Ordeal Properties L.L.C.,
5.67%*, 7/1/98 (LOC:
Keybank)....................... 8,545,000
Continued
91
110
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
DEMAND NOTES (CONTINUED)
$2,500,000 Patt's Enterprises L.L.C.,
5.70%*, 7/2/98 (LOC: Huntington
National Bank)................. $ 2,500,000
5,000,000 PRA at Glenwood Hills
Corporate, Centre Limited
Liability Co., 5.66%*,......... 5,000,000
7/2/98 (LOC: First of America
Bank -- Michigan)
8,350,000 PRD Finance L.L.C., 5.66%*,
7/2/98 (LOC: First of America
Bank Michigan) --.............. 8,350,000
3,000,000 Royal Town Center L.L.C.
Project, 5.67%*, 7/2/98 (LOC:
Comerica Bank)................. 3,000,000
2,655,000 Rumpf Development Ltd., 5.67%*,
7/1/98 (LOC: Keybank).......... 2,655,000
5,000,000 Sheperd Capital L.L.C., 5.70%*,
7/2/98 (LOC: Comerica Bank).... 5,000,000
2,000,000 South Bend MAC, L.P., 5.70%*,
7/1/98 (LOC: LaSalle National
Bank).......................... 2,000,000
1,075,000.. The Economic Development Corp.
of the County of Marquette,
Pioneer 1,075,000
Laboratories, Inc. Project,
5.55%*, 7/2/98 (LOC: NBD Bank)
3,250,000 White Mountain Imaging, 5.67%*,
7/1/98 (LOC: Keybank).......... 3,250,000
5,645,000 Zeigler Realty, L.L.C., 5.70%*,
7/2/98 (LOC: First of America
Bank -- Michigan).............. 5,645,000
------------
TOTAL DEMAND NOTES............. 112,935,000
(Amortized Cost $112,935,000) ------------
EURO CERTIFICATES OF DEPOSIT -- 1.0%
5,000,000 ABN Amro, 5.55%, 7/31/98....... 5,000,000
------------
TOTAL EURO CERTIFICATES OF
DEPOSIT........................ 5,000,000
(Amortized Cost $5,000,000) ------------
FUNDING AGREEMENTS -- 3.9%
5,000,000 Allstate Financial Corp.,
5.84%*, 7/1/98 (b)............. 5,000,000
5,000,000 Allstate Financial Corp.,
5.84%*, 7/1/98 (b)............. 5,000,000
10,000,000 General American Life Insurance
Co., 5.89%*, 7/1/98 (b)........ 10,000,000
------------
TOTAL FUNDING AGREEMENTS....... 20,000,000
(Amortized Cost $20,000,000) ------------
YANKEE CERTIFICATES OF DEPOSIT -- 20.5%
5,000,000.. ABN Amro Bank, 5.82%, 7/17/98 4,999,974
5,000,000.. Bank Of New York, 5.50%,
2/17/99 4,990,622
5,000,000.. Bankers Trust Co., 5.90%,
8/10/98 4,999,738
5,000,000.. Banque National De Paris,
5.63%, 12/28/98 5,000,000
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
YANKEE CERTIFICATES OF DEPOSIT (CONTINUED)
$3,000,000.. Barclays Bank PLC, 5.85%,
8/11/98 $ 3,000,578
5,000,000.. Barclays Bank PLC, 5.65%,
3/2/99 4,998,238
5,000,000.. Canadian Imperial Bank of
Commerce, 5.46%, 7/13/98 5,000,049
5,000,000.. Canadian Imperial Bank of
Commerce, 5.86%, 8/11/98 5,001,074
5,000,000.. Canadian Imperial Bank of
Commerce, 5.55%, 2/10/99 4,995,137
5,000,000.. Commerzbank Ag, 5.65%, 2/26/99 4,996,097
4,000,000.. Commerze Bank, 5.67%, 3/5/99,
5.67%, 3/5/99 3,997,755
5,000,000.. Credit Agricole Indosuez,
5.705%, 1/7/99 4,996,410
5,000,000.. Credit Agricole Indosuez,
5.66%, 3/4/99 4,998,708
5,000,000.. Deutche Bank, 5.58%, 7/9/98 5,000,065
4,000,000.. Deutche Bank, 5.86%, 10/14/98 4,002,530
5,000,000.. National Westminster, 5.54%,
7/29/98 5,000,098
5,000,000.. Rabobank, 5.69%, 4/16/98 4,998,103
5,000,000.. Societe Generale, 5.53%, 8/5/98 5,000,047
5,000,000.. Societe Generale, 5.89%,
10/14/98 5,003,515
5,000,000.. Societe Generale, 5.70%,
3/23/99 4,998,261
5,000,000.. Societe Generale, 5.77%,
4/19/99 4,998,517
5,000,000.. Swiss Bank, 5.74%, 6/11/99 4,999,547
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT........................ 105,975,063
(Amortized Cost $105,975,063) ------------
REPURCHASE AGREEMENTS -- 8.1%
42,000,000 Donaldson, Lufkin & Jenrette
5.50%, dated 6/30/98, due
7/1/98 with a maturity value of
4,000,611 (collateralized by
$10,925,000 FNMA, Discount
Note, 7/10/98, market value
$10,898,977 and by $32,030,000
FNMA, Discount Note, 7/15/98,
market value $31,958,157)...... 42,000,000
------------
TOTAL REPURCHASE AGREEMENTS.... 42,000,000
(Amortized Cost $42,000,000) ------------
INVESTMENT COMPANIES -- 3.1%
16,147,208 Dreyfus Cash Management Money
Market Fund.................... 16,147,208
------------
TOTAL INVESTMENT COMPANIES..... 16,147,208
------------
(Amortized Cost $16,147,208)
TOTAL INVESTMENTS -- 99.6%............... $513,729,166
(Amortized Cost $513,729,166)(a)
OTHER ASSETS IN EXCESS OF LIABILITIES
0.4% 1,992,017
------------
TOTAL NET ASSETS -- 100.0% $515,721,183
============
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Illiquid security.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
LOC Letter of Credit
See Notes to Financial Statements.
92
111
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS -- 83.8%
MICHIGAN -- 78.2%
$ 440,000 Calhoun County, GO, 3.95%,
7/1/98, (Insured by AMBAC)...... $ 440,000
950,000 Clinton Township Economic
Development Corp., Pointe
Village Square, (AMT), 3.80%*,
8/1/98, (LOC: First of
America)........................ 950,000
1,000,000 Detroit Water Revenue, 7.78%,
7/1/98, Prerefunded 7/1/98 @
102, (Insured by MBIA).......... 1,000,000
700,000 Dexter Michigan Community
Schools, QSBLF, 3.80%, 5/1/99,
(Insured by FGIC)............... 700,000
390,000 Farmington Hills Michigan
Education, Marketing Displays,
(AMT), 3.80%*, 9/1/98 (LOC:
Comerica Bank).................. 390,000
9,000,000 Garden City Michigan Hospital,
3.75%*, 7/7/98, (LOC: First of
America)........................ 9,000,000
1,900,000 Genesee County Economic
Development Corp., Grand Blanc
Convalescent Center, 3.75%*,
11/1/98 (LOC: Citizens Banking
Corp.).......................... 1,900,000
1,700,000 Genesee County Michigan, Atlas
Technology, (AMT), 3.65%*,
7/7/98, (LOC: NBD Bank)......... 1,700,000
3,000,000 Grand Ledge Michigan Public
School District, 4.00%,
11/24/98........................ 3,003,138
2,060,000 Leelanau County Economic
Development Corp., American
Mutual Insurance Co., 3.85%*,
12/15/98, (LOC: First of
America)........................ 2,060,000
4,500,000 Lenawee County Economic
Development Corp., Rima Mfg. Co
Project, (AMT), 3.80%*, 7/7/98
(LOC: Keybank).................. 4,500,000
445,000 Livonia County Economic
Development Corp., American
Community Mutual Insurance Co.,
3.80%*, 11/15/98 (LOC: First of
America)........................ 445,000
1,200,000 Marquette County Economic
Development Corp., Pioneer Labs,
Inc., (AMT), 4.00%*,7/7/98,
(LOC: NBD Bank)................. 1,200,000
1,800,000 Meridian, Hannah Technology,
3.70%*, 7/30/98 (LOC: Comerica
Bank)........................... 1,800,000
1,650,000 Michigan Housing Development
Authority, Laurel Valley,
3.55%*, 7/7/98 (LOC:
Wachovia)....................... 1,650,000
7,165,000 Michigan Municipal Bond
Authority, 4.25%, 7/31/98....... 7,169,634
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,670,000 Michigan Municipal Bond
Authority, Revenue Note, Series
1997C, 4.50%, 9/18/98........... $ 1,672,087
1,000,000 Michigan Municipal Bond
Authority, Local Government Loan
Program, Series B, 6.90%, 5/1/99
(Insured by FGIC)............... 1,026,023
7,300,000 Michigan Municipal Bond
Authority, Series 1997 B,
4.50%,.......................... 7,300,124
7,000,000 Michigan State, 4.50%,
9/30/98......................... 7,012,462
2,045,000 Michigan State Building
Authority, 4.50%, 10/15/98...... 2,048,911
1,000,000 Michigan State Building
Authority, 1997 Revenue, Series
I, 4.50%, 10/1/98............... 1,001,465
1,000,000 Michigan State Comprehensive
Transportation, 5.10%,
5/15/99......................... 1,011,361
2,100,000 Michigan State Comprehensive
Transportation, Series 1998-I,
6.70%, 7/31/98.................. 2,109,812
595,000 Michigan State Hospital Finance
Authority Revenue, Mercy Health
Services, 5.00%, 8/15/98........ 595,748
2,600,000 Michigan State Hospital Finance
Authority, St. Mary's Hospital
of Livonia, Series A, 3.50%*,
7/7/98, (LOC: Comerica Bank).... 2,600,000
1,500,000 Michigan State Housing
Development Authority, Limited
Obligation Revenue, Pine Ridge,
3.55%*, 7/7/98, (LOC:
Wachovia)....................... 1,500,000
3,300,000 Michigan State Job Development
Authority, BASF Wyandotte,
3.45%*, 7/7/98 (LOC: Credit
Suisse)......................... 3,300,000
3,000,000 Michigan State Strategic Fund,
Van Andel Research Project,
3.60%*, 7/7/98 (LOC: National
Australia Bank)................. 3,000,000
2,700,000 Michigan State Strategic Fund,
AACOA Extrusions, Inc., (AMT),
3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 2,700,000
2,510,000 Michigan State Strategic Fund,
Atmosphere Annealing, (AMT),
3.75%*, 7/7/98 (LOC: First of
America)........................ 2,510,000
1,160,000 Michigan State Strategic Fund,
B.K. Hardwoods, (AMT), 3.70%*,
7/7/98, (LOC: Huntington Bank).. 1,160,000
4,345,000 Michigan State Strategic Fund,
Banks Hardwoods, Inc., (AMT),
3.70%*, 7/7/98 (LOC: Bank One).. 4,345,000
2,000,000 Michigan State Strategic Fund,
Besser International Sales Co
Project, (AMT), 3.65%*, 7/7/98
(LOC: NBD Bank)................. 2,000,000
Continued
93
112
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$3,000,000 Michigan State Strategic Fund,
Bloomfield Valley Properties,
3.70%*, 10/1/98, (LOC: Charter
One)............................ $ 3,000,000
200,000 Michigan State Strategic Fund,
Bloomfield Valley Properties,
3.70%*, 10/1/98, (LOC: Charter
One)............................ 200,000
1,500,000 Michigan State Strategic Fund,
C-1, (AMT), 4.00%*, 7/7/98,
(LOC: Comerica Bank)............ 1,500,000
1,000,000 Michigan State Strategic Fund,
C-Tec Inc. Project, (AMT),
3.65%*, 7/7/98 (LOC: Suntrust
Bank)........................... 1,000,000
2,600,000 Michigan State Strategic Fund,
CEC Products Co. Inc. Project,
(AMT), 3.75%*, 7/7/98 (LOC:
Comerica Bank).................. 2,600,000
4,000,000 Michigan State Strategic Fund,
Creative Foam Corp. Project,
(AMT), 3.65%*, 7/7/98 (LOC: NBD
Bank)........................... 4,000,000
5,000,000 Michigan State Strategic Fund,
Dawnbreakers LLC, (AMT), 3.75%*,
7/7/98 (LOC: National City
Bank)........................... 5,000,000
2,500,000 Michigan State Strategic Fund,
Delta Containers, Inc. Project,
(AMT), 3.65%*, 7/7/98 (LOC: NBD
Bank)........................... 2,500,000
4,000,000 Michigan State Strategic Fund,
Detroit Edison, 4.10%*, 7/1/98
(LOC Barclays).................. 4,000,000
2,500,000 Michigan State Strategic Fund,
Donnelly Corp., Series B, (AMT),
3.90%*, 10/1/98 (LOC: Dresdner
Bank)........................... 2,500,000
5,000,000 Michigan State Strategic Fund,
Dow Chemical Co. Project, (AMT),
4.10%*, 7/1/98.................. 5,000,000
1,275,000 Michigan State Strategic Fund,
Enviromental Powder Co., (AMT),
3.70%*, 7/7/98 (LOC: Michigan
National Bank).................. 1,275,000
1,000,000 Michigan State Strategic Fund,
Equad Project, (AMT), 3.75%*,
7/7/98, (LOC: National City
Bank)........................... 1,000,000
2,000,000 Michigan State Strategic Fund,
Genesee Packaging Inc. Project,
(AMT), 3.70%*, 7/7/98 (LOC:
Citizens Banking Corp.)......... 2,000,000
1,500,000 Michigan State Strategic Fund,
Gollin Block & Supply Co.,
(AMT), 4.00%*, 7/7/98 (LOC:
Northern Trust)................. 1,500,000
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,510,000 Michigan State Strategic Fund,
Hamilton Industrial Products
Inc. Project, (AMT), 3.75%*,
7/7/98 (LOC: National Australia
Bank)........................... $ 1,510,000
2,000,000 Michigan State Strategic Fund,
I.V.C. Industrial Coatings,
Inc., (AMT), 3.70%*, 7/7/98
(LOC: Bank One)................. 2,000,000
1,700,000 Michigan State Strategic Fund,
Industrial Development, Kinder
Care, 3.70%*, 7/7/98 (LOC: Chase
Manhattan Bank)................. 1,700,000
190,000 Michigan State Strategic Fund,
Kazoo, Inc. Project, (AMT),
3.80%*, 9/15/98 (LOC: First of
America)........................ 190,000
3,005,000 Michigan State Strategic Fund,
Kerkstra Precast Project (AMT),
3.70%*, 7/7/98 (LOC: Huntington
Bank)........................... 3,005,000
1,500,000 Michigan State Strategic Fund,
Kerkstra, (AMT), 3.70%*, 7/7/98
(LOC: Huntington Bank).......... 1,500,000
630,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Tawas Bay Associates Project
(AMT), 3.80%*, 12/1/98 (LOC:
First of America)............... 630,000
1,350,000 Michigan State Strategic Fund,
Limited Obligation Revenue, John
A. Biewer Co. Inc. Project,
(AMT), 3.75%*, 9/1/98, (LOC:
National Australia Bank)........ 1,350,000
1,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Autocam Corp., (AMT), 3.70%*,
7/7/98 (LOC: Comerica Bank)..... 1,000,000
2,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Cincinnati Millacron, (AMT)
3.75%*, 7/7/98 (LOC: PNC
Bank)........................... 2,500,000
1,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Dickinson Press, Inc. Project,
(AMT) 3.70%*, 7/7/98 (LOC:
Huntington Bank)................ 1,000,000
2,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Donnelly Corp., (AMT) 3.65%*,
7/7/98 (LOC: Dresdner Bank)..... 2,500,000
2,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Eclipse Mold (AMT), 3.65%*,
7/7/98 (LOC: NBD Bank).......... 2,000,000
Continued
94
113
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$4,800,000 Michigan State Strategic Fund,
Limited Obligation Revenue, H.P.
Pelzer, Inc. Project, (AMT)
3.65%*, 7/7/98 (LOC: NBD
Bank)........................... $ 4,800,000
4,800,000 Michigan State Strategic Fund,
Limited Obligation Revenue, JB
Labs, Inc., (AMT) 3.70%*, 7/7/98
(LOC: Huntington Bank).......... 4,800,000
940,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Kay
Screen Printing, (AMT) 3.90%*,
7/7/98 (LOC: Comerica Bank)..... 940,000
185,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Kay
Screening (AMT), 3.90%*, 7/7/98
(LOC: Comerica Bank)............ 185,000
1,400,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Knight Industries, (AMT),
3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 1,400,000
3,025,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Midbrook Products, Inc. Project,
(AMT) 3.70%*, 7/7/98 (LOC:
Comerica Bank).................. 3,025,000
715,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Patten Monument, (AMT) 3.70%*,
7/7/98 (LOC: Huntington Bank)... 715,000
1,600,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Pilot Industries, (AMT) 3.80%*,
7/7/98 (LOC: NBD Bank).......... 1,600,000
915,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Stephenson Land, (AMT) 3.70%*,
7/7/98 (LOC: Comerica Bank)..... 915,000
475,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Tom
Miller, Inc., (AMT) 3.65%*,
7/7/98 (LOC: First Union)....... 475,000
4,295,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
United Fixtures, (AMT) 3.70%*,
7/7/98 (LOC: Bankers Trust)..... 4,295,000
1,785,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Wayne, Disposal Oakland Project,
(AMT), 3.70%*, 7/7/98 (LOC:
Comerica Bank).................. 1,785,000
905,000 Michigan State Strategic Fund,
Molmec, Inc. (AMT), 3.75%*,
7/7/98, (LOC: Comerica Bank).... 905,000
1,000,000 Michigan State Strategic Fund,
Northern Pure Ice Co. Project,
(AMT), 4.00%*, 7/7/98 (LOC:
National Australia Bank)........ 1,000,000
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,000,000 Michigan State Strategic Fund,
NSF International Project,
Series 1997B, 4.00%*, 7/7/98,
(LOC: National City)............ $ 1,000,000
1,685,000 Michigan State Strategic Fund,
Omni Technical Services, Inc.,
(AMT) 3.75%*, 7/7/98 (LOC:
National City).................. 1,685,000
945,000 Michigan State Strategic Fund,
Plascore, Inc., (AMT), 3.70%*,
7/7/98, (LOC: Huntington Bank).. 945,000
3,100,000 Michigan State Strategic Fund,
Rochester Gear Project, (AMT),
3.65%*, 7/7/98, (LOC: Comerica
Bank)........................... 3,100,000
11,900,000 Michigan State Strategic Fund,
Solid Waste Disposal, Grayling
Generating Project, (AMT)
3.60%*, 7/7/98 (LOC: Barclays
Bank)........................... 11,900,001
2,200,000 Michigan State Strategic Fund,
Sunrise Windows Ltd. Project,
(AMT), 3.80%*, 7/7/98 (LOC:
Keybank)........................ 2,200,000
800,000 Michigan State Strategic Fund,
Ultimate Laser Inc. Project,
(AMT), 3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 800,000
1,900,000 Michigan State Strategic Fund,
Uni Mist, Inc. Project, (AMT),
3.65%*, 7/7/98, (LOC: NBD
Bank)........................... 1,900,000
2,800,000 Michigan State Strategic Fund,
United Waste System (AMT),
3.70%*, 7/7/98, (LOC: Bank of
America)........................ 2,800,000
1,075,000 Michigan State Strategic Fund,
Wright -- Technology, Inc.,
Series 1997, (AMT), 3.75%*,
7/7/98 (LOC: National City)..... 1,075,000
2,000,000 Michigan State Strategic Fund,
Xibitz Inc. Project, (AMT),
3.65%*, 7/7/98 (LOC: NBD
Bank)........................... 2,000,000
10,000,000 Midland County Economic
Development Corp., Limited
Obligation Revenue, Dow Chemical
Project, Series A, (AMT), Series
A, 4.30%*, 7/1/98............... 10,000,000
3,000,000 Oakland County Economic
Development Corp., Cranbrook
Community, 3.55%*, 7/7/98 (LOC:
Comerica Bank).................. 3,000,000
675,000 Oakland County Economic
Development Corp., Orchard Maple
Project, 3.75%*, 11/15/98 (LOC:
National City Bank)............. 675,000
Continued
95
114
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 310,000 Rochester Hills Economic
Development Corp., BRG Assoc.,
4.00%*, 12/1/98 (LOC: Comerica
Bank)........................... $ 310,000
825,000 Saginaw Township School
Refunding, QSBLF, 3.90%,
12/1/98......................... 825,000
1,200,000 Scio Township Economic
Development Corp., Daycroft
School Project, 3.85%*, 7/7/98,
(LOC: National Australia
Bank)........................... 1,200,000
1,170,000 St. Clair Shores, Michigan
Education, Borman's, Inc.
Project, (AMT), 3.85%*, 10/15/98
(LOC: Michigan National Bank)... 1,170,000
760,000 University Of Michigan Hospital
Revenue, 4.00%, 12/1/98......... 760,611
5,000,000 University Of Michigan Hospital
Revenue, 3.80%*, 7/1/98......... 5,000,000
1,205,000 Warren Economic Development
Corp. (Cross Country Inn),
(AMT), 3.75%*, 11/1/98 (LOC:
Huntington Bank)................ 1,205,000
1,740,000 Warren Economic Development
Corp., CMX Corp. Project, (AMT),
3.80%*, 9/15/98 (LOC: First of
America)........................ 1,740,000
550,000 Warren Economic Development
Corp., Limited Obligation
Revenue, Elias Brothers, (AMT),
3.95%*, 12/1/98, (LOC: Comerica
Bank)........................... 550,000
4,510,000 Wayne County Airport, Detroit
Airport, Series A, (AMT),
3.60%*, 7/7/98 (LOC: Baerische
Landesbank)..................... 4,510,000
2,000,000 Whitmore Lake Michigan Public
Schools, 4.50%, 6/30/99......... 2,009,560
------------
231,960,937
------------
PUERTO RICO -- 5.6%
4,500,000 Commonwealth of Puerto Rico, Tax
& Revenue Anticipation Notes,
Series A, 4.50%, 7/30/98........ 4,502,902
2,750,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Reynolds Metals, 3.80%*, 9/1/98
(LOC: ABN/Amro)................. 2,750,000
3,000,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Abbott Labs Project, 3.55%*,
3/1/99.......................... 3,000,000
500,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Reynolds Metals, 3.80%*, 9/1/98
(LOC: ABN/Amro)................. 500,082
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,695,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Abbott Labs Project, 3.55%*,
3/1/99.......................... $ 1,695,000
4,200,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Merck, 4.00%*, 12/1/98.......... 4,200,000
------------
16,647,984
------------
TOTAL MUNICIPAL BONDS........... 248,608,921
------------
(Amortized Cost $248,608,921)
TAX FREE COMMERCIAL PAPER -- 15.1%
MICHIGAN -- 15.1%
1,100,000 Cornell Township Economic
Development Corp., Industrial
Development Revenue, Mead
Escanaba Paper Co., 3.75%*,
7/9/98 (LOC: Credit Suisse)..... 1,100,000
2,900,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.60%*, 7/15/98 (LOC: Morgan
Guaranty)....................... 2,900,000
3,000,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.75%*, 7/16/98 (LOC: Morgan
Guaranty)....................... 3,000,000
3,000,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.55%*,
7/16/98, (LOC: Union Bank of
Switzerland).................... 3,000,000
3,840,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.15%*,
8/11/98, (LOC: Union Bank of
Switzerland).................... 3,8400,000
450,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.60%*,
8/11/98, (LOC: Union Bank of
Switzerland).................... 450,000
Continued
96
115
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
The Kent Funds JUNE 30, 1998 (UNAUDITED)
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
TAX FREE COMMERCIAL PAPER (CONTINUED)
MICHIGAN (CONTINUED)
9,525,000 Michigan State Building
Authority, 3.70%, 10/1/98,
(LOC:........................... $ 9,525,000
8,050,000 Michigan State Housing
Development Authority,
Multifamily, Series A, 3.75%*,
8/20/98, (LOC: Helaba).......... 8,050,000
12,780,000 Michigan State Underground Tank
Storage, 3.70%, 8/10/98, (LOC:
CIBC)........................... 12,780,000
------------
44,645,000
------------
TOTAL TAX FREE COMMERCIAL
PAPER........................... 44,645,000
------------
(Amortized Cost $44,645,000)
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
INVESTMENT COMPANIES -- 1.4%
3,315,062 Dreyfus Tax Exempt Money Market
Fund............................ $ 3,315,062
791,540 Federated Tax Exempt Money
Market.......................... 791,540
------------
TOTAL INVESTMENT COMPANIES...... 4,106,602
------------
(Amortized Cost $4,106,602)
TOTAL INVESTMENTS--100.3%................... 297,360,523
(Amortized Cost $297,360,523) (a)
LIABILITIES IN EXCESS OF OTHER ASSETS
-- (0.3)%.................................. (1,001,160)
------------
TOTAL NET ASSETS -- 100.0%.................. $296,359,363
============
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
QSBLF Qualified School Board Lending Fund
STP Short Term Put
See Notes to Financial Statements.
97
116
GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998
The Kent Funds (UNAUDITED)
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 80.3%
FEDERAL FARM CREDIT BANK -- 7.5%
$3,550,000 5.45%, 12/14/98.................. $ 3,546,281
4,000,000 5.25%, 3/5/99.................... 3,855,917
-----------
7,402,198
-----------
FEDERAL HOME LOAN BANK -- 22.8%
5,000,000 5.55%, 7/1/98.................... 4,999,999
3,000,000 5.29%, 7/29/98................... 2,987,657
4,000,000 5.44%*, 7/30/98.................. 4,000,000
2,654,000 5.32%, 9/9/98.................... 2,626,546
3,000,000 5.25%, 2/26/99................... 2,895,000
5,000,000 5.50%, 3/26/99................... 4,997,182
-----------
22,506,384
-----------
FEDERAL HOME LOAN MORTGAGE CORP. -- 25.4%
4,000,000 5.40%, 7/2/98.................... 3,999,400
2,167,000 5.40%, 7/10/98................... 2,164,075
3,000,000 5.42%, 7/17/98................... 2,992,773
1,670,000 5.45%, 7/20/98................... 1,665,196
4,000,000 5.69%, 8/21/98................... 3,999,458
2,311,000 5.34%, 8/21/98................... 2,293,517
3,000,000 5.43%, 9/2/98.................... 2,971,493
5,000,000 5.33%, 9/18/98................... 4,941,573
-----------
25,027,485
-----------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 24.6%
3,000,000 5.33%, 7/7/98.................... 2,997,335
3,000,000 5.26%, 7/14/98................... 2,994,302
1,062,000 5.34%, 7/30/98................... 1,057,432
5,000,000 5.44%, 8/28/98................... 4,956,178
3,352,000 5.425%, 9/4/98................... 3,319,167
4,000,000 5.61%*, 11/3/98.................. 4,000,000
5,000,000 5.50%*, 2/4/99................... 4,999,999
-----------
24,324,413
-----------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS...................... 79,260,480
-----------
(Amortized Cost $79,260,480)
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
REPURCHASE AGREEMENTS -- 12.1%
$ 4,000,000 Donaldson, Lufkin & Jenrette
5.50%, dated 6/30/98, due
7/1/98 with a maturity value of
4,000,611 (collateralized by
$4,020,000 FNMA, MTN, 6.59%,
3/27/08, market value
$4,083,808).................... $ 4,000,000
4,000,000 HSBC 5.50%, dated 6/30/98, due
7/1/98 with a maturity value of
$4,000,611, (collateralized by
$2,940,000 U.S. Treasury Notes,
8.875%, 8/15/17 market value
$4,186,782).................... 4,000,000
4,000,000 Merrill Lynch 5.65%, dated
6/30/98, due 7/1/98 with a
maturity value of $4,000,628
(collateralized by $4,010,000
FNMA MTN, 6.58%, 12/17/07
market value $4,083,205)....... 4,000,000
------------
TOTAL REPURCHASE AGREEMENTS.... 12,000,000
------------
(Amortized Cost $12,000,000)
INVESTMENT COMPANIES -- 7.7%
4,090,082 Dreyfus Cash Management Money
Market Fund.................... 4,090,082
3,522,978 Federated Government
Obligations Money Market Fund.. 3,522,978
------------
TOTAL INVESTMENT COMPANIES..... 7,613,060
------------
(Amortized Cost $7,613,060)
TOTAL INVESTMENTS -- 100.1%................ 98,873,540
(Amortized Cost $98,873,540)(a)
LIABILITIES IN EXCESS OF OTHER
ASSETS -- 0.1%.............................. (80,780)
------------
TOTAL NET ASSETS -- 100.0%.................. $ 98,792,760
============
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at June 30,
1998. Maturity date reflects next rate change date.
See Notes to Financial Statements.
98
117
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
GROWTH AND SMALL COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------- ------------- ------------
ASSETS:
Investments:
Investments at cost.................................... $594,708,496 $642,478,988 $453,714,204 $455,042,297
Net unrealized appreciation (depreciation)............. 204,801,433 167,754,523 95,161,014 286,343,012
------------ ------------ ------------ ------------
Total investments at value............................. 799,509,929 810,233,511 548,875,218 741,385,309
Foreign currency at value (cost $0; $0; $1,028,482; $0,
respectively).......................................... -- -- 1,056,556 --
Receivable for investments sold.......................... 33,880 -- -- 146,432
Receivable for capital shares issued..................... 46,764 2,732 936 11,971
Interest and dividends receivable........................ 885,569 524,065 2,349,650 779,250
Tax reclaim receivable................................... -- -- 1,134,982 --
Prepaid expenses......................................... 23,086 20,185 20,518 28,196
------------ ------------ ------------ ------------
Total Assets........................................... 800,499,228 810,780,493 553,437,860 742,351,158
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased........................ -- 9,557,871 219,852 --
Payable for capital shares redeemed...................... 3,445 -- -- 26,113
Foreign withholding taxes payable........................ -- -- 374,294 --
Net payable for variation margin on futures contracts.... 144,520 89,380 -- 76,790
Cash overdraft........................................... -- 1,466 -- --
Payable to adviser....................................... 451,059 444,150 334,302 148,499
Payable to administrator................................. 19,810 19,614 13,464 12,247
Payable to transfer agent................................ 19,990 15,375 16,030 3,417
Payable to distributor (Investment Shares)............... 9,327 5,239 2,347 7,264
Payable to custodian..................................... -- -- 65,540 --
Accrued expenses and other liabilities................... 37,239 40,645 23,782 39,473
------------ ------------ ------------ ------------
Total Liabilities...................................... 685,390 10,173,740 1,049,611 313,803
------------ ------------ ------------ ------------
NET ASSETS................................................. $799,813,838 $800,606,753 $552,388,249 $742,037,355
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital.......................................... $574,976,275 $579,661,898 $415,860,651 $455,156,107
Accumulated undistributed (distributions in excess of)
net investment income.................................. (738,085) 33,217 2,022,792 (4,878)
Accumulated undistributed net realized gains (losses) on
investments, foreign currency and futures contracts
sold................................................... 20,530,551 52,880,609 39,323,374 247,685
Net unrealized appreciation (depreciation) of
investments, foreign currency, forward foreign currency
exchange contracts and futures contracts............... 205,045,097 168,031,029 95,181,432 286,638,441
------------ ------------ ------------ ------------
TOTAL NET ASSETS........................................... $799,813,838 $800,606,753 $552,388,249 $742,037,355
============ ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets............................................... $753,308,043 $774,504,790 $540,202,587 $705,841,136
Shares Outstanding....................................... 44,905,451 42,376,692 31,732,755 31,564,788
Net Asset Value, offering and redemption price per
share.................................................. $ 16.78 $ 18.28 $ 17.02 $ 22.36
============ ============ ============ ============
INVESTMENT SHARES:
Net Assets............................................... $ 46,505,795 $ 26,101,963 $ 12,185,662 $ 36,196,218
Shares Outstanding....................................... 2,794,598 1,434,137 721,470 1,618,064
Net Asset Value, offering and redemption price per
share.................................................. $ 16.64 $ 18.20 $ 16.89 $ 22.37
============ ============ ============ ============
See Notes to Financial Statements
99
118
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
------------ ------------ ------------
ASSETS:
Investments:
Investments at cost..................................... $132,827,916 $754,630,464 $247,669,161
Net unrealized appreciation (depreciation).............. 888,777 10,119,282 7,232,414
------------ ------------ ------------
Total investments at value.............................. 133,716,693 764,749,746 254,901,575
Receivable for investments sold........................... -- 5,148,250 --
Receivable for capital shares issued...................... 8,299 8 3,500
Interest and dividends receivable......................... 2,247,340 11,214,711 4,049,071
Prepaid expenses.......................................... 24,647 15,905 22,825
------------ ------------ ------------
Total Assets............................................ 135,996,979 781,128,620 258,976,971
------------ ------------ ------------
LIABILITIES:
Payable for investments purchased......................... -- 5,254,887 --
Payable for capital shares redeemed....................... 48,384 21,079 535
Payable to adviser........................................ 56,527 358,292 125,828
Payable to administrator.................................. 3,362 19,283 6,433
Payable to transfer agent................................. 7,245 22,694 2,963
Payable to distributor (Investment Shares)................ 829 1,955 1,816
Payable to custodian...................................... 409 557 346
Accrued expenses and other liabilities.................... 5,276 28,816 9,271
------------ ------------ ------------
Total Liabilities....................................... 122,032 5,707,563 147,192
------------ ------------ ------------
NET ASSETS.................................................. $135,874,947 $775,421,057 $258,829,779
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital........................................... $141,916,898 $772,500,514 $249,168,529
Accumulated undistributed (distributions in excess of) net
investment income....................................... 12,220 17,605 45,943
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (6,942,948) (7,216,345) 2,382,893
Net unrealized appreciation (depreciation) of
investments............................................. 888,777 10,119,283 7,232,414
------------ ------------ ------------
TOTAL NET ASSETS............................................ $135,874,947 $775,421,057 $258,829,779
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets................................................ $129,226,590 $765,401,799 $249,546,319
Shares Outstanding........................................ 13,277,762 76,942,692 24,032,308
Net Asset Value, offering and redemption price per
share................................................... $ 9.73 $ 9.95 $ 10.38
============ ============ ============
INVESTMENT SHARES:
Net Assets................................................ $ 6,648,357 $ 10,019,257 $ 9,283,461
Shares Outstanding........................................ 683,820 1,004,960 895,178
Net Asset Value, offering and redemption price per
share................................................... $ 9.72 $ 9.97 $ 10.37
============ ============ ============
See Notes to Financial Statements
100
119
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND
------------- ------------- ------------ ------------
ASSETS:
Investments:
Investments at cost..................................... $36,294,965 $269,255,252 $119,349,777 $122,864,609
Net unrealized appreciation (depreciation).............. 653,467 15,194,834 7,088,501 3,124,599
----------- ------------ ------------ ------------
Total investments at value.............................. 36,948,432 284,450,086 126,438,278 125,989,208
Receivable for investments sold........................... -- -- 5,638,880 --
Interest and dividends receivable......................... 566,035 4,431,968 1,730,912 1,615,980
Unamortized organizational costs.......................... -- -- 348 --
Prepaid expenses.......................................... 2,971 7,976 25,013 8,065
----------- ------------ ------------ ------------
Total Assets............................................ 37,517,438 288,890,030 133,833,431 127,613,253
----------- ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased......................... -- -- 6,454,070 1,495,260
Payable for capital shares redeemed....................... 2,000 -- 150 --
Payable to adviser........................................ 14,106 119,194 57,679 47,342
Payable to administrator.................................. 930 7,167 3,161 3,133
Payable to transfer agent................................. 1,205 4,200 -- 3,902
Payable to distributor (Investment Shares)................ 40 776 406 579
Accrued expenses and other liabilities.................... 1,582 8,822 4,852 13,403
----------- ------------ ------------ ------------
Total Liabilities....................................... 19,863 140,159 6,520,318 1,563,619
----------- ------------ ------------ ------------
NET ASSETS.................................................. $37,497,575 $288,749,871 $127,313,113 $126,049,634
=========== ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital........................................... $36,840,862 $273,360,177 $120,133,633 $123,034,931
Accumulated undistributed (distributions in excess of) net
investment income....................................... 3,966 61,464 8,106 10,896
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (720) 133,396 82,874 (120,793)
Net unrealized appreciation (depreciation) of
investments............................................. 653,467 15,194,834 7,088,501 3,124,599
----------- ------------ ------------ ------------
TOTAL NET ASSETS............................................ $37,497,575 $288,749,871 $127,313,114 $126,049,633
=========== ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets................................................ $37,205,184 $284,980,217 $125,280,385 $121,374,091
Shares Outstanding........................................ 3,657,786 26,746,405 11,788,179 11,906,668
Net Asset Value, offering and redemption price per
share................................................... $ 10.17 $ 10.66 $ 10.63 $ 10.19
=========== ============ ============ ============
INVESTMENT SHARES:
Net Assets................................................ $ 292,391 $ 3,769,653 $ 2,032,728 $ 4,675,544
Shares Outstanding........................................ 28,633 353,745 190,840 459,165
Net Asset Value, offering and redemption price per
share................................................... $ 10.21 $ 10.66 $ 10.65 $ 10.18
=========== ============ ============ ============
See Notes to Financial Statements
101
120
STATEMENTS OF ASSETS AND LIABILITIES
The Kent Funds JUNE 30, 1998 (UNAUDITED)
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ ------------ ------------
ASSETS:
Investments:
Investments in securities at amortized cost............. $471,729,166 $297,380,509 $86,873,540
Repurchase agreements (cost $42,000,000; $0; and
$12,000,000, respectively)............................ 42,000,000 -- 12,000,000
------------ ------------ -----------
Total investments at amortized cost..................... 513,729,166 297,380,509 98,873,540
Cash...................................................... -- 63,961 --
Interest and dividends receivable......................... 4,473,328 2,030,350 365,864
Prepaid expenses.......................................... 15,870 2,458 20,548
------------ ------------ -----------
Total Assets............................................ 518,218,364 299,477,278 99,259,952
------------ ------------ -----------
LIABILITIES:
Dividends payable......................................... 2,245,640 787,968 440,869
Payable for investments purchased......................... -- 2,209,560 --
Cash overdraft............................................ 48,572 -- --
Payable to adviser........................................ 176,629 98,655 17,178
Payable to administrator.................................. 8,002 4,060 1,072
Payable to transfer agent................................. 6,228 3,199 4,556
Accrued expenses and other liabilities.................... 12,110 14,473 3,517
------------ ------------ -----------
Total Liabilities....................................... 2,497,181 3,117,915 467,192
------------ ------------ -----------
NET ASSETS.................................................. $515,721,183 $296,359,363 $98,792,760
============ ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital........................................... $515,710,154 $296,369,178 $98,790,546
Accumulated undistributed (distributions in excess of )net
investment income....................................... 13,072 781 2,214
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (2,043) (10,596) --
------------ ------------ -----------
TOTAL NET ASSETS............................................ $515,721,183 $296,359,363 $98,792,760
============ ============ ===========
INSTITUTIONAL SHARES:
Net Assets................................................ $512,831,244 $295,970,792 $98,758,508
Shares Outstanding........................................ 512,825,420 295,958,311 98,758,504
Net Asset Value, offering and redemption price per
share................................................... $ 1.00 $ 1.00 $ 1.00
============ ============ ===========
INVESTMENT SHARES:
Net Assets................................................ $ 2,889,939 $ 388,571 $ 34,252
Shares Outstanding........................................ 2,889,928 388,549 34,252
Net Asset Value, offering and redemption price per
share................................................... $ 1.00 $ 1.00 $ 1.00
============ ============ ===========
See Notes to Financial Statements.
102
121
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
GROWTH AND SMALL COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------- ------------- ------------
INVESTMENT INCOME:
Dividends.......................................... $ 6,611,585 $ 4,103,028 $ 7,590,259 $ 5,269,655
Interest........................................... 2,433 31,525 113,276 925
Less: Net foreign taxes withheld................... (47,181) (1,391) (681,459) (54,262)
------------ ------------ ----------- ------------
Total Investment Income.......................... 6,566,837 4,133,162 7,022,076 5,216,318
------------ ------------ ----------- ------------
EXPENSES:
Investment advisory fees........................... 2,694,142 2,717,125 2,013,699 1,019,677
Administration fees................................ 696,608 702,563 485,481 614,693
Fund accounting fees............................... 64,105 74,075 59,967 61,899
Custodian fees..................................... 4,061 18,839 177,567 10,551
Audit fees......................................... 3,601 4,735 3,475 4,185
Legal fees......................................... 4,888 4,990 3,441 4,420
Transfer agent fees................................ 85,875 86,244 68,257 76,747
Trustees' fees and expenses........................ 3,282 2,545 2,117 2,490
Distribution fees (Investment Shares).............. 52,068 31,228 13,511 40,957
Printing expenses.................................. 13,191 12,459 8,578 11,455
Registration fees.................................. 31,782 26,279 28,138 39,610
Other expenses..................................... 6,562 6,775 4,636 5,495
------------ ------------ ----------- ------------
Total expenses before waivers.................... 3,660,165 3,687,857 2,868,867 1,892,179
Less: waivers.................................... (38,486) (38,814) (26,848) (424,777)
------------ ------------ ----------- ------------
Net Expenses..................................... 3,621,679 3,649,043 2,842,019 1,467,402
------------ ------------ ----------- ------------
NET INVESTMENT INCOME................................ 2,945,158 484,119 4,180,057 3,748,916
------------ ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses) on investments, foreign
currency, and foreign currency contracts......... 19,400,029 51,316,112 39,479,491 635,885
Net realized gains/(losses) on futures contracts... 1,449,280 1,843,230 -- 569,878
Net change in unrealized appreciation/
(depreciation) of futures contracts.............. 243,665 276,505 -- 295,430
Net change in unrealized appreciation/
(depreciation) of investments, foreign currency,
and foreign currency contracts.................. 94,679,191 (20,315,685) 27,986,888 103,663,727
------------ ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS........................................ 115,772,165 33,120,162 67,466,379 105,164,920
------------ ------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................... $118,717,323 $ 33,604,281 $71,646,436 $108,913,836
============ ============ =========== ============
See Notes to Financial Statements
103
122
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
---------- ------------ -----------
INVESTMENT INCOME:
Interest.................................................. $ 4,424,087 $25,433,905 $ 8,587,366
Dividends................................................. 202,936 567,890 266,855
----------- ----------- -----------
Total Investment Income................................. 4,627,023 26,001,795 8,854,221
----------- ----------- -----------
EXPENSES:
Investment advisory fees.................................. 351,710 2,162,409 731,393
Administration fees....................................... 127,297 711,426 220,524
Fund accounting fees...................................... 12,764 63,373 21,633
Custodian fees............................................ 323 774 430
Audit fees................................................ 4,574 7,567 4,627
Legal fees................................................ 963 5,152 1,465
Transfer agent fees....................................... 27,755 44,016 22,387
Trustees' fees and expenses............................... 509 2,489 891
Distribution fees (Investment Shares)..................... 9,024 10,262 9,327
Printing expenses......................................... 1,244 12,746 2,414
Registration fees......................................... 7,753 12,767 7,916
Other expenses............................................ 37 7,488 2,470
----------- ----------- -----------
Total expenses before waivers........................... 543,953 3,040,469 1,025,477
Less: waivers........................................... (10,643) (39,315) (12,189)
----------- ----------- -----------
Net Expenses............................................ 533,310 3,001,154 1,013,288
----------- ----------- -----------
NET INVESTMENT INCOME....................................... 4,093,713 23,000,641 7,840,933
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS:
Net realized gains/(losses) on investments sold........... (242,985) 3,214,146 2,373,749
Net change in unrealized appreciation/(depreciation) of
investments............................................. 101,666 261,946 (102,128)
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS... (141,319) 3,476,092 2,271,621
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 3,952,394 $26,476,733 $10,112,554
=========== =========== ===========
See Notes to Financial Statements
104
123
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND
------------- ------------- ----------- ----------
INVESTMENT INCOME:
Interest............................................. $ 847,422 $ 7,009,662 $3,043,289 $2,961,110
Dividends............................................ 15,131 90,759 49,305 37,789
---------- ----------- ---------- ----------
Total Investment Income............................ 862,553 7,100,421 3,092,594 2,998,899
---------- ----------- ---------- ----------
EXPENSES:
Investment advisory fees............................. 84,418 709,192 337,287 286,284
Administration fees.................................. 33,945 256,634 110,955 115,113
Distribution fees (Investment Shares)................ 525 4,645 2,333 5,720
Fund accounting fees................................. 5,750 28,932 14,352 15,799
Custodian fees....................................... 224 962 255 872
Audit fees........................................... 1,179 6,734 2,228 4,256
Legal fees........................................... 243 1,779 787 1,551
Transfer agent fees.................................. 15,024 19,996 10,803 17,670
Trustees' fees and expenses.......................... 197 949 419 526
Amortization of organization costs................... -- -- 2,200 --
Printing expenses.................................... 662 7,790 2,381 2,082
Registration fees.................................... 566 9,848 5,188 1,945
Other expenses....................................... 564 739 667 120
---------- ----------- ---------- ----------
Total expenses before waivers...................... 143,297 1,048,200 489,855 451,938
Less: waivers...................................... (2,086) (14,183) (6,132) (8,650)
---------- ----------- ---------- ----------
Net Expenses....................................... 141,211 1,034,017 483,723 443,288
---------- ----------- ---------- ----------
NET INVESTMENT INCOME.................................. 721,342 6,066,404 2,608,871 2,555,611
---------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS:
Net realized gains/(losses) on investments sold...... (2,861) 151,942 84,606 (51,863)
Net change in unrealized appreciation/(depreciation)
of investments..................................... (79,816) (902,594) (269,337) (217,623)
---------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON
INVESTMENTS:......................................... (82,677) (750,652) (184,731) (269,486)
---------- ----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS... $ 638,665 $ 5,315,752 $2,424,140 $2,286,125
========== =========== ========== ==========
See Notes to Financial Statements
105
124
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
The Kent Funds (UNAUDITED)
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ ------------ ------------
INVESTMENT INCOME:
Interest.................................................. $14,160,573 $5,503,729 $2,744,115
Dividends................................................. 506,665 147,701 183,892
----------- ---------- ----------
Total Investment Income................................. 14,667,238 5,651,430 2,928,007
----------- ---------- ----------
EXPENSES:
Investment advisory fees.................................. 1,039,288 623,452 211,788
Administration fees....................................... 470,082 280,669 96,053
Fund accounting fees...................................... 40,809 25,363 8,787
Custodian fees............................................ 3,534 129 1,807
Audit fees................................................ 5,810 3,532 1,441
Legal fees................................................ 3,368 2,122 654
Transfer agent fees....................................... 37,748 18,039 20,190
Trustees' fees and expenses............................... 1,639 1,389 415
Printing expenses......................................... 14,841 6,751 876
Registration fees......................................... 15,300 20,180 18,995
Other expenses............................................ 4,966 1,826 947
----------- ---------- ----------
Total expenses before waivers........................... 1,637,385 983,452 361,953
Less: waivers........................................... (220,830) (147,491) (164,975)
----------- ---------- ----------
Net Expenses............................................ 1,416,555 835,961 196,978
----------- ---------- ----------
NET INVESTMENT INCOME....................................... 13,250,683 4,815,469 2,731,029
----------- ---------- ----------
NET REALIZED GAINS/(LOSSES) ON INVESTMENTS:................. -- 1,873 --
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $13,250,683 $4,817,342 $2,731,029
=========== ========== ==========
See Notes to Financial Statements.
106
125
The Kent Funds STATEMENTS OF CHANGES IN NET ASSETS
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------------------------- --------------------------------
NET ASSETS AT BEGINNING OF PERIOD.................. $733,315,634 $515,920,253 $742,781,688 $ 558,516,596
------------ ------------ ------------ -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................ 2,945,158 10,415,521 484,119 1,548,638
Net realized gains (losses) on investments,
foreign currency, and foreign currency
contracts...................................... 19,400,029 111,932,563 51,316,112 78,087,896
Net realized gains (losses) on futures
contracts...................................... 1,449,280 (61,005) 1,843,230 524,810
Net change in unrealized appreciation/
depreciation of futures contracts.............. 243,665 275,070 276,505 227,785
Net change in unrealized appreciation/
depreciation of investments, foreign currency,
and foreign currency contracts................. 94,679,191 15,661,888 (20,315,685) 81,347,122
------------ ------------ ------------ -------------
Net increase in net assets resulting from
operations..................................... 118,717,323 138,224,037 33,604,281 161,736,251
------------ ------------ ------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
INSTITUTIONAL:
Net investment income............................ (2,891,165) (10,051,899) (444,722) (1,572,242)
In excess of net investment income............... (685,173) -- -- (570,748)
Net realized gains on investments................ (53,299,154) (58,514,755) (36,791,276) (52,695,021)
------------ ------------ ------------ -------------
Total dividends and distributions --
Institutional Shares......................... (56,875,492) (68,566,654) (37,235,998) (54,838,011)
------------ ------------ ------------ -------------
INVESTMENT:
Net investment income............................ (104,002) (322,621) -- --
In excess of net investment income............... (52,912) -- -- (36,830)
Net realized gains on investments................ (3,026,738) (2,725,491) (1,225,423) (1,565,329)
In excess of net realized gains.................. (34,095) -- -- --
------------ ------------ ------------ -------------
Total dividends and distributions -- Investment
Shares....................................... (3,217,747) (3,048,112) (1,225,423) (1,602,159)
------------ ------------ ------------ -------------
Total dividends and distributions to
shareholders................................. (60,093,239) (71,614,766) (38,461,421) (56,440,170)
------------ ------------ ------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 83,677,799 269,087,243 117,500,991 216,183,011
Reinvestment of distributions.................... 28,454,307 33,077,724 19,428,888 28,070,255
Cost of shares redeemed.......................... (104,257,986) (151,378,857) (74,247,674) (165,284,255)
------------ ------------ ------------ -------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS..................................... 7,874,120 150,786,110 62,682,205 78,969,011
------------ ------------ ------------ -------------
Net increase (decrease) in net assets............ 66,498,204 217,395,381 57,825,065 184,265,092
------------ ------------ ------------ -------------
NET ASSETS AT END OF PERIOD........................ $799,813,838 $733,315,634 $800,606,753 $ 742,781,688
============ ============ ============ =============
See Notes to Financial Statements
107
126
The Kent Funds STATEMENTS OF CHANGES IN NET ASSETS
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------------------------- --------------------------------
NET ASSETS AT BEGINNING OF PERIOD.................. $502,378,709 $396,597,865 $618,163,526 $ 253,362,463
------------ ------------ ------------ -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................ 4,180,057 3,728,587 3,748,916 6,100,887
Net realized gains (losses) on investments,
foreign currency, and foreign currency
contracts...................................... 39,479,491 2,742,836 635,885 1,138,162
Net realized gains (losses) on futures
contracts...................................... -- -- 569,878 1,370,043
Net change in unrealized appreciation/
depreciation of futures contracts.............. -- -- 295,430 120,014
Net change in unrealized appreciation/
depreciation of investments, foreign currency,
and foreign currency contracts................. 27,986,888 4,769,670 103,663,727 98,353,714
------------ ------------ ------------ -------------
Net increase in net assets resulting from
operations..................................... 71,646,436 11,241,093 108,913,836 107,082,820
------------ ------------ ------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income............................ -- (3,055,002) (3,605,275) (5,884,290)
In excess of net investment income............... -- (1,831,420) -- (65,127)
Net realized gains on investments................ (95,553) (2,401,097) (277,770) (1,613,042)
In excess of net realized gains.................. -- (341,685) -- (585,460)
------------ ------------ ------------ -------------
Total dividends and distributions --
Institutional Shares......................... (95,553) (7,629,204) (3,883,045) (8,147,919)
------------ ------------ ------------ -------------
INVESTMENT:
Net investment income............................ -- (35,702) (135,943) (215,864)
In excess of net investment income............... -- (59,234) (7,854) (9,227)
Net realized gains on investments................ (1,983) (47,965) (14,200) (88,824)
In excess of net realized gains.................. -- (6,876) -- (11,017)
------------ ------------ ------------ -------------
Total dividends and distributions -- Investment
Shares....................................... (1,983) (149,777) (157,997) (324,932)
------------ ------------ ------------ -------------
Total dividends and distributions to
shareholders................................. (97,536) (7,778,981) (4,041,042) (8,472,851)
------------ ------------ ------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 56,978,331 193,400,718 94,349,805 339,198,444
Reinvestment of distributions.................... 45,260 3,565,223 3,308,354 6,673,196
Cost of shares redeemed.......................... (78,562,951) (94,647,209) (78,657,124) (79,680,546)
------------ ------------ ------------ -------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS..................................... (21,539,360) 102,318,732 19,001,035 266,191,094
------------ ------------ ------------ -------------
Net increase (decrease) in net assets............ 50,009,540 105,780,844 123,873,829 364,801,063
------------ ------------ ------------ -------------
NET ASSETS AT END OF PERIOD........................ $552,388,249 $502,378,709 $742,037,355 $ 618,163,526
============ ============ ============ =============
See Notes to Financial Statements
108
127
The Kent Funds STATEMENTS OF CHANGES IN NET ASSETS
SHORT TERM BOND FUND INTERMEDIATE BOND FUND INCOME FUND
----------------------------- ----------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
---------------------------- ---------------------------- ----------------------------
NET ASSETS AT BEGINNING OF
PERIOD.......................... $147,171,664 $237,096,910 $769,711,501 $776,722,838 $235,388,305 $242,781,715
------------ ------------ ------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income........... 4,093,713 10,326,405 23,000,641 46,719,968 7,840,933 16,498,462
Net realized gains (losses) on
investments sold.............. (242,985) (1,502,731) 3,214,146 (3,309,390) 2,373,749 3,441,169
Net change in unrealized
appreciation/depreciation of
investments................... 101,666 1,638,919 261,946 15,305,110 (102,128) 5,214,704
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations..... 3,952,394 10,462,593 26,476,733 58,715,688 10,112,554 25,154,335
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income........... (3,879,121) (10,203,409) (22,787,131) (46,492,693) (7,573,340) (16,298,443)
Net realized gains on
investments................... -- -- -- -- (279,136) (4,496,656)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional Shares........ (3,879,121) (10,203,409) (22,787,131) (46,492,693) (7,852,476) (20,795,099)
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT:
Net investment income........... (186,088) (230,620) (231,320) (400,310) (221,112) (236,638)
In excess of net investment
income........................ (19,414) -- (3,682) -- (13,608) --
Net realized gains on
investments................... -- -- -- -- (8,712) (85,457)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions -- Investment
Shares...................... (205,502) (230,620) (235,002) (400,310) (243,432) (322,095)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders................ (4,084,623) (10,434,029) (23,022,133) (46,893,003) (8,095,908) (21,117,194)
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 16,308,034 55,848,711 104,996,465 201,540,137 43,595,805 67,917,967
Reinvestment of distributions... 2,479,978 6,828,762 11,974,584 25,204,467 1,881,294 4,339,793
Cost of shares redeemed......... (29,952,500) (152,631,283) (114,716,093) (245,578,626) (24,052,271) (83,688,311)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM
CAPITAL TRANSACTIONS............ (11,164,488) (89,953,810) 2,254,956 (18,834,022) 21,424,828 (11,430,551)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets........................ (11,296,717) (89,925,246) 5,709,556 (7,011,337) 23,441,474 (7,393,410)
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD....... $135,874,947 $147,171,664 $775,421,057 $769,711,501 $258,829,779 $235,388,305
============ ============ ============ ============ ============ ============
See Notes to Financial Statements
109
128
The Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
LIMITED TERM INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND
---------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------------------- ----------------------------
NET ASSETS AT BEGINNING OF PERIOD......................... $36,497,570 $41,577,319 $279,175,752 $289,042,905
----------- ----------- ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income................................... 721,342 1,439,072 6,066,404 12,269,050
Net realized gains (losses) on investments sold......... (2,861) 159,864 151,942 691,582
Net change in unrealized appreciation/depreciation of
investments........................................... (79,816) 136,663 (902,594) 6,286,893
----------- ----------- ------------ ------------
Net increase in net assets resulting from operations.... 638,665 1,735,599 5,315,752 19,247,525
----------- ----------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income................................... (713,447) (1,432,406) (5,961,138) (12,149,068)
Net realized gains on investments....................... -- (170,851) -- (86,552)
In excess of net realized gains......................... -- -- -- (17,244)
----------- ----------- ------------ ------------
Total dividends and distributions -- Institutional
Shares.............................................. (713,447) (1,603,257) (5,961,138) (12,252,864)
----------- ----------- ------------ ------------
INVESTMENT:
Net investment income................................... (7,440) (11,595) (74,278) (135,115)
Net realized gains on investments....................... -- (2,045) -- (863)
In excess of net realized gains......................... -- -- -- (441)
----------- ----------- ------------ ------------
Total dividends and distributions -- Investment
Shares.............................................. (7,440) (13,640) (74,278) (136,419)
----------- ----------- ------------ ------------
Total dividends and distributions to shareholders..... (720,887) (1,616,897) (6,035,416) (12,389,283)
----------- ----------- ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 6,372,230 9,736,272 27,474,194 44,265,909
Reinvestment of distributions........................... 11,843 27,364 132,804 207,641
Cost of shares redeemed................................. (5,301,846) (14,962,087) (17,313,215) (61,198,945)
----------- ----------- ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL TRANSACTIONS... 1,082,227 (5,198,451) 10,293,783 (16,725,395)
----------- ----------- ------------ ------------
Net increase (decrease) in net assets................... 1,000,005 (5,079,749) 9,574,119 (9,867,153)
----------- ----------- ------------ ------------
NET ASSETS AT END OF PERIOD............................... $37,497,575 $36,497,570 $288,749,871 $279,175,752
=========== =========== ============ ============
See Notes to Financial Statements
110
129
The Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
TAX-FREE MICHIGAN MUNICIPAL
INCOME FUND BOND FUND
---------------------------- ------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------------------- ------------------------------
NET ASSETS AT BEGINNING OF PERIOD........................ $118,364,159 $110,883,746 $116,148,299 $155,044,170
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.................................. 2,608,871 5,050,397 2,555,611 5,042,224
Net realized gains (losses) on investments sold........ 84,606 376,069 (51,863) 49,676
Net change in unrealized appreciation/depreciation of
investments.......................................... (269,337) 4,279,292 (217,623) 1,602,539
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations... 2,424,140 9,705,758 2,286,125 6,694,439
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income.................................. (2,561,573) (5,016,230) (2,495,223) (4,914,390)
In excess of net investment income..................... -- (610) -- --
Net realized gains on investments...................... (92,723) (330,223) -- --
------------ ------------ ------------ ------------
Total dividends and distributions -- Institutional
Shares............................................. (2,654,296) (5,347,063) (2,495,223) (4,914,390)
------------ ------------ ------------ ------------
INVESTMENT:
Net investment income.................................. (36,519) (42,572) (84,147) (121,577)
In excess of net investment income..................... (1,304) (929) (5,391) --
Net realized gains on investments...................... (523) (4,346) -- --
In excess of net realized gains........................ (926) -- -- --
------------ ------------ ------------ ------------
Total dividends and distributions -- Investment
Shares............................................. (39,272) (47,847) (89,538) (121,577)
------------ ------------ ------------ ------------
Total dividends and distributions to shareholders.... (2,693,568) (5,394,910) (2,584,761) (5,035,967)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................ 16,873,469 33,039,586 25,035,408 35,519,586
Reinvestment of distributions.......................... 82,613 116,653 87,944 131,586
Cost of shares redeemed................................ (7,737,700) (29,986,674) (14,923,381) (76,205,515)
------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS........................................... 9,218,382 3,169,565 10,199,971 (40,554,343)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets.................. 8,948,954 7,480,413 9,901,335 (38,895,871)
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD.............................. $127,313,113 $118,364,159 $126,049,634 $116,148,299
============ ============ ============ ============
See Notes to Financial Statements
111
130
The Kent Funds
STATEMENTS OF CHANGES IN NET ASSETS
MICHIGAN MUNICIPAL GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
------------------------------- ----------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997(1)
----------------------------- --------------------------- ---------------------------
NET ASSETS AT BEGINNING OF
PERIOD........................ $ 475,557,215 $ 484,722,709 $ 211,971,193 $ 156,205,940 $ 94,626,461 $ --
------------- --------------- ------------- ------------- ------------- -------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income......... 13,250,683 26,741,343 4,815,469 6,381,928 2,731,029 2,952,675
Net realized gains (losses) on
investments................. -- (1,165) 1,873 (12,469) -- 4
------------- --------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations... 13,250,683 26,740,178 4,817,342 6,369,459 2,731,029 2,952,679
------------- --------------- ------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income......... (13,184,778) (26,699,476) (4,809,401) (6,369,567) (2,730,688) (2,952,603)
------------- --------------- ------------- ------------- ------------- -------------
Total dividends and
distributions --
Institutional Shares...... (13,184,778) (26,699,476) (4,809,401) (6,369,567) (2,730,688) (2,952,603)
------------- --------------- ------------- ------------- ------------- -------------
INVESTMENT:
Net investment income......... (65,905) (41,867) (6,068) (12,361) (341) (72)
------------- --------------- ------------- ------------- ------------- -------------
Total dividends and
distributions --
Investment Shares......... (65,905) (41,867) (6,068) (12,361) (341) (72)
------------- --------------- ------------- ------------- ------------- -------------
Total dividends and
distributions to
shareholders.............. (13,250,683) (26,741,343) (4,815,469) (6,381,928) (2,731,029) (2,952,675)
------------- --------------- ------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued... 606,531,858 1,153,447,515 345,849,071 279,204,632 202,383,919 328,636,541
Reinvestment of
distributions............... 1,011,593 1,731,961 144,791 205,995 2,624,219 2,413,648
Cost of shares redeemed....... (567,379,483) (1,164,343,805) (261,607,565) (223,632,905) (200,841,839) (236,423,732)
------------- --------------- ------------- ------------- ------------- -------------
TOTAL NET INCREASE (DECREASE)
FROM CAPITAL TRANSACTIONS..... 40,163,968 (9,164,329) 84,386,297 55,777,722 4,166,299 94,626,457
------------- --------------- ------------- ------------- ------------- -------------
Net increase in net assets.... 40,163,968 (9,165,494) 84,388,170 55,765,253 4,166,299 94,626,461
------------- --------------- ------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD..... $ 515,721,183 $ 475,557,215 $ 296,359,363 $ 211,971,193 $ 98,792,760 $ 94,626,461
============= =============== ============= ============= ============= =============
- ---------------
(1) For the period from June 2, 1997 (commencement of operations) through
December 31, 1997.
See Notes to Financial Statements.
112
131
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
The Kent Funds (the "Trust") was organized as a Massachusetts business trust
on May 9, 1986 and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company. As of
the date of this report, the Trust offered fourteen managed investment
portfolios. The accompanying financial statements and financial highlights are
those of The Kent Growth and Income Fund, The Kent Small Company Growth Fund,
The Kent International Growth Fund, The Kent Index Equity Fund, The Kent Short
Term Bond Fund, The Kent Intermediate Bond Fund, The Kent Income Fund, The Kent
Limited Term Tax-Free Fund, The Kent Intermediate Tax-Free Fund, The Kent
Tax-Free Income Fund, The Kent Michigan Municipal Bond Fund, The Kent Money
Market Fund, The Kent Michigan Municipal Money Market Fund and The Kent
Government Money Market Fund (individually, a "Fund" and collectively, the
"Funds").
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest without par value. It allows for the
creation of one or more classes of shares within each series, each of which,
regardless of class designation, represents an equal proportionate interest in
the Funds with each other share of that series.
The Trust may issue more than one series of shares investing in portfolios of
securities. The Trust currently issues fourteen series of shares with two
separate classes in each series: Investment Shares and Institutional Shares.
Each share in each series or class has identical voting, dividend, liquidation
and other rights, except in matters affecting only a particular series or class,
in which case only shares of the affected series or class are entitled to vote.
Class specific expenses, if any, are currently limited to expenses directly
attributable to the Investment Shares under the Distribution Plan, shareholder
services fees and certain printing and postage expenses incurred as they relate
to a particular class of shares.
The investment objectives of the Funds are as follows:
Growth and Income Fund -- To seek long-term capital growth with current income
as a secondary goal.
Small Company Growth Fund -- To seek long-term capital appreciation by
investing in equity securities of small companies.
International Growth Fund -- To seek long-term growth of capital and
additional diversification for U.S. investors by investing in a varied portfolio
of foreign equity securities.
Index Equity Fund -- To seek investment results which mirror the capital
performance and dividend income of the Standard & Poor's 500 Composite Stock
Price Index.
Short Term Bond Fund -- To seek current income by investing primarily in a
limited range of investment quality fixed income securities.
Intermediate Bond Fund -- To seek current income by investing primarily in a
broad range of investment quality debt securities.
Income Fund -- To seek a high level of current income by investing in a broad
range of investment quality debt securities.
Limited Term Tax-Free Fund -- To seek current income, exempt from federal
income tax, while preserving capital.
Intermediate Tax-Free Fund -- To seek current income, exempt from federal
income tax, while preserving capital.
Tax-Free Income Fund -- To seek to provide as high a level of current income
exempt from federal income tax as is consistent with prudent investing, while
preserving capital.
Michigan Municipal Bond Fund -- To seek current income, exempt from federal
and State of Michigan personal income taxes, while preserving capital.
Money Market Fund -- To seek current income from short-term securities while
preserving capital and maintaining liquidity.
Michigan Municipal Money Market Fund -- To seek current income from short-term
securities that is exempt from federal and State of Michigan personal income
taxes, while preserving capital and maintaining liquidity.
Government Money Market Fund -- To seek current income from short-term United
States Government
113
132
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
securities while preserving capital and maintaining liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual amounts could differ from those estimates.
PORTFOLIO VALUATION: Securities in the Money Market Fund, Government Money
Market Fund and Michigan Municipal Money Market Fund are valued utilizing the
amortized cost valuation method permitted in accordance with Rule 2a-7 under the
1940 Act, which approximates market value. This method involves valuing a
portfolio security initially at its cost on the date of purchase and thereafter
assuming a constant amortization to maturity of the difference between the
principal amount due at maturity and initial cost.
In the Limited Term Tax-Free Fund, Intermediate Tax-Free Fund, Tax-Free Income
Fund, Michigan Municipal Bond Fund, Short Term Bond Fund, Intermediate Bond
Fund, and Income Fund, corporate debt securities, municipal securities and debt
securities of the U.S. government and its agencies (other than short-term
investments maturing in 60 days or less) are valued on the basis of valuations
provided by dealers or by an independent pricing service approved by the Board
of Trustees. Short-term obligations that mature in 60 days or less are valued at
amortized cost, which constitutes fair value and approximates market value. All
other securities and other assets are appraised at their fair value as
determined in good faith under consistently applied procedures established by
and under the general supervision of the Board of Trustees.
The Growth and Income Fund, Small Company Growth Fund, International Growth
Fund and the Index Equity Fund value listed securities at the last sales price
on the principal exchange where such securities are traded. Listed securities
for which last sales prices are not available are valued at the last bid price.
Unlisted securities are valued at the mean of the current bid and asked prices
in the principal market where such securities trade. Short-term obligations that
mature in 60 days or less are valued at amortized cost, which constitutes fair
value and approximates market value. All other securities and other assets are
appraised at their fair value as determined in good faith under consistently
applied procedures established by and under the general supervision of the Board
of Trustees.
REPURCHASE AGREEMENTS: The Trust's custodian and other banks acting in a
sub-custodian capacity, take possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued daily
on a mark-to-market basis to determine that the value, including accrued
interest, exceeds the repurchase price. In the event of the seller's default of
the obligation to repurchase, the Funds have the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of the default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings.
FOREIGN CURRENCY TRANSLATION: Investments and other assets and liabilities
initially expressed in foreign currencies are converted each business day into
U.S. dollars based upon current exchange rates. Realized gains and losses on
foreign investments and foreign income and expenses are converted into U.S.
dollars based upon exchange rates prevailing on the respective dates of such
transactions. That portion of unrealized gains or losses on investments due to
fluctuations in foreign currency exchange rates is not separately disclosed.
Foreign currency-denominated receivables and payables are "marked-to-market'
using the current exchange rate. The fluctuation between the original exchange
rate and the current exchange rate is recorded as unrealized currency gain or
loss. Upon receipt of payment, a Fund realizes a gain or loss on foreign
currency amounting to the difference between the original value and the ending
value of the receivable or payable.
FUTURES CONTRACTS: The Growth and Income Fund, Small Company Growth Fund,
International Growth Fund, Index Equity Fund, Limited Term Tax-Free Fund,
Intermediate Tax-Free Fund, Tax-Free Income Fund and Michigan Municipal Bond
Fund may invest in futures contracts. This investment involves, to varying
degrees,
114
133
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect the
extent of the involvement the Funds have in the particular classes of
instruments. Risks include an imperfect correlation between the movements in the
price of the instruments and the price of the underlying securities and interest
rates. Risks may also arise if there is an illiquid secondary market for the
instruments or due to the inability of counterparties to perform under the terms
of the contract.
Cash or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received daily by the Fund based on the change in
the market value of the position are recorded as an unrealized gain or loss
until the contract is closed out at which time the gain or loss is recognized.
Futures contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.
To the extent that the Fund enters into futures contracts on an index or group
of securities, the Fund exposes itself to an indeterminate liability and will be
required to pay or receive a sum of money measured by the change in the market
value of the index or group of securities. Upon entering into a futures
contract, the Fund is required to deposit either cash or securities in an amount
("initial margin") equal to a certain percentage of the contract value with a
broker. Subsequent payments ("variation margin") equal to changes in the daily
settlement price or last sale on the exchanges where they trade are paid or
received each day and are recorded as a gain or loss on futures contracts.
The average market value of futures contracts held during the six-months ended
June 30, 1998 was as follows:
AVERAGE
FUND MARKET VALUE
---- ------------
Growth and Income Fund................ $15,157,100
Small Company Growth Fund............. 10,764,439
Index Equity Fund..................... 7,882,254
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The International Growth Fund may
enter into forward foreign currency exchange contracts. The purpose of these
contracts is to hedge against fluctuation in the value of the underlying
currency of certain portfolio investments. A forward foreign currency exchange
contract is an agreement to purchase or sell a specified currency at a specified
price on a future date. Risks associated with the contract include changes in
the value of the foreign currency relative to the U.S. dollar and/or the
counterparty's potential inability to perform under the contract.
The forward foreign currency exchange contracts are valued daily using the
current exchange rate of the underlying currency with any fluctuations recorded
as unrealized gains or losses. Realized gains or losses are recognized when
entering a closing or offsetting forward foreign currency exchange contract with
the same settlement date and broker.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Net realized gains and losses on investments sold
and on foreign currency transactions are recorded on the basis of identified
cost. Interest income is recorded on the accrual basis and includes, where
applicable, the amortization of premiums or accretion of discounts. Dividend
income is recorded on the ex-dividend date.
The International Growth Fund, upon the purchase or sale of a security
denominated in a foreign currency, may enter into foreign currency exchange
contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the
amount of foreign currency involved in the underlying security transaction to
hedge the Fund against currency fluctuations during the settlement period. In
such cases, the Fund has not realized currency gains or losses between the trade
and settlement dates on these security transactions.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Funds declare and distribute
dividends from net investment income monthly, with the exception of the
International Growth Fund which declares and pays dividends annually. Net
investment income for this purpose consists of interest accrued, discount earned
(including both original issue and market discount), dividends earned less
amortization of any market premium and accrued expenses. Net realized capital
gains, if any, are distributed at least annually.
The amounts of income and capital gains to be distributed are determined in
accordance with income tax regulations. Such amounts may vary from income
115
134
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
and capital gains recognized in accordance with generally accepted accounting
principles.
FEDERAL INCOME TAXES: For federal income tax purposes, each Fund is treated as
a separate entity for the purpose of determining its qualification as a
regulated investment company under the Internal Revenue Code (the "Code"). It is
the policy of each Fund to meet the requirements of the Code applicable to
regulated investment companies, including the requirement that it distribute
substantially all of its taxable income to shareholders. Therefore, no federal
income tax provision is required. Withholding taxes on foreign dividends have
been paid or provided for in accordance with the applicable country's tax rules
and rates.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
At December 31, 1997, the following Funds had the following capital loss
carryforwards which will expire in the years indicated:
FUND AMOUNT YEAR
---- ----------- ----
Short Term Bond Fund........... $ 656,100 2001
3,015,994 2002
467,881 2003
438,260 2004
1,927,928 2005
-----------
$ 6,506,163
===========
FUND AMOUNT YEAR
---- ----------- ----
Intermediate Bond Fund......... $ 6,353,600 2004
4,043,228 2005
-----------
$10,396,828
===========
Michigan Municipal Bond Fund... $ 68,930 2003
Money Market Fund.............. $ 433 1999
224 2002
194 2003
27 2004
432 2005
-----------
$ 1,310
===========
Michigan Municipal Money Market
Fund......................... $ 12,469 2005
EXPENSES: Expenses directly attributable to a Fund are charged to the Fund,
while expenses which are attributable to more than one series of the Trust are
allocated among the respective series based upon relative net assets or another
appropriate basis. In addition, investors in Investment Shares will pay the
expenses directly attributable to the Investment Shares as a class, and
investors in Institutional Shares will pay the expenses directly attributable to
the Institutional Shares as a class.
ORGANIZATIONAL COSTS: The Tax-Free Income Fund bears all costs in connection
with its organization, including the fees and expenses of registering and
qualifying their initial shares for distribution under federal and state
securities laws. All such costs are amortized using the straight-line method
over a period of five years beginning with the respective Fund's commencement of
operations. In the event that any of the initial shares purchased by the Fund's
sponsors are redeemed during such period by any holder thereof, the Fund will be
reimbursed by such holder for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption. The other Funds bore all
costs in connection with their organization. All such costs were fully amortized
as of June 30, 1998.
116
135
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
3. RELATED PARTY TRANSACTIONS
The Funds are advised by Lyon Street Asset Management Company ("Lyon Street"
or the "Investment Adviser"), a wholly-owned subsidiary of Old Kent Bank ("Old
Kent"). Effective as of March 2, 1998, Lyon Street assumed the investment
advisory responsibilities for each of the Funds from the Investment Management
Group of Old Kent. This change did not involve a change in control or management
of the investment adviser or a change in the Funds' portfolio managers. The
Investment Adviser is entitled to receive a fee, computed daily and paid
monthly, based on each Fund's average daily net assets at the following annual
rates:
Growth and Income Fund...................... 0.70%
Small Company Growth Fund................... 0.70%
International Growth Fund................... 0.75%
Index Equity Fund........................... 0.30%
Short Term Bond Fund........................ 0.50%
Intermediate Bond Fund...................... 0.55%
Income Fund................................. 0.60%
Limited Term Tax-Free Fund.................. 0.45%
Intermediate Tax-Free Fund.................. 0.50%
Tax-Free Income Fund........................ 0.55%
Michigan Municipal Bond Fund................ 0.45%
Money Market Fund........................... 0.40%
Government Money Market Fund................ 0.40%
Michigan Municipal Money Market Fund........ 0.40%
The Index Equity Fund and Government Money Market Fund had investment advisory
fees waived by Lyon Street equal to $169,948 and $105,893, respectively.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
serves the Funds as Administrator and Distributor. BISYS Fund Services, Inc.
serves the Funds as Fund Accountant and Transfer Agent. BISYS and BISYS Fund
Services, Inc. are both wholly owned subsidiaries of The BISYS Group, Inc. The
Administrator is entitled to receive a fee computed daily and paid monthly, at
the annual rate of 0.185% of the average daily net assets of the Trust up to $5
billion; 0.165% of the average daily net assets of the Trust in excess of $5
billion up to $7.5 billion; and 0.135% of the average daily net assets of the
Trust in excess of $7.5 billion. Fund Accounting fees are computed daily and
paid monthly at the annual rate of 0.015% of the average daily net assets of the
Trust.
Gross administration fees and fees waived for the six months ended June 30,
1998 were as follows for the Funds indicated:
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
Growth and Income Fund..... $696,608 $ --
Small Company Growth
Fund..................... 702,563 --
International Growth
Fund..................... 485,481 --
Index Equity Fund.......... 614,693 203,845
Short Term Bond Fund....... 127,297 --
Intermediate Bond Fund..... 711,426 --
Income Fund................ 220,524 --
Limited Term Tax-Free
Fund..................... 33,945 --
Intermediate Tax-Free
Fund..................... 256,634 --
Tax-Free Income Fund....... 110,955 --
Michigan Municipal Bond
Fund..................... 115,113 --
Money Market Fund.......... 470,082 181,854
Michigan Municipal Money
Market Fund.............. 280,669 124,111
Government Money Market
Fund..................... 96,053 51,140
Beginning June 1, 1997, Old Kent provided certain administrative services to
the Trust pursuant to a Sub-Administration Agreement between Old Kent and BISYS.
BISYS agreed to pay Old Kent a fee, calculated daily and paid monthly, at an
annual rate of up to 0.05% of each Fund's average daily net assets. The fees
paid to Old Kent by BISYS for such administrative services come out of BISYS'
administration fee and are not an additional charge to the Funds.
Sub-administration fees for each Fund for the six months ended June 30,1998
are as follows:
FUNDS SUB-ADMINISTRATION FEES
----- -----------------------
Growth and Income Fund........ $188,950
Small Company Growth Fund..... 190,662
International Growth Fund..... 131,901
Index Equity Fund............. 166,552
Short Term Bond Fund.......... 27,716
Intermediate Bond Fund........ 154,689
Income Fund................... 47,855
Limited Term Tax-Free Fund.... 7,379
Intermediate Tax-Free Fund.... 55,765
Tax-Free Income Fund.......... 24,092
117
136
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
FUNDS SUB-ADMINISTRATION FEES
----- -----------------------
Michigan Municipal Bond Fund.. 25,010
Money Market Fund............. 102,113
Michigan Municipal Money
Market Fund................. 45,902
Government Money Market
Fund........................ 26,056
Fund Accounting Fees and fees waived for each Fund for the six months ended
June 30, 1998 are as follows:
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
Growth and Income Fund..... $57,732 $38,486
Small Company Growth
Fund..................... 58,224 38,814
International Growth
Fund..................... 40,274 26,848
Index Equity Fund.......... 50,984 50,984
Short Term Bond Fund....... 10,551 7,034
Intermediate Bond Fund..... 58,975 39,315
Income Fund................ 18,285 12,189
Limited Term Tax-Free
Fund..................... 2,814 1,876
Intermediate Tax-Free
Fund..................... 21,276 14,183
Tax-Free Income Fund....... 9,199 6,132
Michigan Municipal Bond
Fund..................... 9,543 6,362
Money Market Fund.......... 38,976 38,976
Michigan Municipal Money
Market Fund.............. 23,380 23,380
Government Money Market
Fund..................... 7,942 7,942
Certain officers of the Trust are affiliated with BISYS. Such officers receive
no direct payments or fees from the Funds for serving as officers.
The Trust has adopted a distribution plan (the "Plan") on behalf of the
Investment Shares of the Funds pursuant to Rule 12b-1 of the 1940 Act. The Plan
provides for payments to the Distributor of up to 0.25% of the average daily net
assets of the Investment Shares of the Funds. Although the Money Market Fund,
the Michigan Municipal Money Market Fund, and the Government Money Market Fund
are authorized to pay 12b-1 fees of up to 0.25% in connection with the sale of
Investment Shares, none currently intends to pay such fees.
Gross distribution fees and fees waived for each of Fund for the six months
ended June 30, 1998 are as follows:
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
Growth and Income Fund..... $52,068 $ --
Small Company Growth
Fund..................... 31,228 --
International Growth
Fund..................... 13,511 --
Index Equity Fund.......... 40,957 --
Short Term Bond Fund....... 9,024 3,609
Intermediate Bond Fund..... 10,262 --
Income Fund................ 9,327 --
Limited Term Tax-Free
Fund..................... 525 210
Intermediate Tax-Free
Fund..................... 4,645 --
Tax-Free Income Fund....... 2,333 --
Michigan Municipal Bond
Fund..................... 5,720 2,288
Money Market Fund.......... -- --
Michigan Municipal Money
Market Fund.............. -- --
Government Money Market
Fund..................... -- --
Expenses for the Trust include legal fees paid to Drinker Biddle & Reath LLP.
A partner of that firm serves as Assistant Secretary of the Trust.
118
137
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Portfolios are summarized below:
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
---------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
----------------- ------------- ----------------- -------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.............................. $ 74,213,556 $ 249,081,909 $112,376,511 $ 208,702,084
Reinvestment of distributions.............. 25,311,874 30,110,268 18,225,651 26,503,462
Shares redeemed............................ (99,766,393) (147,058,160) (71,502,921) (161,953,808)
------------ ------------- ------------ -------------
Net increase (decrease) from
Institutional shares transactions...... $ (240,963) $ 132,134,017 $ 59,099,241 $ 73,251,738
------------ ------------- ------------ -------------
INVESTMENT:
Shares issued.............................. $ 9,464,243 $ 20,005,334 $ 5,124,481 $ 7,480,927
Reinvestment of distributions.............. 3,142,433 2,967,456 1,203,237 1,566,793
Shares redeemed............................ (4,491,593) (4,320,697) (2,744,754) (3,330,447)
------------ ------------- ------------ -------------
Net increase (decrease) from Investment
shares transactions.................... $ 8,115,083 $ 18,652,093 $ 3,582,964 $ 5,717,273
------------ ------------- ------------ -------------
Total net increase (decrease) from shares
transactions........................... $ 7,874,120 $ 150,786,110 $ 62,682,205 $ 78,969,011
============ ============= ============ =============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.............................. 4,546,510 16,279,124 6,070,971 11,956,401
Reinvestment of distributions.............. 1,563,327 1,971,493 957,845 1,547,774
Shares redeemed............................ (6,086,340) (9,401,038) (3,801,230) (9,131,520)
------------ ------------- ------------ -------------
Net increase (decrease) from
Institutional shares transactions...... 23,497 8,849,579 3,227,586 4,372,655
------------ ------------- ------------ -------------
INVESTMENT:
Shares issued.............................. 585,779 1,283,992 273,920 419,135
Reinvestment of distributions.............. 195,654 195,172 63,462 91,169
Shares redeemed............................ (276,347) (280,261) (146,262) (191,859)
------------ ------------- ------------ -------------
Net increase (decrease) from Investment
shares transactions.................... 505,086 1,198,903 191,120 318,445
------------ ------------- ------------ -------------
Total net increase (decrease) from shares
transactions........................... 528,583 10,048,482 3,418,706 4,691,100
============ ============= ============ =============
119
138
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
-------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- ------------ ---------------- ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued................................... $ 53,043,793 $189,937,844 $ 88,620,020 $323,258,744
Reinvestment of distributions................... 43,310 3,418,753 3,154,022 6,357,380
Shares redeemed................................. (75,622,614) (92,021,615) (76,028,296) (77,077,375)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... $(22,535,511) $101,334,982 $ 15,745,746 $252,538,749
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued................................... $ 3,934,537 $ 3,462,874 $ 5,729,786 $ 15,939,700
Reinvestment of distributions................... 1,951 146,470 154,332 315,816
Shares redeemed................................. (2,940,336) (2,625,594) (2,628,829) (2,603,171)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ $ 996,152 $ 983,750 $ 3,255,289 $ 13,652,345
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions................................ $(21,539,359) $102,318,732 $ 19,001,035 $266,191,094
============ ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued................................... 3,261,560 12,562,555 4,302,815 18,391,993
Reinvestment of distributions................... 2,527 230,973 149,083 353,825
Shares redeemed................................. (4,620,989) (5,990,183) (3,721,984) (4,462,155)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... (1,356,902) 6,803,345 729,914 14,283,663
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued................................... 239,973 227,807 278,345 915,280
Reinvestment of distributions................... 115 9,962 7,288 17,611
Shares redeemed................................. (180,002) (175,388) (125,609) (149,114)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ 60,086 62,381 160,024 783,777
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions................................ (1,296,816) 6,865,726 889,938 15,067,440
============ ============ ============ ============
120
139
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
--------------------------------- -------------------------------- ----------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED)
----------------- ------------- ---------------- ------------- ----------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued...................... $ 15,429,132 $ 48,001,662 $ 100,788,121 $ 199,760,848 $ 39,138,174
Reinvestment of distributions...... 2,278,463 6,604,162 11,764,434 24,873,643 1,649,425
Shares redeemed.................... (28,098,105) (150,317,030) (113,314,910) (243,018,554) (22,982,323)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Institutional shares
transactions................... $(10,390,510) $ (95,711,206) $ (762,355) $ (18,384,063) $ 17,805,276
------------ ------------- ------------- ------------- ------------
INVESTMENT:
Shares issued...................... $ 878,903 $ 7,847,049 $ 4,208,343 $ 1,779,289 $ 4,457,631
Reinvestment of distributions...... 201,515 224,600 210,150 330,824 231,869
Shares redeemed.................... (1,854,396) (2,314,253) (1,401,182) (2,560,072) (1,069,948)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Investment shares
transactions................... $ (773,978) $ 5,757,396 $ 3,017,311 $ (449,959) $ 3,619,552
------------ ------------- ------------- ------------- ------------
Total net increase (decrease)
from shares transactions....... $(11,164,488) $ (89,953,810) $ 2,254,956 $ (18,834,022) $ 21,424,828
============ ============= ============= ============= ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued...................... 1,579,207 4,932,559 10,127,341 20,424,141 3,775,897
Reinvestment of distributions...... 234,165 681,245 1,187,148 2,553,873 160,208
Shares redeemed.................... (2,874,459) (15,426,349) (11,382,133) (24,790,453) (2,217,308)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Institutional shares
transactions................... (1,061,087) (9,812,545) (67,644) (1,812,439) 1,718,797
------------ ------------- ------------- ------------- ------------
INVESTMENT:
Shares issued...................... 89,796 806,758 421,709 180,929 430,540
Reinvestment of distributions...... 20,731 23,130 21,156 33,899 22,551
Shares redeemed.................... (190,071) (237,636) (140,347) (261,548) (103,388)
------------ ------------- ------------- ------------- ------------
Net increase (decrease) from
Investment shares
transactions................... (79,544) 592,252 302,518 (46,720) 349,703
------------ ------------- ------------- ------------- ------------
Total net increase (decrease)
from shares transactions....... (1,140,631) (9,220,293) 234,874 (1,859,159) 2,068,500
============ ============= ============= ============= ============
INCOME FUND
------------
YEAR ENDED
DECEMBER 31,
1997
------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued...................... $ 64,474,285
Reinvestment of distributions...... 4,044,114
Shares redeemed.................... (82,779,834)
------------
Net increase (decrease) from
Institutional shares
transactions................... $(14,261,435)
------------
INVESTMENT:
Shares issued...................... $ 3,443,682
Reinvestment of distributions...... 295,679
Shares redeemed.................... (908,477)
------------
Net increase (decrease) from
Investment shares
transactions................... $ 2,830,884
------------
Total net increase (decrease)
from shares transactions....... $(11,430,551)
============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued...................... 6,376,298
Reinvestment of distributions...... 400,874
Shares redeemed.................... (8,087,197)
------------
Net increase (decrease) from
Institutional shares
transactions................... (1,310,025)
------------
INVESTMENT:
Shares issued...................... 338,211
Reinvestment of distributions...... 29,196
Shares redeemed.................... (89,859)
------------
Net increase (decrease) from
Investment shares
transactions................... 277,548
------------
Total net increase (decrease)
from shares transactions....... (1,032,477)
============
121
140
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
LIMITED TERM INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND
-------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- ------------ ---------------- ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued................................... $ 6,308,730 $ 9,059,260 $ 26,535,651 $ 43,176,593
Reinvestment of distributions................... 4,403 13,903 81,819 124,001
Shares redeemed................................. (5,049,801) (14,638,082) (16,571,106) (60,115,232)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... $ 1,263,332 $(5,564,919) $ 10,046,364 $(16,814,638)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued................................... $ 63,500 $ 677,012 $ 938,543 $ 1,089,316
Reinvestment of distributions................... 7,440 13,461 50,985 83,640
Shares redeemed................................. (252,045) (324,005) (742,109) (1,083,713)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ $ (181,105) $ 366,468 $ 247,419 $ 89,243
----------- ------------ ------------ ------------
Total net increase (decrease) from shares
transactions................................ $ 1,082,227 $(5,198,451) $ 10,293,783 $(16,725,395)
=========== ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued................................... 617,952 888,774 2,481,303 4,110,419
Reinvestment of distributions................... 433 1,369 7,685 11,820
Shares redeemed................................. (495,055) (1,435,754) (1,551,627) (5,717,526)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions......................... 123,330 (545,611) 937,361 (1,595,287)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued................................... 6,213 66,418 87,785 103,878
Reinvestment of distributions................... 728 1,317 4,788 7,978
Shares redeemed................................. (24,682) (31,731) (69,781) (104,039)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions................................ (17,741) 36,004 22,792 7,817
----------- ------------ ------------ ------------
Total net increase (decrease) from share
transactions................................ 105,589 (509,607) 960,153 (1,587,470)
=========== ============ ============ ============
122
141
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
TAX-FREE MICHIGAN MUNICIPAL
INCOME FUND BOND FUND
--------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
----------------- ------------ ---------------- ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.................................. $16,109,076 $31,815,166 $ 24,379,464 $ 32,654,052
Reinvestment of distributions.................. 45,861 76,956 27,079 70,141
Shares redeemed................................ (7,263,010) (29,459,976) (14,476,540) (75,229,474)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions........................ $ 8,891,927 $ 2,432,146 $ 9,930,003 $(42,505,281)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued.................................. $ 764,393 $ 1,224,420 $ 655,944 $ 2,865,534
Reinvestment of distributions.................. 36,752 39,697 60,864 61,445
Shares redeemed................................ (474,690) (526,698) (446,840) (976,041)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment
shares transactions........................ $ 326,455 $ 737,419 $ 269,968 $ 1,950,938
----------- ------------ ------------ ------------
Total net increase (decrease) from shares
transactions............................... $ 9,218,382 $ 3,169,565 $ 10,199,971 $(40,554,343)
=========== ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.................................. 1,511,065 3,066,893 2,376,723 3,222,928
Reinvestment of distributions.................. 4,323 7,401 2,654 6,941
Shares redeemed................................ (681,484) (2,828,842) (1,417,285) (7,426,189)
----------- ------------ ------------ ------------
Net increase (decrease) from Institutional
shares transactions........................ 833,904 245,452 962,092 (4,196,320)
----------- ------------ ------------ ------------
INVESTMENT:
Shares issued.................................. 71,491 116,872 64,231 283,459
Reinvestment of distributions.................. 3,456 3,802 5,977 6,073
Shares redeemed................................ (44,471) (51,267) (43,757) (97,266)
----------- ------------ ------------ ------------
Net increase (decrease) from Investment
shares transactions........................ 30,476 69,407 26,451 192,266
----------- ------------ ------------ ------------
Total net increase (decrease) from share
transactions............................... 864,380 314,859 988,543 (4,004,054)
=========== ============ ============ ============
123
142
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
MICHIGAN MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
--------------------------------- -------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- -------------- ---------------- ------------
SHARE AMOUNTS
(AT $1.00 PER SHARE)
INSTITUTIONAL:
Shares issued..................... 595,011,645 1,151,538,209 342,780,178 279,013,482
Reinvestment of distributions..... 954,568 1,693,047 138,858 192,298
Shares redeemed................... (557,512,743) (1,162,770,823) (258,632,293) (222,935,437)
------------ -------------- ------------ ------------
Net increase (decrease) from
Institutional shares
transactions.................. 38,453,470 (9,539,567) 84,286,743 56,270,343
------------ -------------- ------------ ------------
INVESTMENT:
Shares issued..................... 11,520,214 1,909,306 3,068,893 191,150
Reinvestment of distributions..... 57,025 38,916 5,933 13,697
Shares redeemed................... (9,866,741) (1,572,981) (2,975,272) (697,468)
------------ -------------- ------------ ------------
Net increase from Investment
shares transactions........... 1,710,498 375,241 99,554 (492,621)
------------ -------------- ------------ ------------
Total net increase (decrease)
from shares transactions...... 40,163,968 (9,164,326) 84,386,297 55,777,722
============ ============== ============ ============
GOVERNMENT
MONEY MARKET FUND
--------------------------------
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997(1)
----------------- ------------
SHARE AMOUNTS
(AT $1.00 PER SHARE)
INSTITUTIONAL:
Shares issued..................... 202,345,837 328,632,081
Reinvestment of distributions..... 2,624,012 2,413,585
Shares redeemed................... (200,835,789) (236,421,222)
------------ ------------
Net increase (decrease) from
Institutional shares
transactions.................. 4,134,060 94,624,444
------------ ------------
INVESTMENT:
Shares issued..................... 38,083 4,460
Reinvestment of distributions..... 206 63
Shares redeemed................... (6,050) (2,510)
------------ ------------
Net increase from Investment
shares transactions........... 32,239 2,013
------------ ------------
Total net increase (decrease)
from shares transactions...... 4,166,299 94,626,457
============ ============
- ---------------
(1) From the period June 2, 1997 (commencement of operations) through December
31, 1997.
See Notes to Financial Statements
124
143
The Kent Funds
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the six months ended June 30, 1998 were as follows:
FUND PURCHASES SALES
- ---- ------------ ------------
Growth and Income
Fund................. $111,596,658 $ 81,174,114
Small Company Growth
Fund................. 255,691,482 221,367,560
International Growth
Fund................. 84,783,430 87,259,925
Index Equity Fund...... 25,132,934 8,414,319
Short Term Bond Fund... 53,649,592 73,432,319
Intermediate Bond
Fund................. 486,912,246 477,517,170
Income Fund............ 124,710,448 108,129,102
Limited Term Tax-Free
Fund................. 8,735,943 8,816,633
Intermediate Tax-Free
Fund................. 36,475,323 32,758,043
Tax-Free Income Fund... 31,294,752 23,832,515
Michigan Municipal Bond
Fund................. 41,813,803 31,391,636
6. RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES
The Growth and Income Fund, Small Company Growth Fund, the International
Growth Fund, and the Index Equity Fund can purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers.
The risks include devaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than those of
securities of comparable U.S. issuers.
7. CONCENTRATION OF CREDIT RISK
The Michigan Municipal Money Market Fund and Michigan Municipal Bond Fund
invest primarily in debt obligations issued by the State of Michigan and its
respective political subdivisions, agencies and public authorities to obtain
funds for various public purposes. The Funds are more susceptible to economic
and political factors adversely affecting issuers of Michigan specific municipal
securities than are municipal bond funds that are not concentrated in these
issuers to the same extent.
The Limited Term Tax-Free Fund, the Intermediate Tax-Free Fund, the Tax-Free
Income Fund, the Michigan Municipal Bond Fund and the Michigan Municipal Money
Market Fund had the following concentrations by industry sector at June 30, 1998
(as a percentage of total investments):
MICHIGAN
LIMITED MICHIGAN MUNICIPAL
TERM INTERMEDIATE TAX-FREE MUNICIPAL MONEY
TAX-FREE TAX-FREE INCOME BOND MARKET
FUND FUND FUND FUND FUND
-------- ------------ -------- --------- ---------
Airport.............. 4.15% 1.70% 2.71% 1.74% 1.51%
Development.......... 17.84% 7.27% 8.76% 5.73% 60.83%
Education............ 16.82% 5.55% 8.21% 4.23% 1.93%
Environmental........ -- 2.10% 0.80% 1.02% 8.39%
General Obligation... 30.37% 32.80% 29.30% 15.34% 13.94%
Medical.............. 10.05% 1.63% 7.38% 21.09% 4.72%
Multifamily
Housing............ -- -- 2.10% 2.19% 3.74%
Mutual Funds......... 0.95% 2.99% 2.83% 0.88% 1.37%
Sewer................ -- -- -- 5.35% --
Power................ -- 9.61% 8.59% 5.66% --
School District...... 8.50% 13.78% 6.65% 30.94% 2.19%
Single Family
Housing............ 8.28% -- 0.87% -- --
Transportation....... 3.04% 11.17% 12.35% 4.96% 1.04%
Utilities............ -- 7.72% 7.86% 0.87% --
Water................ -- 3.68% 1.59% -- 0.34%
----- ----- ----- ----- -----
100% 100% 100% 100% 100%
===== ===== ===== ===== =====
See Notes to Financial Statements
125
144
The Kent Funds
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period......... $ 15.55 $ 13.90 $ 13.25 $ 10.50 $ 10.91 $ 10.31
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income...................... 0.06 0.25 0.30 0.33 0.31 0.27
Net realized and unrealized gains (losses)
on investments and futures contracts..... 2.47 3.04 2.16 3.28 (0.26) 0.95
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations...... 2.53 3.29 2.46 3.61 0.05 1.22
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income...................... (0.06) (0.25) (0.30) (0.33) (0.31) (0.27)
In excess of net investment income......... (0.02) -- -- -- ** (0.01)
Net realized gains on investments and
futures contracts........................ (1.22) (1.39) (1.51) (0.53) (0.15) (0.34)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ (1.30) (1.64) (1.81) (0.86) (0.46) (0.62)
-------- -------- -------- -------- -------- --------
Net change in net asset value................ 1.23 1.65 0.65 2.75 (0.41) 0.60
-------- -------- -------- -------- -------- --------
Net asset value, end of period............... $ 16.78 $ 15.55 $ 13.90 $ 13.25 $ 10.50 $ 10.91
======== ======== ======== ======== ======== ========
Total return................................. 16.62%++ 24.14% 19.47% 34.91% 0.51% 11.98%
Ratios/Supplemental Data:
Net Assets, end of period (000's)............ $753,308 $697,973 $500,857 $401,371 $308,825 $180,864
Ratio of expenses to average net assets.... 0.93%+ 0.92% 0.95% 0.94% 0.98% 1.03%
Ratio of net investment income to average
net assets............................... 0.78%+ 1.61% 2.18% 2.73% 3.04% 2.61%
Ratio of expenses to average net assets*... 0.94%+ 0.93% 0.95% *** *** ***
Ratio of net investment income to average
net assets*.............................. 0.77%+ 1.60% 2.18% *** *** ***
Portfolio turnover rate(1)................. 11% 88% 39% 58% 28% 54%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
126
145
The Kent Funds
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------- ------- ------- ------ ------
Net asset value, beginning of period................ $ 15.44 $ 13.81 $ 13.19 $ 10.46 $10.87 $10.29
------- ------- ------- ------- ------ ------
Income from Investment Operations:
Net investment income............................. 0.04 0.21 0.26 0.30 0.32 0.27
Net realized and unrealized gains (losses) on
investments and futures contracts............... 2.44 3.02 2.15 3.26 (0.27) 0.93
------- ------- ------- ------- ------ ------
Total Income from Investment Operations............. 2.48 3.23 2.41 3.56 0.05 1.20
------- ------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income............................. (0.04) (0.21) (0.26) (0.30) (0.31) (0.23)
In excess of net investment income................ (0.02) -- (0.02) -- ** (0.05)
Net realized gains on investments and futures
contracts....................................... (1.21) (1.39) (1.51) (0.53) (0.15) (0.20)
In excess of net realized gains................... (0.01) -- -- -- -- (0.14)
------- ------- ------- ------- ------ ------
Total Dividends and Distributions............... (1.28) (1.60) (1.79) (0.83) (0.46) (0.62)
------- ------- ------- ------- ------ ------
Net change in net asset value....................... 1.20 1.63 0.62 2.73 (0.41) 0.58
------- ------- ------- ------- ------ ------
Net asset value, end of period...................... $ 16.64 $ 15.44 $ 13.81 $ 13.19 $10.46 $10.87
======= ======= ======= ======= ====== ======
Total return(1)..................................... 16.40%++ 23.89% 19.14% 34.61% 0.50% 11.81%
Ratios/Supplemental Data:
Net Assets, end of period (000's)................... $46,506 $35,343 $15,063 $11,079 $8,005 $4,607
Ratio of expenses to average net assets........... 1.18%+ 1.17% 1.09% 1.18% 0.98% 1.22%
Ratio of net investment income to average net
assets.......................................... 0.53%+ 1.31% 1.77% 2.48% 3.03% 2.43%
Ratio of expenses to average net assets*.......... 1.19%+ 1.18% 1.09% *** *** ***
Ratio of net investment income to average net
assets*......................................... 0.52%+ 1.30% 1.77% *** *** ***
Portfolio turnover rate(2)........................ 11% 88% 39% 58% 28% 54%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or
reimbursements.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
127
146
The Kent Funds
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period......... $ 18.39 $ 15.65 $ 13.82 $ 11.99 $ 12.50 $ 10.85
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income...................... 0.01 0.04 0.12 0.10 0.10 0.08
Net realized and unrealized gains (losses)
on investments and futures contracts..... 0.82 4.19 2.55 2.64 (0.10) 1.76
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations...... 0.83 4.23 2.67 2.74 -- 1.84
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income...................... (0.01) (0.04) (0.12) (0.10) (0.09) (0.08)
In excess of net investment income......... -- (0.02) -- -- (0.01) (0.01)
Net realized gains on investments and
futures contracts........................ (0.93) (1.43) (0.72) (0.81) (0.41) (0.10)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ (0.94) (1.49) (0.84) (0.91) (0.51) (0.19)
-------- -------- -------- -------- -------- --------
Net change in net asset value................ (0.11) 2.74 1.83 1.83 (0.51) 1.65
-------- -------- -------- -------- -------- --------
Net asset value, end of period............... $ 18.28 $ 18.39 $ 15.65 $ 13.82 $ 11.99 $ 12.50
======== ======== ======== ======== ======== ========
Total return................................. 4.31%++ 27.94% 19.56% 23.75% (0.06%) 17.04%
Ratios/Supplemental Data:
Net Assets, end of period (000's)............ $774,505 $719,998 $544,081 $450,072 $304,179 $252,401
Ratio of expenses to average net assets.... 0.93%+ 0.93% 0.96% 0.97% 0.98% 1.06%
Ratio of net investment income to average
net assets............................... 0.13%+ 0.24% 0.78% 0.83% 0.79% 0.74%
Ratio of expenses to average net assets*... 0.94%+ 0.94% 0.96% *** *** ***
Ratio of net investment income to average
net assets*.............................. 0.12%+ 0.23% 0.78% *** *** ***
Portfolio turnover rate(1)................. 29% 32% 16% 30% 20% 14%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
128
147
The Kent Funds
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------- ------- ------- ------ ------
Net asset value, beginning of period................ $ 18.33 $ 15.61 $ 13.81 $ 11.98 $12.49 $10.86
------- ------- ------- ------- ------ ------
Income (Loss) from Investment Operations:
Net investment income............................. (0.01) -- 0.07 0.07 0.10 0.08
Net realized and unrealized gains (losses) on
investments and futures contracts............... 0.81 4.19 2.54 2.64 (0.11) 1.74
------- ------- ------- ------- ------ ------
Total Income (Loss) from Investment Operations...... 0.80 4.19 2.61 2.71 (0.01) 1.82
------- ------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income............................. -- -- (0.08) (0.07) (0.08) (0.06)
In excess of net investment income................ -- (0.04) (0.01) -- (0.01) (0.03)
Net realized gains on investments and futures
contracts....................................... (0.93) (1.43) (0.72) (0.81) (0.41) (0.10)
------- ------- ------- ------- ------ ------
Total Dividends and Distributions............... (0.93) (1.47) (0.81) (0.88) (0.50) (0.19)
------- ------- ------- ------- ------ ------
Net change in net asset value....................... (0.13) 2.72 1.80 1.83 (0.51) 1.63
------- ------- ------- ------- ------ ------
Net asset value, end of period...................... $ 18.20 $ 18.33 $ 15.61 $ 13.81 $11.98 $12.49
======= ======= ======= ======= ====== ======
Total return(1)..................................... 4.15%++ 27.71% 19.16% 23.47% (0.08%) 16.84%
Ratios/Supplemental Data:
Net Assets, end of period (000's)................... $26,102 $22,784 $14,436 $10,955 $8,433 $5,345
Ratio of expenses to average net assets........... 1.18%+ 1.18% 1.21% 1.20% 0.98% 1.25%
Ratio of net investment income (loss) to average
net assets...................................... (0.12%)+ (0.01%) 0.53% 0.59% 0.79% 0.59%
Ratio of expenses to average net assets*.......... 1.19%+ 1.19% 1.21% *** *** ***
Ratio of net investment income (loss) to average
net assets*..................................... (0.13%)+ (0.02%) 0.53% *** *** ***
Portfolio turnover rate(2)........................ 29% 32% 16% 30% 20% 14%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
*** During the period, there were no waivers and/or
reimbursements.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
129
148
The Kent Funds
INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period......... $ 14.89 $ 14.75 $ 14.18 $ 13.06 $ 12.84 $ 10.01
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income...................... 0.13 0.11 0.13 0.13 0.12 0.09
Net realized and unrealized gains (losses)
on investments and foreign currency...... 2.00 0.26 0.70 1.54 0.61 2.95
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations...... 2.13 0.37 0.83 1.67 0.73 3.04
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income...................... -- (0.09) (0.10) (0.13) (0.07) (0.08)
In excess of net investment income......... -- (0.06) (0.02) (0.11) (0.03) (0.04)
Net realized gains on investments and
foreign currency......................... ** (0.07) (0.13) (0.31) (0.41) (0.08)
In excess of net realized gains............ -- (0.01) (0.01) -- -- (0.01)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions........ ** (0.23) (0.26) (0.55) (0.51) (0.21)
-------- -------- -------- -------- -------- --------
Net change in net asset value................ 2.13 0.14 0.57 1.12 0.22 2.83
-------- -------- -------- -------- -------- --------
Net asset value, end of period............... $ 17.02 $ 14.89 $ 14.75 $ 14.18 $ 13.06 $ 12.84
======== ======== ======== ======== ======== ========
Total return................................. 14.33%++ 2.54% 5.87% 13.00% 5.73% 30.32%
Ratios/Supplemental Data:
Net Assets, end of period (000's)............ $540,203 $492,598 $387,799 $286,545 $178,186 $157,716
Ratio of expenses to average net assets.... 1.05%+ 1.05% 1.09% 1.17% 1.22% 1.33%
Ratio of net investment income to average
net assets............................... 1.56%+ 0.80% 0.97% 1.35% 0.87% 0.86%
Ratio of expenses to average net assets*... 1.06%+ 1.06% 1.09% *** *** ***
Ratio of net investment income to average
net assets*.............................. 1.55%+ 0.79% 0.97% *** *** ***
Portfolio turnover rate(1)............... 16% 3% 13% 6% 20% 5%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
130
149
The Kent Funds
INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------ ------
Net asset value, beginning of period................... $ 14.79 $14.69 $14.13 $13.00 $12.81 $10.03
------- ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income................................ 0.11 0.08 0.12 0.14 0.14 0.13
Net realized and unrealized gains on securities and
foreign currency................................... 1.99 0.25 0.66 1.50 0.56 2.85
------- ------ ------ ------ ------ ------
Total Income from Investment Operations................ 2.10 0.33 0.78 1.64 0.70 2.98
------- ------ ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income................................ -- (0.06) (0.08) (0.09) (0.07) (0.02)
In excess of net investment income................... -- (0.09) -- (0.11) (0.03) (0.09)
Net realized gains on securities and foreign
currency........................................... ** (0.07) (0.14) (0.31) (0.41) (0.05)
In excess of net realized gains...................... -- (0.01) -- -- -- (0.04)
------- ------ ------ ------ ------ ------
Total Dividends and Distributions.................. ** (0.23) (0.22) (0.51) (0.51) (0.20)
------- ------ ------ ------ ------ ------
Net change in net asset value.......................... 2.10 0.10 0.56 1.13 0.19 2.78
------- ------ ------ ------ ------ ------
Net asset value, end of period......................... $ 16.89 $14.79 $14.69 $14.13 $13.00 $12.81
======= ====== ====== ====== ====== ======
Total return(1)........................................ 14.22%++ 2.25% 5.57% 12.86% 5.51% 29.67%
Ratios/Supplemental Data:
Net Assets, End of period (000's)...................... $12,186 $9,780 $8,799 $7,548 $6,539 $3,202
Ratio of expenses to average net assets.............. 1.30%+ 1.30% 1.34% 1.40% 1.25% 1.43%
Ratio of net investment income to average net
assets............................................. 1.35%+ 0.53% 0.74% 1.11% 0.81% 0.32%
Ratio of expenses to average net assets*............. 1.31%+ 1.31% 1.34% *** *** ***
Ratio of net investment income to average net
assets*............................................ 1.34%+ 0.52% 0.74% *** *** ***
Portfolio turnover rate(2)........................... 16% 3% 13% 6% 20% 5%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or
reimbursements.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
131
150
The Kent Funds
INDEX EQUITY FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period....... $ 19.14 $ 14.71 $ 12.56 $ 10.68 $ 11.04 $ 10.41
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.12 0.25 0.26 0.26 0.25 0.23
Net realized and unrealized gains
(losses) on investments and futures
contracts.............................. 3.23 4.50 2.47 3.44 (0.15) 0.71
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations.... 3.35 4.75 2.73 3.70 0.10 0.94
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................... (0.12) (0.25) (0.26) (0.25) (0.26) (0.23)
In excess of net investment income....... -- -- -- -- -- **
Net realized gains on investments and
futures contracts...................... (0.01) (0.05) (0.28) (1.57) (0.20) (0.08)
In excess of net realized gains.......... -- (0.02) (0.04) -- -- --
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions...... (0.13) (0.32) (0.58) (1.82) (0.46) (0.31)
-------- -------- -------- -------- -------- --------
Net change in net asset value.............. 3.22 4.43 2.15 1.88 (0.36) 0.63
-------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 22.36 $ 19.14 $ 14.71 $ 12.56 $ 10.68 $ 11.04
======== ======== ======== ======== ======== ========
Total return............................... 17.52%++ 32.55% 22.18% 36.23% 0.86% 9.11%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......... $705,841 $590,241 $243,438 $183,877 $245,550 $233,451
Ratio of expenses to average net
assets................................. 0.42%+ 0.43% 0.49% 0.56% 0.58% 0.65%
Ratio of net investment income to average
net assets............................. 1.11%+ 1.44% 1.91% 2.14% 2.32% 2.18%
Ratio of expenses to average net
assets*................................ 0.54%+ 0.54% 0.59% 0.56% 0.58% 0.65%
Ratio of net investment income to average
net assets*............................ 0.99%+ 1.33% 1.81% 2.14% 2.32% 2.18%
Portfolio turnover rate(1)............... 1% 1% 2% 3% 50% 1%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
132
151
The Kent Funds
INDEX EQUITY FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------- ------ ------ ------ ------
Net asset value, beginning of period.................. $ 19.15 $ 14.72 $12.57 $10.70 $11.07 $10.44
------- ------- ------ ------ ------ ------
Income from Investment Operations:
Net investment income............................... 0.09 0.20 0.22 0.23 0.26 0.22
Net realized and unrealized gains (losses) on
investments and futures contracts................. 3.23 4.51 2.48 3.44 (0.17) 0.72
------- ------- ------ ------ ------ ------
Total Income from Investment Operations............... 3.32 4.71 2.70 3.67 0.09 0.94
------- ------- ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income............................... (0.09) (0.20) (0.22) (0.23) (0.26) (0.20)
In excess of net investment income.................. -- (0.01) (0.01) -- -- (0.03)
Net realized gains on investments and futures
contracts......................................... (0.01) (0.06) (0.32) (1.57) (0.20) (0.06)
In excess of net realized gains..................... -- (0.01) -- -- -- (0.02)
------- ------- ------ ------ ------ ------
Total Dividends and Distributions................. (0.10) (0.28) (0.55) (1.80) (0.46) (0.31)
------- ------- ------ ------ ------ ------
Net change in net asset value......................... 3.22 4.43 2.15 1.87 (0.37) 0.63
------- ------- ------ ------ ------ ------
Net asset value, end of period........................ $ 22.37 $ 19.15 $14.72 $12.57 $10.70 $11.07
======= ======= ====== ====== ====== ======
Total return(1)....................................... 17.37%++ 32.24% 21.92% 35.81% 0.75% 9.09%
Net Assets, end of period (000's)..................... $36,196 $27,922 $9,925 $6,612 $4,736 $3,776
Ratio of expenses to average net assets............. 0.67%+ 0.68% 0.74% 0.80% 0.60% 0.86%
Ratio of net investment income to average net
assets............................................ 0.86%+ 1.20% 1.67% 1.86% 2.30% 2.04%
Ratio of expenses to average net assets*............ 0.79%+ 0.79% 0.84% 0.81% 0.60% 0.86%
Ratio of net investment income to average net
assets*........................................... 0.74%+ 1.09% 1.57% 1.85% 2.30% 2.04%
Portfolio turnover rate(2).......................... 1% 1% 2% 3% 50% 1%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
(1) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
133
152
The Kent Funds
SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period....... $ 9.75 $ 9.75 $ 9.96 $ 9.52 $ 9.91 $ 9.99
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.28 0.61 0.61 0.55 0.48 0.42
Net realized and unrealized gains
(losses) on investments................ -- -- (0.21) 0.43 (0.38) (0.09)
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations.... 0.28 0.61 0.40 0.98 0.10 0.33
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................... (0.30) (0.61) (0.61) (0.54) (0.49) (0.41)
In excess of net investment income....... -- -- -- -- ** --
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions...... (0.30) (0.61) (0.61) (0.54) (0.49) (0.41)
-------- -------- -------- -------- -------- --------
Net change in net asset value.............. (0.02) 0.00 (0.21) 0.44 (0.39) (0.08)
-------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 9.73 $ 9.75 $ 9.75 $ 9.96 $ 9.52 $ 9.91
======== ======== ======== ======== ======== ========
Total return............................... 2.74%++ 6.42% 4.22% 10.53% 1.03% 3.36%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......... $129,227 $139,739 $235,430 $310,680 $176,765 $255,892
Ratio of expenses to average net
assets................................. 0.75%+ 0.72% 0.70% 0.77% 0.73% 0.81%
Ratio of net investment income to average
net assets............................. 5.83%+ 6.04% 6.17% 5.60% 4.75% 4.24%
Ratio of expenses to average net
assets*................................ 0.76%+ 0.73% 0.70% *** *** ***
Ratio of net investment income to average
net assets*............................ 5.82%+ 6.03% 6.17% *** *** ***
Portfolio turnover rate(1)............... 41% 89% 32% 75% 56% 50%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or
reimbursements.
(1) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
134
153
The Kent Funds
SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period...... $ 9.74 $ 9.74 $ 9.95 $ 9.52 $ 9.91 $ 10.02
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................... 0.28 0.57 0.59 0.52 0.47 0.38
Net realized and unrealized gains
(losses) on investments............... -- 0.02 (0.20) 0.44 (0.37) (0.08)
-------- -------- -------- -------- -------- --------
Total Income from Investment Operations... 0.28 0.59 0.39 0.96 0.10 0.30
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................... (0.27) (0.59) (0.54) (0.53) (0.48) (0.41)
In excess of net investment income...... (0.03) -- (0.06) -- (0.01) --
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.30) (0.59) (0.60) (0.53) (0.49) (0.41)
-------- -------- -------- -------- -------- --------
Net change in net asset value............. (0.02) 0.00 (0.21) 0.43 (0.39) (0.11)
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 9.72 $ 9.74 $ 9.74 $ 9.95 $ 9.52 $ 9.91
======== ======== ======== ======== ======== ========
Total return(1)........................... 2.68%++ 6.26% 4.06% 10.30% 1.01% 3.04%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $ 6,648 $ 7,433 $ 1,667 $ 1,634 $ 1,649 $ 1,427
Ratio of expenses to average net
assets................................ 0.90%+ 0.88% 0.85% 0.91% 0.74% 1.24%
Ratio of net investment income to
average net assets.................... 5.68%+ 5.75% 6.02% 5.40% 4.79% 3.91%
Ratio of expenses to average net
assets*............................... 1.01%+ 0.99% 0.96% *** *** ***
Ratio of net investment income to
average net assets*................... 5.57%+ 5.64% 5.91% *** *** ***
Portfolio turnover rate(2).............. 41% 89% 32% 75% 56% 50%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
135
154
The Kent Funds
INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE SIX YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period...... $ 9.90 $ 9.76 $ 10.12 $ 9.29 $ 10.18 $ 10.00
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income................... 0.29 0.59 0.60 0.65 0.56 0.51
Net realized and unrealized gains
(losses) on investments............... 0.05 0.14 (0.32) 0.81 (0.88) 0.32
-------- -------- -------- -------- -------- --------
Total Income (Loss) from Investment
Operations.............................. 0.34 0.73 0.28 1.46 (0.32) 0.83
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................... (0.29) (0.59) (0.61) (0.63) (0.54) (0.51)
In excess of net investment income...... -- -- (0.03) -- (0.01) **
Net realized gains on investments....... -- -- -- -- (0.02) (0.14)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.29) (0.59) (0.64) (0.63) (0.57) (0.65)
-------- -------- -------- -------- -------- --------
Net change in net asset value............. 0.05 0.14 (0.36) 0.83 (0.89) 0.18
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 9.95 $ 9.90 $ 9.76 $ 10.12 $ 9.29 $ 10.18
======== ======== ======== ======== ======== ========
Total return.............................. 3.48%++ 7.80% 3.01% 16.18% (3.19%) 8.42%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $765,402 $762,740 $769,395 $854,801 $977,865 $434,264
Ratio of expenses to average net
assets................................ 0.76%+ 0.75% 0.77% 0.77% 0.80% 0.85%
Ratio of net investment income to
average net assets.................... 5.85%+ 6.03% 6.18% 6.50% 6.03% 5.03%
Ratio of expenses to average net
assets*............................... 0.77%+ 0.76% 0.78% *** *** ***
Ratio of net investment income to
average net assets*................... 5.84%+ 6.02% 6.17% *** *** ***
Portfolio turnover rate(1).............. 64% 114% 135% 166% 124% 126%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
136
155
The Kent Funds
INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period.... $ 9.93 $ 9.78 $ 10.14 $ 9.32 $ 10.19 $ 10.03
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment
Operations:
Net investment income................. 0.27 0.57 0.58 0.61 0.57 0.47
Net realized and unrealized gains
(losses) on investments............. 0.05 0.15 (0.32) 0.82 (0.87) 0.34
-------- -------- -------- -------- -------- --------
Total Income (Loss) from Investment
Operations............................ 0.32 0.72 0.26 1.43 (0.30) 0.81
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................. (0.27) (0.57) (0.57) (0.61) (0.54) (0.46)
In excess of net investment income.... (0.01) -- (0.05) -- (0.01) (0.05)
Net realized gains on investments..... -- -- -- -- (0.02) (0.14)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions... (0.28) (0.57) (0.62) (0.61) (0.57) (0.65)
-------- -------- -------- -------- -------- --------
Net change in net asset value........... 0.04 0.15 (0.36) 0.82 (0.87) 0.16
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 9.97 $ 9.93 $ 9.78 $ 10.14 $ 9.32 $ 10.19
======== ======== ======== ======== ======== ========
Total return(1)......................... 3.24%++ 7.62% 2.76% 15.76% (3.01%) 8.19%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $ 10,019 $ 6,972 $ 7,327 $ 6,862 $ 9,196 $ 4,966
Ratio of expenses to average net
assets.............................. 1.01%+ 1.00% 1.02% 1.01% 0.81% 1.13%
Ratio of net investment income to
average net assets.................. 5.60%+ 5.79% 5.92% 6.24% 5.94% 4.75%
Ratio of expenses to average net
assets*............................. 1.02%+ 1.01% 1.03% *** *** ***
Ratio of net investment income to
average net assets*................. 5.59%+ 5.78% 5.91% *** *** ***
Portfolio turnover rate(2)............ 64% 114% 135% 166% 124% 126%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
137
156
The Kent Funds
INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------
(UNAUDITED) 1997 1996 1995(1)
------------- -------- -------- --------
Net asset value, beginning of period........................ $ 10.30 $ 10.16 $ 10.84 $ 10.00
-------- -------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.33 0.68 0.66 0.55
Net realized and unrealized gains (losses) on
investments............................................. 0.09 0.34 (0.56) 0.92
-------- -------- -------- --------
Total Income from Investment Operations..................... 0.42 1.02 0.10 1.47
-------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.33) (0.68) (0.65) (0.54)
In excess of net investment income........................ -- -- (0.10) --
Net realized gains on investments......................... (0.01) (0.20) (0.03) (0.09)
-------- -------- -------- --------
Total Dividends and Distributions....................... (0.34) (0.88) (0.78) (0.63)
-------- -------- -------- --------
Net change in net asset value............................... 0.08 0.14 (0.68) 0.84
-------- -------- -------- --------
Net asset value, end of period.............................. $ 10.38 $ 10.30 $ 10.16 $ 10.84
======== ======== ======== ========
Total return................................................ 4.14%++ 10.55% 1.19% 15.05%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $249,546 $229,778 $240,060 $126,056
Ratio of expenses to average net assets................... 0.82%+ 0.82% 0.83% 0.91%+
Ratio of net investment income to average net assets...... 6.44%+ 6.65% 6.57% 6.65%+
Ratio of expenses to average net assets*.................. 0.83%+ 0.83% 0.83% **
Ratio of net investment income to average net assets*..... 6.43%+ 6.64% 6.57% **
Portfolio turnover rate(2)................................ 47% 84% 102% 50%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** During the period, there were no waivers and/or
reimbursements.
(1) The Institutional Class commenced operations on March 20,
1995.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
138
157
The Kent Funds
INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -----------------------------
(UNAUDITED) 1997 1996 1995(1)
------------- ------- ------- -------
Net asset value, beginning of period........................ $ 10.29 $ 10.16 $ 10.82 $ 10.00
------- ------- ------- -------
Income from Investment Operations:
Net investment income..................................... 0.32 0.63 0.66 0.52
Net realized and unrealized gains (losses) on
investments............................................. 0.09 0.35 (0.56) 0.91
------- ------- ------- -------
Total Income from Investment Operations..................... 0.41 0.98 0.10 1.43
------- ------- ------- -------
Less Dividends and Distributions from:
Net investment income..................................... (0.30) (0.65) (0.64) (0.52)
In excess of net investment income........................ (0.02) -- (0.09) --
Net realized gains on investments......................... (0.01) (0.20) (0.03) (0.09)
------- ------- ------- -------
Total Dividends and Distributions....................... (0.33) (0.85) (0.76) (0.61)
------- ------- ------- -------
Net change in net asset value............................... 0.08 0.13 (0.66) 0.82
------- ------- ------- -------
Net asset value, end of period.............................. $ 10.37 $ 10.29 $ 10.16 $ 10.82
======= ======= ======= =======
Total return(2)............................................. 4.02%++ 10.19% 1.16% 14.63%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 9,283 $ 5,611 $ 2,722 $ 1,961
Ratio of expenses to average net assets................... 1.07%+ 1.07% 1.08% 1.14%+
Ratio of net investment income to average net assets...... 6.19%+ 6.38% 6.31% 6.40%+
Ratio of expenses to average net assets*.................. 1.08%+ 1.08% 1.08% **
Ratio of net investment income to average net assets*..... 6.18%+ 6.37% 6.31% **
Portfolio turnover rate(3)................................ 47% 84% 102% 50%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated. ** During the period, there were no waivers
and/or reimbursements.
(1) The Investment Class date of initial public investment was
March 22, 1995.
(2) Calculation does not include sales charge. Effective May 1,
1997, the Investment Shares were not assessed a sales
charge.
(3) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
139
158
The Kent Funds
LIMITED TERM TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------
(UNAUDITED) 1997 1996 1995 1994(1)
------------- ------- ------- ------- -------
Net asset value, beginning of period..................... $ 10.19 $ 10.16 $ 10.22 $ 9.80 $ 10.00
------- ------- ------- ------- -------
Income (Loss) from Investment Operations:
Net investment income.................................. 0.19 0.40 0.39 0.39 0.13
Net realized and unrealized gains (losses) on
investments.......................................... (0.02) 0.08 (0.04) 0.42 (0.21)
------- ------- ------- ------- -------
Total Income (Loss) from Investment Operations........... 0.17 0.48 0.35 0.81 (0.08)
------- ------- ------- ------- -------
Less Dividends and Distributions from:
Net investment income.................................. (0.19) (0.40) (0.40) (0.39) (0.12)
In excess of net investment income..................... -- -- ** -- --
Net realized gains on investments...................... -- (0.05) (0.01) -- --
------- ------- ------- ------- -------
Total Dividends and Distributions.................... (0.19) (0.45) (0.41) (0.39) (0.12)
------- ------- ------- ------- -------
Net change in net asset value............................ (0.02) 0.03 (0.06) 0.42 (0.20)
------- ------- ------- ------- -------
Net asset value, end of period........................... $ 10.17 $ 10.19 $ 10.16 $ 10.22 $ 9.80
======= ======= ======= ======= =======
Total return............................................. 1.72%++ 4.78% 3.54% 8.43% (0.77%)++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $37,205 $36,023 $41,472 $55,347 $43,497
Ratio of expenses to average net assets................ 0.75%+ 0.76% 0.75% 0.69% 0.79%+
Ratio of net investment income to average net assets... 3.85%+ 3.86% 3.84% 3.87% 3.81%+
Ratio of expenses to average net assets*............... 0.76%+ 0.77% 0.75% 0.74% 0.96%+
Ratio of net investment income to average net
assets*.............................................. 3.84%+ 3.85% 3.84% 3.82% 3.64%+
Portfolio turnover rate(2)............................. 24% 29% 32% 51% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on September 1,
1994.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
140
159
The Kent Funds
LIMITED TERM TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ---------------------------------------
(UNAUDITED) 1997 1996 1995 1994(1)
------------- ------- ------- ------ -------
Net asset value, beginning of period..................... $ 10.23 $ 10.20 $ 10.24 $ 9.81 $ 9.87
------- ------- ------- ------ ------
Income from Investment Operations:
Net investment income.................................. 0.19 0.38 0.37 0.37 0.06
Net realized and unrealized gains (losses) on
investments.......................................... (0.02) 0.08 (0.02) 0.44 (0.06)
------- ------- ------- ------ ------
Total Income from Investment Operations.................. 0.17 0.46 0.35 0.81 --
------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income.................................. (0.19) (0.38) (0.35) (0.38) (0.06)
In excess of net investment income..................... -- -- (0.03) -- --
Net realized gains on investments...................... -- (0.05) (0.01) -- --
------- ------- ------- ------ ------
Total Dividends and Distributions.................... (0.19) (0.43) (0.39) (0.38) (0.06)
------- ------- ------- ------ ------
Net change in net asset value............................ (0.02) 0.03 (0.04) 0.43 (0.06)
------- ------- ------- ------ ------
Net asset value, end of period........................... $ 10.21 $ 10.23 $ 10.20 $10.24 $ 9.81
======= ======= ======= ====== ======
Total return(2).......................................... 1.63%++ 4.61% 3.51% 8.40% 0.03%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $ 292 $ 474 $ 106 $ 54 $ 7
Ratio of expenses to average net assets................ 0.90%+ 0.93% 0.87% 0.84% 0.87%+
Ratio of net investment income to average net assets... 3.70%+ 3.67% 3.69% 3.69% 3.86%+
Ratio of expenses to average net assets*............... 1.01%+ 1.04% 0.97% 0.85% 0.98%+
Ratio of net investment income to average net
assets*.............................................. 3.59%+ 3.56% 3.59% 3.69% 3.75%+
Portfolio turnover rate(3)............................. 24% 29% 32% 51% 10%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Investment Class date of initial public investment was November 1, 1994.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
141
160
The Kent Funds
INTERMEDIATE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period...... $ 10.68 $ 10.42 $ 10.52 $ 9.74 $ 10.45 $ 10.02
Income (Loss) from Investment Operations:
Net investment income................... 0.23 0.45 0.44 0.45 0.40 0.37
Net realized and unrealized gains
(losses) on investments............... (0.02) 0.26 (0.08) 0.79 (0.71) 0.47
-------- -------- -------- -------- -------- --------
Total Income (Loss) from Investment
Operations.............................. 0.21 0.71 0.36 1.24 (0.31) 0.84
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................... (0.23) (0.45) (0.46) (0.45) (0.39) (0.36)
In excess of net investment income...... -- -- ** (0.01) (0.01) --
Net realized gains on investments....... -- -- -- -- -- (0.05)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions..... (0.23) (0.45) (0.46) (0.46) (0.40) (0.41)
Net change in net asset value............. (0.02) 0.26 (0.10) 0.78 (0.71) 0.43
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 10.66 $ 10.68 $ 10.42 $ 10.52 $ 9.74 $ 10.45
======== ======== ======== ======== ======== ========
Total return.............................. 1.84%++ 7.07% 3.41% 12.90% (3.00%) 8.51%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $284,980 $275,641 $285,674 $283,733 $380,715 $135,862
Ratio of expenses to average net
assets................................ 0.73%+ 0.72% 0.73% 0.72% 0.78% 0.84%
Ratio of net investment income to
average net assets.................... 4.28%+ 4.31% 4.34% 4.39% 4.07% 3.62%
Ratio of expenses to average net
assets*............................... 0.74%+ 0.73% 0.73% 0.72% 0.78% 0.84%
Ratio of net investment income to
average net assets*................... 4.27%+ 4.30% 4.34% 4.39% 4.07% 3.62%
Portfolio turnover rate(1).............. 12% 23% 35% 6% 36% 14%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
142
161
The Kent Funds
INTERMEDIATE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------ ------
Net asset value, beginning of period................ $10.68 $10.42 $10.52 $ 9.74 $10.45 $10.04
------ ------ ------ ------ ------ ------
Income (Loss) from Investment Operations:
Net investment income............................. 0.21 0.43 0.42 0.42 0.40 0.36
Net realized and unrealized gains (losses) on
investments..................................... (0.02) 0.26 (0.09) 0.79 (0.71) 0.46
------ ------ ------ ------ ------ ------
Total Income (Loss) from Investment Operations...... 0.19 0.69 0.33 1.21 (0.31) 0.82
------ ------ ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income............................. (0.21) (0.43) (0.41) (0.42) (0.39) (0.33)
In excess of net investment income................ -- -- (0.02) (0.01) (0.01) (0.03)
Net realized gains on investments................. -- -- -- -- -- (0.05)
------ ------ ------ ------ ------ ------
Total Dividends and Distributions............... (0.21) (0.43) (0.43) (0.43) (0.40) (0.41)
------ ------ ------ ------ ------ ------
Net change in net asset value....................... (0.02) 0.26 (0.10) 0.78 (0.71) 0.41
------ ------ ------ ------ ------ ------
Net asset value, end of period...................... $10.66 $10.68 $10.42 $10.52 $ 9.74 $10.45
====== ====== ====== ====== ====== ======
Total return(1)..................................... 1.80%++ 6.80% 3.17% 12.66% (3.03%) 8.29%
Ratios/Supplemental Data:
Net Assets, end of period (000's)................... $3,770 $3,534 $3,368 $3,807 $4,505 $3,307
Ratio of expenses to average net assets........... 0.98%+ 0.97% 0.98% 0.97% 0.79% 1.08%
Ratio of net investment income to average net
assets.......................................... 4.03%+ 4.06% 4.09% 4.13% 3.99% 3.44%
Ratio of expenses to average net assets*.......... 0.99%+ 0.98% 0.98% 0.97% 0.79% 1.08%
Ratio of net investment income to average net
assets*......................................... 4.02%+ 4.05% 4.09% 4.13% 3.99% 3.44%
Portfolio turnover rate(2)........................ 12% 23% 35% 6% 36% 14%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
143
162
The Kent Funds
TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------
JUNE 30, 1998 1997 1996 1995(1)
------------- --------- -------- --------
Net asset value, beginning of period........................ $ 10.65 $ 10.27 $ 10.49 $ 10.00
-------- --------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.23 0.45 0.46 0.36
Net realized and unrealized gains (losses) on investments
and futures contracts:.................................. (0.02) 0.41 (0.06) 0.49
-------- --------- -------- --------
Total Income from Investment Operations..................... 0.21 0.86 0.40 0.85
-------- --------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.22) (0.45) (0.46) (0.36)
Net realized gains on investments and futures contracts... (0.01) (0.03) (0.16) --
-------- --------- -------- --------
Total Dividends and Distributions....................... (0.23) (0.48) (0.62) (0.36)
-------- --------- -------- --------
Net change in net asset value............................. (0.02) 0.38 (0.22) 0.49
-------- --------- -------- --------
Net asset value, end of period............................ $ 10.63 $ 10.65 $ 10.27 $ 10.49
======== ========= ======== ========
Total return................................................ 2.01%++ 8.59% 3.92% 8.64%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)......................... $125,280 $ 116,652 $109,948 $121,855
Ratio of expenses to average net assets................... 0.78%+ 0.79% 0.82% 0.73%+
Ratio of net investment income to average net assets...... 4.26%+ 4.32% 4.38% 4.44%+
Ratio of expenses to average net assets*.................. 0.79%+ 0.80% 0.82% 0.91%+
Ratio of net investment income to average net assets*..... 4.25%+ 4.31% 4.38% 4.26%+
Portfolio turnover rate(2)................................ 20% 16% 40% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced
and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been
as indicated.
(1) The Institutional Class commenced operations on March 20,
1995.
(2) Portfolio turnover is calculated on the basis of the
Portfolio as a whole without distinguishing between the
classes of shares issued.
See Notes to Financial Statements
144
163
The Kent Funds
TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ---------------------------
(UNAUDITED) 1997 1996 1995(1)
------------- ------ ------ -------
Net asset value, beginning of period........................ $10.67 $10.29 $10.52 $10.00
------ ------ ------ ------
Income from Investment Operations:
Net investment income..................................... 0.21 0.42 0.41 0.31
Net realized and unrealized gains (losses) on investments
and futures contracts:................................. (0.01) 0.42 (0.05) 0.51
------ ------ ------ ------
Total Income from Investment Operations..................... 0.20 0.84 0.36 0.82
------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income..................................... (0.20) (0.42) (0.43) (0.30)
In excess of net investment income........................ (0.01) (0.01) -- --
Net realized gains on investments and futures contracts... ** (0.03) (0.12) --
In excess of net realized gains........................... (0.01) -- (0.04) --
------ ------ ------ ------
Total Dividends and Distributions........................... (0.22) (0.46) (0.59) (0.30)
------ ------ ------ ------
Net change in net asset value............................... (0.02) 0.38 (0.23) 0.52
------ ------ ------ ------
Net asset value, end of period.............................. $10.65 $10.67 $10.29 $10.52
====== ====== ====== ======
Total return(2)............................................. 1.89%++ 8.32% 3.53% 8.34%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)......................... $2,033 $1,712 $ 936 $ 529
Ratio of expenses to average net assets................... 1.03%+ 1.04% 1.07% 0.95%+
Ratio of net investment income to average net assets...... 4.01%+ 4.05% 4.14% 4.25%+
Ratio of expenses to average net assets*.................. 1.04%+ 1.05% 1.07% 1.17%+
Ratio of net investment income to average net assets*..... 4.00%+ 4.04% 4.14% 4.03%+
Portfolio turnover rate(3)................................ 20% 16% 40% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Investment Class date of the initial public investment was March 31,
1995.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
145
164
The Kent Funds
MICHIGAN MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 -------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993(1)
------------- -------- -------- -------- -------- -------
Net asset value, beginning of period..... $ 10.21 $ 10.08 $ 10.12 $ 9.72 $ 10.06 $ 10.00
-------- -------- -------- -------- -------- -------
Income from Investment Operations:
Net investment income.................. 0.20 0.41 0.39 0.39 0.37 0.23
Net realized and unrealized gains
(losses) on investments.............. (0.02) 0.13 (0.04) 0.39 (0.34) 0.07
-------- -------- -------- -------- -------- -------
Total Income from Investment
Operations............................. 0.18 0.54 0.35 0.78 0.03 0.30
-------- -------- -------- -------- -------- -------
Less Dividends and Distributions from:
Net investment income.................. (0.20) (0.41) (0.39) (0.37) (0.36) (0.22)
In excess of net investment income..... -- -- -- (0.01) (0.01) (0.01)
Net realized gains on investments...... -- -- -- -- -- (0.01)
In excess of net realized gains........ -- -- -- -- -- **
-------- -------- -------- -------- -------- -------
Total Dividends and Distributions.... (0.20) (0.41) (0.39) (0.38) (0.37) (0.24)
-------- -------- -------- -------- -------- -------
Net change in net asset value............ (0.02) 0.13 (0.04) 0.40 (0.34) 0.06
-------- -------- -------- -------- -------- -------
Net asset value, end of period........... $ 10.19 $ 10.21 $ 10.08 $ 10.12 $ 9.72 $ 10.06
======== ======== ======== ======== ======== =======
Total return............................. 1.82%++ 5.52% 3.51% 8.20% 0.36% 3.06%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........ $121,374 $111,735 $152,623 $185,466 $118,485 $74,647
Ratio of expenses to average net
assets............................... 0.69%+ 0.69% 0.70% 0.69% 0.49% 0.24%+
Ratio of net investment income to
average net assets................... 4.02%+ 4.04% 3.83% 3.81% 3.74% 3.34%+
Ratio of expenses to average net
assets*.............................. 0.70%+ 0.70% 0.70% 0.70% 0.74% 0.84%+
Ratio of net investment income to
average net assets*.................. 4.01%+ 4.03% 3.83% 3.80% 3.50% 2.74%+
Portfolio turnover rate(2)............. 25% 13% 24% 42% 27% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on May 3, 1993.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
146
165
The Kent Funds
MICHIGAN MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993(1)
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period.... $ 10.20 $ 10.07 $ 10.11 $ 9.72 $ 10.08 $ 10.02
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................. 0.20 0.39 0.38 0.37 0.35 0.21
Net realized and unrealized gains
(losses) on investments............. (0.02) 0.14 (0.05) 0.40 (0.34) 0.07
-------- -------- -------- -------- -------- --------
Total Income from Investment
Operations............................ 0.18 0.53 0.33 0.77 0.01 0.28
-------- -------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................. (0.19) (0.40) (0.35) (0.37) (0.34) (0.21)
In excess of net investment income.... (0.01) -- (0.02) (0.01) (0.03) **
Net realized gains on investments..... -- -- -- -- -- (0.01)
-------- -------- -------- -------- -------- --------
Total Dividends and Distributions... (0.20) (0.40) (0.37) (0.38) (0.37) (0.22)
-------- -------- -------- -------- -------- --------
Net change in net asset value........... (0.02) 0.13 (0.04) 0.39 (0.36) 0.06
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 10.18 $ 10.20 $ 10.07 $ 10.11 $ 9.72 $ 10.08
======== ======== ======== ======== ======== ========
Total return(2)......................... 1.75%++ 5.38% 3.36% 8.01% 0.16% 2.85%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $ 4,676 $ 4,413 $ 2,422 $ 1,900 $ 1,980 $ 283
Ratio of expenses to average net
assets.............................. 0.84%+ 0.84% 0.85% 0.83% 0.49% 0.25%+
Ratio of net investment income to
average net assets.................. 3.87%+ 3.88% 3.68% 3.68% 3.80% 3.43%+
Ratio of expenses to average net
assets*............................. 0.95%+ 0.95% 0.95% 0.85% 0.68% 1.08%+
Ratio of net investment income to
average net assets*................. 3.76%+ 3.77% 3.58% 3.67% 3.61% 2.60%+
Portfolio turnover rate(3)............ 25% 13% 24% 42% 27% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Investment Class date of initial public investment was May 11, 1993.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements
147
166
The Kent Funds
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................. 0.025 0.051 0.050 0.050 0.040 0.030
-------- -------- -------- -------- -------- --------
Less Dividends from:
Net investment income................. (0.025) (0.051) (0.050) (0.050) (0.040) (0.030)
-------- -------- -------- -------- -------- --------
Net change in net asset value........... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total return............................ 2.56%++ 5.23% 5.06% 5.58% 3.75% 2.68%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....... $512,831 $474,378 $483,919 $424,815 $323,539 $359,624
Ratio of expenses to average net
assets.............................. 0.55%+ 0.52% 0.52% 0.55% 0.60% 0.60%
Ratio of net investment income to
average net assets.................. 5.10%+ 5.11% 4.95% 5.45% 3.65% 2.65%
Ratio of expenses to average net
assets*............................. 0.63%+ 0.62% 0.62% 0.63% 0.65% 0.68%
Ratio of net investment income to
average net assets*................. 5.02%+ 5.01% 4.85% 5.37% 3.59% 2.57%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements
148
167
The Kent Funds
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period...... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................... 0.025 0.051 0.050 0.050 0.040 0.030
-------- -------- -------- -------- -------- --------
Less Dividends from:
Net investment income................... (0.025) (0.051) (0.050) (0.050) (0.040) (0.030)
-------- -------- -------- -------- -------- --------
Net change in net asset value............. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total return.............................. 2.56%++ 5.23% 5.06% 5.56% 3.71% 2.67%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $ 2,890 $ 1,179 $ 804 $ 1,227 $ 369 $ 593
Ratio of expenses to average net
assets................................ 0.55%+ 0.52% 0.52% 0.55% 0.63% 0.63%
Ratio of net investment income to
average net assets.................... 5.10%+ 5.11% 4.94% 5.41% 3.58% 2.63%
Ratio of expenses to average net
assets*............................... 0.63%+ 0.62% 0.62% 0.62% 0.68% 4.49%
Ratio of net investment income (loss) to
average net assets*................... 5.02%+ 5.01% 4.84% 5.33% 3.53% (1.24%)
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements
149
168
The Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE SIX
MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
Net asset value, beginning of period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.015 0.033 0.030 0.030 0.020 0.020
-------- -------- -------- -------- -------- --------
Less Dividends from:
Net investment income.................... (0.015) (0.033) (0.030) (0.030) (0.020) (0.020)
-------- -------- -------- -------- -------- --------
Net change in net asset value.............. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total return............................... 1.55%++ 3.31% 3.11% 3.50% 2.40% 2.00%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......... $295,971 $211,682 $155,424 $145,215 $128,164 $183,366
Ratio of expenses to average net
assets................................. 0.54%+ 0.52% 0.54% 0.56% 0.60% 0.60%
Ratio of net investment income to average
net assets............................. 3.09%+ 3.27% 3.06% 3.45% 2.33% 1.96%
Ratio of expenses to average net
assets*................................ 0.63%+ 0.63% 0.64% 0.65% 0.70% 0.69%
Ratio of net investment income to average
net assets*............................ 3.00%+ 3.16% 2.96% 3.36% 2.23% 1.87%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements
150
169
The Kent Funds
MICHIGAN MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------ ------
Net asset value, beginning of period............... $ 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------------- ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income............................ 0.015 0.033 0.030 0.030 0.020 0.020
------------- ------ ------ ------ ------ ------
Less Dividends from:
Net investment income............................ (0.015) (0.033) (0.030) (0.030) (0.020) (0.020)
------------- ------ ------ ------ ------ ------
Net change in net asset value...................... -- -- -- -- -- --
Net asset value, end of period..................... $ 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
============= ====== ====== ====== ====== ======
Total return....................................... 1.55%++ 3.31% 3.11% 3.48% 2.38% 1.98%
Ratios/Supplemental Data:
Net Assets, end of period (000's).................. $ 389 $ 289 $ 782 1,603 379 149
Ratio of expenses to average net assets.......... 0.54%+ 0.52% 0.54% 0.54% 0.63% 0.63%
Ratio of net investment income to average net
assets......................................... 3.09%+ 3.22% 3.06% 3.48% 2.47% 2.01%
Ratio of expenses to average net assets *........ 0.63%+ 0.63% 0.64% 0.62% 0.73% 3.77%
Ratio of net investment income (loss) to average
net assets *................................... 3.00%+ 3.11% 2.96% 3.39% 2.37% (1.13)%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements
151
170
The Kent Funds
GOVERNMENT MONEY MARKET
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
FOR THE SIX PERIOD
MONTHS ENDED ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997(1)
------------- ------------
Net asset value, beginning of period........................ $ 1.000 $ 1.000
------- -------
Income from Investment Operations:
Net investment income..................................... 0.026 0.031
------- -------
Less Dividends from:
Net investment income..................................... (0.026) (0.031)
------- -------
Net change in net asset value............................... -- --
------- -------
Net asset value, end of period.............................. $ 1.000 $ 1.000
======= =======
Total return................................................ 2.58%++ 3.10%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $98,759 $94,624
Ratio of expenses to average net assets................... 0.37%+ 0.35%+
Ratio of net investment income to average net assets...... 5.16%+ 5.23%+
Ratio of expenses to average net assets*.................. 0.68%+ 0.50%+
Ratio of net investment income to average net assets*..... 4.85%+ 5.08%+
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Fund commenced operations June 2, 1997.
See Notes to Financial Statements
152
171
The Kent Funds
GOVERNMENT MONEY MARKET
FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
FOR THE SIX PERIOD
MONTHS ENDED ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997(1)
------------- ------------
Net asset value, beginning of period........................ $ 1.000 $ 1.000
------- -------
Income from Investment Operations:
Net investment income..................................... 0.026 0.030
------- -------
Less Dividends from:
Net investment income..................................... (0.026) (0.030)
------- -------
Net change in net asset value............................... -- --
------- -------
Net asset value, end of period.............................. $ 1.000 $ 1.000
======= =======
Total return................................................ 2.58%++ 3.06%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 34 $ 2
Ratio of expenses to average net assets................... 0.37%+ 0.43%+
Ratio of net investment income to average net assets...... 5.16%+ 5.17%+
Ratio of expenses to average net assets*.................. 0.68%+ 0.57%+
Ratio of net investment income to average net assets*..... 4.85%+ 5.03%+
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Fund commenced operations June 2, 1997.
See Notes to Financial Statements
153
172
Audited Financial Statements
for the Fiscal Year Ended December 31, 1997
173
THE KENT FUNDS
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 97.8%
ADVERTISING -- 0.1%
15,200 Interpublic Group Companies
Inc............................. $ 757,150
------------
AEROSPACE & DEFENSE -- 1.2%
104,274 Boeing Co....................... 5,102,908
21,300 Lockheed Martin Corp............ 2,098,050
1 Raytheon Co. -- Class A......... 19
29,000 Raytheon Co. -- Class B......... 1,464,500
------------
8,665,477
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.2%
25,200 Maytag Corp..................... 940,275
14,900 Whirlpool Corp.................. 819,500
------------
1,759,775
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.2%
15,000 Dana Corp....................... 712,500
16,800 TRW Inc......................... 896,700
------------
1,609,200
------------
AUTO/TRUCK -- REPLACEMENT
EQUIPMENT -- 0.1%
24,550 Genuine Parts Co................ 833,166
------------
AUTOMOTIVE -- 1.6%
121,500 Ford Motor Co................... 5,915,531
100,100 General Motors Corp............. 6,068,563
------------
11,984,094
------------
BANKS -- MAJOR REGIONAL -- 6.1%
69,200 Banc One Corp................... 3,758,425
36,300 Bank of New York Co., Inc....... 2,098,594
17,100 BankBoston Corp................. 1,606,331
10,400 Comerica, Inc................... 938,600
18,500 Corestates Financial Corp....... 1,481,156
17,000 Fifth Third Bancorp............. 1,389,750
27,900 First Chicago NBD Corp.......... 2,329,650
52,900 First Union Corp................ 2,711,125
23,500 Fleet Financial Group, Inc...... 1,761,031
19,300 Huntington Bancshares........... 694,800
31,500 KeyCorp......................... 2,230,594
29,900 Mellon Bank Corp................ 1,812,688
20,300 National City Corp.............. 1,334,725
63,000 NationsBank..................... 3,831,187
100,000 Norwest Corp.................... 3,862,499
42,500 PNC Bank Corp................... 2,425,156
6,900 Republic New York Corp.......... 787,894
15,900 State Street Corp............... 925,181
20,800 SunTrust Banks, Inc............. 1,484,600
23,300 U.S. Bancorp.................... 2,608,144
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BANKS -- MAJOR REGIONAL (CONTINUED)
24,000 Wachovia Corp................... $ 1,947,000
8,400 Wells Fargo & Co................ 2,851,275
------------
44,870,405
------------
BANKS -- MONEY CENTER -- 2.4%
67,300 BankAmerica Corp................ 4,912,900
8,900 Bankers Trust New York Corp..... 1,000,694
40,800 Chase Manhattan Corp............ 4,467,600
44,500 Citicorp........................ 5,626,468
16,400 J.P. Morgan & Co., Inc.......... 1,851,150
------------
17,858,812
------------
BEVERAGES -- ALCOHOLIC -- 0.7%
70,200 Anheuser-Busch Co., Inc......... 3,088,800
53,300 Seagram Co., Ltd................ 1,722,256
------------
4,811,056
------------
BEVERAGES -- SOFT DRINKS -- 3.0%
227,200 Coca-Cola Co.................... 15,137,199
181,600 PepsiCo, Inc.................... 6,617,050
------------
21,754,249
------------
BROADCASTING/CABLE -- 0.5%
14,200 Clear Channel Communications*... 1,128,013
31,700 Comcast Corp. Special........... 1,000,531
55,795 Tele-Communications Inc.*....... 1,558,773
------------
3,687,317
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.3%
9,900 Armstrong World Industries,
Inc............................. 740,025
24,200 Masco Corp...................... 1,231,175
------------
1,971,200
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.2%
11,600 Centex Corp..................... 730,075
18,600 Pulte Corp...................... 777,713
------------
1,507,788
------------
BUILDING PRODUCTS --
RETAIL/WHOLESALE -- 0.7%
69,200 Home Depot, Inc................. 4,074,150
17,300 Lowe's Cos., Inc................ 824,994
------------
4,899,144
------------
BUILDING PRODUCTS -- WOOD -- 0.1%
18,600 Weyerhaeuser Co................. 912,563
------------
CHEMICALS -- DIVERSIFIED -- 1.9%
32,500 Dow Chemical Co................. 3,298,749
109,200 E.I. du Pont de Nemours & Co.... 6,558,824
22,600 Hercules, Inc................... 1,131,413
37,100 PPG Industries, Inc............. 2,119,338
23,700 Union Carbide Corp.............. 1,017,619
------------
14,125,943
------------
Continued
27
174
THE KENT FUNDS
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
CHEMICALS -- SPECIALTY -- 0.3%
25,700 Great Lakes Chemical Corp....... $ 1,153,287
27,500 Nalco Chemical Co............... 1,087,969
------------
2,241,256
------------
COMPUTER SOFTWARE -- 2.5%
12,400 Adobe Systems, Inc.............. 511,500
115,800 Microsoft Corp.................. 14,967,149
27,700 Nextlevel Systems Inc.*......... 495,138
97,800 Oracle Corp.*................... 2,182,162
------------
18,155,949
------------
COMPUTERS -- LOCAL AREA NETWORK -- 0.9%
19,400 Cabletron Systems*.............. 291,000
99,750 Cisco Systems, Inc.*............ 5,561,063
60,200 Novell, Inc.*................... 451,500
------------
6,303,563
------------
COMPUTERS -- MAINFRAME -- 1.4%
94,800 International Business Machines
Corp............................ 9,912,525
------------
COMPUTERS -- MEMORY DEVICES -- 0.1%
45,800 Seagate Technology, Inc......... 881,650
------------
COMPUTERS -- MICRO -- 1.0%
80,800 Compaq Computer Corp............ 4,560,150
33,600 Dell Computer Corp.*............ 2,822,400
------------
7,382,550
------------
COMPUTERS -- MINI -- 1.3%
32,100 Digital Equipment Corp.*........ 1,187,700
101,000 Hewlett-Packard Co.............. 6,312,499
34,500 Silicon Graphics, Inc.*......... 429,094
36,100 Sun Microsystems, Inc.*......... 1,439,488
------------
9,368,781
------------
COMPUTERS -- SERVICES -- 0.7%
57,100 Automatic Data Processing,
Inc............................. 3,504,512
15,800 Ceridian Corp.*................. 723,838
30,000 First Data Corp................. 877,500
------------
5,105,850
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.6%
13,500 American Greetings Corp......... 528,188
60,800 Unilever NV, ADR................ 3,796,200
------------
4,324,388
------------
CONTAINERS & PACKAGING -- 0.1%
20,500 Owens-Illinois*................. 777,719
------------
CONTAINERS -- METAL & GLASS -- 0.1%
26,100 Ball Corp....................... 921,656
------------
COSMETICS & TOILETRIES -- 0.7%
4,700 Alberto Culver Co., Class B..... 150,694
52,600 Gillette Co..................... 5,283,012
------------
5,433,706
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DIVERSIFIED -- 4.9%
54,600 Allied Signal, Inc.............. $ 2,125,988
314,200 General Electric Co............. 23,054,424
23,900 Johnson Controls, Inc........... 1,141,225
38,800 Minnesota Mining &
Manufacturing Co................ 3,184,025
49,700 Rockwell International Corp..... 2,596,825
24,900 Tenneco, Inc.................... 983,550
22,700 Textron, Inc.,.................. 1,418,750
22,500 United Technologies Corp........ 1,638,281
------------
36,143,068
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 2.0%
160,200 Intel Corp...................... 11,254,049
28,200 LSI Logic Corp.*................ 556,950
38,800 Micron Technology, Inc.*........ 1,008,800
39,200 Texas Instruments, Inc.......... 1,764,000
------------
14,583,799
------------
ELECTRONIC -- CONNECTORS -- 0.3%
46,500 AMP, Inc........................ 1,953,000
9,000 Thomas & Betts Corp............. 425,250
------------
2,378,250
------------
ELECTRONIC MEASURING EQUIPMENT -- 0.2%
40,900 Tektronix, Inc.................. 1,623,219
------------
ELECTRONIC MEASURING MACHINES -- 0.2%
40,600 Applied Materials, Inc.*........ 1,223,075
------------
ELECTRONICS -- 0.0%
3,600 Raychem Corp.................... 155,025
------------
FINANCIAL -- CONSUMER LOANS -- 0.1%
6,100 Beneficial Corp................. 507,063
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.6%
38,800 Merrill Lynch & Co., Inc........ 2,829,975
31,300 Schwab (Charles) Corp........... 1,312,644
------------
4,142,619
------------
FINANCIAL -- LEASING COMPANY -- 0.0%
10,000 Ryder Systems, Inc.............. 327,500
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 1.0%
44,800 American Express Co............. 3,998,400
56,300 Morgan Stanley, Dean Witter,
Discover & Co................... 3,328,738
------------
7,327,138
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.2%
100,100 Fannie Mae...................... 5,711,956
66,400 Freddie Mac..................... 2,784,650
------------
8,496,606
------------
FINANCIAL -- SAVINGS & LOAN -- 0.1%
11,400 H.F. Ahmanson & Co.............. 763,088
------------
Continued
28
175
THE KENT FUNDS
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FOOD -- CANNED -- 0.6%
42,600 Campbell Soup Co................ $ 2,476,125
44,900 H.J. Heinz Co................... 2,281,481
------------
4,757,606
------------
FOOD -- CONFECTIONARY -- 0.1%
12,600 Hershey Foods Corp.............. 780,413
------------
FOOD -- DIVERSIFIED -- 1.5%
45,500 ConAgra, Inc.................... 1,492,969
13,300 CPC International, Inc.......... 1,433,075
23,300 General Mills, Inc.............. 1,668,863
38,100 Kellogg Co...................... 1,890,713
20,300 Quaker Oats Co.................. 1,070,825
10,400 Ralston Purina Group............ 966,550
46,300 Sara Lee Corp................... 2,607,268
------------
11,130,263
------------
FOOD -- FLOUR & GRAIN -- 0.2%
54,000 Archer-Daniels-Midland Co....... 1,171,125
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
24,100 Supervalu, Inc.................. 1,009,188
------------
FOREST PRODUCTS -- 0.1%
28,400 Fort James Corporation.......... 1,086,300
------------
GAMING -- 0.1%
16,500 Mirage Resorts*................. 375,375
------------
GAS & ELECTRIC UTILITY -- 1.2%
82,000 PG & E Corp..................... 2,495,875
192,400 Public Service Enterprises...... 6,096,675
------------
8,592,550
------------
HOTELS & LODGING -- 0.4%
40,000 Hilton Hotels Corp.............. 1,190,000
10,700 ITT Corp.*...................... 886,763
12,600 Marriott International, Inc..... 872,550
------------
2,949,313
------------
INSTRUMENTS -- CONTROL -- 0.2%
9,800 General Signal Corp............. 413,438
12,800 Honeywell, Inc.................. 876,800
------------
1,290,238
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.2%
19,600 Aon Corp........................ 1,149,050
------------
INSURANCE -- BROKERS -- 0.2%
15,100 Marsh & McLennan Cos., Inc...... 1,125,894
------------
INSURANCE -- LIFE -- 0.7%
48,100 American General Corp........... 2,600,406
27,500 Torchmark Corp.................. 1,156,719
12,400 TransAmerica Corp............... 1,320,600
------------
5,077,725
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
INSURANCE -- MULTI-LINE -- 1.9%
15,100 Aetna, Inc...................... $ 1,065,494
13,700 CIGNA Corp...................... 2,370,956
11,000 Hartford Financial Services
Group, Inc...................... 1,029,188
20,000 Loews Corp...................... 2,122,500
10,800 MBIA, Inc....................... 721,575
123,904 Travelers Group, Inc............ 6,675,328
------------
13,985,041
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.4%
48,000 Allstate Corp................... 4,362,000
67,800 American International Group.... 7,373,249
9,300 Chubb Corp...................... 703,313
11,800 General Re Corp................. 2,501,600
14,200 Lincoln National Corp........... 1,109,375
21,700 Safeco Corp..................... 1,057,875
28,000 USF&G Corp...................... 617,750
------------
17,725,162
------------
LEISURE & RECREATION/GAMING -- 0.0%
11,700 Harrah's Entertainment, Inc.*... 220,838
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.2%
48,200 Cincinnati Milacron, Inc........ 1,250,188
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.2%
36,900 Caterpillar, Inc................ 1,791,956
------------
MACHINERY -- ELECTRICAL -- 0.5%
41,500 Emerson Electric Co............. 2,342,156
10,800 W.W. Grainger, Inc.............. 1,049,625
------------
3,391,781
------------
MACHINERY -- FARM -- 0.3%
19,900 Briggs & Stratton Corp.......... 966,394
24,500 Deere & Co...................... 1,428,656
------------
2,395,050
------------
MACHINERY -- GENERAL INDUSTRIAL -- 0.2%
34,500 Cooper Industries, Inc.......... 1,690,500
------------
MACHINERY -- THERMAL PROCESSOR -- 0.2%
26,500 Thermo Electron Corp.*.......... 1,179,250
------------
MEDIA CONGLOMERATES -- 1.4%
56,100 Time Warner, Inc................ 3,478,200
67,400 Walt Disney Co.................. 6,676,813
------------
10,155,013
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
25,400 Amgen, Inc...................... 1,374,775
------------
MEDICAL -- DRUGS -- 8.4%
73,700 Abbott Laboratories............. 4,831,956
5,800 Alza Corp.*..................... 184,513
64,400 American Home Products Corp..... 4,926,600
118,500 Bristol-Myers Squibb Co......... 11,213,062
131,300 Eli Lilly & Co.................. 9,141,763
125,800 Merck & Co., Inc................ 13,366,249
124,700 Pfizer, Inc..................... 9,297,944
Continued
29
176
THE KENT FUNDS
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL -- DRUGS (CONTINUED)
47,600 Pharmacia & Upjohn, Inc......... $ 1,743,350
70,600 Schering-Plough Corp............ 4,386,025
26,500 Warner-Lambert Co............... 3,286,000
------------
62,377,462
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.1%
21,500 Humana, Inc.*................... 446,125
------------
MEDICAL -- HOSPITAL -- 0.2%
61,000 Columbia/HCA Healthcare Corp.... 1,807,125
------------
MEDICAL -- WHOLESALE DRUG -- 0.2%
14,900 Cardinal Health, Inc............ 1,119,363
------------
MEDICAL INSTRUMENTS -- 0.1%
42,700 Biomet, Inc..................... 1,094,188
------------
MEDICAL PRODUCTS -- 0.3%
4,600 Allergan, Inc................... 154,388
38,000 Baxter International, Inc....... 1,916,625
8,500 Mallinckrodt, Inc............... 323,000
------------
2,394,013
------------
MEDICAL/DENTAL SUPPLIES -- 1.5%
20,000 Becton, Dickinson & Co.......... 1,000,000
56,800 C.R. Bard, Inc.................. 1,778,550
127,900 Johnson & Johnson............... 8,425,413
------------
11,203,963
------------
METAL -- GOLD -- 0.6%
151,500 Barrick Gold Corp............... 2,821,687
50,500 Newmont Mining Corp............. 1,483,438
------------
4,305,125
------------
METAL -- MISCELLANEOUS -- 0.2%
76,800 Cyprus Amax Minerals Co......... 1,180,800
------------
METAL -- NON-FERROUS -- 0.5%
30,000 Asarco, Inc..................... 673,125
18,500 Phelps Dodge Corp............... 1,151,625
25,000 Reynolds Metals Co.............. 1,500,000
------------
3,324,750
------------
OFFICE AUTOMATION & EQUIPMENT -- 0.3%
20,900 Pitney Bowes, Inc............... 1,879,694
------------
OFFICE SUPPLIES & FORMS -- 0.2%
29,100 IKON Office Solutions, Inc...... 818,438
62,500 Moore Corp., Ltd................ 945,312
------------
1,763,750
------------
OIL & GAS -- DRILLING -- 0.6%
50,200 Schlumberger Ltd................ 4,041,100
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OIL -- INTERNATIONAL INTEGRATED -- 3.5%
64,000 Chevron Corp.................... $ 4,928,000
242,400 Exxon Corp...................... 14,831,849
77,200 Mobil Corp...................... 5,572,875
------------
25,332,724
------------
OIL -- PRODUCTION/PIPELINE -- 0.1%
9,600 Columbia Gas System, Inc........ 754,200
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.1%
20,000 Union Pacific Resources Group,
Inc............................. 485,000
------------
OIL -- U.S. INTEGRATED -- 4.4%
144,700 Amoco Corp...................... 12,317,587
92,900 Atlantic Richfield Co........... 7,443,612
13,100 Kerr-Mcgee Corp................. 829,394
15,900 Pennzoil Co..................... 1,062,319
76,000 Phillips Petroleum Co........... 3,695,499
95,100 Unocal Corp..................... 3,691,069
88,500 USX-Marathon Group.............. 2,986,875
------------
32,026,355
------------
OIL REFINING -- 0.4%
30,900 Ashland, Inc.................... 1,658,944
35,680 Sun Co., Inc.................... 1,500,790
------------
3,159,734
------------
PAPER & RELATED PRODUCTS -- 0.6%
12,600 Georgia Pacific Corp............ 765,450
39,900 International Paper Co.......... 1,720,687
20,000 Mead Corp....................... 560,000
19,700 Union Camp Corp................. 1,057,644
10,000 Westvaco Corp................... 314,375
------------
4,418,156
------------
PHOTOGRAPHY -- 0.2%
26,500 Polaroid Corp................... 1,290,219
------------
POLLUTION CONTROL -- 0.1%
38,600 Safety-Kleen Corp............... 1,059,088
------------
PROTECTION -- SAFETY -- 0.4%
60,800 Tyco International Ltd.......... 2,739,800
------------
PUBLISHING -- BOOKS -- 0.1%
14,000 McGraw-Hill Cos., Inc........... 1,036,000
------------
PUBLISHING -- NEWSPAPERS -- 0.8%
9,200 Dow Jones & Co.................. 493,925
40,700 Gannett, Inc.................... 2,515,769
14,600 Knight-Ridder, Inc.............. 759,200
10,000 New York Times Co............... 661,250
9,400 Times Mirror Co................. 578,100
17,900 Tribune Co...................... 1,114,275
------------
6,122,519
------------
Continued
30
177
THE KENT FUNDS
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
RESTAURANTS -- 0.5%
66,100 McDonald's Corp................. $ 3,156,275
20,000 Wendy's International, Inc...... 481,250
------------
3,637,525
------------
RETAIL -- APPAREL/SHOES -- 0.5%
59,100 Gap, Inc........................ 2,094,356
58,700 Limited, Inc.................... 1,496,850
------------
3,591,206
------------
RETAIL -- DISCOUNT -- 2.4%
31,300 Dayton-Hudson Corp.............. 2,112,750
38,500 Toys 'R' Us, Inc.*.............. 1,210,344
365,600 Wal-Mart Stores, Inc. (b)....... 14,418,349
------------
17,741,443
------------
RETAIL -- DRUG STORE -- 0.2%
49,300 Walgreen Co..................... 1,546,788
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.6%
30,400 J.C. Penney, Inc................ 1,833,500
23,100 May Department Stores Co........ 1,217,081
37,600 Sears, Roebuck & Co............. 1,701,400
------------
4,751,981
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
20,000 Dillards Department Stores,
Inc............................. 705,000
20,500 Federated Department Stores,
Inc.*........................... 882,781
------------
1,587,781
------------
RETAIL -- SUPERMARKETS -- 0.1%
34,600 American Stores Co.............. 711,463
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.2%
38,300 Autozone, Inc.*................. 1,110,700
------------
RUBBER -- TIRES -- 0.2%
17,400 Goodyear Tire & Rubber Co....... 1,107,075
------------
SHOES & RELATED APPAREL -- 0.1%
14,200 Nike, Inc....................... 557,350
3,200 Reebok International Ltd.*...... 92,200
------------
649,550
------------
SOAP & CLEANING PREPARATIONS -- 1.4%
127,200 Procter & Gamble Co............. 10,152,150
------------
STEEL -- PRODUCERS -- 0.2%
36,000 USX-U.S. Steel Group, Inc....... 1,125,000
------------
TELECOMMUNICATIONS -- 0.2%
59,400 US West Media Group*............ 1,715,175
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 2.2%
16,000 Harris Corp..................... 734,000
64,200 Lucent Technologies, Inc........ 5,127,975
181,600 Motorola, Inc................... 10,362,549
------------
16,224,524
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
TEXTILE -- APPAREL -- 0.1%
20,000 VF Corp......................... $ 918,750
------------
TOBACCO -- 1.9%
286,500 Philip Morris Cos., Inc......... 12,982,031
29,000 U.S.T., Inc..................... 1,071,188
------------
14,053,219
------------
TOOLS -- HAND HELD -- 0.1%
12,500 Snap-On, Inc.................... 545,312
9,700 The Stanley Works............... 457,719
------------
1,003,031
------------
TOYS/GAME/HOBBY -- 0.4%
33,800 Hasbro, Inc..................... 1,064,700
47,600 Mattel, Inc..................... 1,773,100
------------
2,837,800
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
14,900 Federal Express Corp.*.......... 909,831
------------
TRANSPORTATION -- AIRLINE -- 0.4%
9,100 AMR Corp.*...................... 1,169,350
7,300 Delta Air Lines, Inc............ 868,700
43,900 Southwest Airlines Co........... 1,081,038
------------
3,119,088
------------
TRANSPORTATION -- RAILROAD -- 0.7%
35,000 CSX Corp........................ 1,890,001
34,500 Norfolk Southern Corp........... 1,063,031
29,500 Union Pacific Corp.............. 1,841,906
------------
4,794,938
------------
UTILITIES -- ELECTRIC POWER -- 3.0%
67,700 Baltimore Gas & Electric Co..... 2,306,031
129,200 Consolidated Edison Co. of New
York, Inc....................... 5,297,199
33,700 Detroit Edison Co............... 1,168,969
64,600 Dominion Resources, Inc......... 2,749,537
30,000 Entergy Corp.................... 898,125
92,300 First Energy Corp.*............. 2,676,700
16,800 Florida Power & Light, Inc...... 994,350
19,400 Houston Industries, Inc......... 517,738
15,400 Northern States Power Co........ 897,050
65,700 PacifiCorp...................... 1,794,431
44,600 PECO Energy Corp................ 1,081,550
35,100 Texas Utilities Co.............. 1,458,844
9,700 Union Electric Co............... 419,525
------------
22,260,049
------------
UTILITIES -- GAS DISTRIBUTION -- 0.2%
20,000 Eastern Enterprises............. 900,000
8,700 ONEOK Inc....................... 351,263
------------
1,251,263
------------
Continued
31
178
THE KENT FUNDS
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
COMMON STOCKS (CONTINUED)
UTILITIES -- TELEPHONE -- 5.3%
293,200 AT&T Corp....................... $ 17,958,499
73,000 Bell Atlantic Corp.............. 6,643,000
94,700 BellSouth Corp.................. 5,332,794
87,901 SBC Communications, Inc......... 6,438,748
49,100 U.S. West, Inc.................. 2,215,638
------------
38,588,679
------------
TOTAL COMMON STOCKS............. 716,892,238
(Cost $607,045,067) ------------
COMMERCIAL PAPER -- 2.1%
AUTOMOTIVE -- 2.1%
$15,500,886 General Motors Acceptance Corp.,
5.65%, 1/2/98................... 15,500,886
------------
TOTAL COMMERCIAL PAPER 15,500,886
(Cost $15,500,886) ------------
TOTAL INVESTMENTS -- 99.9%.................. 732,393,124
(Cost $622,545,953)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1%....................... 922,510
------------
TOTAL NET ASSETS -- 100.0%.................. $733,315,634
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $72,274.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation............... $119,844,634
Unrealized depreciation...............
(10,069,737)
------------
Net unrealized appreciation...........
$109,774,897
============
(b) Security has been deposited as initial margin on open futures contracts.
* Non-income producing security
ADR American Depositary Receipt
At December 31, 1997, the Portfolio's open futures contracts were as follows:
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ------------------ ----------- -----------
58 Standard & Poor's $13,921,880 $14,196,950
500, 3/19/98
See Notes to Financial Statements.
32
179
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 97.3%
ADVERTISING -- 0.6%
53,400 Catalina Market Corp.*.......... $ 2,469,750
66,300 True North Communications....... 1,640,925
------------
4,110,675
------------
AEROSPACE & DEFENSE -- 0.3%
35,800 Alliant Techsystems, Inc.*...... 1,995,850
------------
AEROSPACE/DEFENSE EQUIPMENT -- 1.2%
47,500 AAR Corp........................ 1,840,624
57,800 Aviall, Inc.*................... 863,388
69,100 Banner Aerospace, Inc.*......... 764,419
30,000 Curtiss-Wright Corp............. 1,089,375
48,800 Fairchild Corp., Class A*....... 1,213,900
100,000 Hexcel Corp.*................... 2,493,749
16,800 Whitehall Corp.*................ 302,400
32,600 Whittaker Corp.*................ 358,600
------------
8,926,455
------------
AGRICULTURAL OPERATIONS -- 0.0%
27,900 Orange Co., Inc................. 224,944
------------
AGRICULTURE -- 0.1%
18,600 Delta Pine & Land Co............ 567,300
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.3%
119,900 Fedders Corp.................... 749,375
20,800 National Presto Industries,
Inc............................. 822,900
69,400 Royal Appliance Manufacturing
Co.*............................ 459,775
------------
2,032,050
------------
AUDIO/VIDEO PRODUCTION -- 0.4%
48,280 Harman International Industries,
Inc............................. 2,048,883
182,369 Zenith Electronics Corp.*....... 991,631
------------
3,040,514
------------
AUTO PARTS -- 0.0%
6,900 Tower Automotive, Inc.*......... 290,231
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 1.2%
61,800 Arvin Industries, Inc........... 2,058,712
71,500 Detroit Diesel Corp.*........... 1,698,125
54,800 Smith (A.O.) Corp............... 2,315,299
21,200 Sparton Corp.*.................. 215,975
48,700 Standard Products Co............ 1,247,938
64,975 Titan International Inc......... 1,303,561
------------
8,839,610
------------
AUTO/TRUCK --
REPLACEMENT EQUIPMENT -- 0.3%
38,000 Standard Motor Products, Inc.... 857,375
41,225 Wynn's International, Inc....... 1,314,047
------------
2,171,422
------------
AUTOMOTIVE -- 0.0%
10,300 Polaris Industries, Inc......... 314,794
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BANKING -- 1.3%
57,800 BancorpSouth, Inc............... $ 2,731,049
50,900 CNB Bancshares, Inc............. 2,452,743
42,900 Commerce Bancorp, Inc........... 2,187,900
57,200 Hubco, Inc...................... 2,237,950
7,500 Irwin Financial Corp............ 314,063
------------
9,923,705
------------
BANKING & FINANCE -- 0.2%
44,400 Capmac Holdings, Inc............ 1,542,900
------------
BANKS -- NORTHEAST -- 0.4%
72,600 First Commonwealth Financial.... 2,545,538
21,800 Sterling Bancorp................ 523,200
------------
3,068,738
------------
BANKS -- SOUTHEAST -- 0.3%
5,300 Colonial Bancgroup, Inc......... 182,519
62,300 F & M National Corp............. 2,137,669
------------
2,320,188
------------
BROADCASTING/CABLE -- 0.5%
53,500 BET Holdings, Inc.*............. 2,922,438
12,000 Gray Communications Systems,
Inc............................. 315,000
35,600 Spelling Entertainment Group*... 249,200
------------
3,486,638
------------
BUILDING -- 0.9%
65,400 Calmat Co....................... 1,823,025
62,400 Centex Construction Products,
Inc............................. 1,879,800
40,800 Dravo Corp.*.................... 448,800
32,700 Lone Star Industries, Inc....... 1,737,188
15,500 Puerto Rican Cement Co.......... 777,906
------------
6,666,719
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.4%
11,200 Ameron International Corp....... 708,400
37,050 Elcor Corp...................... 889,200
11,600 International Aluminum Co....... 362,500
32,800 Nortek, Inc.*................... 871,250
44,000 Robertson-Ceco Corp.*........... 429,000
------------
3,260,350
------------
BUILDING -- HEAVY CONSTRUCTION -- 0.5%
24,600 Dycom Industries, Inc.*......... 530,438
143,000 Morrison Knudsen Corp.*......... 1,394,250
37,700 Stone & Webster, Inc............ 1,767,187
------------
3,691,875
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.2%
57,800 ABM Industries Inc.............. 1,766,513
------------
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES -- 0.5%
30,500 Cavalier Homes, Inc............. 297,375
45,100 Coachmen Industries, Inc........ 972,468
28,600 Skyline Corp.................... 786,500
Continued
33
180
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES (CONTINUED)
24,400 Thor Industries, Inc............ $ 837,225
68,900 Winnebago Industries, Inc....... 611,488
------------
3,505,056
------------
BUILDING -- RESIDENTIAL/COMMERCIAL -- 1.0%
21,000 Beazer Homes USA, Inc.*......... 418,688
19,600 Continental Home Holding Corp... 788,900
107,000 Kaufman & Broad Home Corp....... 2,400,812
23,900 M/I Schottenstein Homes,
Inc.*........................... 448,125
52,900 MDC Holdings, Inc............... 796,806
44,800 Ryland Group, Inc............... 1,058,400
84,500 Standard-Pacific Corp........... 1,330,875
------------
7,242,606
------------
BUILDING PRODUCTS -- 0.1%
33,760 Republic Gypsum Co.............. 552,820
------------
BUILDING PRODUCTS -- AIR CONDITIONING/
HEAT -- 0.2%
24,100 Mestek, Inc.*................... 451,875
41,975 Watsco, Inc..................... 1,036,258
------------
1,488,133
------------
BUILDING PRODUCTS -- DOORS & TRUSSES -- 0.1%
103,900 Premdor, Inc.*.................. 961,075
------------
BUILDING PRODUCTS -- LIGHTING/FIXTURES -- 0.1%
45,000 Thomas Industries, Inc.......... 888,750
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.3%
59,900 Hughes Supply, Inc.............. 2,092,756
------------
BUSINESS INFORMATION -- 0.6%
17,000 Duff & Phelps Credit Rating
Co.............................. 690,625
60,800 Metromail Corp.*................ 1,086,800
68,800 Primark Corp.*.................. 2,799,300
------------
4,576,725
------------
BUSINESS SERVICES -- 1.3%
72,600 ADVO, Inc.*..................... 1,415,700
52,400 Caribiner International,
Inc.*........................... 2,331,800
38,300 Fair Issac & Co., Inc........... 1,275,869
61,700 Franklin Covey Co.*............. 1,357,400
101,200 Interim Services, Inc.*......... 2,618,549
17,100 Union Corp.*.................... 537,581
------------
9,536,899
------------
CAPITAL GOODS -- 0.1%
18,600 Watts Industries Inc Class A.... 526,613
------------
CHEMICALS -- DIVERSIFIED -- 0.6%
44,222 B.F. Goodrich Co................ 1,832,470
60,700 ChemFirst, Inc.................. 1,714,775
57,413 Schawk, Inc., Class A........... 645,896
------------
4,193,141
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
CHEMICALS -- PLASTIC -- 0.7%
68,300 Geon Co......................... $ 1,596,513
76,600 Spartech Corp................... 1,158,575
34,945 Tredegar Industries, Inc........ 2,302,001
------------
5,057,089
------------
CHEMICALS -- SPECIALTY -- 1.1%
55,600 Bush Boake Allen, Inc.*......... 1,456,025
28,500 Chemed Corp..................... 1,180,969
38,600 LeaRonal, Inc................... 907,100
67,200 Lilly Industries, Inc........... 1,386,000
30,300 McWhorter Technologies, Inc.*... 780,225
137,000 NL Industries, Inc.*............ 1,866,624
18,500 Oil-Dri Corp.................... 305,250
------------
7,882,193
------------
COAL -- 0.2%
85,300 Zeigler Coal Holding Co......... 1,391,456
------------
COMMERCIAL SERVICES -- 0.4%
20,300 Affiliated Computer Services --
Class A*........................ 534,144
10,800 CDI Corp.*...................... 494,100
11,400 Norrell Corp.................... 226,575
19,800 NOVA Corp.*..................... 495,000
86,700 Paymentech, Inc.*............... 1,278,825
------------
3,028,644
------------
COMPUTER SOFTWARE -- 1.8%
60,700 Bell & Howell Co.*.............. 1,468,181
210,000 Computervision Corp.*........... 800,625
60,000 Excalibur Technologies Corp.*... 513,750
17,100 Factset Research Systems*....... 525,825
129,500 Learning Co., Inc.*............. 2,080,093
44,900 Media 100, Inc.*................ 224,500
87,000 Microprose, Inc.*............... 190,313
18,300 National Data Corp.............. 661,088
135,000 Physician Computer Network,
Inc.*........................... 540,000
68,400 Platinum Software, Inc.*........ 803,700
29,400 Project Software & Development,
Inc.*........................... 690,900
25,100 Rainbow Technologies, Inc.*..... 727,900
15,800 Software Spectrum, Inc.*........ 187,625
88,500 SPS Transaction Services,
Inc.*........................... 1,996,780
41,200 State of the Art, Inc.*......... 669,500
114,300 Vanstar Corp.*.................. 1,293,019
27,700 Vmark Software, Inc.*........... 221,600
------------
13,595,399
------------
COMPUTERS -- GRAPHICS -- 0.1%
105,366 Chyron Corp.*................... 467,562
19,200 STB Systems, Inc.*.............. 422,400
------------
889,962
------------
COMPUTERS -- INTEGRATED SYSTEMS -- 0.3%
90,200 Cerner Corp.*................... 1,905,475
------------
Continued
34
181
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
COMPUTERS -- MEMORY DEVICES -- 0.3%
68,911 Applied Magnetics Corp.*........ $ 766,635
49,300 Hutchinson Technology, Inc.*.... 1,078,438
49,400 Syquest Technology, Inc.*....... 165,181
------------
2,010,254
------------
COMPUTERS -- MICRO -- 0.2%
105,700 Data General Corp.*............. 1,843,144
------------
COMPUTERS -- OPTICAL RECOGNITION -- 0.2%
54,200 BancTec, Inc.*.................. 1,453,238
------------
COMPUTERS -- PERIPHERAL EQUIPMENT -- 0.8%
35,700 Analogic Corp................... 1,356,599
35,550 Davox Corp.*.................... 1,159,819
31,100 ENCAD, Inc.*.................... 855,250
24,300 MICROS Systems, Inc.*........... 1,093,500
69,500 Mylex Corp.*.................... 625,500
28,500 Par Technology Corp.*........... 258,281
24,200 Printronix, Inc.*............... 409,888
12,462 TransAct Technologies, Inc.*.... 138,640
12,400 Tridex Corp.*................... 60,450
------------
5,957,927
------------
COMPUTERS -- SERVICES -- 1.1%
61,800 Analysts International Corp..... 2,132,099
24,500 Broadway & Seymour, Inc.*....... 235,813
20,400 BTG, Inc.*...................... 201,450
64,950 Computer Horizons Corp.*........ 2,922,749
57,600 Computer Task Group, Inc........ 2,048,400
106,300 PSINet, Inc.*................... 544,788
------------
8,085,299
------------
CONSUMER GOODS & SERVICES -- 0.2%
102,100 Carter-Wallace Inc.............. 1,722,938
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.6%
61,200 Department 56, Inc.*............ 1,759,499
49,900 Ekco Group, Inc.*............... 386,725
21,300 Jostens, Inc.................... 491,231
60,600 Mikasa, Inc..................... 882,488
47,550 Oneida, Ltd..................... 1,268,991
------------
4,788,934
------------
CONTAINERS -- METAL & GLASS -- 0.3%
37,400 United States Can Corp.*........ 631,125
43,700 Zero Corp....................... 1,294,613
------------
1,925,738
------------
CONTAINERS -- PAPER & PLASTIC -- 0.3%
77,300 ACX Technologies, Inc.*......... 1,889,019
------------
COSMETICS & TOILETRIES -- 0.4%
143,000 Playtex Products, Inc.*......... 1,465,750
54,400 Windmere-Durable Holding,
Inc............................. 1,227,400
------------
2,693,150
------------
DATA PROCESSING & REPRODUCTION -- 0.2%
67,700 Pegasystems, Inc.*.............. 1,366,694
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DIVERSIFIED -- 1.7%
41,850 Allied Products Corp............ $ 1,004,400
29,400 Bairnco Corp.................... 292,163
45,600 Clarcor, Inc.................... 1,350,900
17,700 Craig Corp.*.................... 359,531
90,800 Gencorp, Inc.................... 2,269,999
95,700 Griffon Corp.*.................. 1,399,613
52,850 Manitowoc Co., Inc.............. 1,717,625
19,500 Nashua Corp.*................... 229,125
41,500 Standex International Corp...... 1,462,875
99,300 Triarc Cos., Inc.*.............. 2,705,924
------------
12,792,155
------------
ELECTRICAL & ELECTRONIC -- 0.4%
22,800 Ametek, Inc..................... 615,600
28,500 Berg Electronics Corp.*......... 648,375
39,000 Integrated Process Equipment*... 614,250
9,600 MDU Resources Group, Inc........ 303,600
28,500 MEMC Electronic Materials,
Inc.*........................... 434,625
------------
2,616,450
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 1.4%
60,800 Cypress Semiconductor Corp.*.... 516,800
70,600 Dallas Semi-Conductors Corp..... 2,876,949
65,800 General Semiconductor, Inc.*.... 760,813
34,100 Integrated Circuit Systems,
Inc.*........................... 971,850
84,300 PMC-Sierra, Inc.*............... 2,613,299
66,200 Unitrode Corp.*................. 1,423,300
65,900 Zilog, Inc.*.................... 1,256,219
------------
10,419,230
------------
ELECTRICAL EQUIPMENT -- 0.3%
8,800 C&D Technologies, Inc........... 424,600
39,600 United Illuminating Co.......... 1,819,125
------------
2,243,725
------------
ELECTRONIC -- MANUFACTURING &
MACHINERY -- 0.5%
55,300 Kulicke & Soffa Industries,
Inc.*........................... 1,029,963
40,800 PRI Automation, Inc.*........... 1,178,100
34,600 SpeedFam International, Inc.*... 916,900
27,600 Watkins-Johnson Co.............. 715,875
------------
3,840,838
------------
ELECTRONIC -- MILITARY -- 0.1%
34,800 ESCO Electronics Corp.*......... 587,250
36,100 United Industrial Corp.......... 392,588
------------
979,838
------------
ELECTRONIC -- MISCELLANEOUS
COMPONENTS -- 2.1%
24,100 ACT Manufacturing, Inc.*........ 340,413
67,300 BMC Industries, Inc............. 1,085,213
46,800 California Amplifier, Inc.*..... 99,450
64,900 Computer Products, Inc.*........ 1,468,362
44,256 CTS Corp........................ 1,413,425
24,100 Del Global Technologies
Corp.*.......................... 241,000
Continued
35
182
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ELECTRONIC -- MISCELLANEOUS COMPONENTS
(CONTINUED)
30,900 Hadco Corp.*.................... $ 1,398,225
34,200 Innovex, Inc.................... 784,463
56,700 Littlefuse, Inc.*............... 1,410,413
61,300 Oak Industries, Inc.*........... 1,819,843
47,500 OEA, Inc........................ 1,374,531
37,700 Park Electrochemical Corp....... 1,069,738
68,600 Photronics Corp.*............... 1,663,549
35,200 Plexus Corp.*................... 523,600
23,500 RadiSys Corp.*.................. 875,375
17,900 Reptron Electronics, Inc.*...... 185,713
------------
15,753,313
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.3%
29,400 Cable Design Technologies*...... 1,142,925
35,100 International Rectifier
Corp.*.......................... 414,619
31,400 Technitrol Inc.................. 942,000
------------
2,499,544
------------
ELECTRONIC MEASURING MACHINES -- 0.5%
58,200 Fluke Corp...................... 1,516,838
78,300 Genrad, Inc.*................... 2,363,680
32,500 Microtest, Inc.*................ 150,313
------------
4,030,831
------------
ELECTRONIC PARTS -- DISTRIBUTION -- 0.6%
29,418 Bell Industries, Inc.*.......... 404,498
74,900 Kent Electronics Corp.*......... 1,881,862
51,500 Marshall Industries*............ 1,545,000
29,200 Nu Horizons Electronics
Corp.*.......................... 182,500
23,501 Sterling Electronics Corp.*..... 490,583
------------
4,504,443
------------
ELECTRONIC PRODUCTS -- MISCELLANEOUS -- 0.7%
43,900 Aeroflex, Inc.*................. 384,125
23,500 American Precision
Industries*..................... 489,094
31,300 Electronic Retailing Systems
International, Inc.*............ 136,938
26,400 Franklin Electronic Publishers,
Inc.*........................... 330,000
31,700 Kollmorgen Corp................. 580,506
27,500 Kopin Corp.*.................... 462,344
80,600 MagneTek, Inc.*................. 1,571,700
43,100 Recoton Corp.*.................. 581,850
19,700 SL Industries, Inc.............. 232,706
25,300 Three-Five Systems, Inc.*....... 417,450
------------
5,186,713
------------
ENERGY -- ALTERNATIVE SOURCES -- 0.1%
33,600 Trigen Energy Corp.............. 663,600
------------
ENGINEERING -- RESEARCH & DEVELOPMENT
SERVICES -- 0.1%
17,800 Corrpro Companies, Inc.*........ 262,550
26,490 URS Corp.*...................... 412,251
------------
674,801
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ENTERTAINMENT -- 0.1%
19,200 Vail Resorts, Inc.*............. $ 498,000
------------
FERTILIZERS -- 0.2%
63,636 Mississippi Chemical Corp....... 1,161,357
------------
FINANCE -- 1.1%
20,000 Aames Financial Corp............ 258,750
31,000 CB Commercial Real Estate
Services Group, Inc.*........... 997,813
41,700 Everen Capital Corp............. 1,980,750
109,100 Imperial Credit Industries,
Inc.*........................... 2,236,549
39,500 National Discount Brokers
Group*.......................... 525,844
14,100 Oppenheimer Capital, L.P........ 426,525
7,500 Trans Financial, Inc............ 291,563
75,100 United Cos. Financial Corp...... 1,164,050
------------
7,881,844
------------
FINANCIAL -- CONSUMER LOANS -- 0.4%
123,500 Arcadia Financial Ltd.*......... 918,531
45,400 Student Loan Corp............... 2,241,625
------------
3,160,156
------------
FINANCIAL -- INVESTMENT BANKERS -- 1.8%
28,200 Advest Group, Inc............... 696,188
38,750 Inter-Regional Financial Group,
Inc............................. 2,673,749
17,900 Interstate/Johnson Lane, Inc.... 474,350
69,800 Jefferies Group, Inc............ 2,857,437
59,300 McDonald & Co. Investments,
Inc............................. 1,682,638
100,325 Morgan Keegan, Inc.............. 2,539,476
61,500 Piper Jaffray Cos., Inc......... 2,240,906
------------
13,164,744
------------
FINANCIAL -- INVESTMENT MANAGEMENT
COS. -- 0.5%
26,400 Atlanta Sosnoff Capital Corp.... 316,800
107,300 Insignia Financial Group,
Inc.*........................... 2,467,900
144,500 Phoenix Duff & Phelps Corp...... 1,156,000
------------
3,940,700
------------
FINANCIAL -- LEASING COMPANY -- 0.6%
36,200 DVI, Inc.*...................... 669,700
81,250 Interpool, Inc.................. 1,203,516
92,930 National Auto Credit, Inc.*..... 493,691
123,100 Rollins Truck Leasing Corp...... 2,200,412
------------
4,567,319
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 0.2%
13,600 Hallwood Group, Inc.*........... 506,600
20,200 Stewart Information Services
Corp............................ 585,800
28,500 Transmedia Network, Inc......... 147,844
------------
1,240,244
------------
FINANCIAL -- SAVINGS & LOAN -- 1.9%
83,475 Commercial Federal Corp......... 2,968,579
87,130 Downey Financial Corp........... 2,477,759
25,826 First Republic Bancorp, Inc.*... 824,818
50,650 Firstbank Puerto Rico........... 1,725,266
Continued
36
183
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FINANCIAL -- SAVINGS & LOAN (CONTINUED)
34,700 Firstfed Financial Corp.*....... $ 1,344,625
69,033 New York Bancorp, Inc........... 2,739,746
18,100 PonceBank....................... 341,638
80,273 Westcorp........................ 1,354,607
------------
13,777,038
------------
FINANCIAL -- SMALL BUSINESS INVESTMENT
CO. & COMMERCIAL -- 0.5%
61,200 PEC Israel Economic Corp.*...... 1,323,450
82,000 Safeguard Scientifics, Inc...... 2,572,750
------------
3,896,200
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.1%
12,300 Dominick's Supermarkets,
Inc.*........................... 448,950
------------
FOOD -- DIVERSIFIED -- 0.5%
54,400 Earthgrains Co.................. 2,556,800
41,500 Smucker (J.M.) Co............... 954,500
------------
3,511,300
------------
FOOD -- FLOUR & GRAIN -- 0.2%
50,600 International Multi-Foods
Corp............................ 1,432,613
------------
FOOD -- MEAT PRODUCTS -- 0.4%
85,600 Hudson Foods, Inc., Class A..... 1,760,150
77,500 Pilgrim's Pride Corp............ 1,206,094
------------
2,966,244
------------
FOOD PRODUCTS -- 90.1%
8,000 Suiza Foods Corp.*.............. 476,500
------------
FURNITURE -- 0.3%
40,387 Bush Industries, Inc............ 1,050,062
16,800 Chromcraft Revington, Inc.*..... 537,600
36,250 Rowe Furniture Corp............. 290,000
24,900 Shelby Williams Industries,
Inc............................. 410,850
------------
2,288,512
------------
GLASS PRODUCTS -- 0.2%
43,800 Libbey, Inc..................... 1,658,925
------------
HEALTH CARE -- 0.8%
47,600 Apria Healthcare Group, Inc.*... 639,625
23,700 Harborside Health*.............. 468,075
40,800 Orthodontic Centers of
America*........................ 678,300
165,400 Paracelsus Health*.............. 558,225
142,692 Paragon Health Network*......... 2,791,412
23,100 Renal Treatment Centers,
Inc.*........................... 834,488
------------
5,970,125
------------
HOTELS & LODGING -- 1.0%
9,200 Capstar Hotel Co.*.............. 315,675
84,450 Marcus Corp..................... 1,557,047
107,500 Prime Hospitality Corp.*........ 2,190,312
79,900 Red Roof Inns, Inc.*............ 1,223,469
54,000 Wyndham Hotel*.................. 2,180,250
------------
7,466,753
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
HOUSEHOLD PRODUCTS -- 0.0%
7,100 La-Z-Boy Inc.................... $ 306,188
------------
INDUSTRIAL -- AUTOMOTIVE/ROBOTICS -- 0.4%
28,400 Esterline Technologies Corp.*... 1,022,400
76,000 Gerber Scientific, Inc.......... 1,510,500
35,500 Medar, Inc.*.................... 190,813
------------
2,723,713
------------
INDUSTRIAL GOODS & SERVICES -- 0.5%
63,800 Genl Chemical................... 1,706,650
25,500 Terra Industries Inc............ 333,094
77,400 U S Rentals, Inc.*.............. 1,818,900
------------
3,858,644
------------
INSTRUMENTS -- CONTROL -- 0.2%
9,400 Flowserve Corp.................. 262,613
39,600 Pacific Scientific Co........... 950,400
------------
1,213,013
------------
INSTRUMENTS -- SCIENTIFIC -- 0.6%
33,600 Dionex Corp.*................... 1,688,400
50,300 Dynatech Corp.*................. 2,357,813
31,700 EG&G, Inc....................... 659,756
------------
4,705,969
------------
INSURANCE -- 1.7%
77,300 Allied Group, Inc............... 2,212,713
29,855 Amerus Life Holdings Inc........ 1,100,887
50,200 CNA Surety Corp.*............... 774,963
32,900 Highlands Insurance Group*...... 933,538
62,900 Lasalle Re Holdings Ltd......... 2,225,087
43,100 Mid Atlantic Medical Services,
Inc.*........................... 549,525
46,900 NAC Re Corp..................... 2,289,305
62,500 Nationwide Financial Services... 2,257,812
9,100 PXRE Corp....................... 302,006
------------
12,645,836
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.4%
54,200 Penncorp Financial Group,
Inc............................. 1,934,263
25,550 RLI Corp........................ 1,272,709
------------
3,206,972
------------
INSURANCE -- BROKERS -- 0.6%
58,500 Arthur J. Gallagher & Co........ 2,014,593
43,300 Blanch (E.W.) Holdings, Inc..... 1,491,144
43,800 Hilb, Rogal & Hamilton Co....... 845,888
------------
4,351,625
------------
INSURANCE -- LIFE -- 1.5%
111,700 American Annuity Group, Inc..... 2,457,400
45,100 American Heritage Life
Investment Corp................. 1,623,600
51,510 Delphi Financial Group*......... 2,317,950
76,800 John Alden Financial Corp....... 1,843,200
41,800 Life Re Corp.................... 2,724,837
------------
10,966,987
------------
Continued
37
184
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
INSURANCE -- MULTI-LINE -- 1.3%
46,500 Enhance Financial Services
Group, Inc...................... $ 2,766,749
62,100 FBL Financial Group Inc., Class
A............................... 2,491,763
51,600 Fidelity National Financial,
Inc............................. 1,606,047
100,000 Mutual Risk Management Ltd...... 2,993,749
------------
9,858,308
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.7%
49,600 Acceptance Insurance Cos.*...... 1,199,700
42,200 Capital Re Corp................. 2,619,037
32,600 Executive Risk, Inc............. 2,275,887
37,300 First American Financial
Corp............................ 2,755,537
77,380 Frontier Insurance Group,
Inc............................. 1,770,068
93,500 HCC Insurance Holdings, Inc..... 1,986,875
39,100 MMI Cos., Inc................... 982,388
33,400 Nymagic, Inc.................... 920,588
16,392 USF&G Corp...................... 361,643
49,050 Vesta Insurance Group, Inc...... 2,912,343
58,300 Zenith National Insurance Co.... 1,501,225
------------
19,285,291
------------
LASERS -- SYSTEMS/COMPONENTS -- 0.4%
27,900 Coherent, Inc.*................. 979,988
12,700 Cyberoptics Corp.*.............. 288,925
28,600 Electro Scientific Industries,
Inc.*........................... 1,086,800
37,800 VISX, Inc.*..................... 836,325
------------
3,192,038
------------
LEISURE -- 0.0%
20,900 Coleman*........................ 335,706
------------
LEISURE & RECREATION PRODUCTS -- 0.5%
25,200 Coastcast Corp.*................ 349,650
38,000 Huffy Corp...................... 513,000
47,530 K2, Inc......................... 1,081,308
76,400 Sturm, Ruger & Co., Inc......... 1,408,625
------------
3,352,583
------------
LEISURE & RECREATION SERVICES -- 0.3%
32,100 Carmike Cinemas, Inc.*.......... 920,869
314,300 Cineplex Odeon Corp.*........... 392,875
22,300 GC Cos., Inc.*.................. 1,056,462
------------
2,370,206
------------
LEISURE & RECREATION/GAMING -- 0.9%
129,900 Aztar Corp.*.................... 811,875
173,400 Boyd Gaming Corp.*.............. 1,148,775
121,550 Grand Casinos, Inc.*............ 1,656,119
27,900 Harveys Casino Resorts*......... 578,925
25,300 Jackpot Enterprises, Inc........ 286,206
26,400 Midway Games, Inc.*............. 480,150
46,200 Showboat, Inc................... 1,357,125
68,700 Trump Hotels & Casino Resorts,
Inc.*........................... 459,431
------------
6,778,606
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
LINEN SUPPLY & RELATED -- 0.3%
26,000 Angelica Corp................... $ 588,250
58,200 Unifirst Corp................... 1,633,238
------------
2,221,488
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.5%
37,700 Applied Power, Inc.............. 2,601,300
23,600 Brown & Sharpe Manufacturing
Co.*............................ 240,425
30,400 Gleason Corp.................... 818,900
------------
3,660,625
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.4%
14,600 Christiana Cos., Inc.*.......... 578,525
55,400 CMI Corp., Class A.............. 287,388
44,050 Commercial Intertech Corp....... 914,038
40,600 Terex Corp.*.................... 954,099
------------
2,734,050
------------
MACHINERY -- ELECTRICAL -- 0.2%
40,157 Kuhlman Corp.................... 1,571,143
------------
MACHINERY -- FARM -- 0.1%
27,400 Alamo Group Inc................. 594,238
------------
MACHINERY -- GENERAL INDUSTRIAL -- 1.3%
40,500 Chart Industries, Inc........... 923,906
64,400 Global Industrial Technologies,
Inc.*........................... 1,090,775
49,325 Graco, Inc...................... 1,840,438
65,025 Idex Corp....................... 2,267,746
23,700 Katy Industries, Inc............ 482,888
101,266 Paxar Corp.*.................... 1,500,003
29,800 Scotsman Industries, Inc........ 728,238
10,100 Sequa Corp., Class B*........... 747,400
7,400 Twin Disc, Inc.................. 242,350
------------
9,823,744
------------
MACHINERY -- MATERIAL HANDLING -- 0.4%
62,600 Interlake Corp.*................ 293,438
23,700 Nacco Industries, Inc........... 2,540,343
------------
2,833,781
------------
MANUFACTURING -- CAPITAL GOODS -- 0.1%
17,200 Imation Corp.*.................. 275,200
21,300 Roper Industries, Inc........... 601,725
------------
876,925
------------
MATERIALS -- 0.1%
17,600 Longview Fibre Co............... 267,300
7,500 OM Group, Inc................... 274,688
------------
541,988
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
41,600 Diagnostic Products Corp........ 1,154,400
52,889 Molecular Biosystems, Inc.*..... 449,557
------------
1,603,957
------------
Continued
38
185
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL -- BIOTECHNOLOGY -- 0.1%
29,800 Cryolife, Inc.*................. $ 406,025
------------
MEDICAL -- DRUGS -- 0.3%
65,400 Alpharma, Inc................... 1,422,450
42,060 Vitalink Pharmacy Services,
Inc.*........................... 1,014,698
------------
2,437,148
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.5%
41,200 PHP Healthcare Corp.*........... 620,575
53,500 Sierra Health Services, Inc.*... 1,798,938
41,400 United Wisconsin Services,
Inc............................. 1,066,050
------------
3,485,563
------------
MEDICAL -- HOSPITAL -- 0.4%
45,200 Healthplan Services Corp........ 949,200
46,900 Pediatrix Medical Group,
Inc.*........................... 2,004,975
------------
2,954,175
------------
MEDICAL -- HOSPITAL MANAGEMENT &
SERVICES -- 0.0%
82,100 Physicians Resource Group,
Inc.*........................... 359,188
------------
MEDICAL -- HOSPITAL SERVICES -- 0.3%
26,700 Magellan Health Services,
Inc.*........................... 574,050
89,400 Quest Diagnostics, Inc.*........ 1,508,625
------------
2,082,675
------------
MEDICAL -- NURSING HOMES -- 0.2%
58,100 Integrated Health Services,
Inc............................. 1,811,994
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 0.6%
126,900 Coram Healthcare Corp.*......... 428,288
78,700 Genesis Health Ventures,
Inc.*........................... 2,075,713
165,100 NovaCare, Inc.*................. 2,156,618
------------
4,660,619
------------
MEDICAL -- WHOLESALE DRUG -- 0.1%
35,300 Bindley Western Industries,
Inc............................. 1,089,888
------------
MEDICAL EQUIPMENT & SUPPLIES -- 0.0%
27,700 Oakley, Inc.*................... 251,031
------------
MEDICAL INSTRUMENTS -- 0.5%
84,700 Acuson Corp.*................... 1,402,844
46,560 Elscint, Ltd.*.................. 372,480
72,690 Graham-Field Health Products,
Inc.*........................... 1,213,014
38,800 OEC Medical Systems, Inc.*...... 773,575
------------
3,761,913
------------
MEDICAL PRODUCTS -- 0.5%
45,800 BEC Group, Inc.*................ 271,938
83,200 Haemonetics Corp.*.............. 1,164,800
24,800 Maxxim Medical, Inc.*........... 539,400
96,200 Owens & Minor, Inc.............. 1,394,900
------------
3,371,038
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL SUPPLIES -- 0.1%
22,700 Sola International, Inc.*....... $ 737,750
------------
MEDICAL/DENTAL SUPPLIES -- 0.8%
82,000 Ballard Medical Products........ 1,988,500
35,500 Cooper Cos, Inc.*............... 1,451,063
57,100 Sunrise Medical, Inc.*.......... 881,481
50,000 West Co., Inc................... 1,487,500
------------
5,808,544
------------
METAL -- GOLD -- 0.2%
107,800 Agnico-Eagle Mines, Ltd......... 586,163
73,800 Glamis Gold, Ltd................ 272,138
148,100 Hecla Mining Co.*............... 731,243
------------
1,589,544
------------
METAL -- IRON -- 0.4%
34,000 Cleveland Cliffs, Inc........... 1,557,625
125,300 National Steel Corp.*........... 1,448,781
------------
3,006,406
------------
METAL -- MISCELLANEOUS -- 0.3%
47,200 Brush Wellman, Inc.............. 1,156,400
21,400 Tremont Corp.*.................. 1,118,150
1 Zemex Corp.*.................... 1
------------
2,274,551
------------
METAL -- NON-FERROUS -- 0.2%
131,400 Kaiser Aluminum Corp.*.......... 1,157,963
------------
METAL -- PROCESSING & FABRICATION -- 0.7%
25,000 Amcast Industrial Corp.......... 573,438
26,300 Ampco-Pittsburgh Corp........... 514,494
29,200 Chase Industries, Inc.*......... 744,600
44,533 Commercial Metals Co............ 1,405,572
24,600 Huntco, Inc., Class A........... 415,125
6,000 Mueller Industries, Inc.*....... 354,000
41,100 Wolverine Tube, Inc.*........... 1,274,100
------------
5,281,329
------------
METAL -- SILVER -- 0.1%
63,400 Coeur d'Alene Mines Corp.*...... 570,600
516,672 Sunshine Mining & Refining
Co.*............................ 516,672
------------
1,087,272
------------
METAL PRODUCTS -- DISTRIBUTION -- 0.4%
53,925 Applied Industrial Technology,
Inc............................. 1,442,493
45,450 Reliance Steel & Aluminum Co.... 1,352,138
------------
2,794,631
------------
METAL PRODUCTS -- FASTENERS -- 0.3%
34,500 SPS Technologies, Inc.*......... 1,505,062
13,800 TransTechnology Corp............ 390,713
------------
1,895,775
------------
Continued
39
186
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OFFICE AUTOMATION & EQUIPMENT -- 0.3%
17,000 Daisytek International Corp.*... $ 590,750
34,300 In Focus Systems, Inc.*......... 1,041,863
9,200 Standard Register Co............ 319,700
------------
1,952,313
------------
OFFICE SUPPLIES & FORMS -- 0.7%
46,600 American Business Products,
Inc............................. 1,007,725
29,700 BT Office Products
International*.................. 230,175
31,500 CSS Industries, Inc.*........... 1,004,063
46,700 Ennis Business Forms, Inc....... 431,975
43,400 Hunt Manufacturing Corp......... 1,028,038
42,500 New England Business Service,
Inc............................. 1,434,374
------------
5,136,350
------------
OIL & GAS -- 0.1%
9,600 Barrett Resources Corp.*........ 290,400
5,400 Seacor Holdings, Inc.*.......... 325,350
------------
615,750
------------
OIL & GAS -- DRILLING -- 0.4%
180,200 Parker Drilling Co.*............ 2,196,188
89,020 Zapata Corp..................... 600,885
------------
2,797,073
------------
OIL -- PRODUCTION/PIPELINE -- 0.5%
88,400 Aquila Gas Pipeline Corp........ 1,138,150
101,200 Kaneb Services, Inc.*........... 524,975
7,900 Northern Border Partners,
L.P............................. 268,600
80,000 Western Gas Resources, Inc...... 1,770,000
------------
3,701,725
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 2.5%
66,000 Berry Petroleum Co.............. 1,150,875
68,700 Cabot Oil & Gas Corp............ 1,335,356
75,700 Cross Timers Oil Co............. 1,887,769
53,000 HS Resources, Inc.*............. 732,063
71,900 KCS Energy, Inc................. 1,491,925
83,600 Louis Dreyfus Natural Gas*...... 1,562,275
97,700 Newfield Exploration Co.*....... 2,277,630
32,000 Nuevo Energy Co.*............... 1,304,000
86,000 Snyder Oil Corp................. 1,569,500
36,000 Stone Energy Corp.*............. 1,206,000
50,036 Swift Energy Co.*............... 1,053,883
103,800 Vintage Petroleum, Inc.......... 1,972,199
77,400 Wainoco Oil Corp.*.............. 614,363
24,700 Wiser Oil Co.................... 348,888
------------
18,506,726
------------
OIL -- U.S. INTEGRATED -- 0.1%
13,600 Howell Corp..................... 235,450
26,100 USX-Delhi Group................. 535,050
------------
770,500
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.1%
51,300 Daniel Industries, Inc.......... 987,525
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OIL REFINING -- 0.7%
38,100 Getty Realty Corp............... $ 842,963
33,500 Giant Industries, Inc........... 636,500
107,900 Quaker State Corp............... 1,537,575
80,600 Tesoro Petroleum Corp.*......... 1,249,300
21,600 Tokheim Corp.*.................. 446,850
37,050 World Fuel Services Corp........ 778,050
------------
5,491,238
------------
OIL-FIELD SERVICES -- 0.6%
72,600 Oceaneering International,
Inc.*........................... 1,433,850
87,600 RPC Energy Services, Inc........ 1,034,775
64,600 Seitel, Inc.*................... 1,106,275
73,800 Unit Corp.*..................... 710,325
------------
4,285,225
------------
PAPER & RELATED PRODUCTS -- 0.2%
6,500 Buckeye Technologies, Inc.*..... 300,625
8,000 Chesapeake Corp................. 275,000
35,100 Paragon Trade Brands, Inc.*..... 451,913
38,700 Pope & Talbot, Inc.............. 582,918
------------
1,610,456
------------
PHOTOGRAPHY -- 0.1%
39,900 CPI Corp........................ 902,738
------------
POLLUTION CONTROL -- 0.9%
114,700 Calgon Carbon Corp.............. 1,233,025
61,300 Dames & Moore, Inc.............. 812,225
34,700 Imco Recycling, Inc............. 557,369
171,400 Laidlaw Environmental Services,
Inc.*........................... 835,575
51,100 Lydall, Inc.*................... 996,450
76,600 OHM Corp.*...................... 584,075
41,200 Osmonics, Inc.*................. 651,475
35,500 Zurn Industries, Inc............ 1,116,031
------------
6,786,225
------------
PRECIOUS METALS -- JEWELRY -- 0.2%
38,100 Handy & Harman.................. 1,314,450
------------
PRINTING & PUBLISHING -- 0.0%
17,100 Journal Register Co.*........... 359,100
------------
PRINTING -- COMMERCIAL -- 0.0%
51,800 American Banknote Corp.*........ 259,000
------------
PROTECTION -- SAFETY -- 0.5%
63,200 Borg-Warner Security Corp.*..... 1,113,900
41,725 Wackenhut Corp., Class A........ 967,498
64,100 Wackenhut Corrections Corp.*.... 1,722,688
------------
3,804,086
------------
PUBLISHING -- BOOKS -- 0.4%
46,200 John Wiley & Sons, Inc.......... 2,506,350
46,300 Thomas Nelson, Inc.............. 535,344
------------
3,041,694
------------
Continued
40
187
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PUBLISHING -- PERIODICALS -- 0.2%
117,400 American Media, Inc.*........... $ 909,850
57,100 Playboy Enterprises, Inc.*...... 895,756
------------
1,805,606
------------
REAL ESTATE -- 0.3%
65,100 Grubb & Ellis Co.*.............. 891,056
58,300 Webb -- (Del) Corp.............. 1,515,800
------------
2,406,856
------------
RESTAURANTS -- 0.9%
30,600 Cooker Restaurant Corp.......... 292,613
116,400 Foodmaker, Inc.*................ 1,753,274
69,700 Luby's Cafeteria, Inc........... 1,224,106
19,000 Morton's Restaurant Group,
Inc.*........................... 384,750
31,000 Piccadilly Cafeterias, Inc...... 406,875
60,200 Sbarro, Inc..................... 1,584,013
78,000 Sizzler International, Inc.*.... 209,625
73,900 TCBY Enterprises, Inc........... 558,869
33,775 UNO Restaurant Corp.*........... 232,203
------------
6,646,328
------------
RETAIL -- 0.2%
10,100 Brylane, Inc.*.................. 497,425
17,700 Footstar, Inc.*................. 475,688
23,600 Heilig Meyers Co................ 283,200
6,800 MSC Industrial Direct Co. --
Class A*........................ 288,150
13,400 Talbots Inc..................... 242,875
------------
1,787,338
------------
RETAIL -- APPAREL/SHOES -- 0.8%
75,700 Ann Taylor Stores Corp.*........ 1,012,487
132,480... Burlington Coat Factory
Warehouse Corp.................. 2,177,639
147,000 CML Group, Inc.*................ 486,938
40,000 Cole (Kenneth) Productions,
Inc.*........................... 642,500
28,300 Gottschalks, Inc.*.............. 237,013
97,700 Hartmarx Corp.*................. 744,963
81,800 Starter Corp.*.................. 250,513
52,200 Syms Corp.*..................... 619,875
------------
6,171,928
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
98,900 Handleman Co.*.................. 686,119
27,500 Rex Stores Corp.*............... 281,875
------------
967,994
------------
RETAIL -- DISCOUNT -- 1.0%
16,100 Alexander's, Inc.*.............. 1,462,081
66,800 Mac Frugal's Bargains --
Close-Outs, Inc.*............... 2,747,150
87,000 Shopko Stores, Inc.*............ 1,892,250
62,600 Smart & Final, Inc.............. 1,126,800
------------
7,228,281
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
RETAIL -- GENERAL MERCHANDISE -- 1.7%
83,600 AmeriCredit Corp.*.............. $ 2,314,674
85,900 Cash America Intl., Inc......... 1,111,331
35,200 Cole National Corp.*............ 1,053,800
54,700 Fabri-Centers of America,
Inc.*........................... 1,220,494
126,800 Furniture Brands International,
Inc.*........................... 2,599,399
63,500 Hancock Fabrics, Inc............ 920,750
67,500 Jenny Craig, Inc.*.............. 510,469
64,350 Russ Berrie & Co., Inc.......... 1,689,188
95,550 The Sports Authority, Inc.*..... 1,409,363
------------
12,829,468
------------
RETAIL -- HOME FURNISHINGS -- 0.1%
111,500 Bombay Co., Inc.*............... 515,688
------------
RETAIL -- JEWELRY -- 0.4%
118,800 Claire's Stores, Inc............ 2,309,175
20,300 Zale Corp.*..................... 466,900
------------
2,776,075
------------
RETAIL -- MAIL ORDER -- 0.2%
72,800 National Media Corp.*........... 236,600
52,900 Stanhome Inc.................... 1,358,869
------------
1,595,469
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.3%
48,900 Carson Pirie Scott & Co.*....... 2,451,113
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.1%
93,500 Value City Department Stores,
Inc.*........................... 829,813
------------
RETAIL -- SPECIAL LINE -- 0.2%
8,500 Budget Group, Inc. -- Class
A*.............................. 293,781
15,400 Global Directmail, Inc.*........ 266,613
8,000 Linens 'n Things, Inc.*......... 349,000
26,900 Ruddick Corp.................... 469,069
------------
1,378,463
------------
RETAIL -- SUPERMARKETS -- 0.0%
32,100 Penn Traffic Co.*............... 264,825
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.1%
48,900 Discount Auto Parts, Inc.*...... 935,213
------------
RUBBER & PLASTICS -- 0.2%
51,800 Furon Co........................ 1,081,325
36,100 Lamson & Sessions Co.*.......... 209,831
------------
1,291,156
------------
RUBBER -- TIRES -- 0.0%
25,400 China Tire Holdings, Ltd........ 206,375
------------
SCHOOLS -- 0.3%
27,100 Berlitz International, Inc.*.... 704,600
77,200 ITT Educational Services,
Inc.*........................... 1,722,525
------------
2,427,125
------------
Continued
41
188
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SHOES & RELATED APPAREL -- 0.5%
25,175 Barry(R.G.) Corp.*.............. $ 292,659
49,800 Brown Group, Inc................ 662,963
45,300 Converse, Inc.*................. 271,800
72,500 Genesco, Inc.*.................. 924,375
29,900 Timberland Co., Class A*........ 1,736,069
------------
3,887,866
------------
SOAP & CLEANING PREPARATIONS -- 0.4%
54,800 Church & Dwight Co., Inc........ 1,537,825
21,600 NCH Corp........................ 1,414,800
------------
2,952,625
------------
STEEL -- PIPES & TUBES -- 0.2%
40,000 NS Group, Inc.*................. 685,000
40,000 Quanex Corp..................... 1,125,000
------------
1,810,000
------------
STEEL -- PRODUCERS -- 0.9%
308,600 Armco, Inc.*.................... 1,523,713
82,900 Birmingham Steel Corp........... 1,305,675
6,600 Carpenter Technology............ 317,213
83,100 Chaparral Steel Co.............. 1,282,856
16,600 Inland Steel Industries, Inc.... 284,275
63,200 Rouge Industries Inc............ 766,300
116,700 Weirton Steel Corp.*............ 313,631
72,600 WHX Corp.*...................... 862,125
------------
6,655,788
------------
STEEL -- SPECIALTY -- 0.8%
112,000 J & L Specialty Steel, Inc...... 1,127,000
42,800 Lukens, Inc..................... 1,222,475
45,300 Material Sciences Corp.*........ 552,094
76,100 Oregon Steel Mills, Inc......... 1,621,881
58,630 RMI Titanium Co.*............... 1,172,600
------------
5,696,050
------------
TECHNOLOGY -- 0.1%
41,300 DBT Online, Inc.*............... 1,029,919
------------
TELECOMMUNICATIONS -- 0.1%
14,100 Boston Technology, Inc.*........ 354,263
12,800 Mastec, Inc.*................... 292,800
------------
647,063
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 1.3%
70,300 American Mobile Satelllite
Corp.*.......................... 492,100
37,200 C-Cor Electronics, Inc.......... 571,950
27,600 Centigram Communications
Corp.*.......................... 467,475
42,000 CommNet Cellular, Inc.*......... 1,493,625
68,100 General DataComm Industries,
Inc.*........................... 319,219
57,300 InterVoice, Inc.*............... 429,750
69,400 Network Equipment Technologies,
Inc.*........................... 1,014,975
57,800 Plantronics, Inc.*.............. 2,311,999
24,000 Superior Telecom Inc.*.......... 829,500
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- EQUIPMENT (CONTINUED)
20,300 Tech-Sym Corp.*................. $ 516,381
35,200 Telco Systems, Inc.*............ 341,000
100,500 Telular Corp.*.................. 244,969
45,900 Titan Corp.*.................... 286,875
------------
9,319,818
------------
TELECOMMUNICATIONS -- SERVICES AND
EQUIPMENT -- 0.4%
75,800 Allen Telecom Inc.*............. 1,397,563
25,800 Federal Signal Corp............. 557,925
36,100 Smartalk Teleservices, Inc.*.... 821,275
------------
2,776,763
------------
TEXTILE -- APPAREL -- 0.8%
63,000 Authentic Fitness Corp.......... 1,161,563
21,700 Burlington Industries, Inc.*.... 299,731
26,500 Chic by H.I.S., Inc.*........... 193,781
66,500 Delta Woodside Industries,
Inc............................. 324,188
57,650 Kellwood Co..................... 1,729,499
24,700 Oxford Industries, Inc.......... 802,750
75,900 Phillips-Van Heusen Corp........ 1,081,575
81,000 Tultex Corp.*................... 329,063
39,200 Worldtex, Inc.*................. 311,150
------------
6,233,300
------------
TEXTILE -- HOME FURNISHINGS -- 0.4%
29,800 Cort Business Services Corp.*... 1,186,413
21,700 Crown Crafts, Inc............... 339,063
47,700 O' Sullivan Industries*......... 477,000
37,013 Pillowtex Corp.................. 1,290,838
------------
3,293,314
------------
TEXTILE -- PRODUCTS -- 0.6%
75,300 Cone Mills Corp.*............... 583,575
38,500 Dyersburg Corp.................. 437,938
33,700 Galey & Lord, Inc.*............. 602,388
61,550 Guilford Mills, Inc............. 1,684,930
90,800 Polymer Group, Inc.*............ 862,600
------------
4,171,431
------------
TOBACCO -- 0.6%
50,300 Brooke Group, Ltd............... 433,838
10,800 Consolidated Cigar Holdings
Inc.*........................... 297,675
63,446 General Cigar Holdings*......... 1,352,193
45,100 Schweitzer-Mauduit
International................... 1,679,974
25,740 Standard Commercial Corp........ 426,319
------------
4,189,999
------------
TOOLS -- HAND HELD -- 0.3%
20,000 Starrett (L.S.) Co.............. 731,250
35,200 Toro Co......................... 1,500,400
------------
2,231,650
------------
TOYS/GAME/HOBBY -- 0.1%
49,700 Galoob (Lewis) Toys, Inc.*...... 506,319
------------
Continued
42
189
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- 0.2%
5,000 Florida East Coast Industries... $ 480,624
19,800 Overseas Shipholding Group...... 431,888
5,900 Xtra Corp....................... 345,888
------------
1,258,400
------------
TRANSPORTATION -- AIR FREIGHT -- 0.2%
58,900 Pittston Burlington Group....... 1,546,125
------------
TRANSPORTATION -- AIRLINE -- 0.3%
44,000 Alaska Airgroup, Inc.*.......... 1,705,000
17,300 America West Holding Corp. --
Class B*........................ 322,213
------------
2,027,213
------------
TRANSPORTATION -- EQUIPMENT & LEASING -- 0.5%
43,000 Greenbrier Cos., Inc............ 744,438
102,300 Westinghouse Air Brake Co....... 2,621,437
------------
3,365,875
------------
TRANSPORTATION -- SHIPPING -- 0.6%
20,250 International Shipholding
Corp............................ 349,313
35,500 Maritrans, Inc.................. 346,125
129,900 OMI Corp.*...................... 1,193,456
40,700 Sea Containers, Ltd............. 1,289,681
47,200 Teekay Shipping Corp............ 1,584,150
------------
4,762,725
------------
UTILITIES -- ELECTRIC POWER -- 2.5%
15,000 Baldor Electric Co.............. 325,313
40,600 Black Hills Corp................ 1,431,150
49,400 Central Hudson Gas & Electric
Corp............................ 2,167,424
91,200 Central Maine Power Co.......... 1,390,800
31,500 Central Vermont Public Service
Corp............................ 480,375
38,200 CILCORP, Inc.................... 1,867,024
60,500 Commonwealth Energy Systems
Co.............................. 2,011,624
46,100 Empire District Electric Co..... 904,713
13,100 Green Mountain Power Corp....... 239,894
27,100 Interstate Power Co............. 1,014,556
50,100 Northwestern Public Service
Co.............................. 1,152,300
38,400 Orange & Rockland Utilities..... 1,788,000
14,000 Public Service New Mexico....... 331,625
21,100 St. Joseph Light & Power Co..... 375,844
36,600 TNP Enterprises, Inc............ 1,216,950
90,320 Tucson Electric Power Co.*...... 1,637,050
10,300 WPL Holdings, Inc............... 341,188
------------
18,675,830
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UTILITIES -- GAS DISTRIBUTION -- 3.0%
45,150 Atmos Energy Corp............... $ 1,365,787
37,800 Bay State Gas Co................ 1,403,324
25,950 Cascade Natural Gas Corp........ 486,563
10,100 Chesapeake Utilities Corp....... 207,050
25,400 Connecticut Energy Corp......... 765,175
29,900 Connecticut Natural Gas Corp.... 779,269
6,800 Eastern Enterprises............. 306,000
31,600 Energen Corp.................... 1,256,100
8,700 Energynorth, Inc................ 250,669
63,500 Indiana Energy, Inc............. 2,091,530
49,400 Laclede Gas Co.................. 1,386,287
50,800 New Jersey Resources Corp....... 2,035,174
18,500 North Carolina Natural Gas...... 642,875
31,200 NUI Corp........................ 895,050
29,000 Pennsylvania Enterprises,
Inc............................. 732,250
53,900 Public Service Co. of North
Carolina........................ 1,246,438
30,200 South Jersey Industries, Inc.... 915,438
50,405 Southern Union Co.*............. 1,203,425
74,900 Southwest Gas Corp.............. 1,399,693
69,500 Southwestern Energy Co.......... 894,813
11,000 UGI Corp........................ 322,438
6,200 Wicor Inc....................... 287,913
29,400 Yankee Energy System, Inc....... 784,613
------------
21,657,874
------------
UTILITIES -- WATER SUPPLY -- 0.9%
19,600 Aquarion Co..................... 677,425
17,700 California Water Service Co..... 1,045,406
21,700 E'Town Corp..................... 872,069
54,450 Philadelphia Suburban Corp...... 1,602,872
22,500 Southern California Water....... 565,313
96,600 United Water Resources, Inc..... 1,889,737
------------
6,652,822
------------
WHOLESALE DISTRIBUTION -- 0.3%
69,437 JP Foodservice, Inc.*........... 2,564,825
------------
WIRE & CABLE PRODUCTS -- 0.4%
32,600 Anixter International, Inc.*.... 537,900
56,900 Barnes Group, Inc............... 1,294,475
14,100 Belden, Inc..................... 497,025
13,200 General Cable Corp.............. 477,675
24,680 Keystone Consolidated
Industries*..................... 296,160
------------
3,103,235
------------
TOTAL COMMON STOCKS............. 722,778,366
------------
(Cost $534,978,452)
Continued
43
190
THE KENT FUNDS
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
COMMERCIAL PAPER -- 2.5%
AUTOMOTIVE -- 2.5%
$18,251,221 General Motors Acceptance Corp.,
5.65%, 1/2/98................... $ 18,251,221
------------
TOTAL COMMERCIAL PAPER.......... 18,251,221
(Cost $18,251,221) ------------
U.S. GOVERNMENT OBLIGATIONS -- 0.1%
1,000,000 U.S. Treasury Bills,
5.05** 3/26/98 (b).............. 988,100
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS..................... 988,100
(Cost $987,890) ------------
TOTAL INVESTMENTS -- 99.9%.................. 742,017,687
(Cost $554,217,563) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1%....................... 764,001
------------
TOTAL NET ASSETS -- 100.0%.................. $742,781,688
============
- ---------------
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax of $22,800. Cost for
federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation............... $222,533,317
Unrealized depreciation...............
(34,755,993)
------------
Net unrealized appreciation...........
$187,777,324
============
(b) Security has been deposited as initial margin on open futures contracts.
* Non-income producing security
** Annualized yield at time of purchase
At December 31, 1997, the Portfolio's open futures contracts were as follows:
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ------------------ ----------- -----------
84 Standard & $20,291,015 $20,561,100
Poor's............
500, 3/19/98
See Notes to Financial Statements.
44
191
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 97.3%
AUSTRALIA -- 2.7%
BANKING -- 0.7%
142,787 National Australia Bank Ltd...... $ 1,993,744
191,512 Westpac Banking Corp., Ltd....... 1,224,867
------------
3,218,611
------------
BEVERAGES & TOBACCO -- 0.1%
85,167 Coca-Cola Amatil Ltd............. 636,271
------------
BREWERY -- 0.1%
178,336 Fosters Brewing Group Ltd........ 339,297
------------
BROADCASTING & PUBLISHING -- 0.2%
197,062 News Corp., Ltd.................. 1,087,539
------------
BUILDING PRODUCTS -- 0.1%
105,708 Boral Ltd........................ 267,238
34,780 Hardie (James) Industries Ltd.... 101,365
80,788 Pioneer International Ltd........ 220,556
------------
589,159
------------
CHEMICALS -- 0.0%
22,970 ICI Australia Ltd................ 160,890
------------
CLOSED END FUNDS -- 0.0%
28,285 Stockland Trust Group............ 65,554
------------
DIVERSIFIED -- 0.1%
16,044 Smith (Howard Ltd.).............. 133,181
53,703 Southcorp Holdings Ltd........... 177,754
------------
310,935
------------
ENERGY -- 0.5%
207,143 Broken Hill Proprietary Co.
Ltd.............................. 1,923,286
------------
ENGINEERING -- 0.0%
22,400 Leighton Holdings Ltd............ 78,230
------------
ENTERTAINMENT -- 0.0%
62,916 Crown Ltd. *..................... 27,876
40,300 Sydney Harbour Casino Holdings
Ltd. *........................... 38,206
26,100 TABCORP Holdings Ltd............. 122,442
------------
188,524
------------
FOOD PRODUCTS -- 0.0%
39,301 Burns, Philp & Co., Ltd.......... 6,146
108,833 Goodman Fielder Ltd.............. 173,025
------------
179,171
------------
GAS UTILITY -- 0.0%
25,100 Australian Gas Light Co., Ltd.... 174,991
------------
INDUSTRIAL GOODS & SERVICES -- 0.1%
91,818 CSR Ltd. 311,093
88,700 Pacific Dunlop Ltd............... 187,830
------------
498,923
------------
INSURANCE -- 0.1%
53,074 GIO Australia Holdings Ltd....... 135,662
32,135 QBE Insurance Group Ltd.......... 144,620
------------
280,282
------------
MANUFACTURING-CAPITAL GOODS -- 0.0%
25,575 Email Ltd........................ 60,390
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
AUSTRALIA (CONTINUED)
METALS -- 0.0%
142,760 M.I.M. Holdings Ltd.............. $ 87,436
15,796 RGC Ltd.......................... 24,084
------------
111,520
------------
METALS & MINING -- 0.2%
68,058 Australian National Industries
Ltd.............................. 62,525
16,145 Great Central Mines Ltd.......... 17,357
17,377 Newcrest Mining Ltd. *........... 18,908
143,578 Normandy Mining Ltd.............. 139,390
61,905 North Ltd........................ 163,035
11,700 Plutonic Resources Ltd........... 32,628
48,055 QCT Resources Ltd................ 38,826
29,836 Rio Tinto Ltd.................... 348,037
103,907 WMC Ltd.......................... 362,208
------------
1,182,914
------------
OIL & GAS -- 0.0%
52,241 Santos Ltd....................... 215,123
------------
PACKAGING -- 0.1%
58,093 Amcor Ltd........................ 255,497
------------
PHARMACEUTICALS -- 0.0%
10,369 Faulding (F.H.) & Co., Ltd....... 51,887
------------
REAL ESTATE -- 0.2%
105,816 General Property Trust Units..... 187,534
24,339 Lend Lease Corp., Ltd............ 475,754
101,055 Westfield Trust Units............ 192,923
------------
856,211
------------
REAL ESTATE INVESTMENT TRUST -- 0.0%
14,411 Schroders Property Fund.......... 22,272
------------
RETAIL STORES -- 0.1%
115,528 Coles Myer Ltd................... 554,771
------------
SERVICES -- 0.1%
20,119 Brambles Industries Ltd.......... 399,165
------------
TOBACCO -- 0.0%
8,400 Rothmans Holdings Ltd............ 44,333
------------
13,485,746
------------
AUSTRIA -- 1.6%
AIRLINES -- 0.0%
9,000 Austrian Airlines *.............. 191,371
------------
BANKING -- 0.2%
23,650 Bank Austria AG.................. 1,196,441
100 Bank Austria AG, Participating
Certificates..................... 2,688
------------
1,199,129
------------
BEVERAGES & TOBACCO -- 0.0%
3,100 Oesterreichische
Brau-Beteiligungs AG............. 154,622
------------
BUILDING PRODUCTS -- 0.1%
3,433 Wienerberger Baustoffindustrie
AG............................... 658,061
------------
CHEMICALS -- 0.0%
600 Lenzing AG *..................... 35,523
------------
Continued
45
192
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
AUSTRIA (CONTINUED)
CONSTRUCTION -- 0.0%
1,455 Bau Holding AG................... $ 90,860
------------
ELECTRIC UTILITY -- 0.4%
12,669 Oesterreichische
Elektrizitaetswirtschafts AG,
Class A.......................... 1,341,923
------------
ELECTRICAL EQUIPMENT -- 0.0%
1,000 Austria Mikro Systeme
International AG................. 50,590
------------
ENGINEERING -- 0.2%
6,100 VA Technologie AG................ 924,824
------------
INSURANCE -- 0.1%
2,780 EA-Generali AG................... 729,344
------------
MANUFACTURING-CONSUMER GOODS -- 0.0%
100 Steyr-Daimler-Puch AG............ 2,680
------------
METALS & MINING -- 0.0%
4,775 Radex-Heraklith
Industriebeteiligungs AG......... 164,189
------------
OIL & GAS -- 0.4%
11,140 OMV AG........................... 1,541,003
------------
PAPER PRODUCTS -- 0.0%
4,100 Mayr-Melnhof Karton AG........... 220,413
------------
STEEL -- 0.1%
4,400 Boehler-Uddeholm AG.............. 257,548
------------
TRANSPORTATION -- 0.1%
7,400 Flughafen Wien AG................ 293,640
------------
7,855,720
------------
BELGIUM -- 1.3%
BANKING -- 0.2%
1,583 Generale de Banque SA............ 688,959
1,252 Kredietbank NV................... 525,470
------------
1,214,429
------------
BUILDING PRODUCTS -- 0.0%
1,925 Cimenteries CBR Cementbedrijven.. 173,017
------------
CHEMICALS -- 0.1%
8,510 Solvay SA........................ 535,178
------------
ELECTRIC UTILITY -- 0.1%
6,840 Tractebel........................ 596,309
------------
ENERGY -- 0.2%
2,297 PetroFina SA..................... 847,815
------------
GAS & ELECTRIC UTILITY -- 0.4%
5,500 Electrabel SA.................... 1,272,204
------------
INDUSTRIAL HOLDING COMPANY -- 0.1%
2,000 Groupe Bruxelles Lambert SA...... 289,340
------------
INSURANCE -- 0.2%
4,100 Fortis AG........................ 855,415
1,350 Royale Belge..................... 384,414
------------
1,239,829
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BELGIUM (CONTINUED)
MERCHANDISING -- 0.0%
4,400 Delhaize-Le Lion SA.............. $ 223,266
------------
TECHNOLOGY -- 0.0%
1,000 Barco NV......................... 183,536
------------
TRANSPORTATION -- 0.0%
1,422 Union Miniere SA *............... 98,638
------------
6,673,561
------------
DENMARK -- 2.4%
AGRICULTURE -- 0.0%
1,185 Korn-OG Foderstof Kompagniet AS.. 32,882
2,780 Superfos AS...................... 70,320
------------
103,202
------------
BANKING & FINANCE -- 0.5%
10,147 Den Danske Bank.................. 1,352,991
9,693 Unidanmark AS, Class A........... 712,053
------------
2,065,044
------------
BEVERAGES & TOBACCO -- 0.1%
6,360 Carlsberg AS, Class A............ 344,017
5,205 Carlsberg AS, Class B............ 279,740
------------
623,757
------------
COMMERCIAL SERVICES -- 0.1%
2,190 ISS International Service System
AS, Series B*.................... 80,599
327 Sophus Berendsen AS -- Class A... 54,019
3,506 Sophus Berendsen AS -- Class B... 578,598
------------
713,216
------------
DIVERSIFIED -- 0.0%
6,974 Ostasiatiske Kompagni AS *....... 63,148
------------
ELECTRICAL & ELECTRONIC -- 0.0%
111 NKT Holding AS................... 8,844
------------
ENGINEERING -- 0.0%
8,215 FLS Industries AS -- Class B..... 196,041
------------
FOOD PRODUCTS -- 0.1%
28 Aarhus Oliefabrk AS -- Class A... 1,247
9 Aarhus Oliefabrk AS -- Class B... 401
10,095 Danisco AS....................... 560,243
------------
561,891
------------
MEDICAL SUPPLIES -- 0.0%
84 Radiometer AS -- Class B......... 3,410
------------
PHARMACEUTICALS -- 0.5%
14,846 Novo Nordisk AS, Class B......... 2,124,819
------------
TELECOM EQUIPMENT -- 0.0%
210 GN Store Nord AS................. 3,527
------------
TELECOMMUNICATIONS -- 0.3%
26,100 Tele Danmark AS, Class B......... 1,620,003
------------
Continued
46
193
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DENMARK (CONTINUED)
TRANSPORTATION & SHIPPING -- 0.8%
39 D/S 1912, Class B................ $ 1,799,857
29 D/S Svendborg AS, Class B........ 1,905,885
134 Lauritzen (J.) Holding AS *...... 11,253
320 SAS Danmark AS................... 4,673
------------
3,721,668
------------
11,808,570
------------
FINLAND -- 0.4%
BANKING & FINANCE -- 0.0%
36,906 Merita Ltd., Class A............. 201,965
------------
DIVERSIFIED -- 0.0%
800 Amer Group Ltd. *................ 15,352
1,500 Instrumentarium Group, Series
B................................ 52,337
------------
67,689
------------
ENGINEERING -- 0.0%
8,200 Metra AB......................... 192,747
------------
FOOD PRODUCTS -- 0.0%
1,300 Cultor OY, Series 2.............. 70,425
------------
FOREST PRODUCTS -- 0.1%
15,560 UPM-Kymmene Corp................. 311,458
------------
INSURANCE -- 0.0%
800 Pohjola Insurance Group, Class
B................................ 29,676
------------
MACHINERY & EQUIPMENT -- 0.0%
500 Kone Corp. -- Class B............ 60,601
------------
RETAIL-GENERAL MERCHANDISE -- 0.0%
750 Stockmann AB -- Class B.......... 46,828
------------
TELECOMMUNICATIONS -- 0.3%
11,600 Nokia AB, Class A................ 824,390
5,900 Nokia AB, Class K................ 422,552
------------
1,246,942
------------
2,228,331
------------
FRANCE -- 9.0%
ADVERTISING -- 0.1%
8,378 Havas SA......................... 603,018
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0%
3,050 Moulinex *....................... 75,390
------------
AUTO PARTS -- 0.1%
7,267 Valeo SA......................... 493,095
------------
AUTOMOTIVE -- 0.1%
5,162 PSA Peugeot Citroen.............. 651,271
------------
BANKING -- 0.7%
22,474 Banque Nationale de Paris........ 1,195,079
13,164 Compagnie Financiere de
Paribas -- Class A............... 1,144,436
9,947 Societe Generale................. 1,355,839
------------
3,695,354
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
BEVERAGES & TOBACCO -- 0.4%
9,220 LVMH (Moet Hennessy Louis
Vuitton)......................... $ 1,531,082
5,400 Pernod Ricard.................... 317,760
------------
1,848,842
------------
BROADCASTING/CABLE -- 0.1%
3,136 Canal Plus....................... 583,322
------------
BUILDING PRODUCTS -- 0.2%
1,195 Imetal SA........................ 148,584
9,721 Lafarge SA....................... 638,117
------------
786,701
------------
CHEMICALS -- 0.6%
7,673 L'Air Liquide.................... 1,201,485
35,514 Rhone-Poulenc SA................. 1,591,555
------------
2,793,040
------------
COMMERCIAL SERVICES -- 0.1%
78 Sodexho *........................ 40,777
710 Sodexho SA....................... 380,383
------------
421,160
------------
CONSTRUCTION -- 0.0%
1,466 Bouygues......................... 166,196
------------
DEFENSE -- 0.1%
200 Sagem SA......................... 89,098
12,325 Thomson CSF...................... 388,648
------------
477,746
------------
DIVERSIFIED -- 0.1%
498 Chargeurs International SA....... 29,801
12,106 Lagardere SCA.................... 400,457
1,350 Nord-Est SA...................... 26,929
------------
457,187
------------
ELECTRICAL & ELECTRONIC -- 0.7%
17,137 Alcatel Alsthom.................. 2,179,206
2,800 Legrand SA....................... 558,058
14,200 Schneider SA..................... 771,387
------------
3,508,651
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.1%
25,100 Unisor Sacilor SA................ 362,573
------------
ENERGY -- 1.3%
28,967 Elf Aquitane SA.................. 3,370,572
25,700 Total SA, Class B................ 2,798,186
------------
6,168,758
------------
ENGINEERING -- 0.0%
200 Groupe Gtm....................... 13,464
------------
FINANCE -- 0.4%
13,618 Compagnie Generale des Eaux...... 1,901,493
523 CPR (Compagnie Parisenne de
Reescompte)...................... 42,599
844 Credit National.................. 49,244
192 Eurafrance....................... 78,193
------------
2,071,529
------------
Continued
47
194
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
FOOD & HOUSEHOLD PRODUCTS -- 0.1%
2,600.... Eridania Beghin-Say SA $ 406,692
------------
FOOD PRODUCTS -- 0.3%
7,621 Groupe Danone.................... 1,361,829
------------
HEALTH & PERSONAL CARE -- 0.8%
7,109 L'OREAL.......................... 2,782,925
11,023 Sanofi SA........................ 1,227,656
------------
4,010,581
------------
INDUSTRIAL GOODS & SERVICES -- 0.1%
14,090 Michelin Class B, Registered..... 709,669
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
14,280 Lyonnaise des Eaux SA............ 1,580,901
------------
INSURANCE -- 0.5%
34,100 Axa -- UAP....................... 2,639,750
------------
LEISURE -- 0.1%
3,650 Accor SA......................... 678,930
500 Club Mediterranee SA *........... 35,332
------------
714,262
------------
MACHINE-DIVERSIFIED -- 0.0%
1,600 Sidel SA......................... 106,119
------------
MEDIA -- 0.0%
498 Pathe SA......................... 96,688
------------
MEDICAL SUPPLIES -- 0.0%
500 Essilor International............ 149,605
------------
MERCHANDISING -- 0.9%
4,098 Carrefour SA..................... 2,138,965
6,600 Etablissements Economiques du
Casino Guichard-Perrachon........ 367,528
2,248 Pinault-Printemps-Redoute SA..... 1,199,883
1,950 Promodes......................... 809,385
------------
4,515,761
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.3%
9,133 Compagnie de Saint Gobain........ 1,298,021
------------
OFFICE EQUIPMENT & SERVICES -- 0.1%
5,700 Bic.............................. 416,235
------------
OIL & GAS -- 0.0%
50 Cie Gen Geophysiq *.............. 6,400
1,300 Primagaz Cie..................... 108,696
------------
115,096
------------
REAL ESTATE -- 0.1%
2,600 SEFIMEG.......................... 129,657
918 Simco SA......................... 61,802
800 Unibail.......................... 79,922
572 Union Immobiliere de France...... 41,551
------------
312,932
------------
RETAIL-SPECIAL LINE -- 0.0%
320 Comptoirs Modernes............... 163,834
------------
TELECOMMUNICATIONS-SERVICES &
EQUIPMENT -- 0.3%
35,000 France Telecom *................. 1,270,059
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
TEXTILE PRODUCTS -- 0.0%
1,050 Dollfus-Mieg & Cie *............. $ 18,676
------------
TOBACCO -- 0.0%
3,200 SEITA............................ 114,896
------------
45,178,903
------------
GERMANY -- 11.4%
AIRLINES -- 0.1%
34,680 Lufthansa AG *................... 651,922
------------
AUTOMOTIVE -- 1.2%
58,970 Daimler-Benz AG.................. 4,165,189
761 MAN AG........................... 219,872
3,093 Volkswagen AG.................... 1,728,805
------------
6,113,866
------------
BANKING -- 2.3%
80,840 Bayer AG......................... 3,001,080
26,228 Bayerische Vereinsbank AG........ 1,692,089
57,260 Deutsche Bank AG................. 4,006,193
50,960 Dresdner Bank AG................. 2,318,369
------------
11,017,731
------------
BANKING & FINANCE -- 0.2%
23,320 Bayerische Hypotheken-und
Weschel-Bank AG.................. 1,131,603
------------
BUILDING PRODUCTS -- 0.1%
4,070 Heidelberger Zement AG........... 285,436
------------
CHEMICALS -- 0.6%
69,880 BASF AG.......................... 2,495,100
7,320 Degussa AG....................... 362,327
------------
2,857,427
------------
CLOTHING -- 0.1%
4,100 Adidas AG........................ 542,701
------------
COMPUTER SOFTWARE -- 0.3%
5,500 SAP AG........................... 1,668,620
------------
CONSTRUCTION -- 0.0%
4,730 Hochtief AG...................... 194,667
------------
DIVERSIFIED -- 1.1%
1,331 Preussag AG...................... 409,358
55,990 VEBA AG.......................... 3,814,577
2,312 Viag AG.......................... 1,266,555
------------
5,490,490
------------
ELECTRICAL & ELECTRONIC -- 0.8%
64,170 Siemens AG....................... 3,872,235
------------
ENGINEERING -- 0.4%
2,040 AGIV-AG *........................ 39,596
2,970 Bilfinger & Berger Bau AG........ 93,822
4,080 Mannesmann AG.................... 2,049,028
------------
2,182,446
------------
GAS & ELECTRIC UTILITY -- 0.4%
38,650 RWE AG........................... 2,074,325
------------
HEALTH & PERSONAL CARE -- 0.1%
7,860 Beiersdorf AG, Series ABC........ 334,414
------------
Continued
48
195
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
GERMANY (CONTINUED)
HEALTH CARE -- 0.1%
6,200 Schering AG...................... $ 598,262
------------
INSURANCE -- 2.2%
1,780 Aachener & Muenchener............ 196,013
25,970 Allianz AG....................... 6,701,775
3,660 Amb Aachener & Muenchener........ 403,038
9,160 Muenchener Rueckver.............. 3,484,589
------------
10,785,415
------------
MACHINERY & EQUIPMENT -- 0.1%
3,830 Kloeckner-Humbolt-Deutz AG *..... 28,330
765 Linde AG......................... 464,180
------------
492,510
------------
METALS & MINING -- 0.1%
2,480 FAG Kugelfischer Georg Schaefer
AG............................... 32,413
2,834 Thyssen AG....................... 605,245
------------
637,658
------------
PHARMACEUTICALS -- 0.1%
15,600 Merck KGaA....................... 524,904
------------
RETAIL STORES -- 0.2%
791 Karstadt AG...................... 273,632
19,773 Metro AG......................... 701,606
------------
975,238
------------
RETAIL-GENERAL MERCHANDISE -- 0.0%
1,630 Douglas Holding AG............... 49,406
------------
TELECOMMUNICATIONS -- 0.9%
251,800 Deutsche Telekom AG.............. 4,663,370
------------
TIRE & RUBBER -- 0.0%
4,870 Continental AG................... 109,694
------------
57,254,340
------------
HONG KONG -- 2.4%
AIRLINES -- 0.0%
12,600 Hong Kong Aircraft Engineering
Co., Ltd......................... 31,710
------------
BANKING -- 0.3%
96,666 Bank of East Asia Ltd............ 226,436
135,800 Hang Seng Bank Ltd............... 1,310,106
------------
1,536,542
------------
BANKING & FINANCE -- 0.0%
20,995 Wing Lung Bank................... 100,528
------------
BROADCASTING & PUBLISHING -- 0.0%
130,000 South China Morning Post Holdings
Ltd.............................. 91,439
30,000 Television Broadcasts Ltd........ 85,568
------------
177,007
------------
DISTRIBUTION -- 0.0%
18,000 Dickson Concepts Intl............ 26,251
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
HONG KONG (CONTINUED)
DIVERSIFIED -- 0.2%
111,000 Swire Pacific Ltd., Class A...... $ 608,846
163,000 Wharf Holdings Ltd............... 357,628
------------
966,474
------------
ELECTRIC UTILITY -- 0.2%
175,400 China Light & Power Co., Ltd..... 973,405
------------
ELECTRICAL & ELECTRONIC -- 0.0%
31,200 Johnson Electric Holdings Ltd.... 89,796
------------
ELECTRICAL EQUIPMENT -- 0.0%
65,000 Elec & Eltek International
Holdings Ltd..................... 16,107
------------
FINANCE -- 0.0%
44,000 Peregrine Investment Holdings.... 31,233
------------
GAS UTILITY -- 0.1%
258,250 Hong Kong & China Gas Co., Ltd... 499,951
------------
HOTELS & LODGING -- 0.0%
82,500 Hong Kong & Shanghai Hotels
Ltd.............................. 68,144
41,000 Miramar Hotel & Investment
Ltd.............................. 69,319
284,714 Regal Hotels International....... 54,016
------------
191,479
------------
INDUSTRIAL HOLDING COMPANY -- 0.5%
307,000 Hutchison Whampoa Ltd. 1,925,617
------------
MANUFACTURING-CONSUMER GOODS -- 0.0%
20,000 Varitronix International Ltd..... 34,330
------------
PRINTING & PUBLISHING -- 0.0%
102,000 Oriental Press Group Ltd......... 30,936
------------
REAL ESTATE -- 0.7%
162,000 Cheung Kong Holdings Ltd......... 1,061,076
136,000 Chinese Estates Ltd.............. 60,117
310,000 Hopewell Holdings Ltd............ 77,217
72,000 Hysan Development Co., Ltd....... 143,568
26,000 Kumagai Gumi (Hong Kong)......... 19,798
135,462 New World Development Co., Ltd... 468,541
112,000 Shagri-La Asia Ltd............... 94,679
214,000 Sino Land Company................ 129,119
168,100 Sun Hung Kai Properties Ltd...... 1,171,539
43,270 Tai Cheung Holdings Ltd.......... 17,172
------------
3,242,826
------------
REAL ESTATE INVESTMENT TRUST -- 0.0%
95,100 Hang Lung Development Co......... 133,783
------------
RETAIL STORES -- 0.0%
50,000 Giordano International Ltd....... 17,262
------------
TELECOMMUNICATIONS -- 0.4%
872,032 Hong Kong Telecommunications
Ltd.............................. 1,795,100
------------
TRANSPORTATION -- 0.0%
242,000 Cathay Pacific Airways........... 196,767
106,258 Shun Tak Holdings Ltd............ 28,456
------------
225,223
------------
12,045,560
------------
Continued
49
196
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ITALY -- 4.8%
AGRICULTURE -- 0.0%
134,100 Parmalat Finanziaria SpA......... $ 191,897
------------
AUTO PARTS -- 0.0%
38,500 Magneti Marelli SpA.............. 65,873
------------
AUTOMOTIVE -- 0.3%
413,138 Fiat SpA......................... 1,202,262
69,740 Fiat SpA di Risp
(Non-convertible)................ 115,379
------------
1,317,641
------------
BANKING -- 0.5%
162,400 Banca Commerciale Italiana....... 564,911
54,694 Banco Ambrosiano Veneto SpA...... 209,434
38,900 Banco Ambrosiano Veneto SpA di
Risp, (Non-convertible).......... 75,908
18,400 Banco Popolare de Milano......... 115,521
202,900 Credito Italiano SpA............. 626,030
76,900 Istituto Bancario San Paolo di
Torino........................... 735,075
10,923 Riunione Adriatica di Sicurta SpA
di Risp, (Non-convertible)....... 74,138
------------
2,401,017
------------
BROADCASTING & PUBLISHING -- 0.1%
106,400 Mediaset SpA..................... 522,974
------------
BUILDING PRODUCTS -- 0.0%
1,900 Cementir SpA..................... 1,805
15,350 Italcementi SpA.................. 107,051
900 Italcementi SpA di Risp, (Non-
convertible)..................... 2,698
------------
111,554
------------
CHEMICALS -- 0.1%
451,862 Montedison SpA................... 406,115
12,800 Montedison SpA di Risp, (Non-
convertible)..................... 8,405
62,600 Snia BPD SpA..................... 64,441
900 Snia BPD SpA di Risp, (Non-
convertible)..................... 718
------------
479,679
------------
ENGINEERING -- 0.0%
7,900 Impregilo SpA *.................. 6,028
------------
FINANCE -- 0.2%
54,300 Istituto Mobiliare Italiano
SpA.............................. 644,968
43,075 Mediobanca SpA................... 338,412
------------
983,380
------------
GAS & ELECTRIC UTILITY -- 0.1%
57,400 Edison SpA....................... 347,388
------------
GAS UTILITY -- 0.0%
59,900 Italgas SpA...................... 247,325
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ITALY (CONTINUED)
INSURANCE -- 0.8%
100,763 Assicurazioni Generali........... $ 2,476,335
457,400 Istituto Nazionale delle
Assicurazioni.................... 927,479
29,762 Riuniune Adriatici de Sicurta
SpA.............................. 292,065
10,800 Societa Assicuratrice Industriale
(SAI) SpA........................ 120,340
------------
3,816,219
------------
JEWELRY -- 0.0%
26,000 Bulgari SpA...................... 132,353
------------
OFFICE EQUIPMENT & SERVICES -- 0.0%
210,496 Olivetti SpA *................... 127,274
------------
OIL & GAS -- 1.0%
914,900 ENI SpA.......................... 5,190,309
------------
PAPER PRODUCTS -- 0.0%
11,300 Burgo (Cartiere) SpA............. 67,589
------------
PRINTING & PUBLISHING -- 0.0%
11,400 Mondadori (Arnoldo) Editore SpA.. 89,627
------------
RETAIL STORES -- 0.0%
16,800 La Rinascente SpA................ 125,430
------------
STEEL -- 0.0%
10,400 Falck, Acciaierie & Ferriere
Lombarde SpA..................... 47,588
------------
TELECOMMUNICATIONS -- 1.5%
19,400 Sirti SpA........................ 117,410
141,660 Telecom Italia Mobile SpA........ 403,027
759,260 Telecom Italia Mobile SpA di Risp
(Non-convertible)................ 3,506,430
421,811 Telecom Italia SpA*.............. 2,695,970
82,360 Telecom Italia SpA-Rnc*.......... 363,354
------------
7,086,191
------------
TEXTILE PRODUCTS -- 0.1%
16,432 Benetton Group SpA............... 269,065
------------
TIRE & RUBBER -- 0.1%
132,900 Pirelli SpA...................... 355,554
20,900 Pirelli SpA di Risp, (Non-
convertible)..................... 37,946
------------
393,500
------------
24,019,901
------------
JAPAN -- 26.5%
ALUMINUM -- 0.0%
38,000 Nippon Light Metal Co., Ltd...... 55,530
13,000 Sankyo Aluminum Industry Co...... 11,598
------------
67,128
------------
Continued
50
197
THE KENT FUNDS
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
APPLIANCES & HOUSEHOLD PRODUCTS -- 1.6%
193,000 Matsushita Electric Industrial
Co., Ltd......................... $ 2,835,155
16,000 Pioneer Electronic Corp.......... 247,344
179,000 Sanyo Electric Co................ 468,078
103,000 Sharp Corp....................... 711,377
36,000 Sony Corp........................ 3,211,787
------------
7,473,741
------------
AUTOMOTIVE -- 3.0%
2,000 Autobacs Seven Co., Ltd.......... 57,683
89,000 Honda Motor Co., Ltd............. 3,278,776
1,000 Nippon Sharyo Ltd................ 2,792
230,000 Nissan Motor Co., Ltd............ 955,230
26,000 Toyoda Automatic Loom Works...... 479,922
349,000 Toyota Motor Corp................ 10,038,833
------------
14,813,236
------------
BANKING -- 3.5%
35,000 77 Bank.......................... 250,344
213,000 Asahi Bank Ltd................... 868,244
44,000 Ashikaga Bank Ltd................ 71,065
428,000 Bank of Tokyo -- Mitsubishi
Ltd.............................. 5,925,193
104,000 Bank of Yokohama Ltd............. 275,155
71,000 Chiba Bank Ltd................... 221,156
266,000 Fuji Bank, Ltd................... 1,080,194
47,000 Gunma Bank Ltd................... 307,258
49,000 Hokuriku Bank.................... 64,067
233,000 Industrial Bank of Japan......... 1,666,576
81,000 Joyo Bank........................ 286,569
110,000 Mitsui Trust & Banking Co.,
Ltd.............................. 214,042
314,000 Sakura Bank Ltd.................. 900,792
73,000 Shizuoka Bank.................... 786,026
288,000 Sumitomo Bank Ltd................ 3,300,388
186,000 Tokai Bank....................... 869,767
18,000 Yamaguchi Bank................... 221,503
------------
17,308,339
------------
BEVERAGES & TOBACCO -- 0.3%
43,000 Asahi Breweries Ltd.............. 628,360
96,000 Kirin Brewery Co., Ltd........... 701,424
11,000 Takara Shuzo..................... 41,032
------------
1,370,816
------------
BREWERY -- 0.0%
31,000 Sapporo Breweries Ltd............ 97,753
------------
BROADCASTING & PUBLISHING -- 0.0%
16,000 Tokyo Broadcasting System........ 203,044
------------
BUILDING PRODUCTS -- 0.1%
52,000 Chichibu Onoda Cement Corp....... 95,984
17,000 Nihon Cement Co., Ltd............ 35,171
16,000 Sanwa Shutter Corp............... 80,725
23,000 Sumitomo Osaka Cement Co., Ltd... 29,011
20,000 Tostem Corp...................... 215,350
------------
456,241
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
CHEMICALS -- 1.1%
132,000 Asahi Chemical Industry Co.,
Ltd.............................. $ 448,727
19,000 Daicel Chemical Industries
Ltd.............................. 24,842
72,000 Dainippon Ink & Chemicals,
Inc.............................. 182,740
27,000 Denki Kagaku Kogyo Kabushiki
Kaisha........................... 40,909
32,000 Kaneka Corp...................... 144,961
32,000 Konica Corp...................... 147,668
201,000 Mitsubishi Chemical Corp......... 289,084
35,000 Mitsubishi Gas Chemical Co....... 92,331
10,000 Nippon Shokubai Kabushiki Kaisha
Co............................... 40,686
50,000 Sekisui Chemical Co., Ltd........ 254,959
34,000 Shin-Etsu Chemical Co., Ltd...... 651,125
95,000 Showa Denko Kabushiki Kaisha..... 83,294
148,000 Sumitomo Chemical Co............. 341,483
80,000 Takeda Chemical Industries....... 2,288,860
128,000 Toray Industries, Inc............ 575,907
42,000 Tosoh Corp. *.................... 70,742
76,000 Ube Industries Ltd............... 97,030
------------
5,775,348
------------
CLOTHING -- 0.0%
5,000 Tokyo Style...................... 45,377
------------
COMMERCIAL SERVICES -- 0.0%
1,155 Oyo Corp. 16,700
------------
COMPUTER SOFTWARE -- 0.0%
5,000 CSK Corp......................... 128,441
------------
CONSTRUCTION -- 0.2%
22,000 Aoki Corp. *..................... 7,107
48,000 Daiwa House Industry Co., Ltd.... 254,728
32,000 Haseko *......................... 16,490
35,000 Kumagai Gumi Co., Ltd............ 19,112
13,000 Okumura Corp..................... 30,995
18,000 Penta-Ocean Construction......... 25,334
65,000 Sekisui House Ltd................ 419,433
72,000 Shimizu Corp..................... 167,234
93,000 Taisei Corp...................... 153,067
------------
1,093,500
------------
CONSUMER GOODS & SERVICES -- 0.1%
22,000 Nippon Sheet Glass Co., Ltd...... 30,795
12,000 Shimano, Inc..................... 221,502
34,000 Toto Ltd......................... 218,088
------------
470,385
------------
COSMETICS/PERSONAL CARE -- 0.1%
38,000 Shiseido Co., Ltd................ 520,223
------------
DATA PROCESSING & REPRODUCTION -- 0.4%
170,000 Fujitsu Ltd...................... 1,830,472
------------
DISTRIBUTION -- 0.0%
130,000 Itochu Corp...................... 204,967
------------
DIVERSIFIED -- 0.0%
18,000 Yamaha Corp...................... 204,890
------------
Continued
51
198
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
ELECTRIC UTILITY -- 0.9%
88,900 Kansai Electric Power Co.,
Inc.............................. $ 1,511,055
45,500 Tohoku Electric Power............ 692,888
124,000 Tokyo Electric Power Co.......... 2,269,785
------------
4,473,728
------------
ELECTRICAL & ELECTRONIC -- 0.6%
25,000 Casio Computer Co., Ltd.......... 179,971
17,000 Kyocera Corp..................... 774,028
197,000 Mitsubishi Electric Corp......... 506,056
33,000 Nikon Corp....................... 327,408
24,000 Omron Corp....................... 376,554
10,000 Rohm Co., Ltd.................... 1,022,912
------------
3,186,929
------------
ELECTRICAL EQUIPMENT -- 0.1%
16,000 Alps Electric Co., Ltd........... 151,360
5,000 SMC Corp......................... 442,236
------------
593,596
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 1.1%
7,940 Advantest Corp................... 451,896
8,000 Dainippon Screen Manufacturing
Co., Ltd......................... 36,917
21,100 Fanuc Ltd........................ 801,670
3,000 Hirose Electric Co., Ltd......... 153,898
306,000 Hitachi Ltd...................... 2,188,722
146,000 NEC Corp......................... 1,560,824
23,000 Yokogawa Electric Corp........... 142,577
------------
5,336,504
------------
ELECTRONICS -- 0.0%
13,000 Nitto Denko Corp................. 224,964
------------
ENERGY -- 0.1%
51,000 Cosmo Oil Co., Ltd............... 77,664
100,000 Japan Energy Corp................ 94,600
112,000 Nippon Oil Co., Ltd.............. 290,292
------------
462,556
------------
ENGINEERING -- 0.2%
7,000 Daito Trust Construction Co.,
Ltd.............................. 42,908
25,000 Fujita Corp...................... 9,037
9,000 JGC Corp......................... 19,035
88,000 Kajima Corp...................... 222,672
14,000 Kandenko Co., Ltd................ 71,711
127,000 Kawasaki Heavy Industries Ltd.... 197,306
24,000 Kinden Corp...................... 256,575
5,000 Maeda Road Construction.......... 19,997
19,000 Nishimatsu Construction.......... 59,913
68,000 Obayashi Corp.................... 232,208
13,000 Sato Kogyo Co., Ltd.............. 8,099
------------
1,139,461
------------
ENTERTAINMENT -- 0.1%
1,700 Toho Co.......................... 181,740
11,000 Tokyo Dome Corp.................. 73,434
22,000 Tokyotokeiba..................... 28,426
------------
283,600
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
FINANCE -- 1.1%
13,000 Acom Co., Ltd.................... $ 719,883
123,000 Daiwa Securities Co., Ltd........ 425,700
23,000 Higo Bank........................ 116,750
119,000 Mitsubishi Trust & Banking
Corp............................. 1,198,959
17,000 Nippon Shinpan Co................ 19,220
180,000 Nomura Securities Co., Ltd....... 2,408,840
24,000 Orient Corp...................... 38,948
5,000 Orix Corp........................ 349,943
6,000 Uni-Charm........................ 213,196
83,000 Yasuda Trust & Banking........... 82,987
------------
5,574,426
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.4%
59,000 Ajinomoto Co., Inc............... 576,291
56,000 Kao Corp......................... 809,714
20,000 Nippon Meat Packers, Inc......... 273,802
12,000 Nissin Food Products Co., Ltd.... 218,734
------------
1,878,541
------------
FOOD PRODUCTS -- 0.2%
65,000 Daiei, Inc....................... 269,956
10,000 House Foods Industry............. 130,748
12,000 Itoham Foods..................... 57,037
10,000 Kikkoman Corp.................... 50,838
15,000 Meiji Milk Products Co., Ltd..... 38,994
16,000 Nichirei Corp.................... 34,456
8,000 QP Corp.......................... 48,915
23,000 Snow Brand Milk Products Co.,
Ltd.............................. 62,090
20,000 Yamazaki Baking Co., Ltd......... 195,353
------------
888,387
------------
FOREST PRODUCTS -- 0.2%
17,000 Mitsubishi Paper Mills........... 23,927
87,000 Nippon Paper Industries Co....... 342,591
94,000 Oji Paper Co., Ltd............... 375,215
12,000 Sumitomo Forestry Co., Ltd....... 58,606
------------
800,339
------------
GAS UTILITY -- 0.2%
232,000 Osaka Gas Co., Ltd............... 531,729
258,000 Tokyo Gas Co., Ltd............... 587,351
------------
1,119,080
------------
HEALTH & PERSONAL CARE -- 0.4%
22,000 Chugai Pharmaceutical Co.,
Ltd.............................. 113,366
40,000 Kyowa Hakko Kogyo Co............. 173,818
15,000 Lion Corp........................ 44,531
42,000 Sankyo Co., Ltd.................. 952,923
30,000 Yamanouchi Pharmaceutical Co.,
Ltd.............................. 646,049
------------
1,930,687
------------
HOTELS & LODGING -- 0.0%
8,000 Fujita Kanko, Inc................ 86,140
------------
Continued
52
199
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
INDUSTRIAL GOODS & SERVICES -- 0.9%
75,000 Bridgestone Corp................. $ 1,632,427
82,000 Denso Corp....................... 1,482,067
17,000 Inax Corp........................ 49,554
58,000 Mitsui Engineering & Shipbuilding
Co., Ltd.*....................... 37,025
34,000 NGK Insulators Ltd............... 303,335
20,000 NGK Spark Plug Co., Ltd.......... 113,828
66,000 Sumitomo Electric Industries
Ltd.............................. 903,546
------------
4,521,782
------------
INSURANCE -- 0.5%
66,000 Mitsui Marine & Fire Insurance
Co., Ltd......................... 338,068
41,000 Nichido Fire & Marine Insurance
Co., Ltd......................... 214,427
53,000 Nippon Fire & Marine Insurance
Co............................... 199,329
60,000 Sumitomo Marine & Fire Insurance
Co............................... 318,410
142,000 Tokio Marine & Fire Insurance
Co............................... 1,616,353
------------
2,686,587
------------
JEWELRY -- 0.1%
29,000 Citizen Watch Co., Ltd........... 195,161
10,000 Hoya Corp........................ 315,333
------------
510,494
------------
LEASING -- 0.1%
7,000 Daiwa Kosho Lease Co., Ltd....... 28,534
36,000 Yamato Transport Co., Ltd........ 484,537
------------
513,071
------------
LEISURE -- 0.0%
4,000 Namco............................ 116,596
------------
MACHINE-DIVERSIFIED -- 0.0%
4,000 Komori Corp...................... 59,683
12,000 Kurita Water Industries Ltd...... 122,749
------------
182,432
------------
MACHINERY & EQUIPMENT -- 0.8%
27,000 Amada Co., Ltd................... 100,714
14,000 Brother Industries Ltd........... 32,087
10,000 Chiyoda Corp..................... 10,767
5,000 Daifuku Co., Ltd................. 24,419
22,000 Daikin Industries Ltd............ 83,248
26,000 Ebara Corp....................... 275,955
90,000 Komatsu Ltd...................... 453,389
10,000 Koyo Seiko Co., Ltd.............. 40,147
129,000 Kubota Corp...................... 341,298
36,000 Minebea Co., Ltd................. 387,630
309,000 Mitsubishi Heavy Industries
Ltd.............................. 1,292,837
5,000 Mori Seiki Co.................... 51,915
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
MACHINERY & EQUIPMENT (CONTINUED)
51,000 NSK Ltd.......................... $ 127,479
42,000 NTN Corp......................... 97,553
7,000 Okuma Corp....................... 24,981
63,000 Sumitomo Heavy Industries,
Ltd.............................. 193,330
15,000 Tokyo Electron Ltd............... 482,230
------------
4,019,979
------------
MANUFACTURING-CAPITAL GOODS -- 0.2%
31,000 Fujikura Ltd..................... 205,997
12,000 Kokuyo Co........................ 207,659
14,000 Makita Corp...................... 134,594
21,000 Murata Manufacturing Co., Ltd.... 529,759
8,000 Noritake Co., Ltd................ 38,271
7,000 Takara Standard Co............... 34,456
------------
1,150,736
------------
MANUFACTURING-CONSUMER GOODS -- 0.8%
79,000 Canon, Inc....................... 1,847,085
47,000 Fuji Photo Film Co., Ltd......... 1,807,399
8,700 Sega Enterprises Ltd............. 157,913
------------
3,812,397
------------
MEDICAL SUPPLIES -- 0.0%
24,000 Olympus Optical Co., Ltd. 166,311
------------
MERCHANDISING -- 0.6%
38,000 Ito-Yokado Co., Ltd.............. 1,943,531
29,000 JUSCO Co., Ltd................... 410,395
33,000 Marui Co., Ltd................... 515,224
------------
2,869,150
------------
METALS -- 0.4%
42,000 Daido Steel Co., Ltd............. 52,976
298,000 Kawasaki Steel Corp.............. 407,965
104,000 Mitsubishi Materials Corp........ 167,973
633,000 Nippon Steel Corp................ 939,609
323,000 NKK Corp......................... 258,358
288,000 Sumitomo Metal Industries Ltd.... 369,909
11,000 Tokyo Steel Manufacturing Co..... 37,309
------------
2,234,099
------------
METALS & MINING -- 0.1%
92,000 Hitachi Zosen Corp............... 147,884
46,000 Mitsui Mining & Smelting Co...... 185,385
52,000 Sumitomo Metal Mining Co......... 171,972
------------
505,241
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.1%
107,000 Asahi Glass Co., Ltd............. 510,225
------------
OFFICE EQUIPMENT & SERVICES -- 0.3%
69,000 Dai Nippon Printing Co., Ltd..... 1,300,174
------------
OIL & GAS -- 0.0%
3,100 Arabian Oil Co., Ltd............. 47,208
32,000 Mitsubishi Oil Co., Ltd.......... 47,500
14,000 Teikoko Oil Co., Ltd............. 36,609
------------
131,317
------------
Continued
53
200
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
PACKAGING -- 0.1%
19,600 Toyo Seikan Kaisha Ltd........... $ 280,385
------------
PHARMACEUTICALS -- 0.4%
25,000 Dai-Ichi Pharmaceuticals......... 282,646
25,000 Eisai Co., Ltd................... 382,630
3,000 Kissei Pharmaceutical Co.,
Ltd.............................. 43,378
35,000 Meiji Seika Co................... 116,827
32,000 Shionogi & Co., Ltd.............. 147,176
31,000 Taisho Pharmacuetical Co......... 793,949
------------
1,766,606
------------
REAL ESTATE -- 0.4%
119,000 Mitsubishi Estate Co., Ltd....... 1,299,636
74,000 Mitsui Fudosan Co., Ltd.......... 717,114
------------
2,016,750
------------
RESTAURANTS -- 0.0%
5,000 Skylark Co., Ltd................. 48,069
------------
RETAIL STORES -- 0.1%
6,000 Aoyama Trading Co., Ltd.......... 107,521
13,000 Hankyu Department Stores Co...... 72,488
15,000 Isetan Co........................ 62,874
29,000 Mycal Corp....................... 243,115
28,000 Takashimaya Co., Ltd............. 170,126
------------
656,124
------------
RETAIL-GENERAL MERCHANDISE -- 0.1%
14,300 Credit Saison Co., Ltd........... 354,143
14,000 Daimuru, Inc..................... 33,164
34,000 Mitsukoshi Ltd................... 90,739
------------
478,046
------------
RETAIL-SPECIAL LINE -- 0.1%
15,000 Seiyu Ltd........................ 47,531
2,000 Shimachu Co...................... 31,533
17,000 Uny Co., Ltd..................... 234,039
------------
313,103
------------
SERVICES -- 0.3%
10,000 Secom Co., Ltd................... 641,434
64,000 Toppan Printing Co., Ltd......... 836,788
------------
1,478,222
------------
STORAGE -- 0.0%
15,000 Mitsubishi Logistics Corp........ 156,898
------------
TELECOMMUNICATIONS -- 2.1%
11,000 Nippon Comsys Corp............... 136,209
1,171 Nippon Telegraph & Telephone
Corp............................. 10,086,979
------------
10,223,188
------------
TEXTILE PRODUCTS -- 0.2%
12,000 Gunze Ltd........................ 19,935
26,000 Kanebo Ltd. *.................... 18,997
31,000 Kuraray Co., Ltd................. 257,497
57,000 Mitsubishi Rayon Co., Ltd........ 140,285
16,000 Nisshinbo Industries, Inc........ 67,681
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
15,000 Onward Kashiyama Co., Ltd........ $ 174,203
89,000 Teijin Ltd....................... 186,870
49,000 Toyobo Ltd....................... 59,544
25,000 Unitika Ltd. *................... 13,459
14,000 Wacoal Corp...................... 139,977
------------
1,078,448
------------
TRANSPORTATION -- 1.0%
368 East Japan Railway Co............ 1,667,052
78,000 Hankyu Corp...................... 366,541
163,000 Japan Airlines Co. *............. 445,043
148,000 Kinki Nippon Railway Co.......... 793,379
75,000 Nagoya Railroad Co., Ltd......... 258,420
46,000 Nankai Electric Railway Co....... 201,660
98,000 Nippon Express Co., Ltd.......... 489,921
67,000 Odakyu Electric Railway Co....... 290,630
78,000 Tobu Railway Co., Ltd............ 244,760
100,000 Tokyu Corp....................... 387,629
------------
5,145,035
------------
TRANSPORTATION & SHIPPING -- 0.1%
13,000 Kamigumi Co., Ltd................ 38,594
30,000 Kawasaki Kisen Kaisha Ltd. *..... 36,456
47,000 Keihin Electric Express Railway
Co., Ltd......................... 164,473
101,000 Mitsui OSK Lines, Ltd. *......... 140,600
108,000 Nippon Yusen Kabushiki Kaisha.... 297,367
8,000 Seino Transportation............. 40,055
------------
717,545
------------
WHOLESALE & INTERNATIONAL TRADE -- 0.6%
137,000 Marubeni Corp.................... 241,292
143,000 Mitsubishi Corp.................. 1,132,816
145,000 Mitsui & Co...................... 860,937
97,000 Sumitomo Corp.................... 544,604
------------
2,779,649
------------
WHOLESALE DISTRIBUTION -- 0.0%
1,000 Nagse & Co....................... 2,923
------------
WIRE & CABLE PRODUCTS -- 0.1%
60,000 Furukawa Electric Co., Ltd....... 257,958
------------
132,689,079
------------
MALAYSIA -- 0.8%
AGRICULTURE -- 0.1%
130,000 Golden Hope Plantations Berhad... 150,294
37,500 Highlands & Lowlands Berhad...... 38,344
52,000 IOI Corporated Berhad............ 16,833
72,000 Kuala Lumpur Kepong Berhad....... 154,457
------------
359,928
------------
AIRLINES -- 0.0%
47,000 Malaysian Airlines............... 37,673
12,000 Malaysian Pacific................ 28,826
------------
66,499
------------
Continued
54
201
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MALAYSIA (CONTINUED)
AUTOMOTIVE -- 0.0%
13,000 Ederan Otomobil.................. $ 26,552
19,200 Oriental Holdings................ 23,480
41,000 Tan Chong Motors................. 17,907
------------
67,939
------------
AUTOMOTIVE PARTS-REPLACEMENT -- 0.0%
33,000 Perusahaan Otomobil Nasional
Berhad........................... 32,217
------------
BANKING -- 0.1%
24,000 AMMB Holdings Berhad............. 15,723
48,000 Commerce Asset Holdings Berhad... 22,937
31,000 Ekran Berhad *................... 21,902
115,500 Malayan Banking Berhad........... 335,310
123,600 Public Bank...................... 42,551
104,000 RHB Capital Berhad............... 50,232
------------
488,655
------------
BEVERAGES & TOBACCO -- 0.0%
18,000 Guinness Anchor.................. 22,197
------------
BUILDING PRODUCTS -- 0.0%
15,000 Hume Ind Malaysia................ 15,723
15,000 Jaya Tiasa Holdings Berhad....... 27,554
25,000 Kedah Cement Holdings............ 4,592
25,000 Malayan Cement................... 17,021
46,000 Pan-Malaysia Cement Works
Berhad........................... 17,727
------------
82,617
------------
CHEMICALS -- 0.0%
8,000 Malaysian Oxygen Berhad.......... 17,881
------------
CONSTRUCTION -- 0.0%
77,400 YTL Corp. Berhad................. 104,397
------------
DIVERSIFIED -- 0.1%
54,000 Berjaya Group Berhad............. 10,960
113,000 Malayan United Industries........ 19,741
64,000 Mulpha International Berhad...... 7,481
58,000 Multi-Purpose Holdings Berhad.... 14,901
22,500 Perlis Plantations Berhad........ 31,793
235,040 Sime Darby Berhad................ 225,840
46,000 Time Engineering Berhard......... 11,818
------------
322,534
------------
ELECTRIC UTILITY -- 0.2%
313,000 Tenaga Nasional Berhad........... 667,434
------------
ENERGY -- 0.0%
16,000 Umw Holdings Berhard............. 12,126
------------
ENGINEERING -- 0.0%
180,000 Amsteel Corp. Berhad............. 31,446
49,326 United Engineers (Malaysia)
Ltd.............................. 41,059
------------
72,505
------------
ENTERTAINMENT -- 0.0%
94,000 Magnum Corp. Berhad.............. 56,511
110,000 Resorts World Berhad............. 185,106
------------
241,617
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MALAYSIA (CONTINUED)
FINANCE -- 0.0%
48,000 MBf Capital Berhad............... $ 11,160
23,000 Rashid Hussain Berhad............ 17,846
------------
29,006
------------
FOOD PRODUCTS -- 0.0%
15,000 Nestle (Malaysia) Berhad......... 69,367
------------
HOME FURNISHINGS -- 0.0%
47,000 Technology Resources Industries
Berhad........................... 27,772
------------
INVESTMENT COMPANIES -- 0.0%
13,000 Hong Leong Industries............ 13,226
44,000 Ta Enterprise Berhad............. 8,930
------------
22,156
------------
LEISURE -- 0.0%
38,000 Berjaya Land Berhad.............. 23,235
------------
MANUFACTURING-CAPITAL GOODS -- 0.0%
11,000 Sugei Way Holdings............... 3,561
------------
METALS & MINING -- 0.0%
92,400 Malaysia Mining Corp. Berhad..... 36,320
------------
OIL & GAS -- 0.0%
17,500 Shell Refining Co. (Malaysia)
Berhad........................... 27,425
------------
PRINTING & PUBLISHING -- 0.0%
11,000 New Straits Time Press........... 13,622
------------
REAL ESTATE -- 0.0%
43,000 Hong Leong Properties............ 7,844
60,000 Malaysian Resources.............. 13,873
51,000 Metroplex Berhad................. 13,037
51,000 Selangor Properties Berhad....... 15,592
------------
50,346
------------
TELECOMMUNICATIONS -- 0.3%
303,000 Telekom Malaysia Berhad.......... 895,213
------------
TOBACCO -- 0.0%
15,000 RJ Reynolds...................... 24,471
28,300 Rothmans of Pall Mall (Malaysia)
Berhad........................... 219,937
------------
244,408
------------
TRANSPORTATION -- 0.0%
101,000 Malaysian International
Shipping......................... 147,905
------------
4,148,882
------------
NETHERLANDS -- 3.5%
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.2%
16,840 Philips Electronics NV........... 1,010,121
------------
BANKING -- 0.3%
67,585 ABN Amro Holding NV.............. 1,316,876
------------
Continued
55
202
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
NETHERLANDS (CONTINUED)
BEVERAGES & TOBACCO -- 0.1%
2,670 Heineken NV...................... $ 464,926
------------
BROADCASTING & PUBLISHING -- 0.1%
38,430 Elsevier NV...................... 621,787
------------
CHEMICALS -- 0.2%
4,383 Akzo Nobel NV.................... 755,859
------------
COMPUTER SOFTWARE -- 0.0%
2,952 Getronics NV..................... 94,069
------------
ENERGY -- 1.4%
126,588 Royal Dutch Petroleum Co......... 6,950,008
------------
FINANCE -- 0.3%
40,887 ING Groep NV..................... 1,722,427
------------
FOOD PRODUCTS -- 0.4%
36,124 Unilever NV-CVA.................. 2,227,427
------------
INSURANCE -- 0.0%
1,117 Stad Rotterdam NV................ 60,775
------------
MANUFACTURING-CONSUMER GOODS -- 0.0%
255 Stork NV......................... 8,805
------------
OFFICE EQUIPMENT & SERVICES -- 0.0%
981 Oce Van Griten................... 106,945
------------
PACKAGING -- 0.0%
5,120 Kniniklijke KNP BT NV............ 117,946
------------
PRINTING & PUBLISHING -- 0.1%
3,211 Wolters Kluwer CVA............... 414,833
------------
RETAIL-SPECIAL LINE -- 0.1%
19,619 Ahold............................ 511,953
------------
SERVICES -- 0.2%
23,687 Koninklijke Royal PTT Nederland
NV............................... 988,503
------------
STEEL -- 0.0%
1,305 Koninklijke Hoogovens NV......... 53,495
------------
TRANSPORTATION -- 0.1%
1,950 IHC Caland NV.................... 101,192
3,909 KLM Royal Dutch Air Lines NV..... 144,619
1,133 Pakhoed NV Kon................... 32,695
------------
278,506
------------
17,705,261
------------
NEW ZEALAND -- 0.4%
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0%
13,249 Fisher & Paykel Industries
Ltd.............................. 42,312
------------
BEVERAGES & TOBACCO -- 0.0%
62,000 Lion Nathan Ltd.................. 138,962
------------
BUILDING PRODUCTS -- 0.0%
36,983 Fletcher Challenge Building...... 75,590
------------
FINANCE -- 0.0%
303,100 Brierley Investments Ltd......... 216,475
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
NEW ZEALAND (CONTINUED)
FOREST PRODUCTS -- 0.1%
195,881 Carter Holt Harvey Ltd........... $ 302,546
93,679 Fletcher Challenge Forests....... 77,785
72,922 Fletcher Challenge Paper......... 95,271
------------
475,602
------------
OIL & GAS -- 0.0%
37,968 Fletcher Challenge Energy........ 132,939
------------
TELECOMMUNICATIONS -- 0.3%
204,065 Telecom Corp. of New Zealand
Ltd.............................. 989,402
------------
2,071,282
------------
NORWAY -- 1.3%
BANKING -- 0.0%
61,300 Christiania Bank Og
Kreditkasse...................... 247,788
------------
CHEMICALS -- 0.0%
1,000 Dyno Industrier ASA.............. 19,262
------------
ELECTRIC UTILITY -- 0.0%
15,650 Hafslund ASA, Series A........... 95,528
10,326 Hafslund ASA, Series B........... 49,304
------------
144,832
------------
ENGINEERING -- 0.1%
8,950 Kvaerner ASA, Series A........... 456,472
------------
FOREST PRODUCTS -- 0.0%
3,200 Norske Skogindustrier ASA --
Class A.......................... 92,890
------------
INDUSTRIAL GOODS & SERVICES -- 0.0%
1,200 Unitor ASA....................... 14,650
------------
INSURANCE -- 0.1%
73,500 Storebrand ASA *................. 518,435
------------
MANUFACTURING-CONSUMER GOODS -- 0.2%
10,500 Orkla ASA, Series A.............. 904,412
------------
OIL & GAS -- 0.8%
10,500 Aker RGI ASA, Series A........... 189,428
2,100 Aker RGI ASA, Series B........... 34,183
60,850 Norsk Hydro ASA.................. 2,967,310
8,300 Petroleum Geo-Services ASA *..... 523,521
------------
3,714,442
------------
TRANSPORTATION -- 0.1%
14,100 Bergesen d.y. ASA -- Class A..... 332,791
1,400 Bergesen d.y. ASA -- Class B..... 32,663
2,200 Leif Hoegh & Co. ASA............. 44,763
------------
410,217
------------
6,523,400
------------
SINGAPORE -- 0.8%
AUTOMOTIVE -- 0.0%
1,000 Cycle & Carriage................. 4,125
------------
Continued
56
203
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SINGAPORE (CONTINUED)
BANKING -- 0.3%
48,750 Development Bank Of Singapore
Ltd.............................. $ 416,632
86,042 Oversea-Chinese Banking Corp.,
Ltd.............................. 500,439
70,350 United Overseas Bank Ltd......... 390,384
------------
1,307,455
------------
BEVERAGES & TOBACCO -- 0.0%
21,000 Fraser & Neave Ltd............... 90,983
------------
ELECTRICAL EQUIPMENT -- 0.0%
3,000 Creative Technology Ltd. *....... 60,892
------------
FINANCE -- 0.0%
29,600 Haw Par Brothers International
Ltd.............................. 38,297
------------
HOTELS & LODGING -- 0.0%
1,000 Overseas Union Enterprise Ltd.... 2,397
1,100 Shangri-La Hotel Ltd............. 2,011
------------
4,408
------------
METALS & MINING -- 0.0%
7,000 Straits Trading Co., Ltd......... 8,309
------------
PRINTING & PUBLISHING -- 0.1%
28,320 Singapore Press Holdings......... 354,643
------------
REAL ESTATE -- 0.1%
56,600 City Developments Ltd............ 262,015
72,000 DBS Land Ltd..................... 110,247
8,000 United Industrial Corp., Ltd..... 3,134
52,000 United Overseas Land Ltd......... 43,824
------------
419,220
------------
STEEL -- 0.0%
60,750 NatSteel Ltd..................... 82,205
------------
TELECOMMUNICATIONS -- 0.2%
471,000 Singapore Telecommunications
Ltd.............................. 877,741
------------
TRANSPORTATION -- 0.1%
59,000 Neptune Orient Lines Ltd......... 23,286
91,000 Singapore Airlines Ltd........... 594,087
------------
617,373
------------
TRANSPORTATION & SHIPPING -- 0.0%
49,000 Keppel Corp...................... 140,753
------------
WHOLESALE DISTRIBUTION -- 0.0%
11,000 Inchcape Berhad.................. 16,909
------------
4,023,313
------------
SPAIN -- 2.7%
BANKING -- 0.6%
25,342 Banco Central Hispanoamericano
SA............................... 616,859
45,096 Banco Santander SA............... 1,506,007
10,100 Corporacion Bancaria de Espana
SA............................... 614,288
------------
2,737,154
------------
BANKING & FINANCE -- 0.4%
63,441 Banco Bilbao Vizcaya SA.......... 2,052,051
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
BEVERAGES & TOBACCO -- 0.0%
1,650 El Aguila SA *................... $ 6,474
2,806 Tabacalera SA, Class A........... 227,366
------------
233,840
------------
BUILDING PRODUCTS -- 0.0%
820 Portland Valderrivas SA.......... 73,707
5,400 Uralita SA....................... 61,647
------------
135,354
------------
CHEMICALS -- 0.0%
700 Ercros SA *...................... 680
------------
COMMERCIAL SERVICES -- 0.0%
500 Prosegur, CIA de Seguridad SA.... 5,019
------------
ENERGY -- 0.2%
28,298 Repsol SA........................ 1,206,814
------------
ENGINEERING -- 0.1%
18,613 Autopistas Concesionaria Espanola
SA............................... 249,735
3,400 Dragados & Construcciones SA..... 72,388
200 Urbis SA *....................... 1,890
------------
324,013
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.0%
400 Ebro Agricolas, Compania de
Alimentacion SA.................. 7,033
------------
FOREST PRODUCTS -- 0.0%
100 Empresa Nacional de Celulosas
SA............................... 1,361
2,498 Sarrio SA........................ 9,047
------------
10,408
------------
GAS & ELECTRIC UTILITY -- 0.7%
97,880 Endesa-Empresa Nac Elec.......... 1,737,131
3,008 Fomento de Construcciones y
Contratas SA..................... 114,466
86,924 Iberdrola SA..................... 1,143,471
23,666 Union Electrica Fenosa SA........ 226,699
------------
3,221,767
------------
INDUSTRIAL HOLDING COMPANY -- 0.0%
675 Corporacion Financiara Alba SA... 71,080
------------
INSURANCE -- 0.0%
4,600 Corporacion Mapfre............... 121,930
------------
METALS -- 0.0%
400 Acerinox SA...................... 59,233
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.0%
1,221 Viscofan Industria Navarra de
Envolturas Celulosicassa SA...... 30,642
------------
NATURAL GAS UTILITY -- 0.1%
13,824 Gas Natural SDG SA............... 716,526
------------
REAL ESTATE -- 0.0%
247 Inmobiliaria Metropolitana Vasco
Central SA....................... 11,133
2,361 Vallehermoso SA.................. 72,341
------------
83,474
------------
Continued
57
204
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
TELECOMMUNICATIONS -- 0.6%
88,875 Telefonica de Espana............. $ 2,536,530
------------
WATER UTILITY -- 0.0%
3,442 Aquas De Barcelona............... 141,821
------------
13,695,369
------------
SWEDEN -- 1.4%
AUTOMOTIVE -- 0.1%
19,000 Volvo AB, Series B............... 510,060
------------
BANKING & FINANCE -- 0.0%
6,300 Svenska Handlesbanken, Class B... 202,871
------------
BUILDING PRODUCTS -- 0.0%
4,400 Scancem AB -- Class A............ 180,229
------------
ENGINEERING -- 0.2%
39,000 ABB AB, Series A................. 462,042
28,500 ABB AB, Series B................. 335,849
100 Skanska AB, Series B............. 4,102
------------
801,993
------------
FOREST PRODUCTS -- 0.1%
14,500 Stora Kopparbergs Bergslags
Aktiebolag, Series A............. 182,749
3,250 Stora Kopparbergs Bergslags
Aktiebolag, Series B............. 40,347
3,800 Svenska Cellusoa AB, Series B.... 85,489
------------
308,585
------------
INSURANCE -- 0.1%
12,000 Skandia Forsakrings AB........... 566,397
------------
MACHINERY & EQUIPMENT -- 0.1%
8,250 Atlas Copco AB, Series A......... 246,428
500 Atlas Copco AB, Series B......... 14,904
------------
261,332
------------
MANUFACTURING-CONSUMER GOODS -- 0.1%
3,700 Electrolux AB, Series B.......... 256,946
------------
METAL FABRICATE/HARDWARE -- 0.0%
9,300 SKF AB, Series A................. 186,367
------------
METALS & MINING -- 0.1%
10,100 SKF AB, Series B................. 215,128
7,960 Trelleborg AB, Series B.......... 100,323
------------
315,451
------------
OFFICE EQUIPMENT & SERVICES -- 0.0%
300 Esselte AB, Series B............. 6,087
------------
PHARMACEUTICALS -- 0.3%
76,400 Astra AB, Series A............... 1,323,987
13,333 Astra AB, Series B............... 224,335
------------
1,548,322
------------
TELECOMMUNICATIONS -- 0.3%
54,600 Telefonaktiebolaget LM Ericsson,
Series B......................... 2,054,115
------------
7,198,755
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SWITZERLAND -- 5.2%
AIRLINES -- 0.1%
220 Sairgroup........................ $ 301,669
------------
BANKING -- 0.3%
4,380 Swiss Bank Corp.................. 1,363,353
------------
BUILDING PRODUCTS -- 0.1%
436 Holderbank Financiere Glarus
AG............................... 356,321
------------
COMMERCIAL SERVICES -- 0.0%
390 Addeco SA........................ 113,239
------------
81 SGS Societe Generale de
Surveillance Holding SA.......... 155,497
------------
268,736
------------
DIVERSIFIED -- 0.2%
450 ABB AG, Bearer Shares *.......... 566,144
225 Alusuisse-Lonza Holding AG,
Registered....................... 216,431
------------
782,575
------------
ENGINEERING -- 0.0%
15 Schindler Holding AG,
Participating Certificates....... 15,653
------------
FINANCE -- 0.7%
11,720 Credit Suisse Group,
Registered....................... 1,815,994
1,179 UBS -- Union Bank of Switzerland,
Bearer........................... 1,707,207
------------
3,523,201
------------
FOOD PRODUCTS -- 0.7%
2,468 Nestle SA, Registered............ 3,703,985
------------
INSURANCE -- 0.5%
715 Swiss Reinsurance Co.,
Registered....................... 1,339,261
2,350 Zuerich Verichrng Gesellschft
Rg............................... 1,121,387
------------
2,460,648
------------
MANUFACTURING-CONSUMER GOODS -- 0.0%
182 Sulzer AG, Registered............ 115,548
------------
METAL FABRICATE/HARDWARE -- 0.0%
30 Fischer (George) AG, Bearer...... 41,137
------------
METALS -- 0.0%
40 Alusuisse-Lonza Holding AG,
Bearer........................... 38,202
------------
PHARMACEUTICALS -- 2.6%
461 Novartis AG, Bearer.............. 750,659
3,879 Novartis AG, Registered.......... 6,303,638
439 Roche Holding AG................. 4,365,768
94 Roche Holding AG, Bearer......... 1,450,069
------------
12,870,134
------------
RETAIL-GENERAL MERCHANDISE -- 0.0%
65 Jelmoli Holding AG, Bearer....... 56,151
260 Valora Holding AG................ 54,904
------------
111,055
------------
RETAIL-SPECIAL LINE -- 0.0%
325 Jelmoli Holding AG, Registered... 54,369
------------
Continued
58
205
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
SWITZERLAND (CONTINUED)
TRANSPORTATION -- 0.0%
5 Danzas Holding AG, Registered.... $ 984
------------
26,007,570
------------
UNITED KINGDOM -- 18.7%
AEROSPACE -- 0.1%
21,664 Smiths Industries PLC............ 308,516
------------
AEROSPACE & MILITARY TECHNOLOGY -- 0.2%
30,897 British Aerospace PLC............ 885,090
800 Cobham PLC....................... 11,011
------------
896,101
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
56,200 EMI Group PLC.................... 484,782
------------
AUTO PARTS -- 0.1%
19,014 BBA Group PLC.................... 127,646
3,446 Laird Group PLC.................. 25,147
39,582 T & N PLC........................ 165,425
------------
318,218
------------
AUTOMOTIVE -- 0.1%
3,101 Lex Service PLC.................. 23,803
106,709 Rolls-Royce PLC.................. 403,832
------------
427,635
------------
BANKING -- 2.3%
100,737 Abbey National PLC............... 1,738,748
109,128 Barclays PLC..................... 2,899,886
67,568 HSBC Holdings PLC................ 1,746,584
140,367 HSBC Holdings PLC (Hong Kong
Dollars)......................... 3,478,260
60,801 Royal Bank of Scotland Group
PLC.............................. 778,328
13,979 Schroders PLC.................... 431,270
------------
11,073,076
------------
BEVERAGES & TOBACCO -- 0.6%
288,938 Guinness Giageo PLC.............. 2,655,217
44,161 Scottish & Newcastle PLC......... 534,434
------------
3,189,651
------------
BREWERY -- 0.2%
67,527 Bass PLC......................... 1,039,981
------------
BROADCASTING/CABLE -- 0.2%
122,800 British Sky Broadcasting Group
PLC.............................. 917,332
43,042 Carlton Communications PLC....... 331,444
------------
1,248,776
------------
BUILDING PRODUCTS -- 0.3%
53,502 Blue Circle Industries PLC....... 313,176
37,736 BPB PLC.......................... 209,867
27,842 Hepworth PLC..................... 100,556
8,499 Marley PLC....................... 13,355
9,467 Meyer International PLC.......... 59,660
18,454 RMC Group PLC.................... 260,525
77,228 Rugby Group PLC.................. 173,452
55,474 Tarmac PLC....................... 104,512
54,273 Williams PLC..................... 300,051
------------
1,535,154
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
CHEMICALS -- 0.3%
34,748 BOC Group PLC.................... $ 575,461
21,004 Courtaulds PLC................... 102,816
51,551 Imperial Chemical Industries
PLC.............................. 797,328
------------
1,475,605
------------
COMPUTER HARDWARE MANUFACTURING -- 0.0%
1,793 Viglen Technology PLC............ 0
------------
CONGLOMERATES -- 0.4%
237,175 B.A.T. Industries PLC............ 2,163,927
40,924 Lonrho PLC....................... 62,623
------------
2,226,550
------------
CONSTRUCTION -- 0.0%
56,510 Taylor Woodrow PLC............... 165,972
------------
DISTRIBUTION -- 0.4%
399,610 BG PLC........................... 1,801,601
315,594 Centrica PLC *................... 456,966
------------
2,258,567
------------
ELECTRIC UTILITY -- 0.3%
122,969 National Grid Group PLC.......... 587,273
84,283 Scottish Power PLC............... 744,015
34,209 Southern Electric PLC............ 284,815
------------
1,616,103
------------
ELECTRICAL & ELECTRONIC -- 0.3%
25,643 Bowthorpe PLC.................... 158,857
32,574 Electrocomponents PLC............ 242,260
198,960 General Electric Co., PLC........ 1,306,203
------------
1,707,320
------------
ELECTRICAL EQUIPMENT -- 0.0%
6,722 Delta PLC........................ 29,089
------------
ENERGY -- 1.2%
441,578 British Petroleum Co., PLC....... 5,816,222
------------
ENGINEERING -- 0.0%
10,902 AMEC PLC......................... 21,078
171 Barratt Developments PLC......... 651
------------
21,729
------------
FINANCE -- 1.3%
56,913 Cardon PLC....................... 165,751
418,478 Lloyds TSB Group PLC............. 5,412,119
13,726 Mercury Asset Management Group
PLC.............................. 383,490
19,913 Provident Financial PLC.......... 261,136
25,910 St. James's Place Capital PLC.... 72,049
------------
6,294,545
------------
FOOD & HOUSEHOLD PRODUCTS -- 0.6%
71,702 Cadbury Schweppes PLC............ 713,771
248,748 Unilever PLC..................... 2,132,404
------------
2,846,175
------------
Continued
59
206
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
FOOD PRODUCTS -- 0.2%
64,400 Associated British Foods PLC..... $ 552,072
23,280 Tate & Lyle PLC.................. 192,291
9,334 Unigate PLC...................... 92,380
34,759 United Biscuits (Holdings) PLC... 128,111
------------
964,854
------------
FOREST PRODUCTS -- 0.0%
43,404 Arjo Wiggins Appleton PLC........ 116,410
------------
GAS & ELECTRIC UTILITY -- 0.2%
86,766 National Power PLC............... 860,159
------------
HEALTH & PERSONAL CARE -- 1.8%
271,959 Glaxo Wellcome PLC............... 6,434,792
72,169 Zeneca Group PLC................. 2,541,187
------------
8,975,979
------------
HOMEBUILDERS -- 0.0%
30,094 George Wimpey PLC................ 52,488
31,929 Wilson Connolly Holdings PLC..... 81,956
------------
134,444
------------
INDUSTRIAL HOLDING COMPANY -- 0.3%
26,483 BICC Group PLC................... 74,949
292,639 BTR PLC.......................... 898,015
42,127 Hanson PLC....................... 188,886
34,133 TI Group PLC..................... 261,717
------------
1,423,567
------------
INSURANCE -- 2.2%
65,168 Boots Co., PLC................... 946,820
49,041 Commercial Union PLC............. 724,616
72,016 Great Universal Stores PLC....... 888,715
65,046 Guardian Royal Exchange PLC...... 347,837
89,407 Legal & General Group PLC........ 782,628
215,326 Marks & Spencer PLC.............. 2,122,244
137,833 Prudential Corp., PLC............ 1,602,277
110,873 Royal & Sun Alliance Insurance
Group PLC........................ 1,112,827
133,038 Sainsbury (J) PLC................ 1,115,301
16,318 Sedgwick Group PLC............... 37,858
157,137 Tesco PLC........................ 1,266,913
28,938 Willis Corroon Group PLC......... 70,708
------------
11,018,744
------------
LEISURE -- 0.3%
62,992 Granada Group PLC................ 971,175
84,471 Ladbroke Group PLC............... 366,930
56,900 Rank Group PLC................... 317,383
------------
1,655,488
------------
MACHINE-DIVERSIFIED -- 0.0%
21,296 FKI PLC.......................... 67,278
------------
MACHINERY & EQUIPMENT -- 0.1%
25,300 GKN PLC.......................... 519,110
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
MANUFACTURING-CAPITAL GOODS -- 0.1%
18,984 IMI PLC.......................... $ 126,663
40,592 Wolseley PLC..................... 322,597
------------
449,260
------------
MERCHANDISING -- 0.1%
78,023 Safeway PLC...................... 442,908
------------
METALS -- 0.2%
145,916 British Steel PLC................ 316,319
76,682 Rio Tinto PLC, Registered........ 890,149
------------
1,206,468
------------
METALS & MINING -- 0.0%
24,630 English China Clays PLC.......... 109,016
10,804 Johnson Matthey PLC.............. 96,262
------------
205,278
------------
MISCELLANEOUS MATERIALS & COMMODITIES -- 0.0%
15,900 Harrisons & Crosfield PLC........ 36,627
30,432 Pilkington PLC................... 64,093
11,415 Vickers PLC...................... 44,514
------------
145,234
------------
OIL & GAS -- 0.1%
9,771 Burmah Castrol PLC............... 169,936
69,182 LASMO PLC........................ 307,917
------------
477,853
------------
PAPER PRODUCTS -- 0.0%
24,358 Rexam PLC........................ 119,635
------------
PHARMACEUTICALS -- 0.9%
425,140 SmithKline Beecham PLC........... 4,375,538
------------
PRINTING & PUBLISHING -- 0.5%
4,808 De La Rue PLC.................... 31,328
40,873 Pearson PLC...................... 531,295
81,796 Reed International PLC........... 797,430
120,955 Reuters Holdings PLC............. 1,330,447
------------
2,690,500
------------
RAILROADS -- 0.1%
35,800 Railtrack Group PLC.............. 569,615
------------
REAL ESTATE -- 0.3%
34,009 British Land Co., PLC............ 372,123
2,436 Great Portland Estates PLC....... 9,620
35,421 Hammerson PLC.................... 275,382
37,045 Land Securities PLC.............. 597,348
13,249 MEPC PLC......................... 111,071
23,972 Slough Estates PLC............... 135,489
------------
1,501,033
------------
RETAIL STORES -- 0.1%
26,826 Next PLC......................... 305,446
------------
RETAIL-GENERAL MERCHANDISE -- 0.2%
12,736 Argos PLC........................ 115,467
48,507 Kingfisher PLC................... 676,818
83,403 Sears PLC........................ 72,047
------------
864,332
------------
Continued
60
207
The Kent INTERNATIONAL GROWTH FUND
Funds PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
RETAIL-SPECIAL LINE -- 0.1%
101,624 LucasVarity PLC.................. $ 359,507
------------
TELECOMMUNICATIONS -- 1.4%
480,466 British Telecommunications PLC... 3,792,712
172,196 Cable & Wireless PLC............. 1,514,408
219,768 Vodafone Group PLC............... 1,603,726
------------
6,910,846
------------
TELECOMMUNICATIONS-EQUIPMENT -- 0.0%
16,186 Racal Electronic PLC............. 70,576
------------
TEXTILE PRODUCTS -- 0.0%
36,816 Coats Viyella PLC................ 55,428
3,534 Courtaulds Textiles PLC.......... 20,730
------------
76,158
------------
TRANSPORTATION -- 0.3%
74,172 British Airways PLC.............. 727,986
13,207 Ocean Group PLC.................. 128,429
44,646 Peninsular & Oriental Steam
Navigation Co.................... 510,184
23,478 Transport Development Group PLC.. 79,193
------------
1,445,792
------------
WATER UTILITY -- 0.2%
19,357 Anglian Water PLC................ 257,985
27,099 Thames Water PLC................. 406,204
38,414 United Utilities PLC............. 496,171
------------
1,160,360
------------
94,092,139
------------
TOTAL COMMON STOCKS.............. 488,705,682
(Cost $423,047,484) ------------
PREFERRED STOCKS -- 0.7%
AUSTRALIA -- 0.2%
PRINTING & PUBLISHING -- 0.2%
175,105 News Corp. Ltd................... 866,419
------------
AUSTRIA -- 0.1%
BANKING -- 0.1%
2,600 Bank Austria AG -- Vorguz........ 123,312
7,244 Bank Austria Preferred *......... 321,807
------------
445,119
------------
GERMANY -- 0.4%
AUTOMOTIVE -- 0.1%
168 MAN AG Preferred................. 38,121
527 Volkswagen AG Preferred.......... 225,978
------------
264,099
------------
COMPUTER SOFTWARE -- 0.2%
3,800 SAP AG Preferred................. 1,234,653
------------
GAS & ELECTRIC UTILITY -- 0.1%
19,640 RWE AG........................... 841,070
------------
2,339,822
------------
ITALY -- 0.0%
AUTOMOTIVE -- 0.0%
90,420 Fiat SpA Preferred............... 138,085
------------
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
PREFERRED STOCKS (CONTINUED)
TOTAL PREFERRED STOCKS........... $ 3,789,445
(Cost $2,471,524) ------------
RIGHTS -- 0.1%
AUSTRALIA -- 0.0%
ENTERTAINMENT -- 0.0%
22,876 Crown Ltd. Rights *.............. 1,938
------------
ITALY -- 0.1%
BANKING -- 0.1%
38,900 Banco Ambrosiano Veneto SpA*..... 48,625
54,694 Banco Ambrosiano Veneto SpA*..... 34,648
54,694 Banco Ambrosiano Veneto SpA*..... 232,789
38,900 Banco Ambrosiano Veneto SpA*..... 5,259
------------
321,321
MALAYSIA -- 0.0%
BANKING -- 0.0%
103,000 Public Bank...................... 0
------------
TOTAL RIGHTS..................... 323,259
(Cost $94,665) ------------
WARRANTS -- 0.0%
BELGIUM -- 0.0%
BANKING -- 0.0%
568 Generale Banque Warrants *....... 1,456
------------
FRANCE -- 0.0%
FINANCE -- 0.0%
12,918 Compagnie Generale des Eaux *.... 8,783
------------
TOTAL WARRANTS................... 10,239
(Cost $0) ------------
COMMERCIAL PAPER -- 1.1%
UNITED STATES -- 1.1%
AUTOMOTIVE -- 1.1%
$5,714,579 General Motors Acceptance Corp... 5,714,579
------------
TOTAL COMMERCIAL PAPER........... 5,714,579
(Cost $5,714,579) ------------
TOTAL INVESTMENTS -- 99.2%.................. 498,543,204
(Cost $431,328,252) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.8%....................... 3,835,505
------------
TOTAL NET ASSETS -- 100.0%.................. $502,378,709
============
- ---------------
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of mark to market adjustment
for passive foreign investment companies of $2,685,051. Cost for federal
income tax purposes differs from value by net unrealized appreciation of
securities as follows:
Unrealized appreciation............... $128,496,401
Unrealized depreciation............... (63,966,500)
------------
Net unrealized appreciation........... $ 64,529,901
============
* Non-income producing security.
61
208
The Kent Funds
INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
At December 31, 1997, the International Growth Fund's open forward foreign
currency exchange contracts were as follows:
UNREALIZED
DELIVERY CONTRACT CONTRACT CONTRACT MARKET APPRECIATION
CURRENCY DATE PRICE** AMOUNT** VALUE VALUE (DEPRECIATION)
- -------------------------------- ------------- -------- ----------- ----------- ----------- --------------
Short Contracts:
Austrian Schilling............ 1/5/98 12.5990 $(9,723,653) $ (771,780) $ (768,617) $(3,163)
Belgian Franc................. 1/15/98 36.9860 (5,695,549) (153,992) (153,726) 266
British Pound................. 1/6/98 0.5970 (443,342) (742,598) (729,476) 13,122
British Pound................. 1/7/98 0.6035 (131,207) (217,410) (215,888) 1,522
German Marks.................. 1/8/98 1.7910 (444,121) (247,974) (247,002) 971
French Franc.................. 1/30/98 5.9620 (2,976,299) (499,212) (494,742) 4,470
New Zealand Dollar............ 1/8/98 1.5267 (7.537) (4,937) (4,377) 560
Singapore Dollars............. 1/6/98 1.6790 (101,293) (60,329) (60,117) 213
Japanese Yen.................. 1/7/98 130.1000 (7,866,538) (60,465) (60,502) (37)
----------- ----------- -------
Total Short Contracts: $(2,758,697) $(2,734,447) $24,250
=========== =========== =======
Long Contracts:
U.S. Dollar................... 1/5/98 1.0000 $ 771,780 $ 771,780 $ 771,780 $ 0
U.S. Dollar................... 1/6/98 1.0000 802,927 802,927 802,927 0
U.S. Dollar................... 1/7/98 1.0000 277,875 277,875 277,875 0
U.S. Dollar................... 1/8/98 1.0000 252,911 252,911 252,911 0
U.S. Dollar................... 1/15/98 1.0000 153,992 153,992 153,992 0
U.S. Dollar................... 1/30/98 1.0000 499,212 499,212 499,212 0
----------- ----------- -------
Total Long Contracts: $ 2,758,697 $ 2,758,697 $ 0
=========== =========== =======
- ---------------
** Contract price is in local currency.
See Notes to Financial Statements.
62
209
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 98.8%
ADVERTISING -- 0.1%
10,200 Interpublic Group Companies
Inc............................. $ 508,088
6,600 Omnicom Group................... 279,675
------------
787,763
------------
AEROSPACE & DEFENSE -- 1.3%
80,892 Boeing Co....................... 3,958,653
5,100 General Dynamics Corp........... 440,831
15,694 Lockheed Martin Corp............ 1,545,859
5,400 Northrop Grumman Corp........... 621,000
1 Raytheon Co. -- Class A......... 20
27,500 Raytheon Co. -- Class B......... 1,388,750
------------
7,955,113
------------
AGRICULTURE -- 0.1%
5,300 Pioneer Hi Bred, Inc............ 568,425
------------
APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1%
7,900 Maytag Corp..................... 294,769
6,100 Whirlpool Corp.................. 335,500
------------
630,269
------------
AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.4%
3,100 Cummins Engine, Inc............. 183,094
8,500 Dana Corp....................... 403,750
6,200 Eaton Corp...................... 553,349
6,120 Navistar International Corp.*... 151,853
6,250 PACCAR Inc...................... 328,125
10,000 TRW Inc......................... 533,750
------------
2,153,921
------------
AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.1%
5,100 Echlin, Inc..................... 184,556
14,425 Genuine Parts Co................ 489,549
------------
674,105
------------
AUTOMOTIVE -- 1.6%
53,838 Chrysler Corp................... 1,894,425
97,100 Ford Motor Co................... 4,727,556
58,200 General Motors Corp............. 3,528,375
------------
10,150,356
------------
BANKS -- MAJOR REGIONAL -- 5.8%
47,544 Banc One Corp................... 2,582,233
30,500 Bank of New York Co., Inc....... 1,763,281
11,800 BankBoston Corp................. 1,108,463
15,900 Barnett Banks, Inc.............. 1,142,813
8,500 Comerica, Inc................... 767,125
16,200 Corestates Financial Corp....... 1,297,013
12,500 Fifth Third Bancorp............. 1,021,875
23,553 First Chicago NBD Corp.......... 1,966,675
50,850 First Union Corp................ 2,606,062
20,207 Fleet Financial Group, Inc...... 1,514,262
15,500 Huntington Bancshares........... 558,000
17,800 KeyCorp......................... 1,260,463
20,600 Mellon Bank Corp................ 1,248,875
17,300 National City Corp.............. 1,137,475
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BANKS -- MAJOR REGIONAL (CONTINUED)
57,588 NationsBank..................... $ 3,502,069
61,100 Norwest Corp.................... 2,359,987
24,700 PNC Bank Corp................... 1,409,444
4,400 Republic New York Corp.......... 502,425
13,000 State Street Corp............... 756,438
17,100 SunTrust Banks, Inc............. 1,220,513
19,854 U.S. Bancorp.................... 2,222,406
16,500 Wachovia Corp................... 1,338,563
7,000 Wells Fargo & Co................ 2,376,062
------------
35,662,522
------------
BANKS -- MONEY CENTER -- 2.5%
56,148 BankAmerica Corp................ 4,098,804
7,900 Bankers Trust New York Corp..... 888,256
11,100 BB&T Corp....................... 711,094
34,058 Chase Manhattan Corp............ 3,729,351
37,000 Citicorp........................ 4,678,187
14,400 J.P. Morgan & Co., Inc.......... 1,625,400
------------
15,731,092
------------
BEVERAGES -- ALCOHOLIC -- 0.5%
3,000 Adolph Coors Co................. 99,750
39,670 Anheuser-Busch Co., Inc......... 1,745,480
5,600 Brown-Forman Corp............... 309,400
29,600 Seagram Co., Ltd................ 956,450
------------
3,111,080
------------
BEVERAGES -- SOFT DRINKS -- 2.9%
200,100 Coca-Cola Co.................... 13,331,662
122,800 PepsiCo, Inc.................... 4,474,525
------------
17,806,187
------------
BROADCASTING/CABLE -- 0.4%
7,900 Clear Channel Communications*... 627,556
28,200 Comcast Corp. Special........... 890,063
41,046 Tele-Communications Inc.*....... 1,146,722
------------
2,664,341
------------
BUILDING & CONSTRUCTION --
MISCELLANEOUS -- 0.2%
3,300 Armstrong World Industries,
Inc............................. 246,675
13,400 Masco Corp...................... 681,725
4,300 Owens-Corning Fiberglass
Corp............................ 146,738
------------
1,075,138
------------
BUILDING -- HEAVY CONSTRUCTION -- 0.1%
6,800 Fluor Corp...................... 254,150
3,300 Foster Wheeler Corp............. 89,306
------------
343,456
------------
BUILDING -- MAINTENANCE & SERVICE -- 0.1%
5,200 Ecolab, Inc..................... 288,275
------------
BUILDING -- MOBILE/MANUFACTURING &
RECREATIONAL VEHICLES -- 0.0%
2,900 Fleetwood Enterprises, Inc...... 123,069
------------
Continued
63
210
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.1%
2,400 Centex Corp..................... $ 151,050
3,140 Kaufman & Broad Home Corp....... 70,454
1,700 Pulte Corp...................... 71,081
------------
292,585
------------
BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.7%
59,231 Home Depot, Inc................. 3,487,225
14,100 Lowe's Cos., Inc................ 672,394
------------
4,159,619
------------
BUILDING PRODUCTS -- WOOD -- 0.2%
8,900 Louisiana-Pacific Corp.......... 169,100
16,150 Weyerhaeuser Co................. 792,359
------------
961,459
------------
BUSINESS INFORMATION -- 0.2%
13,165 Cognizant Corp.................. 586,665
13,765 Dun & Bradstreet Corp........... 425,855
------------
1,012,520
------------
BUSINESS SERVICES -- 0.1%
8,400 H & R Block..................... 376,425
------------
CAPITAL GOODS -- 0.3%
57,000 CBS Corp........................ 1,677,938
------------
CHEMICALS -- DIVERSIFIED -- 2.0%
4,400 B.F. Goodrich Co................ 182,325
18,300 Dow Chemical Co................. 1,857,450
91,600 E.I. du Pont de Nemours & Co.... 5,501,724
6,300 Eastman Chemical Co............. 375,244
7,900 Hercules, Inc................... 395,494
48,000 Monsanto Co..................... 2,016,000
14,400 PPG Industries, Inc............. 822,600
5,000 Rohm & Haas Co.,................ 478,750
10,000 Union Carbide Corp.............. 429,375
6,000 W.R. Grace & Co................. 482,625
------------
12,541,587
------------
CHEMICALS -- SPECIALTY -- 0.4%
8,900 Air Products & Chemical Inc..... 732,025
11,737 Engelhard Corp.................. 203,930
4,800 Great Lakes Chemical Corp....... 215,400
11,200 Morton International, Inc....... 385,000
5,400 Nalco Chemical Co............... 213,638
12,800 Praxair, Inc.................... 576,000
8,100 Sigma-Aldrich Corp.............. 321,975
------------
2,647,968
------------
COMPUTER SOFTWARE -- 2.9%
5,900 Adobe Systems, Inc.............. 243,375
44,218 Computer Associates
International, Inc.............. 2,338,026
97,600 Microsoft Corp.*................ 12,614,799
12,000 Nextlevel Systems Inc.*......... 214,500
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
COMPUTER SOFTWARE (CONTINUED)
79,375 Oracle Corp.*................... $ 1,771,055
10,300 Parametric Technology Corp.*.... 487,963
------------
17,669,718
------------
COMPUTERS -- LOCAL AREA NETWORK -- 1.0%
28,000 3COM Corp.*..................... 978,250
17,100 Bay Networks, Inc.*............. 437,119
12,800 Cabletron Systems*.............. 192,000
81,400 Cisco Systems, Inc.*............ 4,538,050
28,300 Novell, Inc.*................... 212,250
------------
6,357,669
------------
COMPUTERS -- MAINFRAME -- 1.4%
78,700 International Business Machines
Corp............................ 8,229,069
14,200 Unisys Corp..................... 197,025
------------
8,426,094
------------
COMPUTERS -- MEMORY DEVICES -- 0.2%
40,100 EMC Corp.*...................... 1,100,244
19,800 Seagate Technology, Inc.*....... 381,150
------------
1,481,394
------------
COMPUTERS -- MICRO -- 1.0%
10,300 Apple Computer, Inc.*........... 135,188
61,267 Compaq Computer Corp............ 3,457,756
3,900 Data General Corp.*............. 68,006
26,400 Dell Computer Corp.*............ 2,217,600
------------
5,878,550
------------
COMPUTERS -- MINI -- 1.2%
12,200 Digital Equipment Corp.*........ 451,400
84,200 Hewlett-Packard Co.............. 5,262,500
15,200 Silicon Graphics, Inc.*......... 189,050
30,300 Sun Microsystems, Inc.*......... 1,208,213
------------
7,111,163
------------
COMPUTERS -- SERVICES -- 0.6%
23,700 Automatic Data Processing,
Inc............................. 1,454,587
6,400 Ceridian Corp.*................. 293,200
6,300 Computer Science*............... 526,050
12,200 Equifax, Inc.................... 432,338
35,400 First Data Corp................. 1,035,450
2,000 Shared Medical Systems Corp..... 132,000
------------
3,873,625
------------
CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.7%
6,000 American Greetings Corp......... 234,750
3,195 Jostens, Inc.................... 73,685
12,900 Newell Cos., Inc................ 548,250
12,100 Rubbermaid, Inc................. 302,500
4,900 Tupperware Corp................. 136,588
51,800 Unilever NV, ADR................ 3,234,262
------------
4,530,035
------------
CONTAINERS & PACKAGING -- 0.1%
11,400 Owens-Illinois*................. 432,488
------------
Continued
64
211
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
CONTAINERS -- METAL & GLASS -- 0.1%
2,400 Ball Corp....................... $ 84,750
10,400 Crown Cork & Seal Co., Inc...... 521,300
------------
606,050
------------
CONTAINERS -- PAPER & PLASTIC -- 0.0%
4,300 Bemis Co........................ 189,469
------------
COSMETICS & TOILETRIES -- 0.9%
4,500 Alberto Culver Co., Class B..... 144,281
10,700 Avon Products, Inc.............. 656,713
45,332 Gillette Co..................... 4,553,033
8,800 International Flavors &
Fragrances, Inc................. 453,200
------------
5,807,227
------------
DIVERSIFIED -- 4.7%
14,120 Allegheny Teledyne, Inc......... 365,355
45,600 Allied Signal, Inc.............. 1,775,550
3,750 Crane Co........................ 162,656
3,000 FMC Corp.*...................... 201,938
264,800 General Electric Co. (b)........ 19,429,699
9,600 ITT Industries, Inc............. 301,200
6,800 Johnson Controls, Inc........... 324,700
33,200 Minnesota Mining & Manufacturing
Co.............................. 2,724,475
3,600 National Service Industries,
Inc............................. 178,425
16,900 Rockwell International Corp..... 883,025
13,800 Tenneco, Inc.................... 545,100
13,300 Textron, Inc.,.................. 831,250
18,900 United Technologies Corp........ 1,376,156
8,200 Whittman Corp................... 213,713
------------
29,313,242
------------
ELECTRICAL & ELECTRONIC -- 0.0%
6,800 KLA-Tencor Corp.*............... 262,650
------------
ELECTRICAL COMPONENTS --
SEMICONDUCTORS -- 1.9%
11,500 Advanced Micro Devices, Inc.*... 206,281
132,400 Intel Corp...................... 9,301,099
11,500 LSI Logic Corp.*................ 227,125
17,100 Micron Technology, Inc.*........ 444,600
13,200 National Semiconductor Corp.*... 342,375
31,600 Texas Instruments, Inc.......... 1,422,000
------------
11,943,480
------------
ELECTRONIC -- CONNECTORS -- 0.2%
17,836 AMP, Inc........................ 749,112
4,500 Thomas & Betts Corp............. 212,625
------------
961,737
------------
ELECTRONIC MEASURING EQUIPMENT -- 0.0%
4,100 Tektronix, Inc.................. 162,719
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
ELECTRONIC MEASURING MACHINES -- 0.1%
29,500 Applied Materials, Inc.*........ $ 888,688
------------
ELECTRONICS -- 0.1%
7,000 Raychem Corp.................... 301,438
------------
ENERGY -- 0.0%
8,600 Orxy Energy Co.*................ 219,300
------------
FINANCE -- 0.3%
15,800 Sunamerica, Inc................. 675,450
20,830 Washington Mutual, Inc.......... 1,329,214
------------
2,004,664
------------
FINANCIAL -- BANKING -- 0.1%
14,200 Synovus Financial Corp.......... 465,050
------------
FINANCIAL -- CONSUMER LOANS -- 0.4%
4,300 Beneficial Corp................. 357,438
8,700 Household International, Inc.... 1,109,794
40,587 MBNA Corp....................... 1,108,532
------------
2,575,764
------------
FINANCIAL -- INVESTMENT BANKERS -- 0.5%
27,000 Merrill Lynch & Co., Inc........ 1,969,313
21,450 Schwab (Charles) Corp........... 899,559
------------
2,868,872
------------
FINANCIAL -- LEASING COMPANY -- 0.0%
6,200 Ryder Systems, Inc.............. 203,050
------------
FINANCIAL -- MISCELLANEOUS SERVICES -- 1.0%
37,600 American Express Co............. 3,355,800
47,916 Morgan Stanley, Dean Witter,
Discover & Co................... 2,833,034
------------
6,188,834
------------
FINANCIAL -- MORTGAGE & RELATED
SERVICES -- 1.3%
8,700 Country Wide Credit Industries,
Inc............................. 373,013
85,900 Fannie Mae...................... 4,901,668
56,200 Freddie Mac..................... 2,356,887
11,000 Green Tree Financial Corp....... 288,063
------------
7,919,631
------------
FINANCIAL -- SAVINGS & LOAN -- 0.2%
4,600 Golden West Financial Corp...... 449,938
7,800 H.F. Ahmanson & Co.............. 522,112
------------
972,050
------------
FOOD -- CANNED -- 0.6%
37,000 Campbell Soup Co................ 2,150,625
29,700 H.J. Heinz Co................... 1,509,131
------------
3,659,756
------------
FOOD -- CONFECTIONARY -- 0.2%
11,600 Hershey Foods Corp.............. 718,475
9,400 Wm. Wrigley Jr. Co.............. 747,888
------------
1,466,363
------------
Continued
65
212
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FOOD -- DIVERSIFIED -- 1.4%
38,150 ConAgra, Inc.................... $ 1,251,797
11,600 CPC International, Inc.......... 1,249,900
12,800 General Mills, Inc.............. 916,800
33,300 Kellogg Co...................... 1,652,513
11,200 Quaker Oats Co.................. 590,800
8,580 Ralston Purina Group............ 797,404
38,800 Sara Lee Corp................... 2,184,924
------------
8,644,138
------------
FOOD -- FLOUR & GRAIN -- 0.2%
45,163 Archer-Daniels-Midland Co....... 979,473
------------
FOOD ITEMS -- WHOLESALE -- 0.1%
4,900 Supervalu, Inc.................. 205,188
13,900 Sysco Corp...................... 633,318
------------
838,506
------------
FOREST PRODUCTS -- 0.1%
16,900 Fort James Corporation.......... 646,425
------------
FUNERAL SERVICES -- 0.1%
20,400 Service Corp. International..... 753,525
------------
GAMING -- 0.1%
14,500 Mirage Resorts*................. 329,875
------------
GAS & ELECTRIC UTILITY -- 0.3%
35,500 PG & E Corp..................... 1,080,531
18,800 Public Service Enterprises...... 595,725
------------
1,676,256
------------
GLASS PRODUCTS -- 0.1%
18,700 Corning, Inc.................... 694,238
------------
HOTELS & LODGING -- 0.3%
20,300 Hilton Hotels Corp.............. 603,925
9,400 ITT Corp.*...................... 779,025
10,300 Marriott International, Inc..... 713,275
------------
2,096,225
------------
INSTRUMENTS -- CONTROL -- 0.1%
4,022 General Signal Corp............. 169,678
10,300 Honeywell, Inc.................. 705,550
------------
875,228
------------
INSTRUMENTS -- SCIENTIFIC -- 0.1%
3,700 EG&G, Inc....................... 77,006
3,500 Millipore Corp.................. 118,781
3,600 Perkin-Elmer Corp............... 255,826
------------
451,613
------------
INSURANCE -- 0.2%
4,400 Cincinnati Financial Corp....... 619,300
5,800 Progressive Corp-Ohio........... 695,275
------------
1,314,575
------------
INSURANCE -- ACCIDENT & HEALTH -- 0.1%
13,600 Aon Corp........................ 797,300
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
INSURANCE -- BROKERS -- 0.2%
13,700 Marsh & McLennan Cos., Inc...... $ 1,021,506
------------
INSURANCE -- LIFE -- 0.7%
19,798 American General Corp........... 1,070,330
15,200 Conseco, Inc.................... 690,650
5,750 Jefferson-Pilot Corp............ 447,781
7,700 Providian Financial............. 347,944
11,300 Torchmark Corp.................. 475,306
5,082 TransAmerica Corp............... 541,233
11,200 UNUM Corp....................... 609,000
------------
4,182,244
------------
INSURANCE -- MULTI-LINE -- 1.6%
12,070 Aetna, Inc...................... 851,689
6,000 CIGNA Corp...................... 1,038,375
9,600 Hartford Financial Services
Group, Inc...................... 898,200
9,300 Loews Corp...................... 986,963
7,200 MBIA, Inc....................... 481,050
9,200 MGIC Investment Corp............ 611,800
92,794 Travelers Group, Inc............ 4,999,277
------------
9,867,354
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.2%
34,699 Allstate Corp................... 3,153,271
56,720 American International Group.... 6,168,299
13,800 Chubb Corp...................... 1,043,625
6,400 General Re Corp................. 1,356,800
8,300 Lincoln National Corp........... 648,438
11,400 Safeco Corp..................... 555,750
6,800 St. Paul Cos., Inc.............. 558,025
9,100 USF&G Corp...................... 200,769
------------
13,684,977
------------
LEISURE & RECREATION PRODUCTS -- 0.0%
8,100 Brunswick Corp.................. 245,531
------------
LEISURE & RECREATION/GAMING -- 0.0%
8,200 Harrah's Entertainment, Inc.*... 154,775
------------
MACHINE TOOLS & RELATED PRODUCTS -- 0.0%
3,200 Cincinnati Milacron, Inc........ 83,000
------------
MACHINERY -- CONSTRUCTION/MINING -- 0.3%
30,100 Caterpillar, Inc................ 1,461,731
13,350 Ingersoll-Rand Co............... 540,675
------------
2,002,406
------------
MACHINERY -- ELECTRICAL -- 0.4%
35,900 Emerson Electric Co............. 2,026,106
4,000 W.W. Grainger, Inc.............. 388,750
------------
2,414,856
------------
MACHINERY -- FARM -- 0.3%
2,000 Briggs & Stratton Corp.......... 97,125
6,100 Case Corp....................... 368,669
20,400 Deere & Co...................... 1,189,575
------------
1,655,369
------------
Continued
66
213
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MACHINERY -- GENERAL INDUSTRIAL -- 0.5%
2,300 Aeroquip-Vickers Inc............ $ 112,844
9,800 Cooper Industries, Inc.......... 480,200
18,000 Dover Corp...................... 650,250
4,022 Harnischfeger Industries,
Inc............................. 142,027
20,200 Illinois Tool Works, Inc........ 1,214,525
9,025 Parker-Hannifin Corp............ 414,022
------------
3,013,868
------------
MACHINERY -- MATERIAL HANDLING -- 0.0%
700 Nacco Industries, Inc........... 75,031
------------
MACHINERY -- THERMAL PROCESSOR -- 0.1%
12,200 Thermo Electron Corp.*.......... 542,900
------------
MEDIA CONGLOMERATES -- 1.5%
45,260 Time Warner, Inc................ 2,806,120
28,600 Viacom, Inc.*................... 1,185,113
54,600 Walt Disney Co.................. 5,408,812
------------
9,400,045
------------
MEDICAL -- BIOMEDICAL/GENETIC -- 0.2%
21,300 Amgen, Inc...................... 1,152,863
------------
MEDICAL -- DRUGS -- 7.8%
61,900 Abbott Laboratories............. 4,058,319
6,900 Alza Corp.*..................... 219,506
52,600 American Home Products Corp..... 4,023,900
80,500 Bristol-Myers Squibb Co......... 7,617,313
89,800 Eli Lilly & Co.................. 6,252,325
97,000 Merck & Co., Inc................ 10,306,249
104,700 Pfizer, Inc..................... 7,806,693
41,030 Pharmacia & Upjohn, Inc......... 1,502,724
59,200 Schering-Plough Corp............ 3,677,800
22,000 Warner-Lambert Co............... 2,728,000
------------
48,192,829
------------
MEDICAL -- HEALTH MEDICAL
ORGANIZATION -- 0.2%
13,300 Humana, Inc.*................... 275,975
15,200 United Healthcare Corp.......... 755,250
------------
1,031,225
------------
MEDICAL -- HOSPITAL -- 0.4%
52,449 Columbia/HCA Healthcare Corp.... 1,553,801
24,700 Tenet Healthcare Corp.*......... 818,188
------------
2,371,989
------------
MEDICAL -- NURSING HOMES -- 0.0%
5,100 Manor Care, Inc................. 178,500
------------
MEDICAL -- OUTPATIENT/HOME CARE -- 0.1%
31,900 HEALTHSOUTH Corp.*.............. 885,225
------------
MEDICAL -- WHOLESALE DRUG -- 0.1%
8,800 Cardinal Health, Inc............ 661,100
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
MEDICAL INSTRUMENTS -- 0.4%
9,000 Biomet, Inc..................... $ 230,625
38,000 Medtronic, Inc.................. 1,987,875
7,400 St. Jude Medical, Inc........... 225,700
6,100 U.S. Surgical Corp.............. 178,806
------------
2,623,006
------------
MEDICAL PRODUCTS -- 0.6%
5,300 Allergan, Inc................... 177,881
22,700 Baxter International, Inc....... 1,144,931
15,700 Boston Scientific Corp.*........ 720,238
12,000 Guidant Corp.................... 747,000
16,200 HBO & Co........................ 777,600
5,900 Mallinckrodt, Inc............... 224,200
------------
3,791,850
------------
MEDICAL/DENTAL SUPPLIES -- 1.3%
4,500 Bausch & Lomb, Inc.............. 178,313
9,900 Becton, Dickinson & Co.......... 495,000
4,600 C.R. Bard, Inc.................. 144,038
108,800 Johnson & Johnson............... 7,167,199
------------
7,984,550
------------
METAL -- GOLD -- 0.2%
30,200 Barrick Gold Corp............... 562,474
18,600 Battle Mountian Gold Co......... 109,275
11,300 Echo Bay Mines Ltd.............. 27,544
11,900 Homestake Mining Co............. 105,613
12,615 Newmont Mining Corp............. 370,565
19,400 Placer Dome, Inc................ 246,138
------------
1,421,609
------------
METAL -- MISCELLANEOUS -- 0.1%
7,600 Cyprus Amax Minerals Co......... 116,850
13,500 Inco, Ltd....................... 229,500
------------
346,350
------------
METAL -- NON-FERROUS -- 0.4%
18,350 Alcan Aluminum, Ltd............. 506,919
14,000 Aluminum Co. of America......... 985,249
3,400 Asarco, Inc..................... 76,288
15,900 Freeport-McMoran Copper &
Gold, Inc. -- Class B........... 250,425
4,800 Phelps Dodge Corp............... 298,800
6,000 Reynolds Metals Co.............. 360,000
------------
2,477,681
------------
METAL -- PROCESSING & FABRICATION -- 0.1%
5,100 Timken Co....................... 175,312
7,825 Worthington Industries, Inc..... 129,113
------------
304,425
------------
MOVIE/TELEVISION PRODUCTION &
DISTRIBUTION -- 0.0%
2,950 King World Productions, Inc..... 170,363
------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.2%
36,800 Waste Management Inc............ 1,012,000
------------
Continued
67
214
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OFFICE AUTOMATION & EQUIPMENT -- 0.5%
11,700 Pitney Bowes, Inc............... $ 1,052,269
26,367 Xerox Corp...................... 1,946,214
------------
2,998,483
------------
OFFICE SUPPLIES & FORMS -- 0.2%
8,300 Avery Dennison Corp............. 371,425
6,600 Deluxe Corp..................... 227,700
10,744 IKON Office Solutions, Inc...... 302,175
2,500 John H. Harland Co.............. 52,500
7,200 Moore Corp., Ltd................ 108,900
------------
1,062,700
------------
OIL & GAS -- 0.1%
4,800 Anadarko Petroleum Corp......... 291,300
7,300 Apache Corp..................... 255,956
------------
547,256
------------
OIL & GAS -- DRILLING -- 0.6%
7,000 Rowan Cos., Inc.*............... 213,500
40,100 Schlumberger Ltd................ 3,228,050
------------
3,441,550
------------
OIL -- FIELD SERVICES -- 0.2%
21,200 Halliburton Co.................. 1,101,075
4,400 Western Atlas*.................. 325,600
------------
1,426,675
------------
OIL -- INTERNATIONAL INTEGRATED -- 5.6%
53,100 Chevron Corp.................... 4,088,700
199,500 Exxon Corp...................... 12,206,905
63,500 Mobil Corp...................... 4,583,906
173,500 Royal Dutch Petroleum Co., ADR.. 9,401,531
44,300 Texaco, Inc..................... 2,408,813
------------
32,689,855
------------
OIL -- PRODUCTION/PIPELINE -- 0.5%
8,550 Coastal Corp.................... 529,566
4,500 Columbia Gas System, Inc........ 353,531
25,700 Enron Corp...................... 1,068,156
6,900 Sonat, Inc...................... 315,675
25,800 Williams Co..................... 732,075
------------
2,999,003
------------
OIL -- U.S. EXPLORATION & PRODUCTION -- 0.2%
14,265 Burlington Resources, Inc....... 639,250
2,000 Helmerich & Payne, Inc.......... 135,750
20,523 Union Pacific Resources Group,
Inc............................. 497,683
------------
1,272,683
------------
OIL -- U.S. INTEGRATED -- 1.6%
7,400 Amerada Hess Corp............... 406,075
39,400 Amoco Corp...................... 3,353,924
26,000 Atlantic Richfield Co........... 2,083,249
3,900 Kerr-Mcgee Corp................. 246,919
27,400 Occidental Petroleum Corp....... 803,163
3,800 Pennzoil Co..................... 253,888
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
OIL -- U.S. INTEGRATED (CONTINUED)
21,300 Phillips Petroleum Co........... $ 1,035,713
19,900 Unocal Corp..................... 772,369
23,300 USX-Marathon Group.............. 786,375
------------
9,741,675
------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.2%
13,700 Baker Hughes, Inc............... 597,662
14,200 Dresser Industries, Inc......... 595,513
4,500 McDermott International, Inc.... 164,813
------------
1,357,988
------------
OIL REFINING -- 0.1%
6,100 Ashland, Inc.................... 327,494
5,774 Sun Co., Inc.................... 242,869
------------
570,363
------------
PAINTS & RELATED PRODUCTS -- 0.1%
14,000 Sherwin-Williams Co............. 388,500
------------
PAPER & RELATED PRODUCTS -- 0.9%
4,508 Boise Cascade Corp.............. 136,367
7,800 Champion International Co....... 353,438
7,500 Georgia Pacific Corp............ 455,625
24,424 International Paper Co.......... 1,053,285
44,440 Kimberly-Clark Corp............. 2,191,447
8,500 Mead Corp....................... 238,000
2,300 Potlatch Corp................... 98,900
8,046 Stone Container Corp............ 83,980
4,600 Temple-Inland, Inc.............. 240,638
5,600 Union Camp Corp................. 300,650
8,250 Westvaco Corp................... 259,359
9,000 Williamette Industries, Inc..... 289,688
------------
5,701,377
------------
PHOTOGRAPHY -- 0.3%
26,300 Eastman Kodak Co................ 1,599,369
3,589 Polaroid Corp................... 174,739
------------
1,774,108
------------
POLLUTION CONTROL -- 0.2%
16,100 Browning-Ferris Industries,
Inc............................. 595,700
26,600 Laidlaw, Inc.................... 362,425
10,299 Pall Corp....................... 213,061
4,700 Safety-Kleen Corp............... 128,956
------------
1,300,142
------------
PRINTING -- COMMERCIAL -- 0.1%
11,800 R.R. Donnelley & Sons Co........ 439,550
------------
PROTECTION -- SAFETY -- 0.3%
43,100 Tyco International Ltd.......... 1,942,194
------------
PUBLISHING -- BOOKS -- 0.1%
8,000 McGraw-Hill Cos., Inc........... 592,000
------------
PUBLISHING -- NEWSPAPERS -- 0.6%
7,800 Dow Jones & Co.................. 418,763
23,000 Gannett, Inc.................... 1,421,687
7,000 Knight-Ridder, Inc.............. 364,000
Continued
68
215
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PUBLISHING -- NEWSPAPERS (CONTINUED)
7,800 New York Times Co............... $ 515,775
7,800 Times Mirror Co................. 479,700
9,900 Tribune Co...................... 616,275
------------
3,816,200
------------
PUBLISHING -- PERIODICALS -- 0.0%
4,300 Meredith Corp................... 153,456
------------
RESTAURANTS -- 0.6%
12,400 Darden Restaurants, Inc......... 155,000
55,700 McDonald's Corp................. 2,659,675
12,310 Tricon Global Restaurants*...... 357,759
10,700 Wendy's International, Inc...... 257,469
------------
3,429,903
------------
RETAIL -- 0.4%
64,019 Cendant Corp.*.................. 2,200,653
------------
RETAIL -- APPAREL/SHOES -- 0.4%
8,600 Charming Shoppes, Inc.*......... 40,313
32,550 Gap, Inc........................ 1,153,490
21,978 Limited, Inc.................... 560,439
6,200 Nordstrom, Inc.................. 374,325
13,200 TJX Companies, Inc.............. 453,750
------------
2,582,317
------------
RETAIL -- CONSUMER ELECTRONICS -- 0.1%
8,000 Circuit City Stores, Inc........ 284,500
------------
RETAIL -- DISCOUNT -- 1.7%
17,150 Costco Cos., Inc.*.............. 765,319
17,600 Dayton-Hudson Corp.............. 1,188,000
39,500 Kmart Corp.*.................... 456,719
23,150 Toys 'R' Us, Inc.*.............. 727,778
182,400 Wal-Mart Stores, Inc............ 7,193,399
10,900 Woolworth Corp.*................ 222,088
------------
10,553,303
------------
RETAIL -- DRUG STORE -- 0.5%
13,900 CVS Corp........................ 890,469
3,100 Longs Drug Stores Corp.......... 99,588
10,100 Rite Aid Corp................... 592,744
39,800 Walgreen Co..................... 1,248,724
------------
2,831,525
------------
RETAIL -- MAJOR DEPARTMENT STORES -- 0.6%
5,716 Harcourt General, Inc........... 312,951
20,200 J.C. Penney, Inc................ 1,218,313
18,700 May Department Stores Co........ 985,256
31,675 Sears, Roebuck & Co............. 1,433,294
------------
3,949,814
------------
RETAIL -- REGIONAL DEPARTMENT STORES -- 0.2%
9,000 Dillards Department Stores,
Inc............................. 317,250
17,000 Federated Department Stores,
Inc.*........................... 732,063
3,000 Mercantile Stores Co............ 182,625
------------
1,231,938
------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
RETAIL -- SUPERMARKETS -- 0.5%
19,900 Albertsons, Inc................. $ 942,762
22,100 American Stores Co.............. 454,431
4,900 Giant Food Inc.................. 165,069
3,100 Great Atlantic & Pacific Tea
Co., Inc........................ 92,031
20,600 Kroger Co.*..................... 760,913
12,000 Winn-Dixie Stores, Inc.......... 524,250
------------
2,939,456
------------
RETAIL/WHOLESALE -- AUTO PARTS -- 0.1%
12,200 Autozone, Inc.*................. 353,800
5,100 Pep Boys-Manny, Moe & Jack...... 121,763
------------
475,563
------------
RETAIL/WHOLESALE -- COMPUTERS -- 0.1%
8,428 Tandy Corp...................... 325,005
------------
RUBBER -- TIRES -- 0.2%
6,400 Cooper Tire & Rubber Co......... 156,000
12,700 Goodyear Tire & Rubber Co....... 808,038
------------
964,038
------------
SHOES & RELATED APPAREL -- 0.2%
23,500 Nike, Inc....................... 922,375
4,600 Reebok International Ltd.*...... 132,538
------------
1,054,913
------------
SOAP & CLEANING PREPARATIONS -- 1.8%
8,400 Clorox, Inc..................... 664,125
23,900 Colgate-Palmolive Co............ 1,756,650
108,800 Procter & Gamble Co............. 8,683,600
------------
11,104,375
------------
STEEL -- PRODUCERS -- 0.1%
8,700 Armco, Inc.*.................... 42,956
9,100 Bethlehem Steel Corp.*.......... 78,488
4,000 Inland Steel Industries, Inc.... 68,500
7,100 Nucor Corp...................... 343,019
6,940 USX-U.S. Steel Group, Inc....... 216,875
------------
749,838
------------
TECHNOLOGY -- SOFTWARE -- 0.0%
3,900 Auto Desk....................... 144,300
------------
TELECOMMUNICATIONS -- 0.2%
49,100 US West Media Group*............ 1,417,763
------------
TELECOMMUNICATIONS -- CELLULAR -- 0.3%
40,800 Airtouch Communications,
Inc.*........................... 1,695,750
------------
TELECOMMUNICATIONS -- EQUIPMENT -- 1.7%
7,255 Andrew Corp.*................... 174,120
9,500 DSC Communications Corp.*....... 228,000
6,500 Harris Corp..................... 298,188
51,923 Lucent Technologies, Inc........ 4,147,349
48,300 Motorola, Inc................... 2,756,118
21,200 Northern Telecom, Ltd........... 1,886,800
Continued
69
216
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- EQUIPMENT (CONTINUED)
6,400 Scientific-Atlanta, Inc......... $ 107,200
14,700 Tellabs, Inc.*.................. 777,263
------------
10,375,038
------------
TEXTILE -- APPAREL -- 0.2%
5,900 Fruit of the Loom, Inc.*........ 151,188
5,600 Liz Claiborne, Inc.............. 234,150
3,000 Russell Corp.................... 79,688
10,000 VF Corp......................... 459,374
------------
924,400
------------
TEXTILE -- HOME FURNISHINGS -- 0.0%
1,600 Springs Industries, Inc......... 83,200
------------
TOBACCO -- 1.6%
13,900 Fortune Brands Inc.............. 515,169
196,200 Philip Morris Cos., Inc......... 8,890,312
14,900 U.S.T., Inc..................... 550,369
------------
9,955,850
------------
TOOLS -- HAND HELD -- 0.1%
7,700 Black & Decker Corp............. 300,781
4,950 Snap-On, Inc.................... 215,944
7,200 The Stanley Works............... 339,750
------------
856,475
------------
TOYS/GAME/HOBBY -- 0.2%
10,200 Hasbro, Inc..................... 321,300
23,547 Mattel, Inc..................... 877,126
------------
1,198,426
------------
TRANSPORTATION -- AIR FREIGHT -- 0.1%
9,300 Federal Express Corp.*.......... 567,881
------------
TRANSPORTATION -- AIRLINE -- 0.4%
7,400 AMR Corp.*...................... 950,900
6,000 Delta Air Lines, Inc............ 714,000
17,750 Southwest Airlines Co........... 437,094
7,400 US Airways Group, Inc.*......... 462,500
------------
2,564,494
------------
TRANSPORTATION -- RAILROAD -- 0.7%
12,600 Burlington Northern Santa Fe
Corp............................ 1,171,013
17,608 CSX Corp........................ 950,832
30,500 Norfolk Southern Corp........... 939,781
20,000 Union Pacific Corp.............. 1,248,750
------------
4,310,376
------------
TRANSPORTATION -- TRUCKING -- 0.0%
3,200 Caliber Systems, Inc............ 155,800
------------
UTILITIES -- ELECTRIC POWER -- 2.4%
15,300 American Electric Power Co...... 789,863
11,900 Baltimore Gas & Electric Co..... 405,344
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
UTILITIES -- ELECTRIC POWER (CONTINUED)
12,200 Carolina Power & Light Co....... $ 517,738
17,200 Central & South West Corp....... 465,475
12,735 CINergy Corp.................... 487,910
19,000 Consolidated Edison Co. of New
York, Inc....................... 779,000
11,700 Detroit Edison Co............... 405,844
15,150 Dominion Resources, Inc......... 644,822
29,106 Duke Power Co................... 1,611,744
31,700 Edison International............ 861,843
19,700 Entergy Corp.................... 589,769
18,600 First Energy Corp.*............. 539,400
14,700 Florida Power & Light, Inc...... 870,055
9,800 General Public Utilities
Corp............................ 412,825
23,044 Houston Industries, Inc......... 614,987
11,700 Niagara Mohawk Power Corp.*..... 122,850
6,000 Northern States Power Co........ 349,500
24,000 PacifiCorp...................... 655,500
18,000 Peco Energy Corp................ 436,500
13,400 PP&L Resources, Inc............. 320,763
55,800 Southern Co..................... 1,443,824
19,970 Texas Utilities Co.............. 830,003
17,500 Unicom Corp..................... 538,125
8,300 Union Electric Co............... 358,975
------------
15,052,659
------------
UTILITIES -- GAS DISTRIBUTION -- 0.2%
7,700 Consolidated Natural Gas Co..... 465,849
1,600 Eastern Enterprises............. 72,000
3,900 Nicor, Inc...................... 164,531
2,500 ONEOK Inc....................... 100,938
6,700 Pacific Enterprises............. 252,088
2,800 People's Energy Corp............ 110,250
------------
1,165,656
------------
UTILITIES -- TELEPHONE -- 6.6%
15,000 Alltel Corp..................... 615,938
44,300 Ameritech Corp.................. 3,566,150
131,456 AT&T Corp....................... 8,051,679
62,820 Bell Atlantic Corp.............. 5,716,619
80,200 BellSouth Corp.................. 4,516,263
13,300 Frontier Corp................... 320,031
77,500 GTE Corp........................ 4,049,375
56,400 MCI Communications Corp......... 2,414,625
74,209 SBC Communications, Inc......... 5,435,809
34,800 Sprint Corp..................... 2,040,150
39,100 U.S. West, Inc.................. 1,764,388
73,100 WorldCom, Inc.*................. 2,211,275
------------
40,702,302
------------
TOTAL COMMON STOCKS............. 611,246,056
------------
(Cost $428,692,981)
Continued
70
217
The Kent Funds
INDEX EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL MARKET
AMOUNT VALUE
- --------- ------
COMMERCIAL PAPER -- 1.0%
AUTOMOTIVE -- 1.0%
$5,896,442 General Motors Acceptance Corp.,
5.65%, 1/2/98................... $ 5,896,442
------------
TOTAL COMMERCIAL PAPER 5,896,442
------------
(Cost $5,896,442)
TOTAL INVESTMENTS -- 99.8%.................. $617,142,498
(Cost $434,589,423)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.2%....................... 1,021,028
------------
TOTAL NET ASSETS -- 100.0%.................. $618,163,526
============
- ---------------
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal tax reporting of $838,110. Cost for
federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation...............
$192,447,182
Unrealized depreciation...............
(10,732,217)
------------
Net unrealized appreciation...........
$181,714,965
============
(b) Security has been deposited as initial margin on open future contracts.
* Non-income producing security.
ADR American Depositary Receipt
At December 31, 1997, the Portfolio's open futures contracts were as follows:
# OF OPENING CURRENT MARKET
CONTRACTS CONTRACT TYPE POSITION VALUE
- --------- ----------------- ---------- ----------
Standard & Poor's
24 500, 3/19/98 $5,748,390 $5,874,600
See Notes to Financial Statements.
71
218
The Kent Funds
SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
COMMERCIAL PAPER -- 2.7%
FINANCE -- 2.7%
$ 4,036,781 General Electric Capital Corp.,
5.65%, 1/2/98.................. $ 4,036,781
------------
TOTAL COMMERCIAL PAPER......... 4,036,781
------------
(Cost $4,036,781)
CORPORATE NOTES & BONDS -- 61.8%
BANKING -- 6.8%
5,000,000 ABN Amro Bank, 6.63%,
10/31/01....................... 5,074,505
5,000,000 Chase Manhattan Corp., 5.88%,
8/4/99......................... 4,981,400
------------
10,055,905
------------
BROKERS -- 10.1%
5,000,000 Goldman Sachs Group L.P.,
6.10%, 4/15/98................. 4,995,900
6,000,000 Morgan Stanley Group, Inc.,
6.50%, 3/30/01................. 6,071,160
3,750,000 Salomon, Inc., 6.50%, 3/1/00... 3,769,650
------------
14,836,710
------------
FINANCE -- 24.4%
5,329,000 Associates Corp N.A., 5.25%,
3/30/00........................ 5,231,906
5,000,000 CIT Group Holdings, 6.10%,
8/9/99......................... 5,008,600
5,000,000 General Motors Acceptance
Corp., 8.25%, 1/23/98.......... 5,005,600
5,000,000 Household International, 7.28%,
7/22/99........................ 5,101,950
5,000,000 MCN Investment Corp., 6.89%,
1/16/02........................ 5,121,800
5,000,000 New England Education, Loan
Marketing Corp., 6.13%,
7/17/98........................ 5,004,550
5,000,000 Norwest Financial, Inc., 7.88%,
2/15/02........................ 5,296,899
------------
35,771,305
------------
INDUSTRIAL GOODS & SERVICES -- 5.7%
4,375,000 Enron Corp., 6.45%, 11/15/01... 4,383,794
4,000,000 SuperValu, Inc., 7.25%,
7/15/99........................ 4,060,440
------------
8,444,234
------------
PHARMACEUTICALS -- 3.5%
5,000,000 American Home Products Corp.,
7.70%, 2/15/00................. 5,146,850
------------
RETAIL -- 3.8%
5,500,000 Sears Roebuck Co., 8.45%,
11/1/98........................ 5,599,550
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS (CONTINUED)
TELECOMMUNICATIONS -- 4.1%
$ 6,000,000 Southwestern Bell Telephone
Co., 6.13%, 3/12/01............ $ 6,014,520
------------
UTILITIES -- 3.4%
5,000,000 Georgia Power Co., First
Mortgage, 6.13%, 9/1/99........ 4,999,450
------------
TOTAL CORPORATE NOTES & BONDS.. 90,868,524
------------
(Cost $90,517,034)
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 10.2%
5,000,000 Federal Home Loan Bank, 5.81%,
11/4/99........................ 5,000,000
5,000,000 Federal Home Loan Mortgage
Corp., 4.65%*, 3/11/98......... 4,990,650
5,000,000 Federal National Mortgage
Assoc., 6.03%, 7/2/99.......... 5,020,300
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 15,010,950
------------
(Cost $14,991,941)
U.S. GOVERNMENT OBLIGATIONS (23.6%)
U.S. TREASURY NOTES (23.6%)
6,000,000 5.50%, 11/15/98................ 5,993,460
20,000,000 7.50%, 10/31/99................ 20,618,800
5,000,000 6.00%, 8/15/00................. 5,035,950
3,000,000 6.63%, 7/31/01................. 3,084,360
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 34,732,570
------------
(Cost $34,315,957)
TOTAL INVESTMENTS - 98.3%................... 144,648,825
(Cost $143,861,713) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.7%....................... 2,522,839
------------
TOTAL NET ASSETS -- 100.0%.................. $147,171,664
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $ 1,315,282
Unrealized depreciation............... (528,170)
------------
Net unrealized appreciation........... $ 787,112
============
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
See Notes to Financial Statements.
72
219
The Kent Funds
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
COMMERCIAL PAPER -- 0.7%
FINANCE -- 0.7%
$ 5,007,999 General Electric Capital Corp.,
5.65%, 1/2/98.................. $ 5,007,999
------------
TOTAL COMMERCIAL PAPER......... 5,007,999
------------
(Cost $5,007,999)
CORPORATE NOTES & BONDS -- 27.9%
BANKING -- 7.4%
6,000,000 Bank of Montreal-Chicago,
7.80%, 4/1/07.................. 6,515,520
8,000,000 Chase Manhattan Corp., 7.25%,
6/1/07......................... 8,368,640
5,000,000 J.P. Morgan & Co., 7.63%,
9/15/04........................ 5,338,800
5,000,000 MBNA American Bank NA, 7.25%,
9/15/02........................ 5,136,450
5,000,000 NCNB Corp., 9.38%, 9/15/09..... 6,111,150
8,000,000 Royal Bank of Scotland, 6.38%,
2/1/11......................... 7,679,040
7,000,000 Societe Generale New York,
9.88%, 7/15/03................. 8,119,860
9,350,000 Societe Generale New York,
7.40%, 6/1/06.................. 9,768,413
------------
57,037,873
------------
BROKERS -- 1.3%
5,000,000 Salomon, Inc., 6.08%*,
2/15/98........................ 5,023,800
5,000,000 Salomon, Inc., 7.25%, 5/1/01... 5,131,600
------------
10,155,400
------------
FINANCE -- 12.9%
5,000,000 American Financial Group,
7.13%, 12/15/07................ 5,046,200
5,000,000 Associates Corp., N.A., 6.52%,
10/11/02....................... 5,075,850
5,500,000 Bear Stearns Co., 6.75%,
4/15/03........................ 5,579,860
11,000,000 Caterpillar Financial Services,
6.95%, 11/1/00................. 11,250,580
5,000,000 First Union Institutional
Capital I, 8.04%, 12/1/26,
Callable 12/1/06 @ 104.02...... 5,269,900
10,000,000 Ford Capital Guaranteed Notes,
9.88%, 5/15/02................. 11,315,700
8,400,000 Ford Motor Credit Corp., 9.03%,
12/30/09, Callable 12/30/04 @
100............................ 9,555,672
5,000,000 General Electric Capital Corp.,
6.66%*, 5/1/18, Callable 5/1/00
@100........................... 5,064,000
5,000,000 Household Finance Corp., 8.00%,
8/1/04......................... 5,394,550
8,000,000 HSBC America Capital II, 8.38%,
5/15/27, Callable 5/15/07 @
104.19......................... 8,529,760
5,000,000 Lehman Brothers, Inc., 7.38%,
1/15/07........................ 5,252,050
10,000,000 New England Education, Loan
Marketing Corp., 6.13%,
7/17/98........................ 10,009,100
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS (CONTINUED)
FINANCE (CONTINUED)
$ 7,000,000 Safeco Corp., 6.88%, 7/15/07
(b)............................ $ 7,162,330
5,000,000 Smith Barney Holdings, Inc.,
6.63%, 11/15/03................ 5,042,800
------------
99,548,352
------------
INDUSTRIAL GOODS & SERVICES -- 4.1%
14,800,000 Comdisco, Inc., 6.94%,
5/2/00......................... 15,045,828
6,000,000 ConAgra, Inc., 6.70%, 8/1/27... 6,158,220
10,000,000 SuperValu, Inc., 7.25%,
7/15/99........................ 10,151,100
------------
31,355,148
------------
RETAIL -- 0.7%
5,000,000 Sears Roebuck Acceptance Corp.,
6.86%, 8/6/01.................. 5,103,850
------------
TELECOMMUNICATIONS -- 0.8%
6,000,000 Bell Canada, 7.75%, 4/1/06..... 6,513,960
------------
UTILITIES -- 0.7%
5,000,000 Western Resorces, Inc., 6.88%,
8/1/04......................... 5,074,700
------------
TOTAL CORPORATE NOTES & BONDS.. 214,789,283
------------
(Cost $208,980,613)
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.5%
10,000,000 Federal Farm Credit Bank,
6.30%, 9/23/04................. 10,175,000
5,000,000 Federal Home Loan Bank, 6.49%,
1/08/04........................ 5,150,800
5,000,000 Federal Home Loan Mortgage
Corp., 4.65%*, 3/11/98......... 4,990,650
10,410,000 Federal Home Loan Mortgage
Corp., 8.12%, 1/31/05.......... 11,631,509
3,000,000 Federal Home Loan Mortgage
Corp., 7.22%, 6/14/06.......... 3,224,070
7,950,000 Federal National Mortgage
Assoc., 7.35%, 3/28/05......... 8,549,987
9,100,000 Federal National Mortgage
Assoc., 6.00%, 11/15/22........ 8,937,838
5,000,000 Tennessee Valley Authority,
6.25%, 12/15/17................ 4,990,600
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 57,650,454
------------
(Cost $56,241,166)
U.S. GOVERNMENT OBLIGATIONS -- 60.9%
8,000,000 U.S. Treasury Bond, 9.13%,
5/15/09........................ 9,357,520
10,000,000 U.S. Treasury Note, 8.88%,
2/15/99........................ 10,345,300
35,000,000 U.S. Treasury Note, 6.38%,
5/15/99........................ 35,322,700
68,250,000 U.S. Treasury Note, 7.75%,
1/31/00........................ 70,980,000
Continued
73
220
The Kent Funds
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
U.S. GOVERNMENT OBLIGATIONS (CONTINUED)
$23,050,000 U.S. Treasury Note, 6.88%,
3/31/00........................ $ 23,619,105
24,000,000 U.S. Treasury Note, 8.75%,
8/15/00........................ 25,754,880
33,500,000 U.S. Treasury Note, 6.25%,
8/31/00........................ 33,950,240
70,300,000 U.S. Treasury Note, 6.38%,
3/31/01........................ 71,618,125
56,000,000 U.S. Treasury Note, 6.50%,
5/31/01........................ 57,330,000
77,000,000 U.S. Treasury Note, 7.50%,
11/15/01....................... 81,632,319
35,000,000 U.S. Treasury Note, 6.25%,
2/15/03........................ 35,793,100
6,000,000 U.S. Treasury Note, 6.50%,
8/15/05........................ 6,260,640
6,800,000 U.S. Treasury Note, 6.13%,
8/15/07........................ 6,988,088
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 468,952,017
------------
(Cost $466,513,738)
YANKEE CERTIFICATES OF DEPOSIT -- 1.3%
10,000,000 Potash Corp. Saskatchewan,
7.13%, 6/15/07................. 10,227,600
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT........................ 10,227,600
------------
(Cost $10,026,500)
TOTAL INVESTMENTS -- 98.3%.................. 756,627,353
(Cost $746,770,016)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.7%....................... 13,084,148
------------
TOTAL NET ASSETS -- 100.0%.................. $769,711,501
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................ $12,213,872
Unrealized depreciation................ (2,356,535)
-----------
Net unrealized appreciation............ $ 9,857,337
===========
(b) 144A security which is restricted as to resale to institutional investors.
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
See Notes to Financial Statements.
74
221
The Kent Funds
INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
COMMERCIAL PAPER -- 4.0%
FINANCE -- 4.0%
$ 9,469,120 General Electric Capital Corp.,
5.65%, 1/2/98.................. $ 9,469,120
------------
TOTAL COMMERCIAL PAPER......... 9,469,120
------------
(Cost $9,469,120)
CORPORATE NOTES & BONDS -- 37.2%
BANKING -- 16.9%
2,700,000 Bank of Montreal-Chicago,
7.80%, 4/1/07.................. 2,931,984
2,000,000 Bank of New York, 8.50%,
12/15/04....................... 2,239,600
2,000,000 BankAmerica Corp., 7.20%,
4/15/06........................ 2,089,080
2,000,000 Chase Manhattan Corp., 7.13%,
3/1/05......................... 2,069,960
2,000,000 Fleet/Norstar Group, 8.63%,
1/15/07........................ 2,275,920
2,000,000 Midland Bank PLC, 7.63%,
6/15/06........................ 2,125,160
3,000,000 National City Bank of
Cleveland, 7.25%, 7/15/10...... 3,205,710
5,000,000 NCNB Corp., 10.20%, 7/15/15.... 6,690,150
2,250,000 PNC Bank N.A., 7.88%,
4/15/05........................ 2,420,865
2,000,000 Republic New York Corp., 7.00%,
3/22/11........................ 2,061,780
3,000,000 Royal Bank of Scotland, 6.38%,
2/1/11......................... 2,879,640
4,600,000 Societe Generale New York,
7.40%, 6/1/06.................. 4,805,850
2,000,000 Southtrust Bank NA, 6.57%,
12/15/27....................... 2,036,600
2,000,000 Swiss Bank Corp. -- New York,
7.38%, 7/15/15................. 2,132,380
------------
39,964,679
------------
BROKERS -- 0.9%
2,000,000 Salomon, Inc., 6.75%,
2/15/03........................ 2,023,140
------------
FINANCE -- 7.3%
2,000,000 Discover Credit, 9.26%,
03/20/12....................... 2,498,700
2,000,000 Ford Motor Credit Corp., 9.03%,
12/30/09, Callable 12/30/04 @
100............................ 2,275,160
3,500,000 Great Western Financial Trust
II, 8.21%, 2/1/27, Callable
2/1/07 @ 104.1................. 3,712,170
2,000,000 HSBC America Capital II, 8.38%,
5/15/27, Callable 5/15/07 @
104.19......................... 2,132,440
2,000,000 Lehman Brothers Holdings, Inc.,
8.75%, 3/15/05................. 2,231,420
4,000,000 St. Paul Cos, Inc., 7.25%,
8/9/07......................... 4,276,960
------------
17,126,850
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
CORPORATE NOTES & BONDS (CONTINUED)
GAS TRANSMISSION -- 1.1%
$ 2,500,000 Enserch Corp., 7.13%,
6/15/05........................ $ 2,591,850
------------
INDUSTRIAL GOODS &
SERVICES -- 4.4%
2,000,000 ConAgra, Inc., 6.70%, 8/1/27... 2,052,740
3,000,000 Engelhard Corp., 7.38%,
8/1/06......................... 3,159,210
2,000,000 General Motors Corp., 9.13%,
7/15/01........................ 2,175,900
2,950,000 Raytheon Co., 6.75%, 8/15/07... 3,009,502
------------
10,397,352
------------
INSURANCE -- 0.9%
2,000,000 Travelers Capital III, 7.63%,
12/1/36........................ 2,170,060
------------
OIL & GAS -- 2.6%
5,000,000 Phillips Petroleum, 9.38%,
2/15/11........................ 6,182,300
------------
RETAIL -- 2.2%
4,893,277 Fred Meyer, Inc., Lease Trust,
8.50%, 7/15/17 (b)............. 5,146,749
------------
UTILITIES -- 0.9%
2,000,000 Pacific Gas & Electric, 6.25%,
3/1/04......................... 2,003,920
------------
TOTAL CORPORATE NOTES & BONDS.. 87,606,900
------------
(Cost $83,245,779)
FOREIGN GOVERNMENT AGENCIES -- 0.5%
1,000,000 Hydro-Quebec, 9.41%, 3/23/00... 1,067,220
------------
TOTAL FOREIGN GOVERNMENT
AGENCIES....................... 1,067,220
------------
(Cost $1,059,483)
MUNICIPAL BOND -- TAXABLE -- 0.9%
CALIFORNIA -- 0.9%
2,000,000 San Bernardino County,
Financing Authority Pension
Obligation Revenue, 6.99%,
8/1/10 (Insured by MBIA)....... 2,102,500
------------
TOTAL MUNICIPAL BOND --
TAXABLE........................ 2,102,500
------------
(Cost $2,030,920)
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 5.5%
2,500,000 Federal Home Loan Mortgage
Corp., 7.22%, 6/14/06.......... 2,686,725
5,000,000 Federal National Mortgage
Assoc., 7.40%, 7/1/04.......... 5,379,700
5,000,000 Tennessee Valley Authority,
6.25%, 12/15/17................ 4,990,600
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 13,057,025
------------
(Cost $12,477,563)
Continued
75
222
The Kent Funds
INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
U.S. GOVERNMENT OBLIGATIONS -- 50.4%
$ 9,500,000 U.S. Treasury Bond, 10.75%,
8/15/05........................ $ 12,358,930
15,000,000 U.S. Treasury Bond, 9.13%,
5/15/09........................ 17,545,350
25,000,000 U.S. Treasury Bond, 10.38%,
11/15/09....................... 31,257,750
19,000,000 U.S. Treasury Bond, 10.38%,
11/15/12....................... 25,246,250
30,000,000 U.S. Treasury Note, 8.00%,
5/15/01........................ 32,048,400
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................... 118,456,680
------------
(Cost $116,142,038)
TOTAL INVESTMENTS -- 98.5%.................. 231,759,445
(Cost $224,424,903) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.5%....................... 3,628,860
------------
TOTAL NET ASSETS -- 100.0%.................. $235,388,305
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................. $7,334,542
Unrealized depreciation................. 0
----------
Net unrealized appreciation............. $7,334,542
==========
(b) 144A security which is restricted as to resale to institutional investors
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
76
223
THE KENT FUNDS
LIMITED TERM TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS -- 98.4%
ALASKA -- 2.9%
$ 500,000 Alaska State Housing Finance
Corp., 4.35%, 6/1/98 (Insured by
MBIA)........................... $ 501,335
530,000 Alaska State Housing Finance
Corp., 4.60%, 12/1/00 (Insured
by MBIA)........................ 540,600
------------
1,041,935
------------
ARIZONA -- 3.1%
1,000,000 Arizona State University
Revenue, 7.10%, 7/1/16,
Prerefunded 7/1/01 @102......... 1,113,750
------------
CALIFORNIA -- 3.4%
1,000,000 University of California
Revenue, Multiple Purpose
Projects, Series B, 9.00%,
9/1/03 (Insured by MBIA)........ 1,238,750
------------
CONNECTICUT -- 2.9%
1,000,000 Connecticut State, GO, Series C,
5.38%, 8/15/02.................. 1,051,250
------------
DISTRICT OF COLUMBIA -- 2.8%
1,000,000 District of Columbia, GO, 5.10%,
12/1/99 (Insured by MBIA)....... 1,020,000
------------
ILLINOIS -- 9.2%
500,000 Chicago, Illinois Metropolitan
Water Reclamation District,
Capital Improvement, 6.20%,
1/1/98.......................... 500,000
1,000,000 Chicago, Illinois Metropolitan
Water Reclamation District,
Working Cash Fund, 5.90%,
12/1/04......................... 1,097,500
1,000,000 Illinois Educational Facilities
Authority Revenue, Loyola
University, Series A, 6.30%,
7/1/98 (Insured by MBIA)........ 1,012,640
745,000 University of Illinois Revenue,
Health Service Facility, 4.90%,
10/1/01 (Insured by AMBAC)...... 762,694
------------
3,372,834
------------
KENTUCKY -- 2.8%
1,000,000 Kentucky State Property &
Buildings Commission, Project
No. 53, 5.80%, 10/1/98.......... 1,015,040
------------
LOUISIANA -- 2.8%
1,000,000 Louisiana State Gas & Fuels Tax
Revenue, Series A, 7.00%,
11/15/98 (Insured by FGIC)...... 1,026,190
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS (CONTINUED)
MARYLAND -- 2.8%
$1,000,000 Washington Suburban Sanitation
District, Water Revenue, Series
A, 6.13%, 6/1/98................ $ 1,009,650
------------
MICHIGAN -- 16.6%
1,235,000 Detroit, GO, 8.00%, 4/1/11,
Prerefunded 4/1/01 @102......... 1,403,269
1,000,000 Detroit, Self Insurance, Series
A, GO, 5.20%, 5/1/98............ 1,002,290
1,000,000 Michigan State Hospital Finance
Authority Revenue, Detroit
Medical Group, Series A, 5.00%,
8/15/06, (Insured by AMBAC)..... 1,037,500
1,600,000 Michigan State Hospital Finance
Authority Revenue, Sisters of
Mercy Health Corp. Bond 1993,
Series F, 4.60%, 8/15/02
(Insured by MBIA)............... 1,623,999
1,000,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, 5.15%, 10/1/00
(Insured by MBIA)............... 1,023,750
------------
6,090,808
------------
NEVADA -- 3.0%
1,090,000 Las Vegas, GO, 6.75%, 8/1/98
(Insured by MBIA)............... 1,108,083
------------
NEW JERSEY -- 3.1%
1,000,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Series A 1994,
7.00%, 7/1/03 (Insured by
MBIA)........................... 1,131,250
------------
NEW YORK -- 2.8%
1,000,000 New York State Dormitory
Authority Revenue, State
University Educational
Facilities, 4.70%, 5/15/99...... 1,010,000
------------
OHIO -- 4.4%
500,000 Cleveland Airport System
Revenue, 5.50%, 1/1/04, (Insured
by FSA)......................... 527,500
565,000 Cleveland-Cuyahoga County Port
Authority, Rock & Roll Hall of
Fame, Refunding, Subordinate
Bonds, 4.30%, 12/1/98........... 567,814
500,000 Cleveland-Cuyahoga County Port
Authority, Rock & Roll Hall of
Fame, Refunding, Subordinate
Bonds, 4.90%, 12/1/00........... 507,500
------------
1,602,814
------------
Continued
77
224
THE KENT FUNDS
LIMITED TERM TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS (CONTINUED)
OKLAHOMA -- 3.2%
$1,115,000 Tulsa Industrial Authority
Revenue, University of Tulsa,
Series A, 5.50%, 10/1/00
(Insured by MBIA)............... $ 1,159,600
------------
PENNSYLVANIA -- 5.5%
1,000,000 Allegheny County Airport
Revenue, Pittsburgh
International Airport, 5.00%,
1/1/99 (Insured by MBIA)........ 1,008,020
1,000,000 Pennsylvania State, First
Series, GO, 5.00%, 5/1/99....... 1,013,750
------------
2,021,770
------------
TEXAS -- 10.8%
700,000 Eagle Pass Independent School
District, GO, 6.50%, 8/15/03.... 778,750
1,000,000 Harris County Flood Control
District, Series C, GO, 6.50%,
11/1/10, Prerefunded 11/1/99 @
100 (Insured by MBIA)........... 1,043,750
1,000,000 Houston Independent School
District, GO, Public Property
Finance Contractual Obligation,
6.25%, 7/15/99.................. 1,033,750
1,000,000 Pasadena Independent School
District, GO, Prerefunded
8/15/01 @ 100, 6.75%, 8/15/05
(Insured by FGIC)............... 1,086,250
------------
3,942,500
------------
UTAH -- 3.7%
1,310,000 Salt Lake City Redevelopment
Agency, Neighborhood
Redevelopment Tax, Inc., Series
A, 5.25%, 10/1/99............... 1,332,925
------------
VIRGINIA -- 4.2%
1,500,000 Norfolk, GO, 5.13%, 6/1/01...... 1,550,625
------------
WISCONSIN -- 2.8%
1,000,000 Green Bay, GO, Series A, 5.10%,
4/1/00.......................... 1,025,000
------------
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
WYOMING -- 5.6%
$ 1,000,000 Campbell County School
District, No. 001 Gillette, GO,
5.15%, 6/1/02.................. $ 1,040,000
1,000,000 Wyoming Community Development,
4.45%, 6/1/99.................. 1,003,750
------------
2,043,750
------------
TOTAL MUNICIPAL BONDS.......... 35,908,524
------------
(Cost $35,175,240)
INVESTMENT COMPANIES -- 0.2%
82,999 Dreyfus Tax Exempt Money
Market......................... 82,999
------------
TOTAL INVESTMENT COMPANIES..... 82,999
------------
(Cost $82,999)
TOTAL INVESTMENTS -- 98.6%.................. 35,991,523
(Cost $35,258,239) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.4%....................... 506,047
------------
TOTAL NET ASSETS -- 100.0%.................. $ 36,497,570
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $ 733,284
Unrealized depreciation............... 0
------------
Net unrealized appreciation........... $ 733,284
============
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
78
225
THE KENT FUNDS
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS -- 98.0%
ALASKA -- 3.3%
$1,520,000 Alaska Municipal Bond Bank
Authority, Series A, GO, 4.75%,
10/1/99......................... $ 1,533,300
1,000,000 Anchorage Electric Utility,
Revenue Bond, Senior Lien,
5.50%, 12/1/03, Callable 6/1/03
@ 102 (Insured by MBIA)......... 1,062,500
1,000,000 Anchorage, GO, 6.30%, 7/1/99
(Insured by MBIA)............... 1,033,750
5,000,000 North Slope Boro, Series B, GO,
7.50%, 6/30/01 (Insured by
FSA)............................ 5,543,750
------------
9,173,300
------------
ARIZONA -- 3.2%
1,750,000 Phoenix, GO, Series A, 4.90%,
7/1/02.......................... 1,806,875
1,500,000 Pima County Unified School
District No. 1 Tucson, Series B,
GO, ETM, 6.80%, 7/1/00.......... 1,597,500
5,000,000 Salt River Project Agricultural
Improvement & Power District
Electric System, Series A,
5.63%, 1/1/06................... 5,418,750
------------
8,823,125
------------
CALIFORNIA -- 6.4%
3,400,000 California State, GO, 6.60%,
2/1/10.......................... 4,007,750
3,000,000 Orange County, Series A, 6.00%,
6/1/10 (Insured by MBIA)........ 3,360,000
2,000,000 Riverside County Transportation
Commission, Sales Tax Revenue,
Series A, 5.60%, 6/1/05 (Insured
by AMBAC)....................... 2,162,500
2,000,000 Turlock Irrigation District
Revenue, Series A, 6.00%, 1/1/06
(Insured by MBIA)............... 2,225,000
4,850,000 University of California
Revenue, Multiple Purpose
Projects, Series B, 9.00%,
9/1/03 (Insured by MBIA)........ 6,007,938
------------
17,763,188
------------
COLORADO -- 3.8%
4,000,000 Arapahoe County, School District
No. 005, Cherry Creek, Series A,
GO, 5.25%, 12/15/02............. 4,195,000
1,400,000 Boulder Valley School District,
5.50%, 12/1/07.................. 1,520,750
1,000,000 Colorado Springs Utility
Revenue, Series A, 6.50%,
11/15/03, Callable 11/15/01 @
102............................. 1,093,750
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
COLORADO (CONTINUED)
$1,000,000 E-470 Public Highway Authority
Revenue, Series C, 6.00%, 9/1/07
(Insured by MBIA)............... $ 1,118,750
2,500,000 Regional Transportation
District, Sales Tax Revenue,
5.50%, 11/1/04.................. 2,693,750
------------
10,622,000
------------
CONNECTICUT -- 1.5%
4,000,000 Connecticut State, Series A,
6.00%, 5/15/02.................. 4,295,000
------------
FLORIDA -- 1.9%
1,000,000 Broward County School District,
GO, 5.20%, 2/15/03.............. 1,038,750
2,000,000 Lakeland Electric & Water
Revenue, 5.90%, 10/1/07......... 2,220,000
1,000,000 Tampa Guaranteed Entitlement
Revenue, 6.60%, 10/1/00 (Insured
by AMBAC)....................... 1,068,750
1,000,000 Tampa Utilities, Tax & Special
Revenue, 6.30%, 10/1/00 (Insured
by AMBAC)....................... 1,061,250
------------
5,388,750
------------
GEORGIA -- 3.0%
2,670,000 Atlanta Airport Facilities
Revenue, Series B, (AMT), 5.50%,
1/1/03 (Insured by AMBAC)....... 2,800,163
1,000,000 Georgia State Tollway Authority
Revenue, Georgia 400 Project,
6.25%, 7/1/00................... 1,056,250
4,000,000 Georgia State, Series B, GO,
5.95%, 3/1/08................... 4,490,000
------------
8,346,413
------------
HAWAII -- 1.2%
1,025,000 Honolulu City & County, Series
A, GO, 5.60%, 1/1/05............ 1,100,594
1,000,000 Honolulu City & County, Series
D, GO, ETM, 6.50%, 12/1/00...... 1,068,750
1,150,000 Maui County, Series A, GO,
6.80%, 12/1/03, Prerefunded
12/1/00 @ 101 (Insured by
AMBAC).......................... 1,249,187
------------
3,418,531
------------
ILLINOIS -- 6.2%
2,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 6.80%,
1/1/03.......................... 2,140,000
3,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 5.50%,
12/1/10......................... 3,228,750
4,270,000 Du Page & Will Counties,
Community School District No.
204, GO, 4.95%, 12/30/01
(Insured by FGIC)............... 4,398,100
Continued
79
226
THE KENT FUNDS
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
ILLINOIS (CONTINUED)
$4,000,000 Illinois Development Finance
Authority, Pollution Control
Revenue, Commonwealth Edison,
5.30%, 1/15/04 (Insured by
MBIA)........................... $ 4,180,000
3,135,000 Northwest Suburban Municipal
Joint Action, Water Agency,
Water Supply System, Series A,
5.25%, 5/1/04 (Insured by
MBIA)........................... 3,283,913
------------
17,230,763
------------
INDIANA -- 3.4%
2,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 5.88%, 1/1/10 (Insured by
MBIA)........................... 2,217,500
3,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 6.00%, 1/1/13 (Insured by
MBIA)........................... 3,371,250
1,000,000 Indiana Transportation Finance
Authority, Highway Revenue,
Series A, 5.75%, 6/1/12 (Insured
by AMBAC)....................... 1,095,000
1,000,000 Purdue University Dormitory
System Revenue, Series A, 6.40%,
7/1/99 (Insured by AMBAC)....... 1,033,750
1,000,000 Purdue University Student Fee
Revenue, Series D, 6.50%,
7/1/03, Callable 1/1/00 @ 103... 1,075,000
500,000 St. Joseph County Educational
Facilities Revenue, University
of Notre Dame, 6.50%, 3/1/26.... 617,500
------------
9,410,000
------------
LOUISIANA -- 2.7%
4,000,000 Louisiana State, Series A, GO,
5.30%, 8/1/04 (Insured by
MBIA)........................... 4,240,000
3,000,000 Louisiana State, Series A, GO,
6.00%, 4/15/07 (Insured by
FGIC)........................... 3,352,500
------------
7,592,500
------------
MASSACHUSETTS -- 5.4%
5,000,000 Massachusetts Bay Transportation
Authority, Series A, 5.00%,
3/1/02.......................... 5,150,000
2,000,000 Massachusetts State Turnpike
Authority, Metropolitan Highway,
Series A, 5.00%, 1/1/10,
Callable 1/1/07 @ 102........... 2,015,000
3,000,000 Massachusetts State Turnpike
Authority, Series A, Bond
Anticipation Note, 5.00%,
6/1/99, ETM..................... 3,041,250
1,000,000 Massachusetts State Turnpike
Authority, Series A, Bond
Anticipation Note, 5.00%,
6/1/99.......................... 1,013,750
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MASSACHUSETTS (CONTINUED)
$3,750,000 Massachusetts State, Special
Obligation Revenue, Series A,
5.25%, 6/1/08 (Insured by
AMBAC).......................... $ 3,975,000
------------
15,195,000
------------
MICHIGAN -- 17.8%
2,215,000 Battle Creek Downtown
Development Authority, 6.00%,
5/1/07.......................... 2,453,113
4,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 7.30%,
5/1/10, Callable 5/1/04 @ 102... 4,705,000
2,100,000 Caledonia Community Schools, GO,
6.70%, 5/1/22, Prerefunded
5/1/02 @ 102 (Insured by
AMBAC).......................... 2,341,500
3,000,000 Detroit Sewage Disposal Revenue,
Series B, 6.00%, 7/1/09 (Insured
by MBIA)........................ 3,390,000
6,000,000 Detroit Water Supply System,
Permanent Linked Bonds, 5.25%,
7/1/13 (Insured by FGIC)........ 6,089,999
1,000,000 Detroit Water Supply System,
Second Lien, Series A, 5.20%,
7/1/08 (Insured by MBIA)........ 1,067,500
3,000,000 Detroit, GO, Distributable State
Aid, 5.70%, 5/1/01 (Insured by
AMBAC).......................... 3,146,250
2,840,000 Grand Ledge Public Schools
District, GO, 5.35%, 5/1/10
(Insured by MBIA)............... 3,038,800
1,700,000 Greater Detroit Resource
Recovery Authority, Series A,
5.50%, 12/13/04 (Insured by
AMBAC).......................... 1,812,625
2,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.35%, 5/15/06
(Insured by MBIA)............... 2,127,500
2,000,000 Michigan State Comprehensive
Transportation, Series B, 5.50%,
5/15/02......................... 2,110,000
1,000,000 Michigan State Hospital Finance
Authority Revenue, Detroit
Medical Group, Series A, 5.00%,
8/15/06, (Insured by AMBAC)..... 1,037,500
1,450,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 5.00%, 5/15/06
(Insured by AMBAC).............. 1,508,000
1,000,000 Michigan State South Central
Power Agency, Power Supply
System Revenue, 5.80%, 11/1/05
(Insured by MBIA)............... 1,096,250
Continued
80
227
THE KENT FUNDS
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,300,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Ford
Motor Co. Project, Series A,
7.10%, 2/1/06................... $ 2,708,250
2,500,000 Michigan State Trunk Line,
Series A, 5.50%, 10/1/02........ 2,646,875
3,500,000 Michigan State Underground
Storage Tank Financial Assurance
Authority, Series I, 6.00%,
5/1/05 (Insured by AMBAC)....... 3,863,125
2,000,000 Northville Public Schools,
Series A, GO, 7.00%, 5/1/08..... 2,185,000
1,575,000 South Redford School District,
5.25%, 5/1/09 (Insured by
FGIC)........................... 1,645,875
1,000,000 Western Michigan University
Revenue, GO, 5.40%, 11/15/01
(Insured by FGIC)............... 1,045,000
------------
50,018,162
------------
MINNESOTA -- 0.4%
1,000,000 Minneapolis Community
Development Agency, Tax
Increment Revenue, 7.00%, 9/1/00
(Insured by MBIA)............... 1,077,500
------------
NEVADA -- 1.0%
2,500,000 Clark County School District,
Group 2, GO, 7.20%, 5/1/01,
Prerefunded 5/1/00 @ 102
(Insured by FGIC)............... 2,718,750
------------
NEW JERSEY -- 4.2%
6,000,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Senior Lien,
7.00%, 7/1/04 (Insured by
MBIA)........................... 6,915,000
1,375,000 New Jersey State, Series D, GO,
5.25%, 2/15/01.................. 1,424,844
3,000,000 Ocean County Utilities
Authority, Wastewater Revenue,
Refunding, GO, 6.00%, 1/1/07.... 3,360,000
------------
11,699,844
------------
NEW YORK -- 2.2%
1,130,000 Metropolitan Transportation
Authority, Series M, 5.50%,
7/1/08 (Insured by FGIC)........ 1,223,225
1,660,000 New York State Urban Development
Corp., Refunding, Syracuse
University Center, 5.50%,
1/1/15.......................... 1,728,475
3,000,000 Triborough Bridge & Tunnel
Authority, General Purpose,
Series Y, 5.50%, 1/1/17......... 3,213,750
------------
6,165,450
------------
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
NORTH CAROLINA -- 0.8%
$2,000,000 North Carolina Municipal Power
Agency No. 1, Catawba Electric
Revenue, 5.90%, 1/1/03.......... $ 2,115,000
------------
OHIO -- 0.8%
2,125,000 Columbus, Sewer Improvement, GO,
6.30%, 9/15/99.................. 2,210,000
------------
OKLAHOMA -- 0.8%
2,000,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16 (Insured by
MBIA)........................... 2,250,000
------------
PENNSYLVANIA -- 3.0%
2,000,000 Allegheny County Airport
Revenue, (AMT), 5.00%, 1/1/02... 2,042,500
4,330,000 Chartiers Valley Joint School,
ETM, 6.15%, 3/1/07.............. 4,800,888
1,475,000 Pennsylvania State, Series A,
GO, 7.00%, 5/1/05, Prerefunded
5/1/00 @ 101.5.................. 1,591,156
------------
8,434,544
------------
PUERTO RICO -- 2.7%
3,055,000 Puerto Rico Commonwealth Aqeduct
& Sewer Authority, 6.00%,
7/1/06.......................... 3,379,594
2,000,000 Puerto Rico Commonwealth Highway
& Transportation Authority,
Highway Revenue, Series X,
4.90%, 7/1/01................... 2,052,500
2,000,000 Puerto Rico Electric Power
Authority Revenue, Series W,
5.00%, 7/1/98................... 2,013,060
------------
7,445,154
------------
RHODE ISLAND -- 2.7%
1,000,000 Providence, GO, 6.70%, 1/15/02
Callable 1/15/00 @ 102 (Insured
by MBIA)........................ 1,070,000
3,025,000 Rhode Island State, GO, Series
A, 5.50%, 8/1/04 (Insured by
MBIA)........................... 3,229,188
2,000,000 State Depositors Economic
Protection Corp., Series A,
Special Obligation, 6.15%,
8/1/99 (Insured by MBIA)........ 2,065,000
1,000,000 State Depositors Economic
Protection Corp., Series B,
Special Obligation, 5.20%,
8/1/03 (Insured by MBIA)........ 1,045,000
------------
7,409,188
------------
TENNESSEE -- 0.5%
1,230,000 Tennessee State, Series B, GO,
6.20%, 6/1/01................... 1,316,100
------------
Continued
81
228
THE KENT FUNDS
INTERMEDIATE TAX-FREE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
TEXAS -- 9.6%
$1,000,000 Austin Independent School
District, GO, 6.20%, 8/1/99..... $ 1,033,750
2,245,000 Dallas Independent School
District, GO, 5.40%, 8/15/03.... 2,374,088
1,190,000 Hays Consolidated Independent
School District, 6.00%,
9/1/04.......................... 1,310,488
1,500,000 Houston Water & Sewer System
Revenue, Junior Lien, Series C,
5.75%, 12/1/03 (Insured by
MBIA)........................... 1,614,375
1,000,000 Houston Water & Sewer System
Revenue, Prior Lien, Series A,
7.00%, 12/1/01 (Insured by
AMBAC).......................... 1,101,250
3,000,000 Lower Colorado River Authority,
4.90%, 1/1/07................... 3,082,499
1,050,000 Round Rock Independent School
District, GO, 5.25%, 2/15/05.... 1,107,750
2,800,000 Texas Municipal Power Agency,
5.60%, 9/1/01 (Insured by
MBIA)........................... 2,936,500
5,595,000 Texas State Public Finance
Authority, GO, Series A, 6.50%,
10/1/04......................... 6,329,343
4,450,000 Texas State, Series A, GO,
5.70%, 10/1/03.................. 4,800,437
1,015,000 University of Texas, University
Revenue, Series A, 6.60%,
8/15/02......................... 1,121,575
------------
26,812,055
------------
VIRGINIA -- 1.1%
3,000,000 Arlington County GO, 5.70%,
12/1/00......................... 3,146,250
------------
WASHINGTON -- 6.7%
1,000,000 King County Washington School
District, 4.60%, 12/1/03........ 1,026,250
2,695,000 Tacoma Electric System,
Refunding, 6.00%, 1/1/06
(Insured by AMBAC).............. 2,961,131
2,000,000 Washington State Public Power
Supply System, Nuclear Project
No. 1 Bond Revenue, Series C,
7.25%, 7/1/00 (Insured by
FGIC)........................... 2,147,500
8,000,000 Washington State, Series A, GO,
5.50%, 9/1/05................... 8,539,999
2,940,000 Washington State, Series A, GO,
Public Improvements, 5.25%,
1/1/06.......................... 3,116,400
850,000 Washington State, Series III-H,
Motor Vehicle Fuel Tax, 5.75%,
9/1/12.......................... 930,750
------------
18,722,030
------------
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
WEST VIRGINIA -- 0.4%
$ 1,095,000 West Virginia School Building
Authority Revenue, Capital
Improvement, Series A, 6.70%,
7/1/00 (Insured by MBIA)...... $ 1,160,700
--------------
WISCONSIN -- 1.3%
1,025,000 Milwaukee Metropolitan Sewer
District, Series A, GO, 6.60%,
10/1/99....................... 1,068,563
1,500,000 Milwaukee Metropolitan Sewer
District, Series A, GO, 6.70%,
10/1/00....................... 1,599,375
1,000,000 Wisconsin State Public Power,
Inc., Supply System, Series A,
7.00%, 7/1/01 (Insured by
AMBAC)........................ 1,085,000
--------------
3,752,938
--------------
TOTAL MUNICIPAL BONDS......... 273,712,235
--------------
(Cost $257,614,807)
INVESTMENT COMPANIES -- 0.4%
1,117,598 Dreyfus Tax Exempt Money
Market........................ 1,117,598
--------------
TOTAL INVESTMENT COMPANIES.... 1,117,598
--------------
(Cost $1,117,598)
TOTAL INVESTMENTS -- 98.4%................. 274,829,833
(Cost $258,732,405)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.6%...................... 4,345,919
--------------
TOTAL NET ASSETS -- 100.0%................. $ 279,175,752
==============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation............... $ 16,097,428
Unrealized depreciation............... 0
------------
Net unrealized appreciation........... $ 16,097,428
============
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
82
229
THE KENT FUNDS
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS -- 97.8%
ARIZONA -- 1.4%
$1,500,000 Arizona State University
Revenue, 7.00%, 7/1/15,
Prerefunded 7/1/02 @ 101
(Insured by AMBAC)............. $ 1,681,875
------------
CALIFORNIA -- 10.2%
1,000,000 Anaheim Public Financing
Authority, Lease Revenue,
Public Improvements Project,
Series A, 6.00%, 9/1/24
(Insured by FSA)............... 1,146,250
1,400,000 California State, GO, 7.00%,
6/1/05......................... 1,634,500
2,000,000 California State, GO, 6.25%,
9/1/12......................... 2,305,000
3,000,000 Northern California Power
Agency Revenue, Geothermal
Project, Series A, 5.50%,
7/1/05 (Insured by AMBAC)...... 3,217,500
2,000,000 Orange County, Series A, 6.00%,
6/1/10 (Insured by MBIA)....... 2,240,000
1,380,000 Turlock Irrigation District
Revenue, Series A, 6.00%,
1/1/07 (Insured by MBIA)....... 1,540,425
------------
12,083,675
------------
COLORADO -- 2.1%
1,580,000 Denver City & County Airport
Revenue, (AMT), 6.75%,
11/15/22....................... 1,718,250
650,000 Denver City & County Airport
Revenue, Series C, (AMT),
6.75%, 11/15/22, Callable
11/15/02 @ 102................. 726,375
------------
2,444,625
------------
FLORIDA -- 1.5%
1,400,000 Port Everglades Authority, Port
Improvement, ETM, 7.13%,
11/1/16........................ 1,723,750
------------
GEORGIA -- 0.9%
1,000,000 Georgia State, Series B, GO,
5.95%, 3/1/08.................. 1,122,500
------------
HAWAII -- 2.8%
2,000,000 Hawaii State, Series CB, GO,
5.75%, 1/1/07.................. 2,185,000
1,000,000 Honolulu City & County, Series
A, GO, 5.75%, 4/1/10........... 1,092,500
------------
3,277,500
------------
ILLINOIS -- 8.1%
2,000,000 Chicago Metropolitan, Water
Reclamation District, Capital
Improvement, GO, 5.50%,
12/1/10........................ 2,152,500
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS (CONTINUED)
ILLINOIS (CONTINUED)
$1,000,000 Chicago Public Building
Commission, Series A, ETM,
7.00%, 1/1/20 (Insured by
MBIA).......................... $ 1,252,500
2,000,000 Chicago School Finance
Authority, Series A, GO, 4.90%,
6/1/05 (Insured by MBIA)....... 2,065,000
2,000,000 Du Page & Will Counties,
Community School District No.
204, GO, 4.95%, 12/30/01
(Insured by FGIC).............. 2,060,000
1,000,000 Illinois State Sales Tax,
Series S, 5.00%, 6/15/08....... 1,033,750
1,000,000 Will County Forest Preserve
District, GO, 5.90%, 12/1/03,
Callable 12/1/02 @ 100 (Insured
by AMBAC)...................... 1,077,500
------------
9,641,250
------------
INDIANA -- 5.7%
2,000,000 Indiana Municipal Power Supply
Agency, System Revenue, Series
B, 6.00%, 1/1/13 (Insured by
MBIA).......................... 2,247,500
2,250,000 Indiana State Office Building
Commission, Capital Complex,
Government Center Parking
Facilities, Series A, 4.80%,
7/1/03 (Insured by AMBAC)...... 2,300,625
1,000,000 Indiana Transportation Finance
Authority, Highway Revenue,
Series A, 5.75%, 6/1/12
(Insured by AMBAC)............. 1,095,000
1,000,000 Marion County Hospital
Authority Revenue, Community
Hospital, Indianapolis Project,
ETM, 6.00%, 5/1/06............. 1,090,000
------------
6,733,125
------------
IOWA -- 2.1%
2,055,000 Iowa Finance Authority, Private
College Revenue, Drake
University Project, 6.50%,
12/1/11 (Insured by MBIA)...... 2,432,606
------------
KENTUCKY -- 1.1%
1,315,000 Louisville & Jefferson County,
Metropolitan Sewer District,
Sewer & Drain System Revenue,
Series A, 5.25%, 5/15/27,
Callable 5/15/07 @ 101 (Insured
by MBIA)....................... 1,321,575
------------
Continued
83
230
THE KENT FUNDS
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS (CONTINUED)
LOUISIANA -- 2.7%
$3,000,000 Louisiana State Gas & Fuels Tax
Revenue, Series A, 7.25%,
11/15/00, Callable 11/15/99 @
102............................ $ 3,228,750
------------
MARYLAND -- 1.7%
2,000,000 Prince Georges County,
Consolidated Public
Improvement, GO, 5.00%, 1/1/02
(Insured by MBIA).............. 2,062,500
------------
MASSACHUSETTS -- 4.3%
1,000,000 Massachusetts State Industrial
Finance Agency, Resource
Recovery Revenue, Refusetech,
Inc. Project, Series A, 5.25%,
7/1/99 (Insured by FSA)........ 1,017,500
1,000,000 Massachusetts State Water,
Resource Authority, Series B,
5.00%, 12/1/25 (Insured by
MBIA).......................... 967,500
1,000,000 Massachusetts State, Series B,
GO, 5.40%, 11/1/06............. 1,067,500
2,000,000 Massachusetts Turnpike
Authority, Metropolitan
Highway, Series A, 5.00%,
1/1/10, Callable 1/1/07 @
102............................ 2,015,000
------------
5,067,500
------------
MICHIGAN -- 20.2%
2,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 7.30%,
5/1/10, Callable 5/1/04 @
102............................ 2,352,500
1,300,000 Berkley School District, GO,
7.00%, 1/1/07 (Insured by
FGIC).......................... 1,548,625
2,000,000 Detroit Sewage Disposal
Revenue, Series B, 6.00%,
7/1/09 (Insured by MBIA)....... 2,260,000
1,000,000 Detroit Water Supply System,
Series B, 5.10%, 7/1/07
(Insured by MBIA).............. 1,056,250
930,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.50%, 1/1/07,
Callable 1/1/05 @ 102.......... 997,425
2,000,000 Michigan State Hospital Finance
Authority, Sisters of Mercy,
Series P, 5.25%, 8/15/21
(Insured by MBIA).............. 1,985,000
2,365,000 Michigan State Hospital Finance
Authority, Detroit Medical
Center, Series B, 5.00%,
8/15/06 (Insured by AMBAC)..... 2,459,599
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,000,000 Michigan State Hospital Finance
Authority, Henry Ford Health,
Series A, 5.25%, 11/15/20
(Insured by AMBAC)............. $ 1,995,000
1,300,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, Series A,
5.15%, 4/1/02 (Insured by
AMBAC)......................... 1,340,625
1,000,000 Michigan State South Central
Power Agency, Power Supply
System Revenue, 5.80%, 11/1/05
(Insured by MBIA).............. 1,096,250
1,500,000 Michigan State Strategic Fund,
Detroit Edition, 5.00%*, 1/2/98
(LOC: Barclays)................ 1,500,000
2,000,000 Michigan State Trunk Line,
5.50%, 11/1/16 (Insured by
FGIC).......................... 2,060,000
1,000,000 Michigan State Underground
Storage Tank Financial
Assurance Authority, Series I,
6.00%, 5/1/05 (Insured by
AMBAC)......................... 1,103,750
2,000,000 Michigan State University
Revenue, Series A, 5.50%,
8/15/22........................ 2,052,500
------------
23,807,524
------------
MISSOURI -- 1.8%
1,625,000 Missouri State, DFB
Infrastructure Facilities,
Science City Union Station A,
4.10%, 12/1/99................. 1,627,031
500,000 Missouri State, Health &
Education Facilities, Lake of
Ozarks General Hospital, 6.50%,
2/15/21, Callable 2/15/06 @
102............................ 541,250
------------
2,168,281
------------
NEBRASKA -- 1.0%
1,075,000 Omaha Public Power District,
5.10%, 2/1/08.................. 1,126,063
------------
NEVADA -- 3.7%
1,805,000 Clark County School District,
GO, 5.75%, 6/15/10, Callable
6/15/06 @ 101 (Insured by
FGIC).......................... 1,938,119
2,000,000 Nevada State, Nevada Municipal
Bond Bank, Series A, GO, 8.00%,
11/1/05........................ 2,487,500
------------
4,425,619
------------
NEW JERSEY -- 2.9%
1,500,000 New Jersey Economic Development
Authority, Market Transition
Facility Revenue, Senior Lien,
7.00%, 7/1/04 (Insured by
MBIA).......................... 1,728,750
Continued
84
231
THE KENT FUNDS
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------ ----------- ------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
$1,500,000 New Jersey State Transportation
Trust Fund Authority,
Transportation System, Series
A, 6.00%, 12/15/06 (Insured by
MBIA).......................... $ 1,670,625
------------
3,399,375
------------
NEW YORK -- 3.4%
1,350,000 New York City, Municipal Water
& Sewer Revenue, 5.50%,
6/15/24, Callable 6/15/06 @
101............................ 1,388,813
1,500,000 New York City, Tax Revenue
Anticipation Note, Livingston
Plaza Project, 5.40%, 1/1/18... 1,567,500
1,000,000 New York State Thruway
Authority, Series 1997 B,
6.00%, 4/1/07.................. 1,090,000
------------
4,046,313
------------
OKLAHOMA -- 1.9%
1,000,000 Grand River Dam Authority,
5.75%, 6/1/08 (Insured by
FSA)........................... 1,112,500
1,000,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16 (Insured by
MBIA).......................... 1,125,000
------------
2,237,500
------------
PENNSYLVANIA -- 1.7%
2,000,000 Pennsylvania State, First
Series, GO, 5.38%, 5/15/16
(Insured by FGIC).............. 2,065,000
------------
PUERTO RICO -- 0.9%
1,000,000 Puerto Rico Commonwealth
Highway & Transportation
Authority, Highway Revenue,
Series X, 4.90%, 7/1/01........ 1,026,250
------------
RHODE ISLAND -- 0.9%
1,000,000 Convention Center Authority,
Series B, 5.00%, 5/15/09
(Insured by MBIA).............. 1,041,250
------------
SOUTH CAROLINA -- 1.0%
1,200,000 Myrtle Beach Water & Sewer
Revenue, 4.90%, 3/1/02 (Insured
by MBIA)....................... 1,234,500
------------
TENNESSEE -- 1.1%
1,225,000 Tennessee Housing Development
Agency, Mortgage Finance,
Series C, (AMT), 5.95%, 7/1/09,
Callable 7/1/05 @ 102 (Insured
by MBIA)....................... 1,307,688
------------
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
TEXAS -- 6.0%
$ 1,000,000 Brownsville Utility System,
6.25%, 9/1/11 (Insured by
AMBAC)......................... $ 1,146,250
1,000,000 Harris County, Certificates of
Obligation, 6.00%, 12/15/11.... 1,133,750
2,000,000 Texas City Industrial
Development Corp., Marine
Terminal Revenue, Arco Pipeline
Co. Project, 7.38%, 10/1/20.... 2,627,500
2,000,000 Texas State, Series A, GO,
5.70%, 10/1/03................. 2,157,500
------------
7,065,000
------------
UTAH -- 2.6%
2,175,000 Intermountain Power Agency,
Utah Power Supply, Series D,
5.00%, 7/1/23.................. 2,096,156
1,000,000 St. George, Parks &
Recreational Facilities, GO,
5.38%, 8/1/21, Callable 8/1/07
@ 101 (Insured by FGIC)........ 1,022,500
------------
3,118,656
------------
WASHINGTON -- 4.1%
1,000,000 Douglas County Public Utility
District No. 001, Electric
Distribution System, 5.90%,
1/1/11, Callable 1/1/05 @ 102
(Insured by MBIA).............. 1,073,750
2,500,000 Port Seattle Limited, GO,
(AMT), 5.35%, 5/1/04........... 2,625,000
1,000,000 Washington State, Motor Vehicle
Fuel Tax, R-92D, GO, 6.25%,
9/1/07......................... 1,140,000
------------
4,838,750
------------
TOTAL MUNICIPAL BONDS.......... 115,729,000
------------
(Cost $108,371,163)
INVESTMENT COMPANIES -- 0.8%
972,571 Dreyfus Tax Exempt Money
Market......................... 972,571
------------
TOTAL INVESTMENT COMPANIES..... 972,571
------------
(Cost $972,571)
TOTAL INVESTMENTS -- 98.6%.................. 116,701,571
(Cost $109,343,734)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.4%....................... 1,662,588
------------
TOTAL NET ASSETS -- 100.0%.................. $118,364,159
============
Continued
85
232
THE KENT FUNDS
TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................. $7,357,837
Unrealized depreciation................. 0
----------
Net unrealized appreciation............. $7,357,837
==========
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
86
233
THE KENT FUNDS
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS -- 98.6%
MICHIGAN -- 95.9%
$1,785,000 Allegan Sanitary Sewer System,
(AMT), 5.45%, 11/1/02........... $ 1,836,319
2,000,000 Battle Creek Downtown
Development Authority, Tax
Increment Revenue, 6.90%,
5/1/04.......................... 2,222,500
1,000,000 Bay City Electric Utility
Revenue, 5.15%, 1/1/07 (Insured
by AMBAC)....................... 1,045,000
745,000 Bay City School District, GO,
5.50%, 5/1/98................... 749,239
560,000 Chippewa County Hospital Finance
Authority, 4.20%, 11/1/98....... 560,235
290,000 Chippewa County Hospital Finance
Authority, 4.40%, 11/1/99....... 290,725
585,000 Chippewa County Hospital Finance
Authority, 4.40%, 11/1/99....... 586,463
260,000 Chippewa County Hospital Finance
Authority, 4.60%, 11/1/00....... 260,975
1,000,000 Chippewa Valley School District,
GO, 6.38%, 5/1/05, Prerefunded
5/1/01 @ 101.5 (Insured by
FGIC)........................... 1,085,000
1,445,000 Chippewa Valley School District,
Series A, GO, 5.60%, 5/1/99..... 1,475,706
1,700,000 Clintondale Community School
District, GO, 4.65%, 5/1/03..... 1,725,500
2,000,000 Dearborn School District, GO,
6.63%, 5/1/09, Prerefunded
5/1/00 @ 102 (Insured by
MBIA)........................... 2,152,500
1,000,000 Dearborn School District, GO,
6.38%, 5/1/10, Prerefunded
5/1/00 @ 102 (Insured by
MBIA)........................... 1,071,250
1,075,000 Dearborn Sewage Disposal System,
7.00%, 4/1/99 (Insured by
MBIA)........................... 1,113,969
965,000 Dearborn Sewage Disposal System,
6.90%, 4/1/02 (Insured by
MBIA)........................... 1,065,119
1,000,000 Detroit, GO, 5.00%, 4/1/04...... 1,036,250
750,000 Detroit, GO, 5.05%, 4/1/06...... 829,688
2,800,000 Detroit Sewage Disposal, Series
A, 4.85%, 7/1/01 (Insured by
FGIC)........................... 2,866,499
580,000 Detroit, Distributable State
Aid, GO, 5.60%, 5/1/00 (Insured
by AMBAC)....................... 599,575
2,000,000 East China Township School
District, GO, 6.00%, 5/1/02,
Callable 5/1/01 @ 102........... 2,117,500
1,000,000 Eastern Michigan University, GO,
5.80%, 6/1/01 (Insured by
AMBAC).......................... 1,052,500
445,000 Farmington Hills Economic
Development Corp. Revenue,
Botsford Continuing Care, Series
A, 5.10%, 2/15/04 (Insured by
MBIA)........................... 463,356
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 470,000 Farmington Hills Economic
Development Corp. Revenue,
Botsford Continuing Care, Series
A, 5.20%, 2/15/05 (Insured by
MBIA)........................... $ 493,500
1,000,000 Grand Haven Area Public Schools,
GO, 5.45%, 5/1/04 (Insured by
MBIA)........................... 1,067,500
1,250,000 Greater Detroit Resource
Recovery Authority, Series B,
5.00%, 12/13/02 (Insured by
AMBAC).......................... 1,289,063
1,000,000 Holland Electric Revenue, 6.40%,
7/1/02, Prerefunded 7/1/99 @
100............................. 1,035,000
1,100,000 Holland Electric Revenue, 6.50%,
7/1/03, Prerefunded 7/1/99 @
100............................. 1,139,875
675,000 Hudsonville Public Schools,
Series B, GO, 4.50%, 5/1/98
(Insured by FGIC)............... 676,661
1,250,000 Huron Valley School District,
GO, 7.10%, 5/1/08, Prerefunded
5/1/01 @ 102 (Insured by
FGIC)........................... 1,389,063
1,810,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 4.95%, 5/15/02
(Insured by MBIA)............... 1,859,775
1,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.25%, 5/15/05
(Insured by MBIA)............... 1,053,750
1,295,000 Kenowa Hills Public Schools, GO,
5.50%, 5/1/05................... 1,388,888
500,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.25%, 1/1/04... 523,125
505,000 Kent County Airport Facility,
Kent County International
Airport, (AMT), 5.30%, 1/1/05... 531,513
1,150,000 Kent Hospital Finance Authority,
Butterworth Hospital, 4.90%,
1/15/05......................... 1,178,750
2,000,000 Lake Orion Community School
District, GO, 6.20%, 5/1/04
(Insured by AMBAC).............. 2,212,500
3,032,379 Michigan Department of State
Police Lease, 4.95%, 3/10/02.... 3,051,331
1,020,000 Michigan Municipal Bond
Authority, Local Government Loan
Program, Qualified School,
6.35%, 5/15/01.................. 1,092,675
1,000,000 Michigan Municipal Bond
Authority, Local Government Loan
Program, Series B, 6.90%, 5/1/99
(Insured by FGIC)............... 1,036,250
Continued
87
234
THE KENT FUNDS
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,000,000 Michigan Municipal Bond
Authority, Pooled Projects,
Series B, 5.10%, 10/1/04........ $ 1,050,000
1,000,000 Michigan Municipal Bond
Authority, State Revolving Fund,
5.50%, 10/1/99.................. 1,025,000
2,000,000 Michigan Municipal Bond
Authority, State Revolving Fund,
5.50%, 10/1/06.................. 2,157,500
2,000,000 Michigan Public Power Agency,
Belle River Project, Series A,
5.30%, 1/1/00................... 2,050,000
750,000 Michigan Public Power Agency,
Belle River Project, Series A,
5.70%, 1/1/03................... 796,875
1,000,000 Michigan State Building
Authority, Series II, 6.10%,
10/1/01......................... 1,071,250
3,000,000 Michigan State Comprehensive
Transportation, Series B, 5.63%,
5/15/03, Callable 7/1/02 @
102............................. 3,194,999
1,000,000 Michigan State Hospital Finance
Authority Revenue, Sisters of
Mercy Health Corp. Bond 1993,
Series F, 4.60%, 8/15/02
(Insured by MBIA)............... 1,015,000
1,855,000 Michigan State Hospital Finance
Authority, Bay Medical Center,
Series A, 5.38%, 7/1/06 (Insured
by FSA)......................... 1,977,894
750,000 Michigan State Hospital Finance
Authority, GO, Detroit Medical
Center Group A, 5.00%, 8/15/04
(Insured by AMBAC).............. 776,250
2,000,000 Michigan State Hospital Finance
Authority, Mclaren Obligated
Group, Series A, 5.75%,
10/15/03........................ 2,122,500
1,500,000 Michigan State Hospital Finance
Authority, Mercy Health
Services, Series S, 6.00%,
8/15/06......................... 1,651,875
1,060,000 Michigan State Hospital Finance
Authority, Sisters of Mercy
Health Corp., Series J, 7.15%,
2/15/99......................... 1,097,100
2,800,000 Michigan State Hospital Finance
Authority, Sisters of Mercy
Health Corp., Series J, 7.38%,
2/15/11, Prerefunded 2/15/01 @
102............................. 3,118,499
1,150,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 4.50%, 5/15/01
(Insured by AMBAC).............. 1,161,500
1,000,000 Michigan State Hospital Finance
Authority, St. John Hospital &
Medical Center, 5.00%, 5/15/05
(Insured by AMBAC).............. 1,038,750
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,680,000 Michigan State Housing
Development Authority, Rental
Housing Revenue, Series A,
(AMT), 5.25%, 10/1/01 (Insured
by MBIA)........................ $ 2,760,399
415,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Lutheran Social Services
Project, 4.40%, 9/1/98 (LOC:
First of America)............... 416,677
860,000 Michigan State Strategic Fund,
Industrial Development Revenue,
Grand Rapids Motel Project,
(AMT), 5.25%*, 6/1/98 Mandatory
Put 6/1/98 @ 100 (LOC: Comerica
Bank)........................... 862,537
2,000,000 Michigan State Underground
Storage, Tank Financial
Assurance Authority, Series I,
5.00%, 5/1/00 (Insured by
AMBAC).......................... 2,040,000
1,270,000 Michigan State Underground
Storage, Tank Financial
Assurance Authority, Series I,
6.00%, 5/1/06 (Insured by
AMBAC).......................... 1,412,875
1,000,000 Mount Clemens Community School
District, GO, 6.60%, 5/1/20,
Prerefunded 5/1/02 @ 102
(Insured by MBIA)............... 1,110,000
1,580,000 Oakland County Economic
Development Corp. Revenue,
Boardwalk Shopping Center,
Limited Obligation Revenue,
4.75%*, 6/30/98 (LOC: NBD)...... 1,585,088
600,000 Oakland County Economic
Development Corp., Sugartree
Shopping Center, 4.75%, 1/1/14,
Mandatory Put 7/1/98 (LOC:
NBD)............................ 600,444
1,000,000 Oakland Washtenaw County
Community College, 6.65%,
5/1/11, Prerefunded 5/1/02 @
100............................. 1,110,000
3,000,000 Okemos Public School District,
Series I, GO, 6.90%, 5/1/11,
Prerefunded 5/1/01 @ 102........ 3,311,249
3,200,000 Plymouth-Canton Community School
District, Series B, GO, 6.80%,
5/1/17, Prerefunded 5/1/01 @
101............................. 3,491,999
735,000 Reeths-Puffer Schools, GO,
6.75%, 5/1/01 (Insured by
FGIC)........................... 795,638
750,000 Reeths-Puffer Schools, GO,
6.25%, 5/1/02 (Insured by
FGIC)........................... 811,875
2,000,000 Rockford Public Schools, GO,
7.38%, 5/1/19, Prerefunded
5/1/00 @ 101.................... 2,165,000
Continued
88
235
THE KENT FUNDS
MICHIGAN MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ----------- ------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,000,000 South Lyon Community Schools,
GO, 7.80%, 5/1/14, Prerefunded
5/1/98 @ 102.................... $ 1,032,870
1,000,000 University of Michigan, Medical
Service Plan, Series A, 4.25%*,
1/2/98.......................... 1,000,000
2,035,000 Walled Lake Consolidated School
District, GO, 4.70%, 5/1/01..... 2,078,244
2,235,000 Walled Lake Consolidated School
District, GO, 4.80%, 5/1/02..... 2,296,463
2,000,000 Walled Lake Consolidated School
District, Series II, GO, 7.10%,
5/1/05, Prerefunded 5/1/00 @
102............................. 2,170,000
945,000 Warren Consolidated School
District, GO, 6.00%, 5/1/01..... 1,000,519
1,025,000 Washtenaw Community College, GO,
4.70%, 4/1/03 (Insured by
FGIC)........................... 1,046,781
550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/98.......................... 548,400
550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/99.......................... 547,938
550,000 Wayne County Downriver System
Sewer Disposal, GO, 3.75%,
5/1/00.......................... 544,500
1,750,000 Western Michigan University,
Series A, 6.50%, 7/15/01,
Prerefunded 7/15/01 @ 102
(Insured by AMBAC).............. 1,916,250
1,000,000 Wyandotte Electric Revenue,
6.20%, 10/1/03 (Insured by
MBIA)........................... 1,098,750
1,150,000 Ypsilanti School District,
4.50%, 5/01/00 (Insured by
FGIC)........................... 1,161,500
------------
111,446,075
------------
PUERTO RICO -- 2.7%
3,000,000 Puerto Rico Commonwealth Highway
& Transportation Authority,
Highway Revenue, Series X,
4.90%, 7/1/01................... 3,078,750
------------
TOTAL MUNICIPAL BONDS........... 114,524,825
------------
(Cost $111,182,602)
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ----------- ------
INVESTMENT COMPANIES -- 0.1%
154,117 Dreyfus Tax Exempt Money
Market......................... $ 154,117
------------
TOTAL INVESTMENT COMPANIES..... 154,117
------------
(Cost $154,117)
TOTAL INVESTMENTS -- 98.7%.................. 114,678,942
(Cost $111,336,719)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.3%....................... 1,469,357
------------
TOTAL NET ASSETS -- 100.0%.................. $116,148,299
============
- ---------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation................. $3,342,223
Unrealized depreciation.................
0
----------
Net unrealized appreciation.............
$3,342,223
==========
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
89
236
THE KENT FUNDS
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL AMORTIZED
AMOUNT COST
- --------- ---------
BANKERS ACCEPTANCES -- $8.1%
$5,000,000 Bank of America, 5.48%,
3/11/98......................... $ 4,947,483
4,398,113 Chase Manhattan Corp., 5.52%,
2/17/98......................... 4,366,417
5,000,000 Corestates Bank N.A., 5.53%,
1/30/98......................... 4,977,726
5,000,000 First Chicago NBD Corp., 5.51%,
3/2/98.......................... 4,954,083
5,000,000 Mellon Bank N.A., 5.53%,
1/20/98......................... 4,985,408
5,000,000 Mellon Bank N.A., 5.51%,
2/6/98.......................... 4,972,450
4,545,172 SunTrust Bank N.A., 5.70%,
1/16/98......................... 4,534,377
5,000,000.. SunTrust Bank N.A., 5.57%,
2/5/98.......................... 4,972,924
------------
TOTAL BANKERS ACCEPTANCES ... 38,710,868
------------
(Amortized Cost $38,710,868)
CERTIFICATES OF DEPOSIT -- 3.6%
3,084,303 First Chicago Corp., 5.35%,
1/5/98.......................... 3,084,172
10,000,000 J. P. Morgan & Co., 5.71%,
1/6/98.......................... 9,999,788
4,000,000 J. P. Morgan & Co., 5.60%,
2/5/98.......................... 3,999,086
------------
TOTAL CERTIFICATES OF DEPOSIT... 17,083,046
------------
(Amortized Cost $17,083,046)
COMMERCIAL PAPER -- 42.1%
7,230,000 ABN Amro North America Finance,
5.60%, 4/20/98.................. 7,107,412
5,000,000 Amoco Corp., 5.52%, 3/4/98...... 4,952,467
5,000,000 Banque National De Paris Canada,
5.55%, 1/5/98................... 4,996,917
4,400,000 Banque National De Paris Canada,
5.53%, 1/21/98.................. 4,386,482
5,000,000 Cargill, Inc., 5.62%, 1/21/98... 4,984,389
5,000,000 Daimler-Benz N.A. Corp., 5.72%,
1/23/98......................... 4,982,522
5,000,000 Daimler-Benz N.A. Corp., 5.52%,
2/12/98......................... 4,967,800
5,000,000 Daimler-Benz N.A. Corp., 5.54%,
2/17/98......................... 4,963,836
5,000,000 Daimler-Benz N.A. Corp., 5.53%,
2/27/98......................... 4,956,221
4,000,000 Daimler-Benz N.A. Corp., 5.65%,
3/26/98......................... 3,947,267
5,000,000 Dresdner US Finance, Inc.,
5.74%, 1/5/98................... 4,996,811
5,000,000 Dresdner US Finance, Inc.,
5.60%, 1/5/98................... 4,996,889
5,300,000 E.I. du Pont de Nemours & Co.,
5.53%, 4/20/98.................. 5,211,259
5,000,000 E.I. du Pont de Nemours & Co.,
5.53%, 6/4/98................... 4,881,719
5,000,000 Ford Motor Credit Co., 5.49%,
1/9/98.......................... 4,993,900
5,000,000 Ford Motor Credit Co., 5.51%,
1/26/98......................... 4,980,868
5,000,000 Gannett Co., Inc., 5.55%,
1/7/98.......................... 4,995,375
5,000,000 General Electric Capital Corp.,
5.59%, 1/12/98.................. 4,991,460
PRINCIPAL AMORTIZED
AMOUNT COST
- --------- ---------
COMMERCIAL PAPER (CONTINUED)
$5,000,000 General Electric Capital Corp.,
5.68%, 2/11/98.................. $ 4,967,656
5,000,000 General Electric Capital Corp.,
5.72%, 3/16/98.................. 4,941,211
5,000,000 General Electric Capital Corp.,
5.50%, 6/15/98.................. 4,873,958
5,000,000 General Motors Acceptance Corp.,
5.57%, 1/12/98.................. 4,991,490
5,000,000 General Motors Acceptance Corp.,
5.74%, 4/15/98.................. 4,917,089
5,000,000 General Motors Acceptance Corp.,
5.60%, 4/20/98.................. 4,915,222
4,000,000 GTE Corp., 5.98%, 1/8/98........ 3,995,349
5,000,000 GTE Corp., 6.20%, 1/16/98....... 4,987,083
5,000,000 HJ Heinz Co., 5.70%, 1/6/98..... 4,996,042
5,000,000 HJ Heinz Co., 5.75%, 2/17/98.... 4,962,465
5,000,000 Michigan Consolidated Gas Co.,
5.58%, 1/20/98.................. 4,985,275
5,000,000 Michigan Consolidated Gas Co.,
5.58%, 2/3/98................... 4,974,425
5,000,000 Michigan Consolidated Gas Co.,
5.68%, 2/17/98.................. 4,962,922
5,000,000 Michigan Consolidated Gas Co.,
5.56%, 2/27/98.................. 4,955,983
5,000,000 National Australia Bank, Ltd.,
5.55%, 1/9/98................... 4,993,833
5,000,000 Schering-Plough Corp., 5.70%,
3/17/98......................... 4,940,625
6,900,000 Sony Capital Corp., 5.75%,
1/7/98(c)....................... 6,893,388
5,500,000 Sony Capital Corp., 5.95%,
2/24/98(c)...................... 5,450,913
5,000,000 Southern New England
Telecommunications, 5.87%,
1/20/98......................... 4,984,510
5,000,000 Toyota Motor Credit Corp.,
5.75%, 2/20/98.................. 4,960,069
5,000,000 Toyota Motor Credit Corp.,
5.70%, 2/27/98.................. 4,954,875
5,000,000 Toyota Motor Credit Corp.,
5.71%, 3/26/98.................. 4,933,383
------------
TOTAL COMMERCIAL PAPER ... 200,831,360
------------
(Amortized Cost $200,831,360)
DEMAND NOTES -- 19.4%
6,000,000 American Healthcare Funding
L.L.C., 5.80%*, 1/8/98 (LOC:
LaSalle National Bank).......... 6,000,000
4,000,000 American Mfg. Co., Inc., Series
1997, 5.95%*, 1/8/98 (LOC:
Mellon Bank).................... 4,000,000
7,500,000 Arboretum Properties, L.L.C.,
6.08%*, 1/7/98 (LOC: Michigan
National Bank).................. 7,500,000
2,500,000 Buckeye Corrugated, Inc.,
6.08%*, 1/7/98 (LOC: Keybank)... 2,500,000
Continued
90
237
THE KENT FUNDS
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL AMORTIZED
AMOUNT COST
- --------- ---------
DEMAND NOTES (CONTINUED)
$5,915,000 FC Bellevue, Inc., 6.10%*,
1/8/98 (LOC: National City Bank
Cleveland, Ohio)................ $ 5,915,000
5,000,000 First Metro Title Co., 6.08%*,
1/8/98 (LOC: Michigan National
Bank)........................... 5,000,000
4,790,000 Harry W. Albright, Jr.,
6.10%*,1/8/98................... 4,790,000
3,500,000 HWP Co., Ltd. Project, 6.10%*,
1/8/98 (LOC: National City Bank
Cleveland, Ohio)................ 3,500,000
4,730,000 Labelle Capital Funding L.L.C.,
6.10%*, 1/8/98 (LOC: First of
America Bank-Michigan).......... 4,730,000
4,000,000 Macroe Properties, Inc., 6.10%*,
1/8/98 (LOC: Huntington Bank)... 4,000,000
8,700,000 Ordeal Properties L.L.C.,
6.08%*, 1/7/98 (LOC: Keybank)... 8,700,000
2,500,000 Patt's Enterprises L.L.C.,
6.10%*, 1/8/98 (LOC: Huntington
National Bank).................. 2,500,000
5,000,000 PRA at Glenwood Hills Corporate,
Centre Limited Liability Co.,
6.05%*, 1/8/98 (LOC: First of
America Bank-Michigan).......... 5,000,000
8,530,000 PRD Finance L.L.C., 6.05%*,
1/8/98 (LOC: First of America
Bank-Michigan).................. 8,530,000
3,000,000 Royal Town Center L.L.C.
Project, 6.10%*, 1/8/98 (LOC:
Comerica Bank).................. 3,000,000
2,685,000 Rumpf Development Ltd., 6.08%*,
1/7/98 (LOC: Keybank)........... 2,685,000
5,000,000 Sheperd Capital L.L.C., 6.10%*,
1/8/98 (LOC: Comerica Bank)..... 5,000,000
2,000,000 South Bend MAC, L.P., 6.10%*,
1/7/98 (LOC: LaSalle National
Bank)........................... 2,000,000
1,075,000 The Economic Development Corp.
of the County of Marquette,
Pioneer Laboratories, Inc.
Project, 6.10%*, 1/8/98 (LOC:
NBD Bank)....................... 1,075,000
5,645,000 Zeigler Realty, L.L.C, 6.10%*,
1/2/98 (LOC: First of America
Bank-Michigan).................. 5,645,000
------------
TOTAL DEMAND NOTES ... 92,070,000
------------
(Amortized Cost $92,070,000)
EURO CERTIFICATES OF DEPOSIT -- 3.2%
5,000,000 Bayerische Landesbank, 5.77%,
2/27/98......................... 4,999,729
5,000,000 Rabobank Nederland, 5.58%,
1/12/98......................... 4,999,970
5,000,000 Societe Generale, 5.71%,
4/3/98.......................... 4,999,355
------------
TOTAL EURO CERTIFICATES OF
DEPOSIT ........................ 14,999,054
------------
(Amortized Cost $14,999,054)
PRINCIPAL AMORTIZED
AMOUNT COST
- --------- ---------
FUNDING AGREEMENTS -- $3.2%
$5,000,000 Allstate Financial Corp.,
5.84%*, 1/2/98 (b).............. $ 5,000,000
5,000,000 Allstate Financial Corp.,
5.84%*, 1/2/98 (b).............. 5,000,000
5,000,000 General American Life Insurance
Co., 5.89%*, 1/2/98 (b)......... 5,000,000
------------
TOTAL FUNDING AGREEMENTS ... 15,000,000
------------
(Amortized Cost $15,000,000)
MUNICIPAL BOND -- TAXABLE -- 1.1%
5,200,000 City of Cloquet, Minnesota
Taxable Industrial Bond, Series
1996B, 5.80%*, 1/7/98 (LOC:
Credit Suisse).................. 5,200,000
------------
TOTAL MUNICIPAL
BOND -- TAXABLE ................ 5,200,000
------------
(Amortized Cost $5,200,000)
YANKEE CERTIFICATES OF DEPOSIT -- 17.9%
5,000,000 ABN Amro Bank, 5.83%, 1/9/98.... 4,999,956
5,000,000 ABN Amro Bank, 5.70%, 3/2/98.... 4,999,993
5,000,000 ABN Amro Bank, 5.82%, 7/17/98... 4,999,683
5,000,000 Bank of Nova Scotia, 5.75%,
2/12/98......................... 5,000,000
5,000,000 Bankers Trust Co., 5.90%,
8/10/98......................... 4,998,553
5,000,000 Banque National De Paris, 5.78%,
2/4/98.......................... 4,999,197
5,000,000 Banque National De Paris, 5.73%,
3/9/98.......................... 5,000,090
5,000,000 Banque National De Paris, 5.96%,
6/30/98......................... 5,001,738
5,000,000 Barclays Bank PLC, 5.87%,
3/9/98.......................... 4,999,870
5,000,000 Barclays Bank PLC, 5.93%,
6/24/98......................... 5,001,370
5,000,000 Canadian Imperial Bank of
Commerce, 5.82%, 2/27/98........ 4,998,082
5,000,000 Commerzebank Group, 5.81%,
3/4/98.......................... 4,999,520
5,000,000 National Westminster Bank,
5.86%, 3/10/98.................. 5,000,181
5,000,000 Societe Generale, 5.81%,
3/16/98......................... 5,000,092
5,000,000 Societe Generale, 5.69%,
3/19/98......................... 4,999,708
5,000,000 Swiss Bank Corp., 5.75%,
2/12/98......................... 5,000,058
5,000,000 Swiss Bank Corp., 6.05%,
5/22/98......................... 5,004,346
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT 85,002,437
------------
(Amortized Cost $85,002,437)
Continued
91
238
THE KENT FUNDS
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
AMORTIZED
SHARES COST
------ ---------
INVESTMENT COMPANIES -- 1.1%
5,230,364 Dreyfus Cash Management Money
Market.......................... $5,230,364
------------
TOTAL INVESTMENT COMPANIES ... 5,230,364
------------
(Amortized Cost $5,230,364)
TOTAL INVESTMENTS -- 99.7% ... 474,127,129
(Amortized Cost $474,127,129) (a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.3% .................... 1,430,086
------------
TOTAL NET ASSETS -- 100.0% .... $475,557,215
============
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Illiquid security.
(c) Section 4(2) Commercial Paper.
Security is subject to contractual or legal restrictions on its resale and
is deemed liquid by guidelines established by the Board of Trustees.
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
LOC Letter of Credit
See Notes to Financial Statements.
92
239
THE KENT FUNDS
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS -- 91.9%
MICHIGAN -- 85.8%
$ 605,000 Bay City Electric Revenue,
5.00%, 1/1/98 (Insured by
AMBAC).......................... $ 605,000
440,000 Calhoun County, GO, 3.95%,
7/1/98 (Insured by AMBAC)....... 440,000
675,000 Clinton Township Economic
Development Corp., Pointe
Village Square, 4.00%, 2/1/98**
(LOC: First of America)......... 675,000
1,200,000 Dearborn Economic Development,
Oakbrook Community, 3.70%*,
1/7/98 (LOC: Mellon Bank)....... 1,200,000
1,100,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series C,
5.10%*, 2/17/98 (LOC: Bank of
Nova Scotia).................... 1,100,000
2,840,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.75%,
1/22/98 (LOC: Union Bank of
Switzerland).................... 2,840,000
1,000,000 Detroit City School District,
State Aid, 4.50%, 5/1/98........ 1,001,912
1,000,000 Detroit Water Revenue, 7.88%,
7/1/19, Prerefunded 7/1/98 @
102............................. 1,039,305
680,000 Ecorse Public School District,
3.90%, 5/1/98 (Insured by
FGIC)........................... 680,000
390,000 Farmington Hills Michigan
Education, Marketing Displays,
3.80%, 3/2/98** (LOC: Comerica
Bank)........................... 390,000
1,780,000 Genesse County Economic
Development Corp., Grand Blanc
Convention Center, 3.85%,
5/1/98** (LOC: Citizens Banking
Corp.).......................... 1,780,000
2,500,000 Grand Rapids Water Supply,
7.88%, 1/1/18, Prerefunded
1/1/98 @ 102.................... 2,550,000
2,225,000 Leelanau County Economic
Development Corp., American
Mutual Insurance Co., 3.85%,
6/15/98 (LOC: First of
America)........................ 2,225,000
445,000 Livonia County Economic
Development Corp., American
Community Mutual Insurance Co.,
3.85%, 5/15/98 ** (LOC: First of
America)........................ 445,000
1,300,000 Marquette County Economic
Development Corp., Pioneer Labs,
Inc., (AMT), 4.15%*, 1/7/98,
(LOC: NBD)...................... 1,300,000
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$1,800,000 Meridian, Hannah Technology,
4.05%*, 1/15/98 (LOC: Comerica
Bank)........................... $ 1,800,000
1,000,000 Michigan Municipal Bond
Authority, 6.80%, 5/1/98
(Insured by FGIC)............... 1,009,253
5,570,000 Michigan Municipal Bond
Authority, 4.75%, 5/1/98........ 5,583,206
2,500,000 Michigan Municipal Bond
Authority, 4.50%, 7/2/98........ 2,508,407
1,670,000 Michigan Municipal Bond
Authority, Revenue Note, Series
1997C, 4.50%, 9/18/98........... 1,676,870
3,000,000 Michigan State, 4.50%,
9/30/98......................... 3,015,803
9,000,000 Michigan State Building
Authority, 3.75%, 3/2/98 (LOC:
CIBC)........................... 8,999,999
1,150,000 Michigan State Building
Authority, 3.70%, 4/1/98........ 1,150,000
1,000,000 Michigan State Building
Authority, 4.50%, 10/1/98....... 1,004,348
2,045,000 Michigan State Building
Authority, 4.50%, 10/15/98...... 2,055,590
595,000 Michigan State Hospital Finance
Authority Revenue, Mercy Health
Services, 5.00%, 8/15/98........ 598,756
3,450,000 Michigan State Housing
Development Authority,
Multifamily, Series A, 3.80%,
1/28/98 (LOC: Credit Suisse).... 3,450,000
1,000,000 Michigan State Housing
Development Authority,
Multifamily, Series A, 3.80%,
2/24/98 (LOC: Credit Suisse).... 1,000,000
3,600,000 Michigan State Housing
Development Authority,
Multifamily, Series A, 3.75%,
2/24/98 (LOC: Credit Suisse).... 3,600,000
3,300,000 Michigan State Job Development
Authority, BASF Wyandotte,
4.00%*, 1/7/98 (LOC: Credit
Suisse)......................... 3,300,000
415,000 Michigan State Strategic Fund,
3.90%, 3/1/98 (LOC: Michigan
National Bank).................. 415,000
4,000,000 Michigan State Strategic Fund,
John A. Brewer, (AMT), 4.20%*,
1/7/98 (LOC: NBD)............... 4,000,000
3,100,000 Michigan State Strategic Fund,
Rochester Gear Project, (AMT),
3.95%*, 1/7/98 (LOC: Comerica
Bank)........................... 3,100,000
5,100,000 Michigan State Strategic Fund,
Dow Chemical Co. Project, (AMT),
5.00%*, 1/2/98.................. 5,100,000
Continued
93
240
THE KENT FUNDS
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$3,000,000 Michigan State Strategic Fund,
Van Andel Research Project,
4.15%*, 1/9/98 (LOC: Michigan
National Bank).................. $ 3,000,000
2,510,000 Michigan State Strategic Fund,
Atmosphere Annealing, (AMT),
4.15%*, 1/8/98 (LOC: First of
America)........................ 2,510,000
1,160,000 Michigan State Strategic Fund,
B.K. Hardwoods, (AMT), 4.35%*,
1/2/98, (LOC: Huntington Bank).. 1,160,000
4,500,000 Michigan State Strategic Fund,
Banks Hardwoods, Inc., (AMT),
4.25%*, 1/8/98 (LOC: Bank One).. 4,500,000
1,000,000 Michigan State Strategic Fund,
C-Tec Inc. Project, (AMT),
4.30%*, 1/7/98 (LOC: SunTrust
Bank)........................... 1,000,000
2,500,000 Michigan State Strategic Fund,
Delta Containers, Inc. Project,
(AMT), 4.10%*, 1/7/98 (LOC:
NBD)............................ 2,500,000
2,500,000 Michigan State Strategic Fund,
Donnelly Corp., Series B, (AMT),
4.00%, 4/1/98** (LOC: Dresdner
Bank)........................... 2,500,000
1,275,000 Michigan State Strategic Fund,
Environmental Powder Co., (AMT),
4.35%*, 1/8/98 (LOC: Michigan
National Bank).................. 1,275,000
1,500,000 Michigan State Strategic Fund,
Gollin Block & Supply Co.,
(AMT), 4.15%*, 1/7/98 (LOC:
Northern Trust)................. 1,499,985
2,000,000 Michigan State Strategic Fund,
I.V.C. Industrial Coatings,
Inc., (AMT), 4.25%*, 1/8/98
(LOC: Bank One)................. 2,000,000
1,700,000 Michigan State Strategic Fund,
Industrial Development, Kinder
Care, (AMT), 3.90%*, 1/7/98
(LOC: Toronto Dominion)......... 1,700,000
205,000 Michigan State Strategic Fund,
Kazoo, Inc. Project, (AMT),
3.90%, 3/15/98 (LOC: First of
America)........................ 205,000
3,155,000 Michigan State Strategic Fund,
Kerkstra Precast Project, (AMT),
4.35%*, 1/8/98 (LOC: Huntington
Bank)........................... 3,155,000
630,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Tawas Bay Associates Project,
(AMT), 3.85%, 6/1/98 (LOC: First
of America)..................... 630,000
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$2,750,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Advanced Tooling, (AMT), 4.10%*,
1/2/98 (LOC: Huntington Bank)... $ 2,750,000
2,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Cincinnati Milacron, (AMT),
4.40%*, 1/2/98 (LOC: PNC Bank).. 2,500,000
1,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Dickinson Press, Inc. Project,
(AMT), 4.35%*, 1/2/98 (LOC:
Huntington Bank)................ 1,000,000
2,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Donnelly Corp., (AMT), 4.20%*,
1/2/98 (LOC: Dresdner Bank)..... 2,500,000
2,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Eclipse Mold, (AMT), 4.10%*,
1/7/98 (LOC: NBD)............... 2,000,000
4,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue, H.P.
Pelzer, Inc. Project, (AMT),
4.20%*, 1/2/98 (LOC: NBD)....... 4,000,000
4,800,000 Michigan State Strategic Fund,
Limited Obligation Revenue, JB
Labs, Inc., Michigan HDA Rental
Revenue, Series C, (AMT),
4.35%*, 1/2/98 (LOC: Credit
Suisse)......................... 4,800,000
5,500,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Karona, Inc., (AMT), 4.35%*,
1/2/98 (LOC: First of
America)........................ 5,498,114
2,430,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Kay
Screen Printing, (AMT), 4.15%*,
1/2/98 (LOC: Comerica Bank)..... 2,430,000
365,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Kay
Screen Printing, (AMT), 4.15%*,
1/8/98 (LOC: Comerica Bank)..... 365,000
3,025,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Midbrook Products, Inc. Project,
(AMT), 4.35%*, 1/7/98 (LOC:
Comerica Bank).................. 3,025,000
715,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Patten Monument, (AMT), 4.35%*,
1/2/98 (LOC: Huntington Bank)... 715,000
1,800,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Pilot Industries, (AMT), 4.25%*,
1/8/98 (LOC: NBD)............... 1,800,000
Continued
94
241
THE KENT FUNDS
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$ 980,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
Stephenson Land, (AMT), 4.35%*,
1/2/98 (LOC: Comerica Bank)..... $ 980,000
500,000 Michigan State Strategic Fund,
Limited Obligation Revenue, Tom
Miller, Inc., (AMT), 4.30%*,
1/2/98 (LOC: First Union)....... 500,000
4,595,000 Michigan State Strategic Fund,
Limited Obligation Revenue,
United Fixtures, (AMT), 4.15%*,
1/2/98 (LOC: LaSalle National
Bank)........................... 4,595,000
1,000,000 Michigan State Strategic Fund,
Limited Obligation Revenue.
Autocam Corp., (AMT), 4.10%*,
1/8/98 (LOC: Comerica Bank)..... 1,000,000
905,000 Michigan State Strategic Fund,
Molmec, Inc. (AMT), 4.35%*,
1/2/98 (LOC: Comerica Bank)..... 905,000
1,000,000 Michigan State Strategic Fund,
NSF International Project,
Series 1997B, 4.15%*, 1/7/98
(LOC: First of America)......... 1,000,000
1,750,000 Michigan State Strategic Fund,
Omni Technical Services, Inc.,
(AMT), 4.35%*, 1/8/98 (LOC:
First of America)............... 1,750,000
2,865,000 Michigan State Strategic Fund,
Ort Tool & Die Corp., (AMT),
4.35%*, 1/8/98 (LOC: National
City Bank)...................... 2,865,000
945,000 Michigan State Strategic Fund,
Plascore, Inc., 4.35%*, 1/2/98,
(LOC: Huntington Bank).......... 945,000
5,000,000 Michigan State Strategic Fund,
Solid Waste Disposal, Grayling
Generating Project, (AMT),
3.75%*, 1/7/98 (LOC: Barclays
Bank)........................... 5,000,000
2,200,000 Michigan State Strategic Fund,
Sunrise Windows Ltd. Project,
4.04%*, 1/7/98 (LOC: Keybank)... 2,200,000
2,800,000 Michigan State Strategic Fund,
Unidet Waste System, (AMT),
3.80%*, 2/4/98, (LOC: Bank of
America)........................ 2,800,000
1,400,000 Michigan State Strategic Fund,
Waltec American Forgings, (AMT),
4.20%*, 1/7/98 (LOC: NBD)....... 1,400,000
1,075,000 Michigan State Strategic Fund,
Wright -- Technology, Inc.,
Series 1997, 4.35%*, 1/8/98
(LOC: First of America)......... 1,075,000
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
MICHIGAN (CONTINUED)
$4,000,000 Midland County Economic
Development Corp., Limited
Obligation Revenue, Dow Chemical
Project, Series A, (AMT), Series
A, 5.10%*, 1/8/98............... $ 4,000,000
3,000,000 Oakland County Economic
Development Corp., Cranbrook
Community, 4.15%*, 1/8/98 (LOC:
SPA Comerica)................... 3,000,000
675,000 Oakland County Economic
Development Corp., Orchard Maple
Project, 3.70%, 5/15/98** (LOC:
First of America)............... 675,000
310,000 Rochester Hills Economic
Development Corp., BRG Assoc.,
4.00%, 6/1/98** (LOC: Comerica
Bank)........................... 310,000
825,000 Saginaw Township School
Refunding, QSBLF, 3.90%,
12/1/98......................... 825,000
955,000 St. Clair Shores, Michigan
Education, Borman's, Inc.
Project, 3.85%*, 4/15/98 (LOC:
Huntington Bank)................ 955,000
1,800,000 University of Michigan Hospital
Revenue, Series A, 5.10%*,
1/2/98.......................... 1,800,000
4,200,000 University of Michigan Hospital
Revenue, Series A, 5.10%*,
1/2/98.......................... 4,200,000
1,205,000 Warren Economic Development
Corp. (Cross Country Inn),
3.75%, 6/1/98 (LOC: Huntington
Bank)........................... 1,205,000
1,855,000 Warren Economic Development
Corp., CMX Corp. Project, 3.90%,
3/15/98 (LOC: First of
America)........................ 1,855,000
550,000 Warren Economic Development
Corp., Limited Obligation
Revenue, Elias Brothers, 4.00%,
6/1/98 (LOC: Comerica Bank)..... 550,000
1,000,000 Waterford Township School
District, QSBLF, 4.30%,
6/1/98.......................... 1,002,203
910,000 Wayne County Airport, Detroit
Airport, Series A, (AMT),
3.75%*, 1/7/98 (LOC: Baerische
Landesbank)..................... 910,000
------------
180,958,751
------------
PUERTO RICO -- 6.1%
2,500,000 Commonwealth of Puerto Rico, Tax
& Revenue Anticipation Notes,
Series A,, 4.50%, 7/30/98....... 2,510,585
3,000,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Abbott Labs Project, 3.75%,
3/2/98.......................... 3,000,000
Continued
95
242
THE KENT FUNDS
MICHIGAN MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO (CONTINUED)
$2,750,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Reynolds Metals, 3.80%, 9/1/98**
(LOC: ABN/Amro)................. $ 2,750,000
4,200,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
4.00%, 12/1/98.................. 4,200,000
500,000 Puerto Rico Industrial Medical &
Environmental Pollution Control,
Facilities Financing Authority,
Reynolds Metals, 3.80%*,
9/1/98** (LOC: ABN/Amro)........ 500,321
------------
12,960,906
------------
TOTAL MUNICIPAL BONDS........... 193,919,657
------------
(Amortized Cost $193,919,657)
TAX FREE COMMERCIAL PAPER -- 7.5%
MICHIGAN -- 7.5%
1,100,000 Cornell Township Economic
Development Corp., Industrial
Development Revenue, Mead
Escanaba Paper Co., 3.65%,
2/26/98 (LOC: Credit Suisse).... 1,100,000
1,000,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., 3.70%,
1/22/98 (LOC: Union Bank of
Switzerland).................... 1,000,000
2,700,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.75%, 1/27/98 (LOC: Morgan
Guaranty)....................... 2,700,000
1,500,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.70%, 2/2/98 (LOC: Morgan
Guaranty)....................... 1,500,000
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
TAX FREE COMMERCIAL PAPER (CONTINUED)
MICHIGAN (CONTINUED)
$1,500,000 Delta County Economic
Development Corp., Environmental
Improvement Revenue, Mead
Escanaba Paper Co., Series A,
3.75%, 2/2/98 (LOC: Morgan
Guaranty)....................... $ 1,500,000
9,000,000 Michigan State Underground Tank
Storage, 3.75%, 2/5/98 (LOC:
CIBC)........................... 9,000,000
------------
TOTAL TAX FREE COMMERCIAL
PAPER........................... 16,800,000
------------
(Amortized Cost $16,800,000)
INVESTMENT COMPANIES -- 0.2%
50,956 Dreyfus Tax Exempt Money
Market.......................... 50,956
455,877 Federated Tax Exempt Money
Market.......................... 455,877
------------
TOTAL INVESTMENT COMPANIES...... 506,833
------------
(Amortized Cost $506,833)
TOTAL INVESTMENTS -- 99.6%.................. 211,226,490
(Amortized Cost $211,226,490)(a)
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.4%....................... 744,703
------------
TOTAL NET ASSETS -- 100.0% $211,971,193
============
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
** Putable security. Maturity date reflects next put date.
AMBAC AMBAC Indemnity Corp.
AMT Alternative Minimum Tax Paper
FGIC Financial Guaranty Insurance Corp.
GO General Obligation
LOC Letter of Credit
QSBLF Qualified School Bond Loan Fund
See Notes to Financial Statements.
96
243
THE KENT FUND
GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ----------- ---------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 98.9%
FEDERAL FARM CREDIT BANK -- 12.6%
$5,000,000 5.65%, 2/2/98.................... $ 5,000,000
5,000,000 5.52%, 3/18/98................... 4,941,733
2,000,000 5.54%, 4/27/98................... 1,964,298
-----------
11,906,031
-----------
FEDERAL HOME LOAN BANK -- 24.8%
3,000,000 5.36%, 1/2/98.................... 2,999,553
1,300,000 5.50%, 1/9/98.................... 1,298,411
1,008,000 5.62%, 1/20/98................... 1,005,010
5,000,000 5.59%, 1/21/98................... 4,984,472
1,602,000 5.50%, 1/27/98................... 1,595,637
6,700,000 5.43%, 1/30/98................... 6,670,672
5,000,000 5.43%, 3/18/98................... 4,942,683
-----------
23,496,438
-----------
FEDERAL HOME LOAN MORTGAGE CORP -- 35.8%
5,000,000 5.47%, 1/7/97.................... 4,995,442
5,000,000 5.60%, 1/9/98.................... 4,993,783
3,990,000 5.63%, 1/14/98................... 3,981,878
4,000,000 5.69%, 1/22/98................... 3,986,723
6,000,000 5.55%, 1/23/98................... 5,979,486
5,000,000 5.65%, 3/6/98.................... 4,949,778
1,000,000 5.42%, 3/26/98................... 987,353
4,000,000 5.69%, 8/21/98................... 3,997,535
-----------
33,871,978
-----------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 25.7%
3,000,000 5.43%, 1/9/98.................... 2,996,380
2,000,000 5.49%, 1/21/98................... 1,993,900
2,125,000 5.63%, 2/2/98.................... 2,114,366
2,000,000 5.47%, 2/5/98.................... 1,989,364
2,000,000 5.58%, 3/5/98.................... 1,980,470
2,360,000 5.42%, 3/23/98................... 2,331,220
5,000,000 5.79%, 3/25/98................... 5,000,914
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------- ---------
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
FEDERAL NATIONAL MORTGAGE ASSOC. (CONTINUED)
$ 1,985,000 5.42%, 3/30/98................. $ 1,958,701
4,000,000 5.91%*, 1/6/98................. 4,000,000
------------
24,365,315
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS.................... 93,639,762
------------
(Amortized Cost $93,639,762)
INVESTMENT COMPANIES -- 1.3%
705,378 Dreyfus Cash Management Money
Market......................... 705,378
498,216 Federated Government
Obligations Money Market....... 498,216
------------
TOTAL INVESTMENT COMPANIES..... 1,203,594
------------
(Amortized Cost $1,203,594)
TOTAL INVESTMENTS -- 100.2%................. 94,843,356
(Amortized Cost $94,843,356)(a)
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (0.2)%............................ (216,895)
------------
TOTAL NET ASSETS -- 100.0%.................. $ 94,626,461
============
- ---------------
(a) Cost for federal income tax and financial reporting purposes is the same.
* Variable rate security. Rate presented represents rate in effect at December
31, 1997. Maturity date reflects next rate change date.
See Notes to Financial Statements.
97
244
THE KENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
GROWTH AND SMALL COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------- ------------- ------------
ASSETS:
Investments:
Investments at cost.................................... $622,545,953 $554,217,563 $431,328,252 $434,589,423
Net unrealized appreciation (depreciation)............. 109,847,171 187,800,124 67,214,952 182,553,075
------------ ------------ ------------ ------------
Total investments at value............................. 732,393,124 742,017,687 498,543,204 617,142,498
Foreign currency at value (cost $334,607)................ -- -- 333,053 --
Receivable for investments sold.......................... 12,588,542 10,378,556 2,734,447 394,786
Receivable for capital shares issued..................... 171,358 42,646 1,000 149,471
Interest and dividends receivable........................ 1,260,449 630,273 673,254 833,927
Tax reclaim receivable................................... -- -- 422,188 --
Net receivable for open foreign currency contracts....... -- -- 24,250 --
Net receivable for variation margin on futures
contracts.............................................. -- -- -- 430
Prepaid expenses......................................... 242 176 1,631 131
------------ ------------ ------------ ------------
Total Assets........................................... 746,413,715 753,069,338 502,733,027 618,521,243
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased........................ 12,970,762 10,103,824 133,042 259,042
Payable for capital shares redeemed...................... 10,519 -- 811 9,152
Withholding taxes payable................................ -- -- 64,382 --
Net payable for variation margin on futures contracts.... 2,890 26,448 -- --
Cash overdraft........................................... -- 40,107 -- --
Payable to adviser....................................... 27,928 28,137 20,531 8,391
Payable to administrator................................. 7,254 7,308 4,977 4,089
Payable to transfer agent................................ 13,515 12,453 9,439 1,223
Payable to distributor (Investment Shares)............... 7,182 4,636 2,057 5,684
Payable to custodian..................................... 1,986 9,589 77,910 13,889
Payable to auditor....................................... 14,877 14,688 9,206 11,549
Payable to legal counsel................................. 4,937 4,962 2,989 3,616
Registration & filing fees payable....................... 12,286 5,574 6,752 21,818
Printing fees payable.................................... 11,802 13,173 8,735 9,659
Accrued expenses and other liabilities................... 12,143 16,751 13,487 9,605
------------ ------------ ------------ ------------
Total Liabilities...................................... 13,098,081 10,287,650 354,318 357,717
------------ ------------ ------------ ------------
NET ASSETS................................................. $733,315,634 $742,781,688 $502,378,709 $618,163,526
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital.......................................... $567,102,155 $516,979,693 $437,400,010 $436,155,073
Accumulated undistributed (distributions in excess of)
net investment income.................................. 50,009 (6,180) (2,157,265) (4,723)
Accumulated undistributed net realized gains (losses) on
investments, foreign currency and futures contracts
sold................................................... 56,041,229 37,737,966 (58,580) (666,108)
Net unrealized appreciation (depreciation) of
investments, foreign currency, forward foreign currency
exchange contracts and futures contracts............... 110,122,241 188,070,209 67,194,544 182,679,284
------------ ------------ ------------ ------------
TOTAL NET ASSETS........................................... $733,315,634 $742,781,688 $502,378,709 $618,163,526
============ ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets............................................... $697,972,970 $719,997,908 $492,598,359 $590,241,426
Shares Outstanding....................................... 44,881,954 39,149,106 33,089,656 30,834,874
Net Asset Value, offering and redemption price per
share.................................................. $ 15.55 $ 18.39 $ 14.89 $ 19.14
============ ============ ============ ============
INVESTMENT SHARES:
Net Assets............................................... $ 35,342,664 $ 22,783,780 $ 9,780,350 $ 27,922,100
Shares Outstanding....................................... 2,289,511 1,243,018 661,385 1,458,041
Net Asset Value, offering and redemption price per
share.................................................. $ 15.44 $ 18.33 $ 14.79 $ 19.15
============ ============ ============ ============
See Notes to Financial Statements
98
245
THE KENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
------------ ------------ ------------
ASSETS:
Investments:
Investments at cost..................................... $143,861,713 $746,770,016 $224,424,903
Net unrealized appreciation (depreciation).............. 787,112 9,857,337 7,334,542
------------ ------------ ------------
Total investments at value.............................. 144,648,825 756,627,353 231,759,445
Cash...................................................... 9,698 65,084 49,843
Receivable for capital shares issued...................... 38,388 42,400 113,566
Interest and dividends receivable......................... 2,507,001 13,123,115 3,520,427
Prepaid expenses.......................................... 568 216 1,919
------------ ------------ ------------
Total Assets............................................ 147,204,480 769,858,168 235,445,200
------------ ------------ ------------
LIABILITIES:
Payable for investments purchased......................... 4,729 37,064 20,922
Payable for capital shares redeemed....................... 4,500 5,000 3,100
Payable to adviser........................................ 4,016 23,142 7,720
Payable to administrator.................................. 1,460 7,650 2,339
Payable to transfer agent................................. 4,130 18,599 3,014
Payable to distributor (Investment Shares)................ 920 1,471 1,108
Payable to custodian...................................... 399 703 348
Payable to auditor........................................ 1,228 13,999 3,361
Payable to legal counsel.................................. 1,150 5,458 1,909
Registration & filing fees payable........................ -- 8,142 25
Printing fees payable..................................... 5,854 12,327 8,571
Accrued expenses and other liabilities.................... 4,430 13,112 4,478
------------ ------------ ------------
Total Liabilities....................................... 32,816 146,667 56,895
------------ ------------ ------------
NET ASSETS.................................................. $147,171,664 $769,711,501 $235,388,305
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital........................................... $153,081,385 $770,245,558 $227,743,701
Accumulated undistributed (distributions in excess of) net
investment income....................................... 3,131 39,097 13,070
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (6,699,964) (10,430,491) 296,992
Net unrealized appreciation (depreciation) of
investments............................................. 787,112 9,857,337 7,334,542
------------ ------------ ------------
TOTAL NET ASSETS............................................ $147,171,664 $769,711,501 $235,388,305
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets................................................ $139,739,111 $762,739,586 $229,777,500
Shares Outstanding........................................ 14,338,849 77,010,336 22,313,511
Net Asset Value, offering and redemption price per
share................................................... $ 9.75 $ 9.90 $ 10.30
============ ============ ============
INVESTMENT SHARES:
Net Assets................................................ $ 7,432,553 $ 6,971,915 $ 5,610,805
Shares Outstanding........................................ 763,364 702,443 545,475
Net Asset Value, offering and redemption price per
share................................................... $ 9.74 $ 9.93 $ 10.29
============ ============ ============
See Notes to Financial Statements
99
246
THE KENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND
------------- ------------- ------------ ------------
ASSETS:
Investments:
Investments at cost..................................... $35,258,239 $258,732,405 $109,343,734 $111,336,719
Net unrealized appreciation (depreciation).............. 733,284 16,097,428 7,357,837 3,342,223
----------- ------------ ------------ ------------
Total investments at value.............................. 35,991,523 274,829,833 116,701,571 114,678,942
Interest and dividends receivable......................... 522,947 4,400,489 1,680,842 1,504,817
Unamortized organizational costs.......................... -- -- 2,548 --
Prepaid expenses.......................................... 16 2,996 1,540 20
----------- ------------ ------------ ------------
Total Assets............................................ 36,514,486 279,233,318 118,386,501 116,183,779
----------- ------------ ------------ ------------
LIABILITIES:
Payable for capital shares redeemed....................... 8,000 4,000 -- --
Payable to adviser........................................ 905 7,655 3,566 2,867
Payable to administrator.................................. 366 2,784 1,179 1,158
Fund accounting fees payable.............................. 1,034 4,195 2,142 2,626
Payable to transfer agent................................. 2,415 3,132 2,639 3,470
Payable to distributor (Investment Shares)................ 61 743 354 540
Payable to custodian...................................... 410 1,075 2,473 788
Payable to auditor........................................ 1,826 3,561 1,761 1,109
Payable to legal counsel.................................. 260 2,245 885 840
Registration & filing fees payable........................ 473 15,700 3,401 6,209
Printing fees payable..................................... 795 -- 1,054 2,358
Accrued expenses and other liabilities.................... 371 12,476 2,888 13,515
----------- ------------ ------------ ------------
Total Liabilities....................................... 16,916 57,566 22,342 35,480
----------- ------------ ------------ ------------
NET ASSETS.................................................. $36,497,570 $279,175,752 $118,364,159 $116,148,299
=========== ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital........................................... $35,758,635 $263,066,394 $110,915,251 $112,834,960
Accumulated undistributed (distributions in excess of) net
investment income....................................... 3,510 30,476 (1,369) 40,046
Accumulated undistributed net realized gains (losses) on
investments sold........................................ 2,141 (18,546) 92,440 (68,930)
Net unrealized appreciation (depreciation) of
investments............................................. 733,284 16,097,428 7,357,837 3,342,223
----------- ------------ ------------ ------------
TOTAL NET ASSETS............................................ $36,497,570 $279,175,752 $118,364,159 $116,148,299
=========== ============ ============ ============
INSTITUTIONAL SHARES:
Net Assets................................................ $36,023,151 $275,641,260 $116,652,429 $111,735,337
Shares Outstanding........................................ 3,534,456 25,809,044 10,954,275 10,944,576
Net Asset Value, offering and redemption price per
share................................................... $ 10.19 $ 10.68 $ 10.65 $ 10.21
=========== ============ ============ ============
INVESTMENT SHARES:
Net Assets................................................ $ 474,419 $ 3,534,492 $ 1,711,730 $ 4,412,962
Shares Outstanding........................................ 46,374 330,953 160,364 432,714
Net Asset Value, offering and redemption price per
share................................................... $ 10.23 $ 10.68 $ 10.67 $ 10.20
=========== ============ ============ ============
See Notes to Financial Statements
100
247
THE KENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ ------------ ------------
ASSETS:
Investments:
Investments in securities at amortized cost............. $474,127,129 $211,226,490 $94,843,356
------------ ------------ -----------
Total investments at amortized cost..................... 474,127,129 211,226,490 94,843,356
Interest and dividends receivable......................... 3,884,471 1,400,326 267,814
Prepaid expenses.......................................... 6,680 218 4,836
------------ ------------ -----------
Total Assets............................................ 478,018,280 212,627,034 95,116,006
------------ ------------ -----------
LIABILITIES:
Dividends payable......................................... 2,341,377 629,509 474,933
Cash overdraft............................................ 77,988 -- --
Payable to adviser........................................ 10,508 4,690 1,039
Payable to administrator.................................. 2,984 1,219 559
Payable to transfer agent................................. 4,240 2,643 665
Payable to custodian...................................... 3,554 5,058 --
Payable to auditor........................................ 8,766 3,546 2,018
Payable to legal counsel.................................. 3,740 1,552 744
Accrued expenses and other liabilities.................... 7,908 7,624 9,587
------------ ------------ -----------
Total Liabilities....................................... 2,461,065 655,841 489,545
------------ ------------ -----------
NET ASSETS.................................................. $475,557,215 $211,971,193 $94,626,461
============ ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital........................................... $475,546,186 $211,982,881 $94,624,247
Accumulated undistributed (distributions in excess of) net
investment income....................................... 13,072 781 2,214
Accumulated undistributed net realized gains (losses) on
investments sold........................................ (2,043) (12,469) --
------------ ------------ -----------
TOTAL NET ASSETS............................................ $475,557,215 $211,971,193 $94,626,461
============ ============ ===========
INSTITUTIONAL SHARES:
Net Assets................................................ $474,377,775 $211,682,179 $94,624,448
Shares Outstanding........................................ 474,371,951 211,671,569 94,624,444
Net Asset Value, offering and redemption price per
share................................................... $ 1.00 $ 1.00 $ 1.00
============ ============ ===========
INVESTMENT SHARES:
Net Assets................................................ $ 1,179,440 $ 289,014 $ 2,013
Shares Outstanding........................................ 1,179,430 288,995 2,013
Net Asset Value, offering and redemption price per
share................................................... $ 1.00 $ 1.00 $ 1.00
============ ============ ===========
See Notes to Financial Statements.
101
248
The Kent STATEMENTS OF OPERATIONS
Funds FOR THE YEAR ENDED DECEMBER 31, 1997
GROWTH AND SMALL COMPANY INTERNATIONAL INDEX
INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND
------------ ------------- ------------- ------------
INVESTMENT INCOME:
Dividends.......................................... $ 16,501,498 $ 7,646,361 $ 9,365,340 $ 7,982,276
Interest........................................... 2,433 32,327 520,830 18,020
Less: Net foreign taxes withheld................... (40,067) (4,583) (1,172,538) (27,698)
------------ ------------ ----------- ------------
Total Investment Income.......................... 16,463,864 7,674,105 8,713,632 7,972,598
------------ ------------ ----------- ------------
EXPENSES:
Investment advisory fees........................... 4,568,032 4,597,213 3,529,317 1,278,392
Administration fees................................ 1,169,235 1,176,682 842,845 766,851
Fund accounting and custodian fees................. 107,230 146,571 420,287 119,844
Audit fees......................................... 19,428 21,465 14,181 15,661
Legal fees......................................... 10,892 10,410 9,514 6,955
Transfer agent fees................................ 141,594 155,246 137,303 106,843
Trustees' fees and expenses........................ 11,333 11,347 8,761 8,289
Distribution fees (Investment Shares).............. 59,946 45,018 23,388 45,030
Printing expenses.................................. 3,402 15,401 20,896 3,555
Registration fees.................................. 32,886 21,741 30,478 5,921
Other expenses..................................... 1,776 2,204 4,137 331
------------ ------------ ----------- ------------
Total expenses before waivers.................... 6,125,754 6,203,298 5,041,107 2,357,672
Less: waivers.................................... (77,411) (77,831) (56,062) (485,961)
------------ ------------ ----------- ------------
Net Expenses..................................... 6,048,343 6,125,467 4,985,045 1,871,711
------------ ------------ ----------- ------------
NET INVESTMENT INCOME................................ 10,415,521 1,548,638 3,728,587 6,100,887
------------ ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on investments, foreign
currency, and foreign currency contracts......... 111,932,563 78,087,896 2,742,836 1,138,162
Net realized gains (losses) on futures contracts... (61,005) 524,810 -- 1,370,043
Net change in unrealized appreciation/depreciation
of futures contracts............................. 275,070 227,785 -- 120,014
Net change in unrealized appreciation/depreciation
of investments, foreign currency, and foreign
currency contracts............................... 15,661,888 81,347,122 4,769,670 98,353,714
------------ ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS........................................ 127,808,516 160,187,613 7,512,506 100,981,933
------------ ------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................... $138,224,037 $161,736,251 $11,241,093 $107,082,820
============ ============ =========== ============
See Notes to Financial Statements
102
249
The Kent STATEMENTS OF OPERATIONS
Funds FOR THE YEAR ENDED DECEMBER 31, 1997
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
---------- ------------ -----------
INVESTMENT INCOME:
Interest.................................................. $11,152,170 $51,050,679 $18,158,378
Dividends................................................. 418,796 1,514,383 382,540
----------- ----------- -----------
Total Investment Income................................. 11,570,966 52,565,062 18,540,918
----------- ----------- -----------
EXPENSES:
Investment advisory fees.................................. 857,575 4,262,333 1,489,950
Administration fees....................................... 306,274 1,386,330 444,179
Fund accounting and custodian fees........................ 26,634 116,074 39,981
Audit fees................................................ 10,509 25,302 10,856
Legal fees................................................ 1,542 10,722 3,892
Transfer agent fees....................................... 45,140 81,993 49,488
Trustees' fees and expenses............................... 2,348 9,884 3,830
Distribution fees (Investment Shares)..................... 9,174 17,259 8,849
Amortization of organization costs........................ -- -- 6,024
Printing expenses......................................... 2,389 9,109 2,190
Registration fees......................................... 7,759 18,896 10,328
Other expenses............................................ 37 446 2,793
----------- ----------- -----------
Total expenses before waivers........................... 1,269,381 5,938,348 2,072,360
Less: waivers........................................... (24,820) (93,254) (29,904)
----------- ----------- -----------
Net Expenses............................................ 1,244,561 5,845,094 2,042,456
----------- ----------- -----------
NET INVESTMENT INCOME....................................... 10,326,405 46,719,968 16,498,462
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains (losses) on investments sold........... (1,502,731) (3,309,390) 3,441,169
Net change in unrealized appreciation/depreciation of
investments............................................. 1,638,919 15,305,110 5,214,704
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS... 136,188 11,995,720 8,655,873
----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $10,462,593 $58,715,688 $25,154,335
=========== =========== ===========
See Notes to Financial Statements
103
250
The Kent STATEMENTS OF OPERATIONS
Funds FOR THE YEAR ENDED DECEMBER 31, 1997
MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND
------------- ------------- ----------- ----------
INVESTMENT INCOME:
Interest............................................. $1,696,028 $14,164,975 $5,900,518 $5,830,519
Dividends............................................ 25,281 154,379 79,656 75,421
---------- ----------- ---------- ----------
Total Investment Income............................ 1,721,309 14,319,354 5,980,174 5,905,940
---------- ----------- ---------- ----------
EXPENSES:
Investment advisory fees............................. 167,800 1,424,578 642,997 563,275
Administration fees.................................. 66,670 509,532 209,139 223,672
Distribution fees (Investment Shares)................ 773 8,298 2,621 7,499
Fund accounting and custodian fees................... 7,938 56,335 25,517 28,492
Audit fees........................................... 5,045 15,742 7,146 9,059
Legal fees........................................... 449 4,311 1,785 3,184
Transfer agent fees.................................. 37,236 40,987 39,201 37,521
Trustees' fees and expenses.......................... -- 4,365 525 1,814
Amortization of organization costs................... -- -- 1,668 --
Printing expenses.................................... -- 13,464 7,177 6,906
Registration fees.................................... 1,147 6,876 4,558 27
Other expenses....................................... -- 222 1,512 513
---------- ----------- ---------- ----------
Total expenses before waivers...................... 287,058 2,084,710 943,846 881,962
Less: waivers...................................... (4,821) (34,406) (14,069) (18,246)
---------- ----------- ---------- ----------
Net Expenses....................................... 282,237 2,050,304 929,777 863,716
---------- ----------- ---------- ----------
NET INVESTMENT INCOME.................................. 1,439,072 12,269,050 5,050,397 5,042,224
---------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on investments sold...... 159,864 691,582 376,069 49,676
Net change in unrealized appreciation/depreciation of
investments........................................ 136,663 6,286,893 4,279,292 1,602,539
---------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS.......................................... 296,527 6,978,475 4,655,361 1,652,215
---------- ----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS... $1,735,599 $19,247,525 $9,705,758 $6,694,439
========== =========== ========== ==========
See Notes to Financial Statements
104
251
The Kent STATEMENTS OF OPERATIONS
Funds FOR THE YEAR ENDED DECEMBER 31, 1997
MICHIGAN
MUNICIPAL GOVERNMENT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND(1)
------------ ------------ ------------
INVESTMENT INCOME:
Interest.................................................. $28,553,830 $7,265,643 $2,957,599
Dividends................................................. 909,527 138,215 193,020
----------- ---------- ----------
Total Investment Income................................. 29,463,357 7,403,858 3,150,619
----------- ---------- ----------
EXPENSES:
Investment advisory fees.................................. 2,092,414 781,668 226,041
Administration fees....................................... 936,013 349,391 103,600
Fund accounting and custodian fees........................ 82,972 34,928 13,744
Audit fees................................................ 17,337 7,568 3,348
Legal fees................................................ 8,442 2,074 927
Transfer agent fees....................................... 55,039 39,410 16,905
Trustees' fees and expenses............................... 8,347 3,207 1,418
Amortization of organization costs........................ -- -- 4,275
Printing expenses......................................... 9,267 2,834 3,172
Registration fees......................................... 21,889 640 12,939
Other expenses............................................ 132 -- 673
----------- ---------- ----------
Total expenses before waivers........................... 3,231,852 1,221,720 387,042
Less: waivers........................................... (509,838) (199,790) (189,098)
----------- ---------- ----------
Net Expenses............................................ 2,722,014 1,021,930 197,944
----------- ---------- ----------
NET INVESTMENT INCOME....................................... 26,741,343 6,381,928 2,952,675
----------- ---------- ----------
NET REALIZED GAINS (LOSSES) ON INVESTMENT................... (1,165) (12,469) 4
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $26,740,178 $6,369,459 $2,952,679
=========== ========== ==========
- ---------------
(1) For the period from June 2, 1997 (commencement of operations) through
December 31, 1997.
See Notes to Financial Statements.
105
252
The Kent
Funds STATEMENTS OF CHANGES IN NET ASSETS
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
----------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
----------------------------- -----------------------------
NET ASSETS AT BEGINNING OF PERIOD........................ $515,920,253 $412,450,592 $558,516,596 $ 461,027,443
------------ ------------ ------------ -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.................................. 10,415,521 9,952,979 1,548,638 3,966,391
Net realized gains (losses) on investments, foreign
currency, and foreign currency contracts............. 111,932,563 39,233,025 78,087,896 32,298,684
Net realized gains (losses) on futures contracts....... (61,005) 2,415,000 524,810 3,527,985
Net change in unrealized appreciation/depreciation of
futures contracts.................................... 275,070 -- 227,785 87,425
Net change in unrealized appreciation/depreciation of
investments, foreign currency, and foreign currency
contracts............................................ 15,661,888 30,902,403 81,347,122 53,847,793
------------ ------------ ------------ -------------
Net increase in net assets resulting from operations... 138,224,037 82,503,407 161,736,251 93,728,278
------------ ------------ ------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income.................................. (10,051,899) (9,772,575) (1,572,242) (3,891,501)
In excess of net investment income..................... -- -- (570,748) --
Net realized gains on investments...................... (58,514,755) (49,510,778) (52,695,021) (24,783,337)
In excess of net realized gains........................ -- -- -- --
------------ ------------ ------------ -------------
Total dividends and distributions -- Institutional
Shares............................................. (68,566,654) (59,283,353) (54,838,011) (28,674,838)
------------ ------------ ------------ -------------
INVESTMENT:
Net investment income.................................. (322,621) (246,918) -- (70,033)
In excess of net investment income..................... -- (18,400) (36,830) (7,537)
Net realized gains on investments...................... (2,725,491) (1,458,817) (1,565,329) (629,504)
In excess of net realized gains........................ -- -- -- --
------------ ------------ ------------ -------------
Total dividends and distributions -- Investment
Shares............................................. (3,048,112) (1,724,135) (1,602,159) (707,074)
------------ ------------ ------------ -------------
Total dividends and distributions to shareholders.... (71,614,766) (61,007,488) (56,440,170) (29,381,912)
------------ ------------ ------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................ 269,087,243 153,847,838 216,183,011 135,473,783
Reinvestment of distributions.......................... 33,077,724 27,411,595 28,070,255 14,891,206
Cost of shares redeemed................................ (151,378,857) (99,285,691) (165,284,255) (117,222,202)
------------ ------------ ------------ -------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS........................................... 150,786,110 81,973,742 78,969,011 33,142,787
------------ ------------ ------------ -------------
Net increase (decrease) in net assets.................. 217,395,381 103,469,661 184,265,092 97,489,153
------------ ------------ ------------ -------------
NET ASSETS AT END OF PERIOD.............................. $733,315,634 $515,920,253 $742,781,688 $ 558,516,596
============ ============ ============ =============
See Notes to Financial Statements
106
253
The Kent
Funds STATEMENTS OF CHANGES IN NET ASSETS
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
----------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
----------------------------- -----------------------------
NET ASSETS AT BEGINNING OF PERIOD......................... $396,597,865 $294,093,096 $253,362,463 $190,488,589
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income................................... 3,728,587 3,169,685 6,100,887 4,133,408
Net realized gains (losses) on investments, foreign
currency, and foreign currency contracts.............. 2,742,836 3,330,884 1,138,162 1,057,376
Net realized gains (losses) on futures contracts........ -- -- 1,370,043 1,498,615
Net change in unrealized appreciation/depreciation of
futures contracts..................................... -- -- 120,014 49,520
Net change in unrealized appreciation/depreciation of
investments, foreign currency, and foreign currency
contracts............................................. 4,769,670 11,892,070 98,353,714 37,969,480
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations.... 11,241,093 18,392,639 107,082,820 44,708,399
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income................................... (3,055,002) (2,589,632) (5,884,290) (3,996,731)
In excess of net investment income...................... (1,831,420) (504,939) (65,127) --
Net realized gains on investments.......................
In excess of net realized gains......................... (341,685) (161,046) (585,460) (668,004)
------------ ------------ ------------ ------------
Total dividends and distributions -- Institutional
Shares.............................................. (7,629,204) (6,581,114) (8,147,919) (9,048,415)
------------ ------------ ------------ ------------
INVESTMENT:
Net investment income................................... (35,702) (49,833) (215,864) (137,968)
In excess of net investment income...................... (59,234) -- (9,227) (5,705)
Net realized gains on investments....................... (47,965) (82,522) (88,824) (199,306)
In excess of net realized gains......................... (6,876) -- (11,017) --
------------ ------------ ------------ ------------
Total dividends and distributions -- Investment
Shares.............................................. (149,777) (132,355) (324,932) (342,979)
------------ ------------ ------------ ------------
Total dividends and distributions to shareholders..... (7,778,981) (6,713,469) (8,472,851) (9,391,394)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 193,400,718 139,625,382 339,198,444 72,390,118
Reinvestment of distributions........................... 3,565,223 3,275,693 6,673,196 6,280,152
Cost of shares redeemed................................. (94,647,209) (52,075,476) (79,680,546) (51,113,401)
------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL TRANSACTIONS... 102,318,732 90,825,599 266,191,094 27,556,869
------------ ------------ ------------ ------------
Net increase (decrease) in net assets................... 105,780,844 102,504,769 364,801,063 62,873,874
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD............................... $502,378,709 $396,597,865 $618,163,526 $253,362,463
============ ============ ============ ============
See Notes to Financial Statements
107
254
The Kent
Funds STATEMENTS OF CHANGES IN NET ASSETS
SHORT TERM BOND FUND INTERMEDIATE BOND FUND INCOME FUND
----------------------------- ----------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996
---------------------------- ---------------------------- ----------------------------
NET ASSETS AT BEGINNING OF
PERIOD.......................... $237,096,910 $312,313,894 $776,722,838 $861,662,351 $242,781,715 $128,017,408
------------ ------------ ------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income........... 10,326,405 17,428,126 46,719,968 50,745,83 16,498,462 13,248,046
Net realized gains (losses) on
investments sold.............. (1,502,731) (937,245) (3,309,390) (7,025,161) 3,441,169 2,157,485
Net change in unrealized
appreciation/depreciation of
investments................... 1,638,919 (5,032,357) 15,305,110 (20,975,605) 5,214,704 (7,015,717)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations..... 10,462,593 11,458,524 58,715,688 22,745,066 25,154,335 8,389,814
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income........... (10,203,409) (17,416,111) (46,492,693) (51,337,391) (16,298,443) (13,204,524)
In excess of net investment
income........................ -- -- -- (2,304,413) -- (1,956,281)
Net realized gains on
investments................... -- -- -- -- (4,496,656) (717,482)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions --
Institutional Shares........ (10,203,409) (17,416,111) (46,492,693) (53,641,804) (20,795,099) (15,878,287)
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT:
Net investment income........... (230,620) (85,476) (400,310) (422,949) (236,638) (143,574)
In excess of net investment
income........................ -- (9,055) -- (38,057) -- (20,998)
Net realized gains on
investments................... -- -- -- -- (85,457) (2,063)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions -- Investment
Shares...................... (230,620) (94,531) (400,310) (461,006) (322,095) (166,635)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to
shareholders................ (10,434,029) (17,510,642) (46,893,003) (54,102,810) (21,117,194) (16,044,922)
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 55,848,711 71,401,214 201,540,137 200,094,674 67,917,967 155,448,604
Reinvestment of distributions... 6,828,762 11,174,796 25,204,467 29,128,985 4,339,793 2,778,971
Cost of shares redeemed......... (152,631,283) (151,740,876) (245,578,626) (282,805,428) (83,688,311) (35,808,160)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM
CAPITAL TRANSACTIONS............ (89,953,810) (69,164,866) (18,834,022) (53,581,769) (11,430,551) 122,419,415
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets........................ (89,925,246) (75,216,984) (7,011,337) (84,939,513) (7,393,410) 114,764,307
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD....... $147,171,664 $237,096,910 $769,711,501 $776,722,838 $235,388,305 $242,781,715
============ ============ ============ ============ ============ ============
See Notes to Financial Statements
108
255
The Kent
Funds STATEMENTS OF CHANGES IN NET ASSETS
LIMITED TERM TAX-FREE FUND INTERMEDIATE TAX-FREE FUND
--------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
--------------------------- ---------------------------
NET ASSETS AT BEGINNING OF PERIOD......................... $41,577,319 $55,401,190 $289,042,905 $287,540,348
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income................................... 1,439,072 1,861,546 12,269,050 12,643,123
Net realized gains (losses) on investments sold......... 159,864 82,971 691,582 1,079,288
Net change in unrealized appreciation/depreciation of
investments........................................... 136,663 (270,758) 6,286,893 (3,796,119)
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations.... 1,735,599 1,673,759 19,247,525 9,926,292
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income................................... (1,432,406) (1,883,853) (12,149,068) (12,639,182)
In excess of net investment income...................... -- (22,303) -- (101,729)
Net realized gains on investments....................... (170,851) (45,972) (86,552) --
In excess of net realized gains......................... -- -- (17,244) --
------------ ------------ ------------ ------------
Total dividends and distributions -- Institutional
Shares.............................................. (1,603,257) (1,952,128) (12,252,864) (12,740,911)
------------ ------------ ------------ ------------
INVESTMENT:
Net investment income................................... (11,595) (2,384) (135,115) (137,261)
In excess of net investment income...................... -- (206) -- (7,740)
Net realized gains on investments....................... (2,045) (87) (863) --
In excess of net realized gains......................... -- -- (441) --
------------ ------------ ------------ ------------
Total dividends and distributions -- Investment
Shares.............................................. (13,640) (2,677) (136,419) (145,001)
------------ ------------ ------------ ------------
Total dividends and distributions to shareholders..... (1,616,897) (1,954,805) (12,389,283) (12,885,912)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 9,736,272 8,696,402 44,265,909 63,415,595
Reinvestment of distributions........................... 27,364 18,971 207,641 120,131
Cost of shares redeemed................................. (14,962,087) (22,258,198) (61,198,945) (59,073,549)
------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL TRANSACTIONS... (5,198,451) (13,542,825) (16,725,395) 4,462,177
------------ ------------ ------------ ------------
Net increase (decrease) in net assets................... (5,079,749) (13,823,871) (9,867,153) 1,502,557
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD............................... $36,497,570 $41,577,319 $279,175,752 $289,042,905
============ ============ ============ ============
See Notes to Financial Statements
109
256
The Kent
Funds STATEMENTS OF CHANGES IN NET ASSETS
TAX-FREE INCOME FUND MICHIGAN MUNICIPAL BOND FUND
--------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
--------------------------- -----------------------------
NET ASSETS AT BEGINNING OF PERIOD........................ $110,883,746 $122,384,290 $155,044,170 $187,365,585
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.................................. 5,050,397 4,737,111 5,042,224 6,577,753
Net realized gains (losses) on investments sold........ 376,069 1,968,582 49,676 86,964
Net realized gains (losses) on futures contracts....... -- (363,313) -- --
Net change in unrealized appreciation/depreciation of
investments.......................................... 4,279,292 (1,887,284) 1,602,539 (795,155)
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations... 9,705,758 4,455,096 6,694,439 5,869,562
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income.................................. (5,016,230) (4,725,879) (4,914,390) (6,489,955)
In excess of net investment income..................... (610) -- -- --
Net realized gains on investments...................... (330,223) (1,679,825) -- --
------------ ------------ ------------ ------------
Total dividends and distributions -- Institutional
Shares............................................. (5,347,063) (6,405,704) (4,914,390) (6,489,955)
------------ ------------ ------------ ------------
INVESTMENT:
Net investment income.................................. (42,572) (32,116) (121,577) (77,375)
In excess of net investment income..................... (929) -- -- (3,313)
Net realized gains on investments...................... (4,346) (9,292) -- --
In excess of net realized gains........................ -- (3,147) -- --
------------ ------------ ------------ ------------
Total dividends and distributions -- Investment
Shares............................................. (47,847) (44,555) (121,577) (80,688)
------------ ------------ ------------ ------------
Total dividends and distributions to shareholders.... (5,394,910) (6,450,259) (5,035,967) (6,570,643)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................ 33,039,586 35,182,548 35,519,586 28,108,486
Reinvestment of distributions.......................... 116,653 68,391 131,586 74,582
Cost of shares redeemed................................ (29,986,674) (44,756,320) (76,205,515) (59,803,402)
------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS........................................... 3,169,565 (9,505,381) (40,554,343) (31,620,334)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets.................. 7,480,413 (11,500,544) (38,895,871) (32,321,415)
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD.............................. $118,364,159 $110,883,746 $116,148,299 $155,044,170
============ ============ ============ ============
See Notes to Financial Statements
110
257
The Kent
Funds STATEMENTS OF CHANGES IN NET ASSETS
GOVERNMENT
MICHIGAN MUNICIPAL MONEY
MONEY MARKET FUND MONEY MARKET FUND MARKET FUND
------------------------------- --------------------------- ------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997(1)
-----------------------------
---------------------------
------------
NET ASSETS AT BEGINNING OF YEAR.................... $ 484,722,709 $ 426,042,320 $156,205,940 $146,818,028 $ --
--------------- ------------- ------------ ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................ 26,741,343 21,617,630 6,381,928 4,998,349 2,952,675
Net realized gains (losses) on investments....... (1,165) (27) (12,469) 251 4
--------------- ------------- ------------ ------------ ------------
Net increase in net assets resulting from
operations..................................... 26,740,178 21,617,603 6,369,459 4,998,600 2,952,679
--------------- ------------- ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
INSTITUTIONAL:
Net investment income............................ (26,699,476) (21,564,398) (6,369,567) (4,966,358) (2,952,603)
--------------- ------------- ------------ ------------ ------------
Total dividends and
distributions -- Institutional Shares........ (26,699,476) (21,564,398) (6,369,567) (4,966,358) (2,952,603)
--------------- ------------- ------------ ------------ ------------
INVESTMENT:
Net investment income............................ (41,867) (53,232) (12,361) (31,991) (72)
--------------- ------------- ------------ ------------ ------------
Total dividends and distributions -- Investment
Shares....................................... (41,867) (53,232) (12,361) (31,991) (72)
--------------- ------------- ------------ ------------ ------------
Total dividends and distributions to
shareholders................................. (26,741,343) (21,617,630) (6,381,928) (4,998,349) (2,952,675)
--------------- ------------- ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 1,153,447,515 845,431,796 279,204,632 258,441,230 328,636,541
Reinvestment of distributions.................... 1,731,961 587,156 205,995 28,579 2,413,698
Cost of shares redeemed.......................... (1,164,343,805) (787,338,536) (223,632,905) (249,082,148) (236,423,732)
--------------- ------------- ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) FROM CAPITAL
TRANSACTIONS..................................... (9,164,329) 58,680,416 55,777,722 9,387,661 94,626,457
--------------- ------------- ------------ ------------ ------------
Net increase (decrease) in net assets............ (9,165,494) 58,680,389 55,765,253 9,387,912 94,626,461
--------------- ------------- ------------ ------------ ------------
NET ASSETS AT END OF YEAR.......................... $ 475,557,215 $ 484,722,709 $211,971,193 $156,205,940 $ 94,626,461
=============== ============= ============ ============ ============
- ---------------
(1) For the period from June 2, 1997 (commencement of operations) through
December 31, 1997.
See Notes to Financial Statements.
111
258
The Kent
Funds NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Kent Funds (the "Trust") was organized as a Massachusetts business trust
on May 9, 1986 and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company. As of
the date of this report, the Trust offered fourteen managed investment
portfolios. The accompanying financial statements and financial highlights are
those of The Kent Growth and Income Fund, The Kent Small Company Growth Fund,
The Kent International Growth Fund, The Kent Index Equity Fund, The Kent Short
Term Bond Fund, The Kent Intermediate Bond Fund, The Kent Income Fund, The Kent
Limited Term Tax-Free Fund, The Kent Intermediate Tax-Free Fund, The Kent
Tax-Free Income Fund, The Kent Michigan Municipal Bond Fund, The Kent Money
Market Fund, The Kent Michigan Municipal Money Market Fund and The Kent
Government Money Market Fund (individually, a "Portfolio" and collectively, the
"Portfolios").
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest without par value. It allows for the
creation of one or more classes of shares within each series, each of which,
regardless of class designation, represents an equal proportionate interest in
the Portfolios with each other share of that series.
The Trust may issue more than one series of shares investing in portfolios of
securities. The Trust currently issues fourteen series of shares with two
separate classes in each series: Investment Shares and Institutional Shares.
Each class of shares is entitled upon liquidation of a series to a pro rata
share in the net assets of that class of such series. Each share in each series
or class has identical voting, dividend, liquidation and other rights, except in
matters affecting only a particular series or class, in which case only shares
of the affected series or class are entitled to vote. Class specific expenses,
if any, are currently limited to expenses directly attributable to the
Investment Shares under the Distribution Plan, shareholder services fees and
certain printing and postage expenses incurred as they relate to a particular
class of shares.
The investment objectives of the Portfolios are as follows:
Growth and Income Fund -- To seek long-term capital growth with current income
as a secondary goal.
Small Company Growth Fund -- To seek long-term capital appreciation by
investing in equity securities of small companies.
International Growth Fund -- To seek long-term growth of capital and
additional diversification for U.S. investors by investing in a varied portfolio
of foreign equity securities.
Index Equity Fund -- To seek investment results which mirror the capital
performance and dividend income of the Standard & Poor's 500 Composite Stock
Price Index.
Short Term Bond Fund -- To seek current income by investing primarily in a
limited range of investment quality fixed income securities.
Intermediate Bond Fund -- To seek current income by investing primarily in a
broad range of investment quality debt securities.
Income Fund -- To seek a high level of current income by investing in a broad
range of investment quality debt securities.
Limited Term Tax-Free Fund -- To seek current income, exempt from federal
income tax, while preserving capital.
Intermediate Tax-Free Fund -- To seek current income, exempt from federal
income tax, while preserving capital.
Tax-Free Income Fund -- To seek to provide as high a level of current income
exempt from federal income tax as is consistent with prudent investing, while
preserving capital.
Michigan Municipal Bond Fund -- To seek current income, exempt from federal
and State of Michigan personal income taxes, while preserving capital.
Money Market Fund -- To seek current income from short-term securities while
preserving capital and maintaining liquidity.
Michigan Municipal Money Market Fund -- To seek current income from short-term
securities that is exempt from federal and State of Michigan personal income
taxes, while preserving capital and maintaining liquidity.
Government Money Market Fund -- To seek current income from short-term United
States Government securities while preserving capital and maintaining liquidity.
112
259
The Kent
Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Portfolios in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual amounts could differ from those estimates.
PORTFOLIO VALUATION: Securities in the Money Market Fund, Government Money
Market Fund and Michigan Municipal Money Market Fund (the "Money Market
Portfolios") are valued utilizing the amortized cost valuation method permitted
in accordance with Rule 2a-7 under the 1940 Act, which approximates market
value. This method involves valuing a portfolio security initially at its cost
on the date of purchase and thereafter assuming a constant amortization to
maturity of the difference between the principal amount due at maturity and
initial cost.
In the Limited Term Tax-Free Fund, the Intermediate Tax-Free Fund, the
Tax-Free Income Fund, the Michigan Municipal Bond Fund, the Short Term Bond
Fund, the Intermediate Bond Fund, and the Income Fund, corporate debt
securities, municipal securities and debt securities of the U.S. government and
its agencies (other than short-term investments maturing in 60 days or less) are
valued on the basis of valuations provided by dealers or by an independent
pricing service approved by the Board of Trustees. Short-term obligations that
mature in 60 days or less are valued at amortized cost, which constitutes fair
value and approximates market value. All other securities and other assets are
appraised at their fair value as determined in good faith under consistently
applied procedures established by and under the general supervision of the Board
of Trustees.
The Growth and Income Fund, Small Company Growth Fund, International Growth
Fund and the Index Equity Fund value securities at the last sales price on the
principal exchange where such securities are traded. Listed securities for which
last sales prices are not available are valued at the last bid price. Unlisted
securities are valued at the mean of the current bid and asked prices in the
principal market where such securities trade. Short-term obligations that mature
in 60 days or less are valued at amortized cost, which constitutes fair value
and approximates market value. All other securities and other assets are
appraised at their fair value as determined in good faith under consistently
applied procedures established by and under the general supervision of the Board
of Trustees.
REPURCHASE AGREEMENTS: The Trust's custodian and other banks acting in a
sub-custodian capacity, take possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued daily
on a mark-to-market basis to determine that the value, including accrued
interest, exceeds the repurchase price. In the event of the seller's default of
the obligation to repurchase, the Portfolios have the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of the default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings.
FOREIGN CURRENCY TRANSLATION: Investments and other assets and liabilities
initially expressed in foreign currencies are converted each business day into
U.S. dollars based upon current exchange rates. Realized gains and losses on
foreign investments and foreign income and expenses are converted into U.S.
dollars based upon exchange rates prevailing on the respective dates of such
transactions. That portion of unrealized gains or losses on investments due to
fluctuations in foreign currency exchange rates is not separately disclosed.
Foreign currency-denominated receivables and payables are "marked-to-market"
using the current exchange rate. The fluctuation between the original exchange
rate and the current exchange rate is recorded as unrealized currency gain or
loss. Upon receipt of payment, a Portfolio realizes a gain or loss on foreign
currency amounting to the difference between the original value and the ending
value of the receivable or payable.
FUTURES CONTRACTS: The Growth and Income Fund, Small Company Growth Fund,
International Growth Fund, Index Equity Fund, Limited Term Tax-Free Fund,
Intermediate Tax-Free Fund, Tax-Free Income Fund and Michigan Municipal Bond
Fund may invest in futures contracts. These Portfolios generally enter into
futures contracts to hedge against declines in the value of their portfolios'
securities. This investment involves, to varying degrees, elements of market
risk and risks in
113
260
The Kent
Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
excess of the amount recognized in the Statement of Assets and Liabilities. The
face or contract amounts reflect the extent of the involvement the Portfolios
have in the particular classes of instruments. Risks include an imperfect
correlation between the movements in the price of the instruments and the price
of the underlying securities and interest rates. Risks may also arise if there
is an illiquid secondary market for the instruments or due to the inability of
counterparties to perform under the terms of the contract.
Cash or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received daily by the Portfolio based on the change
in the market value of the position are recorded as an unrealized gain or loss
until the contract is closed out at which time the gain or loss is recognized.
Futures contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.
To the extent that the Portfolio enters into futures contracts on an index or
group of securities, the Portfolio exposes itself to an indeterminate liability
and will be required to pay or receive a sum of money measured by the change in
the market value of the index or group of securities. Upon entering into a
futures contract, the Portfolio is required to deposit either cash or securities
in an amount ("initial margin") equal to a certain percentage of the contract
value with a broker. Subsequent payments ("variation margin") equal to changes
in the daily settlement price or last sale on the exchanges where they trade are
paid or received each day and are recorded as a gain or loss on futures
contracts.
The average market value of futures contracts held during the year ended
December 31, 1997 was as follows:
AVERAGE
FUND MARKET VALUE
---- ------------
Growth and Income Fund.................... $10,090,452
Small Company Growth Fund................. 8,180,496
Index Equity Fund......................... 7,361,783
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The International Growth Fund may
enter into forward foreign currency exchange contracts. The purpose of these
contracts is to hedge against fluctuation in the value of the underlying
currency of certain portfolio investments. A forward foreign currency exchange
contract is an agreement to purchase or sell a specified currency at a specified
price on a future date. Risks associated with the contract include changes in
the value of the foreign currency relative to the U.S. dollar and/or the
counterparty's potential inability to perform under the contract.
The forward foreign currency exchange contracts are valued daily using the
current exchange rate of the underlying currency with any fluctuations recorded
as unrealized gains or losses. Realized gains or losses are recognized when
entering a closing or offsetting forward foreign currency exchange contract with
the same settlement date and broker.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Net realized gains and losses on investments sold
and on foreign currency transactions are recorded on the basis of identified
cost. Interest income is recorded on the accrual basis and includes, where
applicable, the amortization of premiums or accretion of discounts. Dividend
income is recorded on the ex-dividend date.
The International Growth Fund, upon the purchase or sale of a security
denominated in a foreign currency, may enter into foreign currency exchange
contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the
amount of foreign currency involved in the underlying security transaction to
hedge the portfolio against currency fluctuations during the settlement period.
In such cases, the Portfolio has not realized currency gains or losses between
the trade and settlement dates on these security transactions.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Portfolios declare and
distribute dividends from net investment income monthly, with the exception of
the International Growth Fund which declares and pays dividends annually and the
Money Market Portfolios which declare daily and pay monthly. Net investment
income for this purpose consists of interest accrued, discount earned (including
both original issue and market discount), dividends earned less amortization of
any market premium and accrued expenses. Net realized capital gains, if any, are
distributed at least annually.
The amounts of income and capital gains to be distributed are determined in
accordance with income tax regulations. Such amounts may vary from income and
capital gains recognized in accordance with generally accepted accounting
principles.
114
261
The Kent
Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of December 31, 1997, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments to
paid-in-capital:
ACCUMULATED
ACCUMULATED UNDISTRIBUTED
UNDISTRIBUTED NET REALIZED
NET INVESTMENT GAIN/(LOSS)
INCOME ON INVESTMENTS
------ --------------
Growth and Income Fund... $ -- $ --
Small Company Growth
Fund................... 603,541 (603,541)
International Growth
Fund................... (266,611) 289,981
Index Equity Fund........ 69,631 (69,631)
Short Term Bond Fund..... 1,757 (1,757)
Intermediate Bond Fund... 80,298 (80,298)
Income Fund.............. -- --
Limited Term Tax-Free
Fund................... 1,428 (1,428)
Intermediate Tax-Free
Fund................... 861 (861)
Tax-Free Income Fund..... 170 (170)
Michigan Municipal Bond
Fund................... 11,352 (11,352)
Money Market............. -- --
Michigan Municipal Money
Market Fund............ 781 (781)
Government Money Market
Fund................... 2,214 (4)
FEDERAL INCOME TAXES: For federal income tax purposes, each Portfolio is
treated as a separate entity for the purpose of determining its qualification as
a regulated investment company under the Internal Revenue Code (the "Code"). It
is the policy of each Portfolio to meet the requirements of the Code applicable
to regulated investment companies, including the requirement that it distribute
substantially all of its taxable income to shareholders. Therefore, no federal
income tax provision is required. Withholding taxes on foreign dividends have
been paid or provided for in accordance with the applicable country's tax rules
and rates.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
At December 31, 1997, the following Portfolios had the following capital loss
carryforwards which will expire in the years indicated:
FUND AMOUNT YEAR
---- ----------- ----
Short Term Bond Fund................ $ 656,100 2001
3,015,994 2002
467,881 2003
438,260 2004
1,927,928 2005
-----------
6,506,163
===========
Intermediate Bond Fund.............. $ 6,353,600 2004
4,043,228 2005
-----------
$10,396,828
===========
Michigan Municipal Bond Fund........ $ 68,930 2003
-----------
Money Market Fund................... $ 433 1999
224 2002
194 2003
27 2004
432 2005
-----------
$ 1,310
===========
Michigan Municipal Money Market
Fund.............................. $ 12,469 2005
EXPENSES: Expenses directly attributable to a Portfolio are charged to the
Portfolio, while expenses which are attributable to more than one series of the
Trust are allocated among the respective series based upon relative net assets
or another appropriate basis. In addition, investors in Investment Shares will
pay the expenses directly attributable to the Investment Shares as a class, and
investors in Institutional Shares will pay the expenses directly attributable to
the Institutional Shares as a class.
ORGANIZATIONAL COSTS: The Tax-Free Income Fund bears all costs in connection
with its organization, including the fees and expenses of registering and
qualifying their initial shares for distribution under federal and state
securities laws. All such costs are amortized using the straight-line method
over a period of five years beginning with the respective Portfolio's
commencement of operations. In the event that any of the initial shares
purchased by the Portfolio's sponsors are redeemed during such period by any
holder thereof, the Portfolio will be reimbursed by such holder
115
262
The Kent
Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
for any unamortized organization costs in the same proportion as the number of
initial shares being redeemed bears to the number of initial shares outstanding
at the time of redemption. The other Portfolios beared all costs in connection
with their organization. All such costs were fully amortized as of December 31,
1997.
3. RELATED PARTY TRANSACTIONS
Old Kent Bank ("Investment Adviser") serves as the investment adviser to the
Trust. The Investment Adviser is a member of Michigan State Banking Association
and the principal subsidiary of Old Kent Financial Corporation. The Investment
Adviser is entitled to receive a fee, computed daily and paid monthly, based on
each Portfolio's average daily net assets at the following annual rates:
Growth and Income Fund........................... 0.70%
Small Company Growth Fund........................ 0.70%
International Growth Fund........................ 0.75%
Index Equity Fund................................ 0.30%
Short Term Bond Fund............................. 0.50%
Intermediate Bond Fund........................... 0.55%
Income Fund...................................... 0.60%
Limited Term Tax-Free Fund....................... 0.45%
Intermediate Tax-Free Fund....................... 0.50%
Tax-Free Income Fund............................. 0.55%
Michigan Municipal Bond Fund..................... 0.45%
Money Market Fund................................ 0.40%
Michigan Municipal Money Market Fund............. 0.40%
Government Money Market Fund..................... 0.40%
The Index Equity Fund and Government Money Market Fund had investment advisory
fees waived by Old Kent Bank equal to $119,782 and $113,145, respectively.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
serves the Portfolios as Administrator and Distributor. BISYS Fund Services,
Inc. serves the Portfolios as Fund Accountant and Transfer Agent. BISYS and
BISYS Fund Services, Inc. are both wholly owned subsidiaries of The BISYS Group,
Inc. The Administrator is entitled to receive a fee computed daily and paid
monthly, at the annual rate of 0.185% of the average daily net assets of the
Trust up to $5 billion; 0.165% of the average daily net assets of the Trust in
excess of $5 billion up to $7.5 billion; and 0.135% of the average daily net
assets of the Trust in excess of $7.5 billion. Fund Accounting fees are computed
daily and paid monthly at the annual rate of 0.015% of the average daily net
assets of the Trust and are included as part of the fees paid to the
Administrator.
Gross administration fees and fees waived for the year ended December 31, 1997
were as follows for the Portfolios indicated:
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
Growth and Income Fund......... $1,169,235 $ --
Small Company Growth Fund...... 1,176,682 --
International Growth Fund...... 842,845 --
Index Equity Fund.............. 766,851 302,110
Short Term Bond Fund........... 306,274 --
Intermediate Bond Fund......... 1,386,330 --
Income Fund.................... 444,179 --
Limited Term Tax-Free Fund..... 66,670 --
Intermediate Tax-Free Fund..... 509,532 --
Tax-Free Income Fund........... 209,139 --
Michigan Municipal Bond Fund... 223,672 --
Money Market Fund.............. 936,013 431,371
Michigan Municipal Money Market
Fund......................... 349,391 170,474
Government Money Market Fund... 103,600 67,476
Beginning June 1, 1997, Old Kent Bank provided certain administration services
to the Trust pursuant to a Sub-Administration Agreement between Old Kent Bank
and BISYS. BISYS agreed to pay Old Kent Bank a fee, calculated daily and paid
monthly, at an annual rate of up to 0.05% of each Portfolio's average daily net
assets. The fees paid to Old Kent Bank by BISYS for such administrative services
come out of BISYS' administrative fee and are not an additional charge to the
Portfolios.
FUNDS SUB-ADMINISTRATION FEES
----- -----------------------
Growth and Income Fund........... $166,029
Small Company Growth Fund........ 167,566
International Growth Fund........ 117,605
Index Equity Fund................ 156,303
Short Term Bond Fund............. 36,851
Intermediate Bond Fund........... 185,578
Income Fund...................... 59,261
Limited Term Tax-Free Fund....... 8,723
Intermediate Tax-Free Fund....... 67,234
Tax-Free Income Fund............. 28,022
Michigan Municipal Bond Fund..... 28,435
Money Market Fund................ 123,614
Michigan Municipal Money Market
Fund........................... 37,248
Government Money Market Fund..... 28,520
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Transfer agent fees for each Portfolio for the year ended December 31, 1997
are as follows:
FUNDS TRANSFER AGENT FEES
----- -------------------
Growth and Income Fund............... $141,594
Small Company Growth Fund............ 155,246
International Growth Fund............ 137,303
Index Equity Fund.................... 106,843
Short Term Bond Fund................. 45,140
Intermediate Bond Fund............... 81,993
Income Fund.......................... 49,488
Limited Term Tax-Free Fund........... 37,236
Intermediate Tax-Free Fund........... 40,987
Tax-Free Income Fund................. 39,201
Michigan Municipal Bond Fund......... 37,521
Money Market Fund.................... 55,039
Michigan Municipal Money Market
Fund............................... 39,410
Government Money Market Fund......... 16,905
Fund Accounting Fees and fees waived for each Portfolio for the year ended
December 31, 1997 are as follows:
FUNDS GROSS FEES FEES WAIVED
----- ---------- -----------
Growth and Income Fund.......... $ 97,976 $77,411
Small Company Growth Fund....... 98,587 77,831
International Growth Fund....... 70,630 56,062
Index Equity Fund............... 64,069 64,069
Short Term Bond Fund............ 25,690 21,127
Intermediate Bond Fund.......... 116,243 93,254
Income Fund..................... 37,246 29,904
Limited Term Tax-Free Fund...... 5,591 4,511
Intermediate Tax-Free Fund...... 42,733 34,406
Tax-Free Income Fund............ 17,539 14,069
Michigan Municipal Bond Fund.... 18,760 15,238
Money Market Fund............... 78,467 78,467
Michigan Municipal Money Market
Fund.......................... 29,316 29,316
Government Money Market Fund.... 8,477 8,477
Certain officers of the Trust are affiliated with BISYS. Such officers receive
no direct payments or fees from the Portfolios for serving as officers.
The Trust has adopted a distribution plan (the "Plan") on behalf of the
Investment Shares of the Portfolios pursuant to Rule 12b-1 of the 1940 Act. The
Plan provides for payments to the Distributor of up to 0.25% of the average
daily net assets of the Investment Shares of the Portfolios. Although the money
market Portfolios are authorized to pay 12b-1 fees of up to 0.25% in connection
with the sale of Investment Shares, none of the Portfolios currently intends to
pay such fees.
Gross distribution fees and fees waived for each Portfolio for the year ended
December 31, 1997 are as follows:
FUNDS GROSS FEES FEES WAIVED
- ----- ---------- -----------
Growth and Income Fund......... $59,946 $ --
Small Company Growth Fund...... 45,018 --
International Growth Fund...... 23,388 --
Index Equity Fund.............. 45,030 --
Short Term Bond Fund........... 9,174 3,693
Intermediate Bond Fund......... 17,259 --
Income Fund.................... 8,849 --
Limited Term Tax-Free Fund..... 773 310
Intermediate Tax-Free Fund..... 8,298 --
Tax-Free Income Fund........... 2,621 --
Michigan Municipal Bond Fund... 7,499 3,008
Money Market Fund.............. -- --
Michigan Municipal Money Market
Fund......................... -- --
Government Money Market Fund... -- --
Expenses for the Trust include legal fees paid to Drinker Biddle & Reath LLP.
A partner of the firm serves as Assistant Secretary of the Trust.
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4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Portfolios are summarized below:
GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND
----------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
------------- ------------ ------------- -------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued...................................... $ 249,081,909 $150,224,731 $ 208,702,084 $ 132,474,283
Reinvestment of distributions...................... 30,110,268 25,727,424 26,503,462 14,200,151
Shares redeemed.................................... (147,058,160) (97,365,654) (161,953,808) (115,454,666)
------------- ------------ ------------- -------------
Net increase (decrease) from Institutional shares
transactions................................... $ 132,134,017 $78,586,501 $ 73,251,738 $ 31,219,768
------------- ------------ ------------- -------------
INVESTMENT:
Shares issued...................................... $ 20,005,334 $ 3,623,107 $ 7,480,927 $ 2,999,500
Reinvestment of distributions...................... 2,967,456 1,684,171 1,566,793 691,055
Shares redeemed.................................... (4,320,697) (1,920,037) (3,330,447) (1,767,536)
------------- ------------ ------------- -------------
Net increase (decrease) from Investment shares
transactions................................... $ 18,652,093 $ 3,387,241 $ 5,717,273 $ 1,923,019
------------- ------------ ------------- -------------
Total net increase (decrease) from shares
transactions................................... $ 150,786,110 $81,973,742 $ 78,969,011 $ 33,142,787
============= ============ ============= =============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued...................................... 16,279,124 10,889,808 11,956,401 8,964,612
Reinvestment of distributions...................... 1,971,493 1,890,610 1,547,774 937,802
Shares redeemed.................................... (9,401,038) (7,034,231) (9,131,520) (7,693,348)
------------- ------------ ------------- -------------
Net increase (decrease) from Institutional shares
transactions................................... 8,849,579 5,746,187 4,372,655 2,209,066
------------- ------------ ------------- -------------
INVESTMENT:
Shares issued...................................... 1,283,992 265,482 419,135 203,920
Reinvestment of distributions...................... 195,172 124,536 91,169 45,725
Shares redeemed.................................... (280,261) (139,590) (191,859) (118,619)
------------- ------------ ------------- -------------
Net increase (decrease) from Investment shares
transactions................................... 1,198,903 250,428 318,445 131,026
------------- ------------ ------------- -------------
Total net increase (decrease) from shares
transactions................................... 10,048,482 5,996,615 4,691,100 2,340,092
============= ============ ============= =============
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Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
INTERNATIONAL GROWTH FUND INDEX EQUITY FUND
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued........................................ $189,937,844 $137,648,487 $323,258,744 $ 69,650,513
Reinvestment of distributions........................ 3,418,753 3,147,652 6,357,380 5,950,954
Shares redeemed...................................... (92,021,615) (50,898,479) (77,077,375) (50,001,044)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional shares
transactions..................................... $101,334,982 $89,897,660 $252,538,749 $ 25,600,423
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued........................................ $ 3,462,874 $ 1,976,895 $15,939,700 $ 2,739,605
Reinvestment of distributions........................ 146,470 128,041 315,816 329,198
Shares redeemed...................................... (2,625,594) (1,176,997) (2,603,171) (1,112,357)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions..................................... $ 983,750 $ 927,939 $13,652,345 $ 1,956,446
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions..................................... $102,318,732 $90,825,599 $266,191,094 $ 27,556,869
============ ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued........................................ 12,562,555 9,359,272 18,391,993 5,172,550
Reinvestment of distributions........................ 230,973 215,585 353,825 434,418
Shares redeemed...................................... (5,990,183) (3,491,780) (4,462,155) (3,699,843)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional shares
transactions..................................... 6,803,345 6,083,077 14,283,663 1,907,125
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued........................................ 227,807 137,013 915,280 205,672
Reinvestment of distributions........................ 9,962 8,820 17,611 24,012
Shares redeemed...................................... (175,388) (81,019) (149,114) (81,276)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions..................................... 62,381 64,814 783,777 148,408
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions..................................... 6,865,726 6,147,891 15,067,440 2,055,533
============ ============ ============ ============
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Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
SHORT TERM INTERMEDIATE
BOND FUND BOND FUND INCOME FUND
---------------------------- ----------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996
------------ ------------- ------------- ------------- ------------ ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued...................... $48,001,662 $ 71,054,235 $ 199,760,848 $ 198,301,060 $64,474,285 $154,129,760
Reinvestment of distributions...... 6,604,162 11,089,747 24,873,643 28,757,725 4,044,114 2,631,559
Shares redeemed.................... (150,317,030) (151,375,676) (243,018,554) (281,359,682) (82,779,834) (35,226,634)
------------ ------------- ------------- ------------- ------------ ------------
Net increase (decrease) from
Institutional shares
transactions................... $(95,711,206) $ (69,231,694) $ (18,384,063) $ (54,300,897) $(14,261,435) $121,534,685
------------ ------------- ------------- ------------- ------------ ------------
INVESTMENT:
Shares issued...................... $ 7,847,049 $ 346,979 $ 1,779,289 $ 1,793,614 $ 3,443,682 $ 1,318,844
Reinvestment of distributions...... 224,600 85,049 330,824 371,260 295,679 147,412
Shares redeemed.................... (2,314,253) (365,200) (2,560,072) (1,445,746) (908,477) (581,526)
------------ ------------- ------------- ------------- ------------ ------------
Net increase (decrease) from
Investment shares
transactions................... $ 5,757,396 $ 66,828 $ (449,959) $ 719,128 $ 2,830,884 $ 884,730
------------ ------------- ------------- ------------- ------------ ------------
Total net increase (decrease)
from shares transactions....... $(89,953,810) $ (69,164,866) $ (18,834,022) $ (53,581,769) $(11,430,551) $122,419,415
============ ============= ============= ============= ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued...................... 4,932,559 7,222,192 20,424,141 20,156,864 6,376,298 15,175,279
Reinvestment of distributions...... 681,245 1,133,650 2,553,873 2,949,495 400,874 259,124
Shares redeemed.................... (15,426,349) (15,396,719) (24,790,453) (28,751,972) (8,087,197) (3,437,207)
------------ ------------- ------------- ------------- ------------ ------------
Net increase (decrease) from
Institutional shares
transactions................... (9,812,545) (7,040,877) (1,812,439) (5,645,613) (1,310,025) 11,997,196
------------ ------------- ------------- ------------- ------------ ------------
INVESTMENT:
Shares issued...................... 806,758 35,323 180,929 182,449 338,211 129,967
Reinvestment of distributions...... 23,130 8,703 33,899 38,010 29,196 14,507
Shares redeemed.................... (237,636) (37,044) (261,548) (148,005) (89,859) (57,824)
------------ ------------- ------------- ------------- ------------ ------------
Net increase (decrease) from
Investment shares
transactions................... 592,252 6,982 (46,720) 72,454 277,548 86,650
------------ ------------- ------------- ------------- ------------ ------------
Total net increase (decrease)
from shares transactions....... (9,220,293) (7,033,895) (1,859,159) (5,573,159) (1,032,477) 12,083,846
============ ============= ============= ============= ============ ============
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4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
LIMITED TERM INTERMEDIATE
TAX-FREE FUND TAX-FREE FUND
--------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued............................................. $ 9,059,260 $ 8,644,704 $43,176,593 $ 62,493,861
Reinvestment of distributions............................. 13,903 16,368 124,001 42,417
Shares redeemed........................................... (14,638,082) (22,256,093) (60,115,232) (57,683,879)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional shares
transactions.......................................... $(5,564,919) $(13,595,021) $(16,814,638) $ 4,852,399
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued............................................. $ 677,012 $ 51,698 $ 1,089,316 $ 921,734
Reinvestment of distributions............................. 13,461 2,603 83,640 77,714
Shares redeemed........................................... (324,005) (2,105) (1,083,713) (1,389,670)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions.......................................... $ 366,468 $ 52,196 $ 89,243 $ (390,222)
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions.......................................... $(5,198,451) $(13,542,825) $(16,725,395) $ 4,462,177
============ ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued............................................. 888,774 849,971 4,110,419 5,988,213
Reinvestment of distributions............................. 1,369 1,612 11,820 4,102
Shares redeemed........................................... (1,435,754) (2,187,798) (5,717,526) (5,565,749)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional shares
transactions.......................................... (545,611) (1,336,215) (1,595,287) 426,566
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued............................................. 66,418 5,061 103,878 89,120
Reinvestment of distributions............................. 1,317 256 7,978 7,510
Shares redeemed........................................... (31,731) (205) (104,039) (135,420)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions.......................................... 36,004 5,112 7,817 (38,790)
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions.......................................... (509,607) (1,331,103) (1,587,470) 387,776
============ ============ ============ ============
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Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
TAX-FREE MICHIGAN MUNICIPAL
INCOME FUND BOND FUND
--------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
------------ ------------ ---------------- ------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.......................................... $31,815,166 $34,651,840 $ 32,654,052 $ 27,099,860
Reinvestment of distributions.......................... 76,956 28,992 70,141 44,917
Shares redeemed........................................ (29,459,976) (44,605,879) (75,229,474) (59,293,642)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional shares
transactions....................................... $ 2,432,146 $(9,925,047) $(42,505,281) $(32,148,865)
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued.......................................... $ 1,224,420 $ 530,708 $ 2,865,534 $ 1,008,626
Reinvestment of distributions.......................... 39,697 39,399 61,445 29,665
Shares redeemed........................................ (526,698) (150,441) (976,041) (509,760)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions....................................... $ 737,419 $ 419,666 $ 1,950,938 $ 528,531
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions....................................... $ 3,169,565 $(9,505,381) $(40,554,343) $(31,620,334)
============ ============ ============ ============
SHARE ACTIVITY
INSTITUTIONAL:
Shares issued.......................................... 3,066,893 3,371,900 3,222,928 2,693,878
Reinvestment of distributions.......................... 7,401 2,825 6,941 4,468
Shares redeemed........................................ (2,828,842) (4,276,961) (7,426,189) (5,886,119)
------------ ------------ ------------ ------------
Net increase (decrease) from Institutional shares
transactions....................................... 245,452 (902,236) (4,196,320) (3,187,773)
------------ ------------ ------------ ------------
INVESTMENT:
Shares issued.......................................... 116,872 51,428 283,459 100,489
Reinvestment of distributions.......................... 3,802 3,826 6,073 2,956
Shares redeemed........................................ (51,267) (14,550) (97,266) (50,830)
------------ ------------ ------------ ------------
Net increase (decrease) from Investment shares
transactions....................................... 69,407 40,704 192,266 52,615
------------ ------------ ------------ ------------
Total net increase (decrease) from shares
transactions....................................... 314,859 (861,532) (4,004,054) (3,135,158)
============ ============ ============ ============
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Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
GOVERNMENT
MICHIGAN MUNICIPAL MONEY
MONEY MARKET FUND MONEY MARKET FUND MARKET FUND
------------------------------- ----------------------------- -------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997(1)
--------------- ------------- ------------- ------------- -------------
DOLLAR AMOUNTS
INSTITUTIONAL:
Shares issued.............................. $ 1,151,538,209 $ 844,257,954 $ 279,013,482 $ 258,305,060 $ 328,632,081
Reinvestment of distributions.............. 1,693,047 540,797 192,298 -- 2,413,585
Shares redeemed............................ (1,162,770,824) (785,695,077) (222,935,437) (248,095,918) (236,421,222)
--------------- ------------- ------------- ------------- -------------
Net increase (decrease) from
Institutional shares transactions...... $ (9,539,568) $ 59,103,674 $ 56,270,343 $ 10,209,142 $ 94,624,444
--------------- ------------- ------------- ------------- -------------
INVESTMENT:
Shares issued.............................. $ 1,909,306 $ 1,173,842 $ 191,150 $ 136,170 $ 4,460
Reinvestment of distributions.............. 38,914 46,359 13,697 28,579 63
Shares redeemed............................ (1,572,981) (1,643,459) (697,468) (986,230) (2,510)
--------------- ------------- ------------- ------------- -------------
Net increase (decrease) from Investment
shares transactions.................... $ 375,239 $ (423,258) $ (492,621) $ (821,481) $ 2,013
--------------- ------------- ------------- ------------- -------------
Total net increase (decrease) from shares
transactions........................... $ (9,164,329) $ 58,680,416 $ 55,777,722 $ 9,387,661 $ 94,626,457
=============== ============= ============= ============= =============
SHARE AMOUNTS
INSTITUTIONAL:
Shares issued.............................. 1,151,538,209 844,257,954 279,013,482 258,305,060 328,632,081
Reinvestment of distributions.............. 1,693,047 540,797 192,298 -- 2,413,585
Shares redeemed............................ (1,162,770,823) (785,695,077) (222,935,438) (248,095,918) (236,421,222)
--------------- ------------- ------------- ------------- -------------
Net increase (decrease) from
Institutional shares transactions...... (9,539,567) 59,103,674 56,270,342 10,209,142 94,624,444
--------------- ------------- ------------- ------------- -------------
INVESTMENT:
Shares issued.............................. 1,909,306 1,173,842 191,151 136,170 4,460
Reinvestment of distributions.............. 38,916 46,359 13,697 28,579 63
Shares redeemed............................ (1,572,981) (1,643,459) (697,467) (986,230) (2,510)
--------------- ------------- ------------- ------------- -------------
Net increase (decrease) from Investment
shares transactions.................... 375,241 (423,258) (492,619) (821,481) 2,013
--------------- ------------- ------------- ------------- -------------
Total net increase (decrease) from shares
transactions........................... (9,164,326) 58,680,416 55,777,723 9,387,661 94,626,457
=============== ============= ============= ============= =============
- ---------------
(1) From the period June 2, 1997 (commencement of operations) through December
31, 1997.
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5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended December 31, 1997 were as follows:
FUND PURCHASES SALES
- ---- ------------ ------------
Growth and Income Fund...... $632,120,553 $555,377,838
Small Company Growth Fund... 216,037,006 205,751,523
International Growth Fund... 96,638,427 15,470,957
Index Equity Fund........... 269,077,302 4,027,004
Short Term Bond Fund........ 138,965,062 231,314,649
Intermediate Bond Fund...... 832,771,422 860,725,166
Income Fund................. 198,416,661 222,640,748
Limited Term Tax-Free
Fund...................... 10,477,564 15,166,490
Intermediate Tax-Free
Fund...................... 62,249,579 74,531,186
Tax-Free Income Fund........ 24,828,380 17,964,881
Michigan Municipal Bond
Fund...................... 15,860,879 55,589,588
6. RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES
The Growth and Income Fund and the International Growth Fund can purchase
securities of foreign issuers. Investing in securities of foreign issuers
involves special risks not typically associated with investing in securities of
U.S. issuers.
The risks include devaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than those of
securities of comparable U.S. issuers.
7. CONCENTRATION OF CREDIT RISK
The Michigan Municipal Money Market Fund and Michigan Municipal Bond Fund
invest primarily in debt obligations issued by the State of Michigan and its
respective political subdivisions, agencies and public authorities to obtain
funds for various public purposes. The Portfolios are more susceptible to
economic and political factors adversely affecting issuers of Michigan specific
municipal securities than are municipal bond funds that are not concentrated in
these issuers to the same extent.
The Limited Term Tax-Free Fund, Intermediate Tax-Free Fund, Tax-Free Income
Fund, Michigan Municipal Bond Fund, and Michigan Municipal Money Market Fund had
the following concentrations by industry sector at December 31, 1997 (as a
percentage of total investments):
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Funds NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MICHIGAN MICHIGAN
LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL MUNICIPAL MONEY
TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND MARKET FUND
------------- ------------- ----------- --------- ---------------
Airport.................................... 4.27% 1.76% 2.95% 0.92% 0.43%
Chemical................................... -- -- -- -- 10.17%
Development................................ 18.15% 10.88% 28.56% 8.44% 5.54%
Education.................................. 17.50% 4.48% 5.28% 4.43% --
Environmental.............................. -- -- -- -- 5.10%
General Obligation......................... 25.49% 30.33% 21.69% 15.04% 19.79%
Manufacturing.............................. -- -- -- -- 21.13%
Materials.................................. -- -- -- -- 13.01%
Medical.................................... 7.39% 1.70% 6.92% 15.74% 3.12%
Multifamily Housing........................ 2.89% -- -- 2.41% 4.71%
Mutual Funds............................... 0.23% 0.41% 0.83% 0.13% 0.24%
Sewer...................................... 2.81% 3.43% 3.08% 5.53% 3.70%
Power...................................... -- 8.06% 8.38% 5.34% 0.29%
Printing................................... -- -- -- -- 3.98%
Resource Recovery.......................... -- -- -- 1.12% --
Retail..................................... -- -- -- -- 1.13%
School District............................ 10.94% 13.65% 6.52% 34.52% 1.65%
Technology................................. -- -- -- -- 4.31%
Transportation............................. 2.99% 11.14% 6.74% 5.47% --
Utilities.................................. -- 3.52% 1.90% 0.91% --
Water...................................... 7.34% 10.64% 7.15% -- 1.70%
----- ----- ----- ----- -----
100% 100% 100% 100% 100%
===== ===== ===== ===== =====
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Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 13.90 $ 13.25 $ 10.50 $ 10.91 $ 10.31
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.25 0.30 0.33 0.31 0.27
Net realized and unrealized gains (losses) on
investments and futures contracts................... 3.04 2.16 3.28 (0.26) 0.95
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 3.29 2.46 3.61 0.05 1.22
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.25) (0.30) (0.33) (0.31) (0.27)
In excess of net investment income.................... -- -- -- ** (0.01)
Net realized gains on investments and futures
contracts........................................... (1.39) (1.51) (0.53) (0.15) (0.34)
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (1.64) (1.81) (0.86) (0.46) (0.62)
-------- -------- -------- -------- --------
Net change in net asset value........................... 1.65 0.65 2.75 (0.41) 0.60
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 15.55 $ 13.90 $ 13.25 $ 10.50 $ 10.91
======== ======== ======== ======== ========
Total return............................................ 24.14% 19.47% 34.91% 0.51% 11.98%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $697,973 $500,857 $401,371 $308,825 $180,864
Ratio of expenses to average net assets............... 0.92% 0.95% 0.94% 0.98% 1.03%
Ratio of net investment income to average net
assets.............................................. 1.61% 2.18% 2.73% 3.04% 2.61%
Ratio of expenses to average net assets*.............. 0.93% 0.95% *** *** ***
Ratio of net investment income to average net
assets*............................................. 1.60% 2.18% *** *** ***
Portfolio turnover rate(1)............................ 88% 39% 58% 28% 54%
Average commission rate paid(2)....................... $ 0.0571 $ 0.0539 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratios would have been as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(2) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
126
273
The Kent GROWTH AND INCOME FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 13.81 $ 13.19 $ 10.46 $ 10.87 $ 10.29
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.21 0.26 0.30 0.32 0.27
Net realized and unrealized gains (losses) on
investments and futures contracts................... 3.02 2.15 3.26 (0.27) 0.93
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 3.23 2.41 3.56 0.05 1.20
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.21) (0.26) (0.30) (0.31) (0.23)
In excess of net investment income.................... -- (0.02) -- ** (0.05)
Net realized gains on investments and futures
contracts........................................... (1.39) (1.51) (0.53) (0.15) (0.20)
In excess of net realized gains....................... -- -- -- -- (0.14)
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (1.60) (1.79) (0.83) (0.46) (0.62)
-------- -------- -------- -------- --------
Net change in net asset value........................... 1.63 0.62 2.73 (0.41) 0.58
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 15.44 $ 13.81 $ 13.19 $ 10.46 $ 10.87
======== ======== ======== ======== ========
Total return(1)......................................... 23.89% 19.14% 34.61% 0.50% 11.81%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 35,343 $ 15,063 $ 11,079 $ 8,005 $ 4,607
Ratio of expenses to average net assets............... 1.17% 1.09% 1.18% 0.98% 1.22%
Ratio of net investment income to average net
assets.............................................. 1.31% 1.77% 2.48% 3.03% 2.43%
Ratio of expenses to average net assets*.............. 1.18% 1.09% *** *** ***
Ratio of net investment income to average net
assets*............................................. 1.30% 1.77% *** *** ***
Portfolio turnover rate(2)............................ 88% 39% 58% 28% 54%
Average commission rate paid(3)....................... $ 0.0571 $ 0.0539 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
127
274
The Kent SMALL COMPANY GROWTH FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 15.65 $ 13.82 $ 11.99 $ 12.50 $ 10.85
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.04 0.12 0.10 0.10 0.08
Net realized and unrealized gains (losses) on
investments and futures contracts................... 4.19 2.55 2.64 (0.10) 1.76
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 4.23 2.67 2.74 -- 1.84
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.04) (0.12) (0.10) (0.09) (0.08)
In excess of net investment income.................... (0.02) -- -- (0.01) (0.01)
Net realized gains on investments and futures
contracts........................................... (1.43) (0.72) (0.81) (0.41) (0.10)
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (1.49) (0.84) (0.91) (0.51) (0.19)
-------- -------- -------- -------- --------
Net change in net asset value........................... 2.74 1.83 1.83 (0.51) 1.65
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 18.39 $ 15.65 $ 13.82 $ 11.99 $ 12.50
======== ======== ======== ======== ========
Total return............................................ 27.94% 19.56% 23.75% (0.06%) 17.04%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $719,998 $544,081 $450,072 $304,179 $252,401
Ratio of expenses to average net assets............... 0.93% 0.96% 0.97% 0.98% 1.06%
Ratio of net investment income to average net
assets.............................................. 0.24% 0.78% 0.83% 0.79% 0.74%
Ratio of expenses to average net assets*.............. 0.94% 0.96% *** *** ***
Ratio of net investment income to average net
assets*............................................. 0.23% 0.78% *** *** ***
Portfolio turnover rate(1)............................ 32% 16% 30% 20% 14%
Average commission rate paid(2)....................... $ 0.0447 $ 0.0481 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(2) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
128
275
The Kent SMALL COMPANY GROWTH FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------ ------
Net asset value, beginning of period........................ $ 15.61 $ 13.81 $ 11.98 $12.49 $10.86
------- ------- ------- ------ ------
Income (Loss) from Investment Operations:
Net investment income..................................... -- 0.07 0.07 0.10 0.08
Net realized and unrealized gains (losses) on investments
and futures contracts................................... 4.19 2.54 2.64 (0.11) 1.74
------- ------- ------- ------ ------
Total Income (Loss) from Investment Operations.............. 4.19 2.61 2.71 (0.01) 1.82
------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income..................................... -- (0.08) (0.07) (0.08) (0.06)
In excess of net investment income........................ (0.04) (0.01) -- (0.01) (0.03)
Net realized gains on investments and futures contracts... (1.43) (0.72) (0.81) (0.41) (0.10)
------- ------- ------- ------ ------
Total Dividends and Distributions....................... (1.47) (0.81) (0.88) (0.50) (0.19)
------- ------- ------- ------ ------
Net change in net asset value............................... 2.72 1.80 1.83 (0.51) 1.63
------- ------- ------- ------ ------
Net asset value, end of period.............................. $ 18.33 $ 15.61 $ 13.81 $11.98 $12.49
======= ======= ======= ====== ======
Total return(1)............................................. 27.71% 19.16% 23.47% (0.08%) 16.84%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $22,784 $14,436 $10,955 $8,433 $5,345
Ratio of expenses to average net assets................... 1.18% 1.21% 1.20% 0.98% 1.25%
Ratio of net investment income (loss) to average net
assets.................................................. (0.01%) 0.53% 0.59% 0.79% 0.59%
Ratio of expenses to average net assets*.................. 1.19% 1.21% *** *** ***
Ratio of net investment income (loss) to average net
assets*................................................. (0.02%) 0.53% *** *** ***
Portfolio turnover rate(2)................................ 32% 16% 30% 20% 14%
Average commission rate paid(3)........................... $0.0447 $0.0481 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
129
276
The Kent INTERNATIONAL GROWTH FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period..................... $ 14.75 $ 14.18 $ 13.06 $ 12.84 $ 10.01
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................................. 0.11 0.13 0.13 0.12 0.09
Net realized and unrealized gains (losses) on
investments and foreign currency..................... 0.26 0.70 1.54 0.61 2.95
-------- -------- -------- -------- --------
Total Income from Investment Operations.................. 0.37 0.83 1.67 0.73 3.04
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................................. (0.09) (0.10) (0.13) (0.07) (0.08)
In excess of net investment income..................... (0.06) (0.02) (0.11) (0.03) (0.04)
Net realized gains on investments and foreign
currency............................................. (0.07) (0.13) (0.31) (0.41) (0.08)
In excess of net realized gains........................ (0.01) (0.01) -- -- (0.01)
-------- -------- -------- -------- --------
Total Dividends and Distributions.................... (0.23) (0.26) (0.55) (0.51) (0.21)
-------- -------- -------- -------- --------
Net change in net asset value............................ 0.14 0.57 1.12 0.22 2.83
-------- -------- -------- -------- --------
Net asset value, end of period........................... $ 14.89 $ 14.75 $ 14.18 $ 13.06 $ 12.84
======== ======== ======== ======== ========
Total return............................................. 2.54% 5.87% 13.00% 5.73% 30.32%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $492,598 $387,799 $286,545 $178,186 $157,716
Ratio of expenses to average net assets................ 1.05% 1.09% 1.17% 1.22% 1.33%
Ratio of net investment income to average net assets... 0.80% 0.97% 1.35% 0.87% 0.86%
Ratio of expenses to average net assets*............... 1.06% 1.09% *** *** ***
Ratio of net investment income to average net
assets*.............................................. 0.79% 0.97% *** *** ***
Portfolio turnover rate(1)............................. 3% 13% 6% 20% 5%
Average commission rate paid(2)........................ $ 0.0148 $ 0.0219 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(2) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
130
277
The Kent INTERNATIONAL GROWTH FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------ ------
Net asset value, beginning of period........................ $ 14.69 $ 14.13 $ 13.00 $12.81 $10.03
------- ------- ------- ------ ------
Income from Investment Operations:
Net investment income..................................... 0.08 0.12 0.14 0.14 0.13
Net realized and unrealized gains on investments and
foreign currency........................................ 0.25 0.66 1.50 0.56 2.85
------- ------- ------- ------ ------
Total Income from Investment Operations..................... 0.33 0.78 1.64 0.70 2.98
------- ------- ------- ------ ------
Less Dividends and Distributions from:
Net investment income..................................... (0.06) (0.08) (0.09) (0.07) (0.02)
In excess of net investment income........................ (0.09) -- (0.11) (0.03) (0.09)
Net realized gains on investments and foreign currency.... (0.07) (0.14) (0.31) (0.41) (0.05)
In excess of net realized gains........................... (0.01) -- -- -- (0.04)
------- ------- ------- ------ ------
Total Dividends and Distributions....................... (0.23) (0.22) (0.51) (0.51) (0.20)
------- ------- ------- ------ ------
Net change in net asset value............................... 0.10 0.56 1.13 0.19 2.78
------- ------- ------- ------ ------
Net asset value, end of period.............................. $ 14.79 $ 14.69 $ 14.13 $13.00 $12.81
======= ======= ======= ====== ======
Total return(1)............................................. 2.25% 5.57% 12.86% 5.51% 29.67%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 9,780 $ 8,799 $ 7,548 $6,539 $3,202
Ratio of expenses to average net assets................... 1.30% 1.34% 1.40% 1.25% 1.43%
Ratio of net investment income to average net assets...... 0.53% 0.74% 1.11% 0.81% 0.32%
Ratio of expenses to average net assets*.................. 1.31% 1.34% *** *** ***
Ratio of net investment income to average net assets*..... 0.52% 0.74% *** *** ***
Portfolio turnover rate(2)................................ 3% 13% 6% 20% 5%
Average commission rate paid(3)........................... $0.0148 $0.0219 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
131
278
The Kent INDEX EQUITY FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period..................... $ 14.71 $ 12.56 $ 10.68 $ 11.04 $ 10.41
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................................. 0.25 0.26 0.26 0.25 0.23
Net realized and unrealized gains (losses) on
investments and futures contracts.................... 4.50 2.47 3.44 (0.15) 0.71
-------- -------- -------- -------- --------
Total Income from Investment Operations.................. 4.75 2.73 3.70 0.10 0.94
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................................. (0.25) (0.26) (0.25) (0.26) (0.23)
In excess of net investment income..................... -- -- -- -- **
Net realized gains on investments and futures
contracts............................................ (0.05) (0.28) (1.57) (0.20) (0.08)
In excess of net realized gains........................ (0.02) (0.04) -- -- --
-------- -------- -------- -------- --------
Total Dividends and Distributions.................... (0.32) (0.58) (1.82) (0.46) (0.31)
-------- -------- -------- -------- --------
Net change in net asset value............................ 4.43 2.15 1.88 (0.36) 0.63
-------- -------- -------- -------- --------
Net asset value, end of period........................... $ 19.14 $ 14.71 $ 12.56 $ 10.68 $ 11.04
======== ======== ======== ======== ========
Total return............................................. 32.55% 22.18% 36.23% 0.86% 9.11%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $590,241 $243,438 $183,877 $245,550 $233,451
Ratio of expenses to average net assets................ 0.43% 0.49% 0.56% 0.58% 0.65%
Ratio of net investment income to average net assets... 1.44% 1.91% 2.14% 2.32% 2.18%
Ratio of expenses to average net assets*............... 0.54% 0.59% 0.56% 0.58% 0.65%
Ratio of net investment income to average net
assets*.............................................. 1.33% 1.81% 2.14% 2.32% 2.18%
Portfolio turnover rate(1)............................. 1% 2% 3% 50% 1%
Average commission rate paid(2)........................ $ 0.0508 $ 0.0496 -- -- --
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(2) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
132
279
The Kent INDEX EQUITY FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
Net asset value, beginning of period........................ $ 14.72 $ 12.57 $ 10.70 $ 11.07 $ 10.44
------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income..................................... 0.20 0.22 0.23 0.26 0.22
Net realized and unrealized gains (losses) on investments
and futures contracts................................... 4.51 2.48 3.44 (0.17) 0.72
------- ------- ------- ------- -------
Total Income from Investment Operations..................... 4.71 2.70 3.67 0.09 0.94
------- ------- ------- ------- -------
Less Dividends and Distributions from:
Net investment income..................................... (0.20) (0.22) (0.23) (0.26) (0.20)
In excess of net investment income........................ (0.01) (0.01) -- -- (0.03)
Net realized gains on investments and futures contracts... (0.06) (0.32) (1.57) (0.20) (0.06)
In excess of net realized gains........................... (0.01) -- -- -- (0.02)
------- ------- ------- ------- -------
Total Dividends and Distributions....................... (0.28) (0.55) (1.80) (0.46) (0.31)
------- ------- ------- ------- -------
Net change in net asset value............................... 4.43 2.15 1.87 (0.37) 0.63
------- ------- ------- ------- -------
Net asset value, end of period.............................. $ 19.15 $ 14.72 $ 12.57 $ 10.70 $ 11.07
======= ======= ======= ======= =======
Total return (1)............................................ 32.24% 21.92% 35.81% 0.75% 9.09%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $27,922 $ 9,925 $ 6,612 $ 4,736 $ 3,776
Ratio of expenses to average net assets................... 0.68% 0.74% 0.80% 0.60% 0.86%
Ratio of net investment income to average net assets...... 1.20% 1.67% 1.86% 2.30% 2.04%
Ratio of expenses to average net assets*.................. 0.79% 0.84% 0.81% 0.60% 0.86%
Ratio of net investment income to average net assets*..... 1.09% 1.57% 1.85% 2.30% 2.04%
Portfolio turnover rate (2)............................... 1% 2% 3% 50% 1%
Average commission rate paid (3).......................... $0.0508 $0.0496 -- -- --
- ---------------
(*) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had not
occurred, the ratios would have been as indicated.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(3) The average commission represents the total dollar amount of commissions
paid on portfolio transactions divided by total number of portfolio shares
purchased and sold for which commissions were charged. Disclosure is not
required for periods prior to 1996.
See Notes to Financial Statements.
133
280
The Kent SHORT TERM BOND FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period...................... $ 9.75 $ 9.96 $ 9.52 $ 9.91 $ 9.99
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................... 0.61 0.61 0.55 0.48 0.42
Net realized and unrealized gains (losses) on
investments........................................... -- (0.21) 0.43 (0.38) (0.09)
-------- -------- -------- -------- --------
Total Income from Investment Operations................... 0.61 0.40 0.98 0.10 0.33
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................... (0.61) (0.61) (0.54) (0.49) (0.41)
In excess of net investment income...................... -- -- -- ** --
-------- -------- -------- -------- --------
Total Dividends and Distributions..................... (0.61) (0.61) (0.54) (0.49) (0.41)
-------- -------- -------- -------- --------
Net change in net asset value............................. -- (0.21) 0.44 (0.39) (0.08)
-------- -------- -------- -------- --------
Net asset value, end of period............................ $ 9.75 $ 9.75 $ 9.96 $ 9.52 $ 9.91
======== ======== ======== ======== ========
Total return.............................................. 6.42% 4.22% 10.53% 1.03% 3.36%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......................... $139,739 $235,430 $310,680 $176,765 $255,892
Ratio of expenses to average net assets................. 0.72% 0.70% 0.77% 0.73% 0.81%
Ratio of net investment income to average net assets.... 6.04% 6.17% 5.60% 4.75% 4.24%
Ratio of expenses to average net assets*................ 0.73% 0.70% *** *** ***
Ratio of net investment income to average net assets*... 6.03% 6.17% *** *** ***
Portfolio turnover rate (1)............................. 89% 32% 75% 56% 50%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
134
281
The Kent SHORT TERM BOND FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 9.74 $ 9.95 $ 9.52 $ 9.91 $ 10.02
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.57 0.59 0.52 0.47 0.38
Net realized and unrealized gains (losses) on
investments ........................................ 0.02 (0.20) 0.44 (0.37) (0.08)
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 0.59 0.39 0.96 0.10 0.30
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.59) (0.54) (0.53) (0.48) (0.41)
In excess of net investment income.................... -- (0.06) -- (0.01) --
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (0.59) (0.60) (0.53) (0.49) (0.41)
-------- -------- -------- -------- --------
Net change in net asset value........................... -- (0.21) 0.43 (0.39) (0.11)
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 9.74 $ 9.74 $ 9.95 $ 9.52 $ 9.91
======== ======== ======== ======== ========
Total return(1)......................................... 6.26% 4.06% 10.30% 1.01% 3.04%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 7,433 $ 1,667 $ 1,634 $ 1,649 $ 1,427
Ratio of expenses to average net assets............... 0.88% 0.85% 0.91% 0.74% 1.24%
Ratio of net investment income to average net
assets.............................................. 5.75% 6.02% 5.40% 4.79% 3.91%
Ratio of expenses to average net assets*.............. 0.99% 0.96% *** *** ***
Ratio of net investment income to average net
assets*............................................. 5.64% 5.91% *** *** ***
Portfolio turnover rate(2)............................ 89% 32% 75% 56% 50%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
135
282
The Kent INTERMEDIATE BOND FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 9.76 $ 10.12 $ 9.29 $ 10.18 $ 10.00
-------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income................................. 0.59 0.60 0.65 0.56 0.51
Net realized and unrealized gains (losses) on
investments ........................................ 0.14 (0.32) 0.81 (0.88) 0.32
-------- -------- -------- -------- --------
Total Income (Loss) from Investment Operations.......... 0.73 0.28 1.46 (0.32) 0.83
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.59) (0.61) (0.63) (0.54) (0.51)
In excess of net investment income.................... -- (0.03) -- (0.01) **
Net realized gains on investments..................... -- -- -- (0.02) (0.14)
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (0.59) (0.64) (0.63) (0.57) (0.65)
-------- -------- -------- -------- --------
Net change in net asset value........................... 0.14 (0.36) 0.83 (0.89) 0.18
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 9.90 $ 9.76 $ 10.12 $ 9.29 $ 10.18
======== ======== ======== ======== ========
Total return............................................ 7.80% 3.01% 16.18% (3.19%) 8.42%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $762,740 $769,395 $854,801 $977,865 $434,264
Ratio of expenses to average net assets............... 0.75% 0.77% 0.77% 0.80% 0.85%
Ratio of net investment income to average net
assets.............................................. 6.03% 6.18% 6.50% 6.03% 5.03%
Ratio of expenses to average net assets*.............. 0.76% 0.78% *** *** ***
Ratio of net investment income to average net
assets*............................................. 6.02% 6.17% *** *** ***
Portfolio turnover rate(1)............................ 114% 135% 166% 124% 126%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
*** During the period, there were no waivers and/or reimbursements.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
136
283
The Kent INTERMEDIATE BOND FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 9.78 $ 10.14 $ 9.32 $ 10.19 $ 10.03
-------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income................................. 0.57 0.58 0.61 0.57 0.47
Net realized and unrealized gains (losses) on
investments ........................................ 0.15 (0.32) 0.82 (0.87) 0.34
-------- -------- -------- -------- --------
Total Income (Loss) from Investment Operations.......... 0.72 0.26 1.43 (0.30) 0.81
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.57) (0.57) (0.61) (0.54) (0.46)
In excess of net investment income.................... -- (0.05) -- (0.01) (0.05)
Net realized gains on investments..................... -- -- -- (0.02) (0.14)
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (0.57) (0.62) (0.61) (0.57) (0.65)
-------- -------- -------- -------- --------
Net change in net asset value........................... 0.15 (0.36) 0.82 (0.87) 0.16
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 9.93 $ 9.78 $ 10.14 $ 9.32 $ 10.19
======== ======== ======== ======== ========
Total return(1)......................................... 7.62% 2.76% 15.76% (3.01%) 8.19%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 6,972 $ 7,327 $ 6,862 $ 9,196 $ 4,966
Ratio of expenses to average net assets............... 1.00% 1.02% 1.01% 0.81% 1.13%
Ratio of net investment income to average net
assets.............................................. 5.79% 5.92% 6.24% 5.94% 4.75%
Ratio of expenses to average net assets*.............. 1.01% 1.03% *** *** ***
Ratio of net investment income to average net
assets*............................................. 5.78% 5.91% *** *** ***
Portfolio turnover rate(2)............................ 114% 135% 166% 124% 126%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** During the period, there were no waivers and/or reimbursements.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
137
284
The Kent INCOME FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED
DECEMBER 31,
--------------------------------
1997 1996 1995(1)
-------- -------- --------
Net asset value, beginning of period........................ $ 10.16 $ 10.84 $ 10.00
-------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.68 0.66 0.55
Net realized and unrealized gains (losses) on
investments............................................. 0.34 (0.56) 0.92
-------- -------- --------
Total Income from Investment Operations..................... 1.02 0.10 1.47
-------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.68) (0.65) (0.54)
In excess of net investment income........................ -- (0.10) --
Net realized gains on investments......................... (0.20) (0.03) (0.09)
-------- -------- --------
Total Dividends and Distributions....................... (0.88) (0.78) (0.63)
-------- -------- --------
Net change in net asset value............................... 0.14 (0.68) 0.84
-------- -------- --------
Net asset value, end of period.............................. $ 10.30 $ 10.16 $ 10.84
======== ======== ========
Total return................................................ 10.55% 1.19% 15.05%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $229,778 $240,060 $126,056
Ratio of expenses to average net assets................... 0.82% 0.83% 0.91%+
Ratio of net investment income to average net assets...... 6.65% 6.57% 6.65%+
Ratio of expenses to average net assets*.................. 0.83% 0.83% **
Ratio of net investment income to average net assets*..... 6.64% 6.57% **
Portfolio turnover rate(2)................................ 84% 102% 50%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** During the period, there were no waivers and/or reimbursements.
(1) The Institutional Class commenced operations on March 20, 1995.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
138
285
The Kent INCOME FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED
DECEMBER 31,
---------------------------
1997 1996 1995(1)
------ ------ -------
Net asset value, beginning of period........................ $10.16 $10.82 $10.00
------ ------ ------
Income from Investment Operations:
Net investment income..................................... 0.63 0.66 0.52
Net realized and unrealized gains (losses) on
investments............................................. 0.35 (0.56) 0.91
------ ------ ------
Total Income from Investment Operations..................... 0.98 0.10 1.43
------ ------ ------
Less Dividends and Distributions from:
Net investment income..................................... (0.65) (0.64) (0.52)
In excess of net investment income........................ -- (0.09) --
Net realized gains on investments......................... (0.20) (0.03) (0.09)
------ ------ ------
Total Dividends and Distributions....................... (0.85) (0.76) (0.61)
------ ------ ------
Net change in net asset value............................... 0.13 (0.66) 0.82
------ ------ ------
Net asset value, end of period.............................. $10.29 $10.16 $10.82
====== ====== ======
Total return(2)............................................. 10.19% 1.16% 14.63%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $5,611 $2,722 $1,961
Ratio of expenses to average net assets................... 1.07% 1.08% 1.14%+
Ratio of net investment income to average net assets...... 6.38% 6.31% 6.40%+
Ratio of expenses to average net assets*.................. 1.08% 1.08% **
Ratio of net investment income to average net assets*..... 6.37% 6.31% **
Portfolio turnover rate(3)................................ 84% 102% 50%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** During the period, there were no waivers and/or reimbursements.
(1) The Investment Class date of initial public investment was March 22, 1995.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
139
286
The Kent LIMITED TERM TAX-FREE FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995 1994(1)
------- ------- ------- -------
Net asset value, beginning of period........................ $ 10.16 $ 10.22 $ 9.80 $ 10.00
------- ------- ------- -------
Income (Loss) from Investment Operations:
Net investment income..................................... 0.40 0.39 0.39 0.13
Net realized and unrealized gains (losses) on
investments............................................. 0.08 (0.04) 0.42 (0.21)
------- ------- ------- -------
Total Income (Loss) from Investment Operations.............. 0.48 0.35 0.81 (0.08)
------- ------- ------- -------
Less Dividends and Distributions from:
Net investment income..................................... (0.40) (0.40) (0.39) (0.12)
In excess of net investment income........................ -- ** -- --
Net realized gains on investments......................... (0.05) (0.01) -- --
------- ------- ------- -------
Total Dividends and Distributions....................... (0.45) (0.41) (0.39) (0.12)
------- ------- ------- -------
Net change in net asset value............................... 0.03 (0.06) 0.42 (0.20)
------- ------- ------- -------
Net asset value, end of period.............................. $ 10.19 $ 10.16 $ 10.22 $ 9.80
======= ======= ======= =======
Total return................................................ 4.78% 3.54% 8.43% (0.77%)++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $36,023 $41,472 $55,347 $43,497
Ratio of expenses to average net assets................... 0.76% 0.75% 0.69% 0.79%+
Ratio of net investment income to average net assets...... 3.86% 3.84% 3.87% 3.81%+
Ratio of expenses to average net assets*.................. 0.77% 0.75% 0.74% 0.96%+
Ratio of net investment income to average net assets*..... 3.85% 3.84% 3.82% 3.64%+
Portfolio turnover rate(2)................................ 29% 32% 51% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on September 1, 1994.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
140
287
The Kent LIMITED TERM TAX-FREE FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995 1994(1)
------ ------ ------ -------
Net asset value, beginning of period........................ $10.20 $10.24 $ 9.81 $ 9.87
------ ------ ------ ------
Income from Investment Operations:
Net investment income..................................... 0.38 0.37 0.37 0.06
Net realized and unrealized gains (losses) on
investments............................................. 0.08 (0.02) 0.44 (0.06)
------ ------ ------ ------
Total Income from Investment Operations..................... 0.46 0.35 0.81 --
------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income..................................... (0.38) (0.35) (0.38) (0.06)
In excess of net investment income........................ -- (0.03) -- --
Net realized gains on investments......................... (0.05) (0.01) -- --
------ ------ ------ ------
Total Dividends and Distributions....................... (0.43) (0.39) (0.38) (0.06)
------ ------ ------ ------
Net change in net asset value............................... 0.03 (0.04) 0.43 (0.06)
------ ------ ------ ------
Net asset value, end of period.............................. $10.23 $10.20 $10.24 $ 9.81
====== ====== ====== ======
Total return(2)............................................. 4.61% 3.51% 8.40% 0.03%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 474 $ 106 $ 54 $ 7
Ratio of expenses to average net assets................... 0.93% 0.87% 0.84% 0.87%+
Ratio of net investment income to average net assets...... 3.67% 3.69% 3.69% 3.86%+
Ratio of expenses to average net assets*.................. 1.04% 0.97% 0.85% 0.98%+
Ratio of net investment income to average net assets*..... 3.56% 3.59% 3.69% 3.75%+
Portfolio turnover rate(3)................................ 29% 32% 51% 10%
- ---------------
+ Annualized.
++ Not Annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Investment Class date of initial public investment was November 1,
1994.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
141
288
The Kent INTERMEDIATE TAX-FREE FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period....................... $ 10.42 $ 10.52 $ 9.74 $ 10.45 $ 10.02
-------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income.................................... 0.45 0.44 0.45 0.40 0.37
Net realized and unrealized gains (losses) on
investments............................................ 0.26 (0.08) 0.79 (0.71) 0.47
-------- -------- -------- -------- --------
Total Income (Loss) from Investment Operations............. 0.71 0.36 1.24 (0.31) 0.84
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income.................................... (0.45) (0.46) (0.45) (0.39) (0.36)
In excess of net investment income....................... -- ** (0.01) (0.01) --
Net realized gains on investments........................ -- -- -- -- (0.05)
-------- -------- -------- -------- --------
Total Dividends and Distributions...................... (0.45) (0.46) (0.46) (0.40) (0.41)
-------- -------- -------- -------- --------
Net change in net asset value.............................. 0.26 (0.10) 0.78 (0.71) 0.43
-------- -------- -------- -------- --------
Net asset value, end of period............................. $ 10.68 $ 10.42 $ 10.52 $ 9.74 $ 10.45
======== ======== ======== ======== ========
Total return............................................... 7.07% 3.41% 12.90% (3.00%) 8.51%
Ratios/Supplemental Data:
Net Assets, end of period (000's).......................... $275,641 $285,674 $283,733 $380,715 $135,862
Ratio of expenses to average net assets.................. 0.72% 0.73% 0.72% 0.78% 0.84%
Ratio of net investment income to average net assets..... 4.31% 4.34% 4.39% 4.07% 3.62%
Ratio of expenses to average net assets*................. 0.73% 0.73% 0.72% 0.78% 0.84%
Ratio of net investment income to average net assets*.... 4.30% 4.34% 4.39% 4.07% 3.62%
Portfolio turnover rate(1)............................... 23% 35% 6% 36% 14%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
142
289
The Kent INTERMEDIATE TAX-FREE FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
----------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
Net asset value, beginning of period........................ $10.42 $10.52 $ 9.74 $10.45 $10.04
------ ------ ------ ------ ------
Income (Loss) from Investment Operations:
Net investment income..................................... 0.43 0.42 0.42 0.40 0.36
Net realized and unrealized gains (losses) on
investments............................................. 0.26 (0.09) 0.79 (0.71) 0.46
------ ------ ------ ------ ------
Total Income (Loss) from Investment Operations.............. 0.69 0.33 1.21 (0.31) 0.82
------ ------ ------ ------ ------
Less Dividends and Distributions from:
Net investment income..................................... (0.43) (0.41) (0.42) (0.39) (0.33)
In excess of net investment income........................ -- (0.02) (0.01) (0.01) (0.03)
Net realized gains on investments......................... -- -- -- -- (0.05)
------ ------ ------ ------ ------
Total Dividends and Distributions....................... (0.43) (0.43) (0.43) (0.40) (0.41)
------ ------ ------ ------ ------
Net change in net asset value............................... 0.26 (0.10) 0.78 (0.71) 0.41
------ ------ ------ ------ ------
Net asset value, end of period.............................. $10.68 $10.42 $10.52 $ 9.74 $10.45
====== ====== ====== ====== ======
Total return(1)............................................. 6.80% 3.17% 12.66% (3.03%) 8.29%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $3,534 $3,368 $3,807 $4,505 $3,307
Ratio of expenses to average net assets................... 0.97% 0.98% 0.97% 0.79% 1.08%
Ratio of net investment income to average net assets...... 4.06% 4.09% 4.13% 3.99% 3.44%
Ratio of expenses to average net assets*.................. 0.98% 0.98% 0.97% 0.79% 1.08%
Ratio of net investment income to average net assets*..... 4.05% 4.09% 4.13% 3.99% 3.44%
Portfolio turnover rate(2)................................ 23% 35% 6% 36% 14%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
143
290
The Kent TAX-FREE INCOME FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
Year ended December 31,
--------------------------------
1997 1996 1995(1)
-------- -------- --------
Net asset value, beginning of period........................ $ 10.27 $ 10.49 $ 10.00
-------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.45 0.46 0.36
Net realized and unrealized gains (losses) on investments
and futures contracts................................... 0.41 (0.06) 0.49
-------- -------- --------
Total Income from Investment Operations..................... 0.86 0.40 0.85
-------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.45) (0.46) (0.36)
Net realized gains on investments and futures contracts... (0.03) (0.16) --
-------- -------- --------
Total Dividends and Distributions....................... (0.48) (0.62) (0.36)
-------- -------- --------
Net change in net asset value............................... 0.38 (0.22) 0.49
-------- -------- --------
Net asset value, end of period.............................. $ 10.65 $ 10.27 $ 10.49
======== ======== ========
Total return................................................ 8.59% 3.92% 8.64%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $116,652 $109,948 $121,855
Ratio of expenses to average net assets................... 0.79% 0.82% 0.73%+
Ratio of net investment income to average net assets...... 4.32% 4.38% 4.44%+
Ratio of expenses to average net assets*.................. 0.80% 0.82% 0.91%+
Ratio of net investment income to average net assets*..... 4.31% 4.38% 4.26%+
Portfolio turnover rate(2)................................ 16% 40% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Institutional Class commenced operations on March 20, 1995.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
144
291
The Kent TAX-FREE INCOME FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
Year ended December 31,
--------------------------------
1997 1996 1995(1)
-------- -------- --------
Net asset value, beginning of period........................ $ 10.29 $ 10.52 $ 10.00
-------- -------- --------
Income from Investment Operations:
Net investment income..................................... 0.42 0.41 0.31
Net realized and unrealized gains (losses) on investments
and futures contracts................................... 0.42 (0.05) 0.51
-------- -------- --------
Total Income from Investment Operations..................... 0.84 0.36 0.82
-------- -------- --------
Less Dividends and Distributions from:
Net investment income..................................... (0.42) (0.43) (0.30)
In excess of net investment income........................ (0.01) -- --
Net realized gains on investments and futures contracts... (0.03) (0.12) --
In excess of net realized gains........................... -- (0.04) --
-------- -------- --------
Total Dividends and Distributions....................... (0.46) (0.59) (0.30)
-------- -------- --------
Net change in net asset value............................... 0.38 (0.23) 0.52
-------- -------- --------
Net asset value, end of period.............................. $ 10.67 $ 10.29 $ 10.52
======== ======== ========
Total return(2)............................................. 8.32% 3.53% 8.34%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 1,712 $ 936 $ 529
Ratio of expenses to average net assets................... 1.04% 1.07% 0.95%+
Ratio of net investment income to average net assets...... 4.05% 4.14% 4.25%+
Ratio of expenses to average net assets*.................. 1.05% 1.07% 1.17%+
Ratio of net investment income to average net assets*..... 4.04% 4.14% 4.03%+
Portfolio turnover rate (3)............................... 16% 40% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Investment Class date of the initial public investment was March 31,
1995.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
145
292
The Kent MICHIGAN MUNICIPAL BOND FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993(1)
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 10.08 $ 10.12 $ 9.72 $ 10.06 $ 10.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.41 0.39 0.39 0.37 0.23
Net realized and unrealized gains (losses) on
investments......................................... 0.13 (0.04) 0.39 (0.34) 0.07
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 0.54 0.35 0.78 0.03 0.30
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.41) (0.39) (0.37) (0.36) (0.22)
In excess of net investment income.................... -- -- (0.01) (0.01) (0.01)
Net realized gains on investments..................... -- -- -- -- (0.01)
In excess of net realized gains....................... -- -- -- -- **
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (0.41) (0.39) (0.38) (0.37) (0.24)
-------- -------- -------- -------- --------
Net change in net asset value........................... 0.13 (0.04) 0.40 (0.34) 0.06
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 10.21 $ 10.08 $ 10.12 $ 9.72 $ 10.06
======== ======== ======== ======== ========
Total return............................................ 5.52% 3.51% 8.20% 0.36% 3.06%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $111,735 $152,623 $185,466 $118,485 $ 74,647
Ratio of expenses to average net assets............... 0.69% 0.70% 0.69% 0.49% 0.24%+
Ratio of net investment income to average net
assets.............................................. 4.04% 3.83% 3.81% 3.74% 3.34%+
Ratio of expenses to average net assets*.............. 0.70% 0.70% 0.70% 0.74% 0.68%+
Ratio of net investment income to average net
assets*............................................. 4.03% 3.83% 3.80% 3.50% 3.61%+
Portfolio turnover rate(2)............................ 13% 24% 42% 27% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Institutional Class commenced operations on May 3, 1993.
(2) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
146
293
The Kent MICHIGAN MUNICIPAL BOND FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993(1)
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 10.07 $ 10.11 $ 9.72 $ 10.08 $ 10.02
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.39 0.38 0.37 0.35 0.21
Net realized and unrealized gains (losses) on
investments......................................... 0.14 (0.05) 0.40 (0.34) 0.07
-------- -------- -------- -------- --------
Total Income from Investment Operations................. 0.53 0.33 0.77 0.01 0.28
-------- -------- -------- -------- --------
Less Dividends and Distributions from:
Net investment income................................. (0.40) (0.35) (0.37) (0.34) (0.21)
In excess of net investment income.................... -- (0.02) (0.01) (0.03) **
Net realized gains on investments..................... -- -- -- -- (0.01)
-------- -------- -------- -------- --------
Total Dividends and Distributions................... (0.40) (0.37) (0.38) (0.37) (0.22)
-------- -------- -------- -------- --------
Net change in net asset value........................... 0.13 (0.04) 0.39 (0.36) 0.06
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 10.20 $ 10.07 $ 10.11 $ 9.72 $ 10.08
======== ======== ======== ======== ========
Total return(2)......................................... 5.38% 3.36% 8.01% 0.16% 2.85%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 4,413 $ 2,422 $ 1,900 $ 1,980 $ 283
Ratio of expenses to average net assets............... 0.84% 0.85% 0.83% 0.49% 0.25%+
Ratio of net investment income to average net
assets.............................................. 3.88% 3.68% 3.68% 3.80% 3.43%+
Ratio of expenses to average net assets*.............. 0.95% 0.95% 0.85% 0.84% 1.08%+
Ratio of net investment income to average net
assets*............................................. 3.77% 3.58% 3.67% 2.74% 2.60%+
Portfolio turnover rate(3)............................ 13% 24% 42% 27% 10%
- ---------------
+ Annualized.
++ Not annualized.
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Amount is less than $0.005.
(1) The Investment Class date of initial public investment was May 11, 1993.
(2) Calculation does not include sales charge. Effective May 1, 1997, the
Investment Shares were not assessed a sales charge.
(3) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
147
294
The Kent MONEY MARKET FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.051 0.050 0.050 0.040 0.030
-------- -------- -------- -------- --------
Less Dividends from:
Net investment income................................. (0.051) (0.050) (0.050) (0.040) (0.030)
-------- -------- -------- -------- --------
Net change in net asset value........................... -- -- -- -- --
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total return............................................ 5.23% 5.06% 5.58% 3.75% 2.68%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $474,378 $483,919 $424,815 $323,539 $359,624
Ratio of expenses to average net assets............... 0.52% 0.52% 0.55% 0.60% 0.60%
Ratio of net investment income to average net
assets.............................................. 5.11% 4.95% 5.45% 3.65% 2.65%
Ratio of expenses to average net assets*.............. 0.62% 0.62% 0.63% 0.65% 0.68%
Ratio of net investment income to average net
assets*............................................. 5.01% 4.85% 5.37% 3.59% 2.57%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed. If
such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements.
148
295
The Kent MONEY MARKET FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period.................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income................................. 0.051 0.050 0.050 0.040 0.030
-------- -------- -------- -------- --------
Less Dividends from:
Net investment income................................. (0.051) (0.050) (0.050) (0.040) (0.030)
-------- -------- -------- -------- --------
Net change in net asset value........................... -- -- -- -- --
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total return............................................ 5.23% 5.06% 5.56% 3.71% 2.67%
Ratios/Supplemental Data:
Net Assets, end of period (000's)....................... $ 1,179 $ 804 $ 1,227 $ 369 $ 593
Ratio of expenses to average net assets............... 0.52% 0.52% 0.55% 0.63% 0.63%
Ratio of net investment income to average net
assets.............................................. 5.11% 4.94% 5.41% 3.58% 2.63%
Ratio of expenses to average net assets*.............. 0.62% 0.62% 0.62% 0.68% 4.49%
Ratio of net investment income (loss) to average net
assets*............................................. 5.01% 4.84% 5.33% 3.53% (1.24%)
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed. If
such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements.
149
296
The Kent MICHIGAN MUNICIPAL MONEY MARKET FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Net asset value, beginning of period..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income.................................. 0.033 0.030 0.030 0.020 0.020
-------- -------- -------- -------- --------
Less Dividends from:
Net investment income.................................. (0.033) (0.030) (0.030) (0.020) (0.020)
-------- -------- -------- -------- --------
Net change in net asset value............................ -- -- -- -- --
-------- -------- -------- -------- --------
Net asset value, end of period........................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total return............................................. 3.31% 3.11% 3.50% 2.40% 2.00%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................ $211,682 $155,424 $145,215 $128,164 $183,366
Ratio of expenses to average net assets................ 0.52% 0.54% 0.56% 0.60% 0.60%
Ratio of net investment income to average net assets... 3.27% 3.06% 3.45% 2.33% 1.96%
Ratio of expenses to average net assets*............... 0.63% 0.64% 0.65% 0.70% 0.69%
Ratio of net investment income to average net
assets*.............................................. 3.16% 2.96% 3.36% 2.23% 1.87%
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed. If
such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements.
150
297
The Kent MICHIGAN MUNICIPAL MONEY MARKET FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- ------
Net asset value, beginning of period........................ $ 1.000 $ 1.00 $ 1.000 $ 1.000 $1.000
------- ------- ------- ------- ------
Income from Investment Operations:
Net investment income..................................... 0.033 0.030 0.030 0.020 0.020
------- ------- ------- ------- ------
Less Dividends from:
Net investment income..................................... (0.033) (0.030) (0.030) (0.020) (0.020)
------- ------- ------- ------- ------
Net change in net asset value............................... -- -- -- -- --
------- ------- ------- ------- ------
Net asset value, end of period.............................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $1.000
======= ======= ======= ======= ======
Total return................................................ 3.31% 3.11% 3.48% 2.38% 1.98%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 289 $ 782 $ 1,603 $ 379 $ 149
Ratio of expenses to average net assets................... 0.52% 0.54% 0.54% 0.63% 0.63%
Ratio of net investment income to average net assets...... 3.22% 3.06% 3.48% 2.47% 2.01%
Ratio of expenses to average net assets*.................. 0.63% 0.64% 0.62% 0.73% 3.77%
Ratio of net investment income (loss) to average net
assets*................................................. 3.11% 2.96% 3.39% 2.37% (1.13%)
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed. If
such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
See Notes to Financial Statements.
151
298
The Kent GOVERNMENT MONEY MARKET FUND
Funds FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
PERIOD
ENDED
DECEMBER 31,
1997(1)
------------
Net asset value, beginning of period........................ $ 1.000
-------
Income from Investment Operations:
Net investment income..................................... 0.031
-------
Less Dividends from:
Net investment income..................................... (0.031)
-------
Net change in net asset value............................... --
-------
Net asset value, end of period.............................. $ 1.000
=======
Total return................................................ 3.10%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $94,624
Ratio of expenses to average net assets................... 0.35%+
Ratio of net investment income to average net assets...... 5.23%+
Ratio of expenses to average net assets*.................. 0.69%+
Ratio of net investment income to average net assets*..... 4.89%+
- ---------------
+ Annualized
++ Not Annualized
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Fund commenced operations June 2, 1997.
See Notes to Financial Statements.
152
299
The Kent GOVERNMENT MONEY MARKET FUND
Funds FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
PERIOD
ENDED
DECEMBER 31,
1997(1)
------------
Net asset value, beginning of period........................ $ 1.000
-------
Income from Investment Operations:
Net investment income..................................... 0.030
-------
Less Dividends from:
Net investment income..................................... (0.030)
-------
Net change in net asset value............................... --
-------
Net asset value, end of period.............................. $ 1.000
=======
Total return................................................ 3.06%++
Ratios/Supplemental Data:
Net Assets, end of period (000's)........................... $ 2
Ratio of expenses to average net assets................... 0.43%+
Ratio of net investment income to average net assets...... 5.17%+
Ratio of expenses to average net assets*.................. 0.77%+
Ratio of net investment income to average net assets*..... 4.83%+
- ---------------
+ Annualized
++ Not Annualized
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(1) The Fund commenced operations June 2, 1997.
See Notes to Financial Statements.
153
300
The Kent
Funds INDEPENDENT AUDITOR'S REPORT
The Shareholders and Board of Trustees of
The Kent Funds
We have audited the accompanying statements of assets and liabilities of The
Kent Funds--Growth and Income Fund, Small Company Growth Fund, International
Growth Fund, Index Equity Fund, Short Term Bond Fund, Intermediate Bond Fund,
Income Fund, Limited Term Tax-Free Fund, Tax-Free Income Fund, Michigan
Municipal Bond Fund, Money Market Fund, Michigan Municipal Money Market Fund,
and Government Money Market Fund including the portfolios of investments, as of
December 31, 1997, and the related statements of operations, statements of
changes in net assets and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of The Kent Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1997, by confirmation with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising The Kent Funds at December 31, 1997, the
results of their operations, the changes in their net assets and the financial
highlights for each of the periods indicated herein, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 20, 1998
154
301
FORM N-14
---------
PART C. OTHER INFORMATION
Item 15. Indemnification
---------------
See Article VIII of Section 3 of Registrant's Restatement of
Declaration of Trust which is filed with Registrant's Post-Effective Amendment
No. 24 as Exhibit 24(b)(1) and is incorporated by reference herein. See Section
1.12 of the Distribution Agreement between Registrant and BISYS Fund Services
Limited Partnership which was filed with Registrant's Post-Effective Amendment
No. 21 as Exhibit 24(b)(6)(a) and is incorporated by reference herein.
Item 16. Exhibits
--------
(1) Registrant's Restatement of Declaration of Trust was filed
with Registrant's Post-Effective Amendment No. 24 as Exhibit
24(b)(1) and is incorporated by reference herein.
(2) Registrant's Amended and Restated By-Laws were filed with
Registrant's Post-Effective Amendment No. 24 as Exhibit
24(b)(2) and are incorporated by reference herein.
(3) Not applicable.
(4) Plan of Reorganization dated November 19, 1998 is filed
herewith as Appendix A to the Combined Proxy Prospectuses.
(5) See Articles III, V and VIII of Registrant's Restatement of
Declaration of Trust and Article II of Registrant's Amended
and Restated By-Laws.
(6)(1) The First Amendment to the Investment Advisory Agreement
between Registrant and Old Kent Bank and Trust Company (now
known as Old Kent Bank) was filed with Registrant's
Post-Effective Amendment No. 24 as Exhibit 24(b)(5)(a) and is
incorporated by reference herein.
(6)(2) Amended Schedule A to the First Amendment to the Investment
Advisory Agreement between Registrant and Old Kent Bank and
Trust Company was filed with Registrant's Post-Effective
Amendment No. 24 as Exhibit 24(b)(5)(b) and is incorporated by
reference herein.
302
(6)(2) The notice to Old Kent Bank pursuant to the Investment
Advisory Agreement between Registrant and Old Kent Bank
relating to The Kent Government Money Market Fund was filed
with Registrant's Post-Effective Amendment No. 24 as Exhibit
24(b)(5)(c) and is incorporated by reference herein.
(6)(4) Assumption Agreement between Old Kent Bank and Lyon Street
Asset Management Co. dated March 2, 1998 was filed with
Registrant's Post-Effective Amendment No. 24 as Exhibit
24(b)(5)(d) and is incorporated by reference herein.
(6)(5) The notice to Lyon Street Asset Management Co. pursuant to the
Investment Advisory Agreement between Registrant and Old Kent
Bank (which has been assumed by Lyon Street Asset Management
Co.) relating to The Kent Large Company Growth Fund was filed
with Registrant's Post-Effective Amendment No. 25 as Exhibit
24(d)(1) and is incorporated by reference herein.
(6)(6) The notice to Lyon Street Asset Management Co. pursuant to the
Investment Advisory Agreement between Registrant and Old Kent
Bank (which has been assumed by Lyon Street Asset Management
Co.) relating to Lyon Street Institutional Money Market Fund
was filed with Registrant's Post-Effective Amendment No. 26 as
Exhibit 24(d)(2) and is incorporated by reference herein.
(7)(1) The Distribution Agreement between Registrant and BISYS Fund
Services Limited Partnership dated August 5, 1996 was filed
with Registrant's Post-Effective Amendment No. 21 as Exhibit
24(b)(6)(a) and is incorporated by reference herein.
(7)(2) The notice to BISYS Fund Services Limited Partnership pursuant
to the Distribution Agreement between Registrant and BISYS
Fund Services Limited Partnership relating to The Kent
Government Money Market Fund was filed with Registrant's
Post-Effective Amendment No. 23 as Exhibit 24(b)(6)(b) and is
incorporated by reference herein.
(7)(3) The notice to BISYS Fund Services Limited Partnership pursuant
to the Distribution Agreement between Registrant and BISYS
Fund Services Limited Partnership relating to The Kent Large
Company Growth Fund was filed with Registrant's Post-Effective
Amendment No. 25 as Exhibit 24(e)(1) and is incorporated by
reference herein.
(7)(4) The notice to BISYS Fund Services Limited Partnership pursuant
to the Distribution Agreement between Registrant and BISYS
Fund Services Limited Partnership relating to Lyon Street
Institutional Money Market Fund was filed with Registrant's
Post-Effective Amendment No. 26 as Exhibit 24(e)(2) and is
incorporated by reference herein.
-2-
303
(8) The Kent Funds Deferred Compensation Plan and form of Deferred
Compensation Agreement relating to the Deferred Compensation
Plan were filed with Registrant's Post-Effective Amendment No.
21 as Exhibit 24(b)(7) and are incorporated by reference
herein.
(9) The Custody Agreement between Registrant and Bankers Trust
Company was filed with Registrant's Post-Effective Amendment
No. 18 as Exhibit 24(b)(8) and is incorporated by reference
herein.
(10)(1) Registrant's Amended and Restated Master Distribution Plan for
Investment Shares and related form of agreement were filed
with Registrant's Post-Effective Amendment No. 21 as Exhibit
24(b)(15)(a) and Exhibit 24(b)(15)(b), respectively, and are
incorporated by reference herein.
(10)(2) Registrant's Rule 18f-3 Plan was filed with Registrant's
Post-Effective Amendment No. 23 as Exhibit 24(b)(18) and is
incorporated by reference herein.
(11) Opinion and Consent of Counsel as to the legality of the
securities being registered, indicating whether they will when
sold be legally issued, fully paid and nonassessable is filed
herewith as Exhibit 16(11).
(12) Opinion and Consent of Counsel as to tax matters and
consequences to shareholders discussed in the Prospectus is
filed herewith as Exhibit 16(12).
(13)(1) The Administration Agreement between Registrant and BISYS Fund
Services Limited Partnership dated August 5, 1996 was filed
with Registrant's Post-Effective Amendment No. 21 as Exhibit
24(b)(9)(a) and is incorporated by reference herein.
(13)(2) The notice to BISYS Fund Services Limited Partnership pursuant
to the Administration Agreement between Registrant and BISYS
Fund Services Limited Partnership relating to The Kent
Government Money Market Fund was filed with Registrant's
Post-Effective Amendment No. 23 as Exhibit 24(b)(9)(a)(i) and
is incorporated by reference herein.
(13)(3) The notice to BISYS Fund Services Limited Partnership pursuant
to the Administration Agreement between Registrant and BISYS
Fund Services Limited Partnership relating to The Kent Large
Company Growth Fund was filed with Registrant's Post-Effective
Amendment No. 25 as Exhibit 24(h)(1)(a) and is incorporated by
reference herein.
-3-
304
(13)(4) The notice to BISYS Fund Services Limited Partnership pursuant
to the Administration Agreement between Registrant and BISYS
Fund Services Limited Partnership relating to Lyon Street
Institutional Money Market Fund was filed with Post-Effective
Amendment No. 26 as Exhibit 24(h)(1)(b) and is incorporated by
reference herein.
(13)(5) The Fund Accounting Agreement between Registrant and BISYS
Fund Services, Inc. dated August 5, 1996 was filed with
Registrant's Post-Effective Amendment No. 21 as Exhibit
24(b)(9)(b) and is incorporated by reference herein.
(13)(6) The notice to BISYS Fund Services, Inc. pursuant to the Fund
Accounting Agreement between Registrant and BISYS Fund
Services, Inc. relating to The Kent Government Money Market
Fund was filed with Registrant's Post-Effective Amendment No.
23 as Exhibit 24(b)(9)(b)(i) and is incorporated by reference
herein.
(13)(7) The notice to BISYS Fund Services, Inc. pursuant to the Fund
Accounting Agreement between Registrant and BISYS Fund
Services, Inc. relating to The Kent Large Company Growth Fund
was filed with Registrant's Post-Effective Amendment No. 25 as
Exhibit 24(h)(2)(a) and is incorporated by reference herein.
(13)(8) The notice to BISYS Fund Services, Inc. pursuant to the Fund
Accounting Agreement between Registrant and BISYS Fund
Services, Inc. relating to Lyon Street Institutional Money
Market Fund was filed with Registrant's Post-Effective
Amendment No. 26 as Exhibit 24(h)(2)(b) and is incorporated by
reference herein.
(13)(9) The Transfer Agency Agreement between Registrant and BISYS
Fund Services, Inc. dated October 7, 1996 was filed with
Registrant's Post-Effective Amendment No. 21 as Exhibit
24(b)(9)(c) and is incorporated by reference herein.
(13)(10) The notice to BISYS Fund Services, Inc. pursuant to the
Transfer Agency Agreement between Registrant and BISYS Fund
Services, Inc. relating to The Kent Government Money Market
Fund was filed with Registrant's Post-Effective Amendment No.
23 as Exhibit 24(b)(9)(c)(i) and is incorporated by reference
herein.
(13)(11) The notice to BISYS Fund Services, Inc. pursuant to the
Transfer Agency Agreement between Registrant and BISYS Fund
Services, Inc. relating to The Kent Large Company Growth Fund
was filed with Registrant's Post-Effective Amendment No. 25 as
Exhibit 24(h)(3)(a) and is incorporated by reference herein.
(13)(12) The notice to BISYS Fund Services, Inc. pursuant to the
Transfer Agency Agreement between Registrant and BISYS Fund
Services, Inc. relating to Lyon Street Institutional Money
Market Fund was filed with Registrant's Post-Effective
Amendment No. 26 as Exhibit 24(h)(3)(b) and is incorporated by
reference herein.
-4-
305
(14)(1) Consent of KPMG LLP is filed herewith as Exhibit 16(14)(1).
(15) Not applicable.
(16) Powers of Attorney are filed herewith as Exhibit 16(16).
(17)(1) Form of Proxy is filed herewith as Exhibit 17(1).
(17)(2) Prospectus for the Kent Limited Term Tax-Free and Intermediate
Tax-Free Funds dated May 1, 1998, as supplemented September
24, 1998 and January 5, 1999, is filed herewith as Exhibit
17(2).
(17)(3) Statement of Additional Information for the Kent Limited Term
Tax-Free and Intermediate Tax-Free Funds dated May 1, 1998, as
supplemented January 14, 1999, is filed herewith as Exhibit
17(3).
-5-
306
Item 17. Undertakings
------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act of 1933, as
amended (the "1933 Act"), the reoffering prospectus will
contain the information called for by the applicable
registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the
other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as a part of
an amendment to the registration statement and will not be
used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and
the offering of the securities at that time shall be deemed to
be the initial bona fide offering of them.
-6-
307
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of Columbus, in the State of
Ohio, on the 27th day of January, 1999.
THE KENT FUNDS
By:*/ James F. Duca, II
------------------------------
James F. Duca, II
President
As required by the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
*/ James F. Duca, II President January 27, 1999
- -------------------------------
James F. Duca, II
*/ Martin R. Dean Treasurer (Principal Accounting January 27, 1999
- ------------------------------- and Financial Officer)
Martin R. Dean
*/ Walter B. Grimm Chairman and Trustee January 27, 1999
- -------------------------------
Walter B. Grimm
*/ Joseph F. Damore Trustee January 27, 1999
- -------------------------------
Joseph F. Damore
*/ James F. Rainey Trustee January 27, 1999
- -------------------------------
James F. Rainey
*/ Ronald F. VanSteeland Trustee January 27, 1999
- -------------------------------
Ronald F. VanSteeland
*By: /s/ Robert L. Tuch
-----------------------------
Robert L. Tuch
Attorney-in-Fact
* Robert L. Tuch, by signing his name hereto, does hereby sign this
document on behalf of each of the above-named Trustees and Officers of
Registrant pursuant to powers of attorney duly executed by such
persons.
-7-
308
N-14
EXHIBIT INDEX
-------------
Exhibit 16(11) Opinion and Consent of Counsel as to legality of securities
being registered.
Exhibit 16(12) Opinion and Consent of Counsel as to tax matters.
Exhibit 16(14)(1) Consent of KPMG LLP.
Exhibit 16(16) Powers of Attorney.
Exhibit 17(1) Form of Proxy.
Exhibit 17(2) Prospectus for the Kent Limited Term Tax-Free and
Intermediate Tax-Free Funds dated May 1, 1998, as
supplemented September 24, 1998 and January 5, 1999.
Exhibit 17(3) Statement of Additional Information for the Kent Limited
Term Tax-Free and Intermediate Tax-Free Funds dated May 1,
1998, as supplemented January 14, 1999.