nvcsrs

As filed with the Securities and Exchange Commission on September 4, 2008

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09303 & 811-09923

Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust

(Exact name of registrant as specified in charter)

555 Taxter Road, Suite 175
Elmsford, NY 10523
(Address of principal executive offices) (Zip code)

U.S. Bancorp Fund Services, LLC
615 E. Michigan Street
Milwaukee, WI 53202
(Name and address of agent for service)

(800) 930-3828
Registrant’s telephone number, including area code

Date of fiscal year end: December 31, 2008

Date of reporting period: June 30, 2008

Item 1. Report to Stockholders.



		June 30, 2008 www.kineticsfunds.com

		Semi-Annual Report

		The Internet Fund The Global Fund The Paradigm Fund The Medical Fund The Small Cap Opportunities Fund The Kinetics Government Money Market Fund The Market Opportunities Fund The Water Infrastructure Fund The Multi-Disciplinary Fund

		LOGO Each a series of Kinetics Mutual Funds, Inc.

(Kinetics Mutual Funds, Inc.)

Dear Fellow Shareholders:

We are pleased to present the Kinetics Mutual Funds’ Semi-Annual Report for the six-month period ended June 30, 2008. On balance, the Kinetics Family of Mutual Funds had disappointing results for the first half of 2008, with declines of 18.85% for The Paradigm Fund, 24.37% for the Small-Cap Opportunities Fund, 28.10% for the Market Opportunities Fund, 19.98% for the Internet Fund, and 23.47% for The Global Fund. Our Medical Fund had a modest decline of 2.88%, the Water Infrastructure Fund declined by only 2.26%, and the Multi-Disciplinary Fund, since its inception on February 11, 2008, declined by 2.90%. This compares with first-half 2008 declines of 11.91% and 13.55% for the S&P 500 Index^(l) and the NASDAQ Composite Index⁽²⁾, respectively.

Over time, we have informed you that our long-term investment results will be driven by the underlying business operations of the companies we own. This is an outgrowth of our low-turnover investment strategy. Based on the first six months of this year, one would think that the operations of our companies suffered greatly. This, to a very large measure, is not the case at all. The upward shift in the equity risk premium cut across virtually all holdings, but it was most dramatic in our financial services and Chinese holdings. We believe our positions in these companies have very little credit risk and are being lumped into a class of investments, unfairly in our opinion, that are having real operational and financial problems. A great many of our companies are reporting earnings in line with our expectations; yet, the stocks are down, in some instances substantially. With the passage of time, we expect our companies to be separated from the troubled ones. At present, we believe our Funds offer significant value for long-term investors.

We continue to inform our shareholders through our website, www.kineticsfunds.com. This website provides a broad array of information, including recent portfolio holdings, quarterly investment commentaries, newsflashes, recent performance data, and online access to account information.

Kinetics offers the following Funds to investors:

The Paradigm Fund focuses on companies that currently have, or which should soon have, sustainable high returns on equity. The Fund has produced attractive returns over the last 81/2 years.

The Small Cap Opportunities Fund focuses on undervalued and special situation small capitalization equities that have the potential for rewarding long- term investment results.

The Medical Fund is a sector fund, offering an investment in scientific discovery within the promising field of medical research, particularly in the development of cancer treatments and therapies. As a sector fund, The Medical Fund is likely to have heightened volatility.

The Internet Fund is a sector fund that focuses on companies engaged in the evolution of Internet-related developments. As such, this Fund has been, and is likely to continue to be, quite volatile. The Internet Fund is not designed to be a major component of one’s equity exposure. We view a segment of this Fund’s holdings as publicly traded venture capital and are quite aware that many of these investments will not fulfill their early promise. However, we expect that, over time, some small percentage will develop into excellent investments, allowing the Fund to produce overall attractive, albeit lumpy, returns.

The Global Fund’s mandate was changed in March 2008 to focus on international investments, currently with particular emphasis on China and other Asian markets.

The Market Opportunities Fund focuses on those companies that benefit from increasing transactional volume, such as publicly-traded exchanges, or that act as facilitators, such as gaming companies, airports and publicly-traded toll roads.

The Water Infrastructure Fund is a sector fund that invests in global companies engaged in water infrastructure and water-specific natural resources, as well as related activities. This fund is sub-advised by Aqua Terra Asset Management, LLC.

Prior to writing this commentary, we re-read our investment commentary from the 2007 semi-annual report. The paragraph below is worth restating, especially given the turmoil surrounding the capital markets:

“Equities investing, which constitutes deferred consumption, requires patience because stock price movements in the short term, 1 to 2 years, are often random. To allow the business operations of the companies one owns to start generating decent returns requires a 3 to 5 year time horizon, if not longer. Thus, as always, we would counsel any investor with cash needs expected to develop in less than 3 years to invest in more conservative alternatives, such as U.S. Treasuries. The preceding comment is merely the recognition of the nature of stock investing and not a prediction of what is going to unfold in the shorter term. Too frequently, investors experience a poor investment result even when they are with capable managers, primarily because the time horizon of the investor is out of sync with the parameters of stock investing and/or because the individual investor is chasing recent past performance.”

The question that investors in the Kinetics’ Funds (with the exclusion of the Medical and Water Infrastructure Funds) must be asking themselves is this: “Has Kinetics become so wedded to its positions that it cannot admit its mistakes, or has it been rejecting, or, at least heavily discounting, data that would invalidate its views?” In other words, has Kinetics fallen into a malaise such that it is standing by passively, watching as dire events unfold? This particular assessment, perhaps, might seem self-evident given our exposure to financial services stocks and Chinese stocks, which every other holder seems to be reducing. In addition, it is human nature to seek out data that supports one’s views and to disregard that which does not. This mental tendency is well known to us and something we go to great lengths to avoid.

Any success that we have had historically or plan to have in the future is rooted in the facts as we understand them. Investment success is directly correlated to a correct analysis of data, one’s reasoning and temperament. We have no emotional ties to our companies and would sell them if we believed that their business returns were somehow permanently impaired. Further, we never

would have purchased them if we had not believed that we were receiving value for the prices originally paid.

As a long-term stock investor, one can hope to approach (receive) the actual returns of the businesses themselves, in much the same way one achieves a return from a bond coupon. A stock’s performance inevitability must be linked to the underlying business itself. One does not own a piece of paper, but rather, a fractional interest in a real company. If you purchase at par (100% of face value) 10-year Treasury notes with a 5% coupon and hold them to maturity, your annualized rate of return, over the life of the notes, will be 5%. This is true even if at the end of year three the notes trade at a price of $50. Of course, for that particular year you would have a large negative return. However, your annualized return from year three onward would be vastly higher than your original expected return, but your ultimate annualized return on original investment would be 5%. An investor who purchased the notes at a price of $50 would have a very different return profile in relation to her cost basis, but from that point forward the return to both investors (original and new) would be identical.

Prior to the recent stock market downturn, we believed we owned a collection of companies that would collectively generate a very high rate of return for our investors, with the passage of time. Nothing that has occurred over the last six months has dissuaded us from that view. In fact, based on the logic set forth above, we believe the return profile of our Funds has improved dramatically as a result of the downturn, in much the same way as that of the investor who purchased the notes at a price of $50. This statement, however, does not mean that our Funds cannot go lower from here, but it does mean that we believe our Funds are performing well below their perceived channel rates of return. In order for them to achieve such channel rates of return, their future returns, at some point, must be far higher.

From our perspective, at the exact time when our investors are most concerned they should actually be the most optimistic. If we, in fact, did originally identify excellent businesses, which are now suffering from a temporary collective price decline, investors should be hopeful. This is the reason for our own optimism. With

few exceptions, we believe our companies have a higher intrinsic worth today than they did at the start of the year.

Even a casual observer of the stock market believes that stock prices, in the short-term, are driven by fear and greed. The current decline in the market stems from the conviction that the economy is going into, or already is in, a severe downturn, principally as a consequence of the “de-leveraging” of the financial services sector, initially stemming from the sub-prime mortgage market and later blossoming into a full blown liquidity crisis. While the Federal Reserve has been accommodating, some believe an earnings collapse will occur sometime in the future, making stocks a bad bet despite the absolute and relative low interest rate environment.

We are of the belief that the system is not de-leveraging. If you visit the website of the Federal Reserve at www.federalreserve.gov, you can verify this conclusion for yourself. Under the section All Statistical Releases, you can find the weekly collective balance sheet of U.S. commercial banks. The numbers do not reveal a de-leveraging, or a meaningful diminution of credit. The net worth of the banks is fairly robust, despite the massive write-downs taken. This information can explain why Ben Bernanke, on June 10^th, stated “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.” We cannot confirm, based on Federal Reserve statistics, a massive de-leveraging. Thus, we do not believe that the primary fear driving the market has any basis in fact. Our financial system cannot function in its current form without leverage, and it appears the Federal Reserve will take the necessary steps to maintain the availability of such leverage. The prospective return profile for the financial intermediaries (which assume real capital risk) would not support a system that hopes to operate in today’s environment without leverage. Furthermore, we believe the de-leveraging of a Lehman Brothers does not mean a de-leveraging of the entire system.

A second website that should be visited is that of MBIA.com. Recently, MBIA’s Chief Executive Officer, Jay Brown, authored several shareholder letters. MBIA resides at the eye of the credit crisis storm and has been targeted by prominent short-sellers as being effectively bankrupt. Mr. Brown displays little fear for the

financial health of his company and expresses a good deal of derision for the rating agencies. One cannot read these commentaries and remain neutral regarding the prospects for MBIA. Mr. Brown’s view is in accord with that of the famed value investor, Marty Whitman. We have never seen a company where two more extreme views exist among well-regarded investors (short-sellers vs. famed value investors). This situation cannot go on indefinitely, as certain MBIA-related events are expected to occur, which will reveal which side has done the proper analysis. While both sides can ultimately make money, only one side is going to have an accurate perception of the company’s financial health.

Another illuminating website to visit is bankstocks.com. This website is the creation of Tom Brown and Vernon W. Hill. Mr. Brown is a highly regarded financial analyst who is known for his independent views. He has written a number of articles regarding the financial crisis that seem to be rooted in factual data, as opposed to mere opinion. Several recently published articles advance the view (a distinctly minority view) that the sub-prime loss estimates are too pessimistic. According to data analyzed by Mr. Brown, the problems in sub-prime mortgages peaked in November of 2007. This view is consistent with that of my colleague Murray Stahl, as purported in the early part of this year, to the effect that others were making unrealistically draconian assumptions.

The default rate, by definition, must decline as the shutdown of the sub-prime market guarantees such a result. The problem vintages are becoming seasoned, and we believe the losses have almost certainly been overstated, leaving aside the confusion over mark-to-market accounting, which would require, as shown in our Treasury Notes example above, a write-down of 50% of our equity investment, despite the fact that we know that we will receive our entire principal back.

We have listened to the views of a great number of “financial experts,” and based on available data, we cannot confirm the validity of their extremely negative views. That is not to say that the housing crisis, the liquidity crisis and inflationary pressures have not had their effect on the health of the economy. However, an objective analysis of these conditions does not support the type

of sell-off that has occurred for many of our companies. The more interesting question investors should be asking is: “Why has economic activity held up so well nine months into this crisis?” The answer, in our opinion, is that there are an abundance of positive factors (most notably the large capital expenditures going on in the utility sector and exports) that are having a very salutary effect, but which never get written about in the financial press. A cursory reading of headlines would cause one to expect to see massive bread lines in Manhattan, one of the world’s financial capitals.

Should investor sentiment change, which we expect to occur, our Funds are poised for an impressive rebound. The last time we saw such massive dislocation was in the utility sector at the time of the collapse of Enron in 2001. Most analysts and investors had extremely negative views, unsupported by the underlying facts, which created tremendous opportunity. Companies like Williams Companies rebounded from a price of under a $1 a share to over $35 today. For us, the price of admission for excellent long term results is heightened volatility risk. This risk, while perhaps psychologically and emotionally unpleasant for most, is not synonymous with the permanent erosion of capital. Today’s conditions are, in our opinion, an investor’s ideal scenario.

We thank you for your confidence and look forward to more prosperous times.

Disclosure

This material is intended to be reviewed in conjunction with a current prospectus, which includes all fees and expenses that apply to a continued investment program, as well as information regarding the risk factors, policies and objectives of the Funds. Read it carefully before investing.

Mutual Fund investing involves risk. Principal loss is possible. Because the Funds [other than The Paradigm Fund, The Small Cap Opportunities Fund, The Market Opportunities Fund and The Kinetics Government Money Market Fund] invest in a single industry or geographic region, their shares are subject to a higher degree of risk than funds with a higher level of diversification. Internet and biotechnology stocks are subject to a rate of change in technology, obsolescence and competition that is generally higher than that of other industries and have experienced extreme price and volume fluctuations. International investing [for The Global Fund, The Water Infrastructure Fund, The Paradigm Fund, The Market Opportunities Fund, The Small Cap Opportunities Fund and The Internet Fund] presents special risks including currency exchange fluctuation, government regulations, and the potential for political and economic instability. Accordingly, the share price for these Funds is expected to be more volatile than that of a U.S.-only fund. Past performance is no guarantee of future performance.

As of March 14, 2008, The Global Portfolio, formerly known as the Internet Emerging Growth Portfolio, changed its name and investment mandate.

Because smaller companies [for The Global Fund, The Small Cap Opportunities Fund and the Water Infrastructure Fund] often have narrower markets and limited financial resources, they present more risk than larger, more well established, companies.

Non-investment grade debt securities [for all Funds], i.e., junk bonds, are subject to greater credit risk, price volatility and risk of loss than investment grade securities. Further, options contain special risks including the imperfect correlation between the value of the option and the value of the underlying asset. Investments [for the Multi-Disciplinary Fund] in futures, swaps and other derivative instruments may result in loss as derivative instruments may be illiquid, difficult to price and leveraged so that small changes may produce disproportionate losses to the Fund. To the extent the Funds segregate

assets to cover derivative positions, they may impair their ability to meet current obligations, to honor requests for redemption and to manage the Funds in a manner consistent with their respective investment objectives. Purchasing and writing put and call options and, in particular, writing “uncovered” options are highly specialized activities that entail greater than ordinary investment risk.

As non-diversified [other than The Kinetics Government Money Market Fund] Funds, the value of Fund shares may fluctuate more than shares invested in a broader range of industries and companies.

An investment in the Kinetics Government Money Market Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Unlike other investment companies that directly acquire and manage their own portfolios of securities, The Kinetics Mutual Funds pursue their investment objectives by investing all of their investable assets in a corresponding portfolio series of Kinetics Portfolios Trust.

The information concerning the Funds included in the shareholder report contains certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.

The Nasdaq Composite (NASDAQ) and the Standard & Poor’s 500 Index (S&P 500) each represent an unmanaged, broad-basket of stocks. They are typically used as a proxy for overall market performance.

Distributor: Kinetics Funds Distributor, Inc. is not an affiliate of Kinetics Mutual Funds, Inc. Kinetics Funds Distributor, Inc. is an affiliate of Kinetics Asset Management, Inc., Investment Adviser to Kinetics Mutual Funds, Inc.

For more information, log onto www.kineticsfunds.com.

July 1, 2008 — Kinetics Asset Management, Inc.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Expense Example

June 30, 2008 (Unaudited)

Shareholders incur two type of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvestments of dividends or other distributions made by the Fund, redemption fees, and exchange fees, and (2), ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help investors understand the ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested on January 1, 2008 and held for the entire period from January 1, 2008 to June 30, 2008.

Actual Expenses

The first two lines of each of the accompanying tables provide information about actual account values and actual expenses. Unlike other mutual funds that directly acquire and manage their own portfolio securities, each Feeder Fund invests all of its investable assets in a corresponding Master Portfolio, a separately registered investment company. The Master Portfolio, in turn, invests in securities. With this type of organization, expenses can accrue specifically to the Master Portfolio or the Feeder Fund or both. Each Feeder Fund records its proportionate share of the Master Portfolio’s expenses on a daily basis. Any expense reductions include Feeder Fund-specific expenses as well as the expenses allocated from the Master Portfolio.

The Feeder Funds will charge shareholder fees for outgoing wire transfers, returned checks, and exchanges executed by telephone between the Feeder Fund and any other series of Kinetics Mutual Funds, Inc. The Feeder Fund’s transfer agent charges a $5.00 transaction fee to shareholder accounts for telephone exchanges between any two series of Kinetics Mutual Funds, Inc. The Feeder Fund’s transfer agent does not charge a transaction fee for written exchange requests. IRA accounts are assessed a $15.00 annual fee. Finally, as a disincentive to market-timing transactions, the Feeder Funds will assess a 2.00% fee on certain redemption or exchange of Fund shares held for less than thirty days after purchase. These fees will be paid to the Feeder Funds to help offset transaction costs. The Feeder Funds reserve the right to waive the redemption fee, subject to their sole discretion, in instances deemed not to be disadvantageous to the Feeder Funds or shareholders.

You may use the information provided in the second line, together with the amounts you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account

value divided by $1,000 = 8.6), then multiply the result by the number in the second line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

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

Expense Example


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
The Internet Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	800.20		1.97	%	$	8.82
No Load Class Actual — after expense reimbursement	$	1,000.00	$	800.20		1.90	%	$	8.50
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,015.07		1.97	%	$	9.87
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,015.42		1.90	%	$	9.52


Advisor Class A Actual — before expense reimbursement	$	1,000.00	$	798.90		2.22	%	$	9.93
Advisor Class A Actual — after expense reimbursement	$	1,000.00	$	798.90		2.15	%	$	9.62
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,013.82		2.22	%	$	11.12
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,014.17		2.15	%	$	10.77


Advisor Class C Actual — before expense reimbursement	$	1,000.00	$	797.20		2.72	%	$	12.15
Advisor Class C Actual — after expense reimbursement	$	1,000.00	$	797.20		2.65	%	$	11.84
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,021.74		2.72	%	$	13.67
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,011.69		2.65	%	$	13.25


The Global Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	765.30		5.47	%	$	24.01
No Load Class Actual — after expense reimbursement	$	1,000.00	$	765.30		1.42	%	$	6.23
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	997.61		5.47	%	$	27.17
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,017.80		1.42	%	$	7.12


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Advisor Class A Actual — before expense reimbursement **	$	1,000.00	$	822.40		12.59	%	$	13.16
Advisor Class A Actual — after expense reimbursement**	$	1,000.00	$	822.40		1.64	%	$	1.71
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	943.13		12.59	%	$	60.83
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	997.58		1.64	%	$	8.15


Advisor Class C Actual — before expense reimbursement**	$	1,000.00	$	822.40		13.09	%	$	13.69
Advisor Class C Actual — after expense reimbursement**	$	1,000.00	$	822.40		2.14	%	$	2.24
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	940.65		13.09	%	$	63.16
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	995.10		2.14	%	$	10.62


The Paradigm Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	811.50		1.69	%	$	7.61
No Load Class Actual — after expense reimbursement	$	1,000.00	$	811.50		1.67	%	$	7.52
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,016.46		1.69	%	$	8.47
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,016.56		1.67	%	$	8.37


Advisor Class A Actual — before expense reimbursement	$	1,000.00	$	810.60		1.94	%	$	8.73
Advisor Class A Actual — after expense reimbursement	$	1,000.00	$	810.60		1.92	%	$	8.64
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,015.22		1.94	%	$	9.72
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,015.32		1.92	%	$	9.62


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Advisor Class C Actual — before expense reimbursement	$	1,000.00	$	808.70		2.44	%	$	10.97
Advisor Class C Actual — after expense reimbursement	$	1,000.00	$	808.70		2.42	%	$	10.88
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,012.73		2.44	%	$	12.21
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,012.83		2.42	%	$	12.11


Institutional Class Actual — before expense reimbursement	$	1,000.00	$	812.40		1.64	%	$	7.39
Institutional Class Actual — after expense reimbursement	$	1,000.00	$	812.40		1.47	%	$	6.62
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,016.71		1.64	%	$	8.22
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,017.55		1.47	%	$	7.37


The Medical Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	971.20		2.31	%	$	11.32
No Load Class Actual — after expense reimbursement	$	1,000.00	$	971.20		1.42	%	$	6.96
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,013.38		2.31	%	$	11.56
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,017.80		1.42	%	$	7.12


Advisor Class A Actual — before expense reimbursement	$	1,000.00	$	970.10		2.56	%	$	12.54
Advisor Class A Actual — after expense reimbursement	$	1,000.00	$	970.10		1.67	%	$	8.18
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,012.13		2.56	%	$	12.81
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,016.56		1.67	%	$	8.37


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Advisor Class C Actual — before expense reimbursement	$	1,000.00	$	967.90		3.06	%	$	14.97
Advisor Class C Actual — after expense reimbursement	$	1,000.00	$	967.90		2.17	%	$	10.62
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,021.35		3.06	%	$	15.38
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,022.37		2.17	%	$	10.91


The Small Cap Opportunities Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	756.30		1.77	%	$	7.73
No Load Class Actual — after expense reimbursement	$	1,000.00	$	756.30		1.67	%	$	7.29
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,016.06		1.77	%	$	8.87
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,016.56		1.67	%	$	8.37


Advisor Class A Actual — before expense reimbursement	$	1,000.00	$	755.30		2.02	%	$	8.82
Advisor Class A Actual — after expense reimbursement	$	1,000.00	$	755.30		1.92	%	$	8.38
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,014.82		2.02	%	$	10.12
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,015.32		1.92	%	$	9.62


Advisor Class C Actual — before expense reimbursement	$	1,000.00	$	753.30		2.52	%	$	10.99
Advisor Class C Actual — after expense reimbursement	$	1,000.00	$	753.30		2.42	%	$	10.55
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,021.97		2.52	%	$	12.67
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,022.09		2.42	%	$	12.17


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Institutional Class Actual — before expense reimbursement	$	1,000.00	$	756.90		1.72	%	$	7.51
Institutional Class Actual — after expense reimbursement	$	1,000.00	$	756.90		1.47	%	$	6.42
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,016.31		1.72	%	$	8.62
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,023.18		1.47	%	$	7.39


The Kinetics Government Money Market Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	1,006.60		3.73	%	$	18.61
No Load Class Actual — after expense reimbursement	$	1,000.00	$	1,006.60		0.91	%	$	4.54
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,006.32		3.73	%	$	18.61
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,020.34		0.91	%	$	4.57


The Market Opportunities Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	719.00		1.78	%	$	7.61
No Load Class Actual — after expense reimbursement	$	1,000.00	$	719.00		1.67	%	$	7.14
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,016.01		1.78	%	$	8.92
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,016.56		1.67	%	$	8.37


Advisor Class A Actual — before expense reimbursement	$	1,000.00	$	718.10		2.03	%	$	8.67
Advisor Class A Actual — after expense reimbursement	$	1,000.00	$	718.10		1.92	%	$	8.20
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,014.77		2.03	%	$	10.17
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,015.32		1.92	%	$	9.62


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Advisor Class C Actual — before expense reimbursement	$	1,000.00	$	716.40		2.53	%	$	10.80
Advisor Class C Actual — after expense reimbursement	$	1,000.00	$	716.40		2.42	%	$	10.33
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,021.96		2.53	%	$	12.72
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,022.07		2.42	%	$	12.17


Institutional Class Actual — before expense reimbursement**	$	1,000.00	$	846.10		1.77	%	$	1.87
Institutional Class Actual — after expense reimbursement**	$	1,000.00	$	846.10		1.43	%	$	1.51
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	996.94		1.77	%	$	8.79
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	998.63		1.43	%	$	7.11


The Water Infrastructure Fund
No Load Class Actual — before expense reimbursement	$	1,000.00	$	977.40		2.22	%	$	10.91
No Load Class Actual — after expense reimbursement	$	1,000.00	$	977.40		1.65	%	$	8.11
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,013.82		2.22	%	$	11.12
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,016.66		1.65	%	$	8.27


Advisor Class A Actual — before expense reimbursement	$	1,000.00	$	975.40		2.47	%	$	12.13
Advisor Class A Actual — after expense reimbursement	$	1,000.00	$	975.40		1.90	%	$	9.33
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,012.58		2.47	%	$	12.36
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,015.42		1.90	%	$	9.52


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Advisor Class C Actual — before expense reimbursement	$	1,000.00	$	973.40		2.97	%	$	14.57
Advisor Class C Actual — after expense reimbursement	$	1,000.00	$	973.40		2.40	%	$	11.78
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,010.09		2.97	%	$	14.84
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,012.93		2.40	%	$	12.01


Institutional Class Actual — before expense reimbursement	$	1,000.00	$	978.40		2.17	%	$	10.67
Institutional Class Actual — after expense reimbursement	$	1,000.00	$	978.40		1.45	%	$	7.13
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	1,014.07		2.17	%	$	10.87
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,017.65		1.45	%	$	7.27


The Multi-Disciplinary Fund
No Load Class Actual — before expense reimbursement***	$	1,000.00	$	971.00		17.67	%	$	66.61
No Load Class Actual — after expense reimbursement***	$	1,000.00	$	971.00		1.49	%	$	5.62
No Load Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	931.26		17.67	%	$	84.85
No Load Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,011.72		1.49	%	$	7.45


Advisor Class A Actual — before expense reimbursement***	$	1,000.00	$	970.00		17.92	%	$	67.52
Advisor Class A Actual — after expense reimbursement***	$	1,000.00	$	970.00		1.74	%	$	6.56
Advisor Class A Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	930.02		17.92	%	$	85.99
Advisor Class A Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,010.47		1.74	%	$	8.70


	Beginning		Ending		Annualized			Expenses Paid
	Account		Account		Expense			During Period*
	Value (1/1/08)		Value (6/30/08)		Ratio			(1/1/08 to 6/30/08)
Advisor Class C Actual — before expense reimbursement***	$	1,000.00	$	968.00		18.42	%	$	69.33
Advisor Class C Actual — after expense reimbursement***	$	1,000.00	$	968.00		2.24	%	$	8.43
Advisor Class C Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	927.53		18.42	%	$	88.28
Advisor Class C Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,007.99		2.24	%	$	11.18


Institutional Class Actual — before expense reimbursement***	$	1,000.00	$	972.00		17.62	%	$	66.46
Institutional Class Actual — after expense reimbursement***	$	1,000.00	$	972.00		1.29	%	$	4.87
Institutional Class Hypothetical (5% return before expenses) — before expense reimbursement	$	1,000.00	$	931.51		17.62	%	$	84.62
Institutional Class Hypothetical (5% return before expenses) — after expense reimbursement	$	1,000.00	$	1,012.71		1.29	%	$	6.46


Note:	Each Feeder Fund records its proportionate share of the respective Master Portfolio’s expenses, including directed brokerage credits, on a daily basis. Any expense reductions includes Feeder Fund-specific expenses as well as the expenses allocated for the Master Portfolio.


*	Expenses are equal to the Fund’s annualized expense ratio before expense reimbursement and after expense reimbursement multiplied by the average account value over the period, multiplied by 182/366.

**	Expenses paid 5/19/08-6/30/08 are equal to the Fund’s annualized expense ratio before expense reimbursement, and after expense reimbursement, multiplied by 42/366 (to reflect the inception date to the end of the semi-annual period).

***	Expenses paid 2/11/08-6/30/08 are equal to the Fund’s annualized expense ratio before expense reimbursement and after expense reimbursement, multiplied by 140/366 (to reflect the inception date to the end of the semi-annual period).

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Internet			The Global
	Fund			Fund


ASSETS:
Investments in the Master Portfolios, at value*	$	114,369,069		$	3,016,807
Receivable from Adviser		11,421			39,521
Receivable for Master Portfolio interest sold		123,598			—
Receivable for Fund shares sold		26,237			1,911
Prepaid expenses and other assets		22,423			34,041

Total assets		114,552,748			3,092,280

LIABILITIES:
Payable for Master Portfolio interest purchased		—			1,911
Payable to Directors and Officers		670			7
Payable for Fund shares repurchased		149,835			—
Payable for service fees		24,958			672
Payable for distribution fees		213			6
Accrued expenses and other liabilities		74,447			9,328

Total liabilities		250,123			11,924

Net assets	$	114,302,625		$	3,080,356

NET ASSETS CONSIST OF:
Paid in capital		268,579,570			14,458,619
Accumulated net investment loss		(1,008,320	)		(97,941	)
Accumulated net realized loss on investments,
options and written option contracts		(178,732,835	)		(10,834,001	)
Net unrealized appreciation (depreciation) on:
Investments		25,464,210			(446,321	)

Net Assets	$	114,302,625		$	3,080,356

CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net assets	$	113,719,926		$	3,026,294
Shares outstanding		3,954,651			807,088
Net asset value per share (offering and redemption price)	$	28.76		$	3.75

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net assets	$	463,515		$	45,843
Shares outstanding		16,267			12,219
Net asset value per share (offering and redemption price)	$	28.49		$	3.75

Offering price per share ($28.49 divided by .9425 and $3.75 divided by .9425)	$	30.23		$	3.98

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net assets	$	119,184		$	8,219
Shares outstanding		4,234			2,193

Net asset value per share (offering and redemption price)	$	28.15		$	3.75


*	Each Feeder Fund invests its assets directly in the corresponding Master Portfolio. The financial statements for the Master portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Fund’s financial statements.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Paradigm			The Medical
	Fund			Fund


ASSETS:
Investments in the Master Portfolios, at value*	$	3,611,610,941		$	18,045,371
Receivable from Adviser		357,459			13,208
Receivable for Master Portfolio interest sold		6,426,797			—
Receivable for Fund shares sold		12,223,872			90,025
Prepaid expenses and other assets		200,841			18,036

Total assets		3,630,819,910			18,166,640

LIABILITIES:
Payable for Master Portfolio interest purchased		—			82,456
Payable to Directors and Officers		20,215			83
Payable for Fund shares repurchased		18,650,670			7,569
Payable for service fees		682,908			3,732
Payable for distribution fees		330,459			437
Accrued expenses and other liabilities		619,196			14,934

Total liabilities		20,303,448			109,211

Net assets	$	3,610,516,462		$	18,057,429

NET ASSETS CONSIST OF:
Paid in capital	$	3,599,893,313		$	18,056,764
Accumulated net investment gain (loss)		(2,988,597	)		146,615
Accumulated net realized gain (loss) on investments, foreign currency and written option contracts expired or closed		(80,296,674	)		41,562
Net unrealized appreciation (depreciation) on:
Investments and foreign currency		93,908,420			(187,512	)

Net Assets	$	3,610,516,462		$	18,057,429

CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net assets	$	2,068,229,293		$	16,203,822
Shares outstanding		82,219,893			841,587
Net asset value per share (offering and redemption price)	$	25.15		$	19.25

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net assets	$	528,582,211		$	1,726,071
Shares outstanding		21,364,076			91,749
Net asset value per share (offering and redemption price)	$	24.74		$	18.81

Offering price per share ($24.74 divided by .9425 and $18.81 divided by .9425)	$	26.25		$	19.96

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net assets	$	324,538,529		$	127,536
Shares outstanding		13,421,761			6,813
Net asset value per share (offering and redemption price)	$	24.18		$	18.72

CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net assets	$	689,166,429
Shares outstanding		27,385,706
Net asset value per share (offering and redemption price)	$	25.17


*	Each Feeder Fund invests its assets directly in the corresponding Master Portfolio. The financial statements for the Master portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Fund’s financial statements.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


				The Kinetics
	The Small Cap			Government
	Opportunities			Money Market
	Fund			Fund


ASSETS:
Investments in the Master Portfolios, at value*	$	606,372,727		$	2,044,295
Receivable from Adviser		74,628			5,263
Receivable for Master Portfolio interest sold		1,865,242			—
Receivable for Fund shares sold		601,324			192,344
Prepaid expenses and other assets		62,223			18,634

Total assets		608,976,144			2,260,536

LIABILITIES:
Payable for Master Portfolio interest purchased		—			192,506
Payable to Directors and Officers		3,517			4
Payable for Fund shares repurchased		2,466,566			—
Payable for service fees		95,622			396
Payable for distribution fees		8,830			—
Accrued expenses and other liabilities		152,891			7,385

Total liabilities		2,727,426			200,291

Net assets	$	606,248,718		$	2,060,245

NET ASSETS CONSIST OF:
Paid in capital	$	646,518,050		$	2,060,245
Accumulated net investment loss		(560,318	)		—
Accumulated net realized loss on investments and foreign currency		(25,817,178	)		—
Net unrealized depreciation on:
Investments and foreign currency		(13,891,836	)		—

Net Assets	$	606,248,718		$	2,060,245

CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net assets	$	341,887,048		$	2,060,245
Shares outstanding		14,164,271			2,060,245
Net asset value per share (offering and redemption price)	$	24.14		$	1.00

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net assets	$	26,537,095
Shares outstanding		1,110,981
Net asset value per share	$	23.89

Offering price per share ($23.89 divided by .9425)	$	25.35

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net assets	$	4,917,519
Shares outstanding		206,804
Net asset value per share (offering and redemption price)	$	23.78

CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net assets	$	232,907,056
Shares outstanding		9,640,868
Net asset value per share (offering and redemption price)	$	24.16


*	Each Feeder Fund invests its assets directly in the corresponding Master Portfolio. The financial statements for the Master portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Fund’s financial statements.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Market			The Water
	Opportunities			Infrastructure
	Fund			Fund


ASSETS:
Investments in the Master Portfolios, at value*	$	95,475,989		$	25,848,238
Receivable from Adviser		19,336			10,561
Receivable for Fund shares sold		881,377			580,778
Prepaid expenses and other assets		37,045			35,413

Total assets		96,413,747			26,474,990

LIABILITIES:
Payable for Master Portfolio interest purchased		352,427			580,473
Payable to Directors and Officers		521			37
Payable for Fund shares repurchased		528,949			305
Payable for service fees		20,754			5,086
Payable for distribution fees		11,062			1,342
Accrued expenses and other liabilities		22,439			11,240

Total liabilities		936,152			598,483

Net assets	$	95,477,595		$	25,876,507

NET ASSETS CONSIST OF:
Paid in capital	$	114,592,423		$	26,382,715
Accumulated net investment gain		315,605			111,145
Accumulated net realized gain (loss) on investments and foreign currency		(572,856	)		163,658
Net unrealized depreciation on:
Investments and foreign currency		(18,857,577	)		(781,011	)

Net Assets	$	95,477,595		$	25,876,507

CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net assets	$	54,976,653		$	20,229,195
Shares outstanding		4,742,523			2,035,070
Net asset value per share (offering and redemption price)	$	11.59		$	9.94

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net assets	$	34,129,583		$	3,532,297
Shares outstanding		2,956,576			356,060
Net asset value per share (offering and redemption price)	$	11.54		$	9.92

Offering price per share ($11.54 divided by .9425 and $9.92 divided by .9425)	$	12.24		$	10.53

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net assets	$	6,362,900		$	1,829,304
Shares outstanding		554,752			185,025
Net asset value per share (offering and redemption price)	$	11.47		$	9.89

CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net assets	$	8,459		$	285,711
Shares outstanding		729			28,704
Net asset value per share (offering and redemption price)	$	11.60		$	9.95


*	Each Feeder Fund invests its assets directly in the corresponding Master Portfolio. The financial statements for the Master portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Fund’s financial statements.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Multi-
	Disciplinary
	Fund


ASSETS:
Investments in the Master Portfolios, at value*	$	386,268
Receivable from Adviser		13,243
Prepaid expenses and other assets		5,861

Total assets		405,372

LIABILITIES:
Payable for service fees		67
Payable for distribution fees		80
Accrued expenses and other liabilities		7,966

Total liabilities		8,113

Net assets	$	397,259

NET ASSETS CONSIST OF:
Paid in capital	$	409,363
Accumulated net investment gain		158
Accumulated net realized gain on investments and written option contracts expired or closed		3,281
Net unrealized depreciation on:
Investments		(15,543	)

Net Assets	$	397,259

CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net assets	$	103,962
Shares outstanding		10,705
Net asset value per share (offering and redemption price)	$	9.71

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net assets	$	99,263
Shares outstanding		10,230
Net asset value per share	$	9.70

Offering price per share ($9.70 divided by .9425)	$	10.29

CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net assets	$	96,841
Shares outstanding		10,000
Net asset value per share (offering and redemption price)	$	9.68

CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net assets	$	97,193
Shares outstanding		10,000
Net asset value per share (offering and redemption price)	$	9.72


*	Each Feeder Fund invests its assets directly in the corresponding Master Portfolio. The financial statements for the Master portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Fund’s financial statements.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


	The Internet			The Global
	Fund			Fund


INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	567,122		$	45,828
Interest		242,456			3,511
Income from securities lending		1,006,009			1,813
Expenses only from Master Portfolio		(883,651	)		(38,125	)

Net investment income from Master Portfolio		931,936			13,027

EXPENSES:
Distribution fees — Advisor Class A		652			4
Distribution fees — Advisor Class C		619			8
Shareholder servicing fees and expenses		330,006			10,936
Reports to shareholders		31,870			22,142
Administration fees		16,407			381
Professional fees		6,988			4,162
Directors’ and Officers’ fees and expenses		1,462			30
Registration fees		23,582			11,182
Fund accounting fees		3,243			79
Other expenses		1,578			114

Total expenses		416,407			49,038
Less, expense reimbursement		(43,295	)		(64,552	)

Net expenses		373,112			(15,514	)

Net investment income		558,824			28,541

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain on:
Investments and foreign currency		4,285,608			220,914
Net change in unrealized depreciation of:
Investments and foreign currency		(36,299,364	)		(1,140,248	)

Net loss on investments		(32,013,756	)		(919,334	)

Net decrease in net assets resulting from operations	$	(31,454,932	)	$	(890,793	)

† Net of Foreign Taxes Withheld of:	$	30,606		$	2,262


	Advisor Class A and Advisor Class C shares of the Global Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


	The Paradigm			The Medical
	Fund			Fund


INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	30,072,410		$	227,972
Interest		8,872,192			14,386
Income from securities lending		3,289,316			24,258
Expenses allocated from Master Portfolio		(26,837,378	)		(122,974	)

Net investment income from Master Portfolio		15,396,540			143,642

EXPENSES:
Distribution fees — Advisor Class A		668,050			1,903
Distribution fees — Advisor Class C		1,218,759			594
Shareholder servicing fees and expenses		5,288,599			43,485
Shareholder servicing fees — Institutional Class		732,549			—
Reports to shareholders		348,422			3,296
Administration fees		502,441			2,491
Professional fees		101,504			4,342
Directors’ and Officers’ fees and expenses		47,744			182
Registration fees		134,470			24,996
Fund accounting fees		102,297			523
Other expenses		37,930			130

Total expenses		9,182,765			81,942
Less, expense waiver for Institutional Class service fees		(549,412	)		—
Less, expense reimbursement		(357,459	)		(77,617	)

Net expenses		8,275,894			4,325

Net investment income		7,120,646			139,317

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain (loss) on:
Investments and foreign currency		(82,308,817	)		236,454
Written option contracts expired or closed		(53,393	)		—
Net change in unrealized depreciation of:
Investments and foreign currency		(798,813,170	)		(924,045	)
Written option contracts		(102,907	)		—

Net loss on investments		(881,278,287	)		(687,591	)

Net decrease in net assets resulting from operations	$	(874,157,641	)	$	(548,274	)

† Net of Foreign Taxes Withheld of:	$	1,798,986		$	12,265

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


				The Kinetics
	The Small Cap			Government
	Opportunities			Money Market
	Fund			Fund


INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	4,605,836		$	—
Interest		721,745			20,482
Income from securities lending		2,992,833			—
Expenses only from Master Portfolio		(5,252,455	)		(11,996	)

Net investment income from Master Portfolio		3,067,959			8,486

EXPENSES:
Distribution fees — Advisor Class A		38,031			—
Distribution fees — Advisor Class C		17,760			—
Shareholder servicing fees and expenses		895,065			4,911
Shareholder servicing fees — Institutional Class		262,759			—
Reports to shareholders		127,146			2,310
Administration fees		95,733			235
Professional fees		24,448			4,132
Directors’ and Officers’ fees and expenses		9,704			20
Registration fees		57,272			11,710
Fund accounting fees		18,382			48
Other expenses		8,914			70

Total expenses		1,555,214			23,436
Less, expense waiver for Institutional Class service fees		(197,069	)		—
Less, expense reimbursement		(378,966	)		(26,798	)

Net expenses		979,179			(3,362	)

Net investment income		2,088,780			11,848

REALIZED AND UNREALIZED LOSS ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS:
Net loss on:
Investments and foreign currency		(27,406,232	)		—
Net change in unrealized depreciation of:
Investments and foreign currency		(212,522,912	)		—

Net loss on investments		(239,929,144	)		—

Net increase (decrease) in net assets resulting from operations	$	(237,840,364	)	$	11,848

† Net of Foreign Taxes Withheld of:	$	149,610		$	—

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


	The Market			The Water
	Opportunities			Infrastructure
	Fund			Fund


INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	1,143,232		$	183,081
Interest		101,493			47,178
Income from securities lending		111,825			6,716
Expenses only from Master Portfolio		(714,543	)		(106,900	)

Net investment income from Master Portfolio		642,007			130,075

EXPENSES:
Distribution fees — Advisor Class A		47,366			3,502
Distribution fees — Advisor Class C		29,278			5,321
Shareholder servicing fees and expenses		170,911			29,598
Shareholder servicing fees — Institutional Class		2			162
Reports to shareholders		8,096			1,632
Administration fees		13,181			1,588
Professional fees		6,524			6,088
Directors’ and Officers’ fees and expenses		1,326			90
Registration fees		25,564			10,966
Fund accounting fees		2,697			325
Other expenses		828			104

Total expenses		305,773			59,376
Less, expense waiver for Institutional Class service fees		(1	)		(120	)
Less, expense reimbursement		(57,256	)		(40,326	)

Net expenses		248,516			18,930

Net investment income		393,491			111,145

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain (loss) on:
Investments and foreign currency		(430,613	)		163,021
Written option contracts expired or closed		—			637
Net change in unrealized depreciation of:
Investments and foreign currency		(36,155,979	)		(813,389	)

Net loss on investments		(36,586,592	)		(649,731	)

Net decrease in net assets resulting from operations	$	(36,193,101	)	$	(538,586	)

† Net of Foreign Taxes Withheld of:	$	68,625		$	18,348


	Institutional Class shares of the Market Opportunities Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Operations

For the Period from February 11, 2008ˆ through June 30, 2008 (Unaudited)


	The Multi-
	Disciplinary
	Fund


INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIOS:
Interest	$	2,784
Expenses only from Master Portfolio		(6,949	)

Net investment loss from Master Portfolio		(4,165	)

EXPENSES:
Distribution fees — Advisor Class A		97
Distribution fees — Advisor Class C		288
Shareholder servicing fees and expenses		13,699
Shareholder servicing fees — Institutional Class		77
Reports to shareholders		1,372
Administration fees		51
Professional fees		3,502
Directors’ and Officers’ fees and expenses		—
Registration fees		1,816
Fund accounting fees		8

Total expenses		20,910
Less, expense waiver for Institutional Class service fees		(58	)
Less, expense reimbursement		(25,175	)

Net expenses		(4,323	)

Net investment income		158

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain on:
Investments		117
Written option contracts expired or closed		3,164
Net change in unrealized depreciation of:
Written option contracts		(15,543	)

Net loss on investments		(12,262	)

Net decrease in net assets resulting from operations	$	(12,104	)

Commencement of operations.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets


	The Internet Fund						The Global Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


OPERATIONS:
Net investment income	$	558,824		$	1,352,765		$	28,541		$	159,497
Net realized gain on sale of investments, foreign currency and written option contracts expired or closed		4,285,608			15,698,724			220,914			294,670
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options		(36,299,364	)		16,150,780			(1,140,248	)		(303,988	)

Net increase (decrease) in net assets resulting from operations		(31,454,932	)		33,202,269			(890,793	)		150,179

DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			(1,629,950	)		—			(188,230	)

Total distributions		—			(1,629,950	)		—			(188,230	)

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:⁽¹⁾
Net investment income		—			(5,354	)		—			N/A

Total distributions		—			(5,354	)		—			N/A

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:⁽¹⁾
Net investment income		—			(2,405	)		—			N/A

Total distributions		—			(2,405	)		—			N/A

CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		5,576,820			30,688,190			1,293,589			904,772
Redemption fees		4,628			4,080			1			879
Proceeds from shares issued to holders in reinvestment of dividends		—			1,493,327			—			186,476
Cost of shares redeemed		(27,363,595	)		(33,892,666	)		(520,133	)		(1,906,635	)

Net increase (decrease) in net assets resulting from capital share transactions		(21,782,147	)		(1,707,069	)		773,457			(814,508	)

CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:⁽¹⁾
Proceeds from shares sold		73,123			342,660			49,194			N/A
Redemption fees		20			—			—			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			4,405			—			N/A
Cost of shares redeemed		(122,882	)		(24,946	)		—			N/A

Net increase (decrease) in net assets resulting from capital share transactions		(49,739	)		322,119			49,194			N/A


(1)	Advisor Class A and Advisor Class C shares of the Global Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)


	The Internet Fund						The Global Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:⁽¹⁾
Proceeds from shares sold	$	—		$	299,960		$	10,000			N/A
Redemption fees		—			204			—			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			1,392			—			N/A
Cost of shares redeemed		(128,286	)		(10,217	)		—			N/A

Net increase (decrease) in net assets resulting from capital share transactions		(128,286	)		291,339			10,000			N/A

TOTAL INCREASE (DECREASE) IN NET ASSETS:		(53,415,104	)		30,470,949			(58,142	)		(852,559	)
NET ASSETS:
Beginning of period		167,717,729			137,246,780			3,138,498			3,991,057

End of period*	$	114,302,625		$	167,717,729		$	3,080,356		$	3,138,498

*Including undistributed net investment loss of:	$	(1,008,320	)	$	(1,567,144	)	$	(97,941	)	$	(126,482	)

CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		171,971			877,610			284,015			178,439
Shares issued in reinvestments of dividends and distributions		—			41,574			—			38,212
Shares redeemed		(858,135	)		(1,065,901	)		(118,067	)		(373,212	)

Net increase (decrease) in shares outstanding		(686,164	)		(146,717	)		165,948			(156,561	)

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:⁽¹⁾
Shares sold		2,329			10,246			12,219			N/A
Shares issued in reinvestments of dividends and distributions		—			124			—			N/A
Shares redeemed		(3,926	)		(819	)		—			N/A

Net increase (decrease) in shares outstanding		(1,597	)		9,551			12,219			N/A

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:⁽¹⁾
Shares sold		—			8,559			2,193			N/A
Shares issued in reinvestments of dividends and distributions		—			39			—			N/A
Shares redeemed		(4,081	)		(283	)		—			N/A

Net increase (decrease) in shares outstanding		(4,081	)		8,315			2,193			N/A


(1)	Advisor Class A and Advisor Class C shares of the Global Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets


	The Paradigm Fund						The Medical Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


OPERATIONS:
Net investment income	$	7,120,646		$	11,645,301		$	139,317		$	87,456
Net realized gain (loss) on sale of investments, foreign currency and written option contracts expired or closed		(82,362,210	)		24,069,411			236,454			1,257,766
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options		(798,916,077	)		529,799,808			(924,045	)		936,268

Net increase (decrease) in net assets resulting from operations		(874,157,641	)		565,514,520			(548,274	)		2,281,490

DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			(11,699,941	)		—			(83,580	)
Net realized gains		—			(11,505,288	)		—			(582,488	)

Total distributions		—			(23,205,229	)		—			(666,068	)

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			(1,577,182	)		—			(4,104	)
Net realized gains		—			(2,187,982	)		—			(48,899	)

Total distributions		—			(3,765,164	)		—			(53,003	)

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			(177	)		—			(110	)
Net realized gains		—			(1,318,999	)		—			(5,043	)

Total distributions		—			(1,319,176	)		—			(5,153	)

DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:
Net investment income		—			(4,342,775	)		N/A			N/A
Net realized gains		—			(3,204,711	)		N/A			N/A

Total distributions		—			(7,547,486	)		N/A			N/A

CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		629,452,637			1,849,873,606			4,961,061			9,939,816
Redemption Fees		201,354			208,321			320			8,816
Proceeds from shares issued to holders in reinvestment of dividends		—			22,401,473			—			655,064
Cost of shares redeemed		(934,031,334	)		(629,292,842	)		(2,175,523	)		(13,683,124	)

Net increase (decrease) in net assets resulting from capital share transactions		(304,377,343	)		1,243,190,558			2,785,858			(3,079,428	)

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)


	The Paradigm Fund						The Medical Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold	$	178,920,040		$	350,897,357		$	428,253		$	838,301
Redemption Fees		52,587			47,579			—			9
Proceeds from shares issued to holders in reinvestment of dividends		—			3,255,755			—			44,818
Cost of shares redeemed		(81,803,889	)		(44,065,954	)		(82,455	)		(255,909	)

Net increase in net assets resulting from capital share transactions		97,168,738			310,134,737			345,798			627,219

CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold		97,645,056			194,027,867			46,326			144,802
Redemption Fees		12,273			16,484			—			1
Proceeds from shares issued to holders in reinvestment of dividends		—			1,154,254			—			5,153
Cost of shares redeemed		(25,451,178	)		(21,852,493	)		(65,031	)		(41	)

Net increase (decrease) in net assets resulting from capital share transactions		72,206,151			173,346,112			(18,705	)		149,915

CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS :
Proceeds from shares sold		173,158,502			300,690,200			N/A			N/A
Redemption Fees		2,775			8,309			N/A			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			7,311,557			N/A			N/A
Cost of shares redeemed		(133,766,291	)		(128,408,385	)		N/A			N/A

Net increase in net assets resulting from capital share transactions		39,394,986			179,601,681			N/A			N/A

TOTAL INCREASE (DECREASE) IN NET ASSETS:		(969,765,109	)		2,435,950,553			2,564,677			(745,028	)
NET ASSETS:
Beginning of period		4,580,281,571			2,144,331,018			15,492,752			16,237,780

End of period*	$	3,610,516,462		$	4,580,281,571		$	18,057,429		$	15,492,752

*Including undistributed net investment income (loss) of:	$	(2,988,597	)	$	(10,109,243	)	$	146,615		$	7,298

CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		22,717,301			63,730,279			253,853			490,051
Shares issued in reinvestments of dividends and distributions		—			724,732			—			32,884
Shares redeemed		(34,411,779	)		(22,412,502	)		(114,589	)		(691,314	)

Net increase (decrease) in shares outstanding		(11,694,478	)		42,042,509			139,264			(168,379	)

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)


	The Paradigm Fund						The Medical Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:
Shares sold		6,610,209			12,078,256			22,625			43,860
Shares issued in reinvestments of dividends and distributions		—			106,956			—			2,300
Shares redeemed		(3,072,728	)		(1,555,850	)		(4,503	)		(13,237	)

Net increase in shares outstanding		3,537,481			10,629,362			18,122			32,923

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		3,667,093			6,821,284			2,499			7,397
Shares issued in reinvestments of dividends and distributions		—			38,695			—			265
Shares redeemed		(978,699	)		(780,249	)		(3,346	)		(2	)

Net increase (decrease) in shares outstanding		2,688,394			6,079,730			(847	)		7,660

CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:
Shares sold		6,304,771			10,562,832			N/A			N/A
Shares issued in reinvestments of dividends and distributions		—			236,696			N/A			N/A
Shares redeemed		(4,900,459	)		(4,510,587	)		N/A			N/A

Net increase in shares outstanding		1,404,312			6,288,941			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets


							The Kinetics Government
	The Small Cap Opportunities Fund						Money Market Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


OPERATIONS:
Net investment income	$	2,088,780		$	652,285		$	11,848		$	43,527
Net realized gain (loss) on sale of investments, foreign currency and written option contracts expired or closed		(27,406,232	)		10,940,512			—			—
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options		(212,522,912	)		110,489,283			—			—

Net increase (decrease) in net assets resulting from operations		(237,840,364	)		122,082,080			11,848			43,527

DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			(5,211,975	)		(11,848	)		(43,527	)
Net realized gains		—			(1,576,555	)		—			—

Total distributions		—			(6,788,530	)		(11,848	)		(43,527	)

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			(216,845	)		N/A			N/A
Net realized gains		—			(79,429	)		N/A			N/A

Total distributions		—			(296,274	)		N/A			N/A

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			(29,881	)		N/A			N/A
Net realized gains		—			(10,599	)		N/A			N/A

Total distributions		—			(40,480	)		N/A			N/A

DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:
Net investment income		—			(2,707,668	)		N/A			N/A
Net realized gains		—			(682,422	)		N/A			N/A

Total distributions		—			(3,390,090	)		N/A			N/A

CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		105,843,828			609,987,689			2,529,814			1,478,721
Redemption fees		28,606			81,392			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			6,566,511			10,557			39,561
Cost of shares redeemed		(342,159,920	)		(222,811,396	)		(1,669,642	)		(1,754,222	)

Net increase (decrease) in net assets resulting from capital share transactions		(236,287,486	)		393,824,196			870,729			(235,940	)

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)


							The Kinetics Government
	The Small Cap Opportunities Fund						Money Market Fund
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2008			December 31, 2007			June 30, 2008			December 31, 2007
	(Unaudited)						(Unaudited)


CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold	$	8,426,064		$	25,460,990			N/A			N/A
Redemption fees		3,159			2,571			N/A			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			241,765			N/A			N/A
Cost of shares redeemed		(9,287,962	)		(4,433,515	)		N/A			N/A

Net increase (decrease) in net assets resulting from capital share transactions		(858,739	)		21,271,811			N/A			N/A

CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold		2,251,798			5,051,725			N/A			N/A
Redemption fees		—			1,076			N/A			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			25,478			N/A			N/A
Cost of shares redeemed		(904,867	)		(114,627	)		N/A			N/A

Net increase in net assets resulting from capital share transactions		1,346,931			4,963,652			N/A			N/A

CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS:
Proceeds from shares sold		22,222,092			103,687,085			N/A			N/A
Redemption fees		—			3,028			N/A			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			3,374,500			N/A			N/A
Cost of shares redeemed		(29,652,764	)		(42,283,259	)		N/A			N/A

Net increase (decrease) in net assets resulting from capital share transactions		(7,430,672	)		64,781,354			N/A			N/A

TOTAL INCREASE (DECREASE) IN NET ASSETS:		(481,070,330	)		596,407,719			870,729			(235,940	)
NET ASSETS:
Beginning of period		1,087,319,048			490,911,329			1,189,516			1,425,456

End of period*	$	606,248,718		$	1,087,319,048		$	2,060,245		$	1,189,516

*Including undistributed net investment loss of:	$	(560,318	)	$	(2,649,098	)	$	—		$	—

CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		3,801,887			19,955,450			2,529,814			1,478,721
Shares issued in reinvestments of dividends and distributions		—			206,429			10,557			39,561
Shares redeemed		(12,483,447	)		(7,302,163	)		(1,669,642	)		(1,754,222	)

Net increase (decrease) in shares outstanding		(8,681,560	)		12,859,716			870,729			(235,940	)

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

The Kinetics Government

The Small Cap Opportunities Fund

Money Market Fund

For the

Six Months Ended

Year Ended

Six Months Ended

Year Ended

June 30, 2008

December 31, 2007

June 30, 2008

December 31, 2007

(Unaudited)

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:

Shares sold

309,924

821,149

N/A

Shares issued in reinvestments of dividends and distributions

—

7,673

N/A

Shares redeemed

(349,506

)

(144,091

)

N/A

Net increase (decrease) in shares outstanding

(39,582

)

684,731

N/A

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:

Shares sold

84,399

159,451

N/A

Shares issued in reinvestments of dividends and distributions

—

810

N/A

Shares redeemed

(34,139

)

(3,717

)

N/A

Net increase in shares outstanding

50,260

156,544

N/A

CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:

Shares sold

821,738

3,434,722

N/A

Shares issued in reinvestments of dividends and distributions

—

106,116

N/A

Shares redeemed

(1,102,962

)

(1,406,770

)

N/A

Net increase (decrease) in shares outstanding

(281,224

)

2,134,068

N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets


	The Market Opportunities Fund						The Water Infrastructure Fund
	For the			For the			For the			From June 29,
	Six Months Ended			Year Ended			Six Months Ended			2007ˆ through
	June 30, 2008			December 31, 2007			June 30, 2008			December 31,2007
	(Unaudited)						(Unaudited)


OPERATIONS:
Net investment income	$	393,491		$	84,658		$	111,145		$	16,318
Net realized gain (loss) on sale of investments, foreign currency and written option contracts expired or closed		(430,613	)		(139,847	)		163,658			31,249
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options		(36,155,979	)		15,573,705			(813,389	)		32,378

Net increase (decrease) in net assets resulting from operations		(36,193,101	)		15,518,516			(538,586	)		79,945

DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			(118,628	)		—			(9,413	)
Net realized gains		—			—			—			(11,976	)

Total distributions		—			(118,628	)		—			(21,389	)

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			(22,695	)		—			(7,700	)
Net realized gains		—			—			—			(12,600	)

Total distributions		—			(22,695	)		—			(20,300	)

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			—			—			(2,363	)
Net realized gains		—			—			—			(6,144	)

Total distributions		—			—			—			(8,507	)

DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:⁽¹⁾
Net investment income		—			N/A			—			(435	)
Net realized gains		—			N/A			—			(525	)

Total distributions		—			N/A			—			(960	)

CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		31,851,579			55,769,867			18,816,298			2,828,533
Redemption fees		18,176			14,947			143			—
Proceeds from shares issued to holders in reinvestment of dividends		—			117,154			—			19,762
Cost of shares redeemed		(19,322,339	)		(9,030,247	)		(576,943	)		(465,719	)

Net increase in net assets resulting from capital share transactions		12,547,416			46,871,721			18,239,498			2,382,576


(+)	Commencement of operations.

⁽¹⁾	Institutional Class shares of the Market Opportunities Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)


	The Market Opportunities Fund						The Water Infrastructure Fund
	For the			For the			For the			From June 29,
	Six Months Ended			Year Ended			Six Months Ended			2007ˆ through
	June 30, 2008			December 31, 2007			June 30, 2008			December 31,2007
	(Unaudited)						(Unaudited)


CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold	$	11,830,352		$	33,158,535		$	1,326,719		$	2,521,529
Redemption fees		4,591			949			—			126
Proceeds from shares issued to holders in reinvestment of dividends		—			19,057			—			19,597
Cost of shares redeemed		(8,688,080	)		(5,377,672	)		(163,483	)		(102,213	)

Net increase in net assets resulting from capital share transactions		3,146,863			27,800,869			1,163,236			2,439,039

CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold		2,408,161			8,211,008			714,940			1,194,129
Redemption fees		187			612			—			109
Proceeds from shares issued to holders in reinvestment of dividends		—			—			—			7,586
Cost of shares redeemed		(2,142,818	)		(145,356	)		(39,650	)		(5,465	)

Net increase in net assets resulting from capital share transactions		265,530			8,066,264			675,290			1,196,359

CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS:⁽¹⁾
Proceeds from shares sold		10,000			N/A			195,675			100,000
Redemption fees		—			N/A			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			N/A			—			960
Cost of shares redeemed		—			N/A			(6,329	)		—

Net increase in net assets resulting from capital share transactions		10,000			N/A			189,346			100,960

TOTAL INCREASE (DECREASE) IN NET ASSETS:		(20,223,292	)		98,116,047			19,728,784			6,147,723
NET ASSETS:
Beginning of period		115,700,887			17,584,840			6,147,723			—

End of period*	$	95,477,595		$	115,700,887		$	25,876,507		$	6,147,723

*Including undistributed net investment income (loss) of:	$	315,605		$	(77,886	)	$	111,145		$	—

CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		2,273,386			3,879,691			1,858,016			277,724
Shares issued in reinvestments of dividends and distributions		—			7,325			—			1,945
Shares redeemed		(1,439,848	)		(641,269	)		(57,352	)		(45,263	)

Net increase in shares outstanding		833,538			3,245,747			1,800,664			234,406


(+)	Commencement of operations.

⁽¹⁾	Institutional Class shares of the Market Opportunities Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)


	The Market Opportunities Fund						The Water Infrastructure Fund
	For the			For the			For the			From June 29,
	Six Months Ended			Year Ended			Six Months Ended			2007ˆ through
	June 30, 2008			December 31, 2007			June 30, 2008			December 31,2007
	(Unaudited)						(Unaudited)


CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:
Shares sold		884,098			2,313,386			130,874			249,966
Shares issued in reinvestments of dividends and distributions		—			1,195			—			1,929
Shares redeemed		(659,322	)		(379,689	)		(16,606	)		(10,103	)

Net increase in shares outstanding		224,776			1,934,892			114,268			241,792

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		170,145			559,532			70,938			117,981
Shares issued in reinvestments of dividends and distributions		—			—			—			747
Shares redeemed		(164,366	)		(10,559	)		(4,105	)		(536	)

Net increase in shares outstanding		5,779			548,973			66,833			118,192

CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:⁽¹⁾
Shares sold		729			N/A			19,223			10,000
Shares issued in reinvestments of dividends and distributions		—			N/A			—			94
Shares redeemed		—			N/A			(613	)		—

Net increase in shares outstanding		729			N/A			18,610			10,094


(+)	Commencement of operations.

⁽¹⁾	Institutional Class shares of the Market Opportunities Fund commenced operations on May 19, 2008.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Changes in Net Assets


	The Multi-Disciplinary Fund
	For the Period
	From February 11, 2008ˆ
	through June 30, 2008
	(Unaudited)


OPERATIONS:
Net investment income	$	158
Net realized gain on sale of investments and written option contracts expired or closed		3,281
Net change in unrealized depreciation of investments and written options		(15,543	)

Net decrease in net assets resulting from operations		(12,104	)

DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—
Net realized gains		—

Total distributions		—

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—
Net realized gains		—

Total distributions		—

DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—
Net realized gains		—

Total distributions		—

DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:
Net investment income		—
Net realized gains		—

Total distributions		—

CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		107,006
Redemption fees		—
Proceeds from shares issued to holders in reinvestment of dividends		—
Cost of shares redeemed		—

Net increase in net assets resulting from capital share transactions		107,006

CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold		102,357
Redemption fees		—
Proceeds from shares issued to holders in reinvestment of dividends		—
Cost of shares redeemed		—

Net increase in net assets resulting from capital share transactions		102,357

CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold		100,000
Redemption fees		—
Proceeds from shares issued to holders in reinvestment of dividends		—
Cost of shares redeemed		—

Net increase in net assets resulting from capital share transactions		100,000


(+)	Commencement of operations.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Statement of Changes in Net Assets — (Continued)


	The Multi-Disciplinary Fund
	For the Period
	From February 11, 2008ˆ
	through June 30, 2008
	(Unaudited)


CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS:
Proceeds from shares sold	$	100,000
Redemption fees		—
Proceeds from shares issued to holders in reinvestment of dividends		—
Cost of shares redeemed		—

Net increase in net assets resulting from capital share transactions		100,000

TOTAL INCREASE IN NET ASSETS:		397,259
NET ASSETS:
Beginning of period		—

End of period*	$	397,259

*Including undistributed net investment income of:	$	158

CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		10,705
Shares issued in reinvestments of dividends and distributions		—
Shares redeemed		—

Net increase in shares outstanding		10,705

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:
Shares sold		10,230
Shares issued in reinvestments of dividends and distributions		—
Shares redeemed		—

Net increase in shares outstanding		10,230

CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		10,000
Shares issued in reinvestments of dividends and distributions		—
Shares redeemed		—

Net increase in shares outstanding		10,000

CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:
Shares sold		10,000
Shares issued in reinvestments of dividends and distributions		—
Shares redeemed		—

Net increase in shares outstanding		10,000


(+)	Commencement of operations.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements

June 30, 2008 (Unaudited)

1. Organization

Kinetics Mutual Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and is incorporated in the State of Maryland. The Company is an open-end management investment company issuing its shares in series. One billion shares are authorized for the Company with a par value of $0.001 per share. The series of the Company presently authorized are The Internet Fund (“Internet”), The Global Fund (“Global,” formerly The Internet Emerging Growth Fund), The Paradigm Fund (“Paradigm”), The Medical Fund (“Medical”), The Small Cap Opportunities Fund (“Small Cap”), The Kinetics Government Money Market Fund (“Government”), The Market Opportunities Fund (“Market Opportunities”), The Water Infrastructure Fund (“Water Infrastructure”) and The Multi-Disciplinary Fund (“Multi-Disciplinary”). Investment operations of the Company began on October 21, 1996 (Internet), September 30, 1999 (Medical), December 31, 1999 (Global and Paradigm), February 3, 2000 (Government), March 20, 2000 (Small Cap), January 31, 2006 (Market Opportunities), June 29, 2007 (Water Infrastructure) and February 11, 2008 (Multi-Disciplinary). Each series, unlike many other investment companies which directly acquire and manage their own portfolios of securities, seeks to achieve its investment objective by investing all of its investable assets in a corresponding portfolio series (each a “Master Portfolio” and collectively the “Master Portfolios”) of Kinetics Portfolios Trust (the “Trust”).

On April 28, 2000 (January 31, 2006 with respect to Market Opportunities, June 29, 2007 with respect to Water Infrastructure and February 11, 2008 with respect to Multi-Disciplinary), each series in the Company entered into a master-feeder fund structure. By entering into this structure, each series (each a “Feeder Fund” and collectively, the “Feeder Funds”) invested all of its assets in a corresponding Master Portfolio which had the same investment objective as the Feeder Fund. Each Master Portfolio has multiple feeder funds. Each Feeder Fund receives a proportionate amount of interest in the Master Portfolio equal to its relative contribution of capital. Thus, each Feeder Fund is allocated its portion of income, gains (losses) and expenses from the Master Portfolio.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

Each Feeder Fund’s respective interest in the corresponding Master Portfolio as of June 30, 2008 is as follows:


	Interest in
	Master Portfolio

Internet Fund		99.993%
Global Fund		99.801%
Paradigm Fund		98.712%
Medical Fund		99.920%
Small Cap Fund		99.996%
Government Fund		98.658%
Market Opportunities Fund		99.990%
Water Infrastructure Fund		99.615%
Multi-Disciplinary Fund		80.104%

Prior to the conversion to a master-feeder fund structure on April 28, 2000, each then existing series conducted its own investment operations.

As of June 30, 2008, each of the Feeder Funds, except the Government Fund, offer Advisor Class A shares. Advisor Class A shares are subject to an annual Rule 12b-1 fee of 0.25% of average daily net assets and a service fee of 0.25% of average daily net assets. The Advisor Class A shares are also subject to a front-end sales charge of 5.75%.

As of June 30, 2008 each of the Feeder Funds, except the Government Fund, offer Advisor Class C shares. Advisor Class C shares are subject to an annual Rule 12b-1 fee of 0.75% of average daily net assets and a service fee of 0.25% of average daily net assets. Advisor Class C shares do not have a sales charge.

As of June 30, 2008 each of the Feeder Funds offer No Load Class shares. No Load Class shares are subject to a service fee of 0.25% of average daily net assets but do not have 12b-1 fees or a sales charge.

As of June 30, 2008 the Paradigm, Small Cap, Market Opportunities, Water Infrastructure and Multi-Disciplinary Funds offer Institutional Class shares. Institutional Class shares are subject to a service fee of 0.20% of average daily net assets but do not have 12b-1 fees or a sales charge.

Each class of shares for each Fund has identical rights and privileges except with respect to the Rule 12b-1 fees paid by the Advisor Class A and Advisor Class C shares, the sales charge on the Advisor Class A and Advisor Class C shares, the service fees paid by the Advisor Class A, Advisor Class C, No Load Class and Institutional Class, voting rights on matters pertaining to a single class of shares and the exchange privileges of each class of shares. Shares of each Feeder Fund, except the Government Fund, will assess a 2.00%

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

redemption fee (with exceptions) on shares redeemed or exchanged within 30 days of purchase.

Refer to the Master Portfolio’s financial statements to obtain information about the investment objective of the corresponding Feeder Fund. The financial statements of the Master Portfolios, including the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.

2. Significant Accounting Policies

Security Valuation

Master Portfolio securities (other than securities held by the Kinetics Government Money Market Portfolio) that are listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. All equity securities that are traded using the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) are valued using the NASDAQ Official Closing Price (“NOCP”). In the event market quotations are not readily available or if events occur that may materially affect the value of a particular security between the time trading ends on a particular security and the close of regular trading on the New York Stock Exchange (“NYSE”), “fair value” will be determined. Purchased options, futures, unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the mean of the most recent bid and asked prices. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Investment securities in The Kinetics Government Money Market Portfolio and instruments with remaining maturities of 60 days or less are valued at amortized cost, which approximates fair value. Other assets and securities for which no quotations are readily available (including restricted securities) are valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. At June 30, 2008, none of the Master Portfolios held securities which were fair valued.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

In September 2006, the Financial Accounting Standards Board Issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements.” The Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Statement establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The Master Portfolios adopted the Statement effective January 1, 2008. See the Notes to Financial Statements for the Master Portfolios for a discussion of this statement.

Repurchase Agreements

Each Master Portfolio may enter into repurchase agreements with banks that are members of the Federal Reserve System or securities dealers who are members of a national securities exchange or are primary dealers in U.S. Government Securities. In connection with transactions in repurchase agreements, it is the Trust’s policy that the Master Portfolio receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 100% of the amount invested by the Master Portfolio in each repurchase agreement. If the seller defaults, and the value of the collateral declines, realization of the collateral by the Master Portfolio may be delayed or limited.

Written Option Accounting

The Master Portfolios may write (sell) call or put options for trading or hedging purposes. When a Master Portfolio writes an option, an amount equal to the premium received by the Master Portfolio is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. By writing the option, the Master Portfolio may become obligated during the term of the option to deliver or purchase the securities underlying the option at the exercise price if the option is exercised. Option contracts are valued at the average of the current bid and asked price reported on the day of the valuation. When an option expires on its stipulated expiration date or the Master Portfolio enters into a closing purchase transaction, the Master Portfolio realizes a gain or loss if the cost of the closing transaction differs from the premium received when the option was sold,

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the underlying security (or increases the proceeds on the security sold short) and the Master Portfolio realizes a gain or loss from the sale of the security (or closing of the short sale). As collateral for uncovered written options, the Master Portfolio is required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the market value of the purchase obligation for put options or the market value of the instrument underlying the contract for call options.

Foreign Currency Translations

The books and records of the Master Portfolios are maintained in U.S. dollars. For the Master Portfolios, foreign currency transactions are translated into U.S. dollars on the following basis: (i) market values of investment securities and other assets and liabilities are translated at the exchange rate of such currencies against the U.S. dollar, as provided by an approved pricing service, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Master Portfolios do not isolate and treat as ordinary income that portion of the results of operations arising as a result of changes in the exchange rate from the fluctuations arising from changes in the market prices of securities held during the period. However, for federal income tax purposes, the Master Portfolios do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.

Restricted Securities

The Master Portfolios may invest in restricted securities. These securities are valued by the Master Portfolios after giving due consideration to pertinent factors including recent private sales, market conditions and the issuer’s financial performance. The Master Portfolios have no right to require registration of unregistered securities. At June 30, 2008, the Master Portfolios did not hold any investment securities which were determined to be illiquid pursuant to the guidelines adopted by the Board of Trustees.

When-Issued Securities

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

may be delivered and paid for at a future date. The Master Portfolios record purchases of when-issued securities and reflect the values of such securities in determining net asset value in the same manner as other portfolio securities. The Master Portfolios maintain at all times cash or other liquid assets in an amount at least equal to the amount of outstanding commitments for when-issued securities.

Securities Lending

Each Master Portfolio may lend its portfolio securities to broker-dealers by entering directly into lending arrangements with such broker-dealers or indirectly through repurchase agreements with respect to no more than 331/3% of the total assets of each Portfolio (including any collateral posted) or 50% of the total assets of each Portfolio (excluding any collateral posted). Securities lending and repurchase transactions will be fully collateralized at all times with cash and/or short-term debt obligations. The Master Portfolios receive interest on the collateral received as well as a fee for the securities loaned.

Expense Allocation

Common expenses incurred by Feeder Funds are allocated among the Feeder Funds (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Feeder Funds, depending on the nature of the expenditure.

Each Feeder Fund records its proportionate share of the corresponding Master Portfolio’s expenses on a daily basis. In addition, each Feeder Fund accrues its own separate expenses. Any cap on expenses includes Feeder Fund-specific expenses as well as the expenses allocated from the Master Portfolio.

Federal Income Taxes

Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in the Portfolio will be subject to taxation on its share of the Portfolio’s ordinary income and capital gains. It is intended that the Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of subchapter M of the Internal Revenue Code.

It is the Feeder Funds’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and the Feeder Funds intend to distribute investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded. Dividends from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. The character of distributions made during the year from net investment income or net realized

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expenses and gain items for financial statement and tax purposes. Additionally, the Feeder Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes. Where appropriate, reclassifications between capital accounts are made for such differences that are permanent in nature.

Effective June 29, 2007, the Feeder Funds adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes”. FIN 48 requires the evaluation of tax positions taken on previously filed tax returns or expected to be taken on future returns. These positions must meet a “more likely than not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained upon examination. In evaluating whether a tax position has met the recognition threshold, the Funds must presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax expense in the current year.

FIN 48 requires the Feeder Funds to analyze all open tax years, as defined by the relevant statute of limitations, for all major jurisdictions. Open tax years are those that are open for examination by taxing authorities. Major jurisdictions for the Funds include the Federal Government and the state of New York. As of June 30, 2008, open Federal and New York tax years include the tax years ended December 31, 2003 through 2007. The Funds have no examination in progress.

The Feeder Funds have reviewed all open tax years and major jurisdictions and concluded that the adoption of FIN 48 resulted in no effect to the Funds’ financial position or results of operations. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next six months.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.

Other

Realized gains and losses on the sale of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recognized on the accrual basis. Other noncash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Company’s understanding of the applicable country’s tax rules and rates.

3. Investment Adviser

The Adviser has voluntarily agreed to continue to pay certain operating expenses as deemed appropriate. The Adviser may discontinue the voluntary reimbursement at any time; these reimbursements are not subject to recapture. For the six months ended June 30, 2008, the amounts earned by the Adviser and the reimbursed expenses for the Feeder Funds are as follows:


	Internet		Global

Annual Advisory Rate		1.25%		1.25%
Expenses Reimbursed by Adviser through voluntary waiver	$	43,295	$	64,552
Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	—	$	—

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)


	Paradigm		Medical

Annual Advisory Rate		1.25%		1.25%
Expenses Reimbursed by Adviser through voluntary waiver	$	357,459	$	77,617
Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	549,412	$	—


	Small Cap		Government

Annual Advisory Rate		1.25%		0.50%
Expenses Reimbursed by Adviser through voluntary waiver	$	378,966	$	26,798
Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	197,069	$	—


	Market		Water
	Opportunities		Infrastructure

Annual Advisory Rate		1.25%		1.25%
Expenses Reimbursed by Adviser through voluntary waiver	$	57,256	$	40,326
Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	1	$	120


	Multi-Disciplinary

Annual Advisory Rate		1.25%
Expenses Reimbursed by Adviser through voluntary waiver	$	25,175
Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	58

The Adviser receives a shareholder servicing fee from the No Load, Class A and Class C shares of a Feeder Fund pursuant to a Shareholder Servicing Agreement in the amount equal to 0.25% of the Feeder Fund’s average daily net assets attributable to No Load Class, Class A and Class C shares, respectively. For the Institutional Class, the Adviser receives a shareholder servicing fee pursuant to a shareholder servicing agreement in the amount equal to 0.20% of a Feeder Fund’s average daily net assets attributable to Institutional Class shares. At this time, the Investment Adviser has contractually agreed to waive and/or reimburse the portion of the Institutional Class shareholder servicing fee in excess of 0.05% of a Feeder Fund’s average daily net assets attributable to Institutional Class shares until at least May 1, 2009. For the six months ended June 30, 2008, the Adviser waived amounts depicted in the above table in shareholder servicing fees for the Institutional Class of the Paradigm Fund, the Small Cap Fund, the Market Opportunities Fund, the Water Infrastructure Fund and the Multi-Disciplinary Fund. The

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

Adviser is responsible for paying a portion of these shareholder servicing fees to various agents that have a written shareholder servicing agreement with the Adviser and that perform shareholder servicing functions and maintenance of shareholder accounts on behalf of their clients who own shares of the Feeder Funds.

For the six months ended June 30, 2008, the Feeder Funds were allocated $12,000 for the services of the Chief Compliance Officer employed by the Adviser.

The Company, on behalf of the Feeder Funds, has adopted two Retail Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the “12b-1 Plans”). One Plan is for Advisor Class A shares, while the other Plan is for Advisor Classes B and C shares. Under the first Plan, Advisor Class A shares may pay up to an annual rate of 0.50% of the average daily net asset value of Advisor Class A shares to the Distributor or other qualified recipients under the Plan. During the six months ended June 30, 2008, payments under the 12b-1 Plan for the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water and Multi-Disciplinary Funds were limited to 0.25% of the average daily net asset value of such shares of such Funds. During the six months ended June 30, 2008, the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure and Multi-Disciplinary Funds incurred expenses of $652, $4, $668,050, $1,903, $38,031, $47,366, $3,502 and $97 respectively, pursuant to the 12b-1 Plan. Under the second Plan, Advisor Classes B and C shares pay an annual rate of 0.75% of the average daily net asset value of such shares. During the six months ended June 30, 2008, Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure and Multi-Disciplinary Funds Advisor Class C Shares incurred expenses of $619, $8, $1,218,759, $594, $17,760, $29,278, $5,321, and $288 respectively, pursuant to the 12b-1 Plan. Through June 30, 2008, the Funds had not issued any Advisor Class B shares.

Kinetics Funds Distributor, Inc. (the “Distributor”) acts as the Feeder Funds’ principal underwriter in a continuous public offering of the Feeder Funds’ shares. The Distributor is an affiliate of the Adviser. For the six months ended June 30, 2008, the Distributor received $222, $222, $244,212, $789, $14,236, $29,931, $5,693, and $12 from sales loads from the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Water Infrastructure, and Multi-Disciplinary Funds.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

4. Reclassification of Capital Accounts

Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended December 31, 2007, each Fund recorded the following reclassifications to the accounts listed below:


	INCREASE (DECREASE)
				Accumulated
				Net			Accumulated
				Investment			Net Realized
	Paid-in-Capital			Income(Loss)			Loss

The Internet Fund	$	—		$	(1,972	)	$	1,972
The Global Fund		(402	)		148			254
The Paradigm Fund		744,082			2,834,881			(3,578,963	)
The Medical Fund		218,475			(10,271	)		(208,204	)
The Small Cap Opportunities Fund		—			5,328,084			(5,328,084	)
The Kinetics Government Money Market Fund		—			—			—
The Market Opportunities Fund		—			2,340			(2,340	)
The Water Infrastructure Fund		(3,589	)		3,593			(4	)

5. Income Taxes

At December 31, 2007 the Internet, Global, Paradigm, Medical, Small Cap, Government, Market Opportunities, and Water Infrastructure Funds had $171,807, $0, $1,578, $7,298, $39,101, $0, $106,543 and $3,593, respectively, of undistributed net investment income on a tax basis.

At December 31, 2007 the Paradigm, Medical, and Small Cap Funds had $6,263,516, $28,115, and $4,096,529 respectively, of accumulated gains on a tax basis.

At December 31, 2007, the Feeder Funds had accumulated net realized capital loss carryforwards expiring in the following years.


Feeder Fund	2015		2014		2013		2011		2010		2009		2008

Internet	$	—	$	16,077,777	$	6,777,871	$	—	$	140,178,775	$	19,078,127	$	—
Global		—		—		4,885		887,154		2,635,504		5,481,052		2,046,239
Paradigm		—		—		—		—		—		—		—
Medical		—		—		—		—		—		—		—
Small Cap		—		—		—		—		—		—		—
Government		—		—		—		—		—		—		—
Market Opportunities		40,803		21		—		—		—		—		—
Water Infrastructure		—		—		—		—		—		—		—

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

To the extent that the Feeder Funds realize future net capital gains, those gains will be offset by any unused capital loss carryforwards. For the year ended December 31, 2007, Internet, Global, and Small Cap Funds utilized $15,041,179, $303,648, and $1,496,664, respectively, of capital loss carryforwards.

At December 31, 2007, the following Feeder Funds deferred, on a tax basis, post-October losses and straddle losses of:


			Post-October
Feeder Fund	Post-October Losses		Currency Losses		Straddle Losses

Internet	$	—	$	269		—
Global		—		—		—
Paradigm		—		—		—
Medical		70,829		—		88,724
Small Cap		—		2,907		—
Government		—		—		—
Market Opportunities		101,419		911		—
Water Infrastructure		—		—		—

The tax components of dividends paid during the years ended December 31, 2007 and December 31, 2006, are:


	Internet				Global
	Ordinary Income		Long-Term Capital		Ordinary Income		Long-Term Capital
	Distribution		Gains Distribution		Distribution		Gains Distribution

2007	$	1,637,709	$	—	$	188,230	$	—
2006	$	517,918	$	—	$	136,199	$	—


	Paradigm				Medical
	Ordinary Income		Long-Term Capital		Ordinary Income		Long-Term Capital
	Distribution		Gains Distribution		Distribution		Gains Distribution

2007	$	21,067,887	$	14,769,168	$	185,181	$	539,043
2006	$	12,435,794	$	3,162,407	$	29,493	$	1,054,815


	Small Cap				Government
	Ordinary Income		Long-Term Capital		Ordinary Income		Long-Term Capital
	Distribution		Gains Distribution		Distribution		Gains Distribution

2007	$	5,200,341	$	5,315,033	$	43,527	$	—
2006	$	1,131,237	$	—	$	44,708	$	—


	Market Opportunities				Water Infrastructure
	Ordinary Income		Long-Term Capital		Ordinary Income		Long-Term Capital
	Distribution		Gains Distribution		Distribution		Gains Distribution

2007	$	141,323	$	—	$	51,156	$	—
2006	$	44,530	$	—		N/A		N/A

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

6. Tax Information

The Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, and Water Infrastructure Funds designate 46%, 46%, 99%, 96%, 68%, 23%, and 52%, respectively, of dividends declared after December 31, 2007 from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.

The Paradigm, Medical, and Small Cap Funds hereby designate 26%, 59%, and 50%, respectively, as ordinary income distributions and 74%, 41%, and 50% respectively, as long-term capital gain distributions for the purposes of the dividends paid deduction, which include earnings and profits distributed to shareholders on redemptions of Fund shares.

For corporate shareholders in the Funds, the percentage of ordinary dividend income distributed for the year ended December 31, 2007, which is designated as qualifying for the dividends-received deduction, is as follows: Internet 40%, Global 31%, Paradigm 89%, Medical 96%, Small Cap 36%, Market Opportunities 12%, and Water Infrastructure 30%.

The Internet, Global, Paradigm, Medical, Small Cap, Government, Market Opportunities, and Water Infrastructure Funds designate 16%, 14%, 29%, 15%, 29%, 100%, 18% and 100%, respectively, of their ordinary income distributions for the fiscal year as interest-related dividends under Internal Revenue Code Section 871(k)(l)(C).

The Internet, Global, Paradigm, Medical, Small Cap, Government, Market Opportunities, and Water Infrastructure Funds designate 0%, 0%, 25%, 53%, 0%, 0%, 0% and 61%, respectively, of their ordinary income distributions as short-term capital gain distributions under Internal Revenue Code Section 871(k)(2)(C).

7. New Accounting Pronouncements

In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) was issued. SFAS 161 is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivative instruments and hedging activities are accounted for, and how derivative instruments and related hedging activities affect an entity’s financial performance and financial

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

position. Management is currently evaluating the implications of SFAS 161. The impact on the Funds’ financial statement disclosures, if any, is currently being assessed.

8. Results of Shareholder Meeting

At a meeting held on December 6, 2007, the Board of Directors of the Company and the Board of Trustees of the Trust, approved: (1) changing the Internet Emerging Growth Fund/Internet Emerging Growth Portfolio (the “Fund/Portfolio”) investment strategy such that it will invest at least 65% of its net assets in the equity securities of foreign companies and U.S. companies with business operations and/or equity or business interests in international markets (the Fund’s/Portfolio’s investment strategy currently requires it to invest at least 80% of its net assets plus any borrowings for investment purposes in the securities of small and medium capitalization U.S. and foreign emerging growth companies engaged in the Internet and Internet-related activities); (2) changing the Fund’s/Portfolio’s fundamental investment restriction relating to industry concentration by eliminating the Fund’s/Portfolio’s ability to concentrate its investments in the Internet and Internet-related industries; and (3) changing the name of the Fund to the Global Fund and the name of the Portfolio to the Global Portfolio. On February 27, 2008, a special meeting of shareholders of the Fund was held and the change in the Fund’s/Portfolio’s fundamental restriction relating to industry concentration was approved. The voting results of the special meeting of shareholders are shown below:


Votes for the Resolution:	Votes against the Resolution:		Abstain:

387,034.564		37,097.753		8,806.765

9. Information about Proxy Voting

Information regarding how Kinetics Mutual Funds, Inc. votes proxies relating to portfolio securities is available without charge, upon request by calling toll-free at 1-800-930-3828 or by accessing the Funds’ website at www.kineticsfunds.com and by accessing the SEC’s website at www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

10. Information about the Portfolio Holdings

The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Funds’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov. Finally, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Internet Fund
	No Load Class			Advisor Class A			Advisor Class C			No Load Class			Advisor Class A
	For the Six			For the Six			For the Six			For the			For the
	Months Ended			Months Ended			Months Ended			Year Ended			Year Ended
	June 30, 2008			June 30, 2008			June 30, 2008			December 31,			December 31,
	(Unaudited)			(Unaudited)			(Unaudited)			2007			2007


PER SHARE DATA:⁽¹⁾
Net Asset Value,
Beginning of Period	$	35.94		$	35.66		$	35.31		$	28.62		$	28.24

Income from Investment Operations:
Net investment income (loss)		0.13	⁽²⁾		0.09	⁽²⁾		0.02	⁽²⁾		0.30	⁽²⁾		0.23	⁽²⁾
Net realized and unrealized gain (loss) on investments		(7.31	)		(7.26	)		(7.18	)		7.37			7.49

Total from investment operations		(7.18	)		(7.17	)		(7.16	)		7.67			7.72

Redemption fees		0.00	⁽³⁾		0.00	⁽³⁾		—			0.00	⁽³⁾		—
Less Distributions:
From net investment income		—			—			—			(0.35	)		(0.30	)
From net realized gains		—			—			—			—			—

Total distributions		—			—			—			(0.35	)		(0.30	)

Net Asset Value, End of Period	$	28.76		$	28.49		$	28.15		$	35.94		$	35.66

Total Return⁽⁴⁾		(19.98	)%⁽⁵⁾		(20.11	)%⁽⁵⁾		(20.28	)%⁽⁵⁾		26.81	%		27.35	%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	113,720		$	464		$	119		$	166,787		$	637
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.97	%⁽⁶⁾		2.22	%⁽⁶⁾		2.72	%⁽⁶⁾		1.99	%		2.24	%
After expense reimbursement⁽⁷⁾		1.90	%⁽⁶⁾		2.15	%⁽⁶⁾		2.65	%⁽⁶⁾		1.98	%		2.23	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.78	%⁽⁶⁾		0.53	%⁽⁶⁾		0.03	%⁽⁶⁾		0.94	%		0.70	%
After expense reimbursement⁽⁷⁾		0.85	%⁽⁶⁾		0.60	%⁽⁶⁾		0.10	%⁽⁶⁾		0.95	%		0.71	%
Portfolio turnover rate		N/A			N/A			N/A			N/A			N/A


ˆ	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Internet Fund
	Advisor Class C			No Load Class			Advisor Class A			No Load Class			Advisor Class A			No Load Class			Advisor Class A			No Load Class			Advisor Class A
	February 16, 2007ˆ			For the			For the			For the			For the			For the			For the			For the			For the
	through			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2006			2005			2005			2004			2004			2003			2003





	$	28.66		$	24.66		$	24.40		$	25.29		$	24.93		$	23.31		$	22.88		$	16.69		$	16.47


		0.07	⁽²⁾		(0.08	)⁽²⁾		(0.14	)⁽²⁾		0.11	⁽²⁾		0.05	⁽²⁾		0.10	⁽²⁾		0.05	⁽²⁾		0.03			(0.82	)

		6.87			4.15			4.09			(0.54	)		(0.44	)		2.25			2.23			6.66			7.23


		6.94			4.07			3.95			(0.43	)		(0.39	)		2.35			2.28			6.69			6.41

		0.00	⁽³⁾		0.00	⁽³⁾		—			0.00	⁽³⁾		0.00	⁽³⁾		—			—			—			—

		(0.29	)		(0.11	)		(0.11	)		(0.20	)		(0.14	)		(0.37	)		(0.23	)		(0.07	)		—
		—			—			—			—			—			—			—			—			—

		(0.29	)		(0.11	)		(0.11	)		(0.20	)		(0.14	)		0.37			(0.23	)		(0.07	)		—

	$	35.31		$	28.62		$	28.24		$	24.66		$	24.40		$	25.29		$	24.93		$	23.31		$	22.88

		24.22	%⁽⁵⁾		16.50	%		16.18	%		(1.69	)%		(1.55	)%		10.06	%		9.95	%		40.11	%		38.92	%

	$	294		$	137,012		$	235		$	148,260		$	300		$	201,929		$	354		$	230,971		$	428


		2.73	%⁽⁶⁾		1.98	%		2.23	%		2.35	%		2.60	%		2.37	%		2.62	%		2.39	%		2.64	%
		2.72	%⁽⁶⁾		1.85	%		2.10	%		2.35	%		2.60	%		2.37	%		2.62	%		2.39	%		2.64	%


		0.22	%⁽⁶⁾		(0.42	)%		(0.67	)%		0.46	%		0.21	%		0.44	%		0.19	%		0.11	%		(0.14	)%
		0.23	%⁽⁶⁾		(0.29	)%		(0.54	)%		0.46	%		0.21	%		0.44	%		0.19	%		0.11	%		(0.14	)%
		N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Global Fund
	No Load Class			Advisor Class A			Advisor Class C
	For the Six			May 19, 2008			May 19, 2008
	Months Ended			through			through
	June 30, 2008			June 30, 2008			June 30, 2008
	(Unaudited)			(Unaudited)			(Unaudited)



PER SHARE DATA:⁽¹⁾
Net Asset Value,
Beginning of Period	$	4.90		$	4.56		$	4.56

Income from Investment Operations:
Net investment income		0.04	⁽²⁾		0.00	⁽²⁾⁽³⁾		0.00	⁽²⁾⁽³⁾
Net realized and unrealized gain (loss) on investments		(1.19	)		(0.81	)		(0.81	)

Total from investment operations		(1.15	)		(0.81	)		(0.81	)

Redemption fees		0.00	⁽³⁾		—			—
Less Distributions:
From net investment income		—			—			—
From net realized gains		—			—

Total distributions		—			—			—

Net Asset Value, End of Period	$	3.75		$	3.75		$	3.75

Total Return⁽⁴⁾		(23.47	)%⁽⁵⁾		(17.76	)%⁽⁵⁾		(17.76	)%⁽⁵⁾



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	3,026		$	46		$	8
Ratio of expenses to average net assets:
Before expense reimbursement		5.47	%⁽⁶⁾		12.59	%⁽⁶⁾		13.09	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.42	%⁽⁶⁾		1.64	%⁽⁶⁾		2.14	%⁽⁶⁾
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(2.25	)%⁽⁶⁾		(10.12	)%⁽⁶⁾		(10.62	)%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.80	%⁽⁶⁾		0.83	%⁽⁶⁾		0.33	%⁽⁶⁾
Portfolio turnover rate		N/A			N/A			N/A


ˆ	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Global Fund
For the			For the			For the			For the			For the
Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
December 31,			December 31,			December 31,			December 31,			December 31,
2007			2006			2005			2004			2003




$	5.00		$	4.43		$	4.50		$	4.28		$	3.24


	0.22			0.13			0.15			0.08			0.04
	(0.01	)		0.62			(0.03	)		0.25			1.05

	0.21			0.75			0.12			0.33			1.09

	0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		—			—

	(0.31	)		(0.18	)		(0.19	)		(0.11	)		(0.05	)
	—			—			—			—			—

	(0.31	)		(0.18	)		(0.19	)		(0.11	)		(0.05	)

$	4.90		$	5.00		$	4.43		$	4.50		$	4.28

	4.27	%		16.90	%		2.65	%		7.67	%		33.56	%

$	3,138		$	3,991		$	3,896		$	4,584		$	4,677

	3.84	%		3.09	%		3.22	%		3.45	%		3.64	%
	1.48	%		1.39	%		2.69	%		2.67	%		2.74	%

	1.87	%		3.00	%		2.80	%		1.08	%		0.11	%
	4.23	%		1.30	%		3.33	%		1.84	%		1.01	%
	N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Paradigm Fund
				Advisor			Advisor			Institutional
	No Load Class			Class A			Class C			Class
	For the			For the			For the			For the
	Six Months			Six Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30, 2008			June 30, 2008			June 30, 2008			June 30, 2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)


PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	30.99		$	30.52		$	29.90		$	30.97

Income from Investment Operations:
Net investment income (loss)		0.06	⁽²⁾		0.03	⁽²⁾		(0.04	)⁽²⁾		0.07	⁽²⁾
Net realized and unrealized gain (loss) on investments		(5.90	)		(5.81	)		(5.68	)		(5.87	)

Total from investment operations		(5.84	)		(5.78	)		(5.72	)		(5.80	)

Redemption fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Less Distributions:
From net investment income		—			—			—			—
From net realized gains		—			—			—			—

Total distributions		—			—			—			—

Net Asset Value, End of Period	$	25.15		$	24.74		$	24.18		$	25.17

Total Return⁽⁴⁾		(18.85	)%⁽⁵⁾		(18.94	)%⁽⁵⁾		(19.13	)%⁽⁵⁾		(18.76	)%⁽⁵⁾



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	2,068,229		$	528,582		$	324,539		$	689,166
Ratio of expenses to average net assets:
Before expense reimbursement		1.69	%⁽⁶⁾		1.94	%⁽⁶⁾		2.44	%⁽⁶⁾		1.64	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.67	%⁽⁶⁾		1.92	%⁽⁶⁾		2.42	%⁽⁶⁾		1.47	%⁽⁶⁾
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.39	%⁽⁶⁾		0.14	%⁽⁶⁾		(0.36	)%⁽⁶⁾		0.44	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		0.41	%⁽⁶⁾		0.16	%⁽⁶⁾		(0.34	)%⁽⁶⁾		0.61	%⁽⁶⁾
Portfolio turnover rate		N/A			N/A			N/A			N/A


ˆ	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Paradigm Fund
				Advisor			Advisor			Institutional						Advisor
	No Load Class			Class A			Class C			Class			No Load Class			Class A
	For The			For The			For The			For The			For the			For the
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2007			2007			2007			2006			2006



	$	25.79		$	25.43		$	24.98		$	25.76		$	20.33		$	20.08


		0.11	⁽²⁾		0.04	⁽²⁾		(0.10	)⁽²⁾		0.17	⁽²⁾		0.14	⁽²⁾		0.08	⁽²⁾

		5.35			5.27			5.15			5.34			5.52			5.43

		5.46			5.31			5.05			5.51			5.66			5.51

		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾

		(0.13	)		(0.09	)		(0.00	)⁽³⁾		(0.17	)		(0.16	)		(0.12	)
		(0.13	)		(0.13	)		(0.13	)		(0.13	)		(0.04	)		(0.04	)

		(0.26	)		(0.22	)		(0.13	)		(0.30	)		(0.20	)		(0.16	)

	$	30.99		$	30.52		$	29.90		$	30.97		$	25.79		$	25.43

		21.15	%		20.87	%		20.20	%		21.37	%		27.81	%		27.42	%

	$	2,910,518		$	544,046		$	320,962		$	804,755		$	1,337,761		$	183,031

		1.68	%		1.93	%		2.43	%		1.63	%		1.79	%		2.04	%
		1.68	%		1.93	%		2.43	%		1.48	%		1.63	%		1.88	%

		0.39	%		0.14	%		(0.36	)%		0.44	%		0.44	%		0.19	%
		0.39	%		0.14	%		(0.36	)%		0.59	%		0.60	%		0.35	%
		N/A			N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Paradigm Fund
	Advisor									Advisor			Advisor
	Class C			Institutional Class			No Load Class			Class A			Class C
	For the			For the			For the			For the			For the
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2006			2005			2005			2005


PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	19.76		$	20.31		$	17.54		$	17.40		$	17.21

Income from Investment Operations:
Net investment income (loss)		(0.03	)⁽²⁾		0.19	⁽²⁾		(0.03	)⁽²⁾		(0.07	)⁽²⁾		(0.17	)⁽²⁾
Net realized and unrealized gain (loss) on investments		5.33			5.49			2.82			2.77			2.74

Total from investment operations		5.30			5.68			2.79			2.70			2.57

Redemption fees		0.00	⁽³⁾		—			0.03			0.00	⁽³⁾		0.00	⁽³⁾
Less Distributions:
From net investment income		(0.04	)		(0.19	)		(0.01	)		—			—
From net realized gains		(0.04	)		(0.04	)		(0.02	)		(0.02	)		(0.02	)

Total distributions		(0.08	)		(0.23	)		(0.03	)		(0.02	)		(0.02	)

Net Asset Value, End of Period	$	24.98		$	25.76		$	20.33		$	20.08		$	19.76

Total Return⁽⁴⁾		26.82	%		27.96	%		16.11	%		15.54	%		14.96	%



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	116,226		$	507,314		$	418,914		$	60,421		$	38,740
Ratio of expenses to average net assets:
Before expense reimbursement		2.54	%		1.74	%		1.93	%		2.18	%		2.68	%
After expense reimbursement⁽⁷⁾		2.38	%		1.43	%		1.69	%		1.94	%		2.44	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.31	)%		0.48	%		(0.41	)%		(0.66	)%		(1.16	)%
After expense reimbursement⁽⁷⁾		(0.15	)%		0.79	%		(0.17	)%		(0.42	)%		(0.92	)%
Portfolio turnover rate		N/A			N/A			N/A			N/A			N/A


ˆ	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Paradigm Fund
	Institutional Class			No Load			Advisor			Advisor			No Load			Advisor			Advisor
	For the Period			Class			Class A			Class C			Class			Class A			Class C
	May 27, 2005ˆ			For the			For the			For the			For the			For the			For the
	through			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2005			2004			2004			2004			2003			2003			2003



	$	18.13		$	14.91		$	14.82		$	14.73		$	10.12		$	10.07		$	10.05


		0.01	⁽²⁾		(0.06	)⁽²⁾		(0.10	)		(0.18	)		0.05			0.08			0.02

		2.23			3.17			3.16			3.14			4.79			4.70			4.67

		2.24			3.11			3.06			2.96			4.84			4.78			4.69

		—			—			—			—			—			—			—

		(0.04	)		(0.02	)		(0.02	)		(0.02	)		(0.05	)		(0.03	)		(0.01	)
		(0.02	)		(0.46	)		(0.46	)		(0.46	)		—			—			—

		(0.06	)		(0.48	)		(0.48	)		(0.48	)		(0.05	)		(0.03	)		(0.01	)

	$	20.31		$	17.54		$	17.40		$	17.21		$	14.91		$	14.82		$	14.73

		12.35	%⁽⁵⁾		20.84	%		20.63	%		20.08	%		47.87	%		47.47	%		46.68	%

	$	10,895		$	89,313		$	26,525		$	9,426		$	57,646		$	13,157		$	2,125

		1.88	%⁽⁶⁾		2.10	%		2.35	%		2.85	%		2.24	%		2.49	%		2.99	%
		1.49	%⁽⁶⁾		1.74	%		1.99	%		2.49	%		1.74	%		1.99	%		2.49	%


		(0.37	)%⁽⁶⁾		(0.77	)%		(1.02	)%		(1.52	)%		0.57	%		0.32	%		(0.18	)%
		0.02	%⁽⁶⁾		(0.41	)%		(0.66	)%		(1.16	)%		1.07	%		0.82	%		0.32	%
		N/A			N/A			N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Medical Fund
	No Load Class			Advisor Class A			Advisor Class C			No Load Class			Advisor Class A
	For the Six			For the Six			For the Six			For the			For the
	Months Ended			Months Ended			Months Ended			Year Ended			Year Ended
	June 30, 2008			June 30, 2008			June 30, 2008			December 31,			December 31,
	(Unaudited)			(Unaudited)			(Unaudited)			2007			2007


PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	19.82		$	19.39		$	19.34		$	17.83		$	17.47

Income from Investment Operations:
Net investment income (loss)		0.15	⁽²⁾		0.13	⁽²⁾		0.08	⁽²⁾		0.10	⁽²⁾		0.05	⁽²⁾
Net realized and unrealized gain (loss) on investments		(0.72	)		(0.71	)		(0.70	)		2.67			2.62

Total from investment operations		(0.57	)		(0.58	)		(0.62	)		2.77			2.67

Redemption Fees		0.00	⁽³⁾		—			—			0.01			0.00	⁽³⁾
Less Distributions:
From net investment income		—			—			—			(0.10	)		(0.06	)
From net realized gains		—			—			—			(0.69	)		(0.69	)

Total distributions		—			—			—			(0.79	)		(0.75	)

Net Asset Value, End of Period	$	19.25		$	18.81		$	18.72		$	19.82		$	19.39

Total Return⁽⁴⁾		(2.88	)%⁽⁵⁾		(2.99	)%⁽⁵⁾		(3.21	)%⁽⁵⁾		15.47	%		15.16	%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	16,204		$	1,726		$	128		$	13,917		$	1,427
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.31	%⁽⁶⁾		2.56	%⁽⁶⁾		3.06	%⁽⁶⁾		2.41	%		2.66	%
After expense reimbursement⁽⁷⁾		1.42	%⁽⁶⁾		1.67	%⁽⁶⁾		2.17	%⁽⁶⁾		1.40	%		1.65	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.73	%⁽⁶⁾		0.48	%⁽⁶⁾		(0.02	)%⁽⁶⁾		(0.51	)%		(0.76	)%
After expense reimbursement⁽⁷⁾		1.62	%⁽⁶⁾		1.37	%⁽⁶⁾		0.87	%⁽⁶⁾		0.50	%		0.25	%
Portfolio turnover rate		N/A			N/A			N/A			N/A			N/A


ˆ	Commencement of operations
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Medical Fund
	Advisor Class C			No Load Class			Advisor Class A			No Load Class			Advisor Class A			No Load Class			Advisor Class A			No Load Class			Advisor Class A
	February 16,			For the			For the			For the			For the			For the			For the			For the			For the
	2007ˆ through			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2006			2005			2005			2004			2004			2003			2003




	$	18.29		$	16.64		$	16.34		$	16.76		$	16.49		$	15.67		$	15.47		$	12.72		$	12.61


		(0.04	)⁽²⁾		0.06	⁽²⁾		0.01	⁽²⁾		(0.18	)⁽²⁾		(0.22	)⁽²⁾		(0.10	)⁽²⁾		(0.11	)⁽²⁾		(0.25	)		(0.63	)
		1.79			2.40			2.35			0.06			0.07			1.19			1.13			3.20			3.49

		1.75			2.46			2.36			(0.12	)		(0.15	)		1.09			1.02			2.95			2.86

		0.00	⁽³⁾		0.00	⁽³⁾		—			0.00	⁽³⁾		—			—			—			—			—

		(0.01	)		(0.04	)		—			—			—			—			—			—			—
		(0.69	)		(1.23	)		(1.23	)		—			—			—			—			—			—

		(0.70	)		(1.27	)		(1.23	)		—			—			—			—			—			—

	$	19.34		$	17.83		$	17.47		$	16.64		$	16.34		$	16.76		$	16.49		$	15.67		$	15.47

		9.55	%⁽⁵⁾		14.81	%		14.49	%		(0.72	)%		(0.91	)%		6.96	%		6.59	%		23.19	%		22.68	%

	$	148		$	15,527		$	711		$	13,943		$	559		$	19,583		$	696		$	23,695		$	758

		3.19	%⁽⁶⁾		2.28	%		2.53	%		2.48	%		2.73	%		2.54	%		2.79	%		2.52	%		2.77	%
		2.15	%⁽⁶⁾		1.44	%		1.69	%		2.44	%		2.69	%		2.39	%		2.64	%		2.52	%		2.77	%

		(1.30	)%⁽⁶⁾		(0.51	)%		(0.76	)%		(1.14	)%		(1.39	)%		(1.31	)%		(1.56	)%		(1.55	)%		(1.80	)%
		(0.26	)%⁽⁶⁾		0.33	%		0.08	%		(1.10	)%		(1.35	)%		(1.16	)%		(1.41	)%		(1.55	)%		(1.80	)%
		N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Small Cap Opportunities Fund
	No Load Class			Advisor Class A			Advisor Class C			Institutional Class
	For the Six			For the Six			For the Six			For the Six			No Load Class
	Months Ended			Months Ended			Months Ended			Months Ended			For The
	June 30,			June 30,			June 30,			June 30,			Year Ended
	2008			2008			2008			2008			December 31,
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			2007

PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	31.92		$	31.63		$	31.57		$	31.92		$	26.92

Income from Investment Operations:
Net investment income (loss)		0.07	⁽²⁾		0.03	⁽²⁾		(0.03	)⁽²⁾		0.09	⁽²⁾		0.01	⁽²⁾
Net realized and unrealized gain (loss) on investments		(7.85	)		(7.77	)		(7.76	)		(7.85	)		5.29

Total from investment operations		(7.78	)		(7.74	)		(7.79	)		(7.76	)		5.30

Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		—			—			0.00	⁽³⁾
Less Distributions:
From net investment income		—			—			—			—			(0.23	)
From net realized gains		—			—			—			—			(0.07	)

Total distributions		—			—			—			—			(0.30	)

Net Asset Value, End of Period	$	24.14		$	23.89		$	23.78		$	24.16		$	31.92

Total Return⁽⁴⁾		(24.37	)%⁽⁵⁾		(24.47	)%⁽⁵⁾		(24.67	)%⁽⁵⁾		(24.31	)%⁽⁵⁾		19.65	%



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	341,887		$	26,537		$	4,918		$	232,907		$	729,278
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.77	%⁽⁶⁾		2.02	%⁽⁶⁾		2.52	%⁽⁶⁾		1.72	%⁽⁶⁾		1.71	%
After expense reimbursement⁽⁷⁾		1.67	%⁽⁶⁾		1.92	%⁽⁶⁾		2.42	%⁽⁶⁾		1.47	%⁽⁶⁾		1.69	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.39	%⁽⁶⁾		0.14	%⁽⁶⁾		(0.36	)%⁽⁶⁾		0.44	%⁽⁶⁾		0.00	%
After expense reimbursement⁽⁷⁾		0.49	%⁽⁶⁾		0.24	%⁽⁶⁾		(0.26	)%⁽⁶⁾		0.69	%⁽⁶⁾		0.02	%
Portfolio turnover rate		N/A			N/A			N/A			N/A			N/A


ˆ	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Small Cap Opportunities Fund
			Advisor Class C			Institutional									Institutional
Advisor Class A			February 16,			Class			No Load Class			Advisor Class A			Class			No Load Class			Advisor Class A
For the			2007^			For the			For the			For the			For the			For the			For the
Year Ended			through			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
2007			2007			2007			2006			2006			2006			2005			2005


$	26.71		$	28.70		$	26.91		$	21.02		$	20.89		$	21.00		$	18.69		$	18.63


	(0.07	)⁽²⁾		(0.21	)⁽²⁾		0.07	⁽²⁾		0.03	⁽²⁾		(0.03	)⁽²⁾		0.08	⁽²⁾		0.12	⁽²⁾		0.02	⁽²⁾

	5.25			3.33			5.29			5.92			5.88			5.91			2.35			2.38

	5.18			3.12			5.36			5.95			5.85			5.99			2.47			2.40

	0.00	⁽³⁾		0.02			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾

	(0.19	)		(0.20	)		(0.28	)		(0.05	)		(0.03	)		(0.08	)		(0.01	)		(0.01	)
	(0.07	)		(0.07	)		(0.07	)		—			—			—			(0.13	)		(0.13	)

	(0.26	)		(0.27	)		(0.35	)		(0.05	)		(0.03	)		(0.08	)		(0.14	)		(0.14	)

$	31.63		$	31.57		$	31.92		$	26.92		$	26.71		$	26.91		$	21.02		$	20.89

	19.36	%		10.94	%⁽⁵⁾		19.91	%		28.37	%		28.03	%		28.52	%		13.17	%		12.83	%

$	36,390		$	4,942		$	316,709		$	268,875		$	12,444		$	209,592		$	55,979		$	5,205

	1.96	%		2.47	%⁽⁶⁾		1.66	%		1.83	%		2.08	%		1.78	%		1.93	%		2.16	%
	1.94	%		2.45	%⁽⁶⁾		1.49	%		1.58	%		1.83	%		1.38	%		1.66	%		1.94	%

	(0.25	)%		(0.76	)%⁽⁶⁾		0.05	%		(0.14	)%		(0.39	)%		(0.09	)%		0.18	%		(0.17	)%
	(0.23	)%		(0.75	)%⁽⁶⁾		0.22	%		0.11	%		(0.14	)%		0.31	%		0.45	%		0.06	%
	N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Small Cap Opportunities Fund
	Institutional Class
	For the Period			No Load Class			Advisor Class A			No Load Class			Advisor Class A
	August 12, 2005ˆ			For the			For the			For the			For the
	through			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2005			2004			2004			2003			2003

PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	20.48		$	16.55		$	16.50		$	10.04		$	10.03

Income from Investment Operations:
Net investment income (loss)		0.00	⁽²⁾⁽³⁾		0.22	⁽²⁾		0.18	⁽²⁾		0.25			0.15
Net realized and unrealized gain (loss) on investments		0.67			2.49			2.49			6.43			6.47

Total from investment operations		0.67			2.71			2.67			6.68			6.62

Redemption Fees		—			—			—			—			—
Less Distributions:
From net investment income		(0.02	)		(0.16	)		(0.13	)		(0.17	)		(0.15	)
From net realized gains		(0.13	)		(0.41	)		(0.41	)		—			—

Total distributions		(0.15	)		(0.57	)		(0.54	)		(0.17	)		(0.15	)

Net Asset Value, End of Period	$	21.00		$	18.69		$	18.63		$	16.55		$	16.50

Total Return⁽⁴⁾		3.23	%⁽⁵⁾		16.40	%		16.17	%		66.51	%		65.98	%



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	67,586		$	35,702		$	2,929		$	23,665		$	2,075
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.77	%⁽⁶⁾		2.03	%		2.28	%		2.34	%		2.59	%
After expense reimbursement⁽⁷⁾		1.59	%⁽⁶⁾		1.74	%		1.99	%		2.34	%		2.59	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.21	)%⁽⁶⁾		1.01	%		0.76	%		2.14	%		1.89	%
After expense reimbursement⁽⁷⁾		(0.03	)%⁽⁶⁾		1.30	%		1.05	%		2.14	%		1.89	%
Portfolio turnover rate		N/A			N/A			N/A			N/A			N/A


ˆ	Commencement of operations.


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Kinetics Government Money Market Fund
	For the
	Six Months
	Ended			For the			For the			For the			For the			For the
	June 30,			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	2008			December 31,			December 31,			December 31,			December 31,			December 31,
	(Unaudited)			2007			2006			2005			2004			2003


PER SHARE DATA⁽¹⁾
Net Asset Value, Beginning of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from Investment Operations:
Net investment income		0.01			0.04			0.04			0.02			—			—
Net realized and unrealized gain on investments		—			—			—			—			—			—

Total from investment operations		0.01			0.04			0.04			0.02			—			—

Less Distributions:
From net investment income		(0.01	)		(0.04	)		(0.04	)		(0.02	)		—			—

Total distributions		(0.01	)		(0.04	)		(0.04	)		(0.02	)		—			—

Net Asset Value, End of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total Return		0.66	%⁽²⁾		3.77	%		4.45	%		1.88	%		0.00	%		0.00	%



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	2,060		$	1,190		$	1,425		$	1,052		$	1,166		$	3,048
Ratio of operating expenses to average net assets:
Before expense reimbursement		3.73	%⁽³⁾		6.42	%		3.94	%		5.08	%		2.11	%		1.32	%
After expense reimbursement⁽⁴⁾		0.91	%⁽³⁾		0.98	%		0.22	%		1.06	%		0.98	%		0.94	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.57	)%⁽³⁾		(1.74	)%		0.73	%		(2.17	)%		(1.13	)%		(0.38	)%
After expense reimbursement⁽⁴⁾		1.25	%⁽³⁾		3.70	%		4.45	%		1.85	%		0.00	%		0.00	%
Portfolio turnover rate		N/A			N/A			N/A			N/A			N/A			N/A


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Not annualized.
(3)	Annualized.
(4)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Market Opportunities Fund
	No Load Class			Advisor Class A			Advisor Class C			Institutional Class
	For the Six			For the Six			For the Six			May 19, 2008
	Months Ended			Months Ended			Months Ended			through
	June 30, 2008			June 30, 2008			June 30, 2008			June 30, 2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	16.12		$	16.07		$	16.01		$	13.71

Income from Investment Operations:
Net investment income (loss)		0.06	⁽²⁾		0.04	⁽²⁾		0.01	⁽²⁾		0.02	⁽²⁾
Net realized and unrealized gain (loss) on investments		(4.59	)		(4.57	)		(4.55	)		(2.13	)

Total from investment operations		(4.53	)		(4.53	)		(4.54	)		(2.11	)

Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		—
Less Distributions:
From net investment income		—			—			—			—
From net realized gains		—			—			—			—

Total distributions		—			—			—			—

Net Asset Value, End of Period	$	11.59		$	11.54		$	11.47		$	11.60

Total Return⁽⁴⁾		(28.10	)%⁽⁵⁾		(28.19	)%⁽⁵⁾		(28.36	)%⁽⁵⁾		(15.39	)%⁽⁵⁾



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	54,977		$	34,130		$	6,363		$	8
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.78	%⁽⁶⁾		2.03	%⁽⁶⁾		2.53	%⁽⁶⁾		1.77	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.67	%⁽⁶⁾		1.92	%⁽⁶⁾		2.42	%⁽⁶⁾		1.43	%⁽⁶⁾
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.81	%⁽⁶⁾		0.55	%⁽⁶⁾		0.03	%⁽⁶⁾		1.31	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		0.92	%⁽⁶⁾		0.66	%⁽⁶⁾		0.14	%⁽⁶⁾		1.65	%⁽⁶⁾
Portfolio turnover rate		N/A			N/A			N/A			N/A


ˆ	Commencement of operations.

(1) Information presented relates to a share of capital stock outstanding for each period.


(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Market Opportunities Fund
	No Load Class			Advisor Class A			Advisor Class C			No Load Class			Advisor Class A
	For the			For the			February 16, 2007^{^}			January 31, 2006ˆ			January 31, 2006ˆ
	Year Ended			Year Ended			through			through			through
	December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2007			2007			2006			2006


	$	12.05		$	12.04		$	12.99		$	10.00		$	10.00


		0.04	⁽²⁾		0.00	⁽²⁾		(0.05	)⁽²⁾		0.04			0.02
		4.05			4.04			3.07			2.05			2.05

		4.09			4.04			3.02			2.09			2.07

		0.01			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		—

		(0.03	)		(0.01	)		—			(0.04	)		(0.03	)
		—			—			—			—			—

		(0.03	)		(0.01	)		—			(0.04	)		(0.03	)

	$	16.12		$	16.07		$	16.01		$	12.05		$	12.04

		34.03	%		33.54	%		23.25	%⁽⁵⁾		20.85	%⁽⁵⁾		20.68	%⁽⁵⁾

	$	63,004		$	43,907		$	8,790		$	7,994		$	9,591

		1.91	%		2.16	%		2.66	%⁽⁶⁾		2.68	%⁽⁶⁾		2.93	%⁽⁶⁾
		1.74	%		1.99	%		2.49	%⁽⁶⁾		1.46	%⁽⁶⁾		1.71	%⁽⁶⁾

		0.12	%		(0.14	)%		(0.60	)%⁽⁶⁾		(0.76	)%⁽⁶⁾		(1.01	)%⁽⁶⁾
		0.29	%		0.03	%		(0.43	)%⁽⁶⁾		0.46	%⁽⁶⁾		0.21	%⁽⁶⁾
		N/A			N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Water Infrastructure Fund
	No Load Class			Advisor Class A			Advisor Class C			Institutional Class
	For the Six			For the Six			For the Six			For the Six
	Months Ended			Months Ended			Months Ended			Months Ended
	June 30, 2008			June 30, 2008			June 30, 2008			June 30, 2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)


PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	10.17		$	10.17		$	10.16		$	10.18

Income from Investment Operations:
Net investment income		0.08	⁽²⁾		0.07	⁽²⁾		0.05	⁽²⁾		0.09	⁽²⁾
Net realized and unrealized gain (loss) on investments		(0.31	)		(0.32	)		(0.32	)		(0.32	)

Total from investment operations		(0.23	)		(0.25	)		(0.27	)		(0.23	)

Redemption Fees		0.00	⁽³⁾		—			—			—
Less Distributions:
From net investment income		—			—			—			—
From net realized gains		—			—			—			—

Total distributions		—			—			—			—

Net Asset Value, End of Period	$	9.94		$	9.92		$	9.89		$	9.95

Total Return⁽⁴⁾		(2.26	)%⁽⁵⁾		(2.46	)%⁽⁵⁾		(2.66	)%⁽⁵⁾		(2.16	)%⁽⁵⁾

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	20,229		$	3,532		$	1,829		$	286
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.22	%⁽⁶⁾		2.47	%⁽⁶⁾		2.97	%⁽⁶⁾		2.17	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.65	%⁽⁶⁾		1.90	%⁽⁶⁾		2.40	%⁽⁶⁾		1.45	%⁽⁶⁾
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		1.12	%⁽⁶⁾		0.87	%⁽⁶⁾		0.37	%⁽⁶⁾		1.17	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.69	%⁽⁶⁾		1.44	%⁽⁶⁾		0.94	%⁽⁶⁾		1.89	%⁽⁶⁾
Portfolio turnover rate		N/A			N/A			N/A			N/A


ˆ	Commencement of operations.


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.

(5) Not annualized.

(6) Annualized.


(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.


The Water Infrastructure Fund
	No Load Class			Advisor Class A			Advisor Class C			Institutional Class
	June 29, 2007^			June 29, 2007^			June 29, 2007^			June 29, 2007^
	through			through			through			through
	December 31,			December 31,			December 31,			December 31,
	2007			2007			2007			2007


	$	10.00		$	10.00		$	10.00		$	10.00


		0.06	⁽²⁾		0.05	⁽²⁾		0.02	⁽²⁾		0.06	⁽²⁾

		0.20			0.20			0.21			0.21

		0.26			0.25			0.23			0.27

		—			0.00	⁽³⁾		0.00	⁽³⁾		—


		(0.04	)		(0.03	)		(0.02	)		(0.04	)
		(0.05	)		(0.05	)		(0.05	)		(0.05	)

		(0.09	)		(0.08	)		(0.07	)		(0.09	)

	$	10.17		$	10.17		$	10.16		$	10.18

		2.64	%⁽⁵⁾		2.55	%⁽⁵⁾		2.33	%⁽⁵⁾		2.76	%⁽⁵⁾

	$	2,385		$	2,459		$	1,201		$	103

		3.62	%⁽⁶⁾		3.87	%⁽⁶⁾		4.37	%⁽⁶⁾		3.58	%⁽⁶⁾
		1.74	%⁽⁶⁾		1.99	%⁽⁶⁾		2.49	%⁽⁶⁾		1.54	%⁽⁶⁾


		(0.73	)%⁽⁶⁾		(0.98	)%⁽⁶⁾		(1.48	)%⁽⁶⁾		(0.69	)%⁽⁶⁾
		1.15	%⁽⁶⁾		0.90	%⁽⁶⁾		0.40	%⁽⁶⁾		1.35	%⁽⁶⁾
		N/A			N/A			N/A			N/A

See Notes to the Financial Statements.

KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS

Financial Highlights


	The Multi-Disciplinary Fund
	No Load Class			Advisor Class A			Advisor Class C			Institutional Class
	For the Period			For the Period			For the Period			For the Period
	February 11, 2008			February 11, 2008			February 11, 2008			February 11, 2008
	through			through			through			through
	June 30, 2008			June 30, 2008			June 30, 2008			June 30, 2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)


PER SHARE DATA:⁽¹⁾
Net Asset Value, Beginning of Period	$	10.00		$	10.00		$	10.00		$	10.00

Income from Investment Operations:
Net investment income (loss)		0.01	⁽²⁾		0.00	⁽²⁾⁽³⁾		(0.02	)⁽²⁾		0.02	⁽²⁾
Net realized and unrealized gain (loss) on investments		(0.30	)		(0.30	)		(0.30	)		(0.30	)

Total from investment operations		(0.29	)		(0.30	)		(0.32	)		(0.28	)

Redemption Fees		—			—			—			—
Less Distributions:
From net investment income		—			—			—			—
From net realized gains		—			—			—			—

Total distributions		—			—			—			—

Net Asset Value, End of Period	$	9.71		$	9.70		$	9.68		$	9.72

Total Return⁽⁴⁾		(2.90	)%⁽⁵⁾		(3.00	)%⁽⁵⁾		(3.20	)%⁽⁵⁾		(2.80	)%⁽⁵⁾



SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	104		$	99		$	97		$	97
Ratio of operating expenses to average net assets:
Before expense reimbursement		17.67	%⁽⁶⁾		17.92	%⁽⁶⁾		18.42	%⁽⁶⁾		17.62	%⁽⁶⁾
After expense reimbursement⁽⁷⁾		1.49	%⁽⁶⁾		1.74	%⁽⁶⁾		2.24	%⁽⁶⁾		1.29	%⁽⁶⁾
Ratio of net investment income (loss) to average net assets
Before expense reimbursement		(15.88	)%⁽⁶⁾		(16.13	)%⁽⁶⁾		(16.63	)%⁽⁶⁾		(15.83	)%⁽⁶⁾
After expense reimbursement⁽⁷⁾		0.30	%⁽⁶⁾		0.05	%⁽⁶⁾		(0.45	)%⁽⁶⁾		0.50	%⁽⁶⁾
Portfolio turnover rate		N/A			N/A			N/A			N/A


ˆ	Commencement of operations.

(1) Information presented relates to a share of capital stock outstanding for each period.


(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.

(5) Not annualized.

(6) Annualized.

(7) See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Internet Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 89.40%	Shares		Value

	*Aerospace & Defense — 5.60%*
CAI	CACI International, Inc. — Class A*⁽¹⁾		140,000	$	6,407,800

	*Asian Exchanges — 7.10%*
388 HK	Hong Kong Exchanges & Clearing Limited		240,000		3,508,930
8697 JP	Osaka Securities Exchange Co., Ltd.		144		606,187
SGX SP	Singapore Exchange Limited		788,000		4,002,117

					8,117,234

	*Asset Management — 1.31%*
URB/A CN	Urbana Corp. — Class A*		240,000		689,615
GROW	US Global Investors, Inc. — Class A⁽¹⁾		48,000		804,000

					1,493,615

	*Brokerage & Investment Banking — 0.06%*
IAP LN	ICAP plc		6,000		64,774

	*Capital Markets — 1.21%*
BK	The Bank of New York Mellon Corp.⁽¹⁾		4,000		151,320
CLST LN	Collins Stewart plc		4,000		5,876
GFIG	GFI Group, Inc.⁽¹⁾		8,000		72,080
LAB	LaBranche & Co. Inc.*		48,000		339,840
NTRS	Northern Trust Corp.		4,000		274,280
STT	State Street Corporation		8,000		511,920
TLPR LN	Tullett Prebon plc		4,000		34,259

					1,389,575

	*Commercial Services & Supplies — 5.47%*
CDCO	Comdisco Holding Company, Inc.*		194,400		1,856,520
RBA	Ritchie Bros. Auctioneers, Incorporated⁽¹⁾		162,000		4,395,060

					6,251,580

	*Computers & Peripherals — 0.73%*
AAPL	Apple, Inc.*		5,000		837,200

	*Diversified Consumer Services — 0.41%*
APOL	Apollo Group, Inc. — Class A*⁽¹⁾		2,000		88,520
BID	Sotheby’s⁽¹⁾		14,400		379,728

					468,248

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Internet Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Diversified Financial Services — 8.88%*
CLE LN	Climate Exchange plc*		40,000	$	1,520,964
CME	CME Group, Inc.⁽¹⁾		8,000		3,065,520
ICE	IntercontinentalExchange Inc.*		30,000		3,420,000
LSE LN	London Stock Exchange Group plc		72,352		1,124,082
NMX	Nymex Holdings, Inc.⁽¹⁾		12,200		1,030,656

					10,161,222

	*European Exchanges — 1.93%*
BME SM	Bolsas Y Mercados Espanoles		14,000		521,302
DB1 GR	Deutsche Boerse AG		6,600		744,960
EXAE GA	Hellenic Exchanges S.A. Holding		12,000		151,148
OMX SS	OMX AB*		18,000		792,037

					2,209,447

	*Holding Company — 16.90%*
GBLB BB	Groupe Bruxelles Lambert S.A.		22,000		2,618,982
GBLS BB	Groupe Bruxelles Lambert S.A. Strip VVPR*		2,000		31
LUK	Leucadia National Corporation⁽¹⁾		356,000		16,710,640

					19,329,653

	*Household Durables — 1.11%*
IEP	Icahn Enterprises LP		18,000		1,266,120

	*Internet & Catalog Retail — 0.59%*
EBAY	eBay, Inc.*⁽¹⁾		24,000		655,920
IACI	IAC/InterActiveCorp*⁽¹⁾		1,000		19,280

					675,200

	*Internet Software & Services — 1.10%*
BIDU	Baidu.com, Inc. — ADR*⁽¹⁾		1,000		312,960
GOOG	Google Inc. — Class A*		1,800		947,556

					1,260,516

	*IT Services — 8.24%*
BR	Broadridge Financial Solutions, Inc.		120,000		2,526,000
IRM	Iron Mountain Incorporated*⁽¹⁾		6,000		159,300
MANT	ManTech International Corporation — Class A*⁽¹⁾		140,000		6,736,800

					9,422,100

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Internet Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Leisure Equipment & Products — 0.01%*
MVL	Marvel Entertainment, Inc.*⁽¹⁾		322	$	10,349

	*Media — 14.09%*
DWA	DreamWorks Animation SKG, Inc. — Class A*		92,000		2,742,520
SSP	E.W. Scripps Company — Class A⁽¹⁾		4,000		166,160
HPOL	Harris Interactive, Inc.*⁽¹⁾		80,000		160,800
LBTYA	Liberty Global, Inc. — Class A*		120,257		3,779,677
LBTYK	Liberty Global, Inc. — Series C*⁽¹⁾		182,707		5,546,985
DIS	The Walt Disney Co.⁽¹⁾		1,380		43,056
WMG	Warner Music Group Corp.⁽¹⁾		208,000		1,485,120
WPO	The Washington Post Company — Class B⁽¹⁾		3,600		2,112,840
XMSR	XM Satellite Radio Holdings, Inc. — Class A*		10,000		78,400

					16,115,558

	*Other Exchanges — 2.14%*
ASX AU	ASX Ltd.		36,000		1,083,662
JSE SJ	JSE Limited		60,000		417,625
NZX NZ	NZX Ltd.		12,000		68,959
X CN	TMX Group Inc.		21,340		881,057

					2,451,303

	*Publishing — 0.36%*
MCO	Moody’s Corporation⁽¹⁾		12,000		413,280

	*Software — 2.86%*
FTIS LI	Financial Technologies (India) Ltd. — GDR		144,000		842,400
MVSN	Macrovision Solutions Corp.*⁽¹⁾		152,880		2,287,085
MSFT	Microsoft Corp.		5,000		137,550

					3,267,035

	*Special Purpose Entity — 0.04%*
ADPAO	Adelphia Contingent Value Vehicle CVV Series ACC-4 Int*		250,827		—
ADPAL	Adelphia Recovery Trust Ser ACC-6 E/F Int*		4,878,645		48,786

					48,786

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Internet Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*U.S. Equity Exchanges — 9.26%*
NDAQ	The Nasdaq OMX Group*⁽¹⁾		170,000	$	4,513,500
NYX	NYSE Euronext⁽¹⁾		120,000		6,079,200

					10,592,700

	*Wireless Telecommunication Services — 0.00%*
SNSHA	Sunshine PCS Corp. — Class A*		149,890		450

	TOTAL COMMON STOCKS (cost $75,002,290)				102,253,745



	ESCROW NOTES — 0.00%


	Adelphia Communications Corp.⁽¹⁾		200,000		—
	Adelphia Communications Corp. Preferred		190,000		—

	TOTAL ESCROW NOTES (cost $0)				—



		Principal
	CONVERTIBLE BONDS — 1.63%	Amount


	*Diversified Telecommunication Services — 1.63%*
52729NAS9	Level 3 Communications, Inc., CLB 6.000%, 03/15/2010	$	2,000,000		1,860,000

	TOTAL CONVERTIBLE BONDS (cost $1,533,163)				1,860,000



	RIGHTS — 0.96%	Shares


	*Commercial Services & Supplies — 0.96%*
CDCOR	Comdisco Holding Company, Inc. Rights Expiration Date: 12/31/2050 Strike Price $1.00#		12,240,699		1,101,663

	TOTAL RIGHTS (cost $3,253,775)				1,101,663

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Internet Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


		Principal
Identifier	SHORT-TERM INVESTMENTS — 7.43%	Amount		Value


	*US Government Agency Issues — 7.31%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	8,357,000	$	8,357,000



		Shares

	*Money Market Funds — 0.12%*
FIUXX	First American Prime Obligations Fund — Class I		138,074		138,074

	TOTAL SHORT-TERM INVESTMENTS (cost $8,495,074)				8,495,074



	INVESTMENTS PURCHASED
	WITH THE CASH PROCEEDS
	FROM SECURITIES
	LENDING — 51.22%


	*Investment Companies — 51.22%*
	Mount Vernon Securities Lending Trust — Prime Portfolio		58,584,774		58,584,774

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $58,584,774)				58,584,774

	TOTAL INVESTMENTS — 150.64% (cost $146,869,076)			$	172,295,256

Percentages are stated as a percent of net assets.


* —	Non-income producing security.
# —	Contingent value right (contingent upon profitability of company).


ADR —	American Depository Receipt.
GDR —	Global Depository Receipt.


CLB —	Callable Security.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Total loaned securities had a market value of $56,458,394 at June 30, 2008.

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Global Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 96.35%	Shares		Value

	*Airlines — 2.70%*
753 HK	Air China Limited — Class H		50,000	$	24,624
670 HK	China Eastern Airlines Corporation Limited — Class H*		100,000		31,421
1055 HK	China Southern Airlines Company Limited — Class H*		64,000		25,445

					81,490

	*Asian Exchanges — 11.70%*
CML SJ	Coronation Fund Managers Ltd.		30,000		17,433
DC/A CN	Dundee Corporation — Class A*		1,600		19,362
388 HK	Hong Kong Exchanges & Clearing Limited		9,500		138,895
PSE PM	Philippine Stock Exchange, Inc.		1,600		23,165
SGX SP	Singapore Exchange Limited		30,500		154,904

					353,759

	*Asset Management — 10.06%*
URB/A CN	Urbana Corp. — Class A*		31,800		91,374
GROW	US Global Investors, Inc. — Class A		7,000		117,250
806 HK	Value Partners Group Limited		111,000		95,380

					304,004

	*Beverages — 1.89%*
168 HK	Tsingtao Brewery Co. Limited — Class H		28,000		57,025

	*Commercial Banks — 10.17%*
3988 HK	Bank of China Ltd. — Class H		136,000		60,524
939 HK	China Construction Bank Corp. — Class H		70,000		56,379
HDB	HDFC Bank Ltd. — ADR		620		44,429
IBN	ICICI Bank Ltd. — ADR		1,500		43,140
1398 HK	Industrial & Commercial Bank of China — Class H		80,000		54,686
SBKFF	State Bank of India Ltd. — GDR		900		48,420

					307,578

	*Construction & Engineering — 2.68%*
1186 HK	China Railway Construction Corp. — Class H*		26,000		36,680
390 HK	China Railway Group Ltd. — Class H*		24,000		17,883
NTBC LN	Noida Toll Bridge Company Ltd. — GDR*		4,000		26,500

					81,063

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Global Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Diversified Telecommunication Services — 0.59%*
2267781Z	CIBL Inc.*		51	$	17,850

	*Electric Utilities — 3.79%*
991 HK	Datang International Power Generation Company Limited — Class H		96,000		57,005
HNP	Huaneng Power International, Inc. — ADR		1,200		33,180
RIFS LI	Reliance Infrastructure Ltd. — GDR		450		24,525

					114,710

	*Gaming — 1.91%*
200 HK	Melco International Development Limited		60,000		57,713

	*Holding Company — 0.00%*
GBLS BB	Groupe Bruxelles Lambert S.A. Strip VVPR*		160		3

	*Hotels Restaurants & Leisure — 1.23%*
MPEL	Melco Crown Entertainment Ltd. — ADR*		4,000		37,280

	*Insurance — 4.56%*
LFC	China Life Insurance Co., Limited — ADR⁽¹⁾		500		26,090
2628 HK	China Life Insurance Co., Limited — Class H		16,000		56,020
2318 HK	Ping An Insurance Group Company of China Limited — Class H		7,500		55,789

					137,899

	*Metals & Mining — 3.81%*
358 HK	Jiangxi Copper Company Ltd. — Class H		14,000		27,471
SLT	Sterlite Industries India Ltd. — ADR*		4,000		63,600
VED LN	Vedanta Resources Plc		550		23,959

					115,030

	*Oil, Gas & Consumable Fuels — 9.41%*
SNP	China Petroleum & Chemical Corp. — ADR		250		23,222
386 HK	China Petroleum & Chemical Corp. — Class H		64,000		59,919
1088 HK	China Shenhua Energy Company Limited — Class H		14,000		54,942
CEO	CNOOC Limited — ADR⁽¹⁾		300		52,062
PTR	PetroChina Company Limited — ADR		350		45,101
RIGD LI	Reliance Industries Limited — GDR (Acquired 04/03/08-05/06/08 at $63,073)†		500		49,200

					284,446

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Global Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Other Exchanges — 0.51%*
JSE SJ	JSE Limited		2,225	$	15,487

	*Real Estate — 2.47%*
12 HK	Henderson Land Development Company Limited		12,000		74,796

	*Real Estate Investment Trusts (REITs) — 2.34%*
823 HK	The Link REIT		31,000		70,610

	*Real Estate Management & Development — 2.29%*
1 HK	Cheung Kong Holdings Ltd.		4,000		53,916
XIN	Xinyuan Real Estate Co. Ltd. — ADR*		2,500		15,175

					69,091

	*Software — 4.03%*
FTIS LI	Financial Technologies (India) Ltd. — GDR		20,800		121,680

	*Tobacco — 0.65%*
PM	Philip Morris International, Inc.⁽¹⁾		400		19,756

	*Transportation Infrastructure — 19.56%*
995 HK	Anhui Expressway Co., Ltd. — Class H		66,000		47,825
694 HK	Beijing Capital International Airport Company Limited — Class H		235,000		195,601
357 HK	Hainan Meilan International Airport Company Limited — Class H		65,000		59,938
737 HK	Hopewell Highway Infrastructure Limited		34,000		25,771
54 HK	Hopewell Holdings Limited		16,000		56,840
177 HK	Jiangsu Expressway Company Ltd. — Class H		54,000		44,254
548 HK	Shenzhen Expressway Company Limited — Class H		54,000		31,580
107 HK	Sichuan Expressway Co. Limited — Class H		114,000		32,750
3382 HK	Tianjin Port Development Holdings Ltd.		148,000		59,600
576 HK	Zhejiang Expressway Co., Limited — Class H		48,000		36,998

					591,157

	*Wireless Telecommunication Services — 0.00%*
SNSHA	Sunshine PCS Corp. — Class A*		6,000		18

	TOTAL COMMON STOCKS (cost $3,356,281)				2,912,445

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Global Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier	PREFERRED STOCKS — 0.01%	Shares		Value


	*Diversified Telecommunication Services — 0.01%*
PTVIP.PK	PTV, Inc. — Series A, CLB*		487	$	304

	TOTAL PREFERRED STOCKS (cost $3,774)				304



	SHORT-TERM INVESTMENTS — 3.32%


	*Money Market Funds — 3.32%*
FIUXX	First American Prime Obligations Fund — Class I		100,238		100,238

	TOTAL SHORT-TERM INVESTMENTS (cost $100,238)				100,238



	INVESTMENTS PURCHASED
	WITH THE CASH PROCEEDS
	FROM SECURITIES LENDING — 3.22%


	*Investment Companies — 3.22%*
	Mount Vernon Securities Lending Trust — Prime Portfolio		97,416		97,416

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $97,416)				97,416

	TOTAL INVESTMENTS — 102.90% (cost $3,557,709)			$	3,110,403

Percentages are stated as a percent of net assets.


* —	Non-income producing security.
† —	Restricted security.

ADR — American Depository Receipt.

GDR — Global Depository Receipt.

CLB — Callable Security.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Total loaned securities had a market value of $96,929 at June 30, 2008.

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 86.57%	Shares		Value

	*Aerospace & Defense — 0.72%*
CAI	CACI International, Inc. — Class A*⁽¹⁾		574,000	$	26,271,980

	*Agricultural Operations — 0.12%*
ADM	Archer-Daniels-Midland Company⁽¹⁾		88,000		2,970,000
BG	Bunge Limited⁽¹⁾		15,000		1,615,350

					4,585,350

	*Aircraft Maintenance — 0.04%*
44 HK	Hong Kong Aircraft Engineering Company Limited		84,000		1,293,841

	*Airlines — 0.33%*
753 HK	Air China Limited — Class H		2,400,000		1,181,955
CEA	China Eastern Airlines Corporation Limited — ADR*⁽¹⁾		40,000		1,256,820
670 HK	China Eastern Airlines Corporation Limited — Class H*		11,364,000		3,570,721
ZNH	China Southern Airlines Company Limited — ADR*		18,000		356,040
1055 HK	China Southern Airlines Company Limited — Class H*		14,000,000		5,566,065

					11,931,601

	*Asian Exchanges — 4.60%*
388 HK	Hong Kong Exchanges & Clearing Limited		7,368,000		107,724,133
8697 JP	Osaka Securities Exchange Co., Ltd.		4,800		20,206,244
SGX SP	Singapore Exchange Limited		7,952,000		40,386,844

					168,317,221

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Asset Management — 7.75%*
AB	AllianceBernstein Holding LP		58,000	$	3,171,440
BLK	BlackRock, Inc.⁽¹⁾		258,400		45,736,800
BX	The Blackstone Group LP		600,000		10,926,000
BAM	Brookfield Asset Management Inc. — Class A⁽¹⁾		2,734,000		88,964,360
CNS	Cohen & Steers, Inc.⁽¹⁾		488,000		12,673,360
EV	Eaton Vance Corp.⁽¹⁾		800,000		31,808,000
FIG	Fortress Investment Group LLC — Class A⁽¹⁾		72,000		887,040
BEN	Franklin Resources, Inc.⁽¹⁾		180,000		16,497,000
IGM CN	IGM Financial, Inc.⁽¹⁾		30,000		1,243,307
IVZ	Invesco Limited		12,000		287,760
LM	Legg Mason, Inc.⁽¹⁾		538,000		23,440,660
POW CN	Power Corporation of Canada		1,044,000		31,963,989
PZN	Pzena Investment Management, Inc. — Class A⁽¹⁾		454,000		5,793,040
TROW	T. Rowe Price Group, Inc.⁽¹⁾		80,000		4,517,600
URB/A CN	Urbana Corp. — Class A*		424,000		1,218,319
GROW	US Global Investors, Inc. — Class A⁽¹⁾		240,000		4,020,000
806 HK	Value Partners Group Limited		684,000		587,746

					283,736,421

	*Auto Components — 0.37%*
6201 JP	Toyota Industries Corporation		420,000		13,448,227

	*Automobiles — 0.00%*
2333 HK	Great Wall Motor Company Limited — Class H		20,000		13,261

	*Beverages — 0.48%*
STZ	Constellation Brands, Inc. — Class A*⁽¹⁾		1,800		35,748
DPS	Dr. Pepper Snapple Group, Inc.*⁽¹⁾		1,920		40,282
RI FP	Pernod-Ricard SA		41,680		4,281,922
RCO FP	Remy Cointreau SA		3,600		196,851
168 HK	Tsingtao Brewery Co. Limited — Class H		6,316,000		12,863,263

					17,418,066

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Biotechnology — 0.16%*
CRL	Charles River Laboratories International, Inc.*⁽¹⁾		92,000	$	5,880,640

	*Brokerage & Investment Banking — 0.44%*
GHL	Greenhill & Co., Inc.⁽¹⁾		36,000		1,938,960
IAP LN	ICAP plc		370,000		3,994,423
LAZ	Lazard Ltd. — Class A⁽¹⁾		300,100		10,248,415

					16,181,798

	*Capital Markets — 5.42%*
ACAS	American Capital Ltd.⁽¹⁾		72,000		1,711,440
BK	The Bank of New York Mellon Corp.⁽¹⁾		1,600,060		60,530,270
CLST LN	Collins Stewart plc		40,000		58,759
GFIG	GFI Group, Inc.⁽¹⁾		198,000		1,783,980
GS	The Goldman Sachs Group, Inc.⁽¹⁾		320,000		55,968,000
LAB	LaBranche & Co. Inc.*⁽¹⁾		1,898,000		13,437,840
LEH	Lehman Brothers Holdings, Inc.⁽¹⁾		272,000		5,388,320
NTRS	Northern Trust Corp.⁽¹⁾		252,000		17,279,640
STT	State Street Corporation⁽¹⁾		648,248		41,481,389
TLPR LN	Tullett Prebon plc		72,000		616,672

					198,256,310

	*Chemicals — 1.05%*
NZYMB DC	Novozymes A/S — Class B		200		18,072
POT	Potash Corporation of Saskatchewan Inc.⁽¹⁾		1,200		274,284
SIAL	Sigma-Aldrich Corp.⁽¹⁾		708,000		38,132,880

					38,425,236

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Commercial Banks — 1.45%*
3988 HK	Bank of China Ltd. — Class H		12,000,000	$	5,340,345
CATY	Cathay General Bancorp⁽¹⁾		144,000		1,565,280
CLFC	Center Financial Corporation		224,000		1,897,280
939 HK	China Construction Bank Corp. — Class H		9,084,000		7,316,364
EWBC	East West Bancorp, Inc.⁽¹⁾		144,000		1,016,640
HAFC	Hanmi Financial Corporation⁽¹⁾		224,000		1,167,040
HDB	HDFC Bank Ltd. — ADR⁽¹⁾		80,000		5,732,800
IBN	ICICI Bank Ltd. — ADR⁽¹⁾		270,000		7,765,200
1398 HK	Industrial & Commercial Bank of China — Class H		8,748,000		5,979,908
MTB	M&T Bank Corporation⁽¹⁾		88,000		6,207,520
NARA	Nara Bancorp, Inc.⁽¹⁾		208,000		2,231,840
SBID LI	State Bank of India — GDR⁽¹⁾		72,000		3,873,600
UCBH	UCBH Holdings, Inc.⁽¹⁾		200,000		450,000
WFC	Wells Fargo & Company⁽¹⁾		40,000		950,000
WIBC	Wilshire Bancorp, Inc.⁽¹⁾		200,000		1,714,000

					53,207,817

	*Commercial Services & Supplies — 0.01%*
BCO	The Brink’s Co.		6,000		392,520
EFX	Equifax Inc.⁽¹⁾		100		3,362

					395,882

	*Consumer Finance — 0.06%*
STU	The Student Loan Corporation		21,900		2,147,952

	*Diversified Consumer Services — 0.57%*
HRB	H&R Block, Inc.⁽¹⁾		106,000		2,268,400
BID	Sotheby’s⁽¹⁾		700,000		18,459,000

					20,727,400

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Diversified Financial Services — 4.79%*
CLE LN	Climate Exchange Plc*		80,000	$	3,041,928
CME	CME Group, Inc.⁽¹⁾		204,000		78,170,760
ICE	IntercontinentalExchange Inc.*⁽¹⁾		272,000		31,008,000
LSE LN	London Stock Exchange Group Plc		2,172,291		33,749,367
NMX	Nymex Holdings, Inc.⁽¹⁾		144,000		12,165,120
PARG SW	Pargesa Holding SA		80,000		8,919,779
TPL	Texas Pacific Land Trust⁽¹⁾		158,000		8,374,000

					175,428,954

	*Diversified Food — 0.00%*
CBY	Cadbury PLC — ADR		2,560		128,819

	*Diversified Telecommunication Services — 0.03%*
CN	China Netcom Group Corp. Hong Kong Ltd. — ADR⁽¹⁾		18,000		982,620
728 HK	China Telecom Corp. Ltd. — Class H		200,000		108,756

					1,091,376

	*Electric Utilities — 3.11%*
AYE	Allegheny Energy, Inc.⁽¹⁾		882,000		44,197,020
BIP	Brookfield Infrastucture Partners LP⁽¹⁾		103,920		2,036,832
991 HK	Datang International Power Generation Company Limited — Class H		19,620,000		11,650,338
1071 HK	Huadian Power International Corporation — Class H		1,040,000		274,764
HNP	Huaneng Power International, Inc. — ADR⁽¹⁾		610,000		16,866,500
KEP	Korea Electric Power Corporation — ADR⁽¹⁾		640,000		9,299,200
SRP	Sierra Pacific Resources		1,904,000		24,199,840
USERY	RAO Unified Energy System of Russia — ADR		52,000		5,304,000

					113,828,494

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*European Exchanges — 1.25%*
BME SM	Bolsas y Mercados Espanoles		160,000	$	5,957,742
DB1 GR	Deutsche Boerse AG		314,000		35,442,044
EXAE GA	Hellenic Exchanges S.A. Holding		36,000		453,443
OMX SS	OMX AB*		88,000		3,872,178

					45,725,407

	*Gaming — 3.18%*
IGT	International Game Technology⁽¹⁾		50,000		1,249,000
LVS	Las Vegas Sands Corp.*⁽¹⁾		588,000		27,894,720
200 HK	Melco International Development		3,000,000		2,885,633
MGM	MGM Mirage*⁽¹⁾		686,400		23,262,096
WYNN	Wynn Resorts Limited⁽¹⁾		750,000		61,012,500

					116,303,949

	*Health Care Equipment & Supplies — 0.09%*
BDX	Becton, Dickinson & Co.⁽¹⁾		34,000		2,764,200
SYK	Stryker Corp.⁽¹⁾		6,000		377,280

					3,141,480

	*Holding Company — 6.35%*
BRK/A	Berkshire Hathaway Inc. — Class A*		430		51,922,500
BRK/B	Berkshire Hathaway Inc. — Class B*⁽¹⁾		9,616		38,579,392
GBLB BB	Groupe Bruxelles Lambert S.A.		272,000		32,380,136
GBLS BB	Groupe Bruxelles Lambert S.A. Strip VVPR*		24,000		378
LUK	Leucadia National Corporation⁽¹⁾		2,258,000		105,990,520
PAOR FP	Paris Orleans et Cie SA		200		8,234
PWF CN	Power Financial Corp.⁽¹⁾		108,000		3,512,092

					232,393,252

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Hotels Restaurants & Leisure — 0.09%*
LTO IM	Lottomatica S.p.A		2,000	$	59,798
MPEL	Melco Crown Entertainment Ltd. — ADR*		120,045		1,118,819
BAIN FP	Societe des Bains de Mer et du Cercle des Etrangers a Monaco		2		1,770
TRY	Triarc Companies, Inc. — Class A⁽¹⁾		340,000		2,176,000

					3,356,387

	*Household Durables — 1.26%*
FO	Fortune Brands, Inc.⁽¹⁾		4,000		249,640
IEP	Icahn Enterprises LP		494,600		34,790,164
JAH	Jarden Corporation*⁽¹⁾		610,000		11,126,400

					46,166,204

	*Independent Power Producers & Energy Traders — 3.01%*
CPN	Calpine Corp.*⁽¹⁾		2,550,049		57,529,110
836 HK	China Resources Power Holdings Company Limited		144,000		350,893
DYN	Dynegy, Inc. — Class A *⁽¹⁾		3,552,165		30,371,011
MIR	Mirant Corp. *⁽¹⁾		560,000		21,924,000

					110,175,014

See Notes to the Financial Statements.

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Insurance — 2.72%*
LFC	China Life Insurance Co., Limited — ADR⁽¹⁾		144,666	$	7,548,672
2628 HK	China Life Insurance Co., Limited — Class H		1,000,000		3,501,234
GWO CN	Great-West Lifeco, Inc.⁽¹⁾		128,000		3,660,371
L	Loews Corporation⁽¹⁾		102,000		4,783,800
MKL	Markel Corporation*⁽¹⁾		80,000		29,360,000
2328 HK	PICC Property & Casualty Co. Ltd. — Class H		4,800,000		3,188,817
2318 HK	Ping An Insurance Group Company of China Limited — Class H		2,000,000		14,877,040
PGR	The Progressive Corporation⁽¹⁾		924,000		17,297,280
WSC	Wesco Financial Corporation		1,700		649,400
WTM	White Mountains Insurance Group Ltd.		34,000		14,586,000

					99,452,614

	*Internet & Catalog Retail — 0.09%*
EBAY	eBay, Inc.*⁽¹⁾		114,000		3,115,620

	*Internet Software & Services — 0.10%*
GOOG	Google Inc. — Class A*⁽¹⁾		7,200		3,790,224

	*IT Services — 0.61%*
BR	Broadridge Financial Solutions, Inc.⁽¹⁾		180,000		3,789,000
IRM	Iron Mountain Incorporated*⁽¹⁾		86,000		2,283,300
MA	Mastercard, Inc. — Class A⁽¹⁾		42,000		11,151,840
V	Visa, Inc. — Class A*⁽¹⁾		2,000		162,620
WU	The Western Union Company ⁽¹⁾		200,000		4,944,000

					22,330,760

See Notes to the Financial Statements.

100

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Media — 1.23%*
DWA	DreamWorks Animation SKG, Inc. — Class A*⁽¹⁾		464,000	$	13,831,840
SSP	E.W. Scripps Company — Class A⁽¹⁾		158,000		6,563,320
DIS	The Walt Disney Co.⁽¹⁾		18,400		574,080
WMG	Warner Music Group Corp.⁽¹⁾		1,600,000		11,424,000
WPO	The Washington Post Company — Class B⁽¹⁾		21,600		12,677,040
9399 JP	Xinhua Finance Ltd.*		100		4,944

					45,075,224

	*Metals & Mining — 4.04%*
AAUK	Anglo American PLC — ADR⁽¹⁾		2,400,080		85,082,836
CMC	Commercial Metals Company⁽¹⁾		360,000		13,572,000
FNNVF	Franco-Nevada Corporation		600,000		14,533,687
FCX	Freeport-McMoRan Copper & Gold Inc.⁽¹⁾		2,680		314,069
RTP	Rio Tinto Plc — ADR⁽¹⁾		60,000		29,700,000
YZC	Yanzhou Coal Mining Company Limited — ADR		12,000		1,116,120
1171 HK	Yanzhou Coal Mining Company Limited — Class H		1,800,000		3,347,334

					147,666,046

	*Multiline Retail — 0.67%*
SHLD	Sears Holdings Corporation*⁽¹⁾		332,000		24,455,120

	*Multi-Utilities — 2.99%*
CNP	Centerpoint Energy, Inc.⁽¹⁾		992,000		15,921,600
CMS	CMS Energy Corporation⁽¹⁾		870,000		12,963,000
NRG	NRG Energy, Inc.*⁽¹⁾		540,000		23,166,000
RRI	Reliant Energy Inc.*		2,696,000		57,343,920

					109,394,520

See Notes to the Financial Statements.

101

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Oil, Gas & Consumable Fuels — 15.61%*
CCJ	Cameco Corporation⁽¹⁾		360,000	$	15,433,200
CNQ	Canadian Natural Resources Ltd.		758,000		75,989,500
COSWF	Canadian Oil Sands Trust		1,748,000		94,761,223
1898 HK	China Coal Energy Company — Class H		4,000,000		6,997,339
SNP	China Petroleum & Chemical Corp. — ADR ⁽¹⁾		30,000		2,786,700
386 HK	China Petroleum & Chemical Corp. — Class H		720,000		674,084
1088 HK	China Shenhua Energy Company Limited — Class H		876,000		3,437,827
883 HK	CNOOC Limited		2,400,000		4,130,687
CEO	CNOOC Limited — ADR⁽¹⁾		200,000		34,708,000
EP	El Paso Corporation⁽¹⁾		1,868,000		40,610,320
ECA	EnCana Corporation⁽¹⁾		458,000		41,645,940
OGZPY	Gazprom OAO — ADR⁽¹⁾		1,208,000		70,064,000
IMO	Imperial Oil Ltd.⁽¹⁾		606,000		33,372,420
MRO	Marathon Oil Corp.		204,060		10,584,592
NEGI	National Energy Group, Inc.*		50,000		180,000
NXY	Nexen Inc.		660,000		26,235,000
NHYDY	Norsk Hydro ASA — ADR⁽¹⁾		152,000		2,220,264
PWE	Penn West Energy Trust⁽¹⁾		542,000		18,341,280
PCZ	Petro-Canada⁽¹⁾		200,000		11,150,000
PBR	Petroleo Brasileiro S.A. — ADR⁽¹⁾		48,000		3,399,840
STO	StatoilHydro ASA — ADR⁽¹⁾		144,054		5,384,738
SU	Suncor Energy, Inc.		1,184,000		68,814,080
WZR CN	WesternZagros Resources Ltd.*		34,400		100,532

					571,021,566

	*Other Exchanges — 1.24%*
ASX AU	ASX Ltd.		900,000		27,091,542
JSE SJ	JSE Limited		720,000		5,011,494
NZX NZ	NZX Ltd.		24,329		139,809
X CN	TMX Group Inc.		320,044		13,213,546

					45,456,391

See Notes to the Financial Statements.

102

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Paper & Forest Products — 0.00%*
POPE	Pope Resources Inc. LP		1,800	$	58,140

	*Pharmaceuticals — 0.17%*
1093 HK	China Pharmaceutical Group Limited		1,200,000		600,212
NVO	Novo-Nordisk A/S — ADR⁽¹⁾		84,000		5,544,000

					6,144,212

	*Publishing — 0.66%*
JW/A	John Wiley & Sons, Inc. — Class A		8,000		360,240
JW/B	John Wiley & Sons, Inc. — Class B⁽¹⁾		2,000		90,540
MHP	The McGraw-Hill Companies, Inc.⁽¹⁾		152,000		6,098,240
MCO	Moody’s Corporation⁽¹⁾		502,000		17,288,880
RHD	R.H. Donnelley Corporation*⁽¹⁾		50,000		150,000

					23,987,900

	*Real Estate — 0.19%*
12 HK	Henderson Land Development Co. Ltd.		1,098,000		6,843,798
242 HK	Shun Tak Holdings Limited		72,000		67,408

					6,911,206

	*Real Estate Investment Trusts (REITs) — 1.44%*
ALX	Alexander’s, Inc.*⁽¹⁾		20,000		6,212,000
DFR	Deerfield Capital Corp.⁽¹⁾		36,049		28,479
823 HK	The Link REIT		7,068,000		16,098,968
VNO	Vornado Realty Trust⁽¹⁾		346,000		30,448,000

					52,787,447

	*Real Estate Management & Development — 1.49%*
FCE/A	Forest City Enterprises, Inc. — Class A⁽¹⁾		1,328,400		42,801,048
917 HK	New World China Land Limited		1,000,000		518,131
JOE	The St. Joe Company⁽¹⁾		200,000		6,864,000
4 HK	Wharf Holdings Ltd.		1,000,000		4,187,374

					54,370,553

See Notes to the Financial Statements.

103

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Road & Rail — 1.18%*
BNI	Burlington Northern Santa Fe Corp.		100,000	$	9,989,000
CSX	CSX Corp.⁽¹⁾		164,000		10,300,840
GSH	Guangshen Railway Company Limited — ADR⁽¹⁾		12,000		268,920
525 HK	Guangshen Railway Company Limited — Class H		360,000		163,904
NSC	Norfolk Southern Corp.⁽¹⁾		162,200		10,165,074
UNP	Union Pacific Corp.		163,000		12,306,500

					43,194,238

	*Software — 0.05%*
FTIS LI	Financial Technologies (India) Ltd. — GDR		288,400		1,687,140

	*State Commercial Banks — 0.00%*
PFBC	Preferred Bank Los Angeles⁽¹⁾		18,000		93,240

	*Thrifts & Mortgage Finance — 0.22%*
FRE	Federal Home Loan Mortgage Corporation⁽¹⁾		8,000		131,200
FNM	Federal National Mortgage Association⁽¹⁾		400,000		7,804,000

					7,935,200

	*Tobacco — 0.03%*
PM	Philip Morris International, Inc.⁽¹⁾		22,000		1,086,580

	*Trading Companies & Distributors — 0.02%*
NOBL SP	Noble Group Limited		424,800		739,977

	*Transportation By Air — 0.03%*
PAC	Grupo Aeroportuario del Pacifico SA de CV — ADR⁽¹⁾		40,200		1,180,674

See Notes to the Financial Statements.

104

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Transportation Infrastructure — 1.72%*
995 HK	Anhui Expressway Co., Ltd. — Class H		5,180,000	$	3,753,503
694 HK	Beijing Capital International Airport Co. Ltd. — Class H		34,800,000		28,965,597
OMAB	Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. — ADR⁽¹⁾		78,000		1,293,240
ASR	Grupo Aeroportuario del Sureste S.A.B. de C.V. — ADR⁽¹⁾		35,000		1,802,500
357 HK	Hainan Meilan International Airport Company Limited — Class H		4,096,000		3,777,003
54 HK	Hopewell Holdings Limited		500,000		1,776,267
177 HK	Jiangsu Expressway Company Ltd. — Class H		6,000,000		4,917,118
548 HK	Shenzhen Expressway Company Limited — Class H		9,000,000		5,263,394
107 HK	Sichuan Expressway Co. Limited — Class H		18,000,000		5,171,054
3382 HK	Tianjin Port Development Holdings Ltd.		2,000,000		805,412


576 HK	Zhejiang Expressway Co., Limited — Class H		7,200,000		5,549,649

					63,074,737

	*U.S. Equity Exchanges — 3.31%*
NDAQ	The Nasdaq OMX Group*⁽¹⁾		2,172,000		57,666,600
NYX	NYSE Euronext⁽¹⁾		1,252,552		63,454,284

					121,120,884



	*Wireless Telecommunication Services — 0.03%*
762 HK	China Unicom Limited		640,000		1,188,522

	TOTAL COMMON STOCKS (cost $3,068,084,245)				3,167,297,074

See Notes to the Financial Statements.

105

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


		Principal
Identifier	ESCROW NOTES — 0.00%*	A mount		Value


	Calpine Corporation (converted from Calpine Corp., 8.500%, 02/15/2011)*	$	1,000,000	$	—
	Calpine Corporation (converted from Calpine Corp., 10.500%, 05/15/2015)*		300,000		—
	Calpine Corporation (converted from Calpine Corp., 8.750%, 07/15/2008)*		200,000		—
	Calpine Corporation (converted from Calpine Corp., 7.875%, 04/01/2008)*		200,000		—
	Calpine Corporation (converted from Calpine Corp., 7.625%, 04/15/2050)*		100,000		—
	Calpine Corporation (converted from Calpine Corp., 4.750%, 11/15/2023)*		42,200,000		5

	TOTAL ESCROW NOTES (cost $0)				5



	CORPORATE BONDS — 0.03%


	*Diversified Financial Services — 0.03%*
317928AA7	FINOVA Group, Inc. 7.500%, 11/15/2009, Acquired 10/19/2006-3/29/2007 at $2,775,288 (Default Effective 4/29/2005)*		9,503,880		1,116,706

	TOTAL CORPORATE BONDS (cost $6,167,637)				1,116,706

See Notes to the Financial Statements.

106

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


	CALL OPTIONS
Identifier	PURCHASED — 0.04%	Contracts		Value


LUK.AD	Leucadia National Corporation Expiration: January 2009, Exercise Price: $20.00		72	$	196,200
L.AE	Loews Corporation Expiration: January 2009, Exercise Price: $25.00		500		1,145,000

	TOTAL CALL OPTIONS PURCHASED (cost $1,557,476)				1,341,200



	SHORT-TERM	Principal
	INVESTMENTS — 12.18%	Amount


	*US Government Agency Issues — 11.97%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	438,076,000		438,076,000



		Shares

	*Money Market Funds — 0.21%*
FIUXX	First American Prime Obligations Fund — Class I		7,832,407		7,832,407

	TOTAL SHORT-TERM INVESTMENTS (cost $445,908,407)				445,908,407

See Notes to the Financial Statements.

107

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier	INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING — 38.82%	Shares		Value


	Investment Companies — 36.85%
	AIM Short Term Investment Prime Portfolio		56,000,000	$	56,000,000
	AIM Short Term Liquid Asset Fund		69,000,000		69,000,000
	DWS Money Market Series Institutional Shares		67,000,000		67,000,000
	Federated Prime Obligations Fund		67,000,000		67,000,000
	Goldman Sachs Financial SQ Money Market		67,000,000		67,000,000
	Goldman Sachs Financial SQ Prime Obligation Investment		67,000,000		67,000,000
	Janus Institutional Money Market Fund		65,000,000		65,000,000
	Janus Institutional Cash Management Fund		65,000,000		65,000,000
	Merrill Lynch Premier Institutional Fund		70,000,000		70,000,000
	Mount Vernon Securities Lending Trust — Prime Portfolio		685,215,880		685,215,880
	Reserve Primary Fund		70,000,000		70,000,000

					1,348,215,880

	Repurchase Agreements — 1.97%
	Morgan Stanley Repurchase Agreement, 2.750%, dated 6/30/2008, due 7/1/2008⁽²⁾
	Repurchase price $72,005,500		72,000,000		72,000,000

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (Cost $1,420,215,880)				1,420,215,880

	TOTAL INVESTMENTS — 137.64% (cost $4,941,933,645)			$	5,035,879,272

See Notes to the Financial Statements.

108

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Paradigm Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)

Percentages are stated as a percent of net assets.


* —	Non-income producing security.


ADR —	American Depository Receipt.
GDR —	Global Depository Receipt.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Cash collateral for loaned securities totaled $1,421,598,819 of which $1,420,215,880 was invested. Total loaned securities had a market value of $1,368,187,723 at June 30, 2008.
(2) —	See Repurchase Agreements disclosure in the Notes to Financial Statements for the Kinetics Portfolios Trust.

See Notes to the Financial Statements.

109

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Medical Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 91.46%	Shares		Value

	*Biotechnology — 24.33%*
AEZS	AEterna Zentaris Inc.*⁽¹⁾		100,500	$	105,525
AMRI	Albany Molecular Research, Inc.*		30,000		398,100
ARNA	Arena Pharmaceuticals, Inc.*⁽¹⁾		14,000		72,660
AVXT	AVAX Technologies, Inc.*		50,000		4,500
AVGN	Avigen, Inc.*		27,000		78,030
BIIB	Biogen Idec, Inc.*⁽¹⁾		18,250		1,019,993
CEGE	Cell Genesys, Inc.*⁽¹⁾		61,725		160,485
CBST	Cubist Pharmaceuticals, Inc.*⁽¹⁾		2,000		35,720
CRGN	CuraGen Corporation*		16,000		15,360
DCGN	deCODE genetics, Inc.*⁽¹⁾		11,000		10,120
DNDN	Dendreon Corporation*⁽¹⁾		29,000		129,050
FVRL	Favrille Inc.*⁽¹⁾		43,000		2,713
HGSI	Human Genome Sciences, Inc.*⁽¹⁾		21,000		109,410
IMCL	ImClone Systems, Inc.*⁽¹⁾		3,000		121,380
IMGN	ImmunoGen, Inc.*		14,000		42,840
IVGN	Invitrogen Corp.*⁽¹⁾		22,000		863,720
ISA CN	Isotechnika, Inc.*		40,000		28,636
MEDX	Medarex, Inc.*⁽¹⁾		20,000		132,200
MBRX	Metabasis Therapeutics, Inc.*		27,000		41,850
ONTY	Oncothyreon, Inc.*		15,333		37,259
PGNX	Progenics Pharmaceuticals, Inc.*⁽¹⁾		12,200		193,614
SVNT	Savient Pharmaceuticals Inc.*⁽¹⁾		25,000		632,500
TGEN	Targeted Genetics Corp.*		1,000		590
TELK	Telik, Inc.*⁽¹⁾		38,000		45,980
VICL	Vical Incorporated*		33,500		112,895

					4,395,130

	*Chemicals — 2.94%*
ATB CN	Atrium Innovations Inc.		4,884		76,826
DOW	The Dow Chemical Co.⁽¹⁾		13,000		453,830

					530,656

	*Health Care Equipment & Supplies — 3.42%*
COV	Covidien Ltd.		12,750		610,597
TGX	Theragenics Corporation*		2,000		7,260

					617,857

See Notes to the Financial Statements.

110

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Medical Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Health Care Providers & Services — 0.04%*
IBLTZ	IMPATH Bankruptcy Liquidating Trust — Class A		26,000	$	6,890

	*Life Sciences Tools & Services — 8.45%*
LONN VX	Lonza Group AG		11,000		1,525,819

	*Pharmaceuticals — 52.28%*
ABT	Abbott Laboratories		16,000		847,520
AGEN	Antigenics, Inc.*		892		1,722
BMY	Bristol-Myers Squibb Company		24,000		492,720
1093 HK	China Pharmaceutical Group Limited		1,440,000		720,254
LLY	Eli Lilly & Company		14,000		646,240
EPCT	EpiCept Corporation*⁽¹⁾		2,039		494
GENZ	Genzyme Corporation*		15,538		1,119,047
GSK	GlaxoSmithKline plc — ADR⁽¹⁾		19,673		869,940
JNJ	Johnson & Johnson		15,000		965,100
NVS	Novartis AG — ADR⁽¹⁾		23,000		1,265,920
PTIE	Pain Therapeutics, Inc.*⁽¹⁾		20,000		158,000
PFE	Pfizer, Inc.⁽¹⁾		31,000		541,570
SNY	Sanofi-Aventis SA — ADR		15,000		498,450
SGP	Schering-Plough Corporation⁽¹⁾		15,000		295,350
SCR	Simcere Pharmaceutical Group — ADR*⁽¹⁾		28,000		352,800
WYE	Wyeth		13,900		666,644

					9,441,771

	TOTAL COMMON STOCKS (cost $16,707,569)				16,518,123



		Principal
	SHORT-TERM INVESTMENTS — 8.04%	Amount


	*US Government Agency Issues — 4.19%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	756,000		756,000

See Notes to the Financial Statements.

111

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Medical Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Money Market Funds — 3.85%*
FIUXX	First American Prime Obligations Fund — Class I		695,876	$	695,876

	TOTAL SHORT-TERM INVESTMENTS (cost $1,451,876)				1,451,876



	INVESTMENTS PURCHASED
	WITH THE CASH PROCEEDS
	FROM SECURITIES
	LENDING — 39.27%


	*Investment Companies — 39.27%*
	Mount Vernon Securities Lending Trust — Prime Portfolio		7,091,189		7,091,189

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $7,091,189)				7,091,189

	TOTAL INVESTMENTS — 138.77% (cost $25,250,634)			$	25,061,188

Percentages are stated as a percent of net assets.


* —	Non-income producing security.


ADR —	American Depository Receipt.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Total loaned securities had a market value of $6,779,228 at June 30, 2008.

See Notes to the Financial Statements.

112

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 92.89%	Shares		Value

	*Aerospace & Defense — 1.32%*
BBD/B CN	Bombardier Inc.⁽¹⁾		360,000	$	2,616,064
CAI	CACI International, Inc. — Class A*⁽¹⁾		114,000		5,217,780
GY	GenCorp Inc.*⁽¹⁾		24,000		171,840

					8,005,684

	*Airlines — 2.24%*
753 HK	Air China Limited — Class H		640,000		315,188
CEA	China Eastern Airlines Corporation Limited — ADR*⁽¹⁾		104,000		3,267,732
670 HK	China Eastern Airlines Corporation Limited — Class H*		6,800,000		2,136,651
ZNH	China Southern Airlines Company Limited — ADR*⁽¹⁾		122,000		2,413,160
1055 HK	China Southern Airlines Company Limited — Class H*		13,680,000		5,438,840

					13,571,571

	*Asian Exchanges — 4.79%*
388 HK	Hong Kong Exchanges & Clearing Limited		316,000		4,620,090
8697 JP	Osaka Securities Exchange Co., Ltd.		1,776		7,476,310
SGX SP	Singapore Exchange Limited		3,336,000		16,942,972

					29,039,372

	*Asset Management — 7.77%*
CNS	Cohen & Steers, Inc.⁽¹⁾		360,000		9,349,200
EV	Eaton Vance Corp.⁽¹⁾		588,000		23,378,880
FIG	Fortress Investment Group LLC — Class A⁽¹⁾		24,000		295,680
IVZ	Invesco Ltd.		40,000		959,200
PZN	Pzena Investment Management, Inc. — Class A⁽¹⁾		330,000		4,210,800
URB/A CN	Urbana Corp. — Class A*		666,000		1,913,680
GROW	US Global Investors, Inc. — Class A⁽¹⁾		400,000		6,700,000
806 HK	Value Partners Group Limited		396,000		340,274

					47,147,714

See Notes to the Financial Statements.

113

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Beverages — 2.12%*
168 HK	Tsingtao Brewery Co. Limited — Class H		6,300,000	$	12,830,677

	*Capital Markets — 2.14%*
ACAS	American Capital Ltd.⁽¹⁾		16,000		380,320
CSWC	Capital Southwest Corp.⁽¹⁾		15,400		1,605,142
GFIG	GFI Group, Inc.⁽¹⁾		76,000		684,760
IAAC	International Assets Holding Corporation*⁽¹⁾		224,000		6,733,440
LAB	LaBranche & Co. Inc.*		502,000		3,554,160

					12,957,822

	*Commercial Banks — 2.33%*
BMBZF	BLOM Bank SAL — GDR		30,000		3,112,500
CATY	Cathay General Bancorp⁽¹⁾		172,000		1,869,640
CLFC	Center Financial Corporation		200,000		1,694,000
EWBC	East West Bancorp, Inc.⁽¹⁾		56,000		395,360
FMBL	Farmers & Merchants Bank of Long Beach CA		31		148,800
FBOD	First Bank of Delaware*		324,000		612,360
HAFC	Hanmi Financial Corporation		226,062		1,177,783
NARA	Nara Bancorp, Inc.⁽¹⁾		242,000		2,596,660
UCBH	UCBH Holdings, Inc.⁽¹⁾		200,000		450,000
WIBC	Wilshire Bancorp, Inc.		244,000		2,091,080

					14,148,183

	*Commercial Services & Supplies — 1.10%*
CDCO	Comdisco Holding Company, Inc.*		9,000		85,950
CRRC	Courier Corporation		50,000		1,004,000
LW CN	Loring Ward International Ltd.		1,000		16,105
PICO	PICO Holdings, Inc.*⁽¹⁾		72,000		3,128,400
RBA	Ritchie Bros. Auctioneers, Incorporated⁽¹⁾		90,000		2,441,700

					6,676,155

	*Construction & Engineering — 0.79%*
PWR	Quanta Services, Inc.*⁽¹⁾		144,000		4,790,880

	*Consumer Finance — 0.02%*
STU	The Student Loan Corporation		1,200		117,696

See Notes to the Financial Statements.

114

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Diversified Consumer Services — 1.82%*
BID	Sotheby’s⁽¹⁾		418,000	$	11,022,660

	*Diversified Financial Services — 5.36%*
CLE LN	Climate Exchange plc*		82,000		3,117,976
ICE	IntercontinentalExchange Inc.*		104,000		11,856,000
LSE LN	London Stock Exchange Group plc		310,000		4,816,254
RHJI BB	RHJ International*		800		10,077
TPL	Texas Pacific Land Trust		240,000		12,720,000

					32,520,307

	*Diversified Telecommunication Services — 0.01%*
2267781Z	CIBL Inc.*		18		6,300
LICT	Lynch Interactive Corporation*		18		75,330

					81,630

	*Electric Utilities — 3.46%*
AYE	Allegheny Energy, Inc.⁽¹⁾		24,000		1,202,640
991 HK	Datang International Power Generation Company Limited — Class H		16,180,000		9,607,669
1071 HK	Huadian Power International Corporation — Class H		1,600,000		422,713
SRP	Sierra Pacific Resources		768,000		9,761,280

					20,994,302

	*Energy — 0.72%*
SEMUF	Siem Industries Inc.		50,000		4,393,750

	*European Exchanges — 1.44%*
EXAE GA	Hellenic Exchanges S.A. Holding		36,000		453,443
OMX SS	OMX AB*		188,000		8,272,381

					8,725,824

	*Gaming — 0.68%*
200 HK	Melco International Development Limited		4,276,000		4,112,989

	*Gas Utilities — 0.58%*
SUG	Southern Union Company⁽¹⁾		130,263		3,519,693

See Notes to the Financial Statements.

115

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Holding Company — 0.58%*
BNB CN	BAM Investments Ltd.*⁽¹⁾		194,400	$	3,496,417

	*Hotels Restaurants & Leisure — 0.61%*
BAIN FP	Societe des Bains de Mer et du Cercle des Etrangers a Monaco		20		17,697
TRY	Triarc Companies, Inc. — Class A		574,000		3,673,600

					3,691,297

	*Household Durables — 7.90%*
IEP	Icahn Enterprises LP		509,800		35,859,332
JAH	Jarden Corporation*⁽¹⁾		660,000		12,038,400

					47,897,732

	*Independent Power Producers & Energy Traders — 4.31%*
CPN	Calpine Corp.*		720,128		16,246,088
DYN	Dynegy, Inc. — Class A*⁽¹⁾		1,154,000		9,866,700

					26,112,788

	*Industrial Conglomerates — 0.20%*
Y	Alleghany Corporation*⁽¹⁾		3,600		1,195,380

	*Insurance — 1.91%*
CVA	Covanta Holding Corporation*⁽¹⁾		400,000		10,676,000
NWLIA	National Western Life Insurance Company — Class A⁽¹⁾		1,600		349,600
WSC	Wesco Financial Corporation		1,400		534,800

					11,560,400

	*IT Services — 1.07%*
BR	Broadridge Financial Solutions, Inc.		180,000		3,789,000
MANT	ManTech International Corporation — Class A*⁽¹⁾		56,000		2,694,720

					6,483,720

See Notes to the Financial Statements.

116

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Media — 3.99%*
DWA	DreamWorks Animation SKG, Inc. — Class A*⁽¹⁾		350,000	$	10,433,500
WMG	Warner Music Group Corp.⁽¹⁾		1,930,000		13,780,200

					24,213,700

	*Metals & Mining — 8.25%*
CMC	Commercial Metals Company		280,000		10,556,000
FMG AU	Fortescue Metals Group Ltd.*		1,400,000		15,971,164
FNNVF	Franco-Nevada Corporation		306,000		7,412,180
IMN CN	Inmet Mining Corporation⁽¹⁾		192,000		12,743,513
1171 HK	Yanzhou Coal Mining Company Limited — Class H		1,800,000		3,347,334

					50,030,191

	*Multi-Utilities — 10.37%*
ILA	Aquila, Inc.*⁽¹⁾		1,850,000		6,974,500
CMS	CMS Energy Corporation⁽¹⁾		1,042,000		15,525,800
RRI	Reliant Energy Inc.*		1,900,000		40,413,000

					62,913,300

	*Oil, Gas & Consumable Fuels — 2.33%*
AHD	Atlas Pipeline Holdings LP⁽¹⁾		8,000		268,000
BLMC	Biloxi Marsh Lands Corporation		100		2,035
BGH	Buckeye GP Holdings LP		56,000		1,266,160
1898 HK	China Coal Energy Company — Class H		1,800,000		3,148,802
KEWL	Keweenaw Land Association Ltd.		300		69,300
NEGI	National Energy Group, Inc.*		382,000		1,375,200
PVG	Penn Virginia GP Holdings LP		108,000		3,542,400
UTS CN	UTS Energy Corporation*⁽¹⁾		760,000		4,442,091

					14,113,988

	*Other Exchanges — 1.98%*
ASX AU	ASX Ltd.		128,000		3,853,019
JSE SJ	JSE Limited		720,000		5,011,494
NZX NZ	NZX Ltd.		206,988		1,189,478
X CN	TMX Group Inc.		48,000		1,981,759

					12,035,750

See Notes to the Financial Statements.

117

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Pharmaceuticals — 0.17%*
1093 HK	China Pharmaceutical Group Limited		2,056,000	$	1,028,363

	*Publishing — 0.17%*
RHD	R.H. Donnelley Corporation*⁽¹⁾		180,246		540,738
VALU	Value Line, Inc.		14,000		465,500

					1,006,238

	*Real Estate — 0.00%*
SLED LI	Solidere — GDR		800		29,240

	*Real Estate Investment Trusts (REITS) — 2.59%*
ALX	Alexander’s, Inc.*⁽¹⁾		20,000		6,212,000
NLY	Annaly Capital Management, Inc.⁽¹⁾		18,000		279,180
DFR	Deerfield Capital Corporation⁽¹⁾		96,648		76,352
823 HK	The Link REIT		4,000,000		9,110,904

					15,678,436

	*Real Estate Management & Development — 0.03%*
TRC	Tejon Ranch Co.*⁽¹⁾		6,000		216,360

	*Software — 0.61%*
FTIS LI	Financial Technologies (India) Ltd. — GDR		316,000		1,848,600
MVSN	Macrovision Solutions Corporation*⁽¹⁾		122,304		1,829,668

					3,678,268

	*State Commercial Banks — 0.08%*
PFBC	Preferred Bank Los Angeles⁽¹⁾		94,000		486,920

See Notes to the Financial Statements.

118

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Transportation Infrastructure — 5.06%*
694 HK	Beijing Capital International Airport Company Limited — Class H		17,724,000	$	14,752,478
357 HK	Hainan Meilan International Airport Company Limited — Class H		6,040,000		5,569,605
548 HK	Shenzhen Expressway Company Limited — Class H		1,000,000		584,821
107 HK	Sichuan Expressway Co. Limited — Class H		30,740,000		8,831,011
3382 HK	Tianjin Port Development Holdings Ltd.		800,000		322,165
576 HK	Zhejiang Expressway Co., Limited — Class H		840,000		647,459

					30,707,539

	*U.S. Equity Exchanges — 1.99%*
NDAQ	The Nasdaq OMX Group*⁽¹⁾		454,000		12,053,700

	TOTAL COMMON STOCKS (cost $574,233,774)				563,286,636





		Principal
	ESCROW NOTES — 0.00%	Amount


	Calpine Corporation (converted from Calpine Corp., 4.750%, 11/15/2023)*	$	14,400,000		1

	TOTAL ESCROW NOTES (cost $0)				1



	CORPORATE BONDS — 0.05%


	*Diversified Financial Services — 0.05%*
317928AA7	FINOVA Group, Inc. 7.500%, 11/15/2009, Acquired on 10/19/2006-5/17/2007 at $741,082 (Default Effective 4/29/2005)*		2,783,965		327,116

	TOTAL CORPORATE BONDS (cost $1,225,304)				327,116

See Notes to the Financial Statements.

119

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier	RIGHTS — 0.14%	Shares		Value


	*Commercial Services & Supplies — 0.14%*
CDCOR	Comdisco Holding Company, Inc. — Rights Expiration Date 12/31/2050, Strike Price $1.00#		9,050,400	$	814,536

	TOTAL RIGHTS (cost $2,836,438)				814,536



	CALL OPTIONS PURCHASED — 0.01%	Contracts


L.AF	Loews Corp. Expiration: January 2009, Exercise Price: $30.00		36		63,720

	TOTAL CALL OPTIONS PURCHASED (cost $90,828)				63,720



		Principal
	SHORT-TERM INVESTMENTS — 4.14%	Amount


	*U.S. Government Agency Issues — 4.14%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	25,108,000		25,108,000



		Shares

	*Money Market Funds — 0.00%*
FIUXX	First American Prime Obligations Fund — Class I		1,474		1,474

	TOTAL SHORT-TERM INVESTMENTS (cost $25,109,474)				25,109,474

See Notes to the Financial Statements.

120

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Small Cap Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


	INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING
Identifier	— 29.80%	Shares		Value


	*Investment Companies — 29.80%*
	Mount Vernon Securities Lending Trust — Prime Portfolio		180,731,085	$	180,731,085

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $180,731,085)				180,731,085

	TOTAL INVESTMENTS — 127.03% (cost $784,226,903)			$	770,332,568

Percentages are stated as a percent of net assets.

* — Non-income producing security.


# —	Contingent value right (contingent upon profitability of company).


ADR —	American Depository Receipt.
GDR —	Global Depository Receipt.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Total loaned securities had a market value of $170,723,617 at June 30, 2008.

See Notes to the Financial Statements.

121

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Kinetics Government Money Market Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


		Principal
Identifier	SHORT-TERM INVESTMENTS — 91.12%	Amount		Value


	*US Government Agency Issues — 91.12%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	1,888,000	$	1,888,000

	TOTAL SHORT-TERM INVESTMENTS (cost $1,888,000)				1,888,000

	TOTAL INVESTMENTS — 91.12% (cost $1,888,000)			$	1,888,000

Percentages are stated as a percent of net assets.

See Notes to the Financial Statements.

122

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Market Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 95.59%	Shares		Value

	*Asian Exchanges — 7.40%*
388 HK	Hong Kong Exchanges & Clearing Limited		244,000	$	3,567,412
8697 JP	Osaka Securities Exchange Co., Ltd.		180		757,734
SGX SP	Singapore Exchange Limited		540,000		2,742,567

					7,067,713

	*Asset Management — 23.82%*
AB	AllianceBernstein Holding LP		8,000		437,440
BLK	BlackRock, Inc.⁽¹⁾		9,800		1,734,600
BX	The Blackstone Group LP		86,000		1,566,060
BAM	Brookfield Asset Management Inc. — Class A		98,000		3,188,920
CNS	Cohen & Steers, Inc.⁽¹⁾		28,000		727,160
EV	Eaton Vance Corp.⁽¹⁾		96,000		3,816,960
FII	Federated Investors, Inc. — Class B⁽¹⁾		4,800		165,216
FIG	Fortress Investment Group LLC — Class A⁽¹⁾		18,000		221,760
BEN	Franklin Resources, Inc.		18,200		1,668,030
IGM CN	IGM Financial, Inc.		3,000		124,331
IVZ	Invesco Limited		4,000		95,920
JNS	Janus Capital Group, Inc.⁽¹⁾		200		5,294
LM	Legg Mason, Inc.		36,000		1,568,520
POW CN	Power Corporation of Canada		96,000		2,939,217
PZN	Pzena Investment Management, Inc. — Class A⁽¹⁾		148,000		1,888,480
TROW	T. Rowe Price Group, Inc.⁽¹⁾		11,600		655,052
URB/A CN	Urbana Corp. — Class A*		400,000		1,149,358
GROW	US Global Investors, Inc. — Class A⁽¹⁾		36,000		603,000
806 HK	Value Partners Group Limited		216,000		185,604

					22,740,922

	*Brokerage & Investment Banking — 0.36%*
IAP LN	ICAP plc		32,000		345,464

See Notes to the Financial Statements.

123

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Market Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Capital Markets — 13.88%*
ACAS	American Capital Ltd.⁽¹⁾		28,000	$	665,560
BK	The Bank of New York Mellon Corp.⁽¹⁾		98,856		3,739,722
CLST LN	Collins Stewart plc		6,000		8,814
GFIG	GFI Group, Inc.⁽¹⁾		36,000		324,360
GS	The Goldman Sachs Group, Inc.⁽¹⁾		7,200		1,259,280
IAAC	International Assets Holding Corporation*		8,200		246,492
JEF	Jefferies Group, Inc.⁽¹⁾		36,000		605,520
LAB	LaBranche & Co. Inc.*		60,000		424,800
LEH	Lehman Brothers Holdings, Inc.⁽¹⁾		8,400		166,404
NTRS	Northern Trust Corp.		28,000		1,919,960
STT	State Street Corporation		60,018		3,840,552
TLPR LN	Tullett Prebon plc		6,000		51,389

					13,252,853

	*Commercial Banks — 0.58%*
3988 HK	Bank of China Ltd. — Class H		128,000		56,964
CATY	Cathay General Bancorp⁽¹⁾		3,600		39,132
CLFC	Center Financial Corporation		6,000		50,820
939 HK	China Construction Bank Corp. — Class H		128,000		103,093
EWBC	East West Bancorp, Inc.		3,600		25,416
HAFC	Hanmi Financial Corporation		6,800		35,428
1398 HK	Industrial & Commercial Bank of China — Class H		128,000		87,497
NARA	Nara Bancorp, Inc.⁽¹⁾		7,000		75,110
UCBH	UCBH Holdings, Inc.⁽¹⁾		7,600		17,100
WIBC	Wilshire Bancorp, Inc.		7,200		61,704

					552,264

	*Diversified Consumer Services — 1.38%*
BID	Sotheby’s⁽¹⁾		50,000		1,318,500

See Notes to the Financial Statements.

124

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Market Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*Diversified Financial Services — 11.36%*
CLE LN	Climate Exchange plc*		36,000	$	1,368,868
CME	CME Group, Inc.⁽¹⁾		9,285		3,557,919
IBKR	Interactive Brokers Group, Inc. — Class A*		18,000		578,340
ICE	IntercontinentalExchange Inc.*		12,000		1,368,000
JPM	JPMorgan Chase & Co.		1,305		44,775
LSE LN	London Stock Exchange Group plc		144,043		2,237,895
NMX	Nymex Holdings, Inc.⁽¹⁾		20,000		1,689,600

					10,845,397

	*Electric Utilities — 0.07%*
BIP	Brookfield Infrastucture Partners L.P.⁽¹⁾		3,200		62,720

	*European Exchanges — 6.64%*
BME SM	Bolsas y Mercados Espanoles		44,200		1,645,826
DB1 GR	Deutsche Boerse AG		20,200		2,280,030
EXAE GA	Hellenic Exchanges S.A. Holding		24,000		302,296
OMX SS	OMX AB*		48,000		2,112,097

					6,340,249

	*Holding Company — 1.54%*
BNB CN	BAM Investments Ltd.*		33,000		593,528
BRK/A	Berkshire Hathaway Inc. — Class A*		4		483,000
PWF CN	Power Financial Corp.⁽¹⁾		12,000		390,232

					1,466,760

	*Household Durables — 1.06%*
IEP	Icahn Enterprises LP		14,400		1,012,896

	*Insurance — 5.22%*
2628 HK	China Life Insurance Co., Limited — Class H		643,600		2,253,395
GWO CN	Great West Lifeco, Inc.		12,200		348,879
2318 HK	Ping An Insurance Group Company of China Limited — Class H		320,000		2,380,326

					4,982,600

See Notes to the Financial Statements.

125

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Market Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value

	*IT Services — 1.29%*
BR	Broadridge Financial Solutions, Inc.		36,000	$	757,800
MA	Mastercard, Inc. — Class A⁽¹⁾		1,800		477,936

					1,235,736

	*Media — 0.00%*
9399 JP	Xinhua Finance Ltd.*		100		4,944

	*Metals & Mining — 4.26%*
FNNVF	Franco-Nevada Corporation		168,000		4,069,432

	*Other Exchanges — 6.68%*
ASX AU	ASX Ltd.		100,000		3,010,171
IMAREX NO	IMAREX ASA*		2,000		51,048
JSE SJ	JSE Limited		180,000		1,252,874
NZX NZ	NZX Ltd.		48,526		278,860
X CN	TMX Group Inc.		43,352		1,789,859

					6,382,812

	*Publishing — 1.55%*
MHP	The McGraw-Hill Companies, Inc.⁽¹⁾		6,000		240,720
MCO	Moody’s Corporation⁽¹⁾		36,000		1,239,840

					1,480,560

	*Software — 0.89%*
FTIS LI	Financial Technologies (India) Ltd. — GDR		144,675		846,349

	*State Commercial Banks — 0.01%*
PFBC	Preferred Bank Los Angeles⁽¹⁾		2,700		13,986

	*Thrifts & Mortgage Finance — 0.74%*
FNM	Federal National Mortgage Association⁽¹⁾		36,000		702,360

	*U.S. Equity Exchanges — 6.86%*
NDAQ	The Nasdaq OMX Group*⁽¹⁾		120,000		3,186,000
NYX	NYSE Euronext⁽¹⁾		66,431		3,365,394

					6,551,394

	TOTAL COMMON STOCKS (cost $110,131,953)				91,275,911

See Notes to the Financial Statements.

126

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Market Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier	CALL OPTIONS PURCHASED — 0.05%	Contracts		Value


STT.AH	State Street Corporation Expiration: January 2009, Exercise Price: $40.00		18	$	46,530

	TOTAL CALL OPTIONS PURCHASED (cost $56,394)				46,530



		Principal
	SHORT-TERM INVESTMENTS — 3.87%	Amount


	*US Government Agency Issues — 3.12%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	2,986,000		2,986,000



		Shares

	*Money Market Funds — 0.75%*
FIUXX	First American Prime Obligations Fund — Class I		713,652		713,652

	TOTAL SHORT-TERM INVESTMENTS (cost $3,699,652)				3,699,652

See Notes to the Financial Statements.

127

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Market Opportunities Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


	INVESTMENTS PURCHASED
	WITH THE CASH PROCEEDS
	FROM SECURITIES LENDING
Identifier	— 30.69%	Shares		Value


	*Investment Companies — 30.69%*
	Mount Vernon Securities Lending Trust — Prime Portfolio		29,301,981	$	29,301,981

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $29,301,981)				29,301,981

	TOTAL INVESTMENTS — 130.20% (cost $143,189,980)			$	124,324,074

Percentages are stated as a percent of net assets.


* —	Non-income producing security.


GDR —	Global Depository Receipt.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Total loaned securities had a market value of $27,497,397 at June 30, 2008.

See Notes to the Financial Statements.

128

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Water Infrastructure Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


Identifier	COMMON STOCKS — 68.91%	Shares		Value

	*Building Products — 5.71%*
AMN	Ameron International Corp.⁽¹⁾		3,400	$	407,932
GEBN VX	Geberit AG		2,935		432,399
UNR1V FH	Uponor Oyj		21,000		308,814
WAVIN NA	Wavin NV		40,000		331,266

					1,480,411

	*Chemicals — 0.90%*
HWKN	Hawkins, Inc.		1,500		22,440
YARIY	Yara International ASA — ADR		2,400		212,508

					234,948

	*Commercial Services & Supplies — 3.32%*
AENV SP	Asia Environment Holdings Limited		163,000		57,506
BIOT SP	Bio-Treat Technology Ltd.		250,000		51,450
CLHB	Clean Harbors, Inc.*⁽¹⁾		3,000		213,180
LAYN	Layne Christensen Company*		8,000		350,320
SINO SP	Sinomem Technology Limited*		400,000		188,159

					860,615

	*Construction & Engineering — 4.52%*
URS	URS Corp.*		17,000		713,490
YTY1V FH	YIT Oyj		18,300		460,424

					1,173,914

	*Electric Utilities — 1.07%*
EDE	The Empire District Electric Co.		15,000		278,100

	*Electrical Equipment — 2.32%*
FELE	Franklin Electric Co., Inc.		7,000		271,460
ROP	Roper Industries, Inc.⁽¹⁾		5,000		329,400

					600,860

	*Funds, Trusts, and Other Financial Vehicles — 0.52%*
MGU	Macquarie Global Infrastructure Total Return Fund Inc.		6,000		134,700

	*Household Durables — 0.31%*
6485 JP	Maezawa Kyuso Industries Co. Ltd.		4,500		80,011

See Notes to the Financial Statements.

129

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Water Infrastructure Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Independent Power Producers & Energy Traders — 1.59%*
APF-U CN	Algonquin Power Income Fund		25,000	$	187,065
GLH-U CN	Great Lakes Hydro Income Fund		12,000		224,772

					411,837

	*Industrial Conglomerates — 1.54%*
TYC	Tyco International Ltd.⁽¹⁾		10,000		400,400

	*Machinery — 13.05%*
ANDR AV	Andritz AG		5,000		315,285
ARF-U CN	Armtec Infrastructure Income Fund		12,200		303,893
DHR	Danaher Corp.⁽¹⁾		8,000		618,400
ESE	ESCO Technologies, Inc.*⁽¹⁾		3,000		140,760
GRC	The Gorman-Rupp Company⁽¹⁾		3,000		119,520
IEX	IDEX Corp.⁽¹⁾		10,000		368,400
IR	Ingersoll-Rand Company Ltd. — Class A		690		25,827
ITT	ITT Corporation⁽¹⁾		7,000		443,310
MPR	Met-Pro Corporation		34,800		464,580
MLI	Mueller Industries, Inc.⁽¹⁾		11,900		383,180
840 HK	Xinjiang Tianye Water Saving Irrigation System Co. Ltd. — Class H		800,000		204,174

					3,387,329

	*Metals & Mining — 1.90%*
SOLK GA	Corinth Pipeworks SA*		23,100		145,480
NWPX	Northwest Pipe Company*⁽¹⁾		4,000		223,200
PAP TB	Pacific Pipe Public Company Limited		417,500		123,620

					492,300

	*Multi-Utilities — 7.41%*
ACE IM	ACEA S.P.A.		15,500		295,045
SZE FP	Suez SA		6,500		442,517
VE	Veolia Environnement — ADR		21,200		1,184,020

					1,921,582

	*Multi-Utilities & Unregulated Power — 2.90%*
UU/ LN	United Utilities Group PLC		55,000		752,067

See Notes to the Financial Statements.

130

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Water Infrastructure Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


Identifier		Shares		Value


	*Water Utilities — 21.85%*
AWR	American States Water Company⁽¹⁾		16,200	$	566,028
WTR	Aqua America, Inc.⁽¹⁾		30,800		491,876
ARTNA	Artesian Resources Corp. — Class A		11,910		219,025
CWT	California Water Service Group		24,000		786,480
SBS	Cia de Saneamento Basico do Estado de Sao Paulo — ADR⁽¹⁾		16,000		818,560
CTWS	Connecticut Water Service, Inc.		18,494		414,266
270 HK	Guangdong Investment Limited		300,000		121,581
MWC PM	Manila Water Company		488,100		198,415
MSEX	Middlesex Water Co.		12,000		199,080
NWG LN	Northumbrian Water Group Plc		60,200		377,112
SVT LN	Severn Trent plc		13,000		332,477
SJW	SJW Corp.⁽¹⁾		17,000		448,800
AGS SM	Sociedad General de Aguas de Barcelona SA		15,000		460,056
EYAPS GA	Thessaloniki Water Supply & Sewage Co. SA		500		4,849
YORW	York Water Company		15,953		232,435

					5,671,040

	TOTAL COMMON STOCKS (cost $18,662,258)				17,880,114



		Principal
	SHORT-TERM INVESTMENTS — 36.75%	Amount


	*US Government Agency Issues — 35.08%*
313384YV	Federal Home Loan Bank Discount Note 1.850%, 07/01/2008	$	9,103,000		9,103,000


		Shares

	*Money Market Funds — 1.67%*
FIUXX	First American Prime Obligations Fund — Class I		434,302		434,302

	TOTAL SHORT-TERM INVESTMENTS (cost $9,537,302)				9,537,302

See Notes to the Financial Statements.

131

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Water Infrastructure Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited) — (Continued)


	INVESTMENTS PURCHASED
	WITH THE CASH PROCEEDS FROM SECURITIES
Identifier	LENDING — 16.54%	Shares		Value


	*Investment Companies — 16.54%*
	Mount Vernon Securities Lending Trust — Prime Portfolio		4,290,507	$	4,290,507

	TOTAL INVESTMENTS PURCHASED WITH THE CASH PROCEEDS FROM SECURITIES LENDING (cost $4,290,507)				4,290,507

	TOTAL INVESTMENTS — 122.20% (cost $32,490,067)			$	31,707,923

Percentages are stated as a percent of net assets.

* — Non-income producing security.


ADR —	American Depository Receipt.


(1) —	This security or a portion of this security was out on loan at June 30, 2008. Total loaned securities had a market value of $4,181,821 at June 30, 2008.

See Notes to the Financial Statements.

132

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Investments — June 30, 2008 (Unaudited)


		Principal
Identifier	SHORT-TERM INVESTMENTS — 88.58%	Amount		Value

	*US Government Agency Issues — 88.58%*
313384YV	Federal Home Loan Bank Discount Note 1.851%, 07/01/2008	$	427,000	$	427,000



		Shares

	*Money Market Funds — 0.03%*
FIUXX	First American Prime Obligations Fund — Class I		143		143

	TOTAL SHORT-TERM INVESTMENTS (cost $427,143)				427,143

	TOTAL INVESTMENTS — 88.58% (cost $427,143)			$	427,143

Percentages are stated as a percent of net assets.

See Notes to the Financial Statements.

133

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited)


Identifier	PUT OPTIONS WRITTEN	Contracts		Value

	*Aerospace & Defense*
BA.TO	Boeing Co.
	Expiration: August 2008, Exercise Price: $75.00		1	$	980
NOC.WM	Northrop Grumman Corp.
	Expiration: November 2008, Exercise Price: $65.00		1		360

					1,340

	*Airlines*
ZNH.UG	China Southern Airlines Company Limited — ADR
	Expiration: September 2008, Exercise Price: $35.00		2		3,040

	*Auto Components*
TEN.VE	Tenneco Inc.
	Expiration: October 2008, Exercise Price: $25.00		2		2,280

	*Beverages*
BUD.UI	Anheuser-Busch Cos. Inc.
	Expiration: September 2008, Exercise Price: $45.00		1		32
STZ.VW	Constellation Brands, Inc. — Class A
	Expiration: October 2008, Exercise Price: $17.50		2		150

					182

See Notes to the Financial Statements.

134

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Capital Markets*
AMG.US	Affiliated Managers Group Inc.
	Expiration: September 2008, Exercise Price: $95.00		1	$	1,060
BK.XH	The Bank of New York Mellon Corp.
	Expiration: December 2008, Exercise Price: $40.00		1		565
BX.UC	The Blackstone Group LP
	Expiration: September 2008, Exercise Price: $15.00		3		180
CNS.UE	Cohen & Steers, Inc.
	Expiration: September 2008, Exercise Price: $25.00		2		395
FIG.UV	Fortress Investment Group LLC — Class A
	Expiration: September 2008, Exercise Price: $12.50		3		495
GQG.UC	GFI Group, Inc.
	Expiration: September 2008, Exercise Price: $15.00		4		2,420
GPY.VM	The Goldman Sachs Group, Inc.
	Expiration: October 2008, Exercise Price: $165.00		1		1,000
LM.TV	Legg Mason, Inc.
	Expiration: August 2008, Exercise Price: $55.00		1		1,165
RQW.VJ	T. Rowe Price Group, Inc.
	Expiration: October 2008, Exercise Price: $50.00		1		315
QGW.UV	U.S. Global Investors, Inc. — Class A
	Expiration: September 2008, Exercise Price: $12.50		3		150

					7,745

	*Chemicals*
IAQ.VK	Sigma-Aldrich Corp.
	Expiration: October 2008, Exercise Price: $55.00		1		370

See Notes to the Financial Statements.

135

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Commercial Banks*
HDB.VS	HDFC Bank Ltd. — ADR
	Expiration: October 2008, Exercise Price: $95.00		1	$	2,620
IBN.UH	ICICI Bank Ltd. — ADR
	Expiration: September 2008, Exercise Price: $40.00		1		1,210
MTB.VR	M&T Bank Corporation
	Expiration: October 2008, Exercise Price: $90.00		2		4,140

					7,970

	*Consumer Finance*
DFS.VW	Discover Financial Services
	Expiration: October 2008, Exercise Price: $17.50		2		960

	*Diversified Consumer Services*
BID.SE	Sotheby’s
	Expiration: July 2008, Exercise Price: $25.00		2		180

	*Diversified Financial Services*
LUK.UJ	Leucadia National Corporation
	Expiration: September 2008, Exercise Price: $50.00		1		500
MCO.WG	Moody’s Corporation
	Expiration: November 2008, Exercise Price: $35.00		1		530

					1,030

	*Diversified Telecommunication*
CN.UK	China Netcom Group — ADR
	Expiration: September 2008, Exercise Price: $55.00		1		490

See Notes to the Financial Statements.

136

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Electric Utilities*
AYE.VJ	Allegheny Energy, Inc.
	Expiration: October 2008, Exercise Price: $50.00		1	$	315
KEP.XC	Korea Electric Power Corporation — ADR
	Expiration: December 2008, Exercise Price: $15.00		6		915

					1,230

	*Hotels Restaurants & Leisure*
IGX.VF	International Game Technology
	Expiration: October 2008, Exercise Price: $30.00		1		580
LVS.UP	Las Vegas Sands Corp.
	Expiration: September 2008, Exercise Price: $80.00		1		3,240
MGM.UL	MGM Mirage
	Expiration: September 2008, Exercise Price: $60.00		1		2,580
UWY.UT	Wynn Resorts Limited
	Expiration: September 2008, Exercise Price: $100.00		1		2,045

					8,445

	*Independent Power Producers & Energy Traders*
CPN.UW	Calpine Corp.
	Expiration: September 2008, Exercise Price: $17.50		3		67
HNP.TF	Huaneng Power International, Inc. — ADR
	Expiration: August 2008, Exercise Price: $30.00		2		730
RRI.WE	Reliant Energy Inc.
	Expiration: November 2008, Exercise Price: $25.00		2		890

					1,687

See Notes to the Financial Statements.

137

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Insurance*
AIG.WI	American International Group, Inc.
	Expiration: November 2008, Exercise Price: $45.00		1	$	1,880
LFC.SX	China Life Insurance Co., Limited — ADR
	Expiration: July 2008, Exercise Price: $57.50		1		560
L.UH	Loews Corporation
	Expiration: September 2008, Exercise Price: $40.00		1		83
MBI.WN	MBIA Inc.
	Expiration: November 2008, Exercise Price: $12.00		4		3,060

					5,583

	*Internet Software & Services*
XBA.SF	eBay, Inc.
	Expiration: July 2008, Exercise Price: $30.00		2		574

	*IT Services*
CAI.UI	CACI International, Inc. — Class A
	Expiration: September 2008, Exercise Price: $45.00		1		275
IRM.VE	Iron Mountain Incorporated
	Expiration: October 2008, Exercise Price: $25.00		2		270
WU.WD	The Western Union Company
	Expiration: November 2008, Exercise Price: $20.00		4		240

					785

	*Machinery*
UKU.UD	American Railcar Industries, Inc.
	Expiration: September 2008, Exercise Price: $20.00		2		740

See Notes to the Financial Statements.

138

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Media*
MHP.WG	The McGraw-Hill Companies, Inc.
	Expiration: November 2008, Exercise Price: $35.00		1	$	205
DIS.VF	The Walt Disney Co.
	Expiration: October 2008, Exercise Price: $30.00		1		138

					343

	*Metals & Mining*
CMC.UF	Commercial Metals Company
	Expiration: September 2008, Exercise Price: $30.00		2		140
NRQ.VN	Northern Trust Corp.
	Expiration: October 2008, Exercise Price: $70.00		2		1,260

					1,400

	*Multiline Retail*
KTQ.US	Sears Holdings Corporation
	Expiration: September 2008, Exercise Price: $95.00		1		2,360

See Notes to the Financial Statements.

139

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Oil, Gas & Consumable Fuels*
GIY.TA	AMBAC Financial Group Inc.
	Expiration: August 2008, Exercise Price: $5.00		10	$	3,650
CCJ.UG	Cameco Corporation
	Expiration: September 2008, Exercise Price: $35.00		2		160
CNQ.UN	Canadian Natural Resources Ltd.
	Expiration: September 2008, Exercise Price: $70.00		1		50
SNP.VR	China Petroleum & Chemical Corp. — ADR
	Expiration: October 2008, Exercise Price: $90.00		1		900
CEO.XL	CNOOC Limited — ADR
	Expiration: December 2008, Exercise Price: $160.00		1		1,460
ECA.VO	EnCana Corporation
	Expiration: October 2008, Exercise Price: $75.00		1		183
IMO.TK	Imperial Oil Ltd.
	Expiration: August 2008, Exercise Price: $55.00		1		280
NXY.UF	Nexen Inc.
	Expiration: September 2008, Exercise Price: $30.00		2		75
PWE.UE	Penn West Energy Trust
	Expiration: September 2008, Exercise Price: $25.00		2		15
STO.VG	StatoilHydro ASA — ADR
	Expiration: October 2008, Exercise Price: $35.00		2		430

					7,203

See Notes to the Financial Statements.

140

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

The Multi-Disciplinary Portfolio

Portfolio of Options Written — June 30, 2008 (Unaudited) — (Continued)


Identifier		Contracts		Value


	*Real Estate Investment Trusts (REITs)*
BAM.UF	Brookfield Asset Management, Inc. — Class A
	Expiration: September 2008, Exercise Price: $30.00		1	$	110
VNO.UQ	Vornado Realty Trust
	Expiration: September 2008, Exercise Price: $85.00		1		490

					600

	*Road & Rail*
BNI.VQ	Burlington Northern Santa Fe Corp.
	Expiration: October 2008, Exercise Price: $85.00		1		222
CSX.TK	CSX Corp.
	Expiration: August 2008, Exercise Price: $55.00		1		105
NSC.UK	Norfolk Southern Corp.
	Expiration: September 2008, Exercise Price: $55.00		1		150

					477

	*Specialty Retail*
TIF.WH	Tiffany & Co.
	Expiration: November 2008, Exercise Price: $40.00		1		360

	*Textiles, Apparel & Luxury Goods*
COH.WY	Coach Inc.
	Expiration: November 2008, Exercise Price: $27.50		1		240

	*Thrifts & Mortgage Finance*
NJW.UE	Federal National Mortgage Association
	Expiration: September 2008, Exercise Price: $25.00		2		1,340

	*Transportation Infrastructure*
PAC.VH	Grupo Aeroportuario del Pacifico S.A.B. de C.V. — ADR
	Expiration: October 2008, Exercise Price: $40.00		1		1,065

See Notes to the Financial Statements.

141

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Internet		The Global
	Portfolio		Portfolio


ASSETS:
Investments, at value⁽¹⁾⁽²⁾	$	172,295,256	$	3,110,403
Foreign currencies, at value⁽³⁾		14,471		—
Receivable for contributed capital		26,237		1,911
Receivable for investments sold		186,167		—
Dividends and interest receivable		246,437		18,570
Other assets		536,185		235

Total assets		173,304,753		3,131,119

LIABILITIES:
Payable to Adviser		124,868		3,303
Payable to Custodian		47,165		—
Payable to Trustees and Officers		714		9
Payable for collateral received for securities loaned		58,584,774		97,416
Payable for withdrawn capital		149,835		—
Accrued expenses and other liabilities		19,871		7,568

Total liabilities		58,927,227		108,296

Net assets	$	114,377,526	$	3,022,823

⁽¹⁾Cost of investments	$	146,869,076	$	3,557,709

⁽²⁾Includes loaned securities with a market value of	$	56,458,394	$	96,929

⁽³⁾Cost of foreign currencies	$	13,936	$	—

See Notes to the Financial Statements.

143

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The		The
	Paradigm		Medical
	Portfolio		Portfolio


ASSETS:
Investments, at value⁽¹⁾⁽²⁾	$	5,035,879,272	$	25,061,188
Foreign currencies, at value⁽³⁾		383,923		—
Cash		1,109,228		—
Cash collateral for securities on loan		1,382,939		—
Receivable for contributed capital		12,223,872		90,025
Receivable for investments sold		46,256,707		—
Dividends and interest receivable		5,684,127		31,458
Other assets		685,128		3,895

Total assets		5,103,605,196		25,186,566

LIABILITIES:
Foreign currencies, at value⁽⁴⁾		155,278		—
Payable to Adviser		4,060,628		18,645
Payable to Trustees and Officers		21,233		87
Payable for collateral received for securities loaned		1,421,598,819		7,091,189
Payable for withdrawn capital		18,650,670		7,569
Accrued expenses and other liabilities		389,887		9,336

Total liabilities		1,444,876,515		7,126,826

Net assets	$	3,658,728,681	$	18,059,740

⁽¹⁾Cost of investments	$	4,941,933,645	$	25,250,634

⁽²⁾Includes loaned securities with a market value of	$	1,368,187,723	$	6,779,228

⁽³⁾Cost of foreign currencies	$	366,043	$	—

⁽⁴⁾Cost of foreign currencies short	$	155,144	$	—

See Notes to the Financial Statements.

144

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


			The Kinetics
	The Small Cap		Government
	Opportunities		Money Market
	Portfolio		Portfolio


ASSETS:
Investments, at value^(1) (2)	$	770,332,568	$	1,888,000
Foreign currencies, at value⁽³⁾		171,023		—
Cash		2,472,387		—
Receivable for contributed capital		601,324		192,344
Receivable for investments sold		13,828,212		—
Dividends and interest receivable		1,101,396		—
Other assets		1,874,433		149

Total assets		790,381,343		2,080,493

LIABILITIES:
Payable to Adviser		683,243		772
Payable to Custodian		—		1,129
Payable to Trustees and Officers		4,155		5
Payable for collateral received for securities loaned		180,731,085		—
Payable for withdrawn capital		2,466,566		—
Accrued expenses and other liabilities		97,273		6,495

Total liabilities		183,982,322		8,401

Net assets	$	606,399,021	$	2,072,092

⁽¹⁾Cost of investments	$	784,226,903	$	1,888,000

⁽²⁾Includes loaned securities with a market value of	$	170,723,617	$	—

⁽³⁾Cost of foreign currencies	$	170,595	$	—

See Notes to the Financial Statements.

145

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Market		The Water
	Opportunities		Infrastructure
	Portfolio		Portfolio


ASSETS:
Investments, at value^{(1) (2)}	$	124,324,074	$	31,707,923
Foreign currencies, at value⁽³⁾		35,062		336,134
Cash		—		40,294
Receivable for contributed capital		881,377		580,778
Dividends and interest receivable		220,245		50,448
Other assets		24,275		2,155

Total assets		125,485,033		32,717,732

LIABILITIES:
Payable to Adviser		103,605		25,546
Payable to Custodian		44,983		—
Payable to Trustees and Officers		537		49
Payable for securities purchased		—		2,443,123
Payable for collateral received for securities loaned		29,301,981		4,290,507
Payable for withdrawn capital		528,950		305
Accrued expenses and other liabilities		19,601		10,046

Total liabilities		29,999,657		6,769,576

Net assets	$	95,485,376	$	25,948,156

⁽¹⁾Cost of investments	$	143,189,980	$	32,490,067

⁽²⁾Includes loaned securities with a market value of	$	27,497,397	$	4,181,821

⁽³⁾Cost of foreign currencies	$	32,086	$	338,086

See Notes to the Financial Statements.

146

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Assets & Liabilities

June 30, 2008 (Unaudited)


	The Multi-
	Disciplinary
	Portfolio


ASSETS:
Investments, at value⁽¹⁾	$	427,143
Deposit at brokers for written options		60,004
Cash		60,074
Dividends and interest receivable		5
Other assets		12

Total assets		547,238

LIABILITIES:
Written options, at value⁽²⁾		60,619
Payable to Adviser		511
Accrued expenses and other liabilities		3,903

Total liabilities		65,033

Net assets	$	482,205

⁽¹⁾Cost of investments	$	427,143

⁽²⁾Premiums received	$	41,239

See Notes to the Financial Statements.

147

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


	The Internet			The Global
	Portfolio			Portfolio


INVESTMENT INCOME:
Dividends†	$	567,162		$	45,930
Interest		242,471			3,518
Income from securities lending		1,006,082			1,817

Total investment income		1,815,715			51,265

EXPENSES:
Investment advisory fees		825,996			19,725
Administration fees		25,025			588
Professional fees		5,714			3,670
Fund accounting fees		8,204			1,955
Trustee and Officers’ fees and expenses		1,482			30
Custodian fees and expenses		15,560			12,126
Other expenses		1,730			114

Total expenses		883,711			38,208

Net expenses		883,711			38,208

Net investment income		932,004			13,057

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments and foreign currency		4,285,874			221,004
Net change in unrealized depreciation of:
Investments and foreign currency		(36,301,781	)		(1,142,280	)

Net loss on investments		(32,015,907	)		(921,276	)

Net decrease in net assets resulting from operations	$	(31,083,903	)	$	(908,219	)

† Net of Foreign Taxes Withheld of:	$	30,609		$	2,267

See Notes to the Financial Statements.

148

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


	The			The
	Paradigm			Medical
	Portfolio			Portfolio


INVESTMENT INCOME:
Dividends†	$	30,449,622		$	228,158
Interest		8,983,441			14,397
Income from securities lending		3,327,694			24,278

Total investment income		42,760,757			266,833

EXPENSES:
Investment advisory fees		25,698,959			109,567
Administration fees		775,128			2,258
Professional fees		80,890			3,782
Fund accounting fees		186,186			1,532
Trustee and Officers’ fees and expenses		50,098			192
Custodian fees and expenses		345,190			5,614
Other expenses		37,940			130

Net expenses		27,174,391			123,075

Net investment income		15,586,366			143,758

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments and foreign currency		(83,662,960	)		236,700
Written option contracts expired or closed		(54,066	)		—
Net change in unrealized depreciation of:
Investments and foreign currency		(808,518,420	)		(924,817	)
Written option contracts		(103,358	)		—

Net loss on investments		(892,338,804	)		(688,117	)

Net decrease in net assets resulting from operations	$	(876,752,438	)	$	(544,359	)

† Net of Foreign Taxes Withheld of:	$	1,821,563		$	12,275

See Notes to the Financial Statements.

149

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


				The Kinetics
	The Small Cap			Government
	Opportunities			Money Market
	Portfolio			Portfolio


INVESTMENT INCOME:
Dividends†	$	4,606,016		$	—
Interest		721,771			20,791
Income from securities lending		2,992,955			—

Total investment income		8,320,742			20,791

EXPENSES:
Investment advisory fees		4,809,224			4,806
Administration fees		237,261			344
Professional fees		18,996			3,680
Fund accounting fees		51,735			87
Trustee and Officers’ fees and expenses		9,684			20
Custodian fees and expenses		116,850			3,166
Other Expenses		8,903			70

Total expenses		5,252,653			12,173

Net expenses		5,252,653			12,173

Net investment income		3,068,089			8,618

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on:
Investments and foreign currency		(27,395,575	)		—
Net change in unrealized depreciation of:
Investments and foreign currency		(212,542,148	)		—

Net loss on investments		(239,937,723	)		—

Net increase (decrease) in net assets resulting from operations	$	(236,869,634	)	$	8,618

† Net of Foreign Taxes Withheld of:	$	149,616		$	—

See Notes to the Financial Statements.

150

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Operations

For the Six Months Ended June 30, 2008 (Unaudited)


	The Market			The Water
	Opportunities			Infrastructure
	Portfolio			Portfolio


INVESTMENT INCOME:
Dividends†	$	1,143,348		$	184,319
Interest		101,504			47,479
Income from securities lending		111,837			6,774

Total investment income		1,356,689			238,572

EXPENSES:
Investment advisory fees		659,329			88,194
Administration fees		19,692			2,481
Professional fees		5,632			5,534
Fund accounting fees		7,566			4,868
Trustee and Officers’ fees and expenses		1,450			116
Custodian fees and expenses		20,128			6,386
Other Expenses		818			104

Total expenses		714,615			107,683

Net expenses		714,615			107,683

Net investment income		642,074			130,889

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments and foreign currency		(429,991	)		163,472
Written option contracts expired or closed		—			640
Net change in unrealized depreciation of:
Investments and foreign currency		(36,160,366	)		(816,918	)

Net loss on investments		(36,590,357	)		(652,806	)

Net decrease in net assets resulting from operations	$	(35,948,283	)	$	(521,917	)

† Net of Foreign Taxes Withheld of:	$	68,632		$	18,475

See Notes to the Financial Statements.

151

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Operations

For the Period from February 11,2008ˆ through June 30, 2008 (Unaudited)


	The Multi-
	Disciplinary
	Portfolio


INVESTMENT INCOME:
Interest	$	3,481

Total investment income		3,481

EXPENSES:
Investment advisory fees		2,394
Administration fees		98
Professional fees		3,212
Fund accounting fees		628
Custodian fees and expenses		2,355

Total expenses		8,687

Net expenses		8,687

Net investment loss		(5,206	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments		146
Written option contracts expired or closed		3,950
Net change in unrealized depreciation of:
Written option contracts		(19,380	)

Net loss on investments		(15,284	)

Net decrease in net assets resulting from operations	$	(20,490	)


ˆ		Commencement of operations

See Notes to the Financial Statements.

152


		KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statements of Changes in Net Assets


	The Internet Portfolio						The Global Portfolio
	For the						For the
	Six Months			For the			Six Months			For the
	Ended			Year Ended			Ended			Year Ended
	June 30, 2008			December 31,			June 30, 2008			December 31,
	(Unaudited)			2007			(Unaudited)			2007


OPERATIONS:
Net investment income	$	932,004		$	2,283,029		$	13,057		$	140,984
Net realized gain on sale of investments, foreign currency and written options		4,285,874			15,699,622			221,004			295,159
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options		(36,301,781	)		16,152,318			(1,142,280	)		(304,486	)

Net increase (decrease) in net assets resulting from operations		(31,083,903	)		34,134,969			(908,219	)		131,657

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		1,607,453			21,788,282			(511,416	)		641,520
Withdrawals		(23,984,357	)		(25,387,972	)		1,299,579			(1,617,402	)

Net increase (decrease) in net assets resulting from beneficial interest transactions		(22,376,904	)		(3,599,690	)		788,163			(975,882	)

Total increase (decrease) in net assets		(53,460,807	)		30,535,279			(120,056	)		(844,225	)
NET ASSETS:
Beginning of period		167,838,333			137,303,054			3,142,879			3,987,104

End of period	$	114,377,526		$	167,838,333		$	3,022,823		$	3,142,879

See Notes to the Financial Statements.

153

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statements of Changes in Net Assets


	The Paradigm Portfolio						The Medical Portfolio
	For the						For the
	Six Months			For the			Six Months			For the
	Ended			Year Ended			Ended			Year Ended
	June 30, 2008			December 31,			June 30, 2008			December 31,
	(Unaudited)			2007			(Unaudited)			2007


OPERATIONS:
Net investment income	$	15,586,366		$	24,576,262		$	143,758		$	91,619
Net realized gain (loss) on sale of investments, foreign currency and written options		(83,717,026	)		24,227,223			236,700			1,258,860
Net change in unrealized appreciation (depreciation) of investments, foreign currency and written options		(808,621,778	)		537,525,297			(924,817	)		937,125

Net increase (decrease) in net assets resulting from operations		(876,752,438	)		586,328,782			(544,359	)		2,287,604

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		285,744,507			2,022,528,529			4,422,133			8,466,891
Withdrawals		(390,223,815	)		(130,658,050	)		(1,322,254	)		(11,493,025	)

Net increase (decrease) in net assets resulting from beneficial interest transactions		(104,479,308	)		1,891,870,479			3,099,879			(3,026,134	)

Total increase (decrease) in net assets		(981,231,746	)		2,478,199,261			2,555,520			(738,530	)
NET ASSETS:
Beginning of period		4,639,960,427			2,161,761,166			15,504,220			16,242,750

End of period	$	3,658,728,681		$	4,639,960,427		$	18,059,740		$	15,504,220

See Notes to the Financial Statements.

154

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statements of Changes in Net Assets


	The Small Cap Opportunities Portfolio						The Kinetics Government Money Market Portfolio
	For the						For the
	Six Months			For the			Six Months			For the
	Ended			Year Ended			Ended			Year Ended
	June 30, 2008			December 31,			June 30, 2008			December 31,
	(Unaudited)			2007			(Unaudited)			2007


OPERATIONS:
Net investment income	$	3,068,089		$	3,464,783		$	8,618		$	29,647
Net realized gain (loss) on sale of investments, foreign currency and written options		(27,395,575	)		10,942,305			—			—
Net change in unrealized appreciation (depreciation) of investments,foreign currency and written options		(212,542,148	)		110,493,933			—			—

Net increase (decrease) in net assets resulting from operations		(236,869,634	)		124,901,021			8,618			29,647

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		6,578,745			545,055,337			2,053,592			1,384,198
Withdrawals		(251,026,962	)		(73,301,302	)		(1,202,693	)		(1,639,629	)

Net increase (decrease) in net assets resulting from beneficial interest transactions		(244,448,217	)		471,754,035			850,899			(255,431	)

Total increase (decrease) in net assets		(481,317,851	)		596,655,056			859,517			(225,784	)
NET ASSETS:
Beginning of period		1,087,716,872			491,061,816			1,212,575			1,438,359

End of period	$	606,399,021		$	1,087,716,872		$	2,072,092		$	1,212,575

See Notes to the Financial Statements.

155

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statements of Changes in Net Assets


							The Water
	The Market Opportunities Portfolio						Infrastructure Portfolio
	For the						For the
	Six Months			For the			Six Months			From June 29,
	Ended			Year Ended			Ended			2007ˆ through
	June 30, 2008			December 31,			June 30, 2008			December 31,
	(Unaudited)			2007			(Unaudited)			2007


OPERATIONS:
Net investment income	$	642,074		$	351,788		$	130,889		$	17,366
Net realized gain (loss) on sale of investments, foreign currency and written options		(429,991	)		(139,936	)		164,112			32,043
Net change in unrealized appreciation (depreciation) of investments,foreign currency and written options		(36,160,366	)		15,574,685			(816,918	)		33,213

Net increase (decrease) in net assets resulting from operations		(35,948,283	)		15,786,537			(521,917	)		82,622

NET INCREASE IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		31,336,396			87,609,598			20,388,026			6,511,597
Withdrawals		(15,654,172	)		(5,225,769	)		(175,398	)		(336,774	)

Net increase in net assets resulting from beneficial interest transactions		15,682,224			82,383,829			20,212,628			6,174,823

Total increase (decrease) in net assets		(20,266,059	)		98,170,366			19,690,711			6,257,445
NET ASSETS:
Beginning of period		115,751,435			17,581,069			6,257,445			—

End of period	$	95,485,376		$	115,751,435		$	25,948,156		$	6,257,445

(+)Commencement of operations.

See Notes to the Financial Statements.

156

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Statement of Changes in Net Assets


	The Multi-Disciplinary
	Portfolio
	From February 11,
	2008ˆ through
	June 30, 2008
	(Unaudited)


OPERATIONS:
Net investment loss	$	(5,206	)
Net realized gain on sale of investments and written options		4,096
Net change in unrealized depreciation of investments and written options		(19,380	)

Net decrease in net assets resulting from operations		(20,490	)

NET INCREASE IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		521,192
Withdrawals		(18,497	)

Net increase in net assets resulting from beneficial interest transactions		502,695

Total increase in net assets		482,205
NET ASSETS:
Beginning of period		—

End of period	$	482,205

(+)Commencement of operations.

See Notes to the Financial Statements.

157

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements

June 30, 2008 (Unaudited)

1. Organization

The Kinetics Portfolios Trust (the “Trust”) was organized as a Delaware Statutory Trust on March 14, 2000 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company issuing its beneficial interests in series, each series representing a distinct portfolio with its own investment objective and policies. The series currently authorized are: The Internet Portfolio, The Global Portfolio (formerly The Internet Emerging Growth Portfolio), The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Kinetics Government Money Market Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio and The Multi-Disciplinary Portfolio (the “Master Portfolios”). Pursuant to the 1940 Act, the Master Portfolios, with the exception of The Kinetics Government Money Market Portfolio, are “non-diversified” series of the Trust. The Market Opportunities Portfolio commenced operations on January 31, 2006, The Water Infrastructure Portfolio commenced operations on June 29, 2007 and The Multi-Disciplinary Portfolio commenced operations on February 11, 2008. Each of the remaining Master Portfolios commenced operations on April 28, 2000.

Each Master Portfolio is a Master Investment Portfolio in a master-feeder fund structure. Each Master Portfolio has multiple feeder funds invested in the Master Portfolio. By contributing assets to the Master Portfolio, the feeder funds receive a beneficial interest in the Master Portfolio. The Master Portfolio then invests the contributed assets in portfolio securities and allocates income, gains (losses) and expenses to the feeder funds based on the funds’ proportionate interests in the Master Portfolio.

Each of the Master Portfolios, with the exception of The Kinetics Government Money Market Portfolio, seeks to provide investors with long-term capital growth. The Internet Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in the Internet and Internet-related activities. The Global Portfolio invests primarily in the equity securities of foreign companies that have the ability to facilitate an increase in the growth of their traditional business lines and secondarily in U.S. companies benefiting from international economic growth. The Paradigm Portfolio invests primarily in the equity securities of U.S. and foreign companies that the investment adviser believes are undervalued and that have high returns on equity and are well positioned to reduce their costs, extend the reach of their distribution channels and experience significant growth in revenues. The Medical Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in

158

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

medical research, pharmaceutical treatments and related medical technology with a focus on companies engaged in cancer research and drug development. The Small Cap Opportunities Portfolio invests primarily in the equity securities of U.S. and foreign small capitalized companies that provide attractive valuation opportunities due to special situations such as lack of institutional ownership, lack of significant analyst coverage or companies with sound fundamentals that have experienced a short-term earnings shortfall. The Market Opportunities Portfolio invests primarily in the equity securities of U.S. and foreign companies engaged in capital markets or related to capital markets or in the gaming industry. The Water Infrastructure Portfolio invests primarily in securities issued by U.S. and foreign companies involved in water infrastructure and natural resources with a specific water theme and related activities. The Multi-Disciplinary Portfolio utilizes a two-part investment strategy, investing primarily in fixed income securities and in derivatives. The Kinetics Government Money Market Portfolio seeks to provide investors with current income consistent with the preservation of capital and maintenance of liquidity by investing in money market instruments issued by the U.S. Government, its agencies or instrumentalities.

2. Significant Accounting Policies

Security Valuation

Master Portfolio securities (other than securities held by the Kinetics Government Money Market Portfolio) that are listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. All equity securities that are traded using the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) are valued using the NASDAQ Official Closing Price (“NOCP”). In the event market quotations are not readily available or if events occur that may materially affect the value of a particular security between the time trading ends on a particular security and the close of regular trading on the NYSE, “fair value” will be determined. Purchased options, futures, unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the mean of the most recent bid and asked prices. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon

159

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

rate, maturity, type of issue, trading characteristics and other market data. Investment securities in The Kinetics Government Money Market Portfolio and instruments purchased with remaining maturities of 60 days or less are valued at amortized cost, which approximates fair value. Other assets and securities for which no quotations are readily available (including restricted securities) will be valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. At June 30, 2008 there were no fair valued securities held by the Master Portfolios.

Repurchase Agreements

At June 30, 2008 the Paradigm Portfolio received as collateral securities with a total market value of $73,440,000. The detailed list of the securities received as collateral is listed below.

Morgan Stanley Repurchase Agreement, 2.750%, due 7/1/2008, par value $72,000,000 Collateralized by:


Description	Fair Value

FHLMC, Series 3311, Class FK, 2.7769%, 5/15/2037	$	4,429,117
FNMA, Series 2003-108, Class BE, 4%, 11/25/2018		12,587,692
FNMA, Series 2003-100, Class PA, 5%, 10/25/2018		23,538,949
FHLMC, Series 3315 Class F, 2.8069%, 5/15/2037		32,884,242

Total	$	73,440,000

Written Option Accounting

160

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

obligated during the term of the option to deliver or purchase the securities underlying the option at the exercise price if the option is exercised. Option contracts are valued at the average of the current bid and asked price reported on the day of the valuation. When an option expires on its stipulated expiration date or the Master Portfolio enters into a closing purchase transaction, the Master Portfolio realizes a gain or loss if the cost of the closing transaction differs from the premium received when the option was sold, without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the underlying security (or increases the proceeds on the security sold short) and the Master Portfolio realizes a gain or loss from the sale of the security (or closing of the short sale). As collateral for uncovered written options, the Master Portfolio is required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the market value of the purchase obligation for put options or the market value of the instrument underlying the contract for call options.

Foreign Currency Translations

The books and records of the Master Portfolios are maintained in U.S. dollars. For the Master Portfolios, foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities and other assets and liabilities are translated at the exchange rate of such currencies against the U.S. dollar, as provided by an approved pricing service, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Master Portfolios do not isolate and treat as ordinary income that portion of the results of operations arising as a result of changes in the exchange rate from the fluctuations arising from changes in the market prices of securities held during the period. However, for federal income tax purposes, the Master Portfolios do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.

Restricted Securities

161

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

registration of unregistered securities. At June 30, 2008 the Global Portfolio had restricted securities with an aggregate value of $49,200 representing 1.6% of its net assets.

When-Issued Securities

The Master Portfolios may purchase securities on a when-issued or delayed delivery basis. Although the purchase amounts of these securities are established at the time the purchaser enters into the agreement, these securities may be delivered and paid for at a future date. The Master Portfolios record purchases of when-issued securities and reflect the values of such securities in determining net asset value in the same manner as other portfolio securities. The Master Portfolios maintain at all times cash or other liquid assets in an amount at least equal to the amount of outstanding commitments for when-issued securities.

Securities Lending

Expense Allocation

Common expenses incurred by the Master Portfolios are allocated among the Master Portfolios (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Master Portfolios, depending on the nature of the expenditure. All expenses incurred by the Master Portfolios are allocated to the feeder funds daily based on their proportionate interests in the respective Master Portfolios.

Federal Income Taxes

Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in a Portfolio will be subject to taxation on its share of the Portfolio’s ordinary income and capital gains. It is intended that each Master Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of subchapter M of the Internal Revenue Code.

162

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

Effective June 29, 2007, the Master Portfolios adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes”. FIN 48 requires the evaluation of tax positions taken on previously filed tax returns or expected to be taken on future returns. These positions must meet a “more likely than not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained upon examination. In evaluating whether a tax position has met the recognition threshold, the Portfolios must presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax expense in the current year.

FIN 48 requires the Master Portfolios to analyze all open tax years, as defined by the relevant statute of limitations, for all major jurisdictions. Open tax years are those that are open for exam by taxing authorities. Major jurisdictions for the Portfolios include the Federal Government and the state of New York. As of June 30, 2008, open Federal and New York tax years include the tax years ended December 31, 2003 through 2007. The Portfolios have no examination in progress.

The Master Portfolios have reviewed all open tax years and major jurisdictions and concluded that the adoption of FIN 48 resulted in no effect to the Portfolios’ financial position or results of operations. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Portfolios are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next six months.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.

Other

163

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates.

3. Investment Adviser

The Trust has entered into Investment Advisory Agreements (the “Agreements”) with Kinetics Asset Management, Inc. (the “Adviser”), with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. Under the terms of the Agreements, the Master Portfolios compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio’s average daily net assets, except for The Kinetics Government Money Market Portfolio, which compensates the Adviser at a rate of 0.50% of the Master Portfolio’s average daily net assets. The Sub-Adviser to the Water Infrastructure Portfolio, Aqua Terra Asset Management LLC, receives its compensation from the Adviser at the annual rate of 0.35% of daily net assets of the Water Infrastructure Portfolio. For the six months ended June 30, 2008, The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Portfolio, The Small Cap Opportunities Portfolio, The Kinetics Government Money Market Portfolio, The Market Opportunities Portfolio, The Water Infrastructure Portfolio and The Multi-Disciplinary Portfolio incurred expenses of $825,996, $19,725, $25,698,959, $109,567, $4,809,224, $4,806, $659,329, $88,194 and $2,394, respectively, pursuant to the Investment Advisory Agreements.

For the six months ended June 30, 2008, the Trust was allocated $12,000 for the services of the Chief Compliance Officer employed by the Adviser.


4.	Approval of Investment Advisory Contracts by Trustees of Kinetics Portfolios Trust

At a meeting of the Board of Trustees of the Trust held on March 6, 2008, the Board, including all of the Trustees who are not interested persons under the 1940 Act (the “Independent Trustees”), approved the investment advisory agreements with respect to the Internet, Global, Paradigm, Medical, Small Cap Opportunities, Government Money Market, Market Opportunities and Water Infrastructure Portfolios (collectively, the “Advisory Agreements”). In reaching a decision to renew the Advisory Agreements, the Board of Trustees, including all of the Independent Trustees, considered, among others (1) the nature, extent and quality of the services provided by the Adviser; (2) the performance of the Master Portfolios over the previous six and nine months as

164

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

well as the three and five-year periods ended December 31, 2007, as compared to the median of their relevant Lipper, Inc. (“Lipper”) peer group(s); (3) the contractual and actual compensation to be paid under the Advisory Agreements as compared to the compensation paid to relevant Lipper peer groups; (4) the expense ratios of the Master Portfolios, with expense waivers, as compared to expense ratios for relevant peer groups of Lipper portfolios; (5) the experience and qualifications of the Adviser’s personnel and the Adviser’s portfolio management capabilities and investment methodologies; (6) the Adviser’s operations, compliance program and policies with respect to the Code of Ethics; (7) the financial condition of the Adviser; (8) the cost of services to be provided by the Adviser and the Adviser’s profitability from each Master Portfolio for the year ended December 31, 2007; (9) the “fall-out” benefits to the Adviser and its affiliates from the relationship with the Master Portfolios; (10) the extent to which economies of scale are relevant given the Master Portfolios’ current asset size and current asset growth potential; and (11) that each Master Portfolio other than the Government Money Market Portfolio, is designed for long-term investors. The Lipper peer group information was provided by U.S. Bancorp Fund Services, LLC, the Company’s administrator. In addition, the Board of Trustees, including all of the Independent Trustees, approved the investment sub-advisory agreement for the Water Infrastructure Portfolio (the “Sub-Advisory Agreement”). The Board considered many of the same factors listed above with regards to the Water Infrastructure Portfolio’s sub-adviser, Aqua Terra Asset Management, LLC (the “Sub-Adviser”), which made a presentation to the Board.

The Board of Trustees, including a majority of the Independent Trustees, concluded that: they were satisfied with the quality of services provided by the Adviser in advising the Master Portfolios and the Sub-Adviser in advising the Water Infrastructure Portfolio, the profits earned by the Adviser and Sub-Adviser were reasonable in light of the nature, extent and quality of the services provided to each Master Portfolio; and that each Master Portfolio was not large enough to attain significant economies of scale.

Based on the factors considered, the Board of Trustees, including a majority of the Independent Trustees, concluded that it was appropriate to renew the Advisory and Sub-Advisory Agreements.

165

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

5. Securities Transactions

Purchases and sales of investment securities, other than short-term investments, for the six months ended June 30, 2008 were as follows:


	Purchases				Sales
	U.S.				U.S.
	Government		Other		Government		Other

The Internet Portfolio	$	—	$	4,976,118	$	—	$	13,064,831
The Global Portfolio		—		3,227,923		—		2,467,608
The Paradigm Portfolio		—		383,241,917		—		180,562,547
The Medical Portfolio		—		4,084,004		—		3,991,038
The Small Cap Opportunities Portfolio		—		21,703,612		—		168,284,738
The Market Opportunities Portfolio		—		24,055,471		—		3,958,392
The Water Infrastructure Portfolio		—		14,223,555		—		950,247
The Multi-Disciplinary Portfolioˆ		—		3,865		—		4,011

ˆCommenced operations on February 11, 2008.

As of December 31, 2007, the cost of investments and unrealized appreciation (depreciation) on investment securities for federal income tax purposes was as follows:


	Net
	Appreciation		Appreciated		Depreciated			Cost of
	(Depreciation)		Securities		Securities			Investments

The Internet Portfolio	$	59,080,642	$	64,994,450	$	(5,913,808	)	$	154,094,749
The Global Portfolio		568,385		1,157,597		(589,212	)		3,152,934
The Paradigm Portfolio		888,184,667		1,092,780,824		(204,596,157	)		4,267,839,561
The Medical Portfolio		672,857		4,257,769		(3,584,912	)		20,565,559
The Small Cap Opportunities Portfolio		193,459,774		280,848,603		(87,388,829	)		1,122,964,516
The Kinetics Government Money Market Portfolio		—		—		—			1,247,899
The Market Opportunities Portfolio		17,116,198		20,920,938		(3,804,740	)		106,146,139
The Water Infrastructure Portfolio		33,303		308,752		(275,449	)		7,454,464

166

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

For the six months ended June 30, 2008, the Master Portfolios wrote the following options:


	Number		Premium
	of Contracts		Amount

*The Paradigm Portfolio*
Outstanding at the Beginning of Year		80	$	109,758
Options Closed		80		109,758

Outstanding at June 30, 2008		—	$	—

*The Multi-Disciplinary Portfolioˆ*
Outstanding at February 11, 2008ˆ		—	$	—
Options Written		12,400		45,949
Options Exercised		100		410
Options Expired		100		1,280
Options Closed		100		3,020

Outstanding at June 30, 2008		12,100	$	41,239

ˆCommencement of operations.

6. Portfolio Securities Loaned

As of June 30, 2008, the Master Portfolios had loaned securities that were collateralized by cash. The cash collateral is invested by the custodian in a money market pooled account approved by the Adviser. Although risk is mitigated by the collateral, a Master Portfolio could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. The Master Portfolio receives interest on the collateral received as well as a fee for the securities loaned. The Master Portfolios will continue to receive dividends and interest on all securities loaned. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be accounted for by the Master Portfolios. The value of the securities on loan and the value of the related collateral at June 30, 2008, were as follows:


	Securities		Collateral

The Internet Portfolio	$	56,458,394	$	58,584,774
The Global Portfolio		96,929		97,416
The Paradigm Portfolio		1,368,187,723		1,421,598,819
The Medical Portfolio		6,779,228		7,091,189
The Small Cap Opportunities Portfolio		170,723,617		180,731,085
The Market Opportunities Portfolio		27,497,397		29,301,981
The Water Infrastructure Portfolio		4,181,821		4,290,507
The Multi-Disciplinary Portfolio		—		—

167

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

7. Selected Financial Highlights

Financial highlights for the Master Portfolios were as follows:

The Internet Portfolio

For the

Six Months

For the

Ended

Year Ended

June 30,

December 31,

2008

2007

2006

2005

2004

2003

(Unaudited)

Ratio of expenses to average net assets:

Before expense reduction

1.34%⁽¹

⁾

1.34%

1.39%

1.45%

1.50%

1.51%

After expense reduction

1.34%⁽¹

⁾

1.33%

1.44%

1.51%

Ratio of net investment income to average net assets:

Before expense reduction

1.41%⁽¹

⁾

1.58%

0.17%

1.35%

1.30%

0.99%

After expense reduction

1.41%⁽¹

⁾

1.59%

0.23%

1.36%

0.99%

Portfolio turnover rate

15%

11%

12%

42%

69%

The Global Portfolio

For the

Six Months

For the

Ended

Year Ended

June 30,

December 31,

2008

2007

2006

2005

2004

2003

(Unaudited)

Ratio of expenses to average net assets:

Before expense reduction

2.42%⁽¹

⁾

1.99%

1.62%

1.73%

1.78%

1.84%

After expense reduction

2.42%⁽¹

⁾

1.98%

1.46%

1.72%

1.73%

1.84%

Ratio of net investment income (loss) to average net assets:

Before expense reduction

0.83%⁽¹

⁾

3.73%

2.78%

4.30%

2.77%

1.94%

After expense reduction

0.83%⁽¹

⁾

3.74%

2.94%

4.31%

2.82%

1.94%

Portfolio turnover rate

84%

22%

10%

18%

20%


	The Paradigm Portfolio
	For the
	Six Months			For the		For the		For the		For the			For the
	Ended			Year Ended		Year Ended		Year Ended		Year Ended			Year Ended
	June 30,			December 31,		December 31,		December 31,		December 31,			December 31,
	2008			2007		2006		2005		2004			2003
	(Unaudited)

Ratio of expenses to average net assets:
Before expense reduction		1.32%⁽¹	⁾		1.33%		1.40%		1.45%		1.52%			1.56%
After expense reduction		1.32%⁽¹	⁾		1.33%		1.32%		1.40%		1.42%			1.46%
Ratio of net investment income (loss) to average net assets:
Before expense reduction		0.76%⁽¹	⁾		0.75%		0.85%		0.07%		(0.18%	)		1.28%
After expense reduction		0.76%⁽¹	⁾		0.75%		0.93%		0.12%		(0.08%	)		1.38%
Portfolio turnover rate		5%			8%		3%		5%		52%			20%

168

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)


	The Medical Portfolio
	For the
	Six Months			For the		For the		For the			For the			For the
	Ended			Year Ended		Year Ended		Year Ended			Year Ended			Year Ended
	June 30,			December 31,		December 31,		December 31,			December 31,			December 31,
	2008			2007		2006		2005			2004			2003
	(Unaudited)

Ratio of expenses to average net assets:
Before expense reduction		1.40%	⁽¹⁾		1.49%		1.44%		1.50%			1.58%			1.53%
After expense reduction		1.40%	⁽¹⁾		1.40%		1.34%		1.49%			1.57%			1.53%
Ratio of net investment income (loss) to average net assets:
Before expense reduction		1.64%	⁽¹⁾		0.42%		0.33%		(0.17%	)		(0.33%	)		(0.56%	)
After expense reduction		1.64%	⁽¹⁾		0.51%		0.43%		(0.16%	)		(0.32%	)		(0.56%	)
Portfolio turnover rate		24%			38%		20%		2%			13%			16%


	The Small Cap Opportunities Portfolio
	For the
	Six Months			For the		For the		For the		For the		For the
	Ended			Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
	June 30,			December 31,		December 31,		December 31,		December 31,		December 31,
	2008			2007		2006		2005		2004		2003
	(Unaudited)

Ratio of expenses to average net assets:
Before expense reduction		1.37%	⁽¹⁾		1.34%		1.40%		1.48%		1.55%		1.67%
After expense reduction		1.37%	⁽¹⁾		1.31%		1.27%		1.37%		1.21%		1.49%
Ratio of net investment income to average net assets:
Before expense reduction		0.80%	⁽¹⁾		0.38%		0.30%		0.46%		1.51%		2.88%
After expense reduction		0.80%	⁽¹⁾		0.41%		0.43%		0.57%		1.85%		3.06%
Portfolio turnover rate		3%			17%		6%		4%		96%		180%

The Kinetics Government

Money Market Portfolio

For the

Six Months

For the

Ended

Year Ended

June 30,

December 31,

2008

2007

2006

2005

2004

2003

(Unaudited)

Ratio of expenses to average net assets:

Before expense reduction

1.26%

⁽¹⁾

2.22%

1.56%

1.37%

0.83%

0.79%

After expense reduction

1.26%

⁽¹⁾

2.22%

1.17%

1.37%

0.83%

0.79%

Ratio of net investment income to average net assets:

Before expense reduction

0.89%

⁽¹⁾

2.47%

3.13%

1.58%

0.18%

0.15%

After expense reduction

0.89%

⁽¹⁾

2.47%

3.52%

1.58%

0.18%

0.15%

Portfolio turnover rate

N/A

169

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

The Market

Opportunities Portfolio

For the

Six Months

For the

January 31,

Ended

Year Ended

2006ˆ through

June 30,

December 31,

2008

2007

2006

(Unaudited)

Ratio of expenses to average net assets:

Before expense reduction

1.35%

⁽¹⁾

1.44%

1.81%

⁽¹⁾

After expense reduction

1.35%

⁽¹⁾

1.44%

1.61%

⁽¹⁾

Ratio of net investment income to average net assets:

Before expense reduction

1.21%

⁽¹⁾

0.61%

0.16%

⁽¹⁾

After expense reduction

1.21%

⁽¹⁾

0.61%

0.36%

⁽¹⁾

Portfolio turnover rate

14%


	The Water
	Infrastructure Portfolio
				June 29,
	For the Six			2007ˆ through
	Months Ended			December 31,
	June 30, 2008			2007
	(Unaudited)

Ratio of expenses to average net assets:
Before expense reduction		1.53%	⁽¹⁾		2.01%	⁽¹⁾
After expense reduction		1.53%	⁽¹⁾		2.01%	⁽¹⁾
Ratio of net investment income to average net assets
Before expense reduction		1.86%	⁽¹⁾		0.96%	⁽¹⁾
After expense reduction		1.86%	⁽¹⁾		0.96%	⁽¹⁾
Portfolio turnover rate		10%			7%


	The Multi-
	Disciplinary Portfolio
	February 11, 2008ˆ
	through
	June 30, 2008
	(Unaudited)

Ratio of expenses to average net assets:
Before expense reduction		4	.54	%⁽¹⁾
After expense reduction		4	.54	%⁽¹⁾
Ratio of net investment income (loss) to average net assets
Before expense reduction		(2	.72)	%⁽¹⁾
After expense reduction		(2	.72)	%⁽¹⁾
Portfolio turnover rate		N/A


ˆ	Commencement of operations.
⁽¹⁾	Annualized.

170

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

8. FAS 157 — Summary of Fair Value Exposure

In September 2006, the Financial Accounting Standards Board issued Standard No. 157, “Fair Value Measurements” (“FAS 157”) effective for fiscal years beginning after November 15, 2007. FAS 157 clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosure about the use of fair value measurements in an effort to make the measurement of fair value more consistent and comparable. The Portfolios have adopted FAS 157 effective January 1, 2008. A summary of the fair value hierarchy under FAS 157 is described below:

Various inputs are used in determining the value of the Portfolios’ investments. These inputs are summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 — Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The Internet Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	161,235,856	$	—
Level 2 — Other significant observable inputs		11,059,400		—
Level 3 — Significant unobservable inputs		—		—
Total	$	172,295,256	$	—

The Global Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	2,944,373	$	—
Level 2 — Other significant observable inputs		166,030		—
Level 3 — Significant unobservable inputs		—		—
Total	$	3,110,403	$	—

171

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

The Paradigm Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	4,594,999,422	$	—
Level 2 — Other significant observable inputs		440,879,850		—
Level 3 — Significant unobservable inputs		—		—
Total	$	5,035,879,272	$	—

The Medical Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	24,305,188	$	—
Level 2 — Other significant observable inputs		756,000		—
Level 3 — Significant unobservable inputs		—		—
Total	$	25,061,188	$	—

The Small Cap Opportunities Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	742,973,251	$	—
Level 2 — Other significant observable inputs		27,359,317		—
Level 3 — Significant unobservable inputs		—		—
Total	$	770,332,568	$	—

The Government Money Market Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	—	$	—
Level 2 — Other significant observable inputs		1,888,000		—
Level 3 — Significant unobservable inputs		—		—
Total	$	1,888,000	$	—

172

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

The Market Opportunities Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	120,440,677	$	—
Level 2 — Other significant observable inputs		3,883,397		—
Level 3 — Significant unobservable inputs		—		—
Total	$	124,324,074	$	—

The Water Infrastructure Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	22,604,923	$	—
Level 2 — Other significant observable inputs		9,103,000		—
Level 3 — Significant unobservable inputs		—		—
Total	$	31,707,923	$	—

The Multi-Disciplinary Portfolio

The following is a summary of the inputs used to value the Portfolio’s net assets as of June 30, 2008:


			Other
	Investments in		Financial
Description	Securities		Instruments*

Level 1 — Quoted prices	$	143	$	60,619
Level 2 — Other significant observable inputs		427,000		—
Level 3 — Significant unobservable inputs		—		—
Total	$	427,143	$	60,619


*	Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, written options, forwards and swap contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

173

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

9. New Accounting Pronouncements

In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) was issued. SFAS 161 is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivative instruments and hedging activities are accounted for, and how derivative instruments affect an entity’s financial performance and financial position. Management is currently evaluating the implications of SFAS 161. The impact and related hedging activities on the Portfolios’ financial statement disclosures, if any, is currently being assessed.

10. Results of Shareholder Meeting


Votes for the Resolution:		Votes against the Resolution:		Abstain:

	663,074.109		65,198.924		15,122.001

174

KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS

Notes to Financial Statements — (Continued)

June 30, 2008 (Unaudited)

11. Information about Proxy Voting

Information regarding how Kinetics Portfolios Trust votes proxies relating to portfolio securities is available without charge upon request by calling toll-free at 1-800-930-3828 or by accessing the Funds’ website at www.kineticsfund.com and by accessing the SEC’s website at www.sec.gov. Information regarding how the Portfolios voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.

12. Information about the Portfolio Holdings

The Kinetics Portfolios Trust file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Portfolios’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov. The Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

175

Kinetics Mutual

Funds, Inc.

615 East Michigan Street

Milwaukee, WI 53202

INVESTMENT ADVISER AND

SHAREHOLDER SERVICING AGENT

Kinetics Asset Management, Inc.

555 Taxter Road

Suite 175

Elmsford, NY 10523

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Tait, Weller & Baker LLP

1818 Market Street

Suite 2400

Philadelphia, PA 19103

DISTRIBUTOR

Kinetics Funds Distributor, Inc.

555 Taxter Road

Suite 175

Elmsford, NY 10523

ADMINISTRATOR

FUND ACCOUNTANT AND

TRANSFER AGENT

U.S. Bancorp Fund Services, LLC

615 East Michigan Street

Milwaukee, WI 53202

CUSTODIAN

U.S. Bank, N.A.

Custody Operations

1555 River Center Drive, Suite 302

Milwaukee, WI 53212

THIS MATERIAL MUST BE PRECEDED OR

ACCOMPANIED BY A PROSPECTUS

Item 2. Code of Ethics.

Not applicable for semi-annual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semi-annual reports.

Item 4. Principal Accountant Fees and Services.

Not applicable for semi-annual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

Item 6. Schedule of Investments.

The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders.

Not Applicable.

Item 11. Controls and Procedures.

(a)

The Registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of

		the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

(b)		There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)

(1) Not applicable.

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

(3) Not applicable to open-end investment companies.

(b)

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust

By (Signature and Title)* /s/ Peter B. Doyle

Peter B. Doyle, President

Date September 4, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)* /s/ Peter B. Doyle

Peter B. Doyle, President

Date September 4, 2008

By (Signature and Title)* /s/ Leonid Polyakov

Leonid Polyakov, Treasurer

Date September 4, 2008

* Print the name and title of each signing officer under his or her signature.


	Page

Shareholders’ Letter		2
Year 2008 Semi-Annual Investment Commentary		5
KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS
Expense Example		12
Statement of Assets & Liabilities		22
Statement of Operations		27
Statements of Changes in Net Assets		32
Notes to Financial Statements		45
Financial Highlights		60
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets		79
Portfolio of Investments The Internet Portfolio		84
Portfolio of Investments The Global Portfolio		89
Portfolio of Investments The Paradigm Portfolio		93
Portfolio of Investments The Medical Portfolio		110
Portfolio of Investments The Small Cap Opportunities Portfolio		113
Portfolio of Investments The Kinetics Government Money Market Portfolio		122
Portfolio of Investments The Market Opportunities Portfolio		123
Portfolio of Investments The Water Infrastructure Portfolio		129
Portfolio of Investments The Multi-Disciplinary Portfolio		133
Portfolio of Options Written The Multi-Disciplinary Portfolio		134
Statement of Assets & Liabilities		143
Statement of Operations		148
Statements of Changes in Net Assets		153
Notes to Financial Statements		158
Certification
906 Certification


(1)	The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. You cannot invest directly in an index.
(2)	The NASDAQ Composite Index is a market capitalization-weighted index that is designed to represent the performance of the National Market System which includes over 5,000 stocks traded only over-the-counter and not on an exchange. You cannot invest directly in an index.