N-CSR 1 tim3187181-ncsr.htm CERTIFIED SHAREHOLDER REPORT

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 811-4946

THOMPSON IM FUNDS, INC.
(Exact name of registrant as specified in charter)

918 Deming Way
Madison, Wisconsin 53717
(Address of principal executive offices)--(Zip code)

Jason L. Stephens
Chief Executive Officer
Thompson IM Funds, Inc.
918 Deming Way
Madison, Wisconsin 53717
(Name and address of agent for service)

With a copy to:

Fredrick G. Lautz, Esq.
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202

Registrant's telephone number, including area code: (608) 827-5700

Date of fiscal year end: November 30, 2016

Date of reporting period: November 30, 2016

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Report to Stockholders.

THOMPSON IM FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS

NOTE ON FORWARD-LOOKING STATEMENTS

The matters discussed in this report may constitute forward-looking statements. These include any Advisor or portfolio manager predictions, assessments, analyses or outlooks for individual securities, industries, investment styles, market sectors, interest rates, economic trends and/or markets. These statements involve risks and uncertainties. In addition to the general risks described for each Fund in its current Prospectus, other factors bearing on these reports include the accuracy of the Advisor’s or portfolio manager’s forecasts and predictions, the appropriateness of the investment strategies designed by the Advisor or portfolio manager and the ability of the Advisor or portfolio manager to implement its strategies efficiently and successfully. Any one or more of these factors, as well as other risks affecting the securities markets generally, could cause the actual results of any Fund to differ materially as compared to its benchmarks.

THOMPSON IM FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS

November 30, 2016

CONTENTS

		Page(s)
LARGECAP FUND
Investment review		3-5
Schedule of investments		6-8

MIDCAP FUND
Investment review		9-11
Schedule of investments		12-14

BOND FUND
Investment review		15-17
Schedule of investments		18-26

FUND EXPENSE EXAMPLES		27

FINANCIAL STATEMENTS
Statements of assets and liabilities		28
Statements of operations		29
Statements of changes in net assets		30
Notes to financial statements		31-38
Financial highlights		39-41

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		42

DIRECTORS AND OFFICERS		43-44

ADDITIONAL INFORMATION		45-48

This report contains information for existing shareholders of Thompson IM Funds, Inc. It
does not constitute an offer to sell. This Annual Report is authorized for distribution to prospective investors
only when preceded or accompanied by a Fund Prospectus, which contains information about
the Funds’ objectives and policies, risks, management, expenses and other information.
A Prospectus can be obtained by calling 1-800-999-0887.

Please read your Prospectus carefully.

LARGECAP FUND INVESTMENT REVIEW (Unaudited)

November 30, 2016

Portfolio Managers

James T. Evans, CFA

Jason L. Stephens, CFA

John W. Thompson, CFA

Performance

The LargeCap Fund produced a total return of 14.16% for the fiscal year ended November 30, 2016, as compared to its benchmark, the S&P 500 Index, which returned 8.06%.

Comparison of Change in Value of a Hypothetical $10,000 Investment

Average Annual Total Returns
Through 11/30/16
	1 Year	3 Year	5 Year	10 Year
Thompson LargeCap Fund	14.16%	7.93%	14.41%	3.92%
S&P 500 Index	8.06%	9.07%	14.45%	6.89%

Gross Expense Ratio as of 03/31/16 was 1.22%.
Net Expense Ratio after reimbursement as of 12/1/16 was 1.10%.*

The Advisor has contractually agreed to waive management fees and/or reimburse expenses incurred by the LargeCap Fund through March 31, 2018, so that the annual operating expenses of the Fund do not exceed 1.10% of its average daily net assets. Net expense ratios are current as of the most recent Prospectus and are applicable to investors.

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-800-999-0887 or visiting www.thompsonim.com.

Results include the reinvestment of all dividends and capital gains distributions. Investment performance reflects all fee waivers that may be in effect. In the absence of such waivers, total return would be reduced. The performance information reflected in the graph and the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares, nor does it imply future performance. The S&P 500 Index is an unmanaged index commonly used to measure the performance of U.S. stocks. You cannot directly invest in an index.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC and has been licensed for use by Thompson Investment Management, Inc. S&P^® and S&P 500^® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). The Thompson IM Funds are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and none of S&P Dow Jones Indices LLC, Dow Jones, S&P nor their respective affiliates makes any representation regarding the advisability of investing in such products.

See Notes to Financial Statements.
3

LARGECAP FUND INVESTMENT REVIEW (Unaudited) (Continued)

November 30, 2016

Management Commentary

The Fund’s positive relative performance was virtually all driven by strong security selection across most sectors. Individual standouts include Freeport-McMoRan Inc. and Exact Sciences Corporation, which contributed 1.41% and 1.61% respectively to the Fund’s total return. These were unusual cases, as most of the Fund’s performance was spread more evenly among securities. To a large degree the Fund’s positive relative security selection during the fiscal year was a function of the types of companies and industries on which the Fund focused within sectors. In Financials, for example, we heavily favored banks over insurance companies and REITs, and banks performed quite well at the end of the fiscal year.

Banking wasn’t the only industry to perform well in November. Through the end of the day of the presidential election on November 8, the Fund was up 7.29% and the S&P 500 was up 4.95% for the period. While the Fund’s absolute and relative return were positive, both grew substantially through the end of the month. A sentiment change among investors following the election reveals the factors that drove this phenomenon.

Investors loath uncertainty. The election result was quite unexpected. Overnight, trading in futures and overseas markets suggested that investors would be severely punished for the surprise. However, the market opened modestly down in the U.S. the next day, and subsequently almost doubled its return for the fiscal year in next 3 weeks.

We see two key reasons for this. First, the president-elect’s rhetoric suggests he will pursue an economic policy of lowering taxes and increasing spending. If successful, this would likely lead to an increase in deficit spending and an increase in inflation. We believe deficit spending stimulates the economy, which increases company earnings in our opinion. Higher inflation has historically shown the ability to lead to higher interest rates. We positioned the portfolio for rising interest rates because we were concerned that they would eventually rise from their historically low levels, and we felt that investors were not pricing this potential into stocks that were sensitive to these movements. We did not know when or what would cause interest rates to rise, but that it happened in November was a key driver of relative performance.

Second, it is assumed based on his rhetoric that the president-elect will seek to reduce regulations across industries, and will aim to be generally “pro-business.” This caused sectors with a regulatory overhang, like Health Care, to recover from recent weakness. For now, investors also seem to see this as another reason to own equities in general.

In the long run, earnings growth and valuation matter most. In the short-run, investors can misprice risk and opportunity significantly. One never knows what the catalyst will be for mean reversion, but as we recently saw, market adjustments can be quick and dramatic. We will continue to maintain the long view in the next fiscal year, and will seek to take advantage of opportunities where we find them.

Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice.

Mutual fund investing involves risk. Principal loss is possible. Investments in smaller companies involve additional risks such as limited liquidity and greater volatility. Investments in American Depositary Receipts (“ADRs”) are subject to some extent to the risks associated with directly investing in securities of foreign issuers, including the risk of changes in currency exchange rates, expropriation or nationalization of assets, and the impact of political, diplomatic, or social events. Investments in real estate securities may involve greater risk and volatility including greater exposure to economic downturns and changes in real estate values, rents, property taxes, tax, and other laws. A real estate investment trust’s (REITs) share price may decline because of adverse developments affecting the real estate industry.

Please refer to the Schedule of Investments on page 6 of this report for holdings information. The management commentary above as well as Fund holdings and asset/sector allocations should not be considered a recommendation to buy or sell any security. In addition, please note that Fund holdings and asset/sector allocations are subject to change.

Earnings Growth is a measure of growth in a company’s net income over a specific period, often one year. It is not a prediction of the Fund’s future returns.

See Notes to Financial Statements.
4

LARGECAP FUND INVESTMENT REVIEW (Unaudited) (Continued)

November 30, 2016

Sector Weightings at 11/30/16
% of Total Investments

Top 10 Equity Holdings at 11/30/16
		% of Fund’s
Company	Industry	Net Assets
Alphabet, Inc. Class A	Internet Software & Services	2.98%
Exxon Mobil Corp.	Oil, Gas & Consumable Fuels	2.53%
Microsoft Corp.	Software	2.46%
Bank of America Corp.	Banks	2.36%
Target Corp.	Multiline Retail	2.17%
Qualcomm, Inc.	Semiconductors & Semiconductor Equipment	2.13%
JPMorgan Chase & Co.	Banks	2.04%
Citigroup Inc.	Banks	2.04%
Walgreens Boots Alliance, Inc.	Food & Staples Retailing	2.03%
McKesson Corp.	Health Care Providers & Services	2.03%

As of November 30, 2016, 100.1% of the Fund’s assets were in equity and short-term investments.

See Notes to Financial Statements.
5

LARGECAP FUND SCHEDULE OF INVESTMENTS

November 30, 2016

			Shares	Value
COMMON STOCKS - 100.0%

	Consumer Discretionary - 15.3%
		Auto Components - 0.1%
		Adient PLC (a)	3,346	$	179,212

		Automobiles - 1.2%
		Harley-Davidson, Inc.	23,425		1,426,348

		Distributors - 1.0%
		LKQ Corp. (a)	36,075		1,184,342

		Household Durables - 1.0%
		D.R. Horton, Inc.	20,950		580,734
		TopBuild Corp. (a)	17,352		629,704
					1,210,438
		Leisure Products - 1.1%
		Brunswick Corp.	24,725		1,239,217

		Media - 5.4%
		CBS Corp. Class B	32,075		1,947,594
		The Walt Disney Co.	12,125		1,201,830
		Time Warner Inc.	9,825		902,132
		Viacom Inc. Class B	62,200		2,331,256
					6,382,812
		Multiline Retail - 3.2%
		Kohl’s Corp.	21,710		1,168,649
		Target Corp.	33,010		2,549,692
					3,718,341
		Specialty Retail - 1.8%
		Bed Bath & Beyond Inc.	32,625		1,461,926
		Lumber Liquidators Holdings, Inc. (a)	36,650		646,873
					2,108,799
		Textiles, Apparel & Luxury
		Goods - 0.5%
		Hanesbrands, Inc.	25,150		584,235

	Consumer Staples - 6.4%
		Food & Staples Retailing - 4.6%
		CVS Health Corp.	27,675		2,127,931
		Walgreens Boots Alliance, Inc.	28,225		2,391,504
		Wal-Mart Stores, Inc.	12,750		897,983
					5,417,418
		Household Products - 1.8%
		Kimberly-Clark Corp.	10,318		1,192,864
		The Procter & Gamble Co.	10,625		876,138
					2,069,002
	Energy - 10.3%
		Energy Equipment &
		Services - 1.5%
		Schlumberger Ltd.	20,369		1,712,014

		Oil, Gas & Consumable
		Fuels - 8.8%
		Apache Corp.	19,375		1,277,781
		Chevron Corp.	18,470		2,060,513
		Devon Energy Corp.	38,700		1,870,371
		EOG Resources, Inc.	12,175		1,248,181
		Exxon Mobil Corp.	34,070		2,974,311
		Noble Energy, Inc.	24,875		949,230
					10,380,387
	Financials - 15.0%
		Banks - 11.5%
		Associated Banc-Corp	51,277		1,171,679
		Bank of America Corp.	131,075		2,768,304
		CIT Group Inc.	35,975		1,469,579
		Citigroup Inc.	42,425		2,392,346
		First Horizon National Corp.	63,335		1,208,432
		JPMorgan Chase & Co.	29,925		2,399,087
		PNC Financial Services Group, Inc.	8,105		895,927
		SunTrust Banks, Inc.	11,300		587,035
		Zions Bancorporation	15,300		608,787
					13,501,176
		Capital Markets - 3.0%
		Northern Trust Corp.	14,185		1,165,298
		State Street Corp.	29,750		2,344,300
					3,509,598
		Consumer Finance - 0.5%
		Discover Financial Services	8,770		594,343

	Health Care - 14.8%
		Biotechnology - 6.6%
		AbbVie Inc.	29,975		1,822,480
		Amgen Inc.	10,025		1,444,302
		Celgene Corp. (a)	18,075		2,142,068
		Exact Sciences Corp. (a)	117,600		1,736,952
		Shire PLC ADR	3,352		585,259
					7,731,061
		Health Care Equipment &
		Supplies - 1.0%
		Zimmer Biomet Holdings, Inc.	11,600		1,181,576

See Notes to Financial Statements.
6

LARGECAP FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Shares	Value
COMMON STOCKS (continued)
	Health Care (continued)
		Health Care Providers &
		Services - 5.2%
		Express Scripts Holding Co. (a)	31,025	$	2,354,177
		Hanger, Inc. (a)	149,825		1,423,337
		McKesson Corp.	16,560		2,381,494
					6,159,008
		Pharmaceuticals - 2.0%
		Johnson & Johnson	10,110		1,125,243
		Pfizer Inc.	37,575		1,207,660
					2,332,903
	Industrials - 12.1%
		Air Freight & Logistics - 1.4%
		FedEx Corp.	8,500		1,629,195

		Airlines - 1.0%
		Delta Air Lines, Inc.	23,200		1,117,776

		Building Products - 2.9%
		Johnson Controls Int’l. PLC	35,666		1,604,257
		Masco Corp.	55,450		1,754,992
					3,359,249
		Electrical Equipment - 2.8%
		ABB Ltd. ADR	84,375		1,723,781
		Rockwell Automation, Inc.	11,375		1,520,951
					3,244,732
		Industrial Conglomerates - 2.6%
		General Electric Co.	67,200		2,067,072
		3M Co.	6,000		1,030,440
					3,097,512
		Machinery - 0.5%
		Ingersoll-Rand PLC	7,875		587,003

		Trading Companies &
		Distributors - 0.9%
		HD Supply Holdings, Inc. (a)	27,850		1,092,834

	Information Technology - 24.2%
		Communications
		Equipment - 3.5%
		Cisco Systems, Inc.	78,010		2,326,258
		Lumentum Holdings, Inc. (a)	22,107		886,491
		Viavi Solutions Inc. (a)	110,535		867,700
					4,080,449
		Electronic Equipment,
		Instruments &
		Components - 1.7%
		Corning Inc.	65,975		1,585,379
		Maxwell Technologies, Inc. (a)	93,997		469,985
					2,055,364
		Internet Software &
		Services - 3.5%
		Alphabet, Inc. Class A (a)	4,507		3,496,891
		eBay Inc. (a)	21,070		585,957
					4,082,848
		IT Services - 3.1%
		Alliance Data Systems Corp.	8,550		1,956,069
		PayPal Holdings, Inc. (a)	30,270		1,189,006
		Visa Inc. Class A	7,175		554,771
					3,699,846
		Semiconductors &
		Semiconductor
		Equipment - 6.3%
		Infineon Technologies A.G. ADR	51,875		865,794
		Intel Corp.	33,275		1,154,642
		Maxim Integrated Products, Inc.	21,880		859,228
		NXP Semiconductors N.V. (a)	20,525		2,035,054
		Qualcomm, Inc.	36,780		2,505,821
					7,420,539
		Software - 4.0%
		Microsoft Corp.	48,051		2,895,553
		Oracle Corp.	44,775		1,799,507
					4,695,060
		Technology Hardware, Storage
		& Peripherals - 2.1%
		Apple Inc.	10,675		1,179,801
		Hewlett Packard Enterprise Co.	28,125		669,375
		HP Inc.	38,025		585,585
					2,434,761
	Materials - 1.4%
		Metals & Mining - 1.4%
		Freeport-McMoRan Inc. (a)	109,075		1,674,301

	Real Estate - 0.5%
		Real Estate Investment
		Trusts - 0.5%
		DiamondRock Hospitality Co.	52,475		555,710

		TOTAL COMMON STOCKS
		(COST $116,947,094)			117,449,409

See Notes to Financial Statements.
7

LARGECAP FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Shares	Value
SHORT-TERM INVESTMENTS - 0.1%
	Money Market Funds - 0.1%
		Fidelity Inst’l. Government
		Portfolio Class I, 0.275% (b)	154,454	$	154,454

		Total Money Market Funds			154,454

		TOTAL SHORT-TERM
		INVESTMENTS
		(COST $154,454)			154,454

		TOTAL INVESTMENTS - 100.1%
		(COST $117,101,548)			117,603,863

		NET OTHER ASSETS AND
		LIABILITIES - (0.1%)			(82,929	)

		NET ASSETS - 100.0%		$	117,520,934

	(a)	Non-income producing security.
	(b)	Represents the 7-day yield at November 30, 2016.

	ADR:	American Depositary Receipt
	A.G.:	Aktiengesellschaft is the German term for a public limited liability corporation.
	N.V.:	Naamloze Vennootschap is the Dutch term for a public limited liability corporation.
	PLC:	Public Limited Company

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s Financial Services LLC (“S&P”) and is licensed for use by Thompson Investment Management, Inc. Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any warranties with respect thereto or the results to be obtained by the use thereof, and no such party shall have any liability whatsoever with respect thereto.

See Notes to Financial Statements
8

MIDCAP FUND INVESTMENT REVIEW (Unaudited)

November 30, 2016

Portfolio Managers
James T. Evans, CFA
Jason L. Stephens, CFA

Performance
The MidCap Fund produced a total return of 13.82% for the fiscal year ended November 30, 2016, as compared to its benchmark, the Russell Midcap Index, which returned 9.51%.

Comparison of Change in Value of a Hypothetical $10,000 Investment

Average Annual Total Returns
Through 11/30/16
				Since
				Inception
	1 Year	3 Year	5 Year	(03/31/08)
Thompson MidCap Fund	13.82%	6.49%	13.39%	9.73%
Russell Midcap Index	9.51%	8.57%	14.43%	9.62%

Gross Expense Ratio as of 03/31/16 was 1.49%.
Net Expense Ratio after reimbursement as of 12/1/16 was 1.20%.*

The Advisor has contractually agreed to waive management fees and/or reimburse expenses incurred by the MidCap Fund through March 31, 2018, so that the annual operating expenses of the Fund do not exceed 1.20% of its average daily net assets. Net expense ratios are current as of the most recent Prospectus and are applicable to investors.

Results include the reinvestment of all dividends and capital gains distributions. Investment performance reflects all fee waivers that may be in effect. In the absence of such waivers, total return would be reduced. The performance information reflected in the graph and the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares, nor does it imply future performance. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index based on total market capitalization. You cannot directly invest in an index.

FTSE Russell is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. “FTSE^®” and “Russell^®” are trademarks of the London Stock Exchange Group.

See Notes to Financial Statements.
9

MIDCAP FUND INVESTMENT REVIEW (Unaudited) (Continued)

November 30, 2016

Management Commentary

The fiscal year saw favorable performance for shareholders both on an absolute and relative basis. Performance was largely driven by individual issue selection, as holdings within the Consumer Discretionary, Financial and Health Care sectors each contributed over a percent of issue-specific relative return versus the Fund’s benchmark. Other sectors were positive contributors as well, with only Technology contributing in a negative fashion in a meaningful way. While we are always trying to pick attractive stocks for shareholders, it is gratifying when so many of them perform well at the same time.

Toward the end of the fiscal year there were two important developments with regard to the Fund’s holdings related to the election of Donald Trump as the President of the United States. At this point, the expectation is for his fiscal policy to reflect some combination of tax cuts and infrastructure spending, leading to the likelihood of higher deficits. This contributed to the increase in yield of longer-term Treasury rates. Many of the sectors that had benefited from lower interest rates such as Real Estate, Utilities and Consumer Staples saw the performance of their typical constituents lag the broader index. We had deliberately underweighted these sectors on the belief that something would eventually serve as a catalyst for higher interest rates. While we did not predict the specific catalyst of Mr. Trump’s election, we felt that the valuations of the stocks in these sectors left them vulnerable if such a catalyst occurred.

The second development was related to improving prospects for corporate tax reform. Unlike their large-capitalization peers that tend to derive revenue from many different international tax jurisdictions, the revenues of most midcap stocks are heavily focused on the United States. This means their effective tax rate is often higher than a larger peer who has the opportunity to shelter income overseas. If corporate taxes are lowered to something closer to a 25% rate, the earnings of midcap stocks would likely see a sharp acceleration, lowering the forward P/E ratio of the midcap market. We believe this is one of the key reasons the Russell Midcap Index outperformed the S&P 500 by over 2% from the day after the election through the rest of the fiscal year. The Midcap Fund was a direct beneficiary of this focus on midcap stocks, and if corporate tax reform is passed we are hopeful there could be a further benefit.

Looking forward to the next fiscal year, we are optimistic that these two performance catalysts should continue. We do not believe either is fully priced into the market, and if we are correct shareholders stand to benefit on both an absolute and relative basis.

Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice.

Mutual fund investing involves risk. Principal loss is possible. Midcap companies tend to have more limited liquidity and greater volatility than large-capitalization companies. Investments in American Depositary Receipts (“ADRs”) are subject to some extent to the risks associated with directly investing in securities of foreign issuers, including the risk of changes in currency exchange rates, expropriation or nationalization of assets, and the impact of political, diplomatic, or social events. Investments in real estate securities may involve greater risk and volatility including greater exposure to economic downturns and changes in real estate values, rents, property taxes, tax, and other laws. A real estate investment trust’s (REITs) share price may decline because of adverse developments affecting the real estate industry.

Please refer to the Schedule of Investments on page 12 of this report for holdings information. The management commentary above as well as Fund holdings and asset/sector allocations should not be considered a recommendation to buy or sell any security. In addition, please note that Fund holdings and asset/sector allocations are subject to change.

P/E Ratio is a valuation ratio of a company’s current share price compared to its per-share earnings. Divide market value of a share by the earnings per share.

S&P 500 Index is an unmanaged index commonly used to measure the performance of U.S. stocks. You cannot directly invest in an index.

See Notes to Financial Statements.
10

MIDCAP FUND INVESTMENT REVIEW (Unaudited) (Continued)

November 30, 2016

Sector Weightings at 11/30/16
% of Total Investments

Top 10 Equity Holdings at 11/30/16
		% of Fund’s
Company	Industry	Net Assets
NXP Semiconductors N.V.	Semiconductors & Semiconductor Equipment	2.27%
Alliance Data Systems Corp.	IT Services	2.19%
Hanger, Inc.	Health Care Providers & Services	2.12%
CIT Group Inc.	Banks	2.01%
Bed Bath & Beyond Inc.	Specialty Retail	2.00%
Exact Sciences Corp.	Biotechnology	1.98%
First Horizon National Corp.	Banks	1.83%
Associated Banc-Corp	Banks	1.76%
Northern Trust Corp.	Capital Markets	1.74%
SPX Flow, Inc.	Machinery	1.70%

As of November 30, 2016, 100.1% of the Fund’s net assets were in equity and short-term investments.

See Notes to Financial Statements.
11

MIDCAP FUND SCHEDULE OF INVESTMENTS

November 30, 2016

			Shares	Value
COMMON STOCKS - 99.9%
	Consumer Discretionary - 20.7%
		Automobiles - 1.4%
		Harley-Davidson, Inc.	10,500	$	639,345

		Distributors - 1.3%
		LKQ Corp. (a)	16,870		553,842

		Hotels, Restaurants &
		Leisure - 1.1%
		Extended Stay America, Inc.	30,125		468,745

		Household Durables - 4.6%
		D.R. Horton, Inc.	15,650		433,818
		Newell Brands, Inc.	9,356		439,826
		PulteGroup Inc.	23,425		441,795
		Toll Brothers, Inc. (a)	7,600		225,416
		TopBuild Corp. (a)	13,225		479,935
					2,020,790
		Leisure Products - 1.4%
		Brunswick Corp.	11,900		596,428

		Multiline Retail - 1.8%
		Kohl’s Corp.	12,310		662,647
		Nordstrom, Inc.	2,000		111,840
					774,487
		Specialty Retail - 4.4%
		Bed Bath & Beyond Inc.	19,555		876,260
		Chico’s FAS, Inc.	15,325		234,626
		Lumber Liquidators Holdings, Inc. (a)	27,300		481,845
		Urban Outfitters, Inc. (a)	11,375		359,450
					1,952,181
		Textiles, Apparel &
		Luxury Goods - 4.7%
		Coach, Inc.	8,655		314,955
		Hanesbrands, Inc.	28,185		654,738
		Michael Kors Holdings Ltd. (a)	8,625		400,976
		Skechers U.S.A., Inc. Class A (a)	29,575		673,718
					2,044,387
	Consumer Staples - 3.9%
		Food Products - 3.9%
		Amplify Snack Brands, Inc. (a)	45,750		434,625
		Inventure Foods, Inc. (a)	52,400		473,696
		The Hain Celestial Group, Inc. (a)	9,175		359,568
		The J. M. Smucker Co.	3,480		438,306
					1,706,195
	Energy - 6.1%
		Energy Equipment &
		Services - 1.6%
		FMC Technologies, Inc. (a)	13,125		449,662
		Helmerich & Payne, Inc.	3,235		244,728
					694,390
		Oil, Gas & Consumable
		Fuels - 4.5%
		Cameco Corp.	20,775		190,922
		Devon Energy Corp.	8,775		424,096
		Noble Energy, Inc.	18,675		712,638
		Pioneer Natural Resources Co.	1,475		281,784
		Southwestern Energy Co. (a)	31,400		356,390
					1,965,830
	Financials - 16.9%
		Banks - 8.4%
		Associated Banc-Corp	33,693		769,885
		CIT Group Inc.	21,530		879,500
		First Horizon National Corp.	42,020		801,742
		Regions Financial Corp.	16,535		223,884
		SunTrust Banks, Inc.	8,470		440,017
		Zions Bancorporation	14,335		570,390
					3,685,418
		Capital Markets - 3.3%
		Eaton Vance Corp.	11,545		466,880
		Northern Trust Corp.	9,305		764,406
		State Street Corp.	2,775		218,670
					1,449,956
		Consumer Finance - 1.4%
		Discover Financial Services	9,304		630,532

		Insurance - 2.0%
		FNF Group	13,550		432,787
		Unum Group	10,355		437,706
					870,493
		Mortgage Real Estate
		Investment Trusts - 0.8%
		Annaly Capital Management, Inc.	32,525		332,406

		Thrifts & Mortgage
		Finance - 1.0%
		Flagstar Bancorp, Inc. (a)	15,950		449,471

	Health Care - 13.7%
		Biotechnology - 3.3%
		Exact Sciences Corp. (a)	58,650		866,260
		MiMedx Group Inc. (a)	58,650		556,002
					1,422,262

See Notes to Financial Statements.
12

MIDCAP FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Shares	Value
COMMON STOCKS (continued)
	Health Care (continued)
		Health Care Equipment &
		Supplies - 3.1%
		Hologic, Inc. (a)	8,675	$	332,079
		Natus Medical Inc. (a)	3,825		152,426
		ResMed Inc.	4,721		290,247
		Zimmer Biomet Holdings, Inc.	5,500		560,230
					1,334,982
		Health Care Providers &
		Services - 5.7%
		Acadia Healthcare Co. Inc. (a)	11,625		441,866
		Envision Healthcare Holdings, Inc. (a)	20,675		469,736
		Hanger, Inc. (a)	98,044		931,418
		McKesson Corp.	2,340		336,515
		Patterson Cos., Inc.	8,130		314,956
					2,494,491
		Life Sciences Tools &
		Services - 0.2%
		Fluidigm Corp. (a)	16,200		104,166

		Pharmaceuticals - 1.4%
		Jazz Pharmaceuticals PLC (a)	6,075		629,552

	Industrials - 14.3%
		Building Products - 2.8%
		A.O. Smith Corp.	5,000		243,150
		Masco Corp.	20,575		651,199
		USG Corp. (a)	12,125		347,260
					1,241,609
		Electrical Equipment - 3.2%
		Plug Power, Inc. (a)	52,000		70,980
		Regal Beloit Corp.	9,080		661,932
		Rockwell Automation, Inc.	5,150		688,606
					1,421,518
		Machinery - 5.8%
		Allison Transmission Holdings, Inc.	13,375		443,649
		Ingersoll-Rand PLC	9,400		700,676
		Mueller Water Products, Inc. Class A	28,500		377,055
		SPX Corp. (a)	10,425		254,683
		SPX Flow, Inc. (a)	23,765		744,795
					2,520,858
		Trading Companies &
		Distributors - 2.5%
		HD Supply Holdings, Inc. (a)	17,150		672,966
		W.W. Grainger, Inc.	1,863		429,552
					1,102,518
	Information Technology - 15.9%
		Communications
		Equipment - 1.8%
		Lumentum Holdings, Inc. (a)	8,556		343,096
		Viavi Solutions Inc. (a)	57,281		449,656
					792,752
		Electronic Equipment,
		Instruments &
		Components - 1.5%
		FARO Technologies, Inc. (a)	5,800		211,120
		InvenSense, Inc. (a)	23,475		179,349
		Maxwell Technologies, Inc. (a)	50,397		251,985
					642,454
		Internet Software &
		Services - 1.0%
		Liquidity Services, Inc. (a)	49,800		458,160

		IT Services - 2.8%
		Alliance Data Systems Corp.	4,195		959,732
		Fiserv, Inc. (a)	2,744		287,077
					1,246,809
		Semiconductors &
		Semiconductor
		Equipment - 6.0%
		Cavium Inc. (a)	10,025		571,726
		Infineon Technologies A.G. ADR	26,100		435,609
		Maxim Integrated Products, Inc.	16,516		648,583
		NXP Semiconductors N.V. (a)	10,025		993,979
					2,649,897
		Software - 0.5%
		Take-Two Interactive Software, Inc. (a)	4,035		198,643

		Technology Hardware, Storage
		& Peripherals - 2.3%
		CPI Card Group Inc.	118,613		444,799
		Nimble Storage, Inc. (a)	26,075		197,649
		Pure Storage, Inc. Class A (a)	14,150		197,393
		Stratasys Ltd. (a)	3,900		70,395
		3D Systems Corp. (a)	7,550		104,568
					1,014,804
	Materials - 3.9%
		Chemicals - 1.5%
		Ecolab Inc.	2,581		301,280
		Int’l. Flavors & Fragrances Inc.	2,760		334,098
					635,378
		Containers & Packaging - 0.4%
		AptarGroup, Inc.	2,650		193,927

See Notes to Financial Statements.
13

MIDCAP FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Shares	Value
COMMON STOCKS (continued)

	Materials (continued)
		Metals & Mining - 2.0%
		Freeport-McMoRan Inc. (a)	34,050	$	522,667
		Lundin Mining Corp. (a)	38,900		190,610
		Stillwater Mining Co. (a)	11,600		174,348
					887,625
	Real Estate - 2.7%
		Real Estate Investment
		Trusts - 1.7%
		DiamondRock Hospitality Co.	35,450		375,416
		Host Hotels & Resorts Inc.	20,435		364,560
					739,976
		Real Estate Management &
		Development - 1.0%
		Realogy Holdings Corp.	18,875		455,831

	Utilities - 1.8%
		Multi-Utilities - 1.8%
		MDU Resources Group, Inc.	15,650		435,383
		SCANA Corp.	4,700		331,491
					766,874

		TOTAL COMMON STOCKS
		(COST $38,764,238)			43,789,982

SHORT-TERM INVESTMENTS - 0.2%

	Money Market Funds - 0.2%
		Fidelity Inst’l. Government
		Portfolio Class I, 0.275% (b)	103,120		103,120

		Total Money Market Funds			103,120

		TOTAL SHORT-TERM
		INVESTMENTS (COST $103,120)			103,120

		TOTAL INVESTMENTS - 100.1%
		(COST $38,867,358)			43,893,102

		NET OTHER ASSETS AND
		LIABILITIES - (0.1%)			(47,838	)

		NET ASSETS - 100.0%		$	43,845,264

	(a)	Non-income producing security.
	(b)	Represents the 7-day yield at November 30, 2016.

ADR:	American Depositary Receipt
A.G.:	Aktiengesellschaft is the German term for a public limited liability corporation.
N.V.:	Naamloze Vennootschap is the Dutch term for a public limited liability corporation.
PLC:	Public Limited Company

See Notes to Financial Statements.
14

BOND FUND INVESTMENT REVIEW (Unaudited)

November 30, 2016

Portfolio Managers
       James T. Evans, CFA
       Jason L. Stephens, CFA
       John W. Thompson, CFA

Performance

The Bond Fund produced a total return of 7.05% for the fiscal year ended November 30, 2016, as compared to its benchmark, the Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, which returned 1.29%, and as compared to the Bloomberg Barclays U.S. Credit 1-5 Year Index, which returned 2.08%.

Comparison of Change in Value of a Hypothetical $10,000 Investment

Average Annual Total Returns
Through 11/30/16
	1 Year	3 Year	5 Year	10 Year
Thompson Bond Fund	7.05%	2.33%	3.95%	5.61%
Bloomberg Barclays U.S. Gov’t./Credit 1-5 Year Index	1.29%	1.17%	1.34%	3.03%
Bloomberg Barclays U.S. Credit 1-5 Year Index	2.08%	1.70%	2.54%	3.83%

Gross Expense Ratio as of 03/31/16 was 0.71%.

30-Day SEC Yield as of 11/30/16 was 3.73%.

Results include the reinvestment of all dividends and capital gains distributions. Investment performance reflects all fee waivers that may have been in effect. In the absence of such waivers, total return would have been reduced. The performance information reflected in the graph and the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares, nor does it imply future performance. The Bloomberg Barclays U.S. Government/Credit 1-5 Year Index is a market-value-weighted index of all investment-grade bonds with maturities of more than one year and less than 5 years. The Bloomberg Barclays U.S. Credit 1-5 Year Index is a market-value-weighted index which includes virtually every major investment-grade rated corporate bond with 1-5 years remaining until maturity that serves as a supplementary benchmark. You cannot directly invest in an index.

Bloomberg^® is a trademark and service mark of Bloomberg Finance L.P. Barclays^® is a trademark and service mark of Barclays Bank PLC.

See Notes to Financial Statements.
15

BOND FUND INVESTMENT REVIEW (Unaudited) (Continued)

November 30, 2016

Management Commentary

The fiscal year proved to be both a volatile and rewarding time period for shareholders. The first few months were characterized by a panic among investors in energy-related bonds, as S&P and Moody’s aggressively downgraded many companies on lower spot prices for oil. These worries proved to be overdone, and the Fund benefited from maintaining its energy-related positions along with its ongoing general corporate-bond overweight through the rest of the year. The final month saw a dramatic increase in Treasury yields after the election of Donald Trump as president, as investors forecasted faster growth and wider budget deficits under his administration. While the change in rates had only modest effects on the Fund’s performance, it hurt the performance of our benchmarks tremendously and further contributed to relative performance.

Looking forward to the new fiscal year, we believe it is highly doubtful the Fund will again experience as strong a return as it did in the recently concluded fiscal year. While the 30-day SEC yield at the end of the fiscal year was a robust 3.73%, we expect rising interest rates will eventually work their way over to corporate bonds and depress returns. This is because corporate spreads for 10-year bonds at the BBB credit rating tier narrowed to 158 basis points by the end of the fiscal year. Such a spread is roughly the midpoint of its typical 1-2% range during non-recessionary times¹. To us this suggests there is not much of a cushion in corporate spreads before future increases in Treasury rates from fiscal year end levels could directly flow through to higher yields on corporate bonds. Such action would dampen the return of the Fund as bond prices adjust.

Despite this more realistic outlook, we do believe the Fund’s holdings are attractive for shareholders and hopefully will provide a competitive return versus the Fund’s benchmarks and other fixed income alternatives. We believe the Fund holds a potential yield advantage over its benchmarks with regard to current income simply because in general corporate bonds at the BBB quality tier have historically shown the ability to yield more than the similar maturity Treasuries, Agencies and higher-rated corporate bonds which comprise a large portion of the benchmark’s holdings. It is precisely because we have been concerned about the potential for higher interest rates that we have been overweight these BBB bonds. At the same time the duration of the Fund has been deliberately reduced to 1.45, less than the durations of 2.77 and 2.74 of its two benchmarks. This was done to reduce the relative sensitivity of the Fund’s holdings to rising interest rates. While we cannot immunize the portfolio completely from the risk of higher rates, we are optimistic that the steps we have taken should provide at least some offset while still offering a competitive return.

So while shareholders should lower their expectations after such a strong fiscal year, we believe the Fund is positioned well for the future on a relative and absolute basis. As always, we will remain flexible with regard to the types of bonds we purchase in an effort to maintain this positioning, adding non-corporates only when their yield becomes high enough to justify their associated risks. It is this approach that has generated the Fund’s track record in recent years, and one that we feel should continue to benefit shareholders going forward.

Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice.

Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. Investments in bonds of foreign issuers involve greater volatility, political and economic risks, and differences in accounting methods. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities.

Please refer to the Schedule of Investments on page 18 of this report for holdings information. The management commentary above as well as Fund holdings should not be considered a recommendation to buy or sell any security. In addition, please note that Fund holdings are subject to change.

The federal government guarantees interest payments from government securities while dividend payments carry no such guarantee. Government securities, if held to maturity, guarantee the timely payment of principal and interest.

SEC Yield is a standardized yield computed by dividing the net investment income per share earned during the 30-day period prior to quarter-end and was created to allow for fairer comparisons among bond funds.

Basis point is a unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument.

Spread is the percentage point difference between yields of various classes of bonds compared to treasury bonds.

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

Yield is the income earned from a bond, which takes into account the sum of the interest payment, the redemption value at the bond’s maturity, and the initial purchase price of the bond.

Credit Ratings are provided by Standard & Poor’s, who assign a rating based on their analysis of the issuer’s credit worthiness. The highest rating given is AAA and the lowest is C.

____________________

1 Source: Bloomberg

See Notes to Financial Statements.
16

BOND FUND INVESTMENT REVIEW (Unaudited) (Continued)

November 30, 2016

The purpose of Moody’s ratings is to provide investors with a simple system of gradation by which relative creditworthiness of securities may be noted. Gradations of creditworthiness are indicated by rating symbols, with each symbol representing a group in which the credit characteristics are broadly the same. The highest rating assigned by Moody’s is AAA and the lowest is C.

Although the makeup of the Bond Fund’s portfolio is constantly changing, as of November 30, 2016, 81.09% of the Fund’s portfolio was invested in corporate bonds. Due to prevailing market conditions, the composition of the Fund’s portfolio as of that date was consistent with the composition of the Fund’s portfolio over the past 5 years. In addition, as of that date 65.69% of the Fund’s portfolio was invested in securities rated BBB by Standard & Poor’s, while an additional 13.61% of the Fund’s portfolio was rated below investment grade and 4.05% of the Fund’s portfolio was not rated by Standard & Poor’s. For portfolio information current as of the most recent quarter-end, please call 1-800-999-0887 or visit our website at www.thompsonim.com. Compared to a portfolio that is more evenly allocated between government and corporate bonds, a portfolio that is heavily allocated to corporate bonds may provide higher returns, but is also subject to greater levels of credit and liquidity risk and to greater price fluctuations. A portfolio that is significantly allocated to bonds having lower and below-investment-grade ratings may also be subject to greater levels of credit and liquidity risk and experience greater price fluctuations than a portfolio comprised of higher-rated investment-grade bonds.

Portfolio Concentration at 11/30/16
(Includes cash and cash equivalents)
% Total Investments
Asset Allocation
Corporate Bonds	81.09%
Asset-Backed Securities	13.82%
Taxable Municipal Bonds	2.84%
U.S. Government & Agency Issues	1.56%
Convertible Bonds	0.37%
Tax-Exempt Municipal Bonds	0.31%
Money Market Funds	0.01%
	100.00%

Quality
U.S. Government & Agency Issues	1.56%
AAA	0.50%
AA	2.08%
A	12.50%
BBB	65.69%
BB and Below	13.61%
Not Rated	4.05%
Money Market Funds	0.01%
	100.00%


Top 10 Bond Holdings at 11/30/16
% of Fund’s Net Assets
Issuer
MBIA Inc.	3.68%
GFI Group Inc.	3.53%
XL Group PLC	3.22%
Freeport-McMoran Oil & Gas LLC	3.01%
SESI LLC	2.94%
American Airlines Group Inc.	2.81%
Noble Corporation PLC	2.75%
Regency Energy Partners LP	2.33%
Doric Nimrod Air Alpha	2.13%
Jabil Circuit, Inc.	2.09%

See Notes to Financial Statements.
17

BOND FUND SCHEDULE OF INVESTMENTS

November 30, 2016

				Principal
				Amount		Value
BONDS - 97.0%

	Asset-Backed Securities - 13.6%
		Air Canada
			5.000% due 12/15/2023,
			Series 2015-2 B (e)	$	5,740,000	$	5,754,350

		America West Airlines
			7.930% due 1/2/2019,
			Series 1999-1		6,336,054		6,716,218
			8.057% due 7/2/2020,
			Series 2000-1		20,115		22,630
			7.100% due 4/2/2021,
			Series 2001-1		4,389,561		4,729,752

		American Airlines
			7.000% due 1/31/2018,
			Series 2011-1 B (e)		22,502,946		23,290,550

		Basketball Properties Ltd.
			6.650% due 3/1/2025 (e)		4,452,537		4,764,215

		British Airways PLC
			5.625% due 6/20/2020,
			Series 2013-1 B (e)		65,706		68,663
			5.625% due 6/20/2020,
			Series 2013-1 B (e)		31,546,081		32,965,655

		Bvps II Funding Corp.
			8.890% due 6/1/2017		3,000		3,069

		CAL Funding II Ltd.
			3.350% due 3/27/2023,
			Series 2013-1A A (e)		4,110,333		3,978,012

		Continental Airlines
			6.748% due 3/15/2017,
			Series 1998-1 B		107,249		108,525
			6.648% due 9/15/2017,
			Series 1998-1 A		883,074		895,216
			6.900% due 1/2/2018,
			Series 1997-4 A		134,235		135,416
			6.820% due 5/1/2018,
			Series 1998-3 A-1		61,861		64,181
			6.000% due 1/12/2019,
			Series 2010-1 B		3,225,880		3,306,527
			7.256% due 3/15/2020,
			Series 1999-2 A-1		28,124		30,058
			6.250% due 4/11/2020,
			Series 2012-1 B		6,462,334		6,866,229
			5.500% due 10/29/2020,
			Series 2012-2 B		9,773,051		10,212,838

		Delta Air Lines
			9.750% due 12/17/2016,
			Series 2009-1 B		861,992		864,742
			8.021% due 8/10/2022,
			Series 2007-1 B		2,329,197		2,649,461

		Dong Fang Container
			Finance SPV Ltd.
			3.960% due 9/25/2023,
			Series 2013-1 A (e)		3,302,799		3,161,680

		Doric Nimrod Air Alpha
			6.125% due 11/30/2019,
			Series 2013-1 B (e)		4,317,573		4,479,482
			6.125% due 11/30/2019,
			Series 2013-1 B (e)		26,497,483		27,491,138

		Doric Nimrod Air
			Finance Alpha Ltd.
			6.500% due 5/30/2019,
			Series 2012-1 B (e)		10,819,143		11,140,612

		EngenCap ABS Trust
			3.670% due 7/20/2020,
			Series 2016-1 A (e)		30,000,000		29,607,000

		Express Pipeline LP
			7.390% due 12/31/2017 (e)		496,000		513,235

		Federal Express Corp.
			7.840% due 1/30/2018,
			Series 1996-B2		167,766		173,637

		FPL Energy Caithness
			Funding Corp.
			7.645% due 12/31/2018 (e)		2,682,770		2,776,667

		Great River Energy
			5.829% due 7/1/2017 (e)		516,647		524,879

		Landmark Leasing LLC
			6.200% due 10/1/2022,
			Series 2004A (e)		329,402		331,791

		Latam Airlines Group
			4.500% due 11/15/2023,
			Series 2015-1 B		5,558,113		5,419,160

See Notes to Financial Statements.
18

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

				Principal
				Amount		Value
BONDS (continued)

	Asset-Backed Securities (continued)
		Northwest Airlines
			8.028% due 11/1/2017,
			Series 2007-1 B	$	89,656	$	94,640
			7.575% due 3/1/2019,
			Series 1999-2 A		786,486		817,946
			7.150% due 10/1/2019,
			Series 2000-1 G (b)		18,913		19,954
			6.264% due 11/20/2021,
			Series 2002-1 G-2		1,673,261		1,794,573

		Prudential Securities
			Structured Assets, Inc.
			0.954% due 3/2/2025,
			Series 1998-1 A (b) (e)		11,042,146		10,048,353

		Textainer Marine
			Containers III Ltd.
			3.270% due 10/20/2024,
			Series 2014-1A A (e)		11,875,000		11,382,556

		TRU Trust
			2.788% due 11/15/2019,
			Series 2016-1 A (b) (e)		10,000,000		9,964,872
			3.688% due 11/15/2019,
			Series 2016-1 B (b) (e)		14,600,000		14,641,655
			4.538% due 11/15/2019,
			Series 2016-1 C (b) (e)		9,000,000		9,028,887

		United Air Lines
			5.375% due 8/15/2021,
			Series 2013-1 B		2,040,376		2,132,193

		US Airways
			8.360% due 1/20/2019,
			Series 1999-1 A		62,135		63,999
			8.000% due 10/1/2019,
			Series 2012-1 B		19,215,598		21,089,119
			7.076% due 3/20/2021,
			Series 2001-1 G		798,418		856,304

		Virgin Australia Trust
			5.000% due 10/23/2023,
			Series 2013-1 A (e)		184,305		190,986

		Total Asset-Backed Securities					275,171,625

	Convertible Bonds - 0.4%
		Hospitality Properties Trust
			3.800% due 3/15/2027		7,309,000		7,327,273

		Total Convertible Bonds					7,327,273

	Corporate Bonds - 79.9%
		AbbVie Inc.
			1.750% due 11/6/2017		13,764,000		13,796,318

		Actavis Funding SCS
			1.300% due 6/15/2017		6,900,000		6,906,086

		AerCap Aviation Solutions B.V.
			6.375% due 5/30/2017		1,525,000		1,558,032

		Agilent Technologies, Inc.
			6.500% due 11/1/2017		2,013,000		2,100,209

		Air Lease Corp.
			5.625% due 4/1/2017		1,193,000		1,207,686

		Alcoa Inc.
			5.550% due 2/1/2017		143,000		143,817

		American Equity Investment
			Life Holding Co.
			6.625% due 7/15/2021		20,250,000		21,110,625

		American Express
			Centurion Bank
			5.950% due 6/12/2017		1,133,000		1,160,398

		Applied Materials, Inc.
			7.125% due 10/15/2017		456,000		476,871

		Assured Guaranty US
			Holdings Inc.
			6.400% due 12/15/2066 (b)		14,597,000		10,692,303

		Astoria Financial Corp.
			5.000% due 6/19/2017		30,807,000		31,261,403

		AT&T Inc.
			1.600% due 2/15/2017		9,112,000		9,119,599

See Notes to Financial Statements.
19

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

				Principal
				Amount		Value
BONDS (continued)

	Corporate Bonds (continued)
		Athene Global Funding
			2.875% due 10/23/2018 (e)	$	33,217,000	$	33,192,021

		Autodesk, Inc.
			1.950% due 12/15/2017		1,000,000		1,002,420

		Aviation Capital Group Corp.
			4.625% due 1/31/2018 (e)		1,080,000		1,109,128

		Avon Products, Inc.
			6.600% due 3/15/2020 (b)		500,000		499,015

		Bank of America Corp.
			6.000% due 9/1/2017		535,000		552,416
			5.750% due 12/1/2017		1,380,000		1,433,751
			2.836% due 10/9/2024 (b)		35,000,000		33,337,500

		Beam Suntory Inc.
			1.875% due 5/15/2017		292,000		292,431

		Bear Stearns Cos. LLC
			6.400% due 10/2/2017		2,909,000		3,026,849

		Berkshire Hathaway Inc.
			1.900% due 1/31/2017		500,000		500,794

		BGC Partners Inc.
			5.375% due 12/9/2019		110,000		114,750

		BNP Paribas S.A.
			1.250% due 12/12/2016		675,000		675,088

		Brandywine Operating
			Partnership, L.P.
			5.700% due 5/1/2017		1,455,000		1,478,101

		Broadridge Financial
			Solutions, Inc.
			6.125% due 6/1/2017		4,560,000		4,657,315

		Brookfield Asset
			Management Inc.
			5.800% due 4/25/2017		185,000		187,926

		Cabot Corp.
			2.550% due 1/15/2018		17,057,000		17,108,666

		Camden Property Trust
			5.700% due 5/15/2017		605,000		616,153

		Capital One Bank USA N.A.
			1.300% due 6/5/2017		255,000		254,844

		Capital One Financial Corp.
			5.250% due 2/21/2017		274,000		276,279
			6.750% due 9/15/2017		7,228,000		7,514,691

		Carpenter Technology Corp.
			6.990% due 4/20/2018		2,415,000		2,517,741
			7.060% due 5/21/2018		500,000		520,041
			7.030% due 5/22/2018		8,000		8,317

		Catholic Health Initiatives
			1.600% due 11/1/2017		3,427,000		3,427,994

		Citigroup, Inc.
			1.850% due 11/24/2017		390,000		391,107
			2.761% due 10/15/2024 (b)		35,000,000		34,232,100

		Citizens Bank, N.A.
			1.600% due 12/4/2017		2,945,000		2,940,153

		Cleveland Electric
			Illuminating Co.
			7.880% due 11/1/2017		130,000		137,169

		Cliffs Natural Resources Inc.
			5.900% due 3/15/2020		22,799,000		21,773,045

		Compass Bank
			1.850% due 9/29/2017		630,000		628,552
			6.400% due 10/1/2017		765,000		790,211

		Credit Suisse A.G. New York
			1.375% due 5/26/2017		835,000		834,862

		D.R. Horton, Inc.
			4.750% due 5/15/2017		175,000		177,713

		Deutsche Bank AG
			1.400% due 2/13/2017		3,771,000		3,769,446
			1.512% due 2/13/2017 (b)		2,717,000		2,713,750
			1.350% due 5/30/2017		15,750,000		15,681,739
			6.000% due 9/1/2017		19,187,000		19,649,138

See Notes to Financial Statements.
20

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Principal
			Amount		Value
BONDS (continued)

	Corporate Bonds (continued)
		Diamond 1 Finance Corp. /
		Diamond 2 Finance Corp.
		4.420% due 6/15/2021 (e)	$	500,000	$	514,497

		Discover Financial Services
		6.450% due 6/12/2017		3,432,000		3,515,161
		10.250% due 7/15/2019		11,304,000		13,116,856

		Domtar Corp.
		10.750% due 6/1/2017		10,287,000		10,720,700

		Ecolab Inc.
		3.000% due 12/8/2016		451,000		451,101

		El Paso Corp.
		7.000% due 6/15/2017		3,177,000		3,261,340

		Embraer Overseas Ltd.
		6.375% due 1/24/2017		14,277,000		14,348,385

		Enterprise Products
		Operating LLC
		7.000% due 6/1/2067 (b)		8,538,000		7,214,610

		Everest Reinsurance
		Holdings Inc.
		6.600% due 5/15/2037 (b)		8,692,000		7,431,660

		Exelon Generation Co., LLC
		6.200% due 10/1/2017		5,537,000		5,744,460

		Fairfax Financial Holdings Ltd.
		7.375% due 4/15/2018		24,226,500		25,680,599

		Fidelity National Financial, Inc.
		6.600% due 5/15/2017		3,309,000		3,374,538

		Fifth Third Bancorp
		4.900% due 9/30/2019 (b) (d)		40,162,000		37,551,470

		First Industrial, L.P.
		5.950% due 5/15/2017		2,000,000		2,037,554

		FMC Technologies, Inc.
		2.000% due 10/1/2017		6,473,000		6,475,874

		Ford Motor Credit Co. LLC
		8.000% due 12/15/2016		24,857,000		24,905,943
		1.500% due 1/17/2017		1,500,000		1,500,570
		3.000% due 6/12/2017		3,675,000		3,702,342

		Freeport-McMoran Oil &
		Gas LLC
		6.125% due 6/15/2019		10,233,000		10,514,408
		6.625% due 5/1/2021		24,585,000		25,119,478

		General Electric Capital Corp.
		6.000% due 2/15/2017		75,000		75,563
		1.261% due 5/5/2026 (b)		613,000		592,567

		Genworth Financial Inc.
		7.700% due 6/15/2020		2,918,000		2,801,280

		GFI Group Inc.
		8.375% due 7/19/2018 (b)		66,627,000		71,290,890

		Globo Comunicacao e
		Participacoes S.A.
		5.307% due 5/11/2022 (c) (e)		16,990,000		16,905,050

		Goldman Sachs Group, Inc.
		6.250% due 9/1/2017		547,000		565,303

		Great Plains Energy Inc.
		6.875% due 9/15/2017		395,000		409,749

		Harsco Corp.
		5.750% due 5/15/2018		15,479,000		16,388,391

		HCP, Inc.
		5.625% due 5/1/2017		1,333,000		1,354,960

		Hewlett Packard Enterprise Co.
		2.700% due 10/5/2017 (b) (e)		2,230,000		2,254,030

		Highmark Inc.
		4.750% due 5/15/2021 (e)		25,715,000		25,595,014

		Hospitality Properties Trust
		6.700% due 1/15/2018		5,007,000		5,151,217

		HRPT Properties Trust
		6.250% due 6/15/2017		6,773,000		6,781,195
		6.650% due 1/15/2018		33,478,000		34,333,028

See Notes to Financial Statements.
21

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Principal
			Amount		Value
BONDS (continued)

	Corporate Bonds (continued)
		HSBC USA Inc.
		1.300% due 6/23/2017	$	448,000	$	447,652

		Ingram Micro Inc.
		5.250% due 9/1/2017		210,000		214,694

		International Lease
		Finance Corp.
		8.750% due 3/15/2017		1,213,000		1,235,659
		8.875% due 9/1/2017		3,211,000		3,371,550

		INVISTA Finance LLC
		4.250% due 10/15/2019 (e)		32,365,000		32,361,958

		Jabil Circuit, Inc.
		8.250% due 3/15/2018		39,316,000		42,258,803

		JPMorgan Chase & Co.
		7.900% due 4/30/2018 (b) (d)		36,491,000		37,266,434

		Kinder Morgan Inc.
		7.000% due 2/1/2018		22,171,000		23,046,289

		Koninklijke Ahold Delhaize N.V.
		6.500% due 6/15/2017		6,575,000		6,739,382

		Kraft Heinz Foods Co.
		6.125% due 8/23/2018 (e)		50,000		53,504

		Lennox Int’l. Inc.
		4.900% due 5/15/2017		1,500,000		1,521,696

		Lincoln National Corp.
		3.264% due 5/17/2066 (b)		25,985,000		20,690,556
		6.050% due 4/20/2067 (b)		19,155,000		14,749,350

		Manufacturers & Traders
		Trust Co.
		6.625% due 12/4/2017		9,143,000		9,585,759
		1.818% due 12/28/2020 (b)		14,173,000		14,083,001
		5.629% due 12/1/2021 (b)		1,002,000		981,209

		Masco Corp.
		6.625% due 4/15/2018		13,741,000		14,668,518

		MBIA Inc.
		6.400% due 8/15/2022		75,017,000		74,266,830

		Merrill Lynch & Co.
		5.700% due 5/2/2017		106,000		107,818
		6.400% due 8/28/2017		2,898,000		2,999,053

		Midcontinent Express
		Pipeline LLC
		6.700% due 9/15/2019 (e)		22,665,000		23,514,937

		Molson Coors Brewing Co.
		2.000% due 5/1/2017		481,000		482,129

		Monsanto Co.
		1.150% due 6/30/2017		486,000		484,193

		Morgan Stanley
		5.550% due 4/27/2017		755,000		767,550
		6.250% due 8/28/2017		1,764,000		1,824,429
		3.063% due 4/1/2021 (b)		130,000		132,763
		3.063% due 6/9/2023 (b)		100,000		99,250

		MPT Operating Partnership, L.P.
		6.375% due 2/15/2022		20,407,000		20,942,684

		Murray Street Investment Trust I
		4.647% due 3/9/2017 (c)		3,483,000		3,510,063

		National Australia Bank Ltd.
		2.750% due 3/9/2017		2,500,000		2,511,468

		National City Bank of
		Cleveland OH
		5.800% due 6/7/2017		3,442,000		3,516,781

		National Retail Properties Inc.
		6.875% due 10/15/2017		1,103,000		1,150,944

		NetApp, Inc.
		2.000% due 12/15/2017		3,310,000		3,317,017

		Neuberger Berman Group LLC
		5.875% due 3/15/2022 (e)		21,220,000		22,015,750

		NIPSCO Capital Markets, Inc.
		7.860% due 3/27/2017		296,000		296,788

		Noble Drilling Corp.
		7.500% due 3/15/2019		20,381,000		20,533,857

See Notes to Financial Statements.
22

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Principal
			Amount		Value
BONDS (continued)

	Corporate Bonds (continued)
		Noble Holding Int’l. Ltd.
		4.900% due 8/1/2020	$	21,828,000	$	18,990,360
		4.625% due 3/1/2021		20,264,000		16,109,880

		Northern Indiana Public
		Service Co.
		7.590% due 6/12/2017		187,000		191,516

		Nucor Corp.
		5.750% due 12/1/2017		82,000		85,193

		NXP B.V. / NXP Funding LLC
		5.750% due 2/15/2021 (e)		9,519,000		9,875,963

		Pennsylvania Electric Co.
		6.050% due 9/1/2017		4,299,000		4,430,627

		Pitney Bowes Inc.
		5.750% due 9/15/2017		564,500		581,019
		5.250% due 1/15/2037		2,450,000		2,448,496

		Plains Exploration &
		Production Co.
		6.500% due 11/15/2020		16,327,000		16,808,646
		6.750% due 2/1/2022		7,970,000		8,288,800

		Platinum Underwriters
		Finance, Inc.
		7.500% due 6/1/2017		1,366,000		1,404,800

		PNC Bank, N.A.
		5.250% due 1/15/2017		250,000		251,141
		4.875% due 9/21/2017		3,499,000		3,589,106
		6.000% due 12/7/2017		415,000		432,517

		Pride Int’l., Inc.
		8.500% due 6/15/2019		22,476,000		24,189,795

		Regency Energy Partners LP
		6.500% due 7/15/2021		45,484,000		46,915,700

		Reinsurance Group of
		America, Inc.
		3.515% due 12/15/2065 (b)		32,993,000		27,219,225

		Scripps Networks Interactive, Inc.
		2.700% due 12/15/2016		790,000		790,348

		Seagate HDD Cayman
		7.000% due 11/1/2021		2,569,000		2,647,355

		Select Income REIT
		2.850% due 2/1/2018		18,866,000		18,949,425

		Seminole Indian
		Tribe of Florida
		8.030% due 10/1/2020 (e)		23,900,000		24,378,000

		SESI LLC
		6.375% due 5/1/2019		22,231,000		21,953,112
		7.125% due 12/15/2021		38,264,000		37,403,060

		SLM Corp.
		5.500% due 3/15/2019		800,000		784,334
		6.000% due 3/15/2019 (c)		140,000		138,719
		6.600% due 3/15/2019 (c)		395,000		395,076
		5.190% due 4/24/2019		529,000		521,065
		6.250% due 9/15/2020 (c)		172,000		167,695
		6.500% due 12/15/2020 (c)		71,000		71,026
		6.750% due 12/15/2020 (c)		95,000		93,760
		6.750% due 12/15/2020 (c)		306,000		302,005
		6.000% due 6/15/2021		261,000		247,139
		6.150% due 6/15/2021		146,000		139,087
		7.250% due 1/25/2022		602,000		623,070

		Smithfield Foods, Inc.
		7.750% due 7/1/2017		4,865,000		5,013,383

		StanCorp Financial Group, Inc.
		6.900% due 6/1/2067 (b)		38,809,000		30,891,964

		Standard Chartered PLC
		4.000% due 7/12/2022 (b) (e)		27,573,000		27,654,175

		Sunoco Inc.
		5.750% due 1/15/2017		146,000		146,653

		Symantec Corp.
		2.750% due 6/15/2017		1,608,000		1,614,697

		Tech Data Corp.
		3.750% due 9/21/2017		4,643,000		4,707,347

		Time Warner Cable Inc.
		5.850% due 5/1/2017		607,000		617,722

See Notes to Financial Statements.
23

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Principal
			Amount		Value
BONDS (continued)

	Corporate Bonds (continued)
		Tyco Electronics Group S.A.
		6.550% due 10/1/2017	$	7,845,000	$	8,176,247

		UBS AG, Stamford Branch
		7.375% due 6/15/2017		217,000		223,381

		Unitrin, Inc.
		6.000% due 5/15/2017		16,222,000		16,529,391

		Vodafone Group PLC
		1.625% due 3/20/2017		1,175,000		1,175,741

		Wells Fargo & Co.
		7.980% due 3/15/2018 (b) (d)		32,006,000		33,014,189

		Western Power Distribution
		7.250% due 12/15/2017 (e)		2,580,000		2,663,159

		Western Union Co.
		2.875% due 12/10/2017		127,000		128,609

		Westvaco Corp.
		7.500% due 6/15/2027		427,000		426,645

		White Mountains Insurance
		Group, Ltd.
		6.375% due 3/20/2017 (e)		4,950,000		5,012,915

		Willis North America Inc.
		6.200% due 3/28/2017		1,825,000		1,851,309

		Wyndham Worldwide
		5.750% due 2/1/2018		2,046,000		2,101,275

		XL Group PLC
		6.500% due 4/15/2017 (b) (d)		85,311,000		65,049,637

		Zions Bancorporation
		4.500% due 3/27/2017		1,644,000		1,653,890

		Total Corporate Bonds				1,615,056,053

	Federal Agency Mortgage-Backed
		Securities - 0.0%
		Freddie Mac
		6.500% due 12/1/2018,
		Series C9-0241		9,641		10,029
		Ginnie Mae
		7.000% due 5/15/2033,
		Series 78-2071X		29,381		34,718

		Total Federal Agency Mortgage-
		Backed Securities				44,747

	Taxable Municipal Bonds - 2.8%
		Casino Reinvestment
		Development Authority NJ
		5.340% due 6/1/2020		7,775,000		7,892,014

		City of Cleveland OH Airport
		System Revenue
		5.239% due 1/1/2017		230,000		230,451

		City of Miami FL
		6.750% due 12/1/2018		1,310,000		1,374,976

		City of Newark NJ
		5.603% due 4/1/2018		455,000		466,125

		County of Reeves TX Certs. of
		Participation
		5.000% due 12/1/2016		15,000		15,000
		6.000% due 12/1/2016		20,000		20,000
		5.000% due 12/1/2017		45,000		33,745
		6.250% due 12/1/2017		45,000		33,744
		7.400% due 12/1/2017		320,000		239,968
		5.625% due 12/1/2018		125,000		86,200
		6.500% due 12/1/2018		225,000		155,162
		7.500% due 12/1/2018		35,000		24,136
		6.750% due 12/1/2019		1,320,000		817,502
		6.125% due 12/1/2020		680,000		373,340
		6.875% due 12/1/2020		370,000		203,149
		6.375% due 12/1/2021		45,000		21,554
		7.000% due 12/1/2021		500,000		239,500
		7.700% due 12/1/2021		3,340,000		1,600,428

		District of Columbia Revenue
		5.375% due 10/1/2018		1,455,000		1,468,342

See Notes to Financial Statements.
24

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Principal
			Amount		Value
BONDS (continued)

	Taxable Municipal Bonds (continued)
		Eastern Illinois University
		5.000% due 4/1/2017	$	405,000	$	408,548
		5.250% due 4/1/2018		775,000		801,482
		5.450% due 4/1/2019		515,000		544,041
		5.600% due 4/1/2020		585,000		614,057
		5.700% due 4/1/2021		125,000		131,039

		Fannin County TX Public
		Facility Corp.
		4.600% due 10/1/2017		740,000		688,533
		5.200% due 10/1/2019		515,000		427,239
		5.650% due 10/1/2021		825,000		642,452

		Florida State Mid-Bay Bridge
		Authority
		3.784% due 10/1/2021		4,325,000		4,390,826

		Garza County TX Public
		Facility Corp.
		6.200% due 10/1/2020		1,615,000		1,185,571

		Guam Gov’t. Waterworks
		Authority
		2.516% due 7/1/2017		210,000		210,029
		3.061% due 7/1/2018		255,000		256,244

		Kentucky Economic
		Development Finance
		Authority
		7.000% due 12/1/2021		270,000		271,766

		Lancaster PA Parking Authority
		5.760% due 12/1/2017		500,000		508,200

		LL & P Wind Energy, Inc. WA
		5.733% due 12/1/2017 (e)		480,000		482,808
		5.983% due 12/1/2022 (e)		8,595,000		8,722,292

		Memphis TN Health Educational
		& Housing Facility Board
		4.500% due 3/1/2018		75,000		75,007

		New Jersey Economic
		Development Authority
		5.000% due 6/15/2017 (e)		300,000		301,413

		New Jersey Sports &
		Exposition Authority
		6.076% due 3/1/2023		555,000		605,594

		Pontotoc County OK Educational
		Facilities Authority
		4.119% due 9/1/2023		290,000		298,746

		Public Finance Authority WI
		Student Housing Revenue
		4.500% due 7/1/2021		1,730,000		1,715,537

		Puerto Rico Commonwealth
		Gov’t. Development Bank
		4.704% due 5/1/2016 (f)		24,080,000		5,719,000

		Rockford IL Park District
		3.000% due 12/15/2017		350,000		352,384

		San Luis AZ Facility
		Development Corp.
		4.650% due 5/1/2017		1,130,000		1,050,787
		5.050% due 5/1/2018		780,000		686,049
		5.350% due 5/1/2019		1,240,000		1,028,109
		5.600% due 5/1/2020		670,000		535,069
		5.700% due 5/1/2020		850,000		678,819
		5.800% due 5/1/2021		1,055,000		831,625
		5.900% due 5/1/2021		980,000		772,505
		6.100% due 5/1/2022		1,030,000		749,984
		6.200% due 5/1/2022		1,035,000		753,635

		Summit County OH Development
		Finance Authority
		6.250% due 5/15/2026		630,000		651,634

		West Texas Detention
		Facility Corp.
		4.400% due 11/1/2017		1,195,000		1,127,387
		4.700% due 11/1/2018		920,000		816,150

		Willacy County TX Local
		Gov’t. Corp.
		7.800% due 12/1/2028		1,495,000		134,550

		Willacy County TX Public
		Facility Corp.
		6.000% due 12/1/2016		1,330,000		1,330,000
		6.000% due 12/1/2017		390,000		387,820
		5.600% due 12/1/2018		420,000		393,989

		Total Taxable Municipal Bonds				56,576,256

See Notes to Financial Statements.
25

BOND FUND SCHEDULE OF INVESTMENTS (Continued)

November 30, 2016

			Shares or Principal
			Amount		Value
BONDS (continued)

	Tax-Exempt Municipal Bonds - 0.3%
		Casino Reinvestment
		Development Authority NJ
		5.250% due 6/1/2019	$	5,000,000	$	5,018,350

		Puerto Rico Commonwealth
		5.500% due 7/1/2018		100,000		105,198
		5.500% due 7/1/2019		130,000		139,151

		Puerto Rico Electric
		Power Authority
		5.000% due 7/1/2019		770,000		789,835

		Puerto Rico Highways &
		Transportation Authority
		4.125% due 7/1/2019		120,000		120,997

		Puerto Rico Municipal
		Finance Agency
		5.250% due 8/1/2019		100,000		102,596

		Total Tax-Exempt
		Municipal Bonds				6,276,127

		TOTAL BONDS (COST
		$2,065,302,216)				1,960,452,081

SHORT-TERM INVESTMENTS - 1.6%

	Money Market Funds - 0.0%
		Fidelity Inst’l. Government
		Portfolio
		Class I, 0.275% (a)		150,083		150,083

		Total Money Market Funds				150,083

	United States Government &
		Agency Issues - 1.6%
		U.S. Treasury Bills
		0.078% due 12/1/2016 (b)	$	5,000,000		5,000,000
		0.138% due 12/8/2016 (b)		10,000,000		9,999,509
		0.143% due 12/15/2016 (b)		5,000,000		4,999,673
		0.233% due 12/22/2016 (b)		5,000,000		4,999,247
		0.358% due 12/29/2016 (b)		6,000,000		5,998,458

		Total United States Government
		& Agency Issues				30,996,887

		TOTAL SHORT-TERM
		INVESTMENTS
		(COST $31,146,970)				31,146,970

		TOTAL INVESTMENTS - 98.6%
		(COST $2,096,449,186)				1,991,599,051

		NET OTHER ASSETS AND
		LIABILITIES - 1.4%				28,935,522

		NET ASSETS - 100.0%			$	2,020,534,573

	(a)	Represents the 7-day yield at November 30, 2016.
	(b)	Rate shown represents the current coupon rate at November 30, 2016.
	(c)	Security is a “step-up” bond where the coupon increases or steps up at a predetermined date.
	(d)	Perpetual maturity; date shown represents next contractual call date.
	(e)	Security subject to restrictions on resale under federal securities laws and which therefore may only be resold upon registration under the Securities Act of 1933, as amended, or in transactions exempt from registration, including sales to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. It has been deemed liquid under guidance approved by the Board.
	(f)	The Puerto Rico Commonwealth Gov’t. Development Bank security is currently in default. When a bond is in default its scheduled interest and/or principal payments are not currently being paid.


	A.G.:	Aktiengesellschaft is the German term for a public limited liability corporation.
	B.V.:	Besloten Vennootschap is the Dutch term for a private limited liability corporation.
	N.V.:	Naamloze Vennootschap is the Dutch term for a public limited liability corporation.
	PLC:	Public Limited Company
	REIT:	Real Estate Investment Trust
	S.A.:	Generally designates corporations in various countries, mostly those employing the civil law.

See Notes to Financial Statements.
26

FUND EXPENSE EXAMPLES (Unaudited)

November 30, 2016

Example

A Fund shareholder may incur two types of costs: (1) transaction costs such as redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2016 to November 30, 2016.

Actual Expenses

The first line of the table below under each Fund provides information about actual account values and actual expenses for such Fund. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below under each Fund provides information about hypothetical account values and hypothetical expenses based on such Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 each Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

		Beginning	Ending
	Expense Ratio	Account Value	Account Value	Expenses Paid During
Six-Month Period Ended November 30, 2016	for the Period	06/01/16	11/30/16	Period*
Thompson LargeCap Fund
Actual	1.13%	$1,000.00	$1,126.25	$6.01
Hypothetical (5% return before expenses)	1.13%	$1,000.00	$1,019.35	$5.70
Thompson MidCap Fund
Actual	1.25%	$1,000.00	$1,124.65	$6.64
Hypothetical (5% return before expenses)	1.25%	$1,000.00	$1,018.75	$6.31
Thompson Bond Fund
Actual	0.72%	$1,000.00	$1,048.20	$3.69
Hypothetical (5% return before expenses)	0.72%	$1,000.00	$1,021.40	$3.64

*	Expenses are equal to the annualized [net] expense ratio for each Fund, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

	For more information, please refer to the Funds’ Prospectus.

See Notes to Financial Statements.
27

STATEMENTS OF ASSETS AND LIABILITIES

November 30, 2016 (In thousands, except per share amounts)

	LARGECAP				MIDCAP			BOND
	FUND				FUND			FUND
ASSETS
Total investments in securities, at value (Cost $117,102, $38,867 and
$2,096,449 respectively)		$	117,604			$	43,893		$	1,991,599
Cash			–				–			9,869
Due from sale of securities			77				19			2
Receivable from fund shares sold			4				1			9,893
Dividends and interest receivable			223				39			27,617
Prepaid expenses			9				5			112
Total Assets			117,917				43,957			2,039,092
LIABILITIES
Due on purchase of securities			25				51			11,920
Payable for fund shares redeemed			247				1			5,414
Accrued expenses payable			35				28			120
Accrued directors expense payable			–				–			2
Due to Advisor			89				32			1,101
Total Liabilities			396				112			18,557
NET ASSETS		$	117,521			$	43,845		$	2,020,535
Net Assets consist of:
Capital stock ($.001 par value)		$	139,696			$	36,884		$	2,228,512
Undistributed net investment income			852				23			19,386
Accumulated net realized gain (loss) on investments			(23,529	)			1,912			(122,513	)
Net unrealized appreciation (depreciation) on investments			502				5,026			(104,850	)
Net Assets		$	117,521			$	43,845		$	2,020,535
Shares of capital stock outstanding (unlimited shares authorized)			2,044				3,499			180,087
Offering and redemption price/Net asset value per share		$	57.48	^(a)		$	12.53		$	11.22

(a) Does not recalculate due to rounding.

See Notes to Financial Statements.
28

STATEMENTS OF OPERATIONS

Year Ended November 30, 2016 (In thousands)

	LARGECAP				MIDCAP				BOND
	FUND				FUND				FUND
Investment income
Dividends^(a)		$	2,177			$	500			$	–
Interest			–				–				102,136
Total investment income			2,177				500				102,136
Expenses
Investment advisory fees			1,016				382				12,578
Shareholder servicing costs			78				27				1,040
Administrative & accounting services fees			116				53				613
Custody fees			13				7				188
Directors fees			28				24				145
Professional fees			40				38				83
Federal & state registration			32				33				76
Other expenses			22				9				418
Total expenses			1,345				573				15,141
Less expenses reimbursed by Advisor			(132	)			(96	)			–
Net expenses			1,213				477				15,141
Net investment income			964				23				86,995
Net realized gain (loss) on investments			8,692				2,038				(100,179	)
Net unrealized appreciation on investments			4,959				3,310				124,391
Net gain on investments			13,651				5,348				24,212
Net increase in net assets resulting from operations		$	14,615			$	5,371			$	111,207

^(a)Net of foreign withholding taxes		$	–			$	1			$	–

See Notes to Financial Statements.
29

STATEMENTS OF CHANGES IN NET ASSETS

(In thousands)

	LARGECAP								MIDCAP								BOND
	FUND								FUND								FUND
	Year Ended				Year Ended				Year Ended				Year Ended				Year Ended				Year Ended
	November 30,				November 30,				November 30,				November 30,				November 30,				November 30,
	2016				2015				2016				2015				2016				2015
Operations
Net investment income		$	964			$	773			$	23			$	4			$	86,995			$	127,750
Net realized gain (loss)
on investments			8,692				19,889				2,038				3,154				(100,179	)			(13,899	)
Net unrealized appreciation
(depreciation) on investments			4,959				(26,214	)			3,310				(5,323	)			124,391				(179,649	)
Net increase (decrease) in net assets
resulting from operations			14,615				(5,552	)			5,371				(2,165	)			111,207				(65,798	)
Distributions to Shareholders
Distributions from net
investment income			(773	)			(676	)			(4	)			–				(100,995	)			(136,781	)
Distributions from net realized gains
on securities transactions			–				–				(3,145	)			(3,896	)			–				–
Total distributions to shareholders			(773	)			(676	)			(3,149	)			(3,896	)			(100,995	)			(136,781	)

Fund Share Transactions
(See Note 4)			(8,233	)			(10,476	)			3,273				3,104				(734,159	)			(776,902	)

Total Increase (Decrease)
in Net Assets			5,609				(16,704	)			5,495				(2,957	)			(723,947	)			(979,481	)

Net Assets
Beginning of period			111,912				128,616				38,350				41,307				2,744,482				3,723,963
End of period		$	117,521			$	111,912			$	43,845			$	38,350			$	2,020,535			$	2,744,482
Undistributed net investment
income included in net assets
at end of period		$	852			$	661			$	23			$	4			$	19,386			$	30,623

See Notes to Financial Statements.
30

NOTES TO FINANCIAL STATEMENTS

November 30, 2016

NOTE 1 - ORGANIZATION
Thompson IM Funds, Inc. (the “Company”) is a Wisconsin corporation registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company.

The Company consists of separate mutual funds series (each, a “Fund,” and collectively, the “Funds”): Thompson LargeCap Fund (the “LargeCap Fund”), Thompson MidCap Fund (the “MidCap Fund”) and Thompson Bond Fund (the “Bond Fund”). The assets and liabilities of each Fund are segregated and a shareholder’s interest is limited to the Fund in which the shareholder owns shares. The objectives and strategies of each Fund are described in the Funds’ Prospectus.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The Funds are investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services — Investment Companies.

VALUATION POLICY AND PROCEDURES - The Funds’ Board of Directors (the “Funds’ Board”) has adopted methods for valuing securities set forth in the Funds’ Pricing Policies and Procedures, including circumstances in which market quotes are not readily available or deemed to be unreliable, and has delegated authority to the Advisor to apply those methods in making fair value determinations, subject to oversight by the Funds’ Board. The Advisor has established a valuation committee that, along with other Advisor employees, administers, implements, and oversees the fair valuation process and makes fair value decisions. The valuation committee regularly reviews its own fair value decisions, as well as valuations, valuation techniques and services furnished by pricing services; considers circumstances in the markets which may require it to make or adjust valuation determinations; and reviews previous valuation determinations. The valuation committee reports on its activities and any changes to the fair valuation guidelines to the Funds’ Board.

SECURITY VALUATION - Each Fund’s equity securities including common stocks, ADRs and REITs are valued at their market prices (generally the last reported sales price on the exchange where the securities are primarily traded or, for Nasdaq-listed securities, at their Nasdaq Official Closing Prices). Exchange traded options are valued at the last reported sale price on an exchange on which the option is traded. If no sales are reported on a particular day, the mean between the highest bid and lowest asked quotations at the close of the exchanges will generally be used. Investments in money market mutual funds are generally priced at the ending net asset value provided by the service agent of the funds.

Fixed-income securities such as corporate bonds, asset-backed securities, mortgage-backed securities, U.S. government and agency securities, and municipal bonds are typically valued based on valuations published by an independent pricing service, which uses various valuation methodologies such as matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. Factors considered by pricing services include market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads and fundamental analytical data relating to the issuer. Short-term investments in fixed-income securities (those with remaining maturities of 60 days or less) are generally valued on an amortized cost basis.

Where market quotations are not readily available or are unreliable, a value is determined in good faith pursuant to procedures established by the Funds’ Board. When determining the value of a security, consideration is given to the facts and circumstances relevant to the particular situation, which includes factors such as fundamental analytical data relating to the investment, which may include consideration of yields or prices of securities of comparable quality, coupon rate, maturity and type of issue, nature and duration of any restrictions on disposition of the security and an evaluation of forces that influence the market in which the securities are purchased or sold. Fair value pricing is an inherently subjective process, and no single standard exists for determining fair value. Different funds could reasonably arrive at different values for the same security.

VALUATION MEASUREMENTS – In accordance with generally accepted accounting principles in the United States of America (“GAAP”), fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. GAAP established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

Various inputs are used in determining the value of each Fund’s 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).

Inputs may include price information, specific and broad credit data, liquidity statistics, and other factors. The Fund considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The determination of what constitutes “observable” requires significant judgment by the Fund. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Fund’s perceived risk of that instrument. Investments whose values are based on quoted market prices in active markets, and which are therefore classified as level-1 securities, include active listed equities and certain U.S. government obligations.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs, are classified as level-2 securities. These include certain U.S. government obligations, most government agency securities, investment-grade corporate bonds, sovereign bonds, municipal bonds, and less liquid listed equities. Level-2 investments include positions that are not traded in active markets.

Investments classified as level-3 securities have significant unobservable inputs, as they trade infrequently or not at all. Level-3 instruments include private-placement and less liquid corporate and municipal debt securities. When observable prices are not available for these securities, the Fund uses one or more valuation techniques (e.g., the market approach, the income approach, or the cost approach) for which sufficient and reliable data is available. Within level 3, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. The inputs used by the Fund in estimating the value of level-3 investments include the original transaction price and recent transactions in the same or similar instruments.

The following is a summary of the inputs used to value the Funds’ investments as of November 30, 2016:

	LargeCap Fund
Assets	Level 1		Level 2		Level 3		Total
Investment Securities:
Common stocks	$	117,449,409	$	–	$	–	$	117,449,409
Short-term investments		154,454		–		–		154,454
Total Assets	$	117,603,863	$	–	$	–	$	117,603,863

	MidCap Fund
Assets	Level 1		Level 2			Level 3		Total
Investment Securities:
Common stocks	$	43,789,982	$	–	$	–	$	43,789,982
Short-term investments		103,120		–		–		103,120
Total Assets	$	43,893,102	$	–	$	–	$	43,893,102

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

	Bond Fund
Assets	Level 1		Level 2		Level 3		Total
Investment Securities:
Bonds	$	–	$	1,960,452,081	$	–	$	1,960,452,081
Short-term investments		150,083		30,996,887		–		31,146,970
Total Assets	$	150,083	$	1,991,448,968	$	–	$	1,991,599,051

There were no transfers between level-1 and level-2 securities and the Funds did not invest in any level-3 investments as of and during the fiscal year ended November 30, 2016. It is the Funds’ policy to record transfers at the end of the reporting period. Refer to each Fund’s Schedule of Investments for additional information regarding security types and industry classifications.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Investment securities transactions are accounted for on the trade date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities on the same basis for book and tax purposes which is the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded as earned. Income and capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable, and have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. The ability of the issuers of the debt securities held by the funds to meet their obligations may be affected by economic developments in a specific industry, state, or region. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

OPTIONS - Each Fund may enter into options transactions for hedging purposes and will not use these instruments for speculation. Each Fund may use options to hedge against anticipated declines in the market value of portfolio securities and increases in the market value of securities it intends to purchase and protect against exposure to interest rate changes. Each Fund may also use options to enhance total return or invest in eligible asset classes with greater efficiency and lower cost than is believed to be possible through direct investment. The use of options for hedging purposes involves certain risks and may result in a loss if changes in the value of the option move in a direction different than anticipated, rendering the hedging strategy unsuccessful.

Each Fund may write covered call/put options for which premiums received are recorded as liabilities and are subsequently adjusted to the current fair value of the options written. Premiums received from writing options that expire unexercised are treated as realized gains. Premiums received from writing options which are either exercised or closed are offset against the proceeds received or amount paid on the transaction to determine realized gains or losses.

SECURITIES PURCHASED ON A WHEN-ISSUED OR DELAYED-DELIVERY BASIS - Each Fund may purchase securities on a when-issued or delayed-delivery basis. When-issued securities are securities purchased with delivery to occur at a later date at a stated price and/or yield, thereby involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time a Fund makes a commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. Each Fund designates and maintains cash and marketable securities at least equal in value to commitments for when-issued securities.

VARIABLE-RATE DEMAND NOTES - The Funds invest in short-term variable-rate demand notes, which are unsecured instruments. The Funds may be susceptible to credit risk with respect to these instruments to the extent the issuer defaults on its payment obligation.

PERMANENT BOOK AND TAX DIFFERENCES - Generally accepted accounting principles require that permanent financial reporting and tax differences relating to shareholder distributions be reclassified in the capital accounts.

EXPENSES - Each Fund is charged for those expenses that are directly attributed to it. Expenses that are not readily identifiable to a specific Fund are generally allocated among the Funds in proportion to the relative sizes of the Funds.

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

USE OF ESTIMATES - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders from net investment income and realized gains on securities for the LargeCap Fund and MidCap Fund normally are declared at least annually. Bond Fund distributions to shareholders from net investment income normally are declared on a quarterly basis, and distributions to shareholders from realized gains on securities normally are declared at least annually. Distributions are recorded on the ex-dividend date.

FEDERAL INCOME TAXES - No provision has been made for federal income taxes since the Funds have elected to be taxed as regulated investment companies and intend to distribute substantially all income to shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies.

LINE OF CREDIT - The Funds have established an unsecured line of credit (“LOC”) with U.S. Bank N.A. which expires November 10, 2017, used primarily to finance redemption payments. Each individual Fund’s borrowing under the LOC is limited to 5% of the value of that Fund’s net assets, 33.33% of the value of the Fund’s investments, or any explicit borrowing limits imposed by the LOC, whatever is less. Interest is charged at the prime rate which was 3.5% as of November 30, 2016. As of November 30, 2016, the limits established are: LargeCap Fund - $5,500,000, MidCap Fund - $2,000,000 and Bond Fund - $97,750,000. All terms and borrowing limits imposed by the LOC are subject to review and approval by the Funds’ Board. The LOC was drawn upon during the year; however, as of November 30, 2016, there were no borrowings by the funds outstanding under the LOC. The following table shows the average balance, average interest rate, interest expense, and maximum borrowings incurred by the Funds on the LOC for the fiscal year ended November 30, 2016.

									Date of
	Average		Average	Interest			Maximum		Maximum
	Balance		Interest Rate	Expense			Borrowing		Borrowing
LargeCap Fund	$	38,292	3.49%		$	1,356	$	831,000		5/19/2016
MidCap Fund	$	12,369	3.49%		$	431	$	381,000		12/7/2015
Bond Fund	$	204,811	3.49%		$	7,253	$	17,877,000		12/18/2015 to
										12/20/2015

GUARANTEES AND INDEMNIFICATIONS - Under the Funds’ organizational documents, each Director, officer, employee or other agent of the Funds (including the Funds’ investment advisor) is indemnified, to the extent permitted by the 1940 Act, against certain liabilities that may arise out of performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and believe the risk of loss to be remote.

ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES - As of and during the fiscal year ended November 30, 2016, the Funds did not have a liability for unrecognized tax benefits in the accompanying financial statements. Also, the Funds recognized no interest or penalties related to unrecognized tax benefits during the same period. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. 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 twelve months.

SUBSEQUENT EVENTS - The Funds have evaluated subsequent events through the issuance of the Funds’ financial statements. See notes 3 and 6. There were no other subsequent events which were deemed to have an impact on the Funds’ financial statements.

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

NOTE 3 - INVESTMENT ADVISORY AND ADMINISTRATIVE AND ACCOUNTING SERVICES AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Advisory Agreement pursuant to which Thompson Investment Management, Inc. (“TIM” or “Advisor”) is retained by the Funds provides for monthly compensation to TIM computed on average daily net assets at the following annual rates:

	First	Over
	$50 Million	$50 Million
LargeCap Fund	1.00%	0.90%
MidCap Fund	1.00%	0.90%
Bond Fund	0.65%	0.60%

The Advisor is contractually bound to waive management fees and/or reimburse expenses incurred by the Funds through March 31, 2018, so that the annual operating expenses of the Funds do not exceed the following percentages of their respective average daily net assets: LargeCap Fund - 1.10%, MidCap Fund - 1.20% and Bond Fund - 0.80%. Prior to December 1, 2016, the applicable expense limitation percentages were LargeCap Fund - 1.13% and MidCap Fund - 1.25%. For the fiscal year ended November 30, 2016, the Advisor reimbursed expenses incurred by the LargeCap Fund and the MidCap Fund in the amounts of $132,415 and $95,711, respectively. The Funds are not obligated to reimburse the Advisor for any fees or expenses waived in previous fiscal years.

As of November 30, 2016, an affiliated shareholder held 11.24% of the MidCap Fund’s outstanding shares. Transactions by the shareholder may have a material impact on the Fund.

Pursuant to an Administrative and Accounting Services Agreement, TIM maintains the Funds’ financial records in accordance with the 1940 Act, prepares all necessary financial statements of the Funds and calculates the net asset value per share of the Funds on a daily basis. As compensation for its services, each Fund pays TIM a fee computed daily and payable monthly at the annual rate of 0.15% of average daily net assets up to $30 million, 0.10% of the next $70 million of average daily net assets and 0.025% of average daily net assets in excess of $100 million, with an annual minimum fee of $30,000 per Fund. The calculations of daily net asset value are subcontracted to U.S. Bancorp Fund Services, resulting in fees paid by TIM for the fiscal year ended November 30, 2016, in the following amounts:

	Administrative &
	Accounting Fees Paid
LargeCap Fund		$	36,782
MidCap Fund		$	35,094
Bond Fund		$	230,728

The Funds reimburse the Advisor for a portion of amounts paid by the Advisor out of the Advisor’s own resources under various shareholder, account maintenance, networking and other services provided to the Funds by broker-dealers and other intermediaries. The amount reimbursed by the Funds is equal to (1) for those accounts maintained through a shareholder servicing arrangement, an annual rate of no more than 0.10% of the average daily net assets of the omnibus accounts in the Funds for which all broker-dealers and other intermediaries, in the aggregate, are responsible, and (2) for those accounts maintained through a networking arrangement, no more than $6 per year per account in the Funds for which the broker-dealers and other intermediaries are responsible; provided however, in all cases only one of these fees shall be applicable to the assets in an account. This amount has been determined by the Funds’ Board to approximate (or not to exceed) the transfer agency fees that would otherwise have been payable by the Funds if such broker-dealers and intermediaries did not maintain these accounts. Such amounts are recorded within Shareholder servicing costs on each Fund’s Statement of Operations. For the fiscal year ended November 30, 2016, the amounts reimbursed by the Funds to the Advisor were:

	Intermediary
	Fees Reimbursed
LargeCap Fund		$	20,755
MidCap Fund		$	2,542
Bond Fund		$	713,624

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

NOTE 4 - FUND SHARE TRANSACTIONS (in thousands)
Transactions in shares of the Funds were as follows:

	Year Ended					Year Ended
	November 30, 2016					November 30, 2015
	Shares		Dollars			Shares		Dollars
LargeCap Fund
Shares sold	77		$	3,783		100		$	5,297
Shares issued in reinvestment of dividends	16			753		12			652
Shares issued in reinvestment of realized gains	–			–		–			–
Shares redeemed	(255	)		(12,769	)	(314	)		(16,425	)
Net decrease	(162	)	$	(8,233	)	(202	)	$	(10,476	)

MidCap Fund
Shares sold	354		$	3,786		260		$	3,369
Shares issued in reinvestment of dividends	–			4		–			–
Shares issued in reinvestment of realized gains	296			3,078		299			3,825
Shares redeemed	(330	)		(3,595	)	(322	)		(4,090	)
Net increase	320		$	3,273		237		$	3,104

Bond Fund
Shares sold	37,341		$	410,292		75,715		$	860,664
Shares issued in reinvestment of dividends	9,050			97,414		11,396			128,763
Shares issued in reinvestment of realized gains	–			–		–			–
Shares redeemed	(116,186	)		(1,241,865	)	(155,791	)		(1,766,329	)
Net decrease	(69,795	)	$	(734,159	)	(68,680	)	$	(776,902	)

NOTE 5 - PURCHASE AND SALE OF SECURITIES
Investment transactions for the fiscal year ended November 30, 2016 were as follows:

	Securities other than U.S.
	Government and Short-term
	Investments				U.S. Government Securities
	Purchases		Sales		Purchases		Sales
LargeCap Fund	$	34,562,783	$	42,416,981	$	–	$	–
MidCap Fund	$	13,321,039	$	13,185,482	$	–	$	–
Bond Fund	$	397,736,189	$	1,194,238,020	$	589,418,168	$	591,849,770

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

NOTE 6 - INCOME TAX INFORMATION
At November 30, 2016, the investment cost and aggregate unrealized appreciation and depreciation on investments for federal income tax purposes were as follows:

	LargeCap Fund				MidCap Fund				Bond Fund
Federal tax cost		$	117,115,369			$	38,980,742		$	2,096,581,085
Unrealized appreciation		$	8,929,821			$	9,520,027		$	7,834,547
Unrealized depreciation			(8,441,327	)			(4,607,667	)		(112,816,581	)
Net unrealized appreciation (depreciation)		$	488,494			$	4,912,360		$	(104,982,034	)

Distributable ordinary income		$	852,029			$	362,609		$	19,385,884
Distributable long-term capital gains			–				1,685,686			–
Total distributable earnings		$	852,029			$	2,048,295		$	19,385,884

The tax basis of investments for tax and financial reporting purposes differ principally due to wash sales.

The tax components of distributions paid during the fiscal years ended November 30, 2016 and November 30, 2015 are as follows:

	LargeCap Fund			MidCap Fund			Bond Fund
Fiscal year ended November 30, 2016
Distributions paid from:
Ordinary income distributions		$	773,384		$	160,710	$	100,994,642
Long-term capital gains distributions			–			2,988,206		–
Total distributions paid		$	773,384		$	3,148,916	$	100,994,642

Fiscal year ended November 30, 2015
Distributions paid from:
Ordinary income distributions		$	675,832		$	429,599	$	136,781,134
Long-term capital gains distributions			–			3,466,117		–
Total distributions paid		$	675,832		$	3,895,716	$	136,781,134

The tax basis post-October losses as of November 30, 2016 and capital loss carryforward as of November 30, 2016, which are not being recognized for tax purposes until the first day of the following fiscal year, are as follows:

	LargeCap Fund			MidCap Fund		Bond Fund
Post-October losses		$	–	$	–	$	202,665
Net capital loss carryforward
Subject to expiration
November 30, 2017		$	23,515,595	$	–	$	–
Not subject to expiration
Short-term			–		–		17,788,426
Long-term			–		–		104,389,669
Total capital loss carryforward		$	23,515,595	$	–	$	122,178,095

During the fiscal year ended November 30, 2016, the LargeCap Fund utilized capital loss carryforwards in the amount of $8,613,841.

NOTES TO FINANCIAL STATEMENTS (Continued)

November 30, 2016

Under the Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”), capital losses incurred during taxable years after December 22, 2010 are carried forward indefinitely and retain the character of the original loss. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Modernization Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

The following distributions were declared on December 19, 2016, payable to shareholders on December 20, 2016:

	LargeCap Fund			MidCap Fund			Bond Fund
Ordinary income distributions
Amount		$	929,854		$	363,026	$	23,183,742
Per Share		$	0.46		$	0.10	$	0.13
Long-term capital gains distributions
Amount		$	–		$	1,687,109	$	–
Per Share		$	–		$	0.48	$	–

FINANCIAL HIGHLIGHTS

The following table presents information relating to a share of capital stock outstanding for the entire period.

	Year Ended November 30,
	2016		2015		2014		2013		2012
LARGECAP FUND

Net Asset Value, Beginning of Period	$50.72		$53.40		$46.47		$34.27		$30.07
Income from Investment Operations
Net investment income	0.47		0.35		0.27		0.19		0.18
Net realized and unrealized gains (losses)
on investments	6.64		(2.75	)	6.84		12.20		4.13
Total from Investment Operations	7.11		(2.40	)	7.11		12.39		4.31
Less Distributions
Distributions from net investment income	(0.35	)	(0.28	)	(0.18	)	(0.19	)	(0.11	)
Distributions from net realized gains	–		–		–		–		–
Total Distributions	(0.35	)	(0.28	)	(0.18	)	(0.19	)	(0.11	)

Net Asset Value, End of Period	$57.48		$50.72		$53.40		$46.47		$34.27

Total Return	14.16%		(4.52%	)	15.35%		36.33%		14.37%

Ratios/Supplemental Data
Net assets, end of period (millions)	$117.5		$111.9		$128.6		$124.8		$99.6
Ratios to average net assets:
Ratio of expenses	1.13%		1.15%		1.15%		1.21%		1.31%
Ratio of expenses without reimbursement	1.25%		1.22%		1.23%		1.22%		1.31%
Ratio of net investment income	0.90%		0.64%		0.54%		0.46%		0.47%
Ratio of net investment income
without reimbursement	0.78%		0.57%		0.46%		0.45%		0.47%
Portfolio turnover rate	32%		45%		27%		38%		30%

See Notes to Financial Statements.
39

FINANCIAL HIGHLIGHTS (Continued)

The following table presents information relating to a share of capital stock outstanding for the entire period.

	Year Ended November 30,
	2016		2015		2014		2013		2012
MIDCAP FUND

Net Asset Value, Beginning of Period	$12.07		$14.04		$14.04		$11.28		$11.15
Income from Investment Operations
Net investment income (loss)	0.01		–	^(a)	–	^(a)	–	^(a)	–	^(a)
Net realized and unrealized gains (losses)
on investments	1.45		(0.64	)	1.47		3.71		1.38
Total from Investment Operations	1.46		(0.64	)	1.47		3.71		1.38
Less Distributions
Distributions from net investment income	–	^(a)	–		–		–		–
Distributions from net realized gains	(1.00	)	(1.33	)	(1.47	)	(0.95	)	(1.25	)
Total Distributions	(1.00	)	(1.33	)	(1.47	)	(0.95	)	(1.25	)

Net Asset Value, End of Period	$12.53		$12.07		$14.04		$14.04		$11.28

Total Return	13.82%		(5.10%	)	11.82%		35.65%		14.41%

Ratios/Supplemental Data
Net assets, end of period (millions)	$43.8		$38.4		$41.3		$37.6		$24.6
Ratios to average net assets:
Ratio of expenses	1.25%		1.30%		1.30%		1.30%		1.30%
Ratio of expenses without reimbursement	1.50%		1.49%		1.54%		1.63%		1.83%
Ratio of net investment income (loss)	0.06%		0.01%		(0.02%	)	(0.02%	)	(0.03%	)
Ratio of net investment loss
without reimbursement	(0.19%	)	(0.18%	)	(0.27%	)	(0.35%	)	(0.56%	)
Portfolio turnover rate	34%		27%		34%		47%		44%

(a) Less than .005 per share.

See Notes to Financial Statements.
40

FINANCIAL HIGHLIGHTS (Continued)

The following table presents information relating to a share of capital stock outstanding for the entire period.

	Year Ended November 30,
	2016		2015		2014		2013		2012
BOND FUND

Net Asset Value, Beginning of Period	$10.98		$11.69		$11.91		$11.95		$11.33
Income from Investment Operations
Net investment income	0.49		0.49		0.45		0.41		0.41
Net realized and unrealized gains (losses)
on investments	0.26		(0.72	)	(0.19	)	(0.03	)	0.67	^(a)
Total from Investment Operations	0.75		(0.23	)	0.26		0.38		1.08
Less Distributions
Distributions from net investment income	(0.51	)	(0.48	)	(0.45	)	(0.40	)	(0.43	)
Distributions from net realized gains	–		–		(0.03	)	(0.02	)	(0.03	)
Total Distributions	(0.51	)	(0.48	)	(0.48	)	(0.42	)	(0.46	)

Net Asset Value, End of Period	$11.22		$10.98		$11.69		$11.91		$11.95

Total Return	7.05%		(2.04%	)	2.19%		3.24%		9.70%

Ratios/Supplemental Data
Net assets, end of period (millions)	$2,020.5		$2,744.5		$3,724.0		$2,252.1		$1,292.3
Ratios to average net assets:
Ratio of expenses	0.72%		0.71%		0.72%		0.74%		0.78%
Ratio of expenses without reimbursement	0.72%		0.71%		0.72%		0.74%		0.78%
Ratio of net investment income	4.16%		3.98%		4.04%		3.73%		3.90%
Ratio of net investment income
without reimbursement	4.16%		3.98%		4.04%		3.73%		3.90%
Portfolio turnover rate	20%		29%		21%		33%		16%

(a)

Realized and unrealized gains and losses per share are balancing amounts necessary to reconcile the change in net asset value per share in the period. It does not agree to the aggregate gains and losses in the Statement of Operations due to the fluctuation in share transactions.

See Notes to Financial Statements.
41

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Thompson IM Funds, Inc.

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Thompson IM Funds, Inc., comprising Thompson LargeCap Fund, Thompson MidCap Fund, and Thompson Bond Fund (the “Funds”), as of November 30, 2016, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2016, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds constituting Thompson IM Funds, Inc. as of November 30, 2016, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

COHEN & COMPANY, LTD.
Cleveland, Ohio
January 23, 2017

DIRECTORS AND OFFICERS (Unaudited)

(Information as of 12/31/16)

			Number of	Other
	Position(s) Held with		Thompson IM	Directorships
	Thompson IM Funds, Inc.		Funds Overseen	Held
Name and Age	and Length of Time Served⁽¹⁾	Principal Occupation(s) During Past Five Years	by Director	by Director

Independent Directors:

John W. Feldt Birth date: 5/2/42	Chairman since July 2012 Director since 1987	●Currently retired ●Senior Vice President of Finance of the University of Wisconsin Foundation from 1984 to 2006 ●Former Vice President of Finance for the University of Wisconsin Foundation	3	Baird Funds, Inc. (15 funds)
George E. Austin Birth date: 9/15/52	Director since 2011	●President of AVA Civic Enterprises Inc. (consulting firm), since January 2011 ●Director of W. Jerome Frautschi Foundation Inc. (private foundation), since December 2012; President from 1998 to December 2012 ●Director of the Home Savings Bank since 1998 ●Director of Overture Development Corporation (support organization for Overture Center Foundation), since 2001; President from 2001 to 2009	3	None
Cornelia Boyle Birth date: 9/23/53	Director since 2015	●Currently retired ●Director of North Track Funds, Inc. (investment company) from 2003 to 2009 ●Trustee of Ziegler Exchange Traded Trust (investment company) from 2005 to 2009 ●Executive Vice President and Chief Operations Officer, AIG Sun America Retirement Markets, Inc. (distribution and marketing company for variable annuity and retirement products) from 2000 to 2003 ●Executive Vice President, Fidelity Investments from 1996 to 2000	3	None
Patricia Lipton Birth date: 12/9/42	Director since 2007	●Currently retired ●Executive Director, State of Wisconsin Investment Board (“SWIB”) from 1989 to 2004 ●Assistant Executive Director, SWIB from 1982 to 1989 ●Former Director, State Tax Policy Bureau of the Wisconsin Department of Revenue	3	None

DIRECTORS AND OFFICERS (Unaudited) (Continued)

(Information as of 12/31/16)

			Number of	Other
	Position(s) Held with		Thompson IM	Directorships
	Thompson IM Funds, Inc.		Funds Overseen	Held
Name and Age	and Length of Time Served⁽¹⁾	Principal Occupation(s) During Past Five Years	by Director	by Director

Interested Directors and Officers:

Jason L. Stephens⁽²⁾Birth date: 10/15/74	Director since 2011 Chief Executive Officer since 2015 Vice President from 2009 to 2015	●Chief Executive Officer of Thompson Investment Management, Inc. (“TIM”) since 2015 ●Chief Operating Officer of TIM from 2009 to 2015 ●Corporate Secretary of TIM since 2004 ●Portfolio Manager of TIM since 2007 ●A Chartered Financial Analyst	3	None
John W. Thompson⁽²⁾Birth date: 7/26/43	Director since 1987 President since 2009 Chief Executive Officer from 2005 to 2015	●Chairman of TIM since 2015 ●President of TIM since 2004 ●President of Thompson Plumb & Associates, Inc. (“TPA”) (investment advisor) from 1984 to 2003 ●A Chartered Financial Analyst	3	None
James T. Evans Birth date: 6/6/75	Vice President since 2009	●Chief Investment Officer of TIM since 2009 ●Portfolio Manager of TIM since 2008 ●Managing Director of Nakoma Capital Management, from 2000 to 2005 ●A Chartered Financial Analyst	N/A	N/A
Penny M. Hubbard Birth date: 6/2/61	Chief Financial Officer and Treasurer since 2005	●Vice President of TIM since 2004 ●Assistant Vice President - Client Services of TPA and various other capacities 1984-2004	N/A	N/A
Nedra S. PierceBirth date: 10/2/61	Chief Compliance Officer since 2006	●Chief Compliance Officer of TIM since 2006 ●Director of Business Development of TIM from 2004 to 2006 and since June 2010 ●Director of Business Development of TPA from 1998 to 2003	N/A	N/A
Lesley T. Bailey Birth date: 9/30/78	Secretary since 2010	●Fund Accounting and Administration at TIM since 2004 ●Fund Accounting and Administration at TPA from 2001 to 2004	N/A	N/A
Sarah M. Baumgartner Birth date: 2/21/84	Assistant Secretary since 2012	●Fund Accounting and Administration at TIM since 2007	N/A	N/A

The address of each Director and officer as it relates to the Company’s business is 918 Deming Way, Madison WI 53717.

(1) Officers of the Company serve one-year terms, subject to annual reappointment by the Board of Directors. Directors of the Investment Company serve a term of indefinite length until their resignation or removal, and stand for re-election by shareholders as and when required under the 1940 Act.

(2) Jason L. Stephens and John W. Thompson are “interested persons” of the Company by virtue of their position with the Company and TIM.

ADDITIONAL INFORMATION (Unaudited)

THOMPSON IM FUNDS, INC.

INVESTMENT ADVISOR
Thompson Investment Management, Inc.
918 Deming Way
Madison, Wisconsin 53717

DISTRIBUTOR
Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202

TRANSFER AGENT
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Cohen & Company, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, OH 44115

LEGAL COUNSEL
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202

The Statement of Additional Information contains additional information about the directors and officers of Thompson IM Funds, Inc. and is available without charge, upon request, by calling 1-800-999-0887.

Proxy Voting Policy

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds actually voted proxies during the most recent 12-month period ended June 30 are available without charge, upon request, by calling 1-800-999-0887, through the Funds’ website at www.thompsonim.com and on the SEC’s website at www.sec.gov.

Information About Portfolio Securities

The Funds file complete schedules of their portfolio holdings with the Securities and Exchange Commission for the Funds’ first and third quarters of its fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Securities and Exchange Commission’s website at www.sec.gov. You may also review and copy those documents by visiting the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Funds’ Forms N-Q are also available without charge, upon request, by calling 1-800-999-0887.

ADDITIONAL INFORMATION (Unaudited) (Continued)

Board Approval of Investment Advisory Agreement

The Investment Company Act of 1940 (the “Act”) requires that the Investment Advisory Agreement (the “Agreement”) for Thompson IM Funds, Inc. (the “Funds”) be approved annually by a vote of a majority of the Board of Directors, including a majority of the Directors who are not parties to the Agreement or “interested persons” of the Funds as that term is defined in the Act (the “Independent Directors”). At its meeting on November 15, 2016, the Board of Directors of the Funds, including all of the Independent Directors, voted unanimously to renew the existing Agreement between the Funds and Thompson Investment Management, Inc. (the “Advisor”) for each of the LargeCap Fund, the MidCap Fund, and the Bond Fund (each of these series of the Funds is sometimes referred to as a “Fund” in this section).

The Board’s approval was based on its consideration and evaluation of a variety of factors, including: (1) the nature, extent, and quality of the services provided by the Advisor; (2) the performance of each of the Funds in comparison to its benchmark index and to a peer group of mutual funds; (3) the management fees and total operating expenses of each Fund, including comparative information with respect to a peer group of mutual funds and with fees charged by the Advisor to other clients whose assets are managed under similar objectives and strategies; (4) the extent to which economies of scale may be realized as a Fund grows; and (5) whether fee levels reflect any potential economies of scale for the benefit of shareholders. The Board generally viewed these factors in their totality, with no single factor serving as the principal reason for determining whether to renew the Agreement and with individual Board members giving different weight to different factors.

In connection with the renewal process, both the Independent Directors as well as the full Board met separately in person on November 15, 2016, and the full Board met by telephone on November 3, 2016, to consider information relevant to the renewal process. The Independent Directors and the full Board are referred to collectively as the “Board” in this section.

To facilitate evaluation of the Agreement, the Board received and reviewed information prepared or compiled by the Advisor as well as an independent analysis of each Fund’s performance, expenses, and profitability prepared by Broadridge, a leading independent provider of data for independent directors of investment companies for purposes of their review of investment advisory agreements. The Board also requested and received supplementary performance information as of the most recent calendar quarter for the Funds and comparing each Fund’s performance to an applicable category of funds as determined by Morningstar, Inc., a ranking service widely recognized in the mutual fund industry. Information reviewed included a memorandum from Fund counsel discussing the fiduciary duty of Directors under Section 15(c) of the Act; an executive summary and memorandum from Fund management providing its recommendation for renewal of the Agreement; the Advisor’s analysis of profitability of the Agreement to the Advisor and the profitability of related service contracts with the Advisor; a separate profitability comparison prepared by Broadridge; a detailed statistical report from Broadridge comparing each Fund’s respective performance and expenses with both a comparison “group” and a comparison “universe” and expanded universe of other funds; information regarding the composition of and fees charged for standardized investment products offered to separately managed account clients of the Advisor; the Advisor’s Form ADV, which, among other things, showed fees charged by the Advisor to manage the investments of other clients with objectives and programs similar to the Funds; the Agreement and other service agreements with the Advisor; and background information on the Funds’ portfolio managers and reports from the Funds’ Chief Compliance Officer. In addition, the Board had received and considered detailed information on the Funds’ investment performance and expenses at each of its quarterly meetings during the year as well as in-person reports from the Fund’s portfolio managers and reports from the Funds’ Chief Compliance Officer. Throughout the review and approval process, the Independent Directors were represented by independent legal counsel.

The Board considered the nature, extent, and quality of services provided by the Advisor, including services required to be provided under the Agreement, services required to be provided under other agreements with the Advisor and with affiliates of the Advisor, and additional services provided by the Advisor that were not required under any of those agreements. The Board considered the background and experience of the Funds’ portfolio managers, other advisory personnel, compliance personnel, and other support personnel. It noted that in addition to considering these factors at this meeting, it had also considered many of these factors during the course of its quarterly meetings over the past year as well as at its November 3 special telephonic meeting. The Board noted that, in addition to investment management and broker-selection services, the Advisor prepares compliance and other materials for each of the Board’s meetings; provides office space, equipment, information technology and administrative services necessary for operation of the Funds; and performs regular compliance and risk analysis functions for the Funds. The Board believed that the nature, extent, and quality of services provided by the Advisor were comparable to those provided by advisors to comparable funds and that such services were adequate for the Funds’ needs, and were being performed by the Advisor in a competent and appropriate manner.

In reviewing the investment performance of each of the Funds, the Board reviewed the one-, two-, three-, four-, five- and ten-year performances of the LargeCap Fund and Bond Fund and the one-, two-, three-, four-, and five-year and life-of-fund performances of the MidCap Fund (which commenced operations on March 31, 2008).

ADDITIONAL INFORMATION (Unaudited) (Continued)

The Board observed that the investment performance for the LargeCap Fund was strong relative to its Broadridge performance group during the four-year period, in which it ranked in the top 40 percent, but less favorable for other periods, in particular the one-, two-, three-, and ten-year periods, during which time it ranked in the bottom 20 percent. The Board noted that the more recent Morningstar data showed more favorable performance for the applicable measurement period as compared to other funds in the Morningstar Large Blend category, including performance in the top 5 percent of such funds in the one-year period and near the top 20 percent of such funds for the five-year period. The Board observed that while the Fund continued to rank among the bottom 20 percent of funds over the ten-year period in both the Broadridge and the Morningstar data, a consistent team of portfolio managers for the Fund had been in place during the past five years of more favorable performance.

The performance of the MidCap Fund ranked above the median of its performance universe for the since-inception period, but in the bottom 40 percent of both its performance group and performance universe for the one-, four-, and five-year periods and in the bottom 20 percent for the two-year period. The Board noted that notwithstanding these Broadridge performance metrics, the Fund had performed in the top 20 percent of its Morningstar category for the applicable one-year period and above the median and near the median, respectively, of its Morningstar category for the five-year and three-year periods.

The Board noted that the Bond Fund ranked in the top 20 percent of its comparison group and its comparison universe for the four-, five-, and ten-year periods but in the bottom 20 percent for the one- and two-year periods. The Board noted that the Bond Fund had performed in the top 20 percent of the Morningstar Short-Term Bond category for the one-, three-, five-, and ten-year periods.

After considering the performances of the LargeCap Fund, MidCap Fund, and Bond Fund, the Board determined that relative to the performances of comparable funds and to each Fund’s benchmark index, the performance of each Fund was within an acceptable range.

In reviewing the cost of services provided to the Funds and profits realized by the Advisor from these relationships, the Board compared information relating to the various management fees charged to separately managed accounts of the Advisor that have relatively analogous investment objectives as those of a Fund. Among the information reviewed by the Board was information relating to standardized investment products offered to separately managed account clients of the Advisor. The Board determined that these standardized products in most instances had investment objectives and styles that were sufficiently different from the investment objectives and styles of any of the Funds so as to make the comparison inapt. With respect to those standardized products available to separately managed account clients of the Advisor that the Board determined to be sufficiently similar in investment objective and strategy to a Fund to be relevant for comparative purposes, the Board determined that in light of the significantly different level of services and resources required for the management of these products and the Funds, the management fees charged by the Advisor with respect to each of the Funds were reasonable relative to the management fees charged by the Advisor with respect to the relevant standardized separately managed account product.

The information provided by Broadridge indicated that the advisory fees of the LargeCap Fund were one of the highest in both the Fund’s Broadridge comparison group and its comparison universe. The Board, however, observed that the Advisor was proposing to institute a more substantial fee waiver that would lower the ceiling on the maximum total expense ratio that the Fund could incur from 1.13 percent to 1.10 percent of average daily net assets of the Fund, which would place the Fund’s total expense ratio in the third quintile of its expanded comparison universe. The Board also noted that the Fund’s non-management expenses were near the median both of its comparison group and its comparison universe. After taking into account all of these considerations, the Board determined that the management fee and total expense ratio of the LargeCap Fund were reasonable.

The Board noted that the MidCap Fund’s management fee, even after waiver of a portion thereof by the Advisor, ranked in the fifth quintile of management fees of funds in the MidCap Fund’s Broadridge comparison group. The Board further noted that the non-management expense ratio of the Fund continued to be relatively high as compared to the Fund’s Broadridge comparison universe, but that this ratio compared more favorably relative to the Fund’s comparison group. The Board further observed that, given the relatively low level of assets in the Fund, the opportunity existed for non-management expenses to further decline as the MidCap Fund grows in assets, thereby having a decreasing impact on the Fund’s total expenses. The Board observed that the actual total expense ratio of the Fund was above the median actual total expense ratio for funds in the Fund’s comparison group while falling in the top 80 percent for funds in the Fund’s comparison universe. The Board considered that the Advisor was proposing to institute a more substantial fee waiver for the Fund, which would have the effect of capping the maximum total expense ratio that the Fund could incur at 1.20 percent (whereas the cap had previously been set at 1.25 percent). This cap would have the effect of placing the Fund’s actual total expense ratio in the top 60 percent of funds in the Fund’s comparison expanded universe, which the Board believed was reasonable.

The Board noted that the Bond Fund’s contractual management fee was the highest of its Broadridge comparison group and that its actual management fee was the highest of both its comparison group and comparison universe. The Board also noted, however, that the Fund’s total expense ratio was at the median of both its Broadridge comparison group and comparison universe, which the Board determined was reasonable.

ADDITIONAL INFORMATION (Unaudited) (Continued)

With regard to profitability, the Board noted that the Advisor’s pre-tax profitability, before accounting for marketing fees borne by the Advisor, ranked near the median of firms included in the Broadridge analysis, though it ranked high relative to these firms on a post-marketing basis. The Board observed that all of the investment advisors for which profitability information was publicly available and that were included in the Broadridge comparison were publicly traded entities having markedly different marketing strategies from that of the Advisor. The Board also observed that the Advisor’s profitability has tended to fluctuate from year-to-year rather than being consistently high and had decreased to some degree during the past year. The Board determined that the operating margins of the Advisor were reasonable and, after reviewing information provided by Broadridge and reviewing the Advisor’s own analysis, the Board concluded that the cost of services provided by the Advisor and its affiliates to the Funds and the profits realized with respect thereto were reasonable.

The Board also considered whether economies of scale might be realized as the Funds’ assets increase. It noted that the Agreement provides for a fee breakpoint at $50 million of assets. This breakpoint is equal to ten basis points for the LargeCap Fund and MidCap Fund and five basis points for the Bond Fund. The Board considered that an increase in assets could provide economies of scale in the Funds’ operations. However, it noted that the level of assets of both the LargeCap Fund and the MidCap Fund presented no meaningful opportunity for such economies. Therefore the Board concluded that neither Fund was likely to realize material economies of scale until its assets grew significantly. The Board noted that assets in the Bond Fund had recently stabilized to some degree, and the Board determined that the Bond Fund had not yet reached a point where the Fund was realizing any material economies of scale.

Item 2. Code of Ethics.

As of the end of the period covered by this report on Form N-CSR, the Registrant has adopted a Code of Ethics (as defined in Item 2(b) of Form N-CSR) that applies to the Registrant’s principal executive officer, principal financial officer and principal accounting officer. The Registrant’s Code of Ethics (as defined in Item 2(b) of Form N-CSR) and any amendments or waivers thereto are available on the Registrant’s website at www.thompsonim.com.

Item 3. Audit Committee Financial Expert.

The Registrant’s Board of Directors has determined that the Registrant has at least one audit committee financial expert serving on its audit committee. John Feldt, a director of the Registrant since 1987, has been determined to be an audit committee financial expert and is “independent” within the meaning of Item 3(a)(2) of Form N-CSR. Mr. Feldt, currently retired, was the Senior Vice President-Finance for the University of Wisconsin Foundation from 1984 through 2006. In such capacity, he oversaw the investment and accounting functions for the Foundation. These duties required Mr. Feldt to supervise the Foundation’s controller and approve the Foundation’s accounting and audit information.

Item 4. Principal Accountant Fees and Services.

The following table sets forth information as to the fees billed to the Registrant for each of the last two fiscal years for audit-related, tax and other services and products provided by Cohen & Company, Ltd., the Registrant’s principal accountant.

	Fiscal Year Ended November 30,
	2015			2016
Audit Fees⁽¹⁾		$	38,500.00		$	38,500.00
Audit-Related Fees⁽²⁾		$	0.00		$	0.00
Tax Fees⁽³⁾		$	9,000.00		$	9,000.00
All Other Fees⁽⁴⁾		$	0.00		$	0.00
TOTAL		$	47,500.00		$	47,500.00

___________________

(1)	This category relates to professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

(2)	This category relates to assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under "Audit Fees" above.

(3)	This category relates to professional services rendered by the principal accountant for tax compliance, tax advice and tax planning. For 2015 and 2016, the tax services provided by the Registrant’s principal accountant specifically related to the preparation of the Registrant’s federal and state income and excise tax returns and a review of the Registrant’s distributions of capital gains and dividend and interest income.

(4)	This category relates to products and services provided by the principal accountant other than those reported under "Audit Fees," "Audit-Related Fees," and "Tax Fees" above.

Cohen & Company, Ltd. did not bill any amounts over the last two fiscal years for services or products provided to Thompson Investment Management, Inc., the Registrant's investment advisor, or any entity controlling, controlled by or under common control with such advisor that provides ongoing services for the Registrant.

The audit committee of the Registrant’s Board of Directors has not adopted any pre-approval policies and procedures (as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X) regarding the provision of audit or non-audit services to the Registrant.

No services described in paragraphs (b)-(d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this Registrant because it is not a “listed issuer” within the meaning of Rule 10A-3 under the Securities Exchange Act of 1934.

Item 6. Investments.

The required Schedules of Investments in securities of unaffiliated issuers is included as part of the Registrant’s Annual Report to Shareholders dated as of November 30, 2016 provided under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to this Registrant because it is not a closed-end management investment company.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to this Registrant because it is not a closed-end management investment company.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Not applicable to this Registrant because it is not a closed-end management investment company.

Item 10. Submission of Matters to a Vote of Securities Holders.

The Registrant has not made any material changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Directors after the Registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K or this Item.

Item 11. Controls and Procedures.

	(a)	Disclosure Controls and Procedures. Based on an evaluation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) carried out under the supervision and with the participation of the Registrant’s management, including its principal executive and financial officers, within 90 days prior to the filing date of this report on Form N-CSR, the Registrant’s principal executive and financial officers have concluded that the design and operation of the Registrant’s disclosure controls and procedures are effective in providing reasonable assurance that the information required to be disclosed on Form N-CSR is recorded, processed, summarized and reported within the applicable time periods.

	(b)	Change in Internal Controls Over Financial Reporting. There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this Form N-CSR that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

The following exhibits are attached to this Form N-CSR:

	Exhibit No.		Description of Exhibit
	12(a)(1)		The Code of Ethics for the Registrant’s Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer referred to in Item 2 was filed as Exhibit 12(a)(1) to the Registrant’s Certified Shareholder Report on Form N-CSR filed on January 28, 2005, and is incorporated herein by reference

	12(a)(2)-1		Certification of Principal Executive Officer Required by Section 302 of the Sarbanes-Oxley Act of 2002

	12(a)(2)-2		Certification of Principal Financial Officer Required by Section 302 of the Sarbanes-Oxley Act of 2002

	12(b)		Certification of Chief Executive Officer and Chief Financial Officer Required by Section 906 of the Sarbanes-Oxley Act of 2002

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, on this 30^th day of January, 2017.

THOMPSON IM FUNDS, INC.

By:	/s/ Jason L. Stephens
	Jason L. Stephens, Chief Executive
	Officer

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 indicated on this 30^th day of January, 2017.

By:	/s/ Jason L. Stephens
	Jason L. Stephens, Chief Executive
	Officer (Principal Executive Officer)

By:	/s/ Penny Hubbard
	Penny Hubbard, Chief Financial
	Officer (Principal Financial Officer)