-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KzVpA+hXB2mVmyTSXWC1t/uB+/A1USCpBETBrQ13ecDcTV/zm/oOdwK2eKudWnOS iSNXF+5lSFgAojpJUgqpGw== 0000866841-99-000005.txt : 19990308 0000866841-99-000005.hdr.sgml : 19990308 ACCESSION NUMBER: 0000866841-99-000005 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990129 FILED AS OF DATE: 19990305 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RANSON MANAGED PORTFOLIOS CENTRAL INDEX KEY: 0000866841 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 481084551 STATE OF INCORPORATION: KS FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06153 FILM NUMBER: 99557966 BUSINESS ADDRESS: STREET 1: 1 NORTH MAIN CITY: MINOT STATE: ND ZIP: 58703 BUSINESS PHONE: 7018525292 MAIL ADDRESS: STREET 1: 1 NORTH MAIN CITY: MINOT STATE: ND ZIP: 58703 N-30D 1 Dear Shareholder: We are pleased to enclose the semi-annual report of the operations of The Kansas Municipal Fund for the six months ended January 29, 1999. The Fund's portfolio and related financial statements are presented within for your review. In 1998, the U.S. economy exhibited more strength than expected. While there has been some weakening in factory orders reflective of foreign competition, the housing market and domestic consumer sales have been strong. Much of this strength can be contributed to the way computer technology has allowed productivity to increase in the U.S. In addition to new efficient technology, the U.S. is poised to benefit from free international trade. The recent trade deficit has restrained U.S. growth, but at the same time has kept inflation low. However, with the U.S. dollar declining relative to Asian currencies and Europe improving, international trade should become less of a drag on the U.S. economy. This, along with an already robust domestic economy, should help the U.S. prosper. The main story for municipal investors in 1998 was the increase in the ratio between municipal and Treasury yields. At the beginning of the year, municipals were yielding 87% as much as the 30-year Treasury bond. By year-end, that ratio had climbed to 98%. As yields on the 30-year Treasury bond fell from 5.92% to 5.09%, municipal yields dropped from 5.15% to 5.00%. This abnormal relationship does not appear to be a concern over possible tax law changes, but results from foreign and domestic investor demand for U.S. Treasuries in times of economic turmoil abroad. Restoring municipals and Treasuries to a more normal relationship will likely result as the U.S. trade deficit puts downward pressure on the dollar, thus weakening foreign support for Treasuries. Municipal bonds remain ridiculously cheap (in terms of price) by historical standards. Normally, buyers pay for the tax benefits of municipals by getting a lower return. Today, however, investors are saving on taxes without giving up return. Faced with a choice of paying taxes on investment income or not, what would you do? The Kansas Municipal Fund began the year at $12.15 and ended the six month period at $12.22. The Kansas Municipal Fund, at times during the first six months, utilized a defensive position in U.S. Treasury futures to minimize the effects of strong economic growth. Share price was tempered as yields on U.S. Treasuries dropped to record lows in the fall and stabilized share price as yields rose in the latter part of the year. Stability of share price is the primary objective of a defensive position. The Fund continues to invest in high-grade Kansas double exempt bonds. Diversification remains an important strategy for the Fund. Purchases throughout the year in the primary and secondary markets include Newton Healthcare, Sedgwick County School District #267, and Wyandotte County International Speedway. The investment objective of the Fund is to provide a high level of current income exempt from both federal and Kansas income tax as is consistent with preservation of capital. Sincerely, Monte L. Avery Robert E.Walstad Chief Portfolio Strategist President TERMS & DEFINITIONS - ------------------- Appreciation Increase in value of an asset. Average Annual Total Return A standardized measurement of the return (yield and appreciation) earned by the fund on an annual basis, assuming all distributions are reinvested. Coupon Rate or Face Rate The rate of interest annually payable based on the face amount of the bond; expressed as a percentage. Depreciation Decrease in value of an asset. Lehman Brothers Municipal Bond Index An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market. The index does not take into account brokerage commissions or other costs, may include bonds different from those in the fund, and may pose different risks than the fund. Market Value Actual (or estimated) price at which a bond trades in the market place. Maturity A measure of the term or life of a bond in years. When a bond "matures", the issuer repays the principal. Net Asset Value (NAV) The value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not including any initial sales charge. Quality Ratings A designation assigned by independent rating companies to give a relative indication of a bond's credit worthiness. "AAA", "AA", "A" and "BBB" indicate investment grade securities. Ratings can range from a high of "AAA" to a low of "D". Total Return Measures both the net investment income and any realized and unrealized appreciation or depreciation of the underlying investments in the fund's portfolio for the period, assuming the reinvestment of all dividends. It represents the aggregate percentage or dollar value change over the period. PERFORMANCE AND COMPOSITION - --------------------------- Portfolio Ratings (based on Total Long-Term Investments) - -------------------------------------- [pie chart] AAA 41.8 AA 15.2 A 22.3 NR 12.4 BBB 8.3 Quality ratings reflect the financial strength of the issuer. They are assigned by independent rating services such as Moody's Investors Services and Standard & Poor's. Non-rated bonds have been determined to be of appropriate quality for the portfolio by Ranson Capital Corporation, the investment adviser. Portfolio Market Sectors (as a % of Net Assets) - ------------------------ [pie chart] H-Housing 35.6 HC-Health Care 26.6 U-Utilities 14.7 GO-General Obligation 6.1 S-School 4.2 I-Industrial 4.0 O-Other 3.3 W/S-Water/Sewer 3.1 T-Transportation 2.4 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. COMPARATIVE INDEX GRAPH - ----------------------- [line graph] Comparison of change in value of a $10,000 investment in The Kansas Municipal Fund and the Lehman Brothers Municipal Bond Index Kansas Municipal Fund Kansas Municipal Fund Lehman Brother's w/o sales charge w/ max sales charge Muni Bond Index ------------------------------------------------------------------ 11/15/90 $10,000 $9,575 $10,000 1991 $10,524 $10,077 $10,723 1992 $11,855 $11,351 $12,198 1993 $13,050 $12,495 $13,276 1994 $13,168 $12,609 $13,525 1995 $13,988 $13,394 $14,592 1996 $14,814 $14,184 $15,553 1997 $15,933 $15,256 $17,150 1998 $16,372 $15,676 $18,177 1/29/1999 $16,863 $16,146 $19,025 Average Annual Total Returns - ---------------------------- For periods ending January 29, 1999 Since Inception 1 year 5 year (November 15, 1990) - ------------------------------------------------------------------------- Without sales charge 4.59% 4.08% 6.57% With sales charge .15% 3.18% 6.01% - ------------------------------------------------------------------------- Putting Performance into Perspective The graph comparing your Fund's performance to a benchmark index provides you with a general sense of how your Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Lehman Brothers index is a national index representative of the national municipal bond market whereas the Fund concentrates its investments in Kansas municipal bonds. Your Fund's total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities necessary to match the index. And, if they could, they would incur transaction costs and other expenses. All Fund and benchmark returns include reinvested dividends. Returns are historical and are not a guarantee of future results. The Fund's share price, yields and total returns will vary, so that shares, when redeemed, may be worth more or less than their original cost. Key Statistics - -------------- 07-31-98 NAV(share value) $12.15 01-29-99 NAV $12.22 Average Maturity 21.0 years Number of Issues 77 Total Net Assets $119,416,060
Schedule of Investments January 29, 1999 (Unaudited) - ----------------------------------------------------- Name of Issuer Percentages represent the market value of each investment category to total net assets Rating Coupon Principal Market Moody's/S&P Rate Maturity Amount Value - ----------------------------------------------------------------------------------------------------------------------- KANSAS MUNICIPAL BONDS (97.7%) *Burlington, KS (Gas & Elec.) Rev. Ref. MBIA Aaa/AAA 7.000% 06/01/31 $ 4,000,000 $ 4,353,360 Cowley Cty., KS Community College C.O.P.'s A/NR 7.000 03/01/12 900,000 937,539 Douglas Cty., KS USD #497 (Lawrence) G.O. Aa-3/NR 6.000 09/01/15 1,000,000 1,092,470 Ford Cty., KS Single Family Mrtge. Rev. Ref. A-1/NR 7.900 08/01/10 370,000 399,171 Gardner, KS Elec. Util. Rev. NR/NR 7.000 11/01/09 1,000,000 1,076,690 Garnett, KS (Garnett Hsg. Auth. Project) Rev. NR/NR 5.900 10/01/18 500,000 513,080 Goddard, KS (IFR Syst., Inc.) Indl. Rev. Ref. & Impvt. NR/NR 6.250 05/01/12 500,000 538,380 Hiawatha, KS (WalMart Stores) Indl. Rev. Ref. NR/AA 6.750 01/01/06 490,000 510,443 Hutchinson, KS Single Family Mrtge. Rev. Ref. A/NR 8.875 12/01/12 1,800,000 1,943,892 Johnson Cty., KS Internal Impvt. & Ref. Aa-1/NR 6.125 09/01/12 2,410,000 2,603,426 Johnson Cty., KS Single Family Mrtge. Rev. A/NR 7.100 05/01/12 790,000 857,790 Johnson Cty., KS Water Dist. #1 Rev. Aa/AA+ 6.250 12/01/11 700,000 747,215 Johnson Cty., KS Water Dist. #1 Rev. Ref. Aa/AA+ 6.500 12/01/13 500,000 530,055 Kansas City, KS GNMA Mrtge. Rev. GNMA Aaa/NR 5.900 11/01/27 1,640,000 1,724,345 *Kansas City, KS Util. Syst. Ref. & Impvt. FGIC Aaa/AAA 6.375 09/01/23 7,750,000 8,770,830 *Kansas City, KS Util. Syst. Ref. & Impvt. AMBAC Aaa/AAA 6.300 09/01/16 2,000,000 2,160,720 Kansas City\Leavenworth Cty.\Lenexa, KS Mrtge. Rev. GNMA NR/AAA 7.850 11/01/10 490,000 507,150 KS Department of Transportation Highway Rev. Aa/AA+ 6.000 09/01/12 2,200,000 2,410,342 KS Devl. Fin. Auth. (Indian Ridge Apts.) NR/NR 6.000 01/01/28 1,150,000 1,170,458 KS Devl. Fin. Auth. (Jackson Co.) Hlth. Rev. Aa-3/NR 5.375 09/01/27 1,000,000 1,036,750 KS Devl. Fin. Auth. (Susan B. Allen Memorial Hosp.) ASGUA NR/AA 5.250 12/15/23 1,000,000 1,003,060 KS Devl. Finance Auth. (Board of Regents) AMBAC Aaa/AAA 5.875 06/01/21 750,000 815,385 KS Devl. Finance Auth. (Board of Regents) Rev. NR/NR 6.000 04/01/08 500,000 528,210 KS Devl. Finance Auth. (El Dorado/Larned) Rev. Ref. MBIA Aaa/AAA 6.000 02/01/12 2,000,000 2,116,740 KS Devl. Finance Auth. (Highway Patrol Training Facs.) Rev. NR/NR 6.300 12/01/05 450,000 476,536 KS Devl. Finance Auth. (Martin Creek Place) Rev. FHA Aa/NR 6.500 08/01/24 750,000 793,320 #KS Devl. Finance Auth. (Martin Creek Place) Rev. FHA Aa/NR 6.600 08/01/34 1,900,000 2,014,228 KS Devl. Finance Auth. (Oak Ridge Park Apt.) NR/NR 6.500 02/01/18 2,065,000 2,185,926 KS Devl. Finance Auth. (Oak Ridge Park Apt.) NR/NR 6.625 08/01/29 1,875,000 2,007,825 KS Devl. Finance Auth. (Sec. 8) Rev. Ref. MBIA Aaa/AAA 6.400 01/01/24 770,000 816,993 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev. MBIA Aaa/AAA 5.800 11/15/21 430,000 467,634 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev. MBIA Aaa/AAA 5.800 11/15/16 550,000 605,396 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev. MBIA Aaa/AAA 5.800 11/15/21 680,000 739,514 KS Devl. Finance Auth. Multifamily Hsg. Rev. NR/AAA 6.000 12/01/21 1,975,000 2,097,549 KS Devl. Finance Auth. Water Fund Rev. Aa-1/AA+ 6.000 11/01/14 500,000 552,930 KS Water Finance Auth. (Public Water Supply Dist #6) Rev. NR/NR 6.000 05/01/17 255,000 273,628 Lawrence, KS (Brandon Woods) Multifamily Hsg. Devl. Rev. Ref. NR/A 6.625 04/01/12 2,000,000 2,086,780 Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.000 07/01/09 2,000,000 2,171,260 Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.200 07/01/14 1,200,000 1,313,940 Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.200 07/01/19 1,725,000 1,867,968 Leavenworth Cty., KS (Lansing) USD #469 G.O. FSA Aaa/AAA 5.750 09/01/15 930,000 1,032,858 Leavenworth Cty., KS (Lansing) USD #469 G.O. FSA Aaa/AAA 5.750 09/01/14 875,000 967,566 Lenexa KS (Lakeview Village) Hlth. Care Facs. Rev. NR/BBB- 6.250 05/15/26 8,000,000 8,642,560 *Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 6.450 02/01/18 2,500,000 2,655,825 Newton, KS (Newton Healthcare) Hosp. Rev. NR/BBB- 5.700 11/15/18 1,000,000 1,039,350 Newton, KS (Newton Healthcare) Hosp. Rev. ACA NR/A 5.750 11/15/24 500,000 527,400 Olathe, KS (Bristol Pointe) Multifamily Hsg. Rev. Ref. FNMA NR/AAA 5.700 11/01/27 2,210,000 2,286,400 Olathe, KS (Jefferson Place) Multifamily Hsg. Rev. Ref. NR/A- 5.950 07/01/22 5,060,000 5,279,655 Olathe, KS (Jefferson Place) Multifamily Hsg. Rev. Ref. NR/A- 6.100 07/01/22 785,000 822,759 Olathe, KS Hlth. Care Ref. (Luth. Gd. Sam.) AMBAC Aaa/AAA 6.000 05/01/19 900,000 987,543 Olathe, KS Hlth. Care Ref. (Olathe Med. Ctr.) AMBAC Aaa/AAA 6.000 09/01/11 1,000,000 1,022,590 Olathe, KS Hlth. Care Ref. (Olathe Med. Ctr.) AMBAC Aaa/AAA 5.875 09/01/16 2,000,000 2,103,720 Pratt, KS Elec. Util. Syst. Rev. Ref. & Impvt. AMBAC Aaa/AAA 6.600 11/01/07 1,000,000 1,180,030 Riley Cty., KS (Colbert Hills Golf Project) NR/NR 5.550 05/01/23 2,590,000 2,651,797 Salina, KS Combined Water & Sewage Syst. Impvt. Rev. MBIA Aaa/AAA 6.250 10/01/12 500,000 521,170 Sedgwick Cty., KS USD #267 (Renwick) G.O. AMBAC Aaa/AAA 5.000 11/01/19 1,000,000 1,002,920 Seward Cty., KS G.O. AMBAC Aaa/AAA 6.000 08/15/13 750,000 805,260 Seward Cty., KS Single Family Mrtge. Rev. Ref. Aa-1/NR 8.000 05/01/11 290,000 311,008 Shawnee Cty., KS (Auburn-Washburn) USD #437 G.O. Ref. FGIC Aaa/AAA 6.600 09/01/09 500,000 542,950 Shawnee, KS Int. Impvt. G.O. Aa-3/NR 5.850 12/01/06 235,000 249,253 Wichita KS Multifamily Hsg. Rev. (Innes Station Apt. 5) NR/NR 6.250 03/01/28 1,750,000 1,765,750 Wichita, KS (Broadmoor Chelsea) Multifamily Hsg. Rev. FNMA NR/AAA 5.650 07/01/16 990,000 1,029,402 #Wichita, KS (Broadmoor Chelsea) Multifamily Hsg. Rev. FNMA NR/AAA 5.700 07/01/22 2,000,000 2,077,980 Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.000 11/15/08 640,000 697,594 Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.200 10/01/15 2,225,000 2,550,295 Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.000 11/15/18 2,350,000 2,554,967 Wichita, KS (St. Francis) Facs. Impvt. & Ref. MBIA Aaa/AAA 6.250 10/01/10 1,000,000 1,094,050 Wichita, KS Airport Auth. Facs. Rev. Ref. ASGUA NR/AA 7.000 03/01/05 440,000 486,803 Wichita, KS Hlth. Care (KS Masonic Home) Rev. NR/NR 6.375 12/01/22 1,275,000 1,318,108 Wichita, KS Multifamily Hsg. (Brentwood Apts.) Rev. NR/A 5.850 12/01/25 1,000,000 1,039,570 Wichita, KS Multifamily Hsg. (Cimarron Apts.) FNMA Aa/AAA 5.550 10/01/22 1,000,000 1,025,090 Wichita, KS Multifamily Hsg. (Northpark II-A) Rev. GNMA Aaa/NR 6.125 08/20/28 1,900,000 1,993,290 Wichita, KS Public Building Commission Rev. A/AA- 5.500 08/01/14 715,000 755,197 Wichita, KS Public Building Commission Rev. AMBAC Aaa/AAA 5.750 02/01/17 350,000 369,372 Wichita, KS Single Family Mrtge. Rev. Ref. A/NR 7.100 09/01/09 900,000 963,864 Wichita, KS Water & Sewer Util. Ref. & Impvt. FGIC Aaa/AAA 6.000 10/01/12 1,000,000 1,069,020 Wyandotte Cty, KS (KS Int'l. Speedway) Sales Tax Rev. MBIA Aaa/AAA 5.000 12/01/27 2,500,000 2,484,650 ----------- KANSAS MUNICIPAL BONDS (COST: $110,071,962) $116,726,544 ----------- SHORT-TERM SECURITIES (.9%) Federated Tax-Free Fund 73 $ 591,970 Federated Intermediate Municipal Trust 78 503,724 ----------- TOTAL SHORT-TERM SECURITIES (COST: $1,091,970) $ 1,095,694 ----------- TOTAL INVESTMENTS IN SECURITIES (COST: $111,163,932) $117,822,238 OTHER ASSETS LESS LIABILITIES 1,593,822 ----------- NET ASSETS $119,416,060 ===========
* Indicates bonds are segregated by the custodian to cover when-issued or delayed-delivery purchases. # Indicates bonds are segregated by the custodian to cover initial margin requirements FOOTNOTE: Non-rated (NR) securities have been determined to be of investment grade quality by the Fund's Manager. The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Assets and Liabilities January 29, 1999 (Unaudited) - ----------------------------------------------------------------
Assets Investment in securities, at value (cost: $111,163,932) $ 117,822,238 Variation margin on futures 584,807 Accrued dividends receivable 3,184 Accrued interest receivable 1,925,463 Prepaid expenses 9,732 Receivable for fund shares sold 9,207 -------------- Total Assets $ 120,354,631 -------------- Liabilities Dividends payable $ 454,625 Accrued expenses 91,485 Payable for fund shares redeemed 80,104 Bank overdraft 312,357 -------------- Total Liabilities $ 938,571 -------------- Net Assets $ 119,416,060 ============== Net assets are represented by: Paid-in capital $ 118,860,171 Accumulated undistributed net realized gain(loss) on investments (6,241,074) Unrealized appreciation on futures 138,657 Unrealized appreciation on investments 6,658,306 -------------- Total amount representing net assets applicable to 9,773,166 outstanding shares of no par common stock (unlimited shares authorized) $ 119,416,060 ============== Net asset value per share $ 12.22 ============== The accompanying notes are an integral part of these financial statements. Statement of Operations For the six months ended January 29, 1999 (Unaudited) - ------------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 3,387,671 Dividend 19,279 -------------- Total Investment Income $ 3,406,950 -------------- EXPENSES Investment advisory fees $ 296,456 Service fees 140,286 Custodian fees 8,871 Transfer agent fees 61,678 Accounting service fees 37,139 Transfer agent out of pockets 7,144 Professional fees 5,015 Trustees fees 3,495 Insurance 205 Reports to shareholders 2,937 Registration and filing fees 40 -------------- Total Expenses $ 563,266 -------------- NET INVESTMENT INCOME $ 2,843,684 -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) from: Investment transactions $ 541,151 Futures transactions (844,188) Net change in unrealized appreciation (depreciation) of: Investments $ 804,701 Futures 138,657 -------------- Net Realized And Unrealized Gain (Loss) On Investments and Futures $ 640,321 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,484,005 ==============
The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Changes in Net Assets For the six months ended January 29, 1999 and the year ended July 31, 1998 - ----------------------------------------------------------------------------
For The Six Months Ended For The January 29, 1999 Year Ended (Unaudited) July 31, 1998 ---------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 2,843,684 $ 6,095,141 Net realized gain (loss) on investment and futures transactions (303,037) (1,671,434) Net change in unrealized appreciation (depreciation) on investments and futures 943,358 (1,066,095) ----------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 3,484,005 $ 3,357,612 ----------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.29 and $.60 per share, respectively) $ (2,843,684) $ (6,095,141) Distributions from net realized gain on investment transactions 0 0 ----------------------------------- Total Dividends and Distributions $ (2,843,684) $ (6,095,141) ----------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 4,322,700 $ 8,635,428 Proceeds from reinvested dividends 1,954,884 4,211,696 Cost of shares redeemed (7,525,580) (18,287,314) ---------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ (1,247,996) $ (5,440,190) ---------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ (607,675) $ (8,177,719) NET ASSETS, BEGINNING OF PERIOD 120,023,735 128,201,454 ---------------------------------- NET ASSETS, END OF PERIOD $ 119,416,060 $ 120,023,735 ==================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements January 29, 1999 (Unaudited) Note 1. ORGANIZATION Business Operations - The Kansas Municipal Fund (the "Fund") is an investment portfolio of Ranson Managed Portfolios (the "Trust") registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust may offer multiple portfolios; currently five portfolios are offered. Ranson Managed Portfolios is an unincorporated business trust organized under Massachusetts law on August 10, 1990. The Fund had no operations from that date to November 15, 1990, other than matters relating to organization and registration. On November 15, 1990, the Fund commenced its Public Offering of capital shares. The investment objective of the Fund is to provide its shareholders with as high a level of current income exempt from both federal and Kansas income tax as is consistent with preservation of capital. The Fund will seek to achieve this objective by investing primarily in a portfolio of Kansas municipal securities. Shares of the Fund are offered at net asset value plus a maximum sales charge of 4.25% of the offering price. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment security valuation - Securities for which quotations are not readily available (which will constitute a majority of the securities held by the Fund) are valued using a matrix system at fair value as determined by Ranson Capital Corporation, ("Ranson"). The matrix system has been developed based on procedures approved by the Board of Trustees which include consideration of the following: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, and indications as to value from dealers and general market conditions. Because the market value of securities can only be established by agreement between parties in a sales transaction, and because of the uncertainty inherent in the valuation process, the fair values as determined may differ from the values that would have been used had a ready market for the securities existed. The Fund follows industry practice and records security transactions on the trade date. The Fund concentrates its investments in a single state. This concentration may result in the Fund investing a relatively high percentage of its assets in a limited number of issuers. Federal and state income taxes - The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies, and to distribute all of its net investment income and any net realized gain on investments, to its shareholders. Therefore, no provision for income taxes is required. The Fund has available at January 29, 1999, a net capital loss carryforward totaling $5,951,996, which may be used to offset capital gains realized during subsequent years through July 31, 2006. Distributions to shareholders - Dividends from net investment income, declared daily and paid monthly, are reinvested in additional shares of the Fund at net asset value or paid in cash. Capital gains, when available, are distributed at least annually. Investment income - Dividend income is recognized on the ex-dividend date and interest income is recognized daily on an accrual basis. Premiums and discounts on securities purchased are amortized using the effective interest method over the life of the respective securities, unless callable, in which case they are amortized to the earliest call date. Futures contracts - The Fund may purchase and sell financial futures contracts to hedge against changes in the values of tax-exempt municipal securities the Fund owns or expects to purchase. A futures contract is an agreement between two parties to buy or sell units of a particular index or a certain amount of U.S. Government or municipal securities at a set price on a future date. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum "initial margin" requirement of the futures exchange on which the contract is traded. Subsequent payments ("variation margin") are made or received by the Fund, dependent on the fluctuations in the value of the underlying index. Daily fluctuations in value are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize, for book purposes, a gain or loss equal to the difference between the value of the futures contracts sold and the futures contracts to buy. Unrealized appreciation (depreciation) related to open futures contracts is required to be treated as realized gain (loss) for Federal income tax purposes. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Schedule of Investments. The Statement of Assets and Liabilities reflects a receivable or payable for the daily mark to market for variation margin. Certain risks may arise upon entering into futures contracts. These risks may include changes in the value of the futures contracts that may not directly correlate with changes in the value of the underlying securities. At January 29, 1999, the Fund had outstanding futures contracts to sell debt securities as follows: Number of Valuation Unrealized Contracts Expiration Futures as of Appreciation To Sell Date Contracts January 29, 1999 (Depreciation) - ------------------------------------------------------------------------------- U.S. Treasury Notes 3/99 115 $584,807 $152,617 - -------------------------------------------------------------------------------- Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles 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 those estimates. Note 3. CAPITAL SHARE TRANSACTIONS As of January 29, 1999, there were unlimited shares of no par authorized; 9,773,166 and 9,875,312 shares were outstanding at January 29, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares -------------------------------- For The Six Months Ended For The January 29, 1999 Year Ended (Unaudited) July 31, 1998 -------------------------------- Shares sold 355,091 706,375 Shares issued on reinvestment of dividends 160,698 344,664 Shares redeemed (617,935) (1,497,432) -------------------------------- Net increase (decrease) (102,146) (446,393) ================================ Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Ranson Capital Corporation, the Fund's investment adviser and underwriter, ND Resources, Inc., the Fund's transfer and accounting services agent, and ND Capital, Inc., the Fund's agent for the purchase of certain investment securities, are subsidiaries of ND Holdings, Inc., the Fund's sponsor. The Fund has engaged Ranson Capital Corporation to provide investment advisory and management services to the Fund. The Investment Advisory Agreement provides for fees to be computed at an annual rate of 0.50% of the Fund's average daily net assets. The Fund has recognized $296,456 of investment advisory fees for the six months ended January 29, 1999. The Fund has a payable to Ranson Capital Corporation of $47,989 at January 29, 1999 for investment advisory fees. Certain officers and trustees of the Fund are also officers and directors of the investment adviser. The Fund pays an annual service fee to Ranson Capital Corporation, (Ranson), its principal underwriter, an annual fee for certain expenses incurred by Ranson in connection with the distribution of the Fund's shares. The annual fee paid to Ranson is calculated daily and paid monthly by the Fund at the annual rate of 0.25% of the average daily net assets of the Fund. The Fund has recognized $140,286 of service fee expenses after partial waiver for the six months ended January 29, 1999. The Fund has a payable to Ranson of $22,603 at January 29, 1999 for service fees. In addition, the Fund has engaged ND Capital, Inc. as agent for the purchase of certain investment securities. ND Resources, Inc., (the transfer agent), provides shareholder services for a monthly fee equal to an annual rate of 0.16% of the Fund's first $10 million of net assets, 0.13% of the Fund's net assets on the next $15 million, 0.11% of the Fund's net assets on the next $15 million, 0.10% of the Fund's net assets on the next $10 million, and 0.09% of the Fund's net assets in excess of $50 million. The Fund has recognized $61,678 of transfer agency fees and expenses for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $9,960 at January 29, 1999 for transfer agency fees. ND Resources, Inc. also acts as the Fund's accounting services agent for a monthly fee equal to the sum of a fixed fee of $2,000, and a variable fee equal to 0.05% of the Fund's average daily net assets on an annual basis for the Fund's first $50 million and at a lower rate on the average daily net assets in excess of $50 million. The Fund has recognized $37,139 of accounting service fees for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $6,002 at January 29, 1999 for accounting service fees. Note 5. INVESTMENT SECURITY TRANSACTIONS The cost of purchases and proceeds from sales of investment securities (excluding short-term securities) aggregated $10,065,346 and $11,958,818, respectively, for the six months ended January 29, 1999. Note 6. INVESTMENT IN SECURITIES At January 29, 1999, the aggregate cost of securities for federal income tax purposes was $111,163,932, and the net unrealized appreciation of investments based on the cost was $6,658,306, which is comprised of $6,667,952 aggregate gross unrealized appreciation and $9,646 aggregate gross unrealized depreciation. Financial Highlights Selected per share data and ratios for the period indicated - --------------------------------------------------------------------------------
For the Six For the For the For the For the For the Months Ended Year Ended Year Ended Year Ended Year Ended Year Ended January 29, 1999 July 31, July 31, July 31, July 31, July 31, (Unaudited) 1998 1997 1996 1995 1994 ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.15 $ 12.42 $ 12.14 $ 12.07 $ 12.00 $ 12.67 ------------------------------------------------------------------------------- Income from Investment Operations: Net investment income $ .29 $ .60 $ .61 $ .69 $ .65 $ .66 Net realized and unrealized gain (loss) on investment and futures transactions .07 (.27) .28 .07 .07 (.53) ------------------------------------------------------------------------------ Total From Investment Operations $ .36 $ .33 $ .89 $ .76 $ .72 $ .13 ------------------------------------------------------------------------------ Less Distributions: Dividends from net investment income $ (.29) $ (.60) $ (.61) $ (.69) $ (.65) $ (.66) Distributions from net capital gains .00 .00 .00 .00 .00 (.14) ------------------------------------------------------------------------------ Total Distributions $ (.29) $ (.60) $ (.61) $ (.69) $ (.65) $ (.80) ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.22 $ 12.15 $ 12.42 $ 12.14 $ 12.07 $ 12.00 ============================================================================== Total Return 6.00%(A)(C) 2.76%(A) 7.56%(A) 5.90%(A) 6.23%(A) 0.91%(A) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 119,416 $ 120,024 $ 128,201 $ 132,349 $ 130,091 $ 127,337 Ratio of net expenses (after expense assumption) to average net assets 0.95%(C) 0.95%(B) 0.93%(B) 0.85%(B) 0.82%(B) 0.70%(B) Ratio of net investment income to average net assets 4.76%(C) 4.93% 5.02% 5.18% 5.46% 5.26% Portfolio turnover rate 8.59% 26.68% 18.64% 20.14% 57.00% 55.00%
(A) Excludes maximum sales charge of 4.25%. (B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed expenses of $3,901, $46,741, $212,056, $295,875, and $419,129, respectively. If the expenses had not been assumed, the annualized ratios of total expenses to average net assets would have been 0.95%, 0.97%, 1.01%, 1.06%, and 1.06%, respectively. (C) Ratio is annualized. The accompanying notes are an integral part of these financial statements. Dear Shareholder, We are pleased to enclose the semi-annual report of the operations of The Kansas Insured Intermediate Fund, for the six months ended January 29, 1999. The Fund's portfolio and related financial statements are presented within for your review. In 1998, the U.S. economy exhibited more strength than expected. While there has been some weakening in factory orders reflective of foreign competition, the housing market and domestic consumer sales have been strong. Much of this strength can be contributed to the way computer technology has allowed productivity to increase in the U.S. In addition to new efficient technology, the U.S. is poised to benefit from free international trade. The recent trade deficit has restrained U.S. growth, but at the same time has kept inflation low. However, with the U.S. dollar declining relative to Asian currencies and Europe improving, international trade should become less of a drag on the U.S. economy. This, along with an already robust domestic economy, should help the U.S. prosper. The main story for municipal investors in 1998 was the increase in the ratio between municipal and Treasury yields. At the beginning of the year, municipals were yielding 87% as much as the 30-year Treasury bond. By year-end, that ratio had climbed to 98%. As yields on the 30-year Treasury bond fell from 5.92% to 5.09%, municipal yields dropped from 5.15% to 5.00%. This abnormal relationship does not appear to be a concern over possible tax law changes, but results from foreign and domestic investor demand for U.S. Treasuries in times of economic turmoil abroad. Restoring municipals and Treasuries to a more normal relationship will likely result as the U.S. trade deficit puts downward pressure on the dollar, thus weakening foreign support for Treasuries. Municipal bonds remain ridiculously cheap (in terms of price) by historical standards. Normally, buyers pay for the tax benefits of municipals by getting a lower return. Today, however, investors are saving on taxes without giving up return. Faced with a choice of paying taxes on investment income or not, what would you do? The Kansas Insured Intermediate began the year at $12.07 and closed the six month period at $12.18. The Kansas Insured Intermediate Fund, at times during the first six months, utilized a defensive position in U.S. Treasury futures to minimize the effects of strong economic growth. Share price was tempered as yields on U.S. Treasuries dropped to record lows in the fall and stabilized share price as yields rose in the latter part of the year. Stability of share price is the primary objective of a defensive position. The Fund continues to invest in high-grade Insured Kansas tax-exempt bonds. Diversification remains an important strategy for the Fund. Purchases throughout the year in the primary and secondary markets include Harvey County School District #373, Mission Kansas Multi-Family Housing, and Wyandotte County International Speedway. The investment objective of the Fund is to provide a high level of current income exempt from both federal and Kansas income tax as is consistent with preservation of capital. Sincerely, Monte L. Avery Robert E.Walstad Chief Portfolio Strategist President Terms & Definitions Appreciation Increase in value of an asset. Average Annual Total Return A standardized measurement of the return (yield and appreciation) earned by the fund on an annual basis, assuming all distributions are reinvested. Coupon Rate or Face Rate The rate of interest annually payable based on the face amount of the bond; expressed as a percentage. Depreciation Decrease in value of an asset. Lehman Brothers Municipal Bond Index An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market. The index does not take into account brokerage commissions or other costs, may include bonds different from those in the fund, and may pose different risks than the fund. Market Value Actual (or estimated) price at which a bond trades in the market place. Maturity A measure of the term or life of a bond in years. When a bond "matures", the issuer repays the principal. Net Asset Value (NAV) The value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not including any initial sales charge. Quality Ratings A designation assigned by independent rating companies to give a relative indication of a bond's credit worthiness. "AAA", "AA", and "A", and "BBB" indicate investment grade securities. Ratings can range from a high of "AAA" to a low of "D". Total Return Measures both the net investment income and any realized and unrealized appreciation or depreciation of the underlying investments in the fund's portfolio for the period, assuming the reinvestment of all dividends. It represents the aggregate percentage or dollar value change over the period. PERFORMANCE AND COMPOSITION - --------------------------- Portfolio Ratings (based on Total Long-Term Investments) - -------------------------------------- [pie chart] AAA 93.8 AA 6.2 Quality ratings reflect the financial strength of the issuer. They are assigned by independent rating services such as Moody's Investors Services and Standard & Poor's. Non-rated bonds have been determined to be of appropriate quality for the portfolio by Ranson Capital Corporation, the investment advisor. Portfolio Market Sectors (as a % of Net Assets) - ------------------------ [pie chart] GO-General Obligation 31.1 H-Housing 26.1 HC-Health Care 23.6 W/S-Water/Sewer 6.3 O-Other 3.8 U-Utilities 2.7 I-Industrial 2.4 T-Transportation 1.5 C/L-COP/Lease 1.3 S-Schools 1.2 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. COMPARATIVE INDEX GRAPH - ----------------------- [line graph]
Comparison of change in value of $10,000 investment in The Kansas Insured Intermediate Fund and the Lehman Bros. Municipal 7 Year Maturity Bond Index The Kansas Insured The Kansas Insured Lehman Bros. Municipal Intermediate Fund Intermediate Fund 7 Year Maturity Bond Index w/o sales charge w/ max sales charge --------------------------------------------------------------------------- 11/23/1992 $10,000 $9,725 $10,000 1993 $10,829 $10,531 $10,694 1994 $11,025 $10,722 $10,981 1995 $11,656 $11,335 $11,869 1996 $12,326 $11,987 $12,470 1997 $12,912 $12,557 $13,548 1998 $13,321 $12,955 $14,273 1/29/1999 $13,738 $13,360 $14,985
Average Annual Total Returns For periods ending January 29, 1999 ----------------------------------- Since Inception 1 year 5 year (November 23, 1992) ------ ------ ------------------- Without sales charge 4.93% 3.66% 5.27% With sales charge 2.04% 3.08% 4.79% Putting Performance into Perspective The graph comparing your Fund's performance to a benchmark index provides you with a general sense of how your Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Lehman Brothers' index is a national index representative of the national municipal bond market whereas the Fund concentrates its investments in Kansas municipal bonds. Your Fund's total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities necessary to match the index. And, if they could, they would incur transaction costs and other expenses. All Fund and benchmark returns include reinvested dividends. Returns are historical and are not a guarantee of future results. The Fund's share price, yields and total returns will vary, so that shares, when redeemed, may be worth more or less than their original cost. Key Statistics - -------------- 07-31-98 NAV(share value) $12.07 01-29-99 NAV $12.18 Average Maturity 9.9 years Number of issues 46 Total Net Assets $21,053,191
Schedule of Investments January 29, 1999 (Unaudited) Name of Issuer Percentages represent the Rating Market value of each Moody's Coupon Principal Market investment category to total net assets /S&P Rate Maturity Amount Value - -------------------------------------------------------------------------------------------------------------------------------- KANSAS MUNICIPAL BONDS (96.1%) Butler Cty., KS (Augusta) USD #402 G.O. AMBAC Aaa/AAA 5.400% 10/01/06 $200,000 $210,050 *Douglas Cty., KS USD #497 (Lawrence) G.O. FGIC Aaa/AAA 7.200 09/01/02 1,370,000 1,530,276 Harvey Cty., KS USD #373 (Newton) FSA Aaa/AAA 5.000 09/01/16 250,000 256,405 Johnson Cty., KS USD #232 (Desoto) G.O. MBIA Aaa/AAA 5.150 09/01/09 510,000 549,025 Johnson Cty., KS USD #232 (Desoto) G.O. MBIA Aaa/AAA 5.200 09/01/10 600,000 643,482 Johnson Cty., KS USD #233 (Olathe) G.O. AMBAC Aaa/AAA 6.150 03/01/07 300,000 322,629 Kansas City, KS (St. Margaret Hlth. Ctr.) AMBAC Aaa/AAA 5.700 08/01/03 250,000 268,158 Kansas City, KS Special Obligation Escrowed NR/AAA 6.000 02/15/03 200,000 215,920 KS Devl. Fin. Auth. (Hays Medl. Ctr.) Rev. MBIA Aaa/NR 5.300 11/15/09 375,000 406,500 KS Devl. Fin. Auth. (Hays Medl. Ctr.) Rev. MBIA Aaa/NR 5.200 11/15/08 375,000 403,530 #KS Devl. Fin. Auth. (Stormont Vail) Hlth. Care Rev. MBIA Aaa/AAA 5.700 11/15/08 450,000 493,511 KS Devl. Fin. Auth. (Stormont Vail) Hlth. Care Rev. MBIA Aaa/AAA 5.600 11/15/07 100,000 109,011 KS Devl. Fin. Auth. Multifamily (Park Apts.) Hsg. Rev. FNMA NR/AAA 5.700 12/01/09 325,000 338,042 KS Devl. Fin. Auth. Pooled Ref. Lease Rev. MBIA Aaa/AAA 5.500 10/01/05 250,000 270,070 KS State Turnpike Auth. Rev. FGIC Aaa/AAA 5.450 09/01/10 200,000 215,040 Larned, KS (Cath. Hlth. Corp.) Hlth. Facs. Rev. MBIA Aaa/AAA 5.400 11/15/04 155,000 166,134 Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 6.050 02/01/06 350,000 363,944 *Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 5.875 02/01/04 500,000 521,390 Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 5.950 02/01/05 250,000 260,340 McPherson Cty., KS (McPherson) USD #418 G.O. FSA Aaa/AAA 5.700 09/01/06 400,000 438,772 Mission, KS (Lamar Place) Multifamily Hsg. Rev. FNMA NR/AAA 5.000 10/01/14 605,000 607,983 Mission, KS (Lamar Place) Multifamily Hsg. Rev. FNMA NR/AAA 5.180 10/01/23 945,000 949,460 Olathe, KS (Bristol Pointe) MultiFamily Hsg. Rev. Ref. FNMA NR/AAA 5.250 11/01/12 485,000 497,508 Olathe, KS (Evang. Lutheran Good Samaritan Soc.) AMBAC Aaa/AAA 5.500 05/01/03 110,000 117,208 Olathe, KS (Evang. Lutheran Good Samaritan Soc.) AMBAC Aaa/AAA 5.400 05/01/02 150,000 157,424 Olathe, KS (Evang. Lutheran Good Samaritan Soc.) AMBAC Aaa/AAA 5.200 05/01/01 140,000 144,549 Olathe, KS (Medl. Ctr.) Hlth. Facs. Rev. AMBAC Aaa/AAA 5.125 09/01/12 500,000 519,245 Olathe, KS (Medl. Ctr.) Hlth. Facs. Rev. Ref. AMBAC Aaa/AAA 5.600 09/01/05 1,000,000 1,054,380 Sedgwick Cty., KS (Maize) USD #266 G.O. FSA Aaa/AAA 5.500 09/01/05 300,000 320,436 Sedgwick Cty., KS (Maize) USD #266 G.O. FSA Aaa/AAA 5.600 09/01/06 200,000 214,110 Sedgwick Cty., KS (Renwick) USD #267 G.O. AMBAC Aaa/AAA 6.000 11/01/07 570,000 636,171 Sedgwick Cty., KS (Renwick) USD #267 G.O. AMBAC Aaa/AAA 5.850 11/01/06 290,000 321,839 Sedgwick\Shawnee Cty., KS Single Family Mrtge. Rev. GNMA Aaa/NR 5.200 12/01/08 505,000 520,514 Shawnee Cty., KS (Shawnee Heights) USD #450 G.O. FSA Aaa/AAA 6.500 09/01/00 250,000 261,245 *Shawnee Cty., KS (Topeka) USD #501 G.O. FGIC Aaa/AAA 5.550 02/01/07 820,000 873,144 Wellington, KS Utility Rev. AMBAC Aaa/AAA 4.950 05/01/11 300,000 312,003 Wellington, KS Utility Rev. AMBAC NR/AAA 5.000 05/01/12 250,000 260,570 Wichita, KS (St. Francis Regl. Medl. Ctr.) Impvt. & Ref. MBIA Aaa/AAA 6.100 10/01/04 775,000 847,300 Wichita, KS (St. Francis Regl. Medl. Ctr.) Impvt. & Ref. MBIA Aaa/AAA 6.000 10/01/03 250,000 272,115 Wichita, KS Airport Auth. Facs. Rev. Ref. ASGUA NR/AA 7.000 03/01/05 100,000 110,637 #Wichita, KS Multi Hsg. (Broadmoor Chelsea) Rev. FNMA NR/AAA 5.375 07/01/10 625,000 647,100 *Wichita, KS Multifamily Hsg. (Cimarron Apartments) FNMA Aa/AAA 5.250 10/01/12 775,000 796,785 Wichita, KS Water & Sewer Util. Rev. Ref. FGIC Aaa/AAA 5.600 04/01/05 610,000 638,859 Wichita, KS Water & Sewer Util. Rev. Ref. FGIC Aaa/AAA 5.750 10/01/06 150,000 157,341 Wichita, KS Water & Sewer Util. Rev. FGIC Aaa/NR 5.000 07/01/11 500,000 523,020 Wyandotte Cty, KS (KS Int'l. Speedway) Sales Tax Rev. MBIA Aaa/AAA 5.000 12/01/27 500,000 496,930 ----------- TOTAL KANSAS MUNICIPAL BONDS (COST: $19,226,299) $20,240,104 ----------- SHORT-TERM SECURITIES (2.1%) Federated Tax-Free Fund 73 $ 182,913 Federated Intermediate Municipal Trust 78 250,000 ----------- TOTAL SHORT-TERM SECURITIES (COST: $432,913) $ 432,913 ----------- TOTAL INVESTMENTS IN SECURITIES (COST: $19,659,212) $20,673,017 OTHER ASSETS LESS LIABILITIES 380,174 ----------- NET ASSETS $21,053,191 ===========
*Indicates bonds are segregated by the custodian to cover when-issued or delayed-delivery purchases. # Indicates bonds are segragated by the custodian to cover initial margin requirements. FOOTNOTE: Non-rated (NR) securities have been determined to be of investment grade quality by the Funds Manager. The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Assets and Liabilities January 29, 1999 (Unaudited) - -----------------------------------------------------------------
Assets Investment in securities, at value (cost: $19,659,212) $20,673,017 Cash 17,847 Variation margin on futures 80,627 Accrued interest receivable 367,786 Prepaid expenses 1,689 Accrued dividends receivable 482 ----------- Total Assets $21,141,448 ----------- Liabilities Dividends payable $ 74,930 Accrued expenses 13,327 ----------- Total Liabilities $ 88,257 ----------- Net Assets $21,053,191 ----------- Net assets are represented by: Paid-in capital $20,955,405 Accumulated undistributed net realized gain(loss) on Investments (933,832) Unrealized appreciation on futures 17,813 Unrealized appreciation on investments 1,013,805 Total amount representing net assets applicable to 1,728,323 outstanding shares of no par common stock (unlimited shares authorized) $21,053,191 =========== Net asset value per share $ 12.18 =========== The accompanying notes are an integral part of these financial statements. Statement of Operations For the six months ended January 29, 1999 (Unaudited) - ------------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 523,041 Dividends 10,714 ----------- Total Investment Income $ 533,755 ----------- EXPENSES Investment advisory fees $ 37,066 Custodian fees 1,560 Transfer agent fees 15,016 Accounting service fees 17,138 Transfer agent out of pockets 1,766 Professional fees 2,973 Trustees' fees 1,227 Reports to shareholders 1,027 Registration and filing fees 249 Insurance Expense 36 ----------- Total Expenses $ 78,058 ----------- NET INVESTMENT INCOME $ 455,697 ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) from: Investment transactions $ 37,892 Futures transactions (130,904) Net change in unrealized appreciation (depreciation) of: Investment transactions $ 271,711 Futures transactions 17,813 ----------- Net Realized and Unrealized Gain (Loss) on Investments and Futures $ 196,512 ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 652,209 ===========
The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Changes in Net Assets For the six months ended January 29, 1999 and the year ended July 31, 1998 - ---------------------------------------------------------------------------
For The Six Months Ended For The Year Ended January 29, 1999 July 31, 1998 (Unaudited) ---------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 455,697 $ 993,262 Net realized gain (loss) on investment and futures transactions (93,012) (125,540) Net change in unrealized appreciation (depreciation) on investments and futures 289,524 (212,731) ---------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 652,209 $ 654,991 ---------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.26 and $.54 per share, Respectively) $ (455,697) $ (993,262) Distributions from net realized gain on investment transactions 0 0 ---------------------------------------------------- Total Dividends and Distributions $ (455,697) $ (993,262) ---------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 765,794 $ 746,870 Proceeds from reinvested dividends 271,357 603,378 Cost of shares redeemed (765,313) (5,960,554) ---------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 271,838 $ (4,610,306) ---------------------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ 468,350 $ (4,948,577) NET ASSETS, BEGINNING OF PERIOD 20,584,841 25,533,418 ---------------------------------------------------- NET ASSETS, END OF PERIOD $ 21,053,191 $ 20,584,841 ====================================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements January 29, 1999 (Unaudited) Note 1. ORGANIZATION Business Operations -The Kansas Insured Intermediate Fund (the "Fund") is an investment portfolio of Ranson Managed Portfolios (the "Trust") registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust may offer multiple portfolios; currently five portfolios are offered. Ranson Managed Portfolios is an unincorporated business trust organized under Massachusetts law on August 10, 1990. The Fund had no operations from that date to November 23, 1992, other than matters relating to organization and registration. On November 23, 1992, the Fund commenced its Public Offering of capital shares. The investment objective of the Fund is to provide its shareholders with as high a level of current income exempt from both federal and Kansas income tax as is consistent with preservation of capital. The Fund will seek to achieve this objective by investing primarily in a portfolio of Kansas insured securities. Shares of the Fund are offered at net asset value plus a maximum sales charge of 2.75% of the offering price. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment security valuation - Securities for which quotations are not readily available (which will constitute a majority of the securities held by the Fund) are valued using a matrix system at fair value as determined by Ranson Capital Corporation, ("Ranson"). The matrix system has been developed based on procedures approved by the Board of Trustees which include consideration of the following: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, and indications as to value from dealers and general market conditions. Because the market value of securities can only be established by agreement between parties in a sales transaction, and because of the uncertainty inherent in the valuation process, the fair values as determined may differ from the values that would have been used had a ready market for the securities existed. The Fund follows industry practice and records security transactions on the trade date. The Fund concentrates its investments in a single state. This concentration may result in the Fund investing a relatively high percentage of its assets in a limited number of issuers. Deferred organization costs - Costs incurred by the Fund in connection with its organization were amortized over a 60-month period on the straight-line basis. The entire cost of $37,500 has been amortized as of January 29, 1999. Federal and state income taxes - The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies, and to distribute all of its net investment income and any net realized gain on investments, to its shareholders. Therefore, no provision for income taxes is required. The Fund has available at January 29, 1999, a net capital loss carryforward totaling $842,915, which may be used to offset capital gains realized during subsequent years through July 31, 2006. Distributions to shareholders - Dividends from net investment income, declared daily and payable monthly, are reinvested in additional shares of the Fund at net asset value or paid in cash. Capital gains, when available, are distributed at least annually. Investment income - Dividend income is recognized on the ex-dividend date and interest income is recognized daily on an accrual basis. Premiums and discounts on securities purchased are amortized using the effective interest method over the life of the respective securities, unless callable, in which case they are amortized to the earliest call date. Futures contracts - The Fund may purchase and sell financial futures to hedge against changes in the values of tax-exempt municipal securities the Fund owns or expects to purchase. A futures contract is an agreement between two parties to buy or sell units of a particular index or a certain amount of U.S. Government or municipal securities at a set price on a future date. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum "initial margin" requirement of the futures exchange on which the contract is traded. Subsequent payments ("variation margin") are made or received by the Fund, dependent on the fluctuations in the value of the underlying index. Daily fluctuations in value are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize, for book purposes, a gain or loss equal to the difference between the value of the futures contracts sold and the futures contracts to buy. Unrealized appreciation (depreciation) related to open futures contracts is required to be treated as realized gain (loss) for Federal income tax purposes. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Schedule of Investments. The Statement of Assets and Liabilities reflects a receivable or payable for the daily mark to market for variation margin. Certain risks may arise upon entering into futures contracts. These risks may include changes in the value of the futures contracts that may not directly correlate with changes in the value of the underlying securities. At January 29, 1999, the Fund had outstanding futures contracts to sell debt securities as follows: Contracts Expiration Number of Valuation Unrealized To Date Futures as of Appreciation Sell Contracts January 29, 1999 (Depreciation) - -------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Notes 03/99 15 $80,627 $19,907 - --------------------------------------------------------------------------------------------------------------------------------
Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles 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 those estimates. Note 3. CAPITAL SHARE TRANSACTIONS As of January 29, 1999, there were unlimited shares of no par authorized; 1,728,323 and 1,705,829 shares were outstanding at January 29, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares ------ For The Six For The Months Ended Year Ended January 29, 1999 July 31, 1998 (Unaudited) ---------------- ------------- Shares sold 63,199 61,738 Shares issued on reinvestment of dividends 22,408 49,895 Shares redeemed (63,113) (492,742) ---------------- ------------- Net increase (decrease) 22,494 (381,109) ================ ============= Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Ranson Capital Corporation, the Fund's investment adviser and underwriter, and ND Resources, Inc., the Fund's transfer and accounting services agent, and ND Capital, Inc., the Fund's agent for the purchase of certain investment securities, are subsidiaries of ND Holdings, Inc., the Fund's sponsor. The Fund has engaged Ranson Capital Corporation, to provide investment advisory and management services to the Fund. The Investment Advisory Agreement provides for fees to be computed at an annual rate of 0.50% of the Fund's average daily net assets. The Fund has recognized $37,066 of investment advisory fees after partial waiver for the six months ended January 29, 1999. The Fund has a payable to Ranson Capital Corporation of $6,088 at January 29, 1999, for investment advisory fees. Certain officers and trustees of the Fund are also officers and directors of the investment adviser. The Fund has engaged ND Capital, Inc. as agent for the purchase of certain investment securities. For the six months ended January 29, 1999, commissions earned by ND Capital, Inc. totaled $625 and are included in the cost basis of the securities acquired. ND Resources, Inc., (the transfer agent), provides shareholder services for a monthly fee equal to an annual rate of 0.16% of the Fund's first $10 million of net assets, 0.13% of the Fund's net assets on the next $15 million, 0.11% of the Fund's net assets on the next $15 million, 0.10% of the Fund's net assets on the next $10 million, and 0.09% of the Fund's net assets in excess of $50 million. The Fund has recognized $15,016 of transfer agency fees and expenses for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $2,447 at January 29, 1999 for transfer agency fees. ND Resources, Inc. also acts as the Fund's accounting services agent for a monthly fee equal to the sum of a fixed fee of $2,000, and a variable fee equal to 0.05% of the Fund's average daily net assets on an annual basis for the Fund's first $50 million and at a lower rate on the average daily net assets in excess of $50 million. The Fund has recognized $17,138 of accounting service fees for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $2,785 at January 29, 1999 for accounting service fees. Note 5. INVESTMENT SECURITY TRANSACTIONS The cost of purchases and proceeds from the sales of investment securities (excluding short-term securities) aggregated $2,796,380 and $2,586,827 respectively, for the six months ended January 29, 1999. Note 6. INVESTMENT IN SECURITIES At January 29, 1999, the aggregate cost of securities for federal income tax purposes was $19,659,212, and the net unrealized appreciation of investments based on the cost was $1,013,805, which is comprised of $1,013,805 aggregate gross unrealized appreciation and $0 aggregate gross unrealized depreciation. Financial Highlights Selected per share data and ratios for the period indicated - --------------------------------------------------------------------------------
For The For The For The For The For The For The Six months Year Ended Year Ended Year Ended Year Ended Year Ended Ended January July 31, July 31, July 31, July 31, July 31, 29, 1999 1998 1997 1996 1995 1994 (Unaudited) ----------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $12.07 $12.23 $12.19 $12.04 $11.92 $12.24 ----------------------------------------------------------------------------------- Income from Investment Operations: Net investment income $.26 $.54 $.53 $.53 $.54 $.52 Net realized and unrealized gain (loss) on investment and futures transactions .11 (.16) .04 .15 .12 (.30) ----------------------------------------------------------------------------------- Total From Investment Operations $.37 $.38 $.57 $.68 $.66 $.22 ----------------------------------------------------------------------------------- Less Distributions: Dividends from net investment income $(.26) $(.54) $ (.53) $(.53) $ (.54) $(.52) Distributions from net capital gains .00 .00 .00 .00 .00 (.02) ----------------------------------------------------------------------------------- Total Distributions $(.26) $(.54) $(.53) $(.53) $(.54) $(.54) ----------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $12.18 $12.07 $12.23 $12.19 $12.04 $11.92 ----------------------------------------------------------------------------------- Total Return 6.26%(A)(C) 3.17%(A) 4.76%(A) 5.75%(A) 5.72%(A) 1.81%(A) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $21,053 $20,585 $25,533 $30,564 $30,678 $31,216 Ratio of net expenses (after expense assumption) to average net assets 0.74%(C) 0.75%(B) 0.76%(B) 0.69%(B) 0.62% (B) 0.51%(B) Ratio of net investment income to average net assets 4.36%(C) 4.42% 4.33% 4.37% 4.57% 4.26% Portfolio turnover rate 12.78% 25.46% 28.68% 19.96% 63.00% 56.00%
(A) Excludes maximum sales charge of 2.75%. (B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed expenses of $13,708, $40,608, $71,943, $112,745, and $136,079, respectively. If the expenses had not been assumed, the annualized ratios of total expenses to average net assets would have been 0.82%, 0.90%, 0.92%, 0.98%, and 0.99%, respectively. (C) Ratio was annualized. The accompanying notes are an integral part of these financial statements. Dear Shareholder: We are pleased to enclose the semi-annual report of the operations of The Nebraska Municipal Fund, for the six months ended January 29, 1999. The Fund's portfolio and related financial statements are presented within for your review. In 1998, the U.S. economy exhibited more strength than expected. While there has been some weakening in factory orders reflective of foreign competition, the housing market and domestic consumer sales have been strong. Much of this strength can be contributed to the way computer technology has allowed productivity to increase in the U.S. In addition to new efficient technology, the U.S. is poised to benefit from free international trade. The recent trade deficit has restrained U.S. growth, but at the same time has kept inflation low. However, with the U.S. dollar declining relative to Asian currencies and Europe improving, international trade should become less of a drag on the U.S. economy. This, along with an already robust domestic economy, should help the U.S. prosper. The main story for municipal investors in 1998 was the increase in the ratio between municipal and Treasury yields. At the beginning of the year, municipals were yielding 87% as much as the 30-year Treasury bond. By year-end, that ratio had climbed to 98%. As yields on the 30-year Treasury bond fell from 5.92% to 5.09%, municipal yields dropped from 5.15% to 5.00%. This abnormal relationship does not appear to be a concern over possible tax law changes, but results from foreign and domestic investor demand for U.S. Treasuries in times of economic turmoil abroad. Restoring municipals and Treasuries to a more normal relationship will likely result as the U.S. trade deficit puts downward pressure on the dollar, thus weakening foreign support for Treasuries. Municipal bonds remain ridiculously cheap (in terms of price) by historical standards. Normally, buyers pay for the tax benefits of municipals by getting a lower return. Today, however, investors are saving on taxes without giving up return. Faced with a choice of paying taxes on investment income or not, what would you do? The Nebraska Municipal Fund began the year at $11.13 and ended the six month period at $11.37. The Nebraska Municipal Fund, at times during the first six months, utilized a defensive position in U.S. Treasury futures to minimize the effects of strong economic growth. Share price was tempered as yields on U.S. Treasuries dropped to record lows in the fall and stabilized share price as yields rose in the latter part of the year. Stability of share price is the primary objective of a defensive position. The Fund continues to invest in high-grade Nebraska tax-exempt bonds. Diversification remains an important strategy for the Fund. Purchases throughout the year in the primary and secondary markets include Douglas County Hospital Authority, Nebraska Public Power, and Omaha Rosenblatt Stadium Facility. The investment objective of the Fund is to provide a high level of current income exempt from both federal and Nebraska income tax as is consistent with preservation of capital. Sincerely, Monte L. Avery Robert E.Walstad Chief Portfolio Strategist President Terms & Definitions Appreciation Increase in value of an asset. Average Annual Total Return A standardized measurement of the return (yield and appreciation) earned by the fund on an annual basis, assuming all distributions are reinvested. Coupon Rate or Face Rate The rate of interest annually payable based on the face amount of the bond; expressed as a percentage. Depreciation Decrease in value of an asset. Lehman Brothers Municipal Bond Index An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market. The index does not take into account brokerage commissions or other costs, may include bonds different from those in the fund, and may pose different risks than the fund. Market Value Actual (or estimated) price at which a bond trades in the market place. Maturity A measure of the term or life of a bond in years. When a bond "matures", the issuer repays the principal. Net Asset Value (NAV) The value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not including any initial sales charge. Quality Ratings A designation assigned by independent rating companies to give a relative indication of a bond's credit worthiness. "AAA", "AA", "A" and "BBB" indicate investment grade securities. Ratings can range from a high of "AAA" to a low of "D". Total Return Measures both the net investment income and any realized and unrealized appreciation or depreciation of the underlying investments in the fund's portfolio for the period, assuming the reinvestment of all dividends. It represents the aggregate percentage or dollar value change over the period. PERFORMANCE AND COMPOSITION - ---------------------------- Portfolio Ratings (based on Total Long-Term Investments) - -------------------------------------- [pie chart] AAA 54.5 AA 23.8 A 8.0 BBB 0.4 NR 13.3 Quality ratings reflect the financial strength of the issuer. They are assigned by independent rating services such as Moody's Investors Services and Standard & Poor's. Non-rated bonds have been determined to be of appropriate quality for the portfolio by Ranson Capital Corporation, the investment adviser. Portfolio Market Sectors (as a % of Net Assets) - ------------------------- [pie chart] H-Housing 21.8 GO-General Obligation 15.8 U-Utilities 15.2 S-Schoo1 4.6 HC-Health Care 14.5 O-Other 8.0 I-Industrial 5.2 C/L-Cop/Lease 3.0 W/S-Water/Sewer 1.9 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. COMPARATIVE INDEX GRAPH - ------------------------ [line graph] Comparison of change in value of a $10,000 investment in The Nebraska Municipal Fund and the Lehman Brothers Municipal Bond Index The Nebraska The Nebraska The Lehman Municipal Fund Municipal Fund Brothers Muni w/o sales charge w/ max sales charge Bond Index - ---------------------------------------------------------------------- 11/17/93 $10,000 $ 9,575 $10,000 1994 $ 9,773 $ 9,357 $ 9,892 1995 $10,471 $10,026 $10,673 1996 $11,071 $10,600 $11,376 1997 $11,909 $11,402 $12,544 1998 $12,380 $11,853 $13,295 01/29/99 $12,953 $12,402 $13,915 Average Annual Total Returns - -----------------------------. For periods ending January 29, 1999 Since Inception 1 year 5 year (Nov. 17, 1993) Without sales charge 6.24% 4.64% 5.10% With sales charge 1.72% 3.73% 4.22% Putting Performance into Perspective The graph comparing your Fund's performance to a benchmark index provides you with a general sense of how your Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Lehman Brothers index is a national index representative of the national municipal bond market whereas the Fund concentrates its investments in Nebraska municipal bonds. Your Fund's total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities necessary to match the index. And, if they could, they would incur transaction costs and other expenses. All Fund and benchmark returns include reinvested dividends. Returns are historical and are not a guarantee of future results. The Fund's share price, yields and total returns will vary, so that shares, when redeemed, may be worth more or less than their original cost. Key Statistics - ----------------. 07-31-98 NAV(share value) $11.13 01-29-99 NAV $11.37 Average Maturity 20.2 years Number of Issues 65 Total Net Assets $27,382,345
Schedule of Investments January 29, 1999 (Unaudited) Name of Issuer Percentages represent the market value of each investment category to total net assets Rating Coupon Principal Market Moody's/S&P Rate Maturity Amount Value - ------------------------------------------------------------------------------------------------------------------------------ NEBRASKA MUNICIPAL BONDS (97.4%) Adams Cty., NE Hosp. Auth. #1 (Mary Lanning Memorial Hosp.) NR/AA 5.300% 12/15/18 $ 250,000 $ 261,455 Chadron State College, NE Student Fees & Facs. Rev. Ref. NR/NR 5.700 07/01/11 300,000 304,974 Cuming Cty., NE School Dist. #020 (Bancraft-Rosalie) NR/NR 5.750 12/15/17 100,000 102,615 Dawson Cty., NE SID #1 (IBP, Inc. Proj.) Ref. G.O. A-3/A- 5.650 02/01/22 300,000 315,597 Douglas Cty., NE (Cath. Hlth. Corp.) Rev. MBIA Aaa/AAA 5.500 11/15/21 340,000 363,283 Douglas Cty., NE Hosp. Auth #2 (Bethphage Project) Rev. NR/NR 5.400 02/01/13 120,000 122,843 Douglas Cty., NE Hospital (Alegent Hlth.) Auth. #001 Rev. AMBAC Aaa/AAA 5.250 09/01/21 250,000 258,795 Douglas Cty., NE SID #240 (LeBea) Ref. G.O. NR/NR 5.900 10/15/16 100,000 105,622 Douglas Cty., NE SID #295 G.O. NR/NR 6.500 06/01/17 800,000 820,656 Douglas Cty., NE SID #363 (Hillsborough) G.O. NR/NR 5.850 09/15/17 100,000 102,240 Douglas Cty., NE SID #392 (Cinnamon Creek) G.O. NR/NR 5.750 08/15/17 200,000 204,366 Douglas Cty., NE SID #396 (First National Business Park) NR/NR 5.750 09/01/17 100,000 102,277 Gage Cty., NE (Beatrice) School Dist. #15 G.O. AMBAC Aaa/AAA 5.900 12/15/16 850,000 916,062 Grand Island, NE Sewer Syst. Rev. NR/A 6.000 04/01/14 250,000 272,200 Hastings, NE Elec. Rev. A/A 6.300 01/01/19 370,000 409,020 Hemingford, NE G.O. NR/NR 5.600 02/15/12 115,000 116,511 Kearney Cty., NE Combined Util. Rev. A-1/NR 6.100 06/01/14 600,000 629,268 Kearney Cty., NE School Dist. #503 (Minden) G.O. NR/NR 6.150 12/15/12 100,000 103,652 Lancaster Cty., NE (Bryan Memorial Hospital) Rev. MBIA Aaa/AAA 5.375 06/01/19 750,000 782,888 Lancaster Cty., NE (Lincoln Medl. Educ. Foundn.) Rev. NR/NR 5.700 02/01/11 100,000 104,96 Lancaster Cty., NE (Lincoln Medl. Educ. Foundn.) Rev. NR/NR 5.800 02/01/12 175,000 184,067 Lincoln, NE Elec. Syst. Rev. Aa/AA+ 5.750 09/01/16 750,000 801,285 Lincoln/Lancaster Cty., NE Public Bldg. Community Rev. Aa/AA+ 5.875 10/15/23 850,000 937,304 Lincoln/Lancaster Cty., NE Public Bldg. Community Tax Lease Aa/AA+ 5.800 10/15/18 475,000 524,239 NE Educ. Finance Auth. (Creighton Univ.) Rev. AMBAC Aaa/AAA 5.950 01/01/11 300,000 332,853 NE Educ. Finance Auth. (Midland Lutheran College) Rev. NR/NR 6.250 06/15/15 100,000 105,113 NE Hgr. Educ. Loan Program Junior Subord. Term MBIA Aaa/AAA 6.450 06/01/18 400,000 441,640 NE Hgr. Educ. Loan Program Senior Subord. Term MBIA Aaa/AAA 6.250 06/01/18 800,000 864,472 *NE Hgr. Educ. Loan Program Student Loan MBIA Aaa/AAA 5.875 06/01/14 1,350,000 1,431,608 NE Invmt. Finance Auth. (Great Plains Regl. Medl. Ctr.) Rev. NR/AA 5.450 11/15/17 400,000 417,664 NE Invmt. Finance Auth. (Great Plains Regl. Medl. Ctr.) Rev. NR/AAA 6.500 05/15/14 150,000 167,141 NE Invmt. Finance Auth. (Muirfield Greens) Multifamily Rev. FHA Aa/NR 6.800 12/01/15 365,000 388,156 NE Invmt. Finance Auth. (Muirfield Greens) Multifamily Rev. FHA Aa/NR 6.850 12/01/25 525,000 562,548 NE Invmt. Finance Auth. Multifamily Hsg. Rev. FNMA NR/AAA 6.200 06/01/28 495,000 520,220 NE Invmt. Finance Auth. Multifamily Hsg. Rev. GNMA NR/AAA 6.000 06/01/17 500,000 528,390 NE Invmt. Finance Auth. Multifamily Hsg. Rev. GNMA NR/AAA 6.100 06/01/29 500,000 526,420 *NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.600 09/01/20 695,000 742,976 *NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.300 09/01/28 1,105,000 1,189,776 NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.850 09/01/28 470,000 491,291 NE Invmt. Finance Auth. Single Family Hsg. Rev. FHA/GNMA NR/AAA 6.500 09/01/18 400,000 426,860 NE Invmt. Finance Auth. Single Family Hsg. Rev. GNMA NR/AAA 6.200 09/01/17 250,000 267,068 NE Invmt. Finance Auth. Single Family Hsg. Rev. GNMA NR/AAA 6.250 03/01/21 300,000 321,843 #NE Invmt. Finance Auth.(Children Healthcare Svcs.) Rev. AMBAC Aaa/AAA 5.500 08/15/27 1,000,000 1,064,800 NE Public Power Dist. Power Supply Syst. Rev. Aaa/AAA 6.125 01/01/15 390,000 431,001 NE Public Power Dist. Power Supply Syst. Rev. Aaa/AAA 5.750 01/01/20 250,000 273,433 NE Public Power Dist. Power Supply Syst. Rev. MBIA Aaa/AAA 5.000 01/01/28 500,000 501,425 NE Student Loan Program B Rev. MBIA Aaa/AAA 6.000 06/01/28 100,000 104,030 Northeast NE Juvenile Auth. 1st Mrtge. Rev. NR/NR 6.375 06/01/17 280,000 292,180 Northeast NE Solid Waste Facs. Rev. MBIA Aaa/AAA 5.900 05/15/15 600,000 627,876 Omaha, NE (Rosenblatt Stadium) Facs. Rev. Aa-1/AA+ 5.000 11/01/18 500,000 505,595 Omaha, NE Parking Facs. Corp. (Omaha Park 4\5) Lease Rev. Aa-1/AA+ 5.700 09/15/15 750,000 821,115 Omaha, NE Public Power Dist. Elec. Syst. Rev. NR/AA 6.000 02/01/15 330,000 373,471 Omaha, NE Public Power Dist. Elec. Syst. Rev. Aa/NR 6.200 02/01/17 650,000 749,021 Omaha, NE Various Purpose Aaa/AAA 6.250 12/01/12 250,000 282,545 Omaha, NE Various Purpose Aaa/AAA 6.250 12/01/14 250,000 281,568 Otoe Cty., NE School Dist. #111 (Nebraska City) Ref. AMBAC Aaa/AAA 5.800 11/15/14 400,000 419,440 Papillion, NE G.O. NR/NR 6.150 07/01/12 105,000 109,102 Sarpy Cty., NE SID #142 (Fair Meadows) Ref. G.O. NR/NR 5.850 08/15/17 100,000 103,214 Sarpy Cty., NE SID #52 (Prairie Corners) G.O. NR/NR 6.000 10/01/17 300,000 308,304 Sarpy Cty., NE SID #86 (Willow Springs) G.O. NR/NR 6.250 01/15/17 100,000 103,579 Scotts Bluff Cty., NE Hosp. Auth. #1 (Regl West Medl. Ctr.) A-3/A- 5.250 11/15/28 250,000 252,310 Washington Cty., NE School Dist. #1 G.O. NR/A 5.800 07/15/11 100,000 104,329 Washington Cty., NE School Dist. #1 G.O. NR/A 5.900 07/15/15 135,000 141,496 York, NE Sewer Syst. Rev. NR/NR 5.850 06/01/12 140,000 147,784 York, NE Sewer Syst. Rev. NR/NR 6.000 06/01/17 100,000 102,913 ----------- TOTAL NEBRASKA MUNICIPAL BONDS (COST: $24,912,691) $ 26,672,752 ------------ SHORT-TERM SECURITIES (1.3%) Federated Tax-Free Fund 73 $ 199,174 Federated Intermediate Municipal Trust 78 150,696 ----------- TOTAL SHORT-TERM SECURITIES (COST: $349,174) $ 349,870 ------------ TOTAL INVESTMENTS IN SECURITIES (COST: $25,261,865) $ 27,022,622 OTHER ASSETS LESS LIABILITIES 359,723 ------------ NET ASSETS $ 27,382,345 ============
*Indicates bonds are segregated by the custodian to cover when-issued or delayed-delivery purchases. # Indicates bonds are segregated by the custodian to cover initial margin requirements. Footnote: Non-rated securities have been determined to be of investment grade quality by the Fund's Manager. The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Assets and Liabilities January 29, 1999 (Unaudited) - ----------------------------------------------------------------
Assets Investment in securities, at value (Cost: $25,261,865) $ 27,022,622 Accrued interest receivable 383,913 Accrued dividends receivable 922 Receivable for fund shares sold 30,000 Prepaid expenses 2,462 Variation margin on futures 68,750 -------------- Total Assets $ 27,508,669 -------------- Liabilities Dividends payable $ 105,471 Accrued expenses 16,586 Bank overdraft 4,267 -------------- Total Liabilities $ 126,324 -------------- Net Assets $ 27,382,345 ============== Net assets are represented by: Paid-in capital $ 27,166,716 Accumulated undistributed net realized gain(loss) on Investments (1,522,653) Unrealized appreciation on futures (22,475) Unrealized appreciation on investments 1,760,757 --------------- Total amount representing net assets applicable to 2,408,753 outstanding shares of no par common stock (Unlimited shares authorized) $ 27,382,345 =============== Net asset value per share $ 11.37 =============== Statement of Operations for the six months ended January 29, 1999 (Unaudited) - ------------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 733,274 Dividends 6,080 -------------- Total Investment Income $ 739,354 -------------- EXPENSES Investment advisory fees $ 45,731 Custodian fees 2,003 Transfer agent fees 18,671 Accounting service fees 18,593 Transfer agent out-of-pocket fees 2,187 Professional fees 2,572 Reports to shareholders 1,214 Trustees fees 1,363 Registration and filing fees 1,000 Amortization of organization costs 1,868 Insurance expense 46 -------------- Total Expenses $ 95,248 -------------- NET INVESTMENT INCOME $ 644,106 -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) from: Investment transactions $ 53,685 Futures transactions (66,701) Net change in unrealized appreciation (depreciation) of: Investments 609,945 Futures (22,475) --------------- Net Realized And Unrealized Gain (Loss) On Investments And Futures $ 574,454 --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,218,560 ===============
The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Changes in Net Assets For the six months January 29, 1999 and the year ended July 31, 1998 - ----------------------------------------------------------------------
For The Six Months Ended For The Jan. 29, 1999 Year Ended (Unaudited) Dec. 31, 1998 ----------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 644,106 $ 1,380,231 Net realized gain (loss) on investment and futures transactions (13,016) (383,905) Net change in unrealized appreciation (depreciation) on investments and futures 587,470 49,878 ------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 1,218,560 $ 1,046,204 ------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.27 and $.56 per share, respectively) $ (644,106) $ (1,380,231) Distributions from net realized gain on investment and futures transactions 0 0 ------------------------------------------- Total Dividends and Distributions $ (644,106) $ (1,380,231) ------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 1,409,304 $ 2,803,618 Proceeds from reinvested dividends 426,952 915,428 Cost of shares redeemed (1,346,743) (4,868,195) ------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 489,513 $ (1,149,149) ------------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ 1,063,967 $ (1,483,176) NET ASSETS, BEGINNING OF PERIOD $ 26,318,378 $ 27,801,554 ------------------------------------------- NET ASSETS, END OF PERIOD $ 27,382,345 $ 26,318,378 ===========================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements January 29, 1999 (Unaudited) Note 1. ORGANIZATION Business Operations - The Nebraska Municipal Fund (the "Fund") is an investment portfolio of Ranson Managed Portfolios (the "Trust") registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust may offer multiple portfolios; currently five portfolios are offered. Ranson Managed Portfolios is an unincorporated business trust organized under Massachusetts law on August 10, 1990. The Fund had no operations from that date to November 17, 1993, other than matters relating to organization and registration. On November 17, 1993, the Fund commenced its Public Offering of capital shares. The investment objective of the Fund is to provide its shareholders with as high a level of current income exempt from both federal and Nebraska income taxes as is consistent with preservation of capital. The Fund will seek to achieve this objective by investing primarily in a portfolio of Nebraska municipal securities. Shares of the Fund are offered at net asset value plus a maximum sales charge of 4.25% of the offering price. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment security valuation - Securities for which quotations are not readily available (which will constitute a majority of the securities held by the Fund) are valued using a matrix system at fair value as determined by Ranson Capital Corporation, ("Ranson"). The matrix system has been developed based on procedures approved by the Board of Trustees which include consideration of the following: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, and indications as to value from dealers and general market conditions. Because the market value of securities can only be established by agreement between parties in a sales transaction, and because of the uncertainty inherent in the valuation process, the fair values as determined may differ from the values that would have been used had a ready market for the securities existed. The Fund follows industry practice and records security transactions on the trade date. The Fund concentrates its investments in a single state. This concentration may result in the Fund investing a relatively high percentage of its assets in a limited number of issuers. Deferred organization costs - Costs incurred by the Fund in connection with its organization are being amortized over a 60-month period on the straight-line basis beginning December 12, 1993. Organizational costs were fully amortized at the end of the six month period January 29, 1999. Accumulated amortization at January 29, 1999 totaled $27,054. Federal and state income taxes - The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies, and to distribute all of its net investment income and any net realized gain on investments, to its shareholders. Therefore, no provision for income taxes is required. The Fund has available at January 29, 1999, a net capital loss carry forward totaling $1,512,429, which may be used to offset capital gains realized during subsequent years through July 31, 2006. Distributions to shareholders - Dividends from net investment income, declared daily and payable monthly, are reinvested in additional shares of the Fund at net asset value or paid in cash. Capital gains, when available, are distributed at least annually. Investment income - Dividend income is recognized on the ex-dividend date and interest income is recognized daily on an accrual basis. Premiums and discounts on securities purchased are amortized using the effective interest method over the life of the respective securities, unless callable, in which case they are amortized to the earliest call date. Futures contracts - The Fund may purchase and sell financial futures contracts to hedge against changes in the values of tax-exempt municipal securities the Fund owns or expects to purchase. A futures contract is an agreement between two parties to buy or sell units of a particular index or a certain amount of U.S. Government or municipal securities at a set price on a future date. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum "initial margin" requirement of the futures exchange on which the contract is traded. Subsequent payments ("variation margin") are made or received by the Fund, dependent on the fluctuations in the value of the underlying index. Daily fluctuations in value are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize, for book purposes, a gain or loss equal to the difference between the value of the futures contracts sold and the futures contracts to buy. Unrealized appreciation (depreciation) related to open futures contracts is required to be treated as realized gain (loss) for Federal income tax purposes. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Schedule of Investments. The Statement of Assets and Liabilities reflects a receivable or payable for the daily mark to market for variation margin. Certain risks may arise upon entering into futures contracts. These risks may include changes in the value of the futures contracts that may not directly correlate with changes in the value of the underlying securities. At January 29, 1999, the Fund had outstanding futures contracts to sell debt securities as follows: Number of Valuation Unrealized Contracts Expiration Futures as of Appreciation To Sell Date Contracts Jan. 29, 1999 (Depreciation) - ----------------------------------------------------------------------------- U.S. Treasury Notes 3/99 50 $ 68,750 $ (19,683) - ------------------------------------------------------------------------------ Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles 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 those estimates. Note 3. CAPITAL SHARE TRANSACTIONS As of January 29, 1999, there were unlimited shares of no par authorized; 2,408,753 and 2,365,171 shares were outstanding at January 29, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares For The Six Months Ended For The January 29, 1999 Year Ended (Unaudited) July 31, 1998 ------------------------------------ Shares sold 125,213 251,824 Shares issued on reinvestment of dividends 37,992 82,101 Shares redeemed (119,623) (436,786) ------------------------------------ Net increase (decrease) 43,582 (102,861) ==================================== Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Ranson Capital Corporation, the Fund's investment adviser and underwriter, ND Resources, Inc., the Fund's transfer and accounting services agent, and ND Capital, Inc., the Fund's agent for the purchase of certain investment securities, are subsidiaries of ND Holdings, Inc., the Fund's sponsor. The Fund has engaged Ranson Capital Corporation to provide investment advisory and management services to the Fund. The Investment Advisory Agreement provides for fees to be computed at an annual rate of 0.50% of the Fund's average daily net assets. The Fund has recognized $45,731 of investment advisory fees after partial waiver for the six months ended January 29, 1999. The Fund has a payable to Ranson Capital Corporation of $7,504 at January 29, 1999 for investment advisory fees. Certain officers and trustees of the Fund are also officers and directors of the investment adviser. The Fund pays an annual service fee to Ranson Capital Corporation (Ranson), its principal underwriter, in connection with the distribution of the Fund's shares. The annual fee paid to Ranson is calculated daily and paid monthly by the Fund at the annual rate of 0.25% of the average daily net assets of the Fund. Ranson has elected to waive all operation service fees for the six months ended January 29, 1999. ND Resources, Inc., (the transfer agent), provides shareholder services for a monthly fee equal to an annual rate of 0.16% of the Fund's first $10 million of net assets, 0.13% of the Fund's net assets on the next $15 million, 0.11% of the Fund's net assets on the next $15 million, 0.10% of the Fund's net assets on the next $10 million, and 0.09% of the Fund's net assets in excess of $50 million. The Fund incurred $18,671 of transfer agency fees for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $3,043 at January 29, 1999 for transfer agency fees. ND Resources, Inc. also acts as the Fund's accounting services agent for a monthly fee equal to the sum of a fixed fee of $2,000, and a variable fee equal to 0.05% of the Fund's average daily net assets on an annual basis for the Fund's first $50 million and at a lower rate on the average daily net assets in excess of $50 million. The Fund has incurred $18,593 of accounting service fees for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $3,023 at January 29, 1999 for accounting service fees. Note 5. INVESTMENT SECURITY TRANSACTIONS The cost of purchases and proceeds from the sales of investment securities (excluding short-term securities) aggregated $1,997,918 and $1,858,070 respectively, for the six months ended January 29, 1999. Note 6. INVESTMENT IN SECURITIES At January 29, 1999, the aggregate cost of securities for federal income tax purposes was $25,261,865, and the net unrealized appreciation of investments based on the cost was $1,760,757 which is comprised of $1,760,757 aggregate gross unrealized appreciation and $0 aggregate gross unrealized depreciation.
Financial Highlights Selected per share data and ratios for the period indicated - --------------------------------------------------------------------------------- For The Period For The Six For the For The For The For The Since Inception Months Ended Year Ended Year Ended Year Ended Year Ended (Nov. 17, 1993) Jan. 31, 1999 July 31,1998 July 31, 1997 July 31, 1996 July 31, 1995 Through July 1994 - ------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.13 $ 11.26 $ 11.00 $ 10.95 $ 10.82 $ 11.49 ------------------------------------------------------------------------------------------- Income from Investment Operations: Net investment income $ .27 $ .56 $ .55 $ .57 $ .59 $ .45 Net realized and unrealized gain (loss) on investment and futures transactions .24 (.13) .26 .05 .13 (.67) ------------------------------------------------------------------------------------------- Total From Investment Operations $ .51 $ .43 $ .81 $ .62 $ .72 $ (.22) ------------------------------------------------------------------------------------------ Less Distributions: Dividends from net investment income $ (.27) $ (.56) $ (.55) $ (.57) $ (.59) $ (.45) Distributions from net capital gains .00 .00 .00 .00 .00 .00 -------------------------------------------------------------------------------------------- Total Distributions $ (.27) $ (.56) $ (.55) $ (.57) $ (.59) $ (.45) ------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.37 $ 11.13 $ 11.26 $ 11.00 $ 10.95 $ 10.82 =========================================================================================== Total Return 9.24%(A)(B) 3.95%(A) 7.57%(A) 5.73%(A) 7.14%(A) (3.20)%(A)(B) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $27,382 $26,318 $27,802 $18,077 $14,445 $8,171 Ratio of net expenses (after expense assumption) to average net assets 0.70%(B) 0.63%(C) 0.71%(C) 0.62%(C) 0.35%(C) 0.19%(B)(C) Ratio of net investment income to average net assets 4.80%(B) 5.06% 5.03% 5.13% 5.63% 5.51%(B) Portfolio turnover rate 7.06% 26.36% 42.84% 27.20% 140.00% 314.00%
(A) Excludes maximum sales charge of 4.25%. (B) Ratio was annualized. (C) During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed expenses of $51,233, $124,394, $129,053, $146,913 and $70,186, respectively. If the expenses had not been assumed, the annualized ratios of total expenses to average net assets would have been 0.81%, 1.22%, 1.38%, 1.66%, and 2.25%, respectively. The accompanying notes are an integral part of these financial statements. Dear Shareholder, We are pleased to enclose the semi-annual report of the operations of The Oklahoma Municipal Fund, for the six months ended January 29, 1999. The Fund's portfolio and related financial statements are presented within for your review. In 1998, the U.S. economy exhibited more strength than expected. While there has been some weakening in factory orders reflective of foreign competition, the housing market and domestic consumer sales have been strong. Much of this strength can be contributed to the way computer technology has allowed productivity to increase in the U.S. In addition to new efficient technology, the U.S. is poised to benefit from free international trade. The recent trade deficit has restrained U.S. growth, but at the same time has kept inflation low. However, with the U.S. dollar declining relative to Asian currencies and Europe improving, international trade should become less of a drag on the U.S. economy. This, along with an already robust domestic economy, should help the U.S. prosper. The main story for municipal investors in 1998 was the increase in the ratio between municipal and Treasury yields. At the beginning of the year, municipals were yielding 87% as much as the 30-year Treasury bond. By year-end, that ratio had climbed to 98%. As yields on the 30-year Treasury bond fell from 5.92% to 5.09%, municipal yields dropped from 5.15% to 5.00%. This abnormal relationship does not appear to be a concern over possible tax law changes, but results from foreign and domestic investor demand for U.S. Treasuries in times of economic turmoil abroad. Restoring municipals and Treasuries to a more normal relationship will likely result as the U.S. trade deficit puts downward pressure on the dollar, thus weakening foreign support for Treasuries. Municipal bonds remain ridiculously cheap (in terms of price) by historical standards. Normally, buyers pay for the tax benefits of municipals by getting a lower return. Today, however, investors are saving on taxes without giving up return. Faced with a choice of paying taxes on investment income or not, what would you do? The Oklahoma Municipal Fund began the year at $11.68 and ended the six month period at $11.96. The Oklahoma Municipal Fund., at times during the first six months, utilized a defensive position in U.S. Treasury futures to minimize the effects of strong economic growth. Share price was tempered as yields on U.S. Treasuries dropped to record lows in the fall and stabilized share price as yields rose in the latter part of the year. Stability of share price is the primary objective of a defensive position. The Fund continues to invest in high-grade Oklahoma double exempt bonds. Diversification remains an important strategy for the Fund. Purchases throughout the year in the primary and secondary markets include Oklahoma Housing Authority, Oklahoma State University, and Oklahoma State Industrial Finance bonds. The investment objective of the Fund is to provide a high level of current income exempt from both federal income tax and, to the extent indicated in the prospectus, Oklahoma income tax as is consistent with preservation of capital. Sincerely, Monte L. Avery Robert E.Walstad Chief Portfolio Strategist President Terms & Definitions Appreciation Increase in value of an asset. Average Annual Total Return A standardized measurement of the return (yield and appreciation) earned by the fund on an annual basis, assuming all distributions are reinvested. Coupon Rate or Face Rate The rate of interest annually payable based on the face amount of the bond; expressed as a percentage. Depreciation Decrease in value of an asset. Lehman Brothers Municipal Bond Index An unmanaged list of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market. The index does not take into account brokerage commissions or other costs, may include bonds different from those in the fund, and may pose different risks than the fund. Market Value Actual (or estimated) price at which a bond trades in the market place. Maturity A measure of the term or life of a bond in years. When a bond "matures", the issuer repays the principal. Net Asset Value (NAV) The value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not including any initial sales charge. Quality Ratings A designation assigned by independent rating companies to give a relative indication of a bond's credit worthiness. "AAA", "AA", "A", and "BBB" indicate investment grade securities. Ratings can range from a high of "AAA" to a low of "D". Total Return Measures both the net investment income and any realized and unrealized appreciation or depreciation of the underlying investments in the fund's portfolio for the period, assuming the reinvestment of all dividends. It represents the aggregate percentage or dollar value change over the period. PERFORMANCE AND COMPOSITION - --------------------------- Portfolio Ratings (based on Total Long-Term Investments) - -------------------------------------- [pie chart] AAA 61.1 AA 15.4 A 4.6 BBB 7.6 NR 11.3 Quality ratings reflect the financial strength of the issuer. They are assigned by independent rating services such as Moody's Investors Services and Standard & Poor's. Non-rated bonds have been determined to be of appropriate quality for the portfolio by Ranson Capital Corporation, the investment advisor. Portfolio Market Sectors (as a % of Net Assets) - ------------------------ [pie chart] S-School 40.9 GO-General Obligation 11.5 HC-Health Care 11.4 U-Utilities 10.6 H-Housing 9.6 O-Other 6.5 W/S-Water/Sewer 3.7 I-Industrial 3.2 T-Transportation 2.6 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. COMPARATIVE INDEX GRAPH - ------------------------ [line graph] Comparison of change in value of a $10,000 investment in The Oklahoma Municipal Fund and the Lehman Bros. Municipal Bond Index The Oklahoma Municipal The Oklahoma Municipal Lehman Bros Fund w/o sales charge Fund w/ max sales charge Muni Bond Index - ------------------------------------------------------------------------------ 09/25/96 $10,000 $ 9,575 $10,000 1997 $10,779 $10,321 $11,027 1998 $11,186 $10,711 $11,687 01/29/99 $11,725 $11,227 $12,233 Average Annual Total Returns For periods ending January 29, 1999 Since Inception 1 year 5 year (September 25, 1996) - ------------------------------------------------------------------------------- Without sales charge 5.23% NA 7.02% With sales charge .76% NA 5.06% - ------------------------------------------------------------------------------- Putting Performance into Perspective The graph comparing your Fund's performance to a benchmark index provides you with a general sense of how your Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Lehman Brothers index is a national index representative of the national municipal bond market whereas the Fund concentrates its investments in Oklahoma municipal bonds. Your Fund's total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities necessary to match the index. And, if they could, they would incur transaction costs and other expenses. All Fund and benchmark returns include reinvested dividends. Returns are historical and are not a guarantee of future results. The Fund's share price, yields and total returns will vary, so that shares, when redeemed, may be worth more or less than their original cost. Key Statistics 07-31-98 NAV (share value) $11.68 01-29-99 NAV $11.96 Average Maturity 19.2 years Number of Issues 55 Total Net Assets $16,204,307
Schedule of Investments January 29,1999 (Unaudited) Name of Issuer Percentages represent the market valueof each investment category to total net assets Rating Coupon Maturity Principal Market Moody's/S&P Rate Amount Value - ----------------------------------------------------------------------------------------------------- OKLAHOMA MUNICIPAL BONDS (96.6%) Eastern OK Board of Regents (State College) Facs. Rev. NR/NR 6.100% 06/01/17 $150,000 $159,936 Edmond Economic Dev. Auth., OK. Student Housing Rev. Baa-3/NR 5.250 12/01/10 125,000 125,158 Edmond Economic Dev. Auth., OK. Student Housing Rev. Baa-3/NR 5.375 12/01/19 100,000 100,767 Edmond Economic Dev. Auth., OK. Student Housing Rev. Baa-3/NR 5.500 12/01/28 515,000 515,057 Grand River Dam Auth. Rev. Ref. A/A- 5.000 06/01/12 100,000 100,000 Grand River Dam Auth., OK Rev. AMBAC Aaa/AAA 5.500 06/01/09 75,000 83,522 *Grand River Dam Auth., OK Rev. AMBAC Aaa/AAA 6.250 06/01/11 210,000 248,720 Grand River Dam Auth., OK Rev. Ref. AMBAC Aaa/AAA 5.500 06/01/13 190,000 211,314 OK Agric. & Mech. Coll. (OK St. Univ.) Athl. Facs. AMBAC Aaa/NR 5.000 08/01/24 400,000 411,540 OK Agric. & Mech. Coll. (OK St. Univ.) Athl. Facs. AMBAC Aaa/NR 4.900 08/01/18 355,000 362,618 OK Agric. & Mech. Colleges (OK St. Univ.) Util. Syst. FGIC Aaa/AAA 5.000 07/01/13 600,000 622,530 OK Agric. & Mech. Colleges Facs. (Connors College) MBIA Aaa/AAA 4.650 06/01/18 250,000 243,645 OK Board of Regents Univ. of OK Mult. Facs. Rev. AMBAC Aaa/NR 4.900 05/01/17 590,000 605,021 OK Capital Impvt. Auth. (Dept. of Corrections) Rev. AMBAC Aaa/AAA 5.000 05/01/18 500,000 511,155 OK Capital Impvt. Auth. Rev. (State Office Building) A/NR 5.500 10/01/16 105,000 111,995 OK Colleges Brd. of Regents (NE State Univ. Ctr.) Rev. FSA Aaa/AAA 5.100 03/01/16 140,000 145,125 OK Colleges Brd. of Regents (NE State Univ. Ctr.) Rev. FSA Aaa/AAA 5.150 03/01/21 100,000 103,938 OK Devl. Finance Auth. (All Saints Cath. School) Rev. MBIA Aaa/NR 4.800 12/01/13 250,000 249,228 OK Devl. Finance Auth. (Central OK Univ.) Aa-3/NR 5.300 12/01/18 100,000 103,951 OK Devl. Finance Auth. (DHS Cty. Office Bldg.) Rev. A/NR 5.250 11/01/11 120,000 126,870 OK Devl. Finance Auth. (DHS Cty. Office Bldg.) Rev. A/NR 5.300 11/01/12 275,000 292,012 *OK Devl. Finance Auth. (OK City Univ.) Rev. Ref. AMBAC Aaa/AAA 5.125 06/01/17 545,000 561,454 OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.200 11/01/07 100,000 110,351 OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.500 11/01/13 75,000 83,415 OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 5.750 03/01/13 400,000 405,984 #OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.000 03/01/18 600,000 612,060 *OK Devl. Finance Auth. (Tulsa Vo Tech Dist. Proj. ) AMBAC Aaa/AAA 5.100 08/01/15 750,000 776,708 OK Devl. Finance Auth. Facs. (Univ. of OK-Norman) FSA Aaa/AAA 5.625 07/01/13 50,000 54,476 OK Devl. Finance Auth. Facs. (OK State Univ.) Rev. FSA Aaa/NR 5.000 07/01/18 225,000 231,876 OK Devl. Finance Auth. (ST. Ann's Retire Village) Rev. MBIA Aaa/NR 5.000 12/01/28 1,000,000 986,390 OK Housing Finance Agency Single Family GNMA Aaa/NR 5.375 03/01/20 800,000 814,672 OK Housing Finance Agency Single Family GNMA/FNMA Aaa/NR 5.150 09/01/20 750,000 750,555 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.300 09/01/11 50,000 52,595 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.400 09/01/12 50,000 52,828 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.000 04/01/13 400,000 412,200 OK State Indl. Finance Auth. G.O. Aa-3/NR 4.700 01/01/12 220,000 219,133 OK State Indl. Finance Auth. G.O. Aa-3/NR 4.800 01/01/13 130,000 129,528 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.000 01/01/14 245,000 246,629 OK State Municipal Power Auth. Rev. MBIA Aaa/AAA 5.875 01/01/12 200,000 230,246 OK State Municipal Power Auth. Rev. MBIA Aaa/AAA 5.750 01/01/24 290,000 332,662 OK State Student Loan Auth. A/NR 6.350 09/01/25 100,000 105,375 OK State Turnpike Auth. Rev. AMBAC Aaa/AAA 5.500 01/01/22 150,000 158,976 OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.000 01/01/14 250,000 260,575 OK State Unlimited Tax G.O. Aa-3/AA 5.200 07/15/16 350,000 365,215 OK State Unlimited Tax G.O. Aa-3/AA 5.200 07/15/18 145,000 150,813 OK State Unlimited Tax G.O. Aa-3/AA 5.100 07/15/13 90,000 94,593 OK State Water (Loan Program) Rev. NR/AA 6.250 10/01/12 50,000 55,101 OK State Water (Loan Program) Rev. NR/AA 5.400 09/01/15 105,000 112,753 *OK State Water (Loan Program) Rev. NR/AA 5.100 09/01/16 415,000 430,982 Oklahoma Cnty, OK Finance Auth. (Epworth Villa) Rev. Ref. NR/NR 6.500 04/01/15 200,000 206,248 Oklahoma Cnty, OK Finance Auth. (Epworth Villa) Rev. Ref. NR/NR 7.000 04/01/22 200,000 207,348 Oklahoma Cnty., OK Indl. Auth. (Benevolent Association) Ref. Baa-1/NR 6.150 01/01/11 100,000 108,529 Puerto Rico Commonwealth Unlimited G.O. MBIA Aaa/AAA 5.375 07/01/21 150,000 158,265 Puerto Rico Elec. Power Auth. Rev. MBIA Aaa/AAA 5.375 07/01/27 500,000 530,085 Shawnee, OK Hospital Auth. (Midamerica Hlth. Care) NR/BBB 6.125 10/01/14 325,000 352,177 ------------ TOTAL OKLAHOMA MUNICIPAL BONDS (COST: $15,324,442) $ 15,794,896 ------------ SHORT-TERM SECURITIES (5.8%) Federated Tax-Free Fund 73 $ 575,826 Federated Intermediate Municipal Trust 78 367,218 ------------ TOTAL SHORT-TERM SECURITIES (COST: $940,979) $ 943,044 ------------ TOTAL INVESTMENTS IN SECURITIES (COST: $16,265,421) $ 16,737,940 OTHER ASSETS LESS LIABILITIES (393,633) ------------ NET ASSETS $ 16,344,307 ============
* Indicates bonds are segregated by the custodian to cover when-issued or delayed delivery purchases. # Indicates bonds are segregated by the custodian to cover initial margin requirements. Footnote: Non-rated (NR) investments have been determined to be of investment grade quality by the Fund's Manager. The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Assets and Liabilities January 29, 1999 (Unaudited) - ---------------------------------------------------------------
Assets Investment in securities, at value (Cost: $16,265,421) $ 16,737,940 Accrued interest receivable 210,788 Accrued dividends receivable 1,155 Deferred organization costs 17,862 Variation margin on futures 34,375 Prepaid expenses 750 -------------- Total Assets $ 17,002,870 Liabilities Payable for fund shares redeemed $ 592,984 Dividends payable 60,652 Accrued expenses 4,927 -------------- Total Liabilities $ 658,563 -------------- Net Assets $ 16,344,307 ============== Net assets are represented by: Paid-in capital $ 15,977,590 Accumulated undistributed net realized gain(loss) on investments (94,565) Unrealized appreciation on investments 472,519 Unrealized appreciation on futures (11,237) -------------- Total amount representing net assets applicable to 1,367,070 outstanding shares of no par common stock (unlimited shares authorized) $ 16,344,307 ============== Net asset value per share $ 11.96 ============== The accompanying notes are an integral part of these financial statements. Statement of Operations For the six months ended January 29, 1999 (Unaudited) - ----------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 341,619 Dividends 9,192 Total Investment Income $ 350,811 -------------- EXPENSES Custodian fees $ 1,085 Registration and filing fees 924 Transfer agent fees 61 Accounting service fees 12,792 Transfer agent out-of-pocket expenses 2,040 Trustees fees 1,061 Reports to shareholders 736 Amortization of organizational costs 2,640 Professional fees 2,248 Insurance expense 14 -------------- Total Expenses $ 23,601 -------------- NET INVESTMENT INCOME $ 327,210 -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) on: Investment transactions $ 15,734 Futures transactions (43,550) Net change in unrealized appreciation (depreciation) of: Investments 364,727 Futures (11,237) -------------- Net Realized And Unrealized Gain (Loss) On Investments And Futures $ 325,674 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 652,884 ==============
The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Changes in Net Assets For the six months ended January 29, 1999 and the Year ended July 31, 1998 - --------------------------------------------------------------------------
For The Six Months Ended For The January 29, 1999 Year Ended (Unaudited) July 31, 1998 ---------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 327,210 $ 522,753 Net realized gain (loss) on investment and futures transactions (27,816) (68,145) Net unrealized appreciation (depreciation) on investments and futures 353,490 (30,903) ------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 652,884 $ 423,705 ------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.28 and $.60 per share, respectively) $ (327,210) $ (522,753) Distributions from net realized gain on investment transactions ($.00 and $.02 per share, respectively) 0 (19,246) ------------------------------------------- Total Dividends and Distributions $ (327,210) $ (541,999) ------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 5,533,441 $ 8,032,955 Proceeds from reinvested dividends 187,514 294,779 Cost of shares redeemed (1,037,558) (3,464,879) ------------------------------------------ Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 4,683,397 $ 4,862,855 ------------------------------------------ TOTAL INCREASE (DECREASE) IN NET ASSETS $ 5,007,071 $ 4,744,561 NET ASSETS, BEGINNING OF PERIOD $ 11,335,236 $ 6,590,675 ------------------------------------------ NET ASSETS, END OF PERIOD $ 16,344,307 $ 11,335,236 ==========================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements January 29, 1999 (Unaudited) Note 1. ORGANIZATION Business Operations - The Oklahoma Municipal Fund (the "Fund") is an investment portfolio of Ranson Managed Portfolios (the "Trust") registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust may offer multiple portfolios; currently five portfolios are offered. Ranson Managed Portfolios is an unincorporated business trust organized under Massachusetts law on August 10, The Fund had no operations from that date to September 25, 1996, other than matters relating to organization and registration. On September 25, 1996, the Fund commenced its Public Offering of capital shares. The investment objective of the Fund is to provide its shareholders with as high a level of current income exempt from both federal income tax and, to a certain extent, Oklahoma income tax, as is consistent with preservation of capital. Up to 30% of the Fund's total assets may be invested in Oklahoma municipal securities which are subject to Oklahoma state income taxes. The Fund will seek to achieve this objective by investing primarily in a portfolio of Oklahoma municipal securities. Shares of the Fund are offered at net asset value plus a maximum sales charge of 4.25% of the offering price. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment security valuation - Securities for which quotations are not readily available (which will constitute a majority of the securities held by the Fund) are valued using a matrix system at fair value as determined by Ranson Capital Corporation, ("Ranson"). The matrix system has been developed based on procedures approved by the Board of Trustees which include consideration of the following: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, and indications as to value from dealers and general market conditions. Because the market value of securities can only be established by agreement between parties in a sales transaction, and because of the uncertainty inherent in the valuation process, the fair values as determined may differ from the values that would have been used had a ready market for the securities existed. The Fund follows industry practice and records security transactions on the trade date. The Fund concentrates its investments in a single state. This concentration may result in the Fund investing a relatively high percentage of its assets in a limited number of issuers. Deferred organization costs - Costs incurred by the Fund in connection with its organization will be amortized over a 60-month period on the straight-line basis beginning May 10, 1997. Accumulated amortization at January 29, 1999 totaled $8,688 leaving an unamortized balance of $17,862. Federal and state income taxes - The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies, and to distribute all of its net investment income and any net realized gain on investments, to its shareholders. Therefore, no provision for income taxes is required. The fund has available at January 29, 1999, a net capital loss carryforward totaling $68,145, which may be used to offset capital gains realized during subsequent years through July 31, 2006. Distributions to shareholders - Dividends from net investment income, declared daily and payable monthly, are reinvested in additional shares of the Fund at net asset value or paid in cash. Capital gains, when available, are distributed at least annually. Investment income - Dividend income is recognized on the ex-dividend date and interest income is recognized daily on an accrual basis. Premiums and discounts on securities purchased are amortized using the effective interest method over the life of the respective securities, unless callable, in which case they are amortized to the earliest call date. Futures contracts - The Fund may purchase and sell financial futures contracts to hedge against changes in the values of tax-exempt municipal securities the Fund owns or expects to purchase. A futures contract is an agreement between two parties to buy or sell units of a particular index or a certain amount of U.S. Government or municipal securities at a set price on a future date. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum "initial margin" requirement of the futures exchange on which the contract is traded. Subsequent payments ("variation margin") are made or received by the Fund, dependent on the fluctuations in the value of the underlying index. Daily fluctuations in value are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize, for book purposes, a gain or loss equal to the difference between the value of the futures contracts sold and the futures contracts to buy. Unrealized appreciation (depreciation) related to open futures contracts is required to be treated as realized gain (loss) for Federal income tax purposes. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Schedule of Investments. The Statement of Assets and Liabilities reflects a receivable or payable for the daily mark to market for variation margin. Certain risks may arise upon entering into futures contracts. These risks may include changes in the value of the futures contracts that may not directly correlate with changes in the value of the underlying securities. At January 29, 1999, the Fund had outstanding futures contracts to sell debt securities as follows: Number of Valuation Unrealized Contracts Expiration Futures as of Appreciation To Sell Date Contracts January 29, 1999 (Depreciation) - ----------------------------------------------------------------------------- U.S. Treasury Notes 03/99 25 $34,375 ($9,841) - ----------------------------------------------------------------------------- Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles 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 those estimates. Note 3. CAPITAL SHARE TRANSACTIONS As of January 29, 1999, there were unlimited shares of no par authorized; on January 29, 1999 and July 31, 1998 there were 1,367,070 and 970,625 shares outstanding, respectively. Transactions in capital shares were as follows: Shares For The Six Months Ended For The January 29, 1999 Year Ended (Unaudited) July 31, 1998 ------------------------------------ Shares sold 468,023 684,086 Shares issued on reinvestment of dividends 15,866 25,084 Shares redeemed (87,444) (294,163) ---------------------------------- Net increase (decrease) 396,445 415,007 ================================== Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Ranson Capital Corporation, the Fund's investment adviser and underwriter, ND Resources, Inc., the Fund's transfer and accounting services agent, and ND Capital, Inc., the Fund's agent for the purchase of certain investment securities, are subsidiaries of ND Holdings, Inc., the Fund's sponsor. The Fund has engaged Ranson Capital Corporation to provide investment advisory and management services to the Fund. The Investment Advisory Agreement provides for fees computed at an annual rate of 0.50% of the Fund's average daily net assets. The Fund has waived all investment advisory fees for the six months ended January 29, 1999. Certain officers and trustees of the Fund are also officers and directors of the investment adviser. The Fund pays an annual service fee to Ranson Capital Corporation (Ranson), its principal underwriter, in connection with the distribution of the Fund's shares. The annual fee paid to Ranson under the Plan is calculated daily and paid monthly by the Fund at the annual rate of 0.25% of the average daily net assets of the Fund. Ranson has elected to waive all operation service fees for the six months ended January 29, 1999. ND Resources, Inc., (the transfer agent), provides shareholder services for a monthly fee equal to an annual rate of 0.16% of the Fund's first $10 million of net assets, 0.13% of the Fund's net assets on the next $15 million, 0.11% of the Fund's net assets on the next $15 million, 0.10% of the Fund's net assets on the next $10 million, and 0.09% of the Fund's net assets in excess of $50 million. The Fund has recognized $61 of transfer agent fees and expenses after partial waiver for the six months ended January 29, 1999. ND Resources, Inc. also acts as the Fund's accounting services agent for a monthly fee equal to the sum of a fixed fee of $2,000, and a variable fee equal to 0.05% of the Fund's average daily net assets on an annual basis for the Fund's first $50 million and at a lower rate on the average daily net assets in excess of $50 million. The Fund has recognized $12,792 of accounting service fees after partial waiver for the six months ended January 29, 1999. The Fund has a payable to ND Resources, Inc. of $1,633 at January 29,1999 for accounting service fees. Note 5. INVESTMENT SECURITY TRANSACTIONS The cost of purchases and proceeds from the sales of investment securities (excluding short-term securities) aggregated $5,762,162 and $1,369,081 respectively, for the six months ended January 29, 1999. Note 6. INVESTMENT IN SECURITIES At January 29, 1999, the aggregate cost of securities for federal income tax purposes was $16,265,421, and the net unrealized appreciation of investments based on the cost was $472,519, which is comprised of $476,908 aggregate gross unrealized appreciation and $4,389 aggregate gross unrealized depreciation.
Financial Highlights Selected per share data and ratios for the period indicated - ------------------------------------------------------------------------------------------------------------------------ For the Six For The Period Months Ended For The Since Inception January 29, 1999 Year Ended (Sept. 25, 1996) (Unaudited) July 31, 1998 Through July 31, 1997 - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.68 $ 11.86 $ 11.49 ----------------------------------------------------------------------------- Income from Investment Operations: Net investment income $ .28 $ .60 $ .50 Net realized and unrealized gain (loss) on investment and futures transactions .28 (.16) .37 -------------------------------------------------------------------- Total From Investment Operations $ .56 $ .44 $ .87 -------------------------------------------------------------------- Less Distributions: Dividends from net investment income $ (.28) $ (.60) $ (.50) Distributions from net capital gains .00 (.02) .00 -------------------------------------------------------------------- Total Distributions $ (.28) $ (.62) $ (.50) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.96 $ 11.68 $ 11.86 ==================================================================== Total Return 9.16%(A)(B) 3.81%(A) 7.79%(A)(B) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 16,344 $ 11,335 $ 6,591 Ratio of net expenses (after expense assumption) to average net assets .34%(B) 0.20%(C) 0.11%(C) Ratio of net investment income to average net assets 4.64%(B) 5.08% 3.70% Portfolio turnover rate 10.04% 53.32% 63.70%
(A) Excludes maximum sales charge of 4.25%. (B) Ratio was annualized. (C) During the year ended July 31, 1998 and the period ended July 31, 1997, ND Holdings, Inc. or Ranson Capital Corporation assumed expenses of $53,180, and $34,609, respectively. If the expenses had not been assumed, the annualized ratio of total expenses to average net assets would have been 0.71% and 2.01%, respectively. The accompanying notes are an integral part of these financial statements. The Illinois Municipal Fund Financial Statements January 29, 1999 Statement of Assets and Liabilities January 29, 1999 (Unaudited) - ----------------------------------------------------------------
Assets Cash $ 924 Receivable from manager 178 Deferred organization costs 35,750 --------- Total Assets $ 36,852 --------- Liabilities Organizational costs payable $ 35,750 Other Payables 123 --------- Total Liabilities $ 35,873 --------- Net Assets $ 979 ========= Net assets are represented by: Paid-in capital $ 4,383 Accumulated undistributed net realized gain(loss) on investments (3,404) --------- Total amount representing net assets applicable to 88.183 outstanding shares of no par common stock (unlimited shares authorized) $ 979 ========= Net asset value per share $ 11.10 ========= The accompanying notes are an integral part of these financial statements. Statement of Operations For the six months ended January 29, 1999 (Unaudited) - ------------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 0 Dividends 0 --------- Total Investment Income $ 0 --------- EXPENSES Trustees fees $ 683 Professional fees 4 --------- Total Expenses $ 687 Less expenses waived or absorbed by the Fund's manager 687 --------- Total Net Expenses $ 0 --------- NET INVESTMENT INCOME $ 0 --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investment transactions $ 0 --------- Net Realized And Unrealized Gain (Loss) On Investments $ 0 --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 0 =========
The accompanying notes are an integral part of these financial statements. Financial Statements January 29, 1999 Statement of Changes in Net Assets For the six month period ended January 29,1999 and the period since inception (October 11, 1997) through July 31, 1998 - -------------------------------------------------------------------------
For the Six Months For the Period Ended Since Inception January 29, 1999 (October 11, 1997) (Unaudited) Through July 31, 1998 -------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 0 $ 3,307 Net realized gain (loss) on investment transactions 0 (3,404) Net unrealized appreciation (depreciation) on investments 0 0 -------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 0 $ (97) -------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income $ 0 $ (3,307) Distributions from net realized gain on investment transactions 0 0 -------------------------------------------- Total Dividends and Distributions $ 0 $ (3,307) -------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 0 $ 138,297 Proceeds from reinvested dividends 0 229 Cost of shares redeemed 0 (134,143) -------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 0 $ 4,383 -------------------------------------------- TOTAL INCREASE IN NET ASSETS $ 0 $ 979 NET ASSETS, BEGINNING OF PERIOD $ 979 $ 0 -------------------------------------------- NET ASSETS, END OF PERIOD $ 979 $ 979 ============================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements January 29, 1999 (Unaudited) Note 1. ORGANIZATION Business Operations - The Illinois Municipal Fund (the "Fund") is an investment portfolio of Ranson Managed Portfolios (the "Trust") registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust may offer multiple portfolios; currently five portfolios are offered. Ranson Managed Portfolios is an unincorporated business trust organized under Massachusetts law on August 10, 1990. The Fund had no operations from that date to October 11, 1997, other than matters relating to organization and registration. On October 11, 1997, the Fund commenced its Public Offering of capital shares. The investment objective of the Fund is to provide its shareholders with as high a level of current income exempt from federal income tax and, to the extent indicated, Illinois income tax as is consistent with preservation of capital. The Fund will seek to achieve this objective by investing primarily in a portfolio of Illinois municipal securities. Shares of the Fund are offered at net asset value plus a maximum sales charge of 4.25% of the offering price. As of May 1, 1998 the Fund ceased offering shares to the public. All shares were redeemed except for 88.183 shares currently held by ND Holdings, the Fund's sponsor. At the time of this report, the future of the Fund's operations has not been determined. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment security valuation - Securities for which quotations are not readily available (which will constitute a majority of the securities held by the Fund) are valued using a matrix system at fair value as determined by Ranson Capital Corporation, ("Ranson"). The matrix system has been developed based on procedures approved by the Board of Trustees which include consideration of the following: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications as to value from dealers and general market conditions. Because the market value of securities can only be established by agreement between parties in a sales transaction, and because of the uncertainty inherent in the valuation process, the fair values as determined may differ from the values that would have been used had a ready market for the securities existed. The Fund follows industry practice and records security transactions on the trade date. The Fund concentrates its investments in a single state. This concentration may result in the Fund investing a relatively high percentage of its assets in a limited number of issuers. Deferred organization costs - Costs incurred by the Fund in connection with its organization will be amortized over a 60-month period on the straight-line basis. As of January 29, 1999 no organizational costs have been amortized leaving an unamortized balance of $35,750. Federal and state income taxes - The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies, and to distribute all of its net investment income and any net realized gain on investments, to its shareholders. Therefore, no provision for income taxes is required. The Fund has available at January 29, 1999, a net capital loss carryforward totaling $3,404, which may be used to offset capital gains realized during subsequent years through July 31, 2006. Distributions to shareholders - Dividends from net investment income, declared daily and payable monthly, are reinvested in additional shares of the Fund at net asset value or paid in cash. Capital gains, when available, are distributed at least annually. Investment income - Dividend income is recognized on the ex-dividend date and interest income is recognized daily on an accrual basis. Premiums and discounts on securities purchased are amortized using the effective interest method over the life of the respective securities, unless callable, in which case they are amortized to the earliest call date. Futures contracts - The Fund may purchase and sell financial futures contracts to hedge against changes in the values of tax-exempt municipal securities the Fund owns or expects to purchase. A futures contract is an agreement between two parties to buy or sell units of a particular index or a certain amount of U.S. Government or municipal securities at a set price on a future date. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum "initial margin" requirement of the futures exchange on which the contract is traded. Subsequent payments ("variation margin") are made or received by the Fund, dependent on the fluctuations in the value of the underlying index. Daily fluctuations in value are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize, for book purposes, a gain or loss equal to the difference between the value of the futures contracts sold and the futures contracts to buy. Unrealized appreciation (depreciation) related to open futures contracts is required to be treated as realized gain (loss) for Federal income tax purposes. Certain risks may arise upon entering into futures contracts. These risks may include changes in the value of the futures contracts that may not directly correlate with changes in the value of the underlying securities. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles 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 those estimates. Note 3. CAPITAL SHARE TRANSACTIONS As of July 31, 1998, there were unlimited shares of no par authorized; 88 shares and 88 shares were outstanding as of January 29, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares -------------------------------------- For the Six For the Period Months Ended Since Inception January 29, 1999 (October 11, 1997) (Unaudited) Through July 31, 1998 -------------------------------------- Shares sold 0 11,876 Shares issued on reinvestment of dividends 0 19 Shares redeemed 0 (11,807) -------------------------------------- Net increase 0 88 ====================================== Note 4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Ranson Capital Corporation, the Fund's investment adviser and underwriter, ND Resources, Inc., the Fund's transfer and accounting services agent, and ND Capital, Inc., the Fund's agent for the purchase of certain investment securities, are subsidiaries of ND Holdings, Inc., the Fund's sponsor. The Fund has engaged Ranson Capital Corporation to provide investment advisory and management services to the Fund. The Investment Advisory Agreement provides for fees to be computed at an annual rate of 0.50% of the Fund's average daily net assets. Capital has elected to waive all Investment advisory fees for the six months ended January 29, 1999. Certain officers and trustees of the Fund are also officers and directors of the investment adviser. The Fund pays an annual service fee to Ranson Capital Corporation (Ranson), its principal underwriter, in connection with the distribution of the Fund's shares. The annual fee paid to Ranson is calculated daily and paid monthly by the Fund at the annual rate of 0.25% of the average daily net assets of the Fund. Capital has elected to waive all service fees for the six months ended January 29, 1999. In addition, the Fund has engaged ND Capital, Inc. as agent for the purchase of certain investment securities. ND Resources, Inc., (the transfer agent), provides shareholder services for a monthly fee equal to an annual rate of 0.16% of the Fund's first $10 million of net assets, 0.13% of the Fund's net assets on the next $15 million, 0.11% of the Fund's net assets on the next $15 million, 0.10% of the Fund's net assets on the next $10 million, and 0.09% of the Fund's net assets in excess of $50 million. ND Resources, Inc. also acts as the Fund's accounting services agent for a monthly fee equal to the sum of a fixed fee of $2,000, and a variable fee equal to 0.05% of the Fund's average daily net assets on an annual basis for the Fund's first $50 million and at a lower rate on the average daily net assets in excess of $50 million. ND Holdings, Inc. has assumed all transfer agent and accounting service fees for the six months ended January 29, 1999. Note 5. INVESTMENT SECURITY TRANSACTIONS The cost of purchases and proceeds from the sales of investment securities (excluding short-term securities) aggregated $0 and $0 respectively, for the six months ended January 29, 1999. Financial Highlights Selected per share data and ratios for the period indicated - --------------------------------------------------------------------------------
For the Period For the Six Months Since Inception Ended January 29, 1999 (October 11, 1997) (Unaudited) Through July 31, 1998 ------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.10 $ 11.49 ------------------------------------------------- Income from Investment Operations: Net Investment Income $ .00 $ .29 Net realized and unrealized gain (loss) on investments .00 (.39) ------------------------------------------------- Total From Investment Operations $ .00 $ (.10) ------------------------------------------------- Less Distributions: Dividends from net investment income $ .00 $ (.29) Distributions from net capital gains .00 .00 ------------------------------------------------- Total Distributions $ .00 $ (.29) ------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.10 $ 11.10 ================================================== Total Return 0.00%(A)(B) (.52)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1 $ 1 Ratio of net expenses (after expense assumption) to average net assets 0.00%(B) 0.00%(B)(C) Ratio of net investment income to average net assets 0.00%(B) 4.18%(B) Portfolio turnover rate 0.00% 261.63%
(A) Excludes maximum sales charge of 4.25%. (B) Ratio was annualized. (C) During the period ended July 31, 1997, ND Holdings, Inc. assumed expenses of $26,588. If the expenses had not been assumed, the annualized ratio of total expenses to average net assets would have been 33.60%. The accompanying notes are an integral part of these financial statements. EX-27.1 2
6 0000866841 RANSON MANAGED PORTFOLIOS 01 THE KANSAS MUNICIPAL FUND 6-MOS JUL-30-1999 JAN-29-1999 111163932 117822238 1937854 594539 0 120354631 0 0 938571 938571 0 118860171 9773166 9875312 0 0 (6241074) 0 6796963 119416060 19279 3387671 0 563266 2843684 (303037) 943358 3484005 0 (2843684) 0 0 355091 (617935) 160698 (607675) 0 0 0 0 296456 0 563266 119278827 12.15 .29 .07 (.29) 0 0 12.22 .95 0 0
EX-27.2 3
6 0000866841 RANSON MANAGED PORTFOLIOS 02 THE KANSAS INSURED INTERMEDIATE FUND 6-MOS JUL-31-1999 JAN-29-1999 19659212 20673017 368268 100163 0 21141448 74930 0 13327 88257 0 20955405 1728323 1705829 0 0 (933832) 0 1031618 21053191 10714 523041 0 (78058) 455697 (93012) 289524 652209 0 (455697) 0 0 63199 63113 22408 468350 0 0 0 0 52039 0 78058 20885975 12.07 .26 .11 (.26) 0 0 12.18 .74 0 0
EX-27.3 4
6 0000866841 RANSON MANAGED PORTFOLIOS 03 THE NEBRASKA MUNICIPAL FUND 6-MOS JUL-30-1999 JAN-29-1999 25261865 27022622 414835 71212 0 27508669 0 0 126324 126324 0 27166716 2408753 2365171 0 0 (1522653) 0 1738282 27382345 6080 733274 0 95248 644106 (13016) 587470 1218560 0 (644106) 0 0 125213 119623 37992 1063967 0 0 0 0 45731 0 95248 26853892 11.13 .27 .24 (.27) 0 0 11.37 .70 0 0
EX-27.4 5
6 0000866841 RANSON MANAGED PORTFOLIOS 04 THE OKLAHOMA MUNCIPAL FUND 6-MOS JUL-30-1999 JAN-29-1999 16265421 16737940 211943 52987 0 17002870 0 0 658563 658563 0 15977590 1367070 970625 0 0 (94565) 0 461282 16344307 9192 341619 0 23601 327210 (27816) 353490 652884 0 (327210) 0 0 468023 87444 15866 5007071 0 0 0 0 0 0 23601 14110829 11.68 .28 .28 .28 0 0 11.96 .34 0 0
EX-27.5 6
6 0000866841 RANSON MANAGED PORTFOLIOS 05 THE ILLINOIS MUNICIPAL FUND 6-MOS JUL-30-1999 JAN-29-1999 0 0 178 36674 0 36852 0 0 35873 35873 0 4383 88 88 0 0 0 0 (3404) 979 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 687 1 11.10 0 0 0 0 0 11.10 0 0 0
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