-----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, WNyBpzB2lfdGBWkicruHrdYoScCTxMcH//4ZyfhBSKqvehRcaawBalBFizXiSycu 0RbSMgKMDz2NaU82Pa/iOw== 0000866841-99-000018.txt : 19990921 0000866841-99-000018.hdr.sgml : 19990921 ACCESSION NUMBER: 0000866841-99-000018 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990730 FILED AS OF DATE: 19990920 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: 99713937 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 annual report of the operations of The Kansas Municipal Fund for the year ended July 30, 1999. The Fund's portfolio and related financial statements are presented within for your review. As we end the first half of 1999, stabilizing global economies and the U.S. economy growing at what many economists believe is an unsustainable pace has lead the Federal Reserve to raise short-term interest rates a quarter of a percentage point. Strong consumer spending and a tight labor market were the primary factors for Mr. Greenspan's pre-emptive strike against a rise in inflation. Typically, a higher fed funds rate - the rate at which banks borrow from each other overnight - means higher rates for things such as mortgage loans, credit cards and savings accounts. Anticipations of a Federal Reserve tightening have seen yields on the benchmark 30-year Treasury bond rise from a January yield of 5.07% to 6.10%. Tax-free municipal yields have also risen from 5.06% to 5.41% on AAA rated bonds. This slower rise compared to Treasuries can be attributed to investor demand for tax-free bonds. The Kansas Municipal Fund began the year at $12.15 and closed the year at $11.98. In anticipation of stronger economic growth, the Kansas Municipal Fund at times during the period utilized a defensive position in U.S. Treasury futures. Share price was tempered as yields on U.S. Treasuries declined in the latter part of 1998 and stabilized as yields on U.S. Treasuries rose throughout the first half of 1999. 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 payable annually, 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 43.8 AA 13.9 A 21.9 BBB 8.1 NR 12.3 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 37.0 HC-Health Care 25.9 U-Utilities 14.9 GO-General Obligation 7.1 S-School 4.1 I-Industrial 3.1 O-Other 2.7 W/S-Water/Sewer 2.7 T-Transportation 2.5 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. These percentages are subject to change. 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 Kansas Municipal Lehman Brothers Fund 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 $10,724 1992 $11,855 $11,351 $12,199 1993 $13,050 $12,495 $13,276 1994 $13,168 $12,609 $13,525 1995 $13,988 $13,394 $14,591 1996 $14,814 $14,184 $15,553 1997 $15,933 $15,256 $17,150 1998 $16,372 $15,676 $18,177 1999 $16,936 $16,216 $18,700 Average Annual Total Returns - ---------------------------- For periods ending July 30, 1999 -------------------------------- Since Inception 1 year 5 year (November 15, 1990) - ---------------------------------------------------------------------------- Without sales charge 3.44% 5.16% 6.24% With sales charge (4.25%) (.95)% 4.25% 5.71% - ---------------------------------------------------------------------------- Putting Performance into Perspective Returns are historical and are not a guarantee of future results. 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. 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 07-30-99 NAV $11.98 Average Maturity 20.7 years Number of Issues 81 Total Net Assets $115,882,087
Schedule of Investments July 30, 1999 - -------------------------------------- Name of Issuer Percentages represent the market Rating value of each investment (Unaudited) Coupon Principal Market category to total net assets Moody's/S&P Rate Maturity Amount Value - -------------------------------------------------------------------------------------------------------------------------- KANSAS MUNICIPAL BONDS (98.3 *Burlington, KS (Gas & Elec.) Rev. Ref. MBIA Aaa/AAA 7.000% 06/01/31 $ 4,000,000 $ 4,270,720 Cowley Cty., KS Community College C.O.P.'s A/NR 7.000 03/01/12 900,000 934,857 Douglas Cty., KS USD #497 (Lawrence) G.O. Aa-3/NR 6.000 09/01/15 1,000,000 1,074,680 Ford Cty., KS Single Family Mrtge. Rev. Ref. A-1/NR 7.900 08/01/10 335,000 357,462 Gardner, KS Elec. Util. Rev. NR/NR 7.000 11/01/09 1,000,000 1,056,810 Garnett, KS (Garnett Hsg. Auth. Project) Rev. NR/NR 5.900 10/01/18 500,000 497,580 Goddard, KS (IFR Syst., Inc.) Indl. Rev. Ref. & Impvt. NR/NR 6.250 05/01/12 500,000 519,500 Hiawatha, KS (WalMart Stores) Indl. Rev. Ref. NR/AA 6.750 01/01/06 490,000 502,603 Hutchinson, KS Single Family Mrtge. Rev. Ref. A/NR 8.875 12/01/12 1,625,000 1,730,771 Johnson Cty., KS Internal Impvt. & Ref. Aa-1/NR 6.125 09/01/12 1,040,000 1,092,104 Johnson Cty., KS Internal Impvt. & Ref. Aa-1/NR 6.125 09/01/12 1,370,000 1,438,637 Johnson Cty., KS Single Family Mrtge. Rev. A/NR 7.100 05/01/12 675,000 721,899 Johnson Cty., KS Water Dist. #1 Rev. Aa-1/AA+ 6.500 12/01/13 500,000 520,620 Johnson Cty., KS Water Dist. #1 Rev. Aa-1/AA+ 6.250 12/01/11 700,000 733,677 Kansas City, KS GNMA Mrtge. Rev. GNMA Aaa/NR 5.900 11/01/27 1,560,000 1,599,952 *Kansas City, KS Util. Syst. Ref. & Impvt. AMBAC Aaa/AAA 6.300 09/01/16 1,415,000 1,501,244 *Kansas City, KS Util. Syst. Ref. & Impvt. AMBAC Aaa/AAA 6.300 09/01/16 585,000 620,656 *Kansas City, KS Util. Syst. Ref. & Impvt. FGIC Aaa/AAA 6.375 09/01/23 2,525,000 2,806,689 *Kansas City, KS Util. Syst. Ref. & Impvt. FGIC Aaa/AAA 6.375 09/01/23 5,225,000 5,807,901 Kansas City\Leavenworth Cty.\Lenexa, KS Mrtge. Rev. NR/AAA 7.850 11/01/10 450,000 460,751 KS Water Finance Auth. (Public Water Supply Dist. #6) Rev. NR/NR 6.000 05/01/17 255,000 261,571 KS Department of Transportation Highway Rev. Aa/AA+ 6.000 09/01/12 2,200,000 2,368,542 KS Devl. Finance Auth. (Board of Regents) AMBAC Aaa/AAA 5.875 06/01/21 750,000 770,543 KS Devl. Finance Auth. Water Fund Rev. Aa-1/AA+ 6.000 11/01/14 500,000 545,560 #KS Devl. Finance Auth. (Martin Creek Place) Rev. FHA Aa/NR 6.600 08/01/34 1,900,000 1,963,669 KS Devl. Finance Auth. (Martin Creek Place) Rev. FHA Aa/NR 6.500 08/01/24 750,000 775,650 KS Devl. Finance Auth. (Lewis Field Stadium) Rev. NR/NR 6.000 04/01/08 500,000 513,765 KS Devl. Finance Auth. (Sec. 8) Rev. Ref. MBIA Aaa/AAA 6.400 01/01/24 770,000 798,736 KS Devl. Finance Auth. (Highway Patrol Training Facs.) NR/NR 6.300 12/01/05 450,000 469,512 KS Devl. Finance Auth. Multifamily Hsg. Rev. NR/AAA 6.000 12/01/21 1,975,000 2,053,151 KS Devl. Finance Auth. (Oak Ridge Park Apt.) NR/NR 6.500 02/01/18 2,065,000 2,146,485 KS Devl. Finance Auth. (Oak Ridge Park Apt.) NR/NR 6.625 08/01/29 1,875,000 1,959,262 KS Devl. Finance Auth. (Indian Ridge Apts.) NR/NR 6.000 01/01/28 1,140,000 1,132,727 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev. Aaa/AAA 5.800 11/15/21 430,000 440,587 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev. Aaa/AAA 5.800 11/15/16 550,000 580,448 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care Rev. Aaa/AAA 5.800 11/15/21 680,000 703,786 KS Devl. Finance Auth. (Hays Medl. Ctr. Inc.) Facs. Rev. Aaa/AAA 5.500 11/15/17 500,000 500,835 KS Devl. Finance Auth. (Jackson Co.) Hlth. Rev. Aa-3/NR 5.375 09/01/27 1,000,000 981,600 Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.000 07/01/09 2,000,000 2,127,620 Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.200 07/01/14 1,200,000 1,266,564 Lawrence, KS (Memorial Hospital) Rev. A-3/NR 6.200 07/01/19 1,725,000 1,783,667 Lawrence, KS (Brandon Woods) Multifamily Hsg. Devl. NR/A 6.625 04/01/12 2,000,000 2,057,060 Leavenworth Cty., KS (Lansing) USD #469 G.O. FSA Aaa/AAA 5.750 09/01/14 875,000 948,316 Leavenworth Cty., KS (Lansing) USD #469 G.O. FSA Aaa/AAA 5.750 09/01/15 930,000 1,009,180 Lenexa, KS (Lakeview Village) Hlth. Care Facs. Rev. NR/BBB 6.250 05/15/26 8,000,000 8,184,960 *Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. NR/AA 6.450 02/01/18 2,500,000 2,607,525 Lyon Cty., KS Unlimited Tax G.O. AMBAC Aaa/NR 5.125 09/01/16 1,120,000 1,086,097 Newton, KS (Newton Healthcare) Hosp. Rev. NR/BBB 5.700 11/15/18 1,000,000 991,960 Newton, KS (Newton Healthcare) Hosp. Rev. NR/A 5.750 11/15/24 500,000 501,225 Olathe, KS Hlth. Care Ref. (Luth. Gd. Sam.) AMBAC Aaa/AAA 6.000 05/01/19 900,000 941,481 Olathe, KS Hlth. Care Ref. (Luth. Gd. Sam.) AMBAC Aaa/AAA 6.000 09/01/11 1,000,000 1,004,810 Olathe, KS Hlth. Care Ref. (Luth. Gd. Sam.) AMBAC Aaa/AAA 5.875 09/01/16 2,000,000 2,021,460 Olathe, KS (Jefferson Place) Multifamily Hsg. Rev. Ref. NR/A- 5.950 07/01/22 5,060,000 5,168,031 Olathe, KS (Jefferson Place) Multifamily Hsg. Rev. Ref. NR/A- 6.100 07/01/22 785,000 805,512 Olathe, KS (Bristol Pointe) Multifamily Hsg. Rev. Ref. NR/AAA 5.700 11/01/27 2,210,000 2,229,824 Pratt, KS Elec. Util. Syst. Rev. Ref. & Impvt. AMBAC Aaa/AAA 6.600 11/01/07 1,000,000 1,145,370 Riley Cty., KS (Colbert Hills Golf Project) NR/NR 5.550 05/01/23 2,590,000 2,516,107 Sedgwick Cty., KS USD #267 (Renwick) G.O. AMBAC Aaa/AAA 5.000 11/01/19 1,000,000 954,080 Seward Cty., KS G.O. AMBAC Aaa/AAA 6.000 08/15/13 750,000 777,923 Seward Cty., KS Single Family Mrtge. Rev. Ref. Aa-1/NR 8.000 05/01/11 255,000 269,981 Shawnee Cty., KS (Auburn-Washburn) USD #437 G.O. Ref. Aaa/AAA 6.600 09/01/09 500,000 532,000 Shawnee, KS Int. Impvt. G.O. Aa-3/NR 5.850 12/01/06 235,000 244,978 Shawnee, KS (Thomasbrooks Apts.) Multifamily Hsg Rev. NR/AAA 5.250 10/01/14 830,000 824,530 Shawnee, KS (Thomasbrooks Apts.) Multifamily Hsg Rev. NR/AAA 5.500 04/01/24 3,200,000 3,163,424 Wichita, KS Airport Auth. Facs. Rev. Ref. ASGUA NR/AA 7.000 03/01/05 440,000 477,101 Wichita, KS Hlth. Care (Masonic Home) Rev. NR/NR 6.375 12/01/22 1,275,000 1,256,334 Wichita, KS (St. Francis) Facs. Impvt. & Ref. MBIA Aaa/AAA 6.250 10/01/10 1,000,000 1,075,360 Wichita, KS Multifamily Hsg. (Northpark II-A) Rev. GNMA Aaa/NR 6.125 08/20/28 1,900,000 1,945,049 Wichita, KS Multifamily Hsg. (Brentwood Apts.) Rev. NR/A 5.850 12/01/25 1,000,000 1,014,820 Wichita, KS (Broadmoor Chelsea) Multifamily Hsg. Rev. NR/AAA 5.650 07/01/16 990,000 1,011,255 #Wichita, KS (Broadmoor Chelsea) Multifamily Hsg. Rev. NR/AAA 5.700 07/01/22 2,000,000 2,033,240 Wichita, KS Multifamily Hsg. (Cimarron Apts.) FNMA Aa/AAA 5.550 10/01/22 1,000,000 1,002,870 Wichita, KS Multifamily Hsg. Rev. (Innes Station Apt. 5) NR/NR 6.250 03/01/28 1,750,000 1,734,163 Wichita, KS Public Building Commission Rev. Aaa/AAA 5.750 02/01/17 350,000 354,337 Wichita, KS Public Building Commission Rev. A/AA- 5.500 08/01/14 715,000 728,170 Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.000 11/15/08 640,000 684,883 Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.200 10/01/15 2,225,000 2,481,253 Wichita, KS (CSJ Hlth. Sys.) Rev. NR/A+ 7.000 11/15/18 2,350,000 2,509,612 Wichita, KS Single Family Mrtge. Rev. Ref. A/NR 7.100 09/01/09 745,000 788,471 Wichita, KS Water & Sewer Util. Ref. & Impvt. FGIC Aaa/AAA 6.000 10/01/12 1,000,000 1,034,590 Wyandotte Cty., KS (KS Int'l. Speedway) Sales Tax Rev. Aaa/AAA 5.000 12/01/27 1,500,000 1,416,195 ------------- KANSAS MUNICIPAL BONDS (COST: $110,543,262) $ 113,926,930 ------------- SHORT-TERM SECURITIES (.5%) Federated Tax-Free Fund 73 $ 381,554 Federated Intermediate Municipal Trust 78 200,194 ------------- TOTAL SHORT-TERM SECURITIES (COST: $581,554) $ 581,748 ------------- TOTAL INVESTMENTS IN SECURITIES (COST: $111,124,816) $ 114,508,678 OTHER ASSETS LESS LIABILITIES 1,373,409 ------------- NET ASSETS $ 115,882,087 =============
* 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 July 30, 1999 Statement of Assets and Liabilities July 30, 1999 - --------------------------------------------------
Assets Investment in securities, at value (cost: $111,124,816 ) $ 114,508,678 Accrued dividends receivable 2,746 Accrued interest receivable 1,985,956 Receivable for fund shares sold 1,744 --------------- Total Assets $ 116,499,124 --------------- Liabilities Dividends payable $ 471,598 Accrued expenses 103,873 Payable for fund shares redeemed 20,801 Bank overdraft 20,765 --------------- Total Liabilities $ 617,037 --------------- Net Assets $ 115,882,087 =============== Net assets are represented by: Paid-in capital $ 117,675,469 Accumulated undistributed net realized gain (loss) on investments (5,177,244) Unrealized appreciation on investments 3,383,862 --------------- Total amount representing net assets applicable to 9,675,452 outstanding shares of no par common stock (unlimited shares authorized) $ 115,882,087 =============== Net asset value per share $ 11.98 =============== The accompanying notes are an integral part of these financial statements. Statement of Operations For the year ended July 30, 1999 - ---------------------------------------------------------- INVESTMENT INCOME Interest $ 6,755,336 Dividends 52,564 --------------- Total Investment Income $ 6,807,900 --------------- EXPENSES Investment advisory fees $ 592,103 Service fees 296,051 Transfer agent fees 123,302 Accounting service fees 74,511 Custodian fees 17,718 Transfer agent out of pockets 13,610 Professional fees 8,168 Trustees fees 7,002 Insurance expense 8,663 Reports to shareholders 6,906 Registration and filing fees 292 --------------- Total Expenses $ 1,148,326 Less expenses waived or absorbed by the Fund's manager (23,429) ---------------- Total Net Expenses $ 1,124,897 ---------------- NET INVESTMENT INCOME $ 5,683,003 ---------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) from: Investment transactions $ 606,732 Futures transactions 168,020 Net change in unrealized appreciation (depreciation) of : Investments (2,469,743) Futures (13,960) ---------------- Net Realized And Unrealized Gain (Loss) On Investments and Futures $ (1,708,951) ---------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,974,052 ================
The accompanying notes are an integral part of these financial statements. Financial Statements July 30, 1999 Statement of Changes in Net Assets For the year ended July 30, 1999 and the year ended July 31, 1998 - ------------------------------------------------------------------
For The For The Year Ended Year Ended July 30, 1999 July 31, 1998 ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 5,683,003 $ 6,095,141 Net realized gain (loss) on investment and futures transactions 774,752 (1,671,434) Net change in unrealized appreciation (depreciation) on investments and futures (2,483,703) (1,066,095) -------------- -------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 3,974,052 $ 3,357,612 -------------- -------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.58 and $.60 per share, respectively) $ (5,683,003) $ (6,095,141) Distributions from net realized gain on investment and futures transactions 0 0 -------------- -------------- Total Dividends and Distributions $ (5,683,003) $ (6,095,141) -------------- -------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 7,216,537 $ 8,635,428 Proceeds from reinvested dividends 3,847,350 4,211,696 Cost of shares redeemed (13,496,584) (18,287,314) -------------- -------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ (2,432,697) $ (5,440,190) -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ (4,141,648) $ (8,177,719) NET ASSETS, BEGINNING OF PERIOD 120,023,735 128,201,454 -------------- -------------- NET ASSETS, END OF PERIOD $ 115,882,087 $ 120,023,735 ============== ==============
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements July 30, 1999 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 four 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 July 30, 1999, a net capital loss carryforward totaling $5,177,244, which may be used to offset capital gains realized during subsequent years through July 31, 2007. 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. 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 30, 1999, there were unlimited shares of no par authorized; 9,675,452 and 9,875,312 shares were outstanding at July 30, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares ---------------------------------- For The For The Year Ended Year Ended July 30, 1999 July 31, 1998 ---------------------------------- Shares sold 594,266 706,375 Shares issued on reinvestment of dividends 316,848 344,664 Shares redeemed (1,110,974) (1,497,432) ---------------------------------- Net increase (decrease) (199,860) (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 $592,103 of investment advisory fees for the year ended July 30, 1999. The Fund has a payable to Ranson Capital Corporation of $48,425 at July 30, 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, 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 $272,622 of service fee expenses after partial waiver for the year ended July 30, 1999. The Fund has a payable to Ranson of $22,066 at July 30, 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 $123,302 of transfer agency fees and expenses for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $10,111 at July 30, 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 $74,511 of accounting service fees for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $6,161 at July 30, 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 $15,690,485 and $17,193,448, respectively, for the year ended July 30, 1999. Note 6. INVESTMENT IN SECURITIES At July 30, 1999, the aggregate cost of securities for federal income tax purposes was $111,124,816, and the net unrealized appreciation of investments based on the cost was $3,383,862, which is comprised of $3,981,265 aggregate gross unrealized appreciation and $597,403 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 Year Ended Year Ended Year Ended Year Ended Year Ended July 30, July 31, July 31, July 31, July 31, 1999 1998 1997 1996 1995 NET ASSET VALUE, BEGINNING OF PERIOD $ 12.15 $ 12.42 $ 12.14 $ 12.07 $ 12.00 --------------------------------------------------------------------------------- Income from Investment Operations: Net investment income $ .58 $ .60 $ .61 $ .69 $ .65 Net realized and unrealized gain (loss) on investment and futures transactions (.17) (.27) .28 .07 .07 -------------------------------------------------------------------------------- Total Income (Loss) From Investment Operations $ .41 $ .33 $ .89 $ .76 $ .72 -------------------------------------------------------------------------------- Less Distributions: Dividends from net investment income $ (.58) $ (.60) $ (.61) $ (.69) $ (.65) Distributions from net capital gains .00 .00 .00 .00 .00 -------------------------------------------------------------------------------- Total Distributions $ (.58) $ (.60) $ (.61) $ (.69) $ (.65) -------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.98 $ 12.15 $ 12.42 $ 12.14 $ 12.07 ================================================================================ Total Return 3.44%(A) 2.76%(A) 7.56%(A) 5.90%(A) 6.23%(A) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $115,882 $120,024 $128,201 $132,349 $130,091 Ratio of net expenses (after expense assumption) to average net assets 0.95%(B) 0.95%(B) 0.93%(B) 0.85%(B) 0.82%(B) Ratio of net investment income to average net assets 4.80% 4.93% 5.02% 5.18% 5.46% Portfolio turnover rate 13.54% 26.68% 18.64% 20.14% 57.00%
(A) (Excludes maximum sales charge of 4.25%. (B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed/waived expenses of $23,429, $3,901, $46,741, $212,056, and $295,875, respectively. If the expenses had not been assumed/waived, the annualized ratios of total expenses to average net assets would have been 0.97%, 0.95%, 0.97%, 1.01%, and 1.06%,, respectively. The accompanying notes are an integral part of these financial statements. Tax Information For The Year Ended July 30, 1999 (Unaudited) We are required to advise you within 60 days of the Fund's fiscal year-end regarding the federal tax status of distributions received by shareholders during such fiscal year. The distributions made during the fiscal year by the Fund were earned from the following sources:
Dividends and Distributions Per Share From Net Investment From Net Realized From Net Realized To Shareholders of Record Payment Date Income Short-Term Gains Long-Term Gains - ------------------------- --------------- ------------------- ----------------- ------------------ August 28, 1998 August 31, 1998 $ .049 - - September 29, 1998 September 30, 1998 .049 - - October 29, 1998 October 30, 1998 .049 - - November 27, 1998 November 30, 1998 .049 - - December 30, 1998 December 31, 1998 .048 - - January 28, 1999 January 29, 1999 .046 - - February 25, 1999 February 26, 1999 .044 - - March 30, 1999 March 31, 1999 .055 - - April 29, 1999 April 30, 1999 .048 - - May 27, 1999 May 28, 1999 .045 - - June 29, 1999 June 30, 1999 .052 - - July 29, 1999 July 30, 1999 .049 - -
Shareholders should consult their tax advisors. INDEPENDENT AUDITOR'S REPORT To the Shareholders and Board of Trustees of The Kansas Municipal Fund We have audited the accompanying statement of assets and liabilities of The Kansas Municipal Fund, (one of the portfolios constituting the Ranson Managed Portfolios), including the schedule of investments, as of July 30, 1999, the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for the period ended July 31, 1995, were audited by other auditors whose report dated September 11, 1995, expressed an unqualified opinion on those financial highlights. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 30, 1999, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Kansas Municipal Fund of the Ranson Managed Portfolios, as of July 30, 1999, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the four years in the period then ended, in conformity with generally accepted accounting principles. BRADY, MARTZ & ASSOCIATES, P.C. September 10, 1999 Dear Shareholder: We are pleased to enclose the annual report of the operations of the Kansas Insured Intermediate Fund for the year ended July 30, 1999. The Fund's portfolio and related financial statements are presented within for your review. As we end the first half of 1999, stabilizing global economies and the U.S. economy growing at what many economists believe is an unsustainable pace has lead the Federal Reserve to raise short-term interest rates a quarter of a percentage point. Strong consumer spending and a tight labor market were the primary factors for Mr. Greenspan's pre-emptive strike against a rise in inflation. Typically, a higher fed funds rate - the rate at which banks borrow from each other overnight - means higher rates for things such as mortgage loans, credit cards and savings accounts. Anticipations of a Federal Reserve tightening have seen yields on the benchmark 30-year Treasury bond rise from a January yield of 5.07% to 6.10%. Tax-free municipal yields have also risen from 5.06% to 5.41% on AAA rated bonds. This slower rise compared to Treasuries can be attributed to investor demand for tax-free bonds. The Kansas Insured Intermediate Fund began the year at $12.07 and closed the year at $11.98. In anticipation of stronger economic growth, the Kansas Insured Intermediate Fund, at times during the period utilized a defensive position in U.S. Treasury futures. Share price was tempered as yields on U.S. Treasuries declined in the latter part of 1998 and stabilized as yields on U.S. Treasuries rose throughout the first half of 1999. 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 payable annually, 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 100 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] GO-General Obligation 30.0 H-Housing 29.9 HC-Health Care 24.3 W/S-Water/Sewer 7.2 U-Utilities 2.6 O-Other 2.1 T-Transportation 1.5 C/L-COP/Lease 1.2 S-Schools 1.2 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. These percentages are subject to change. COMPARATIVE INDEX GRAPH - ----------------------- [line graph]
Comparison of change in value of $10,000 investment in The Kansas Insured Intermediate Fund and the Lehman Brothers Municipal 7 Year Maturity Bond Index The Kansas Insured The Kansas Insured Intermediate Fund Intermediate Fund Lehman Bros. Municipal w/o sales charge w/ max sales charge 7 Year Maturity Bond Index ---------------------------------------------------------------------------------- 11/23/92 $10,000 $ 9,725 $10,000 1993 $10,829 $10,531 $10,694 1994 $11,025 $10,722 $10,982 1995 $11,656 $11,335 $11,868 1996 $12,326 $11,987 $12,471 1997 $12,912 $12,557 $13,548 1998 $13,321 $12,955 $14,260 1999 $13,815 $13,435 $14,729
Average Annual Total Returns For periods ending July 30, 1999 -------------------------------- Since Inception 1 year 5 year (November 23, 1992) ------ ------ ------------------- Without sales charge 3.70% 4.61% 4.95% With sales charge (2.75%) .85% 4.03% 4.52% Putting Performance into Perspective Returns are historical and are not a guarantee of future results. 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. 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 07-30-99 NAV $11.98 Average Maturity 9.3 years Number of issues 48 Total Net Assets $21,333,426
Schedule of Investments July 30, 1999 Name of Issuer Percentages represent the Rating market value of each investment Coupon (Unaudited) Principal Market category to total net assets Moodys /S&P Rate Maturity Amount Value - --------------------------------------------------------------------------------------------------------------------------- KANSAS MUNICIPAL BONDS (97.8%) Butler Cty., KS (Augusta) USD #402 G.O. AMBAC Aaa/AAA 5.400% 10/01/06 $ 200,000 $ 205,258 *Douglas Cty., KS USD #497 (Lawrence) G.O. FGIC Aaa/AAA 7.200 09/01/02 1,370,000 1,496,725 Harvey Cty., KS USD #373 (Newton) FSA Aaa/AAA 5.000 09/01/16 250,000 245,915 Johnson Cty., KS USD #232 (Desoto) G.O. MBIA Aaa/AAA 5.150 09/01/09 510,000 533,689 Johnson Cty., KS USD #232 (Desoto) G.O. MBIA Aaa/AAA 5.200 09/01/10 600,000 624,636 Johnson Cty., KS USD #233 (Olathe) G.O. AMBAC Aaa/AAA 6.150 03/01/07 300,000 317,031 Kansas City, KS (St. Margaret Hlth. Ctr.) AMBAC Aaa/AAA 5.700 08/01/03 250,000 264,230 Kansas City, KS Special Obligation Escrowed NR/AAA 6.000 02/15/03 200,000 212,056 KS Devl. Finance Auth. (Hays Medl. Ctr.) Rev. MBIA Aaa/NR 5.300 11/15/09 375,000 394,976 KS Devl. Finance Auth. (Hays Medl. Ctr.) Rev. MBIA Aaa/NR 5.200 11/15/08 375,000 391,984 #KS Devl. Finance Auth. (Stormont Vail) Hlth. Care MBIA Aaa/AAA 5.700 11/15/08 450,000 481,063 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care MBIA Aaa/AAA 5.800 11/15/11 300,000 318,882 KS Devl. Finance Auth. (Stormont Vail) Hlth. Care MBIA Aaa/AAA 5.600 11/15/07 100,000 106,363 KS Devl. Finance Auth. (Park Apts.) Hsg. Rev. FNMA NR/AAA 5.700 12/01/09 325,000 334,123 KS Devl. Finance Auth. Pooled Ref. Lease Rev. MBIA Aaa/AAA 5.500 10/01/05 250,000 264,535 KS State Turnpike Auth. Rev. FGIC Aaa/AAA 5.450 09/01/10 200,000 208,800 Larned, KS (Cath. Hlth. Corp.) Hlth. Facs. Rev. MBIA Aaa/AAA 5.400 11/15/04 155,000 162,796 Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 6.050 02/01/06 350,000 360,591 *Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 5.875 02/01/04 500,000 517,940 Lenexa, KS (Barrington Park) Multifamily Hsg. Rev. ASGUA NR/AA 5.950 02/01/05 250,000 258,025 McPherson Cty., KS (McPherson) USD #418 G.O. FSA Aaa/AAA 5.700 09/01/06 400,000 429,336 Mission, KS (Lamar Place) Multifamily Hsg. Rev. FNMA NR/AAA 5.000 10/01/14 605,000 599,023 Mission, KS (Lamar Place) Multifamily Hsg. Rev. FNMA NR/AAA 5.180 10/01/23 945,000 926,865 Olathe, KS (Bristol Pointe) MultiFamily Hsg. Rev. Ref. FNMA NR/AAA 5.250 11/01/12 485,000 489,918 Olathe, KS (Evangelical Luth. Good Samaritan Soc.) AMBAC Aaa/AAA 5.500 05/01/03 110,000 115,170 Olathe, KS (Evangelical Luth. Good Samaritan Soc.) AMBAC Aaa/AAA 5.400 05/01/02 150,000 155,065 Olathe, KS (Evangelical Luth. Good Samaritan Soc.) AMBAC Aaa/AAA 5.200 05/01/01 140,000 142,723 Olathe, KS (Medl. Ctr.) Hlth. Facs. Rev. AMBAC Aaa/AAA 5.125 09/01/12 500,000 502,255 Olathe, KS (Medl. Ctr.) Hlth. Facs. Rev. Ref. AMBAC Aaa/AAA 5.600 09/01/05 1,000,000 1,038,530 Sedgwick Cty., KS (Maize) USD #266 G.O. FSA Aaa/AAA 5.500 09/01/05 300,000 314,727 Sedgwick Cty., KS (Maize) USD #266 G.O. FSA Aaa/AAA 5.600 09/01/06 200,000 210,254 Sedgwick Cty., KS (Renwick) USD #267 G.O. AMBAC Aaa/AAA 6.000 11/01/07 570,000 621,072 Sedgwick Cty., KS (Renwick) USD #267 G.O. AMBAC Aaa/AAA 5.850 11/01/06 290,000 314,285 Sedgwick\Shawnee Cty., KS Single Family Mrtge. Rev. GNMA Aaa/NR 5.200 12/01/08 490,000 498,541 Shawnee Cty., KS (Shawnee Heights) USD #450 G.O. FSA Aaa/AAA 6.500 09/01/00 250,000 256,755 *Shawnee Cty., KS (Topeka) USD #501 G.O. FGIC Aaa/AAA 5.550 02/01/07 820,000 858,819 Shawnee KS (Thomasbroooks Apts.) Multi Hsg Rev FNMA NR/AAA 5.250 10/01/14 1,000,000 993,410 Wellington, KS Utility Rev. AMBAC Aaa/AAA 4.950 05/01/11 300,000 302,565 Wellington, KS Utility Rev. AMBAC NR/AAA 5.000 05/01/12 250,000 252,087 Wichita, KS (St. Francis Regl. Medl. Ctr.) Impvt. MBIA Aaa/AAA 6.100 10/01/04 775,000 832,869 Wichita, KS (St. Francis Regl. Medl. Ctr.) Impvt. MBIA Aaa/AAA 6.000 10/01/03 250,000 267,625 Wichita, KS Airport Auth. Facs. Rev. Ref. ASGUA NR/AA 7.000 03/01/05 100,000 108,432 #Wichita, KS Multi Hsg. (Broadmoor Chelsea) Rev. FNMA NR/AAA 5.375 07/01/10 625,000 639,363 *Wichita, KS Multifamily Hsg. (Cimarron Apartments) FNMA Aa/AAA 5.250 10/01/12 755,000 764,370 Wichita, KS Water & Sewer Util. Rev. Ref. FGIC Aaa/AAA 5.600 04/01/05 610,000 629,569 Wichita, KS Water & Sewer Util. Rev. Ref. FGIC Aaa/AAA 5.750 10/01/06 150,000 153,804 Wichita, KS Water & Sewer Rev. FGIG Aaa/AAA 5.000 10/01/15 250,000 241,250 Wichita, KS Water & Sewer Util. Rev. FGIC Aaa/NR 5.000 10/01/11 500,000 506,980 ------------ TOTAL KANSAS MUNICIPAL BONDS (COST: $20,258,184) $ 20,865,280 ------------ SHORT-TERM SECURITIES (.8%) Federated Tax-Free Fund 73 $ 30,093 Federated Intermediate Municipal Trust 78 149,433 ------------ TOTAL SHORT-TERM SECURITIES (COST: $180,093) $ 179,526 ------------ TOTAL INVESTMENTS IN SECURITIES (COST: $20,438,277) $ 21,044,806 OTHER ASSETS LESS LIABILITIES 288,620 ------------ NET ASSETS $ 21,333,426 =============
*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 July 30, 1999 Statement of Assets and Liabilities July 30, 1999 - ---------------------------------------------------
Assets Investment in securities, at value (cost: $20,438,277) $ 21,044,806 Accrued interest receivable 395,415 Accrued dividends receivable 490 ------------ Total Assets $ 21,440,711 ------------ Liabilities Bank overdraft $ 10,947 Dividends payable 79,035 Accrued expenses 17,303 ------------ Total Liabilities $ 107,285 ------------ Net Assets $ 21,333,426 ============ Net assets are represented by: Paid-in capital $ 21,596,919 Accumulated undistributed net realized gain (loss) on Investments (870,022) Unrealized appreciation on investments 606,529 ------------ Total amount representing net assets applicable to 1,781,247 outstanding shares of no par common stock (unlimited shares authorized) $ 21,333,426 ============ Net asset value per share $ 11.98 ============ The accompanying notes are an integral part of these financial statements. Statement of Operations For the year ended July 30, 1999 - ---------------------------------------------------------- INVESTMENT INCOME Interest $ 1,068,785 Dividends 17,380 ------------ Total Investment Income $ 1,086,165 ------------ EXPENSES Investment advisory fees $ 105,661 Transfer agent fees 30,456 Accounting service fees 34,563 Custodian fees 3,168 Transfer agent out of pockets 2,903 Professional fees 4,165 Trustees' fees 2,482 Reports to shareholders 2,297 Registration and filing fees 500 Insurance Expense 1,525 ------------ Total Expenses $ 187,720 Less expenses waived or absorbed by the Fund's manager (29,229) ------------ Total Net Expenses 158,491 ------------ NET INVESTMENT INCOME $ 927,674 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) from: Investment transactions $ 22,513 Futures transactions (49,621) Net change in unrealized appreciation (depreciation) of: Investments $ (135,565) Futures (2,094) ------------ Net Realized and Unrealized Gain (Loss) on Investments and Futures $ (164,767) ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 762,907 ============
The accompanying notes are an integral part of these financial statements. Financial Statements July 30, 1999 Statement of Changes in Net Assets For the year ended July 30, 1999 and the year ended July 31, 1998 - -------------------------------------------------------------------
For The Year Ended For The Year Ended July 30, 1999 July 31, 1998 ---------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 927,674 $ 993,262 Net realized gain (loss) on investment and futures transactions (27,108) (125,540) Net change in unrealized appreciation (depreciation) on investments and futures (137,659) (212,731) ---------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 762,907 $ 654,991 ---------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.53 and $.54 per share, respectively) $ (927,674) $ (993,262) Distributions from net realized gain on investment and future transactions 0 0 ---------------------------------------------- Total Dividends and Distributions $ (927,674) $ (993,262) ---------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 2,012,253 $ 746,870 Proceeds from reinvested dividends 542,608 603,378 Cost of shares redeemed (1,641,509) (5,960,554) ---------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 913,352 $ (4,610,306) ---------------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ 748,585 $ (4,948,577) NET ASSETS, BEGINNING OF PERIOD 20,584,841 25,533,418 --------------------------------------------- NET ASSETS, END OF PERIOD $ 21,333,426 $ 20,584,841 ===============================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements July 30, 1999 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 four 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. 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 July 30, 1999, a net capital loss carryforward totaling $870,022, which may be used to offset capital gains realized during subsequent years through July 31, 2007. 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. 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 30, 1999, there were unlimited shares of no par authorized; 1,781,247 and 1,705,829 shares were outstanding at July 30, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares -------- For The For The Year Ended Year Ended July 30, 1999 July 31, 1998 --------------- --------------- Shares sold 166,145 61,738 Shares issued on reinvestment of dividends 44,820 49,895 Shares redeemed (135,547) (492,742) --------------- --------------- Net increase (decrease) 75,418 (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 $76,432 of investment advisory fees after partial waiver for the year ended July 30, 1999. The Fund has a payable to Ranson Capital Corporation of $7,898 at July 30, 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 year ended July 30, 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 $30,456 of transfer agency fees and expenses for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $2,553 at July 30, 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 $34,563 of accounting service fees for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $2,887 at July 30, 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 $4,617,325 and $3,354,494, respectively, for the year ended July 30, 1999. Note 6. INVESTMENT IN SECURITIES At July 30, 1999, the aggregate cost of securities for federal income tax purposes was $20,438,277, and the net unrealized appreciation of investments based on the cost was $606,529, which is comprised of $658,631 aggregate gross unrealized appreciation and $52,102 aggregate gross unrealized depreciation. Financial Highlights Selected per share data and ratios for the period indicated - ------------------------------------------------------------------------
For The Year Ended --------------------------------------------------------------------------- 1999 1998 1997 1996 1995 --------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.07 $ 12.23 $ 12.19 $ 12.04 $ 11.92 --------------------------------------------------------------------------- Income from Investment Operations: Net investment income $ .53 $ .54 $ .53 $ .53 $ .54 Net realized and unrealized gain (loss) on investment and futures transactions (.09) (.16) .04 .15 .12 --------------------------------------------------------------------------- Total Income (Loss) From Investment Operations $ .44 $ .38 $ .57 $ .68 $ .66 --------------------------------------------------------------------------- Less Distributions: Dividends from net investment income $ (.53) $ (.54) $ (.53) $ (.53) $ (.54) Distributions from net capital gains .00 .00 .00 .00 .00 --------------------------------------------------------------------------- Total Distributions $ (.53) $ (.54) $ (.53) $ (.53) $ .54) --------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.98 $ 12.07 $ 12.23 $ 12.19 $ 12.04 ============================================================================= Total Return 3.70%(A) 3.17%(A) 4.76%(A) 5.75%(A) 5.72%(A) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $21,333 $20,585 $25,533 $30,564 $30,678 Ratio of net expenses (after expense assumption) to average net assets 0.75%(B) 0.75%(B) 0.76%(B) 0.69%(B) 0.62%(B) Ratio of net investment income to average net assets 4.39% 4.42% 4.33% 4.37% 4.57% Portfolio turnover rate 16.34% 25.46% 28.68% 19.96% 63.00%
(A) Excludes maximum sales charge of 2.75%. (B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed/waived expenses of $29,229, $13,708, $40,608, $71,943, and $112,745, respectively. If the expenses had not been assumed/ waived, the annualized ratios of total expenses to average net assets would have been 0.89%, 0.82%, 0.90%, 0.92%, and 0.98%, respectively. The accompanying notes are an integral part of these financial statements. Tax Information For The Year Ended July 30, 1999 (Unaudited) We are required to advise you within 60 days of the Fund's fiscal year-end regarding the federal tax status of distributions received by shareholders during such fiscal year. The distributions made during the fiscal year by the Fund were earned from the following sources:
Dividends and Distributions Per Share ------------------------------------- From Net From Net To Shareholders of Investment Realized Short- From Net Realized Record Payment Date Income Term Gains Long-Term Gains - ------------------ ------------------ ---------- --------------- ------------------ August 28, 1998 August 31, 1998 $ .045 - - September 29, 1998 September 30, 1998 .044 - - October 29, 1998 October 30, 1998 .044 - - November 27, 1998 November 30, 1998 .044 - - December 30, 1998 December 31, 1998 .044 - - January 28, 1999 January 29, 1999 .043 - - February 25, 1999 February 26, 1999 .040 - - March 30, 1999 March 31, 1999 .050 - - April 29, 1999 April 30, 1999 .044 - - May 27, 1999 May 28, 1999 .042 - - June 29, 1999 June 30, 1999 .048 - - July 29, 1999 July 30, 1999 .045 - -
Shareholders should consult their tax advisors. INDEPENDENT AUDITOR'S REPORT To the Shareholders and Board of Trustees of The Kansas Insured Intermediate Fund We have audited the accompanying statement of assets and liabilities of The Kansas Insured Intermediate Fund, (one of the portfolios constituting the Ranson Managed Portfolios), including the schedule of investments, as of July 30, 1999, the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for the period ended July 31, 1995, were audited by other auditors whose report dated September 11, 1995, expressed an unqualified opinion on those financial highlights. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 30, 1999, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Kansas Insured Intermediate Fund of the Ranson Managed Portfolios, as of July 30, 1999, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended, in conformity with generally accepted accounting principles. BRADY, MARTZ & ASSOCIATES, P.C. September 10, 1999 Dear Shareholder: We are pleased to enclose the annual report of the operations of The Nebraska Municipal Fund for the year ended July 30, 1999. The Fund's portfolio and related financial statements are presented within for your review. As we end the first half of 1999, stabilizing global economies and the U.S. economy growing at what many economists believe is an unsustainable pace has lead the Federal Reserve to raise short-term interest rates a quarter of a percentage point. Strong consumer spending and a tight labor market were the primary factors for Mr. Greenspan's pre-emptive strike against a rise in inflation. Typically, a higher fed funds rate - the rate at which banks borrow from each other overnight - means higher rates for things such as mortgage loans, credit cards and savings accounts. Anticipations of a Federal Reserve tightening have seen yields on the benchmark 30-year Treasury bond rise from a January yield of 5.07% to 6.10%. Tax-free municipal yields have also risen from 5.06% to 5.41% on AAA rated bonds. This slower rise compared to Treasuries can be attributed to investor demand for tax-free bonds. The Nebraska Municipal Fund began the year at $11.13 and closed the year at $11.01. In anticipation of stronger economic growth, the Nebraska Municipal Fund, at times during the period utilized a defensive position in U.S. Treasury futures. Share price was tempered as yields on U.S. Treasuries declined in the latter part of 1998 and stabilized as yields on U.S. Treasuries rose throughout the first half of 1999. 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 PERFORMANCE AND COMPOSITION - --------------------------- Portfolio Ratings (based on Total Long-Term Investments) - -------------------------------------- [pie chart] AAA 51.1 AA 17.0 A 13.5 BBB 1.9 NR 16.5 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 19.1 HC-Health Care 18.5 U-Utilities 16.0 S-School 15.3 GO-General Obligation 13.5 O-Other 7.5 I-Industrial 5.7 W/S-Water/Sewer 2.5 C/L-Cop/Lease 1.9 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. These percentages are subject to change. 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 $10,672 1996 $11,071 $10,600 $11,376 1997 $11,909 $11,402 $12,544 1998 $12,380 $11,853 $13,295 1999 $12,853 $12,306 $13,677 Average Annual Total Returns - ---------------------------- For periods ending July 30, 1999 ---------------------------------- Since Inception 1 year 5 year (November 17, 1993) ------------------------------------------------- Without sales charge 3.82% 5.63% 4.50% With sales charge (4.25%) (.59)% 4.72% 3.71% Putting Performance into Perspective Returns are historical and are not a guarantee of future results. 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. 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 07-30-99 NAV $11.01 Average Maturity 19.0 years Number of Issues 122 Total Net Assets $41,942,648
Schedule of Investments July 30, 1999 Name of Issuer Rating Percentages represent the market value of each investment (Unaudited) Coupon Principal Market category to total net assets Moody's/S&P Rate Maturity Amount Value - --------------------------------------------------------------------------------------------------------------------------- NEBRASKA MUNICIPAL BONDS (98.3%) Adams Cty., NE Hosp. Auth. #1 (Mary Lanning Memorial Hosp.) ASGUA NR/AA 5.300% 12/15/18 $ 250,000 $ 249,232 NE Public Gas (American Public Energy Agency) AMBAC Aaa/AAA 4.700 06/01/11 200,000 197,302 Columbus, NE Combined Rev. NR/NR 5.100 12/15/16 125,000 121,038 Columbus, NE Combined Rev. NR/NR 5.200 12/15/17 100,000 97,198 Cuming Cty., NE School Dist. #020 (Bancraft-Rosalie) NR/NR 5.750 12/15/17 100,000 97,966 Dawson Cty., NE SID #1 (IBP, Inc. Proj.) Ref. G.O. A-3/A- 5.650 02/01/22 700,000 701,981 District Energy Corp., NE (County Bldg. & Correction) Fac. Rev. NR/NR 5.500 07/01/13 150,000 150,490 Douglas Cty., NE Hosp. Impvt. G.O. Aa/AA+ 5.100 07/01/04 150,000 155,440 Douglas Cty., NE Hospital (Alegent Hlth.) Auth. #001 Rev. AMBAC Aaa/AAA 5.250 09/01/21 250,000 246,093 Douglas Cty., NE Hosp. Auth. #002 (Archbishop Bergan) Hlth. Facs. Aa/AA- 5.850 11/15/03 100,000 106,270 Douglas Cty., NE Hosp. Auth. #002 (Archbishop Bergan) Hlth. Facs. Aa/AA- 6.250 11/15/22 100,000 103,677 Douglas Cty., NE Hosp. Auth. #002 (Archbishop Bergan) Hlth Facs. Aaa/AAA 6.000 11/15/15 125,000 131,650 Douglas Cty., NE (Catholic Health Corp.) Hlth. Facs. Rev. MBIA Aaa/AAA 5.375 11/15/15 275,000 277,794 Douglas Cty., NE (Catholic Health Corp.) Rev. MBIA Aaa/AAA 5.500 11/15/21 340,000 345,477 Douglas Cty., NE Hosp. Auth. #002 (Lakeside Village) Hlth. Aaa/AAA 5.000 12/15/17 250,000 238,262 Douglas Cty., NE Hosp. Auth #2 (Bethphage Project) Rev. NR/NR 5.400 02/01/13 120,000 118,387 Douglas Cty., NE SID #257 (Ramble Ridge) G.O. NR/NR 6.250 05/15/09 100,000 102,535 Douglas Cty., NE SID #295 G.O. NR/NR 6.500 06/01/17 800,000 786,640 Douglas Cty., NE SID #392 (Cinnamon Creek) G.O. NR/NR 5.750 08/15/17 200,000 195,334 Douglas Cty., NE SID #396 (First National Business Park) NR/NR 5.750 09/01/17 100,000 97,740 Douglas Cty., NE SID #240 (LeBea) Ref. G.O. NR/NR 5.900 10/15/16 100,000 101,150 Douglas Cty., NE SID #397 (Linden Estates II) NR/NR 5.600 07/15/18 265,000 262,019 Douglas Cty., NE SID #397 (Linden Estates II) NR/NR 5.600 07/15/19 280,000 276,732 Douglas Cty., NE SD #010 (Elkhorn Pub. Schools) G.O. NR/A 6.600 12/15/10 100,000 101,574 Douglas Cty., NE SD #010 (Elkhorn Pub. Schools) G.O. NR/A 6.750 12/15/14 100,000 101,664 Douglas Cty., NE SD #066 G.O. (Westside Comm. Schools) A-1/AA 5.000 12/01/17 150,000 144,012 Gage Cty., NE Hosp. Auth. #01 (Beatrice Comm. Hosp.) Hosp. Rev. NR/NR 6.400 10/01/07 100,000 106,976 Gage Cty., NE Hosp. Auth. #01 (Beatrice Comm. Hosp.) Hosp. Rev. NR/NR 6.750 10/01/14 200,000 216,024 Gage Cty., NE (Beatrice) School Dist. #15 G.O. AMBAC Aaa/AAA 5.900 12/15/16 850,000 871,301 Grand Island, NE Sewer Syst. Rev. NR/A 6.000 04/01/14 550,000 572,495 Hastings, NE Combined Utilities Rev. NR/NR 6.875 10/15/14 100,000 101,056 Hastings, NE Elec. Rev. A-3/A 6.300 01/01/19 370,000 387,090 Kearney Cty., NE Combined Util. Rev. A-1/NR 6.100 06/01/14 800,000 807,560 Keith Cty., NE SD #001 (Ogallala Pub. Schools) G.O. NR/NR 6.300 11/15/09 100,000 101,262 Lancaster Cty., NE Hosp. Auth. #001 (Sisters of Charity) Hosp. Aaa/AAA 6.250 05/15/12 200,000 217,474 Lancaster Cty., NE (Lincoln Medl. Educ. Foundn.) Rev. NR/NR 5.700 02/01/11 100,000 100,794 Lancaster Cty., NE (Lincoln Medl. Educ. Foundn.) Rev. NR/NR 5.800 02/01/12 175,000 177,681 Lancaster Cty., NE (Bryan Memorial Hospital) Rev. MBIA Aaa/AAA 5.375 06/01/19 1,275,000 1,267,439 Lincoln/Lancaster Cties., NE Public Bldg. Comm. G.O. NR/NR 6.200 10/15/11 100,000 104,662 Lincoln/Lancaster Cties., NE Public Bldg. Community Tax Lease Rental Aa/AA+ 5.800 10/15/18 475,000 499,928 Lincoln/Lancaster Cties., NE Public Bldg. Community Rev. Aa/AA+ 5.875 10/15/23 850,000 882,793 Lincoln, NE Various Purpose Unlimited Tax G.O. Aa-1/AAA 4.750 08/15/19 750,000 707,182 Lincoln, NE Elec. Syst. Rev. Aa/AA+ 5.750 09/01/16 750,000 769,320 Lincoln, NE Parking Rev. NR/NR 6.100 08/15/09 250,000 258,628 Lincoln, NE Parking Rev. NR/NR 6.150 08/15/11 100,000 103,242 Madison Cty., NE Hosp. Auth. #1 (Faith Regl. Hlth. Svcs.) NR/AA 5.350 07/01/18 250,000 247,758 McCook, NE Pub. Pwr. Dist. Elec. Sys. Rev. NR/NR 6.750 12/15/09 100,000 101,544 NE Municipal Energy Agency Power Supply Syst. Rev. Ref. AMBAC Aaa/AAA 6.000 04/01/17 200,000 207,586 NE Hgr. Educ. Loan Program Senior Subord. Term MBIA Aaa/AAA 6.250 06/01/18 800,000 826,792 NE Higher Ed Jr-Sub Rev. MBIA Aaa/AAA 6.400 06/01/13 300,000 320,496 NE Hgr. Educ. Loan Program Junior Subord. Term MBIA Aaa/AAA 6.450 06/01/18 400,000 422,384 *NE Hgr. Educ. Loan Program Student Loan MBIA Aaa/AAA 5.875 06/01/14 1,350,000 1,381,671 NE Student Loan Program B Rev. MBIA Aaa/AAA 6.000 06/01/28 100,000 98,770 NE Educ. Finance Auth. (Concordia Teachers College) Rev. NR/NR 5.900 12/15/15 100,000 101,331 NE Educ. Finance Auth. (Dana College) Rev. G.O. of Instn. NR/NR 6.750 06/01/14 100,000 109,822 NE Educ. Finance Auth. (Midland Lutheran College) Rev. G.O. NR/NR 6.250 06/15/15 300,000 303,213 NE Educ. Finance Auth. (Creighton Univ.) Rev. AMBAC Aaa/AAA 5.950 01/01/11 300,000 325,203 NE Educ. Finance Auth. (Midland Lutheran College) Rev. G.O. NR/NR 5.550 06/15/18 500,000 512,805 NE Educ. Finance Auth. (Grace Univ.) Rev. NR/NR 5.300 02/01/15 200,000 192,630 NE Educ. Finance Auth. (Grace Univ.) Rev. NR/NR 5.500 02/01/19 200,000 189,912 NE Invmt. Finance Auth. (Muirfield Greens) Multifamily Rev. FHA Aa/NR 6.800 12/01/15 360,000 377,147 NE Invmt. Finance Auth. (Muirfield Greens) Multifamily Rev. FHA Aa/NR 6.850 12/01/25 525,000 550,043 NE Invmt. Finance Auth. (Kings Gate Sr. Apts.) Multifamily Hsg. NR/AAA 5.350 03/01/29 290,000 287,172 NE Invmt. Finance Auth. (Catholic Hlth. Initiatives) Rev. Aa/AA 5.125 12/01/17 200,000 195,602 NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.600 07/01/08 100,000 99,016 NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.700 07/01/09 100,000 98,997 NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.800 07/01/10 100,000 98,898 NE Invmt. Finance Auth. (State Revolving Fund) Rev. NR/A+ 4.900 07/01/11 100,000 98,742 NE Invmt. Finance Auth. Single Family Hsg. Rev. Coll. NR/AAA 6.300 03/01/17 175,000 185,281 *NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.600 09/01/20 660,000 691,588 NE Invmt. Finance Auth. Single Family Hsg. Rev. VA/FNMA NR/AAA 7.300 09/01/26 390,000 408,689 NE Invmt. Finance Auth. Single Family Hsg. Rev. FHA/VA NR/AAA 6.150 03/01/09 100,000 103,630 NE Invmt. Finance Auth. Single Family Hsg. Rev. FHA/VA NR/AAA 6.200 09/01/10 100,000 102,957 NE Invmt. Finance Auth. Single Family Hsg. Rev. FHA/GNMA NR/AAA 6.500 09/01/18 400,000 418,292 NE Invmt. Finance Auth. Single Family Hsg. Rev. FNMA/GNMA NR/AAA 6.400 09/01/26 250,000 260,348 NE Invmt. Finance Auth. Single Family Hsg. Rev. Coll. NR/AAA 5.950 03/01/27 100,000 102,605 NE Invmt. Finance Auth. Single Family Hsg. Rev. GNMA/FNMA NR/AAA 6.250 09/01/28 220,000 227,126 NE Invmt. Finance Auth. Single Family Hsg. Rev. GNMA/FNMA NR/AAA 5.850 09/01/17 95,000 97,526 NE Invmt. Finance Auth. Single Family Hsg. Rev. GNMA NR/AAA 6.200 09/01/17 250,000 262,143 NE Invmt. Finance Auth. Single Family Hsg. Rev. GNMA NR/AAA 6.250 03/01/21 300,000 315,204 *NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 6.300 09/01/28 1,105,000 1,160,891 NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.850 09/01/28 465,000 473,998 NE Invmt. Finance Auth. Single Family Hsg. Rev. NR/AAA 5.250 09/01/28 250,000 245,128 #NE Invmt. Finance Auth. (Children Healthcare Svcs.) Rev. AMBAC Aaa/AAA 5.500 08/15/27 1,000,000 1,008,020 NE Invmt. Finance Auth. Multifamily Hsg. Rev. FNMA NR/AAA 6.200 06/01/28 495,000 507,736 NE Invmt. Finance Auth. Multifamily Hsg. Rev. GNMA NR/AAA 6.000 06/01/17 500,000 518,690 NE Invmt. Finance Auth. Multifamily Hsg. Rev. GNMA NR/AAA 6.100 06/01/29 500,000 513,295 NE Invmt. Finance Auth. Multifamily Hsg. (Waterbrook) Rev. Aaa/AAA 5.600 04/01/07 210,000 220,609 NE Public Gas Agency (Gas Supply Sys.) Rev. Baa-1/NR 6.250 04/01/05 200,000 210,970 NE Public Gas Agency (Gas Supply Sys.) Rev. Baa-1/NR 5.650 04/01/06 200,000 208,370 NE Public Power Dist. (Power Supply Syst.) Rev MBIA Aaa/AAA 5.000 01/01/28 250,000 237,740 NE Public Power Dist. (Power Supply Syst.) Rev. MBIA Aaa/AAA 5.000 01/01/28 700,000 665,672 NE Public Power Dist. (Power Supply Syst.) Rev. FSA Aaa/AAA 5.125 01/01/19 750,000 729,210 NE Public Power Dist. (Elec. System) Rev. Coll. Govts. Aaa/AAA 6.250 01/01/12 150,000 161,112 NE Public Power Dist. (Power Supply Syst.) Rev. Aaa/AAA 6.125 01/01/15 390,000 423,131 NE Public Power Dist. (Power Supply Syst.) Rev. Aaa/AAA 5.750 01/01/20 250,000 260,218 NE State Colleges Facs. Deferred Maintenance Project NR/A 5.050 09/15/09 325,000 323,330 NE Invmt. Finance Auth. (Great Plains Regl. Medl. Ctr.) NR/AAA 6.500 05/15/14 300,000 327,873 NE Invmt. Finance Auth. (Great Plains Regl. Medl. Ctr.) ASSET GUAR NR/AA 5.450 11/15/17 400,000 399,456 NE Elem. & Secondary School Fin. Auth. (Creighton Prep) NR/BBB+ 5.000 07/15/09 250,000 246,220 North Platte, NE Spec. Assessment G.O. NR/NR 6.200 03/15/15 100,000 100,314 Northeast NE Solid Waste Facs. Rev. MBIA Aaa/AAA 5.900 05/15/15 600,000 604,878 Northeast NE Juvenile Svcs. (Detention) 1st Mrtge. Rev. NR/NR 6.375 06/01/17 770,000 769,492 Omaha, NE Various Purpose Aaa/AAA 6.250 12/01/12 250,000 276,250 Omaha, NE Various Purpose Aaa/AAA 6.250 12/01/14 250,000 275,063 Omaha, NE Parking Facs. Corp. (Omaha Park 4\5) Lease Rev. Aa-1/AA+ 5.700 09/15/15 750,000 789,180 Omaha, NE Public Power Dist. Elec. Syst. Rev. NR/AA 6.000 02/01/15 330,000 359,509 Omaha, NE Public Power Dist. Elec. Syst. Rev. Aa/NR 6.200 02/01/17 650,000 717,359 Omaha, NE (Rosenblatt Stadium) Facs. Rev. Aa-1/AA+ 5.000 11/01/18 500,000 481,985 Otoe Cty., NE School Dist. #111 (Nebraska City) Ref. AMBAC Aaa/AAA 5.800 11/15/14 400,000 404,224 Platte Cty., NE (Columbus) SD #001 GO School Building Bonds A/NR 5.000 12/15/19 500,000 484,260 Sarpy Cty., NE SID #86 (Willow Springs) G.O. NR/NR 6.250 01/15/17 100,000 99,288 Sarpy Cty., NE SID #52 (Prairie Corners) G.O. NR/NR 6.000 10/01/17 300,000 294,759 Sarpy Cty., NE SID #142 (Fair Meadows) Ref. G.O. NR/NR 5.850 08/15/17 100,000 98,654 Scotts Bluff Cty., NE Hosp. Auth. #1 (Regl West Medl. Ctr.) A-3/A- 5.125 11/15/19 1,250,000 1,187,112 Scotts Bluff Cty., NE Hosp. Auth. #1 (Regl West Medl. Ctr.) A-3/A- 5.250 11/15/28 500,000 477,385 Washington Cty., NE School Dist. #1 G.O. NR/A 5.800 07/15/11 100,000 101,154 Washington Cty., NE School Dist. #1 G.O. NR/A 5.900 07/15/15 135,000 136,277 Western NE Community College COP's NR/NR 6.550 10/15/13 150,000 156,184 York, NE Water Rev. NR/NR 5.150 06/01/17 250,000 244,837 York, NE Sewer Syst. Rev. NR/NR 5.850 06/01/12 140,000 142,57 York, NE Sewer Syst. Rev. NR/NR 6.000 06/01/17 100,000 98,483 ---------- TOTAL NEBRASKA MUNICIPAL BONDS (COST: $40,394,251) $41,224,373 ---------- SHORT-TERM SECURITIES (.7%) Federated Tax-Free Fund 73 $ 64,410 Federated Intermediate Municipal Trust 78 224,135 ---------- TOTAL SHORT-TERM SECURITIES (COST: $289,410) $ 288,545 ---------- TOTAL INVESTMENTS IN SECURITIES (COST: $40,683,661) $41,512,918 OTHER ASSETS LESS LIABILITIES 429,730 ---------- NET ASSETS $41,942,648 ============
*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. Statement of Assets and Liabilities July 30, 1999 - ---------------------------------------------------
Assets Investment in securities, at value (Cost: $40,683,661) $ 41,512,918 Accrued interest receivable 605,908 Accrued dividends receivable 1,777 Receivable for fund shares sold 50,000 --------------- Total Assets $ 42,170,603 --------------- Liabilities Dividends payable $ 172,321 Accrued expenses 30,040 Payable for fund shares redeemed 25,594 --------------- Total Liabilities $ 227,955 --------------- Net Assets $ 41,942,648 =============== Net assets are represented by: Paid-in capital $ 42,850,706 Accumulated undistributed net realized gain (loss) on Investments (1,737,315) Unrealized appreciation on investments 829,257 --------------- Total amount representing net assets applicable to 3,808,712 outstanding shares of no par common stock (Unlimited shares authorized) $ 41,942,648 =============== Net asset value per share $ 11.01 =============== Statement of Operations For the year ended July 30, 1999 - --------------------------------------------------------- INVESTMENT INCOME Interest $ 1,664,770 Dividends 16,250 ---------------- Total Investment Income $ 1,681,020 ---------------- EXPENSES Investment advisory fees $ 151,507 Service fees 75,753 Transfer agent fees 42,192 Accounting service fees 39,190 Custodian fees 4,669 Transfer agent out of pockets 4,490 Professional fees 4,471 Reports to shareholders 2,743 Trustees fees 2,878 Registration and filing fees 2,207 Amortization of organization costs 1,868 Insurance expense 1,958 --------------- Total Expenses $ 333,926 Less expenses waived or absorbed by the Fund's manager (119,949) --------------- Total Net Expenses $ 213,977 --------------- NET INVESTMENT INCOME $ 1,467,043 --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) from: Investment transactions $ 65,174 Futures transactions 116,437 Net change in unrealized appreciation (depreciation) of: Investments (755,751) Futures (2,792) --------------- Net Realized And Unrealized Gain (Loss) On Investments And Futures $ (576,932) --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 890,111 ===============
The accompanying notes are an integral part of these financial statements. Financial Statements July 30, 1999 Statement of Changes in Net Assets For the year ended July 30, 1999 and the year ended July 31, 1998 - ------------------------------------------------------------------
For The Year For The Year Ended Ended July 30, 1999 July, 31 1998 --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 1,467,043 $ 1,380,231 Net realized gain (loss) on investment and futures transactions 181,611 (383,905) Net change in unrealized appreciation (depreciation) on investments and futures (758,543) 49,878 ------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 890,111 $ 1,046,204 ------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.54 and $.56 per share, respectively) $ (1,467,043) $ (1,380,231) Distributions from net realized gain on investment and futures transactions 0 0 ------------------------------------------------- Total Dividends and Distributions $ (1,467,043) $ (1,380,231) ------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 5,450,673 $ 2,803,618 Shares issued in connection with the Fund reorganization 12,877,367 0 Proceeds from reinvested dividends 944,562 915,428 Cost of shares redeemed (3,071,400) (4,868,195) ------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 16,201,202 $ (1,149,149) ------------------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ 15,624,270 $ (1,483,176) NET ASSETS, BEGINNING OF PERIOD 26,318,378 27,801,554 ------------------------------------------------- NET ASSETS, END OF PERIOD $ 41,942,648 $ 26,318,378 ==================================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements July 30, 1999 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 four 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 year end July 30, 1999. Accumulated amortization at July 30, 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 July 30, 1999, a net capital loss carryforward totaling $1,737,315, which may be used to offset capital gains realized during subsequent years through July 31, 2007. 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. 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 30, 1999, there were unlimited shares of no par authorized; 3,808,712 and 2,365,171 shares were outstanding at July 30, 1999 and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares ------------------------------ For The For The Year Ended Year Ended July 30, 1999 July 31, 1998 ------------------------------ Shares sold 484,495 251,824 Shares issued in connection with the Fund Reorganization 1,148,739 0 Shares issued on reinvestment of dividends 84,149 82,101 Shares redeemed (273,842) (436,786) ------------------------------ Net increase (decrease) 1,443,541 (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 $107,311 of investment advisory fees after partial waiver for the year ended July 30, 1999. The Fund has a payable to Ranson Capital Corporation of $14,151 at July 30, 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 year ended July 30, 1999, no commissions were earned by ND Capital, Inc. 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 year ended July 30, 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 $42,192 of transfer agency fees for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $4,508 at July 30, 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 $39,190 of accounting service fees for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $3,753 at July 30, 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 $8,089,878 and $3,806,481, respectively, for the year ended July 30, 1999. Note 6. INVESTMENT IN SECURITIES At July 30, 1999, the aggregate cost of securities for federal income tax purposes was $40,683,661, and the net unrealized appreciation of investments based on the cost was $829,257, which is comprised of $1,122,455 aggregate gross unrealized appreciation and $293,198 aggregate gross unrealized depreciation. Note 7. PLAN OF REORGANIZATION An agreement and plan of reorganization was approved effective May 21, 1999 by the shareholders of the Lancaster Nebraska Tax Free Fund (Lancaster). Pursuant to the agreement, the Fund, in exchange for the assets of Lancaster, assumed certain liabilities of Lancaster and issued shares of the Fund to shareholders of Lancaster on a pro rata basis. On the date of exchange, 1,148,739 shares of the Fund were issued to the shareholders of Lancaster for net assets of $12,877,367, including $434,196 of unrealized appreciation, at $11.21 per share. As of May 21, 1999, Lancaster had an accumulated undistributed net realized loss on investments of $406,497. The combined net assets of the Fund and Lancaster immediately after the reorganization was $42,459,680
Financial Highlights Selected per share data and ratios for the period indicated - -------------------------------------------------------------------------------- For the For the For the For The For The Year Ended Year Ended Year Ended Year Ended Year Ended July 30, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995 ----------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.13 $ 11.26 $ 11.00 $ 10.95 $ 10.82 ----------------------------------------------------------------------------------- Income from Investment Operations: Net investment income $ .54 $ .56 $ .55 $ .57 $ .59 Net realized and unrealized gain (loss) on investment and futures transactions (.12) (.13) .26 .05 .13 ----------------------------------------------------------------------------------- Total Income (Loss) From Investment Operations $ .42 $ .43 $ .81 $ .62 $ .72 ------------------------------------------------------------------------------------ Less Distributions: Dividends from net investment income $ (.54) $ (.56) $ (.55) $ (.57) $ (.59) Distributions from net capital gains .00 .00 .00 .00 .00 ------------------------------------------------------------------------------------ Total Distributions $ (.54) $ (.56) $ (.55) $ (.57) $ (.59) ------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.01 $ 11.13 $ 11.26 $ 11.00 $ 10.95 ======================================================================================= Total Return 3.82%(A) 3.95%(A) 7.57%(A) 5.73%(A) 7.14%(A) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $41,943 $26,318 $27,802 $18,077 $14,445 Ratio of net expenses (after expense assumption) to average net assets 0.70%(B) 0.63%(B) 0.71%(B) 0.62%(B) 0.35%(B) Ratio of net investment income to average net assets 4.83% 5.06% 5.03% 5.13% 5.63% Portfolio turnover rate 12.58% 26.36% 42.84% 27.20% 140.00%
(A) Excludes maximum sales charge of 4.25%. (B) During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed/waived expenses of $119,949, $51,233, $124,394, $129,053, and $146,913, respectively. If the expenses had not been assumed/waived, the annualized ratios of total expenses to average net assets would have been 1.10%, 0.81%, 1.22%, 1.38%, and 1.66%, respectively. The accompanying notes are an integral part of these financial statements. Tax Information For The Year Ended July 30, 1999 (Unaudited) We are required to advise you within 60 days of the Fund's fiscal year-end regarding the federal tax status of distributions received by shareholders during such fiscal year. The distributions made during the fiscal year by the Fund were earned from the following sources: Dividends and Distributions Per Share - -------------------------------------
From Net From Net From Net To Shareholders of Investment Realized Short- Realized Long- Record Payment Date Income Term Gains Term Gains - -------------------------------------------------------------------------------------------------------------------------- August 28, 1998 August 31, 1998 $ .046 - - September 29, 1998 September 30, 1998 .045 - - October 29, 1998 October 30, 1998 .045 - - November 27, 1998 November 30, 1998 .045 - - December 30, 1998 December 31, 1998 .045 - - January 28, 1999 January 29, 1999 .044 - - February 25, 1999 February 26, 1999 .041 - - March 30, 1999 March 31, 1999 .051 - - April 29, 1999 April 30, 1999 .045 - - May 27, 1999 May 28, 1999 .042 - - June 29, 1999 June 30, 1999 .049 - - July 29, 1999 July 30, 1999 .045 - -
Shareholders should consult their tax advisors. INDEPENDENT AUDITOR'S REPORT To the Shareholders and Board of Trustees of The Nebraska Municipal Fund We have audited the accompanying statement of assets and liabilities of The Nebraska Municipal Fund, (one of the portfolios constituting the Ranson Managed Portfolios), including the schedule of investments, as of July 30, 1999, the related statement of operations for the year ended July 30, 1999, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for the period ended July 31, 1995, was audited by other auditors whose report dated September 11, 1995, expressed an unqualified opinion on those financial highlights. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 30, 1999, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Nebraska Municipal Fund of the Ranson Managed Portfolio, as of July 30, 1999, the results of its operations for the year ended July 30, 1999, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended, in conformity with generally accepted accounting principles. BRADY, MARTZ & ASSOCIATES, P.C. September 10, 1999 Dear Shareholder: We are pleased to enclose the annual report of the operations of The Oklahoma Municipal Fund for the year ended July 30, 1999. The Fund's portfolio and related financial statements are presented within for your review. As we end the first half of 1999, stabilizing global economies and the U.S. economy growing at what many economists believe is an unsustainable pace has lead the Federal Reserve to raise short-term interest rates a quarter of a percentage point. Strong consumer spending and a tight labor market were the primary factors for Mr. Greenspan's pre-emptive strike against a rise in inflation. Typically, a higher fed funds rate - the rate at which banks borrow from each other overnight - means higher rates for things such as mortgage loans, credit cards and savings accounts. Anticipations of a Federal Reserve tightening have seen yields on the benchmark 30-year Treasury bond rise from a January yield of 5.07% to 6.10%. Tax-free municipal yields have also risen from 5.06% to 5.41% on AAA rated bonds. This slower rise compared to Treasuries can be attributed to investor demand for tax-free bonds. The Oklahoma Municipal Fund began the year at $11.68 and closed the year at $11.61. In anticipation of stronger economic growth, the Oklahoma Municipal Fund, at times during the period utilized a defensive position in U.S. Treasury futures. Share price was tempered as yields on U.S. Treasuries declined in the latter part of 1998 and stabilized as yields on U.S. Treasuries rose throughout the first half of 1999. 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 payable annually, 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 51.8 AA 11.8 A 4.8 BBB 17.5 NR 14.1 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] S-School 38.4 HC-Health Care 19.6 H-Housing 9.5 GO-General Obligation 7.3 U-Utilities 7.2 T-Transportation 5.9 O-Other 5.3 W/S-Water/Sewer 3.6 I-Industrial 3.2 Market sectors are breakdowns of the Fund's portfolio holdings into specific investment classes. These percentages are subject to change COMPARATIVE INDEX GRAPH - ----------------------- [line graph] Comparison of change in value of a $10,000 investment in The Oklahoma Municipal Fund and the Lehman Brothers Municipal Bond Index The Oklahoma Municipal The Oklahoma Municipal Lehman Brothers Fund w/o sales charge Fund w/ max sales charge Municipal 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 1999 $11,662 $11,166 $12,024 Average Annual Total Returns For periods ending July 30, 1999 -------------------------------- Since Inception 1 year 5 year (September 25, 1996) - ---------------------------------------------------------------------------- Without sales charge 4.25% NA 5.55% With sales charge (4.25%) (.18)% NA 3.95% Putting Performance into Perspective Returns are historical and are not a guarantee of future results. 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. 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 07-30-99 NAV $11.61 Average Maturity 20.1 years Number of Issues 50 Total Net Assets $16,135,191
OKLAHOMA MUNICIPAL BONDS (97.7%) Eastern OK Board of Regents (State College) Student Facs. Rev. NR/NR 6.100% 06/01/17 $ 150,000 $ 152,931 Edmond Economic Dev. Auth., OK. Student Housing Rev. Baa-3/NR 5.375 12/01/19 100,000 98,723 Edmond Economic Dev. Auth., OK. Student Housing Rev. Baa-3/NR 5.500 12/01/28 865,000 843,479 Grand River Dam Auth. Rev. Ref. A/A- 5.000 06/01/12 135,000 134,865 *Grand River Dam Auth., OK Rev. AMBAC Aaa/AAA 6.250 06/01/11 210,000 240,469 Grand River Dam Auth., OK Rev. Ref. AMBAC Aaa/AAA 5.500 06/01/13 290,000 311,031 OK Agric. & Mech. Coll. (Univ. of OK) Mult. Facs. Rev. AMBAC Aaa/NR 4.900 05/01/17 590,000 578,884 OK Agric. & Mech. Coll. (OK State Univ.) Athl. Facs. AMBAC Aaa/NR 5.000 08/01/24 400,000 390,056 OK Agric. & Mech. Coll. (OK State Univ.) Util. Syst. FGIC Aaa/AAA 5.000 07/01/13 600,000 600,954 OK Capital Impvt. Auth. (Dept. of Corrections) Rev. AMBAC Aaa/AAA 5.000 05/01/18 500,000 487,695 OK Capital Impvt. Auth. (State Office Building) Rev. A/NR 5.500 10/01/16 105,000 107,099 OK Colleges Brd. of Regents (NE State Univ. Ctr.) Rev. FSA Aaa/AAA 5.100 03/01/16 140,000 139,511 OK Colleges Brd. of Regents (NE State Univ. Ctr.) Rev. FSA Aaa/AAA 5.150 03/01/21 100,000 98,791 OK Devl. Finance Auth. (Central OK Univ.) Aa-3/NR 5.300 12/01/18 100,000 99,115 OK Devl. Finance Auth. (DHS Cty. Office Bldg.) Rev. A/NR 5.250 11/01/11 120,000 122,753 OK Devl. Finance Auth. (DHS Cty. Office Bldg.) Rev. A/NR 5.300 11/01/12 275,000 282,056 OK Devl. Finance Auth. (Hillcrest Healthcare Syst.) Rev. Ref. Baa/BBB+ 5.625 08/15/19 1,000,000 968,800 OK Devl. Finance Auth. (Hillcrest Healthcare Syst.) Rev. Ref. Baa/BBB+ 5.625 08/15/29 295,000 286,448 OK Devl. Finance Auth. (Langston Univ. Athletic Facs.) Rev. NR/NR 5.250 12/01/23 500,000 476,680 *OK Devl. Finance Auth. (OK City Univ.) Rev. Ref. AMBAC Aaa/AAA 5.125 06/01/17 555,000 547,241 OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.200 11/01/07 100,000 108,320 OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.500 11/01/13 75,000 81,827 OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 5.750 03/01/13 400,000 404,976 #OK Devl. Finance Auth. (Southern Nazarene Univ.) Rev. NR/NR 6.000 03/01/18 600,000 601,620 OK Devl. Finance Auth. (St. Ann's Retire.Village) Rev. MBIA Aaa/NR 5.000 12/01/28 1,000,000 944,950 *OK Devl. Finance Auth. (Tulsa Vo Tech Dist. Proj.) Rev. AMBAC Aaa/AAA 5.100 08/01/15 750,000 747,540 OK Devl. Finance Auth. Facs. (Univ. of OK-Norman) Rev. FSA Aaa/AAA 5.625 07/01/13 50,000 52,573 OK Devl. Finance Auth. Facs. (OK State Univ.) Rev. FSA Aaa/NR 5.000 07/01/18 70,000 68,525 OK Housing Finance Agency Single Family GNMA Aaa/NR 5.375 03/01/20 800,000 797,872 OK Housing Finance Agency Single Family GNMA/FNMA Aaa/NR 5.150 09/01/20 750,000 734,857 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.300 09/01/11 50,000 50,950 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.400 09/01/12 50,000 51,096 OK State Indl. Finance Auth. G.O. Aa-3/NR 5.000 04/01/13 400,000 394,768 OK State Municipal Power Auth. Rev. MBIA Aaa/AAA 5.875 01/01/12 100,000 108,466 OK State Municipal Power Auth. Rev. MBIA Aaa/AAA 5.750 01/01/24 340,000 368,472 OK State Student Loan Auth. A/NR 6.350 09/01/25 100,000 104,650 OK State Turnpike Auth. Rev. AMBAC Aaa/AAA 5.500 01/01/22 200,000 200,340 OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.000 01/01/14 250,000 251,283 OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.250 01/01/28 250,000 250,103 OK State Turnpike Auth. Rev. FGIC Aaa/AAA 5.000 01/01/28 250,000 243,448 OK State Unlimited Tax G.O. Aa-3/AA 5.200 07/15/16 450,000 450,635 OK State Unlimited Tax G.O. Aa-3/AA 5.200 07/15/18 145,000 142,802 OK State Unlimited Tax G.O. Aa-3/AA 5.100 07/15/13 90,000 90,833 OK State Water (Loan Program) Rev. NR/AA 6.250 10/01/12 50,000 54,110 OK State Water (Loan Program) Rev. NR/AA 5.400 09/01/15 105,000 108,470 *OK State Water (Loan Program) Rev. NR/AA 5.100 09/01/16 415,000 413,352 Oklahoma Cnty, OK Finance Auth. (Epworth Villa) Rev. Ref. NR/NR 6.500 04/01/15 200,000 198,616 Oklahoma Cnty, OK Finance Auth. (Epworth Villa) Rev. Ref. NR/NR 7.000 04/01/22 200,000 198,102 Oklahoma Cnty, OK Indl. Auth. (Benevolent Association) Ref. Baa-1/NR 6.150 01/01/11 100,000 105,399 Oklahoma Cnty, OK Indl. Auth. (Benevolent Association) Ref. Baa-1/NR 5.500 02/01/29 500,000 460,680 ----------- TOTAL OKLAHOMA MUNICIPAL BONDS (COST: $15,904,989) $ 15,757,216 ------------ SHORT-TERM SECURITIES (.8%) Federated Tax-Free Fund 73 $ 66,679 Federated Intermediate Municipal Trust 78 60,058 ------------ TOTAL SHORT-TERM SECURITIES (COST: $126,679) $ 126,737 ------------ TOTAL INVESTMENTS IN SECURITIES (COST: $16,031,668) $ 15,883,953 OTHER ASSETS LESS LIABILITIES 251,238 ------------ NET ASSETS $ 16,135,191 ============
*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 July 30, 1999 Statement of Assets and Liabilities July 30, 1999 - -------------------------------------------------
Assets Investment in securities, at value (Cost: $16,031,668) $ 15,883,953 Receivable for fund shares sold 20,233 Accrued interest receivable 238,010 Accrued dividends receivable 683 Deferred organization costs 15,192 Variation margin on futures 66,752 --------------- Total Assets $ 16,224,823 --------------- Liabilities Payable for fund shares redeemed $ 10,000 Dividends payable 66,895 Accrued expenses 12,737 --------------- Total Liabilities $ 89,632 --------------- Net Assets $ 16,135,191 =============== Net assets are represented by: Paid-in capital $ 16,247,377 Accumulated undistributed net realized gain (loss) on investments 35,529 Unrealized appreciation on investments (147,715) --------------- Total amount representing net assets applicable to 1,389,571 outstanding shares of no par common stock (unlimited shares authorized) $ 16,135,191 =============== Net asset value per share $ 11.61 =============== The accompanying notes are an integral part of these financial statements. Statement of Operations For the year ended July 30, 1999 - -------------------------------------------------------- INVESTMENT INCOME Interest $ 757,441 Dividends 14,910 --------------- Total Investment Income $ 772,351 --------------- EXPENSES Investment advisory fees 75,641 Service fees 37,821 Transfer agent fees 23,052 Accounting service fees 31,978 Custodian fees 2,313 Registration and filing fees 1,880 Transfer agent out of pockets 803 Trustees fees 2,173 Reports to shareholders 1,655 Amortization of organizational costs 5,310 Professional fees 3,933 Insurance expense 586 ---------------- Total Expenses $ 187,145 Less expenses waived or absorbed by the Fund's manager (133,089) ---------------- Total Net Expenses $ 54,056 ---------------- NET INVESTMENT INCOME $ 718,295 ---------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES Net realized gain (loss) on: Investment transactions $ 13,809 Futures transactions 89,865 Net change in unrealized appreciation (depreciation) of: Investments (255,507) Futures (1,396) --------------- Net Realized And Unrealized Gain (Loss) On Investments And Futures $ (153,229) --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 565,066 ===============
The accompanying notes are an integral part of these financial statements. Financial Statements July 30, 1999 Statement of Changes in Net Assets For the year ended July 30, 1999 and the year ended July 31, 1998 - -------------------------------------------------------------------
For The For The Year Ended Year Ended July 30,1999 July 31, 1998 -------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income $ 718,295 $ 522,753 Net realized gain (loss) on investment and futures transactions 103,674 (68,145) Net change in unrealized appreciation (depreciation) on investments and futures (256,903) (30,903) ------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Operations $ 565,066 $ 423,705 ------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income ($.56 and $.60 per share, respectively) $ (718,295) $ (522,753) Distributions from net realized gain on investment and Futures transactions ($.00 and $.02 per share, respectively) 0 (19,246) ------------------------------------- Total Dividends and Distributions $ (718,295) $ (541,999) ------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares $ 8,624,247 $ 8,032,955 Proceeds from reinvested dividends 441,883 294,779 Cost of shares redeemed (4,112,946) (3,464,879) ------------------------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ 4,953,184 $ 4,862,855 ------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS $ 4,799,955 $ 4,744,561 NET ASSETS, BEGINNING OF PERIOD 11,335,236 6,590,675 ------------------------------------- NET ASSETS, END OF PERIOD $ 16,135,191 $ 11,335,236 =====================================
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements July 30, 1999 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 four 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 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 July 30, 1999, totaled $11,358, leaving an unamortized balance of $15,192. 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. 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. 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 30, 1999, there were unlimited shares of no par authorized; on July 30, 1999, and July 31, 1998, there were 1,389,571 and 970,625 shares outstanding, respectively. Transactions in capital shares were as follows: Shares ------------- For The For The Year Ended Year Ended July 30, 1999 July 31, 1998 ------------------------------- Shares sold 730,053 684,086 Shares issued on reinvestment of dividends 37,403 25,084 Shares redeemed (348,510) (294,163) -------------------------------- Net increase (decrease) 418,946 415,007 ================================ 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 recognized $4,998 of investment advisory fees after partial waiver for the year ended July 30, 1999. The Fund has a payable to Ranson Capital Corporation of $3,223 at July 30, 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, for certain expenses incurred by Ranson 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 year ended July 30, 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 $4,114 of transfer agent fees and expenses after partial waiver for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $2,026 at July 30, 1999 for transfer agent 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 $26,292 of accounting service fees after partial waiver for the year ended July 30, 1999. The Fund has a payable to ND Resources, Inc. of $2,694 at July 30, 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 $9,665,620 and $4,692,834, respectively, for the year ended July 30, 1999. Note 6. INVESTMENT IN SECURITIES At July 30, 1999, the aggregate cost of securities for federal income tax purposes was $16,031,668, and the net unrealized depreciation of investments based on the cost was $147,715, which is comprised of $91,554 aggregate gross unrealized appreciation and $239,269 aggregate gross unrealized depreciation.
Financial Highlights Selected per share data and ratios for the period indicated ---------------------------------------------------------------------------- For The Period For the For the Since Inception Year Ended Year Ended (Sept. 25, 1996) July 30, 1999 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 $ .56 $ .60 $ .50 Net realized and unrealized gain (loss) on investment and futures transactions (.07) (.16) .37 ------------------------------------------------------------------------- Total Income (Loss) From Investment Operations $ .49 $ .44 $ .87 ------------------------------------------------------------------------- Less Distributions: Dividends from net investment income $ (.56) $ (.60) $ (.50) Distributions from net capital gains .00 (.02) .00 ------------------------------------------------------------------------- Total Distributions $ (.56) $ (.62) $ (.50) ------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.61 $ 11.68 $ 11.86 ========================================================================= Total Return 4.25%(A) 3.81%(A) 7.79%(A)(B) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $16,135 $11,335 $6,591 Ratio of net expenses (after expense assumption) to average net assets 0.36%(C) 0.20%(C) 0.11%(C) Ratio of net investment income to average net assets 4.74% 5.08% 3.70% Portfolio turnover rate 32.09% 53.32% 63.70%
(A) Excludes maximum sales charge of 4.25%. (B) Ratio was annualized. During the periods indicated above, ND Holdings, Inc. or Ranson Capital Corporation assumed/waived expenses of $133,089, $53,180, and $34,609, respectively. If the expenses had not been assumed/waived, the annualized ratio of total expenses to average net assets would have been 1.23%, 0.71% and 2.01%, respectively. The accompanying notes are an integral part of these financial statements. Tax Information For The Year Ended July 30, 1999 (Unaudited) We are required to advise you within 60 days of the Fund's fiscal year-end regarding the federal tax status of distributions received by shareholders during such fiscal year. The distributions made during the fiscal year by the Fund were earned from the following sources:
Dividends and Distributions Per Share ------------------------------------- From Net From Net From Net To Shareholders of Investment Realized Short- Realized Long- Record Payment Date Income Term Gains Term Gains - ------------------ ------------------ ---------- --------------- -------------- August 28, 1998 August 31, 1998 $ .047 - - September 29, 1998 September 30, 1998 .047 - - October 29, 1998 October 30, 1998 .047 - - November 27, 1998 November 30, 1998 .046 - - December 30, 1998 December 31, 1998 .046 - - January 28, 1999 January 29, 1999 .045 - - February 25, 1999 February 26, 1999 .043 - - March 30, 1999 March 31, 1999 .053 - - April 29, 1999 April 30, 1999 .048 - - May 27, 1999 May 28, 1999 .044 - - June 29, 1999 June 30, 1999 .051 - - July 29, 1999 July 30, 1999 .048 - -
Shareholders should consult their tax advisors. INDEPENDENT AUDITOR'S REPORT To the Shareholders and Board of Trustees of The Oklahoma Municipal Fund We have audited the accompanying statement of assets and liabilities of The Oklahoma Municipal Fund, (one of the portfolio's constituting the Ranson Managed Portfolios), including the schedule of investments, as of July 30, 1999, the related statement of operations for the year ended July 30, 1999, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for the years ended July 30, 1999, July 31, 1998, and for the period from inception (September 25, 1996) through July 31, 1997. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 30, 1999, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Oklahoma Municipal Fund of the Ranson Managed Portfolios, as of July 30, 1999, the results of its operations for the year ended July 30, 1999, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the years ended July 30, 1999, July 31, 1998, and for the period from inception (September 25, 1996) through July 31, 1997, in conformity with generally accepted accounting principles. BRADY, MARTZ & ASSOCIATES, P.C. September 10, 1999 The Illinois Municipal Fund Financial Statements July 6, 1999 Statement of Assets and Liabilities July 6, 1999 - ------------------------------------------------
Assets Total Assets $ 0 ----------- Liabilities Total Liabilities $ 0 ----------- Net Assets $ 0 =========== Net assets are represented by: Paid-in capital $ 3,404 Accumulated undistributed net realized gain(loss) on investments (3,404) ----------- Total amount representing net assets applicable to 0.00 outstanding shares of no par common stock (unlimited shares authorized) $ 0 =========== Net asset value per share $ 0 =========== The accompanying notes are an integral part of these financial statements. Statement of Operations For the period from Aug. 1, 1998 through July 2, 1999 INVESTMENT INCOME Total Investment Income $ 0 ------------ EXPENSES Investment advisory fees 4 Distribution (12b-1) fees 3 Transfer agent fees 200 Accounting service fees 22,118 Professional fees $ 4 Trustees fees 1,321 ------------ Total Expenses $ 23,650 Less expenses waived or absorbed by the Fund's manager (23,650) ------------ 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 July 2, 1999 Statement of Changes in Net Assets For the period from Aug. 1 through July 6, 1999 and the period since inception (October 11, 1997) through July 31, 1998
For the period The Period from Since Inception Aug.1 through (October 11, 1997) July 6, 1999 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 (979) (134,143) ------------------- ---------------------- Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions $ (979) $ 4,383 ------------------- ---------------------- TOTAL INCREASE IN NET ASSETS $ (979) $ 979 NET ASSETS, BEGINNING OF PERIOD $ 979 $ 0 ------------------- ---------------------- NET ASSETS, END OF PERIOD $ 0 $ 979 =================== ======================= The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements July 6, 1999 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 four 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. As of July 6, 1999, there were no shares owned in the Fund. 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. 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 July 6, 1999, a net capital loss carry forward totaling $3,404. 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 2, 1999, there were unlimited shares of no par authorized; 0 shares and 88 shares were outstanding as of July 2, 1999, and July 31, 1998, respectively. Transactions in capital shares were as follows: Shares ------------------------------------ For The For the Period Period From Since Inception Aug. 1 through (October 11, 1997) July 6, 1999 Through July 31, 1998 ------------------------------------ Shares sold 0 11,876 Shares issued on reinvestment of dividends 0 19 Shares redeemed (88) (11,807) ------------------------------------ Net increase (88) 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 period ended July 6, 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 period ended July 6, 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/waived all transfer agent and accounting service fees for the period ended July 6, 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 period ended July 6, 1999. Financial Highlights Selected per share data and ratios for the period indicated - --------------------------------------------------------------------------------
For the period from For The Period Since Inception Aug. 1 through July 2, 1999 (October 11, 1997) 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) $ 0 $ 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 periods ended above, ND Holdings, Inc. assumed/waived expenses of $23,650 and $26,588. If the expenses had not been assumed/waived, the annualized ratio of total expenses to average net assets would have been 2,418%, and 33.60%. The accompanying notes are an integral part of these financial statements. -----END PRIVACY-ENHANCED MESSAGE-----