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Kent Funds · N-30D · For 12/31/98

Filed On 3/15/99   ·   Accession Number 950152-99-1902   ·   SEC File 811-04824

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  As Of                Filer                Filing    For/On/As Docs:Size              Issuer               Agent

 3/15/99  Kent Funds                        N-30D      12/31/98    1:554K                                   Bowne BCL/FA

Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Kent Funds Annual Report (N-30D)                     305±  1.06M 


Document Table of Contents

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-------------------------------------------------------------------------------- ANNUAL REPORT DECEMBER 31, 1998 [KENT FUNDS LOGO] KENT FUNDS KENT GROWTH AND INCOME FUND KENT SMALL COMPANY GROWTH FUND KENT INTERNATIONAL GROWTH FUND KENT INDEX EQUITY FUND KENT SHORT TERM BOND FUND KENT INTERMEDIATE BOND FUND KENT INCOME FUND KENT LIMITED TERM TAX-FREE FUND KENT INTERMEDIATE TAX-FREE FUND KENT TAX-FREE INCOME FUND KENT MICHIGAN MUNICIPAL BOND FUND KENT MICHIGAN MUNICIPAL MONEY MARKET FUND KENT GOVERNMENT MONEY MARKET FUND KENT MONEY MARKET FUND
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Message to Shareholders Dear Kent Funds Shareholder: Following is the Annual Report for the Kent Funds for the twelve months ended December 31, 1998. The report contains the following features: - Economic Outlook by Joseph T. Keating, Chief Investment Officer, Lyon Street Asset Management Company - Fund Manager Updates -- investment strategy, performance overview and outlook for the coming months for each of the Kent Funds - Schedules of Portfolio Investments -- summary of the holdings in each fund by industry - Statements of Assets and Liabilities -- summary of the assets and liabilities of each fund - Statements of Operations -- summary of operations and its effect on the assets of each fund - Statements of Changes in Net Assets -- summary of changes in net assets during period - Notes to Financial Statements - Financial Highlights -- per share summary of activity affecting net asset value We appreciate the confidence you have placed in us and continue to focus on providing our shareholders with good value and attractive potential for growth. If you have any questions about your investments after reading this report, please call the Kent Funds Shareholder Servicing Center at 1-800-633-KENT (5368) between the hours of 8:00 a.m. and 9:00 p.m. EST. We remain committed to sound investment principles and to providing you with useful information that can help you make the most of your investments. Sincerely, /s/ JAMES F. DUCA, II James F. Duca, II President  INVESTMENT ADVISER Lyon Street Asset Management Company 111 Lyon Street N.W. Grand Rapids, MI 49503 SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, LYON STREET ASSET MANAGEMENT COMPANY OR ANY OF ITS AFFILIATES. SHARES OF THE FUNDS ARE NOT FEDERALLY INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENT RETURN AND PRINCIPAL VALUE WILL VARY AS A RESULT OF MARKET CONDITIONS AND OTHER FACTORS, SO THAT SHARES OF THE FUNDS, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET FUNDS WILL BE ABLE TO SUSTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. This report is submitted for the general information of shareholders of the Kent Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus for the funds, which contains more information concerning the funds' investment policies as well as fees and expenses and other pertinent information. Please read the prospectus carefully before investing. The distributor for the Kent Funds is BISYS Fund Services. The performance indices used for comparison in this report are unmanaged indices. Unlike actual mutual fund performance, the performance of an index does not reflect any management fees, other expenses or sales charges. A direct investment in the unmanaged index is not possible. 1
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Economic Outlook Real Economic Activity Strong, Sustained Growth With Virtual Price Stability. The U.S. economy crossed the finish line at the end of December to earn the distinction as the longest peacetime expansion on record. The economy was not the picture of the exhausted marathon runner struggling to finish the race as 1998 drew to a close, however. Rather, the economy sprinted across the finish line with roaring investment-led growth combined with virtual price stability. Consider these remarkable achievements: - Real Gross Domestic Product grew at a 5.6 percent annualized rate during the fourth quarter, the economy's second fastest quarterly growth rate since the fourth quarter of 1983. - For the full year, the economy grew 3.9 percent, matching 1997's pace. This marked the third straight year of growth above 3.0 percent, the longest string of yearly gains above 3.0 percent since the 1983-1986 period. - Expenditures on business equipment rose 17.5 percent during the year, the sharpest gain since a 19.2 percent increase in 1984. Outlays for computers rose 71.5 percent. - Consumer spending grew 4.8 percent during 1998, the largest increase in consumer outlays since a 5.2 percent rise in 1984. - Depending upon the measure one uses, the economy's inflation rate reached either a forty or fifty year low last year. - Comparing current conditions with the final quarter of the 1982-1990 business expansion, the unemployment rate is almost a full percentage point lower; inflation is three percentage points lower; interest rates and bond yields are four to five percentage points lower; and Corporate America is three times as productive. The economy's strong performance occurred despite the economic and financial market crises that washed over the global markets over the past eighteen months. The only business expansion greater in length occurred between 1961 and 1969 and coincided with the buildup for the Vietnam War. Should this expansion remain intact through January of next year, it will become the longest expansion on record, peacetime or wartime. We think the economy will break the record and continue growing well into the year 2000. REAL ECONOMIC ACTIVITY [Download Table] 4Q 4Q '97 to 1998* 4Q '98 Gross Domestic Product 5.6% 4.1% Personal Consumption Expenditures 4.4% 5.2% Business Capital Spending 16.7% 12.3% Residential Construction Outlays 10.1% 12.6% *Annualized Strong Consumer Spending and the Wealth Effect. Consumer spending grew at a strong 4.4 percent rate last quarter, with durable goods outlays leading the way with a gain of 21.4 percent. Automobile and light truck sales, which were boosted by the end of the General Motors strike, rose at a robust 41.7 percent rate. The other major component of durable goods -- home furnishings -- was also strong; rising at an 11.0 percent rate. The year-long surge in mortgage refinance activity, the 3.6 percent rate of gain in real disposable income, the 3.3 million jobs created during the year, the sharp drop in gasoline prices, the flood of less expensive imported goods, and the sharp rise in purchases of new and existing homes all combined to push consumer outlays, higher despite the advanced age of the business expansion. Another factor that has helped push along consumer spending in recent quarters has been the much debated wealth effect. This effect arises from consumers feeling wealthier from higher asset prices, such as from four years of robust returns in the domestic equity market. This effect boosted consumer spending as the personal savings rate fell to zero in the fourth quarter from over 3.0 percent of disposable income as recently as 1996. 2
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CONSUMER SPENDING* FOURTH QUARTER 1998 Economic Outlook [Download Table] Durable Goods 21.4% Motor Vehicles 41.7% Furniture 11.0% Nondurable Goods 3.2% Food 4.1% Apparel 3.5% Services 1.7% Electricity & Gas -23.4% *Annualized While a recent change by the Commerce Department in the definition of personal savings that excludes capital gains distributions by mutual funds from income has distorted the consistency of the savings data, it is very clear that a wealth effect from rising asset prices, including both real estate and common stock prices, has boosted consumer outlays. Robust Housing Market. A dramatic surge in affordability spurred by strong income gains and the sharp drop in mortgage rates supported a very high level of activity in the housing market last year. It is also very likely that the sharp gains in the stock market over the past four years has helped support the housing market. Residential construction outlays rose at a 10.1 percent rate last quarter and gained 12.6 percent for all of 1998. Sales of previously owned homes registered a third consecutive annual record, while new housing starts climbed to a twelve-year high in December. Building permits reached a cycle high during December, pointing to a substantial amount of near-term momentum in the housing industry as 1999 unfolds. The Remarkable Story of Business Equipment Purchases. The remarkable story of business expenditures on equipment during this business expansion continues. Outlays on producers' durable equipment were, once again, the fastest growing major sector of the economy during the fourth quarter, increasing at a 21.0 percent annual rate. For the full year, equipment outlays grew 17.5 percent, the sixth consecutive year of double-digit growth. In fact, during each of those six years, equipment spending was the strongest sector in the economy -- and most of those years, was strongest by far. BUSINESS CAPITAL SPENDING [Download Table] 4Q 4Q '97 to 1998* 4Q '98 Producers' Durable Equipment 21.0% 17.5% High Technology Equipment 26.5% 32.1% Computers 59.7% 71.5% Structures 5.5% -0.4% *Annualized Spending on high-technology equipment again led the way last quarter, growing at a 26.5 percent rate. Computer purchases rose at a 59.7 percent pace and grew an astounding 71.5 percent over the four quarters of 1998. The economy-wide, relentless search for productivity gains, more efficient production processes, higher quality and cost savings continues to drive the explosive growth in high-technology equipment. The virtual elimination of pricing power has turned the focus of the business world to productivity gains as a reliable source of profit margin expansion. The further acceleration in the pace of equipment spending over the past two years is largely a result of the huge push in Corporate America and government to become year 2000 compliant. The required spending on hardware and software to address the Y2K problem is not unlike a natural disaster that requires remedial action, except for the fact that the timing of this disaster is predictable. The looming obsolescence of the nation's older computer systems will continue to spur a higher level of technology purchases throughout 1999. A key question for later this year and into next is what happens to the level of high-technology equipment expenditures once the massive push to upgrade operating, accounting and peripheral systems is behind us? Will high-technology equipment outlays hit an air pocket and plunge, bringing the economy down with it? We do not expect this to happen. The business environment will remain intensely competitive, and we expect companies will divert all, or a majority at the very least, of their Y2K expenditures to productivity and quality- enhancing equipment purchases. The concern for a company contemplating saving their Y2K expendi- 3
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Economic Outlook ture budget is that their competitors may not, placing that enterprise in a very precarious position. While the growth rate on high-technology equipment may drop from the 32.1 percent of the past four quarters, it will not likely drop much below ten percent. No Near Term Threats to the Expansion. The economy proved quite resilient to the turmoil that arose from the economic and financial market crises that reverberated around the globe during 1998. Although growth in the manufacturing sector ground to a halt during the second half of the year due to weakness in exports and the flood of imports into the United States, the strong momentum in the other sectors of the economy continued to push the economy forward at a brisk pace. Riding the wave created by a series of rapid cuts in short term interest rates by the Federal Reserve Board and the remarkable rebound in the equity market, the current expansion has entered 1999 with solid forward momentum. We look for the expansion to continue into the year 2000 and for the economy to grow at a rate close to its long-run average of three percent this year. Consumer spending should remain strong in the face of continued job and income growth, a favorable interest rate environment, and no significant deterioration in asset values. Housing activity may be reaching a peak, as there is a demographic limit to how high the demand for housing can reach, despite further gains in the affordability measure. As long as mortgage rates remain low, however, we do not expect a significant downturn in the housing sector, but we are also not looking for further sharp gains. The recent decline in the capacity utilization rate is probably more related to the idling of older, less efficient equipment than a harbinger of a looming drop-off in equipment purchases, particularly high-technology equipment outlays. There are no serious imbalances evident that would seem ready to trigger a downturn in the economy. Some distortions in the pattern of economic growth may appear at year-end as consumers and business take actions to ensure that they limit the potential impact on them from suppliers and service providers that may not be year 2000 compliant. These actions, to the extent they occur, would represent a shuffling of activity from the first quarter of next year to the fourth quarter of this year and would not represent any fundamental difficulties in the underlying strength of the domestic economy. Inflation Take Your Pick, Lowest Inflation Rate in Forty or Fifty Years. The pervasive low inflation/deflationary environment was, once again, very evident in the domestic economy last quarter and for all of 1998. The 0.9 percent rise for 1998 in the Gross Domestic Price Index was the lowest in forty years, while the 0.5 percent gain in the Gross Domestic Purchases Price Index, which captures the full impact of import prices, was the lowest in fifty years. The Consumer Price Index has been below two percent for two years in a row, a feat last achieved in 1964-1965. The Producer Price Index fell for the second year in a row and indicates that there are no inflationary pressures in the production pipeline; intermediate goods prices fell 3.1 percent last year, while crude material prices fell 17.6 percent. INFLATION MEASURES [Download Table] 4Q 4Q '97 to 1998* 4Q '98 Gross Domestic Product Price Index 0.8% 0.9% Gross Domestic Purchases Price Index 0.9% 0.5% Consumer Price Index 2.2% 1.6% Producer Price Index 1.6% -0.1% *Annualized The causes of the current low inflation/deflationary environment have been well documented in this report over the years. The combination of intense worldwide competition that has been fostered by the end of the Cold War, falling commodity prices that have declined further with the weakness in many emerging/developing economies, and the conservative monetary and fiscal policies that are being followed in the major developed economies around the globe have brought about the current environment where inflationary pressures are virtually nil. 4
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Economic Outlook Recent events have not altered our outlook for an inflation rate very close to zero in the United States over the next year or so. If anything, the continued weakness in Japan, the softening in Europe and the recent turbulence in Brazil suggest that the prospects for global economic activity this year have dimmed. These events, combined with a game plan by most foreign economies that are experiencing problems to export their way out of their troubles via the U.S. economy, should suppress any material upward movement in prices for the foreseeable future. JOSEPH T. KEATING President and Chief Investment Officer The information contained herein is based on Commerce Department data released January 29, 1999. 5
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Portfolio Reviews KENT GROWTH AND INCOME FUND by Allan J. Meyers Portfolio Manager The stock market was unusually volatile during the 12-month period ended December 31, 1998. For the first six months of the year, strong economic growth, low inflation and falling interest rates combined to provide an ideal investment environment. The Standard & Poor's 500 Index reached an all-time high in mid-July. Then, events such as the Russian short-term loan default and the near-bankruptcy of Long Term Capital Management, a hedge fund, along with lingering concerns about the Asian financial crisis, shook investor confidence. Fears that a global economic slowdown would sharply reduce U.S. corporate profits led to a sharp stock market decline through most of the third quarter. But the Federal Reserve cut interest rates three times in an effort to halt the economic backslide, and investors began to buy shares of companies at depressed prices. As a result, stock prices took a sharp upturn in the fourth quarter. For the 12 months ended December 31, 1998, the Kent Growth and Income Fund's Institutional and Investment shares had total returns of 28.07% and 27.68%, respectively. That compared with the Lipper Growth and Income Funds Average(1) return of 15.61% and 28.74% for the S&P 500 Index. Favoring Large Firms Shares of large growth companies significantly outperformed shares of small companies during the period. Fears of a global recession prompted investors to seek the safety of blue-chip stocks, and liquidity concerns kept most investors away from small-company shares. The Fund was slightly overweight in the health-care sector. Large, brand-name companies such as Warner Lambert Co. (0.73%), Pfizer Inc. (1.76%), Schering-Plough Corp. (0.91%) and Bristol-Meyers Squibb (1.60%) comprised the bulk of the Fund's KENT GROWTH AND INCOME FUND* Distribution of Net Assets as of December 31, 1998 Finance 15.6% Computer & Technology 19.4% Consumer Discretionary 3.5% Consumer Staples 11.0% Utilities 10.5% Conglomerates 4.9% Retail 7.0% Oil/Energy 6.8% Other 5.7% Basic Materials 2.9% Medical 12.7% positions in the sector. The Fund also added to its existing investments in Microsoft Corp. (3.66%), Lucent Technologies Corp. (1.81%) and IBM Corp. (2.02%). The Fund is currently building positions in EMC Corp. (0.32%), Northern Telecom (0.33%), Waste Management (0.26%) and HEALTHSOUTH (0.13%).* Growth and Volatility to Come In our view, low inflation and low interest rates should help bolster the U.S. economy during the coming year. But we expect more volatility in the financial markets. For example, economic instability in Asia, Russia or Latin America could dampen corporate earnings. That said, we will attempt to seek long-term values in the market, with the expectation that such an approach could be rewarded in the long run. (1)The Lipper Growth and Income Funds Average consists of managed funds that combine a growth-of-earnings orientation and an income requirement for level and/or rising dividends. *The Fund's portfolio composition is subject to change. 6
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SHADOW BAR Portfolio Reviews KENT GROWTH AND INCOME FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 11/2/92) (inception 12/1/92) -------------------------------------------------------------------------------------------- One Year 28.07% 27.68% Three Years 23.84% 23.52% Five Years 20.83% 20.58% Life of Fund 19.46% 18.90% GROWTH OF $10,000 INVESTMENT COMPARISON WITH STANDARD & POOR'S 500 STOCK INDEX -------------------------------------------------------------------------------- [Download Table] THE KENT GROWTH AND INCOME FUND STANDARD & POOR'S COMPOSITE OF INSTITUTIONAL CLASS SHARES 500 STOCKS ------------------------------- ------------------------------ 11/2/92 10000 10000 12/31/92 10398 10472 12/31/93 11610 11518 12/31/94 11669 11669 12/31/95 15743 16036 12/31/96 18809 19737 12/31/97 23351 26321 12/31/98 29907 33886 [Download Table] THE KENT GROWTH AND INCOME FUND STANDARD & POOR'S COMPOSITE INDEX INVESTMENT CLASS SHARES OF 500 STOCKS ------------------------------- --------------------------------- '12/1/92' 10000 10000 '12/31/92' 10059 10131 '12/31/93' 11247 11143 '12/31/94' 11302 11288 '12/31/95' 15213 15514 '12/31/96' 18124 19093 12/31/97 22454 25464 12/31/98 28666 32782 The Fund's performance is being measured against the Standard & Poor's 500 Stock Index, which is an unmanaged index that generally represents the performance of the U.S. stock market as a whole. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 7
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Portfolio Reviews KENT SMALL COMPANY GROWTH FUND+ by Robert Cummisford Portfolio Manager The year that ended December 31, 1998, was a difficult period for small-company stocks, whose performance once again trailed large-company stocks by a wide margin. Investors seeking safety and liquidity amid market volatility turned to larger firms. The Kent Small Company Growth Fund's Institutional and Investment shares' total returns were -6.15% and -6.40%, respectively, during the period. During this same period, the Lipper Small-Cap Funds Average(1) posted a return of -0.33%, and the Russell 2000 Index returned -2.55%. We found promising opportunities in underperforming sectors, such as technology and finance. Our approach has been to look for companies whose shares we believe are undervalued, then lighten up on those stocks when their prices rise, pushing them out of the small-cap universe. In this way, the Fund is able to maintain its small-cap focus and reinvest the sale proceeds into additional small-cap companies. Although small-company stocks remained out of favor during the period, some individual issues performed well. For example, shares of PSInet (0.40% of the portfolio), an Internet service provider, climbed 360%, and shares of Intervoice (0.26%), a company that makes wireless headsets for telephones, rose 82%.* The average capitalization of companies held in the Fund rose approximately $684 million over the period, as we started purchasing shares of companies with market capitalizations in the $800 million to $1 billion ranges. Purchasing shares of firms with these larger market caps gave the Fund more liquidity without losing its small-company focus. Previously, the stocks in the Fund had an average market capitalization of $520 million, which is significantly smaller than its benchmark index, the Russell 2000. KENT SMALL COMPANY GROWTH FUND* Distribution of Net Assets as of December 31, 1998 Consumer Staples 4.6% Consumer Discretionary 5.8% Finance 20.0% Oil/Energy 3.1% Industrial Products 7.0% Utilities 5.5% Other 11.2% Retail 7.1% Medical 8.3% Basic Materials 5.5% Computer & Technology 20.6% Construction 1.1% The Outlook The Kent Small Company Growth Fund continues to be a well-diversified fund, with 660 securities in the portfolio as of December 31, 1998. We believe the market is currently experiencing a sentimental shift in favor of small-cap stocks, a view that draws support from the Fund's strong 14.14% (Investment Shares) and 14.18% (Institutional Shares) gain during the fourth quarter of 1998. Meanwhile, we continue to find excellent opportunities in several high-growth sectors of the small-cap segment of the market, and we are taking advantage of them as they arise. (+)Small-capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure and, by definition, are not as well established as "blue-chip" companies. Historically, smaller companies' stock has experienced a greater degree of market volatility than large company stocks on average. (1)Lipper Small-Cap Funds Average is comprised of funds that by prospectus or portfolio practice invest primarily in companies with market capitalizations of less than $1 billion at time of purchase. (*)The Fund's portfolio composition is subject to change. 8
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SHADOW BAR Portfolio Reviews KENT SMALL COMPANY GROWTH FUND+ AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 11/2/92) (inception 12/4/92) -------------------------------------------------------------------------------------------- One Year -6.15% -6.40% Three Years 12.81% 12.51% Five Years 12.17% 11.94% Life of Fund 14.15% 12.94% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE RUSSELL 2000 INDEX -------------------------------------------------------------------------------- [Download Table] KENT SMALL COMPANY GROWTH FUND INSTITUTIONAL CLASS SHARES RUSSELL 2000 INDEX ------------------------------ ------------------ 11/2/92 10000 10000 12/31/92 10885 11140 12/31/93 12729 13246 12/31/94 12722 13005 12/31/95 15745 16704 12/31/96 18825 19466 12/31/97 24085 23819 12/31/98 22600 23212 [Download Table] KENT SMALL COMPANY GROWTH FUND INVESTMENT CLASS SHARES RUSSELL 2000 INDEX ------------------------------ ------------------ 12/4/92 10000 10000 12/31/92 10197 10348 12/31/93 11915 12304 12/31/94 11906 12080 12/31/95 14702 15516 12/31/96 17518 18081 12/31/97 22372 22124 12/31/98 20937 21560 The Fund's performance is being measured against the Russell 2000 Index, which is an unmanaged index that represents the performance of domestically traded common stocks of small to mid-sized companies. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 9
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Portfolio Reviews KENT INTERNATIONAL GROWTH FUND+ by David Eder Portfolio Manager During the 12 months ended December 31, 1998, the Kent International Growth Fund's Institutional and Investment shares had a total return of 17.92% and 17.60%, respectively. Those returns compared to a 20.33% return for the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index, and a return of 13.02% for the Lipper International Funds Average(1) for the period. The year proved to be an exceptional one for European stocks. The eleven countries participating in the European Monetary Union (EMU) generated the highest returns. The advent of a single currency, the euro, forced most EMU participants to lower their interest rates to meet criteria for membership in the union. Low interest rates in conjunction with low inflation created an extremely positive investment environment. The MSCI Europe Index gained 28.5% for the year, with markets in Finland (+122%), Belgium (+68%) and Italy (+53%) boasting especially high returns. We also added two countries to the Fund during the period -- Ireland (+33%) and Portugal (+28%) both of which are participating in the EMU. Lingering economic troubles in Asia continued to pose problems for investors. The MSCI Pacific Rim Index gained only 2.44% for the year, as investors avoided markets in countries such as Malaysia (-29%) and New Zealand (-23%). Despite Asia's economic troubles, the Fund has recently moved to a slightly overweighted position in the Pacific Rim countries, where valuations are very attractive compared to Europe and an eventual economic recovery is likely. KENT INTERNATIONAL GROWTH FUND* Distribution of Net Assets as of December 31, 1998 Japan 26.6% Denmark 0.8% Australia 3.3% Spain 3.4% Hong Kong 2.5% Germany 9.8% Other 3.4% Singapore 1% United Kingdom 19.5% Netherlands 5.0% Italy 4.6% Switzerland 7.1% France 8.1% Finland 0.9% Belgium 1.7% Sweden 2.3% The Outlook The Kent International Growth Fund remains a well-diversified fund, with investments in 851 securities as of December 31, 1998. We aim to reduce risk by maintaining a well-diversified portfolio in each country in which the Fund invests. Looking ahead, we believe the global economy will continue to be characterized by low inflation and low interest rates. We believe Europe's stock markets can advance further despite lofty valuations, thanks in part to the advent of a single currency. We also remain confident that the Pacific Rim is slated for a recovery. However, the timing of such a rebound depends upon whether governments in countries such as Japan hold true to their promises to stimulate the economy through tax cuts and restructured banking systems. (+)International investing involves increased risk and volatility. (1)The Lipper International Funds Average is comprised of managed funds that invest their assets in securities whose primary trading markets are outside of the United States. *The Fund's portfolio composition is subject to change. 10
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SHADOW BAR Portfolio Reviews KENT INTERNATIONAL GROWTH FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 12/4/92) (inception 12/4/92) -------------------------------------------------------------------------------------------- One Year 17.92% 17.60% Three Years 8.58% 8.28% Five Years 8.87% 8.62% Life of Fund 12.07% 11.77% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALIA AND FAR EAST INDEX, THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE INDEX AND THE MORGAN STANLEY CAPITAL INTERNATIONAL PACIFIC RIM INDEX -------------------------------------------------------------------------------- [Enlarge/Download Table] KENT INTERNATIONAL MORGAN STANLEY GROWTH FUND, CAPITAL INTERNATIONAL MORGAN STANLEY MORGAN STANLEY INSTITUTIONAL CLASS EUROPE, AUSTRALIA AND CAPITAL INTERNATIONAL CAPITAL INTERNATIONAL SHARES FAR EAST INDEX EUROPE INDEX PACIFIC INDEX ------------------- --------------------- --------------------- --------------------- '12/4/92' 10000 10000 10000 10000 '12/31/92' 10020 10054 10233 9887 '12/31/93' 13045 13367 13282 13444 '12/31/94' 13794 14444 13636 15195 '12/31/95' 15591 16113 16653 15650 '12/31/96' 16507 17138 20246 14335 '12/31/97' 16926 17443 25063 10681 '12/31/98' 19976 20989 32213 10942 [Enlarge/Download Table] KENT INTERNATIONAL MORGAN STANLEY GROWTH FUND, CAPITAL INTERNATIONAL MORGAN STANLEY MORGAN STANLEY INVESTMENT CLASS EUROPE, AUSTRALIA AND CAPITAL INTERNATIONAL CAPITAL INTERNATIONAL SHARES FAR EAST INDEX EUROPE INDEX PACIFIC INDEX ------------------ --------------------- --------------------- --------------------- '12/4/92' 10000 10000 10000 10000 '12/31/92' 10010 10054 10233 9887 '12/31/93' 13006 13367 13282 13444 '12/31/94' 13723 14444 13636 15195 '12/31/95' 15487 16113 16653 15650 '12/31/96' 16350 17138 20245 14335 '12/31/97' 16719 17443 25063 10681 '12/31/98' 19661 20989 32213 10942 The Fund's performance is being measured against the Morgan Stanley Capital International Europe, Australia and Far East Index (EAFE), which is an unmanaged index that is comprised of a sample of companies representative of the market structure of 20 European and Pacific Basin countries. The Morgan Stanley Capital International Europe Index and the Morgan Stanley Capital International Pacific Rim Index are unmanaged indices of stocks in their respective regions. Investors are reminded that, while investing globally can be rewarding, investments in foreign securities involve certain risks and considerations in addition to those inherent with investing in U.S. companies, such as currency fluctuations and political instability. The indices are unmanaged and do not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. The Morgan Stanley Capital International (MSCI) indices measure performance for a diverse range of developed country global stock markets including the United States, Canada, Europe, Australia, New Zealand and the Far East. The foundation of the various MSCI indices is the database of approximately 1,500 companies listed on the stock exchanges of the 24 countries for which there are MSCI national indices. The indices are capitalization weighted. Furthermore, companies included in the indices replicate the industry composition of each local market and, in addition, represent samplings of large-, medium- and small-capitalization companies from each local market, taking into account the stocks' liquidity. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 11
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Portfolio Reviews KENT INDEX EQUITY FUND by David Eder Portfolio Manager The year ended December 31, 1998, was characterized by strong economic growth, low interest rates, and low inflation in the United States. Those factors supported significant gains in large-company stocks, despite severe volatility. The Standard & Poor's 500 Index posted a gain of greater than 20% for the fourth consecutive year. Investors flocked to shares of the largest companies in order to find safety and liquidity in the face of overseas economic troubles that seemed to threaten the U.S. expansion. Thus, the 50 largest companies in the S&P 500 accounted for over two thirds of the returns of the index. Large-company stocks in technology and the financial services market were especially strong performers. For example, technology giants such as Dell (+248%), Lucent Technologies (+176%) and Microsoft (+115%) and financial companies such as Charles Schwab (+101%) and Providian Financial (+150%) were among the top performers.* A Rebound Late in the Year After the Federal Reserve reduced interest rates in the fall -- the federal funds rate was lowered by one quarter percentage point three times -- investors regained confidence in the liquidity of many global markets and economies. The U.S. stock market rebounded sharply, and both large- and small-company stocks performed well. For the year ended December 31, 1998, Institutional and Investment Shares of the Kent Index Equity Fund posted total returns of 28.26% and 27.93%, respectively. During the same period, the Lipper Growth and Income Funds Average(1) returned 15.61%. The Standard & Poor's 500 Index posted a return of 28.74%. KENT INDEX EQUITY FUND* Distribution of Net Assets as of December 31, 1998 Medical 12.2% Consumer Discretionary 4.2% Consumer Staples 10.4% Oil/Energy 6.2% Other 6.4% Utilities 10.5% Computer & Technology 19.4% Basic Materials 2.9% Finance 15.6% Retail 7.6% Conglomerates 4.6% Changes in the Index The S&P 500 Index -- and therefore the Kent Index Equity Fund -- underwent significant changes during the year. No fewer than 48 changes in the index took place, with 13 occurring during the third quarter alone. The pace of change in the composition of the index reflected in part a large number of corporate mergers. The combination of continued strong performance of the largest companies and lower earnings expectations has resulted in historically high valuations among many stocks in the S&P 500. Thus, we believe it may be difficult for the index to duplicate its recent performance during the coming year. That said, low inflation, low interest rates and modest economic growth continue to form a sound basis for continued gains among shares of large companies that make up the Fund and its benchmark index. (1)The Lipper Growth and Income Funds Average consists of managed funds that combine a growth-of-earnings orientation and an income requirement for level and/or rising dividends. *The Fund's portfolio composition is subject to change.  12
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SHADOW BAR Portfolio Reviews KENT INDEX EQUITY FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 11/2/92) (inception 11/25/92) -------------------------------------------------------------------------------------------- One Year 28.26% 27.93% Three Years 27.59% 27.29% Five Years 23.33% 23.05% Life of Fund 21.08% 20.60% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE STANDARD & POOR'S 500 STOCK INDEX -------------------------------------------------------------------------------- [Download Table] THE KENT INDEX EQUITY FUND STANDARD & POOR'S COMPOSITE INDEX INSTITUTIONAL CLASS SHARES OF 500 STOCKS -------------------------- --------------------------------- 11/2/92 10000 10000 12/31/92 10440 10472 12/31/93 11390 11518 12/31/94 11488 11669 12/31/95 15648 16036 12/31/96 19119 19737 12/31/97 25342 26321 12/31/98 32503 33886 [Download Table] THE KENT INDEX EQUITY FUND STAND & POOR'S COMPOSITE INDEX OF INVESTMENT CLASS SHARES 500 STOCKS -------------------------- --------------------------------- 11/25/92 10000 10000 12/31/92 10185 10131 12/31/93 11111 11143 12/31/94 11194 11288 12/31/95 15199 15514 12/31/96 18531 19093 12/31/97 24505 25464 12/31/98 31347 32782 The Fund's performance is being measured against the Standard & Poor's 500 Stock Index, which is an unmanaged index that generally represents the performance of the U.S. stock market as a whole. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower.  13
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Portfolio Reviews KENT SHORT TERM BOND FUND by Mitchell Stapley Portfolio Manager Yields on short-term notes declined dramatically during the 12-month period ending December 31, 1998, as global economic uncertainty caused investors to buy very liquid, high-quality issues. The yield on two-year Treasury securities fell from 5.55% at the beginning of the period to 3.82% in October, as investors moved money from riskier investments into the safety of short-term Treasury notes. Subsequently, however, conditions in worldwide financial markets stabilized somewhat, and yields on two-year Treasury securities rose to 4.53%. The Fund's Institutional and Investment shares posted total returns of 6.14% and 6.00%, respectively. That compares to a 6.55% return for the Fund's benchmark, the Lehman Brothers 1-3-Year Government Bond Index. Longer Maturities During the period, we extended the Fund's average maturity from 1.9 years to 2.1 years to lock in the higher yields that longer-term issues carried. We maintained the Fund's average credit rating at AA2. That high credit quality helped insulate the Fund from some of the market's volatility. The Fund's assets were invested primarily in high-quality corporate notes and Treasury securities. Investors' concerns that the global economic crisis would hurt the U.S. economy caused them to shift money from corporate securities to Treasury securities. This widening of corporate yield spreads provided an outstanding opportunity to lock in additional yield for the Fund. The Fund ended the period with 64.3% of its assets in corporate securities.* KENT SHORT TERM BOND FUND* Distribution of Net Assets as of December 31, 1998 U.S. Government & Agency Issues 34.0% Corporate Notes & Bonds 61.0% Cash Equivalents Net Other Assets & Liabilities 5.0% Looking Ahead The domestic economy continues to experience growth in the 3% to 4% range, along with low and declining inflation, low unemployment and high consumer confidence. While we expect the economy to slow somewhat in the coming year, those economic underpinnings should continue to provide a beneficial environment for fixed-income securities and corporate securities, in particular. We will seek to maintain a relatively long average maturity to help provide extra yield for shareholders, and we will continue to look for opportunities to lock in higher yields by investing in select corporate bonds. KENT SHORT TERM BOND FUND+ SEC 30-DAY YIELDS AS OF DECEMBER 31, 1998 ------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS -------------------------------------------------------------------------------------------- 4.59% 4.44% SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. (+)Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yields would have been 4.58% for Institutional Shares and 4.34% for Investment Shares. *The Fund's portfolio composition is subject to change. 14
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SHADOW BAR Portfolio Reviews KENT SHORT TERM BOND FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 11/2/92) (inception 12/4/92) -------------------------------------------------------------------------------------------- One Year 6.14% 6.00% Three Years 5.58% 5.44% Five Years 5.62% 5.48% Life of Fund 5.20% 5.06% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS 1-3-YEAR GOVERNMENT BOND INDEX, CONSUMER PRICE INDEX AND 91-DAY TREASURY BILL -------------------------------------------------------------------------------- [Enlarge/Download Table] THE KENT SHORT TERM CONSUMER PRICE INDEX 91-DAY TREASURY BILL* THE LEHMAN BROTHERS BOND FUND|INSTITUTIONAL -------------------- --------------------- 1-3 YEAR GOVERNMENT CLASS SHARES BOND INDEX -------------------- ------------------- 11/2/92 10000 10000 10000 10000 12/31/92 10087 9992 10053 10078 12/31/93 10395 10267 10356 10621 12/31/94 10502 10542 10798 10675 12/31/95 11608 10809 11393 11832 12/31/96 12098 11213 11965 12433 12/31/97 12875 11404 12593 13625 12/31/98 13663 11580 13160 14517 [Enlarge/Download Table] THE KENT SHORT TERM CONSUMER PRICE INDEX 91-DAY TREASURY BILL* THE LEHMAN BROTHERS BOND FUND|INVESTMENT -------------------- --------------------- 1-3 YEAR GOVERNMENT CLASS SHARES BOND INDEX -------------------- ------------------- 12/4/92 10000 10000 10000 10000 12/31/92 10030 9992 10027 10093 12/31/93 10335 10267 10329 10637 12/31/94 10439 10542 10770 10691 12/31/95 11514 10809 11364 11850 12/31/96 11982 11197 11935 12452 12/31/97 12732 11387 12562 13646 12/31/98 13495 11563 13127 14540 The Fund's performance is being measured against the Lehman Brothers 1-3-Year Government Bond Index, which is an unmanaged index comprised of U.S. Treasury issues and publicly issued debt of U.S. government agencies with maturities of one to three years. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. The 91-day Treasury bill return tracks the investment returns paid on U.S. Treasury bills maturing in 91 days. The Consumer Price Index is an unmanaged index measuring price increases in a standardized "market basket" of consumer products. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gains distributions. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower.  15
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Portfolio Reviews KENT INTERMEDIATE BOND FUND by Mitchell Stapley Portfolio Manager Uncertainty in world financial markets caused investors to seek the safety and liquidity of Treasury bonds during the 12 months ended December 31, 1998. Corporate bonds underperformed Treasury securities, as investors worried that a global economic downturn would make it more difficult for companies to pay their debts. The period was also characterized by a great deal of volatility in the bond market. The yield on ten-year Treasury securities began the period at 5.75%, fell to as low as 4.16% in October, and then rebounded to 4.65% at the close of the year. The Kent Intermediate Bond Fund performed well during the period, with returns similar to those of its benchmark. The Fund's Institutional and Investment shares had total returns of 7.65% and 7.26%, respectively, compared to an 8.44% return for the Lehman Brothers Intermediate Government/Corporate Bond Index. Managing the Portfolio The average maturity of the Fund was slightly longer than that of its benchmark at the start of the period, and we extended the average maturity over the year, from 5.2 years to 5.8 years. That strategy benefited the Fund as yields fell during most of the period. The Fund began the period with an allocation between Treasury and corporate securities close to that of its benchmark. The relatively poor performance of corporate securities compared to Treasury securities during most of the period led to some outstanding opportunities in the corporate sector. We took advantage of those opportunities by investing in bonds with credit ratings of A and above KENT INTERMEDIATE BOND FUND* Distribution of Net Assets as of December 31, 1998 Cash Equivalents Net Other Assets & Liabilities 5.5% Corporate Notes & Bonds 30.1% U.S. Government & Agency Issues 64.4% issued by high-quality financial and industrial companies. The Fund's credit rating remained high throughout the period, at AA1. Going Forward Given the one percentage point decline in the yield of the ten-year Treasury note during the past year, we do not expect yields to move significantly lower in the coming months. However, low inflation and low interest rates should prevent yields from rising significantly. Therefore, we expect fixed-income securities to trade in a narrow range going forward, and we do anticipate some narrowing of the yield spread on corporate securities. We plan to maintain the Fund's average maturity longer than that of its benchmark to help lock in higher yield for shareholders. KENT INTERMEDIATE BOND FUND+ SEC 30-DAY YIELDS AS OF DECEMBER 31, 1998 ------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS -------------------------------------------------------------------------------------------- 4.57% 4.34% SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. (+)Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yield would have been 4.56% for Institutional Shares and 4.33% for Investment Shares. *The Fund's portfolio composition is subject to change.  16
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SHADOW BAR Portfolio Reviews KENT INTERMEDIATE BOND FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 11/2/92) (inception 11/25/92) -------------------------------------------------------------------------------------------- One Year 7.65% 7.26% Three Years 6.12% 5.85% Five Years 6.09% 5.89% Life of Fund 6.45% 6.22% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX -------------------------------------------------------------------------------- [Download Table] THE KENT INTERMEDIATE BOND FUND THE LEHMAN BROTHERS INTERMEDIATE INSTITUTIONAL CLASS SHARES GOVERNMENT/CORPORATE BOND INDEX ------------------------------- -------------------------------- 11/2/92 10000 10000 12/31/92 10125 10095 12/31/93 10934 10976 12/31/94 10585 10762 12/31/95 12298 12410 12/31/96 12667 12913 12/31/97 13655 13929 12/31/98 14699 15105 [Download Table] THE KENT INTERMEDIATE BOND FUND THE LEHMAN BROTHERS INTERMEDIATE INVESTMENT CLASS SHARES GOVERNMENT/CORPORATE BOND INDEX ------------------------------- -------------------------------- 11/25/92 10000 10000 12/31/92 10050 10134 12/31/93 10873 11018 12/31/94 10545 10803 12/31/95 12207 12457 12/31/96 12544 12962 12/31/97 13500 13982 12/31/98 14448 15162 The Fund's performance is being measured against the Lehman Brothers Intermediate Government/Corporate Bond Index, which is an unmanaged index comprised of U.S. Treasury issues, publicly issued debt of U.S. Government agencies, corporate debt guaranteed by the U.S. Government and all publicly issued, fixed-rate, nonconvertible, investment-grade, dollar-denominated, SEC-registered corporate debt. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower.  17
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Portfolio Reviews KENT INCOME FUND by Mitchell Stapley Portfolio Manager Yields on long-term bonds declined significantly during the 12-month period ended December 31, 1998. The year was characterized by considerable volatility in the bond market. During the first 10 months of the period, investors were concerned about the impact that overseas economic financial troubles would have on the U.S. economy, and they turned to the liquidity and safety of Treasury bonds. This pushed yields on Treasury instruments lower by over a full percentage point. As a result, the gap between yields on corporate bonds and Treasury securities widened to levels not seen since the last recession. During the final months of 1998, however, conditions in overseas markets seemed to stabilize, and investors began to shift money back into corporate issues. The yield on the 30-year Treasury bond began the period at 5.85%, then fell to as low as 4.75% in October and finished the period at 5.10%. The Fund's relatively long average maturity helped its returns, with the rather significant drop in yields that occurred over the course of the year. The Fund's Institutional and Investment Shares posted total returns of 9.29% and 9.04%, respectively, for the 12 months ended December 31, 1998. That compared to an 11.77% return for the Lehman Brothers Long Government/Corporate Bond Index. Opportunities in Corporate Bonds Throughout the period, we aggressively bought high-quality corporate issues as their yield spread rose relative to Treasury yields. That strategy helped the Fund's performance during the last two months of the period. We kept the credit rating of KENT INCOME FUND* Distribution of Net Assets as of December 31, 1998 U.S. Government & Agency Obligations 40.7% Corporate Notes & Bonds 53.4% Cash Equivalents Net Other Assets & Liabilities 4.6% Municipal Bonds 0.9% Foreign Government Agencies 0.4% the Fund's holdings high, at AA1, and that high-quality orientation helped the Fund weather some of the volatility in the market over the August-to-October period.* The Outlook Going forward, we expect long-term bonds to trade in a relatively narrow range, in an environment of moderate economic growth, low inflation, and low interest rates. We will seek to maintain the Fund's relatively long average maturity to help lock in extra yield, particularly on corporate securities. Meanwhile, we believe that some of the securities we purchased at attractive prices during the market's recent volatility could provide solid returns for the Fund's shareholders. KENT INCOME FUND+ SEC 30-DAY YIELDS AS OF DECEMBER 31, 1998 ------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS -------------------------------------------------------------------------------------------- 4.97% 4.71% SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. (+)Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yields would have been 4.96% for Institutional Shares and 4.71% for Investment Shares. *The Fund's portfolio composition is subject to change. 18
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SHADOW BAR Portfolio Reviews KENT INCOME FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 3/20/95) (inception 3/22/95) -------------------------------------------------------------------------------------------- One Year 9.29% 9.04% Three Years 6.92% 6.72% Life of Fund 9.41% 9.14% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX AND THE LEHMAN BROTHERS LONG GOVERNMENT/CORPORATE BOND INDEX -------------------------------------------------------------------------------- [Download Table] THE LEHMAN BROTHERS THE LEHMAN BROTHERS LONG THE KENT INCOME FUND GOVERNMENT/CORPORATE GOVERNMENT/CORPORATE INSTITUTIONAL CLASS SHARES BOND INDEX BOND INDEX -------------------------- -------------------- ------------------------ 3/20/95 10000 10000 10000 12/31/95 11506 11358 12190 12/31/96 11643 11688 12207 12/31/97 12828 12871 13979 12/31/98 14063 14043 15624 [Download Table] THE LEHMAN BROTHERS THE LEHMAN BROTHERS LONG THE KENT INCOME FUND GOVERNMENT/CORPORATE GOVERNMENT/CORPORATE INVESTMENT CLASS SHARES BOND INDEX BOND INDEX ----------------------- -------------------- ------------------------ 3/22/95 10000 10000 10000 12/31/95 11464 11358 12190 12/31/96 11597 11688 12207 12/31/97 12779 12828 13979 12/31/98 13933 14043 15624 The Fund's performance is being measured against the Lehman Brothers Government/Corporate Bond Index and the Lehman Brothers Long Government/Corporate Bond Index. The indices are comprised of U.S. Treasury issues, debt of U.S. government agencies, corporate debt guaranteed by the U.S. government and all publicly issued, fixed-rate, nonconvertible investment-grade, dollar-denominated, SEC-registered corporate debt. The indices are unmanaged and do not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 19
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Portfolio Reviews KENT LIMITED TERM TAX-FREE FUND+ by Michael Martin Portfolio Manager The massive amount of new supply that came to the municipal market during 1998 and the 75-basis-point cut in the federal funds rate each had a significant, yet somewhat offsetting, impact on short-term municipal securities during the 12 months ended December 31, 1998. The yield on a three-year AAA-rated general obligation municipal bond decreased by 40 basis points during the period, ending the year at 3.55%; down from 3.95% on December 31, 1997. That decline pales, however, when compared to the 110-basis-point decline in comparable-maturity Treasury securities. The ratio of the yield of a five-year municipal security to the yield of a five-year Treasury security ended the year at 82.6%, up from 72% at the beginning of the year. The Fund's Institutional and Investment shares posted total returns of 4.08% and 3.91%, respectively, for the 12 months ended December 31, 1998. That compares to a total return of 4.77% for the Lehman Brothers One-Year General Obligation Municipal Bond Index. Managing the Fund During the period, we maintained the Fund's average maturity at the upper end of the permissible range in order to provide an attractive level of yield for shareholders. The Fund's average maturity finished the year at 2.89 years, essentially unchanged from 2.9 years at the start of the period. Throughout the period, we looked for opportunities to increase the Fund's yield while maintaining the portfolio's high average credit rating of AA. We did not feel that the extra yield available from lower-rated securities was enough to warrant taking on the extra credit risk. KENT LIMITED TERM TAX-FREE FUND* Distribution of Net Assets as of December 31, 1998 Pacific 10.0% East 14.5% Other 7.4% North Central 45.2% South 13.9% Mountain 9.0% Looking Ahead We believe it is likely that there will continue to be a very heavy supply of new municipal issues coming to market in the months ahead, which could continue to dampen the performance of municipal securities somewhat. Nevertheless, we believe that the outlook for the municipal market is quite favorable, as the inflation rate is projected to remain low. As a result, we will seek to keep the Fund's average maturity slightly longer than that of its benchmark, to lock in yield for the Fund's shareholders. We will also attempt to take advantage of any market declines to help increase the average maturity further. THE KENT LIMITED TERM TAX-FREE FUND TAX EQUIVALENT YIELDS(++) AS OF DECEMBER 31, 1998 ----------------------------------------------------- [Download Table] TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS ------------------------------------------------------------------------------ 28.0% 4.60% 4.39% 31.0% 4.80% 4.58% 36.0% 5.17% 4.94% 39.6% 5.48% 5.23% ++Based on an SEC 30-day yield on 12/31/98 of 3.31% for the Institutional Class and 3.16% for the Investment Class, SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yields would have been 3.31% for Institutional Shares and 3.04% for Investment Shares. (+)The Fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. *The Fund's portfolio composition is subject to change. 20
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SHADOW BAR Portfolio Reviews KENT LIMITED TERM TAX-FREE FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 9/1/94) (inception 11/1/94) -------------------------------------------------------------------------------------------- One Year 4.08% 3.91% Three Years 4.13% 4.01% Life of Fund 4.60% 4.89% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS ONE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX AND THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX -------------------------------------------------------------------------------- [Enlarge/Download Table] THE KENT LIMITED TERM TAX- THE LEHMAN BROTHERS ONE- THE LEHMAN BROTHERS THREE- FREE FUND INSTITUTIONAL CLASS YEAR GENERAL OBLIGATION YEAR GENERAL OBLIGATION SHARES MUNICIPAL BOND INDEX MUNICIPAL BOND INDEX ----------------------------- ------------------------ -------------------------- 9/1/94 10000 10000 10000 12/31/94 9923 10108 9943 12/31/95 10760 10767 10821 12/31/96 11140 11245 11319 12/31/97 11672 11762 11931 21/31/98 12148 12323 12548 [Enlarge/Download Table] THE KENT LIMITED TERM TAX- THE LEHMAN BROTHERS ONE- THE LEHMAN BROTHERS THREE- FREE FUND INVESTMENT CLASS YEAR GENERAL OBLIGATION YEAR GENERAL OBLIGATION SHARES MUNICIPAL BOND INDEX MUNICIPAL BOND INDEX -------------------------- ------------------------ -------------------------- 11/1/94 10000 10005 10000 12/31/94 10003 10198 10132 12/31/95 10843 10863 11027 12/31/96 11224 11343 11534 12/31/97 11742 11867 12158 12/31/98 12201 12433 12787 The Fund's performance is being measured against the Lehman Brothers One-Year General Obligation Municipal Bond Index and the Lehman Brothers Three-Year General Obligation Municipal Bond Index, which are unmanaged indices that are comprised of debt instruments issued by municipalities. The indices are unmanaged and do not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 21
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Portfolio Reviews KENT INTERMEDIATE TAX-FREE FUND+ by Michael Martin Portfolio Manager Intermediate municipal bond returns lagged returns for Treasury securities of comparable maturities during the 12-month period ended December 31, 1998. For example, the yield on the ten-year AAA-rated general obligation municipal security declined by 25 basis points, compared to a 109-basis-point decrease in the yield on a ten-year Treasury note. As a result, the ratio of the yield on a ten-year AAA-rated general obligation security to the yield on a ten-year Treasury security increased from 75.8% at the beginning of the year to 87.7% as of December 31, 1998. The performance of intermediate municipal securities lagged that of Treasury securities for several reasons. A very heavy supply of municipal issues met with lukewarm demand from retail investors, who were attracted by strong returns in the equity markets. Also, investors favored the liquidity of Treasury securities over municipal securities, given the increasingly unsettled condition of the financial markets over the August-to-October period. For the 12 months ended December 31, 1998, the Fund's Institutional and Investment shares posted total returns of 5.37% and 5.09%, respectively. That performance compared to a total return of 5.17% for the Fund's benchmark, the Lehman Brothers Three-Year General Obligation Municipal Bond Index. The average maturity of the Fund began the period at 7.14 years and ended the year at 6.89 years. We kept the average credit quality of the portfolio high at AA because we saw few opportunities to purchase lower quality issues at attractive prices. KENT INTERMEDIATE TAX-FREE FUND* Distribution of Net Assets as of December 31, 1998 North Central 36.5% East 15.9% Other 6.7% Mountain 7.3% Pacific 14.1% South 19.5% The Outlook We believe the municipal market will once again have to contend with heavy supply coming into the market and with competition from the stock market in the months ahead. But we believe that the outlook for the municipal market -- as well as for the overall bond market -- is favorable given prospects for continued low inflation. Thus, we intend to maintain the Fund's relatively long average maturity to help provide an attractive yield for shareholders. We also look to extend the Fund's average maturity during market setbacks. KENT INTERMEDIATE TAX-FREE FUND+ TAX EQUIVALENT YIELDS(++) AS OF DECEMBER 31, 1998 ----------------------------------------------------- [Download Table] TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS ------------------------------------------------------------------------------ 28.0% 4.76% 4.42% 31.0% 4.97% 4.61% 36.0% 5.36% 4.97% 39.6% 5.68% 5.26% (++)Based on an SEC 30-day yield on 12/31/98 of 3.43% for the Institutional Class and 3.18% for the Investment Class, SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yields would have been 3.42% for Institutional Shares and 3.17% for Investment Shares. (+)The Fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. *The Fund's portfolio composition is subject to change. 22
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SHADOW BAR Portfolio Reviews KENT INTERMEDIATE TAX-FREE FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 12/16/92) (inception 12/18/92) -------------------------------------------------------------------------------------------- One Year 5.37% 5.09% Three Years 5.27% 5.01% Five Years 5.04% 4.83% Life of Fund 5.64% 5.44% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX AND THE LEHMAN BROTHERS FIVE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX -------------------------------------------------------------------------------- [Enlarge/Download Table] THE KENT INTERMEDIATE TAX- THE LEHMAN BROTHERS THREE- THE LEHMAN BROTHERS FIVE- FREE FUND INSTITUTIONAL CLASS YEAR GENERAL OBLIGATION YEAR GENERAL OBLIGATION SHARES MUNICIPAL BOND INDEX MUNICIPAL BOND INDEX ----------------------------- -------------------------- ------------------------- 12/16/92 10000 10000 10000 12/31/92 10060 10300 10500 12/31/93 10895 10673 10930 12/31/94 10567 10755 10779 12/31/95 11941 11705 12032 12/31/96 12349 12243 12589 12/31/97 13222 12905 13406 12/31/98 13929 13572 14189 [Enlarge/Download Table] THE KENT INTERMEDIATE TAX- THE LEHMAN BROTHERS THREE- THE LEHMAN BROTHERS FIVE- FREE FUND INVESTMENT CLASS YEAR GENERAL OBLIGATION YEAR GENERAL OBLIGATION SHARES MUNICIPAL BOND INDEX MUNICIPAL BOND INDEX -------------------------- -------------------------- ------------------------- 12/18/92 10000 10000 10000 12/31/92 10040 10200 10600 12/31/93 10873 10673 10930 12/31/94 10543 10755 10779 12/31/95 11889 11705 12032 12/31/96 12266 12243 12581 12/31/97 13100 12905 13406 12/31/98 13765 13572 14189 The Fund's performance is being measured against the Lehman Brothers Three-Year General Obligation Municipal Bond Index and the Lehman Brothers Five-Year General Obligation Municipal Bond Index which are unmanaged indices comprised of debt instruments issued by municipalities. The indices are unmanaged and do not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 23
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Portfolio Reviews KENT TAX-FREE INCOME FUND+ by Michael Martin Portfolio Manager The main factor holding back the municipal market during 1998 was the tremendous supply of new issues, which amounted to $284 billion for the year -- second only to the $293 billion of new supply seen in 1993. That tremendous increase in supply was met with lukewarm demand by retail investors, who comprise fully one third of the municipal market. These investors continued to be attracted to the very high returns in the equity markets compared to the low relatively level of yields available on municipal securities. In addition, many investors became increasingly concerned about how the economic and financial market problems around the globe would affect the U.S. economy. These concerns brought about a tremendous flight to safety and liquidity in Treasury securities. For the year, the yield on a thirty-year AAA-rated general obligation municipal bond declined by only nine basis points, ending the period at 4.94%. By comparison, the thirty-year Treasury bond's yield declined by 84 basis points. This underperformance of the municipal market relative to the Treasury market caused hedge funds and other non-traditional buyers to exit the municipal market. This sell-off caused the ratio of the yield on a thirty-year municipal bond to the yield of a thirty-year Treasury security to steadily increase during the period, from 84.8% to 96%. During the flight-to-quality rally that occurred in the Treasury market over the August-to-October period, the municipal-to-Treasury yield ratio actually approached 100%. The Fund's Institutional and Investment shares delivered total returns of 5.71% and 5.43%, respectively, for the 12 months through December 31, 1998. That compared to a 5.84% return for the Lehman Brothers Municipal Bond Index. Managing Average Maturity During the brief moments that the fixed-income markets sold off during 1998, we took the opportunity to extend the average maturity of the portfolio. Conversely, when the fixed-income markets ral- KENT TAX-FREE INCOME FUND* Distribution of Net Assets as of December 31, 1998 East 12.1% Other 0.3% Mountain 11.6% Pacific 19.1% South 15.2% North Central 41.7% lied, we generally decreased the average maturity the portfolio. The Fund started the year with an average maturity of 11.9 years and ended the year with an average maturity close to 10 years. The average credit rating of the portfolio remained high at AA. We saw little incentive to purchase lower-rated credits given their very small yield advantage over higher-rated issues. This quality-spread differential has narrowed sharply in recent years. The Outlook Although the municipal market may once again have to contend with a heavy supply of new issues in 1999, we believe that the outlook for the municipal market and the bond market, in general, is favorable given the likelihood of continued low inflation. We will continue to seek to maintain an average maturity slightly longer than that of our index, and will take advantage of any market declines to increase the average maturity of the portfolio. KENT TAX-FREE INCOME FUND+ TAX EQUIVALENT YIELDS++ AS OF DECEMBER 31, 1998 --------------------------------------------------- [Download Table] TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS ------------------------------------------------------------------------------ 28.0% 4.94% 4.60% 31.0% 5.16% 4.80% 36.0% 5.56% 5.17% 39.6% 5.89% 5.48% (++)Based on an SEC 30-day yield on 12/31/98 of 3.56% for the Institutional Class and 3.31% for the Investment Class. SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yields would have been 3.55% for Institutional Shares and 3.30% for Investment Shares. (+)The Fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. *The Fund's portfolio composition is subject to change. 24
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SHADOW BAR Portfolio Reviews KENT TAX-FREE INCOME FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 --------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 3/20/95) (inception 3/31/95) -------------------------------------------------------------------------------------------- One Year 5.71% 5.43% Three Years 6.05% 5.74% Life of Fund 7.07% 6.82% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS MUNICIPAL BOND INDEX -------------------------------------------------------------------------------- [Download Table] THE KENT TAX-FREE INCOME FUND THE LEHMAN BROTHERS MUNICIPAL INSTITUTIONAL CLASS SHARES BOND INDEX ----------------------------- ----------------------------- 3/20/95 10000 10000 12/31/95 10860 10971 12/31/96 11290 11457 12/31/97 12261 12511 12/31/98 12957 13242 [Download Table] THE KENT TAX-FREE INCOME FUND THE LEHMAN BROTHERS MUNICIPAL INVESTMENT CLASS SHARES BOND INDEX ----------------------------- ----------------------------- 3/31/95 10000 10000 12/31/95 10834 10971 12/31/96 11217 11457 12/31/97 12150 12511 12/31/98 12809 13242 The Fund's performance is being measured against the Lehman Brothers Municipal Bond Index, which is an unmanaged index comprised of general obligation municipal debt instruments. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. Past performance is no guarantee of future results. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 25
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Portfolio Reviews KENT MICHIGAN MUNICIPAL BOND FUND+ by Michael Martin Portfolio Manager Municipal securities underperformed Treasury securities during the 12 months ended December 31, 1998. The main reason was the tremendous amount of new issues hitting the municipal market during the year. That supply met with lukewarm demand by retail investors who comprise fully one third of the municipal market. These investors continued to be attracted to the very high returns in the equity markets compared to the relatively low level of yields available on municipal securities. The yield on the five-year AAA-rated general obligation municipal security ended the year at 3.75%, down from 4.10% at the beginning of the year. That 35-basis point decline compares to a 117-basis point decline for a five-year Treasury security. The ratio of the yield on a five-year AAA-rated municipal security to the yield on a five-year Treasury security ended the year at 82.6%, compared to 72% at the beginning of the period. During the 12 months ending December 31, 1998, the Fund's Institutional and Investor shares had total returns of 4.75% and 4.60%, respectively. That compared to a 5.17% total return for the Lehman Brothers Three-Year General Obligation Municipal Bond Index. A Focus on Quality The decline in municipal and Treasury yields last year partially reflected concerns about potential weakness in the U.S. economy due to overseas economic problems. Those concerns led the Federal Reserve to cut the federal funds rate three times from September through November. Municipal securities underperformed Treasury securities because worried investors favored issues backed by the federal government and due to the very strong supply of new municipal issues that came to market. In the state of Michigan, new issue volume rose almost 50% compared to 1997. KENT MICHIGAN MUNICIPAL FUND* Distribution of Net Assets as of December 31, 1998 Cash Equivalents & Net Other Assets & Liabilities 1.7% Municipal Securities 98.3% The average maturity of the portfolio ended the year at 4.10 years, up only slightly from 4.06 years at the start of the period. During the year, we increased the Fund's yield by purchasing issues such as Chippewa County War Memorial Hospital bonds with a 4.60% coupon due in 2000. We also maintained the Fund's high average credit rating of AA. Yields on lower quality bonds were not attractive enough to compensate for the additional risk in those issues.* Looking Ahead We believe Michigan's economy should continue to benefit from solid economic growth in 1999. We expect new supply to be strong -- but not as strong as it was in 1998. In addition, the market should benefit from continued low inflation. We will look for opportunities in a variety of sectors, but we believe that education and transportation issues might be especially strong. KENT MICHIGAN MUNICIPAL BOND FUND(+) TAX EQUIVALENT YIELDS(++) AS OF DECEMBER 31, 1998 ----------------------------------------------------- [Download Table] TAX BRACKET INSTITUTIONAL CLASS INVESTMENT CLASS ------------------------------------------------------------------------------ 28.0% 5.17% 4.96% 31.0% 5.39% 5.17% 36.0% 5.81% 5.58% 39.6% 6.16% 5.91% ++Based on an SEC 30-day yield on 12/31/98 of 3.72% for the Institutional Class and 3.57% for the Investment Class, SEC 30-day yield is computed based on net income during the 30-day period ended December 31, 1998. Yield calculations represent past performance and will fluctuate. Certain fees were waived. Had these waivers not been in effect, the 30-day SEC yields would have been 3.71% for Institutional Shares and 3.51% for Investment Shares. (+)The Fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. *The Fund's portfolio composition is subject to change. Regional investing may involve additional risks since investments are limited to one geographical area. 26
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SHADOW BAR Portfolio Reviews KENT MICHIGAN MUNICIPAL BOND FUND AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998 -------------------------------------------------------- [Enlarge/Download Table] INSTITUTIONAL CLASS INVESTMENT CLASS (inception 5/3/93) (inception 5/11/93) -------------------------------------------------------------------------------------------- One Year 4.75% 4.60% Three Years 4.59% 4.44% Five Years 4.43% 4.27% Life of Fund 4.46% 4.29% GROWTH OF $10,000 INVESTMENT COMPARISON WITH THE LEHMAN BROTHERS THREE-YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX -------------------------------------------------------------------------------- [Download Table] LEHMAN BROTHERS THREE-YEAR THE KENT MICHIGAN MUNICIPAL BOND GENERAL OBLIGATION MUNICIPAL FUND INSTITUTIONAL CLASS SHARES BOND INDEX -------------------------------- ---------------------------- 5/3/93 10000 10000 12/31/93 10300 10311 12/31/94 10340 10390 12/31/95 11190 11308 12/31/96 11580 11828 12/31/97 12222 12468 12/31/98 12802 13113 [Download Table] LEHMAN BROTHERS THREE-YEAR THE KENT MICHIGAN MUNICIPAL BOND GENERAL OBLIGATION MUNICIPAL FUND INVESTMENT CLASS SHARES BOND INDEX -------------------------------- ---------------------------- 5/11/93 10000 10000 12/31/93 10285 10311 12/31/94 10301 10390 12/31/95 11126 11308 12/31/96 11500 11828 12/31/97 12119 12468 12/31/98 12676 13113 The Fund's performance is being measured against the Lehman Brothers Three-Year General Obligation Municipal Bond Index, which is an unmanaged index comprised of debt instruments issued by municipalities. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management and fund accounting fees. The performance of the Fund does reflect the deduction of fees for these value-added services. Past performance is no guarantee of future results. The investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than the original cost. Performance for each class will differ based on differences in expenses for each class of shares. Return figures and investment values are quoted after deducting all expenses. Total return is based on changes in net asset value, assuming reinvestment of all dividends and capital gain distributions. Certain fees were waived during the period. Had these waivers not been in effect, total returns would have been lower. 27
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THE KENT GROWTH AND INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ COMMERCIAL PAPER -- 1.8% OIL -- U.S. INTEGRATED -- 1.8% $15,795,000 Shell Oil Co., 5.00%, 1/4/99.... $ 15,788,419 ------------ TOTAL COMMERCIAL PAPER.......... 15,788,419 ------------ (Cost $15,788,419) COMMON STOCKS -- 98.2% ADVERTISING -- 0.1% 15,100 Interpublic Group Cos., Inc. ... 1,204,225 ------------ AEROSPACE & DEFENSE -- 0.7% 87,800 Boeing Co. ..................... 2,864,475 20,400 Lockheed Martin Corp. .......... 1,728,900 30,300 Raytheon Co., Class B........... 1,613,475 ------------ 6,206,850 ------------ APPLIANCES & HOUSEHOLD PRODUCTS -- 0.2% 24,900 Maytag Corp. ................... 1,550,025 ------------ AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.2% 15,000 Dana Corp. ..................... 613,125 16,200 TRW, Inc. ...................... 910,238 ------------ 1,523,363 ------------ AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.1% 16,650 Genuine Parts Co. .............. 556,734 ------------ AUTOMOTIVE -- 1.3% 116,700 Ford Motor Co. ................. 6,848,832 66,100 General Motors Corp. ........... 4,730,281 ------------ 11,579,113 ------------ BANKS -- MIDWEST -- 0.3% 24,400 Fifth Third Bancorp............. 1,740,025 20,300 Huntington Bancshares........... 610,269 ------------ 2,350,294 ------------ BANKS -- MONEY CENTER -- 2.1% 174,064 BankAmerica Corp. .............. 10,465,598 8,600 Bankers Trust New York Corp. ... 734,763 84,900 Chase Manhattan Corp. .......... 6,027,900 16,100 J.P. Morgan & Co., Inc. ........ 1,691,506 ------------ 18,919,767 ------------ BANKS -- NORTHEAST -- 0.2% 23,500 State Street Corp. ............. 1,634,719 ------------ BANKS -- MAJOR REGIONAL -- 4.8% 73,800 Bank of New York Co., Inc. ..... 2,970,450 124,346 Bank One Corp. ................. 6,349,417 32,900 BankBoston Corp. ............... 1,281,044 13,700 Comerica, Inc. ................. 934,169 95,900 First Union Corp. .............. 5,831,919 50,300 Fleet Financial Group, Inc. .... 2,247,781 60,200 KeyCorp......................... 1,926,400 29,700 Mellon Bank Corp. .............. 2,041,875 29,200 National City Corp. ............ 2,117,000 SECURITY MARKET SHARES DESCRIPTION VALUE ---------- -------------------------------- ------------ COMMON STOCKS -- 98.2% BANKS -- MAJOR REGIONAL -- (CONTINUED) 20,400 Northern Trust Corp. ........... $ 1,781,175 40,700 PNC Bank Corp. ................. 2,202,888 27,800 SunTrust Banks, Inc. ........... 2,126,700 67,000 U.S. Bancorp.................... 2,378,500 26,800 Wachovia Corp. ................. 2,343,325 160,000 Wells Fargo Co. ................ 6,389,999 ------------ 42,922,642 ------------ BEVERAGES -- ALCOHOLIC -- 0.3% 45,200 Anheuser-Busch Co., Inc. ....... 2,966,250 ------------ BEVERAGES -- SOFT DRINKS -- 2.4% 212,600 Coca-Cola Co. .................. 14,217,625 168,089 PepsiCo, Inc. .................. 6,881,143 ------------ 21,098,768 ------------ BROADCASTING/CABLE -- 1.0% 28,500 Clear Channel Communications, Inc.*........................... 1,553,250 33,700 Comcast Corp., Special Class A......................... 1,977,769 57,700 MediaOne Group, Inc.*........... 2,711,900 55,800 Tele-Communications, Inc., Class A*........................ 3,086,437 ------------ 9,329,356 ------------ BUILDING & CONSTRUCTION -- MISCELLANEOUS -- 0.2% 48,000 Masco Corp. .................... 1,380,000 ------------ BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.1% 12,800 Centex Corp. ................... 576,800 16,800 Pulte Corp. .................... 467,250 ------------ 1,044,050 ------------ BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 1.1% 132,400 Home Depot, Inc. ............... 8,101,225 33,200 Lowe's Cos., Inc. .............. 1,699,425 ------------ 9,800,650 ------------ BUILDING PRODUCTS -- WOOD -- 0.1% 18,400 Weyerhaeuser Co. ............... 934,950 ------------ CHEMICALS -- DIVERSIFIED -- 1.3% 25,700 Dow Chemical Co. ............... 2,337,094 101,700 E.I. du Pont de Nemours & Co. ............................ 5,396,456 21,700 Hercules, Inc. ................. 594,038 35,500 PPG Industries, Inc. ........... 2,067,875 22,800 Union Carbide Corp. ............ 969,000 ------------ 11,364,463 ------------ CHEMICALS -- SPECIALTY -- 0.3% 24,600 Great Lakes Chemical Corp. ..... 984,000 26,400 Nalco Chemical Co. ............. 818,400 20,000 Sigma-Aldrich Corp. ............ 587,500 ------------ 2,389,900 ------------ Continued 28
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THE KENT GROWTH AND INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) COMPUTER SOFTWARE -- 4.0% 58,000 Computer Associates International, Inc. ............ $ 2,472,250 231,700 Microsoft Corp.*................ 32,133,893 21,000 Oracle Corp.*................... 905,625 ------------ 35,511,768 ------------ COMPUTERS -- LOCAL AREA NETWORK -- 1.7% 159,275 Cisco Systems, Inc.*............ 14,782,711 ------------ COMPUTERS -- MAINFRAME -- 2.0% 96,000 IBM Corp. ...................... 17,736,000 ------------ COMPUTERS -- MEMORY DEVICES -- 0.4% 33,000 EMC Corp.*...................... 2,805,000 30,000 Seagate Technology, Inc.*....... 907,500 ------------ 3,712,500 ------------ COMPUTERS -- MICRO -- 1.7% 154,874 Compaq Computer Corp. .......... 6,495,028 113,800 Dell Computer Corp.*............ 8,328,738 ------------ 14,823,766 ------------ COMPUTERS -- MINI -- 1.2% 109,340 Hewlett-Packard Co. ............ 7,469,289 34,600 Sun Microsystems, Inc.*......... 2,962,625 ------------ 10,431,914 ------------ COMPUTERS -- SERVICES -- 0.7% 52,870 Automatic Data Processing, Inc. ........................... 4,239,513 14,700 Computer Sciences Corp. ........ 947,231 40,800 First Data Corp. ............... 1,292,850 ------------ 6,479,594 ------------ CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.8% 13,000 American Greetings Corp., Class A......................... 533,813 28,800 Newell Co. ..................... 1,188,000 60,900 Unilever NV, ADR................ 5,050,893 ------------ 6,772,706 ------------ CONTAINERS & PACKAGING -- 0.1% 19,700 Owens-Illinois, Inc.*........... 603,313 ------------ COSMETICS & TOILETRIES -- 0.9% 106,712 Gillette Co. ................... 5,155,524 52,400 Kimberly-Clark Corp. ........... 2,855,800 ------------ 8,011,324 ------------ DIVERSIFIED -- 4.9% 52,300 Allied Signal, Inc. ............ 2,317,544 308,000 General Electric Co............. 31,435,249 23,000 Johnson Controls, Inc. ......... 1,357,000 35,200 Minnesota Mining & Manufacturing Co. ............................ 2,503,599 44,900 Seagram Co., Ltd. .............. 1,706,200 23,900 Tenneco, Inc. .................. 814,094 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) DIVERSIFIED (CONTINUED) 22,500 Textron, Inc. .................. $ 1,708,594 22,300 United Technologies Corp. ...... 2,425,125 ------------ 44,267,405 ------------ ELECTRICAL COMPONENTS -- SEMICONDUCTORS -- 2.7% 40,100 Applied Materials, Inc.*........ 1,711,769 144,700 Intel Corp. .................... 17,155,993 18,700 Micron Technology, Inc.*........ 945,519 29,100 Rockwell International Corp. ... 1,413,169 37,500 Texas Instruments, Inc. ........ 3,208,593 ------------ 24,435,043 ------------ ELECTRONIC -- CONNECTORS -- 0.0% 8,700 Thomas & Betts Corp. ........... 376,819 ------------ FINANCE -- 0.6% 61,114 Associates First Capital Corp., Class A......................... 2,589,706 63,216 Washington Mutual, Inc. ........ 2,414,061 ------------ 5,003,767 ------------ FINANCIAL -- CONSUMER LOANS -- 0.2% 45,300 Household International, Inc. ........................... 1,795,013 ------------ FINANCIAL -- INVESTMENT BANKERS -- 0.3% 37,200 Merrill Lynch & Co., Inc. ...... 2,483,100 ------------ FINANCIAL -- MISCELLANEOUS SERVICES -- 1.0% 45,200 American Express Co. ........... 4,621,700 66,000 Morgan Stanley, Dean Witter & Co. ............................ 4,686,000 ------------ 9,307,700 ------------ FINANCIAL -- MORTGAGE & RELATED SERVICES -- 1.3% 99,200 Fannie Mae...................... 7,340,800 62,300 Freddie Mac..................... 4,014,456 ------------ 11,355,256 ------------ FINANCIAL SERVICES -- DIVERSIFIED -- 1.2% 217,650 Citigroup, Inc. ................ 10,773,675 ------------ FOOD -- CANNED -- 0.6% 46,700 Campbell Soup Co. .............. 2,568,500 44,991 H.J. Heinz Co. ................. 2,547,615 ------------ 5,116,115 ------------ FOOD -- CONFECTIONARY -- 0.1% 13,400 Hershey Foods Corp. ............ 833,313 ------------ FOOD -- DIVERSIFIED -- 1.2% 26,300 Bestfoods....................... 1,400,475 45,600 ConAgra, Inc. .................. 1,436,400 22,700 General Mills, Inc. ............ 1,764,925 37,300 Kellogg Co. .................... 1,272,863 19,800 Quaker Oats Co. ................ 1,178,100 Continued 29
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THE KENT GROWTH AND INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FOOD -- DIVERSIFIED (CONTINUED) 30,500 Ralston Purina Group............ $ 987,438 90,000 Sara Lee Corp. ................. 2,536,874 ------------ 10,577,075 ------------ FOOD -- FLOUR & GRAIN -- 0.1% 55,960 Archer-Daniels-Midland Co. ..... 961,813 ------------ FOOD ITEMS -- WHOLESALE -- 0.1% 47,000 Supervalu, Inc. ................ 1,316,000 ------------ GAS & ELECTRIC UTILITY -- 0.4% 40,500 PG & E Corp. ................... 1,275,750 56,200 Public Service Enterprise Group, Inc. ........................... 2,248,000 ------------ 3,523,750 ------------ HOTELS & LODGING -- 0.2% 49,800 Marriott International, Inc., Class A......................... 1,444,200 ------------ INSTRUMENTS -- CONTROL -- 0.2% 20,400 Honeywell, Inc. ................ 1,536,375 ------------ INSTRUMENTS -- SCIENTIFIC -- 0.1% 22,700 EG&G, Inc. ..................... 631,344 ------------ INSURANCE -- ACCIDENT & HEALTH -- 0.1% 21,400 Aon Corp. ...................... 1,185,025 ------------ INSURANCE -- BROKERS -- 0.2% 34,000 Marsh & McLennan Cos., Inc. .... 1,986,875 ------------ INSURANCE -- LIFE -- 0.5% 32,000 American General Corp. ......... 2,496,000 19,300 Torchmark Corp. ................ 681,531 11,900 Transamerica Corp. ............. 1,374,450 ------------ 4,551,981 ------------ INSURANCE -- MULTI-LINE -- 0.5% 14,500 Aetna, Inc. .................... 1,140,063 29,500 CIGNA Corp. .................... 2,280,719 12,500 MBIA, Inc. ..................... 819,531 ------------ 4,240,313 ------------ INSURANCE -- PROPERTY & CASUALTY -- 1.8% 107,500 Allstate Corp. ................. 4,152,187 105,700 American International Group, Inc. ........................... 10,213,262 15,700 Chubb Corp. .................... 1,018,538 23,400 Safeco Corp. ................... 1,004,738 ------------ 16,388,725 ------------ LEISURE & RECREATION/GAMING -- 0.0% 11,300 Harrah's Entertainment, Inc.*... 177,269 16,800 Mirage Resorts*................. 250,950 ------------ 428,219 ------------ MACHINERY & EQUIPMENT -- 0.1% 46,200 Milacron, Inc. ................. 889,350 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MACHINERY -- CONSTRUCTION/MINING -- 0.2% 35,400 Caterpillar, Inc. .............. $ 1,628,400 ------------ MACHINERY -- ELECTRICAL -- 0.4% 41,000 Emerson Electric Co. ........... 2,480,500 20,800 W.W. Grainger, Inc. ............ 865,800 ------------ 3,346,300 ------------ MACHINERY -- GENERAL INDUSTRIAL -- 0.3% 27,200 Cooper Industries, Inc. ........ 1,297,100 22,000 Illinois Tool Works, Inc. ...... 1,276,000 ------------ 2,573,100 ------------ MEDIA CONGLOMERATES -- 1.4% 112,200 Time Warner, Inc. .............. 6,963,413 180,655 Walt Disney Co. ................ 5,419,650 ------------ 12,383,063 ------------ MEDICAL -- BIOMEDICAL/GENETIC -- 0.3% 24,300 Amgen, Inc.*.................... 2,540,869 ------------ MEDICAL -- DRUGS -- 9.5% 148,700 Abbott Laboratories............. 7,286,300 127,000 American Home Products Corp. ... 7,151,688 105,100 Bristol-Myers Squibb Co. ....... 14,063,694 98,400 Eli Lilly & Co. ................ 8,745,300 112,100 Merck & Co., Inc. .............. 16,555,768 123,310 Pfizer, Inc. ................... 15,467,697 45,600 Pharmacia & Upjohn, Inc. ....... 2,582,100 144,000 Schering-Plough Corp. .......... 7,956,000 84,800 Warner-Lambert Co. ............. 6,375,900 ------------ 86,184,447 ------------ MEDICAL -- HEALTH MEDICAL ORGANIZATION -- 0.0% 21,200 Humana, Inc.*................... 377,625 ------------ MEDICAL -- OUTPATIENT/HOME CARE -- 0.1% 71,200 HEALTHSOUTH Corp.*.............. 1,099,150 ------------ MEDICAL -- WHOLESALE DRUG -- 0.2% 25,100 Cardinal Health, Inc. .......... 1,904,463 ------------ MEDICAL INSTRUMENTS -- 0.1% 18,700 Biomet, Inc. ................... 752,675 ------------ MEDICAL PRODUCTS -- 0.4% 26,500 Baxter International, Inc. ..... 1,704,281 20,700 Guidant Corp. .................. 2,282,175 ------------ 3,986,456 ------------ MEDICAL/DENTAL SUPPLIES -- 1.5% 32,500 Becton, Dickinson & Co. ........ 1,387,344 24,600 C.R. Bard, Inc. ................ 1,217,700 125,720 Johnson & Johnson............... 10,544,765 ------------ 13,149,809 ------------ Continued 30
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THE KENT GROWTH AND INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) METAL -- GOLD -- 0.2% 57,500 Barrick Gold Corp. ............. $ 1,121,250 30,500 Homestake Mining Co. ........... 280,219 ------------ 1,401,469 ------------ METAL -- MISCELLANEOUS -- 0.0% 37,000 Cyprus Amax Minerals Co. ....... 370,000 ------------ METAL -- NON-FERROUS -- 0.4% 22,700 Aluminum Co. of America......... 1,692,569 29,600 Freeport-McMoran Copper & Gold, Inc., Class B................... 308,950 23,900 Reynolds Metals Co. ............ 1,259,231 ------------ 3,260,750 ------------ OFFICE AUTOMATION & EQUIPMENT -- 0.7% 40,000 Pitney Bowes, Inc. ............. 2,642,500 29,400 Xerox Corp. .................... 3,469,200 ------------ 6,111,700 ------------ OIL -- FIELD SERVICES -- 0.2% 51,200 Halliburton Co. ................ 1,516,800 ------------ OIL -- INTERNATIONAL INTEGRATED -- 4.5% 66,000 Chevron Corp. .................. 5,473,875 231,700 Exxon Corp. .................... 16,943,062 73,800 Mobil Corp. .................... 6,429,825 184,200 Royal Dutch Petroleum Co., ADR.. 8,818,575 47,000 Texaco, Inc. ................... 2,485,125 ------------ 40,150,462 ------------ OIL -- PRODUCTION/PIPELINE -- 0.3% 14,050 Columbia Gas System, Inc. ...... 811,388 30,000 Enron Corp. .................... 1,711,875 ------------ 2,523,263 ------------ OIL -- U.S. INTEGRATED -- 1.3% 82,400 Amoco Corp. .................... 4,861,600 45,300 Atlantic Richfield Co. ......... 2,955,825 34,400 Phillips Petroleum Co. ......... 1,466,300 38,300 Unocal Corp. ................... 1,117,881 49,300 USX-Marathon Group.............. 1,485,163 ------------ 11,886,769 ------------ OIL FIELD MACHINERY & EQUIPMENT -- 0.1% 34,500 Baker Hughes, Inc. ............. 610,219 ------------ OIL REFINING -- 0.3% 21,600 Ashland, Inc. .................. 1,044,900 34,100 Sunoco, Inc. ................... 1,229,731 ------------ 2,274,631 ------------ PAPER & RELATED PRODUCTS -- 0.6% 28,500 Fort James Corp. ............... 1,140,000 39,400 International Paper Co. ........ 1,765,612 29,900 Mead Corp. ..................... 876,444 18,900 Union Camp Corp. ............... 1,275,750 ------------ 5,057,806 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) PHOTOGRAPHY -- 0.2% 29,300 Eastman Kodak Co. .............. $ 2,109,600 ------------ POLLUTION CONTROL -- 0.3% 48,600 Waste Management, Inc. ......... 2,265,975 ------------ PROTECTION -- SAFETY -- 0.6% 72,800 Tyco International Ltd. ........ 5,491,850 ------------ PUBLISHING -- BOOKS -- 0.2% 13,800 McGraw-Hill Cos., Inc. ......... 1,405,875 ------------ PUBLISHING -- NEWSPAPERS -- 0.7% 8,900 Dow Jones & Co. ................ 428,313 36,600 Gannett, Inc. .................. 2,360,700 14,000 Knight-Ridder, Inc. ............ 715,750 19,900 New York Times Co., Class A..... 690,281 9,100 Times Mirror Co., Class A....... 509,600 17,700 Tribune Co. .................... 1,168,200 ------------ 5,872,844 ------------ RESTAURANTS -- 0.6% 66,200 McDonald's Corp. ............... 5,072,575 ------------ RETAIL -- APPAREL/SHOES -- 0.5% 59,100 Gap, Inc. ...................... 3,324,375 40,600 Limited, Inc. .................. 1,182,475 ------------ 4,506,850 ------------ RETAIL -- DISCOUNT -- 2.9% 61,700 Dayton-Hudson Corp. ............ 3,347,225 43,200 Kmart Corp.*.................... 661,500 270,400 Wal-Mart Stores, Inc. (b)....... 22,020,699 ------------ 26,029,424 ------------ RETAIL -- DRUG STORE -- 0.3% 51,778 Walgreen Co. ................... 3,032,249 ------------ RETAIL -- MAJOR DEPARTMENT STORES -- 0.5% 29,200 J.C. Penney, Inc. .............. 1,368,750 22,900 May Department Stores Co. ...... 1,382,588 37,100 Sears, Roebuck & Co. ........... 1,576,750 ------------ 4,328,088 ------------ RETAIL -- REGIONAL DEPARTMENT STORES -- 0.1% 19,700 Federated Department Stores, Inc.*........................... 858,181 ------------ RETAIL -- SUPERMARKETS -- 0.3% 27,100 Albertson's, Inc. .............. 1,725,931 33,700 American Stores Co. ............ 1,244,794 ------------ 2,970,725 ------------ RETAIL/WHOLESALE -- AUTO PARTS -- 0.1% 27,600 Auto Zone, Inc.*................ 909,075 ------------ RUBBER -- TIRES -- 0.1% 16,800 Goodyear Tire & Rubber Co. ..... 847,350 ------------ Continued 31
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THE KENT GROWTH AND INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) SOAP & CLEANING PREPARATIONS -- 1.6% 29,178 Colgate-Palmolive Co. .......... $ 2,709,907 127,300 Procter & Gamble Co. ........... 11,624,081 ------------ 14,333,988 ------------ STEEL -- PRODUCERS -- 0.1% 16,800 Nucor Corp. .................... 726,600 13,800 USX-U.S. Steel Group............ 317,400 ------------ 1,044,000 ------------ TELECOMMUNICATIONS -- CELLULAR -- 0.5% 59,100 Airtouch Communications, Inc.*........................... 4,262,588 ------------ TELECOMMUNICATIONS -- EQUIPMENT -- 2.9% 26,600 General Instrument Corp.*....... 902,738 15,400 Harris Corp. ................... 564,025 144,804 Lucent Technologies, Inc. ...... 15,928,439 71,900 Motorola, Inc. ................. 4,390,393 57,625 Northern Telecom Ltd. .......... 2,888,453 21,100 Tellabs, Inc.*.................. 1,446,669 ------------ 26,120,717 ------------ TEXTILE -- APPAREL -- 0.1% 19,200 VF Corp. ....................... 900,000 ------------ TOBACCO -- 1.6% 252,800 Philip Morris Cos., Inc. ....... 13,524,800 28,200 U.S.T., Inc. ................... 983,475 ------------ 14,508,275 ------------ TOOLS -- HAND HELD -- 0.0% 12,000 Snap-On, Inc. .................. 417,750 ------------ TOYS/GAME/HOBBY -- 0.2% 22,400 Hasbro, Inc. ................... 809,200 25,000 Mattel, Inc. ................... 570,313 ------------ 1,379,513 ------------ TRANSPORTATION -- AIR FREIGHT -- 0.1% 14,300 FDX Corp.*...................... 1,272,700 ------------ TRANSPORTATION -- AIRLINE -- 0.3% 17,500 AMR Corp.*...................... 1,039,062 16,100 Delta Air Lines, Inc. .......... 837,200 45,300 Southwest Airlines Co. ......... 1,016,419 ------------ 2,892,681 ------------ TRANSPORTATION -- EQUIPMENT & LEASING -- 0.0% 14,500 Ryder Systems, Inc. ............ 377,000 ------------ TRANSPORTATION -- RAILROAD -- 0.4% 28,600 CSX Corp. ...................... 1,186,900 33,100 Norfolk Southern Corp. ......... 1,048,856 28,300 Union Pacific Corp. ............ 1,275,269 ------------ 3,511,025 ------------ UTILITIES -- ELECTRIC POWER -- 2.0% 12,900 Ameren Corp. ................... 550,669 38,900 Baltimore Gas & Electric Co. ... 1,201,038 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UTILITIES -- ELECTRIC POWER (CONTINUED) 47,200 Consolidated Edison, Inc. ...... $ 2,495,699 32,800 Detroit Edison Co. ............. 1,406,300 36,700 Dominion Resources, Inc. ....... 1,715,725 21,500 Entergy Corp. .................. 669,188 49,100 First Energy Corp. ............. 1,598,819 27,631 Florida Power & Light, Inc. .... 1,702,760 25,400 Houston Industries, Inc. ....... 815,975 38,500 Northern States Power Co. ...... 1,068,375 43,300 Peco Energy Corp. .............. 1,802,362 56,140 Southern Co. ................... 1,631,569 34,100 Texas Utilities Co. ............ 1,592,044 ------------ 18,250,523 ------------ UTILITIES -- GAS DISTRIBUTION -- 0.1% 19,500 Eastern Enterprises............. 853,125 8,500 ONEOK, Inc. .................... 307,063 ------------ 1,160,188 ------------ UTILITIES -- TELEPHONE -- 7.5% 108,798 Ameritech Corp. ................ 6,895,073 163,400 AT&T Corp. ..................... 12,295,849 155,800 Bell Atlantic Corp. ............ 8,257,400 191,000 BellSouth Corp. ................ 9,526,125 80,900 GTE Corp. ...................... 5,258,500 133,341 MCI Worldcom, Inc.*............. 9,567,216 177,000 SBC Communications, Inc. ....... 9,491,625 39,100 Sprint Corp. ................... 3,289,288 50,097 US West, Inc. .................. 3,237,519 ------------ 67,818,595 ------------ TOTAL COMMON STOCKS............. 862,070,396 ------------ (Cost $569,967,757) TOTAL INVESTMENTS -- 100.0%................. 877,858,815 (Cost $585,756,176)(a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.0%....................... 427,017 ------------ TOTAL NET ASSETS -- 100.0%.................. $878,285,832 ============ --------------- (a) Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $301,020,370 Unrealized depreciation............... (9,093,759) ------------ Net unrealized appreciation........... $291,926,611 ============ (b) Security has been deposited as initial margin on open futures contract * Non-income producing security ADR -- American Depositary Receipt At December 31, 1998 the Fund's open future contracts were as follows: [Download Table] # OF OPENING FACE MARKET CONTRACTS CONTRACT TYPE AMOUNT VALUE --------- ----------------- ----------- ----------- 49 Standard & Poor's $14,455,365 $15,257,375 500, 3/18/99 See Notes to Financial Statements. 32
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ COMMERCIAL PAPER -- 3.7% ENERGY -- 1.9% $15,126,000 Duke Energy, 5.25%, 1/4/99...... $ 15,119,382 ------------ OIL & GAS -- 1.8% 14,023,000 Shell Oil Co., 5.00%, 1/4/99.... 14,017,157 ------------ TOTAL COMMERCIAL PAPER.......... 29,136,539 ------------ (Cost $29,136,539) COMMON STOCKS -- 95.9% ADVERTISING -- 1.0% 51,000 Catalina Market Corp.*.......... 3,487,125 54,600 Ha-Lo Industries, Inc.*......... 2,054,325 173,400 Sitel Corp.*.................... 422,663 68,200 True North Communications....... 1,832,875 ------------ 7,796,988 ------------ AEROSPACE & DEFENSE -- 0.4% 20,400 Alliant Techsystems, Inc.*...... 1,681,725 54,800 Newport News Shipbuilding....... 1,832,375 ------------ 3,514,100 ------------ AEROSPACE/DEFENSE EQUIPMENT -- 0.4% 43,150 AAR Corp. ...................... 1,030,207 42,800 Aviall, Inc.*................... 502,900 39,100 Banner Aerospace, Inc.*......... 369,006 3,600 Ducommun, Inc.*................. 49,725 23,800 Fairchild Corp., Class A*....... 374,850 57,800 Hexcel Corp.*................... 484,075 ------------ 2,810,763 ------------ APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1% 119,900 Fedders Corp. .................. 696,919 63,500 Royal Appliance Manufacturing Co.*............................ 234,156 ------------ 931,075 ------------ AUDIO/VIDEO PRODUCTION -- 0.2% 50,280 Harman International Industries, Inc. ........................... 1,916,925 ------------ AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 1.0% 46,800 Arvin Industries, Inc. ......... 1,950,974 49,100 Breed Technologies, Inc.*....... 402,006 56,500 Detroit Diesel Corp.*........... 1,168,844 3,100 Excel Industries, Inc. ......... 54,250 37,500 Miller Industries, Inc.*........ 168,750 27,700 Standard Products Co. .......... 564,388 23,000 Superior Industries International................... 639,688 64,975 Titan International, Inc. ...... 617,263 79,100 Tower Automotive, Inc.*......... 1,972,555 5,800 Wabash National Corp. .......... 117,813 ------------ 7,656,531 ------------ AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.3% 16,200 Exide Corp. .................... 263,250 38,000 Standard Motor Products, Inc.*........................... 921,500 46,837 Wynn's International, Inc. ..... 1,036,269 ------------ 2,221,019 ------------ SECURITY MARKET SHARES DESCRIPTION VALUE ---------- -------------------------------- ------------ COMMON STOCKS (CONTINUED) BANKS -- CENTRAL US -- 1.2% 175,000 Community First Bankshares...... $ 3,685,937 80,700 MAF Bancorp, Inc. .............. 2,138,550 75,000 Republic Bancorp................ 1,021,875 82,500 St. Paul Bancorp, Inc. ......... 2,245,547 ------------ 9,091,909 ------------ BANKS -- EAST -- 0.8% 27,000 Community Bank System, Inc. .... 791,438 114,000 Roslyn Bancorp, Inc. ........... 2,451,000 122,000 UST Corp. ...................... 2,874,625 ------------ 6,117,063 ------------ BANKS -- MIDWEST -- 0.6% 71,900 First Midwest Bancgroup, Inc. ........................... 2,736,693 81,000 Irwin Financial Corp. .......... 2,202,188 ------------ 4,938,881 ------------ BANKS -- NORTHEAST -- 1.2% 73,606 Commerce Bancorp, Inc. ......... 3,864,315 79,200 First Commonwealth Financial.... 1,940,400 79,573 Hubco, Inc. .................... 2,397,137 52,200 Independent Bank Corp. ......... 906,975 25,300 Sterling Bancorp................ 577,156 ------------ 9,685,983 ------------ BANKS -- SOUTH -- 0.7% 111,300 Firstbank Corp. ................ 3,359,868 91,500 Republic Security Financial Corp. .......................... 1,109,438 77,100 Triangle Bancorp, Inc. ......... 1,219,144 ------------ 5,688,450 ------------ BANKS -- SOUTHEAST -- 0.6% 159,800 BancorpSouth, Inc. ............. 2,886,388 72,800 F & M National Corp. ........... 2,179,450 ------------ 5,065,838 ------------ BANKS -- SOUTHWEST -- 0.1% 46,800 Texas Regional Bancshares....... 1,172,925 ------------ BANKS -- WEST -- 0.6% 33,326 First Republic Bancorp, Inc.*... 835,233 140,000 Imperial Bancorp................ 2,327,500 72,500 Silicon Valley Bankshares....... 1,234,766 ------------ 4,397,499 ------------ BEVERAGES -- ALCOHOLIC -- 0.0% 31,000 Boston Beer Company, Inc. -- Class A*........................ 263,500 ------------ BEVERAGES -- SOFT DRINKS -- 0.0% 2,145 Buenos Aires Embotella Doro -- ADR*.................... 0 8,000 Pepsi-Cola Puerto Rico Bottling Co.*............................ 41,500 ------------ BROADCASTING/CABLE -- 0.0% 48,300 Spelling Entertainment Group*... 362,250 ------------ Continued 33
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) BUILDING -- 0.5% 35,400 Calmat Co. ..................... $ 1,092,975 37,400 Centex Construction Products, Inc. ........................... 1,519,375 35,400 Lone Star Industries, Inc....... 1,303,163 ------------ 3,915,513 ------------ BUILDING & CONSTRUCTION -- MISCELLANEOUS -- 0.4% 2,200 Butler Manufacturing Co. ....... 49,225 70,900 Dal-Tile International, Inc.*... 735,588 1,700 Dayton Superior Corp.*.......... 32,725 37,050 Elcor Corp. .................... 1,197,178 27,800 Nortek, Inc.*................... 767,975 33,760 Republic Gypsum Co. ............ 677,310 4,400 Willbros Group, Inc.*........... 24,475 ------------ 3,484,476 ------------ BUILDING -- HEAVY CONSTRUCTION -- 0.3% 15,600 Dycom Industries, Inc.*......... 891,150 42,700 Granite Construction, Inc. ..... 1,433,119 ------------ 2,324,269 ------------ BUILDING -- MAINTENANCE & SERVICE -- 0.3% 48,800 ABM Industries, Inc. ........... 1,689,700 52,500 Rollins, Inc. .................. 918,750 4,100 Service Experts, Inc.*.......... 119,925 ------------ 2,728,375 ------------ BUILDING -- MOBILE/MANUFACTURING & RECREATIONAL VEHICLES -- 0.2% 30,500 Cavalier Homes, Inc. ........... 346,938 25,100 Coachmen Industries, Inc. ...... 658,874 38,300 Winnebago Industries, Inc. ..... 579,288 ------------ 1,585,100 ------------ BUILDING -- RESIDENTIAL/COMMERCIAL -- 1.1% 10,000 Beazer Homes USA, Inc.*......... 250,000 53,400 D. R. Horton, Inc. ............. 1,228,199 63,200 Kaufman & Broad Home Corp. ..... 1,816,999 22,600 M/I Schottenstein Homes, Inc. ........................... 497,200 24,900 MDC Holdings, Inc. ............. 532,238 35,400 Pulte Corp. .................... 984,563 21,800 Ryland Group, Inc. ............. 629,475 59,500 Standard-Pacific Corp. ......... 840,438 53,300 Toll Brothers, Inc.*............ 1,202,581 18,300 U.S. Home Corp.*................ 608,475 ------------ 8,590,168 ------------ BUILDING PRODUCTS -- AIR CONDITIONING/HEAT -- 0.1% 47,962 Watsco, Inc. ................... 803,364 ------------ BUILDING PRODUCTS -- LIGHTING/FIXTURES -- 0.1% 23,000 Thomas Industries, Inc. ........ 451,375 ------------ BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 0.3% 86,400 HomeBase, Inc.*................. 550,800 59,900 Hughes Supply, Inc. ............ 1,752,075 ------------ 2,302,875 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) BUSINESS INFORMATION -- 0.3% 75,900 Primark Corp.*.................. $ 2,058,788 ------------ BUSINESS SERVICES -- 1.3% 67,000 ADVO, Inc.*..................... 1,767,125 54,600 Budget Group, Inc. -- Class A*........................ 866,775 38,300 Fair Issac & Co., Inc. ......... 1,768,981 69,300 Franklin Covey Co.*............. 1,160,775 45,200 Healthplan Services Corp. ...... 519,800 136,100 Interim Services, Inc.*......... 3,181,337 ------------ 9,264,793 ------------ CHEMICALS -- DIVERSIFIED -- 0.1% 47,800 ChemFirst, Inc. ................ 944,050 ------------ CHEMICALS -- PLASTIC -- 0.4% 62,600 Borden Chemicals & Plastics LP.............................. 293,438 50,100 Geon Co. ....................... 1,152,300 61,700 Spartech Corp. ................. 1,357,399 66,600 Wellman, Inc. .................. 678,488 ------------ 3,481,625 ------------ CHEMICALS -- SPECIALTY -- 1.2% 41,100 Bush Boake Allen, Inc.*......... 1,448,774 45,800 General Chemical Group, Inc. ... 635,475 97,100 Lawter International, Inc. ..... 1,128,788 30,400 LeaRonal, Inc. ................. 1,029,800 53,000 Lilly Industries, Inc. ......... 1,056,688 44,300 Material Sciences Corp.*........ 376,550 24,000 McWhorter Technologies, Inc.*... 549,000 111,400 NL Industries, Inc. ............ 1,580,487 47,300 OM Group, Inc. ................. 1,726,449 5,000 TETRA Technologies, Inc.*....... 54,688 ------------ 9,586,699 ------------ COMMERCIAL SERVICES -- 1.3% 40,400 CDI Corp.*...................... 815,575 27,800 InaCom Corp.*................... 413,525 40,100 Maximus, Inc.*.................. 1,483,700 28,500 Metamor Worldwide, Inc. ........ 712,500 143,400 National Processing, Inc.*...... 788,700 72,700 Norrell Corp. .................. 1,072,325 107,200 NOVA Corp.*..................... 3,718,499 60,000 Personnel Group of America, Inc.*........................... 1,050,000 ------------ 10,054,824 ------------ COMPUTER HARDWARE MANUFACTURING -- 0.1% 33,100 Sequent Computer*............... 399,269 ------------ COMPUTER SOFTWARE -- 2.0% 30,800 Ardent Software, Inc.*.......... 708,400 20,700 Documentum, Inc. ............... 1,106,156 60,000 Excalibur Technologies Corp.*... 367,500 25,600 Hyperion Solutions Corp. ....... 460,800 105,100 Infoseek Corp. ................. 5,189,312 50,300 MacNeal-Schwendler Corp.*....... 352,100 141,208 Midway Games, Inc.*............. 1,553,288 82,700 Platinum Software, Inc.*........ 1,059,594 12,800 Progress Software Corp. ........ 432,000 Continued 34
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) COMPUTER SOFTWARE (CONTINUED) 36,600 Project Software & Development, Inc.*........................... $ 1,226,100 42,650 Rainbow Technologies, Inc.*..... 802,353 61,300 Sybase, Inc.*................... 454,003 159,200 Vanstar Corp.*.................. 1,472,600 ------------ 15,184,206 ------------ COMPUTERS -- INTEGRATED SYSTEMS -- 0.8% 122,000 Cerner Corp.*................... 3,263,500 58,900 MICROS Systems, Inc.*........... 1,936,338 51,500 Systems & Computer Technology Corp. .......................... 708,125 ------------ 5,907,963 ------------ COMPUTERS -- LOCAL AREA NETWORK -- 0.5% 175,700 Anixter International, Inc.*.... 3,568,906 ------------ COMPUTERS -- MEMORY DEVICES -- 1.0% 92,011 Applied Magnetics Corp.*........ 569,318 72,700 Hutchinson Technology, Inc.*.... 2,589,938 298,100 Western Digital Corp. .......... 4,490,130 ------------ 7,649,386 ------------ COMPUTERS -- MICRO -- 0.3% 150,300 Data General Corp.*............. 2,470,556 ------------ COMPUTERS -- OPTICAL RECOGNITION -- 0.1% 78,800 BancTec, Inc.*.................. 989,925 ------------ COMPUTERS -- PERIPHERAL EQUIPMENT -- 0.4% 46,700 Analogic Corp. ................. 1,757,088 78,600 Mylex Corp.*.................... 943,200 30,800 Printronix, Inc.*............... 442,750 ------------ 3,143,038 ------------ COMPUTERS -- SERVICES -- 2.1% 82,700 Analysts International Corp. ... 1,591,975 60,400 BA Merchant Services, Inc.*..... 1,215,550 83,800 Bell & Howell Co.*.............. 3,168,687 33,000 Computer Horizons Corp.*........ 878,625 66,500 Computer Task Group, Inc. ...... 1,803,813 67,600 DBT Online, Inc.*............... 1,685,775 40,100 Factset Research Systems*....... 2,476,175 148,800 PSINet, Inc.*................... 3,106,199 ------------ 15,926,799 ------------ COMPUTERS -- NETWORKING PRODUCTS -- 0.1% 29,500 Visual Networks, Inc. .......... 1,106,250 ------------ CONSTRUCTION -- 0.1% 84,200 Morrison Knudsen Corp.*......... 820,950 ------------ CONSUMER NON-DURABLE -- 0.2% 107,900 Wolverine World Wide, Inc. ..... 1,429,675 ------------ CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.8% 61,200 Department 56, Inc.*............ 2,298,825 67,500 Jenny Craig, Inc.*.............. 405,000 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) CONSUMER PRODUCTS -- MISCELLANEOUS (CONTINUED) 105,700 Jostens, Inc. .................. $ 2,768,019 46,950 Oneida, Ltd. ................... 695,447 ------------ 6,167,291 ------------ CONTAINERS -- METAL & GLASS -- 0.1% 17,900 BWAY Corp.*..................... 269,619 37,400 United States Can Corp.*........ 668,525 ------------ 938,144 ------------ CONTAINERS -- PAPER & PLASTIC -- 0.3% 58,700 ACX Technologies, Inc.*......... 777,775 110,700 Longview Fibre Co. ............. 1,279,969 ------------ 2,057,744 ------------ COSMETICS & TOILETRIES -- 0.3% 128,300 Playtex Products, Inc.*......... 2,060,819 39,400 Windmere-Durable Holding, Inc.*........................... 305,350 ------------ 2,366,169 ------------ DATA PROCESSING & REPRODUCTION -- 0.4% 39,600 Choicepoint, Inc.*.............. 2,554,200 105,700 Pegasystems, Inc.*.............. 439,316 ------------ 2,993,516 ------------ DIVERSIFIED -- 1.4% 33,850 Allied Products Corp. .......... 213,678 17,700 Chemed Corp. ................... 592,950 38,400 Clarcor, Inc. .................. 768,000 65,400 Federal Signal Corp. ........... 1,790,324 60,800 Gencorp, Inc. .................. 1,516,199 41,700 Griffon Corp.*.................. 443,063 54,900 Imation Corp.*.................. 960,750 51,239 IT Group, Inc. ................. 570,034 23,350 Manitowoc Co., Inc. ............ 1,036,156 45,900 MascoTech, Inc. ................ 786,038 31,500 Standex International Corp. .... 826,875 84,300 Triarc Cos., Inc.*.............. 1,348,800 ------------ 10,852,867 ------------ ELECTRICAL & ELECTRONIC -- 0.2% 40,400 Sigcorp, Inc. .................. 1,441,775 47,000 VLSI Technology, Inc.*.......... 514,063 ------------ 1,955,838 ------------ ELECTRICAL COMPONENTS -- SEMICONDUCTORS -- 1.3% 328,300 Cypress Semiconductor Corp.*.... 2,728,993 136,700 General Semiconductor, Inc.*.... 1,119,231 40,100 Integrated Circuit Systems, Inc.*........................... 706,763 189,500 International Rectifier Corp.*.......................... 1,847,625 153,700 MEMC Electronic Materials, Inc.*........................... 1,306,450 20,000 PMC-Sierra, Inc.*............... 1,262,500 87,100 Unitrode Corp.*................. 1,524,250 ------------ 10,495,812 ------------ Continued 35
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) ELECTRICAL EQUIPMENT -- 0.4% 46,500 C&D Technologies, Inc. ......... $ 1,278,750 27,100 United Illuminating Co. ........ 1,395,650 23,448 World Access, Inc.*............. 501,201 ------------ 3,175,601 ------------ ELECTRONIC -- MANUFACTURING & MACHINERY -- 0.6% 84,100 Kulicke & Soffa Industries, Inc.*........................... 1,492,774 55,600 PRI Automation, Inc.*........... 1,445,600 57,500 SpeedFam International, Inc.*... 984,688 30,500 Watkins-Johnson Co. ............ 621,438 ------------ 4,544,500 ------------ ELECTRONIC -- MILITARY -- 0.1% 29,800 ESCO Electronics Corp.*......... 270,063 36,100 United Industrial Corp. ........ 354,231 ------------ 624,294 ------------ ELECTRONIC -- MISCELLANEOUS COMPONENTS -- 2.1% 102,100 BMC Industries, Inc. ........... 638,125 58,256 CTS Corp. ...................... 2,534,135 38,900 Hadco Corp.*.................... 1,361,500 53,500 Innovex, Inc. .................. 733,953 73,100 Littlefuse, Inc.*............... 1,407,175 66,200 Oak Industries, Inc.*........... 2,316,999 76,300 OEA, Inc. ...................... 901,294 41,900 Park Electrochemical Corp. ..... 1,199,388 88,200 Photronics Corp.*............... 2,114,044 54,400 Plexus Corp.*................... 1,842,800 28,800 RadiSys Corp.*.................. 864,000 ------------ 15,913,413 ------------ ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.6% 88,600 Artesyn Technologies, Inc.*..... 1,240,400 64,300 Cable Design Technologies*...... 1,189,550 59,800 Technitrol, Inc. ............... 1,906,125 10,600 Triumph Group, Inc.*............ 339,200 ------------ 4,675,275 ------------ ELECTRONIC MEASURING EQUIPMENT -- 0.7% 169,500 Tektronix, Inc. ................ 5,095,594 ------------ ELECTRONIC MEASURING MACHINES -- 0.2% 99,100 Genrad, Inc.*................... 1,560,825 ------------ ELECTRONIC PARTS -- DISTRIBUTION -- 0.4% 34,918 Bell Industries, Inc.*.......... 397,192 103,000 Kent Electronics Corp.*......... 1,313,250 61,800 Marshall Industries*............ 1,514,100 ------------ 3,224,542 ------------ ELECTRONIC PRODUCTS -- MISCELLANEOUS -- 1.1% 48,300 Aeroflex, Inc.*................. 730,538 100,300 Allen Telecom, Inc.*............ 670,756 27,300 American Precision Industries*..................... 281,531 122,700 Ametek, Inc. ................... 2,737,743 61,500 Integrated Process Equipment*... 661,125 36,200 Kollmorgen Corp. ............... 552,050 40,500 Kopin Corp.*.................... 850,500 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) ELECTRONIC PRODUCTS -- MISCELLANEOUS (CONTINUED) 115,200 MagneTek, Inc.*................. $ 1,332,000 42,100 Recoton Corp.*.................. 755,169 ------------ 8,571,412 ------------ ENGINEERING -- 0.3% 40,100 Jacobs Engineering Group, Inc.*........................... 1,634,075 33,200 Stone & Webster, Inc. .......... 1,103,900 ------------ 2,737,975 ------------ ENGINEERING -- RESEARCH & DEVELOPMENT SERVICES -- 0.1% 19,490 URS Corp.*...................... 455,579 ------------ ENTERTAINMENT -- 0.3% 60,500 Acclaim Entertainment........... 741,125 25,900 Marvel Enterprises, Inc. ....... 160,256 9,700 Scientific Games Holdings Corp.*.......................... 183,088 71,900 Vail Resorts, Inc.*............. 1,581,800 ------------ 2,666,269 ------------ FERTILIZERS -- 0.5% 59,536 Mississippi Chemical Corp. ..... 833,504 160,500 Terra Industries, Inc. ......... 993,094 38,500 Terra Nitrogen Company LP....... 397,031 39,900 The Scotts Company*............. 1,533,656 ------------ 3,757,285 ------------ FINANCIAL -- CONSUMER LOANS -- 0.6% 209,200 AmeriCredit Corp.*.............. 2,889,574 136,500 Arcadia Financial Ltd.*......... 494,813 35,900 Student Loan Corp. ............. 1,611,013 ------------ 4,995,400 ------------ FINANCIAL -- INVESTMENT BANKER/BROKER -- 3.1% 31,400 Advest Group, Inc. ............. 580,900 104,000 Ameritrade Holding Corp. -- Class A*........................ 3,276,000 44,250 Dain Rauscher Corp. ............ 1,305,375 124,000 E*Trade Group, Inc.*............ 5,800,874 122,700 Everen Capital Corp. ........... 2,791,425 87,700 Hambrecht & Quist Group*........ 1,989,694 22,000 Interstate/Johnson Lane, Inc. ........................... 688,875 71,800 Jefferies Group, Inc. .......... 3,563,075 113,225 Morgan Keegan, Inc. ............ 2,130,045 39,500 National Discount Brokers Group*.......................... 787,531 34,630 Southwest Securities Group, Inc. ........................... 696,929 ------------ 23,610,723 ------------ FINANCIAL -- INVESTMENT MANAGEMENT COS. -- 0.3% 127,500 Eaton Vance Corp. .............. 2,661,563 ------------ FINANCIAL -- LEASING COMPANY -- 0.3% 45,800 Cort Business Services Corp.*... 1,110,649 39,700 DVI, Inc.*...................... 719,563 53,400 Rental Service Corp.*........... 837,713 ------------ 2,667,925 ------------ Continued 36
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FINANCIAL -- MORTGAGE & RELATED SERVICES -- 0.2% 47,600 Triad Guaranty, Inc.*........... $ 1,050,175 115,700 United Cos. Financial Corp. .... 390,488 ------------ 1,440,663 ------------ FINANCIAL -- SAVINGS & LOAN -- 0.6% 100,686 Downey Financial Corp. ......... 2,561,200 72,800 FirstFed Financial Corp.*....... 1,301,300 93,873 Westcorp........................ 651,244 ------------ 4,513,744 ------------ FINANCIAL SERVICES -- DIVERSIFIED -- 0.6% 34,600 Healthcare Financial Partners*....................... 1,373,188 125,200 Paymentech, Inc.*............... 2,316,200 157,900 Phoenix Investment Partners..... 1,332,281 ------------ 5,021,669 ------------ FOOD -- DIVERSIFIED -- 0.6% 18,900 Morrison Health Care, Inc. ..... 360,281 83,200 Ralcorp Holding, Inc.*.......... 1,518,400 73,500 Smucker (J.M.) Co. ............. 1,626,188 2,900 Tasty Baking Co. ............... 44,044 64,020 Zapata Corp. ................... 784,245 ------------ 4,333,158 ------------ FOOD -- FLOUR & GRAIN -- 0.2% 50,600 International Multi-Foods Corp. .......................... 1,306,113 ------------ FOOD -- MEAT PRODUCTS -- 0.2% 77,500 Pilgrim's Pride Corp. .......... 1,545,156 ------------ FOOD ITEMS -- WHOLESALE -- 0.1% 42,500 Fleming Co., Inc. .............. 440,938 ------------ FOREST PRODUCTS -- 0.0% 3,700 Deltic Timber Corp. ............ 75,388 ------------ FUNERAL SERVICES -- 0.2% 52,100 Equity Corp. International*..... 1,383,906 ------------ FURNITURE -- 0.2% 40,387 Bush Industries, Inc. .......... 502,313 3,900 Falcon Products, Inc. .......... 46,800 47,700 O'Sullivan Industries*.......... 500,850 24,900 Shelby Williams Industries, Inc. ........................... 298,800 ------------ 1,348,763 ------------ GLASS PRODUCTS -- 0.1% 36,200 Libbey, Inc. ................... 1,047,538 ------------ HAZARDOUS WASTE DISPOSAL -- 0.1% 62,500 Safety-Kleen Corp. ............. 882,813 ------------ HEALTH CARE -- 0.4% 122,600 IDEXX Laboratories, Inc.*....... 3,298,706 ------------ HOTELS & LODGING -- 0.5% 54,450 Marcus Corp. ................... 884,813 127,500 Prime Hospitality Corp.*........ 1,346,719 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) HOTELS & LODGING (CONTINUED) 79,900 Red Roof Inns, Inc.*............ $ 1,348,312 35,500 Sunburst Hospitality Corp.*..... 150,875 ------------ 3,730,719 ------------ INDUSTRIAL -- AUTOMOTIVE/ROBOTICS -- 0.4% 63,700 Esterline Technologies Corp.*... 1,385,475 86,700 Gerber Scientific, Inc. ........ 2,064,544 ------------ 3,450,019 ------------ INSTRUMENTS -- CONTROL -- 0.5% 115,200 Roper Industries, Inc. ......... 2,347,200 100,500 Watts Industries, Inc. -- Class A......................... 1,670,813 ------------ 4,018,013 ------------ INSTRUMENTS -- SCIENTIFIC -- 0.9% 86,200 Dionex Corp.*................... 3,157,075 151,700 EG&G, Inc. ..................... 4,219,155 ------------ 7,376,230 ------------ INSURANCE -- ACCIDENT & HEALTH -- 0.5% 83,800 Arm Financial Group, Inc. -- Class A......................... 1,859,313 26,900 Penn Treaty American Corp.*..... 724,619 42,137 RLI Corp. ...................... 1,401,055 ------------ 3,984,987 ------------ INSURANCE -- BROKERS -- 0.7% 59,100 Arthur J. Gallagher & Co. ...... 2,607,787 46,600 Blanch (E.W.) Holdings, Inc. ... 2,210,588 47,200 Hilb, Rogal & Hamilton Co. ..... 938,100 ------------ 5,756,475 ------------ INSURANCE -- LIFE -- 1.2% 113,800 American Heritage Life Investment Corp. ............... 2,780,987 53,000 American Medical Security Group, Inc. .................... 758,563 65,054 Amerus Life Holdings, Inc. ..... 1,455,582 68,584 Delphi Financial Group*......... 3,596,373 74,500 Life USA Holding, Inc. ......... 959,188 ------------ 9,550,693 ------------ INSURANCE -- MULTI-LINE -- 0.9% 126,000 Enhance Financial Services Group, Inc. .................... 3,780,000 119,800 FBL Financial Group, Inc. -- Class A......................... 2,905,150 ------------ 6,685,150 ------------ INSURANCE -- PROPERTY & CASUALTY -- 3.9% 54,900 Acceptance Insurance Cos.*...... 1,111,725 104,600 Capital Re Corp. ............... 2,098,537 42,600 Centris Group, Inc. ............ 415,350 34,400 Chartwell Re Corp. ............. 817,000 37,900 Executive Risk, Inc. ........... 2,082,131 60,279 Fidelity National Financial, Inc. ........................... 1,838,506 60,000 First American Financial Corp. .......................... 1,927,500 98,500 Foremost Corporation of America......................... 2,068,500 Continued 37
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) INSURANCE -- PROPERTY & CASUALTY (CONTINUED) 32,300 FPIC Insurance Group, Inc.*..... $ 1,544,344 105,618 Frontier Insurance Group, Inc. ........................... 1,359,832 76,400 Gainsco, Inc. .................. 467,950 9,500 Gryphon Holdings, Inc.*......... 176,938 133,700 HCC Insurance Holdings, Inc. ... 2,356,462 52,400 Highlands Insurance Group*...... 684,475 86,800 LaSalle Re Holdings Ltd......... 1,898,750 41,700 MMI Cos., Inc. ................. 698,475 65,900 NAC Re Corp. ................... 3,093,180 15,700 Penn-America Group, Inc. ....... 142,281 43,700 Philadelphia Consolidated Holding Corp.*.................. 988,713 49,300 PXRE Corp. ..................... 1,235,581 45,900 SCPIE Holdings, Inc. ........... 1,391,344 63,700 Zenith National Insurance Co. ............................ 1,473,063 ------------ 29,870,637 ------------ LASERS -- SYSTEMS/COMPONENTS -- 0.9% 83,900 Coherent, Inc.*................. 1,043,506 36,900 Electro Scientific Industries, Inc.*........................... 1,672,031 52,400 VISX, Inc.*..................... 4,581,726 ------------ 7,297,263 ------------ LEISURE & RECREATION PRODUCTS -- 0.9% 38,000 Huffy Corp. .................... 627,000 42,530 K2, Inc. ....................... 438,591 197,600 Oakley, Inc.*................... 1,877,200 71,600 Polaris Industries, Inc. ....... 2,805,825 21,900 Steinway Musical Instruments*... 569,400 76,400 Sturm, Ruger & Co., Inc. ....... 912,025 ------------ 7,230,041 ------------ LEISURE & RECREATION SERVICES -- 0.1% 32,100 Carmike Cinemas, Inc.*.......... 652,031 ------------ LEISURE & RECREATION/GAMING -- 0.7% 104,400 Aztar Corp.*.................... 528,525 173,400 Boyd Gaming Corp.*.............. 574,388 101,550 Grand Casinos, Inc.*............ 818,747 27,900 Harveys Casino Resorts.......... 772,481 44,900 Hollywood Park, Inc.*........... 373,231 25,300 Jackpot Enterprises, Inc.*...... 238,769 58,100 Rio Hotel & Casino, Inc.*....... 922,337 96,300 Station Casinos, Inc.*.......... 788,456 57,300 WMS Industries, Inc.*........... 422,588 ------------ 5,439,522 ------------ LINEN SUPPLY & RELATED -- 0.1% 26,000 Angelica Corp. ................. 484,250 27,900 Unifirst Corp. ................. 636,469 ------------ 1,120,719 ------------ MACHINE TOOLS & RELATED PRODUCTS -- 0.5% 87,145 Applied Power, Inc. ............ 3,289,724 23,600 Brown & Sharpe Manufacturing Co.*.............. 188,800 20,400 Gleason Corp. .................. 369,750 ------------ 3,848,274 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MACHINERY -- CONSTRUCTION/MINING -- 0.4% 40,400 CMI Corp., Class A.............. $ 320,675 35,150 Commercial Intertech Corp. ..... 454,753 92,500 JLG Industries, Inc. ........... 1,445,312 40,600 Terex Corp.*.................... 1,159,638 ------------ 3,380,378 ------------ MACHINERY -- DIVERSIFIED -- 0.1% 22,500 Cascade Corp. .................. 355,781 3,800 Gardner Denver Machinery, Inc.*........................... 56,050 ------------ 411,831 ------------ MACHINERY -- ELECTRICAL -- 0.5% 76,000 Baldor Electric Co. ............ 1,539,000 31,657 Kuhlman Corp. .................. 1,199,009 57,900 Smith (A.O.) Corp. ............. 1,422,169 ------------ 4,160,178 ------------ MACHINERY -- GENERAL INDUSTRIAL -- 0.9% 66,830 Albany International Corp., Class A......................... 1,265,601 42,725 Applied Industrial Technology, Inc. ............... 592,809 53,100 Chart Industries, Inc. ......... 404,888 52,900 Global Industrial Technologies, Inc.*........................... 565,369 55,487 Graco, Inc. .................... 1,636,866 62,425 Idex Corp. ..................... 1,529,412 83,566 Paxar Corp.*.................... 746,871 27,700 Scotsman Industries, Inc. ...... 569,581 ------------ 7,311,397 ------------ MACHINERY -- MATERIAL HANDLING -- 0.2% 17,200 Nacco Industries, Inc. ......... 1,582,400 ------------ MEDICAL -- BIOMEDICAL/GENETIC -- 0.8% 73,100 Affymetrix, Inc.*............... 1,781,813 67,100 Alkermes, Inc.*................. 1,488,781 107,300 Creative Biomolecules, Inc.*.... 395,669 93,400 Millennium Pharmaceuticals*..... 2,416,725 ------------ 6,082,988 ------------ MEDICAL -- BIOTECHNOLOGY -- 0.0% 31,900 Cryolife, Inc.*................. 378,813 ------------ MEDICAL -- DRUGS -- 1.3% 75,400 Alpharma, Inc. ................. 2,662,563 149,200 Carter-Wallace, Inc. ........... 2,928,049 62,700 Guilford Pharmaceuticals*....... 893,475 106,200 Ligand Pharmaceuticals*......... 1,234,575 45,300 Medicus Pharmaceuticals, Inc.*........................... 2,701,012 ------------ 10,419,674 ------------ MEDICAL -- HEALTH MEDICAL ORGANIZATION -- 0.5% 149,800 Mid Atlantic Medical Services, Inc.*........................... 1,469,913 86,250 Sierra Health Services, Inc.*... 1,816,640 53,000 United Wisconsin Services....... 460,438 ------------ 3,746,991 ------------ Continued 38
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MEDICAL -- HOSPITAL -- 0.7% 40,300 Curative Health Services, Inc.*........................... $ 1,350,050 228,792 Mariner Post-Acute Network, Inc. ........................... 1,043,864 177,200 Paracelsus Health*.............. 276,875 48,500 Pediatrix Medical Group, Inc.*........................... 2,906,968 ------------ 5,577,757 ------------ MEDICAL -- HOSPITAL SERVICES -- 0.3% 92,800 Magellan Health Services, Inc.*........................... 777,200 95,700 Quest Diagnostics, Inc.*........ 1,704,656 ------------ 2,481,856 ------------ MEDICAL -- NURSING HOMES -- 0.6% 36,700 American Retirement Corp.*...... 575,731 335,000 Beverly Enterprises, Inc. ...... 2,261,250 80,100 Integrated Health Services, Inc.*........................... 1,131,413 159,725 Sun Healthcare Group, Inc.*..... 1,048,195 ------------ 5,016,589 ------------ MEDICAL -- OUTPATIENT/HOME CARE -- 0.8% 165,500 Apria Healthcare Group, Inc.*... 1,479,156 138,200 Coram Healthcare Corp.*......... 259,125 112,800 Genesis Health Ventures, Inc.*........................... 987,000 196,100 NovaCare, Inc.*................. 490,250 141,700 Orthodontic Centers of America*........................ 2,754,294 ------------ 5,969,825 ------------ MEDICAL -- WHOLESALE DRUG -- 0.4% 47,066 Bindley Western Industries, Inc. ........................... 2,318,001 10,000 Express Scripts, Inc. -- Class A*........................ 671,250 ------------ 2,989,251 ------------ MEDICAL EQUIPMENT & SUPPLIES -- 0.4% 48,300 Conmed Corp.*................... 1,593,900 63,800 Respironics, Inc.*.............. 1,277,994 ------------ 2,871,894 ------------ MEDICAL INSTRUMENTS -- 0.3% 93,100 Acuson Corp.*................... 1,384,862 43,000 OEC Medical Systems, Inc.*...... 1,351,813 ------------ 2,736,675 ------------ MEDICAL PRODUCTS -- 0.7% 44,000 Diagnostic Products Corp. ...... 1,369,500 86,800 Haemonetics Corp.*.............. 1,974,700 27,500 Maxxim Medical, Inc.*........... 818,125 103,400 Owens & Minor, Inc. ............ 1,628,550 ------------ 5,790,875 ------------ MEDICAL SUPPLIES -- 0.4% 65,800 Ocular Sciences, Inc.*.......... 1,760,150 78,500 Sola International, Inc.*....... 1,354,125 ------------ 3,114,275 ------------ MEDICAL/DENTAL SUPPLIES -- 0.7% 91,900 Ballard Medical Products........ 2,234,318 46,500 Cooper Cos., Inc.*.............. 961,969 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MEDICAL/DENTAL SUPPLIES (CONTINUED) 62,200 Sunrise Medical, Inc.*.......... $ 773,613 53,000 West Co., Inc. ................. 1,891,438 ------------ 5,861,338 ------------ METAL -- GOLD -- 0.1% 106,100 Hecla Mining Co.*............... 384,613 70,000 Meridian Gold, Inc.*............ 398,125 ------------ 782,738 ------------ METAL -- IRON -- 0.1% 24,300 Cleveland Cliffs, Inc. ......... 979,594 ------------ METAL -- MISCELLANEOUS -- 0.1% 37,400 Brush Wellman, Inc. ............ 652,163 ------------ METAL -- NON-FERROUS -- 0.2% 153,500 Kaiser Aluminum Corp.*.......... 748,313 43,730 RTI International Metals, Inc. ........................... 612,220 ------------ 1,360,533 ------------ METAL -- PROCESSING & FABRICATION -- 0.5% 25,000 Amcast Industrial Corp. ........ 478,125 30,300 Chase Industries, Inc.*......... 316,256 35,233 Commercial Metals Co. .......... 977,716 77,700 Mueller Industries, Inc.*....... 1,578,281 32,500 Wolverine Tube, Inc.*........... 682,500 ------------ 4,032,878 ------------ METAL -- SILVER -- 0.0% 36,400 Coeur d'Alene Mines Corp.*...... 168,350 ------------ METAL PRODUCTS -- DISTRIBUTION -- 0.1% 32,550 Reliance Steel & Aluminum Co. ............................ 899,194 ------------ METAL PRODUCTS -- FASTENERS -- 0.2% 27,500 SPS Technologies, Inc.*......... 1,529,688 13,800 TransTechnology Corp. .......... 286,350 ------------ 1,816,038 ------------ OFFICE SUPPLIES & FORMS -- 0.8% 38,400 American Business Products, Inc. ........................... 902,400 34,000 Daisytek International Corp.*... 646,000 29,700 Ennis Business Forms, Inc. ..... 295,144 32,200 Hunt Manufacturing Corp. ....... 342,125 62,900 John H. Harland Co. ............ 994,606 33,800 New England Business Service, Inc. ........................... 1,322,425 50,200 Standard Register Co. .......... 1,553,063 ------------ 6,055,763 ------------ OIL & GAS -- DRILLING -- 0.1% 29,000 Atwood Oceanics, Inc.*.......... 493,000 165,800 Parker Drilling Co.*............ 528,488 ------------ 1,021,488 ------------ OIL -- FIELD SERVICES -- 0.7% 57,700 Hanover Compressor Co.*......... 1,482,168 49,600 Oceaneering International, Inc.*........................... 744,000 62,700 RPC Energy Services, Inc. ...... 462,413 29,500 Seacor Holdings, Inc.*.......... 1,458,406 Continued 39
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) OIL -- FIELD SERVICES (CONTINUED) 54,600 Seitel, Inc.*................... $ 679,088 53,800 Unit Corp.*..................... 225,288 46,600 Veritas DGC, Inc.*.............. 605,800 ------------ 5,657,163 ------------ OIL -- PRODUCTION/PIPELINE -- 0.6% 62,900 Aquila Gas Pipeline Corp. ...... 538,581 56,900 Kaneb Services, Inc.*........... 231,156 55,000 Northern Border Partners, LP.... 1,797,813 61,800 Teppco Partners................. 1,506,375 68,500 Western Gas Resources, Inc. .... 393,875 ------------ 4,467,800 ------------ OIL -- U.S. EXPLORATION & PRODUCTION -- 1.4% 67,500 Belco Oil & Gas Corp. .......... 375,469 50,600 Benton Oil & Gas Co.*........... 151,800 48,200 Berry Petroleum Co. ............ 683,838 44,600 Cabot Oil & Gas Corp. .......... 669,000 37,500 Comstock Resources, Inc.*....... 114,844 83,850 Cross Timbers Oil Co. .......... 628,875 40,500 Forcenergy, Inc.*............... 106,313 64,700 Forest Oil Corp.*............... 549,950 49,700 Houston Exploration Co.*........ 987,787 28,700 HS Resources, Inc.*............. 213,456 56,900 KCS Energy, Inc. ............... 174,256 3,800 Key Production Company, Inc.*... 19,950 54,200 Louis Dreyfus Natural Gas*...... 772,350 24,900 Meridian Resource Corp.*........ 79,369 76,100 Newfield Exploration Co.*....... 1,588,587 41,900 Nuevo Energy Co.*............... 481,850 26,300 Range Resources Corp. .......... 90,406 63,100 Snyder Oil Corp. ............... 840,019 32,000 Stone Energy Corp.*............. 919,999 32,836 Swift Energy Co.*............... 242,166 109,900 Vintage Petroleum, Inc. ........ 947,887 ------------ 10,638,171 ------------ OIL -- U.S. INTEGRATED -- 0.1% 61,530 Pennzoil-Quaker State Co.*...... 911,413 ------------ OIL FIELD MACHINERY & EQUIPMENT -- 0.1% 36,400 Daniel Industries, Inc. ........ 441,350 ------------ OIL REFINING -- 0.2% 46,100 Frontier Oil Corp.*............. 227,619 33,500 Giant Industries, Inc. ......... 314,063 57,200 Tesoro Petroleum Corp.*......... 693,549 27,050 World Fuel Services Corp. ...... 290,788 ------------ 1,526,019 ------------ PAPER & RELATED PRODUCTS -- 0.6% 82,100 Buckeye Technologies, Inc.*..... 1,226,369 50,200 Chesapeake Corp. ............... 1,851,124 11,100 Fibermark, Inc.*................ 151,238 38,700 Pope & Talbot, Inc. ............ 324,113 50,700 Rock-Tenn Company............... 858,731 ------------ 4,411,575 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) PAPER & RELATED PRODUCTS (CONTINUED) POLLUTION CONTROL -- 0.4% 78,700 Calgon Carbon Corp. ............ $ 590,250 47,500 Dames & Moore, Inc. ............ 611,563 34,700 Imco Recycling, Inc. ........... 535,681 20,700 Ionics, Inc.*................... 619,706 41,000 Lydall, Inc.*................... 486,875 28,200 Osmonics, Inc.*................. 237,938 ------------ 3,082,013 ------------ PRINTING -- COMMERCIAL -- 0.3% 26,500 Consolidated Graphics, Inc.*.... 1,790,406 73,600 Mail-Well, Inc.*................ 841,800 ------------ 2,632,206 ------------ PROTECTION -- SAFETY -- 0.3% 42,100 Borg-Warner Security Corp.*..... 789,375 48,400 Checkpoint Systems, Inc.*....... 598,950 46,900 Wackenhut Corrections Corp.*.... 1,342,513 ------------ 2,730,838 ------------ PUBLISHING -- BOOKS -- 0.1% 46,300 Thomas Nelson, Inc. ............ 625,050 ------------ PUBLISHING -- NEWSPAPERS -- 0.2% 122,000 Journal Register Co.*........... 1,830,000 ------------ PUBLISHING -- PERIODICALS -- 0.3% 117,400 American Media, Inc.*........... 653,038 38,500 Big Flower Holdings, Inc.*...... 849,406 41,100 Playboy Enterprises, Inc.*...... 860,531 ------------ 2,362,975 ------------ REAL ESTATE -- 0.5% 71,500 Castle & Cooke, Inc.*........... 1,054,625 47,500 CB Richard Ellis Services*...... 860,938 69,900 Grubb & Ellis Co.*.............. 563,569 64,000 Webb (Del) Corp. ............... 1,763,999 ------------ 4,243,131 ------------ RESTAURANTS -- 1.1% 8,375 Consolidated Products, Inc.*.... 172,734 116,400 Foodmaker, Inc.*................ 2,568,074 79,300 Host Marriott Services Corp.*... 822,738 69,700 Luby's Cafeteria, Inc. ......... 1,075,994 19,000 Morton's Restaurant Group, Inc.*........................... 358,625 67,900 Ruby Tuesday, Inc. ............. 1,442,875 60,200 Sbarro, Inc. ................... 1,576,487 65,500 Shoney's, Inc.*................. 85,969 73,900 TCBY Enterprises, Inc. ......... 517,300 ------------ 8,620,796 ------------ RETAIL -- APPAREL/SHOES -- 1.4% 57,800 Ann Taylor Stores Corp.*........ 2,279,487 113,880 Burlington Coat Factory Warehouse Corp. ................ 1,857,668 40,000 Cole (Kenneth) Productions, Inc.*........................... 750,000 69,500 Footstar, Inc.*................. 1,737,500 55,500 Genesco, Inc.*.................. 315,656 52,200 Syms Corp.*..................... 469,800 Continued 40
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) RETAIL -- APPAREL/SHOES (CONTINUED) 77,300 Talbots Inc. ................... $ 2,425,287 49,050 The Buckle, Inc.*............... 1,177,200 ------------ 11,012,598 ------------ RETAIL -- AUTOMOBILE -- 0.1% 24,300 Circuit City Stores -- Carmax*............... 132,131 6,000 Cross-Continent Auto Retailer*....................... 58,500 27,700 United Auto Group, Inc.*........ 254,494 ------------ 445,125 ------------ RETAIL -- CONSUMER ELECTRONICS -- 0.1% 73,900 Handleman Co.*.................. 1,039,219 ------------ RETAIL -- DISCOUNT -- 0.7% 52,875 99 Cents Only Stores*........... 2,597,484 58,900 Shopko Stores, Inc.*............ 1,958,425 62,600 Smart & Final, Inc. ............ 602,525 ------------ 5,158,434 ------------ RETAIL -- FABRIC & CRAFT -- 0.1% 54,700 Jo-Ann Stores, Inc., -- Class A*........................ 882,038 ------------ RETAIL -- GENERAL MERCHANDISE -- 0.7% 55,900 Cash America Intl., Inc. ....... 848,981 35,200 Cole National Corp.*............ 602,800 63,500 Hancock Fabrics, Inc. .......... 531,813 80,500 Musicland Stores Corp.*......... 1,202,469 64,350 Russ Berrie & Co., Inc. ........ 1,512,224 82,650 The Sports Authority, Inc.*..... 433,913 ------------ 5,132,200 ------------ RETAIL -- HOME FURNISHINGS -- 0.8% 81,500 Bombay Co., Inc.*............... 453,344 128,900 Heilig Meyers Co. .............. 862,019 149,300 La-Z-Boy, Inc. ................. 2,659,406 44,200 Linens 'n Things, Inc.*......... 1,751,425 33,800 Maxim Group, Inc.*.............. 811,200 ------------ 6,537,394 ------------ RETAIL -- JEWELRY -- 0.6% 102,300 Claire's Stores, Inc. .......... 2,097,150 83,100 Zale Corp.*..................... 2,679,975 ------------ 4,777,125 ------------ RETAIL -- MAIL ORDER -- 0.4% 52,900 Enesco Group, Inc. ............. 1,229,925 85,900 Global Directmail, Inc.*........ 2,007,913 ------------ 3,237,838 ------------ RETAIL -- REGIONAL DEPARTMENT STORES -- 0.1% 73,500 Value City Department Stores, Inc.*........................... 1,024,406 ------------ RETAIL -- SPECIAL LINE -- 0.0% 4,000 Heritage Propane Partners LP.... 90,250 ------------ RETAIL -- SUPERMARKETS -- 0.3% 110,700 Ruddick Corp. .................. 2,421,563 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) RETAIL/WHOLESALE -- AUTO PARTS -- 0.2% 48,900 Discount Auto Parts, Inc.*...... $ 1,072,744 41,000 Tyler Corp. .................... 251,125 ------------ 1,323,869 ------------ RUBBER & PLASTICS -- 0.1% 34,300 Furon Co. ...................... 585,244 ------------ SHOES & RELATED APPAREL -- 0.6% 25,175 Barry (R.G.) Corp.*............. 276,925 49,800 Brown Group, Inc. .............. 874,613 90,000 Reebok International Ltd.*...... 1,338,750 115,200 Stride Rite Corp. .............. 1,008,000 29,900 Timberland Co., Class A*........ 1,362,318 ------------ 4,860,606 ------------ SOAP & CLEANING PREPARATIONS -- 0.3% 54,800 Church & Dwight Co., Inc. ...... 1,969,375 ------------ STEEL -- PIPES & TUBES -- 0.1% 42,800 NS Group, Inc.*................. 189,925 31,900 Quanex Corp. ................... 719,744 12,300 Shaw Group, Inc.*............... 98,400 ------------ 1,008,069 ------------ STEEL -- PRODUCERS -- 0.6% 229,200 Armco, Inc.*.................... 1,002,749 12,600 Atchison Casting Corp.*......... 116,550 48,900 Birmingham Steel Corp. ......... 204,769 41,800 Carpenter Technology............ 1,418,587 39,300 Lone Star Technologies, Inc.*... 397,913 92,700 National Steel Corp. ........... 660,488 50,200 Rouge Industries, Inc. ......... 439,250 76,700 Weirton Steel Corp.*............ 119,844 55,800 WHX Corp.*...................... 561,488 ------------ 4,921,638 ------------ STEEL -- SPECIALTY -- 0.1% 54,200 Oregon Steel Mills, Inc. ....... 643,625 ------------ TECHNOLOGY -- 0.2% 53,400 Security Dynamics Technologies, Inc. ........................... 1,228,200 25,000 Structural Dynamics*............ 496,875 ------------ 1,725,075 ------------ TELECOMMUNICATIONS -- CELLULAR -- 0.1% 93,500 American Mobile Satelllite Corp.*.......................... 490,875 ------------ TELECOMMUNICATIONS -- EQUIPMENT -- 1.7% 37,200 C-Cor Electronics, Inc.*........ 511,500 67,500 Dsp Communications Inc. ........ 1,033,594 60,100 InterVoice, Inc.*............... 2,073,450 78,600 Network Equipment Technologies, Inc.*............. 810,563 58,800 Plantronics, Inc.*.............. 5,056,799 60,000 Superior Telecom, Inc. ......... 2,834,999 22,300 Tech-Sym Corp.*................. 496,175 54,300 Titan Corp. .................... 298,650 ------------ 13,115,730 ------------ Continued 41
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) TELECOMMUNICATIONS -- SERVICES AND EQUIPMENT -- 0.2% 42,700 Mastec, Inc.*................... $ 896,700 60,400 Smartalk Teleservices, Inc.*.... 160,438 37,000 Western Wireless Corp. -- Class A............................... 814,000 ------------ 1,871,138 ------------ TEXTILE -- APPAREL -- 1.0% 63,000 Authentic Fitness Corp. ........ 1,149,750 154,300 Burlington Industries, Inc.*.... 1,697,299 66,500 Delta Woodside Industries, Inc. ........................... 399,000 23,000 Donna Karan International, Inc.*........................... 173,938 37,700 Guess ?, Inc.*.................. 181,431 82,700 Hartmarx Corp.*................. 465,188 57,650 Kellwood Co. ................... 1,441,250 24,700 Oxford Industries, Inc. ........ 697,775 75,900 Phillips-Van Heusen Corp. ...... 545,531 33,500 St. John Knits, Inc. ........... 871,000 ------------ 7,622,162 ------------ TEXTILE -- HOME FURNISHINGS -- 0.1% 34,013 Pillowtex Corp. ................ 909,848 ------------ TEXTILE -- PRODUCTS -- 0.3% 99,900 Collins & Aikman Corp.*......... 511,988 75,300 Cone Mills Corp.*............... 423,563 4,800 Culp, Inc. ..................... 37,800 20,700 Galey & Lord, Inc.*............. 178,538 47,550 Guilford Mills, Inc. ........... 793,490 74,900 Polymer Group, Inc.*............ 744,318 ------------ 2,689,697 ------------ TOBACCO -- 0.2% 38,300 Brooke Group, Ltd. ............. 933,563 45,100 Schweitzer-Mauduit International................... 696,231 25,740 Standard Commercial Corp. ...... 220,399 ------------ 1,850,193 ------------ TOOLS -- HAND HELD -- 0.1% 35,200 Toro Co. ....................... 1,003,200 ------------ TRANSPORTATION -- 0.2% 36,000 Coach USA, Inc.*................ 1,248,750 79,900 OMI Corp.*...................... 259,675 ------------ 1,508,425 ------------ TRANSPORTATION -- AIR FREIGHT -- 0.4% 20,600 AirNet Systems, Inc.*........... 296,125 47,900 Atlas Air, Inc.*................ 2,344,106 58,900 Pittston Burlington Group....... 655,263 ------------ 3,295,494 ------------ TRANSPORTATION -- AIRLINE -- 0.4% 31,900 Alaska Airgroup, Inc.*.......... 1,411,575 95,300 America West Holding Corp. -- Class B*........................ 1,620,100 11,250 Midwest Express Holdings*....... 296,016 ------------ 3,327,691 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) TRANSPORTATION -- EQUIPMENT & LEASING -- 0.9% 43,000 Greenbrier Cos., Inc. .......... $ 607,375 51,250 Interpool, Inc. ................ 858,438 33,700 Motivepower Industries, Inc.*... 1,084,719 146,650 Rollins Truck Leasing Corp. .... 2,163,087 49,800 Westinghouse Air Brake Co. ..... 1,216,988 32,500 Xtra Corp. ..................... 1,344,687 ------------ 7,275,294 ------------ TRANSPORTATION -- RAILROAD -- 0.3% 75,300 Florida East Coast Industries... 2,649,619 ------------ TRANSPORTATION -- SHIPPING -- 0.2% 77,800 Overseas Shipholding Group...... 1,249,663 ------------ UTILITIES -- ELECTRIC POWER -- 2.2% 29,900 Black Hills Corp. .............. 788,613 5,900 Calpine Corp.*.................. 148,975 29,400 Central Hudson Gas & Electric Corp. .......................... 1,315,650 31,500 Central Vermont Public Service Corp. .......................... 326,813 25,200 CILCORP, Inc. .................. 1,541,924 37,700 Cleco Corp. .................... 1,293,581 55,200 CMP Group, Inc. ................ 1,041,900 41,600 Commonwealth Energy Systems Co. ............................ 1,684,799 26,200 Eastern Utilities Assoc. ....... 740,150 35,200 Empire District Electric Co. ... 871,200 32,800 Northwestern Corp. ............. 867,150 25,900 Orange & Rockland Utilities..... 1,476,300 70,700 Public Service New Mexico....... 1,444,931 23,300 TNP Enterprises, Inc. .......... 883,944 55,320 UniSource Energy Corp.*......... 746,820 40,000 WPS Resources Corp. ............ 1,410,000 ------------ 16,582,750 ------------ UTILITIES -- GAS DISTRIBUTION -- 2.4% 33,150 Atmos Energy Corp. ............. 1,069,088 25,800 Bay State Gas Co. .............. 1,027,163 15,400 Connecticut Energy Corp. ....... 469,700 18,900 Connecticut Natural Gas Corp. .......................... 496,125 27,800 Eastern Enterprises............. 1,216,250 51,200 Energen Corp. .................. 998,400 53,466 Indiana Energy, Inc. ........... 1,316,600 30,400 Laclede Gas Co. ................ 813,200 34,300 New Jersey Resources Corp. ..... 1,354,850 11,750 North Carolina Natural Gas...... 389,953 22,900 NUI Corp. ...................... 614,006 38,900 Public Service Co. of North Carolina........................ 1,011,400 20,200 South Jersey Industries, Inc. ........................... 528,988 56,077 Southern Union Co.*............. 1,366,876 54,900 Southwest Gas Corp. ............ 1,475,437 59,500 Southwestern Energy Co. ........ 446,250 49,800 UGI Corp. ...................... 1,182,750 62,600 Wicor, Inc. .................... 1,365,460 24,400 Yankee Energy System, Inc. ..... 710,648 ------------ 17,853,144 ------------ Continued 42
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THE KENT SMALL COMPANY GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UTILITIES -- WATER SUPPLY -- 0.5% 15,500 American States Water Co. ...... $ 422,375 14,600 Aquarion Co. ................... 598,600 36,200 Philadelphia Suburban Corp. .... 1,070,163 71,600 United Water Resources, Inc. ... 1,713,925 ------------ 3,805,063 ------------ WHOLESALE DISTRIBUTION -- 0.1% 16,300 Aviation Sales Co.*............. 662,188 ------------ WIRE & CABLE PRODUCTS -- 0.5% 6,900 Alpine Group, Inc.*............. 103,500 42,100 Barnes Group, Inc. ............. 1,236,688 45,100 Belden, Inc. ................... 955,556 77,800 General Cable Corp. ............ 1,594,900 ------------ 3,890,644 ------------ TOTAL COMMON STOCKS............. 751,544,035 ------------ (Cost $663,135,103) SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE ---------- -------------------------------- ------------ RIGHTS -- 0.0% BEVERAGES -- SOFT DRINKS -- 0.0% 105,105 Buenos Aires Embotella*......... 0 ------------ ELECTRONIC -- MISCELLANEOUS COMPONENTS -- 0.0% 153,700 MEMC Electronic Materials, Inc.*........................... 0 ------------ TOTAL RIGHTS.................... 0 ------------ (Cost $0) U.S. GOVERNMENT OBLIGATIONS -- 0.2% $1,720,000 United States Treasury Bills, 4.54%**, 6/24/99 (b)............ 1,684,379 ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS..................... 1,684,379 ------------ TOTAL INVESTMENTS -- 99.8%.................. 782,364,951 (Cost $693,952,947) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2%....................... 1,425,522 ------------ TOTAL NET ASSETS -- 100.0%.................. $783,790,477 ============ --------------- (a) Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $187,339,580 Unrealized depreciation............... (98,999,832) ------------ Net unrealized appreciation........... $ 88,339,748 ============ (b) Security has been deposited as initial margin on open futures contract. * Non-income producing security ** Effective yield at purchase ADR -- American Depositary Receipt At December 31, 1998 the Fund's open future contracts were as follows: [Download Table] # OF OPENING FACE MARKET CONTRACTS CONTRACT TYPE AMOUNT VALUE --------- ------------------ ----------- ----------- 50 Russell 2000, $10,212,250 $10,631,253 3/18/99 62 Standard & Poor's 18,531,433 19,305,250 500, 3/19/99 See Notes to Financial Statements. 43
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS -- 98.7% AUSTRALIA -- 3.1% BANKING -- 0.7% 142,414 National Australia Bank Ltd. .... $ 2,148,837 177,015 Westpac Banking Corp., Ltd. ..... 1,185,627 ------------ 3,334,464 ------------ BEVERAGES & TOBACCO -- 0.1% 70,676 Coca-Cola Ltd. .................. 263,567 107,952 Coca-Cola Amatil Ltd. ........... 198,706 ------------ 462,273 ------------ BREWERY -- 0.1% 178,336 Fosters Brewing Group Ltd. ...... 483,478 ------------ BROADCASTING & PUBLISHING -- 0.2% 193,020 News Corp., Ltd. ................ 1,276,252 ------------ BUILDING PRODUCTS -- 0.1% 111,203 Boral Ltd. ...................... 158,241 34,780 Hardie (James) Industries Ltd. ............................ 71,123 80,788 Pioneer International Ltd. ...... 170,955 ------------ 400,319 ------------ CHEMICALS -- 0.0% 24,206 Orica Ltd. ...................... 126,051 ------------ DIVERSIFIED -- 0.1% 16,044 Smith (Howard) Ltd. ............. 106,241 55,564 Southcorp Holdings Ltd. ......... 177,390 ------------ 283,631 ------------ ENERGY -- 0.3% 198,507 Broken Hill Proprietary Co., Ltd. ............................ 1,463,388 ------------ ENGINEERING -- 0.0% 22,400 Leighton Holdings Ltd. .......... 96,175 ------------ ENTERTAINMENT -- 0.0% 40,300 Star City Holdings Ltd.* ........ 35,669 26,100 TABCORP Holdings Ltd. ........... 160,087 ------------ 195,756 ------------ FOOD PRODUCTS -- 0.0% 109,521 Goodman Fielder Ltd. ............ 110,840 ------------ GAS UTILITY -- 0.0% 26,021 Australian Gas Light Co., Ltd. ............................ 187,597 ------------ INDUSTRIAL GOODS & SERVICES -- 0.1% 91,818 CSR Ltd. ........................ 224,707 88,700 Pacific Dunlop Ltd. ............. 143,629 ------------ 368,336 ------------ INSURANCE -- 0.3% 102,900 AMP Ltd.* ....................... 1,304,897 53,578 GIO Australia Holdings Ltd. ..... 176,144 33,545 QBE Insurance Group Ltd. ........ 138,882 ------------ 1,619,923 ------------ MANUFACTURING -- CAPITAL GOODS -- 0.0% 27,129 Email Ltd. ...................... 38,787 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) AUSTRALIA (CONTINUED) METALS -- 0.0% 147,691 M.I.M. Holdings Ltd. ............ $ 65,223 ------------ METALS & MINING -- 0.2% 68,058 Australian National Industries Ltd. ............................ 48,006 16,914 Great Central Mines Ltd. ........ 12,138 17,377 Newcrest Mining Ltd.* ........... 24,109 151,360 Normandy Mining Ltd. ............ 140,186 64,635 North Ltd. ...................... 105,454 51,258 QCT Resources Ltd. .............. 30,811 29,836 Rio Tinto Ltd. .................. 354,200 10,352 Westralian Sands Ltd. ........... 25,081 104,971 WMC Ltd. ........................ 316,774 ------------ 1,056,759 ------------ OIL & GAS -- 0.0% 52,241 Santos Ltd. ..................... 140,346 ------------ PACKAGING -- 0.0% 58,093 Amcor Ltd. ...................... 248,461 ------------ PHARMACEUTICALS -- 0.0% 10,670 Faulding (F.H.) & Co., Ltd. ..... 50,393 ------------ REAL ESTATE -- 0.2% 113,230 General Property Trust Units..... 211,825 50,194 Lend Lease Corp., Ltd. .......... 677,313 107,728 Westfield Trust Units............ 237,874 ------------ 1,127,012 ------------ REAL ESTATE INVESTMENT TRUST -- 0.0% 14,411 Schroders Property Fund.......... 23,512 ------------ RETAIL STORES -- 0.1% 115,754 Coles Myer Ltd. ................. 607,040 ------------ SERVICES -- 0.1% 20,119 Brambles Industries Ltd. ........ 490,523 ------------ TELECOM EQUIPMENT -- 0.5% 493,400 Telstra Corporation Ltd. ........ 2,309,082 ------------ TOBACCO -- 0.0% 8,400 Rothmans Holdings Ltd. .......... 60,281 ------------ 16,625,902 ------------ AUSTRIA -- 0.5% BANKING -- 0.2% 11,885 Bank Austria AG.................. 604,694 ------------ BEVERAGES & TOBACCO -- 0.0% 3,100 Oesterreichische Brau-Beteiligungs AG............. 177,221 ------------ BUILDING PRODUCTS -- 0.0% 1,133 Wienerberger Baustoffindustrie AG............................... 225,477 ------------ CHEMICALS -- 0.0% 600 Lenzing AG* ..................... 37,378 ------------ Continued 44
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) AUSTRIA (CONTINUED) CONSTRUCTION -- 0.0% 1,455 Bau Holding AG................... $ 68,292 ------------ ELECTRIC UTILITY -- 0.2% 3,569 Oesterreichische Elektrizitaetswirtschafts AG, Class A.......................... 545,794 ------------ ENGINEERING -- 0.0% 1,800 VA Technologie AG................ 156,067 ------------ INSURANCE -- 0.0% 880 EA-Generali AG................... 216,282 ------------ METALS & MINING -- 0.0% 2,575 Radex-Heraklith Industriebeteiligungs AG......... 67,133 ------------ OIL & GAS -- 0.1% 3,240 OMV AG........................... 305,529 ------------ PAPER PRODUCTS -- 0.0% 2,100 Mayr-Melnhof Karton AG........... 98,207 ------------ STEEL -- 0.0% 1,800 Boehler-Uddeholm AG.............. 83,824 ------------ TRANSPORTATION -- 0.0% 4,100 Austrian Airlines................ 146,953 2,500 Flughafen Wien AG................ 122,738 ------------ 269,691 ------------ 2,855,589 ------------ BELGIUM -- 1.7% BANKING -- 0.3% 1,116 Generale de Banque SA............ 524,657 12,520 KBC Bancassurance Holding NV..... 991,315 ------------ 1,515,972 ------------ BUILDING PRODUCTS -- 0.0% 1,925 Cimenteries CBR Cementbedrijven.................. 190,523 ------------ CHEMICALS -- 0.1% 8,510 Solvay SA........................ 641,605 ------------ ELECTRIC UTILITY -- 0.2% 5,840 Tractebel........................ 1,133,906 ------------ ENERGY -- 0.2% 1,897 PetroFina SA..................... 869,734 ------------ GAS & ELECTRIC UTILITY -- 0.3% 3,800 Electrabel SA.................... 1,670,318 ------------ INDUSTRIAL HOLDING COMPANY -- 0.1% 2,000 Groupe Bruxelles Lambert SA...... 407,537 ------------ INSURANCE -- 0.3% 2,900 Fortis AG........................ 1,051,007 1,350 Royale Belge..................... 546,245 ------------ 1,597,252 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) BELGIUM (CONTINUED) MERCHANDISING -- 0.1% 4,400 Delhaize-Le Lion SA.............. $ 389,372 ------------ PHARMACEUTICALS -- 0.0% 40 UCB SA........................... 246,851 ------------ TECHNOLOGY -- 0.1% 1,000 Barco NV......................... 282,365 ------------ 8,945,435 ------------ DENMARK -- 0.8% BANKING & FINANCE -- 0.1% 4,547 Den Danske Bank.................. 610,854 4,693 Unidanmark AS, Class A........... 423,999 ------------ 1,034,853 ------------ BEVERAGES & TOBACCO -- 0.1% 3,060 Carlsberg AS, Class A............ 177,897 2,305 Carlsberg AS, Class B............ 133,280 ------------ 311,177 ------------ COMMERCIAL SERVICES -- 0.0% 2,390 ISS International Service System AS, Series B..................... 155,469 ------------ ENGINEERING -- 0.0% 3,615 FLS Industries AS -- Class B..... 73,841 ------------ FOOD PRODUCTS -- 0.1% 5,195 Danisco AS....................... 281,612 ------------ PHARMACEUTICALS -- 0.1% 4,946 Novo Nordisk AS, Class B......... 652,799 ------------ TELECOMMUNICATIONS -- 0.2% 7,000 Tele Danmark AS, Class B......... 944,795 ------------ TRANSPORTATION & SHIPPING -- 0.2% 70 D/S 1912, Class B................ 489,445 53 D/S Svendborg AS, Class B........ 537,133 ------------ 1,026,578 ------------ 4,481,124 ------------ FINLAND -- 0.9% BANKING & FINANCE -- 0.1% 57,106 Merita PLC, Class A.............. 363,166 ------------ CHEMICALS -- 0.0% 8,900 Kemira........................... 64,158 ------------ DIVERSIFIED -- 0.0% 800 Amer Group Ltd. ................. 8,327 1,500 Instrumentarium Group, Series B......................... 61,886 ------------ 70,213 ------------ ENGINEERING -- 0.0% 5,500 Metra OYJ........................ 95,590 ------------ FOOD PRODUCTS -- 0.0% 3,300 Cultor -- Series 2............... 33,891 ------------ Continued 45
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FINLAND (CONTINUED) FOREST PRODUCTS -- 0.1% 13,860 UPM-Kymmene Corp. ............... $ 388,704 ------------ INSURANCE -- 0.0% 800 Pohjola Insurance Group, Class B................................ 43,924 4,300 Sampo Insurance Co. ............. 164,330 ------------ 208,254 ------------ MACHINERY & EQUIPMENT -- 0.0% 500 Kone Corp. -- Class B............ 58,263 ------------ METALS -- 0.0% 8,700 Outokumpu OYJ.................... 80,414 ------------ RETAIL -- GENERAL MERCHANDISE -- 0.0% 6,300 Kesko............................ 94,563 2,250 Stockmann AB-B Share............. 42,482 ------------ 137,045 ------------ TELECOMMUNICATIONS -- 0.7% 22,500 Nokia -- Class A................. 2,755,127 6,500 Nokia -- Class K................. 795,925 ------------ 3,551,052 ------------ 5,050,750 ------------ FRANCE -- 8.0% ADVERTISING -- 0.0% 3 Havas SA......................... 306 ------------ ALUMINUM -- 0.0% 2,000 Pechiney SA -- A Shares.......... 65,342 ------------ AUTO PARTS -- 0.1% 7,345 Valeo SA......................... 579,079 ------------ AUTOMOTIVE -- 0.1% 3,662 PSA Peugeot Citroen.............. 567,065 ------------ BANKING -- 0.6% 14,898 Banque Nationale de Paris........ 1,227,363 11,664 Paribas.......................... 1,014,178 6,247 Societe Generale................. 1,012,089 ------------ 3,253,630 ------------ BEVERAGES & TOBACCO -- 0.3% 6,120 LVMH (Moet Hennessy Louis Vuitton)......................... 1,211,727 5,400 Pernod Ricard.................... 350,913 ------------ 1,562,640 ------------ BROADCASTING/CABLE -- 0.2% 3,136 Canal Plus....................... 856,139 ------------ BUILDING PRODUCTS -- 0.1% 1,195 Imetal SA........................ 119,799 6,721 Lafarge SA....................... 638,892 ------------ 758,691 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FRANCE (CONTINUED) CHEMICALS -- 0.4% 5,932 L'Air Liquide.................... $ 1,088,488 24,814 Rhone-Poulenc SA................. 1,277,568 ------------ 2,366,056 ------------ COMMERCIAL SERVICES -- 0.1% 2,840 Sodexho SA....................... 635,517 ------------ COMPUTER SOFTWARE -- 0.0% 3,000 Dassault Systems SA.............. 141,085 ------------ CONSTRUCTION -- 0.1% 1,466 Bouygues......................... 302,333 ------------ DEFENSE -- 0.1% 200 Sagem SA......................... 132,474 12,325 Thomson CSF...................... 529,537 ------------ 662,011 ------------ DIVERSIFIED -- 0.1% 498 Chargeurs International SA....... 27,548 12,106 Lagardere S.C.A.................. 514,710 1,350 Nord-Est SA...................... 36,251 ------------ 578,509 ------------ ELECTRICAL & ELECTRONIC -- 0.4% 9,837 Alcatel Alsthom.................. 1,204,530 2,100 Legrand SA....................... 556,766 10,800 Schneider SA..................... 655,423 ------------ 2,416,719 ------------ ENERGY -- 0.6% 16,567 Elf Aquitane SA.................. 1,915,909 14,700 Total SA, Class B................ 1,489,472 ------------ 3,405,381 ------------ ENGINEERING -- 0.0% 200 Groupe Gtm....................... 20,766 ------------ FINANCE -- 0.5% 9,588 Compagnie Generale des Eaux...... 2,488,825 546 CPR (Compagnie Parisenne de Reescompte)...................... 25,218 863 Credit National.................. 55,618 202 Societe Eurafrance SA............ 133,534 ------------ 2,703,195 ------------ FOOD & HOUSEHOLD PRODUCTS -- 0.1% 2,600 Eridania Beghin-Say SA........... 450,089 ------------ FOOD PRODUCTS -- 0.3% 5,121 Groupe Danone.................... 1,466,808 ------------ HEALTH & PERSONAL CARE -- 0.8% 4,047 L'OREAL.......................... 2,926,935 7,623 Sanofi SA........................ 1,255,487 ------------ 4,182,422 ------------ Continued 46
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FRANCE (CONTINUED) INDUSTRIAL GOODS & SERVICES -- 0.1% 9,801 Michelin Class B, Registered..... $ 392,145 ------------ INDUSTRIAL HOLDING COMPANY -- 0.3% 8,380 Lyonnaise des Eaux SA............ 1,722,203 ------------ INSURANCE -- 0.6% 20,600 Axa -- UAP....................... 2,987,107 2,000 Cap Gemini....................... 321,160 ------------ 3,308,267 ------------ LEISURE -- 0.1% 2,650 Accor SA......................... 574,024 541 Club Mediterranee SA*............ 48,618 ------------ 622,642 ------------ MACHINE -- DIVERSIFIED -- 0.0% 1,600 Sidel SA......................... 135,768 ------------ MEDIA -- 0.0% 498 Pathe SA......................... 139,076 ------------ MEDICAL SUPPLIES -- 0.0% 500 Essilor International............ 196,921 ------------ MERCHANDISING -- 1.0% 2,303 Carrefour SA..................... 1,739,410 6,600 Etablissements Economiques du Casino........................... 687,647 7,885 Pinault Printemps Redoute........ 1,507,549 1,450 Promodes......................... 1,054,922 ------------ 4,989,528 ------------ MISCELLANEOUS MATERIALS & COMMODITIES -- 0.2% 6,333 Compagnie de Saint Gobain........ 894,510 ------------ OFFICE EQUIPMENT & SERVICES -- 0.1% 5,700 Bic.............................. 316,326 ------------ OIL & GAS -- 0.0% 50 Cie Gen Geophysique*............. 2,915 1,300 Primagaz Cie..................... 123,344 ------------ 126,259 ------------ REAL ESTATE -- 0.1% 2,600 SEFIMEG.......................... 183,852 918 Simco SA......................... 83,320 800 Unibail.......................... 116,720 572 Union Immobiliere de France...... 51,609 ------------ 435,501 ------------ STEEL -- 0.1% 25,100 Unisor Sacilor SA................ 278,814 ------------ TELECOMMUNICATIONS -- SERVICES & EQUIPMENT -- 0.5% 35,000 France Telecom................... 2,781,951 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FRANCE (CONTINUED) TOBACCO -- 0.0% 3,200 SEITA............................ $ 200,501 ------------ 43,514,195 ------------ GERMANY -- 9.3% AUTOMOTIVE -- 1.3% 52,287 Daimler Chrysler AG*............. 5,164,310 761 MAN AG........................... 223,888 22,270 Volkswagen AG.................... 1,778,365 ------------ 7,166,563 ------------ BANKING -- 1.1% 26,968 Bayerische Vereinsbank AG........ 2,113,043 34,660 Deutsche Bank AG................. 2,040,447 37,160 Dresdner Bank AG................. 1,561,791 ------------ 5,715,281 ------------ BUILDING PRODUCTS -- 0.1% 4,070 Heidelberger Zement AG........... 317,678 ------------ CHEMICALS -- 0.8% 45,780 BASF AG.......................... 1,748,163 49,840 Bayer AG......................... 2,081,250 7,120 Degussa AG....................... 391,370 ------------ 4,220,783 ------------ CLOTHING -- 0.1% 3,500 Adidas AG........................ 380,361 ------------ COMPUTER SOFTWARE -- 0.4% 4,403 SAP AG........................... 1,903,401 ------------ CONSTRUCTION -- 0.0% 4,730 Hochtief AG...................... 184,597 ------------ DIVERSIFIED -- 0.7% 1,231 Preussag AG...................... 556,547 35,890 VEBA AG.......................... 2,148,413 2,007 Viag AG.......................... 1,177,311 ------------ 3,882,271 ------------ ELECTRICAL & ELECTRONIC -- 0.4% 37,370 Siemens AG....................... 2,412,019 ------------ ENGINEERING -- 0.5% 2,040 AGIV-AG.......................... 52,668 25,420 Mannesmann AG.................... 2,915,131 ------------ 2,967,799 ------------ GAS & ELECTRIC UTILITY -- 0.3% 29,050 RWE AG........................... 1,591,579 ------------ HEALTH & PERSONAL CARE -- 0.1% 7,860 Beiersdorf AG, Series ABC........ 542,712 ------------ HEALTH CARE -- 0.1% 5,300 Schering AG...................... 665,872 ------------ Continued 47
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) GERMANY (CONTINUED) INSURANCE -- 1.8% 1,780 Aachener & Muenchener............ $ 209,578 15,970 Allianz AG....................... 5,858,618 3,660 AMB Aachener & Muenchener........ 538,389 1,000 Axa Colonia Konzern AG........... 113,478 5,547 Muenchener Rueckver AG........... 2,687,700 ------------ 9,407,763 ------------ MACHINERY & EQUIPMENT -- 0.1% 3,830 Kloeckner-Humbolt-Deutz AG*...... 35,643 636 Linde AG......................... 391,409 ------------ 427,052 ------------ METALS & MINING -- 0.1% 2,480 FAG Kugelfischer Georg Schaefer AG............................... 21,070 2,734 Thyssen AG....................... 507,395 ------------ 528,465 ------------ PHARMACEUTICALS -- 0.1% 13,100 Merck KGaA....................... 589,904 ------------ RETAIL STORES -- 0.1% 791 Karstadt AG...................... 413,185 ------------ RETAIL -- MAJOR DEPARTMENT STORES -- 0.2% 17,073 Metro AG......................... 1,363,360 ------------ RETAIL -- GENERAL MERCHANDISE -- 0.0% 1,630 Douglas Holding AG............... 98,846 ------------ TELECOMMUNICATIONS -- 0.9% 142,500 Deutsche Telekom AG.............. 4,688,615 ------------ TIRE & RUBBER -- 0.0% 4,870 Continental AG................... 134,504 ------------ TRANSPORTATION -- 0.1% 28,980 Lufthansa AG..................... 640,317 ------------ 50,242,927 ------------ HONG KONG -- 2.5% AIRLINES -- 0.0% 12,600 Hong Kong Aircraft Engineering Co., Ltd. ....................... 17,240 ------------ BANKING -- 0.3% 364,218 Bank of East Asia Ltd. .......... 634,688 108,800 Hang Seng Bank Ltd. ............. 972,555 14,695 Wing Lung Bank................... 51,025 ------------ 1,658,268 ------------ BROADCASTING & PUBLISHING -- 0.0% 96,000 South China Morning Post Holdings Ltd. ............................ 49,258 25,000 Television Broadcasts Ltd. ...... 64,541 ------------ 113,799 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) HONG KONG (CONTINUED) DIVERSIFIED -- 0.1% 94,500 Swire Pacific Ltd., Class A...... $ 423,279 262,500 Wharf Holdings Ltd. ............. 382,889 ------------ 806,168 ------------ ELECTRIC UTILITY -- 0.1% 141,400 CLP Holdings Ltd. ............... 704,534 ------------ ELECTRICAL & ELECTRONIC -- 0.2% 323,400 Johnson Electric Holdings Ltd. ............................ 830,727 ------------ ELECTRICAL EQUIPMENT -- 0.0% 65,000 Elec & Eltek International Holdings Ltd. ................... 12,418 ------------ GAS UTILITY -- 0.1% 402,232 Hong Kong & China Gas Co., Ltd. ............................ 511,420 ------------ HOTELS & LODGING -- 0.1% 65,500 Hong Kong & Shanghai Hotels Ltd. ..................... 46,502 33,000 Miramar Hotel & Investment Ltd. ............................ 33,865 384,000 Shangri-La Asia Ltd. ............ 327,144 ------------ 407,511 ------------ INDUSTRIAL HOLDING COMPANY -- 0.5% 357,000 Hutchison Whampoa Ltd. .......... 2,523,000 ------------ MANUFACTURING -- CONSUMER GOODS -- 0.0% 20,000 Varitronix International Ltd. ... 37,434 ------------ REAL ESTATE -- 0.5% 133,000 Cheung Kong Holdings Ltd. ....... 957,109 369,557 Hysan Development Co., Ltd. ..... 550,971 116,525 New World Development Co., Ltd. ............................ 293,305 135,136 Sun Hung Kai Properties Ltd. .... 985,562 ------------ 2,786,947 ------------ REAL ESTATE INVESTMENT TRUST -- 0.1% 455,100 Hang Lung Development Co. ....... 487,585 ------------ TELECOMMUNICATIONS -- 0.3% 845,855 Hong Kong Telecommunications Ltd. ......... 1,479,450 ------------ TRANSPORTATION -- 0.2% 1,092,000 Cathay Pacific Airways........... 1,085,372 ------------ 13,461,873 ------------ IRELAND -- 0.4% AIRLINES -- 0.0% 7,300 Ryanair Holdings PLC*............ 52,244 ------------ BANKING -- 0.3% 59,200 Allied Irish Banks............... 1,061,852 ------------ BUILDING PRODUCTS -- 0.1% 17,480 C.R.H. PLC....................... 302,326 ------------ Continued 48
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) IRELAND (CONTINUED) CONSUMER GOODS & SERVICES -- 0.0% 29,000 Waterford Wedgewood.............. $ 24,646 ------------ DIVERSIFIED -- 0.0% 3,227 DCC PLC.......................... 27,425 ------------ FINANCE -- 0.0% 4,200 Irish Permanent PLC.............. 63,248 ------------ FOOD PRODUCTS -- 0.0% 11,700 Fyffes PLC....................... 26,167 7,660 Greencore Group.................. 35,405 7,300 Kerry Group PLC.................. 99,591 ------------ 161,163 ------------ HOTELS & LODGING -- 0.0% 1,900 Jurys Hotel Group PLC............ 14,448 ------------ INDUSTRIAL GOODS & SERVICES -- 0.0% 49,400 Smurfit (Jefferson) Group........ 89,123 ------------ INSURANCE -- 0.0% 14,630 Irish Life PLC................... 137,860 ------------ MEDIA -- 0.0% 10,026 Independent Newspapers PLC....... 40,362 ------------ OIL & GAS -- 0.0% 9,100 Tullow Oil*...................... 7,462 ------------ PRINTING & PUBLISHING -- 0.0% 1,608 Clondalkin Group PLC............. 11,508 ------------ TRANSPORTATION & SHIPPING -- 0.0% 1,000 Irish Continental Group PLC...... 11,853 ------------ 2,005,520 ------------ ITALY -- 4.6% AGRICULTURE -- 0.0% 94,400 Parmalat Finanziaria SpA......... 180,912 ------------ AUTO PARTS -- 0.0% 72,520 Magneti Marelli SpA.............. 125,786 ------------ AUTOMOTIVE -- 0.2% 233,938 Fiat SpA......................... 814,368 70,340 Fiat SpA di Risp., (Non-convertible)................ 140,774 90,820 Fiat SpA Preferred............... 175,428 ------------ 1,130,570 ------------ BANKING -- 0.7% 114,300 Banca Commerciale Italiana....... 790,240 117,282 Banca Intesa Veneto SpA.......... 705,232 46,200 Banca Ambrosiano Veneto SpA di Risp., (Non-convertible)......... 141,215 17,100 Banca Popolare de Milano......... 155,559 269,200 Credito Italiano SpA............. 1,599,142 11,723 Riunione Adriatica di Sicurta SpA di Risp., (Non-convertible)...... 117,664 ------------ 3,509,052 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) ITALY (CONTINUED) BROADCASTING & PUBLISHING -- 0.1% 75,600 Mediaset SpA..................... $ 614,376 ------------ BUILDING PRODUCTS -- 0.0% 1,900 Cementir SpA..................... 2,189 10,950 Italcementi SpA.................. 120,863 900 Italcementi SpA di Risp., (Non-convertible)................ 4,585 ------------ 127,637 ------------ CHEMICALS -- 0.1% 317,962 Montedison SpA................... 423,270 12,800 Montedison SpA di Risp., (Non-convertible)................ 12,809 84,200 Snia BPD SpA..................... 132,768 900 Snia BPD SpA di Risp., (Non-convertible)................ 993 ------------ 569,840 ------------ ENGINEERING -- 0.0% 7,900 Impregilo SpA*................... 7,158 ------------ FINANCE -- 0.4% 89,312 Banc San Paolo Torino............ 1,581,614 36,470 Mediobanca SpA................... 507,605 ------------ 2,089,219 ------------ GAS & ELECTRIC UTILITY -- 0.1% 40,500 Edison SpA....................... 478,098 ------------ GAS UTILITY -- 0.0% 44,500 Italgas SpA...................... 241,406 ------------ INSURANCE -- 0.9% 65,363 Assicurazioni Generali........... 2,735,197 357,500 Istituto Nazionale delle Assicurazioni.................... 946,385 27,062 Riuniune Adriatici de Sicurta SpA.............................. 393,073 10,900 Societa Assicuratrice Industriale (SAI) SpA........................ 131,549 298,200 Unione Immobiliare*.............. 155,892 ------------ 4,362,096 ------------ JEWELRY -- 0.0% 21,300 Bulgari SpA...................... 127,240 ------------ OFFICE EQUIPMENT & SERVICES -- 0.1% 179,696 Olivetti SpA*.................... 626,634 ------------ OIL & GAS -- 0.6% 509,300 ENI SpA.......................... 3,335,839 ------------ PAPER PRODUCTS -- 0.0% 15,200 Burgo (Cartiere) SpA............. 97,991 ------------ PRINTING & PUBLISHING -- 0.0% 11,400 Mondadori (Arnoldo) Editore SpA.............................. 151,065 ------------ RETAIL STORES -- 0.0% 14,200 La Rinascente SpA................ 146,358 ------------ Continued 49
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) ITALY (CONTINUED) TELECOMMUNICATIONS -- 1.2% 19,400 Sirti SpA........................ $ 117,302 99,760 Telecom Italia Mobile SpA........ 470,699 422,760 Telecom Italia Mobile SpA di Risp, (Non-convertible).......... 3,127,960 234,911 Telecom Italia SpA............... 2,008,770 57,260 Telecom Italia SpA-RNC........... 361,154 ------------ 6,085,885 ------------ TEXTILE PRODUCTS -- 0.1% 115,720 Benetton Group SpA............... 233,701 4,200 Marzotto (Gaetano) & Figli SpA... 46,358 ------------ 280,059 ------------ TIRE & RUBBER -- 0.1% 120,700 Pirelli SpA...................... 387,598 10,600 Pirelli SpA di Risp, (Non-convertible)................ 26,164 ------------ 413,762 ------------ 24,700,983 ------------ JAPAN -- 27.3% ALUMINUM -- 0.0% 38,000 Nippon Light Metal Co., Ltd. .... 39,753 ------------ APPLIANCES & HOUSEHOLD PRODUCTS -- 1.5% 203,000 Matsushita Electric Industrial Co., Ltd. ....................... 3,597,599 16,000 Pioneer Electronic Corp. ........ 268,802 187,000 Sanyo Electric Co. .............. 580,248 108,000 Sharp Corp. ..................... 975,668 39,000 Sony Corp. ...................... 2,845,564 ------------ 8,267,881 ------------ AUTOMOTIVE -- 2.6% 3,000 Autobacs Seven Co., Ltd. ........ 101,067 93,000 Honda Motor Co., Ltd. ........... 3,058,869 241,000 Nissan Motor Co., Ltd. .......... 739,260 381,000 Toyota Motor Corp. .............. 10,369,727 ------------ 14,268,923 ------------ BANKING -- 3.1% 36,000 77 Bank.......................... 360,649 228,000 Asahi Bank Ltd. ................. 836,834 44,000 Ashikaga Bank Ltd. .............. 78,797 449,000 Bank of Tokyo -- Mitsubishi Ltd. ............................ 4,657,321 104,000 Bank of Yokohama Ltd. ........... 249,866 73,000 Chiba Bank Ltd. ................. 290,585 300,000 Fuji Bank Ltd. .................. 1,106,416 49,000 Gunma Bank Ltd. ................. 389,666 23,000 Higo Bank........................ 105,420 62,000 Hokuriku Bank.................... 111,581 265,000 Industrial Bank of Japan......... 1,224,017 85,000 Joyo Bank........................ 333,077 125,000 Mitsubishi Trust & Banking Corp. ........................... 805,654 110,000 Mitsui Trust & Banking Co., Ltd. ............................ 125,802 359,000 Sakura Bank Ltd. ................ 824,324 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) BANKING (CONTINUED) 77,000 Shizuoka Bank.................... $ 952,289 305,000 Sumitomo Bank Ltd. .............. 3,136,619 199,000 Tokai Bank....................... 942,103 18,000 Yamaguchi Bank................... 170,112 ------------ 16,701,132 ------------ BREWERY -- 0.4% 46,000 Asahi Breweries Ltd. ............ 679,010 101,000 Kirin Brewery Co., Ltd. ......... 1,289,400 31,000 Sapporo Breweries Ltd. .......... 134,667 ------------ 2,103,077 ------------ BROADCASTING & PUBLISHING -- 0.0% 16,000 Tokyo Broadcasting System........ 179,154 ------------ BUILDING PRODUCTS -- 0.1% 21,000 Sanwa Shutter Corp. ............. 91,971 23,000 Sumitomo Osaka Cement Co., Ltd. ............................ 43,024 72,400 Taiheiyo Cement Corp. ........... 181,647 20,000 Tostem Corp. .................... 397,176 ------------ 713,818 ------------ CHEMICALS -- 1.3% 138,000 Asahi Chemical Industry Co., Ltd. ............................ 659,435 19,000 Daicel Chemical Industries Ltd. ............................ 56,597 72,000 Dainippon Ink & Chemicals Inc. ............................ 197,240 27,000 Denki Kagaku Kogyo Kabushiki Kaisha........................... 44,044 32,000 Kaneka Corp. .................... 240,291 201,000 Mitsubishi Chemical Corp. ....... 424,108 45,000 Mitsubishi Gas Chemical Co. ..... 124,871 10,000 Nippon Shokubai Kabushiki Kaisha Co. ...................... 53,902 52,000 Sekisui Chemical Co., Ltd. ...... 350,365 37,000 Shin-Etsu Chemical Co., Ltd. .... 892,225 155,000 Sumitomo Chemical Co. ........... 604,628 89,000 Takeda Chemical Industries....... 3,432,285 54,000 Tosoh Corp. ..................... 77,556 76,000 Ube Industries Ltd. ............. 115,216 ------------ 7,272,763 ------------ COMMERCIAL SERVICES -- 0.0% 100 Oyo Corp. ....................... 1,618 ------------ CONSTRUCTION -- 0.3% 50,000 Daiwa House Industry Co., Ltd. ............................ 533,261 35,000 Kumagai Gumi Co., Ltd.*.......... 26,995 13,000 Okumura Corp. ................... 57,741 18,000 Penta-Ocean Construction......... 36,065 68,000 Sekisui House Ltd. .............. 720,412 74,000 Shimizu Corp. ................... 248,642 93,000 Taisei Corp. .................... 178,915 ------------ 1,802,031 ------------ Continued 50
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) CONSUMER GOODS & SERVICES -- 0.1% 22,000 Nippon Sheet Glass Co., Ltd. .... $ 62,023 35,000 Toto Ltd. ....................... 281,436 ------------ 343,459 ------------ COSMETICS/PERSONAL CARE -- 0.4% 59,000 Kao Corp. ....................... 1,333,817 15,000 Lion Corp. ...................... 62,635 40,000 Shiseido Co., Ltd. .............. 514,909 ------------ 1,911,361 ------------ DATA PROCESSING & REPRODUCTION -- 0.5% 197,000 Fujitsu Ltd. .................... 2,628,492 ------------ DISTRIBUTION -- 0.0% 137,000 Itochu Corp. .................... 264,777 ------------ DIVERSIFIED -- 0.0% 18,000 Yamaha Corp. .................... 186,708 ------------ ELECTRIC UTILITY -- 1.2% 107,900 Kansai Electric Power Co., Inc. ............................ 2,367,558 47,500 Tohoku Electric Power............ 842,224 132,000 Tokyo Electric Power Co. ........ 3,264,991 ------------ 6,474,773 ------------ ELECTRICAL & ELECTRONIC -- 0.6% 25,000 Casio Computer Co., Ltd. ........ 184,846 18,000 Kyocera Corp. ................... 952,688 206,000 Mitsubishi Electric Corp. ....... 648,335 25,000 Omron Corp. ..................... 343,095 11,000 Rohm Co., Ltd. .................. 1,003,488 ------------ 3,132,452 ------------ ELECTRICAL EQUIPMENT -- 0.2% 16,000 Alps Electric Co., Ltd. ......... 294,335 6,000 SMC Corp. ....................... 479,801 10,000 Taiyo Yuden Co., Ltd. ........... 118,621 ------------ 892,757 ------------ ELECTRONIC COMPONENTS/INSTRUMENTS -- 1.0% 8,600 Advantest Corp. ................. 545,903 22,100 Fanuc Ltd. ...................... 758,241 3,000 Hirose Electric Co., Ltd. ....... 210,379 330,000 Hitachi Ltd. .................... 2,047,933 153,000 NEC Corp. ....................... 1,410,681 13,000 Nitto Denko Corp. ............... 216,673 23,000 Yokogawa Electric Corp. ......... 114,188 ------------ 5,303,998 ------------ ENERGY -- 0.0% 100,000 Japan Energy Corp. .............. 94,861 ------------ ENGINEERING -- 0.3% 7,000 Daito Trust Construction Co., Ltd. ............................ 60,755 92,000 Kajima Corp. .................... 240,610 18,000 Kandenko Co., Ltd. .............. 121,919 131,000 Kawasaki Heavy Industries Ltd. ............................ 307,766 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) ENGINEERING (CONTINUED) 25,000 Kinden Corp. .................... $ 380,774 25,000 Nishimatsu Construction.......... 146,281 71,000 Obayashi Corp. .................. 341,163 ------------ 1,599,268 ------------ ENTERTAINMENT -- 0.1% 4,000 NAMCO............................ 80,499 1,700 Toho Co. ........................ 233,304 14,000 Tokyo Dome Corp. ................ 74,719 ------------ 388,522 ------------ FINANCE -- 0.7% 14,000 Acom Co., Ltd. .................. 901,091 128,000 Daiwa Securities Co., Ltd. ...... 438,027 195,000 Nomura Securities Co., Ltd. ..... 1,702,843 24,000 Orient Corp. .................... 53,619 6,000 Orix Corp. ...................... 448,950 ------------ 3,544,530 ------------ FOOD & HOUSEHOLD PRODUCTS -- 0.2% 62,000 Ajinomoto Co., Inc. ............. 659,594 21,000 Nippon Meat Packers Inc. ........ 338,840 12,000 Nissin Food Products Co., Ltd. ............................ 302,669 ------------ 1,301,103 ------------ FOOD PRODUCTS -- 0.2% 65,000 Daiei Inc. ...................... 176,911 10,000 House Foods Industry............. 169,331 12,000 Itoham Foods..................... 51,172 17,000 Kikkoman Corp. .................. 108,212 15,000 Meiji Milk Products Co., Ltd. ... 45,214 16,000 Nichirei Corp. .................. 38,157 8,000 QP Corp. ........................ 65,889 23,000 Snow Brand Milk Products Co., Ltd. ....................... 105,216 20,000 Yamazaki Baking Co., Ltd. ....... 261,179 ------------ 1,021,281 ------------ FOREST PRODUCTS -- 0.2% 17,000 Mitsubishi Paper Mills........... 34,815 91,000 Nippon Paper Industries Co. ..... 414,676 99,000 Oji Paper Co., Ltd. ............. 515,201 12,000 Sumitomo Forestry Co., Ltd. ..... 86,173 6,000 Uni-Charm........................ 281,923 ------------ 1,332,788 ------------ GAS UTILITY -- 0.3% 243,000 Osaka Gas Co., Ltd. ............. 838,030 270,000 Tokyo Gas Co., Ltd. ............. 710,926 ------------ 1,548,956 ------------ HEALTH & PERSONAL CARE -- 0.2% 40,000 Kyowa Hakko Kogyo Co. ........... 197,878 44,000 Sankyo Co., Ltd. ................ 963,504 ------------ 1,161,382 ------------ Continued 51
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) HEALTH CARE -- 0.1% 11,000 Hoya Corp. ...................... $ 536,364 ------------ HOTELS & LODGING -- 0.0% 11,000 Fujita Kanko Inc. ............... 97,813 ------------ INDUSTRIAL GOODS & SERVICES -- 1.0% 88,000 Bridgestone Corp. ............... 2,001,124 97,000 Denso Corp. ..................... 1,797,306 17,000 Inax Corp. ...................... 110,021 58,000 Mitsui Engineering & Shipbuilding Co., Ltd.*....................... 57,590 35,000 NGK Insulators Ltd. ............. 452,097 20,000 NGK Spark Plug Co., Ltd. ........ 204,084 70,000 Sumitomo Electric Industries Ltd. ............................ 788,765 ------------ 5,410,987 ------------ INSURANCE -- 0.6% 74,000 Mitsui Marine & Fire Insurance Co., Ltd. ....................... 390,349 41,000 Nichido Fire & Marine Insurance Co., Ltd. ....................... 201,735 53,000 Nippon Fire & Marine Insurance Co. ............................. 195,467 64,000 Sumitomo Marine & Fire Insurance Co. ............................. 406,253 170,000 Tokio Marine & Fire Insurance Co. ............................. 2,034,635 ------------ 3,228,439 ------------ JEWELRY -- 0.0% 29,000 Citizen Watch Co., Ltd. ......... 174,828 ------------ LEASING -- 0.1% 7,000 Daiwa Kosho Lease Co., Ltd. ..... 28,795 39,000 Yamato Transport Co., Ltd. ...... 546,293 ------------ 575,088 ------------ MACHINE -- DIVERSIFIED -- 0.1% 7,000 Komori Corp. .................... 147,699 12,000 Kurita Water Industries Ltd. .... 176,388 27,000 Toyoda Automatic Loom Works...... 478,499 ------------ 802,586 ------------ MACHINERY & EQUIPMENT -- 0.8% 27,000 Amada Co., Ltd. ................. 130,935 14,000 Brother Industries Ltd. ......... 43,689 24,000 Daikin Industries Ltd. .......... 238,305 26,000 Ebara Corp. ..................... 224,280 93,000 Komatsu Ltd. .................... 488,924 10,000 Koyo Seiko Co., Ltd. ............ 55,498 135,000 Kubota Corp. .................... 403,337 38,000 Minebea Co., Ltd. ............... 435,935 324,000 Mitsubishi Heavy Industries Ltd. ............................ 1,263,868 5,000 Mori Seiki Co. .................. 56,739 51,000 NSK Ltd. ........................ 190,804 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) MACHINERY & EQUIPMENT (CONTINUED) 42,000 NTN Corp. ....................... $ 135,536 16,000 Tokyo Electron Ltd. ............. 608,529 ------------ 4,276,379 ------------ MANUFACTURING -- CAPITAL GOODS -- 0.3% 31,000 Fujikura Ltd. ................... 166,548 12,000 Kokuyo Co. ...................... 161,813 14,000 Makita Corp. .................... 156,264 23,000 Murata Manufacturing Co., Ltd. ............................ 956,322 8,000 Noritake Co., Ltd. .............. 41,420 7,000 Takara Standard Co. ............. 58,956 ------------ 1,541,323 ------------ MANUFACTURING -- CONSUMER GOODS -- 0.9% 88,000 Canon Inc. ...................... 1,884,099 54,000 Fuji Photo Film Co., Ltd. ....... 2,010,698 32,000 Konica Corp. .................... 146,104 35,000 Nikon Corp. ..................... 341,322 8,700 Sega Enterprises Ltd. ........... 193,211 13,000 Shimano Inc. .................... 335,959 ------------ 4,911,393 ------------ MEDICAL SUPPLIES -- 0.1% 25,000 Olympus Optical Co., Ltd. ....... 287,908 ------------ MERCHANDISING -- 0.8% 41,000 Ito-Yokado Co., Ltd. ............ 2,871,540 31,000 JUSCO Co., Ltd. ................. 627,989 35,000 Marui Co., Ltd. ................. 674,887 ------------ 4,174,416 ------------ METALS -- 0.5% 42,000 Daido Steel Co., Ltd. ........... 55,480 312,000 Kawasaki Steel Corp. ............ 467,461 104,000 Mitsubishi Materials Corp. ...... 175,183 662,000 Nippon Steel Corp. .............. 1,203,139 338,000 NKK Corp. ....................... 230,734 343,000 Sumitomo Metal Industries Ltd. ............................ 392,272 11,000 Tokyo Steel Manufacturing Co. ... 55,197 ------------ 2,579,466 ------------ METALS & MINING -- 0.1% 92,000 Hitachi Zosen Corp. ............. 127,238 46,000 Mitsui Mining & Smelting Co. .... 227,153 52,000 Sumitomo Metal Mining Co. ....... 169,189 ------------ 523,580 ------------ MISCELLANEOUS MATERIALS & COMMODITIES -- 0.1% 113,000 Asahi Glass Co., Ltd. ........... 702,264 ------------ OIL & GAS -- 0.1% 3,100 Arabian Oil Co., Ltd. ........... 39,878 57,000 Cosmo Oil Co., Ltd. ............. 86,412 32,000 Mitsubishi Oil Co., Ltd.*........ 56,456 Continued 52
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) OIL & GAS (CONTINUED) 118,000 Nippon Oil Co., Ltd. ............ $ 412,176 14,000 Teikoko Oil Co., Ltd. ........... 41,579 ------------ 636,501 ------------ PACKAGING -- 0.1% 21,000 Toyo Seikan Kaisha Ltd. ......... 357,085 ------------ PHARMACEUTICALS -- 0.7% 22,000 Chugai Pharmaceutical Co., Ltd. ............................ 220,397 26,000 Dai-Ichi Pharmaceuticals......... 440,031 28,000 Eisai Co., Ltd. ................. 546,116 3,000 Kissei Pharmaceutical Co., Ltd. ............................ 53,060 35,000 Meiji Seika Co. ................. 139,632 33,000 Shionogi & Co., Ltd. ............ 241,949 33,000 Taisho Pharmaceutical Co. ....... 909,868 32,000 Yamanouchi Pharmaceutical Co., Ltd. ............................ 1,032,654 ------------ 3,583,707 ------------ PRINTING & PUBLISHING -- 0.4% 73,000 Dai Nippon Printing Co., Ltd. ... 1,166,223 67,000 Toppan Printing Co., Ltd. ....... 819,705 ------------ 1,985,928 ------------ REAL ESTATE -- 0.3% 124,000 Mitsubishi Estate Co., Ltd. ..... 1,113,615 78,000 Mitsui Fudosan Co., Ltd. ........ 591,241 ------------ 1,704,856 ------------ RETAIL STORES -- 0.2% 6,000 Aoyama Trading Co., Ltd. ........ 168,090 14,000 Daimuru Inc. .................... 42,200 16,000 Hankyu Department Stores Co. .... 105,110 20,000 Isetan Co. ...................... 214,900 43,000 Mitsukoshi Ltd. ................. 114,365 29,000 Mycal Corp. ..................... 173,285 5,000 Skylark Co., Ltd. ............... 74,515 28,000 Takashimaya Co., Ltd. ........... 236,071 ------------ 1,128,536 ------------ RETAIL -- GENERAL MERCHANDISE -- 0.1% 15,300 Credit Saison Co., Ltd. ......... 377,764 ------------ RETAIL-SPECIAL LINE -- 0.1% 2,000 Shimachu Co. .................... 39,895 18,000 Uny Co., Ltd. ................... 329,531 ------------ 369,426 ------------ SERVICES -- 0.2% 11,000 Secom Co., Ltd. ................. 912,793 ------------ STORAGE -- 0.0% 15,000 Mitsubishi Logistics Corp. ...... 175,537 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) JAPAN (CONTINUED) TELECOMMUNICATIONS -- 1.9% 11,000 Nippon Comsys Corp. ............. $ 150,084 1,314 Nippon Telegraph & Telephone Corp. ........................... 10,158,178 ------------ 10,308,262 ------------ TEXTILE PRODUCTS -- 0.4% 12,000 Gunze Ltd. ...................... 28,937 33,000 Kuraray Co., Ltd. ............... 364,825 57,000 Mitsubishi Rayon Co., Ltd. ...... 156,148 21,000 Nisshinbo Industries Inc. ....... 73,353 15,000 Onward Kashiyama Co., Ltd. ...... 201,868 89,000 Teijin Ltd. ..................... 328,237 5,000 Tokyo Style...................... 50,711 134,000 Toray Industries Inc. ........... 700,908 49,000 Toyobo Ltd. ..................... 63,424 14,000 Wacoal Corp. .................... 180,342 ------------ 2,148,753 ------------ TOBACCO -- 0.0% 11,000 Takara Shuzo..................... 65,631 ------------ TRANSPORTATION -- 1.1% 422 East Japan Railway Co. .......... 2,360,727 82,000 Hankyu Corp. .................... 360,578 171,000 Japan Airlines Co.*.............. 451,769 155,000 Kinki Nippon Railway Co. ........ 831,364 77,000 Nagoya Railroad Co., Ltd. ....... 279,884 46,000 Nankai Electric Railway Co. ..... 232,046 103,000 Nippon Express Co., Ltd. ........ 580,762 67,000 Odakyu Electric Railway Co. ..... 234,626 78,000 Tobu Railway Co., Ltd. .......... 228,198 105,000 Tokyu Corp. ..................... 276,471 ------------ 5,836,425 ------------ TRANSPORTATION & SHIPPING -- 0.2% 25,000 Kamigumi Co., Ltd. .............. 121,679 30,000 Kawasaki Kisen Kaisha Ltd. ...... 40,427 47,000 Keihin Electric Express Railway Co., Ltd. ....................... 147,921 101,000 Mitsui OSK Lines Ltd. ........... 162,966 113,000 Nippon Yusen Kabushiki Kaisha.... 357,644 8,000 Seino Transportation............. 45,817 ------------ 876,454 ------------ WHOLESALE & INTERNATIONAL TRADE -- 0.5% 143,000 Marubeni Corp. .................. 245,947 150,000 Mitsubishi Corp. ................ 864,388 152,000 Mitsui & Co., Ltd. .............. 850,309 102,000 Sumitomo Corp. .................. 497,355 ------------ 2,457,999 ------------ WIRE & CABLE PRODUCTS -- 0.0% 60,000 Furukawa Electric Co., Ltd. ..... 204,793 ------------ 147,434,902 ------------ Continued 53
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MALAYSIA -- 0.6% AGRICULTURE -- 0.0% 130,000 Golden Hope Plantations Berhad... $ 98,160 37,500 Highlands & Lowlands Berhad...... 17,197 52,000 IOI Corp. Berhad................. 20,877 79,000 Kuala Lumpur Kepong Berhad....... 94,570 ------------ 230,804 ------------ AUTOMOTIVE -- 0.0% 13,000 Ederan Otomobil.................. 14,365 19,200 Oriental Holdings................ 20,686 33,000 Perusahaan Otomobil Nasional Berhad........................... 34,945 41,000 Tan Chong Motors................. 9,288 ------------ 79,284 ------------ BANKING -- 0.2% 24,000 AMMB Holdings Berhad............. 19,802 48,000 Commerce Asset Holdings Berhad... 25,990 343,000 Malayan Banking Berhad........... 486,403 213,600 Public Bank Berhad............... 72,775 187,000 RHB Capital Berhad............... 73,011 ------------ 677,981 ------------ BEVERAGES & TOBACCO -- 0.0% 18,000 Guinness Anchor.................. 12,663 ------------ BUILDING PRODUCTS -- 0.0% 15,000 Jaya Tiasa Holdings Berhad....... 13,951 113,000 Malayan United Industries........ 17,169 ------------ 31,120 ------------ CHEMICALS -- 0.0% 8,000 Malaysian Oxygen Berhad.......... 10,608 ------------ DIVERSIFIED -- 0.1% 60,000 Malaysian Resources.............. 15,249 58,000 Multi-Purpose Holdings Berhad*... 10,895 22,500 Perlis Plantations Berhad........ 16,161 247,040 Sime Darby Berhad................ 198,365 132,500 YTL Corp. Berhad................. 120,546 ------------ 361,216 ------------ ELECTRIC UTILITY -- 0.1% 327,000 Tenaga Nasional Berhad........... 469,736 ------------ ELECTRICAL & ELECTRONIC -- 0.0% 12,000 Malaysian Pacific................ 11,492 ------------ ENERGY -- 0.0% 16,000 UMW Holdings Berhard............. 11,787 ------------ ENGINEERING -- 0.0% 180,000 Amsteel Corp. Berhad*............ 17,570 6,300 Silverstone Berhad*.............. 0 46,000 Time Engineering Berhard*........ 7,497 49,326 United Engineers (Malaysia) Ltd.*............................ 25,163 ------------ 50,230 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MALAYSIA (CONTINUED) ENTERTAINMENT -- 0.0% 38,000 Berjaya Land Berhad.............. $ 12,807 141,000 Magnum Corp. Berhad.............. 42,327 118,000 Resorts World Berhad............. 95,185 ------------ 150,319 ------------ FINANCE -- 0.0% 48,000 MBf Capital Berhad*.............. 7,558 23,000 Rashid Hussain Berhad*........... 11,437 ------------ 18,995 ------------ FOOD PRODUCTS -- 0.0% 26,000 Nestle (Malaysia) Berhad......... 72,783 ------------ METALS & MINING -- 0.0% 92,400 Malaysia Mining Corp. Berhad..... 37,097 ------------ OIL & GAS -- 0.0% 17,500 Shell Refining Co. (Malaysia) Berhad........................... 12,892 ------------ PRINTING & PUBLISHING -- 0.0% 11,000 New Straits Time Press........... 5,409 ------------ TELECOMMUNICATIONS -- 0.2% 47,000 Technology Resources Industries Berhad........................... 17,139 351,000 Telekom Malaysia Berhad.......... 646,425 ------------ 663,564 ------------ TOBACCO -- 0.0% 15,000 RJ Reynolds...................... 11,879 29,300 Rothmans of Pall Mall (Malaysia) Berhad........................... 120,872 ------------ 132,751 ------------ TRANSPORTATION -- 0.0% 47,000 Malaysian Airlines............... 18,004 91,000 Malaysian International Shipping......................... 83,796 ------------ 101,800 ------------ 3,142,531 ------------ NETHERLANDS -- 5.0% BANKING -- 0.4% 91,835 ABN Amro Holding NV.............. 1,932,939 ------------ BEVERAGES & TOBACCO -- 0.2% 19,937 Heineken NV...................... 1,200,469 ------------ BROADCASTING & PUBLISHING -- 0.1% 48,430 Elsevier NV...................... 678,708 ------------ CHEMICALS -- 0.2% 18,132 Akzo Nobel NV.................... 826,085 ------------ COMPUTER SOFTWARE -- 0.1% 6,665 Getronics NV..................... 330,290 ------------ CONSUMER GOODS & SERVICES -- 0.6% 40,624 Unilever NV-CVA.................. 3,474,325 ------------ Continued 54
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) NETHERLANDS (CONTINUED) ELECTRONICS -- 0.3% 23,240 Philips Electronics NV........... $ 1,560,341 ------------ FINANCE -- 0.7% 59,683 ING Groep NV..................... 3,641,404 ------------ FOOD PRODUCTS -- 0.3% 30,149 Koninklijke Ahold NV............. 1,510,127 ------------ INSURANCE -- 0.1% 6,400 Aegon NV......................... 786,415 ------------ MANUFACTURING -- CONSUMER GOODS -- 0.0% 262 Stork NV......................... 5,989 ------------ OIL & GAS -- 1.2% 135,788 Royal Dutch Petroleum Co. ....... 6,765,281 ------------ PACKAGING -- 0.0% 5,696 Buhrmann NV...................... 101,982 ------------ PRINTING & PUBLISHING -- 0.2% 6,216 Oce NV........................... 223,577 4,461 Wolters Kluwer CVA............... 955,114 ------------ 1,178,691 ------------ RETAIL -- SPECIAL LINE -- 0.3% 38,917 Ahold............................ 1,439,168 ------------ STEEL -- 0.0% 3,036 Koninklijke Hoogovens NV......... 84,124 ------------ TRANSPORTATION -- 0.3% 1,986 IHC Caland NV.................... 82,544 10,159 KLM Royal Dutch Air Lines NV..... 307,477 1,133 Pakhoed NV....................... 28,617 30,151 TNT Post Group NV................ 972,008 ------------ 1,390,646 ------------ 26,906,984 ------------ NEW ZEALAND -- 0.2% APPLIANCES & HOUSEHOLD PRODUCTS -- 0.0% 8,949 Fisher & Paykel Industries Ltd. ............................ 32,383 ------------ BEVERAGES & TOBACCO -- 0.0% 41,300 Lion Nathan Ltd. ................ 105,376 ------------ FOREST PRODUCTS -- 0.0% 130,281 Carter Holt Harvey Ltd. ......... 116,997 ------------ TELECOMMUNICATIONS -- 0.2% 131,965 Telecom Corp. of New Zealand Ltd. ................ 575,120 ------------ 829,876 ------------ NORWAY -- 0.4% BANKING -- 0.1% 68,900 Christiania Bank Og Kreditkasse...................... 238,748 37,000 Den Norske Bank ASA.............. 127,724 ------------ 366,472 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) NORWAY (CONTINUED) CHEMICALS -- 0.0% 1,000 Dyno Industrier ASA.............. $ 14,832 ------------ DIVERSIFIED -- 0.2% 26,150 Norsk Hydro ASA.................. 882,104 ------------ ELECTRIC UTILITY -- 0.0% 15,650 Hafslund ASA, Series A........... 98,599 10,326 Hafslund ASA, Series B........... 43,913 ------------ 142,512 ------------ FOREST PRODUCTS -- 0.0% 3,200 Norske Skogindustrier ASA -- Class A.......................... 93,243 ------------ INDUSTRIAL GOODS & SERVICES -- 0.0% 1,200 Unitor ASA....................... 11,655 ------------ INSURANCE -- 0.0% 34,100 Storebrand ASA................... 257,358 ------------ MANUFACTURING -- CONSUMER GOODS -- 0.1% 18,800 Orkla ASA -- Class A............. 280,072 ------------ OIL & GAS -- 0.0% 10,500 Aker RGI ASA, Series A........... 110,254 2,100 Aker RGI ASA, Series B........... 18,743 9,700 Petroleum Geo-Services ASA....... 123,498 ------------ 252,495 ------------ TRANSPORTATION -- 0.0% 2,200 Leif Hoegh & Co. ASA............. 25,700 ------------ 2,326,443 ------------ PORTUGAL -- 0.3% BANKING -- 0.1% 10,500 Banco Commercial Portuguese...... 322,822 6,300 Banco Espirito Santo............. 195,539 ------------ 518,361 ------------ ELECTRICAL & ELECTRONIC -- 0.1% 32,100 Electricidade De Portugal........ 706,766 ------------ TELECOMMUNICATIONS -- 0.1% 10,100 Portugal Telecom SA.............. 463,095 ------------ TRANSPORTATION -- 0.0% 2,000 Brisa Auto-Estradas.............. 117,732 ------------ 1,805,954 ------------ SINGAPORE -- 1.0% AUTOMOTIVE -- 0.0% 1,000 Cycle & Carriage................. 3,424 ------------ Continued 55
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) SINGAPORE (CONTINUED) BANKING -- 0.4% 77,375 Development Bank of Singapore Ltd. ............................ $ 698,738 115,676 Oversea-Chinese Banking Corp., Ltd. ............................ 785,214 117,350 United Overseas Bank Ltd. ....... 753,905 ------------ 2,237,857 ------------ BEVERAGES & TOBACCO -- 0.0% 47,000 Fraser & Neave Ltd. ............. 137,301 ------------ FINANCE -- 0.0% 29,600 Haw Par Brothers International Ltd. ............................ 33,189 ------------ HOTELS & LODGING -- 0.0% 1,400 Overseas Union Enterprise Ltd. ............................ 2,783 1,100 Shangri-La Hotel Ltd. ........... 1,787 ------------ 4,570 ------------ PRINTING & PUBLISHING -- 0.1% 46,023 Singapore Press Holdings Ltd. ... 499,289 ------------ REAL ESTATE -- 0.1% 69,600 City Developments Ltd. .......... 301,608 115,000 DBS Land Ltd. ................... 169,368 8,000 United Industrial Corp., Ltd. ... 3,200 52,000 United Overseas Land Ltd. ....... 35,298 ------------ 509,474 ------------ STEEL -- 0.0% 60,750 NatSteel Ltd. ................... 66,643 ------------ TELECOMMUNICATIONS -- 0.2% 635,000 Singapore Telecommunications Ltd. ............................ 969,843 ------------ TRANSPORTATION -- 0.2% 133,000 Singapore Airlines Ltd. ......... 975,359 ------------ TRANSPORTATION & SHIPPING -- 0.0% 79,000 Keppel Corp. .................... 211,630 ------------ 5,648,579 ------------ SPAIN -- 3.4% AGRICULTURE -- 0.0% 5,700 Azucarera Ebro Agricolas SA...... 125,915 ------------ BANKING -- 0.7% 79,726 Banco Central Hispanoamericano SA............................... 948,106 84,322 Banco Santander SA............... 1,678,212 1,676 Banco Santander SA............... 33,365 35,400 Corporation Bancaria De Espana SA............................... 918,158 ------------ 3,577,841 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) SPAIN (CONTINUED) BANKING & FINANCE -- 0.4% 147,123 Banco Bilbao Vizcaya............. $ 2,310,294 2,460 Portland Valoerrivass............ 100,698 ------------ 2,410,992 ------------ BEVERAGES & TOBACCO -- 0.1% 1,650 El Aguila SA*.................... 15,954 13,330 Tabacalera SA -- Class A......... 336,798 ------------ 352,752 ------------ BUILDING PRODUCTS -- 0.0% 5,400 Uralita SA....................... 60,215 ------------ CHEMICALS -- 0.0% 700 Ercros SA*....................... 944 ------------ COMMERCIAL SERVICES -- 0.0% 500 Prosegur, CIA de Seguridad SA.... 5,840 ------------ CONSTRUCTION -- 0.1% 4,100 ACS, Actividades de Construccion y Servicios SA................... 162,042 5,308 Fomento de Construcciones y Contratas SA..................... 395,222 ------------ 557,264 ------------ ENGINEERING -- 0.1% 20,163 Autopistas Concesionaria Espanola SA............................... 335,834 5,800 Dragados & Construcciones SA..... 214,085 200 Urbis SA*........................ 3,112 ------------ 553,031 ------------ FOOD PRODUCTS -- 0.0% 18,700 Telepizza SA*.................... 178,169 1,282 Viscofan Industria Navarra de Envolturas Celulosicassa SA...... 41,530 ------------ 219,699 ------------ FOREST PRODUCTS -- 0.0% 100 Empresa Nacional de Celulosas SA............................... 1,680 2,498 Sarrio SA*....................... 12,429 ------------ 14,109 ------------ GAS & ELECTRIC UTILITY -- 1.0% 68,880 Endesa SA........................ 1,827,838 10,824 Gas Natural SDG SA............... 1,180,247 65,024 Iberdrola SA..................... 1,218,414 22,066 Union Electrica Fenosa SA........ 382,324 ------------ 4,608,823 ------------ HOTELS & LODGING -- 0.0% 2,700 Sol Melia SA..................... 94,325 ------------ INDUSTRIAL HOLDING COMPANY -- 0.0% 1,475 Corporacion Financiara Alba SA... 246,716 ------------ Continued 56
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) SPAIN (CONTINUED) INSURANCE -- 0.0% 5,500 Corporacion Mapfre............... $ 149,445 ------------ MACHINERY & EQUIPMENT -- 0.0% 6,416 Zardoya Otis SA.................. 200,597 ------------ METALS -- 0.0% 6,000 Acerinox SA...................... 139,952 ------------ OIL & GAS -- 0.2% 21,698 Repsol SA........................ 1,159,237 ------------ REAL ESTATE -- 0.1% 4,268 Metrovacesa SA................... 128,319 13,083 Vallehermoso SA.................. 187,439 ------------ 315,758 ------------ TELECOMMUNICATIONS -- 0.6% 73,909 Telefonica de Espana............. 3,291,421 ------------ WATER UTILITY -- 0.1% 4,747 Aquas de Barcelona............... 318,273 ------------ 18,403,149 ------------ SWEDEN -- 2.3% AUTOMOTIVE -- 0.1% 11,300 Volvo AB, Series A............... 253,031 18,300 Volvo AB, Series B............... 419,935 ------------ 672,966 ------------ BANKING & FINANCE -- 0.3% 21,000 ForeningsSparbanken AB........... 544,072 35,400 Skandiaviska Enskilda Banken, Series A......................... 373,411 13,000 Svenska Handelsbanken, Series A......................... 548,514 6,300 Svenska Handlesbanken, Series B......................... 241,724 ------------ 1,707,721 ------------ CHEMICALS -- 0.0% 10,200 Aga AB, Series A................. 135,277 8,900 Aga AB, Series B................. 116,939 ------------ 252,216 ------------ COMPUTER HARDWARE MANUFACTURING -- 0.0% 5,800 WM-Data AB, Series B............. 247,584 ------------ CONSUMER GOODS & SERVICES -- 0.1% 19,600 Securitas AB, Series B........... 304,680 ------------ ENGINEERING -- 0.2% 40,200 ABB AB, Series A................. 429,002 28,500 ABB AB, Series B................. 302,386 9,300 Drott AB*........................ 85,479 9,300 Skanska AB, Series B............. 258,157 ------------ 1,075,024 ------------ FINANCE -- 0.0% 5,800 Om Gruppen AB.................... 72,987 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) SWEDEN (CONTINUED) FOREST PRODUCTS -- 0.1% 700 Korsnas AB, Series B............. $ 9,500 21,500 Stora Kopparbergs Bergslags Aktiebolag, Series A............. 236,073 3,250 Stora Kopparbergs Bergslags Aktiebolag, Series B............. 36,086 11,900 Svenska Cellusoa AB, Series B.... 259,859 ------------ 541,518 ------------ INDUSTRIAL GOODS & SERVICES -- 0.0% 14,900 Sandvik AB, Series A............. 259,193 ------------ INSURANCE -- 0.1% 30,800 Skandia Forsakrings AB........... 471,184 ------------ MACHINERY & EQUIPMENT -- 0.0% 10,050 Atlas Copco AB, Series A......... 220,701 500 Atlas Copco AB, Series B......... 10,857 ------------ 231,558 ------------ MANUFACTURING -- CONSUMER GOODS -- 0.1% 22,000 Electrolux AB, Series B.......... 378,630 ------------ METALS & MINING -- 0.0% 7,960 Trelleborg AB, Series B.......... 64,815 ------------ OFFICE EQUIPMENT & SERVICES -- 0.0% 300 Esselte AB, Series B............. 4,923 ------------ PHARMACEUTICALS -- 0.4% 79,400 Astra AB, Series A............... 1,621,200 18,433 Astra AB, Series B............... 375,230 ------------ 1,996,430 ------------ RETAIL -- SPECIAL LINE -- 0.2% 12,400 Hennes & Mauritz AB, Series B.... 1,012,739 ------------ TELECOMMUNICATIONS -- 0.7% 7,300 Netcom AB, Series B*............. 297,204 115,800 Telefonaktiebolaget LM Ericsson, Series B......................... 2,757,299 ------------ 3,054,503 ------------ 12,348,671 ------------ SWITZERLAND -- 7.0% AIRLINES -- 0.1% 1,100 SAirGroup........................ 273,102 ------------ BUILDING PRODUCTS -- 0.2% 700 Holderbank Financiere Glarus AG -- Class A.................... 175,321 542 Holderbank Financiere Glarus AG -- Class B.................... 641,648 ------------ 816,969 ------------ COMMERCIAL SERVICES -- 0.1% 1,690 Addeco SA........................ 771,492 ------------ Continued 57
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) SWITZERLAND (CONTINUED) DIVERSIFIED -- 0.3% 704 ABB AG, Bearer Shares............ $ 825,231 579 Alusuisse-Lonza Holding AG, Registered*...................... 674,490 ------------ 1,499,721 ------------ ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.1% 285 The Swatch Group AG, Bearer...... 176,376 1,100 The Swatch Group AG, Registered.. 164,782 ------------ 341,158 ------------ FINANCE -- 1.1% 14,820 Credit Suisse Group, Registered....................... 2,319,870 12,842 UBS AG, Registered............... 3,945,682 ------------ 6,265,552 ------------ FOOD PRODUCTS -- 1.0% 2,469 Nestle SA, Registered............ 5,374,887 ------------ INSURANCE -- 0.9% 927 Swiss Reinsurance Co., Registered....................... 2,416,914 2,940 Zuerich Verichrng Gesellschft Registered....................... 2,204,761 ------------ 4,621,675 ------------ MANUFACTURING -- CONSUMER GOODS -- 0.0% 281 Sulzer AG, Registered............ 171,037 ------------ PHARMACEUTICALS -- 3.0% 578 Novartis AG, Bearer.............. 1,136,236 3,824 Novartis AG, Registered.......... 7,518,031 470 Roche Holding AG................. 5,735,204 133 Roche Holding AG, Bearer......... 2,408,750 ------------ 16,798,221 ------------ TELECOMMUNICATIONS -- 0.2% 2,500 Swisscom AG, Registered*......... 1,046,610 ------------ 37,980,424 ------------ UNITED KINGDOM -- 19.4% AEROSPACE -- 0.1% 25,464 Smiths Industries PLC............ 356,730 ------------ AEROSPACE & MILITARY TECHNOLOGY -- 0.2% 119,388 British Aerospace PLC............ 1,014,046 7,300 Cobham PLC....................... 83,380 ------------ 1,097,426 ------------ AIRLINES -- 0.1% 26,000 BAA PLC.......................... 301,946 ------------ APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1% 65,300 EMI Group PLC.................... 460,116 ------------ AUTO PARTS -- 0.0% 34,514 BBA Group PLC.................... 215,054 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UNITED KINGDOM (CONTINUED) AUTOMOTIVE -- 0.1% 124,647 Rolls-Royce PLC.................. $ 512,247 ------------ BANKING -- 1.9% 93,637 Abbey National PLC............... 2,005,058 101,328 Barclays PLC..................... 2,179,862 58,483 HSBC Holdings PLC................ 1,592,866 120,292 HSBC Holdings PLC (Hong Kong Dollars)......................... 3,040,153 57,404 Royal Bank of Scotland Group PLC.............................. 923,570 24,268 Schroders PLC.................... 438,495 ------------ 10,180,004 ------------ BEVERAGES & TOBACCO -- 0.6% 237,642 Diageo PLC....................... 2,670,850 51,361 Scottish & Newcastle PLC......... 582,372 ------------ 3,253,222 ------------ BREWERY -- 0.2% 62,127 Bass PLC......................... 873,967 ------------ BROADCASTING/CABLE -- 0.2% 114,000 British Sky Broadcasting Group PLC.............................. 873,919 48,242 Carlton Communications PLC....... 442,260 ------------ 1,316,179 ------------ BUILDING PRODUCTS -- 0.2% 63,291 Blue Circle Industries PLC....... 365,404 42,536 BPB PLC.......................... 152,158 21,454 RMC Group PLC.................... 292,700 50,900 Rugby Group PLC.................. 79,606 80,155 Tarmac PLC....................... 132,695 58,313 Williams Holdings................ 327,446 ------------ 1,350,009 ------------ CHEMICALS -- 0.2% 40,448 BOC Group PLC.................... 592,216 29,410 Elementis PLC.................... 40,859 60,251 Imperial Chemical Industries PLC.............................. 520,275 ------------ 1,153,350 ------------ COMPUTER SOFTWARE -- 0.0% 12,540 Mysis PLC........................ 91,332 ------------ CONSTRUCTION -- 0.0% 31,469 Taylor Woodrow PLC............... 78,799 ------------ DISTRIBUTION -- 0.4% 260,409 BG PLC........................... 1,645,337 366,494 Centrica PLC*.................... 736,300 ------------ 2,381,637 ------------ DIVERSIFIED -- 0.1% 70,000 Rentokil Initial PLC............. 527,590 52,000 Siebe PLC........................ 205,047 ------------ 732,637 ------------ Continued 58
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UNITED KINGDOM (CONTINUED) ELECTRIC UTILITY -- 0.4% 121,353 National Grid Group PLC.......... $ 965,116 39,709 Scottish & Southern Energy PLC... 445,627 79,283 Scottish Power PLC............... 811,912 ------------ 2,222,655 ------------ ELECTRICAL & ELECTRONIC -- 0.4% 15,800 Bowthorpe PLC.................... 91,614 35,374 Electrocomponents PLC............ 236,010 180,203 General Electric Co., PLC........ 1,619,036 ------------ 1,946,660 ------------ ENERGY -- 1.1% 388,928 British Petroleum Co., PLC....... 5,804,471 ------------ FINANCE -- 1.3% 56,913 Cardon PLC....................... 96,586 108,200 Halifax PLC...................... 1,535,597 357,273 Lloyds TSB Group PLC............. 5,070,493 22,109 Provident Financial PLC.......... 319,293 31,900 St. James's Place Capital PLC.... 153,653 ------------ 7,175,622 ------------ FOOD & HOUSEHOLD PRODUCTS -- 0.7% 67,002 Cadbury Schweppes PLC............ 1,141,534 215,948 Unilever PLC..................... 2,427,032 ------------ 3,568,566 ------------ FOOD PRODUCTS -- 0.3% 74,900 Associated British Foods PLC..... 699,110 15,000 Compass Group.................... 171,829 37,080 Tate & Lyle PLC.................. 206,674 19,834 Unigate PLC...................... 142,559 38,630 United Biscuits Holdings PLC..... 154,415 ------------ 1,374,587 ------------ FOREST PRODUCTS -- 0.0% 68,504 Arjo Wiggins Appleton PLC........ 125,944 ------------ GAS & ELECTRIC UTILITY -- 0.2% 94,871 National Power PLC............... 838,164 ------------ HEALTH & PERSONAL CARE -- 2.0% 236,685 Glaxo Wellcome PLC............... 8,116,143 62,969 Zeneca Group PLC................. 2,750,154 ------------ 10,866,297 ------------ INDUSTRIAL GOODS & SERVICES -- 0.0% 10,000 Bunzl PLC........................ 39,099 ------------ INDUSTRIAL HOLDING COMPANY -- 0.2% 314,244 BTR PLC.......................... 643,092 54,127 Hanson PLC....................... 427,993 39,633 TI Group PLC..................... 213,815 ------------ 1,284,900 ------------ INSURANCE -- 2.2% 102,941 Allied Zurich PLC*............... 1,540,602 60,568 Boots Co., PLC................... 1,029,396 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UNITED KINGDOM (CONTINUED) INSURANCE (CONTINUED) 57,041 Commercial Union PLC............. $ 891,630 83,616 Great Universal Stores PLC....... 875,762 71,949 Guardian Royal Exchange PLC...... 402,221 84,407 Legal & General Group PLC........ 1,098,914 189,526 Marks & Spencer PLC.............. 1,294,443 128,433 Prudential Corp., PLC............ 1,941,345 106,541 Royal & Sun Alliance Insurance Group PLC........................ 862,384 126,338 Sainsbury (J) PLC................ 983,216 441,269 Tesco PLC........................ 1,266,466 ------------ 12,186,379 ------------ LEISURE -- 0.3% 59,792 Granada Group PLC................ 1,060,974 100,282 Ladbroke Group PLC............... 400,438 69,606 Rank Group PLC................... 265,206 ------------ 1,726,618 ------------ MACHINE -- DIVERSIFIED -- 0.0% 44,496 FKI PLC.......................... 99,574 ------------ MACHINERY & EQUIPMENT -- 0.1% 58,800 GKN PLC.......................... 786,075 ------------ MANUFACTURING -- CAPITAL GOODS -- 0.1% 28,784 IMI PLC.......................... 113,741 47,801 Wolseley PLC..................... 301,821 ------------ 415,562 ------------ MERCHANDISING -- 0.1% 92,836 Safeway PLC...................... 462,995 ------------ METALS -- 0.2% 169,516 British Steel PLC................ 258,772 71,082 Rio Tinto PLC, Registered........ 820,768 ------------ 1,079,540 ------------ METALS & MINING -- 0.0% 18,004 Johnson Matthey PLC.............. 121,468 ------------ OIL & GAS -- 0.1% 17,571 Burmah Castrol PLC............... 252,441 80,282 LASMO PLC........................ 132,237 ------------ 384,678 ------------ PAPER PRODUCTS -- 0.0% 32,556 Rexam PLC -- New................. 91,813 19,673 Rexam PLC -- B Shares*........... 31,587 ------------ 123,400 ------------ PHARMACEUTICALS -- 1.0% 368,827 SmithKline Beecham PLC........... 5,176,173 ------------ PRINTING & PUBLISHING -- 0.5% 47,573 Pearson PLC...................... 948,240 94,996 Reed International PLC........... 756,290 97,327 Reuters Group PLC................ 1,020,985 ------------ 2,725,515 ------------ Continued 59
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UNITED KINGDOM (CONTINUED) RAILROADS -- 0.2% 33,667 Railtrack Group PLC.............. $ 880,558 ------------ REAL ESTATE -- 0.3% 42,809 British Land Co., PLC............ 316,598 31,336 Great Portland Estates PLC....... 102,188 35,421 Hammerson PLC.................... 203,026 44,945 Land Securities PLC.............. 538,412 28,788 MEPC PLC......................... 193,985 32,472 Slough Estates PLC............... 147,493 ------------ 1,501,702 ------------ RETAIL STORES -- 0.0% 31,126 Next PLC......................... 252,723 ------------ RETAIL -- GENERAL MERCHANDISE -- 0.2% 90,385 Kingfisher PLC................... 977,487 11,990 Sear PLC......................... 51,867 ------------ 1,029,354 ------------ RETAIL -- SPECIAL LINE -- 0.1% 120,111 LucasVarity PLC.................. 395,684 ------------ TELECOMMUNICATIONS -- 2.2% 424,768 British Telecommunications PLC... 6,392,362 158,777 Cable & Wireless PLC............. 1,953,560 204,651 Vodafone Group PLC............... 3,316,453 ------------ 11,662,375 ------------ TELECOMMUNICATIONS -- EQUIPMENT -- 0.0% 22,300 Racal Electronic PLC............. 128,746 ------------ TOBACCO -- 0.2% 102,941 British American Tobacco......... 913,742 ------------ TRANSPORTATION -- 0.3% 87,761 British Airways PLC.............. 594,288 11,886 Ocean Group PLC.................. 149,806 52,509 Peninsular & Oriental Steam Navigation Co. .................. 620,288 30,200 Stagecoach Holdings.............. 120,215 ------------ 1,484,597 ------------ WATER UTILITY -- 0.3% 21,666 Anglian Water.................... 300,645 12,412 Hyder PLC........................ 156,432 28,874 Thames Water PLC................. 550,545 46,044 United Utilities PLC............. 638,144 ------------ 1,645,766 ------------ 104,784,844 ------------ TOTAL COMMON STOCKS.............. 533,496,655 ------------ (Cost $449,100,450) [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ CLOSED END FUNDS -- 0.0% AUSTRALIA -- 0.0% 30,253 Stockland Trust Group............ $ 75,337 ------------ TOTAL CLOSED END FUNDS........... 75,337 ------------ (Cost $74,093) PREFERRED STOCKS -- 0.6% AUSTRALIA -- 0.2% PRINTING & PUBLISHING -- 0.2% 133,541 News Corp., Ltd. ................ 813,353 ------------ GERMANY -- 0.4% AUTOMOTIVE -- 0.1% 5,270 Den Volkswagen................... 262,626 168 MAN AG........................... 33,993 ------------ 296,619 ------------ COMPUTER SOFTWARE -- 0.2% 3,300 SAP AG........................... 1,575,577 ------------ GAS & ELECTRIC UTILITY -- 0.1% 16,540 RWE AG........................... 603,793 ------------ 2,475,989 ------------ TOTAL PREFERRED STOCKS........... 3,289,342 ------------ (Cost $1,648,486) RIGHTS -- 0.0% FINLAND -- 0.0% MEDICAL SUPPLIES -- 0.0% 1,500 Instrumentarium Rights*.......... 4,002 ------------ ITALY -- 0.0% BUILDING PRODUCTS -- 0.0% 190 Cementir SpA Rights*............. 0 ------------ NETHERLANDS -- 0.0% MACHINERY & EQUIPMENT -- 0.0% 10 Stork Rights*.................... 7 ------------ SPAIN -- 0.0% TELECOMMUNICATIONS -- 0.0% 73,909 Telefonica Rights*............... 65,724 ------------ TOTAL RIGHTS..................... 69,733 ------------ (Cost $0) Continued 60
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THE KENT INTERNATIONAL GROWTH FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ WARRANTS -- 0.0% GERMANY -- 0.0% INSURANCE -- 0.0% 209 Munchener Ruckversicherungs Warrants*........................ $ 9,788 ------------ HONG KONG -- 0.0% REAL ESTATE -- 0.0% 11,529 Chinese Estates Ltd. Warrants*... 610 11,529 Chinese Estates Ltd. Warrants*... 506 5,200 Kumagai Gumi Company Warrants*... 416 ------------ 1,532 ------------ ITALY -- 0.0% FINANCIAL -- BANKING -- 0.0% 8,395 Mediobanca Warrants*............. 30,441 ------------ TOTAL WARRANTS................... 41,761 ------------ (Cost $0) TOTAL INVESTMENTS -- 99.3%.................. 536,972,828 (Cost $450,823,029) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.7%....................... 3,916,358 ------------ TOTAL NET ASSETS -- 100.0%.................. $540,889,186 ============ --------------- (a) Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $154,292,546 Unrealized depreciation............... (70,583,850) ------------ Net unrealized appreciation........... $ 83,708,696 ============ * Non-income producing [Download Table] AB -- Aktiebolag (Swedish Stock Company) AG -- Aktiengesellschaft (German Stock Company) NV -- Naamloze Vennootschap (Dutch Corporation) PLC -- Public Limited Company (British) SA -- Sociedad Anonima (Spanish Corporation) SpA -- Societa per Azioni (Italian Corporation) See Notes to Financial Statements. 61
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ COMMERCIAL PAPER -- 1.0% OIL -- U.S. INTEGRATED -- 1.0% $7,701,000 Shell Oil Co., 5.00%, 1/4/99.... $ 7,697,791 ------------ TOTAL COMMERCIAL PAPER.......... 7,697,791 ------------ (Cost $7,697,791) COMMON STOCKS -- 98.6% ADVERTISING -- 0.2% 11,100 Interpublic Group Cos., Inc. ... 885,225 13,800 Omnicom Group................... 800,400 ------------ 1,685,625 ------------ AEROSPACE & DEFENSE -- 0.8% 80,892 Boeing Co. ..................... 2,639,101 10,300 General Dynamics Corp. ......... 603,838 15,894 Lockheed Martin Corp. .......... 1,347,017 5,600 Northrop Grumman Corp. ......... 409,500 27,500 Raytheon Co., Class B........... 1,464,375 ------------ 6,463,831 ------------ AGRICULTURE -- 0.1% 19,600 Pioneer Hi-Bred, Inc. .......... 529,200 ------------ APPLIANCES & HOUSEHOLD PRODUCTS -- 0.1% 7,400 Maytag Corp. ................... 460,650 6,200 Whirlpool Corp. ................ 343,325 ------------ 803,975 ------------ AUTO/TRUCK -- ORIGINAL EQUIPMENT -- 0.3% 3,100 Cummins Engine, Inc. ........... 110,050 13,432 Dana Corp. ..................... 549,033 5,800 Eaton Corp. .................... 409,988 5,420 Navistar International Corp.*... 154,470 6,350 PACCAR, Inc. ................... 261,144 9,900 TRW, Inc. ...................... 556,256 ------------ 2,040,941 ------------ AUTO/TRUCK -- REPLACEMENT EQUIPMENT -- 0.1% 14,525 Genuine Parts Co. .............. 485,680 ------------ AUTOMOTIVE -- 1.2% 98,500 Ford Motor Co. ................. 5,780,719 53,200 General Motors Corp. ........... 3,807,125 ------------ 9,587,844 ------------ BANKS -- MIDWEST -- 0.3% 21,800 Fifth Third Bancorp............. 1,554,613 17,170 Huntington Bancshares........... 516,173 ------------ 2,070,786 ------------ BANKS -- MONEY CENTER -- 2.0% 140,142 BankAmerica Corp. .............. 8,426,037 7,800 Bankers Trust New York Corp. ... 666,413 23,300 BB&T Corp. ..................... 939,281 68,516 Chase Manhattan Corp. .......... 4,864,635 14,300 J.P. Morgan & Co., Inc. ........ 1,502,394 ------------ 16,398,760 ------------ SECURITY MARKET SHARES DESCRIPTION VALUE ---------- -------------------------------- ------------ COMMON STOCK (CONTINUED) BANKS -- NORTHEAST -- 0.1% 13,100 State Street Corp. ............. $ 911,269 ------------ BANKS -- MAJOR REGIONAL -- 4.2% 60,700 Bank of New York Co., Inc. ..... 2,443,175 95,211 Bank One Corp. ................. 4,861,711 23,900 BankBoston Corp. ............... 930,606 12,650 Comerica, Inc. ................. 862,572 78,770 First Union Corp. .............. 4,790,200 46,114 Fleet Financial Group, Inc. .... 2,060,719 35,700 KeyCorp......................... 1,142,400 21,200 Mellon Bank Corp. .............. 1,457,500 26,800 National City Corp. ............ 1,943,000 9,000 Northern Trust Corp. ........... 785,813 24,500 PNC Bank Corp. ................. 1,326,063 8,800 Republic New York Corp. ........ 400,950 14,100 Summit Bancorp.................. 615,994 17,000 SunTrust Banks, Inc. ........... 1,300,500 58,762 U.S. Bancorp.................... 2,086,051 16,800 Wachovia Corp. ................. 1,468,950 131,400 Wells Fargo Co. ................ 5,247,787 ------------ 33,723,991 ------------ BEVERAGES -- ALCOHOLIC -- 0.4% 3,000 Adolph Coors Co. ............... 169,313 39,170 Anheuser-Busch Co., Inc. ....... 2,570,531 5,600 Brown-Forman Corp. ............. 423,850 ------------ 3,163,694 ------------ BEVERAGES -- SOFT DRINKS -- 2.2% 197,700 Coca-Cola Co. .................. 13,221,187 119,700 PepsiCo, Inc. .................. 4,900,218 ------------ 18,121,405 ------------ BROADCASTING/CABLE -- 0.9% 20,200 Clear Channel Communications, Inc.*........... 1,100,900 30,000 Comcast Corp., Special Class A......................... 1,760,625 49,500 MediaOne Group, Inc.*........... 2,326,500 42,546 Tele-Communications, Inc., Class A*........................ 2,353,326 ------------ 7,541,351 ------------ BUILDING & CONSTRUCTION -- MISCELLANEOUS -- 0.1% 3,300 Armstrong World Industries, Inc. ........................... 199,031 27,600 Masco Corp. .................... 793,500 4,400 Owens-Corning Fiberglass Corp. .......................... 155,925 ------------ 1,148,456 ------------ BUILDING -- HEAVY CONSTRUCTION -- 0.0% 6,400 Fluor Corp. .................... 272,400 3,300 Foster Wheeler Corp. ........... 43,519 ------------ 315,919 ------------ BUILDING -- MAINTENANCE & SERVICE -- 0.0% 10,500 Ecolab, Inc. ................... 379,969 ------------ Continued 62
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) BUILDING -- MOBILE/MANUFACTURING & RECREATIONAL VEHICLES -- 0.0% 2,800 Fleetwood Enterprises, Inc. .... $ 97,300 ------------ BUILDING -- RESIDENTIAL/COMMERCIAL -- 0.1% 4,800 Centex Corp. ................... 216,300 3,240 Kaufman & Broad Home Corp. ..... 93,150 3,500 Pulte Corp. .................... 97,344 ------------ 406,794 ------------ BUILDING PRODUCTS -- RETAIL/WHOLESALE -- 1.1% 119,462 Home Depot, Inc. ............... 7,309,581 28,600 Lowe's Cos., Inc. .............. 1,463,963 ------------ 8,773,544 ------------ BUILDING PRODUCTS -- WOOD -- 0.1% 8,900 Louisiana-Pacific Corp. ........ 162,981 16,150 Weyerhaeuser Co. ............... 820,622 ------------ 983,603 ------------ BUSINESS EQUIPMENT & SERVICES -- 0.6% 14,300 AES Corp.*...................... 677,463 40,000 Electronic Data Systems Corp. .......................... 2,009,999 13,300 Paychex, Inc. .................. 684,119 25,300 Staples, Inc.*.................. 1,105,294 ------------ 4,476,875 ------------ BUSINESS SERVICES -- 0.0% 8,200 H & R Block, Inc. .............. 369,000 ------------ CAPITAL GOODS -- 0.2% 57,200 CBS Corp. ...................... 1,873,300 ------------ CHEMICALS -- DIVERSIFIED -- 1.4% 6,000 B.F. Goodrich Co. .............. 215,250 18,200 Dow Chemical Co. ............... 1,655,063 92,000 E.I. du Pont de Nemours & Co. ............................ 4,881,749 6,400 Eastman Chemical Co. ........... 286,400 7,700 Hercules, Inc. ................. 210,788 48,800 Monsanto Co. ................... 2,317,999 14,400 PPG Industries, Inc. ........... 838,800 13,500 Rohm & Haas Co. ................ 406,688 11,000 Union Carbide Corp. ............ 467,500 6,200 W.R. Grace & Co.*............... 97,263 ------------ 11,377,500 ------------ CHEMICALS -- SPECIALTY -- 0.3% 18,800 Air Products & Chemical, Inc. ........................... 752,000 11,737 Engelhard Corp. ................ 228,872 4,800 Great Lakes Chemical Corp. ..... 192,000 10,600 Morton International, Inc. ..... 259,700 5,400 Nalco Chemical Co. ............. 167,400 12,900 Praxair, Inc. .................. 454,725 8,200 Sigma-Aldrich Corp. ............ 240,875 ------------ 2,295,572 ------------ COMMERCIAL SERVICES -- 0.2% 69,719 Cendant Corp.*.................. 1,329,018 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) COMPUTER SOFTWARE -- 4.2% 5,500 Adobe Systems, Inc. ............ $ 257,125 43,618 Computer Associates International, Inc. ............ 1,859,217 200,200 Microsoft Corp.*................ 27,765,237 79,075 Oracle Corp.*................... 3,410,109 22,126 Parametric Technology Corp.*.... 362,313 ------------ 33,654,001 ------------ COMPUTERS -- LOCAL AREA NETWORK -- 1.7% 29,2003 COM Corp.*...................... 1,308,525 13,400 Cabletron Systems*.............. 112,225 126,350 Cisco Systems, Inc.*............ 11,726,859 28,700 Novell, Inc.*................... 520,188 ------------ 13,667,797 ------------ COMPUTERS -- MAINFRAME -- 1.8% 74,800 IBM Corp. ...................... 13,819,299 20,700 Unisys Corp.*................... 712,856 ------------ 14,532,155 ------------ COMPUTERS -- MEMORY DEVICES -- 0.5% 40,600 EMC Corp.*...................... 3,451,000 19,800 Seagate Technology, Inc.*....... 598,950 ------------ 4,049,950 ------------ COMPUTERS -- MICRO -- 1.8% 10,900 Apple Computer, Inc.*........... 446,219 135,774 Compaq Computer Corp. .......... 5,694,022 4,000 Data General Corp.*............. 65,750 102,100 Dell Computer Corp.*............ 7,472,443 12,700 Gateway 2000, Inc.*............. 650,081 ------------ 14,328,515 ------------ COMPUTERS -- MINI -- 1.1% 84,500 Hewlett-Packard Co. ............ 5,772,406 15,300 Silicon Graphics, Inc.*......... 196,988 30,800 Sun Microsystems, Inc.*......... 2,637,250 ------------ 8,606,644 ------------ COMPUTERS -- SERVICES -- 0.6% 24,500 Automatic Data Processing, Inc. ........................... 1,964,594 5,900 Ceridian Corp.*................. 411,894 12,800 Computer Sciences Corp. ........ 824,800 12,000 Equifax, Inc. .................. 410,250 36,300 First Data Corp. ............... 1,150,256 2,200 Shared Medical Systems Corp. ... 109,725 ------------ 4,871,519 ------------ CONSUMER DURABLE -- 0.1% 10,800 Danaher Corp. .................. 586,575 ------------ CONSUMER NON-DURABLE -- 0.2% 31,700 Coca-Cola Enterprises, Inc. .... 1,133,275 26,400 RJR Nabisco Holdings Corp. ..... 783,750 ------------ 1,917,025 ------------ Continued 63
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) CONSUMER PRODUCTS -- MISCELLANEOUS -- 0.7% 5,700 American Greetings Corp., Class A......................... $ 234,056 2,995 Jostens, Inc. .................. 78,432 13,200 Newell Co. ..................... 544,500 12,200 Rubbermaid, Inc. ............... 383,538 4,700 Tupperware Corp. ............... 77,256 52,000 Unilever NV, ADR................ 4,312,750 ------------ 5,630,532 ------------ CONSUMER SERVICES -- 0.1% 10,000 Carnival Cruise Lines, Inc. .... 480,000 ------------ CONTAINERS & PACKAGING -- 0.1% 12,600 Owens-Illinois, Inc.*........... 385,875 6,816 Sealed Air Corp.*............... 348,042 ------------ 733,917 ------------ CONTAINERS -- METAL & GLASS -- 0.1% 2,500 Ball Corp. ..................... 114,375 10,100 Crown Cork & Seal Co., Inc. .... 311,206 ------------ 425,581 ------------ CONTAINERS -- PAPER & PLASTIC -- 0.0% 4,300 Bemis Co. ...................... 163,131 ------------ COSMETICS & TOILETRIES -- 1.0% 4,500 Alberto Culver Co., Class B..... 120,094 21,400 Avon Products, Inc. ............ 946,950 89,864 Gillette Co. ................... 4,341,555 8,700 International Flavors & Fragrances, Inc. ............... 384,431 44,440 Kimberly-Clark Corp. ........... 2,421,980 ------------ 8,215,010 ------------ DIVERSIFIED -- 4.7% 16,020 Allegheny Teledyne, Inc. ....... 327,409 45,600 Allied Signal, Inc. ............ 2,020,650 5,625 Crane Co. ...................... 169,805 2,800 Freeport-McMoran-Cooper Corp.*.. 156,800 262,800 General Electric Co. (b)........ 26,822,024 13,465 IMS Health, Inc. ............... 1,015,766 9,600 ITT Industries, Inc. ........... 381,600 6,900 Johnson Controls, Inc. ......... 407,100 32,800 Minnesota Mining & Manufacturing Co. ............................ 2,332,899 3,400 National Service Industries, Inc. ........................... 129,200 32,000 Seagram Co., Ltd. .............. 1,216,000 13,800 Tenneco, Inc. .................. 470,063 13,300 Textron, Inc. .................. 1,009,969 18,500 United Technologies Corp. ...... 2,011,875 ------------ 38,471,160 ------------ ELECTRICAL & ELECTRONIC -- 0.0% 7,100 KLA-Tencor Corp.*............... 307,963 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) ELECTRICAL COMPONENTS -- SEMICONDUCTORS -- 2.8% 11,700 Advanced Micro Devices, Inc.*... $ 338,569 29,800 Applied Materials, Inc.*........ 1,272,088 135,000 Intel Corp. .................... 16,005,937 11,500 LSI Logic Corp.*................ 185,438 17,300 Micron Technology, Inc.*........ 874,731 13,300 National Semiconductor Corp.*... 179,550 15,500 Rockwell International Corp. ... 752,719 31,700 Texas Instruments, Inc. ........ 2,712,330 ------------ 22,321,362 ------------ ELECTRONIC -- CONNECTORS -- 0.1% 16,255 AMP, Inc. ...................... 846,275 4,600 Thomas & Betts Corp. ........... 199,238 ------------ 1,045,513 ------------ ELECTRONIC MEASURING EQUIPMENT -- 0.0% 3,800 Tektronix, Inc. ................ 114,238 ------------ ELECTRONICS -- 0.0% 6,800 Raychem Corp. .................. 219,725 ------------ ENERGY -- 0.0% 8,600 Orxy Energy Co.*................ 115,563 ------------ FINANCE -- 1.2% 56,254 Associates First Capital Corp., Class A......................... 2,383,762 9,200 Bear Stearns Companies, Inc. ... 343,850 5,400 Capital One Financial Corp. .... 621,000 20,600 Franklin Resources, Inc. ....... 659,200 12,400 Mercantile Bancorporation....... 571,950 11,000 Provident Cos., Inc. ........... 456,500 17,400 Regions Financial Corp. ........ 701,438 13,600 SLM Holding Corp. .............. 652,800 15,900 SunAmerica, Inc. ............... 1,289,888 10,300 Union Planters Corp. ........... 466,719 48,169 Washington Mutual, Inc. ........ 1,839,454 ------------ 9,986,561 ------------ FINANCIAL -- BANKING -- 0.1% 21,400 Synovus Financial Corp. ........ 521,625 ------------ FINANCIAL -- CONSUMER LOANS -- 0.4% 38,693 Household International, Inc. ........................... 1,533,211 61,130 MBNA Corp. ..................... 1,524,429 ------------ 3,057,640 ------------ FINANCIAL -- INVESTMENT BANKER/BROKER -- 0.1% 9,600 Lehman Brothers Holding, Inc. ........................... 423,000 ------------ FINANCIAL -- INVESTMENT BANKERS -- 0.5% 28,300 Merrill Lynch & Co., Inc. ...... 1,889,025 32,475 Schwab (Charles) Corp. ......... 1,824,689 ------------ 3,713,714 ------------ Continued 64
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) FINANCIAL -- MISCELLANEOUS SERVICES -- 0.9% 36,600 American Express Co. ........... $ 3,742,350 46,816 Morgan Stanley, Dean Witter & Co.............................. 3,323,936 ------------ 7,066,286 ------------ FINANCIAL -- MORTGAGE & RELATED SERVICES -- 1.3% 9,000 Countrywide Credit Industries, Inc. ............... 451,688 84,300 Fannie Mae...................... 6,238,200 55,100 Freddie Mac..................... 3,550,506 ------------ 10,240,394 ------------ FINANCIAL -- SAVINGS & LOAN -- 0.1% 4,700 Golden West Financial Corp. .... 430,931 ------------ FINANCIAL SERVICES -- DIVERSIFIED -- 1.1% 183,944 Citigroup, Inc. ................ 9,105,228 ------------ FOOD -- CANNED -- 0.5% 36,500 Campbell Soup Co. .............. 2,007,500 29,400 H.J. Heinz Co. ................. 1,664,775 ------------ 3,672,275 ------------ FOOD -- CONFECTIONERY -- 0.2% 11,600 Hershey Foods Corp. ............ 721,375 9,400 Wm. Wrigley Jr. Co. ............ 841,888 ------------ 1,563,263 ------------ FOOD -- DIVERSIFIED -- 1.0% 23,400 Bestfoods....................... 1,246,050 39,650 ConAgra, Inc. .................. 1,248,975 12,600 General Mills, Inc. ............ 979,650 33,100 Kellogg Co. .................... 1,129,538 11,100 Quaker Oats Co. ................ 660,450 25,340 Ralston Purina Group............ 820,383 76,000 Sara Lee Corp. ................. 2,142,249 ------------ 8,227,295 ------------ FOOD -- FLOUR & GRAIN -- 0.1% 48,666 Archer-Daniels-Midland Co. ..... 836,447 ------------ FOOD ITEMS -- WHOLESALE -- 0.1% 9,800 Supervalu, Inc. ................ 274,400 27,400 Sysco Corp. .................... 751,788 ------------ 1,026,188 ------------ FOOD PRODUCTS -- 0.3% 39,300 Safeway, Inc.*.................. 2,394,844 ------------ FUNERAL SERVICES -- 0.1% 20,900 Service Corp. International..... 795,506 ------------ GAS & ELECTRIC UTILITY -- 0.2% 31,000 PG & E Corp. ................... 976,500 18,900 Public Service Enterprise Group, Inc. .................... 756,000 ------------ 1,732,500 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) GLASS PRODUCTS -- 0.1% 18,800 Corning, Inc. .................. $ 846,000 ------------ HEALTH CARE -- 0.0% 8,800 HCR Manor Care, Inc.*........... 258,500 ------------ HOTELS & LODGING -- 0.1% 21,000 Hilton Hotels Corp. ............ 401,625 20,300 Marriott International, Inc., Class A......................... 588,700 ------------ 990,325 ------------ INSTRUMENTS -- CONTROL -- 0.1% 10,300 Honeywell, Inc. ................ 775,719 ------------ INSTRUMENTS -- SCIENTIFIC -- 0.1% 3,700 EG&G, Inc. ..................... 102,906 3,600 Millipore Corp. ................ 102,375 4,000 Perkin-Elmer Corp. ............. 390,250 ------------ 595,531 ------------ INSURANCE -- 0.3% 13,600 Cincinnati Financial Corp. ..... 498,100 9,300 Loews Corp. .................... 913,725 5,900 Progressive Corp. .............. 999,313 ------------ 2,411,138 ------------ INSURANCE -- ACCIDENT & HEALTH -- 0.1% 13,700 Aon Corp. ...................... 758,638 ------------ INSURANCE -- BROKERS -- 0.1% 20,750 Marsh & McLennan Cos., Inc. .... 1,212,578 ------------ INSURANCE -- LIFE -- 0.7% 20,598 American General Corp. ......... 1,606,644 25,364 Conseco, Inc. .................. 775,187 8,625 Jefferson-Pilot Corp. .......... 646,875 11,550 Providian Financial Corp. ...... 866,250 11,400 Torchmark Corp. ................ 402,563 5,082 TransAmerica Corp. ............. 586,971 11,200 UNUM Corp. ..................... 653,800 ------------ 5,538,290 ------------ INSURANCE -- MULTI-LINE -- 0.5% 11,770 Aetna, Inc. .................... 925,416 16,700 CIGNA Corp. .................... 1,291,119 19,000 Hartford Financial Services Group, Inc. .................... 1,042,625 8,100 MBIA, Inc. ..................... 531,056 9,200 MGIC Investment Corp. .......... 366,275 ------------ 4,156,491 ------------ Continued 65
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) INSURANCE -- PROPERTY & CASUALTY -- 1.7% 67,298 Allstate Corp. ................. $ 2,599,385 85,380 American International Group, Inc. ........................... 8,249,842 13,500 Chubb Corp. .................... 875,813 8,200 Lincoln National Corp. ......... 670,863 11,500 Safeco Corp. ................... 493,781 19,234 St. Paul Cos., Inc. ............ 668,382 ------------ 13,558,066 ------------ LEISURE & RECREATION PRODUCTS -- 0.0% 8,100 Brunswick Corp. ................ 200,475 ------------ LEISURE & RECREATION/GAMING -- 0.0% 8,200 Harrah's Entertainment, Inc.*... 128,638 14,600 Mirage Resorts, Inc.*........... 218,087 ------------ 346,725 ------------ MACHINERY & EQUIPMENT -- 0.0% 3,200 Milacron, Inc. ................. 61,600 ------------ MACHINERY -- CONSTRUCTION/MINING -- 0.2% 29,600 Caterpillar, Inc. .............. 1,361,600 13,450 Ingersoll-Rand Co. ............. 631,309 ------------ 1,992,909 ------------ MACHINERY -- ELECTRICAL -- 0.3% 35,800 Emerson Electric Co. ........... 2,165,900 7,900 W.W. Grainger, Inc. ............ 328,838 ------------ 2,494,738 ------------ MACHINERY -- FARM -- 0.1% 2,000 Briggs & Stratton Corp. ........ 99,750 6,000 Case Corp. ..................... 130,875 19,900 Deere & Co. .................... 659,188 ------------ 889,813 ------------ MACHINERY -- GENERAL INDUSTRIAL -- 0.3% 2,300 Aeroquip-Vickers, Inc. ......... 68,856 8,400 Cooper Industries, Inc. ........ 400,575 18,100 Dover Corp. .................... 662,913 3,922 Harnischfeger Industries, Inc. ........................... 39,955 20,300 Illinois Tool Works, Inc. ...... 1,177,400 9,025 Parker Hannifin Corp. .......... 295,569 ------------ 2,645,268 ------------ MACHINERY -- MATERIAL HANDLING -- 0.0% 700 Nacco Industries, Inc. ......... 64,400 ------------ MACHINERY -- THERMAL PROCESSOR -- 0.0% 13,500 Thermo Electron Corp.*.......... 228,656 ------------ MEDIA CONGLOMERATES -- 1.6% 97,320 Time Warner, Inc. .............. 6,039,923 28,200 Viacom, Inc., Class B*.......... 2,086,800 166,500 Walt Disney Co. ................ 4,995,000 ------------ 13,121,723 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) MEDICAL -- BIOMEDICAL/GENETIC -- 0.3% 20,600 Amgen, Inc.*.................... $ 2,153,988 ------------ MEDICAL -- DRUGS -- 8.8% 122,900 Abbott Laboratories............. 6,022,100 7,000 ALZA Corp.*..................... 365,750 106,900 American Home Products Corp. ... 6,019,806 79,700 Bristol-Myers Squibb Co. ....... 10,664,856 89,500 Eli Lilly & Co. ................ 7,954,313 96,400 Merck & Co., Inc. .............. 14,237,075 105,100 Pfizer, Inc. ................... 13,183,481 41,330 Pharmacia & Upjohn, Inc. ....... 2,340,311 119,400 Schering-Plough Corp. .......... 6,596,850 66,700 Warner-Lambert Co. ............. 5,015,006 ------------ 72,399,548 ------------ MEDICAL -- HEALTH MEDICAL ORGANIZATION -- 0.1% 13,600 Humana, Inc.*................... 242,250 15,900 United Healthcare Corp. ........ 684,694 ------------ 926,944 ------------ MEDICAL -- HOSPITAL -- 0.2% 52,449 Columbia HCA Healthcare Corp. .. 1,298,113 25,100 Tenet Healthcare Corp.*......... 658,875 ------------ 1,956,988 ------------ MEDICAL -- OUTPATIENT/HOME CARE -- 0.1% 34,300 HEALTHSOUTH Corp.*.............. 529,506 ------------ MEDICAL -- WHOLESALE DRUG -- 0.2% 16,200 Cardinal Health, Inc. .......... 1,229,175 ------------ MEDICAL INSTRUMENTS -- 0.4% 9,100 Biomet, Inc. ................... 366,275 38,100 Medtronic, Inc. ................ 2,828,925 6,800 St. Jude Medical, Inc.*......... 188,275 ------------ 3,383,475 ------------ MEDICAL PRODUCTS -- 0.7% 5,300 Allergan, Inc. ................. 343,175 23,200 Baxter International, Inc. ..... 1,492,049 31,800 Boston Scientific Corp.*........ 852,638 12,300 Guidant Corp. .................. 1,356,075 37,800 HBO & Co. ...................... 1,084,388 5,900 Mallinckrodt, Inc. ............. 181,794 ------------ 5,310,119 ------------ MEDICAL/DENTAL SUPPLIES -- 1.3% 4,500 Bausch & Lomb, Inc. ............ 270,000 20,100 Becton, Dickinson & Co. ........ 858,019 4,600 C.R. Bard, Inc. ................ 227,700 109,300 Johnson & Johnson............... 9,167,537 ------------ 10,523,256 ------------ Continued 66
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) METAL -- GOLD -- 0.2% 30,300 Barrick Gold Corp. ............. $ 590,850 18,700 Battle Mountian Gold Co. ....... 77,138 17,200 Homestake Mining Co. ........... 158,025 13,315 Newmont Mining Corp. ........... 240,502 20,300 Placer Dome, Inc. .............. 233,450 ------------ 1,299,965 ------------ METAL -- MISCELLANEOUS -- 0.0% 7,600 Cyprus Amax Minerals Co. ....... 76,000 13,500 Inco, Ltd. ..................... 142,594 ------------ 218,594 ------------ METAL -- NON-FERROUS -- 0.3% 18,450 Alcan Aluminum, Ltd. ........... 499,303 15,200 Aluminum Co. of America......... 1,133,350 3,200 Asarco, Inc. ................... 48,200 14,600 Freeport-McMoran Copper & Gold, Inc., Class B................... 152,388 4,800 Phelps Dodge Corp. ............. 244,200 5,900 Reynolds Metals Co. ............ 310,856 ------------ 2,388,297 ------------ METAL -- PROCESSING & FABRICATION -- 0.0% 5,100 Timken Co. ..................... 96,263 7,825 Worthington Industries, Inc. ... 97,812 ------------ 194,075 ------------ MOVIE/TELEVISION PRODUCTION & DISTRIBUTION -- 0.0% 5,900 King World Productions, Inc.*... 173,681 ------------ OFFICE AUTOMATION & EQUIPMENT -- 0.6% 11,044 IKON Office Solutions, Inc. .... 94,564 22,300 Pitney Bowes, Inc. ............. 1,473,194 26,667 Xerox Corp. .................... 3,146,706 ------------ 4,714,464 ------------ OFFICE SUPPLIES & FORMS -- 0.1% 9,500 Avery Dennison Corp. ........... 428,093 6,600 Deluxe Corp. ................... 241,313 7,200 Moore Corp., Ltd. .............. 79,200 ------------ 748,606 ------------ OIL & GAS -- 0.1% 9,800 Anadarko Petroleum Corp. ....... 302,575 8,000 Apache Corp. ................... 202,500 ------------ 505,075 ------------ OIL & GAS -- DRILLING -- 0.3% 6,900 Rowan Cos., Inc.*............... 69,000 44,200 Schlumberger, Ltd. ............. 2,038,725 ------------ 2,107,725 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) OIL -- FIELD SERVICES -- 0.1% 35,700 Halliburton Co. ................ $ 1,057,613 ------------ OIL -- INTERNATIONAL INTEGRATED -- 4.3% 53,200 Chevron Corp. .................. 4,412,275 196,900 Exxon Corp. .................... 14,398,312 63,500 Mobil Corp. .................... 5,532,437 174,300 Royal Dutch Petroleum Co., ADR.. 8,344,612 43,500 Texaco, Inc. ................... 2,300,063 ------------ 34,987,699 ------------ OIL -- PRODUCTION/PIPELINE -- 0.5% 17,300 Coastal Corp. .................. 604,419 6,750 Columbia Gas System, Inc. ...... 389,813 26,800 Enron Corp. .................... 1,529,274 8,900 Sonat, Inc. .................... 240,856 34,500 Williams Co. ................... 1,075,969 ------------ 3,840,331 ------------ OIL -- U.S. EXPLORATION & PRODUCTION -- 0.1% 14,465 Burlington Resources, Inc. ..... 518,028 4,100 Helmerich & Payne, Inc. ........ 79,438 20,423 Union Pacific Resources Group, Inc. ........................... 185,083 ------------ 782,549 ------------ OIL -- U.S. INTEGRATED -- 0.8% 7,400 Amerada Hess Corp. ............. 368,150 27,500 Amoco Corp. .................... 1,622,500 26,100 Atlantic Richfield Co. ......... 1,703,024 3,900 Kerr-Mcgee Corp. ............... 149,175 28,700 Occidental Petroleum Corp. ..... 484,313 21,000 Phillips Petroleum Co. ......... 895,125 19,600 Unocal Corp. ................... 572,075 23,900 USX-Marathon Group.............. 719,988 ------------ 6,514,350 ------------ OIL FIELD MACHINERY & EQUIPMENT -- 0.1% 25,780 Baker Hughes, Inc. ............. 455,984 4,800 McDermott International, Inc. ........................... 118,500 ------------ 574,484 ------------ OIL REFINING -- 0.1% 6,200 Ashland, Inc. .................. 299,925 7,574 Sunoco, Inc. ................... 273,137 ------------ 573,062 ------------ PAINTS & RELATED PRODUCTS -- 0.1% 14,100 Sherwin-Williams Co. ........... 414,188 ------------ Continued 67
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) PAPER & RELATED PRODUCTS -- 0.5% 4,608 Boise Cascade Corp. ............ $ 142,848 7,800 Champion International Co. ..... 315,900 17,900 Fort James Corp. ............... 716,000 7,600 Georgia Pacific Corp. .......... 445,075 24,924 International Paper Co. ........ 1,116,907 8,400 Mead Corp. ..................... 246,225 2,400 Potlatch Corp. ................. 88,500 4,500 Temple-Inland, Inc. ............ 266,906 5,600 Union Camp Corp. ............... 378,000 8,250 Westvaco Corp. ................. 221,203 9,100 Williamette Industries, Inc. ... 304,850 ------------ 4,242,414 ------------ PHOTOGRAPHY -- 0.2% 26,200 Eastman Kodak Co. .............. 1,886,400 3,589 Polaroid Corp. ................. 67,069 ------------ 1,953,469 ------------ POLLUTION CONTROL -- 0.4% 14,100 Browning-Ferris Industries, Inc. ........................... 400,969 26,800 Laidlaw, Inc. .................. 269,675 10,099 Pall Corp. ..................... 255,631 46,442 Waste Management, Inc. ......... 2,165,358 ------------ 3,091,633 ------------ PRINTING & PUBLISHING -- 0.1% 13,865 Dun & Bradstreet Corp. ......... 437,614 ------------ PRINTING -- COMMERCIAL -- 0.1% 11,300 R.R. Donnelley & Sons Co. ...... 495,081 ------------ PROTECTION -- SAFETY -- 0.5% 52,343 Tyco International Ltd. ........ 3,948,625 ------------ PUBLISHING -- BOOKS -- 0.1% 8,100 McGraw-Hill Cos., Inc. ......... 825,188 ------------ PUBLISHING -- NEWSPAPERS -- 0.5% 7,600 Dow Jones & Co. ................ 365,750 23,100 Gannett, Inc. .................. 1,489,950 6,400 Knight-Ridder, Inc. ............ 327,200 15,400 New York Times Co., Class A..... 534,188 7,000 Times Mirror Co., Class A....... 392,000 9,900 Tribune Co. .................... 653,400 ------------ 3,762,488 ------------ PUBLISHING -- PERIODICALS -- 0.0% 4,300 Meredith Corp. ................. 162,863 ------------ RESTAURANTS -- 0.6% 11,300 Darden Restaurants, Inc. ....... 203,400 54,800 McDonald's Corp. ............... 4,199,050 12,410 Tricon Global Restaurants, Inc.*........................... 622,051 10,300 Wendy's International, Inc. .... 224,669 ------------ 5,249,170 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) RETAIL -- 0.3% 8,900 Consolidated Stores*............ $ 179,669 15,050 Dollar General, Corp. .......... 355,556 12,500 Fred Meyer, Inc.*............... 753,125 12,800 Kohl's Corp.*................... 786,400 ------------ 2,074,750 ------------ RETAIL -- APPAREL/SHOES -- 0.5% 46,925 Gap, Inc. ...................... 2,639,531 18,478 Limited, Inc. .................. 538,172 12,100 Nordstrom, Inc. ................ 419,719 25,800 TJX Companies, Inc. ............ 748,200 ------------ 4,345,622 ------------ RETAIL -- CONSUMER ELECTRONICS -- 0.0% 8,100 Circuit City Stores, Inc. ...... 404,494 ------------ RETAIL -- DISCOUNT -- 2.3% 17,550 Costco Cos., Inc.*.............. 1,266,891 35,700 Dayton-Hudson Corp. ............ 1,936,724 40,000 Kmart Corp.*.................... 612,500 21,250 Toys 'R' Us, Inc.*.............. 358,594 181,700 Wal-Mart Stores, Inc. .......... 14,797,193 ------------ 18,971,902 ------------ RETAIL -- DRUG STORE -- 0.7% 31,600 CVS Corp. ...................... 1,738,000 3,200 Longs Drug Stores Corp. ........ 120,000 21,000 Rite Aid Corp. ................. 1,040,813 40,400 Walgreen Co. ................... 2,365,925 ------------ 5,264,738 ------------ RETAIL -- MAJOR DEPARTMENT STORES -- 0.5% 5,716 Harcourt General, Inc. ......... 304,020 20,600 J.C. Penney, Inc. .............. 965,625 18,800 May Department Stores Co. ...... 1,135,050 31,875 Sears, Roebuck & Co. ........... 1,354,687 ------------ 3,759,382 ------------ RETAIL -- REGIONAL DEPARTMENT STORES -- 0.1% 9,000 Dillards Department Stores, Inc. ........................... 255,375 17,100 Federated Department Stores, Inc.*................... 744,919 ------------ 1,000,294 ------------ RETAIL -- SUPERMARKETS -- 0.5% 20,000 Albertson's, Inc. .............. 1,273,749 22,300 American Stores Co. ............ 823,706 3,100 Great Atlantic & Pacific Tea Co., Inc. ...................... 91,838 20,800 Kroger Co.*..................... 1,258,400 12,100 Winn-Dixie Stores, Inc. ........ 542,988 ------------ 3,990,681 ------------ Continued 68
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) RETAIL/WHOLESALE -- AUTO PARTS -- 0.1% 12,400 Auto Zone, Inc.*................ $ 408,425 5,200 Pep Boys-Manny, Moe & Jack...... 81,575 ------------ 490,000 ------------ RETAIL/WHOLESALE -- COMPUTERS -- 0.0% 8,128 Tandy Corp. .................... 334,772 ------------ RUBBER -- TIRES -- 0.1% 6,300 Cooper Tire & Rubber Co. ....... 128,756 12,800 Goodyear Tire & Rubber Co. ..... 645,600 ------------ 774,356 ------------ SHOES & RELATED APPAREL -- 0.1% 23,400 Nike, Inc., Class B............. 949,163 4,600 Reebok International Ltd.*...... 68,425 ------------ 1,017,588 ------------ SOAP & CLEANING PREPARATIONS -- 1.6% 8,400 Clorox, Inc. ................... 981,225 24,000 Colgate-Palmolive Co. .......... 2,229,000 106,400 Procter & Gamble Co. ........... 9,715,650 ------------ 12,925,875 ------------ STEEL -- PRODUCERS -- 0.1% 10,500 Bethlehem Steel Corp.*.......... 87,938 7,200 Nucor Corp. .................... 311,400 7,140 USX-U.S. Steel Group............ 164,220 ------------ 563,558 ------------ TECHNOLOGY -- 0.1% 16,800 BMC Software, Inc.*............. 748,650 18,700 Peoplesoft, Inc.*............... 354,131 ------------ 1,102,781 ------------ TECHNOLOGY -- SOFTWARE -- 0.0% 3,800 AutoDesk, Inc. ................. 162,213 ------------ TELECOMMUNICATIONS -- 0.1% 34,000 Sprint Corp., PCS*.............. 786,250 ------------ TELECOMMUNICATIONS -- CELLULAR -- 0.4% 46,600 Airtouch Communications, Inc.*........................... 3,361,025 ------------ TELECOMMUNICATIONS -- EQUIPMENT -- 2.5% 6,955 Andrew Corp.*................... 114,758 16,400 Ascend Communications, Inc.*.... 1,078,300 12,300 General Instrument Corp.*....... 417,431 6,500 Harris Corp. ................... 238,063 105,446 Lucent Technologies, Inc. ...... 11,599,059 48,600 Motorola, Inc. ................. 2,967,637 53,000 Northern Telecom Ltd. .......... 2,656,625 6,400 Scientific-Atlanta, Inc. ....... 146,000 15,700 Tellabs, Inc.*.................. 1,076,431 ------------ 20,294,304 ------------ [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) TEXTILE -- APPAREL -- 0.1% 5,900 Fruit of the Loom, Inc.*........ $ 81,494 5,400 Liz Claiborne, Inc. ............ 170,438 2,900 Russell Corp. .................. 58,906 9,900 VF Corp. ....................... 464,062 ------------ 774,900 ------------ TEXTILE -- HOME FURNISHINGS -- 0.0% 1,500 Springs Industries, Inc. ....... 62,156 ------------ TOBACCO -- 1.4% 14,000 Fortune Brands, Inc. ........... 442,750 195,200 Philip Morris Cos., Inc. ....... 10,443,200 15,100 U.S.T., Inc. ................... 526,613 ------------ 11,412,563 ------------ TOOLS -- HAND HELD -- 0.1% 7,600 Black & Decker Corp. ........... 426,075 4,850 Snap-On, Inc. .................. 168,841 7,200 The Stanley Works............... 199,800 ------------ 794,716 ------------ TOYS/GAME/HOBBY -- 0.1% 10,700 Hasbro, Inc. ................... 386,538 23,747 Mattel, Inc. ................... 541,728 ------------ 928,266 ------------ TRANSPORTATION -- AIR FREIGHT -- 0.1% 11,960 FDX Corp.*...................... 1,064,440 ------------ TRANSPORTATION -- AIRLINE -- 0.3% 14,800 AMR Corp.*...................... 878,750 12,400 Delta Air Lines, Inc. .......... 644,800 27,325 Southwest Airlines Co. ......... 613,105 7,600 US Airways Group, Inc.*......... 395,200 ------------ 2,531,855 ------------ TRANSPORTATION -- EQUIPMENT & LEASING -- 0.0% 6,000 Ryder Systems, Inc. ............ 156,000 ------------ TRANSPORTATION -- RAILROAD -- 0.5% 38,400 Burlington Northern Santa Fe Corp. .......................... 1,296,000 17,808 CSX Corp. ...................... 739,032 30,800 Norfolk Southern Corp. ......... 975,975 20,100 Union Pacific Corp. ............ 905,756 ------------ 3,916,763 ------------ UTILITIES -- ELECTRIC POWER -- 2.2% 11,200 Ameren Corp. ................... 478,100 15,500 American Electric Power Co. .... 729,469 12,100 Baltimore Gas & Electric Co. ... 373,588 12,300 Carolina Power & Light Co. ..... 578,869 17,300 Central & South West Corp. ..... 474,669 12,835 CINergy Corp. .................. 441,203 19,000 Consolidated Edison, Inc. ...... 1,004,624 11,800 Detroit Edison Co. ............. 505,925 Continued 69
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THE KENT INDEX EQUITY FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UTILITIES -- ELECTRIC POWER (CONTINUED) 15,950 Dominion Resources, Inc. ....... $ 745,663 29,306 Duke Power Co.*................. 1,877,415 28,700 Edison International............ 800,012 20,000 Entergy Corp. .................. 622,500 19,300 First Energy Corp. ............. 628,456 14,700 Florida Power & Light, Inc. .... 905,887 10,400 General Public Utilities Corp. .......................... 459,550 24,044 Houston Industries, Inc. ....... 772,414 9,000 New Century Energies, Inc. ..... 438,750 15,200 Niagara Mohawk Power Corp.*..... 245,100 12,300 Northern States Power Co. ...... 341,325 24,200 PacifiCorp...................... 509,713 18,100 Peco Energy Corp. .............. 753,413 12,300 PP&L Resources, Inc. ........... 342,863 56,700 Southern Co. ................... 1,647,843 22,670 Texas Utilities Co. ............ 1,058,405 17,600 Unicom Corp. ................... 678,700 ------------ 17,414,456 ------------ UTILITIES -- GAS DISTRIBUTION -- 0.2% 7,800 Consolidated Natural Gas Co. ... 421,200 1,700 Eastern Enterprises............. 74,375 3,900 Nicor, Inc. .................... 164,775 2,600 ONEOK, Inc. .................... 93,925 2,900 People's Energy Corp. .......... 115,638 19,525 Sempra Energy................... 495,446 ------------ 1,365,359 ------------ UTILITIES -- TELEPHONE -- 7.7% 22,300 Alltel Corp. ................... 1,333,819 89,600 Ameritech Corp. ................ 5,678,400 146,756 AT&T Corp. ..................... 11,043,388 126,240 Bell Atlantic Corp. ............ 6,690,720 158,400 BellSouth Corp. ................ 7,900,200 13,900 Frontier Corp. ................. 472,600 78,300 GTE Corp. ...................... 5,089,500 144,299 MCI Worldcom, Inc.*............. 10,353,453 23,200 Nextel Communications, Inc. -- Class A*........................ 548,100 [Download Table] SECURITY MARKET SHARES DESCRIPTION VALUE ------ ----------- ------ COMMON STOCKS (CONTINUED) UTILITIES -- TELEPHONE (CONTINUED) 156,818 SBC Communications, Inc. ....... $ 8,409,365 35,000 Sprint Corp. ................... 2,944,375 40,760 US West, Inc. .................. 2,634,115 ------------ 63,098,035 ------------ TOTAL COMMON STOCKS............. 798,574,754 ------------ (Cost $447,287,779) TOTAL INVESTMENTS -- 99.6%.................. 806,272,545 (Cost $454,985,570)(a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4%....................... 3,078,807 ------------ TOTAL NET ASSETS -- 100.0%.................. $809,351,352 ============ --------------- (a) Cost for federal income tax purposes differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $366,424,228 Unrealized depreciation............... (16,800,065) ------------ Net unrealized appreciation........... $349,624,163 ============ (b) Security has been deposited as initial margin on open future contracts. * Non-income producing security. ADR -- American Depositary Receipt At December 31, 1998, the Fund's open future contracts were as follows: [Download Table] # OF OPENING FACE MARKET CONTRACTS CONTRACT TYPE AMOUNT VALUE --------- ----------------- ---------- ---------- 30 Standard & Poor's $9,066,650 $9,341,249 500, 3/18/99 See Notes to Financial Statements. 70
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THE KENT SHORT TERM BOND FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ COMMERCIAL PAPER -- 3.3% ENERGY -- 3.3% $ 4,857,000 Duke Energy, 5.25%, 1/4/99..... $ 4,854,875 ------------ TOTAL COMMERCIAL PAPER......... 4,854,875 ------------ (Cost $4,854,875) CORPORATE NOTES & BONDS -- 61.0% AEROSPACE -- 4.2% 6,000,000 Boeing Capital Corp., 6.83%, 5/21/01........................ 6,172,500 ------------ BANKING -- 7.0% 5,000,000 ABN Amro Bank, 6.63%, 10/31/01....................... 5,109,350 5,000,000 Bankers Trust Corp., 5.85%, 5/11/00........................ 5,031,250 ------------ 10,140,600 ------------ BROKERS -- 6.8% 6,000,000 Morgan Stanley Group, Inc., 6.50%, 3/30/01................. 6,127,500 3,750,000 Salomon, Inc., 6.50%, 3/1/00... 3,787,500 ------------ 9,915,000 ------------ COMPUTER HARDWARE MANUFACTURING -- 3.5% 5,000,000 IBM Corp., 5.76%, 7/10/00...... 5,037,500 ------------ FINANCE -- 26.7% 5,000,000 Aristar, Inc., 6.00%, 8/1/01... 5,025,000 4,000,000 Beneficial Corp., 6.28%, 1/15/02........................ 4,045,000 5,000,000 Ford Motor Credit Corp., 7.50%, 1/15/03........................ 5,343,750 3,000,000 General Motors Acceptance Corp., 6.80%, 5/22/01.......... 3,086,250 4,000,000 Household Netherlands BV, 6.20%, 12/1/03................. 4,095,000 5,000,000 MCN Investment Corp., 6.89%, 1/16/02........................ 5,168,750 5,000,000 Merrill Lynch & Co., Inc., 6.64%, 9/19/02................. 5,156,250 5,000,000 Norwest Financial, Inc., 7.88%, 2/15/02........................ 5,368,750 1,500,000 Transamerica Financial Corp., 6.13%, 11/1/01................. 1,501,875 ------------ 38,790,625 ------------ INDUSTRIAL GOODS & SERVICES -- 5.8% 4,375,000 Enron Corp., 6.45%, 11/15/01... 4,478,906 2,000,000 Monsanto Co., 5.38%, 12/1/01 (b).................... 1,990,000 2,000,000 SuperValu, Inc., 7.25%, 7/15/99........................ 2,017,500 ------------ 8,486,406 ------------ [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ CORPORATE NOTES & BONDS (CONTINUED) PHARMACEUTICALS -- 3.5% $ 5,000,000 American Home Products Corp., 7.70%, 2/15/00................. $ 5,131,250 ------------ UTILITIES -- 3.5% 5,000,000 Georgia Power Co., First Mortgage, 6.13%, 9/1/99........ 5,031,250 ------------ TOTAL CORPORATE NOTES & BONDS.......................... 88,705,131 ------------ (Cost $87,676,049) U.S. GOVERNMENT AGENCY OBLIGATIONS -- 12.5% FANNIE MAE -- 3.5% 5,000,000 6.03%, 7/2/99.................. 5,027,150 ------------ FEDERAL HOME LOAN BANK -- 3.5% 5,000,000 5.81%, 11/4/99................. 5,035,700 ------------ FREDDIE MAC -- 5.5% 3,000,000 4.95%, 2/4/99.................. 2,985,975 5,000,000 5.75%, 7/15/03................. 5,138,000 ------------ 8,123,975 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS.................... 18,186,825 ------------ (Cost $18,214,923) U.S. GOVERNMENT OBLIGATIONS -- 21.5% U.S. TREASURY NOTES -- 21.5% 2,000,000 5.00%, 2/15/99................. 2,001,180 20,000,000 7.50%, 10/31/99................ 20,453,200 2,250,000 6.00%, 8/15/00................. 2,297,273 2,250,000 6.63%, 7/31/01................. 2,358,720 3,900,000 6.25%, 1/31/02................. 4,074,330 ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS.................... 31,184,703 ------------ (Cost $30,909,269) TOTAL INVESTMENTS -- 98.3%.................. 142,931,534 (Cost $141,655,116) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.7%....................... 2,423,522 ------------ TOTAL NET ASSETS -- 100.0%.................. $145,355,056 ============ --------------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $ 1,608,301 Unrealized depreciation............... (331,883) ------------ Net unrealized appreciation........... $ 1,276,418 ------------ ------------ (b) 144a security which is restricted as to resale to institutional investors. This security has been deemed liquid by the Board of Trustees. See Notes to Financial Statements. 71
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THE KENT INTERMEDIATE BOND FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ COMMERCIAL PAPER -- 4.2% ENERGY -- 4.2% $37,787,000 Duke Energy, 5.25%, 1/4/99..... $ 37,770,468 ------------ TOTAL COMMERCIAL PAPER......... 37,770,468 ------------ (Cost $37,770,468) CORPORATE NOTES & BONDS -- 28.9% BANKING -- 7.5% 6,000,000 Bank of Montreal-Chicago, 7.80%, 4/1/07.................. 6,720,000 10,000,000 Bankers Trust Corp., 5.85%, 5/11/00........................ 10,062,500 10,000,000 Chase Manhattan Corp., 6.75%, 9/15/06........................ 10,525,000 8,000,000 Chase Manhattan Corp.-New, 6.50%, 1/15/09................. 8,370,000 5,000,000 J.P. Morgan & Co., 7.63%, 9/15/04........................ 5,375,000 5,000,000 MBNA American Bank NA, 7.25%, 9/15/02........................ 5,318,750 5,000,000 MBNA Master Credit Card Trust, 5.65%*, 1/15/99................ 5,004,500 5,000,000 NCNB Corp., 9.38%, 9/15/09..... 6,325,000 10,000,000 Wachovia Corp., 6.38%, 2/1/09......................... 10,550,000 ------------ 68,250,750 ------------ BROKERS -- 0.6% 5,000,000 Salomon, Inc., 5.64%*, 2/15/99........................ 4,993,750 ------------ COMPUTER HARDWARE MANUFACTURING -- 0.6% 5,000,000 IBM Corp., 5.76%, 7/10/00...... 5,037,500 ------------ FINANCE -- 10.2% 5,000,000 Associates Corp., N.A., 6.52%, 10/11/02....................... 5,156,250 5,500,000 Bear Stearns Co., 6.75%, 4/15/03........................ 5,644,375 5,000,000 First Union Institutional Capital I, 8.04%, 12/1/26, Callable 12/1/06 @ 104.02...... 5,312,500 10,000,000 Ford Capital Guaranteed Notes, 9.88%, 5/15/02................. 11,300,000 8,400,000 Ford Motor Credit Corp., 9.03%, 12/30/09, Callable 12/30/04 @ 100............................ 9,912,000 5,000,000 General Electric Capital Corp., 6.66%*, 5/1/00, Putable 5/1/00 @ 100.......................... 5,087,500 10,000,000 General Motors Acceptance Corp., 5.35%, 12/7/01.......... 9,937,500 5,000,000 Household Finance Corp., 8.00%, 8/1/04......................... 5,531,250 8,000,000 Household Netherlands BV, 6.20%, 12/1/03................. 8,190,000 8,000,000 HSBC America Capital II, 8.38%, 5/15/27, Callable 5/15/07 @ 104.19......................... 8,150,000 7,000,000 Safeco, 6.88%, 7/15/07 (b)..... 7,271,250 5,000,000 Salomon Smith Barney, 7.13%, 10/1/06........................ 5,331,250 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ CORPORATE NOTES & BONDS (CONTINUED) FINANCE (CONTINUED) $ 5,100,000 Travelers Group, Inc., 6.88%, 12/15/03....................... $ 5,335,875 ------------ 92,159,750 ------------ INDUSTRIAL GOODS & SERVICES -- 5.7% 5,500,000 Boston Scientific, 6.63%, 3/15/05........................ 5,190,625 11,500,000 Champion International Corp., 7.70%, 12/15/99................ 11,686,875 7,500,000 Comdisco, Inc., 6.13%*, 2/1/99......................... 7,640,625 6,000,000 ConAgra, Inc., 6.70%, 8/1/27... 6,307,500 10,000,000 General Motors, 6.25%, 5/1/05......................... 10,275,000 10,000,000 Tyco International Group, 5.88%, 11/1/04 (b)............. 10,012,500 ------------ 51,113,125 ------------ INSURANCE -- 1.2% 5,000,000 American Annuity Group, 6.88%, 6/1/08......................... 5,050,000 5,000,000 St. Paul Companies, Inc., 7.19%, 8/2/07.................. 5,475,000 ------------ 10,525,000 ------------ TELECOMMUNICATIONS -- 1.7% 6,000,000 Bell Canada, 7.75%, 4/1/06..... 6,630,000 8,000,000 Sprint Cap Corp., 6.88%, 11/15/28....................... 8,360,000 ------------ 14,990,000 ------------ TRANSPORTATION -- RAILROAD -- 0.8% 7,000,000 Union Pacific Co., 6.34%, 11/25/03....................... 7,070,000 ------------ UTILITIES -- 0.6% 5,000,000 Western Resources, Inc., 6.88%, 8/1/04......................... 5,268,750 ------------ TOTAL CORPORATE NOTES & BONDS.......................... 259,408,625 ------------ (Cost $251,831,173) U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.0% FANNIE MAE -- 4.5% 7,950,000 7.35%, 3/28/05................. 8,817,902 10,000,000 5.75%, 6/15/05................. 10,369,600 9,100,000 6.00%, 11/15/22................ 9,180,808 12,000,000 6.25%, 11/18/23................ 12,167,760 ------------ 40,536,070 ------------ FEDERAL FARM CREDIT BANK -- 1.2% 10,000,000 6.30%, 9/23/04................. 10,552,300 ------------ FEDERAL HOME LOAN BANK -- 0.6% 5,000,000 6.49%, 1/8/04.................. 5,288,050 ------------ FREDDIE MAC -- 6.1% 39,000,000 5.75%, 7/15/03................. 40,076,400 10,410,000 8.12%, 1/31/05................. 11,931,942 3,000,000 7.22%, 6/14/06................. 3,358,200 ------------ 55,366,542 ------------ Continued 72
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THE KENT INTERMEDIATE BOND FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED) TENNESSEE VALLEY AUTHORITY -- 0.6% $ 5,000,000 6.25%, 12/15/17................ $ 5,287,500 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS.................... 117,030,462 ------------ (Cost $113,663,258) U.S. GOVERNMENT OBLIGATIONS -- 51.4% U.S. TREASURY BONDS -- 3.8% 28,275,000 9.13%, 5/15/09................. 33,916,145 ------------ U.S. TREASURY NOTES -- 47.6% 31,500,000 6.38%, 5/15/99................. 31,698,765 39,500,000 7.75%, 1/31/00................. 40,761,235 23,050,000 6.88%, 3/31/00................. 23,656,907 33,500,000 6.25%, 8/31/00................. 34,345,540 56,000,000 6.50%, 5/31/01................. 58,365,999 13,300,000 6.25%, 10/31/01................ 13,866,048 77,000,000 7.50%, 11/15/01................ 82,853,539 2,650,000 6.25%, 2/28/02................. 2,771,185 3,200,000 6.63%, 4/30/02................. 3,388,064 2,000,000 6.25%, 2/15/03................. 2,113,340 35,900,000 5.50%, 2/28/03................. 36,960,486 7,000,000 5.75%, 4/30/03................. 7,282,170 2,900,000 5.50%, 5/31/03................. 2,992,829 4,600,000 5.75%, 8/15/03................. 4,802,860 14,850,000 7.50%, 2/15/05................. 17,001,468 2,100,000 6.88%, 5/15/06................. 2,378,586 7,800,000 7.00%, 7/15/06................. 8,900,346 2,300,000 6.50%, 10/15/06................ 2,557,508 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ U.S. GOVERNMENT OBLIGATIONS (CONTINUED) U.S. TREASURY NOTES (CONTINUED) $ 1,420,000 6.25%, 2/15//07................ $ 1,561,049 26,000,000 6.63%, 5/15/07................. 29,294,460 18,135,000 6.13%, 8/15/07................. 19,841,504 ------------ 427,393,888 ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS.................... 461,310,033 ------------ (Cost $453,745,914) YANKEE CERTIFICATES OF DEPOSIT -- 1.2% 10,000,000 Potash Corp. Saskatchewan, 7.13%, 6/15/07................. 10,437,500 ------------ TOTAL YANKEE CERTIFICATES OF DEPOSIT........................ 10,437,500 ------------ (Cost $10,026,500) TOTAL INVESTMENTS -- 98.7%................... 885,957,088 (Cost $867,037,313) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.3%........................ 11,935,787 ------------ TOTAL NET ASSETS -- 100%..................... $897,892,875 ============ --------------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation................ $20,659,028 Unrealized depreciation................ (1,739,253) ----------- Net unrealized appreciation............ $18,919,775 =========== (b) 144a security which is restricted as to resale to institutional investors. This security has been deemed liquid by the Board of Trustees. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. See Notes to Financial Statements. 73
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THE KENT INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ COMMERCIAL PAPER -- 3.0% ENERGY -- 3.0% $ 7,230,000 Duke Energy, 5.25%, 1/4/99..... $ 7,226,837 ------------ TOTAL COMMERCIAL PAPER......... 7,226,837 ------------ (Cost $7,226,837) CORPORATE NOTES & BONDS -- 53.4% BANKING -- 16.7% 2,700,000 Bank of Montreal-Chicago, 7.80%, 4/1/07.................. 3,024,000 2,000,000 Bank of New York, 8.50%, 12/15/04....................... 2,322,500 2,000,000 BankAmerica Corp., 7.20%, 4/15/06........................ 2,172,500 2,000,000 Chase Manhattan Corp., 7.13%, 3/1/05......................... 2,132,500 4,000,000 First Union Corp., 9.45%, 8/15/01........................ 4,430,000 2,000,000 Fleet/Norstar Group, 8.63%, 1/15/07........................ 2,370,000 2,000,000 Midland Bank PLC, 7.63%, 6/15/06........................ 2,212,500 3,000,000 National City Bank of Cleveland, 7.25%, 7/15/10...... 3,412,500 5,000,000 NCNB Corp., 10.20%, 7/15/15.... 6,793,749 5,000,000 PNC Bank N.A., 7.88%, 4/15/05.. 5,556,250 2,000,000 Republic New York Corp., 7.00%, 3/22/11........................ 2,082,500 2,000,000 South Trust Bank NA, 6.57%, 12/15/27....................... 2,015,000 2,000,000 Swiss Bank Corp.-New York, 7.38%, 7/15/15................. 2,137,500 ------------ 40,661,499 ------------ BROADCASTING/CABLE -- 1.6% 3,000,000 Time Warner, Inc., 9.13%, 1/15/13........................ 3,795,000 ------------ BROKERS -- 0.9% 2,000,000 Salomon, Inc., 6.75%, 2/15/03........................ 2,067,500 ------------ FINANCE -- 10.8% 5,000,000 Associates Corp. NA, 6.25%, 11/1/08........................ 5,193,750 3,500,000 British Gas Finance, 6.63%, 6/1/18......................... 3,486,875 2,000,000 Discover Credit, 9.26%, 3/20/12........................ 2,610,000 2,000,000 Ford Motor Credit Corp., 9.03%, 12/30/09, Callable 12/30/04 @ 100............................ 2,360,000 3,500,000 Great Western Financial Trust II, 8.21%, 2/1/27, Callable 2/1/07 @ 104.10................ 3,745,000 2,000,000 HSBC America Capital II, 8.38%, 5/15/27, Callable 5/15/07 @ 104.19......................... 2,037,500 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ CORPORATE NOTES & BONDS (CONTINUED) FINANCE (CONTINUED) $ 2,000,000 Lehman Brothers Holdings, Inc., 8.75%, 3/15/05................. $ 2,215,000 4,000,000 St. Paul Cos., Inc., 7.25%, 8/9/07......................... 4,400,000 ------------ 26,048,125 ------------ GAS TRANSMISSION -- 1.1% 2,500,000 Enserch Corp., 7.13%, 6/15/05........................ 2,681,250 ------------ INDUSTRIAL GOODS & SERVICES -- 10.1% 2,000,000 ConAgra, Inc., 6.70%, 8/1/27... 2,102,500 5,000,000 Cyprus Amax, 7.38%, 5/15/07.... 5,025,000 3,000,000 Engelhard Corp., 7.38%, 8/1/06......................... 3,255,000 2,000,000 General Motors Corp., 9.13%, 7/15/01........................ 2,175,000 3,650,000 Hasbro, Inc., 6.60%, 7/15/28... 3,700,188 5,000,000 Protection One Alarm, 7.38%, 08/15/05 (b)................... 5,162,500 2,950,000 Raytheon Co., 6.75%, 8/15/07... 3,104,875 ------------ 24,525,063 ------------ INSURANCE -- 0.9% 2,000,000 Travelers Capital III, 7.63%, 12/1/36........................ 2,070,000 ------------ OIL & GAS -- 2.7% 5,000,000 Phillips Petroleum, 9.38%, 2/15/11........................ 6,518,750 ------------ RETAIL -- 2.2% 4,740,009 Fred Meyer, Inc., Lease Trust, 8.50%, 7/15/17................. 5,196,235 ------------ TELECOMMUNICATIONS -- 5.5% 3,500,000 GTE Florida, Inc., 6.86%, 2/1/28......................... 3,762,500 4,000,000 Sprint Capital Corp., 6.88%, 11/15/28....................... 4,180,000 5,000,000 US West Cap Funding, Inc., 6.88%, 7/15/28................. 5,262,500 ------------ 13,205,000 ------------ UTILITIES -- 0.9% 2,000,000 Pacific Gas & Electric, 6.25%, 3/1/04......................... 2,057,500 ------------ TOTAL CORPORATE NOTES & BONDS.......................... 128,825,922 ------------ (Cost $121,789,409) FOREIGN GOVERNMENT AGENCIES -- 0.4% 1,000,000 Hydro-Quebec, 9.41%, 3/23/00... 1,045,000 ------------ TOTAL FOREIGN GOVERNMENT AGENCIES....................... 1,045,000 ------------ (Cost $1,059,483) Continued 74
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THE KENT INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BOND -- TAXABLE -- 0.9% CALIFORNIA -- 0.9% $ 2,000,000 San Bernardino County, Financing Authority Pension Obligation Revenue, 6.99%, 8/1/10 (Insured by MBIA)....... $ 2,172,500 ------------ TOTAL MUNICIPAL BONDS -- TAXABLE........................ 2,172,500 ------------ (Cost $2,030,920) U.S. GOVERNMENT AGENCY OBLIGATIONS -- 10.6% FANNIE MAE -- 7.2% 10,000,000 7.40%, 7/1/04.................. 11,024,200 3,000,000 6.05%, 12/1/08................. 3,057,188 3,500,000 6.25%, 11/18/23................ 3,548,930 ------------ 17,630,318 ------------ FREDDIE MAC -- 1.2% 2,500,000 7.22%, 6/14/06................. 2,798,500 ------------ TENNESSEE VALLEY AUTHORITY -- 2.2% 5,000,000 6.25%, 12/15/17................ 5,287,500 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS.................... 25,716,318 ------------ (Cost $24,588,632) U.S. GOVERNMENT OBLIGATIONS -- 30.1% U.S. TREASURY BONDS -- 4.7% 2,200,000 7.50%, 11/15/16................ 2,732,356 6,000,000 8.75%, 5/15/20................. 8,534,940 ------------ 11,267,296 ------------ [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ U.S. GOVERNMENT OBLIGATIONS (CONTINUED) U.S. TREASURY NOTES -- 25.4% $10,000,000 6.75%, 6/30/99................. $ 10,107,000 12,500,000 8.00%, 5/15/01................. 13,431,125 12,000,000 7.50%, 5/15/02................. 13,036,440 12,000,000 5.50%, 2/28/03................. 12,354,480 11,000,000 7.50%, 2/15/05................. 12,593,680 ------------ 61,522,725 ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS.................... 72,790,021 ------------ (Cost $72,433,984) TOTAL INVESTMENTS -- 98.4%................... 237,776,598 (Cost $229,129,265) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.6%........................ 3,869,748 ------------ TOTAL NET ASSETS -- 100%..................... $241,646,346 ============ --------------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation................ $9,165,346 Unrealized depreciation................ (518,013) ---------- Net unrealized appreciation............ $8,647,333 ========== (b) 144a security which is restricted as to resale to institutional investors. This security has been deemed liquid by the Board of Trustees. [Download Table] MBIA Municipal Bond Insurance Association PLC Public Limited Company See Notes to Financial Statements. 75
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THE KENT LIMITED TERM TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS -- 97.3% ALASKA -- 1.6% $ 530,000 Alaska State Housing Finance Corp., 4.60%, 12/1/00 (Insured by MBIA)........................ $ 537,950 ------------ ARIZONA -- 3.4% 1,000,000 Arizona State University Revenue, 7.10%, 7/1/16, Prerefunded 7/1/01 @ 102........ 1,100,000 ------------ ARKANSAS -- 3.2% 1,000,000 Arkansas State Economic Development, (AMT), 5.00%, 2/1/03, (Insured by AMBAC)...... 1,038,750 ------------ CALIFORNIA -- 3.7% 1,000,000 University of California Revenue, Multiple Purpose Projects, Series B, 9.00%, 9/1/03 (Insured by MBIA)........ 1,218,750 ------------ COLORADO -- 1.5% 500,000 Colorado Housing Finance Authority, 4.50%, 11/1/05....... 499,375 ------------ CONNECTICUT -- 3.2% 1,000,000 Connecticut State, GO, Series C, 5.38%, 8/15/02.................. 1,056,250 ------------ DISTRICT OF COLUMBIA -- 3.1% 1,000,000 District of Columbia, GO, 5.10%, 12/1/99, (Insured by MBIA)...... 1,016,407 ------------ ILLINOIS -- 10.0% 1,000,000 Chicago Metropolitan Water Reclamation District, Working Cash Fund, 5.90%, 12/1/04....... 1,103,750 1,400,000 Joliet Illinois Regional Port District, Marine Term Revenue, 5.10%*, 1/4/99.................. 1,400,000 745,000 University of Illinois Revenue, Health Service Facility, 4.90%, 10/1/01 (Insured by AMBAC)...... 767,350 ------------ 3,271,100 ------------ INDIANA -- 3.5% 1,100,000 Greenwood Indiana School Building Corp., 4.75%, 7/15/07......................... 1,139,875 ------------ IOWA -- 3.1% 1,000,000 Chillicothe Pollution Control Revenue Bond, 4.25%, 11/1/23, Mandatory Put 11/1/03 @ 100..... 1,000,000 ------------ MICHIGAN -- 21.9% 1,235,000 Detroit, GO, 8.00%, 4/1/11, Prerefunded 4/1/01 @102......... 1,373,938 1,050,000 Flint Michigan Hospital Building Authority Revenue, 5.00%, 7/1/03.......................... 1,072,313 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,000,000 Michigan State Hospital Finance Authority Revenue, Detroit Medical Group, Series A, 5.00%, 8/15/06 (Insured by AMBAC)...... $ 1,048,750 1,600,000 Michigan State Hospital Finance Authority Revenue, Sisters of Mercy Health Corp. Bond 1993, Series F, 4.60%, 8/15/02 (Insured by MBIA)............... 1,637,999 1,000,000 Michigan State Housing Development Authority, Rental Housing Revenue, (AMT), 5.15%, 10/1/00 (Insured by MBIA)....... 1,020,000 1,000,000 Western Townships Michigan Utilities Authority, Sewer Disposal System, 8.13%, 1/1/09, Callable 1/1/99 @ 102........... 1,020,000 ------------ 7,173,000 ------------ NEW JERSEY -- 3.5% 1,000,000 New Jersey Economic Development Authority, Market Transition Facility Revenue, Series A 1994, 7.00%, 7/1/03 (Insured by MBIA)........................... 1,130,000 ------------ NEW MEXICO -- 3.1% 1,000,000 Albuquerque New Mexico Gross Receipts Tax, 5.38%, 7/1/01, Callable 7/1/99 @ 100 (Insured by MBIA)........................ 1,007,460 ------------ OHIO -- 3.2% 500,000 Cleveland Airport System Revenue, 5.50%, 1/1/04 (Insured by FSA)......................... 530,625 500,000 Cleveland-Cuyahoga County Port Authority, Rock & Roll Hall of Fame, Refunding, Subordinated Bonds, 4.90%, 12/1/00........... 505,625 ------------ 1,036,250 ------------ OKLAHOMA -- 3.5% 1,115,000 Tulsa Industrial Authority Revenue, University of Tulsa, Series A, 5.50%, 10/1/00 (Insured by MBIA)............... 1,154,025 ------------ TEXAS -- 7.6% 1,400,000 Guadalupe-Blanco River Authority, Texas Pollution Control Revenue, 5.15%*, 1/4/99.......................... 1,400,000 1,000,000 Pasadena Independent School District, GO, 6.75%, 8/15/05, Prerefunded 8/15/01 @ 100, (Insured by FGIC)............... 1,076,250 ------------ 2,476,250 ------------ Continued 76
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THE KENT LIMITED TERM TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) UTAH -- 4.1% $1,310,000 Salt Lake City Redevelopment Agency, Neighborhood Redevelopment Tax, Inc., Series A, (AMT), 5.25%, 10/1/99........ $ 1,327,397 ------------ VIRGINIA -- 4.7% 1,500,000 Norfolk, GO, 5.13%, 6/1/01...... 1,550,625 ------------ WISCONSIN -- 3.1% 1,000,000 Green Bay, GO, Series A, 5.10%, 4/1/00.......................... 1,020,000 ------------ WYOMING -- 6.3% 1,000,000 Campbell County School District, No. 001 Gillette, GO, 5.15%, 6/1/02.......................... 1,043,750 1,000,000 Wyoming Community Development, (AMT), 4.45%, 6/1/30, Callable 2/16/99 @ 100, Mandatory Put 6/30/99 @ 100................... 1,001,990 ------------ 2,045,740 ------------ TOTAL MUNICIPAL BONDS........... 31,799,204 ------------ (Cost $30,981,779) INVESTMENT COMPANIES -- 1.2% 380,067 Dreyfus Tax Exempt Money Market Fund............................ 380,067 ------------ TOTAL INVESTMENT COMPANIES...... 380,067 ------------ (Cost $380,067) TOTAL INVESTMENTS -- 98.5%.................. 32,179,271 (Cost $31,361,846) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.5%....................... 474,288 ------------ TOTAL NET ASSETS -- 100%.................... $ 32,653,559 ============ --------------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $ 818,050 Unrealized depreciation............... (625) ------------ Net unrealized appreciation........... $ 817,425 ============ * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. [Download Table] AMBAC AMBAC Indemnity Corp. AMT Alternative Minimum Tax Paper FGIC Financial Guaranty Insurance Corp. FSA Financial Security Assurance GO General Obligation MBIA Municipal Bond Insurance Association See Notes to Financial Statements. 77
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THE KENT INTERMEDIATE TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ DEMAND NOTES -- 3.4% ILLINOIS -- 0.8% $2,400,000 Southwestern Illinois Development Authority, Solid Waste Disposal Revenue Bond, 5.20%*, 1/4/99.................. $ 2,400,000 ------------ MICHIGAN -- 1.0% 3,000,000 University of Michigan, University Revenue, 5.15%*, 1/4/99.......................... 3,000,000 ------------ NEW MEXICO -- 0.3% 1,050,000 Hurley New Mexico Pollution Control Revenue Bond, 5.10%*, 1/4/99.......................... 1,050,000 ------------ TEXAS -- 0.7% 2,000,000 Gulf Coast Waste Disposal Authority, Texas Pollution Control Revenue Bond, 5.05%*, 1/4/99.......................... 2,000,000 ------------ WYOMING -- 0.6% 1,900,000 Sublette County Pollution Control Revenue Bond, 5.05%*, 1/4/99.......................... 1,900,000 ------------ TOTAL DEMAND NOTES.............. 10,350,000 ------------ (Cost $10,350,000) MUNICIPAL BONDS -- 95.4% ALASKA -- 2.7% 1,520,000 Alaska Municipal Bond Bank Authority, Series A, GO, 4.75%, 10/1/99......................... 1,535,717 1,000,000 Anchorage Electric Utility, Revenue Bond, Senior Lien, 5.50%, 12/1/03, Callable 6/1/03 @ 102 (Insured by MBIA)......... 1,071,250 5,000,000 North Slope Boro, Series B, GO, 7.50%, 6/30/01 (Insured by FSA)............................ 5,437,500 ------------ 8,044,467 ------------ ARIZONA -- 3.2% 2,000,000 Maricopa County Unified School District No. 97 Deer Valley, Series F, GO, 5.00%, 7/1/11, Callable 7/1/08 @ 100 (Insured by MBIA)........................ 2,070,000 500,000 Phoenix, GO, 6.00%, 7/1/99...... 506,890 1,500,000 Pima County Unified School District No. 1 Tucson, Series B, GO, ETM, 6.80%, 7/1/00.......... 1,571,250 5,000,000 Salt River Project Agricultural Improvement & Power District Electric System, Series A, 5.63%, 1/1/06................... 5,456,250 ------------ 9,604,390 ------------ CALIFORNIA -- 5.9% 3,400,000 California State, GO, 6.60%, 2/1/10.......................... 4,084,250 3,000,000 Orange County, Series A, 6.00%, 6/1/10 (Insured by MBIA)........ 3,442,500 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) CALIFORNIA (CONTINUED) $2,000,000 Riverside County Transportation Commission, Sales Tax Revenue, Series A, 5.60%, 6/1/05 (Insured by AMBAC)....................... $ 2,187,500 2,000,000 Turlock Irrigation District Revenue, Series A, 6.00%, 1/1/06 (Insured by MBIA)............... 2,240,000 4,850,000 University of California Revenue, Multiple Purpose Projects, Series B, 9.00%, 9/1/03 (Insured by MBIA)........ 5,910,937 ------------ 17,865,187 ------------ COLORADO -- 2.8% 500,000 Arapahoe County, School District No. 001, Englewood, 4.50%, 12/1/16, Callable 12/1/08 @ 100 (Insured by FSA)................ 474,375 4,000,000 Arapahoe County, School District No. 005, Cherry Creek, Series A, GO, 5.25%, 12/15/02............. 4,220,000 1,400,000 Boulder Valley School District, 5.50%, 12/1/07 (Insured by FGIC)........................... 1,538,250 1,000,000 Colorado Springs Utility Revenue, Series A, 6.50%, 11/15/03, Callable 11/15/01 @ 102............................. 1,088,750 1,000,000 E-470 Public Highway Authority Revenue, Series C, 6.00%, 9/1/07 (Insured by MBIA)............... 1,130,000 ------------ 8,451,375 ------------ CONNECTICUT -- 1.4% 4,000,000 Connecticut State, Series A, 6.00%, 5/15/02.................. 4,290,000 ------------ FLORIDA -- 1.8% 1,000,000 Broward County School District, GO, 5.20%, 2/15/03.............. 1,048,750 2,000,000 Lakeland Electric & Water Revenue, 5.90%, 10/1/07......... 2,245,000 1,000,000 Tampa Guaranteed Entitlement Revenue, 6.60%, 10/1/00 (Insured by AMBAC)....................... 1,053,750 1,000,000 Tampa Utilities, Tax & Special Revenue, 6.30%, 10/1/00 (Insured by AMBAC)....................... 1,048,750 ------------ 5,396,250 ------------ GEORGIA -- 2.8% 2,670,000 Atlanta Airport Facilities Revenue, (AMT), Series B, 5.50%, 1/1/03 (Insured by AMBAC)....... 2,810,175 4,000,000 Georgia State, Series B, GO, 5.95%, 3/1/08................... 4,565,000 Continued 78
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THE KENT INTERMEDIATE TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) GEORGIA (CONTINUED) $1,000,000 Georgia State Tollway Authority Revenue, Georgia 400 Project, 6.25%, 7/1/00................... $ 1,042,500 ------------ 8,417,675 ------------ HAWAII -- 1.1% 1,025,000 Honolulu City & County, Series A, GO, 5.60%, 1/1/05............ 1,105,719 1,000,000 Honolulu City & County, Series D, GO, ETM, 6.50%, 12/1/00...... 1,056,250 1,150,000 Maui County, Series A, GO, 6.80%, 12/1/03, Prerefunded 12/1/00 @ 101 (Insured by AMBAC).......................... 1,231,937 ------------ 3,393,906 ------------ IDAHO -- 0.7% 1,915,000 Ada & Canyon Counties, Joint School District No. 2, Meridan, GO, 5.50%, 7/30/14.............. 2,084,956 ------------ ILLINOIS -- 6.8% 305,000 Chicago, GO, 6.00%, 1/1/09, Callable 1/1/08 @ 102 (Insured by FGIC)........................ 342,744 300,000 Chicago Equipment Notes, GO, 5.60%, 1/1/05 (Insured by AMBAC).......................... 323,250 2,000,000 Chicago Metropolitan, Water Reclamation District, Capital Improvement, GO, 6.80%, 1/1/03, Prerefunded 1/1/00 @ 102........ 2,103,480 3,000,000 Chicago Metropolitan, Water Reclamation District, Capital Improvement, GO, 5.50%, 12/1/10......................... 3,300,000 4,270,000 Du Page & Will Counties, Community School District No. 204, GO, 4.95%, 12/30/01 (Insured by FGIC)............... 4,414,112 1,865,000 Glenview, Series B, GO, 4.50%, 12/1/10, Callable 12/1/09 @ 100 (b)............................. 1,892,975 4,000,000 Illinois Development Finance Authority, Pollution Control Revenue, Commonwealth Edison, 5.30%, 1/15/04 (Insured by MBIA)........................ 4,235,000 300,000 Kane, Cook, & Du Page Counties, School District No. 46, Elgin, GO, 5.05%, 1/1/06 (Insured by FSA)............................ 314,625 100,000 Lake County, School District No. 046, Grayslake, Series A, GO, 6.10%, 12/1/04, Callable 12/1/99 @ 100 (Insured by MBIA)......... 100,909 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) ILLINOIS (CONTINUED) $3,135,000 Northwest Suburban Municipal Joint Action, Water Agency, Water Supply System, Series A, 5.25%, 5/1/04 (Insured by MBIA)........................... $ 3,330,938 ------------ 20,358,033 ------------ INDIANA -- 4.4% 2,000,000 Indiana Municipal Power Supply Agency, System Revenue, Series B, 5.88%, 1/1/10 (Insured by MBIA)........................... 2,255,000 3,000,000 Indiana Municipal Power Supply Agency, System Revenue, Series B, 6.00%, 1/1/13 (Insured by MBIA)........................... 3,408,749 1,000,000 Indiana Transportation Finance Authority, Highway Revenue, Series A, 5.75%, 6/1/12 (Insured by AMBAC)....................... 1,118,750 1,565,000 Indianapolis Utilities District, Series B, 3.50%, 6/1/18 (Insured by FGIC)........................ 1,263,738 1,000,000 Purdue University Student Fee Revenue, Series D, 6.50%, 7/1/03, Prerefunded 1/1/00 @ 103............................. 1,058,830 2,500,000 Purdue University Student Fee Revenue, Series P, 5.25%, 7/1/09.......................... 2,690,625 1,300,000 Purdue University Student Fee Revenue, Series P, 5.25%, 7/1/13.......................... 1,378,000 ------------ 13,173,692 ------------ IOWA -- 0.3% 1,000,000 Chillicothe Pollution Control Revenue Bond, 4.25%, 11/1/23, Mandatory Put 11/1/03 @ 100..... 1,000,000 ------------ LOUISIANA -- 3.3% 2,050,000 Baton Rouge, Sales & Use Tax Revenue, Series A, 5.25%, 8/1/06 (Insured by FGIC)............... 2,190,938 4,000,000 Louisiana State, Series A, GO, 5.30%, 8/1/04 (Insured by MBIA)........................ 4,275,000 3,000,000 Louisiana State, Series A, GO, 6.00%, 4/15/07 (Insured by FGIC)........................ 3,382,500 ------------ 9,848,438 ------------ MARYLAND -- 0.0% 50,000 Maryland State Refunding Bond, GO, 4.20%, 8/1/01............... 50,813 ------------ MASSACHUSETTS -- 3.1% 5,000,000 Massachusetts Bay Transportation Authority, Series A, 5.00%, 3/1/02.......................... 5,181,250 Continued 79
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THE KENT INTERMEDIATE TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MASSACHUSETTS (CONTINUED) $3,750,000 Massachusetts State, Special Obligation Revenue, Series A, 5.25%, 6/1/08 (Insured by AMBAC).......................... $ 4,003,125 ------------ 9,184,375 ------------ MICHIGAN -- 18.1% 2,215,000 Battle Creek Downtown Development Authority, 6.00%, 5/1/07 (Insured by MBIA)........ 2,486,338 4,000,000 Battle Creek Downtown Development Authority, Tax Increment Revenue, 7.30%, 5/1/10.......................... 4,699,999 250,000 Beaverton Rural, GO, 4.60%, 5/1/07, Callable 5/1/04 @ 101 (Insured by FGIC)............... 255,938 300,000 Cadillac Public Schools, GO, 7.25%, 5/1/05 (Insured by FGIC)........................... 351,750 2,100,000 Caledonia Community Schools, GO, 6.70%, 5/1/22, Prerefunded 5/1/02 @ 102 (Insured by AMBAC).......................... 2,331,000 3,000,000 Detroit, GO, Distributable State Aid, 5.70%, 5/1/01 (Insured by AMBAC).......................... 3,131,250 3,000,000 Detroit Sewage Disposal Revenue, Series B, 6.00%, 7/1/09 (Insured by MBIA)........................ 3,416,250 6,000,000 Detroit Water Supply System, Permanent Linked Bonds, 5.25%, 7/1/13, Callable 7/1/04 @ 104 (Insured by FGIC)............... 6,232,499 1,000,000 Detroit Water Supply System, Second Lien, Series A, 5.20%, 7/1/08 (Insured by MBIA)........ 1,068,750 2,840,000 Grand Ledge Public Schools District, GO, 5.35%, 5/1/10 (Insured by MBIA)............... 3,070,750 1,700,000 Greater Detroit Resource Recovery Authority, Series A, 5.50%, 12/13/04 (Insured by AMBAC).......................... 1,833,875 1,000,000 Ingham County, GO, 5.13%, 11/1/12 (Insured by FSA)........ 1,055,000 2,000,000 Kalamazoo Hospital Finance Authority, Refunding & Improvement, Bronson Methodist Hospital, 5.35%, 5/15/06 (Insured by MBIA)............... 2,140,000 300,000 Lincoln School District, 5.00%, 5/1/13, Callable 5/1/08 @ 100 (Insured by FSA)................ 304,875 2,000,000 Michigan State Comprehensive Transportation, Series B, 5.50%, 5/15/02......................... 2,105,000 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,000,000 Michigan State Hospital Finance Authority Revenue, Detroit Medical Group, Series A, 5.00%, 8/15/06 (Insured by AMBAC)...... $ 1,048,750 1,450,000 Michigan State Hospital Finance Authority, St. John Hospital & Medical Center, 5.00%, 5/15/06 (Insured by AMBAC).............. 1,518,875 1,000,000 Michigan State South Central Power Agency, Power Supply System Revenue, 5.80%, 11/1/05 (Insured by MBIA)............... 1,103,750 1,000,000 Michigan State Strategic Fund, Hope Network Project, Series B, 4.80%, 9/1/08 (LOC: First of America)........................ 1,018,750 1,000,000 Michigan State Strategic Fund, Hope Network Project, Series B, 5.13%, 9/1/13, Callable 9/1/08 @ 102 (LOC: First of America)..... 1,020,000 2,300,000 Michigan State Strategic Fund, Limited Obligation Revenue, Ford Motor Co. Project, Series A, 7.10%, 2/1/06................... 2,699,625 2,500,000 Michigan State Trunk Line, Series A, 5.50%, 10/1/02........ 2,646,875 3,500,000 Michigan State Underground Storage Tank Financial Assurance Authority, Series I, 6.00%, 5/1/05 (Insured by AMBAC)....... 3,880,625 2,000,000 Northville Public Schools, Series A, GO, 7.00%, 5/1/08..... 2,165,000 1,575,000 South Redford School District, 5.25%, 5/1/09 (Insured by FGIC)........................... 1,671,469 1,000,000 Western Michigan University Revenue, 5.40%, 11/15/01 (Insured by FGIC)............... 1,045,000 ------------ 54,301,993 ------------ MINNESOTA -- 0.5% 1,000,000 Minneapolis Community Development Agency, Tax Increment Revenue, 7.00%, 9/1/00 (Insured by MBIA)............... 1,056,250 400,000 Minnesota Various Purpose Bonds, GO, 6.40%, 8/1/01............... 427,000 ------------ 1,483,250 ------------ MISSOURI -- 0.3% 1,000,000 St. Louis Water Revenue, 4.25%, 7/1/09, Callable 1/1/09 @ 101 (Insured by AMBAC).............. 995,000 ------------ Continued 80
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THE KENT INTERMEDIATE TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) NEVADA -- 0.9% $2,500,000 Clark County School District, Group 2, GO, 7.20%, 5/1/01, Prerefunded 5/1/00 @ 102 (Insured by FGIC)............... $ 2,671,875 ------------ NEW JERSEY -- 4.4% 350,000 Manalapan School District, GO, 5.00%, 12/1/11, Callable 12/1/08 @ 100 (Insured by FGIC)......... 362,688 1,000,000 Monmouth County Improvement Authority, 4.15%, 12/1/07 (Insured by AMBAC).............. 1,002,500 6,000,000 New Jersey Economic Development Authority, Market Transition Facility Revenue, Senior Lien, 7.00%, 7/1/04 (Insured by MBIA)........................... 6,922,499 1,375,000 New Jersey State, Series D, GO, 5.25%, 2/15/01.................. 1,421,406 3,000,000 Ocean County Utilities Authority, Wastewater Revenue, Refunding, GO, 6.00%, 1/1/07.... 3,371,250 ------------ 13,080,343 ------------ NEW MEXICO -- 0.3% 1,000,000 New Mexico Mortgage Financing Authority, (AMT), 5.35%, 7/1/23, Callable 7/1/08 @ 102 (Insured by GNMA, FNMA, FHLMC)........... 1,011,250 ------------ NEW YORK -- 2.4% 1,000,000 Long Island Power Authority, 4.10%, 4/1/07 (Insured by MBIA)........................... 996,250 1,130,000 Metropolitan Transportation Authority, Series M, 5.50%, 7/1/08 (Insured by FGIC)........ 1,243,000 1,660,000 New York State Urban Development Corp., Refunding, Syracuse University Center, 5.50%, 1/1/15.......................... 1,774,125 3,000,000 Triborough Bridge & Tunnel Authority, General Purpose, Series Y, 5.50%, 1/1/17......... 3,266,250 ------------ 7,279,625 ------------ NORTH CAROLINA -- 0.7% 2,000,000 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue, 5.90%, 1/1/03.......... 2,127,500 ------------ [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) OKLAHOMA -- 2.2% $1,600,000 Oklahoma Housing Finance Agency, Single Family Mortgage Revenue Bond, (AMT), 5.15%, 9/1/20, Callable 9/1/08 @ 101.5......... $ 1,602,000 1,000,000 Oklahoma State Turnpike Authority, Series A, 5.50%, 1/1/07 (Insured by FGIC)........ 1,095,000 3,500,000 Tulsa Industrial Authority, University of Tulsa, Series A, 6.00%, 10/1/16 (Insured by MBIA)........................... 4,003,125 ------------ 6,700,125 ------------ OREGON -- 0.4% 800,000 Chemeketa Community College District, GO, 5.95%, 6/1/16, Callable 6/1/06 @ 100 (Insured by FGIC)........................ 899,000 400,000 Clackamas County Schools, GO, 4.05%, 6/1/07 (Insured by FGIC)........................... 398,500 ------------ 1,297,500 ------------ PENNSYLVANIA -- 2.8% 2,000,000 Allegheny County Airport Revenue, (AMT), 5.00%, 1/1/02 (Insured by MBIA)............... 2,055,000 4,285,000 Chartiers Valley Joint School, ETM, 6.15%, 3/1/07.............. 4,772,419 1,475,000 Pennsylvania State, Series A, GO, 7.00%, 5/1/05, Prerefunded 5/1/00 @ 101.5.................. 1,565,344 ------------ 8,392,763 ------------ PUERTO RICO -- 1.8% 3,055,000 Puerto Rico Commonwealth Aqueduct & Sewer Authority, 6.00%, 7/1/06................... 3,398,688 2,000,000 Puerto Rico Commonwealth Highway & Transportation Authority, Highway Revenue, Series X, 4.90%, 7/1/01................... 2,052,500 ------------ 5,451,188 ------------ RHODE ISLAND -- 1.8% 1,000,000 Providence, GO, 6.70%, 1/15/02, Prerefunded 1/15/00 @ 102 (Insured by MBIA)............... 1,052,800 3,025,000 Rhode Island State, Series A, GO, 5.50%, 8/1/04 (Insured by MBIA)........................... 3,270,781 1,000,000 State Depositors Economic Protection Corp., Series B, Special Obligation, 5.20%, 8/1/03 (Insured by MBIA)........ 1,053,750 ------------ 5,377,331 ------------ Continued 81
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THE KENT INTERMEDIATE TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) SOUTH CAROLINA -- 0.8% $2,380,000 Charleston Waterworks & Sewer, 4.50%, 1/1/04................... $ 2,442,475 ------------ TENNESSEE -- 0.4% 1,230,000 Tennessee State, Series B, GO, 6.20%, 6/1/01................... 1,302,263 ------------ TEXAS -- 8.3% 400,000 Arlington Permanent Improvements, GO, 5.38%, 8/15/08, Callable 8/15/06 @ 100............................. 430,500 2,245,000 Dallas Independent School District, GO, 5.40%, 8/15/03 (Insured by PSFG)............... 2,388,119 1,500,000 Houston Water & Sewer System Revenue, Junior Lien, Series C, 5.75%, 12/1/03 (Insured by MBIA)........................... 1,623,750 1,000,000 Houston Water & Sewer System Revenue, Prior Lien, Series A, 7.00%, 12/1/01 (Insured by AMBAC).......................... 1,090,000 3,000,000 Lower Colorado River Authority, 4.90%, 1/1/07, Callable 1/1/06 @ 102............................. 3,138,750 1,050,000 Round Rock Independent School District, GO, 5.25%, 2/15/05 (Insured by PSFG)............... 1,116,938 2,800,000 Texas Municipal Power Agency, 5.60%, 9/1/01 (Insured by MBIA)........................... 2,933,000 4,450,000 Texas State, Series A, GO, 5.70%, 10/1/03.................. 4,789,312 5,595,000 Texas State Public Finance Authority, Series A, GO, 6.50%, 10/1/04......................... 6,315,355 1,015,000 University of Texas, University Revenue, Series A, 6.60%, 8/15/02, Callable 8/15/01 @ 102............................. 1,102,544 ------------ 24,928,268 ------------ VIRGINIA -- 0.1% 150,000 Newport News Water Utility Improvements, Series A, GO, 5.30%, 6/1/99................... 151,322 ------------ WASHINGTON -- 7.1% 1,000,000 King County School District, 4.60%, 12/1/03 (Insured by FGIC)........................... 1,028,750 5,000,000 Port Seattle Passenger Facilities, (AMT), Series B, 5.00%, 12/1/07 (Insured by AMBAC).......................... 5,262,500 2,695,000 Tacoma Electric System, Refunding, 6.00%, 1/1/06 (Insured by AMBAC).............. 2,994,819 50,000 Washington State, Series A, GO, 5.30%, 2/1/99, Callable 9/1/04 @ 100............................. 50,060 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) WASHINGTON (CONTINUED) $8,000,000 Washington State, Series A, GO, 5.50%, 9/1/05, Callable 9/1/04 @ 100............................. $ 8,659,999 300,000 Washington State, Series B, GO, 5.38%, 5/1/08................... 328,125 850,000 Washington State, Series III-H, Motor Vehicle Fuel Tax, 5.75%, 9/1/12.......................... 942,438 2,000,000 Washington State Public Power Supply System, Nuclear Project No. 1 Bond Revenue, Series C, 7.25%, 7/1/00 (Insured by FGIC)........................... 2,107,500 ------------ 21,374,191 ------------ WEST VIRGINIA -- 0.4% 1,095,000 West Virginia School Building Authority Revenue, Capital Improvement, Series A, 6.70%, 7/1/00 (Insured by MBIA)........ 1,145,644 ------------ WISCONSIN -- 1.4% 350,000 Milwaukee County, Series A, GO, 5.00%, 10/1/10, Callable 10/1/08 @ 100........................... 367,063 1,025,000 Milwaukee Metropolitan Sewer District, Series A, GO, 6.60%, 10/1/99......................... 1,050,851 1,500,000 Milwaukee Metropolitan Sewer District, Series A, GO, 6.70%, 10/1/00......................... 1,580,624 1,000,000 Wisconsin State Public Power, Inc., Supply System, Series A, 7.00%, 7/1/01, Callable 7/1/00 @ 102 (Insured by AMBAC).......... 1,067,500 ------------ 4,066,038 ------------ TOTAL MUNICIPAL BONDS........... 286,743,501 ------------ (Cost $268,479,669) INVESTMENT COMPANIES -- 0.4% 1,078,116 Dreyfus Tax Exempt Money Market Fund............................ 1,078,116 ------------ TOTAL INVESTMENT COMPANIES...... 1,078,116 ------------ (Cost $1,078,116) TOTAL INVESTMENTS -- 99.2%.................. 298,171,617 (Cost $279,907,785)(a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.8%....................... 2,350,287 ------------ TOTAL NET ASSETS -- 100.0%.................. $300,521,904 ============ --------------- Continued 82
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THE KENT INTERMEDIATE TAX-FREE FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation................ $18,308,042 Unrealized depreciation................ (44,210) ----------- Net unrealized appreciation............ $18,263,832 =========== (b) Represents security purchased on a when issued basis. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. [Download Table] AMBAC AMBAC Indemnity Corp. AMT Alternative Minimum Tax Paper ETM Escrowed to Maturity FGIC Financial Guaranty Insurance Corp. FHLMC Freddie Mac FNMA Fannie Mae FSA Financial Security Assurance GNMA Ginnie Mae GO General Obligation LOC Letter of Credit MBIA Municipal Bond Insurance Association PSFG Permanent School Fund Guarantee See Notes to Financial Statements. 83
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THE KENT TAX-FREE INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS -- 99.7% CALIFORNIA -- 12.8% $1,000,000 Anaheim Public Financing Authority, Lease Revenue, Public Improvements Project, Series A, 6.00%, 9/1/24 (Insured by FSA)............... $ 1,161,250 1,200,000 California State Department of Water, Resource Center Valley Project, 5.00%, 12/1/10, Callable 12/1/08 @ 101......... 1,266,000 1,400,000 California State, GO, 7.00%, 6/1/05......................... 1,638,000 2,000,000 California State, GO, 6.25%, 9/1/12......................... 2,375,000 3,000,000 Northern California Power Agency Revenue, Geothermal Project, Series A, 5.50%, 7/1/05 (Insured by AMBAC)...... 3,270,000 2,000,000 Orange County, Series A, 6.00%, 6/1/10 (Insured by MBIA)....... 2,295,000 3,000,000 Sacramento California Municipal Utility District, 5.10%, 7/1/14, Callable 7/1/07 @ 102 (Insured by AMBAC)............. 3,094,680 1,380,000 Turlock Irrigation District Revenue, Series A, 6.00%, 1/1/07 (Insured by MBIA).............. 1,561,125 ------------ 16,661,055 ------------ COLORADO -- 1.9% 1,580,000 Denver City & County Airport Revenue, (AMT), 6.75%, 11/15/22, Callable 11/15/02 @ 102................. 1,708,375 650,000 Denver City & County Airport Revenue, Series C, (AMT), 6.75%, 11/15/22, Callable 11/15/02 @ 102................. 727,188 ------------ 2,435,563 ------------ GEORGIA -- 0.9% 1,000,000 Georgia State, Series B, GO, 5.95%, 3/1/08.................. 1,141,250 ------------ HAWAII -- 2.5% 2,000,000 Hawaii State, Series CB, GO, 5.75%, 1/1/07.................. 2,195,000 1,000,000 Honolulu City & County, Series A, GO, 5.75%, 4/1/10........... 1,112,500 ------------ 3,307,500 ------------ IDAHO -- 1.9% 1,500,000 Ada & Canyon Counties School District No. 2, GO, 5.50%, 7/30/13........................ 1,635,000 785,000 Idaho Health Facilities Authority Hospital, 5.45%, 7/15/23, Callable 7/15/08 @ 101............................ 784,019 ------------ 2,419,019 ------------ [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) ILLINOIS -- 7.5% $2,000,000 Chicago Metropolitan, Water Reclamation District, Capital Improvement, GO, 5.50%, 12/1/10........................ $ 2,200,000 1,000,000 Chicago Public Building Commission, Series A, ETM, 7.00%, 1/1/20 (Insured by MBIA).......................... 1,265,000 2,000,000 Chicago School Finance Authority, Series A, GO, 4.90%, 6/1/05, Callable 6/1/04 @ 102 (Insured by MBIA).............. 2,085,000 2,000,000 Du Page & Will Counties, Community School District No 204, GO, 4.95%, 12/30/01 (Insured by FGIC).............. 2,067,500 1,000,000 Illinois State Sales Tax, Series S, 5.00%, 6/15/08....... 1,060,000 1,000,000 Will County Forest Preserve District, GO, 5.90%, 12/1/03, Callable 12/1/02 @ 100 (Insured by AMBAC)...................... 1,068,750 ------------ 9,746,250 ------------ INDIANA -- 6.1% 2,000,000 Indiana Municipal Power Supply Agency, System Revenue, Series B, 6.00%, 1/1/13 (Insured by MBIA).......................... 2,272,500 2,250,000 Indiana State Office Building Commission, Capital Complex, Government Center Parking Facilities, Series A, 4.80%, 7/1/03 (Insured by AMBAC)...... 2,325,938 1,000,000 Indiana Transportation Finance Authority, Highway Revenue, Series A, 5.75%, 6/1/12 (Insured by AMBAC)............. 1,118,750 1,000,000 Marion County Hospital Authority Revenue, Community Hospital, Indianapolis Project, ETM, 6.00%, 5/1/06............. 1,110,000 1,000,000 Purdue University Student Fee Revenue, Series P, 5.25%, 7/1/09......................... 1,076,250 ------------ 7,903,438 ------------ IOWA -- 1.9% 2,055,000 Iowa Finance Authority, Private College Revenue, Drake University Project, 6.50%, 12/1/11 (Insured by MBIA)...... 2,455,725 ------------ KENTUCKY -- 1.0% 1,315,000 Louisville & Jefferson County, Metropolitan Sewer District, Sewer & Drain System Revenue, Series A, 5.25%, 5/15/27, Callable 5/15/07 @ 101 (Insured by MBIA).............. 1,346,231 ------------ Continued 84
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THE KENT TAX-FREE INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) LOUISIANA -- 2.4% $3,000,000 Louisiana State Gas & Fuels Tax Revenue, Series A, 7.25%, 11/15/00, Callable 11/15/99 @ 102................. $ 3,153,150 ------------ MARYLAND -- 1.6% 2,000,000 Prince Georges County, Consolidated Public Improvement, GO, 5.00%, 1/1/02 (Insured by MBIA).............. 2,072,500 ------------ MASSACHUSETTS -- 1.6% 1,000,000 Massachusetts State Water, Resource Authority, Series B, 5.00%, 12/1/25, Callable 12/1/05 @ 102 (Insured by MBIA).......................... 987,500 1,000,000 Massachusetts State, Series B, GO, 5.40%, 11/1/06............. 1,087,500 ------------ 2,075,000 ------------ MICHIGAN -- 20.5% 2,000,000 Battle Creek Downtown Development Authority, Tax Increment Revenue, 7.30%, 5/1/10, Prerefunded 5/14/04 @ 102.................. 2,350,000 1,300,000 Berkley School District, GO, 7.00%, 1/1/07 (Insured by FGIC)....................... 1,538,875 2,000,000 Detroit Sewage Disposal Revenue, Series B, 6.00%, 7/1/09 (Insured by MBIA)....... 2,277,500 1,000,000 Detroit Water Supply System, Series B, 5.10%, 7/1/07 (Insured by MBIA).............. 1,057,500 930,000 Kent County Airport Facility, Kent County International Airport, (AMT), 5.50%, 1/1/07, Callable 1/1/05 @ 102.......... 1,002,075 1,000,000 Michigan Higher Education Facilities Authority, 5.35%, 5/1/15, Callable 5/1/08 @ 101 (LOC: FOA)..................... 1,017,500 2,000,000 Michigan State Hospital Finance Authority, Sisters of Mercy, Series P, 5.25%, 8/15/21, Callable 8/15/03 @ 102 (Insured by MBIA).............. 2,022,500 2,365,000 Michigan State Hospital Finance Authority, Detroit Medical Center, Series B, 5.00%, 8/15/06 (Insured by AMBAC)..... 2,480,294 2,000,000 Michigan State Hospital Finance Authority, Henry Ford Health, Series A, 5.25%, 11/15/20, Callable 5/15/06 @ 102 (Insured by AMBAC)...................... 2,010,000 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,300,000 Michigan State Housing Development Authority, Rental Housing Revenue, Series A, 5.15%, 4/1/02 (Insured by AMBAC)............. $ 1,339,000 1,000,000 Michigan State South Central Power Agency, Power Supply System Revenue, 5.80%, 11/1/05 (Insured by MBIA).............. 1,103,750 2,000,000 Michigan State Trunk Line, 5.50%, 11/1/16, Prerefunded 11/1/06 @ 101 (Insured by FGIC).......................... 2,207,500 1,000,000 Michigan State Underground Storage Tank Financial Assurance Authority, Series I, 6.00%, 5/1/05 (Insured by AMBAC)......................... 1,108,750 2,000,000 Michigan State University Revenue, Series A, 5.50%, 8/15/22, Prerefunded 8/15/02 @ 100.................. 2,117,500 3,000,000 University of Michigan Hospital Revenue, Series A, 5.15%*, 1/4/99................. 2,999,999 ------------ 26,632,743 ------------ MISSOURI -- 1.2% 500,000 Missouri State, Health & Education Facilities, Lake of Ozarks General Hospital, 6.50%, 2/15/21, Callable 2/15/06 @ 102............................ 546,250 1,000,000 St. Louis Missouri Water Revenue, 4.30%, 7/1/10, Callable 1/1/09 @ 101 (Insured by AMBAC)............. 990,000 ------------ 1,536,250 ------------ NEBRASKA -- 0.9% 1,075,000 Omaha Public Power District, 5.10%, 2/1/08.................. 1,142,188 ------------ NEVADA -- 3.4% 1,805,000 Clark County School District, GO, 5.75%, 6/15/10, Callable 6/15/06 @ 101 (Insured by FGIC).......................... 1,976,475 2,000,000 Nevada State, Nevada Municipal Bond Bank, Series A, GO, 8.00%, 11/1/05........................ 2,467,500 ------------ 4,443,975 ------------ NEW JERSEY -- 2.6% 1,500,000 New Jersey Economic Development Authority, Market Transition Facility Revenue, Senior Lien, 7.00%, 7/1/04 (Insured by MBIA).......................... 1,730,625 Continued 85
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THE KENT TAX-FREE INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) NEW JERSEY (CONTINUED) $1,500,000 New Jersey State Transportation Trust Fund Authority, Transportation System, Series A, 6.00%, 12/15/06 (Insured by MBIA).............. $ 1,695,000 ------------ 3,425,625 ------------ NEW YORK -- 3.9% 1,000,000 Long Island Power Authority, 4.10%, 4/1/07 (Insured by MBIA).............. 996,250 1,350,000 New York City, Municipal Water & Sewer Revenue, 5.50%, 6/15/24, Callable 6/15/06 @ 101............................ 1,400,625 1,500,000 New York City, Tax Revenue Anticipation Note, Livingston Plaza Project, 5.40%, 1/1/18 (Insured by FSA)............... 1,608,750 1,000,000 New York State Thruway Authority, Series 1997 B, 6.00%, 4/1/07.................. 1,112,500 ------------ 5,118,125 ------------ OKLAHOMA -- 2.6% 1,000,000 Grand River Dam Authority, 5.75%, 6/1/08 (Insured by FSA)........................... 1,123,750 1,000,000 Oklahoma State Turnpike Authority, Series A, 5.50%, 1/1/07 (Insured by FGIC)....... 1,095,000 1,000,000 Tulsa Industrial Authority, University of Tulsa, Series A, 6.00%, 10/1/16 (Insured by MBIA).......................... 1,143,750 ------------ 3,362,500 ------------ PENNSYLVANIA -- 1.6% 2,000,000 Pennsylvania State, First Series, GO, 5.38%, 5/15/16, Callable 5/15/06 @ 101.5 (Insured by FGIC).............. 2,082,500 ------------ PUERTO RICO -- 0.8% 1,000,000 Puerto Rico Commonwealth Highway & Transportation Authority, Highway Revenue, Series X, 4.90%, 7/1/01........ 1,026,250 ------------ RHODE ISLAND -- 0.8% 1,000,000 Convention Center Authority, Series B, 5.00%, 5/15/09 (Insured by MBIA).............. 1,058,750 ------------ [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) SOUTH CAROLINA -- 2.5% $2,000,000 Charleston Water & Sewer Revenue, 4.50%, 1/1/04......... $ 2,052,500 1,200,000 Myrtle Beach Water & Sewer Revenue, 4.90%, 3/1/02 (Insured by MBIA)....................... 1,239,000 ------------ 3,291,500 ------------ TENNESSEE -- 1.0% 1,225,000 Tennessee Housing Development Agency, Mortgage Finance, Series C, (AMT), 5.95%, 7/1/09, Callable 7/1/05 @ 102 (Insured by MBIA)....................... 1,296,969 ------------ TEXAS -- 6.6% 1,000,000 Brownsville Utility System, 6.25%, 9/1/11 (Insured by AMBAC)......................... 1,168,750 1,000,000 Harris County, Certificates of Obligation, 6.00%, 12/15/11.... 1,150,000 1,500,000 Richardson Texas Independent School District, Series C, 4.75%, 2/15/04 (Guaranteed by PSF) (b)....................... 1,560,000 2,000,000 Texas City Industrial Development Corp., Marine Terminal Revenue, Arco Pipeline Co. Project, 7.38%, 10/1/20.... 2,610,000 2,000,000 Texas State, Series A, GO, 5.70%, 10/1/03................. 2,152,500 ------------ 8,641,250 ------------ UTAH -- 2.4% 2,175,000 Intermountain Power Agency, Utah Power Supply, Series D, 5.00%, 7/1/23, Callable 7/1/06 @ 102.......................... 2,120,625 1,000,000 St. George, Parks & Recreational Facilities, GO, 5.38%, 8/1/21, Callable 8/1/07 @ 101 (Insured by FGIC)........ 1,028,750 ------------ 3,149,375 ------------ WASHINGTON -- 3.8% 1,000,000 Douglas County Public Utility District No. 001, Electric Distribution System, 5.90%, 1/1/11, Callable 1/1/05 @ 102 (Insured by MBIA).............. 1,087,500 2,500,000 Port Seattle Limited Tax, GO, (AMT), 5.35%, 5/1/04........... 2,668,750 1,000,000 Washington State, Motor Vehicle Fuel Tax, R-92D, GO, 6.25%, 9/1/07.................. 1,152,500 ------------ 4,908,750 ------------ Continued 86
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THE KENT TAX-FREE INCOME FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE ----------- ------------------------------- ------------ MUNICIPAL BONDS (CONTINUED) WISCONSIN -- 1.0% $1,285,000 Wisconsin State Health and Education Facility, Lawrence University, 5.13%, 4/15/28, Callable 10/1/08 @ 101......... $ 1,254,481 ------------ WYOMING -- 2.0% 2,650,000 Sublette County Pollution Control Revenue Bond, 5.05%*, 1/4/99......................... 2,650,000 ------------ TOTAL MUNICIPAL BONDS.......... 129,737,912 ------------ (Cost $121,194,230) INVESTMENT COMPANIES -- 0.2% 294,445 Dreyfus Tax Exempt Money Market Fund........................... 294,445 ------------ TOTAL INVESTMENT COMPANIES..... 294,445 ------------ (Cost $294,445) TOTAL INVESTMENTS -- 99.9%.................. 130,032,357 (Cost $121,488,675)(a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1%....................... 137,873 ------------ TOTAL NET ASSETS -- 100.0%.................. $130,170,230 ============ --------------- (a) Represents cost for federal income tax purposes and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation................... $8,572,998 Unrealized depreciation................... (29,316) ---------- Net unrealized appreciation............... $8,543,682 ========== (b) Represents security purchased on a when issued basis. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. [Download Table] AMBAC AMBAC Indemnity Corp. AMT Alternative Minimum Tax Paper ETM Escrowed to Maturity FGIC Financial Guaranty Insurance Corp. FOA First of America FSA Financial Security Assurance GO General Obligation LOC Letter of Credit MBIA Municipal Bond Insurance Association PSF Permanent School Fund See Notes to Financial Statements. 87
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THE KENT MICHIGAN MUNICIPAL BOND FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS -- 98.3% MICHIGAN -- 95.8% $1,465,000 Allegan Sanitary Sewer System, (AMT), 5.45%, 11/1/02........... $ 1,512,613 2,000,000 Battle Creek Downtown Development Authority, Tax Increment Revenue, 6.90%, 5/1/04.......................... 2,230,000 1,000,000 Bay City Electric Utility Revenue, 5.15%, 1/1/07 (Insured by AMBAC)....................... 1,061,250 2,450,000 Brighton Area School District, 5.13%, 5/01/08, (Insured by FSA)............................ 2,612,313 290,000 Chippewa County Hospital Finance Authority, 4.40%, 11/1/99....... 291,073 585,000 Chippewa County Hospital Finance Authority, 4.40%, 11/1/99....... 587,165 260,000 Chippewa County Hospital Finance Authority, 4.60%, 11/1/00....... 261,950 1,000,000 Chippewa Valley School District, GO, 6.38%, 5/1/05, Prerefunded 5/1/01 @ 101.5 (Insured by FGIC)........................... 1,073,750 745,000 Chippewa Valley School District, Series A, GO, 5.60%, 5/1/99..... 750,699 1,700,000 Clintondale Community School District, GO, 4.65%, 5/1/03..... 1,755,250 2,000,000 Dearborn School District, GO, 6.63%, 5/1/09, Prerefunded 5/1/00 @ 102 (Insured by MBIA)........................... 2,122,500 1,000,000 Dearborn School District, GO, 6.38%, 5/1/10, Prerefunded 5/1/00 @ 102 (Insured by MBIA)........................... 1,058,750 965,000 Dearborn Sewage Disposal System, 6.90%, 4/1/02 (Insured by MBIA)........................... 1,053,056 580,000 Detroit, Distributable State Aid, GO, 5.60%, 5/1/00 (Insured by AMBAC)....................... 595,225 1,000,000 Detroit, GO, 5.00%, 4/1/04 (Insured by FGIC)............... 1,046,250 750,000 Detroit, GO, 6.00%, 4/1/06 (Insured by FGIC)............... 833,438 1,570,000 Detroit, Local Development Finance Authority, Tax Increment Revenue, 5.25%, 5/1/07.......... 1,660,275 1,730,000 Dexter Community School District, GO, 6.25%, 5/1/07 (Insured by FGIC)............... 1,976,525 2,000,000 East China Township School District, GO, 6.00%, 5/1/02, Callable 5/1/01 @ 102........... 2,140,000 1,000,000 Eastern Michigan University, GO, 5.80%, 6/1/01 (Insured by AMBAC).......................... 1,047,500 445,000 Farmington Hills Economic Development Corp. Revenue, Botsford Continuing Care, Series A, 5.10%, 2/15/04 (Insured by MBIA)........................... 467,250 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $ 470,000 Farmington Hills Economic Development Corp. Revenue, Botsford Continuing Care, Series A, 5.20%, 2/15/05 (Insured by MBIA)............... $ 497,613 465,000 Flint Hospital Building Authority, Hurley Medical Center, 4.00%, 7/1/99........... 465,037 1,600,000 Flint Hospital Building Authority, Hurley Medical Center, Series A, 5.00%, 7/1/03.......................... 1,634,000 305,000 Flint Hospital Building Authority, Hurley Medical Center, Series B, 4.00%, 7/1/99.......................... 305,024 740,000 Grand Haven Area Public Schools, 5.45%, 5/1/04 (Insured by MBIA), Prerefunded 5/1/03 @ 102........ 800,798 260,000 Grand Haven Area Public Schools, 5.45%, 5/1/04 (Insured by MBIA), Callable 5/1/03 @ 102........... 278,486 1,250,000 Greater Detroit Resource Recovery Authority, Series B, 5.00%, 12/13/02 (Insured by AMBAC).......................... 1,301,563 1,575,000 Hamilton Community Schools District, 5.50%, 5/1/07 (Insured by FGIC)............... 1,716,750 1,250,000 Huron Valley School District, GO, 7.10%, 5/1/08, Prerefunded 5/1/01 @ 102 (Insured by FGIC)........................... 1,368,750 1,810,000 Kalamazoo Hospital Finance Authority, Refunding & Improvement, Bronson Methodist Hospital, 4.95%, 5/15/02 (Insured by MBIA)............... 1,871,088 1,000,000 Kalamazoo Hospital Finance Authority, Refunding & Improvement, Bronson Methodist Hospital, 5.25%, 5/15/05 (Insured by MBIA)............... 1,063,750 750,000 Kalamazoo Hospital Finance Authority, Revenue, Bronson Methodist Hospital, 5.50%, 5/15/08 (Insured by MBIA)....... 817,500 1,295,000 Kenowa Hills Public Schools, GO, 5.50%, 5/1/05................... 1,401,838 500,000 Kent County Airport Facility, Kent County International Airport, (AMT), 5.25%, 1/1/04... 526,250 505,000 Kent County Airport Facility, Kent County International Airport, (AMT), 5.30%, 1/1/05... 534,038 645,000 Kent County Airport Facility, Kent County International Airport, (AMT), 4.30%, 1/1/05 (Insured by MBIA)............... 648,225 Continued 88
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THE KENT MICHIGAN MUNICIPAL BOND FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,150,000 Kent Hospital Finance Authority, Butterworth Hospital, 4.90%, 1/15/05......................... $ 1,193,125 2,000,000 Lake Orion Community School District, GO, 6.20%, 5/1/04 (Insured by AMBAC).............. 2,212,500 2,375,055 Michigan Department of State Police Lease, 4.95%, 3/10/02 (b)............................. 2,392,868 1,265,000 Michigan Higher Education Facility Authority, Thomas M Cooley Law School, 4.75%, 5/1/07 (LOC: First of America)......... 1,279,231 1,000,000 Michigan Hospital Finance Authority, Sisters of Mercy, 7.50%, 2/15/18, Prerefunded 2/15/01 @ 102................... 1,097,500 1,020,000 Michigan Municipal Bond Authority, Local Government Loan Program, Qualified School, 6.35%, 5/15/01.................. 1,081,200 1,000,000 Michigan Municipal Bond Authority, Pooled Projects, Series B, 5.10%, 10/1/04........ 1,057,500 2,000,000 Michigan Municipal Bond Authority, State Revolving Fund, 5.50%, 10/1/06.................. 2,182,500 1,500,000 Michigan Municipal Bond Authority, State Revolving Fund, Series A, 6.00%, 10/1/03........ 1,633,125 2,000,000 Michigan Public Power Agency, Belle River Project, Series A, 5.30%, 1/1/00................... 2,033,800 750,000 Michigan Public Power Agency, Belle River Project, Series A, 5.70%, 1/1/03................... 799,688 1,000,000 Michigan State Building Authority, Series II, 6.10%, 10/1/01......................... 1,061,250 3,000,000 Michigan State Comprehensive Transportation, Series B, 5.63%, 5/15/03......................... 3,206,249 1,855,000 Michigan State Hospital Finance Authority, Bay Medical Center, Series A, 5.38%, 7/1/06 (Insured by FSA)......................... 1,989,488 2,000,000 Michigan State Hospital Finance Authority, Daughters of Charity National Health System, 4.80%, 11/1/17, Mandatory Put 11/1/04 @ 100................... 2,077,500 750,000 Michigan State Hospital Finance Authority, GO, Detroit Medical Center Group A, 5.00%, 8/15/04 (Insured by AMBAC).............. 787,500 2,000,000 Michigan State Hospital Finance Authority, Mclaren Obligated Group, Series A, 5.75%, 10/15/03........................ 2,142,500 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,500,000 Michigan State Hospital Finance Authority, Mercy Health Services, Series S, 6.00%, 8/15/06......................... $ 1,661,250 1,000,000 Michigan State Hospital Finance Authority, Sisters of Mercy Health Corp. Bond 1993, Series F, 4.60%, 8/15/02 (Insured by MBIA)........................... 1,023,750 2,800,000 Michigan State Hospital Finance Authority, Sisters of Mercy Health Corp., Series J, 7.38%, 2/15/11, Prerefunded 2/15/01 @ 102............................. 3,065,999 1,000,000 Michigan State Hospital Finance Authority, St. John Hospital & Medical Center, 5.00%, 5/15/05 (Insured by AMBAC).............. 1,050,000 2,680,000 Michigan State Housing Development Authority, Rental Housing Revenue, Series A, (AMT), 5.25%, 10/1/01 (Insured by MBIA)........................ 2,757,049 2,500,000 Michigan State Strategic Fund, 5.05%*, 1/4/99 (LOC: Barclays)....................... 2,500,000 2,000,000 Michigan State Underground Storage, Tank Financial Assurance Authority, Series I, 5.00%, 5/1/00 (Insured by AMBAC).......................... 2,037,500 3,270,000 Michigan State Underground Storage, Tank Financial Assurance Authority, Series I, 6.00%, 5/1/06 (Insured by AMBAC).......................... 3,637,874 505,000 Michigan Strategic Fund, Clark Retirement Community Project, 4.50%, 6/1/03................... 506,894 520,000 Michigan Strategic Fund, Clark Retirement Community Project, 4.60% 6/1/04.................... 522,600 610,000 Michigan Strategic Fund, Clark Retirement Community Project, 4.85%, 6/1/07................... 613,050 615,000 Michigan Strategic Fund, Hope Network Project, Series B, 4.75%, 9/1/07 (LOC: First of America)........................ 628,069 1,000,000 Mount Clemens Community School District, GO, 6.60%, 5/1/20, Prerefunded 5/1/02 @ 102 (Insured by MBIA)............... 1,107,500 1,495,000 Oakland County Economic Development Corp., Boardwalk Shopping Center, 4.38%*, 2/25/99 (LOC: NBD), Mandatory Put 7/1/03 @ 100........................... 1,495,000 1,080,000 Oakland County Economic Development Corp., Sugartree Shopping Center, 4.38%*, 2/25/99 (LOC: NBD), Mandatory Put 7/1/03 @ 100........................... 1,080,000 Continued 89
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THE KENT MICHIGAN MUNICIPAL BOND FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,000,000 Oakland Washtenaw County Community College, 6.65%, 5/1/11, Prerefunded 5/1/02 @ 100............................. $ 1,107,500 3,000,000 Okemos Public School District, Series I, GO, 6.90%, 5/1/11, Prerefunded 5/1/01 @ 102........ 3,269,999 3,200,000 Plymouth-Canton Community School District, Series B, GO, 6.80%, 5/1/17, Prerefunded 5/1/01 @ 101............................. 3,451,999 735,000 Reeths-Puffer Schools, GO, 6.75%, 5/1/01 (Insured by FGIC)........................... 784,613 750,000 Reeths-Puffer Schools, GO, 6.25%, 5/1/02 (Insured by FGIC)........................... 808,125 2,000,000 Rockford Public Schools, GO, 7.38%, 5/1/19, Prerefunded 5/1/00 @ 101.................... 2,122,500 2,035,000 Walled Lake Consolidated School District, GO, 4.70%, 5/1/01..... 2,080,788 2,235,000 Walled Lake Consolidated School District, GO, 4.80%, 5/1/02..... 2,307,638 2,000,000 Walled Lake Consolidated School District, Series II, GO, 7.10%, 5/1/05, Prerefunded 5/1/00 @ 102............................. 2,135,000 1,025,000 Washtenaw Community College, GO, 4.70%, 4/1/03 (Insured by FGIC)........................... 1,057,031 550,000 Wayne County Downriver System Sewer Disposal, GO, 3.75%, 5/1/99.......................... 550,693 550,000 Wayne County Downriver System Sewer Disposal, GO, 3.75%, 5/1/00.......................... 550,286 1,750,000 Western Michigan University, Series A, 6.50%, 7/15/21, Prerefunded 7/15/01 @ 102 (Insured by AMBAC).............. 1,903,125 1,000,000 Western Townships Michigan Utilities Authority, Sewer Disposal System, 8.13%, 1/1/09, Callable 1/1/99 @ 102........... 1,020,000 1,000,000 Wyandotte Electric Revenue, 6.20%, 10/1/03 (Insured by MBIA)........................... 1,097,500 [Download Table] SHARES OR PRINCIPAL SECURITY MARKET AMOUNT DESCRIPTION VALUE --------- ----------- ------ MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) 1,150,000 Ypsilanti School District, 4.50%, 5/1/00 (Insured by FGIC)........................... 1,165,813 ------------ 118,694,211 ------------ PUERTO RICO -- 2.5% 3,000,000 Puerto Rico Commonwealth Highway & Transportation Authority, Highway Revenue, Series X, 4.90%, 7/1/01................... 3,078,750 ------------ TOTAL MUNICIPAL BONDS........... 121,772,961 ------------ (Cost $117,862,360) INVESTMENT COMPANIES -- 0.5% 655,493 Dreyfus Tax Exempt Money Market Fund............................ 655,493 ------------ TOTAL INVESTMENT COMPANIES...... 655,493 ------------ (Cost $655,493) TOTAL INVESTMENTS -- 98.8%.................. 122,428,454 (Cost $118,517,853)(a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2%....................... 1,474,409 ------------ TOTAL NET ASSETS -- 100.0%.................. $123,902,863 ============ --------------- (a) Represents cost for federal income tax and financial reporting purposes and differs from value by net unrealized appreciation of securities as follows: [Download Table] Unrealized appreciation............... $ 3,921,381 Unrealized depreciation............... (10,780) ------------ Net unrealized appreciation........... $ 3,910,601 ============ (b) 144a security which is restricted as to resale to institutional investors. This security has been deemed liquid by the Board of Trustees. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. [Download Table] AMBAC AMBAC Indemnity Corp. AMT Alternative Minimum Tax Paper FGIC Financial Guaranty Insurance Corp. FSA Financial Security Assurance GO General Obligation LOC Letter of Credit MBIA Municipal Bond Insurance Association See Notes to Financial Statements. 90
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THE KENT MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- BANK NOTES -- 2.9% $ 5,000,000 First Union National Bank of North Carolina, 5.22%, 2/26/99........................ $ 5,000,000 5,000,000 First Union National Bank of North Carolina, 5.11%, 2/26/99........................ 5,000,000 5,000,000 First Union National Bank of North Carolina, 5.25%, 9/17/99........................ 5,000,000 5,000,000 Morgan Guaranty Trust, 5.55%, 2/4/99......................... 4,999,105 ------------ TOTAL BANK NOTES............... 19,999,105 ------------ (Cost $19,999,105) BANKERS ACCEPTANCES -- 0.7% 5,000,000 First Union National Bank of North Carolina, 5.00%, 2/23/99........................ 4,963,194 ------------ TOTAL BANKERS ACCEPTANCES...... 4,963,194 ------------ (Cost $4,963,194) CERTIFICATES OF DEPOSIT -- 3.6% 5,000,000 Mellon Bank, 5.25%, 2/5/99..... 5,000,000 5,000,000 Mellon Bank, 5.71%, 3/5/99..... 5,000,000 5,000,000 Mellon Bank, 5.06%, 4/16/99.... 5,000,000 5,000,000 Mellon Bank, 4.85%, 4/19/99.... 5,000,000 5,000,000 Mellon Bank, 5.75%, 6/3/99..... 5,000,000 ------------ TOTAL CERTIFICATES OF DEPOSIT........................ 25,000,000 ------------ (Cost $25,000,000) COMMERCIAL PAPER -- 38.7% 5,000,000 Bank of Nova Scotia, 5.65%, 3/23/99........................ 4,998,278 5,000,000 BellSouth Telecommunications, 5.10%, 2/12/99................. 4,970,250 5,000,000 Cargill, Inc., 5.03%, 3/5/99... 4,955,988 5,000,000 Cargill, Inc., 4.98%, 3/18/99........................ 4,947,433 5,000,000 Commerzbank AG, 5.47%, 1/11/99........................ 4,992,403 30,000,000 Commonwealth Bank of Australia, 5.25%, 1/4/99.................. 29,986,876 5,000,000 DaimlerChrysler, 5.25%, 2/23/99........................ 4,961,354 5,000,000 DaimlerChrysler, 5.00%, 4/22/99........................ 4,922,917 5,000,000 Deere & Co., 5.31%, 1/22/99.... 4,984,513 5,000,000 Deere & Co., 5.01%, 3/26/99.... 4,941,550 5,000,000 Deutsche Bank Financial, 5.80%, 1/5/99......................... 4,996,778 5,000,000 Dresdner US Finance, 5.23%, 2/16/99........................ 4,966,586 5,000,000 Dresdner US Finance, 5.26%, 2/18/99........................ 4,964,933 5,000,000 E.I. du Pont de Nemours & Co., 5.12%, 1/15/99................. 4,990,044 5,000,000 E.I. du Pont de Nemours & Co., 5.07%, 1/27/99................. 4,981,692 5,000,000 First Union National Bank of North Carolina, 4.87%, 5/13/99........................ 4,910,717 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- COMMERCIAL PAPER (CONTINUED) $ 5,000,000 Ford Motor Credit Corp., 5.40%, 1/8/99......................... $ 4,994,749 5,000,000 Ford Motor Credit Corp., 5.15%, 1/19/99........................ 4,987,125 5,000,000 Ford Motor Credit Corp., 5.09%, 1/28/99........................ 4,980,913 5,000,000 Ford Motor Credit Corp., 5.05%, 2/3/99......................... 4,976,854 5,000,000 General Electric Capital Corp., 5.45%, 2/22/99................. 4,960,639 5,000,000 General Electric Capital Corp., 5.08%, 2/26/99................. 4,960,489 5,000,000 General Electric Capital Corp., 5.04%, 3/18/99................. 4,946,800 5,000,000 General Electric Capital Corp., 5.06%, 3/19/99................. 4,945,886 5,000,000 General Motors Acceptance Corp., 5.29%, 1/21/99.......... 4,985,306 5,000,000 General Motors Acceptance Corp., 5.39%, 1/26/99.......... 4,981,285 5,000,000 General Motors Acceptance Corp., 5.44%, 1/26/99.......... 4,981,111 5,000,000 General Motors Acceptance Corp., 5.18%, 2/3/99........... 4,976,258 5,000,000 H.J. Heinz Co., 5.13%, 1/29/99........................ 4,980,050 5,000,000 Household Finance, 5.10%, 1/4/99......................... 4,997,875 5,000,000 Household Finance, 5.38%, 1/21/99........................ 4,985,056 4,230,000 Motorola Credit Corp., 5.20%, 2/19/99........................ 4,200,061 5,000,000 Motorola Credit Corp., 5.00%, 2/26/99........................ 4,961,111 5,000,000 National Australia Funding, 5.18%, 1/4/99.................. 4,997,842 10,000,000 National Australia Funding, 5.05%, 3/2/99.................. 9,915,833 5,000,000 Panasonic, 5.10%, 1/26/99...... 4,982,292 989,000 Shell Oil Co., 5.00%, 1/4/99... 988,588 5,000,000 Societe Generale North America, 5.42%, 1/12/99................. 4,991,719 5,000,000 Sony Capital Corp., 5.25%, 1/12/99........................ 4,991,978 5,000,000 Sony Capital Corp., 5.20%, 1/25/99........................ 4,982,666 5,000,000 Sony Capital Corp., 5.20%, 1/29/99........................ 4,979,778 6,250,000 Toronto Dominion, 4.70%, 4/14/99........................ 6,165,955 5,000,000 Toyota Motor Credit Corp., 5.03%, 3/5/99.................. 4,955,988 15,000,000 Walt Disney Co., 5.00%. 1/6/99......................... 14,989,584 5,000,000 Walt Disney Co., 5.05%, 2/5/99......................... 4,975,451 10,000,000 Xerox Credit Corp., 5.00%, 1/5/99......................... 9,994,444 ------------ TOTAL COMMERCIAL PAPER......... 270,185,998 ------------ (Cost $270,185,998) Continued 91
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THE KENT MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- CORPORATE NOTES & BONDS -- 1.1% $ 7,825,000 General Motors Acceptance Corp., 6.15%, 9/20/99.......... $ 7,884,530 ------------ TOTAL CORPORATE NOTES & BONDS.......................... 7,884,530 ------------ (Cost $7,884,530) DEMAND NOTES -- 24.3% 4,000,000 Adena Health System, 5.56%*, 1/7/99......................... 4,000,000 8,000,000 American Healthcare Funding L.L.C., 5.70%*, 1/6/99 (LOC: LaSalle National Bank)......... 8,000,000 4,000,000 American Mfg. Co., Inc., Series 1997, 5.50%*, 1/7/99 (LOC: Mellon Bank)................... 4,000,000 7,500,000 Arboretum Properties L.L.C., 5.56%*, 1/6/99 (LOC: Michigan National Bank)................. 7,500,000 2,900,000 Buckeye Corrugated, Inc., 5.56%*, 1/6/99 (LOC: Keybank)....................... 2,900,000 8,159,000 Capital One Funding Corp., 5.57%*, 1/7/99................. 8,159,000 4,400,000 City of Cloquet, Minnesota Taxable Industrial Bond, Series 1996B, 5.70%*, 1/6/99 (LOC: Credit Suisse)................. 4,400,000 3,920,000 Excel Health Services, Inc., 5.56%*, 1/7/99................. 3,920,000 4,830,000 First Metro Title Co., 5.56%*, 1/7/99 (LOC: Michigan National Bank).......................... 4,830,000 6,565,000 GTB Properties L.L.C., 5.80%*, 1/7/99......................... 6,565,000 4,565,000 Harry W. Albright, Jr., 5.58%*, 1/7/99......................... 4,565,000 3,450,000 HWP Co., Ltd. Project, 5.30%*, 1/7/99 (LOC: National City Bank Cleveland, Ohio)............... 3,450,000 3,450,000 Idaho Associates L.L.C., 5.70%*, 1/6/99 (LOC: LaSalle National Bank)................. 3,450,000 5,010,000 Jackson Tube Service, Inc., 5.56%*, 1/6/99................. 5,010,000 5,000,000 Jefferson County, Kentucky, 5.34%*, 1/7/99 (LOC: Bank One Kentucky)...................... 5,000,000 11,520,000 Katz Capital Corp., 5.68%*, 1/7/99 (LOC: Citizens Bank).... 11,520,000 4,445,000 Labelle Capital Funding L.L.C., 5.58%*, 1/7/99 (LOC: First of America Bank -- Michigan)...... 4,445,000 1,575,000 Laird's Auto Glass & Trim, Inc., 5.25%*, 1/7/99 (LOC: Michigan National Bank)........ 1,575,000 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- DEMAND NOTES (CONTINUED) $ 3,920,000 Macroe Properties, Inc., 5.58%*, 1/7/99 (LOC: Huntington Bank).......................... $ 3,920,000 1,300,000 Michigan State Strategic Fund, Ltd., 5.65%*, 1/6/99........... 1,300,000 5,000,000 Mississippi Business Finance Corp., 5.70%*, 1/6/99 (LOC: First National Bank of Chicago)....................... 5,000,000 5,000,000 Nationsbank Corp., 5.44%*, 11/18/99....................... 4,999,356 6,000,000 Nationsbank Corp., 5.27%*, 4/1/99......................... 6,009,717 8,385,000 Ordeal Properties L.L.C., 5.56%*, 1/6/99 (LOC: Keybank)....................... 8,385,000 2,420,000 Patt's Enterprises L.L.C., 5.58%*, 1/7/99 (LOC: Huntington National Bank)................. 2,420,000 4,860,000 PRA at Glenwood Hills Corporate, Centre Limited Liability Co., 5.27%*, 1/7/99 (LOC: First of America Bank -- Michigan)...................... 4,860,000 8,350,000 PRD Finance L.L.C., 5.27%*, 1/7/99 (LOC: First of America Bank -- Michigan).............. 8,350,000 5,140,000 Reynolds Road Fitness Center, Inc., 5.50%*, 1/6/99 (LOC: Fifth Third Bank).............. 5,140,000 3,000,000 Royal Town Center L.L.C. Project, 5.56%*, 1/7/99 (LOC: Comerica Bank)................. 3,000,000 2,625,000 Rumpf Development Ltd., 5.56%*, 1/6/99 (LOC: Keybank).......... 2,625,000 5,000,000 Sheperd Capital L.L.C., 5.58%*, 1/7/99 (LOC: Comerica Bank).... 5,000,000 1,900,000 South Bend MAC, L.P., 5.65%*, 1/6/99 (LOC: LaSalle National Bank).......................... 1,900,000 1,075,000 The Economic Development Corp. of the County of Marquette, Pioneer Laboratories, Inc. Project, 5.80%*, 1/6/99 (LOC: NBD Bank)...................... 1,075,000 4,000,000 Village of Glendale Heights, Illinois, 5.57%*, 1/7/99....... 4,000,000 3,020,000 White Mountain Imaging, 5.56%*, 1/6/99 (LOC: Keybank).......... 3,020,000 5,275,000 Zeigler Realty L.L.C, 5.58%*, 1/7/99 (LOC: First of America Bank -- Michigan).............. 5,275,000 ------------ TOTAL DEMAND NOTES............. 169,568,073 ------------ (Cost $169,568,073) Continued 92
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THE KENT MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- EURO CERTIFICATES OF DEPOSIT -- 0.7% $ 5,000,000 Commerzbank AG, 5.42%, 2/16/99........................ $ 5,000,125 ------------ TOTAL EURO CERTIFICATES OF DEPOSIT........................ 5,000,125 ------------ (Cost $5,000,125) FUNDING AGREEMENTS -- 4.3% 5,000,000 Allstate Financial Corp., 5.29%*, 1/4/99 (b)............. 5,000,000 5,000,000 Allstate Financial Corp., 5.29%*, 1/4/99 (b)............. 5,000,000 20,000,000 General American Life Insurance Co., 5.24%*, 1/4/99............ 20,000,000 ------------ TOTAL FUNDING AGREEMENTS....... 30,000,000 ------------ (Cost $30,000,000) YANKEE CERTIFICATES OF DEPOSIT -- 17.4% 5,000,000 Bank of New York, 5.50%, 2/17/99........................ 4,998,092 5,000,000 Bank of Nova Scotia, 5.33%, 1/11/99........................ 5,000,000 5,000,000 Bank of Nova Scotia, 5.21%, 11/25/99....................... 5,000,000 5,000,000 Bank of Nova Scotia, 5.23%, 2/4/99......................... 5,000,000 5,000,000 Bank of Nova Scotia, 5.08%, 3/29/99........................ 5,000,000 5,000,000 Barclays Bank PLC, 5.65%, 3/2/99......................... 4,999,567 5,000,000 Bayerische Landesbank, 5.70%, 5/21/99........................ 5,011,136 5,000,000 Canadian Imperial Bank of Commerce, 5.55%, 2/10/99....... 4,999,132 5,000,000 Canadian Imperial Bank of Commerce, 5.31%, 3/16/99....... 4,999,900 5,000,000 Canadian Imperial Bank of Commerce, 4.87%, 4/21/99....... 5,000,298 5,000,000 Commerzbank AG, 5.65%, 2/26/99........................ 4,999,089 4,000,000 Commerzbank AG, 5.67%, 3/5/99......................... 3,999,427 5,000,000 Credit Agricole Indosuez, 5.71%, 1/7/99.................. 4,999,887 [Download Table] SHARES OR PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- YANKEE CERTIFICATES OF DEPOSIT (CONTINUED) $ 5,000,000 Credit Agricole Indosuez, 5.66%, 3/3/99.................. $ 4,999,674 5,000,000 Credit Agricole Indosuez, 5.73%, 4/16/99................. 4,999,177 5,000,000 Credit Agricole Indosuez, 5.78%, 5/14/99................. 5,010,528 7,000,000 Deutche Bank, 5.74%, 4/27/99... 7,006,443 5,000,000 Dresdner US Finance, 5.45%, 1/6/99......................... 5,000,000 5,000,000 Dresdner US Finance, 5.33%, 3/11/99........................ 5,000,057 5,000,000 Rabobank, 5.69%, 4/16/99....... 4,999,311 5,000,000 Societe Generale, 5.70%, 3/23/99........................ 4,999,468 5,000,000 Societe Generale, 5.77%, 4/19/99........................ 4,999,451 5,000,000 Swiss Bank, 5.74%, 6/11/99..... 4,999,789 5,000,000 Toronto Dominion, 5.26%, 2/1/99......................... 5,000,128 ------------ TOTAL YANKEE CERTIFICATES OF DEPOSIT........................ 121,020,554 ------------ (Cost $121,020,554) INVESTMENT COMPANIES -- 5.8% 660,852 Dreyfus Cash Management Money Market Fund.................... 660,852 39,664,114 Federated Prime Value Obligations Money Market Fund........................... 39,664,114 ------------ TOTAL INVESTMENT COMPANIES..... 40,324,966 ------------ (Cost $40,324,966) TOTAL INVESTMENTS -- 99.5%................... 693,946,545 (Cost $693,946,545) (a) OTHER ASSETS IN EXCESS OF LIABILITIES 0.5%... 3,181,074 ------------ TOTAL NET ASSETS -- 100.0%................... $697,127,619 ============ --------------- (a) Cost for federal income tax and financial reporting purposes is the same. (b) Illiquid security. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. [Download Table] LOC Letter of Credit PLC Public Limited Company See Notes to Financial Statements. 93
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THE KENT MICHIGAN MUNICIPAL MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS -- 86.3% MICHIGAN -- 82.2% $5,000,000 City of Dearborn Economic Development Corp., Henry Ford Village, 4.10%*, 1/7/99, (LOC: Comerica)....................... $ 5,000,000 950,000 Clinton Township Economic Development Corp., Pointe Village Square, (AMT), 3.90%, 2/1/99, (LOC: FOA).............. 950,000 760,000 De Witt Michigan Public Schools, QSBLF, 3.50%, 5/1/99, (Insured by FSA)......................... 760,000 1,200,000 Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper Co., Series D, 5.00%*, 1/4/99, (LOC: Credit Suisse)......................... 1,200,000 2,300,000 Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper Co., Series F, 5.00%*, 1/4/99, (LOC: Bank of Nova Scotia).................... 2,300,000 7,700,000 Detroit Michigan City School District, 4.50%, 7/1/99......... 7,731,290 500,000 Detroit Michigan Downtown Development Authority Tax Increment, Project A, 3.60%, 7/1/99, (Insured by MBIA)....... 500,000 1,300,000 Detroit Michigan Sewage Disposal, 7.18%, 7/1/99, Prerefunded 7/1/99 @ 101.50, (Insured by MBIA)............... 1,341,636 700,000 Dexter Michigan Community Schools, QSBLF, 3.80%, 5/1/99, (Insured by FGIC)............... 700,000 365,000 Farmington Hills Michigan Education, Marketing Displays, (AMT), 3.80%, 3/1/99, (LOC: Comerica Bank).................. 365,000 5,810,000 Garden City Michigan Hospital, 4.05%*, 1/7/99, (LOC: FOA)...... 5,810,000 7,000,000 Genesee County Economic Development Corp., Rue Properties, (AMT), 4.20%*, 1/7/99, (LOC: Nationsbank)...... 7,000,000 3,000,000 Kalamazoo Michigan City School District, 3.75%, 9/16/99, (LOC: National City).................. 3,007,166 1,000,000 Kent County Hospital Authority, Butterworth Hospital, 7.25%, 1/15/12, Prerefunded 1/15/00 @ 102................... 1,061,324 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $2,060,000 Leelanau County Economic Development Corp., American Mutual Insurance Co., 3.25%*, 6/15/99, (LOC: FOA)............. $ 2,060,000 4,500,000 Lenawee County Economic Development Corp., Rima Mfg. Co. Project, (AMT), 4.20%*, 1/7/99, (LOC: Keybank).................. 4,500,000 390,000 Livonia County Economic Development Corp., American Community Mutual Insurance Co., 3.25%*, 5/15/99, (LOC: FOA)..... 390,000 1,400,000 Marquette County Economic Development Corp., Pioneer Labs, Inc., (AMT), 4.00%*, 1/6/99, (LOC: NBD Bank)................. 1,400,000 1,800,000 Meridian Michigan Economic Development Corp., Hannah Technology, 3.50%*, 1/15/99, (LOC: Comerica Bank)............ 1,800,000 2,520,000 Michigan Municipal Bond Authority, 4.50%, 8/27/99, (LOC: Comerica)....................... 2,534,263 6,000,000 Michigan Municipal Bond Authority, 4.25%, 8/27/99, (LOC: Bank of Nova Scotia)............ 6,025,274 8,000,000 Michigan Municipal Bond Authority, School Loan, 3.50%, 12/1/99......................... 8,042,881 1,000,000 Michigan Municipal Bond Authority, Local Government Loan Program, Series B, 6.90%, 5/1/99 (Insured by FGIC)............... 1,010,272 3,500,000 Michigan Municipal Bond Authority, Series B-1, 4.50%, 7/2/99.......................... 3,515,148 3,500,000 Michigan Municipal Bond Authority, Series D-1, 4.25%, 8/27/99......................... 3,518,776 1,000,000 Michigan State Building Authority, Series 1, 4.20%, 10/1/99, (Insured by AMBAC)..... 1,005,970 1,000,000 Michigan State Comprehensive Transportation, Series B, 5.10%, 5/15/99......................... 1,004,787 1,060,000 Michigan State Hospital Finance Authority, Sisters of Mercy Health Corp., Series J, 7.15%, 2/15/99......................... 1,064,398 Continued 94
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THE KENT MICHIGAN MUNICIPAL MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $2,500,000 Michigan State Hospital Finance Authority, St. Mary's Hospital of Livonia, Series A, 3.95%*, 1/6/99, (LOC: Comerica Bank).... $ 2,500,000 3,000,000 Michigan State Housing Development Authority, Canton Club East, (AMT), 4.15%*, 1/7/99, (LOC: Keybank).......... 3,000,000 1,650,000 Michigan State Housing Development Authority, Laurel Valley, 4.05%*, 1/6/99, (LOC: Wachovia)....................... 1,650,000 1,500,000 Michigan State Housing Development Authority, Limited Obligation Revenue, Pine Ridge, 4.00%*, 1/6/99, (LOC: Wachovia)....................... 1,500,000 1,190,000 Michigan State Housing Development Authority, Series B, (AMT), 3.00%, 12/1/99........... 1,190,000 1,300,000 Michigan State Housing Development Authority, Woodland Meadows, (AMT), 4.00%*, 1/6/99, (LOC: Union Bank of Switzerland).................... 1,300,000 3,300,000 Michigan State Job Development Authority, BASF Wyandotte, 3.67%*, 1/7/99, (LOC: Bayerische Landesbank)..................... 3,300,000 6,900,000 Michigan State Strategic Fund, Detroit Edison, 5.05%*, 1/4/99, (LOC: Barclays)................. 6,900,000 2,300,000 Michigan State Strategic Fund, Jedco Inc., 4.20%*, 1/7/99, (LOC: NBD Bank)................. 2,300,000 3,000,000 Michigan State Strategic Fund, Van Andel Research Project, 4.15%*, 1/7/99, (LOC: Michigan National Bank).................. 3,000,000 2,700,000 Michigan State Strategic Fund, AACOA Extrusions, Inc., (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)........................... 2,700,000 2,510,000 Michigan State Strategic Fund, Atmosphere Annealing, (AMT), 4.20%*, 1/7/99, (LOC: FOA)...... 2,510,000 1,160,000 Michigan State Strategic Fund, B.K. Hardwoods, (AMT), 4.20%*, 1/7/99, (LOC: Huntington Bank)........................... 1,160,000 4,035,000 Michigan State Strategic Fund, Banks Hardwoods, Inc., (AMT), 4.15%*, 1/7/99, (LOC: Bank One)............................ 4,035,000 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,900,000 Michigan State Strategic Fund, Besser International Sales Inc. Project, (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)................. $ 1,900,000 3,200,000 Michigan State Strategic Fund, Bloomfield Valley Properties, 3.40%*, 1/4/99, (LOC: Charter One)............................ 3,200,000 3,700,000 Michigan State Strategic Fund, Brazing Concepts Co., (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)........................... 3,700,000 1,500,000 Michigan State Strategic Fund, C-1, (AMT), 4.15%*, 1/6/99, (LOC: Comerica Bank)............ 1,500,000 1,000,000 Michigan State Strategic Fund, C-Tec Inc. Project, (AMT), 4.10%*, 1/6/99, (LOC: Suntrust Bank)........................... 1,000,000 2,000,000 Michigan State Strategic Fund, Camac LLC, (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)......... 2,000,000 1,200,000 Michigan State Strategic Fund, Consumers Power, 5.10%*, 1/4/99, (LOC: Union Bank of Switzerland).................... 1,200,000 1,875,000 Michigan State Strategic Fund, Cyberplast, (AMT), 4.15%*, 1/7/99, (LOC: NBD Bank)......... 1,875,000 5,000,000 Michigan State Strategic Fund, Dawnbreakers LLC, (AMT), 4.20%*, 1/7/99, (LOC: National City Bank)........................... 5,000,000 2,500,000 Michigan State Strategic Fund, Donnelley Corp., Series B, (AMT), 3.75%*, 4/1/99, (LOC: Dresdner Bank).................. 2,500,000 5,000,000 Michigan State Strategic Fund, Dow Chemical Co. Project, (AMT), 5.10%*, 1/4/99.................. 5,000,000 1,000,000 Michigan State Strategic Fund, Dow Chemical Co. Project, 5.15%*, 1/4/99.................. 1,000,000 1,170,000 Michigan State Strategic Fund, Enviromental Powder Co., (AMT), 4.20%*, 1/7/99, (LOC: Michigan National Bank).................. 1,170,000 1,000,000 Michigan State Strategic Fund, Equad Project, (AMT), 4.20%*, 1/7/99, (LOC: Huntington Bank)........................... 1,000,000 Continued 95
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THE KENT MICHIGAN MUNICIPAL MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $ 750,000 Michigan State Strategic Fund, Focus Hope Group, 3.65%, 10/1/99, (LOC: Michigan National Bank)........................... $ 750,000 1,405,000 Michigan State Strategic Fund, Gollin Block & Supply Co., (AMT), 4.00%*, 1/6/99, (LOC: Northern Trust)................. 1,404,987 1,510,000 Michigan State Strategic Fund, Hamilton Industrial Products, Inc. Project, (AMT), 4.20%*, 1/7/99, (LOC: National Australia Bank)........................... 1,510,000 1,715,000 Michigan State Strategic Fund, I.V.C. Industrial Coatings, Inc., (AMT), 4.15%*, 1/6/99, (LOC: Bank One)................. 1,715,000 1,700,000 Michigan State Strategic Fund, Industrial Development, Kinder Care, 4.15%*, 1/6/99............ 1,700,000 235,000 Michigan State Strategic Fund, Kazoo, Inc. Project, (AMT), 3.70%*, 3/15/99, (LOC: FOA)..... 235,000 3,005,000 Michigan State Strategic Fund, Kerkstra Precast Project (AMT), 4.20%*, 1/7/99, (LOC: Huntington Bank)........................... 3,005,000 1,500,000 Michigan State Strategic Fund, Kerkstra, (AMT), 4.20%*, 1/6/99, (LOC: Huntington Bank).......... 1,500,000 1,320,000 Michigan State Strategic Fund, Limited Obligation Revenue, John A. Biewer Co. Project, (AMT), 3.25%*, 3/1/99, (LOC: Michigan National Bank)......... 1,320,000 960,000 Michigan State Strategic Fund, Limited Obligation Revenue, Autocam Corp., (AMT), 4.20%*, 1/7/99, (LOC: Comerica Bank).... 960,000 2,500,000 Michigan State Strategic Fund, Limited Obligation Revenue, Cincinnati Milacron, (AMT), 4.20%*, 1/6/99, (LOC: PNC Bank)........................... 2,500,000 1,000,000 Michigan State Strategic Fund, Limited Obligation Revenue, Dickinson Press, Inc. Project, (AMT), 4.20%*, 1/7/99, (LOC: Huntington Bank)................ 1,000,000 2,500,000 Michigan State Strategic Fund, Limited Obligation Revenue, Donnelly Corp., (AMT), 4.25%*, 1/6/99, (LOC: Dresdner Bank).... 2,500,000 4,615,000 Michigan State Strategic Fund, Limited Obligation Revenue, JB Labratoriess, Inc., (AMT), 4.20%*, 1/7/99, (LOC: Huntington Bank)........................... 4,615,000 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $ 295,000 Michigan State Strategic Fund, Limited Obligation Revenue, Kay Screen Printing, (AMT), 4.25%*, 1/7/99, (LOC: Manufacturers Bank)........................... $ 295,000 940,000 Michigan State Strategic Fund, Limited Obligation Revenue, Kay Screen Printing, (AMT), 4.25%*, 1/7/99, (LOC: Comercia Bank).... 940,000 3,025,000 Michigan State Strategic Fund, Limited Obligation Revenue, Midbrook Products, Inc. Project, (AMT), 4.20%*, 1/7/99, (LOC: Comerica Bank).................. 3,025,000 715,000 Michigan State Strategic Fund, Limited Obligation Revenue, Patten Monument, (AMT), 4.20%, 1/7/99, (LOC: Huntington Bank)........................... 715,000 1,600,000 Michigan State Strategic Fund, Limited Obligation Revenue, Pilot Industries, (AMT), 4.30%*, 1/7/99, (LOC: NBD Bank)......... 1,600,000 915,000 Michigan State Strategic Fund, Limited Obligation Revenue, Stephenson Land, (AMT), 4.20%*, 1/7/99, (LOC: Comerica Bank).... 915,000 500,000 Michigan State Strategic Fund, Limited Obligation Revenue, Tawas Bay Associates, (AMT), 3.25%, 6/1/99, (LOC: FOA)....... 500,000 455,000 Michigan State Strategic Fund, Limited Obligation Revenue, Tom Miller, Inc., (AMT), 4.15%*, 1/6/99, (LOC: First Union)...... 455,000 1,840,000 Michigan State Strategic Fund, Limited Obligation Revenue, Wayne Disposal Project, (AMT), 4.15%*, 1/6/99, (LOC: Comerica Bank)........................... 1,840,000 4,000,000 Michigan State Strategic Fund, Middleville Tool & Die Project, (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)........................... 4,000,000 765,000 Michigan State Strategic Fund, Molmec, Inc., (AMT), 4.20%*, 1/7/99, (LOC: Comerica Bank).... 765,000 1,000,000 Michigan State Strategic Fund, Northern Pure Ice Co. Project, (AMT), 4.00%*, 1/6/99, (LOC: National Australia Bank)........ 1,000,000 Continued 96
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THE KENT MICHIGAN MUNICIPAL MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $1,000,000 Michigan State Strategic Fund, NSF International Project, Series 1997B, 3.75%*, 1/6/99, (LOC: FOA)...................... $ 1,000,000 1,685,000 Michigan State Strategic Fund, Omni Technical Services, Inc., (AMT), 4.20%*, 1/7/99, (LOC: FOA)............................ 1,685,000 2,000,000 Michigan State Strategic Fund, Phipps Emmett Assoc., (AMT), 4.15%*, 1/6/99, (LOC: National Australia Bank)................. 2,000,000 865,000 Michigan State Strategic Fund, Plascore, Inc., (AMT), 4.20%*, 1/7/99, (LOC: First Michigan Bank)........................... 865,000 5,700,000 Michigan State Strategic Fund, Rochester Gear Project, (AMT), 4.20%*, 1/6/99, (LOC: Comerica Bank)........................... 5,700,000 11,900,000 Michigan State Strategic Fund, Solid Waste Disposal, Grayling Generating Project, (AMT), 4.15%*, 1/6/99, (LOC: Barclays Bank)........................... 11,900,001 2,120,000 Michigan State Strategic Fund, Sunrise Windows Ltd. Project, (AMT), 4.20%*, 1/6/99 (LOC: Keybank)........................ 2,120,000 1,000,000 Michigan State Strategic Fund, Thompson Family Holdings, (AMT), 4.20%*, 1/7/99, (LOC: FOA)...... 1,000,000 2,800,000 Michigan State Strategic Fund, United Waste System, (AMT), 4.05%*, 1/6/99, (LOC: Bank of America)........................ 2,800,000 1,075,000 Michigan State Strategic Fund, Wright -- Technology, Inc., Series 1997, (AMT), 4.20%*, 1/7/99, (LOC: FOA).............. 1,075,000 2,000,000 Michigan State Strategic Fund, Xibitz, Inc. Project, (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)........................... 2,000,000 1,000,000 Michigan State Trunk Line, 4.70%, 11/15/99, (Insured by FGIC)........................... 1,014,046 10,000,000 Midland County Economic Development Corp., Limited Obligation Revenue, Dow Chemical Project, Series A, (AMT), 5.15%*, 1/4/99.................. 10,000,001 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $4,300,000 Oakland County Economic Development Corp., V & M Corp., (AMT), 4.20%*, 1/6/99, (LOC: NBD Bank)........................... $ 4,300,000 3,000,000 Oakland County Economic Development Corp., Cranbrook Community, 4.05%*, 1/7/99, (LOC: SPA Comerica Bank).............. 3,000,000 675,000 Oakland County Economic Development Corp., Orchard Maple Project, 3.65%*, 5/15/99, (LOC: FOA)............................ 675,000 675,000 Oakland County Michigan Building Authority, West Wing Extension, 5.10%, 9/1/99................... 682,867 280,000 Rochester Hills Economic Development Corp., BRG Assoc., 3.40%*, 6/1/99, (LOC: Comerica Bank)........................... 280,000 1,200,000 Scio Township Economic Development Corp., Daycroft School Project, 3.75%*, 1/7/99, (LOC: National Australia Bank)........................... 1,200,000 1,070,000 St. Clair Shores, Michigan Education, Borman's, Inc. Project, (AMT), 3.50%*, 4/15/99, (LOC: Michigan National Bank)... 1,070,000 590,000 Standish-Sterling Michigan Community Schools QSBLF, 4.25%, 5/1/99, (Insured by FGIC)....... 592,395 3,100,000 University of Michigan Hospital Revenue, 5.15%*, 1/4/99......... 3,100,000 2,000,000 University of Michigan Hospital Revenue, Series A, 5.15%*, 1/4/99.......................... 2,000,000 1,300,000 University of Michigan Hospital Revenue, Series A, 5.15%*, 1/4/99.......................... 1,300,000 6,625,000 University of Michigan University Revenue, 5.15%*, 1/4/99.......................... 6,625,000 3,075,000 University of Michigan, Medical Service Plan, Series A, 5.15%*, 1/4/99.......................... 3,075,000 1,740,000 Warren Economic Development Corp., CMX Corp. Project, (AMT), 3.70%*, 3/15/99, (LOC: FOA)..... 1,740,000 1,120,000 Warren Economic Development Corp., Cross Country Inn, (AMT), 3.65%, 5/1/99, (LOC: Huntington Bank)........................... 1,120,000 525,000 Warren Economic Development Corp., Limited Obligation Revenue, Elias Brothers, (AMT), 3.40%, 6/1/99, (LOC: Comercia Bank)........................... 525,000 Continued 97
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THE KENT MICHIGAN MUNICIPAL MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED) DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- MUNICIPAL BONDS (CONTINUED) MICHIGAN (CONTINUED) $4,410,000 Wayne County Airport, Detroit Airport, Series A, (AMT), 4.15%*, 1/6/99, (LOC: Baerische Landesbank)..................... $ 4,410,000 2,000,000 Whitmore Lake Michigan Public School District, 4.50%, 6/30/99......................... 2,004,741 ------------ 266,312,223 ------------ PUERTO RICO -- 4.1% 4,695,000 Puerto Rico Industrial Medical & Environmental Pollution Control, Facilities Financing Authority, Abbott Labs, 3.55%*, 3/1/99..... 4,695,000 4,200,000 Puerto Rico Industrial Medical & Environmental Pollution Control, Facilities Financing Authority, Merck, 2.90%*, 6/1/99........... 4,200,000 4,250,000 Puerto Rico Industrial Medical & Environmental Pollution Control, Facilities Financing Authority, Reynolds Metal, 3.80%*, 9/1/99, (LOC: ABN/Amro)................. 4,250,783 ------------ 13,145,783 ------------ TOTAL MUNICIPAL BONDS........... 279,458,006 ------------ (Cost $279,458,006) TAX FREE COMMERCIAL PAPER -- 13.2% MICHIGAN -- 13.2% 4,800,000 Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper Co., Series A, 2.85%*, 1/5/99, (LOC: Morgan Guaranty)....................... 4,800,000 3,600,000 Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper Co., Series A, 2.90%*, 1/6/99, (LOC: Morgan Guaranty)....................... 3,600,000 4,390,000 Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper Co., Series B, 3.05%*, 1/7/99, (LOC: Union Bank of Switzerland)................. 4,390,000 [Download Table] SHARES OR PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- TAX FREE COMMERCIAL PAPER (CONTINUED) MICHIGAN (CONTINUED) $3,000,000 Delta County Economic Development Corp., Environmental Improvement Revenue, Mead Escanaba Paper Co., Series B, 2.85%*, 1/11/99, (LOC: Union Bank of Switzerland)............ $ 3,000,000 6,500,000 Michigan State Builders, 3.30%, 2/9/99, (LOC: CIBC)............. 6,500,000 8,050,000 Michigan State Housing Development Authority, Multifamily Series A, (AMT), 3.25%, 1/13/99, (LOC: Comerica Bank)........................... 8,050,000 12,380,000 Michigan State Underground Tank Storage, 3.25%, 1/20/99, (LOC: CIBC)........................... 12,380,000 ------------ TOTAL TAX FREE COMMERCIAL PAPER........................... 42,720,000 ------------ (Cost $42,720,000) INVESTMENT COMPANIES -- 0.2% 375,554 Dreyfus Tax Exempt Money Market Fund............................ 375,554 172,243 Federated Tax Exempt Money Market.......................... 172,243 ------------ TOTAL INVESTMENT COMPANIES...... 547,797 ------------ (Cost $547,797) TOTAL INVESTMENTS -- 99.7%.................. 322,725,803 (Cost $322,725,803) (a) OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3%......................... 891,690 ------------ TOTAL NET ASSETS -- 100.0%.................. $323,617,493 ============ --------------- (a) Cost for federal income tax and financial reporting purposes is the same. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. [Download Table] AMBAC AMBAC Indemnity Corp. AMT Alternative Minimum Tax Paper FGIC Financial Guaranty Insurance Corp. FSA Financial Security Assurance FOA First of America LOC Letter of Credit MBIA Municipal Bond Insurance Association QSBLF Qualified School Board Lending Fund See Notes to Financial Statements. 98
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THE KENT GOVERNMENT MONEY MARKET FUND FUNDS SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1998 [Download Table] PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- U.S. GOVERNMENT AGENCY OBLIGATIONS -- 80.8% FANNIE MAE -- 17.3% $ 1,961,000 5.39%**, 1/4/99................ $ 1,960,119 4,000,000 5.36%**, 1/19/99............... 3,989,280 5,000,000 5.01%*, 2/4/99................. 5,000,000 7,000,000 4.99%**, 2/19/99............... 6,952,471 4,000,000 4.98%**, 3/10/99............... 3,962,373 2,215,000 5.40%, 3/12/99................. 2,214,746 5,000,000 4.55%**, 4/7/99................ 4,939,333 ------------ 29,018,322 ------------ FEDERAL FARM CREDIT BANK -- 5.3% 5,000,000 4.92%**, 2/18/99............... 4,967,200 4,000,000 5.25%**, 3/5/99................ 3,963,250 ------------ 8,930,450 ------------ FEDERAL HOME LOAN BANK -- 21.6% 4,000,000 5.03%**, 1/8/99................ 3,996,088 2,240,000 4.96%**, 1/20/99............... 2,234,136 1,472,000 5.33%**, 2/3/99................ 1,464,808 3,300,000 5.33%**, 2/4/99................ 3,283,388 1,298,000 5.05%**, 2/16/99............... 1,289,624 3,000,000 5.25%**, 2/26/99............... 2,975,500 5,000,000 5.50%, 3/26/99................. 4,999,117 1,941,000 4.71%**, 5/28/99............... 1,903,670 5,000,000 4.95%*, 8/12/99................ 4,998,534 4,000,000 4.94%, 10/27/99................ 4,000,000 5,000,000 5.13%, 11/17/99................ 5,000,000 ------------ 36,144,865 ------------ FREDDIE MAC -- 36.6% 4,000,000 5.03%**, 1/4/99................ 3,998,323 4,000,000 5.27%**, 1/6/99................ 3,997,072 1,132,000 5.39%**, 1/7/99................ 1,130,983 5,000,000 5.05%**, 1/8/99................ 4,995,091 4,000,000 5.10%**, 1/11/99............... 3,994,333 3,000,000 5.10%**, 1/14/99............... 2,994,475 1,000,000 5.10%**, 1/15/99............... 998,017 1,320,000 5.24%**, 1/21/99............... 1,316,157 5,000,000 5.00%**, 1/22/99............... 4,985,593 4,000,000 4.94%**, 1/22/99............... 3,988,170 3,000,000 4.98%**, 2/3/99................ 2,986,305 5,000,000 5.18%**, 2/5/99................ 4,974,819 2,000,000 4.96%**, 2/25/99............... 1,984,844 5,000,000 4.91%**, 2/26/99............... 4,961,811 [Download Table] SHARES OR PRINCIPAL SECURITY AMORTIZED AMOUNT DESCRIPTION COST --------- ----------- --------- U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED) FREDDIE MAC (CONTINUED) $ 5,000,000 5.00%**, 2/26/99............... $ 4,961,111 4,000,000 4.98%**, 3/9/99................ 3,962,927 5,000,000 4.87%**, 3/30/99............... 4,940,477 ------------ 61,170,508 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS.................... 135,264,145 ------------ (Cost $135,274,145) [Download Table] REPURCHASE AGREEMENTS -- 9.6% 16,000,000 Donaldson, Lufkin & Jenrette, 4.85%, dated 12/31/98, due 1/4/99 with a maturity value of $16,008,622 (collateralized by $16,070,000 DHLB, 5.13%, 9/15/03, market value $16,327,120)................... 16,000,000 ------------ TOTAL REPURCHASE AGREEMENTS.... 16,000,000 ------------ (Cost $16,000,000) INVESTMENT COMPANIES -- 9.6% 104,738 Dreyfus Cash Management Money Market Fund.................... 104,738 15,985,868 Federated Government Obligations Money Market Fund........................... 15,985,868 ------------ TOTAL INVESTMENT COMPANIES..... 16,090,606 ------------ (Cost $16,090,606) TOTAL INVESTMENTS -- 100.2%................. 167,354,751 (Cost $167,354,751) (a) LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2)%............................ (339,207) ------------ TOTAL NET ASSETS -- 100.0%.................. $167,015,544 ============ --------------- (a) Cost for federal income tax and financial reporting purposes is the same. * Variable rate security. Rate presented represents rate in effect at December 31, 1998. Maturity date reflects next rate change date. ** Effective yield at purchase. See Notes to Financial Statements. 99
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THE KENT STATEMENTS OF ASSETS AND LIABILITIES FUNDS DECEMBER 31, 1998 [Enlarge/Download Table] GROWTH AND SMALL COMPANY INTERNATIONAL INDEX INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND ------------ ------------- ------------- ------------ ASSETS: Investments: Investments at cost.................................... $585,756,176 $693,952,947 $450,823,029 $454,985,570 Net unrealized appreciation/(depreciation)............. 292,102,639 88,412,004 86,149,799 351,286,975 ------------ ------------ ------------ ------------ Total investments at value............................. 877,858,815 782,364,951 536,972,828 806,272,545 Cash..................................................... 166 118 16,442 946 Foreign currency at value (cost $0; $0; $2,681,444; $0, respectively).......................................... -- -- 2,699,230 -- Receivable for investments sold.......................... -- 1,225,645 61,253 2,836,155 Receivable for capital shares issued..................... 2,464 732 4,006 109,574 Interest and dividends receivable........................ 982,914 504,685 1,215,811 850,136 Tax reclaim receivable................................... -- -- 900,067 -- Net receivable for variation margin on future contracts.............................................. 39,940 244,615 -- 22,575 Prepaid expenses and other assets........................ 209 1,649 1,510 330 ------------ ------------ ------------ ------------ Total Assets........................................... 878,884,508 784,342,395 541,871,147 810,092,261 ------------ ------------ ------------ ------------ LIABILITIES: Payable for investments purchased........................ -- -- 196,312 450,500 Payable for capital shares redeemed...................... 4,954 16,445 2,901 44,893 Foreign withholding taxes payable........................ -- -- 336,733 -- Payable to adviser....................................... 508,421 438,532 335,464 166,214 Payable to administrator................................. 17,504 14,998 10,599 10,673 Payable to distributor (Investment Shares)............... 10,422 4,765 2,568 7,903 Payable to trustees...................................... 5,227 4,764 2,722 3,907 Accrued expenses and other liabilities................... 52,148 72,414 94,662 56,819 ------------ ------------ ------------ ------------ Total Liabilities...................................... 598,676 551,918 981,961 740,909 ------------ ------------ ------------ ------------ NET ASSETS................................................. $878,285,832 $783,790,477 $540,889,186 $809,351,352 ============ ============ ============ ============ NET ASSETS CONSIST OF: Paid-in capital.......................................... $572,364,316 $679,470,845 $438,225,408 $457,166,312 Accumulated undistributed (distributions in excess of) net investment income.................................. (7,045) (7,159) (3,835,078) (5,959) Accumulated undistributed net realized gains/(losses) on investments, foreign currency and futures contracts sold................................................... 13,825,922 15,914,787 20,283,904 904,024 Net unrealized appreciation/(depreciation) of investments and translation of assets and liabilities in foreign currencies............................................. 292,102,639 88,412,004 86,214,952 351,286,975 ------------ ------------ ------------ ------------ TOTAL NET ASSETS........................................... $878,285,832 $783,790,477 $540,889,186 $809,351,352 ============ ============ ============ ============ INSTITUTIONAL SHARES: Net Assets............................................... $827,828,283 $760,335,137 $528,499,548 $771,146,580 Shares Outstanding....................................... 45,923,297 49,175,609 33,209,957 31,818,561 Net Asset Value, offering and redemption price per share.................................................. $ 18.03 $ 15.46 $ 15.91 $ 24.24 ============ ============ ============ ============ INVESTMENT SHARES: Net Assets............................................... $ 50,457,549 $ 23,455,340 $ 12,389,638 $ 38,204,772 Shares Outstanding....................................... 2,821,601 1,523,843 786,656 1,575,565 Net Asset Value, offering and redemption price per share.................................................. $ 17.88 $ 15.39 $ 15.75 $ 24.25 ============ ============ ============ ============ See Notes to Financial Statements.  100
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THE KENT STATEMENTS OF ASSETS AND LIABILITIES FUNDS DECEMBER 31, 1998 [Enlarge/Download Table] SHORT TERM INTERMEDIATE BOND FUND BOND FUND INCOME FUND ------------ ------------ ------------ ASSETS: Investments: Investments at cost..................................... $141,655,116 $867,037,313 $229,129,265 Net unrealized appreciation/(depreciation).............. 1,276,418 18,919,775 8,647,333 ------------ ------------ ------------ Total investments at value.............................. 142,931,534 885,957,088 237,776,598 Cash...................................................... 890 39 582 Receivable for capital shares issued...................... -- -- 27,474 Interest and dividends receivable......................... 2,494,507 12,432,459 3,998,891 Prepaid expenses and other assets......................... 4,585 192 3,678 ------------ ------------ ------------ Total Assets............................................ 145,431,516 898,389,778 241,807,223 ------------ ------------ ------------ LIABILITIES: Payable for capital shares redeemed....................... -- -- 21,353 Payable to adviser........................................ 61,637 415,751 123,450 Payable to administrator.................................. 2,868 17,650 4,751 Payable to transfer agent................................. 1,369 7,777 95 Payable to distributor (Investment Shares)................ 793 2,606 2,266 Payable to trustees....................................... 1,128 5,178 1,543 Accrued expenses and other liabilities.................... 8,665 47,941 7,419 ------------ ------------ ------------ Total Liabilities....................................... 76,460 496,903 160,877 ------------ ------------ ------------ NET ASSETS.................................................. $145,355,056 $897,892,875 $241,646,346 ============ ============ ============ NET ASSETS CONSIST OF: Paid-in capital........................................... $150,876,110 $883,474,535 $232,800,716 Accumulated undistributed (distributions in excess of) net investment income.................................................. (1,436) 244,070 (6,610) Accumulated undistributed net realized gains/(losses) on investments sold........................................ (6,796,036) (4,745,505) 204,907 Net unrealized appreciation/(depreciation) of investments............................................. 1,276,418 18,919,775 8,647,333 ------------ ------------ ------------ TOTAL NET ASSETS............................................ $145,355,056 $897,892,875 $241,646,346 ============ ============ ============ INSTITUTIONAL SHARES: Net Assets................................................ $139,228,674 $885,579,501 $231,017,204 Shares Outstanding........................................ 14,244,639 88,008,592 22,357,460 Net Asset Value, offering and redemption price per share................................................... $ 9.77 $ 10.06 $ 10.33 ============ ============ ============ INVESTMENT SHARES: Net Assets................................................ $ 6,126,382 $ 12,313,374 $ 10,629,142 Shares Outstanding........................................ 627,439 1,221,080 1,030,103 Net Asset Value, offering and redemption price per share................................................... $ 9.76 $ 10.08 $ 10.32 ============ ============ ============ See Notes to Financial Statements. 101
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THE KENT STATEMENTS OF ASSETS AND LIABILITIES FUNDS DECEMBER 31, 1998 [Enlarge/Download Table]  MICHIGAN LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND ------------- ------------- ------------ ------------ ASSETS: Investments: Investments at cost..................................... $31,361,846 $279,907,785 $121,488,675 $118,517,853 Net unrealized appreciation/(depreciation).............. 817,425 18,263,832 8,543,682 3,910,601 ----------- ------------ ------------ ------------ Total investments at value.............................. 32,179,271 298,171,617 130,032,357 122,428,454 Interest and dividends receivable......................... 482,217 4,370,735 1,754,690 1,554,796 Prepaid expenses and other assets......................... 6,832 5,544 9,624 4,309 ----------- ------------ ------------ ------------ Total Assets............................................ 32,668,320 302,547,896 131,796,671 123,987,559 ----------- ------------ ------------ ------------ LIABILITIES: Payable for investments purchased......................... -- 1,872,908 1,554,330 -- Payable for capital shares redeemed....................... -- -- -- 27,276 Payable to adviser........................................ 12,643 127,418 60,812 47,655 Payable to administrator.................................. 646 5,924 2,566 2,446 Payable to distributor (Investment Shares)................ 49 844 401 763 Payable to trustees....................................... 264 1,791 668 822 Accrued expenses and other liabilities.................... 1,159 17,107 7,664 5,734 ----------- ------------ ------------ ------------ Total Liabilities....................................... 14,761 2,025,992 1,626,441 84,696 ----------- ------------ ------------ ------------ NET ASSETS.................................................. $32,653,559 $300,521,904 $130,170,230 $123,902,863 =========== ============ ============ ============ NET ASSETS CONSIST OF: Paid-in capital........................................... $31,832,374 $281,950,649 $121,514,637 $119,972,096 Accumulated undistributed (distributions in excess of) net investment income....................................... 1,397 4,382 414 20,166 Accumulated undistributed net realized gains/(losses) on investments sold........................................ 2,363 303,041 111,497 -- Net unrealized appreciation/(depreciation) of investments............................................. 817,425 18,263,832 8,543,682 3,910,601 ----------- ------------ ------------ ------------ TOTAL NET ASSETS............................................ $32,653,559 $300,521,904 $130,170,230 $123,902,863 =========== ============ ============ ============ INSTITUTIONAL SHARES: Net Assets................................................ $32,233,520 $296,483,634 $128,232,124 $117,957,313 Shares Outstanding........................................ 3,155,599 27,557,941 11,928,915 11,485,861 Net Asset Value, offering and redemption price per share................................................... $ 10.21 $ 10.76 $ 10.75 $ 10.27 =========== ============ ============ ============ INVESTMENT SHARES: Net Assets................................................ $ 420,039 $ 4,038,270 $ 1,938,106 $ 5,945,550 Shares Outstanding........................................ 40,964 375,322 179,888 579,638 Net Asset Value, offering and redemption price per share................................................... $ 10.25 $ 10.76 $ 10.77 $ 10.26 =========== ============ ============ ============ See Notes to Financial Statements.  102
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THE KENT STATEMENTS OF ASSETS AND LIABILITIES FUNDS DECEMBER 31, 1998 [Enlarge/Download Table]  MICHIGAN MUNICIPAL GOVERNMENT MONEY MARKET MONEY MARKET MONEY MARKET FUND FUND FUND ------------ ------------ ------------ ASSETS: Investments: Investments at amortized cost........................... $693,946,545 $322,725,803 $151,354,751 Repurchase agreements (cost $0; $0; and $16,000,000, respectively)......................................... -- -- 16,000,000 ------------ ------------ ------------ Total investments at amortized cost..................... 693,946,545 322,725,803 167,354,751 Cash...................................................... -- 54,360 -- Interest and dividends receivable......................... 6,316,231 1,813,435 303,626 Prepaid expenses and other assets......................... 3,340 124 3,243 ------------ ------------ ------------ Total Assets............................................ 700,266,116 324,593,722 167,661,620 ------------ ------------ ------------ LIABILITIES: Dividends payable......................................... 2,723,907 809,470 598,148 Cash overdraft............................................ 91,159 -- -- Payable to adviser........................................ 231,191 114,476 25,412 Payable to administrator.................................. 7,825 3,668 1,200 Payable to trustees....................................... 3,759 1,343 407 Accrued expenses and other liabilities.................... 80,656 47,272 20,909 ------------ ------------ ------------ Total Liabilities....................................... 3,138,497 976,229 646,076 ------------ ------------ ------------ NET ASSETS.................................................. $697,127,619 $323,617,493 $167,015,544 ============ ============ ============ NET ASSETS CONSIST OF: Paid-in capital........................................... $697,119,620 $323,627,308 $167,014,096 Accumulated undistributed (distributions in excess of) net investment income....................................... 13,072 781 2,214 Accumulated undistributed net realized gains/(losses) on investments sold........................................ (5,073) (10,596) (766) ------------ ------------ ------------ TOTAL NET ASSETS............................................ $697,127,619 $323,617,493 $167,015,544 ============ ============ ============ INSTITUTIONAL SHARES: Net Assets................................................ $693,399,440 $323,271,698 $166,922,456 Shares Outstanding........................................ 693,397,466 323,259,217 166,923,218 Net Asset Value, offering and redemption price per share................................................... $ 1.00 $ 1.00 $ 1.00 ============ ============ ============ INVESTMENT SHARES: Net Assets................................................ $ 3,728,179 $ 345,795 $ 93,088 Shares Outstanding........................................ 3,728,406 345,773 93,088 Net Asset Value, offering and redemption price per share................................................... $ 1.00 $ 1.00 $ 1.00 ============ ============ ============ See Notes to Financial Statements. 103
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THE KENT STATEMENTS OF OPERATIONS FUNDS FOR THE YEAR ENDED DECEMBER 31, 1998 [Enlarge/Download Table] GROWTH AND SMALL COMPANY INTERNATIONAL INDEX INCOME FUND GROWTH FUND GROWTH FUND EQUITY FUND ------------ ------------- ------------- ------------ INVESTMENT INCOME: Dividends.......................................... $ 13,253,212 $ 8,350,306 $11,107,566 $ 10,841,384 Interest........................................... 4,627 62,036 300,671 1,995 Less: Net foreign taxes withheld................... (21,615) (2,201) (1,214,185) (27,631) ------------ ------------ ----------- ------------ Total Investment Income.......................... 13,236,224 8,410,141 10,194,052 10,815,748 ------------ ------------ ----------- ------------ EXPENSES: Investment advisory fees........................... 5,462,664 5,258,368 3,990,372 2,128,823 Administration fees................................ 1,411,202 1,358,690 962,462 1,282,561 Distribution fees (Investment Shares).............. 109,568 59,520 27,994 84,973 Fund accounting fees............................... 131,824 145,893 123,992 131,054 Custodian fees..................................... 9,520 32,853 323,344 19,084 Other expenses..................................... 307,720 326,639 226,820 319,879 ------------ ------------ ----------- ------------ Total expenses before waivers.................... 7,432,498 7,181,963 5,654,984 3,966,374 Less: expenses voluntarily waived................ (78,034) (75,116) (53,203) (886,706) ------------ ------------ ----------- ------------ Net Expenses..................................... 7,354,464 7,106,847 5,601,781 3,079,668 ------------ ------------ ----------- ------------ NET INVESTMENT INCOME................................ 5,881,760 1,303,294 4,592,271 7,736,080 ------------ ------------ ----------- ------------ NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS: Net realized gains/(losses) on investments and foreign currency transactions.................... 25,901,332 56,249,334 65,343,795 2,640,102 Net realized gains/(losses) on futures contracts... 3,481,810 3,370,391 -- 226,836 Net change in unrealized appreciation/(depreciation) of investments and translation of assets and liabilities in foreign currencies....................................... 164,789,723 (99,658,205) 19,020,408 168,607,691 ------------ ------------ ----------- ------------ NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS........................................ 194,172,865 (40,038,480) 84,364,203 171,474,629 ------------ ------------ ----------- ------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......................................... $200,054,625 $(38,735,186) $88,956,474 $179,210,709 ============ ============ =========== ============ See Notes to Financial Statements. 104
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THE KENT STATEMENTS OF OPERATIONS FUNDS FOR THE YEAR ENDED DECEMBER 31, 1998 [Enlarge/Download Table] SHORT TERM INTERMEDIATE BOND FUND BOND FUND INCOME FUND ---------- ------------ ----------- INVESTMENT INCOME: Interest.................................................. $8,660,770 $50,056,981 $16,935,762 Dividends................................................. 398,238 1,552,766 548,803 ---------- ----------- ----------- Total Investment Income................................. 9,059,008 51,609,747 17,484,565 ---------- ----------- ----------- EXPENSES: Investment advisory fees.................................. 696,368 4,345,604 1,481,491 Administration fees....................................... 251,895 1,429,015 446,634 Distribution fees (Investment Shares)..................... 17,117 24,241 21,966 Fund accounting fees...................................... 25,860 128,198 45,167 Custodian fees............................................ 339 1,200 773 Other expenses............................................ 97,815 205,694 101,258 ---------- ----------- ----------- Total expenses before waivers........................... 1,089,394 6,133,952 2,097,289 Less: expenses voluntarily waived....................... (20,774) (79,007) (24,690) ---------- ----------- ----------- Net Expenses............................................ 1,068,620 6,054,945 2,072,599 ---------- ----------- ----------- NET INVESTMENT INCOME....................................... 7,990,388 45,554,802 15,411,966 ---------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS: Net realized gains/(losses) on investments sold........... (96,072) 5,947,686 5,514,294 Net change in unrealized appreciation/(depreciation) of investments............................................. 489,306 5,377,857 1,312,791 ---------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS... 393,234 11,325,543 6,827,085 ---------- ----------- ----------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $8,383,622 $56,880,345 $22,239,051 ========== =========== =========== See Notes to Financial Statements. 105
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THE KENT STATEMENTS OF OPERATIONS FUNDS FOR THE YEAR ENDED DECEMBER 31, 1998 [Enlarge/Download Table]  MICHIGAN LIMITED TERM INTERMEDIATE TAX-FREE MUNICIPAL TAX-FREE FUND TAX-FREE FUND INCOME FUND BOND FUND ------------- ------------- ----------- ---------- INVESTMENT INCOME: Interest.............................................. $1,604,101 $13,949,025 $6,109,763 $5,743,195 Dividends............................................. 29,610 194,338 97,885 77,727 ---------- ----------- ---------- ---------- Total Investment Income............................. 1,633,711 14,143,363 6,207,648 5,820,922 ---------- ----------- ---------- ---------- EXPENSES: Investment advisory fees.............................. 163,210 1,431,252 687,774 561,713 Administration fees................................... 65,607 517,725 226,159 225,753 Distribution fees (Investment Shares)................. 934 9,397 4,710 11,671 Fund accounting fees.................................. 12,025 59,674 30,000 33,272 Custodian fees........................................ 156 1,164 1,111 904 Transfer agent fees................................... 32,712 37,335 33,940 33,718 Other expenses........................................ 9,347 58,010 41,879 20,276 ---------- ----------- ---------- ---------- Total expenses before waivers....................... 283,991 2,114,557 1,025,573 887,307 Less: expenses voluntarily waived................... (4,000) (28,624) (12,504) (17,150) ---------- ----------- ---------- ---------- Net Expenses........................................ 279,991 2,085,933 1,013,069 870,157 ---------- ----------- ---------- ---------- NET INVESTMENT INCOME................................... 1,353,720 12,057,430 5,194,579 4,950,765 ---------- ----------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS: Net realized gains/(losses) on investments sold....... 20,940 1,069,994 628,871 174,981 Net change in unrealized appreciation/(depreciation) of investments...................................... 84,141 1,761,120 1,185,845 568,378 ---------- ----------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS........................................... 105,081 2,831,114 1,814,716 743,359 ---------- ----------- ---------- ---------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................................ $1,458,801 $14,888,544 $7,009,295 $5,694,124 ========== =========== ========== ========== See Notes to Financial Statements. 106
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THE KENT STATEMENTS OF OPERATIONS FUNDS FOR THE YEAR ENDED DECEMBER 31, 1998 [Enlarge/Download Table]  MICHIGAN MUNICIPAL GOVERNMENT MONEY MARKET MONEY MARKET MONEY MARKET FUND FUND FUND ------------ ------------ ------------ INVESTMENT INCOME: Interest.................................................. $30,020,373 $11,067,121 $5,878,125 Dividends................................................. 1,363,628 275,682 422,930 ----------- ----------- ---------- Total Investment Income................................. 31,384,001 11,342,803 6,301,055 ----------- ----------- ---------- EXPENSES: Investment advisory fees.................................. 2,260,092 1,279,122 466,055 Administration fees....................................... 1,019,396 576,690 210,160 Fund accounting fees...................................... 88,851 52,810 19,555 Custodian fees............................................ 10,470 195 5,259 Registration fees......................................... 67,249 50,996 48,206 Other expenses............................................ 162,319 78,899 53,114 ----------- ----------- ---------- Total expenses before waivers........................... 3,608,377 2,038,712 802,349 Less: expenses voluntarily waived....................... (479,290) (303,052) (364,797) ----------- ----------- ---------- Net Expenses............................................ 3,129,087 1,735,660 437,552 ----------- ----------- ---------- NET INVESTMENT INCOME....................................... 28,254,914 9,607,143 5,863,503 ----------- ----------- ---------- NET REALIZED GAINS/(LOSSES) ON INVESTMENTS.................. (3,030) 1,873 (766) ----------- ----------- ---------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $28,251,884 $ 9,609,016 $5,862,737 =========== =========== ========== See Notes to Financial Statements. 107
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THE KENT STATEMENTS OF CHANGES IN NET ASSETS FUNDS [Enlarge/Download Table] SMALL COMPANY GROWTH AND INCOME FUND GROWTH FUND --------------------------- --------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 --------------------------- --------------------------- NET ASSETS AT BEGINNING OF PERIOD........................... $733,315,634 $515,920,253 $742,781,688 $558,516,596 ------------ ------------ ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income..................................... 5,881,760 10,415,521 1,303,294 1,548,638 Net realized gains/(losses) on investment and foreign currency transactions................................... 25,901,332 111,932,563 56,249,334 78,087,896 Net realized gains/(losses) on futures contracts.......... 3,481,810 (61,005) 3,370,391 524,810 Net change in unrealized appreciation/(depreciation) of investments and translation of assets and liabilities in foreign currencies...................................... 164,789,723 15,936,958 (99,658,205) 81,574,907 ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets resulting from operations.............................................. 200,054,625 138,224,037 (38,735,186) 161,736,251 ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: INSTITUTIONAL: Net investment income..................................... (5,717,209) (10,051,899) (1,316,803) (1,572,242) In excess of net investment income........................ (497,079) -- -- (570,748) Net realized gains on investments......................... (67,102,370) (58,514,755) (78,853,710) (52,695,021) ------------ ------------ ------------ ------------ Total dividends and distributions -- Institutional Shares................................................ (73,316,658) (68,566,654) (80,170,513) (54,838,011) ------------ ------------ ------------ ------------ INVESTMENT: Net investment income..................................... (214,560) (322,621) -- -- In excess of net investment income........................ (46,210) -- -- (36,830) Net realized gains on investments......................... (3,959,835) (2,725,491) (2,576,664) (1,565,329) ------------ ------------ ------------ ------------ Total dividends and distributions -- Investment Shares................................................ (4,220,605) (3,048,112) (2,576,664) (1,602,159) ------------ ------------ ------------ ------------ Total dividends and distributions to shareholders....... (77,537,263) (71,614,766) (82,747,177) (56,440,170) ------------ ------------ ------------ ------------ NET INCREASE/(DECREASE) FROM CAPITAL TRANSACTIONS........... 22,452,836 150,786,110 162,491,152 78,969,011 ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets..................... 144,970,198 217,395,381 41,008,789 184,265,092 ------------ ------------ ------------ ------------ NET ASSETS AT END OF PERIOD................................. $878,285,832 $733,315,634 $783,790,477 $742,781,688 ============ ============ ============ ============ See Notes to Financial Statements. 108
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THE KENT STATEMENTS OF CHANGES IN NET ASSETS FUNDS [Enlarge/Download Table] INTERNATIONAL GROWTH FUND INDEX EQUITY FUND --------------------------- --------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 --------------------------- --------------------------- NET ASSETS AT BEGINNING OF PERIOD........................... $502,378,709 $396,597,865 $618,163,526 $253,362,463 ------------ ------------ ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income..................................... 4,592,271 3,728,587 7,736,080 6,100,887 Net realized gains/(losses) on investments and foreign currency transactions................................... 65,343,795 2,742,836 2,640,102 1,138,162 Net realized gains/(losses) on futures contracts.......... -- -- 226,836 1,370,043 Net change in unrealized appreciation/(depreciation) of investments and translation of assets and liabilities in foreign currencies...................................... 19,020,408 4,769,670 168,607,691 98,473,728 ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets resulting from operations.............................................. 88,956,474 11,241,093 179,210,709 107,082,820 ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: INSTITUTIONAL: Net investment income..................................... (2,352,718) (3,055,002) (7,447,316) (5,884,290) In excess of net investment income........................ (3,928,519) (1,831,420) (5,750) (65,127) Net realized gains on investments......................... (43,820,789) (2,401,097) (1,228,000) (1,613,042) In excess of net realized gains........................... -- (341,685) -- (585,460) ------------ ------------ ------------ ------------ Total dividends and distributions -- Institutional Shares................................................ (50,102,026) (7,629,204) (8,681,066) (8,147,919) ------------ ------------ ------------ ------------ INVESTMENT: Net investment income..................................... -- (35,702) (284,041) (215,864) In excess of net investment income........................ (144,473) (59,234) (7,182) (9,227) Net realized gains on investments......................... (1,024,896) (47,965) (61,833) (88,824) In excess of net realized gains........................... -- (6,876) -- (11,017) ------------ ------------ ------------ ------------ Total dividends and distributions -- Investment Shares................................................ (1,169,369) (149,777) (353,056) (324,932) ------------ ------------ ------------ ------------ Total dividends and distributions to shareholders....... (51,271,395) (7,778,981) (9,034,122) (8,472,851) ------------ ------------ ------------ ------------ NET INCREASE/(DECREASE) FROM CAPITAL TRANSACTIONS........... 825,398 102,318,732 21,011,239 266,191,094 ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets..................... 38,510,477 105,780,844 191,187,826 364,801,063 ------------ ------------ ------------ ------------ NET ASSETS AT END OF PERIOD................................. $540,889,186 $502,378,709 $809,351,352 $618,163,526 ============ ============ ============ ============ See Notes to Financial Statements. 109
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THE KENT STATEMENTS OF CHANGES IN NET ASSETS FUNDS [Enlarge/Download Table] SHORT TERM BOND FUND INTERMEDIATE BOND FUND INCOME FUND ----------------------------- ----------------------------- ----------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 1998 1997 ---------------------------- ---------------------------- ---------------------------- NET ASSETS AT BEGINNING OF PERIOD.......................... $147,171,664 $237,096,910 $769,711,501 $776,722,838 $235,388,305 $242,781,715 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income........... 7,990,388 10,326,405 45,554,802 46,719,968 15,411,966 16,498,462 Net realized gains/(losses) on investments sold.............. (96,072) (1,502,731) 5,947,686 (3,309,390) 5,514,294 3,441,169 Net change in unrealized appreciation/(depreciation) of investments................... 489,306 1,638,919 5,377,857 15,305,110 1,312,791 5,214,704 ------------ ------------ ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets resulting from operations.................... 8,383,622 10,462,593 56,880,345 58,715,688 22,239,051 25,154,335 ------------ ------------ ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: INSTITUTIONAL: Net investment income........... (7,612,645) (10,203,409) (45,070,559) (46,492,693) (14,910,611) (16,298,443) In excess of net investment income........................ -- -- -- -- (2,725) -- Net realized gains on investments................... -- -- -- -- (5,347,331) (4,496,656) ------------ ------------ ------------ ------------ ------------ ------------ Total dividends and distributions -- Institutional Shares........ (7,612,645) (10,203,409) (45,070,559) (46,492,693) (20,260,667) (20,795,099) ------------ ------------ ------------ ------------ ------------ ------------ INVESTMENT: Net investment income........... (364,391) (230,620) (541,970) (400,310) (514,425) (236,638) In excess of net investment income........................ (17,935) -- -- -- (23,412) -- Net realized gains on investments................... -- -- -- -- (239,521) (85,457) ------------ ------------ ------------ ------------ ------------ ------------ Total dividends and distributions -- Investment Shares...................... (382,326) (230,620) (541,970) (400,310) (777,358) (322,095) ------------ ------------ ------------ ------------ ------------ ------------ Total dividends and distributions to shareholders................ (7,994,971) (10,434,029) (45,612,529) (46,893,003) (21,038,025) (21,117,194) ------------ ------------ ------------ ------------ ------------ ------------ NET INCREASE/(DECREASE) FROM CAPITAL TRANSACTIONS............ (2,205,259) (89,953,810) 116,913,558 (18,834,022) 5,057,015 (11,430,551) ------------ ------------ ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets........................ (1,816,608) (89,925,246) 128,181,374 (7,011,337) 6,258,041 (7,393,410) ------------ ------------ ------------ ------------ ------------ ------------ NET ASSETS AT END OF PERIOD....... $145,355,056 $147,171,664 $897,892,875 $769,711,501 $241,646,346 $235,388,305 ============ ============ ============ ============ ============ ============ See Notes to Financial Statements. 110
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THE KENT STATEMENTS OF CHANGES IN NET ASSETS FUNDS [Enlarge/Download Table] LIMITED TERM INTERMEDIATE TAX-FREE FUND TAX-FREE FUND --------------------------- --------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 --------------------------- --------------------------- NET ASSETS AT BEGINNING OF PERIOD........................... $36,497,570 $41,577,319 $279,175,752 $289,042,905 ----------- ----------- ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income..................................... 1,353,720 1,439,072 12,057,430 12,269,050 Net realized gains/(losses) on investments sold........... 20,940 159,864 1,069,994 691,582 Net change in unrealized appreciation/(depreciation) of investments............................................. 84,141 136,663 1,761,120 6,286,893 ----------- ----------- ------------ ------------ Net increase/(decrease) in net assets resulting from operations.............................................. 1,458,801 1,735,599 14,888,544 19,247,525 ----------- ----------- ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: INSTITUTIONAL: Net investment income..................................... (1,343,343) (1,432,406) (11,933,893) (12,149,068) Net realized gains on investments......................... (19,718) (170,851) (738,103) (86,552) In excess of net realized gains........................... -- -- -- (17,244) ----------- ----------- ------------ ------------ Total dividends and distributions -- Institutional Shares................................................ (1,363,061) (1,603,257) (12,671,996) (12,252,864) ----------- ----------- ------------ ------------ INVESTMENT: Net investment income..................................... (13,266) (11,595) (149,636) (135,115) Net realized gains on investments......................... (224) (2,045) (10,299) (863) In excess of net realized gains........................... -- -- -- (441) ----------- ----------- ------------ ------------ Total dividends and distributions -- Investment Shares................................................ (13,490) (13,640) (159,935) (136,419) ----------- ----------- ------------ ------------ Total dividends and distributions to shareholders....... (1,376,551) (1,616,897) (12,831,931) (12,389,283) ----------- ----------- ------------ ------------ NET INCREASE/(DECREASE) FROM CAPITAL TRANSACTIONS........... (3,926,261) (5,198,451) 19,289,539 (16,725,395) ----------- ----------- ------------ ------------ Net increase/(decrease) in net assets..................... (3,844,011) (5,079,749) 21,346,152 (9,867,153) ----------- ----------- ------------ ------------ NET ASSETS AT END OF PERIOD................................. $32,653,559 $36,497,570 $300,521,904 $279,175,752 =========== =========== ============ ============ See Notes to Financial Statements. 111
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THE KENT STATEMENTS OF CHANGES IN NET ASSETS FUNDS [Enlarge/Download Table] TAX-FREE MICHIGAN MUNICIPAL INCOME FUND BOND FUND --------------------------- ----------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 --------------------------- ----------------------------- NET ASSETS AT BEGINNING OF PERIOD......................... $118,364,159 $110,883,746 $116,148,299 $155,044,170 ------------ ------------ ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income................................... 5,194,579 5,050,397 4,950,765 5,042,224 Net realized gains/(losses) on investments sold......... 628,871 376,069 174,981 49,676 Net change in unrealized appreciation/(depreciation) of investments........................................... 1,185,845 4,279,292 568,378 1,602,539 ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets resulting from operations............................................ 7,009,295 9,705,758 5,694,124 6,694,439 ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: INSTITUTIONAL: Net investment income................................... (5,118,923) (5,016,230) (4,809,973) (4,914,390) In excess of net investment income...................... -- (610) -- -- Net realized gains on investments....................... (600,924) (330,223) (80,492) -- ------------ ------------ ------------ ------------ Total dividends and distributions -- Institutional Shares.............................................. (5,719,847) (5,347,063) (4,890,465) (4,914,390) ------------ ------------ ------------ ------------ INVESTMENT: Net investment income................................... (73,875) (42,572) (182,181) (121,577) In excess of net investment income...................... -- (929) -- -- Net realized gains on investments....................... (8,888) (4,346) (4,050) -- ------------ ------------ ------------ ------------ Total dividends and distributions -- Investment Shares.............................................. (82,763) (47,847) (186,231) (121,577) ------------ ------------ ------------ ------------ Total dividends and distributions to shareholders..... (5,802,610) (5,394,910) (5,076,696) (5,035,967) ------------ ------------ ------------ ------------ NET INCREASE/(DECREASE) FROM CAPITAL TRANSACTIONS......... 10,599,386 3,169,565 7,137,136 (40,554,343) ------------ ------------ ------------ ------------ Net increase/(decrease) in net assets................... 11,806,071 7,480,413 7,754,564 (38,895,871) ------------ ------------ ------------ ------------ NET ASSETS AT END OF PERIOD............................... $130,170,230 $118,364,159 $123,902,863 $116,148,299 ============ ============ ============ ============ See Notes to Financial Statements. 112
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THE KENT STATEMENTS OF CHANGES IN NET ASSETS FUNDS [Enlarge/Download Table] MICHIGAN MUNICIPAL GOVERNMENT MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND --------------------------- --------------------------- --------------------------- YEAR YEAR YEAR YEAR YEAR PERIOD ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 1998 1997(1) -------------------------- -------------------------- --------------------------- NET ASSETS AT BEGINNING OF PERIOD....... $475,557,215 $484,722,709 $211,971,193 $156,205,940 $94,626,461 $ -- ------------ ------------ ------------ ------------ ------------ ----------- INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income................. 28,254,914 26,741,343 9,607,143 6,381,928 5,863,503 2,952,675 Net realized gains/(losses) on investments......................... (3,030) (1,165) 1,873 (12,469) (766) 4 ------------ ------------ ------------ ------------ ------------ ----------- Net increase/(decrease) in net assets resulting from operations........... 28,251,884 26,740,178 9,609,016 6,369,459 5,862,737 2,952,679 ------------ ------------ ------------ ------------ ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: INSTITUTIONAL: Net investment income................. (28,105,841) (26,699,476) (9,596,573) (6,369,567) (5,861,605) (2,952,603) ------------ ------------ ------------ ------------ ------------ ----------- Total dividends and distributions -- Institutional Shares.............. (28,105,841) (26,699,476) (9,596,573) (6,369,567) (5,861,605) (2,952,603) ------------ ------------ ------------ ------------ ------------ ----------- INVESTMENT: Net investment income................. (149,073) (41,867) (10,570) (12,361) (1,898) (72) ------------ ------------ ------------ ------------ ------------ ----------- Total dividends and distributions -- Investment Shares................. (149,073) (41,867) (10,570) (12,361) (1,898) (72) ------------ ------------ ------------ ------------ ------------ ----------- Total dividends and distributions to shareholders...................... (28,254,914) (26,741,343) (9,607,143) (6,381,928) (5,863,503) (2,952,675) ------------ ------------ ------------ ------------ ------------ ----------- NET INCREASE/(DECREASE) FROM CAPITAL TRANSACTIONS.......................... 221,573,434 (9,164,329) 111,644,427 55,777,722 72,389,849 94,626,457 ------------ ------------ ------------ ------------ ------------ ----------- Net increase/(decrease) in net assets.............................. 221,570,404 (9,165,494) 111,646,300 55,765,253 72,389,083 94,626,461 ------------ ------------ ------------ ------------ ------------ ----------- NET ASSETS AT END OF PERIOD............. $697,127,619 $475,557,215 $323,617,493 $211,971,193 $167,015,544 $94,626,461 ============ ============ ============ ============ ============ =========== --------------- (1) For the period from June 2, 1997 (commencement of operations) through December 31, 1997. See Notes to Financial Statements. 113
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THE KENT NOTES TO FINANCIAL STATEMENTS FUNDS DECEMBER 31, 1998 1. ORGANIZATION The Kent Funds (the "Trust") was organized as a Massachusetts business trust on May 9, 1986 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. As of the date of this report, the Trust offered fourteen managed investment funds. The accompanying financial statements and financial highlights are those of the following: Kent Growth and Income Fund, Kent Small Company Growth Fund, Kent International Growth Fund, Kent Index Equity Fund, Kent Short Term Bond Fund, Kent Intermediate Bond Fund, Kent Income Fund, Kent Limited Term Tax-Free Fund, Kent Intermediate Tax-Free Fund, Kent Tax-Free Income Fund, Kent Michigan Municipal Bond Fund, Kent Money Market Fund, Kent Michigan Municipal Money Market Fund and Kent Government Money Market Fund (individually, a "Fund" and collectively, the "Funds"). The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited number of shares of beneficial interest without par value and it allows for the creation of one or more classes of shares within each series. The Trust may issue more than one series of shares investing in Funds of securities. The Trust currently issues fourteen series of shares with two separate classes in each series: Investment Shares and Institutional Shares. Each share in each series or class has identical voting, dividend, liquidation and other rights, except in matters affecting only a particular series or class, in which case only shares of the affected series or class are entitled to vote. The investment objectives of the Funds are as follows: Growth and Income Fund -- To seek long-term capital growth with current income as a secondary goal. Small Company Growth Fund -- To seek long-term capital appreciation by investing in equity securities of small companies. International Growth Fund -- To seek long-term growth of capital and additional diversification for U.S. investors by investing in a varied Fund of foreign equity securities. Index Equity Fund -- To seek investment results which mirror the capital performance and dividend income of the Standard & Poor's 500 Composite Stock Price Index. Short Term Bond Fund -- To seek current income by investing primarily in a limited range of investment quality fixed income securities. Intermediate Bond Fund -- To seek current income by investing primarily in a broad range of investment quality debt securities. Income Fund -- To seek a high level of current income by investing in a broad range of investment quality debt securities. Limited Term Tax-Free Fund -- To seek current income, exempt from federal income tax, while preserving capital. Intermediate Tax-Free Fund -- To seek current income, exempt from federal income tax, while preserving capital. Tax-Free Income Fund -- To seek to provide as high a level of current income exempt from federal income tax as is consistent with prudent investing, while preserving capital. Michigan Municipal Bond Fund -- To seek current income, exempt from federal and State of Michigan personal income taxes, while preserving capital. Money Market Fund -- To seek current income from short-term securities while preserving capital and maintaining liquidity. Michigan Municipal Money Market Fund -- To seek current income from short-term securities that is exempt from federal and State of Michigan personal income taxes, while preserving capital and maintaining liquidity. Government Money Market Fund -- To seek current income from short-term United States Government securities while preserving capital and maintaining liquidity. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles. The preparation of financial statements requires management to make estimates and assumptions that 114
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual amounts could differ from those estimates. SECURITY VALUATION: Securities in the Money Market Fund, Michigan Municipal Money Market Fund and Government Money Market Fund (the "Money Market Funds") are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act, which approximates market value. This method involves valuing a Fund security initially at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and initial cost. In the Short Term Bond Fund, Intermediate Bond Fund, Income Fund, Limited Term Tax-Free Fund, Intermediate Tax-Free Fund, Tax-Free Income Fund and Michigan Municipal Bond Fund, corporate debt securities, municipal securities and debt securities of the U.S. government and its agencies (other than short-term investments maturing in 60 days or less) are valued on the basis of valuations provided by dealers or by an independent pricing service approved by the Board of Trustees. Short-term obligations that mature in 60 days or less are valued at amortized cost, which approximates market value. All other securities and other assets are appraised at their fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. The Growth and Income Fund, Small Company Growth Fund, International Growth Fund and the Index Equity Fund value listed securities at the last sales price on the principal exchange where such securities are traded. Listed securities for which last sales prices are not available are valued at the last bid price. Unlisted securities are valued at the mean of the current bid and asked prices in the principal market where such securities trade. Short-term obligations that mature in 60 days or less are valued at amortized cost, which approximates market value. All other securities and other assets are appraised at their fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. REPURCHASE AGREEMENTS: Each Fund may agree to purchase portfolio securities from financial institutions subject to the seller's agreement to repurchase them at a mutually agreed upon date and price ("repurchase agreement"). The Trust's custodian and other banks acting in a sub-custodian capacity, take possession of the collateral pledged for investments in repurchase agreements. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller's default of the obligation to repurchase, the Funds have the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, in the event of the default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. FOREIGN CURRENCY TRANSLATION: Investments and other assets and liabilities denominated in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Realized gains and losses on foreign investments and foreign income and expenses are converted into U.S. dollars based upon exchange rates prevailing on the respective dates of such transactions. That portion of unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed. Foreign currency-denominated receivables and payables are "marked-to-market" using the current exchange rate. The fluctuation between the original exchange rate and the current exchange rate is recorded as unrealized currency gain or loss. Upon receipt of payment, a Fund realizes a gain or loss on foreign currency amounting to the difference between the original value and the ending value of the receivable or payable. FUTURES CONTRACTS: The Funds (except for the Money Market Funds) may engage in transactions in financial futures contracts in order to manage the risk of unanticipated changes in market values of securities held in the portfolio, or which it intends to purchase. Such transactions may be considered trading activity under generally accepted accounting principles. The expectation is that any gain or loss on such transactions will be substantially offset by any gain or loss on the securities in the underlying portfolio or on those which are being considered for purchase. This investment involves, to varying degrees, elements of market risk 115
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 and risks in excess of the amount recognized in the Statement of Assets and Liabilities. The face or contract amounts reflect the extent of the involvement the Funds have in the particular classes of instruments. Risks include an imperfect correlation between the movements in the price of the instruments and the price of the underlying securities and interest rates. Risks may also arise if there is an illiquid secondary market for the instruments or due to the inability of counterparties to perform under the terms of the contract. Cash or securities are deposited with brokers in order to maintain a position. Subsequent payments made or received daily by the Fund based on the change in the market value of the position are recorded as a realized gain or loss. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. To the extent that the Fund enters into futures contracts on an index or group of securities, the Fund exposes itself to an indeterminate liability and will be required to pay or receive a sum of money measured by the change in the market value of the index or group of securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities in an amount ("initial margin") equal to a certain percentage of the contract value with a broker. Subsequent payments ("variation margin") equal to changes in the daily settlement price or last sale on the exchanges where they trade are paid or received each day and are recorded as a gain or loss on futures contracts. The average market value of futures contracts held during the year ended December 31, 1998 was as follows: [Download Table] AVERAGE FUNDS MARKET VALUE ----- -------------- Growth and Income Fund............... $13,995,765 Small Company Growth Fund............ 13,571,437 Index Equity Fund.................... 7,242,800 FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The International Growth Fund may enter into forward foreign currency exchange contracts. The purpose of these contracts is to hedge against fluctuation in the value of the underlying currency of certain Fund investments. A forward foreign currency exchange contract is an agreement to purchase or sell a specified currency at a specified price on a future date. Risks associated with the contract include changes in the value of the foreign currency relative to the U.S. dollar and/or the counterparty's potential inability to perform under the contract. The forward foreign currency exchange contracts are valued daily using the current exchange rate of the underlying currency with any fluctuations recorded as unrealized gains or losses. Realized gains or losses are recognized when entering a closing or offsetting forward foreign currency exchange contract with the same settlement date and broker. SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Each Fund may purchase securities on a "when-issued" basis. When-issued securities are securities purchased for delivery beyond the normal settlement date at a stated price and/or yield, thereby, involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time a Fund makes the commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. Normally, the settlement date occurs within one month of the purchase. The Funds maintain cash and marketable securities at least equal in value to commitments for when-issued securities. Securities purchased on a when-issued basis do not earn income until settlement date. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on the trade date. Net realized gains and losses on investments sold and on foreign currency transactions are recorded on the basis of identified cost. Interest income is recorded on the accrual basis and includes, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. The International Growth Fund, upon the purchase or sale of a security denominated in a foreign currency, may enter into foreign currency exchange contracts for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction to hedge the Fund against currency fluctuations during the settlement period. In such cases, the Fund has not realized currency gains or losses between the trade and settlement dates on these security transactions. 116
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Money Market Fund, Michigan Municipal Money Market Fund and Government Money Market Fund declare dividends daily from net investment income and pay such dividends monthly. The other Funds declare and distribute dividends from net investment income monthly, with the exception of the International Growth Fund, which declares and pays dividends annually. Net realized capital gains, if any, are distributed at least annually. The amounts of dividends from net investment income and of distributions from net realized gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions to shareholders which exceed net investment income and net realized capital gains for financial reporting purposes but not for tax purposes are reported as dividends in excess of net investment income or distributions in excess of net realized gains. To the extent they exceed net investment income and net realized gains for tax purposes, they are reported as distributions of paid-in-capital. As of December 31, 1998, the following reclassifications have been made to increase (decrease) such accounts with offsetting adjustments to paid-in-capital: [Download Table] ACCUMULATED UNDISTRIBUTED ACCUMULATED (DISTRIBUTIONS UNDISTRIBUTED IN EXCESS OF) NET REALIZED NET INVESTMENT GAINS/(LOSSES) FUNDS INCOME ON INVESTMENTS ----- -------------- -------------- Growth and Income Fund................ $536,244 $(536,244) Small Company Growth Fund................ 12,530 (12,530) International Growth Fund................ 155,626 (155,626) Index Equity Fund..... 6,973 (6,973) Short Term Bond Fund.. 16 -- Intermediate Bond Fund................ 262,700 (262,700) Income Fund........... 19,527 (19,527) Limited Term Tax-Free Fund................ 776 (776) Intermediate Tax-Free Fund................ 5 (5) Tax-Free Income Fund.. 2 (2) Michigan Municipal Bond Fund........... 21,509 (21,509) Money Market.......... -- -- Michigan Municipal Money Market Fund... -- -- Government Money Market Fund......... -- -- FEDERAL INCOME TAXES: For federal income tax purposes, each Fund is treated as a separate entity for the purpose of determining its qualification as a regulated investment company under the Internal Revenue Code (the "Code"). It is the policy of each Fund to meet the requirements of the Code applicable to regulated investment companies, including the requirement that it distribute substantially all of its taxable income to shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends have been paid or provided for in accordance with the applicable country's tax rules and rates. At December 31, 1998, the following Funds had the following capital loss carryforwards which will expire in the years indicated: [Download Table] FUNDS AMOUNT YEAR ----- ---------- ---- Short Term Bond Fund............ $ 656,100 2001 3,015,994 2002 467,881 2003 438,260 2004 1,927,928 2005 237,955 2006 ---------- $6,744,118 ========== 117
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 [Download Table] FUNDS AMOUNT YEAR ----- ---------- ---- Intermediate Bond Fund.......... $ 682,119 2004 4,043,228 2005 ---------- $4,725,347 ========== Money Market Fund............... $ 433 1999 224 2002 194 2003 27 2004 432 2005 3,763 2006 ---------- $ 5,073 ========== Michigan Municipal Money Market Fund.......................... $ 10,596 2005 ========== Government Money Market Fund.... $ 765 2006 ========== EXPENSES: Expenses directly attributable to a Fund are charged to the Fund, while expenses which are attributable to more than one series of the Trust are allocated among the respective series based upon relative net assets or another appropriate basis. In addition, investors in Investment Shares will pay the expenses directly attributable to the Investment Shares as a class, and investors in Institutional Shares will pay the expenses directly attributable to the Institutional Shares as a class. ORGANIZATIONAL COSTS: The Funds bear all costs in connection with their organization, including the fees and expenses of registering and qualifying their initial shares for distribution under federal and state securities laws. All such costs are amortized using the straight-line method over a period of five years beginning with the respective Fund's commencement of operations. In the event that any of the initial shares purchased by the Fund's sponsors are redeemed during such period by any holder thereof, the Fund will be reimbursed by such holder for any unamortized organization costs in the same proportion as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. All such costs were fully amortized as of December 31, 1998. RECLASSIFICATIONS: Certain reclassifications have been made to prior year financial statements in order to conform to the current presentation. 3. RELATED PARTY TRANSACTIONS The Funds are advised by Lyon Street Asset Management Company ("Lyon Street" or the "Investment Adviser"), a wholly-owned subsidiary of Old Kent Bank ("Old Kent"). Effective as of March 2, 1998, Lyon Street assumed the investment advisory responsibilities for each of the Funds from the Investment Management Group of Old Kent. This change did not involve a change in control or management of the investment adviser or a change in the Funds' portfolio managers. The Investment Adviser is entitled to receive a fee, computed daily and paid monthly, based on each Fund's average daily net assets at the following annual rates: [Download Table] Growth and Income Fund...................... 0.70% Small Company Growth Fund................... 0.70% International Growth Fund................... 0.75% Index Equity Fund........................... 0.30% Short Term Bond Fund........................ 0.50% Intermediate Bond Fund...................... 0.55% Income Fund................................. 0.60% Limited Term Tax-Free Fund.................. 0.45% Intermediate Tax-Free Fund.................. 0.50% Tax-Free Income Fund........................ 0.55% Michigan Municipal Bond Fund................ 0.45% Money Market Fund........................... 0.40% Michigan Municipal Money Market Fund........ 0.40% Government Money Market Fund................ 0.40% The Index Equity Fund and Government Money Market Fund had investment advisory fees waived by Lyon Street equal to $354,807 and $233,025, respectively. BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS") serves the Funds as Administrator and Distributor. BISYS Fund Services Ohio, Inc. serves the Funds as Fund Accountant and Transfer Agent. BISYS and BISYS Fund Services Ohio, Inc. are both wholly owned subsidiaries of The BISYS Group, Inc. The Administrator is entitled to receive a fee computed daily and paid monthly, at the annual rate of 0.185% of the average daily net assets of the Trust up to $5 billion; 0.165% of the average daily net assets of the Trust in excess of $5 billion up to $7.5 billion; and 0.135% of the average daily net assets of the Trust in excess of $7.5 billion. Fund Accounting fees are computed daily 118
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 and paid monthly at the annual rate of 0.015% of the average daily net assets of the Trust. Gross administration fees and fees waived for the year ended December 31, 1998 were as follows for the Funds indicated: [Download Table] FUNDS GROSS FEES FEES WAIVED ----- ---------- ----------- Growth and Income Fund..... $1,411,202 $ -- Small Company Growth Fund..................... 1,358,690 -- International Growth Fund..................... 962,462 -- Index Equity Fund.......... 1,282,561 425,483 Short Term Bond Fund....... 251,895 -- Intermediate Bond Fund..... 1,429,015 -- Income Fund................ 446,634 -- Limited Term Tax-Free Fund..................... 65,607 -- Intermediate Tax-Free Fund..................... 517,725 -- Tax-Free Income Fund....... 226,159 -- Michigan Municipal Bond Fund..................... 225,753 -- Money Market Fund.......... 1,019,396 394,533 Michigan Municipal Money Market Fund.............. 576,590 255,083 Government Money Market Fund..................... 210,160 114,295 Old Kent provides certain administrative services to the Trust pursuant to a Sub-Administration Agreement between Old Kent and BISYS. BISYS pays Old Kent a fee, calculated daily and paid monthly, at an annual rate of up to 0.05% of each Fund's average daily net assets. The fees received by Old Kent for such administrative services were paid out of BISYS' administration fee and are not an additional charge to the Funds. Sub-administration fees for each Fund for the year ended December 31, 1998 are as follows: [Download Table] FUNDS SUB-ADMINISTRATION FEES ----- ----------------------- Growth and Income Fund........ $390,190 Small Company Growth Fund..... 375,597 International Growth Fund..... 266,025 Index Equity Fund............. 354,803 Short Term Bond Fund.......... 55,710 Intermediate Bond Fund........ 316,044 Income Fund................... 98,766 Limited Term Tax-Free Fund.... 14,508 Intermediate Tax-Free Fund.... 114,500 Tax-Free Income Fund.......... 50,020 Michigan Municipal Bond Fund........................ 49,930 Money Market Fund............. 226,018 Michigan Municipal Money Market Fund................. 95,938 Government Money Market Fund........................ 58,257 Transfer agent fees for each Fund for the year ended December 31, 1998 are as follows: [Download Table] FUNDS TRANSFER AGENT FEES ----- ------------------- Growth and Income Fund............ $171,326 Small Company Growth Fund......... 175,858 International Growth Fund......... 127,054 Index Equity Fund................. 171,097 Short Term Bond Fund.............. 50,162 Intermediate Bond Fund............ 77,676 Income Fund....................... 45,893 Limited Term Tax-Free Fund........ 32,712 Intermediate Tax-Free Fund........ 37,335 Tax-Free Income Fund.............. 33,940 Michigan Municipal Bond Fund...... 33,718 Money Market Fund................. 72,008 Michigan Municipal Money Market Fund............................ 34,885 Government Money Market Fund...... 34,643 119
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 Fund accounting fees for each Fund for the year ended December 31, 1998 are as follows: [Download Table] FUNDS GROSS FEES FEES WAIVED ----- ---------- ----------- Growth and Income Fund...... $131,824 $ 78,034 Small Company Growth Fund... 145,893 75,116 International Growth Fund... 123,992 53,203 Index Equity Fund........... 131,054 106,416 Short Term Bond Fund........ 25,860 13,927 Intermediate Bond Fund...... 128,198 79,007 Income Fund................. 45,167 24,690 Limited Term Tax-Free Fund...................... 12,025 3,627 Intermediate Tax-Free Fund...................... 59,674 28,624 Tax-Free Income Fund........ 31,111 12,504 Michigan Municipal Bond Fund...................... 33,272 12,482 Money Market Fund........... 88,851 84,757 Michigan Municipal Money Market Fund............... 52,810 47,969 Government Money Market Fund...................... 19,555 17,477 Certain officers of the Trust are affiliated with BISYS and Lyon Street. Such officers receive no direct payments or fees from the Funds for serving as officers. The Trust has adopted a distribution plan (the "Plan") on behalf of the Investment Shares of the Funds pursuant to Rule 12b-1 of the 1940 Act. The Plan provides for payments to the Distributor of up to 0.25% of the average daily net assets of the Investment Shares of the Funds. Although the Money Market Funds are authorized to pay 12b-1 fees of up to 0.25% in connection with the sale of Investment Shares, none of the Funds currently intends to pay such fees. Gross distribution fees and fees waived for each Fund for the year ended December 31, 1998 are as follows: [Download Table] FUNDS GROSS FEES FEES WAIVED ----- ---------- ----------- Growth and Income Fund...... $109,568 $ -- Small Company Growth Fund... 59,520 -- International Growth Fund... 27,994 -- Index Equity Fund........... 84,973 -- Short Term Bond Fund........ 17,117 6,847 Intermediate Bond Fund...... 24,241 -- Income Fund................. 21,966 -- Limited Term Tax-Free Fund.. 934 373 Intermediate Tax-Free Fund...................... 9,397 -- Tax-Free Income Fund........ 4,710 -- Michigan Municipal Bond Fund...................... 11,671 4,668 Money Market Fund........... -- -- Michigan Municipal Money Market Fund............... -- -- Government Money Market Fund...................... -- -- Expenses for the Trust include legal fees paid to Drinker Biddle & Reath LLP. A partner of that firm serves as Assistant Secretary of the Trust. 120
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the Funds are summarized below: [Enlarge/Download Table] GROWTH AND INCOME FUND SMALL COMPANY GROWTH FUND ------------------------------ ------------------------------ YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 ------------- ------------- ------------- ------------- DOLLAR AMOUNTS INSTITUTIONAL: Shares issued......................................... $ 227,159,369 $ 249,081,909 $ 302,052,649 $ 208,702,084 Reinvestment of distributions......................... 32,729,339 30,110,268 40,424,917 26,503,462 Shares redeemed....................................... (246,102,212) (147,058,160) (184,973,716) (161,953,808) ------------- ------------- ------------- ------------- Net increase (decrease) from Institutional capital transactions...................................... 13,786,496 132,134,017 157,503,850 73,251,738 ------------- ------------- ------------- ------------- INVESTMENT: Shares issued......................................... 14,780,302 20,005,334 8,768,844 7,480,927 Reinvestment of distributions......................... 4,118,060 2,967,456 2,517,754 1,566,793 Shares redeemed....................................... (10,232,022) (4,320,697) (6,299,296) (3,330,447) ------------- ------------- ------------- ------------- Net increase (decrease) from Investment capital transactions...................................... 8,666,340 18,652,093 4,987,302 5,717,273 ------------- ------------- ------------- ------------- Total net increase (decrease) from capital transactions...................................... $ 22,452,836 $ 150,786,110 $ 162,491,152 $ 78,969,011 ============= ============= ============= ============= SHARE ACTIVITY INSTITUTIONAL: Shares issued......................................... 14,055,251 16,279,124 18,894,661 11,956,401 Reinvestment of distributions......................... 1,992,365 1,971,493 2,459,426 1,547,774 Shares redeemed....................................... (15,006,273) (9,401,038) (11,327,584) (9,131,520) ------------- ------------- ------------- ------------- Net increase (decrease) from Institutional shares transactions...................................... 1,041,343 8,849,579 10,026,503 4,372,655 ------------- ------------- ------------- ------------- INVESTMENT: Shares issued......................................... 913,994 1,283,992 511,690 419,135 Reinvestment of distributions......................... 252,348 195,172 152,813 91,169 Shares redeemed....................................... (634,252) (280,261) (383,678) (191,859) ------------- ------------- ------------- ------------- Net increase (decrease) from Investment shares transactions...................................... 532,090 1,198,903 280,825 318,445 ------------- ------------- ------------- ------------- Total net increase (decrease) from shares transactions...................................... 1,573,433 10,048,482 10,307,328 4,691,100 ============= ============= ============= ============= 121
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 4. CAPITAL SHARE TRANSACTIONS (CONTINUED) Transactions in shares of the Funds are summarized below: [Enlarge/Download Table] INTERNATIONAL GROWTH FUND INDEX EQUITY FUND ----------------------------- ----------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 ------------- ------------ ------------- ------------ DOLLAR AMOUNTS INSTITUTIONAL: Shares issued.......................................... $ 136,493,110 $189,937,844 $ 190,070,776 $323,258,744 Reinvestment of distributions.......................... 23,365,621 3,418,753 7,019,186 6,357,380 Shares redeemed........................................ (161,041,176) (92,021,615) (178,461,700) (77,077,375) ------------- ------------ ------------- ------------ Net increase (decrease) from Institutional capital transactions....................................... (1,182,445) 101,334,982 18,628,262 252,538,749 ------------- ------------ ------------- ------------ INVESTMENT: Shares issued.......................................... 7,181,444 3,462,874 8,289,279 15,939,700 Reinvestment of distributions.......................... 1,132,738 146,470 344,605 315,816 Shares redeemed........................................ (6,306,339) (2,625,594) (6,250,907) (2,603,171) ------------- ------------ ------------- ------------ Net increase (decrease) from Investment capital transactions....................................... 2,007,843 983,750 2,382,977 13,652,345 ------------- ------------ ------------- ------------ Total net increase (decrease) from capital transactions....................................... $ 825,398 $102,318,732 $ 21,011,239 $266,191,094 ============= ============ ============= ============ SHARE ACTIVITY INSTITUTIONAL: Shares issued.......................................... 8,614,874 12,562,555 9,139,342 18,391,993 Reinvestment of distributions.......................... 1,492,409 230,973 322,723 353,825 Shares redeemed........................................ (9,986,982) (5,990,183) (8,478,378) (4,462,155) ------------- ------------ ------------- ------------ Net increase (decrease) from Institutional shares transactions....................................... 120,301 6,803,345 983,687 14,283,663 ------------- ------------ ------------- ------------ INVESTMENT: Shares issued.......................................... 441,796 227,807 394,992 915,280 Reinvestment of distributions.......................... 73,057 9,962 15,815 17,611 Shares redeemed........................................ (389,582) (175,388) (293,283) (149,114) ------------- ------------ ------------- ------------ Net increase (decrease) from Investment shares transactions....................................... 125,271 62,381 117,524 783,777 ------------- ------------ ------------- ------------ Total net increase (decrease) from shares transactions....................................... 245,572 6,865,726 1,101,211 15,067,440 ============= ============ ============= ============ 122
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 4. CAPITAL SHARE TRANSACTIONS (CONTINUED) Transactions in shares of the Funds are summarized below: [Enlarge/Download Table] SHORT TERM INTERMEDIATE BOND FUND BOND FUND INCOME FUND ----------------------------- ------------------------------ ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 1998 1997 ------------ ------------- ------------- ------------- ------------ ------------ DOLLAR AMOUNTS INSTITUTIONAL: Shares issued................. $46,983,304 $ 48,001,662 $ 338,390,247 $ 199,760,848 $72,628,587 $ 64,474,285 Reinvestment of distributions............... 4,494,488 6,604,162 23,782,242 24,873,643 4,483,402 4,044,114 Shares redeemed............... (52,355,665) (150,317,030) (250,453,733) (243,018,554) (77,077,231) (82,779,834) ------------ ------------- ------------- ------------- ------------ ------------ Net increase (decrease) from Institutional capital transactions.............. (877,873) (95,711,206) 111,718,756 (18,384,063) 34,758 (14,261,435) ------------ ------------- ------------- ------------- ------------ ------------ INVESTMENT: Shares issued................. 1,555,661 7,847,049 8,360,353 1,779,289 7,872,571 3,443,682 Reinvestment of distributions............... 372,460 224,600 489,509 330,824 742,082 295,679 Shares redeemed............... (3,255,507) (2,314,253) (3,655,060) (2,560,072) (3,592,396) (908,477) ------------ ------------- ------------- ------------- ------------ ------------ Net increase (decrease) from Investment capital transactions.............. (1,327,386) 5,757,396 5,194,802 (449,959) 5,022,257 2,830,884 ------------ ------------- ------------- ------------- ------------ ------------ Total net increase (decrease) from capital transactions.............. $(2,205,259) $ (89,953,810) $ 116,913,558 $ (18,834,022) $ 5,057,015 $(11,430,551) ============ ============= ============= ============= ============ ============ SHARE ACTIVITY INSTITUTIONAL: Shares issued................. 4,796,963 4,932,559 33,667,668 20,424,141 6,983,209 6,376,298 Reinvestment of distributions............... 460,770 681,245 2,384,021 2,553,873 433,651 400,874 Shares redeemed............... (5,351,943) (15,426,349) (25,053,433) (24,790,453) (7,372,911) (8,087,197) ------------ ------------- ------------- ------------- ------------ ------------ Net increase (decrease) from Institutional shares transactions.............. (94,210) (9,812,545) 10,998,256 (1,812,439) 43,949 (1,310,025) ------------ ------------- ------------- ------------- ------------ ------------ INVESTMENT: Shares issued................. 159,007 806,758 833,731 180,929 757,461 338,211 Reinvestment of distributions............... 38,229 23,130 48,917 33,899 71,851 29,196 Shares redeemed............... (333,161) (237,636) (364,011) (261,548) (344,684) (89,859) ------------ ------------- ------------- ------------- ------------ ------------ Net increase (decrease) from Investment shares transactions.............. (135,925) 592,252 518,637 (46,720) 484,628 277,548 ------------ ------------- ------------- ------------- ------------ ------------ Total net increase (decrease) from shares transactions.............. (230,135) (9,220,293) 11,516,893 (1,859,159) 528,577 (1,032,477) ============ ============= ============= ============= ============ ============ 123
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 4. CAPITAL SHARE TRANSACTIONS (CONTINUED) Transactions in shares of the Funds are summarized below: [Enlarge/Download Table] LIMITED TERM INTERMEDIATE TAX-FREE FUND TAX-FREE FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 ------------ ------------ ------------ ------------ DOLLAR AMOUNTS INSTITUTIONAL: Shares issued........................................... $ 8,572,004 $ 9,059,260 $66,076,832 $ 43,176,593 Reinvestment of distributions........................... 8,045 13,903 208,477 124,001 Shares redeemed......................................... (12,452,040) (14,638,082) (47,473,584) (60,115,232) ------------ ------------ ------------ ------------ Net increase (decrease) from Institutional capital transactions........................................ (3,871,991) (5,564,919) 18,811,725 (16,814,638) ------------ ------------ ------------ ------------ INVESTMENT: Shares issued........................................... 222,120 677,012 2,087,564 1,089,316 Reinvestment of distributions........................... 13,490 13,461 116,321 83,640 Shares redeemed......................................... (289,880) (324,005) (1,726,071) (1,083,713) ------------ ------------ ------------ ------------ Net increase (decrease) from Investment capital transactions........................................ (54,270) 366,468 477,814 89,243 ------------ ------------ ------------ ------------ Total net increase (decrease) from capital transactions........................................ $(3,926,261) $(5,198,451) $19,289,539 $(16,725,395) ============ ============ ============ ============ SHARE ACTIVITY INSTITUTIONAL: Shares issued........................................... 839,153 888,774 6,151,853 4,110,419 Reinvestment of distributions........................... 790 1,369 19,474 11,820 Shares redeemed......................................... (1,218,800) (1,435,754) (4,422,430) (5,717,526) ------------ ------------ ------------ ------------ Net increase (decrease) from Institutional shares transactions........................................ (378,857) (545,611) 1,748,897 (1,595,287) ------------ ------------ ------------ ------------ INVESTMENT: Shares issued........................................... 21,641 66,418 194,674 103,878 Reinvestment of distributions........................... 1,318 1,317 10,869 7,978 Shares redeemed......................................... (28,369) (31,731) (161,174) (104,039) ------------ ------------ ------------ ------------ Net increase (decrease) from Investment shares transactions........................................ (5,410) 36,004 44,369 7,817 ------------ ------------ ------------ ------------ Total net increase (decrease) from share transactions........................................ (384,267) (509,607) 1,793,266 (1,587,470) ============ ============ ============ ============ 124
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 4. CAPITAL SHARE TRANSACTIONS (CONTINUED) Transactions in shares of the Funds are summarized below: [Enlarge/Download Table] TAX-FREE MICHIGAN MUNICIPAL INCOME FUND BOND FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 ------------ ------------ ------------ ------------ DOLLAR AMOUNTS INSTITUTIONAL: Shares issued........................................... $32,537,497 $31,815,166 $40,230,617 $ 32,654,052 Reinvestment of distributions........................... 111,411 76,956 47,874 70,141 Shares redeemed......................................... (22,259,614) (29,459,976) (34,650,281) (75,229,474) ------------ ------------ ------------ ------------ Net increase (decrease) from Institutional capital transactions........................................ 10,389,294 2,432,146 5,628,210 (42,505,281) ------------ ------------ ------------ ------------ INVESTMENT: Shares issued........................................... 1,402,556 1,224,420 3,062,612 2,865,534 Reinvestment of distributions........................... 77,686 39,697 129,291 61,445 Shares redeemed......................................... (1,270,150) (526,698) (1,682,977) (976,041) ------------ ------------ ------------ ------------ Net increase (decrease) from Investment capital transactions........................................ 210,092 737,419 1,508,926 1,950,938 ------------ ------------ ------------ ------------ Total net increase (decrease) from capital transactions........................................ $10,599,386 $ 3,169,565 $ 7,137,136 $(40,554,343) ============ ============ ============ ============ SHARE ACTIVITY INSTITUTIONAL: Shares issued........................................... 3,037,158 3,066,893 3,919,445 3,222,928 Reinvestment of distributions........................... 10,424 7,401 4,681 6,941 Shares redeemed......................................... (2,072,941) (2,828,842) (3,382,841) (7,426,189) ------------ ------------ ------------ ------------ Net increase (decrease) from Institutional shares transactions........................................ 974,641 245,452 541,285 (4,196,320) ------------ ------------ ------------ ------------ INVESTMENT: Shares issued........................................... 130,884 116,872 298,776 283,459 Reinvestment of distributions........................... 7,256 3,802 12,655 6,073 Shares redeemed......................................... (118,616) (51,267) (164,507) (97,266) ------------ ------------ ------------ ------------ Net increase (decrease) from Investment shares transactions........................................ 19,524 69,407 146,924 192,266 ------------ ------------ ------------ ------------ Total net increase (decrease) from share transactions........................................ 994,165 314,859 688,209 (4,004,054) ============ ============ ============ ============ 125
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 4. CAPITAL SHARE TRANSACTIONS (CONTINUED) Transactions in shares of the Funds are summarized below: [Enlarge/Download Table] MICHIGAN MUNICIPAL GOVERNMENT MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND --------------------------------- ----------------------------- ----------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998 1997 1998 1997 1998 1997(1) --------------- --------------- ------------- ------------- ------------- ------------- DOLLAR AMOUNTS INSTITUTIONAL: Shares issued............... $ 1,330,695,260 $ 1,151,538,209 $ 559,420,529 $ 279,013,482 $ 525,385,514 $ 328,632,081 Reinvestment of distributions............. 2,064,457 1,693,047 358,257 192,298 5,375,385 2,413,585 Shares redeemed............. (1,113,735,038) (1,162,770,824) (448,191,138) (222,935,437) (458,462,125) (236,421,222) --------------- --------------- ------------- ------------- ------------- ------------- Net increase (decrease) from Institutional capital transactions.... 219,024,679 (9,539,568) 111,587,648 56,270,343 72,298,774 94,624,444 --------------- --------------- ------------- ------------- ------------- ------------- INVESTMENT: Shares issued............... 19,973,693 1,909,306 5,192,300 191,150 124,496 4,460 Reinvestment of distributions............. 136,660 38,914 10,702 13,697 1,547 63 Shares redeemed............. (17,561,598) (1,572,981) (5,146,223) (697,468) (34,968) (2,510) --------------- --------------- ------------- ------------- ------------- ------------- Net increase (decrease) from Investment capital transactions............ 2,548,755 375,239 56,779 (492,621) 91,075 2,013 --------------- --------------- ------------- ------------- ------------- ------------- Total net increase (decrease) from capital transactions............ $ 221,573,434 $ (9,164,329) $ 111,644,427 $ 55,777,722 $ 72,389,849 $ 94,626,457 =============== =============== ============= ============= ============= ============= SHARE ACTIVITY INSTITUTIONAL: Shares issued............... 1,330,695,260 1,151,538,209 559,420,529 279,013,482 525,385,514 328,632,081 Reinvestment of distributions............. 2,064,457 1,693,047 358,257 192,298 5,375,385 2,413,585 Shares redeemed............. (1,113,735,038) (1,162,770,823) (448,191,138) (222,935,438) (458,462,125) (236,421,222) --------------- --------------- ------------- ------------- ------------- ------------- Net increase (decrease) from Institutional shares transactions..... 219,024,679 (9,539,567) 111,587,648 56,270,342 72,298,774 94,624,444 --------------- --------------- ------------- ------------- ------------- ------------- INVESTMENT: Shares issued............... 19,973,693 1,909,306 5,192,299 191,151 124,496 4,460 Reinvestment of distributions............. 136,660 38,916 10,702 13,697 1,547 63 Shares redeemed............. (17,561,598) (1,572,981) (5,146,223) (697,467) (34,968) (2,510) --------------- --------------- ------------- ------------- ------------- ------------- Net increase (decrease) from Investment shares transactions............ 2,548,755 375,241 56,778 (492,619) 91,075 2,013 --------------- --------------- ------------- ------------- ------------- ------------- 221,573,434 (9,164,326) 111,644,426 55,777,723 72,389,849 94,626,457 =============== =============== ============= ============= ============= ============= --------------- (1) From the period June 2, 1997 (commencement of operations) through December 31, 1997. 126
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 5. PURCHASES AND SALES OF SECURITIES The cost of purchases and proceeds from sales of securities, excluding short-term investments, for the year ended December 31, 1998 were as follows: [Download Table] FUNDS PURCHASES SALES ----- ------------ ------------ Growth and Income Fund................. $184,514,729 $154,544,061 Small Company Growth Fund................. 400,632,671 301,355,298 International Growth Fund................. 116,319,221 140,654,758 Index Equity Fund...... 96,162,138 80,203,220 Short Term Bond Fund... 93,066,275 100,991,593 Intermediate Bond Fund................. 825,713,060 781,848,961 Income Fund............ 276,195,724 247,308,500 Limited Term Tax-Free Fund................. 12,761,283 21,621,733 Intermediate Tax-Free Fund................. 126,889,869 110,781,032 Tax-Free Income Fund... 73,084,065 63,254,521 Michigan Municipal Bond Fund................. 67,993,922 61,060,945 6. FEDERAL INCOME TAX INFORMATION (UNAUDITED) LONG TERM CAPITAL GAINS DISTRIBUTIONS: During the year ended December 31, 1998, the following Funds declared long-term capital distributions in the following amounts: [Download Table] FUNDS AMOUNT ----- ----------- Growth and Income Fund............... $60,688,954 Small Company Growth Fund............ 75,870,260 International Growth Fund............ 44,306,551 Index Equity Fund.................... 291,970 Income Fund.......................... 2,384,670 Limited Term Tax-Free Fund........... 19,942 Intermediate Tax-Free Fund........... 160,372 Tax-Free Income Fund................. 303,502 Michigan Municipal Bond Fund......... 80,758 DIVIDEND RECEIVED DEDUCTION: For corporate shareholders the following percentages of the total ordinary income distributions paid during the fiscal year ended December 31, 1998, qualify for the corporate dividends received deductions: [Download Table] FUNDS PERCENTAGE ----- ---------- Growth and Income Fund................. 68.84% Small Company Growth Fund.............. 80.55% Index Equity Fund...................... 99.99% TAX-EXEMPT INCOME DISTRIBUTIONS: During the fiscal year ended December 31, 1998, the following Funds declared tax-exempt income distributions in the following amounts: [Download Table] FUNDS AMOUNT ----- ----------- Limited Term Tax-Free Fund........... $ 1,351,944 Intermediate Term Tax-Free Fund...... 12,083,528 Tax-Free Income Fund................. 5,192,797 Michigan Municipal Bond Fund......... 4,974,008 Michigan Municipal Money Market Fund............................... 9,427,033 7. RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES The Growth and Income Fund and the International Growth Fund can purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include devaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers. 8. CONCENTRATION OF CREDIT RISK The Michigan Municipal Money Market Fund and Michigan Municipal Bond Fund invest primarily in debt obligations issued by the State of Michigan and its respective political subdivisions, agencies and public authorities to obtain funds for various public purposes. The Funds are more susceptible to economic and political factors adversely affecting issuers of Michigan specific municipal securities than are municipal bond funds that are not concentrated in these issuers to the same extent. The Limited Term Tax-Free Fund, Intermediate Tax-Free Fund, Tax-Free Income Fund, Michigan Municipal Bond Fund and the Michigan Municipal Money Market Fund had the following concentrations by industry 127
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THE KENT NOTES TO FINANCIAL STATEMENTS (CONTINUED) FUNDS DECEMBER 31, 1998 sector at December 31, 1998 (as a percentage of total investments): [Download Table]  MICHIGAN LIMITED MICHIGAN MUNICIPAL TERM INTERMEDIATE TAX-FREE MUNICIPAL MONEY TAX-FREE TAX-FREE INCOME BOND MARKET FUND FUND FUND FUND FUND -------- ------------ -------- --------- --------- Airport.............. 1.65% 1.63% 2.64% 1.40% 1.37% Development.......... 10.94% 3.62% 2.69% 6.80% 55.78% Education............ 13.13% 5.81% 7.06% 4.36% 4.37% Facilities........... 1.57% 5.12% 2.60% 2.69% 0.52% General Obligation... 21.98% 31.05% 27.98% 10.64% 5.14% Housing Development........ -- -- 1.00% 2.25% 5.48% Law Enforcement...... -- -- -- 1.95% -- Medical.............. 11.68% 1.58% 9.19% 19.10% 3.85% Multifamily Housing............ -- -- 1.03% -- 1.33% Mutual Funds......... 1.18% 0.36% 0.23% 0.54% 0.17% Nursing Homes........ -- -- -- 1.34% -- Pollution............ 7.46% 6.07% 2.04% 1.06% 5.98% Public Improvements....... 3.28% -- -- -- -- Power................ -- 9.61% 11.63% 4.08% -- School District...... 6.59% 12.88% 8.35% 33.97% 7.08% Sewer................ -- -- -- 0.45% -- Single Family Housing............ 9.51% 0.88% -- -- 0.37% Transportation....... 7.86% 9.35% 10.92% 5.13% 0.63% Utilities............ 3.17% 8.14% 9.33% 3.38% 4.10% Water................ -- 3.90% 3.31% 0.86% 3.84% ----- ----- ----- ----- ----- 100% 100% 100% 100% 100% ===== ===== ===== ===== ===== 9. COMMON TRUST FUND CONVERSIONS: On December 3, 1998, the net assets of certain common trust funds managed by the Investment Adviser were exchanged in a tax-free conversion for Institutional shares of the corresponding Kent Funds. The following is a summary of shares issued, net assets converted, net asset value per share and unrealized appreciation of assets acquired as of the conversion date: [Download Table] NET ASSET SHARES NET ASSETS VALUE PER UNREALIZED ISSUED CONVERTED SHARE APPRECIATION ---------- ----------- ------------ ------------ Growth and Income Fund............... 3,222,690 $54,431,232 $16.89 $17,190,675 Intermediate Bond Fund............... 9,258,351 93,787,091 10.13 3,684,581 Intermediate Tax- Free Fund.......... 1,042,405 11,247,552 10.79 405,284 10. SUBSEQUENT EVENT: On November 18, 1998, the Board of Trustees approved a Plan of Reorganization whereby the assets and liabilities of the Limited Term Tax-Free Fund would be transferred to the Intermediate Tax-Free Fund. Proxy materials will be mailed to shareholders of the Limited Term Tax-Free Fund seeking approval of the proposed reorganization. If the reorganization is approved by the shareholders of the Limited Term Tax-Free Fund, shareholders of the Limited Term Tax-Free Fund will become shareholders of the Intermediate Tax-Free Fund upon consummation of the reorganization. 128
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THE KENT GROWTH AND INCOME FUND FUNDS FINANCIAL HIGHLIGHTS  INSTITUTIONAL SHARES [Enlarge/Download Table] YEAR ENDED DECEMBER 31, -------------------------------------------------------- 1998 1997 1996 1995 1994 -------- -------- -------- -------- -------- Net asset value, beginning of period....................... $ 15.55 $ 13.90 $ 13.25 $ 10.50 $ 10.91 -------- -------- -------- -------- -------- Income from Investment Operations: Net investment income.................................... 0.13 0.25 0.30 0.33 0.31 Net realized and unrealized gains (losses) on investments, futures contracts and foreign currency translations........................................... 4.03 3.04 2.16 3.28 (0.26) -------- -------- -------- -------- -------- Total Income from Investment Operations.................... 4.16 3.29 2.46 3.61 0.05 -------- -------- -------- -------- -------- Less Dividends and Distributions from: Net investment income.................................... (0.13) (0.25) (0.30) (0.33) (0.31) In excess of net investment income....................... (0.01) -- -- -- ** Net realized gains on investments and futures contracts.............................................. (1.54) (1.39) (1.51) (0.53) (0.15) -------- -------- -------- -------- -------- Total Dividends and Distributions...................... (1.68) (1.64) (1.81) (0.86) (0.46) -------- -------- -------- -------- -------- Net change in net asset value.............................. 2.48 1.65 0.65 2.75 (0.41) -------- -------- -------- -------- -------- Net asset value, end of period............................. $ 18.03 $ 15.55 $ 13.90 $ 13.25 $ 10.50 ======== ======== ======== ======== ======== Total return............................................... 28.07% 24.14% 19.47% 34.91% 0.51% Ratios/Supplemental Data: Net Assets, end of period (000's).......................... $827,828 $697,973 $500,857 $401,371 $308,825 Ratio of expenses to average net assets.................. 0.93% 0.92% 0.95% 0.94% 0.98% Ratio of net investment income to average net assets..... 0.77% 1.61% 2.18% 2.73% 3.04% Ratio of expenses to average net assets*................. 0.94% 0.93% 0.95% *** *** Portfolio turnover rate(1)............................... 20% 88% 39% 58% 28% --------------- [Download Table] * During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio would have been as indicated. ** Amount is less than $0.005. *** During the period, there were no waivers and/or reimbursements. (1) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See Notes to Financial Statements. 129
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THE KENT GROWTH AND INCOME FUND FUNDS FINANCIAL HIGHLIGHTS  INVESTMENT SHARES [Enlarge/Download Table] YEAR ENDED DECEMBER 31, -------------------------------------------------- 1998 1997 1996 1995 1994 ------- ------- ------- ------- ------ Net asset value, beginning of period........................ $ 15.44 $ 13.81 $ 13.19 $ 10.46 $10.87 ------- ------- ------- ------- ------ Income from Investment Operations: Net investment income..................................... 0.08 0.21 0.26 0.30 0.32 Net realized and unrealized gains (losses) on investments, futures contracts and foreign currency translations..... 4.00 3.02 2.15 3.26 (0.27) ------- ------- ------- ------- ------ Total Income from Investment Operations..................... 4.08 3.23 2.41 3.56 0.05 ------- ------- ------- ------- ------ Less Dividends and Distributions from: Net investment income..................................... (0.08) (0.21) (0.26) (0.30) (0.31) In excess of net investment income........................ (0.02) -- (0.02) -- ** Net realized gains on investments and futures contracts... (1.54) (1.39) (1.51) (0.53) (0.15) ------- ------- ------- ------- ------ Total Dividends and Distributions....................... (1.64) (1.60) (1.79) (0.83) (0.46) ------- ------- ------- ------- ------ Net change in net asset value............................... 2.44 1.63 0.62 2.73 (0.41) ------- ------- ------- ------- ------ Net asset value, end of period.............................. $ 17.88 $ 15.44 $ 13.81 $ 13.19 $10.46 ======= ======= ======= ======= ====== Total return(1)............................................. 27.68% 23.89% 19.14% 34.61% 0.50% Ratios/Supplemental Data: Net Assets, end of period (000's)........................... $50,458 $35,343 $15,063 $11,079 $8,005 Ratio of expenses to average net assets................... 1.18% 1.17% 1.09% 1.18% 0.98% Ratio of net investment income to average net assets...... 0.50% 1.31% 1.77% 2.48% 3.03% Ratio of expenses to average net assets*.................. 1.19% 1.18% 1.09% *** *** Portfolio turnover rate(2)................................ 20% 88% 39% 58% 28% --------------- [Download Table] * During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratio would have been as indicated. ** Amount is less than $0.005. *** During the period, there were no waivers and/or reimbursements. (1) Calculation does not include sales charge. Effective May 1, 1997, the Investment Shares were not assessed a sales charge. (2) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See Notes to Financial Statements. 130
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