LKCM
FUNDS
LKCM Small Cap Equity Fund
LKCM Small-Mid Cap Equity Fund
LKCM Equity Fund
LKCM Balanced Fund
LKCM Fixed Income Fund
Annual Report
December 31, 2012
Dear Fellow Shareholders:
We report the following performance information for the LKCM Funds:
Funds | Inception Dates | NAV @ 12/31/12 | Net Expense Ratio*, ** | Gross Expense Ratio** | One Year Total Return Ended 12/31/12 | Five Year Average Annualized Return Ended 12/31/12 | Ten Year Average Annualized Return Ended 12/31/12 | Avg. Annual Total Return Since Incept. | ||||||||||||||||||||||||
LKCM Equity Fund – | ||||||||||||||||||||||||||||||||
Institutional Class | 1/3/96 | $ | 17.62 | 0.81 | % | 1.00 | % | 15.69 | % | 4.04 | % | 7.83 | % | 7.47 | % | |||||||||||||||||
S&P 500 Index1 | 16.00 | % | 1.66 | % | 7.10 | % | 6.95 | % | ||||||||||||||||||||||||
LKCM Small Cap Equity Fund – | ||||||||||||||||||||||||||||||||
Institutional Class | 7/14/94 | $ | 22.69 | N/A | 0.96 | % | 9.74 | % | 4.24 | % | 10.20 | % | 10.71 | % | ||||||||||||||||||
Russell 2000 Index2 | 16.35 | % | 3.56 | % | 9.72 | % | 8.40 | % | ||||||||||||||||||||||||
LKCM Small Cap Equity Fund – | ||||||||||||||||||||||||||||||||
Adviser Class | 6/5/03 | $ | 22.07 | N/A | 1.21 | % | 9.45 | % | 3.97 | % | N/A | 9.25 | % | |||||||||||||||||||
Russell 2000 Index2 | 16.35 | % | 3.56 | % | N/A | 8.10 | % | |||||||||||||||||||||||||
LKCM Small-Mid Cap Equity Fund – | ||||||||||||||||||||||||||||||||
Institutional Class | 5/2/11 | $ | 9.68 | 1.01 | % | 2.15 | % | 9.26 | % | N/A | N/A | -1.92 | % | |||||||||||||||||||
Russell 2500 Index3 | 17.88 | % | N/A | N/A | 1.64 | % | ||||||||||||||||||||||||||
LKCM Balanced Fund | 12/30/97 | $ | 16.11 | 0.80 | % | 1.14 | % | 12.20 | % | 4.73 | % | 7.21 | % | 5.46 | % | |||||||||||||||||
S&P 500 Index1 | 16.00 | % | 1.66 | % | 7.10 | % | 4.47 | % | ||||||||||||||||||||||||
Barclays U.S. Intermediate | ||||||||||||||||||||||||||||||||
Government/Credit Bond Index4 | 3.89 | % | 5.18 | % | 4.62 | % | 5.58 | % | ||||||||||||||||||||||||
LKCM Fixed Income Fund | 12/30/97 | $ | 11.23 | 0.65 | % | 0.72 | % | 5.44 | % | 5.81 | % | 4.67 | % | 5.30 | % | |||||||||||||||||
Barclays U.S. Intermediate | ||||||||||||||||||||||||||||||||
Government/Credit Bond Index4 | 3.89 | % | 5.18 | % | 4.62 | % | 5.58 | % |
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM. The Funds impose a 1.00% redemption fee on shares held less than 30 days. If reflected, the fee would reduce performance shown.
* | The Adviser has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund to maintain designated expense ratios through April 30, 2013. Investment performance reflects fee waivers, if any, in effect. In the absence of such waivers, total return would be reduced. Investment performance is based upon the net expense ratio. |
** | Expense ratios above are as of December 31, 2011, the Funds’ prior fiscal year end, as reported in the Funds’ most recent prospectus. Expense ratios reported for other periods in the financial highlights of this report may differ. |
1 | The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. |
2 | The Russell 2000 Index is an unmanaged index which measures the performance of the 2,000 smallest companies in the Russell 3000 Index. |
3 | The Russell 2500 Index is an unmanaged index which measures the performance of the 2,500 smallest companies in the Russell 3000 Index. |
4 | The Barclays U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued. |
Note: These indices defined above are not available for direct investment.
2012 Review
In many ways, the storyline of 2012 was the myopic focus on “tail risk,” which generally refers to events that are not likely, but are possible. A year ago, the list of tail risks included a hard economic landing in China, countries being expelled from the European Monetary Union, war in the Middle East and a disastrous domestic fiscal crunch. While none of these events came to pass, there was continuous concern of calamity around the next corner. Not unexpectedly, a pattern developed in the equity market where a relief rally ensued as the specter of each crisis faded. With the looming debt ceiling debate and sequestration onset scheduled in the first quarter of 2013, this pattern appears likely to continue in the short-run.
Early in 2012, global manufacturing data were better than expected, which helped fuel a strong equity market rally during the first quarter. The second quarter of 2012 was marked by a stall in manufacturing data, a cut in Chinese economic growth expectations and an increasing probability that Greece would exit the European Economic and Monetary Union. Last year marked the third consecutive year in which the equity market weakened during the summer over concern of sagging economic growth. A combination of further monetary easing by the Federal Reserve Bank and the European Central Bank in the third quarter of 2012 helped increase equity prices.
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Beginning in the fall, our research revealed an increasing tendency for companies to delay significant capital decisions until resolution of the “fiscal cliff”. Although the most recent readings of manufacturing data are mixed, our research indicates we may see positive signs that manufacturing activity is improving early in 2013. We believe there are already early signs of a potential mini-renaissance in U.S. manufacturing as companies begin to bring many of these jobs back onshore. The shift to Asian manufacturing in the 1990’s was driven by cheaper labor and occurred at a time when oil was closer to $25 per barrel rather than $100 per barrel. Companies are citing time to market, quality, high energy costs and lower labor contribution to products as the impetus to bring manufacturing back to the United States.
We believe the quasi-resolution of the fiscal cliff reflected the current Washington D.C. model to reach for the lowest common denominator while deferring substantive progress. While a bevy of tax changes prevented an increase in tax rates across the board, Congress fell short of addressing spending cuts including sequestration. We believe these crucial items may instead be held hostage to the federal debt ceiling debate which is expected to occur over the first few months of 2013.
2013 Outlook
We believe the global economy is entering 2013 with a slight increase in momentum. The increased activity appears to be driven by the corporate sector which slowed in the middle of 2012 as concerns over the EuroZone and China intensified. Domestically, the corporate sector has been gripped by uncertainty around the Presidential election, fiscal cliff and tax issues. Policy actions in China have bolstered its economic growth forecast for 2013 and the European Central Bank’s actions in the second half of last year appear to have temporarily arrested further deterioration in the economic outlook for the EuroZone. Offsetting the benefit of the modest uptick in global growth are the home-grown issues of higher payroll taxes and a patchwork of additional tax increases. Our current forecast suggests that real Gross Domestic Product will grow between 2.0% and 2.4% in 2013, although we expect the growth to be back-end loaded.
We expect the negative real interest rate environment will remain an economic tailwind in 2013. Our base case is that the Federal Reserve’s conditional thresholds for higher interest rates of unemployment below 6.5% and inflation above 2.5% will not be met in 2013. This is not a deviation from the consensus forecast of many market observers. However, we stand apart from consensus in that we would not be surprised if capital markets began to focus more intently on this issue and discount higher rates towards the end of 2013. Current data such as average hourly earnings, excess manufacturing capacity and low velocity of the money stock suggest that inflation is not a near-term threat. With global growth accelerating, particularly with better economic data from China, we believe inflation expectations could rise in the marketplace during 2013 even though there are few indications of inflationary pressure today.
Although we have previously mentioned housing as a positive force for economic growth, we remain in the early stages of this development. We believe home prices have stabilized and begun to move higher. The monthly supply of new homes was approximately 4.9 months at year-end, well below the long-term average. The 30-year conventional mortgage rate rests at all-time lows. In our view, housing has the potential to add 1.0% growth to Gross Domestic Product in 2013. While this may represent a best case scenario, we believe there is little question that housing will positively impact the economy in 2013 to a greater degree than 2012.
Housing continues to positively impact consumer sentiment, and the wealth effect of housing helps sustain our continued outlook for positive consumer spending. Examining the domestic economy, we find that there has been little net deleveraging. However, there has been a significant shift of leverage from the private to the public sector. This has contributed to robust consumer spending, although the 2% payroll tax cut expiration on January 1, 2013, translates directly into a tax increase on discretionary income for a majority of paycheck earners in the country. Consistent with the nation’s approach to many difficult issues, Congress opted to bolster the consumer at the expense of the nation’s fiscal situation. However, this is largely an exercise in semantics. The private sector remains on the hook for public debt and ultimately pays the price through a combination of higher taxes, reduced services or inflation.
Although corporate profits registered a new high in 2012, we believe that it was valuation expansion which drove the equity market return. Earnings for the Standard & Poor’s 500 Index grew an estimated 3.0% in 2012 compared to the index return of 16.0% for the year. Although the Standard & Poor’s 500 Index’s earnings multiple of approximately 13.8X at year-end, based on trailing twelve month earnings, represents some multiple expansion in 2012, we are comfortable with the current market valuation. Our forecast for 2013 is for higher earnings growth, but less multiple expansion compared with 2012. The greatest risk to our outlook would be disappointing corporate earnings resulting from a combination of weaker consumer spending than expected, follow-on effects of the fiscal cliff debate and a surge in inflation.
We continue to anticipate a significant reallocation from bond funds into equity funds. Over the past four years, investors have plowed more than $1 trillion into bond mutual funds while withdrawing $500 billion from domestically oriented equity mutual funds. We believe this action is simply a reflection of stock price action from October 2007 through the March 2009 low in the equity market. However, since January 2009, the Standard & Poor’s 500 Index has posted a 14% compounded annual return, or roughly double the average of the past fifty years. In contrast, the compounded annual return on 10-Year U.S. Treasury bonds is 4.0% over this same time period. Given our view that equity valuations are attractive and bond valuations are less attractive, we maintain our cautious stance on the bond market. When rates begin to rise, there is likely to be a large asset allocation shift from bonds to equities. This may not be a 2013 event, but if our view on growing inflationary concerns unfolds in 2013, we think the markets will move meaningfully closer to reversing the equities-to-bonds money flow.
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LKCM Equity Fund
The LKCM Equity Fund performed in line with the S&P 500 Index for the year ended December 31, 2012. The Fund’s performance relative to the benchmark benefited from stock selection in the Consumer Discretionary, Healthcare and Materials sectors, while stock selection in the Financials and Information Technology sectors detracted from the Fund’s relative performance. Our decision to overweight the Consumer Discretionary sector and underweight the Energy sector also enhanced the Fund’s performance relative to the benchmark, but our underweight position in the Financials sector detracted from the Fund’s relative performance. We believe the Fund’s concentration on quality companies can provide an opportunity to add value for the Fund and its shareholders in the upcoming year.
Total Return Year Ended December 31, 2012 | ||||
LKCM Equity Fund | 15.69 | % | ||
S&P 500 Index | 16.00 | % |
LKCM Small Cap Equity Fund
The LKCM Small Cap Equity Fund underperformed the Russell 2000 Index during the year ended December 31, 2012. The Fund’s underperformance relative to the benchmark primarily resulted from our stock selection decisions, as our sector allocation decisions benefited the Fund’s returns. Stock selection in the Consumer Discretionary, Financials and Information Technology sectors detracted from the Fund’s relative performance, while our stock selection in the Healthcare sector benefited the Fund’s relative performance. Our decision to overweight the Consumer Discretionary sector benefited the Fund’s relative performance. Overall, we believe 2012 was a year in which the market was not interested in the companies identified by our small cap investment strategy, as our investments did not appreciate to the same degree as the benchmark.
Total Return Year Ended December 31, 2012 | ||||
LKCM Small Cap Equity Fund – Institutional Class | 9.74 | % | ||
Russell 2000 Index | 16.35 | % |
LKCM Small-Mid Cap Equity Fund
The LKCM Small-Mid Cap Equity Fund underperformed the Russell 2500 Index during the year ended December 31, 2012. The Fund’s underperformance relative to the benchmark primarily resulted from our stock selection decisions. Stock selection in the Energy, Industrials, Materials and Financials sectors detracted from the Fund’s relative performance, while our stock selection in the Information Technology sector slightly benefited the Fund’s relative performance. Our sector allocation decisions did not have a meaningful impact on the Fund’s performance relative to the benchmark. Overall, we believe 2012 was a year in which the market was not interested in the companies identified by our small-mid cap investment strategy, as our investments did not appreciate to the same degree as the benchmark.
Total Return Year Ended December 31, 2012 | ||||
LKCM Small-Mid Cap Equity Fund | 9.26 | % | ||
Russell 2500 Index | 17.88 | % |
LKCM Balanced Fund
The LKCM Balanced Fund’s blend of equity and fixed income securities, along with stock selection, benefited the Fund’s performance during the year ended December 31, 2012. Our stock selection decisions in the Healthcare, Consumer Discretionary and Materials sectors were positive to the Fund’s relative performance, while stock selection decisions in the Financials, Industrials and Information Technology sectors detracted from the Fund’s relative performance. The Fund continued to focus its holdings of fixed income securities on investment grade corporate bonds, which generated income for the Fund and helped reduce the overall volatility of the Fund’s performance during the year.
Total Return Year Ended December 31, 2012 | ||||
LKCM Balanced Fund | 12.20 | % | ||
S&P 500 Index | 16.00 | % | ||
Barclays U.S. Intermediate Government/Credit Bond Index | 3.89 | % |
LKCM Fixed Income Fund
The LKCM Fixed Income Fund outperformed its benchmark, the Barclays Intermediate Government/Credit Bond Index, during the year ended December 31, 2012, advancing 5.44% versus 3.89% for the benchmark. During the year, the corporate market continued to be bolstered by strong balance sheets and cash flow metrics and investors searched for yield, causing spreads relative to Treasuries to tighten further and yields to decline throughout much of the year. The Fund’s primary corporate bond focus, along with an overweighting in the
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Financials sector, were additive to relative performance as the healing of the Financials sector continued and U.S. Treasury and Agency issues lagged despite the Federal Reserve’s extraordinary quantitative easing measures. The Fund was defensively postured with a 3.6 year average duration relative to the 3.9 average duration of the benchmark, which detracted from the Fund’s relative performance as longer duration issues continued to outperform their shorter duration counterparts. We believe the Fund’s investment emphasis on a diversified portfolio of high-quality, short-to-intermediate duration corporate bonds has the Fund well-positioned in this increasingly dynamic market environment.
Total Return Year Ended December 31, 2012 | ||||
LKCM Fixed Income Fund | 5.44 | % | ||
Barclays U.S. Intermediate Government/Credit Bond Index | 3.89 | % |
J. Luther King, Jr., CFA, CIC
February 1, 2013
The information provided herein represents the opinion of J. Luther King, Jr., CFA, CIC and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Please refer to the Schedule of Investments found on pages 15-27 of the report for more information on Fund holdings. Fund holdings and sector allocations are subject to change and are not recommendations to buy or sell any securities.
Mutual fund investing involves risk. Principal loss is possible. Past performance is not a guarantee of future results. Small and medium capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure, and, historically, their stocks have experienced a greater degree of market volatility than stocks on average. Investments in debt securities typically decrease in value when interest rates rise. This risk is greater for longer-term debt securities. These risks are discussed in the Fund’s summary and statutory prospectuses.
Current and future portfolio holdings are subject to risk.
Diversification does not assure a profit nor protect against loss in a declining market.
Earnings growth is not a measure of the Fund’s future performance.
Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.
Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.
Earnings multiple: The earnings multiple of a stock, also called the price/earnings (P/E) ratio, is the share price divided by the earnings per share. The earnings multiple is often based on the prior twelve months of earnings data.
Must be preceded or accompanied by a prospectus.
Quasar Distributors, LLC, distributor.
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PERFORMANCE:
The following information illustrates the historical performance of LKCM Small Cap Equity Fund as of December 31, 2012 compared to the Fund’s representative market indices.
Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.
An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2012)
Past 1 Year | Past 5 Years(1) | Past 10 Years(1) | Since Inception(1)(2) | |||||||||||||
LKCM Small Cap Equity Fund – Institutional Class | 9.74 | % | 4.24 | % | 10.20 | % | 10.71 | % | ||||||||
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Russell 2000 Index | 16.35 | % | 3.56 | % | 9.72 | % | 8.40 | % | ||||||||
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Lipper Small-Cap Core Funds Index | 15.94 | % | 3.96 | % | 9.70 | % | 9.55 | % | ||||||||
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(1) | Annualized. |
(2) | July 14, 1994 |
A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL CAP EQUITY FUND – INSTITUTIONAL CLASS (for the ten years ended December 31, 2012)
The Russell 2000 Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000 Index.
The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.
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AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2012)
Past 1 Year | Past 3 Years(1) | Past 5 Years(1) | Since Inception(1)(2) | |||||||||||||
LKCM Small Cap Equity Fund – Adviser Class | 9.45 | % | 14.80 | % | 3.97 | % | 9.25 | % | ||||||||
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Russell 2000 Index | 16.35 | % | 12.25 | % | 3.56 | % | 8.10 | % | ||||||||
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Lipper Small-Cap Core Funds Index | 15.94 | % | 11.92 | % | 3.96 | % | 8.89 | % | ||||||||
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(1) | Annualized. |
(2) | June 5, 2003 |
A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL CAP EQUITY FUND – ADVISER CLASS (for the period from June 5, 2003 through December 31, 2012)
The Russell 2000 Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000 Index.
The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.
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PERFORMANCE:
The following information illustrates the historical performance of LKCM Small-Mid Cap Equity Fund as of December 31, 2012 compared to the Fund’s representative market indices.
Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.
An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2012)
Past 1 Year | Since Inception(1)(2) | |||||||
LKCM Small-Mid Cap Equity Fund – Institutional Class | 9.26 | % | -1.92 | % | ||||
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Russell 2500 Index | 17.88 | % | 1.64 | % | ||||
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Lipper Small-Cap Core Funds Index | 15.94 | % | 0.67 | % | ||||
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(1) | Annualized. |
(2) | May 2, 2011 |
A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL-MID CAP EQUITY FUND – INSTITUTIONAL CLASS (for the period from May 2, 2011 to December 31, 2012)
The Russell 2500 Index is an unmanaged index consisting of the 2,500 smallest companies in the Russell 3000 Index.
The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.
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PERFORMANCE:
The following information illustrates the historical performance of LKCM Equity Fund as of December 31, 2012 compared to the Fund’s representative market indices.
Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.
An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2012)
Past 1 Year | Past 5 Years(1) | Past 10 Years(1) | Since Inception(1)(2) | |||||||||||||
LKCM Equity Fund – Institutional Class | 15.69 | % | 4.04 | % | 7.83 | % | 7.47 | % | ||||||||
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S&P 500 Index | 16.00 | % | 1.66 | % | 7.10 | % | 6.95 | % | ||||||||
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Lipper Large-Cap Core Funds Index | 15.32 | % | 0.97 | % | 6.13 | % | 6.03 | % | ||||||||
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(1) | Annualized. |
(2) | January 3, 1996 |
A HYPOTHETICAL $10,000 INVESTMENT IN LKCM EQUITY FUND – INSTITUTIONAL CLASS (for the ten years ended December 31, 2012)
The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Lipper Large-Cap Core Funds Index is an index of large cap core mutual funds tracked by Lipper, Inc.
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PERFORMANCE:
The following information illustrates the historical performance of LKCM Balanced Fund as of December 31, 2012 compared to the Fund’s representative market indices.
Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.
An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2012)
Past 1 Year | Past 5 Years(1) | Past 10 Years(1) | Since Inception(1)(2) | |||||||||||||
LKCM Balanced Fund | 12.20 | % | 4.73 | % | 7.21 | % | 5.46 | % | ||||||||
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Barclays U.S. Intermediate Government/Credit Bond Index | 3.89 | % | 5.18 | % | 4.62 | % | 5.58 | % | ||||||||
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S&P 500 Index | 16.00 | % | 1.66 | % | 7.10 | % | 4.47 | % | ||||||||
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Lipper Mixed-Asset Target Allocation Growth Funds Index | 13.67 | % | 2.65 | % | 6.96 | % | 5.30 | % | ||||||||
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(1) | Annualized. |
(2) | December 30, 1997 |
A HYPOTHETICAL $10,000 INVESTMENT IN LKCM BALANCED FUND (for the ten years ended December 31, 2012)
The Barclays U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued.
The Lipper Mixed-Asset Target Allocation Growth Funds Index is an unmanaged index consisting of funds tracked by Lipper, Inc. that, by portfolio practice, maintain a mix of between 60%-80% equity securities, with the remainder invested in bonds, cash and cash equivalents.
The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic
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PERFORMANCE:
The following information illustrates the historical performance of LKCM Fixed Income Fund as of December 31, 2012 compared to the Fund’s representative market indices.
Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.
An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2012)
Past 1 Year | Past 5 Years(1) | Past 10 Years(1) | Since Inception(1)(2) | |||||||||||||
LKCM Fixed Income Fund | 5.44 | % | 5.81 | % | 4.67 | % | 5.30 | % | ||||||||
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Barclays U.S. Intermediate Government/Credit Bond Index | 3.89 | % | 5.18 | % | 4.62 | % | 5.58 | % | ||||||||
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Lipper Short Intermediate Investment-Grade Debt Funds Index | 5.01 | % | 4.72 | % | 4.08 | % | 4.88 | % | ||||||||
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(1) | Annualized. |
(2) | December 30, 1997 |
A HYPOTHETICAL $10,000 INVESTMENT IN LKCM FIXED INCOME FUND (for the ten years ended December 31, 2012)
The Barclays U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued.
The Lipper Short Intermediate Investment-Grade Debt Funds Index is an index of short intermediate investment grade mutual funds tracked by Lipper, Inc.
11
LKCM Funds Expense Example — December 31, 2012
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (7/1/12-12/31/12).
ACTUAL EXPENSES
The first line of the tables below provides information about actual account values and actual expenses. Although the Funds charge no sales load, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently a $15.00 fee is charged by the Funds’ transfer agent. You will be charged a redemption fee equal to 1.00% of the net amount of the redemption if you redeem your shares of the LKCM Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced and Fixed Income Funds within 30 days of purchase. To the extent the Funds invest in shares of other investment companies as part of their investment strategies, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Funds invest in addition to the expenses of the Funds. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the example below. The example below includes management fees, registration fees and other expenses. However, the example below does not include portfolio trading commissions and related expenses and other extraordinary expenses as determined under generally accepted accounting principles. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLES FOR COMPARISON PURPOSES
The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactions costs were included, your costs would have been higher.
LKCM Small Cap Equity Fund – Institutional Class | ||||||||||||
Beginning Account Value 7/1/12 | Ending Account Value 12/31/12 | Expenses Paid During Period* 7/1/12 – 12/31/12 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,042.20 | $ | 4.83 | ||||||
Hypothetical (5% return before expense) | $ | 1,000.00 | $ | 1,020.41 | $ | 4.77 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 0.94%, multiplied by the average account value over the period,multiplied by 184/366 to reflect the one-half year period. |
LKCM Small Cap Equity Fund – Adviser Class | ||||||||||||
Beginning Account Value 7/1/12 | Ending Account Value 12/31/12 | Expenses Paid During Period* 7/1/12 – 12/31/12 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,040.80 | $ | 6.10 | ||||||
Hypothetical (5% return before expense) | $ | 1,000.00 | $ | 1,019.15 | $ | 6.04 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 1.19%, multiplied by the average account value over the period,multiplied by 184/366 to reflect the one-half year period. |
12
LKCM Small-Mid Cap Equity Fund | ||||||||||||
Beginning Account Value 7/1/12 | Ending Account Value 12/31/12 | Expenses Paid During Period* 7/1/12 – 12/31/12 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,034.20 | $ | 5.11 | ||||||
Hypothetical (5% return before expense) | $ | 1,000.00 | $ | 1,020.11 | $ | 5.08 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 1.00%, multiplied by the average account value over the period,multiplied by 184/366 to reflect the one-half year period. |
LKCM Equity Fund | ||||||||||||
Beginning Account Value 7/1/12 | Ending Account Value 12/31/12 | Expenses Paid During Period* 7/1/12 – 12/31/12 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,084.10 | $ | 4.19 | ||||||
Hypothetical (5% return before expense) | $ | 1,000.00 | $ | 1,021.11 | $ | 4.06 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 0.80%, multiplied by the average account value over the period,multiplied by 184/366 to reflect the one-half year period. |
LKCM Balanced Fund | ||||||||||||
Beginning Account Value 7/1/12 | Ending Account Value 12/31/12 | Expenses Paid During Period* 7/1/12 – 12/31/12 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,046.70 | $ | 4.12 | ||||||
Hypothetical (5% return before expense) | $ | 1,000.00 | $ | 1,021.11 | $ | 4.06 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 0.80%, multiplied by the average account value over the period,multiplied by 184/366 to reflect the one-half year period. |
LKCM Fixed Income Fund | ||||||||||||
Beginning Account Value 7/1/12 | Ending Account Value 12/31/12 | Expenses Paid During Period* 7/1/12 – 12/31/12 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,025.40 | $ | 3.31 | ||||||
Hypothetical (5% return before expense) | $ | 1,000.00 | $ | 1,021.87 | $ | 3.30 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 0.65%, multiplied by the average account value over the period,multiplied by 184/366 to reflect the one-half year period. |
13
ALLOCATION OF PORTFOLIO HOLDINGS — LKCM Funds — December 31, 2012
Percentages represent market value as a percentage of total investments.
14
LKCM SMALL CAP EQUITY FUND
SCHEDULEOF INVESTMENTS
December 31, 2012
COMMON STOCKS - 97.6% | Shares | Value | ||||||
Aerospace & Defense - 2.4% |
| |||||||
Hexcel Corporation (a) | 516,200 | $ | 13,916,752 | |||||
Teledyne Technologies Incorporated (a) | 108,720 | 7,074,410 | ||||||
|
| |||||||
20,991,162 | ||||||||
|
| |||||||
Auto Components - 1.2% |
| |||||||
Group 1 Automotive, Inc. | 169,130 | 10,484,369 | ||||||
|
| |||||||
Automobiles - 0.8% |
| |||||||
Thor Industries, Inc. | 175,177 | 6,556,875 | ||||||
|
| |||||||
Banks - 8.7% |
| |||||||
Community Bank System, Inc. | 377,430 | 10,326,485 | ||||||
First Horizon National Corporation | 1,189,395 | 11,786,904 | ||||||
Hancock Holding Company | 138,330 | 4,390,594 | ||||||
Home Bancshares Inc. | 268,825 | 8,876,602 | ||||||
Prosperity Bancshares, Inc. | 232,425 | 9,761,850 | ||||||
Texas Capital Bancshares, Inc. (a) | 261,240 | 11,708,777 | ||||||
UMB Financial Corporation | 200,443 | 8,787,421 | ||||||
Umpqua Holdings Corporation | 812,550 | 9,579,964 | ||||||
|
| |||||||
75,218,597 | ||||||||
|
| |||||||
Biotechnology - 0.8% |
| |||||||
Exact Sciences Corp. (a) | 619,830 | 6,564,000 | ||||||
|
| |||||||
Building Products - 0.8% |
| |||||||
Armstrong World Industries, Inc. | 142,830 | 7,245,766 | ||||||
|
| |||||||
Capital Markets - 1.3% |
| |||||||
Greenhill & Co., Inc. | 218,675 | 11,368,913 | ||||||
|
| |||||||
Commercial Services & Supplies - 1.0% |
| |||||||
Insperity, Inc. | 273,300 | 8,898,648 | ||||||
|
| |||||||
Communications Equipment - 4.7% |
| |||||||
Ciena Corporation (a) | 654,225 | 10,271,333 | ||||||
Infinera Corporation (a) | 543,500 | 3,157,735 | ||||||
Ixia (a) | 625,250 | 10,616,745 | ||||||
Loral Space & Communications Inc. | 120,475 | 6,585,163 | ||||||
NICE Systems Limited - ADR (a) (b) | 293,745 | 9,834,583 | ||||||
|
| |||||||
40,465,559 | ||||||||
|
| |||||||
Consumer Finance - 2.0% |
| |||||||
Cash America International, Inc. | 172,900 | 6,858,943 | ||||||
First Cash Financial Services, Inc. (a) | 216,301 | 10,732,856 | ||||||
|
| |||||||
17,591,799 | ||||||||
|
| |||||||
Containers & Packaging - 1.1% |
| |||||||
Silgan Holdings Inc. | 225,575 | 9,381,664 | ||||||
|
| |||||||
Electrical Equipment & Instruments - 4.8% |
| |||||||
Belden Inc. | 294,325 | 13,241,682 | ||||||
Franklin Electric Co., Inc. | 187,915 | 11,682,675 | ||||||
Thermon Group Holdings Inc. (a) | 377,520 | 8,505,526 | ||||||
Woodward Inc. | 207,195 | 7,900,345 | ||||||
|
| |||||||
41,330,228 | ||||||||
|
| |||||||
Electronic Equipment & Instruments - 1.4% |
| |||||||
FARO Technologies, Inc. (a) | 117,800 | 4,203,104 | ||||||
Mercury Computer Systems, Inc. (a) | 80,200 | 737,840 |
COMMON STOCKS | Shares | Value | ||||||
Electronic Equipment & Instruments - 1.4% |
| |||||||
National Instruments Corporation | 268,000 | $ | 6,917,080 | |||||
|
| |||||||
11,858,024 | ||||||||
|
| |||||||
Energy Equipment & Services - 0.9% |
| |||||||
Atwood Oceanics, Inc. (a) | 160,925 | 7,368,756 | ||||||
|
| |||||||
Food & Drug Retailing - 1.0% |
| |||||||
Casey’s General Stores, Inc. | 164,465 | 8,733,092 | ||||||
|
| |||||||
Health Care Equipment & Supplies - 7.1% |
| |||||||
Cyberonics, Inc. (a) | 233,290 | 12,254,724 | ||||||
DexCom Inc. (a) | 700,900 | 9,539,249 | ||||||
Endologix, Inc. (a) | 747,913 | 10,650,281 | ||||||
Integra LifeSciences Holdings (a) | 263,350 | 10,262,749 | ||||||
MWI Veterinary Supply, Inc. (a) | 131,100 | 14,421,000 | ||||||
The Spectranetics Corporation (a) | 299,353 | 4,421,444 | ||||||
|
| |||||||
61,549,447 | ||||||||
|
| |||||||
Health Care Providers & Services - 5.0% |
| |||||||
Computer Programs and Systems, Inc. | 185,675 | 9,346,879 | ||||||
Health Management | ||||||||
Associates Inc. - Class A (a) | 1,112,330 | 10,366,916 | ||||||
HMS Holdings Corporation (a) | 411,620 | 10,669,190 | ||||||
Team Health Holdings, Inc. (a) | 427,275 | 12,292,702 | ||||||
|
| |||||||
42,675,687 | ||||||||
|
| |||||||
Household Durables - 1.9% |
| |||||||
Select Comfort Corporation (a) | 370,050 | 9,684,209 | ||||||
Tempur-Pedic International Inc. (a) | 222,450 | 7,004,950 | ||||||
|
| |||||||
16,689,159 | ||||||||
|
| |||||||
Industrial Conglomerates - 1.4% |
| |||||||
Raven Industries, Inc. | 248,200 | 6,542,552 | ||||||
Rexnord Corp. (a) | 253,445 | 5,398,379 | ||||||
|
| |||||||
11,940,931 | ||||||||
|
| |||||||
Insurance - 1.6% |
| |||||||
AmTrust Financial Services, Inc. | 469,990 | 13,484,013 | ||||||
|
| |||||||
Internet Software & Services - 1.6% |
| |||||||
LivePerson, Inc. (a) | 495,195 | 6,506,862 | ||||||
LogMeIn, Inc. (a) | 345,025 | 7,732,010 | ||||||
|
| |||||||
14,238,872 | ||||||||
|
| |||||||
IT Consulting & Services - 1.0% |
| |||||||
Acxiom Corporation (a) | 481,230 | 8,402,276 | ||||||
|
| |||||||
Machinery - 6.3% |
| |||||||
Actuant Corporation - Class A | 385,950 | 10,771,865 | ||||||
Barnes Group Inc. | 358,800 | 8,058,648 | ||||||
Chart Industries, Inc. (a) | 104,530 | 6,969,015 | ||||||
CLARCOR Inc. | 146,150 | 6,983,047 | ||||||
The Middleby Corporation (a) | 105,920 | 13,580,003 | ||||||
Westport Innovations Inc. (a) (b) | 285,521 | 7,626,266 | ||||||
|
| |||||||
53,988,844 | ||||||||
|
| |||||||
Marine - 1.2% |
| |||||||
Kirby Corporation (a) | 160,925 | 9,959,648 | ||||||
|
|
The accompanying notes are an integral part of these financial statements.
15
LKCM SMALL CAP EQUITY FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
COMMON STOCKS | Shares | Value | ||||||
Media - 1.2% |
| |||||||
Cinemark Holdings, Inc. | 403,475 | $ | 10,482,280 | |||||
|
| |||||||
Metals & Mining - 3.2% |
| |||||||
Carpenter Technology Corporation | 192,675 | 9,947,810 | ||||||
Commercial Metals Company | 717,450 | 10,661,307 | ||||||
Walter Energy, Inc. | 192,770 | 6,916,588 | ||||||
|
| |||||||
27,525,705 | ||||||||
|
| |||||||
Oil & Gas & Consumable Fuels - 6.7% |
| |||||||
Approach Resources Inc. (a) | 441,003 | 11,029,485 | ||||||
Comstock Resources, Inc. (a) | 513,470 | 7,768,801 | ||||||
Gulfport Energy Corporation (a) | 356,920 | 13,641,482 | ||||||
Kodiak Oil & Gas Corporation (a) (b) | 949,775 | 8,405,509 | ||||||
Oasis Petroleum Inc. (a) | 274,470 | 8,728,146 | ||||||
Rosetta Resources, Inc. (a) | 176,273 | 7,995,743 | ||||||
|
| |||||||
57,569,166 | ||||||||
|
| |||||||
Pharmaceuticals - 2.4% |
| |||||||
Akorn, Inc. (a) | 836,234 | 11,172,086 | ||||||
IMPAX Laboratories, Inc. (a) | 457,205 | 9,368,131 | ||||||
|
| |||||||
20,540,217 | ||||||||
|
| |||||||
Real Estate - 0.5% |
| |||||||
FirstService Corporation (a) (b) | 143,210 | 4,047,115 | ||||||
|
| |||||||
Semiconductor Equipment & Products - 0.9% |
| |||||||
Cirrus Logic, Inc. (a) | 270,270 | 7,829,722 | ||||||
|
| |||||||
Software - 6.4% |
| |||||||
ACI Worldwide, Inc. (a) | 270,835 | 11,832,781 | ||||||
Aspen Technology, Inc. (a) | 612,730 | 16,935,857 | ||||||
Interactive Intelligence Group, Inc. (a) | 330,600 | 11,088,324 | ||||||
MicroStrategy Incorporated - Class A (a) | 79,187 | 7,394,482 | ||||||
Pegasystems Inc. | 333,683 | 7,567,931 | ||||||
|
| |||||||
54,819,375 | ||||||||
|
| |||||||
Specialty Retail - 6.0% |
| |||||||
bebe stores, inc. | 408,800 | 1,631,112 | ||||||
DSW Inc. - Class A | 183,800 | 12,073,822 | ||||||
Genesco Inc. (a) | 167,725 | 9,224,875 | ||||||
GNC Holdings, Inc. - Class A | 189,310 | 6,300,237 | ||||||
Monro Muffler Brake, Inc. | 223,933 | 7,830,937 | ||||||
Sonic Automotive, Inc. - Class A | 687,950 | 14,371,275 | ||||||
|
| |||||||
51,432,258 | ||||||||
|
| |||||||
Textiles, Apparel & Luxury Goods - 4.8% |
| |||||||
The Children’s Place Retail Stores, Inc. (a) | 170,470 | 7,550,116 | ||||||
Crocs, Inc. (a) | 531,400 | 7,646,846 | ||||||
Fifth & Pacific Companies, Inc. (a) | 943,700 | 11,749,065 | ||||||
Oxford Industries, Inc. | 123,015 | 5,702,976 | ||||||
Wolverine World Wide, Inc. | 207,050 | 8,484,909 | ||||||
|
| |||||||
41,133,912 | ||||||||
|
| |||||||
Thrifts & Mortgage Finance - 1.1% |
| |||||||
Capitol Federal Financial Inc. | 850,050 | 9,937,085 | ||||||
|
| |||||||
Trading Companies & Distributors - 3.8% |
| |||||||
Beacon Roofing Supply, Inc. (a) | 329,155 | 10,954,278 |
COMMON STOCKS | Shares | Value | ||||||
Trading Companies & Distributors - 3.8, Continued |
| |||||||
Kaman Corporation | 260,225 | $ | 9,576,280 | |||||
WESCO International, Inc. (a) | 176,200 | 11,881,166 | ||||||
|
| |||||||
32,411,724 | ||||||||
|
| |||||||
Wireless Telecommunication Services - 0.6% |
| |||||||
Leap Wireless International, Inc. (a) | 824,400 | 5,482,260 | ||||||
|
| |||||||
TOTAL COMMON STOCKS | 840,197,148 | |||||||
|
| |||||||
SHORT-TERM INVESTMENT - 1.9% | ||||||||
Money Market Fund (c) - 1.9% | ||||||||
Federated Government Obligations Fund - Institutional Shares, 0.01% | 16,166,526 | 16,166,526 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENT | 16,166,526 | |||||||
|
| |||||||
Total Investments - 99.5% | 856,363,674 | |||||||
Other Assets in Excess of Liabilities - 0.5% | 4,358,368 | |||||||
|
| |||||||
TOTAL NET ASSETS - 100.0% | $ | 860,722,042 | ||||||
|
|
ADR American Depository Receipt.
(a) | Non-income producing security. |
(b) | U.S. Dollar-denominated foreign security. |
(c) | The rate quoted is the annualized seven-day yield of the fund at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
16
LKCM SMALL-MID CAP EQUITY FUND
SCHEDULEOF INVESTMENTS
December 31, 2012
COMMON STOCKS - 96.1% | Shares | Value | ||||||
Aerospace & Defense - 4.4% |
| |||||||
BE Aerospace, Inc. (a) | 107,560 | $ | 5,313,464 | |||||
Hexcel Corporation (a) | 206,400 | 5,564,544 | ||||||
|
| |||||||
10,878,008 | ||||||||
|
| |||||||
Auto Components - 1.6% |
| |||||||
Group 1 Automotive, Inc. | 66,100 | 4,097,539 | ||||||
|
| |||||||
Banks - 9.6% |
| |||||||
Comerica Incorporated | 168,030 | 5,098,031 | ||||||
First Horizon National Corporation | 375,200 | 3,718,232 | ||||||
Prosperity Bancshares, Inc. | 106,945 | 4,491,690 | ||||||
Texas Capital Bancshares, Inc. (a) | 63,905 | 2,864,222 | ||||||
UMB Financial Corporation | 102,750 | 4,504,560 | ||||||
Umpqua Holdings Corporation | 275,055 | 3,242,898 | ||||||
|
| |||||||
23,919,633 | ||||||||
|
| |||||||
Capital Markets - 2.1% |
| |||||||
Affiliated Managers Group, Inc. (a) | 41,210 | 5,363,482 | ||||||
|
| |||||||
Chemicals - 1.6% |
| |||||||
FMC Corporation | 68,395 | 4,002,475 | ||||||
|
| |||||||
Communications Equipment - 2.9% |
| |||||||
Ciena Corporation (a) | 325,350 | 5,107,995 | ||||||
NICE Systems Limited - ADR (a) (b) | 65,780 | 2,202,314 | ||||||
|
| |||||||
7,310,309 | ||||||||
|
| |||||||
Construction Materials - 1.7% |
| |||||||
Vulcan Materials Company | 83,720 | 4,357,626 | ||||||
|
| |||||||
Consumer Finance - 1.7% |
| |||||||
First Cash Financial Services, Inc. (a) | 87,765 | 4,354,899 | ||||||
|
| |||||||
Distributors - 2.6% |
| |||||||
LKQ Corporation (a) | 312,320 | 6,589,952 | ||||||
|
| |||||||
Electrical Equipment & Instruments - 5.1% |
| |||||||
AMETEK, Inc. | 154,275 | 5,796,112 | ||||||
Belden Inc. | 153,045 | 6,885,494 | ||||||
|
| |||||||
12,681,606 | ||||||||
|
| |||||||
Electronic Equipment & Instruments - 3.3% |
| |||||||
National Instruments Corporation | 99,270 | 2,562,159 | ||||||
Trimble Navigation Limited (a) | 96,305 | 5,757,113 | ||||||
|
| |||||||
8,319,272 | ||||||||
|
| |||||||
Food & Drug Retailing - 1.6% |
| |||||||
United Natural Foods, Inc. (a) | 76,520 | 4,100,707 | ||||||
|
| |||||||
Health Care Equipment & Supplies - 6.0% |
| |||||||
Cyberonics, Inc. (a) | 49,775 | 2,614,681 | ||||||
DENTSPLY International Inc. | 105,360 | 4,173,310 | ||||||
IDEXX Laboratories, Inc. (a) | 49,405 | 4,584,783 | ||||||
MWI Veterinary Supply, Inc. (a) | 32,225 | 3,544,750 | ||||||
|
| |||||||
14,917,524 | ||||||||
|
| |||||||
Health Care Providers & Services - 3.2% |
| |||||||
HMS Holdings Corporation (a) | 95,430 | 2,473,546 | ||||||
Team Health Holdings, Inc. (a) | 189,010 | 5,437,817 | ||||||
|
| |||||||
7,911,363 | ||||||||
|
|
COMMON STOCKS | Shares | Value | ||||||
Household Durables - 0.9% |
| |||||||
Select Comfort Corporation (a) | 88,430 | $ | 2,314,213 | |||||
|
| |||||||
Insurance - 2.3% |
| |||||||
AmTrust Financial Services, Inc. | 202,312 | 5,804,331 | ||||||
|
| |||||||
Internet Software & Services - 2.1% |
| |||||||
Akamai Technologies, Inc. (a) | 127,810 | 5,228,707 | ||||||
|
| |||||||
Leisure Equipment & Products - 2.7% |
| |||||||
Polaris Industries Inc. | 80,800 | 6,799,320 | ||||||
|
| |||||||
Machinery - 6.7% |
| |||||||
Actuant Corporation - Class A | 151,445 | 4,226,830 | ||||||
The Middleby Corporation (a) | 32,780 | 4,202,724 | ||||||
Valmont Industries, Inc. | 46,025 | 6,284,714 | ||||||
Westport Innovations Inc. (a) (b) | 79,950 | 2,135,465 | ||||||
|
| |||||||
16,849,733 | ||||||||
|
| |||||||
Marine - 1.7% |
| |||||||
Kirby Corporation (a) | 67,425 | 4,172,933 | ||||||
|
| |||||||
Media - 1.6% | ||||||||
Cinemark Holdings, Inc. | 150,900 | 3,920,382 | ||||||
|
| |||||||
Metals & Mining - 3.1% |
| |||||||
Carpenter Technology Corporation | 77,390 | 3,995,646 | ||||||
Cliffs Natural Resources Inc. | 94,430 | 3,641,221 | ||||||
|
| |||||||
7,636,867 | ||||||||
|
| |||||||
Oil & Gas & Consumable Fuels - 4.8% |
| |||||||
Kodiak Oil & Gas Corporation (a) (b) | 440,880 | 3,901,787 | ||||||
Oasis Petroleum Inc. (a) | 96,195 | 3,059,001 | ||||||
Rosetta Resources, Inc. (a) | 61,805 | 2,803,475 | ||||||
WPX Energy Inc. (a) | 149,845 | 2,229,694 | ||||||
|
| |||||||
11,993,957 | ||||||||
|
| |||||||
Pharmaceuticals - 3.2% |
| |||||||
Akorn, Inc. (a) | 375,500 | 5,016,680 | ||||||
IMPAX Laboratories, Inc. (a) | 140,040 | 2,869,420 | ||||||
|
| |||||||
7,886,100 | ||||||||
|
| |||||||
Semiconductor Equipment & Products - 1.6% |
| |||||||
Cirrus Logic, Inc. (a) | 136,730 | 3,961,068 | ||||||
|
| |||||||
Software - 8.9% |
| |||||||
ACI Worldwide, Inc. (a) | 117,730 | 5,143,624 | ||||||
ANSYS, Inc. (a) | 76,250 | 5,134,675 | ||||||
Aspen Technology, Inc. (a) | 156,490 | 4,325,384 | ||||||
Nuance Communications, Inc. (a) | 106,950 | 2,387,124 | ||||||
TIBCO Software Inc. (a) | 234,445 | 5,160,134 | ||||||
|
| |||||||
22,150,941 | ||||||||
|
| |||||||
Specialty Retail - 3.6% |
| |||||||
GNC Holdings, Inc. - Class A | 118,851 | 3,955,362 | ||||||
Tractor Supply Company | 28,595 | 2,526,654 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | 25,490 | 2,504,647 | ||||||
|
| |||||||
8,986,663 | ||||||||
|
|
The accompanying notes are an integral part of these financial statements.
17
LKCM SMALL-MID CAP EQUITY FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
COMMON STOCKS | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods - 2.3% |
| |||||||
Fifth & Pacific Companies, Inc. (a) | 281,690 | $ | 3,507,040 | |||||
Wolverine World Wide, Inc. | 56,465 | 2,313,936 | ||||||
|
| |||||||
5,820,976 | ||||||||
|
| |||||||
Trading Companies & Distributors - 3.2% |
| |||||||
Beacon Roofing Supply, Inc. (a) | 111,245 | 3,702,234 | ||||||
WESCO International, Inc. (a) | 63,680 | 4,293,942 | ||||||
|
| |||||||
7,996,176 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 240,326,762 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS - 3.8% |
| |||||||
Money Market Funds (c) - 3.8% |
| |||||||
Dreyfus Government Cash Management Fund - Institutional Shares, 0.01% | 2,419,422 | 2,419,422 | ||||||
Federated Government Obligations Fund - Institutional Shares, 0.01% | 7,233,985 | 7,233,985 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 9,653,407 | ||||||
|
| |||||||
Total Investments - 99.9% | 249,980,169 | |||||||
Other Assets in Excess of Liabilities - 0.1% | 183,702 | |||||||
|
| |||||||
TOTAL NET ASSETS - 100.0% | $ | 250,163,871 | ||||||
|
|
ADR American Depository Receipt.
(a) | Non-income producing security. |
(b) | U.S. Dollar-denominated foreign security. |
(c) | The rate quoted is the annualized seven-day yield of the fund at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
18
LKCM EQUITY FUND
SCHEDULEOF INVESTMENTS
December 31, 2012
COMMON STOCKS - 89.8% | Shares | Value | ||||||
Aerospace & Defense - 2.5% | ||||||||
Honeywell International Inc. | 40,000 | $ | 2,538,800 | |||||
Rockwell Collins, Inc. | 25,400 | 1,477,518 | ||||||
|
| |||||||
4,016,318 | ||||||||
|
| |||||||
Auto Components - 1.8% | ||||||||
Gentex Corporation | 150,000 | 2,823,000 | ||||||
|
| |||||||
Banks - 9.2% | ||||||||
Bank of America Corporation | 155,000 | 1,798,000 | ||||||
Comerica Incorporated | 63,000 | 1,911,420 | ||||||
Cullen/Frost Bankers, Inc. | 38,350 | 2,081,254 | ||||||
Glacier Bancorp, Inc. | 60,000 | 882,600 | ||||||
Hancock Holding Company | 70,000 | 2,221,800 | ||||||
Prosperity Bancshares, Inc. | 35,000 | 1,470,000 | ||||||
SunTrust Banks, Inc. | 45,000 | 1,275,750 | ||||||
Texas Capital Bancshares, Inc. (a) | 18,000 | 806,760 | ||||||
Wells Fargo & Company | 70,000 | 2,392,600 | ||||||
|
| |||||||
14,840,184 | ||||||||
|
| |||||||
Beverages - 2.0% | ||||||||
The Coca-Cola Company | 45,000 | 1,631,250 | ||||||
PepsiCo, Inc. | 24,000 | 1,642,320 | ||||||
|
| |||||||
3,273,570 | ||||||||
|
| |||||||
Biotechnology - 2.3% | ||||||||
Amgen Inc. | 20,000 | 1,726,400 | ||||||
Celgene Corporation (a) | 25,000 | 1,968,000 | ||||||
|
| |||||||
3,694,400 | ||||||||
|
| |||||||
Chemicals - 5.3% | ||||||||
Airgas, Inc. | 13,000 | 1,186,770 | ||||||
E. I. du Pont de Nemours and Company | 45,000 | 2,023,650 | ||||||
FMC Corporation | 52,000 | 3,043,040 | ||||||
Monsanto Company | 24,000 | 2,271,600 | ||||||
|
| |||||||
8,525,060 | ||||||||
|
| |||||||
Commercial Services & Supplies - 0.6% | ||||||||
Waste Connections, Inc. | 30,000 | 1,013,700 | ||||||
|
| |||||||
Communication Equipment - 0.7% | ||||||||
QUALCOMM, Inc. | 18,000 | 1,116,360 | ||||||
|
| |||||||
Computers & Peripherals - 5.6% | ||||||||
Apple Inc. | 4,000 | 2,132,120 | ||||||
EMC Corporation (a) | 75,000 | 1,897,500 | ||||||
International Business Machines Corporation | 20,000 | 3,831,000 | ||||||
NetApp, Inc. (a) | 37,000 | 1,241,350 | ||||||
|
| |||||||
9,101,970 | ||||||||
|
| |||||||
Construction Materials - 1.6% | ||||||||
Martin Marietta Materials, Inc. | 27,000 | 2,545,560 | ||||||
|
| |||||||
Containers & Packaging - 1.0% | ||||||||
Ball Corporation | 36,550 | 1,635,612 | ||||||
|
| |||||||
Diversified Telecommunication Services - 0.7% | ||||||||
Verizon Communications Inc. | 25,000 | 1,081,750 | ||||||
|
| |||||||
Electrical Equipment & Instruments - 3.4% | ||||||||
Emerson Electric Co. | 37,600 | 1,991,296 |
COMMON STOCKS | Shares | Value | ||||||
Electrical Equipment & Instruments - 3.4%, Continued | ||||||||
Franklin Electric Co., Inc. | 27,000 | $ | 1,678,590 | |||||
Roper Industries, Inc. | 15,990 | 1,782,565 | ||||||
|
| |||||||
5,452,451 | ||||||||
|
| |||||||
Electronic Equipment & Instruments - 2.1% | ||||||||
National Instruments Corporation | 49,300 | 1,272,433 | ||||||
Trimble Navigation Limited (a) | 35,000 | 2,092,300 | ||||||
|
| |||||||
3,364,733 | ||||||||
|
| |||||||
Energy Equipment & Services - 0.3% | ||||||||
National Oilwell Varco Inc. | 8,000 | 546,800 | ||||||
|
| |||||||
Food & Drug Retailing - 0.9% | ||||||||
Walgreen Co. | 40,000 | 1,480,400 | ||||||
|
| |||||||
Food Products - 0.7% | ||||||||
Mondelez International Inc. - Class A | 42,000 | 1,069,740 | ||||||
|
| |||||||
Health Care Equipment & Supplies - 3.6% | ||||||||
Covidien plc (b) | 33,000 | 1,905,420 | ||||||
DENTSPLY International Inc. | 40,000 | 1,584,400 | ||||||
Thermo Fisher Scientific, Inc. | 35,000 | 2,232,300 | ||||||
|
| |||||||
5,722,120 | ||||||||
|
| |||||||
Hotels, Restaurants & Leisure - 0.6% | ||||||||
Yum! Brands, Inc. | 14,000 | 929,600 | ||||||
|
| |||||||
Household Durables - 2.8% | ||||||||
Jarden Corporation (a) | 60,000 | 3,102,000 | ||||||
Whirlpool Corporation | 14,600 | 1,485,550 | ||||||
|
| |||||||
4,587,550 | ||||||||
|
| |||||||
Household Products - 3.7% | ||||||||
Colgate-Palmolive Company | 8,600 | 899,044 | ||||||
Kimberly-Clark Corporation | 30,000 | 2,532,900 | ||||||
The Procter & Gamble Company | 36,810 | 2,499,031 | ||||||
|
| |||||||
5,930,975 | ||||||||
|
| |||||||
Industrial Conglomerates - 0.5% | ||||||||
Raven Industries, Inc. | 32,868 | 866,401 | ||||||
|
| |||||||
Insurance - 0.8% | ||||||||
Prudential Financial, Inc. | 24,000 | 1,279,920 | ||||||
|
| |||||||
Internet Catalog & Retail - 1.2% | ||||||||
Amazon.com, Inc. (a) | 7,500 | 1,883,550 | ||||||
|
| |||||||
Internet Software & Services - 2.9% | ||||||||
Akamai Technologies, Inc. (a) | 45,000 | 1,840,950 | ||||||
Google Inc. - Class A (a) | 4,000 | 2,837,480 | ||||||
|
| |||||||
4,678,430 | ||||||||
|
| |||||||
Machinery - 3.7% | ||||||||
Danaher Corporation | 35,000 | 1,956,500 | ||||||
Pall Corporation | 27,000 | 1,627,020 | ||||||
Valmont Industries, Inc. | 17,000 | 2,321,350 | ||||||
|
| |||||||
5,904,870 | ||||||||
|
|
The accompanying notes are an integral part of these financial statements.
19
LKCM EQUITY FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
COMMON STOCKS | Shares | Value | ||||||
Marine - 1.7% | ||||||||
Kirby Corporation (a) | 45,000 | $ | 2,785,050 | |||||
|
| |||||||
Media - 1.9% | ||||||||
Cinemark Holdings, Inc. | 25,000 | 649,500 | ||||||
Liberty Media Corporation (a) | 9,800 | 1,136,898 | ||||||
Time Warner Inc. | 27,200 | 1,300,976 | ||||||
|
| |||||||
3,087,374 | ||||||||
|
| |||||||
Oil & Gas & Consumable Fuels - 9.9% | ||||||||
Cabot Oil & Gas Corporation | 32,000 | 1,591,680 | ||||||
Chevron Corporation | 18,000 | 1,946,520 | ||||||
ConocoPhillips | 33,700 | 1,954,263 | ||||||
Devon Energy Corporation | 29,000 | 1,509,160 | ||||||
EOG Resources, Inc. | 19,000 | 2,295,010 | ||||||
Exxon Mobil Corporation | 43,000 | 3,721,650 | ||||||
Noble Energy, Inc. | 10,000 | 1,017,400 | ||||||
Range Resources Corporation | 30,000 | 1,884,900 | ||||||
|
| |||||||
15,920,583 | ||||||||
|
| |||||||
Pharmaceuticals - 6.2% | ||||||||
Abbott Laboratories | 40,000 | 2,620,000 | ||||||
Allergan, Inc. | 12,000 | 1,100,760 | ||||||
Eli Lilly and Company | 28,000 | 1,380,960 | ||||||
Johnson & Johnson | 35,000 | 2,453,500 | ||||||
Pfizer Inc. | 100,000 | 2,508,000 | ||||||
|
| |||||||
10,063,220 | ||||||||
|
| |||||||
Road & Rail - 1.8% | ||||||||
Kansas City Southern | 8,500 | 709,580 | ||||||
Union Pacific Corporation | 18,000 | 2,262,960 | ||||||
|
| |||||||
2,972,540 | ||||||||
|
| |||||||
Software - 2.5% | ||||||||
Adobe Systems Incorporated (a) | 45,000 | 1,695,600 | ||||||
Microsoft Corporation | 43,000 | 1,149,390 | ||||||
Nuance Communications, Inc. (a) | 50,000 | 1,116,000 | ||||||
|
| |||||||
3,960,990 | ||||||||
|
| |||||||
Specialty Retail - 4.4% | ||||||||
The Home Depot, Inc. | 28,000 | 1,731,800 | ||||||
PetSmart, Inc. | 32,000 | 2,186,880 | ||||||
Tiffany & Co. | 25,000 | 1,433,500 | ||||||
Tractor Supply Company | 20,000 | 1,767,200 | ||||||
|
| |||||||
7,119,380 | ||||||||
|
| |||||||
Textiles, Apparel & Luxury Goods - 0.9% | ||||||||
VF Corporation | 10,000 | 1,509,700 | ||||||
|
| |||||||
TOTAL COMMON STOCKS | 144,783,861 | |||||||
|
|
SHORT-TERM INVESTMENTS - 10.3% | Shares | Value | ||||||
Money Market Funds (c) - 10.3% | ||||||||
Dreyfus Government Cash Management Fund - Institutional Shares, 0.01% | 4,750,000 | $ | 4,750,000 | |||||
Federated Government Obligations Fund - Institutional Shares, 0.01% | 4,750,752 | 4,750,752 | ||||||
Federated Treasury Obligations Fund - Institutional Shares, 0.01% | 2,316,732 | 2,316,732 | ||||||
Invesco Short Term Investments Trust - Treasury Portfolio - Institutional Shares, 0.02% | 4,750,000 | 4,750,000 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 16,567,484 | |||||||
|
| |||||||
Total Investments - 100.1% | 161,351,345 | |||||||
Liabilities in Excess of Other Assets - (0.1)% | (221,990 | ) | ||||||
|
| |||||||
TOTAL NET ASSETS - 100.0% | $ | 161,129,355 | ||||||
|
|
(a) | Non-income producing security. |
(b) | U.S. Dollar-denominated foreign security. |
(c) | The rate quoted is the annualized seven-day yield of the fund at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
20
LKCM BALANCED FUND
SCHEDULEOF INVESTMENTS
December 31, 2012
COMMON STOCKS - 70.6% | Shares | Value | ||||||
Aerospace & Defense - 1.4% | ||||||||
General Dynamics Corporation | 1,400 | $ | 96,978 | |||||
Rockwell Collins, Inc. | 3,600 | 209,412 | ||||||
|
| |||||||
306,390 | ||||||||
|
| |||||||
Air Freight & Logistics - 0.9% | ||||||||
United Parcel Service, Inc. - Class B | 2,600 | 191,698 | ||||||
|
| |||||||
Banks - 4.4% | ||||||||
Comerica Incorporated | 9,500 | 288,230 | ||||||
Cullen/Frost Bankers, Inc. | 3,900 | 211,653 | ||||||
Wells Fargo & Company | 8,471 | 289,539 | ||||||
Zions Bancorporation | 7,500 | 160,500 | ||||||
|
| |||||||
949,922 | ||||||||
|
| |||||||
Beverages - 2.1% | ||||||||
The Coca-Cola Company | 5,800 | 210,250 | ||||||
PepsiCo, Inc. | 3,600 | 246,348 | ||||||
|
| |||||||
456,598 | ||||||||
|
| |||||||
Biotechnology - 1.2% | ||||||||
Celgene Corporation (a) | 3,400 | 267,648 | ||||||
|
| |||||||
Chemicals - 4.8% | ||||||||
Air Products and Chemicals, Inc. | 1,900 | 159,638 | ||||||
Airgas, Inc. | 3,000 | 273,870 | ||||||
E. I. du Pont de Nemours and Company | 3,200 | 143,904 | ||||||
FMC Corporation | 4,800 | 280,896 | ||||||
Monsanto Company | 1,900 | 179,835 | ||||||
|
| |||||||
1,038,143 | ||||||||
|
| |||||||
Commercial Services & Supplies - 0.9% | ||||||||
Waste Management, Inc. | 6,100 | 205,814 | ||||||
|
| |||||||
Communications Equipment - 0.5% | ||||||||
Harris Corporation | 2,200 | 107,712 | ||||||
|
| |||||||
Computers & Peripherals - 5.0% | ||||||||
Apple Inc. | 875 | 466,401 | ||||||
EMC Corporation (a) | 7,400 | 187,220 | ||||||
International Business Machines Corporation | 1,300 | 249,015 | ||||||
NetApp, Inc. (a) | 5,500 | 184,525 | ||||||
|
| |||||||
1,087,161 | ||||||||
|
| |||||||
Construction Materials - 1.2% | ||||||||
Martin Marietta Materials, Inc. | 2,700 | 254,556 | ||||||
|
| |||||||
Containers & Packaging - 1.2% | ||||||||
Ball Corporation | 5,700 | 255,075 | ||||||
|
| |||||||
Diversified Financial Services - 1.1% | ||||||||
JPMorgan Chase & Co. | 5,500 | 241,835 | ||||||
|
| |||||||
Diversified Telecommunication Services - 1.1% |
| |||||||
AT&T Inc. | 7,400 | 249,454 | ||||||
|
| |||||||
Electrical Equipment & Instruments - 0.8% | ||||||||
Emerson Electric Co. | 3,200 | 169,472 | ||||||
|
| |||||||
Electronic Equipment & Instruments - 0.9% | ||||||||
National Instruments Corporation | 7,500 | 193,575 | ||||||
|
|
COMMON STOCKS | Shares | Value | ||||||
Energy Equipment & Services - 0.9% | ||||||||
Schlumberger Limited (b) | 2,700 | $ | 187,083 | |||||
|
| |||||||
Food & Drug Retailing - 3.3% | ||||||||
CVS Caremark Corporation | 4,700 | 227,245 | ||||||
Walgreen Co. | 5,500 | 203,555 | ||||||
Wal-Mart Stores, Inc. | 4,300 | 293,389 | ||||||
|
| |||||||
724,189 | ||||||||
|
| |||||||
Health Care Equipment & Supplies - 2.1% | ||||||||
Covidien plc (b) | 4,600 | 265,604 | ||||||
Thermo Fisher Scientific Inc. | 3,100 | 197,718 | ||||||
|
| |||||||
463,322 | ||||||||
|
| |||||||
Health Care Providers & Services - 2.2% | ||||||||
Catamaran Corporation (a) (b) | 5,944 | 280,022 | ||||||
Express Scripts Holding Co (a) | 3,800 | 205,200 | ||||||
|
| |||||||
485,222 | ||||||||
|
| |||||||
Hotels, Restaurants & Leisure - 0.5% | ||||||||
Yum! Brands, Inc. | 1,500 | 99,600 | ||||||
|
| |||||||
Household Products - 2.8% | ||||||||
Colgate-Palmolive Company | 2,200 | 229,988 | ||||||
Kimberly-Clark Corporation | 2,100 | 177,303 | ||||||
The Procter & Gamble Company | 3,100 | 210,459 | ||||||
|
| |||||||
617,750 | ||||||||
|
| |||||||
Industrial Conglomerates - 0.6% | ||||||||
General Electric Company | 5,900 | 123,841 | ||||||
|
| |||||||
Insurance - 0.6% | ||||||||
Prudential Financial, Inc. | 2,600 | 138,658 | ||||||
|
| |||||||
Internet Catalog & Retail - 1.5% | ||||||||
Amazon.com, Inc. (a) | 1,300 | 326,482 | ||||||
|
| |||||||
Internet Software & Services - 2.1% | ||||||||
Akamai Technologies, Inc. (a) | 5,100 | 208,641 | ||||||
Google Inc. - Class A (a) | 350 | 248,279 | ||||||
|
| |||||||
456,920 | ||||||||
|
| |||||||
IT Consulting & Services - 1.9% | ||||||||
Accenture plc - Class A (b) | 3,200 | 212,800 | ||||||
Automatic Data Processing, Inc. | 3,700 | 210,937 | ||||||
|
| |||||||
423,737 | ||||||||
|
| |||||||
Machinery - 2.3% | ||||||||
Danaher Corporation | 4,900 | 273,910 | ||||||
Pall Corporation | 3,800 | 228,988 | ||||||
|
| |||||||
502,898 | ||||||||
|
| |||||||
Media - 4.0% | ||||||||
CBS Corporation - Class B | 6,200 | 235,910 | ||||||
DIRECTV (a) | 3,300 | 165,528 | ||||||
Time Warner Inc. | 5,800 | 277,414 | ||||||
The Walt Disney Company | 4,000 | 199,160 | ||||||
|
| |||||||
878,012 | ||||||||
|
|
The accompanying notes are an integral part of these financial statements.
21
LKCM BALANCED FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
COMMON STOCKS | Shares | Value | ||||||
Metals & Mining - 0.6% | ||||||||
Commercial Metals Company | 9,500 | $ | 141,170 | |||||
|
| |||||||
Multiline Retail - 0.6% | ||||||||
Kohl’s Corporation | 3,100 | 133,238 | ||||||
|
| |||||||
Oil & Gas & Consumable Fuels - 9.1% | ||||||||
Cabot Oil & Gas Corporation | 5,000 | 248,700 | ||||||
Chevron Corporation | 2,095 | 226,553 | ||||||
Devon Energy Corporation | 1,700 | 88,468 | ||||||
EOG Resources, Inc. | 1,900 | 229,501 | ||||||
Exxon Mobil Corporation | 3,732 | 323,005 | ||||||
Pioneer Natural Resources Company | 2,200 | 234,498 | ||||||
Range Resources Corporation | 2,500 | 157,075 | ||||||
SM Energy Company | 4,200 | 219,282 | ||||||
The Williams Companies, Inc. | 7,700 | 252,098 | ||||||
|
| |||||||
1,979,180 | ||||||||
|
| |||||||
Pharmaceuticals - 1.7% | ||||||||
Abbott Laboratories | 4,100 | 268,550 | ||||||
Teva Pharmaceutical Industries Ltd. - ADR (b) | 2,500 | 93,350 | ||||||
|
| |||||||
361,900 | ||||||||
|
| |||||||
Software - 2.1% | ||||||||
Adobe Systems Incorporated (a) | 6,700 | 252,456 | ||||||
Nuance Communications, Inc. (a) | 9,000 | 200,880 | ||||||
|
| |||||||
453,336 | ||||||||
|
| |||||||
Specialty Retail - 2.2% | ||||||||
The Home Depot, Inc. | 4,400 | 272,140 | ||||||
O’Reilly Automotive, Inc. (a) | 2,300 | 205,666 | ||||||
|
| |||||||
477,806 | ||||||||
|
| |||||||
Textiles, Apparel & Luxury Goods - 1.0% | ||||||||
VF Corporation | 1,400 | 211,358 | ||||||
|
| |||||||
Thrifts & Mortgage Finance - 1.0% | ||||||||
Capitol Federal Financial Inc. | 19,500 | 227,955 | ||||||
|
| |||||||
TOTAL COMMON STOCKS | 15,388,710 | |||||||
|
| |||||||
CORPORATE BONDS - 28.5% | Principal Amount | Value | ||||||
Banks - 1.9% | ||||||||
BB&T Corporation | $ | 200,000 | 203,843 | |||||
Wells Fargo & Company: | 100,000 | 105,483 | ||||||
2.625%, 12/15/2016 | 100,000 | 105,636 | ||||||
|
| |||||||
414,962 | ||||||||
|
| |||||||
Beverages - 1.0% | ||||||||
Anheuser-Busch InBev Worldwide Inc. | 100,000 | 101,164 | ||||||
The Coca-Cola Company | 100,000 | 119,869 | ||||||
|
| |||||||
221,033 | ||||||||
|
|
CORPORATE BONDS | Principal Amount | Value | ||||||
Biotechnology - 1.9% | ||||||||
Amgen Inc. | $ | 135,000 | $ | 138,124 | ||||
Celgene Corporation | 200,000 | 207,681 | ||||||
Gilead Sciences, Inc. | 63,000 | 64,998 | ||||||
|
| |||||||
410,803 | ||||||||
|
| |||||||
Capital Markets - 1.0% | ||||||||
The Bank of New York Mellon Corporation | 175,000 | 183,442 | ||||||
The Goldman Sachs Group, Inc. | 35,000 | 37,752 | ||||||
|
| |||||||
221,194 | ||||||||
|
| |||||||
Chemicals - 1.9% | ||||||||
Airgas, Inc. | 125,000 | 132,853 | ||||||
E. I. du Pont de Nemours and Company | 75,000 | 78,985 | ||||||
Eastman Chemical Company | 200,000 | 210,546 | ||||||
|
| |||||||
422,384 | ||||||||
|
| |||||||
Computers & Peripherals - 1.8% | ||||||||
Dell Inc. | 200,000 | 205,657 | ||||||
Hewlett-Packard Company | 175,000 | 176,273 | ||||||
|
| |||||||
381,930 | ||||||||
|
| |||||||
Consumer Finance - 1.1% | ||||||||
American Express Credit Corporation | 225,000 | 236,040 | ||||||
|
| |||||||
Consumer Services - 0.5% | ||||||||
The Western Union Company | 100,000 | 99,198 | ||||||
|
| |||||||
Containers & Packaging - 0.4% | ||||||||
Ball Corporation | 75,000 | 80,625 | ||||||
|
| |||||||
Diversified Financial Services - 0.3% | ||||||||
JPMorgan Chase & Co. | 75,000 | 76,193 | ||||||
|
| |||||||
Diversified Telecommunication Services - 1.1% | ||||||||
AT&T Inc. | 125,000 | 134,330 | ||||||
|
| |||||||
Verizon Communications Inc. | 100,000 | 106,564 | ||||||
|
| |||||||
240,894 | ||||||||
|
| |||||||
Electric Utilities - 0.9% | ||||||||
Duke Energy Corporation | 185,000 | 194,896 | ||||||
|
|
The accompanying notes are an integral part of these financial statements.
22
LKCM BALANCED FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
Principal | ||||||||
CORPORATE BONDS | Amount | Value | ||||||
Food & Drug Retailing - 1.6% | ||||||||
CVS Caremark Corporation: | ||||||||
3.250%, 05/18/2015 | $ | 50,000 | $ | 53,039 | ||||
5.750%, 06/01/2017 | 100,000 | 119,676 | ||||||
Walgreen Co. | 175,000 | 175,242 | ||||||
|
| |||||||
347,957 | ||||||||
|
| |||||||
Health Care Equipment & Supplies - 1.4% | ||||||||
Covidien International Finance S.A. (b) | 140,000 | 146,514 | ||||||
Thermo Fisher Scientific Inc.: | ||||||||
2.050%, 02/21/2014 | 50,000 | 50,717 | ||||||
3.200%, 05/01/2015 | 110,000 | 115,851 | ||||||
|
| |||||||
313,082 | ||||||||
|
| |||||||
Health Care Providers & Services - 1.5% | ||||||||
Express Scripts Holding Co | 200,000 | 211,028 | ||||||
McKesson Corporation | 100,000 | 107,271 | ||||||
|
| |||||||
318,299 | ||||||||
|
| |||||||
Insurance - 1.2% | ||||||||
Berkshire Hathaway Inc. | 100,000 | 108,542 | ||||||
Prudential Financial, Inc. | 150,000 | 158,499 | ||||||
|
| |||||||
267,041 | ||||||||
|
| |||||||
Machinery - 0.5% | ||||||||
Caterpillar Inc. | 100,000 | 101,253 | ||||||
|
| |||||||
Media - 1.3% | ||||||||
DIRECTV Holdings LLC | 100,000 | 105,251 | ||||||
Time Warner Inc. | 175,000 | 185,175 | ||||||
|
| |||||||
290,426 | ||||||||
|
| |||||||
Oil & Gas & Consumable Fuels - 3.0% | ||||||||
Apache Corporation | 75,000 | 87,928 | ||||||
Devon Energy Corporation | 100,000 | 102,048 | ||||||
Enterprise Products Operating LLC | 191,000 | 192,296 | ||||||
Noble Drilling Corporation (b) | 160,000 | 167,066 | ||||||
Noble Energy, Inc. | 100,000 | 104,778 | ||||||
|
| |||||||
654,116 | ||||||||
|
|
Principal | ||||||||
CORPORATE BONDS | Amount | Value | ||||||
Pharmaceuticals - 1.1% | ||||||||
Teva Pharmaceutical Industries Ltd. (b): | ||||||||
3.000%, 06/15/2015 | $ | 125,000 | $ | 131,499 | ||||
2.400%, 11/10/2016 | 100,000 | 104,308 | ||||||
|
| |||||||
235,807 | ||||||||
|
| |||||||
Semiconductor Equipment & Products - 0.5% | ||||||||
National Semiconductor Corporation | 100,000 | 107,761 | ||||||
|
| |||||||
Software - 2.6% | ||||||||
Adobe Systems Incorporated | 200,000 | 209,543 | ||||||
Oracle Corporation | 150,000 | 157,539 | ||||||
Symantec Corporation | 200,000 | 206,987 | ||||||
|
| |||||||
574,069 | ||||||||
|
| |||||||
TOTAL CORPORATE BONDS | 6,209,963 | |||||||
|
| |||||||
SHORT-TERM INVESTMENT - 0.8% | Shares | |||||||
Money Market Fund (c) - 0.8% | ||||||||
Federated Government Obligations Fund - Institutional Shares, 0.01% | 174,462 | 174,462 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENT | 174,462 | |||||||
|
| |||||||
Total Investments - 99.9% | 21,773,135 | |||||||
Other Assets in Excess of Liabilities - 0.1% | 27,349 | |||||||
|
| |||||||
TOTAL NET ASSETS - 100.0% | $ | 21,800,484 | ||||||
|
|
ADR | American Depository Receipt. |
(a) | Non-income producing security. |
(b) | U.S. Dollar-denominated foreign security. |
(c) | The rate quoted is the annualized seven-day yield of the fund at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
23
LKCM FIXED INCOME FUND
SCHEDULEOF INVESTMENTS
December 31, 2012
Principal | ||||||||
CORPORATE BONDS - 92.2% | Amount | Value | ||||||
Aerospace & Defense - 1.2% | ||||||||
Lockheed Martin Corporation: | ||||||||
7.650%, 05/01/2016 | $ | 1,250,000 | $ | 1,514,909 | ||||
3.350%, 09/15/2021 | 525,000 | 555,846 | ||||||
Rockwell Collins, Inc. | 430,000 | 445,497 | ||||||
|
| |||||||
2,516,252 | ||||||||
|
| |||||||
Banks - 6.6% | ||||||||
Bank of America Corporation: | ||||||||
7.375%, 05/15/2014 | 1,000,000 | 1,083,205 | ||||||
5.375%, 06/15/2014 | 1,025,000 | 1,083,638 | ||||||
BB&T Corporation | 3,080,000 | 3,280,631 | ||||||
Branch Banking & Trust Company (b): | ||||||||
0.862%, 09/13/2016 | 1,775,000 | 1,748,979 | ||||||
0.793%, 05/23/2017 | 1,284,000 | 1,256,413 | ||||||
Wells Fargo & Company: | ||||||||
4.625%, 04/15/2014 | 456,000 | 479,691 | ||||||
1.250%, 02/13/2015 | 1,500,000 | 1,514,856 | ||||||
2.625%, 12/15/2016 | 3,000,000 | 3,169,077 | ||||||
|
| |||||||
13,616,490 | ||||||||
|
| |||||||
Beverages - 1.0% | ||||||||
The Coca-Cola Company | 1,500,000 | 1,798,034 | ||||||
PepsiCo, Inc. | 214,000 | 289,137 | ||||||
|
| |||||||
2,087,171 | ||||||||
|
| |||||||
Biotechnology - 6.4% | ||||||||
Amgen Inc.: | ||||||||
2.500%, 11/15/2016 | 1,815,000 | 1,908,734 | ||||||
2.125%, 05/15/2017 | 2,350,000 | 2,437,002 | ||||||
Celgene Corporation | 5,279,000 | 5,481,756 | ||||||
Gilead Sciences, Inc. | 3,300,000 | 3,404,646 | ||||||
|
| |||||||
13,232,138 | ||||||||
|
| |||||||
Building Products - 0.8% | ||||||||
Masco Corporation | 1,350,000 | 1,572,892 | ||||||
|
| |||||||
Capital Markets - 1.4% | ||||||||
The Bank of New York Mellon Corporation | 738,000 | 773,604 | ||||||
The Goldman Sachs Group, Inc. | 1,000,000 | 1,074,808 | ||||||
Morgan Stanley | 1,000,000 | 1,002,760 | ||||||
|
| |||||||
2,851,172 | ||||||||
|
|
Principal | ||||||||
CORPORATE BONDS | Amount | Value | ||||||
Chemicals - 4.2% | ||||||||
Airgas, Inc.: | ||||||||
3.250%, 10/01/2015 | $ | 2,794,000 | $ | 2,969,530 | ||||
2.950%, 06/15/2016 | 950,000 | 1,003,009 | ||||||
Eastman Chemical Company | 2,625,000 | 2,763,414 | ||||||
The Lubrizol Corporation | 1,579,000 | 1,712,299 | ||||||
Praxair, Inc. | 200,000 | 217,487 | ||||||
|
| |||||||
8,665,739 | ||||||||
|
| |||||||
Commercial Services & Supplies - 0.6% | ||||||||
Republic Services, Inc. | 1,000,000 | 1,185,939 | ||||||
|
| |||||||
Communications Equipment - 2.0% |
| |||||||
Cisco Systems, Inc.: | ||||||||
5.500%, 02/22/2016 | 1,000,000 | 1,143,892 | ||||||
4.950%, 02/15/2019 | 700,000 | 829,788 | ||||||
Harris Corporation: | ||||||||
5.000%, 10/01/2015 | 1,088,000 | 1,193,813 | ||||||
6.375%, 06/15/2019 | 900,000 | 1,065,266 | ||||||
|
| |||||||
4,232,759 | ||||||||
|
| |||||||
Computers & Peripherals - 4.0% |
| |||||||
Dell Inc. | 750,000 | 796,340 | ||||||
Hewlett-Packard Company: | ||||||||
1.550%, 05/30/2014 | 1,000,000 | 998,110 | ||||||
2.200%, 12/01/2015 | 1,000,000 | 1,002,070 | ||||||
3.000%, 09/15/2016 | 3,675,000 | 3,701,732 | ||||||
International Business Machines Corporation | 1,500,000 | 1,813,398 | ||||||
|
| |||||||
8,311,650 | ||||||||
|
| |||||||
Consumer Finance - 1.3% | ||||||||
American Express Credit Corporation | 2,485,000 | 2,606,932 | ||||||
|
| |||||||
Consumer Services - 1.8% | ||||||||
The Western Union Company: | ||||||||
5.930%, 10/01/2016 | 1,000,000 | 1,099,602 | ||||||
3.650%, 08/22/2018 | 2,500,000 | 2,558,692 | ||||||
|
| |||||||
3,658,294 | ||||||||
|
|
The accompanying notes are an integral part of these financial statements.
24
LKCM FIXED INCOME FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
Principal | ||||||||
CORPORATE BONDS | Amount | Value | ||||||
Containers & Packaging - 2.0% |
| |||||||
Ball Corporation: | ||||||||
7.125%, 09/01/2016 | $ | 1,825,000 | $ | 1,961,875 | ||||
5.750%, 05/15/2021 | 2,000,000 | 2,175,000 | ||||||
|
| |||||||
4,136,875 | ||||||||
|
| |||||||
Diversified Financial Services - 3.6% |
| |||||||
JPMorgan Chase & Co.: | ||||||||
3.450%, 03/01/2016 | 3,525,000 | 3,746,402 | ||||||
4.250%, 10/15/2020 | 3,325,000 | 3,704,010 | ||||||
|
| |||||||
7,450,412 | ||||||||
|
| |||||||
Diversified Telecommunication Services - 5.1% |
| |||||||
AT&T Inc. | 1,750,000 | 1,880,623 | ||||||
CenturyLink, Inc.: | ||||||||
5.150%, 06/15/2017 | 2,000,000 | 2,157,000 | ||||||
6.150%, 09/15/2019 | 1,402,000 | 1,541,136 | ||||||
6.450%, 06/15/2021 | 2,000,000 | 2,213,640 | ||||||
Verizon Communications Inc.: | ||||||||
5.550%, 02/15/2016 | 1,000,000 | 1,139,564 | ||||||
3.000%, 04/01/2016 | 490,000 | 522,160 | ||||||
5.500%, 02/15/2018 | 875,000 | 1,051,961 | ||||||
|
| |||||||
10,506,084 | ||||||||
|
| |||||||
Electric Utilities - 0.6% |
| |||||||
Southern Power Co. | 1,050,000 | 1,150,805 | ||||||
|
| |||||||
Energy Equipment & Services - 1.9% |
| |||||||
Weatherford International, Inc. | 1,550,000 | 1,775,826 | ||||||
Weatherford International Ltd (a) | 2,000,000 | 2,126,468 | ||||||
|
| |||||||
3,902,294 | ||||||||
|
| |||||||
Food & Drug Retailing - 3.9% |
| |||||||
CVS Caremark Corporation: | ||||||||
3.250%, 05/18/2015 | 1,000,000 | 1,060,782 | ||||||
5.750%, 06/01/2017 | 2,750,000 | 3,291,096 | ||||||
Walgreen Co.: | ||||||||
1.000%, 03/13/2015 | 725,000 | 726,003 | ||||||
1.800%, 09/15/2017 | 2,925,000 | 2,944,603 | ||||||
|
| |||||||
8,022,484 | ||||||||
|
| |||||||
Health Care Equipment & Supplies - 1.2% |
| |||||||
DENTSPLY International Inc. | 1,446,000 | 1,501,555 | ||||||
Thermo Fisher Scientific, Inc. | 900,000 | 941,484 | ||||||
|
| |||||||
2,443,039 | ||||||||
|
|
Principal | ||||||||
CORPORATE BONDS | Amount | Value | ||||||
Health Care Providers & Services - 3.3% |
| |||||||
Express Scripts Holding Co: | ||||||||
6.250%, 06/15/2014 | $ | 1,000,000 | $ | 1,077,256 | ||||
3.125%, 05/15/2016 | 225,000 | 237,406 | ||||||
2.650%, 02/15/2017 (c) | 3,000,000 | 3,121,209 | ||||||
McKesson Corporation | 2,275,000 | 2,440,422 | ||||||
|
| |||||||
6,876,293 | ||||||||
|
| |||||||
Hotels, Restaurants & Leisure - 0.6% |
| |||||||
McDonald’s Corporation | 1,000,000 | 1,207,571 | ||||||
|
| |||||||
Household Durables - 1.2% |
| |||||||
Jarden Corporation: | ||||||||
8.000%, 05/01/2016 | 1,000,000 | 1,067,500 | ||||||
7.500%, 01/15/2020 | 1,340,000 | 1,477,350 | ||||||
|
| |||||||
2,544,850 | ||||||||
|
| |||||||
Household Products - 0.6% |
| |||||||
The Procter & Gamble Company | 775,000 | 1,161,590 | ||||||
|
| |||||||
Insurance - 1.9% |
| |||||||
Berkshire Hathaway Inc. | 1,225,000 | 1,329,641 | ||||||
Prudential Financial, Inc. | 2,393,000 | 2,528,582 | ||||||
|
| |||||||
3,858,223 | ||||||||
|
| |||||||
Internet Catalog & Retail - 0.8% |
| |||||||
Amazon.com, Inc. | 1,545,000 | 1,538,333 | ||||||
|
| |||||||
Media - 3.1% | ||||||||
DIRECTV Holdings LLC | 1,265,000 | 1,331,431 | ||||||
Time Warner Inc. | 3,175,000 | 3,359,601 | ||||||
The Walt Disney Company | 1,500,000 | 1,746,536 | ||||||
|
| |||||||
6,437,568 | ||||||||
|
| |||||||
Metals & Mining - 0.3% |
| |||||||
Alcoa Inc. | 500,000 | 541,766 | ||||||
|
| |||||||
Multiline Retail - 2.5% |
| |||||||
Family Dollar Stores, Inc. | 4,500,000 | 4,865,625 |
The accompanying notes are an integral part of these financial statements.
25
LKCM FIXED INCOME FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
CORPORATE BONDS | Principal Amount | Value | ||||||
Multiline Retail - 2.5%, Continued |
| |||||||
Kohl’s Corporation | $ | 282,000 | $ | 338,345 | ||||
|
| |||||||
5,203,970 | ||||||||
|
| |||||||
Oil & Gas & Consumable Fuels - 18.1% |
| |||||||
Anadarko Petroleum Corporation: | ||||||||
5.950%, 09/15/2016 | 2,000,000 | 2,304,204 | ||||||
6.375%, 09/15/2017 | 2,000,000 | 2,391,470 | ||||||
Devon Energy Corporation | 1,830,000 | 1,897,013 | ||||||
Enterprise Products Operating LLC: | ||||||||
3.200%, 02/01/2016 | 2,229,000 | 2,356,978 | ||||||
4.050%, 02/15/2022 | 2,000,000 | 2,214,982 | ||||||
EOG Resources, Inc. | 1,200,000 | 1,262,192 | ||||||
Kinder Morgan Energy Partners, L.P. | 2,000,000 | 2,171,118 | ||||||
Linn Energy LLC / Linn Energy | 2,000,000 | 2,020,000 | ||||||
Nabors Industries Inc. | 3,500,000 | 3,773,623 | ||||||
Noble Energy, Inc.: | 1,500,000 | 1,571,668 | ||||||
4.150%, 12/15/2021 | 1,000,000 | 1,105,975 | ||||||
Noble Holding International Ltd. (a) | 4,855,000 | 5,119,248 | ||||||
Peabody Energy Corporation | 4,000,000 | 4,310,000 | ||||||
Range Resources Corporation: | 500,000 | 556,250 | ||||||
5.000%, 08/15/2022 | 4,100,000 | 4,305,000 | ||||||
|
| |||||||
37,359,721 | ||||||||
|
| |||||||
Pharmaceuticals - 2.5% | ||||||||
Teva Pharmaceutical Industries Ltd. (a): | 2,830,000 | 2,977,134 | ||||||
5.550%, 02/01/2016 | 1,860,000 | 2,106,703 | ||||||
|
| |||||||
5,083,837 | ||||||||
|
| |||||||
Road & Rail - 0.5% | ||||||||
Burlington Northern Santa Fe Corporation | 185,000 | 217,978 | ||||||
Norfolk Southern Corporation | 750,000 | 808,157 | ||||||
|
| |||||||
1,026,135 | ||||||||
|
|
CORPORATE BONDS | Principal Amount | Value | ||||||
Semiconductor Equipment & Products - 2.6% |
| |||||||
Analog Devices, Inc. | $ | 1,050,000 | $ | 1,114,465 | ||||
Applied Materials, Inc. | 1,717,000 | 1,807,386 | ||||||
National Semiconductor Corporation | 2,275,000 | 2,451,554 | ||||||
|
| |||||||
5,373,405 | ||||||||
|
| |||||||
Software - 3.8% | ||||||||
Adobe Systems Incorporated | 2,175,000 | 2,278,774 | ||||||
Microsoft Corporation | 1,910,000 | 1,981,050 | ||||||
Symantec Corporation: | 2,300,000 | 2,380,350 | ||||||
2.750%, 06/15/2017 | 1,160,000 | 1,194,196 | ||||||
|
| |||||||
7,834,370 | ||||||||
|
| |||||||
Specialty Retail - 0.8% | ||||||||
Lowe’s Companies, Inc. | 525,000 | 586,865 | ||||||
O’Reilly Automotive, Inc. | 1,000,000 | 1,109,428 | ||||||
|
| |||||||
1,696,293 | ||||||||
|
| |||||||
TOTAL CORPORATE BONDS | ||||||||
(Cost $178,982,067) | 189,893,346 | |||||||
|
|
PREFERRED STOCKS - 3.5% | Shares | |||||||
Banks - 1.2% | ||||||||
BB&T Corporation: | 40,000 | 1,019,200 | ||||||
Callable 11/01/2017 | 40,000 | 982,800 | ||||||
Wells Fargo & Company | 20,000 | 503,600 | ||||||
|
| |||||||
2,505,600 | ||||||||
|
| |||||||
Capital Markets - 1.3% | ||||||||
The Goldman Sachs Group, Inc. | 40,000 | 827,600 | ||||||
Merrill Lynch Preferred Capital Trust III | 75,000 | 1,874,250 | ||||||
|
| |||||||
2,701,850 | ||||||||
|
| |||||||
Diversified Financial Services - 1.0% |
| |||||||
JPMorgan Chase Capital XIV | 75,000 | 1,908,000 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost $7,201,733) | 7,115,450 | |||||||
|
|
The accompanying notes are an integral part of these financial statements.
26
LKCM FIXED INCOME FUND
SCHEDULEOF INVESTMENTS, CONTINUED
December 31, 2012
U.S. GOVERNMENT & | Principal Amount | Value | ||||||
Fannie Mae - 0.6% | ||||||||
5.000%, 03/15/2016 | $ | 1,000,000 | $ | 1,145,212 | ||||
|
| |||||||
Federal Home Loan Bank - 0.8% |
| |||||||
5.500%, 08/13/2014 | 500,000 | 543,027 | ||||||
4.875%, 05/17/2017 | 1,000,000 | 1,179,629 | ||||||
|
| |||||||
1,722,656 | ||||||||
|
| |||||||
Freddie Mac - 0.3% | ||||||||
5.125%, 11/17/2017 | 500,000 | 603,229 | ||||||
U.S. Treasury Notes - 0.8% | ||||||||
4.250%, 11/15/2014 | 500,000 | 537,207 | ||||||
4.250%, 08/15/2015 | 500,000 | 550,977 | ||||||
4.500%, 02/15/2016 | 500,000 | 563,633 | ||||||
|
| |||||||
1,651,817 | ||||||||
|
| |||||||
TOTAL U.S. GOVERNMENT & AGENCY ISSUES |
| |||||||
(Cost $4,520,688) | 5,122,914 | |||||||
|
|
SHORT-TERM INVESTMENT - 1.0% | Shares | Value | ||||||
Money Market Fund (d) - 1.0% |
| |||||||
Federated Government Obligations Fund - Institutional Shares, 0.01% | 2,152,774 | $ | 2,152,774 | |||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENT |
| |||||||
(Cost $2,152,774) | 2,152,774 | |||||||
|
| |||||||
Total Investments - 99.2% | ||||||||
(Cost $192,857,262) | 204,284,484 | |||||||
Other Assets in Excess of Liabilities - 0.8% | 1,595,225 | |||||||
|
| |||||||
TOTAL NET ASSETS - 100.0% | $ | 205,879,709 | ||||||
|
|
(a) | U.S. Dollar-denominated foreign security. |
(b) | Floating rate. |
(c) | Rule 144A security. Resale to the public may require registration or may extend only to qualified institutional buyers. The fair market value of the securities was $5,141,209 representing 2.50% of the Fund’s total net assets. |
(d) | The rate quoted is the annualized seven-day yield of the fund at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
27
STATEMENTOF ASSETSAND LIABILITIES
December 31, 2012
LKCM Small Cap Equity Fund | LKCM Small-Mid Cap Equity Fund | LKCM Equity Fund | LKCM Balanced Fund | LKCM Fixed Income Fund | ||||||||||||||||
Assets: | ||||||||||||||||||||
Investments, at value* | $ | 856,363,674 | $ | 249,980,169 | $ | 161,351,345 | $ | 21,773,135 | $ | 204,284,484 | ||||||||||
Dividends and interest receivable | 180,708 | 60,794 | 84,138 | 58,354 | 1,900,173 | |||||||||||||||
Receivable for fund shares sold | 7,133,446 | 841,028 | 165,451 | 2,500 | 63,500 | |||||||||||||||
Other assets | 71,971 | 36,968 | 19,021 | 4,224 | 19,936 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total assets | 863,749,799 | 250,918,959 | 161,619,955 | 21,838,213 | 206,268,093 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Liabilities: | ||||||||||||||||||||
Payable for investment advisory fees | 1,610,566 | 351,013 | 198,341 | 19,986 | 230,979 | |||||||||||||||
Payable for fund shares redeemed | 1,121,066 | 205,445 | 235,671 | 600 | 85,277 | |||||||||||||||
Payable for administrative fees | 113,329 | 35,640 | 22,529 | 3,423 | 27,968 | |||||||||||||||
Payable for accounting and transfer agent fees and expenses | 50,424 | 106,119 | 15,110 | 7,137 | 17,036 | |||||||||||||||
Payable for distribution expense (Note B) | 22,367 | — | — | — | — | |||||||||||||||
Accrued expenses and other liabilities | 110,005 | 56,871 | 18,949 | 6,583 | 27,124 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total liabilities | 3,027,757 | 755,088 | 490,600 | 37,729 | 388,384 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net assets | $ | 860,722,042 | $ | 250,163,871 | $ | 161,129,355 | $ | 21,800,484 | $ | 205,879,709 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net assets consist of: | ||||||||||||||||||||
Paid in capital | $ | 686,205,617 | $ | 239,661,829 | $ | 127,147,303 | $ | 16,753,575 | $ | 193,881,753 | ||||||||||
Accumulated net investment income | 120,236 | — | 41,852 | 96 | — | |||||||||||||||
Accumulated net realized gain (loss) on securities | 6,326,373 | (5,994,606 | ) | 416,415 | (272,515 | ) | 570,734 | |||||||||||||
Net unrealized appreciation on investments | 168,069,816 | 16,496,648 | 33,523,785 | 5,319,328 | 11,427,222 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net assets | $ | 860,722,042 | $ | 250,163,871 | $ | 161,129,355 | $ | 21,800,484 | $ | 205,879,709 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
INSTITUTIONAL CLASS** | ||||||||||||||||||||
Net assets | $ | 819,984,564 | $ | 250,163,871 | $ | 161,129,355 | $ | 21,800,484 | $ | 205,879,709 | ||||||||||
Shares of beneficial interest outstanding (unlimited shares of no par value authorized) | 36,144,306 | 25,845,750 | 9,143,706 | 1,353,478 | 18,325,921 | |||||||||||||||
Net asset value per share (offering and redemption price) | $ | 22.69 | $ | 9.68 | $ | 17.62 | $ | 16.11 | $ | 11.23 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
ADVISER CLASS | ||||||||||||||||||||
Net assets | $ | 40,737,478 | ||||||||||||||||||
Shares of beneficial interest outstanding (unlimited shares of no par value authorized) | 1,845,755 | |||||||||||||||||||
Net asset value per share (offering and redemption price) | $ | 22.07 | ||||||||||||||||||
|
| |||||||||||||||||||
* Cost of Investments | $ | 688,293,858 | $ | 233,483,521 | $ | 127,827,560 | $ | 16,453,807 | $ | 192,857,262 | ||||||||||
|
|
|
|
|
|
|
|
|
|
** | Currently, only the Small Cap Equity, Small-Mid Cap Equity and Equity Funds offer a second class. |
The accompanying notes are an integral part of these financial statements.
28
STATEMENTOF OPERATIONS
For the Year Ended December 31, 2012
LKCM Small Cap Equity Fund | LKCM Small-Mid Cap Equity Fund | LKCM Equity Fund | LKCM Balanced Fund | LKCM Fixed Income Fund | ||||||||||||||||
Investment Income: | ||||||||||||||||||||
Dividends* | $ | 12,921,480 | $ | 1,017,678 | $ | 2,124,154 | $ | 282,693 | $ | 308,595 | ||||||||||
Interest | 3,753 | 1,446 | 900 | 135,740 | 6,990,736 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total income | 12,925,233 | 1,019,124 | 2,125,054 | 418,433 | 7,299,331 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Expenses: | ||||||||||||||||||||
Investment advisory fees | 6,566,837 | 1,122,052 | 904,398 | 135,253 | 989,911 | |||||||||||||||
Distribution expense—Adviser Class (Note B) | 113,400 | — | — | — | — | |||||||||||||||
Administrative fees | 694,805 | 136,175 | 116,664 | 20,430 | 159,736 | |||||||||||||||
Accounting and transfer agent fees and expenses | 323,492 | 295,223 | �� | 81,714 | 42,613 | 100,246 | ||||||||||||||
Professional fees | 146,816 | 22,729 | 23,415 | 7,022 | 35,199 | |||||||||||||||
Trustees’ fees | 120,866 | 8,000 | 14,671 | 2,914 | 26,519 | |||||||||||||||
Custody fees and expenses | 110,916 | 26,930 | 14,176 | 4,190 | 21,065 | |||||||||||||||
Federal and state registration | 93,447 | 113,299 | 56,296 | 11,580 | 40,820 | |||||||||||||||
Reports to shareholders | 32,319 | 23,019 | 3,985 | 1,048 | 3,980 | |||||||||||||||
Other | 176,510 | 12,617 | 23,160 | 3,976 | 36,662 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total expenses | 8,379,408 | 1,760,044 | 1,238,479 | 229,026 | 1,414,138 | |||||||||||||||
Less, expense waiver and/or reimbursement (Note B) | — | (263,974 | ) | (204,881 | ) | (62,559 | ) | (127,253 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net expenses | 8,379,408 | 1,496,070 | 1,033,598 | 166,467 | 1,286,885 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income (loss) | 4,545,825 | (476,946 | ) | 1,091,456 | 251,966 | 6,012,446 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Realized and Unrealized Gain (Loss) on Investments: | ||||||||||||||||||||
Net realized gain (loss) on investments | 71,291,554 | (5,294,736 | ) | 416,504 | 207,068 | 1,628,044 | ||||||||||||||
Net change in unrealized appreciation/depreciation on investments | 1,660,006 | 15,449,619 | 16,294,358 | 1,829,984 | 2,747,190 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net realized and unrealized gain on investments | 72,951,560 | 10,154,883 | 16,710,862 | 2,037,052 | 4,375,234 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Increase in Net Assets | ||||||||||||||||||||
Resulting from Operations | $ | 77,497,385 | $ | 9,677,937 | $ | 17,802,318 | $ | 2,289,018 | $ | 10,387,680 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
* Net of foreign taxes withheld | $ | — | $ | 1,725 | $ | — | $ | 559 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
29
STATEMENTSOF CHANGESIN NET ASSETS
LKCM Small Cap Equity Fund | LKCM Small-Mid Cap Equity Fund | |||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2012 | May 2, 2011(1) through December 31, 2011 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 4,545,825 | $ | (2,783,986 | ) | $ | (476,946 | ) | $ | (37,460 | ) | |||||
Net realized gain (loss) on investments | 71,291,554 | 69,601,456 | (5,294,736 | ) | (699,870 | ) | ||||||||||
Net change in unrealized appreciation/depreciation on investments | 1,660,006 | (35,091,526 | ) | 15,449,619 | 1,047,029 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 77,497,385 | 31,725,944 | 9,677,937 | 309,699 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Dividends and Distributions to Institutional Class Shareholders: | ||||||||||||||||
Net investment income | (4,320,888 | ) | — | — | — | |||||||||||
Net realized gain on investments | (59,944,714 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
(64,265,602 | ) | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Dividends and Distributions to Adviser Class Shareholders: | ||||||||||||||||
Net investment income | (104,701 | ) | — | — | — | |||||||||||
Net realized gain on investments | (3,026,087 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
(3,130,788 | ) | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from Fund share transactions (Note C) | 22,217,530 | 62,042,933 | 216,731,428 | 23,444,807 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 32,318,525 | 93,768,877 | 226,409,365 | 23,754,506 | ||||||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 828,403,517 | 734,634,640 | 23,754,506 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period* | $ | 860,722,042 | $ | 828,403,517 | $ | 250,163,871 | $ | 23,754,506 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Including accumulated net investment income of | $ | 120,236 | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
(1) | Commencement of operations. |
The accompanying notes are an integral part of these financial statements.
30
STATEMENTSOF CHANGESIN NET ASSETS
LKCM Equity Fund | LKCM Balanced Fund | |||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2012 | Year Ended December 31, 2011 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 1,091,456 | $ | 636,785 | $ | 251,966 | $ | 223,658 | ||||||||
Net realized gain (loss) on investments | 416,504 | 847,915 | 207,068 | (4,518 | ) | |||||||||||
Net change in unrealized appreciation/depreciation on investments | 16,294,358 | 1,370,417 | 1,829,984 | 271,728 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 17,802,318 | 2,855,117 | 2,289,018 | 490,868 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||
Net investment income | (1,050,235 | ) | (636,154 | ) | (251,963 | ) | (223,616 | ) | ||||||||
Net realized gain on investments | (95,025 | ) | (1,598,383 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
(1,145,260 | ) | (2,234,537 | ) | (251,963 | ) | (223,616 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from Fund share transactions (Note C) | 41,924,696 | 29,557,371 | 1,203,679 | 1,806,145 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total increase in net assets | 58,581,754 | 30,177,951 | 3,240,734 | 2,073,397 | ||||||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 102,547,601 | 72,369,650 | 18,559,750 | 16,486,353 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period* | $ | 161,129,355 | $ | 102,547,601 | $ | 21,800,484 | $ | 18,559,750 | ||||||||
|
|
|
|
|
|
|
| |||||||||
* Including accumulated net investment income of | $ | 41,852 | $ | 631 | $ | 96 | $ | 107 | ||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
31
STATEMENTSOF CHANGESIN NET ASSETS
LKCM | ||||||||
Fixed Income Fund | ||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | |||||||
Operations: | ||||||||
Net investment income | $ | 6,012,446 | $ | 5,703,042 | ||||
Net realized gain on investments | 1,628,044 | 917,718 | ||||||
Net change in unrealized appreciation/depreciation on investments | 2,747,190 | 230,560 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 10,387,680 | 6,851,320 | ||||||
|
|
|
| |||||
Dividends and Distributions to Shareholders: | ||||||||
Net investment income | (6,031,076 | ) | (5,721,525 | ) | ||||
Net realized gain on investments | (1,152,139 | ) | (1,206,565 | ) | ||||
|
|
|
| |||||
(7,183,215 | ) | (6,928,090 | ) | |||||
|
|
|
| |||||
Net increase in net assets resulting from Fund share transactions (Note C) | 24,559,400 | 15,840,038 | ||||||
|
|
|
| |||||
Total increase in net assets | 27,763,865 | 15,763,268 | ||||||
Net Assets: | ||||||||
Beginning of period | 178,115,844 | 162,352,576 | ||||||
|
|
|
| |||||
End of period | $ | 205,879,709 | $ | 178,115,844 | ||||
|
|
|
|
The accompanying notes are an integral part of these financial statements.
32
FINANCIAL HIGHLIGHTS
SELECTED DATAFOR EACH SHAREOF CAPITAL STOCK OUTSTANDING
LKCM Small Cap Equity Fund – Institutional Class | ||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | Year Ended December 31, 2008 | ||||||||||||||||
Net Asset Value—Beginning of Period | $ | 22.45 | $ | 21.49 | $ | 16.16 | $ | 12.24 | $ | 20.03 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income (loss)(1) | 0.13 | (0.08 | ) | (0.07 | ) | (0.05 | ) | (0.03 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | 2.01 | 1.04 | 5.40 | 3.97 | (7.75 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.14 | 0.96 | 5.33 | 3.92 | (7.78 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from net investment income | (0.13 | ) | — | — | — | — | ||||||||||||||
Distributions from net realized gains | (1.77 | ) | — | — | — | (0.01 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total dividends and distributions | (1.90 | ) | — | — | — | (0.01 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value—End of Period | $ | 22.69 | $ | 22.45 | $ | 21.49 | $ | 16.16 | $ | 12.24 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 9.74 | % | 4.47 | % | 32.98 | % | 32.03 | % | (38.87 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (thousands) | $ | 819,985 | $ | 785,280 | $ | 690,511 | $ | 529,166 | $ | 385,223 | ||||||||||
Ratio of expenses to average net assets | 0.94 | % | 0.95 | % | 0.96 | % | 1.00 | % | 0.97 | % | ||||||||||
Ratio of net investment income (loss) to average net assets | 0.53 | % | (0.33 | )% | (0.38 | )% | (0.35 | )% | (0.17 | )% | ||||||||||
Portfolio turnover rate(2) | 49 | % | 50 | % | 57 | % | 59 | % | 61 | % |
(1) | Net investment income (loss) per share represents net investment income (loss) divided by the average shares outstanding throughout the period. |
(2) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
LKCM Small Cap Equity Fund – Adviser Class | ||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | Year Ended December 31, 2008 | ||||||||||||||||
Net Asset Value—Beginning of Period | $ | 21.88 | $ | 21.00 | $ | 15.83 | $ | 12.02 | $ | 19.72 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income (loss)(1) | 0.07 | (0.13 | ) | (0.11 | ) | (0.08 | ) | (0.07 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | 1.95 | 1.01 | 5.28 | 3.89 | (7.62 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.02 | 0.88 | 5.17 | 3.81 | (7.69 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from net investment income | (0.06 | ) | — | — | — | — | ||||||||||||||
Distributions from net realized gains | (1.77 | ) | — | — | — | (0.01 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total dividends and distributions | (1.83 | ) | — | — | — | (0.01 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value—End of Period | $ | 22.07 | $ | 21.88 | $ | 21.00 | $ | 15.83 | $ | 12.02 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 9.45 | % | 4.19 | % | 32.66 | % | 31.70 | % | (39.02 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (thousands) | $ | 40,737 | $ | 43,124 | $ | 44,124 | $ | 35,725 | $ | 24,925 | ||||||||||
Ratio of expenses to average net assets | 1.19 | % | 1.20 | % | 1.21 | % | 1.25 | % | 1.22 | % | ||||||||||
Ratio of net investment income (loss) to average net assets | 0.28 | % | (0.58 | )% | (0.63 | )% | (0.60 | )% | (0.42 | )% | ||||||||||
Portfolio turnover rate(2) | 49 | % | 50 | % | 57 | % | 59 | % | 61 | % |
(1) | Net investment income (loss) per share represents net investment income (loss) divided by the average shares outstanding throughout the period. |
(2) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
33
FINANCIAL HIGHLIGHTS
SELECTED DATAFOR EACH SHAREOF CAPITAL STOCK OUTSTANDING
LKCM | ||||||||
Small-Mid Cap Equity Fund | ||||||||
Year Ended December 31, 2012 | May 2, 2011(1) through December 31, 2011 | |||||||
Net Asset Value—Beginning of Period | $ | 8.86 | $ | 10.00 | ||||
|
|
|
| |||||
Net investment loss(2) | (0.03 | ) | (0.02 | ) | ||||
Net realized and unrealized gain (loss) on investments | 0.85 | (1.12 | ) | |||||
|
|
|
| |||||
Total from investment operations | 0.82 | (1.14 | ) | |||||
|
|
|
| |||||
Net Asset Value—End of Period | $ | 9.68 | $ | 8.86 | ||||
|
|
|
| |||||
Total Return | 9.26 | % | (11.40 | )%(3) | ||||
Ratios and Supplemental Data: | ||||||||
Net assets, end of period (thousands) | $ | 250,164 | $ | 23,755 | ||||
Ratio of expenses to average net assets: | ||||||||
Before expense waiver and/or reimbursement | 1.18 | % | 2.14 | %(4) | ||||
After expense waiver and/or reimbursement | 1.00 | % | 1.00 | %(4) | ||||
Ratio of net investment loss to average net assets: | ||||||||
Before expense waiver and/or reimbursement | (0.50 | )% | (1.55 | )%(4) | ||||
After expense waiver and/or reimbursement | (0.32 | )% | (0.41 | )%(4) | ||||
Portfolio turnover rate | 56 | % | 36 | % |
(1) | Commencement of operations. |
(2) | Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the period. |
(3) | Not annualized. |
(4) | Annualized. |
LKCM Equity Fund | ||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | Year Ended December 31, 2008 | ||||||||||||||||
Net Asset Value—Beginning of Period | $ | 15.34 | $ | 15.18 | $ | 13.02 | $ | 10.33 | $ | 15.38 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income | 0.14 | (1) | 0.11 | (1) | 0.08 | 0.10 | 0.16 | |||||||||||||
Net realized and unrealized gain (loss) on investments | 2.27 | 0.39 | 2.24 | 2.69 | (5.05 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 2.41 | 0.50 | 2.32 | 2.79 | (4.89 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from net investment income | (0.12 | ) | (0.10 | ) | (0.08 | ) | (0.10 | ) | (0.16 | ) | ||||||||||
Distributions from net realized gains | (0.01 | ) | (0.24 | ) | (0.08 | ) | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total dividends and distributions | (0.13 | ) | (0.34 | ) | (0.16 | ) | (0.10 | ) | (0.16 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value—End of Period | $ | 17.62 | $ | 15.34 | $ | 15.18 | $ | 13.02 | $ | 10.33 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 15.69 | % | 3.30 | % | 17.77 | % | 27.01 | % | (31.80 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (thousands) | $ | 161,129 | $ | 102,548 | $ | 72,370 | $ | 49,157 | $ | 36,677 | ||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense waiver and/or reimbursement | 0.96 | % | 0.99 | % | 1.04 | % | 1.13 | % | 1.06 | % | ||||||||||
After expense waiver and/or reimbursement | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | ||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||
Before expense waiver and/or reimbursement | 0.69 | % | 0.54 | % | 0.39 | % | 0.62 | % | 0.85 | % | ||||||||||
After expense waiver and/or reimbursement | 0.85 | % | 0.73 | % | 0.63 | % | 0.95 | % | 1.11 | % | ||||||||||
Portfolio turnover rate | 12 | % | 20 | % | 23 | % | 26 | % | 31 | % |
(1) | Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. |
The accompanying notes are an integral part of these financial statements.
34
FINANCIAL HIGHLIGHTS
SELECTED DATAFOR EACH SHAREOF CAPITAL STOCK OUTSTANDING
LKCM Balanced Fund | ||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | Year Ended December 31, 2008 | ||||||||||||||||
Net Asset Value—Beginning of Period | $ | 14.53 | $ | 14.25 | $ | 13.09 | $ | 10.85 | $ | 13.84 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income | 0.19 | 0.17 | 0.18 | 0.22 | 0.26 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.58 | 0.28 | 1.16 | 2.24 | (2.96 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.77 | 0.45 | 1.34 | 2.46 | (2.70 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from net investment income | (0.19 | ) | (0.17 | ) | (0.18 | ) | (0.22 | ) | (0.28 | ) | ||||||||||
Distributions from net realized gains | — | — | — | — | (0.01 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total dividends and distributions | (0.19 | ) | (0.17 | ) | (0.18 | ) | (0.22 | ) | (0.29 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value—End of Period | $ | 16.11 | $ | 14.53 | $ | 14.25 | $ | 13.09 | $ | 10.85 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 12.20 | % | 3.16 | % | 10.31 | % | 22.90 | % | (19.70 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (thousands) | $ | 21,800 | $ | 18,560 | $ | 16,486 | $ | 13,476 | $ | 10,156 | ||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense waiver and/or reimbursement | 1.10 | % | 1.14 | % | 1.25 | % | 1.41 | % | 1.38 | % | ||||||||||
After expense waiver and/or reimbursement | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | ||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||
Before expense waiver and/or reimbursement | 0.91 | % | 0.83 | % | 0.89 | % | 1.28 | % | 1.51 | % | ||||||||||
After expense waiver and/or reimbursement | 1.21 | % | 1.17 | % | 1.34 | % | 1.89 | % | 2.09 | % | ||||||||||
Portfolio turnover rate | 15 | % | 34 | % | 13 | % | 22 | % | 38 | % | ||||||||||
LKCM Fixed Income Fund | ||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | Year Ended December 31, 2008 | ||||||||||||||||
Net Asset Value—Beginning of Period | $ | 11.04 | $ | 11.03 | $ | 10.85 | $ | 10.20 | $ | 10.33 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income | 0.34 | 0.37 | 0.40 | 0.43 | 0.43 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.25 | 0.09 | 0.22 | 0.65 | (0.13 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.59 | 0.46 | 0.62 | 1.08 | 0.30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Dividends from net investment income | (0.34 | ) | (0.37 | ) | (0.40 | ) | (0.43 | ) | (0.43 | ) | ||||||||||
Distributions from net realized gains | (0.06 | ) | (0.08 | ) | (0.04 | ) | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total dividends and distributions | (0.40 | ) | (0.45 | ) | (0.44 | ) | (0.43 | ) | (0.43 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Asset Value—End of Period | $ | 11.23 | $ | 11.04 | $ | 11.03 | $ | 10.85 | $ | 10.20 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | 5.44 | % | 4.22 | % | 5.82 | % | 10.77 | % | 2.99 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (thousands) | $ | 205,880 | $ | 178,116 | $ | 162,353 | $ | 149,218 | $ | 120,674 | ||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense waiver and/or reimbursement | 0.71 | % | 0.72 | % | 0.73 | % | 0.76 | % | 0.73 | % | ||||||||||
After expense waiver and/or reimbursement | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||
Before expense waiver and/or reimbursement | 2.98 | % | 3.31 | % | 3.55 | % | 4.00 | % | 4.15 | % | ||||||||||
After expense waiver and/or reimbursement | 3.04 | % | 3.38 | % | 3.63 | % | 4.11 | % | 4.23 | % | ||||||||||
Portfolio turnover rate | 31 | % | 24 | % | 20 | % | 30 | % | 23 | % |
The accompanying notes are an integral part of these financial statements.
35
LKCM FUNDS
NOTESTOTHE FINANCIAL STATEMENTS
A. Organization and Significant Accounting Policies: LKCM Funds (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end, management investment company. The Trust was organized as a Delaware business trust on February 10, 1994 and consists of eight diversified series, five of which are presented herein and include the LKCM Small Cap Equity Fund, LKCM Small-Mid Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund and LKCM Fixed Income Fund (collectively, the “Funds”), the assets of which are invested in separate, independently managed portfolios. Investment operations of the Funds began on July 14, 1994 (LKCM Small Cap Equity Fund), January 3, 1996 (LKCM Equity Fund), December 30, 1997 (LKCM Balanced Fund and LKCM Fixed Income Fund), and May 2, 2011 (LKCM Small-Mid Cap Equity Fund). The Small Cap Equity Fund and the Equity Fund issued a second class of shares, Adviser Class Shares, and renamed the initial class as Institutional Class Shares on May 1, 2003. The Small Cap Equity Adviser Class Shares were initially sold on June 5, 2003 and are subject to expenses pursuant to the Rule 12b-1 plan described in Note B. The Equity Fund and Small-Mid Cap Equity Fund Adviser Class Shares have not yet commenced sales. Each Fund charges a 1% redemption fee for redemptions on Fund shares held for less than 30 days.
The LKCM Small Cap Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of smaller companies (those with market capitalizations at the time of investment between $400 million and $2.5 billion) which Luther King Capital Management Corporation (the “Adviser”) believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. The LKCM Small-Mid Cap Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of small-mid capitalization companies (those with market capitalizations at the time of investment between $1 billion and $7 billion) which the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above average capital appreciation. The LKCM Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of companies which the Adviser believes are likely to have above-average growth in revenue and/or earnings, above-average returns on shareholders’ equity and under-leveraged balance sheets, and potential for above-average capital appreciation. The LKCM Balanced Fund seeks to provide investors with current income and long-term capital appreciation by investing under normal circumstances primarily in a portfolio of equity and fixed income securities with at least 25% of the Fund’s total assets invested in fixed income securities. The LKCM Fixed Income Fund seeks to provide investors with current income by investing under normal circumstances at least 80% of its net assets in a portfolio of investment grade corporate and government fixed income securities.
The following is a summary of significant accounting policies followed by the Funds in preparation of the financial statements.
1. Security Valuation: Securities listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price taken from the exchange where the security is primarily traded. Nasdaq National Market securities are valued at the Nasdaq Official Closing Price (“NOCP”). Unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the mean of the most recent quoted bid and asked price. Securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price available before the time when assets are valued. Debt securities (other than obligations having a maturity of 60 days or less) are normally valued at the mean of the bid and ask price and/or by using a combination of daily quotes or matrix evaluations provided by an independent pricing service. Debt securities purchased with remaining maturities of 60 days or less are valued at amortized cost which approximates fair value. Other assets and securities for which no quotations are readily available (including restricted securities) are valued in good faith at fair value using methods determined by the Board of Trustees. The Board has adopted specific procedures for valuing portfolio securities and delegated the implementation of these procedures to the Adviser. The procedures authorize the Adviser to make all determinations regarding the fair value of a portfolio security and to report such determinations to the Board of Trustees. The Funds may also use independent pricing services to assist in pricing portfolio securities.
The Trust has adopted accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used in pricing the asset or liability. These standards state that “observable inputs” reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources and “unobservable inputs” reflect an entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. These inputs are summarized in the three broad levels listed below.
36
Level 1 - | Quoted unadjusted prices for identical instruments in active markets to which the Trust has access at the date of measurement. |
Level 2 - | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers. |
Level 3 - | Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Trust’s own assumptions that market participants would use to price the asset or liability based on the best available information. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Funds’ investments as of December 31, 2012:
LKCM Small Cap Equity Fund
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 840,197,148 | $ | — | $ | — | $ | 840,197,148 | ||||||||
Money Market Fund | 16,166,526 | — | — | 16,166,526 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments* | $ | 856,363,674 | $ | — | $ | — | $ | 856,363,674 | ||||||||
|
|
|
|
|
|
|
| |||||||||
LKCM Small-Mid Cap Equity Fund |
| |||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 240,326,762 | $ | — | $ | — | $ | 240,326,762 | ||||||||
Money Market Funds | 9,653,407 | — | — | 9,653,407 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments* | $ | 249,980,169 | $ | — | $ | — | $ | 249,980,169 | ||||||||
|
|
|
|
|
|
|
| |||||||||
LKCM Equity Fund |
| |||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 144,783,861 | $ | — | $ | — | $ | 144,783,861 | ||||||||
Money Market Funds | 16,567,484 | — | — | 16,567,484 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments* | $ | 161,351,345 | $ | — | $ | — | $ | 161,351,345 | ||||||||
|
|
|
|
|
|
|
| |||||||||
LKCM Balanced Fund |
| |||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 15,388,710 | $ | — | $ | — | $ | 15,388,710 | ||||||||
Corporate Bonds | — | 6,209,963 | — | 6,209,963 | ||||||||||||
Money Market Fund | 174,462 | — | — | 174,462 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments* | $ | 15,563,172 | $ | 6,209,963 | $ | — | $ | 21,773,135 | ||||||||
|
|
|
|
|
|
|
| |||||||||
LKCM Fixed Income Fund |
| |||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Preferred Stocks | $ | 7,115,450 | $ | — | $ | — | $ | 7,115,450 | ||||||||
Corporate Bonds | — | 189,893,346 | — | 189,893,346 | ||||||||||||
U.S. Government & Agency Issues | — | 5,122,914 | — | 5,122,914 | ||||||||||||
Money Market Fund | 2,152,774 | — | — | 2,152,774 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments* | $ | 9,268,224 | $ | 195,016,260 | $ | — | $ | 204,284,484 | ||||||||
|
|
|
|
|
|
|
|
* | Additional information regarding the industry classifications of these investments is disclosed in the Schedule of Investments. |
There were no significant transfers into or out of Level 1, Level 2 or Level 3 fair value measurements during the reporting period, as compared to their classification from the previous annual report.
In May 2011, the FASB issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“IFRS”). ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRS. ASU No. 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. The Funds have disclosed the applicable requirements of this accounting standard in their financial statements.
2. Federal Income Taxes: The Funds have elected to be treated as “regulated investment companies” under Subchapter M of the Internal Revenue Code and each Fund intends to distribute all of its investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded.
37
3. Distributions to Shareholders: The LKCM Small Cap Equity, LKCM Small-Mid Cap Equity and LKCM Equity Funds generally intend to pay dividends and net capital gain distributions, if any, at least on an annual basis. The LKCM Balanced and LKCM Fixed Income Funds generally intend to pay dividends on a quarterly basis and net capital gain distributions, if any, at least on an annual basis.
4. Foreign Securities: Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include devaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and securities of the U.S. government.
5. Expense Allocation: Expenses incurred by the Funds are allocated among the Funds based upon (i) relative average net assets, (ii) a specific identification basis as incurred, or (iii) evenly among the Funds, depending on the nature of the expense. Expenses that are directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class. For multi-class Funds, income, unrealized and realized gains/losses are generally allocated between the Fund’s classes in proportion to their respective net assets.
6. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
7. Guarantees and Indemnifications: In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds expect the risk of loss to be remote.
8. Other: Security and shareholder transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income and dividends and distributions to shareholders are recorded on the ex-dividend date. Interest income is recognized on the accrual basis. All discounts and premiums are amortized on the effective interest method for tax and financial reporting purposes.
Generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share.
Accordingly, at December 31, 2012, reclassifications were recorded as follows:
LKCM Small Cap Equity Fund | LKCM Small-Mid Cap Equity Fund | LKCM Equity Fund | LKCM Balanced Fund | LKCM Fixed Income Fund | ||||||||||||||||
Accumulated net investment income (loss) | $ | — | $ | 476,946 | $ | — | $ | (14 | ) | $ | 18,630 | |||||||||
Accumulated gains (loss) | — | — | — | 14 | (18,630 | ) | ||||||||||||||
Capital stock | — | (476,946 | ) | — | — | — |
9. Restricted and Illiquid Securities: The Funds are permitted to invest in securities that are subject to legal or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.
B. Investment Advisory and Other Agreements: Luther King Capital Management Corporation (the “Adviser”) serves as the investment adviser to the Funds under an Investment Advisory Agreement (the “Agreement”). The Adviser receives a fee, computed daily and payable quarterly, at the annual rates presented below as applied to each Fund’s average daily net assets. The Adviser has contractually agreed to waive all or a portion of its management fee and/or reimburse the Funds through April 30, 2013 in order to limit each Fund’s operating expenses to the annual cap rates presented below. For the year ended December 31, 2012, the Adviser waived the following management fees to meet its expense cap obligations:
LKCM Small Cap Equity Fund | LKCM Small-Mid Cap Equity Fund | LKCM Equity Fund | LKCM Balanced Fund | LKCM Fixed Income Fund | ||||||
Annual Advisory Rate | 0.75% | 0.75% | 0.70% | 0.65% | 0.50% | |||||
Annual Cap on Expenses | 1.00% (Inst.) | 1.00% | 0.80% | 0.80% | 0.65% | |||||
1.25% (Adviser) | ||||||||||
Fees Waived in 2012 | — | $263,974 | $204,881 | $62,559 | $127,253 |
U.S. Bancorp Fund Services, LLC serves as transfer agent and administrator for the Trust and serves as accounting services agent for the Trust. U.S. Bank, N.A. serves as custodian for the Trust.
38
Distribution services are performed pursuant to a distribution contract with Quasar Distributors, LLC, the Trust’s principal underwriter.
The Small Cap Equity Fund, Small-Mid Cap Equity and the Equity Fund have adopted a Rule 12b-1 plan under which the Adviser Class of each Fund may pay up to 1.00% of its average daily net assets for distribution and other services. However, the Board of Trustees has currently only authorized a fee of 0.25% of each Fund’s average daily net assets. For the year ended December 31, 2012, fees accrued by the Small Cap Equity Fund pursuant to the 12b-1 Plan were $113,400.
C. Fund Shares: At December 31, 2012, there was an unlimited number of shares of beneficial interest, no par value, authorized. The following table summarizes the activity in shares of each Fund:
Small Cap Equity Fund
Year Ended December 31, 2012 | Year Ended December 31, 2011 | |||||||||||||||
Institutional Class | Institutional Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 8,100,091 | $ | 196,206,366 | 8,832,325 | $ | 201,191,471 | ||||||||||
Shares issued to shareholders in reinvestment of distributions | 2,352,426 | 52,200,325 | — | — | ||||||||||||
Shares redeemed | (9,289,328 | ) | (223,028,143 | ) | (5,987,585 | ) | (135,600,658 | ) | ||||||||
Redemption fee | 16,577 | 7,239 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 1,163,189 | $ | 25,395,125 | 2,844,740 | $ | 65,598,052 | ||||||||||
|
|
|
| |||||||||||||
Shares Outstanding: | ||||||||||||||||
Beginning of period | 34,981,117 | 32,136,377 | ||||||||||||||
|
|
|
| |||||||||||||
End of period | 36,144,306 | 34,981,117 | ||||||||||||||
|
|
|
| |||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2011 | |||||||||||||||
Adviser Class | Adviser Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 354,133 | $ | 8,367,217 | 818,200 | $ | 17,753,894 | ||||||||||
Shares issued to shareholders in reinvestment of distributions | 144,448 | 3,118,634 | — | — | ||||||||||||
Shares redeemed | (623,689 | ) | (14,664,514 | ) | (948,884 | ) | (21,309,344 | ) | ||||||||
Redemption fee | 1,068 | 331 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (125,108 | ) | $ | (3,177,595 | ) | (130,684 | ) | $ | (3,555,119 | ) | ||||||
|
|
|
| |||||||||||||
Shares Outstanding: | ||||||||||||||||
Beginning of period | 1,970,863 | 2,101,547 | ||||||||||||||
|
|
|
| |||||||||||||
End of period | 1,845,755 | 1,970,863 | ||||||||||||||
|
|
|
| |||||||||||||
Total Net Increase | $ | 22,217,530 | $ | 62,042,933 | ||||||||||||
|
|
|
| |||||||||||||
Small-Mid Cap Equity Fund | ||||||||||||||||
Year Ended December 31, 2012 | May 2, 2011(1) through December 31, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 25,719,580 | $ | 241,058,436 | 2,908,059 | $ | 25,500,659 | ||||||||||
Shares redeemed | (2,555,855 | ) | (24,343,804 | ) | (226,034 | ) | (2,055,865 | ) | ||||||||
Redemption fee | 16,796 | 13 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 23,163,725 | $ | 216,731,428 | 2,682,025 | $ | 23,444,807 | ||||||||||
|
|
|
| |||||||||||||
Shares Outstanding: | ||||||||||||||||
Beginning of period | 2,682,025 | — | ||||||||||||||
|
|
|
| |||||||||||||
End of period | 25,845,750 | 2,682,025 | ||||||||||||||
|
|
|
|
(1) | Commencement of operations. |
39
Equity Fund |
| |||||||||||||||
Year Ended | Year Ended | |||||||||||||||
December 31, 2012 | December 31, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 3,492,239 | $ | 59,271,200 | 2,438,054 | $ | 37,526,183 | ||||||||||
Shares issued to shareholders in reinvestment of distributions | 55,498 | 964,550 | 141,992 | 2,188,102 | ||||||||||||
Shares redeemed | (1,089,491 | ) | (18,316,158 | ) | (663,144 | ) | (10,157,406 | ) | ||||||||
Redemption fee | 5,104 | 492 | ||||||||||||||
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|
|
|
|
|
|
| |||||||||
Net increase | 2,458,246 | $ | 41,924,696 | 1,916,902 | $ | 29,557,371 | ||||||||||
|
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|
| |||||||||||||
Shares Outstanding: | ||||||||||||||||
Beginning of period | 6,685,460 | 4,768,558 | ||||||||||||||
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|
|
| |||||||||||||
End of period | 9,143,706 | 6,685,460 | ||||||||||||||
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| |||||||||||||
Balanced Fund |
| |||||||||||||||
Year Ended | Year Ended | |||||||||||||||
December 31, 2012 | December 31, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 119,962 | $ | 1,887,652 | 387,905 | $ | 5,695,753 | ||||||||||
Shares issued to shareholders in reinvestment of distributions | 15,738 | 248,897 | 15,313 | 221,650 | ||||||||||||
Shares redeemed | (59,493 | ) | (932,870 | ) | (282,945 | ) | (4,111,314 | ) | ||||||||
Redemption fee | — | 56 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 76,207 | $ | 1,203,679 | 120,273 | $ | 1,806,145 | ||||||||||
|
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|
| |||||||||||||
Shares Outstanding: | ||||||||||||||||
Beginning of period | 1,277,271 | 1,156,998 | ||||||||||||||
|
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|
| |||||||||||||
End of period | 1,353,478 | 1,277,271 | ||||||||||||||
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|
| |||||||||||||
Fixed Income Fund |
| |||||||||||||||
Year Ended | Year Ended | |||||||||||||||
December 31, 2012 | December 31, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 3,756,490 | $ | 42,295,000 | 2,238,192 | $ | 24,941,740 | ||||||||||
Shares issued to shareholders in reinvestment of distributions | 565,654 | 6,353,109 | 557,529 | 6,158,736 | ||||||||||||
Shares redeemed | (2,132,409 | ) | (24,088,709 | ) | (1,372,672 | ) | (15,260,453 | ) | ||||||||
Redemption fee | — | 15 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 2,189,735 | $ | 24,559,400 | 1,423,049 | $ | 15,840,038 | ||||||||||
|
|
|
| |||||||||||||
Shares Outstanding: | ||||||||||||||||
Beginning of period | 16,136,186 | 14,713,137 | ||||||||||||||
|
|
|
| |||||||||||||
End of period | 18,325,921 | 16,136,186 | ||||||||||||||
|
|
|
|
D. Security Transactions: Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2012 were as follows:
Purchases | Sales | |||||||||||||||
U.S. Government | Other | U.S. Government | Other | |||||||||||||
LKCM Small Cap Equity Fund | $ | — | $ | 412,289,257 | $ | — | $ | 432,048,417 | ||||||||
LKCM Small-Mid Cap Equity Fund | — | 286,901,528 | — | 78,399,228 | ||||||||||||
LKCM Equity Fund | — | 43,011,893 | — | 14,276,776 | ||||||||||||
LKCM Balanced Fund | — | 4,237,210 | — | 3,030,779 | ||||||||||||
LKCM Fixed Income Fund | — | 83,803,299 | 1,274,660 | 57,799,768 |
40
E. Tax Information: At December 31, 2012, the components of accumulated earnings (losses) on a tax basis were as follows:
LKCM Small Cap Equity Fund | LKCM Small-Mid Cap Equity Fund | LKCM Equity Fund | LKCM Balanced Fund | LKCM Fixed Income Fund | ||||||||||||||||
Cost of Investments | $ | 688,341,596 | $ | 234,230,250 | $ | 127,827,560 | $ | 16,453,807 | $ | 192,857,262 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Gross Unrealized Appreciation | 192,757,843 | 21,914,404 | 35,317,824 | 5,409,583 | 11,743,865 | |||||||||||||||
Gross Unrealized Depreciation | (24,735,765 | ) | (6,164,485 | ) | (1,794,039 | ) | (90,255 | ) | (316,643 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net Unrealized Appreciation | $ | 168,022,078 | $ | 15,749,919 | $ | 33,523,785 | $ | 5,319,328 | $ | 11,427,222 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Undistributed Ordinary Income | 120,236 | — | 41,852 | 96 | — | |||||||||||||||
Undistributed Long-Term Capital Gain | 6,374,111 | — | 416,415 | — | 570,734 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Distributable Earnings | $ | 6,494,347 | $ | — | $ | 458,267 | $ | 96 | $ | 570,734 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Other Accumulated Losses | $ | — | $ | (5,247,877 | ) | $ | — | $ | (272,515 | ) | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Accumulated Gains | $ | 174,516,425 | $ | 10,502,042 | $ | 33,982,052 | $ | 5,046,909 | $ | 11,997,956 | ||||||||||
|
|
|
|
|
|
|
|
|
|
The difference between book-basis and tax-basis unrealized appreciation is attributable primarily to the tax deferral of losses on wash sales and partnerships.
At December 31, 2012, the capital loss carryforwards were as follows:
Month/Year Realized | Month/Year Expiring | Short-Term | ||||||
LKCM Small-Mid Cap Equity Fund | Unexpiring Losses | $ | 5,247,877 | |||||
LKCM Balanced Fund | 12/2009 | 12/2017 | $ | 180,429 |
To the extent the Funds realize future net capital gains, taxable distributions will be reduced by any unused capital loss carryforwards as permitted by the Internal Revenue Code.
During the year ended December 31, 2012, the LKCM Balanced Fund utilized capital loss carryforwards of $239,865.
At December 31, 2012, the LKCM Balanced Fund deferred, on a tax basis, post-October capital losses of $92,086.
The tax components of dividends paid during the periods shown below were as follows:
Year Ended December 31, 2012 | Year Ended December 31, 2011 | |||||||||||||||
Ordinary Income | Long-Term Capital Gains | Ordinary Income | Long-Term Capital Gains | |||||||||||||
LKCM Small Cap Equity Fund | $ | 4,425,589 | $ | 62,970,801 | $ | — | $ | — | ||||||||
LKCM Small-Mid Cap Equity Fund | — | — | — | — | ||||||||||||
LKCM Equity Fund | 1,050,235 | 95,025 | 636,154 | 1,598,383 | ||||||||||||
LKCM Balanced Fund | 251,963 | — | 223,616 | — | ||||||||||||
LKCM Fixed Income Fund | 6,096,109 | 1,087,106 | 5,739,348 | 1,188,742 |
The Trust has adopted financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The Trust has reviewed all open tax years and major jurisdictions and concluded that there is no impact on the Funds’ financial position or results of operations. Tax years that remain open to examination by major tax jurisdictions include tax years ended December 31, 2009 through December 31, 2012. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on tax returns as of December 31, 2012. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. If applicable, the Funds would recognize interest accrued related to unrecognized tax benefits in “interest expense” and penalties in “other expense” on the statement of operations.
41
F. Election of Trustees: On February 21, 2013, the Trust held a Special Meeting of Shareholders to elect Trustees to the Board of Trustees of the Trust. In connection with the Special Meeting of Shareholders, the Trust’s shareholders elected J. Luther King, Jr., H. Kirk Downey, Earle A. Shields, Jr., Richard J. Howell, Steven Purvis and Larry J. Lockwood to serve as trustees to the Board of Trustees of the Trust.
The following table illustrates the results of the voting with respect to the election of Trustees:
Trustee | For | Withheld | ||||||
J. Luther King Jr. | 83,209,072 | 2,032,811 | ||||||
H. Kirk Downey | 83,238,239 | 2,003,646 | ||||||
Earle A. Shields, Jr. | 83,208,667 | 2,033,217 | ||||||
Richard J. Howell | 83,248,488 | 1,993,396 | ||||||
Steven R. Purvis | 80,694,422 | 4,547,461 | ||||||
Larry J. Lockwood | 84,999,777 | 242,107 |
G. Subsequent Events: In preparing these financial statements, the Trust has evaluated events after December 31, 2012 that would require adjustment to or additional disclosure in these financial statements.
The Board of Trustees of the Trust and the Board of Directors of Armstrong Associates, Inc. (“Armstrong”) have approved an agreement and plan of reorganization and dissolution between Armstrong and the Trust, on behalf of the LKCM Equity Fund (the “Plan”). Under the Plan, Armstrong would transfer all of its assets to the LKCM Equity Fund, and the LKCM Equity Fund would assume all of the liabilities of Armstrong, in exchange solely for Institutional Class shares of the LKCM Equity Fund, following which Armstrong would distribute those LKCM Equity Fund shares pro rata to its shareholders and dissolve. The Plan must be approved by the shareholders of Armstrong. The Trust currently expects that Armstrong will hold a special meeting of its shareholders to consider the Plan during the second quarter of 2013.
42
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of LKCM Funds:
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of LKCM Funds (the “Funds”) comprising the LKCM Small Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund, LKCM Fixed Income Fund, and LKCM Small-Mid Cap Equity Fund as of December 31, 2012, and the related statements of operations, statements of changes in net assets, and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2012, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the portfolios constituting the LKCM Funds as of December 31, 2012, and the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated in the first paragraph, in conformity with accounting principles generally accepted in the United States of America.
Milwaukee, Wisconsin
February 27, 2013
43
LKCM FUNDS
ADDITIONAL INFORMATION
December 31, 2012
Availability of Proxy Voting Information: A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, as well as the proxy voting record, is available without charge, upon request, by calling toll-free 1-800-688-LKCM or on the SEC website at http://www.sec.gov.
The actual voting records relating to portfolio securities during the twelve month period ended June 30 (as filed with the SEC on Form N-PX) are available without charge, upon request, by calling the Funds toll free at 1-800-688-LKCM or by accessing the SEC’s website at www.sec.gov.
Availability of Quarterly Portfolio Schedule: The Funds’ are required to file complete schedules of portfolio holdings with the SEC for the first and third fiscal quarters on Form N-Q. Once filed, the Funds’ Form N-Q is available without charge upon request on the SEC’s website(http://www.sec.gov) and may be available by calling 1-800-688-LKCM. You can also obtain copies of Form N-Q by (i) visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330); (ii) sending your request and a duplicating fee to the SEC’s Public Reference Room, Washington, DC 20549; or (iii) sending your request electronically to publicinfosec.gov.
44
Information about the Funds’ Trustees:
The business and affairs of the Funds are managed under the direction of the Funds’ Board of Trustees. Information pertaining to the Trustees of the Funds is set forth below. The Statement of Additional Information includes additional information about the Funds’Trustees and officers and is available, without charge, upon request by calling 1-800-688-LKCM.
Name, Address and Age | Position(s) Held with the Trust | Term of of Time | Principal Occupation During Past Five Years | Number of | Other Directorships Held by Trustee | |||||
Disinterested Trustees: | ||||||||||
H. Kirk Downey 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1942 | Chairman of the Board of Trustees | Since 2005 | President and CEO, Texas Systems, LLC and CEO, Texas learning systems LLC since 1999; Dean, M.J. Neeley School of Business, Texas Christian University Business School from 1987 to 1999. | 8 | Non-Executive Chairman of the Board of AZZ Incorporated, (a manufacturing company). | |||||
Trustee | Since 1994 | |||||||||
Earle A. Shields, Jr. 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1920 | Trustee | Since 1994 | Consultant; formerly Consultant for NASDAQ Corp. and Vice President, Merrill Lynch & Co., Inc. | 8 | Priests Pension Fund of the Catholic Diocese of Fort Worth, Lay Workers Pension Fund of the Catholic Diocese of Fort Worth, St. Joseph Health Care Trust, Catholic Schools Trust and Catholic Foundation of North Texas. | |||||
Richard J. Howell 301 Commerce Street | Trustee | Since 2005 | CPA; Adjunct Faculty at SMU Cox School of Business from | 8 | Red Robin Gourmet Burgers, Inc. | |||||
Suite 1600 Fort Worth, TX 76102 Year of Birth: 1942 | Chairman of the Audit and Compliance Committee | Since 2008 | 2004 to 2009; Consulting Services, since 2002; Audit Partner, Arthur Andersen LLP from 1974 to 2002. | |||||||
Larry J. Lockwood 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1953 | Trustee | Since 2013 | C.R. Williams Professor of Finance, Stan Block Endowed Chair in Finance, Department of Finance, Neeley School of Business, Texas Christian University since 1994. | 8 | N/A | |||||
Interested Trustees: | ||||||||||
J. Luther King, Jr.(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1940 | Trustee, President and Chief Executive Officer | Since 1994 | Chairman, President and Director, Luther King Capital Management Corporation since 1979. | 8 | 4K Land & Cattle Company (ranching), Hunt Forest Products (lumber), Southwestern Exposition & Livestock (livestock), Southwest JLK Corporation (management company), Texas Christian University, Texas Southwestern Cattleraisers Foundation (livestock), Tyler Technologies (information management company for government agencies), King Ranch, Inc. (ranching), and Amon Carter Museum of American Art. |
(1) | Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced. |
(2) | Mr. King and Mr. Purvis are “interested persons” of the Trust (as defined in the 1940 Act) because of their affiliation with the Adviser. |
45
Information about the Funds’ Trustees, Continued
Name, Address and Age | Position(s) Held with the Trust | Term of of Time | Principal Occupation During Past Five Years | Number of | Other | |||||
Interested Trustees, Continued: | ||||||||||
Steve R. Purvis(2) 301 Commerce Street | Trustee | Since 2013 | Principal, Luther King Capital Management since 2003, Vice | 8 | N/A | |||||
Suite 1600 Fort Worth, TX 76102 Year of Birth: 1964 | Vice President | Since 2000 | President and Portfolio Adviser Luther King Capital Management since 1996. | |||||||
Name, Address and Age | Position(s) Held with the Trust | Term of of Time | Principal Occupation During Past Five Years | |||||||
Officers: | ||||||||||
J. Luther King, Jr. 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1940 | Trustee, President and Chief Executive Officer | Since 1994 | Chairman, President and Director, Luther King Capital Management Corporation since 1979. | |||||||
Paul W. Greenwell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1950 | Vice President | Since 1996 | Principal, Luther King Capital Management since 1986, Vice President and Portfolio Manager, Luther King Capital Management since 1983. | |||||||
Richard Lenart 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1966 | Secretary and Treasurer | Since 2006 | Luther King Capital Management since 2005. | |||||||
Steven R. Purvis 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1964 | Trustee Vice President | Since 2013 Since 2000 | Principal, Luther King Capital Management since 2003, Vice President and Portfolio Manager, Luther King Capital Management since 1996. | |||||||
Jacob D. Smith 301 Commerce Street Suite 1600 Fort Worth, TX 76102 | Chief Financial Officer | Since 2010 | Vice President, General Counsel and Chief Compliance Officer, Luther King Capital Management since 2006. | |||||||
Year of Birth: 1974 | Chief Compliance Officer | Since 2006 |
(1) | Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced. |
(2) | Mr. King and Mr. Purvis are “interested persons” of the Trust (as defined in the 1940 Act) because of their affiliation with the Adviser. |
46
PRIVACY NOTICE
Our Commitment to Your Privacy
At LKCM Funds, we are committed to safeguarding the confidentiality and privacy of personal information about our shareholders. This privacy notice describes the policies and procedures we have implemented to protect the privacy of your personal information as well as the sources through which we may obtain personal information about you.
How We Protect Your Personal Information
Protecting your personal information is an important priority at LKCM Funds. Accordingly, we have implemented policies and procedures designed to safeguard your personal information, such as your social security number, portfolio and investment history, account numbers, account balances, and contact information from unauthorized access. Pursuant to these policies and procedures, we maintain various physical, technological, and administrative safeguards to protect the security and confidentiality of your personal information, and we adapt these safeguards to respond to evolving technological and other standards.
We do not disclose nonpublic personal information about you to nonaffiliated third parties, except as authorized by you or your representatives, as required or permitted by law, or to certain nonaffiliated third parties, such as custodians, brokers, auditors, attorneys, or proxy administrators, that assist us in providing investment management services to you or on your behalf.
How We Obtain Your Personal Information
We collect nonpublic personal information about you from various sources, including documents and other information that you or your representatives provide to us, communications that we have with you or your representatives, and documents and other information related to your investments or portfolio experience with us.
Please do not hesitate to contact our Chief Compliance Officer if you have any questions regarding the measures we have implemented to protect the privacy of your personal information.
U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
LKCM FUNDS
P.O. Box 701
Milwaukee, WI 53201-0701
Officers and Trustees | ||||
J. Luther King, Jr., CFA, CIC | H. Kirk Downey | Larry J. Lockwood | ||
Trustee, President | Chairman of the Board | Trustee | ||
Paul W. Greenwell | Richard J. Howell | Richard Lenart | ||
Vice President | Trustee | Secretary & Treasurer | ||
Steven R. Purvis, CFA | Earle A. Shields, Jr. | Jacob D. Smith | ||
Trustee, Vice President | Trustee | Chief Financial Officer | ||
Chief Compliance Officer | ||||
Investment Adviser | ||||
Luther King Capital Management Corporation | ||||
301 Commerce Street, Suite 1600 | ||||
Fort Worth, TX 76102 | ||||
Administrator, Transfer Agent, Dividend | ||||
Paying Agent & Shareholder Servicing Agent | ||||
U.S. Bancorp Fund Services, LLC | ||||
P.O. Box 701 | ||||
Milwaukee, WI 53201-0701 | ||||
Custodian | ||||
U.S. Bank, N.A. | ||||
1555 N. River Center Drive, Suite 302 | ||||
Milwaukee, WI 53212 | ||||
Independent Registered Public Accounting Firm | ||||
Deloitte & Touche LLP | ||||
555 E. Wells St., Suite 1400 | ||||
Milwaukee, WI 53202 | ||||
Distributor | ||||
Quasar Distributors, LLC | ||||
615 E. Michigan Street | ||||
Milwaukee, WI 53202 |