ThZeal - The Zeal

As filed with the Securities and Exchange Commission on 9/6/2013

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09303 & 811-09923

Kinetics Mutual Funds, Inc. & Kinetics Portfolios Trust

(Exact name of registrant as specified in charter)

470 Park Avenue South

New York, NY 10016

(Address of principal executive offices) (Zip code)

U.S. Bancorp Fund Services, LLC

615 E. Michigan Street

Milwaukee, WI 53202

(Name and address of agent for service)

(800) 930-3828

Registrant's telephone number, including area code

Date of fiscal year end: December 31, 2013

Date of reporting period: June 30, 2013

Item 1. Reports to Stockholders.

KINETICS MUTUAL FUNDS, INC.

Table of Contents

June 30, 2013

	Page
Shareholders’ Letter	2
Year 2013 Semi-Annual Investment Commentary	7
KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS
Expense Example	11
Statements of Assets & Liabilities	20
Statements of Operations	24
Statements of Changes in Net Assets	28
Notes to Financial Statements	39
Financial Highlights	54
KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS
Allocation of Portfolio Assets	83
Portfolio of Investments — The Internet Portfolio	91
Portfolio of Investments — The Global Portfolio	96
Portfolio of Investments — The Paradigm Portfolio	101
Portfolio of Investments — The Medical Portfolio	107
Portfolio of Investments — The Small Cap Opportunities Portfolio	110
Portfolio of Investments — The Market Opportunities Portfolio	115
Portfolio of Investments — The Alternative Income Portfolio	119
Portfolio of Investments — The Multi-Disciplinary Portfolio	127
Portfolio of Options Written — The Alternative Income Portfolio	132
Portfolio of Options Written — The Multi-Disciplinary Portfolio	150
Statements of Assets & Liabilities	169
Statements of Operations	173
Statements of Changes in Net Assets	177
Notes to Financial Statements	181

KINETICS MUTUAL FUNDS, INC.

Shareholders’ Letter

Dear Fellow Shareholders:

We are pleased to present the Kinetics Mutual Funds (“Funds”) Semi-Annual Report for the six-month period ended June 30, 2013. The investment team at Kinetics Asset Management LLC (“Kinetics”) has always followed a distinctly bottom-up value oriented investment strategy. By definition, this process emphasizes the fundamentals of each individual company within the portfolio over the prevailing macroeconomic factors. We remain constructive on the investment prospects for the Funds with respect to valuations combined with operating expectations, but remain cognizant of the fact that accommodative fiscal policies have likely been a boon to equity valuations. That being said, the Funds appreciated as follows during the first half of the year: The Paradigm Fund +20.55%, The Multi-Disciplinary Fund +0.63%, The Small Cap Opportunities Fund +28.33%, The Market Opportunities Fund +22.27%, The Internet Fund +15.63%, The Medical Fund +24.86%, The Alternative Income Fund +1.65% and The Global Fund +9.34%. This compares to returns of 13.82% for the S&P 500 Index and 6.05% for the MSCI All Country World Index.

Academics and modern investors often seek to add complexity to the investment process, whether it is through attempts at precise financial modeling or complex algorithmic analysis of revenue and earnings trends. We find little value in such approaches; in fact, we have always strived to simplify the investment process. This involves focusing on businesses and industries that have reasonably predictable operating characteristics and are easily understandable if one takes the time to look closely. Consider Howard Hughes Corporation (“HHC”), which is a top holding in several of the Funds. HHC is a real estate development company with assets in some of the most desirable locations in the United States including Honolulu, Hawaii and Manhattan, New York. These properties are in varying stages of development, and therefore the company is generating far less cash flow than it will once the development process is complete. However, it is clear from even a

cursory review of their properties that the company’s current market capitalization, while significantly higher than it was six months ago, does not reflect the intrinsic value of the business. We are content to own shares of HHC and wait patiently for other investors appreciate the future cash flow profile of the company.

The HHC example highlights another distinct element of our investment process: extending our investment time horizon. Just as the preponderance of investors are seeking to add complexity to the investment process, many of these individuals are similarly short-term oriented and attempt to forecast precise quarterly earnings or monthly sales figures (and trade based on those near-term data). We view equity investing no differently than one might view the purchase of an entire private business—accordingly we are far more concerned with the long-term, sustainable cash flow that a company can generate than we are with a quarterly accounting statement. It does not require any exceptional insight to appreciate the value potential that HHC offers; however, many investors are driven by near-term, artificial investment horizons and therefore are unwilling or unable to purchase shares without a tangible catalyst. We view this as an advantage for our investment team and other likeminded value investors.

An additional element of our investment process that is particularly pertinent in the current investment environment, and that we believe distinguishes us from most peers, is our equal focus devoted to qualitative and quantitative factors. The aforementioned mainstream investors devote most, if not all of the investment discovery process to quantitative analysis. For instance, these investors commonly run quantitative screens to focus upon companies with a low multiple of cash flow to enterprise value. We are wary of such quantitative screens for two primary reasons: 1) the numbers only tell half the story, and 2) presumably many hundreds or thousands of other investors are running similar screens. Revisiting our investment in HHC once again, any

type of purely quantitative screen would fail to identify the company for investment, as it has yet to generate its potential cash flows and values many of its assets well below our estimation of replacement value.

The Funds are all managed utilizing the distinct process briefly described above; we believe this will allow us to generate attractive absolute returns going forward. We further have confidence that it requires a unique approach to achieve the extraordinary results we seek.

Shareholders can continue to access additional information from our website, www.kineticsfunds.com. This website provides a broad array of information, including recent portfolio holdings, quarterly investment commentaries, conference call transcripts, newsflashes, recent performance data, and online access to account information.

Kinetics offers the following funds to investors:

The Paradigm Fund focuses on companies that are valued attractively and currently have, or are expected to soon have, sustainable high business returns. The Fund has produced attractive returns since its inception in an environment that should be described as difficult for equity investors. The Paradigm Fund is Kinetics’ flagship fund.

The Multi-Disciplinary Fund seeks to utilize stock options and fixed-income investments in order to provide investors with equity-like returns, but with more muted volatility. At times, the options strategies of the Fund may cause the manager to purchase equity securities.

The Small Cap Opportunities Fund focuses on undervalued and special situation small capitalization equities that have the potential for rewarding

long-term investment results. The same investment fundamentals employed by The Paradigm Fund are used to identify such opportunities.

The Medical Fund is a sector fund, offering an investment in scientific discovery within the promising field of medical research, particularly in the development of cancer treatments and therapies. As a sector fund, The Medical Fund is likely to have heightened volatility.

The Internet Fund is a sector fund that focuses on companies engaged in the evolution of Internet-related developments. As such, this Fund has been, and is likely to continue to be, quite volatile. The Internet Fund is not designed to be a major component of one’s equity exposure. More recently, this Fund has been focusing on content companies, which we believe will be the winners in the next generation of Internet development.

The Global Fund is focused on selecting long life cycle international companies that can generate long-term wealth through their business operations. This Fund is presently finding exciting opportunities in the more developed markets.

The Market Opportunities Fund focuses on those companies that benefit from increasing transactional volume or throughput, such as publicly-traded exchanges and credit card processors, or companies that act as facilitators, such as gaming companies, airports and publicly-traded toll roads.

The end of the second quarter of 2013 marks the first 6 months of performance under The Alternative Income Fund’s new investment strategy since undergoing a proxy vote on December 21, 2012 wherein Fund shareholders approved changes to the Fund’s investment objective and to one of the Fund’s fundamental investment restrictions. As a result of the proxy, The Water Infrastructure Fund was renamed The Alternative Income Fund. The

primary investment objective of the Alternative Income Fund is to provide current income and gains, with a secondary objective of obtaining long-term growth of capital. Consistent with this change, prospectively, the Fund will seek to generate a total return that exceeds most short-term U.S. fixed income indexes, with limited market value variability.



.	Peter B. Doyle President Kinetics Mutual Funds, Inc.

KINETICS MUTUAL FUNDS, INC.

Investment Commentary

Dear Fellow Shareholders,

The S&P 500 Index (“S&P 500”) and the Dow Jones Industrial Average (“DJ Industrial”) both crossed important psychological thresholds during the first half of 2013 by eclipsing 2007 peaks levels. It is inevitable that investors will benchmark investment returns following a prolonged market decline against the pre-decline peak levels, but it is important that our shareholders understand that when taken in isolation, the fact that various equity indexes are at all-time peak levels provides little information. There is greater utility in assessing the valuation of the individual constituents of the indexes and comparing them to previous peaks. That being said, the valuations of the constituents of these two indexes—which are, by definition, some of the largest companies in the United States—are, in aggregate, more attractive on a price to earnings basis than they were during the previous market peaks in 2000 and 2007. This does not imply that the companies are undervalued, but simply that the companies are “cheaper” than during previous market peaks.

The comparison of corporate earnings above only uses the price to earnings ratio to generalize valuations. This is a good starting point, but far from conclusive. In order to analyze the data on a more granular basis, let’s examine Proctor & Gamble (“P&G”) which is the 8th1 and 11th2 largest constituent in the S&P 500 and DJ Industrial, respectively. P&G is a $220 billion company with a diverse portfolio of household and personal care products that are sold across the globe. Given this breadth of products and geographies, we believe that P&G serves as a good barometer for the performance of a truly multi-national, diversified corporation. Using 2012 year-end figures (which are not materially different from the 2013 estimates) P&G has increased revenue at a compound annual growth rate of 1.8% dating back to 2007, while growing book value per share at 1.7%. The compounding effect of this growth has resulted in considerable aggregate


1	As of June 28, 2013. Source: http://us.spindices.com/indices/equity/sp-500
2	As of July 23, 2013, using the SPDR® Dow Jones® Industrial Average ETF as a proxy. Source: https://www.spdrs.com/product/fund.seam?ticker=DIA

increases in book value and revenues over the past five years, but it is none the less uninspiring. Let us assume that P&G continues to grow at these levels and compare this to the current price to earnings ratio of approximately 19x. Even when considering P&G’s average return on equity over the past five years of 17.3%, the valuation doesn’t stand out as attractive. One wonders whether investors are currently simply valuing P&G (and many other top U.S. companies) based upon its dividend yield of approximately 3%.

The point of the discussion above is that while we have been quite pleased with the post-crisis performance of the Kinetics Mutual Funds (“Funds”), many have yet to surpass 2007 peak levels. We are, however very optimistic that this will occur, simply due to the fact that, in general, the top companies in the Funds have materially grown in shareholder value over the past five or more years. Even more, these companies have far superior growth prospects than the markets in aggregate, while trading at lower valuation multiples. This should place our confidence in the Funds in context.

We encourage our shareholders to look beyond where the markets are currently trading and focus on the company specific fundamentals within each portfolio. The Funds represent very different exposures than the S&P 500 and DJ Industrial, thus we remain confident in the Funds despite our uninspired view of the markets in aggregate.



.	Peter B. Doyle Chief Investment Strategist

Disclosure

This material is intended to be reviewed in conjunction with a current prospectus, which includes all fees and expenses that apply to a continued investment, as well as information regarding the risk factors, policies and objectives of the Funds. Read it carefully before investing.

Mutual Fund investing involves risk. Principal loss is possible. Because The Internet Fund, The Medical Fund and The Market Opportunities Fund invest in a single industry or geographic region, their shares are subject to a higher degree of risk than funds with a higher level of diversification. Internet, biotechnology and certain capital markets or gaming stocks are subject to a rate of change in technology, obsolescence and competition that is generally higher than that of other industries, hence they may experience extreme price and volume fluctuations.

International investing [for all Funds] presents special risks including currency exchange fluctuation, government regulations, and the potential for political and economic instability. Accordingly, the share prices for these Funds are expected to be more volatile than that of U.S.-only funds. Past performance is no guarantee of future performance.

Because smaller companies [for The Small Cap Opportunities Fund] often have narrower markets and limited financial resources, they present more risk than larger, more well established, companies.

Non-investment grade debt securities [for all Funds], i.e., junk bonds, are subject to greater credit risk, price volatility and risk of loss than investment grade securities.

Further, options contain special risks including the imperfect correlation between the value of the option and the value of the underlying asset. Investments [for The Multi- Disciplinary Fund and The Alternative Income Fund] in futures, swaps and other derivative instruments may result in loss as derivative instruments may be illiquid, difficult to price and leveraged so that small changes may produce disproportionate losses to the Funds. To the extent the Funds segregate assets to cover derivative positions, they may impair their ability to meet current obligations, to honor requests for redemption and to manage the investments in a manner consistent with their respective investment objectives. Purchasing and writing put and call

options and, in particular, writing “uncovered” options are highly specialized activities that entail greater than ordinary investment risk.

As non-diversified Funds, the value of Fund shares may fluctuate more than shares invested in a broader range of industries and companies. Unlike other investment companies that directly acquire and manage their own portfolios of securities, The Kinetics Mutual Funds pursue their investment objectives by investing all of their investable assets in a corresponding portfolio series of the Kinetics Portfolios Trust.

The information concerning the Funds included in the shareholder report contains certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.

The Nasdaq Composite (NASDAQ) and the Standard & Poor’s 500 Index (S&P 500) each represent an unmanaged, broad-basket of stocks. They are typically used as a proxy for overall market performance.

Distributor: Kinetics Funds Distributor LLC is not an affiliate of Kinetics Mutual Funds, Inc. Kinetics Funds Distributor LLC is an affiliate of Kinetics Asset Management LLC, Investment Adviser to Kinetics Mutual Funds, Inc.

For more information, log onto www.kineticsfunds.com. July 1, 2013 — Kinetics Asset Management LLC ®

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example

June 30, 2013 (Unaudited)

Shareholders incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvestments of dividends or other distributions made by a Fund, redemption fees, and exchange 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 investors understand the ongoing costs (in dollars) of investing in a series of Kinetics Mutual Funds, Inc. (each a “Feeder Fund” and collectively the “Feeder 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 on January 1, 2013 and held for the entire period from January 1, 2013 to June 30, 2013.

Actual Expenses

The first line and second line items of the table below provide information about actual account values and actual expenses before and after expense reimbursement. Unlike other mutual funds that directly acquire and manage their own portfolio securities, each Feeder Fund invests all or generally all of its investable assets in a corresponding series of The Kinetics Portfolios Trust (each, a “Master Portfolio”, and together the “Master Portfolios”), a separately registered investment company. The Master Portfolio, in turn, invests in securities. With this type of organization, expenses can accrue specifically to the Master Portfolio or the Feeder Fund or both. Each Feeder Fund records its proportionate share of the Master Portfolio’s expenses, including directed brokerage credits, on a daily basis. Any expense reductions include Fund-specific expenses as well as the expenses allocated from the Master Portfolio.

The Feeder Funds will charge shareholder fees for outgoing wire transfers, returned checks, and exchanges executed by telephone between a Feeder Fund and any other Feeder Fund. The Feeder Funds’ transfer agent charges a $5.00 transaction fee to shareholder accounts for telephone exchanges between any two Feeder Funds. The Feeder Funds’ transfer agent does not charge a transaction fee for written exchange requests. IRA accounts are assessed a $15.00 annual fee. Finally, as a disincentive to market-timing transactions, the Feeder Funds will assess a 2.00% fee on the redemption or exchange of Fund shares held for less than 30 days. These fees will be paid to the Feeder Funds to help offset transaction costs. The Feeder Funds reserve the right to waive the redemption fee, subject to their sole discretion, in instances deemed not to be

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

disadvantageous to the Feeder Funds or shareholders as described in the Feeder Funds’ prospectus.

You may use the information provided in the first line, together with the amounts you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The third and fourth line items of the table below provide information about hypothetical account values and hypothetical expenses before and after expense reimbursements based on the Feeder Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Feeder Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses one paid for the period. You may use this information to compare the ongoing costs of investing in the Feeder 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 one’s ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help one determine the relative total costs of owning different funds. If these transactional costs had been included, one’s costs would have been higher.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
The Internet Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,156.30	1.84	%	$	9.84
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,156.30	1.84	%	$	9.84
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,015.68	1.84	%	$	9.20
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,015.68	1.84	%	$	9.20
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,154.90	2.09	%	$	11.17
Advisor Class A Actual —
after expense reimbursement	$	1,000.00	$	1,154.90	2.09	%	$	11.17
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.44	2.09	%	$	10.44
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,014.44	2.09	%	$	10.44
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,152.00	2.59	%	$	13.82
Advisor Class C Actual —
after expense reimbursement	$	1,000.00	$	1,152.00	2.59	%	$	13.82
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,011.96	2.59	%	$	12.92
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,011.96	2.59	%	$	12.92

The Global Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,093.40	2.92	%	$	15.16
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,093.40	1.39	%	$	7.21
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,010.32	2.92	%	$	14.55
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,017.91	1.39	%	$	6.95
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,091.30	3.17	%	$	16.44

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,091.30	1.64	%	$	8.50
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,009.08	3.17	%	$	15.79
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.67	1.64	%	$	8.20
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,090.90	3.67	%	$	19.03
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,090.90	2.14	%	$	11.09
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,006.60	3.67	%	$	18.26
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,014.19	2.14	%	$	10.69

The Paradigm Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,205.50	1.74	%	$	9.52
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,205.50	1.64	%	$	8.97
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,016.17	1.74	%	$	8.70
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.67	1.64	%	$	8.20
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,204.30	1.99	%	$	10.88
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,204.30	1.89	%	$	10.33
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.93	1.99	%	$	9.94
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,015.43	1.89	%	$	9.44
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,201.70	2.49	%	$	13.59
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,201.70	2.39	%	$	13.05

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,012.45	2.49	%	$	12.42
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,012.95	2.39	%	$	11.93
Institutional Class Actual — before
expense reimbursement	$	1,000.00	$	1,207.30	1.69	%	$	9.25
Institutional Class Actual — after
expense reimbursement	$	1,000.00	$	1,207.30	1.44	%	$	7.88
Institutional Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,016.42	1.69	%	$	8.45
Institutional Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,017.66	1.44	%	$	7.20

The Medical Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,248.60	2.12	%	$	11.82
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,248.60	1.39	%	$	7.75
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.29	2.12	%	$	10.59
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,017.91	1.39	%	$	6.95
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,247.00	2.37	%	$	13.20
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,247.00	1.64	%	$	9.14
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,013.05	2.37	%	$	11.83
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.67	1.64	%	$	8.20
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,243.70	2.87	%	$	15.97
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,243.70	2.14	%	$	11.91
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,010.57	2.87	%	$	14.31

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,014.19	2.14	%	$	10.69

The Small Cap Opportunities Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,283.30	1.78	%	$	10.08
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,283.30	1.64	%	$	9.28
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,015.97	1.78	%	$	8.90
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.67	1.64	%	$	8.20
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,281.80	2.03	%	$	11.48
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,281.80	1.89	%	$	10.69
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.73	2.03	%	$	10.14
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,015.43	1.89	%	$	9.44
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,278.90	2.53	%	$	14.30
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,278.90	2.39	%	$	13.50
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,012.25	2.53	%	$	12.62
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,012.95	2.39	%	$	11.93
Institutional Class Actual — before
expense reimbursement	$	1,000.00	$	1,284.80	1.73	%	$	9.80
Institutional Class Actual — after
expense reimbursement	$	1,000.00	$	1,284.80	1.44	%	$	8.16
Institutional Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,016.22	1.73	%	$	8.65
Institutional Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,017.66	1.44	%	$	7.20

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
The Market Opportunities Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,222.70	1.88	%	$	10.36
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,222.70	1.64	%	$	9.04
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,015.48	1.88	%	$	9.39
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.67	1.64	%	$	8.20
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,221.20	2.13	%	$	11.73
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,221.20	1.89	%	$	10.41
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.24	2.13	%	$	10.64
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,015.43	1.89	%	$	9.44
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,217.80	2.63	%	$	14.46
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,217.80	2.39	%	$	13.14
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,011.76	2.63	%	$	13.12
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,012.95	2.39	%	$	11.93
Institutional Class Actual — before
expense reimbursement	$	1,000.00	$	1,224.80	1.83	%	$	10.09
Institutional Class Actual — after
expense reimbursement	$	1,000.00	$	1,224.80	1.44	%	$	7.94
Institutional Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,015.73	1.83	%	$	9.15
Institutional Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,017.66	1.44	%	$	7.20

The Alternative Income Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,016.50	2.16	%	$	10.80

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,016.50	0.95	%	$	4.75
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.09	2.16	%	$	10.79
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,020.09	0.95	%	$	4.76
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,014.90	2.41	%	$	12.04
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,014.90	1.20	%	$	6.00
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,012.85	2.41	%	$	12.03
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,018.85	1.20	%	$	6.01
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,013.00	2.91	%	$	14.52
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,013.00	1.70	%	$	8.48
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,010.37	2.91	%	$	14.51
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.37	1.70	%	$	8.50
Institutional Class Actual — before
expense reimbursement	$	1,000.00	$	1,017.20	2.11	%	$	10.55
Institutional Class Actual — after
expense reimbursement	$	1,000.00	$	1,017.20	0.75	%	$	3.75
Institutional Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.34	2.11	%	$	10.54
Institutional Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,021.08	0.75	%	$	3.76

The Multi-Disciplinary Fund
No Load Class Actual — before
expense reimbursement	$	1,000.00	$	1,006.30	1.85	%	$	9.20
No Load Class Actual — after
expense reimbursement	$	1,000.00	$	1,006.30	1.51	%	$	7.51

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Expense Example — (Continued)

June 30, 2013 (Unaudited)

		Beginning Account Value (1/1/13)		Ending Account Value (6/30/13)	Annualized Expense Ratio			Expenses Paid During Period* (1/1/13 to 6/30/13)
No Load Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,015.63	1.85	%	$	9.25
No Load Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,017.31	1.51	%	$	7.55
Advisor Class A Actual — before
expense reimbursement	$	1,000.00	$	1,005.40	2.10	%	$	10.44
Advisor Class A Actual — after
expense reimbursement	$	1,000.00	$	1,005.40	1.76	%	$	8.75
Advisor Class A Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,014.39	2.10	%	$	10.49
Advisor Class A Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,016.07	1.76	%	$	8.80
Advisor Class C Actual — before
expense reimbursement	$	1,000.00	$	1,002.10	2.60	%	$	12.91
Advisor Class C Actual — after
expense reimbursement	$	1,000.00	$	1,002.10	2.26	%	$	11.22
Advisor Class C Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,011.91	2.60	%	$	12.97
Advisor Class C Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,013.59	2.26	%	$	11.28
Institutional Class Actual — before
expense reimbursement	$	1,000.00	$	1,007.30	1.80	%	$	8.96
Institutional Class Actual — after
expense reimbursement	$	1,000.00	$	1,007.30	1.31	%	$	6.52
Institutional Class Hypothetical
(5% return before expenses) —
before expense reimbursement	$	1,000.00	$	1,015.87	1.80	%	$	9.00
Institutional Class Hypothetical
(5% return before expenses) —
after expense reimbursement	$	1,000.00	$	1,018.30	1.31	%	$	6.56


Note:	Each Feeder Fund records its proportionate share of the respective Master Portfolio’s expenses on a daily basis. Any expense reductions include Feeder Fund-specific expenses as well as the expenses allocated for the Master Portfolio.

*	Expenses are equal to the Feeder Fund’s annualized expense ratio before expense reimbursement and after expense reimbursement multiplied by the average account value over the period, multiplied by 181/365.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Assets & Liabilities

June 30, 2013 (Unaudited)

		The Internet Fund			The Global Fund
ASSETS:
Investments in the Master Portfolio, at value*	$	177,698,444		$	8,966,259
Receivable from Adviser		191			9,373
Receivable for Fund shares sold		128,941			37,149
Prepaid expenses and other assets		38,422			25,065
Total Assets		177,865,998			9,037,846
LIABILITIES:
Payable for Master Portfolio interest purchased		83,534			36,970
Payable to Directors and Officers		3,007			124
Payable for Fund shares repurchased		45,408			179
Payable for shareholder servicing fees		36,555			1,844
Payable for distribution fees		1,128			781
Accrued expenses and other liabilities		69,619			11,418
Total Liabilities		239,251			51,316
Net Assets	$	177,626,747		$	8,986,530
NET ASSETS CONSIST OF:
Paid in capital	$	112,610,225		$	8,228,127
Accumulated net investment loss		(969,396	)		(69,986	)
Accumulated net realized gain (loss) on investments and foreign currency		4,947,567			(330,923	)
Net unrealized appreciation on:
Investments and foreign currency		61,038,351			1,159,312
Net Assets	$	177,626,747		$	8,986,530
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net Assets	$	174,976,379		$	6,905,834
Shares outstanding		3,504,611			1,339,854
Net asset value per share (offering price and redemption price)	$	49.93		$	5.15
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net Assets	$	2,192,375		$	1,092,225
Shares outstanding		44,885			212,321
Net asset value per share (redemption price)	$	48.84		$	5.14
Offering price per share ($48.84 divided by .9425 and $5.14 divided by .9425)	$	51.82		$	5.45
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net Assets	$	457,993		$	988,471
Shares outstanding		9,747			196,145
Net asset value per share (offering price and redemption price)	$	46.99		$	5.04


*	Each Feeder Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Assets & Liabilities — (Continued)

June 30, 2013 (Unaudited)

		The Paradigm Fund			The Medical Fund
ASSETS:
Investments in the Master Portfolio, at value*	$	1,053,442,124		$	22,404,343
Receivable from Adviser		53,915			11,242
Receivable for Master Portfolio interest sold		—			23,106
Receivable for Fund shares sold		5,534,426			21,874
Prepaid expenses and other assets		92,822			24,843
Total Assets		1,059,123,287			22,485,408
LIABILITIES:
Payable for Master Portfolio interest purchased		4,500,503			—
Payable to Directors and Officers		17,039			358
Payable for Fund shares repurchased		1,033,923			44,980
Payable for shareholder servicing fees		170,238			4,693
Payable for distribution fees		245,318			2,812
Accrued expenses and other liabilities		261,199			15,292
Total Liabilities		6,228,220			68,135
Net Assets	$	1,052,895,067		$	22,417,273
NET ASSETS CONSIST OF:
Paid in capital	$	1,625,772,674		$	19,297,026
Accumulated net investment income (loss)		(11,513,102	)		202,996
Accumulated net realized gain (loss) on investments and foreign currency		(778,836,353	)		618,732
Net unrealized appreciation on:
Investments and foreign currency		217,471,848			2,298,519
Net Assets	$	1,052,895,067		$	22,417,273
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net Assets	$	507,679,946		$	18,313,174
Shares outstanding		17,551,863			822,868
Net asset value per share (offering price and redemption price)	$	28.92		$	22.26
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net Assets	$	161,906,467		$	3,551,456
Shares outstanding		5,699,835			164,307
Net asset value per share (redemption price)	$	28.41		$	21.61
Offering price per share ($28.41 divided by .9425 and $21.61 divided by .9425)	$	30.14		$	22.93
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net Assets	$	116,055,036		$	552,643
Shares outstanding		4,262,682			25,852
Net asset value per share (offering price and redemption price)	$	27.23		$	21.38
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net Assets	$	267,253,618			N/A
Shares outstanding		9,251,024			N/A
Net asset value per share (offering price and redemption price)	$	28.89			N/A


*	Each Feeder Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Assets & Liabilities — (Continued)

June 30, 2013 (Unaudited)

		The Small Cap Opportunities Fund			The Market Opportunities Fund
ASSETS:
Investments in the Master Portfolio, at value*	$	163,057,020		$	59,157,436
Receivable from Adviser		7,753			16,524
Receivable for Fund shares sold		729,346			63,778
Prepaid expenses and other assets		42,452			35,547
Total Assets		163,836,571			59,273,285
LIABILITIES:
Payable for Master Portfolio interest purchased		669,272			61,293
Payable to Directors and Officers		2,056			985
Payable for Fund shares repurchased		60,074			2,486
Payable for shareholder servicing fees		30,049			11,476
Payable for distribution fees		11,678			9,679
Accrued expenses and other liabilities		38,469			19,894
Total Liabilities		811,598			105,813
Net Assets	$	163,024,973		$	59,167,472
NET ASSETS CONSIST OF:
Paid in capital	$	287,767,373		$	76,296,031
Accumulated net investment loss		(805,438	)		(1,081,462	)
Accumulated net realized loss on investments and foreign currency		(158,878,430	)		(27,657,738	)
Net unrealized appreciation on:
Investments and foreign currency		34,941,468			11,610,641
Net Assets	$	163,024,973		$	59,167,472
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net Assets	$	128,862,881		$	41,810,404
Shares outstanding		3,989,026			2,830,945
Net asset value per share (offering price and redemption price)	$	32.30		$	14.77
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net Assets	$	13,086,230		$	8,543,447
Shares outstanding		412,134			579,460
Net asset value per share (redemption price)	$	31.75		$	14.74
Offering price per share ($31.75 divided by .9425 and $14.74 divided by .9425)	$	33.69		$	15.64
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net Assets	$	4,205,856		$	4,698,202
Shares outstanding		135,061			323,140
Net asset value per share (offering price and redemption price)	$	31.14		$	14.54
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net Assets	$	16,870,006		$	4,115,419
Shares outstanding		518,586			277,740
Net asset value per share (offering price and redemption price)	$	32.53		$	14.82


*	Each Feeder Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Assets & Liabilities — (Continued)

June 30, 2013 (Unaudited)

		The Alternative Income Fund			The Multi- Disciplinary Fund
ASSETS:
Investments in the Master Portfolio, at value*	$	17,609,981		$	92,919,915
Receivable from Adviser		21,817			25,554
Receivable for Fund shares sold		70,000			1,253,794
Prepaid expenses and other assets		53,566			39,777
Total Assets		17,755,364			94,239,040
LIABILITIES:
Payable for Master Portfolio interest purchased		58,828			725,990
Payable to Directors and Officers		265			1,385
Payable for Fund shares repurchased		11,172			527,804
Payable for shareholder servicing fees		3,111			16,745
Payable for distribution fees		4,480			26,080
Accrued expenses and other liabilities		11,828			23,673
Total Liabilities		89,684			1,321,677
Net Assets	$	17,665,680		$	92,917,363
NET ASSETS CONSIST OF:
Paid in capital	$	26,029,925		$	92,480,850
Accumulated net investment loss		(99,828	)		(760,625	)
Accumulated net realized gain (loss) on investments, foreign currency and written options		(8,462,517	)		2,217,998
Net unrealized appreciation (depreciation) on:
Investments and foreign currency		(120,973	)		(3,101,566	)
Written option contracts		319,073			2,080,706
Net Assets	$	17,665,680		$	92,917,363
CALCULATION OF NET ASSET VALUE PER SHARE — NO LOAD CLASS:
Net Assets	$	10,918,067		$	19,832,072
Shares outstanding		128,786			1,802,100
Net asset value per share (offering price and redemption price)	$	84.78		$	11.00
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS A:
Net Assets	$	1,811,956		$	47,368,592
Shares outstanding		21,382			4,323,580
Net asset value per share (redemption price)	$	84.74		$	10.96
Offering price per share ($84.74 divided by .9425 and $10.96 divided by .9425)	$	89.91		$	11.63
CALCULATION OF NET ASSET VALUE PER SHARE — ADVISOR CLASS C:
Net Assets	$	1,627,048		$	10,772,319
Shares outstanding		19,515			989,970
Net asset value per share (offering price and redemption price)	$	83.37		$	10.88
CALCULATION OF NET ASSET VALUE PER SHARE — INSTITUTIONAL CLASS:
Net Assets	$	3,308,609		$	14,944,380
Shares outstanding		38,676			1,353,696
Net asset value per share (offering price and redemption price)	$	85.55		$	11.04


*	Each Feeder Fund invests all or generally all its assets directly in the corresponding Master Portfolio. The financial statements for the Master Portfolios, along with the portfolio of investments in securities, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Operations

For the Six Months Ended June 30, 2013 (Unaudited)

	The Internet Fund			The Global Fund
INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	524,093		$	61,490
Interest		1,233			55
Income from securities lending		43,239			6,123
Expenses allocated from Master Portfolio		(1,174,573	)		(67,696	)
Net investment loss from Master Portfolio		(606,008	)		(28	)
EXPENSES:
Distribution fees — Advisor Class A		2,170			1,252
Distribution fees — Advisor Class C		990			2,665
Shareholder servicing fees — Advisor Class A		2,170			1,252
Shareholder servicing fees — Advisor Class C		330			889
Shareholder servicing fees — No Load Class		211,910			7,855
Transfer agent fees and expenses		85,418			9,974
Reports to shareholders		16,350			1,791
Administration fees		33,814			2,530
Professional fees		11,754			4,203
Directors’ and Officers’ fees and expenses		8,006			354
Registration fees		26,094			19,720
Fund accounting fees		4,378			197
Other expenses		3,845			140
Total expenses		407,229			52,822
Less, expense reimbursement		—			(61,050	)
Net expenses		407,229			(8,228	)
Net investment income (loss)		(1,013,237	)		8,200
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain on:
Investments and foreign currency		2,511,710			78,935
Net change in unrealized appreciation of:
Investments and foreign currency		23,051,809			521,131
Net gain on investments		25,563,519			600,066
Net increase in net assets resulting from operations	$	24,550,282		$	608,266
† Net of foreign taxes withheld of:	$	8,003		$	4,133

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Operations — (Continued)

For the Six Months Ended June 30, 2013 (Unaudited)

	The Paradigm Fund			The Medical Fund
INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	5,666,371		$	290,481
Interest		242,965			55
Income from securities lending		342,212			31,978
Expenses allocated from Master Portfolio		(6,539,606	)		(144,576	)
Net investment income (loss) from Master Portfolio		(288,058	)		177,938
EXPENSES:
Distribution fees — Advisor Class A		189,714			3,661
Distribution fees — Advisor Class C		416,332			1,904
Shareholder servicing fees — Advisor Class A		189,714			3,661
Shareholder servicing fees — Advisor Class C		138,777			635
Shareholder servicing fees — No Load Class		585,494			21,302
Shareholder servicing fees — Institutional Class		237,925			—
Transfer agent fees and expenses		193,308			13,848
Reports to shareholders		115,845			2,773
Administration fees		192,349			3,986
Professional fees		44,454			4,667
Directors’ and Officers’ fees and expenses		42,318			860
Registration fees		42,957			19,442
Fund accounting fees		23,848			479
Other expenses		26,747			604
Total expenses		2,439,782			77,822
Less, expense waiver for Institutional Class shareholder servicing fees		(178,444	)		—
Less, expense reimbursement		(486,099	)		(74,508	)
Net expenses		1,775,239			3,314
Net investment income (loss)		(2,063,297	)		174,624
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain on:
Investments and foreign currency		3,609,613			545,136
Net change in unrealized appreciation of:
Investments and foreign currency		173,485,809			3,474,653
Net gains on investments		177,095,422			4,019,789
Net increase in net assets resulting from operations	$	175,032,125		$	4,194,413
† Net of foreign taxes withheld of:	$	352,472		$	13,528

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Operations — (Continued)

For the Six Months Ended June 30, 2013 (Unaudited)

	The Small Cap Opportunities Fund			The Market Opportunities Fund
INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS:
Dividends†	$	920,710		$	523,876
Interest		481			354
Income from securities lending		32,089			20,872
Expenses allocated from Master Portfolio		(821,000	)		(378,084	)
Net investment income from Master Portfolio		132,280			167,018
EXPENSES:
Distribution fees — Advisor Class A		12,326			9,093
Distribution fees — Advisor Class C		12,787			16,883
Shareholder servicing fees — Advisor Class A		12,326			9,093
Shareholder servicing fees — Advisor Class C		4,262			5,628
Shareholder servicing fees — No Load Class		122,446			48,486
Shareholder servicing fees — Institutional Class		10,347			4,102
Transfer agent fees and expenses		27,493			14,848
Reports to shareholders		10,211			6,060
Administration fees		23,621			11,586
Professional fees		8,507			6,074
Directors’ and Officers’ fees and expenses		4,823			2,298
Registration fees		25,760			22,825
Fund accounting fees		2,898			1,299
Other expenses		2,704			1,316
Total expenses		280,511			159,591
Less, expense waiver for Institutional Class shareholder servicing fees		(7,760	)		(3,077	)
Less, expense reimbursement		(82,071	)		(64,640	)
Net expenses		190,680			91,874
Net investment income (loss)		(58,400	)		75,144
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain on:
Investments and foreign currency		1,751,836			2,093,051
Net change in unrealized appreciation of:
Investments and foreign currency		25,219,701			7,755,133
Net gains on investments		26,971,537			9,848,184
Net increase in net assets resulting from operations	$	26,913,137		$	9,923,328
† Net of foreign taxes withheld of:	$	10,409		$	32,327

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Operations — (Continued)

For the Six Months Ended June 30, 2013 (Unaudited)

	The Alternative Income Fund			The Multi- Disciplinary Fund
INVESTMENT INCOME (LOSS) ALLOCATED FROM MASTER PORTFOLIOS:
Dividends	$	14,673		$	31,549
Interest		34,671			1,355,756
Income from securities lending		514			5,732
Expenses allocated from Master Portfolio		(92,483	)		(557,316	)
Net investment income (loss) from Master Portfolio		(42,625	)		835,721
EXPENSES:
Distribution fees — Advisor Class A		2,703			47,184
Distribution fees — Advisor Class C		6,053			34,572
Shareholder servicing fees — Advisor Class A		2,703			47,184
Shareholder servicing fees — Advisor Class C		2,018			11,524
Shareholder servicing fees — No Load Class		10,770			25,994
Shareholder servicing fees — Institutional Class		2,562			12,404
Transfer agent fees and expenses		11,321			19,148
Reports to shareholders		3,687			8,381
Administration fees		2,923			17,354
Professional fees		4,499			7,474
Directors’ and Officers’ fees and expenses		618			3,583
Registration fees		26,406			25,885
Fund accounting fees		362			2,098
Other expenses		402			1,240
Total expenses		77,027			264,025
Less, expense waiver for Institutional Class shareholder servicing fees		(1,922	)		(9,303	)
Less, expense reimbursement		(90,357	)		(138,426	)
Net expenses		(15,252	)		116,296
Net investment income (loss)		(27,373	)		719,425
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
ALLOCATED FROM MASTER PORTFOLIOS:
Net realized gain (loss) on:
Investments and foreign currency		(17,154	)		929,904
Written option contracts expired or closed		(35,834	)		409,002
Securities sold short		—			(141,288	)
Realized gain distributions received from other investment companies		—			21,478
Net change in unrealized appreciation (depreciation) of:
Investments and foreign currency		(71,372	)		(1,985,890	)
Written option contracts		318,905			(370,076	)
Securities sold short		—			(10,201	)
Net gain (loss) on investments		194,545			(1,147,071	)
Net increase (decrease) in net assets resulting from operations	$	167,172		$	(427,646	)

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets

	The Internet Fund						The Global Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
OPERATIONS:
Net investment income (loss)	$	(1,013,237	)	$	(433,729	)	$	8,200		$	39,580
Net realized gain on sale of investments and foreign currency		2,511,710			4,839,728			78,935			104,946
Net change in unrealized appreciation of investments and foreign currency		23,051,809			19,949,877			521,131			1,011,339
Net increase in net assets resulting from operations		24,550,282			24,355,876			608,266			1,155,865
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			—			—			(123,429	)
Net realized gains		—			(5,207,093	)
Total distributions		—			(5,207,093	)		—			(123,429	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			—			—			(24,753	)
Net realized gains		—			(46,661	)
Total distributions		—			(46,661	)		—			(24,753	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			—			—			(8,334	)
Net realized gains		—			(6,516	)
Total distributions		—			(6,516	)		—			(8,334	)
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		14,958,109			46,371,634			2,093,968			1,878,282
Redemption fees		2,769			4,548			20			6
Proceeds from shares issued to holders in reinvestment of dividends		—			5,050,816			—			115,580
Cost of shares redeemed		(19,309,482	)		(19,118,564	)		(740,363	)		(1,366,910	)
Net increase (decrease) in net assets resulting from capital share transactions		(4,348,604	)		32,308,434			1,353,625			626,958
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold		656,948			509,770			276,622			1,116,949
Redemption fees		—			—			—			385
Proceeds from shares issued to holders in reinvestment of dividends		—			38,332			—			22,174
Cost of shares redeemed		(77,321	)		(394,222	)		(363,998	)		(591,598	)
Net increase (decrease) in net assets resulting from capital share transactions		579,627			153,880			(87,376	)		547,910

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Internet Fund						The Global Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold	$	266,477		$	82,925		$	566,553		$	238,490
Redemption fees		—			—			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			4,595			—			7,789
Cost of shares redeemed		(21,463	)		(25,134	)		—			(8,967	)
Net increase in net assets resulting from capital share transactions		245,014			62,386			566,553			237,312
TOTAL INCREASE IN NET ASSETS:		21,026,319			51,620,306			2,441,068			2,411,529
NET ASSETS:
Beginning of period		156,600,428			104,980,122			6,545,462			4,133,933
End of period*	$	177,626,747		$	156,600,428		$	8,986,530		$	6,545,462
Including undistributed net investment income (loss) of:	$	(969,396	)	$	43,841		$	(69,986	)	$	(78,186	)
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		323,852			1,069,839			409,561			427,158
Shares issued in reinvestments of dividends and distributions		—			118,341			—			24,697
Shares redeemed		(409,706	)		(461,243	)		(145,902	)		(301,524	)
Net increase (decrease) in shares outstanding		(85,854	)		726,937			263,659			150,331
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:
Shares sold		13,895			12,322			53,746			258,844
Shares issued in reinvestments of dividends and distributions		—			917			—			4,738
Shares redeemed		(1,615	)		(10,094	)		(73,663	)		(131,342	)
Net increase (decrease) in shares outstanding		12,280			3,145			(19,917	)		132,240
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		5,702			2,130			113,198			54,697
Shares issued in reinvestments of dividends and distributions		—			114			—			1,693
Shares redeemed		(491	)		(674	)		—			(2,056	)
Net increase in shares outstanding		5,211			1,570			113,198			54,334

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Paradigm Fund						The Medical Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
OPERATIONS:
Net investment income (loss)	$	(2,063,297	)	$	1,073,108		$	174,624		$	305,849
Net realized gain on sale of investments and foreign currency		3,609,613			37,284,162			545,136			522,636
Net change in unrealized appreciation of investments and foreign currency		173,485,809			127,689,744			3,474,653			852,539
Net increase in net assets resulting from operations		175,032,125			166,047,014			4,194,413			1,681,024
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			(2,091,661	)		—			(256,326	)
Net realized gains		—			—			—			(1,561,461	)
Total distributions		—			(2,091,661	)		—			(1,817,787	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			(146,854	)		—			(40,937	)
Net realized gains		—			—			—			(297,758	)
Total distributions		—			(146,854	)		—			(338,695	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			—			—			(4,623	)
Net realized gains		—			—			—			(51,491	)
Total distributions		—			—			—			(56,114	)
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:
Net investment income		—			(1,577,657	)		N/A			N/A
Total distributions		—			(1,577,657	)		N/A			N/A
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		63,044,453			64,026,639			4,427,476			726,629
Redemption fees		4,473			3,832			2,302			179
Proceeds from shares issued to holders in reinvestment of dividends		—			1,971,657			—			1,796,827
Cost of shares redeemed		(57,138,479	)		(161,429,928	)		(3,886,692	)		(4,192,023	)
Net increase (decrease) in net assets resulting from capital share transactions		5,910,447			(95,427,800	)		543,086			(1,668,388	)
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold		15,186,696			18,086,486			1,166,985			313,634
Redemption fees		4,080			796			136			2
Proceeds from shares issued to holders in reinvestment of dividends		—			132,398			—			201,396
Cost of shares redeemed		(16,725,518	)		(57,418,386	)		(770,613	)		(1,109,278	)
Net increase (decrease) in net assets resulting from capital share transactions		(1,534,742	)		(39,198,706	)		396,508			(594,246	)

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Paradigm Fund						The Medical Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CAPITAL SHARE TRANSACTIONS —ADVISOR CLASS C:
Proceeds from shares sold	$	4,228,586		$	3,849,753		$	59,929		$	36,059
Redemption fees		4			52			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			—			—			29,798
Cost of shares redeemed		(9,634,958	)		(25,024,304	)		(63,507	)		(181,789	)
Net decrease in net assets resulting from capital share transactions		(5,406,368	)		(21,174,499	)		(3,578	)		(115,932	)
CAPITAL SHARE TRANSACTIONS —INSTITUTIONAL CLASS:
Proceeds from shares sold		68,030,507			81,609,346			N/A			N/A
Redemption fees		3,708			6,189			N/A			N/A
Proceeds from shares issued to holders in reinvestment of dividends		—			1,311,574			N/A			N/A
Cost of shares redeemed		(35,466,250	)		(57,342,208	)		N/A			N/A
Net increase in net assets resulting from capital share transactions		32,567,965			25,584,901			N/A			N/A
TOTAL INCREASE (DECREASE) IN NET ASSETS:.		206,569,427			32,014,738			5,130,429			(2,910,138	)
NET ASSETS:
Beginning of period		846,325,640			814,310,902			17,286,844			20,196,982
End of period*	$	1,052,895,067		$	846,325,640		$	22,417,273		$	17,286,844
* Including undistributed net investment income (loss) of:	$	(11,513,102	)	$	(9,449,805	)	$	202,996		$	28,372
CHANGES IN SHARES OUTSTANDING —NO LOAD CLASS:
Shares sold		2,303,268			2,761,190			202,590			36,993
Shares issued in reinvestments of dividends and distributions		—			83,157			—			101,230
Shares redeemed		(2,122,694	)		(7,210,869	)		(179,429	)		(211,946	)
Net increase (decrease) in shares outstanding		180,574			(4,366,522	)		23,161			(73,723	)
CHANGES IN SHARES OUTSTANDING —ADVISOR CLASS A:
Shares sold		571,541			793,709			55,133			16,529
Shares issued in reinvestments of dividends and distributions		—			5,675			—			11,668
Shares redeemed		(627,132	)		(2,600,387	)		(39,855	)		(56,326	)
Net increase (decrease) in shares outstanding		(55,591	)		(1,801,003	)		15,278			(28,129	)

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Paradigm Fund						The Medical Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		167,239			180,440			2,913			1,995
Shares issued in reinvestments of dividends and distributions		—			—			—			1,741
Shares redeemed		(379,002	)		(1,172,251	)		(3,243	)		(9,532	)
Net decrease in shares outstanding		(211,763	)		(991,811	)		(330	)		(5,796	)
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:
Shares sold		2,492,081			3,733,029			N/A			N/A
Shares issued in reinvestments of dividends and distributions		—			55,434			N/A			N/A
Shares redeemed		(1,282,907	)		(2,534,864	)		N/A			N/A
Net increase in shares outstanding		1,209,174			1,253,599			N/A			N/A

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Small Cap Opportunities Fund						The Market Opportunities Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
OPERATIONS:
Net investment income (loss)	$	(58,400	)	$	30,632		$	75,144		$	52,756
Net realized gain on sale of investments and foreign currency		1,751,836			7,834,606			2,093,051			4,862,677
Net change in unrealized appreciation of investments and foreign currency		25,219,701			12,106,767			7,755,133			2,198,282
Net increase in net assets resulting from operations		26,913,137			19,972,005			9,923,328			7,113,715
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			—			—			(532,781	)
Total distributions		—			—			—			(532,781	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			—			—			(84,630	)
Total distributions		—			—			—			(84,630	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			—			—			(33,350	)
Total distributions		—			—			—			(33,350	)
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:
Net investment income		—			—			—			(4,195	)
Total distributions		—			—			—			(4,195	)
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		55,285,064			1,841,937			3,090,593			630,318
Redemption fees		2,014			434			2,177			455
Proceeds from shares issued to holders in reinvestment of dividends		—			—			—			531,266
Cost of shares redeemed		(12,110,701	)		(21,727,814	)		(1,608,338	)		(3,055,029	)
Net increase (decrease) in net assets resulting from capital share transactions		43,176,377			(19,885,443	)		1,484,432			(1,892,990	)
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold		4,536,975			712,257			2,105,360			400,180
Redemption fees		574			23			1,579			280
Proceeds from shares issued to holders in reinvestment of dividends		—			—			—			69,282
Cost of shares redeemed		(1,136,382	)		(2,129,011	)		(1,410,667	)		(3,721,538	)
Net increase (decrease) in net assets resulting from capital share transactions		3,401,167			(1,416,731	)		696,272			(3,251,796	)

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Small Cap Opportunities Fund						The Market Opportunities Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold	$	1,137,305		$	162,437		$	200,968		$	162,143
Redemption fees		—			—			73			101
Proceeds from shares issued to holders in reinvestment of dividends		—			—			—			29,824
Cost of shares redeemed		(238,829	)		(634,738	)		(292,128	)		(1,117,534	)
Net increase (decrease) in net assets resulting from capital share transactions		898,476			(472,301	)		(91,087	)		(925,466	)
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS:
Proceeds from shares sold		8,491,076			2,959,765			12,103,715			57,706
Redemption fees		—			532			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			50			—			1,417
Cost of shares redeemed		(1,378,655	)		(2,620,000	)		(8,557,443	)		(48,403	)
Net increase in net assets resulting from capital share transactions		7,112,421			340,347			3,546,272			10,720
TOTAL INCREASE (DECREASE) IN NET ASSETS:.
NET ASSETS:		81,501,578			(1,462,123	)		15,559,217			399,227
Beginning of period		81,523,395			82,985,518			43,608,255			43,209,028
End of period*	$	163,024,973		$	81,523,395		$	59,167,472		$	43,608,255
* Including undistributed net investment loss of:	$	(805,438	)	$	(747,038	)	$	(1,081,462	)	$	(1,156,606	)
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		1,846,599			80,246			214,526			54,575
Shares issued in reinvestments of dividends and distributions		—			—			—			44,495
Shares redeemed		(398,545	)		(953,945	)		(109,596	)		(263,041	)
Net increase (decrease) in shares outstanding		1,448,054			(873,699	)		104,930			(163,971	)
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:
Shares sold		145,499			30,501			142,530			34,816
Shares issued in reinvestments of dividends and distributions		—			—			—			5,807
Shares redeemed		(38,558	)		(95,419	)		(102,975	)		(325,109	)
Net increase (decrease) in shares outstanding		106,941			(64,918	)		39,555			(284,486	)

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Small Cap Opportunities Fund						The Market Opportunities Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		39,260			7,094			14,537			14,383
Shares issued in reinvestments of dividends and distributions		—			—			—			2,527
Shares redeemed		(8,356	)		(29,018	)		(20,789	)		(97,683	)
Net increase (decrease) in shares outstanding		30,904			(21,924	)		(6,252	)		(80,773	)
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:
Shares sold		268,698			133,450			837,123			5,247
Shares issued in reinvestments of dividends and distributions		—			3			—			118
Shares redeemed		(45,625	)		(113,744	)		(578,329	)		(4,211	)
Net increase in shares outstanding		223,073			19,709			258,794			1,154

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Alternative Income Fund						The Multi- Disciplinary Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
OPERATIONS:
Net investment income (loss)	$	(27,373	)	$	186,370		$	719,425		$	1,275,828
Net realized gain (loss) on sale of investments, foreign currency, written option contracts expired or closed, securities sold short and distributions received from other investment companies		(52,988	)		309,517			1,219,096			1,177,010
Net change in unrealized appreciation(depreciation) of investments, foreign currency, written options and securities sold short		247,533			604,822			(2,366,167	)		2,744,146
Net increase (decrease) in net assets resulting from operations		167,172			1,100,709			(427,646	)		5,196,984
DISTRIBUTIONS TO SHAREHOLDERS — NO LOAD CLASS:
Net investment income		—			(121,802	)		(258,238	)		(679,067	)
Net realized gains		—			—			—			(200,492	)
Total distributions		—			(121,802	)		(258,238	)		(879,559	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS A:
Net investment income		—			(54,584	)		(492,966	)		(647,761	)
Net realized gains		—			—			—			(258,629	)
Total distributions		—			(54,584	)		(492,966	)		(906,390	)
DISTRIBUTIONS TO SHAREHOLDERS — ADVISOR CLASS C:
Net investment income		—			(29,650	)		(92,494	)		(173,702	)
Net realized gains		—			—			—			(77,474	)
Total distributions		—			(29,650	)		(92,494	)		(251,176	)
DISTRIBUTIONS TO SHAREHOLDERS — INSTITUTIONAL CLASS:
Net investment income		—			(45,289	)		(203,351	)		(218,586	)
Net realized gains		—			—			—			(67,014	)
Total distributions		—			(45,289	)		(203,351	)		(285,600	)
CAPITAL SHARE TRANSACTIONS — NO LOAD CLASS:
Proceeds from shares sold		8,116,556			1,553,283			5,351,422			9,228,811
Redemption fees		—			78			334			725
Proceeds from shares issued to holders in reinvestment of dividends		—			108,785			205,424			651,115
Cost of shares redeemed		(1,968,408	)		(2,871,859	)		(5,138,920	)		(5,059,428	)
Net increase (decrease) in net assets resulting from capital share transactions		6,148,148			(1,209,713	)		418,260			4,821,223

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Alternative Income Fund						The Multi- Disciplinary Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS A:
Proceeds from shares sold	$	211,781		$	255,900		$	25,301,273		$	22,935,328
Redemption fees		313			—			1,537			5,989
Proceeds from shares issued to holders in reinvestment of dividends		—			46,863			477,525			851,763
Cost of shares redeemed		(1,039,977	)		(2,604,163	)		(3,304,256	)		(3,459,167	)
Net increase (decrease) in net assets resulting from capital share transactions		(827,883	)		(2,301,400	)		22,476,079			20,333,913
CAPITAL SHARE TRANSACTIONS — ADVISOR CLASS C:
Proceeds from shares sold		417,356			250,862			3,546,702			6,096,378
Redemption fees		—			—			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			19,420			86,580			240,039
Cost of shares redeemed		(578,025	)		(992,794	)		(212,214	)		(801,065	)
Net increase (decrease) in net assets resulting from capital share transactions		(160,669	)		(722,512	)		3,421,068			5,535,352
CAPITAL SHARE TRANSACTIONS — INSTITUTIONAL CLASS:
Proceeds from shares sold		1,901,750			1,083,914			8,549,166			2,153,101
Redemption fees		—			159			—			—
Proceeds from shares issued to holders in reinvestment of dividends		—			31,108			197,983			276,678
Cost of shares redeemed		(252,056	)		(327,778	)		(62,107	)		(240,894	)
Net increase in net assets resulting from capital share transactions		1,649,694			787,403			8,685,042			2,188,885
TOTAL INCREASE (DECREASE) IN NET ASSETS:		6,976,462			(2,596,838	)		33,525,754			35,753,632
NET ASSETS:
Beginning of period		10,689,218			13,286,056			59,391,609			23,637,977
End of period*	$	17,665,680		$	10,689,218		$	92,917,363		$	59,391,609
* Including undistributed net investment loss of:	$	(99,828	)	$	(72,455	)	$	(760,625	)	$	(433,001	)
CHANGES IN SHARES OUTSTANDING — NO LOAD CLASS:
Shares sold		918,681			183,153			470,557			848,038
Shares issued in reinvestments of dividends and distributions		—			13,044			18,323			59,656
Shares redeemed(1)		(1,353,956	)		(352,741	)		(453,225	)		(467,948	)
Net increase (decrease) in shares outstanding		(435,275	)		(156,544	)		35,655			439,746

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Statements of Changes in Net Assets — (Continued)

	The Alternative Income Fund						The Multi- Disciplinary Fund
	For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS A:
Shares sold		24,303			30,908			2,239,789			2,108,470
Shares issued in reinvestments of dividends and distributions		—			5,612			42,908			78,399
Shares redeemed(1)		(314,412	)		(311,285	)		(294,643	)		(321,378	)
Net increase (decrease) in shares outstanding		(290,109	)		(274,765	)		1,988,054			1,865,491
CHANGES IN SHARES OUTSTANDING — ADVISOR CLASS C:
Shares sold		25,317			30,770			318,253			570,311
Shares issued in reinvestments of dividends and distributions		—			2,357			7,811			22,235
Shares redeemed(1)		(220,176	)		(120,473	)		(19,055	)		(74,099	)
Net increase (decrease) in shares outstanding		(194,859	)		(87,346	)		307,009			518,447
CHANGES IN SHARES OUTSTANDING — INSTITUTIONAL CLASS:
Shares sold		206,476			127,757			749,729			205,219
Shares issued in reinvestments of dividends and distributions		—			3,699			17,613			25,267
Shares redeemed(1)		(361,741	)		(39,174	)		(5,500	)		(21,810	)
Net increase (decrease) in shares outstanding		(155,265	)		92,282			761,842			208,676


(1)	Shares redeemed include: 1,198,771 No Load Class shares, 210,478 Class A shares, 159,007 Class C shares and 332,551 Institutional Class shares respectively due to the reverse split. Please see Note 10 for more information.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements

June 30, 2013 (Unaudited)

1. Organization

Kinetics Mutual Funds, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and is incorporated in the State of Maryland. The Company is an open-end management investment company issuing its shares in series. One billion shares are authorized for the Company with a par value of $0.001 per share. The series of the Company presently authorized are The Internet Fund (“Internet”), The Global Fund (“Global”), The Paradigm Fund (“Paradigm”), The Medical Fund (“Medical”), The Small Cap Opportunities Fund (“Small Cap”), The Market Opportunities Fund (“Market Opportunities”), The Alternative Income Fund (“Alternative Income”), and The Multi-Disciplinary Fund (“Multi-Disciplinary”). Investment operations of the Company began on October 21, 1996 (Internet), September 30, 1999 (Medical), December 31, 1999 (Global and Paradigm), March 20, 2000 (Small Cap), January 31, 2006 (Market Opportunities), June 29, 2007 (Alternative Income), and February 11, 2008 (Multi-Disciplinary). Each series, unlike many other investment companies which directly acquire and manage their own portfolios of securities, seeks to achieve its investment objective by investing all of its investable assets in a corresponding portfolio series (each a “Master Portfolio” and collectively the “Master Portfolios”) of Kinetics Portfolios Trust (the “Trust”).

On April 28, 2000 (January 31, 2006 with respect to Market Opportunities, June 29, 2007 with respect to Alternative Income, and February 11, 2008 with respect to Multi-Disciplinary), each series in the Company entered into a master-feeder fund structure. By entering into this structure, each series (each a “Feeder Fund” and collectively, the “Feeder Funds”) invested all of its assets in a corresponding Master Portfolio which had the same investment objective as the Feeder Fund. Each Master Portfolio has multiple feeder funds. Each Feeder Fund receives a proportionate amount of interest in the Master Portfolio equal to its relative contribution of capital. Thus, each Feeder Fund is allocated its portion of income, gains (losses) and expenses from the Master Portfolio.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

Each Feeder Fund’s respective interest in the corresponding Master Portfolio as of June 30, 2013 is as follows:


	Interest in
	Master Portfolio
Internet Fund	99.991%
Global Fund	99.921%
Paradigm Fund	95.986%
Medical Fund	99.896%
Small Cap Fund	99.979%
Market Opportunities Fund	99.976%
Alternative Income Fund	99.385%
Multi-Disciplinary Fund	99.842%

Prior to the conversion to a master-feeder fund structure on April 28, 2000, each then existing series conducted its own investment operations.

As of June 30, 2013 each of the Feeder Funds offers Advisor Class A shares. Advisor Class A shares are subject to an annual Rule 12b-1 fee of 0.25% of average daily net assets and a shareholder servicing fee of 0.25% of average daily net assets. The Advisor Class A shares are also subject to a front-end sales charge of 5.75%.

As of June 30, 2013, each of the Feeder Funds offers Advisor Class C shares. Advisor Class C shares are subject to an annual Rule 12b-1 fee of 0.75% of average daily net assets and a shareholder servicing fee of 0.25% of average daily net assets. Advisor Class C shares do not have a sales charge.

As of June 30, 2013, each of the Feeder Funds offers No Load Class shares. No Load Class shares are subject to a shareholder servicing fee of 0.25% of average daily net assets but do not have 12b-1 fees or a sales charge.

As of June 30, 2013 the Paradigm, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds offer Institutional Class shares. Institutional Class shares are subject to a shareholder servicing fee of 0.20% of average daily net assets but do not have 12b-1 fees or a sales charge.

Each class of shares for each Fund has identical rights and privileges except with respect to the Rule 12b-1 fees paid by the Advisor Class A and Advisor Class C shares, the sales charge on the Advisor Class A shares, the shareholder servicing fees paid by the Advisor Class A, Advisor Class C, No Load Class and

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

Institutional Class shares, voting rights on matters pertaining to a single class of shares and the exchange privileges of each class of shares. Shares of each Feeder Fund will assess a 2.00% redemption fee (with exceptions) on shares redeemed or exchanged within 30 days of purchase. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class based on its relative net assets.

Refer to the Master Portfolio’s financial statements to obtain information about the investment objective of the corresponding Feeder Fund. The financial statements of the Master Portfolios, including the portfolios of investments, are contained elsewhere in this report and should be read in conjunction with the Feeder Funds’ financial statements.

2. Significant Accounting Policies

Security Valuation

Master Portfolio securities that are listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. All equity securities that are traded using the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) are valued using the NASDAQ Official Closing Price (“NOCP”). Foreign securities are valued by an independent pricing service. In the event market quotations are not readily available or if events occur that may materially affect the value of a particular security between the time trading ends on a particular security and the close of regular trading on the New York Stock Exchange (“NYSE”), “fair value” will be determined. 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 last bid price. Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes (“NBBO”). NBBO consists of the highest bid price and lowest ask price across any of the exchanges on which an option is quoted, thus providing a view across the entire U.S. options marketplace. Composite option pricing calculates the mean of the highest bid price and lowest ask price across the exchanges where the option is traded. If the composite option price is not available, the mean between the highest bid and the lowest asked quotations at the close of the exchanges will be used. If none of the above are available, exchange traded options are valued at the last

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

quoted sales price. Non-exchange traded options for which over-the-counter quotations are not readily available are valued at the mean of the current bid and asked prices. Fixed-income securities (other than obligations having a maturity of 60 days or less) are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Instruments 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) will be valued in good faith at fair value using methods determined by the Board of Trustees of the Master Portfolios. In determining the fair value of a security, the Board of Trustees shall take into account the relevant factors and surrounding circumstances, which may include: (i) the nature and pricing history (if any) of the security; (ii) whether any dealer quotations for the security are available; (iii) possible valuation methodologies that could be used to determine the fair value of the security; (iv) the recommendation of the portfolio manager of the Portfolios with respect to the valuation of the security; (v) whether the same or similar securities are held by other funds managed by the Advisor or other funds and the method used to price the security in those funds; (vi) the extent to which the fair value to be determined for the security will result from the use of data or formula produced by third parties independent of the Advisor; and (vii) the liquidity or illiquidity of the market for the security; and (viii) the value of a foreign security traded on other foreign markets. At June 30, 2013, 0.00%, 0.00%, 0.00%, 0.00% and 0.00% of the net assets of The Internet Portfolio, The Global Portfolio, The Paradigm Portfolio, The Medical Fund and The Market Opportunities Portfolio, respectively, were fair valued securities. The other Master Portfolios did not hold any fair valued securities at June 30, 2013.

Repurchase Agreements

Each Master Portfolio may enter into repurchase agreements with banks that are members of the Federal Reserve System or securities dealers who are members of a national securities exchange or are primary dealers in U.S. Government Securities. In connection with transactions in repurchase agreements, it is the Trust’s policy that the Master Portfolio receive, as collateral, securities whose market value, including accrued interest, at all times will be at least equal to 102% of the amount invested by the Master Portfolio in each repurchase

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

agreement. If the seller defaults and the value of the collateral declines, realization of the collateral by the Master Portfolio may be delayed or limited.

Written Option Accounting

The Master Portfolios may write (sell) call or put options for trading or hedging purposes. When the Master Portfolio writes an option, an amount equal to the premium received by the Master Portfolio is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. By writing the option, the Master Portfolio may become obligated during the term of the option to deliver or purchase the securities underlying the option at the exercise price if the option is exercised. When an option expires on its stipulated expiration date or the Master Portfolio enters into a closing purchase transaction, the Master Portfolio realizes a gain or loss if the cost of the closing transaction differs from the premium received when the option was sold, without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the underlying security (or increases the proceeds on the security sold short) and the Master Portfolio realizes a gain or loss from the sale of the security (or closing of the short sale). As collateral for uncovered written options, the Master Portfolio is required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the exercise price of the purchase obligation for put options or the market value of the instrument underlying the contract for call options.

Foreign Currency Translations

The books and records of the Master Portfolios are maintained in U.S. dollars. For the Master Portfolios, foreign currency transactions are translated into U.S. dollars on the following basis: (i) market values of investment securities and other assets and liabilities are translated at the exchange rate of such currencies against the U.S. dollar, as provided by an approved pricing service, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes to market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

from investments. However, for federal income tax purposes, the Master Portfolios do isolate and treat as ordinary income the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the effect of changes in foreign exchange rates arising between trade date and settlement date.

Restricted and Illiquid Securities

The Master Portfolios may invest in restricted securities. These securities are valued by the Master Portfolios after giving due consideration to pertinent factors including recent private sales, market conditions and the issuer’s financial performance. The Master Portfolios have no right to require registration of unregistered securities. At June 30, 2013 the following Master Portfolio held securities restricted to institutional investors (144A securities):

		Percentage of
	Market Value	Net Assets
The Multi-Disciplinary Portfolio	$8,991,437	9.66%

An illiquid asset is any asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Master Portfolio has valued the investment. At June 30, 2013, the following Master Portfolios held illiquid securities:

		Percentage of
	Market Value	Net Assets
The Internet Portfolio	$0.00	0.00%
The Global Portfolio	0.00	0.00%
The Paradigm Portfolio	0.00	0.00%
The Medical Portfolio	0.00	0.00%
The Market Opportunities Portfolio	0.00	0.00%

When-Issued Securities

The Master Portfolios may purchase securities on a when-issued or delayed delivery basis. Although the purchase amounts of these securities are established at the time the purchaser enters into the agreement, these securities may be delivered and paid for at a future date. The Master Portfolios record purchases of when-issued securities and reflect the values of such securities in determining net asset value in the same manner as other portfolio securities. The Master Portfolios maintain at all times cash or other liquid assets in an amount at least equal to the amount of outstanding commitments for when-issued securities.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

Securities Lending

Each Master Portfolio may lend its portfolio securities to broker-dealers by entering directly into lending arrangements with such broker-dealers or indirectly through repurchase agreements with respect to no more than 331/3% of the total assets of each Master Portfolio (including any collateral posted) or 50% of the total assets of each Master Portfolio (excluding any collateral posted). Securities lending and repurchase transactions will be fully collateralized at all times with cash and/or short-term debt obligations. The Master Portfolios receive intere st on the collateral received as well as a fee for the securities loaned.

Expense Allocation

Common expenses incurred by Feeder Funds are allocated among the Feeder Funds (i) based upon relative average net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Feeder Funds, depending on the nature of the expenditure.

Each Feeder Fund records its proportionate share of the corresponding Master Portfolio’s expenses on a daily basis. In addition, each Feeder Fund accrues its own separate expenses. Any cap on expenses includes Feeder Fund-specific expenses as well as the expenses allocated from the Master Portfolio.

Federal Income Taxes

Each Master Portfolio will be treated as a partnership for federal income tax purposes. As such, each investor in the Master Portfolio via its investment in a Feeder Fund will be subject to taxation on its share of the Master Portfolio’s ordinary income and capital gains. It is intended that the Master Portfolio’s assets will be managed so an investor in the Master Portfolio via its investment in a Feeder Fund can satisfy the requirements of subchapter M of the Internal Revenue Code.

It is the Feeder Funds’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and the Feeder Funds intend to distribute investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded.

Dividends from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. The character of

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

distributions made during the year from net investment income or net realized gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expenses and gain items for financial statement and tax purposes. Additionally, the Feeder Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes. Where appropriate, reclassifications between capital accounts are made for such differences that are permanent in nature.

There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. As of June 30, 2013, open tax years include the tax years ended December 31, 2009 through 2012. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next six months.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.

Other

Realized gains and losses on the sale of investments are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is accounted for on the accrual basis and includes amortization of premiums and discounts on the interest method. Other noncash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Company’s understanding of the applicable country’s tax rules and rates.

3. Investment Adviser

The Trust has entered into Investment Advisory Agreements (the “Agreements”) with Kinetics Asset Management LLC (the “Adviser”), with whom certain officers and trustees of the Trust are affiliated, to furnish investment advisory services to the Master Portfolios. The Adviser is a wholly-owned subsidiary of

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

Horizon Kinetics LLC. Under the terms of the Agreements, the Master Portfolios, except the Alternative Income Portfolio, compensate the Adviser for its management services at the annual rate of 1.25% of each Master Portfolio’s average daily net assets. The Alternative Income Portfolio began compensating the Adviser for its management services at the annual rate of 0.90% of the Master Portfolio’s average daily net assets beginning January 1, 2013.

The Adviser has voluntarily agreed to waive a portion of its advisory fee and/or reimburse certain operating expenses as deemed appropriate. The Adviser may discontinue the voluntary waiver/reimbursement at any time; these waivers/reimbursements are not subject to recapture.

For the period ended June 30, 2013, the rate earned by the Adviser from the Master Portfolios and the waived fees/reimbursed expenses for the Feeder Funds are as follows:

	The Internet Fund			The Global Fund
Annual advisory rate		1.25	%		1.25	%
Expenses reimbursed by Adviser through voluntary waiver	$	—		$	61,050
Expenses reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	—		$	—

	The Paradigm Fund			The Medical Fund
Annual advisory rate		1.25	%		1.25	%
Expenses reimbursed by Adviser through voluntary waiver	$	486,099		$	74,508
Expenses reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	178,444		$	—

	The Small Cap Opportunities Fund			The Market Opportunities Fund
Annual advisory rate		1.25	%		1.25	%
Expenses reimbursed by Adviser through voluntary waiver	$	82,071		$	64,640
Expenses reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	7,760		$	3,077

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

	The Alternative Income Fund			The Multi- Disciplinary Fund
Annual Advisory Rate		0.90	%		1.25	%
Expenses Reimbursed by Adviser through voluntary waiver	$	90,357		$	138,426
Expenses Reimbursed by Adviser through institutional class shareholder servicing fee waiver	$	1,922		$	9,303

The Adviser receives a shareholder servicing fee from the No Load Class, Advisor Class A and Advisor Class C shares of a Feeder Fund pursuant to a Shareholder Servicing Agreement in the amount equal to 0.25% of the Feeder Fund’s average daily net assets attributable to No Load Class, Advisor Class A and Advisor Class C shares, respectively. For the Institutional Class, the Adviser receives a shareholder servicing fee pursuant to a shareholder servicing agreement in the amount equal to 0.20% of a Feeder Fund’s average daily net assets attributable to Institutional Class shares. At this time, the Adviser has contractually agreed to waive and/or reimburse the portion of the Institutional Class shareholder servicing fee in excess of 0.05% of a Feeder Fund’s average daily net assets attributable to Institutional Class shares until at least May 1, 2014. For the six months ended June 30, 2013, the Adviser waived amounts depicted in the above table in shareholder servicing fees for the Institutional Class of the Paradigm, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds. The Adviser is responsible for paying a portion of these shareholder servicing fees to various agents that have a written shareholder servicing agreement with the Adviser and that perform shareholder servicing functions and maintenance of shareholder accounts on behalf of their clients who own shares of the Feeder Funds.

For the six months ended June 30, 2013, the Feeder Funds were allocated $13,000 for the services of the Chief Compliance Officer employed by the Adviser.

The Company, on behalf of the Feeder Funds, has adopted two Retail Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the “12b-1Plans”). One Plan is for Advisor Class A shares, while the other Plan is for Advisor Class C shares. Under the first Plan, Advisor Class A shares may pay up to an annual rate of 0.50% of the average daily net asset value of Advisor Class A shares to the Distributor or other qualified recipients under the Plan. During the six months ended June 30, 2013, payments under the 12b-1 Plan for

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds were limited to 0.25% of the average daily net asset value of such shares of such Funds. During the six months ended June 30, 2013, the Advisor Class A shares of the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds incurred expenses of $2,170, $1,252, $189,714, $3,661, $12,326, $9,093, $2,703 and $47,184, respectively, pursuant to the 12b-1 Plan. Under the second Plan, Advisor Class C shares pay an annual rate of 0.75% of the average daily net asset value of such shares. During the six months ended June 30, 2013, Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds Advisor Class C Shares incurred expenses of $990, $2,665, $416,332, $1,904, $12,787, $16,883, $6,053 and $34,572, respectively, pursuant to the 12b-1 Plan.

Kinetics Funds Distributor, LLC (the “Distributor”) acts as the Feeder Funds’ principal underwriter in a continuous public offering of the Feeder Funds’ shares. The Distributor is an affiliate of the Adviser. For the six months ended June 30, 2013, the Distributor received $1,280, $394, $19,504, $1,064, $1,944, $885, $670, and $9,970 from sales loads from the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds.

4. Reclassification of Capital Accounts

GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended December 31, 2012, each Feeder Fund recorded the following reclassifications to the accounts listed below:

	INCREASE (DECREASE)
	Paid In Capital			Accumulated Net Investment Income (Loss)			Accumulated Net Realized Gain (Loss)
The Internet Fund	$	(562,313	)	$	554,229		$	8,084
The Global Fund		—			53,089			(53,089	)
The Paradigm Fund		—			6,337,895			(6,337,895	)
The Medical Fund		—			(3,259	)		3,259
The Small Cap Fund		(536,024	)		33,023			503,001
The Market Opportunities Fund		(126,217	)		1,593,523			(1,467,306	)
The Alternative Income Fund		(9,435.	)		101,358			(91,923	)
The Multi-Disciplinary Fund		(50,734	)		143,373			(92,639	)

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

5. Income Taxes

At December 31, 2012, the Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds had $0, $12,171, $8,045,811, $28,372, $0, $220,821 $0, and $392,566, respectively, of undistributed net investment income on a tax basis.

At December 31, 2012, the Internet and Medical Funds had $3,213,576 and $144,235, respectively, of accumulated net realized gains on a tax basis.

At December 31, 2012, the Feeder Funds had accumulated net realized capital loss carryforwards expiring in the following years:

Feeder Fund	2018		2017		2016		2015		2014		2013
Global	$	—	$	391,787	$	—	$	—	$	—	$	—
Paradigm		115,786,082		445,505,345		206,726,423		—		—		—
Small Cap		8,224,702		96,486,615		53,815,879		—		—		—
Market Opportunities		2,108,533		6,623,055		20,630,375		—		—		—
Alternative Income		2,203,647		4,868,599		988,771		—		—		—

As a result of the Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”), losses incurred in this fiscal year and beyond retain their character, short-term or long-term, have no expiration date and are utilized prior to capital loss carryforwards accumulated before the enactment of the Modernization Act.

For the year ended December 31, 2012, the following Feeder Funds utilized capital loss carryforwards:

Fund	Capital Loss Carryforward
Global	$	60,657
Paradigm		30,509,870
Small Cap		9,136,443
Market Opportunities		3,392,052
Alternative Income		442,025

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

At December 31, 2012, the following Feeder Funds deferred, on a tax basis, post-October losses:

Feeder Fund	Post-October Losses		Post-October Currency Losses
Internet	$	—	$	—
Global		—		—
Paradigm		591,431		—
Medical		—		—
Small Cap		32,888		182,544
Market Opportunities		—		—
Alternative Income		348,512		72,455
Multi-Disciplinary		—		—

The tax components of dividends paid during the years ended December 31, 2012 and December 31, 2011, are:

	Internet				Global
	Ordinary Income Distribution		Long-Term Capital Gains Distribution		Ordinary Income Distribution		Long-Term Capital Gains Distribution
2012	$	—	$	5,260,270	$	156,516	$	—
2011	$	—	$	734,212	$	31,833	$	—

	Paradigm				Medical
	Ordinary Income Distribution		Long-Term Capital Gains Distribution		Ordinary Income Distribution		Long-Term Capital Gains Distribution
2012	$	3,816,172	$	—	$	301,886	$	1,910,710
2011	$	7,652,859	$	—	$	237,948	$	1,483,472

	Small Cap				Market Opportunities
	Ordinary Income Distribution		Long-Term Capital Gains Distribution		Ordinary Income Distribution		Long-Term Capital Gains Distribution
2012	$	—	$	—	$	654,956	$	—
2011	$	1,133,648	$	—	$	388,006	$	—

	Alternative Income				Multi-Disciplinary
	Ordinary Income Distribution		Long-Term Capital Gains Distribution		Ordinary Income Distribution		Long-Term Capital Gains Distribution
2012	$	251,325	$	—	$	2,322,725	$	—
2011	$	268,563	$	—	$	727,453	$	40,907

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

6. Tax Information

The Global, Paradigm, Medical, and Market Opportunities Funds designate 54%, 100%, 100% and 100%, respectively, of dividends declared after December 31, 2012 from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.

The Internet, Global, Paradigm, Medical, Small Cap, Market Opportunities, Alternative Income, and Multi-Disciplinary Funds hereby designate 0%, 100%, 100%, 14%, 0%, 100%, 100% and 100%, respectively, as ordinary income distributions and 100% and 86% for the Internet and Medical Funds as long-term capital gain distributions for the purposes of the dividends paid deduction, which include earnings and profits distributed to shareholders on redemptions of Fund shares.

For corporate shareholders in the Feeder Funds, the percentage of ordinary dividend income distributed for the year ended December 31, 2012, which is designated as qualifying for the dividends-received deduction, is as follows: Global 22%, Paradigm 100%, Medical 100%, and Market Opportunities 63%. The Alternative Income and Multi-Disciplinary Funds designate 96% and 91%, respectively, of their ordinary income distributions for the fiscal year ended December 31, 2012 as interest-related dividends under Internal Revenue Code Section 871(k) (l) (C).

The Multi-Disciplinary Fund designates 26% of its ordinary income distribution as a short-term capital gain distribution under Internal Revenue Code Section 871 (k) (2) (C).

7. Information about Proxy Voting

Information regarding how the Company and the Master Portfolios vote proxies relating to portfolio securities is available without charge, upon request by calling toll-free at 1-800-930-3828 or by accessing the Company’s website at www.kineticsfunds.com and by accessing the SEC’s website at www.sec.gov. Information regarding how the Feeder Funds and the Master Portfolios voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, is available without charge, upon request, by calling toll-free at 1-800-930-3828 or by accessing the SEC’s website at www.sec.gov.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Notes to Financial Statements — (Continued)

June 30, 2013 (Unaudited)

8. Information about the Portfolio Holdings

The Feeder Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the SEC on Form N-Q. The Feeder Funds’ Form N-Q is available without charge, upon request, by calling toll-free at 1-800-930-3828. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov. Finally, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

9. Subsequent Events

In preparing these financial statements, management has evaluated Fund related events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no events or translations that occurred during the period that materially impacted the amounts or disclosures in the Feeder Funds’ financial statements.

10. Reverse Stock Split

During the period ended June 30, 2013, shares of The Alternative Income Fund were adjusted to reflect a reverse stock split. The effect of the reverse stock split was to reduce the number of shares outstanding while maintaining the Fund’s and each shareholder’s aggregate net asset value. A summary of the reverse stock split is as follows:

	Date	Rate	Net Asset Value Before Reverse Split	Net Asset Value After Reverse Split	Shares Outstanding Before Reverse Split	Shares Outstanding After Reverse Split
Alternative Income Fund,
No Load Class	5/31/13	1:10	8.52	85.20	1,331,968	133,197
Alternative Income Fund,
Class A	5/31/13	1:10	8.52	85.20	233,864	23,386
Alternative Income Fund,
Class C	5/31/13	1:10	8.39	83.90	176,674	17,667
Alternative Income Fund,
Institutional Class	5/31/13	1:10	8.60	86.00	369,501	36,950

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights

		The Internet Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	43.18		$	36.26		$	37.25		$	30.74		$	20.71		$	35.94
Income from Investment Operations:
Net investment income (loss)(2)		(0.28	)		(0.15	)		(0.37	)		(0.28	)		(0.14	)		0.29
Net realized and unrealized gain (loss) on investments		7.03			8.56			(0.37	)		6.79			10.21			(15.47	)
Total from investment operations		6.75			8.41			(0.74	)		6.51			10.07			(15.18	)
Redemption Fees(3)		0.00			0.00			0.00			0.00			0.00			0.00
Less Distributions:
From net investment income		—			—			—			—			(0.04	)		(0.05	)
From net realized gains		—			(1.49	)		(0.25	)		—			—			—
Total distributions		—			(1.49	)		(0.25	)		—			(0.04	)		(0.05	)
Net Asset Value, End of Period	$	49.93		$	43.18		$	36.26		$	37.25		$	30.74		$	20.71
Total return		15.63	%(4)		23.24	%		(1.98	)%		21.18	%		48.61	%		(42.24	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	174,976		$	155,036		$	103,828		$	113,085		$	104,666		$	75,112
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.84	%(5)		1.94	%		1.94	%		1.95	%		1.98	%		2.03	%
After expense reimbursement(6)		1.84	%(5)		1.89	%		1.89	%		1.89	%		1.89	%		1.90	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.18	)%(5)		(0.41	)%		(0.99	)%		(0.91	)%		(0.64	)%		0.90	%
After expense reimbursement(6)		(1.18	)%(5)		(0.36	)%		(0.94	)%		(0.85	)%		(0.55	)%		1.03	%
Portfolio turnover rate(7)		4	%		9	%		32	%		12	%		14	%		19	%


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Internet Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Internet Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	42.30		$	35.63		$	36.69		$	30.35		$	20.50		$	35.66
Income from Investment Operations:
Net investment income (loss)(2)		(0.33	)		(0.24	)		(0.46	)		(0.36	)		(0.21	)		0.22
Net realized and unrealized gain (loss) on investments		6.87			8.40			(0.36	)		6.70			10.09			(15.33	)
Total from investment operations		6.54			8.16			(0.82	)		6.34			9.88			(15.11	)
Redemption Fees		—			—			0.01			0.00	(3)		0.01			0.00	(3)
Less Distributions:
From net investment income		—			—			—			—			(0.04	)		(0.05	)
From net realized gains		—			(1.49	)		(0.25	)		—			—			—
Total distributions		—			(1.49	)		(0.25	)		—			(0.04	)		(0.05	)
Net Asset Value, End of Period	$	48.84		$	42.30		$	35.63		$	36.69		$	30.35		$	20.50
Total return(4)		15.49	%(5)		22.92	%		(2.20	)%		20.89	%		48.23	%		(42.37	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	2,192		$	1,379		$	1,050		$	1,892		$	738		$	318
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.09	%(6)		2.19	%		2.19	%		2.20	%		2.23	%		2.28	%
After expense reimbursement(7)		2.09	%(6)		2.14	%		2.14	%		2.14	%		2.14	%		2.15	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.43	)%(6)		(0.66	)%		(1.24	)%		(1.16	)%		(0.89	)%		0.65	%
After expense reimbursement(7)		(1.43	)%(6)		(0.61	)%		(1.19	)%		(1.10	)%		(0.80	)%		0.78	%
Portfolio turnover rate(8)		4	%		9	%		32	%		12	%		14	%		19	%


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Internet Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Internet Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	40.79		$	34.58		$	35.79		$	29.76		$	20.20		$	35.31
Income from Investment Operations:
Net investment income (loss)(2)		(0.43	)		(0.43	)		(0.63	)		(0.51	)		(0.31	)		0.08
Net realized and unrealized gain (loss) on investments		6.63			8.13			(0.34	)		6.54			9.91			(15.15	)
Total from investment operations		6.20			7.70			(0.97	)		6.03			9.60			(15.07	)
Redemption Fees		—			—			0.01			—			—			—
Less Distributions:
From net investment income		—			—			—			—			(0.04	)		(0.04	)
From net realized gains		—			(1.49	)		(0.25	)		—			—			—
Total distributions		—			(1.49	)		(0.25	)		—			(0.04	)		(0.04	)
Net Asset Value, End of Period	$	46.99		$	40.79		$	34.58		$	35.79		$	29.76		$	20.20
Total return		15.20	%(3)		22.32	%		(2.67	)%		20.26	%		47.51	%		(42.67	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	458		$	185		$	103		$	196		$	120		$	113
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.59	%(4)		2.69	%		2.69	%		2.70	%		2.73	%		2.78	%
After expense reimbursement(5)		2.59	%(4)		2.64	%		2.64	%		2.64	%		2.64	%		2.65	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.93	)%(4)		(1.16	)%		(1.74	)%		(1.66	)%		(1.39	)%		0.15	%
After expense reimbursement(5)		(1.93	)%(4)		(1.11	)%		(1.69	)%		(1.60	)%		(1.30	)%		0.28	%
Portfolio turnover rate(6)		4	%		9	%		32	%		12	%		14	%		19	%


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Not annualized.
(4)	Annualized.
(5)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(6)	Portfolio turnover of The Internet Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Global Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	4.71		$	3.92		$	4.67		$	3.92		$	2.36		$	4.90
Income from Investment Operations:
Net investment income(2)		0.01			0.03			0.06			0.02			0.02			0.07
Net realized and unrealized gain (loss) on investments		0.43			0.88			(0.78	)		0.78			1.55			(2.56	)
Total from investment operations		0.44			0.91			(0.72	)		0.80			1.57			(2.49	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.01			0.00	(3)
Less Distributions:
From net investment income		—			(0.12	)		(0.03	)		(0.05	)		(0.02	)		(0.05	)
Total distributions		—			(0.12	)		(0.03	)		(0.05	)		(0.02	)		(0.05	)
Net Asset Value, End of Period	$	5.15		$	4.71		$	3.92		$	4.67		$	3.92		$	2.36
Total return		9.34	%(4)		23.16	%		(15.41	)%		20.30	%		66.86	%		(50.72	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	6,906		$	5,069		$	3,631		$	4,541		$	4,370		$	1,863
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.92	%(5)		3.38	%		3.94	%		4.17	%		5.32	%		5.98	%
After expense reimbursement(6)		1.39	%(5)		1.39	%		1.39	%		1.39	%		1.39	%		1.41	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.23	)%(5)		(1.22	)%		(1.11	)%		(2.26	)%		(3.27	)%		(2.72	)%
After expense reimbursement(6)		0.30	%(5)		0.77	%		1.44	%		0.52	%		0.66	%		1.85	%
Portfolio turnover rate(7)		6	%		23	%		135	%		122	%		53	%		98	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Global Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Global Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			May 19, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	4.71		$	3.92		$	4.68		$	3.93		$	2.36		$	4.56
Income from Investment Operations:
Net investment income(2)		0.00	(3)		0.02			0.05			0.01			0.01			0.03
Net realized and unrealized gain (loss) on investments		0.43			0.88			(0.78	)		0.78			1.57			(2.18	)
Total from investment operations		0.43			0.90			(0.73	)		0.79			1.58			(2.15	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		—			—
Less Distributions:
From net investment income		—			(0.11	)		(0.03	)		(0.04	)		(0.01	)		(0.05	)
Total distributions		—			(0.11	)		(0.03	)		(0.04	)		(0.01	)		(0.05	)
Net Asset Value, End of Period	$	5.14		$	4.71		$	3.92		$	4.68		$	3.93		$	2.36
Total return(4)		9.13	%(5)		22.94	%		(15.59	)%		20.04	%		67.11	%		(47.12	)%(5)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	1,092		$	1,093		$	392		$	707		$	368		$	106
Ratio of operating expenses to average net assets:
Before expense reimbursement		3.17	%(6)		3.63	%		4.19	%		4.42	%		5.57	%		8.28	%(6)
After expense reimbursement(7)		1.64	%(6)		1.64	%		1.64	%		1.64	%		1.64	%		1.65	%(6)
Ratio of net investment income (loss)to average net assets:
Before expense reimbursement		(1.48	)%(6)		(1.47	)%		(1.36	)%		(2.51	)%		(3.52	)%		(5.16	)%(6)
After expense reimbursement(7)		(0.05	)%(6)		0.52	%		1.19	%		0.27	%		0.41	%		1.47	%(6)
Portfolio turnover rate(8)		6	%		23	%		135	%		122	%		53	%		98	%


^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Global Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Global Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			May 19, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	4.62		$	3.87		$	4.64		$	3.90		$	2.37		$	4.56
Income from Investment Operations:
Net investment income (loss)(2)		(0.01	)		0.00	(3)		0.03			(0.01	)		0.00	(3)		0.02
Net realized and unrealized gain (loss) on investments		0.43			0.85			(0.77	)		0.77			1.53			(2.17	)
Total from investment operations		0.42			0.85			(0.74	)		0.76			1.53			(2.15	)
Redemption Fees		—			—			—			—			—			—
Less Distributions:
From net investment income		—			(0.10	)		(0.03	)		(0.02	)		(0.00	)(3)		(0.04	)
Total distributions		—			(0.10	)		(0.03	)		(0.02	)		(0.00	)(3)		(0.04	)
Net Asset Value, End of Period	$	5.04		$	4.62		$	3.87		$	4.64		$	3.90		$	2.37
Total return		9.09	%(4)		22.04	%		(15.94	)%		19.24	%		65.08	%		(47.14	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	988		$	383		$	111		$	64		$	36		$	5
Ratio of operating expenses to average net assets:
Before expense reimbursement		3.67	%(5)		4.13	%		4.69	%		4.92	%		6.07	%		8.78	%(5)
After expense reimbursement(6)		2.14	%(5)		2.14	%		2.14	%		2.14	%		2.14	%		2.15	%(5)
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.98	)%(5)		(1.97	)%		(1.86	)%		(3.01	)%		(4.02	)%		(5.66	)%(5)
After expense reimbursement(6)		(0.45	)%(5)		0.02	%		0.69	%		(0.23	)%		(0.09	)%		0.97	%(5)
Portfolio turnover rate(7)		6	%		23	%		135	%		122	%		53	%		98	%


^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Global Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Paradigm Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	23.99		$	19.81		$	23.31		$	20.18		$	14.42		$	30.99
Income from Investment Operations:
Net investment income (loss)(2)		(0.05	)		0.05			0.02			0.11			0.15			0.12
Net realized and unrealized gain (loss) on investments		4.98			4.25			(3.34	)		3.39			5.78			(16.62	)(4)
Total from investment operations		4.93			4.30			(3.32	)		3.50			5.93			(16.50	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.01
Less Distributions:
From net investment income		—			(0.12	)		(0.18	)		(0.37	)		(0.17	)		—
From net realized gains		—			—			—			—			—			(0.08	)
Total distributions		—			(0.12	)		(0.18	)		(0.37	)		(0.17	)		(0.08	)
Net Asset Value, End of Period	$	28.92		$	23.99		$	19.81		$	23.31		$	20.18		$	14.42
Total return		20.55	%(5)		21.78	%		(14.27	)%		17.37	%		41.02	%		(53.17	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	507,680		$	416,696		$	430,528		$	687,056		$	825,278		$	740,983
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.74	%(6)		1.78	%		1.78	%		1.76	%		1.73	%		1.72	%
After expense reimbursement(7)		1.64	%(6)		1.64	%		1.64	%		1.64	%		1.64	%		1.66	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.45	)%(6)		0.08	%		(0.03	)%		0.43	%		0.78	%		0.46	%
After expense reimbursement(7)		(0.35	)%(6)		0.22	%		0.11	%		0.55	%		0.87	%		0.52	%
Portfolio turnover rate(8)		2	%		6	%		58	%		7	%		15	%		34	%


(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Paradigm Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Paradigm Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	23.59		$	19.45		$	22.95		$	19.88		$	14.16		$	30.52
Income from Investment Operations:
Net investment income (loss)(2)		(0.08	)		(0.01	)		(0.03	)		0.06			0.10			0.06
Net realized and unrealized gain (loss) on investments		4.90			4.18			(3.29	)		3.33			5.68			(16.34	)(4)
Total from investment operations		4.82			4.17			(3.32	)		3.39			5.78			(16.28	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—			0.00	(3)
Less Distributions:
From net investment income		—			(0.03	)		(0.18	)		(0.32	)		(0.06	)		—
From net realized gains		—			—			—			—			—			(0.08	)
Total distributions		—			(0.03	)		(0.18	)		(0.32	)		(0.06	)		(0.08	)
Net Asset Value, End of Period	$	28.41		$	23.59		$	19.45		$	22.95		$	19.88		$	14.16
Total return(5)		20.43	%(6)		21.49	%		(14.49	)%		17.11	%		40.64	%		(53.30	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	161,906		$	135,747		$	146,939		$	226,264		$	252,106		$	249,424
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.99	%(7)		2.03	%		2.03	%		2.01	%		1.98	%		1.97	%
After expense reimbursement(8)		1.89	%(7)		1.89	%		1.89	%		1.89	%		1.89	%		1.91	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.70	)%(7)		(0.17	)%		(0.28	)%		0.18	%		0.53	%		0.21	%
After expense reimbursement(8)		(0.60	)%(7)		(0.03	)%		(0.14	)%		0.30	%		0.62	%		0.27	%
Portfolio turnover rate(9)		2	%		6	%		58	%		7	%		15	%		34	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(6)	Not annualized.
(7)	Annualized.
(8)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion. (9) Portfolio turnover of The Paradigm Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Paradigm Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	22.66		$	18.76		$	22.25		$	19.33		$	13.80		$	29.90
Income from Investment Operations:
Net investment income (loss)(2)		(0.14	)		(0.11	)		(0.14	)		(0.04	)		0.02			(0.05	)
Net realized and unrealized gain (loss) on investments		4.71			4.01			(3.17	)		3.22			5.51			(15.97	)(4)
Total from investment operations		4.57			3.90			(3.31	)		3.18			5.53			(16.02	)
Redemption Fees(3)		0.00			0.00			0.00			0.00			0.00			0.00
Less Distributions:
From net investment income		—			—			(0.18	)		(0.26	)		—			—
From net realized gains		—			—			—			—			—			(0.08	)
Total distributions		—			—			(0.18	)		(0.26	)		—			(0.08	)
Net Asset Value, End of Period	$	27.23		$	22.66		$	18.76		$	22.25		$	19.33		$	13.80
Total return		20.17	%(5)		20.85	%		(14.90	)%		16.45	%		39.97	%		(53.54	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	116,055		$	101,405		$	102,534		$	152,571		$	169,578		$	147,915
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.49	%(6)		2.53	%		2.53	%		2.51	%		2.48	%		2.47	%
After expense reimbursement(7)		2.39	%(6)		2.39	%		2.39	%		2.39	%		2.39	%		2.41	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.20	)%(6)		(0.67	)%		(0.78	)%		(0.32	)%		0.03	%		(0.29	)%
After expense reimbursement(7)		(1.10	)%(6)		(0.53	)%		(0.64	)%		(0.20	)%		0.12	%		(0.23	)%
Portfolio turnover rate(8)		2	%		6	%		58	%		7	%		15	%		34	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Paradigm Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Paradigm Fund
		Institutional Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	23.93		$	19.79		$	23.25		$	20.13		$	14.44		$	30.97
Income from Investment Operations:
Net investment income (loss)(2)		(0.02	)		0.10			0.07			0.16			0.18			0.18
Net realized and unrealized gain (loss) on investments		4.98			4.24			(3.35	)		3.38			5.78			(16.63	)(4)
Total from investment operations		4.96			4.34			(3.28	)		3.54			5.96			(16.45	)
Redemption Fees(3)		0.00			0.00			0.00			0.00			0.00			0.00
Less Distributions:
From net investment income		—			(0.20	)		(0.18	)		(0.42	)		(0.27	)		—
From net realized gains		—			—			—			—			—			(0.08	)
Total distributions		—			(0.20	)		(0.18	)		(0.42	)		(0.27	)		(0.08	)
Net Asset Value, End of Period	$	28.89		$	23.93		$	19.79		$	23.25		$	20.13		$	14.44
Total return		20.73	%(5)		21.99	%		(14.13	)%		17.62	%		41.31	%		(53.11	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	267,254		$	192,478		$	134,309		$	142,261		$	125,372		$	128,129
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.69	%(6)		1.73	%		1.73	%		1.71	%		1.68	%		1.67	%
After expense reimbursement(7)		1.44	%(6)		1.44	%		1.44	%		1.44	%		1.44	%		1.46	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.40	)%(6)		0.13	%		0.02	%		0.48	%		0.83	%		0.51	%
After expense reimbursement(7)		(0.15	)%(6)		0.42	%		0.31	%		0.75	%		1.07	%		0.72	%
Portfolio turnover rate(8)		2	%		6	%		58	%		7	%		15	%		34	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Paradigm Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Medical Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	17.82		$	18.75		$	19.48		$	18.77		$	15.23		$	19.82
Income from Investment Operations:
Net investment income(2)		0.18			0.33			0.18			0.10			0.20			0.19
Net realized and unrealized gain (loss) on investments		4.26			1.32			0.82			0.72			3.51			(4.25	)
Total from investment operations		4.44			1.65			1.00			0.82			3.71			(4.06	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.01			0.01
Less Distributions:
From net investment income		—			(0.36	)		(0.25	)		(0.11	)		(0.16	)		(0.16	)
From net realized gains		—			(2.22	)		(1.48	)		—			(0.02	)		(0.38	)
Total distributions		—			(2.58	)		(1.73	)		(0.11	)		(0.18	)		(0.54	)
Net Asset Value, End of Period	$	22.26		$	17.82		$	18.75		$	19.48		$	18.77		$	15.23
Total return		24.86	%(4)		8.86	%		5.11	%		4.30	%		24.47	%		(20.42	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	18,313		$	14,254		$	16,376		$	25,777		$	21,126		$	15,727
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.12	%(5)		2.22	%		2.02	%		2.00	%		2.15	%		2.26	%
After expense reimbursement(6)		1.39	%(5)		1.39	%		1.39	%		1.39	%		1.39	%		1.41	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		1.03	%(5)		0.83	%		0.24	%		(0.06	)%		0.42	%		0.18	%
After expense reimbursement(6)		1.76	%(5)		1.66	%		0.87	%		0.55	%		1.17	%		1.03	%
Portfolio turnover rate(7)		7	%		0	%		5	%		3	%		13	%		28	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Medical Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Medical Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	17.33		$	18.29		$	19.06		$	18.36		$	14.90		$	19.39
Income from Investment Operations:
Net investment income(2)		0.15			0.27			0.12			0.05			0.15			0.13
Net realized and unrealized gain (loss) on investments		4.13			1.29			0.80			0.71			3.44			(4.15	)
Total from investment operations		4.28			1.56			0.92			0.76			3.59			(4.02	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.01			0.04
Less Distributions:
From net investment income		—			(0.30	)		(0.21	)		(0.06	)		(0.12	)		(0.13	)
From net realized gains		—			(2.22	)		(1.48	)		—			(0.02	)		(0.38	)
Total distributions		—			(2.52	)		(1.69	)		(0.06	)		(0.14	)		(0.51	)
Net Asset Value, End of Period	$	21.61		$	17.33		$	18.29		$	19.06		$	18.36		$	14.90
Total return(4)		24.70	%(5)		8.60	%		4.79	%		4.13	%		24.17	%		(20.49	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	3,551		$	2,583		$	3,240		$	4,207		$	4,347		$	2,941
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.37	%(6)		2.47	%		2.27	%		2.25	%		2.40	%		2.51	%
After expense reimbursement(7)		1.64	%(6)		1.64	%		1.64	%		1.64	%		1.64	%		1.66	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.78	%(6)		0.58	%		(0.01	)%		(0.31	)%		0.17	%		(0.07	)%
After expense reimbursement(7)		1.51	%(6)		1.41	%		0.62	%		0.30	%		0.92	%		0.78	%
Portfolio turnover rate(8)		7	%		0	%		5	%		3	%		13	%		28	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Medical Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Medical Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	17.19		$	18.15		$	18.90		$	18.27		$	14.83		$	19.34
Income from Investment Operations:
Net investment income (loss)(2)		0.10			0.17			0.02			(0.04	)		0.07			0.05
Net realized and unrealized gain (loss) on investments		4.09			1.29			0.80			0.69			3.41			(4.13	)
Total from investment operations		4.19			1.46			0.82			0.65			3.48			(4.08	)
Redemption Fees		—			—			0.00	(3)		—			0.00	(3)		0.02
Less Distributions:
From net investment income		—			(0.20	)		(0.09	)		(0.02	)		(0.02	)		(0.07	)
From net realized gains		—			(2.22	)		(1.48	)		—			(0.02	)		(0.38	)
Total distributions		—			(2.42	)		(1.57	)		(0.02	)		(0.04	)		(0.45	)
Net Asset Value, End of Period	$	21.38		$	17.19		$	18.15		$	18.90		$	18.27		$	14.83
Total return		24.37	%(4)		8.08	%		4.32	%		3.55	%		23.50	%		(20.97	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	553		$	450		$	580		$	692		$	454		$	314
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.87	%(5)		2.97	%		2.77	%		2.75	%		2.90	%		3.01	%
After expense reimbursement(6)		2.14	%(5)		2.14	%		2.14	%		2.14	%		2.14	%		2.16	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.28	%(5)		0.08	%		(0.51	)%		(0.81	)%		(0.33	)%		(0.57	)%
After expense reimbursement(6)		1.01	%(5)		0.91	%		0.12	%		(0.20	)%		0.42	%		0.28	%
Portfolio turnover rate(7)		7	%		0	%		5	%		3	%		13	%		28	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Medical Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Small Cap Opportunities Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	25.17		$	19.85		$	23.32		$	20.83		$	13.17		$	31.92
Income from Investment Operations:
Net investment income (loss)(2)		(0.01	)		0.01			(0.04	)		(0.04	)		(0.04	)		0.05
Net realized and unrealized gain (loss) on investments		7.14			5.31			(3.15	)		2.93			7.70			(18.53	)(4)
Total from investment operations		7.13			5.32			(3.19	)		2.89			7.66			(18.48	)
Redemption Fees(3)		0.00			0.00			0.00			0.00			0.00			0.00
Less Distributions:
From net investment income		—			—			(0.28	)		(0.40	)		—			—
From net realized gains		—			—			—			—			—			(0.27	)
Total distributions		—			—			(0.28	)		(0.40	)		—			(0.27	)
Net Asset Value, End of Period	$	32.30		$	25.17		$	19.85		$	23.32		$	20.83		$	13.17
Total return		28.33	%(5)		26.74	%		(13.65	)%		13.86	%		58.16	%		(57.88	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	128,863		$	63,947		$	67,798		$	130,279		$	161,205		$	126,971
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.78	%(6)		1.96	%		1.90	%		1.86	%		1.86	%		1.79	%
After expense reimbursement(7)		1.64	%(6)		1.64	%		1.64	%		1.64	%		1.64	%		1.67	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.21	)%(6)		(0.25	)%		(0.44	)%		(0.42	)%		(0.48	)%		0.09	%
After expense reimbursement(7)		(0.07	)%(6)		0.07	%		(0.18	)%		(0.20	)%		(0.26	)%		0.21	%
Portfolio turnover rate(8)		1	%		22	%		47	%		4	%		4	%		16	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Small Cap Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Small Cap Opportunities Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	24.77		$	19.59		$	22.98		$	20.53		$	13.01		$	31.63
Income from Investment Operations:
Net investment loss(2)		(0.05	)		(0.04	)		(0.10	)		(0.09	)		(0.08	)		(0.01	)
Net realized and unrealized gain (loss) on investments		7.03			5.22			(3.08	)		2.87			7.60			(18.34	)(4)
Total from investment operations		6.98			5.18			(3.18	)		2.78			7.52			(18.35	)
Redemption Fees(3)		0.00			0.00			0.00			0.00			0.00			0.00
Less Distributions:
From net investment income		—			—			(0.21	)		(0.33	)		—			—
From net realized gains		—			—			—			—			—			(0.27	)
Total distributions		—			—			(0.21	)		(0.33	)		—			(0.27	)
Net Asset Value, End of Period	$	31.75		$	24.77		$	19.59		$	22.98		$	20.53		$	13.01
Total return(5)		28.18	%(6)		26.44	%		(13.85	)%		13.56	%		57.80	%		(58.00	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	13,086		$	7,558		$	7,250		$	11,509		$	14,244		$	12,090
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.03	%(7)		2.21	%		2.15	%		2.11	%		2.11	%		2.04	%
After expense reimbursement(8)		1.89	%(7)		1.89	%		1.89	%		1.89	%		1.89	%		1.92	%
Ratio of net investment loss to average net assets:
Before expense reimbursement		(0.46	)%(7)		(0.50	)%		(0.69	)%		(0.67	)%		(0.73	)%		(0.16	)%
After expense reimbursement(8)		(0.32	)%(7)		(0.18	)%		(0.43	)%		(0.45	)%		(0.51	)%		(0.04	)%
Portfolio turnover rate(9)		1	%		22	%		47	%		4	%		4	%		16	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(6)	Not annualized.
(7)	Annualized.
(8)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(9)	Portfolio turnover of The Small Cap Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Small Cap Opportunities Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	24.35		$	19.36		$	22.68		$	20.28		$	12.92		$	31.57
Income from Investment Operations:
Net investment loss(2)		(0.12	)		(0.15	)		(0.20	)		(0.20	)		(0.16	)		(0.12	)
Net realized and unrealized gain (loss) on investments		6.91			5.14			(3.04	)		2.84			7.52			(18.26	)(4)
Total from investment operations		6.79			4.99			(3.24	)		2.64			7.36			(18.38	)
Redemption Fees		—			—			—			—			0.00	(3)		0.00	(3)
Less Distributions:
From net investment income		—			—			(0.08	)		(0.24	)		—			—
From net realized gains		—			—			—			—			—			(0.27	)
Total distributions		—			—			(0.08	)		(0.24	)		—			(0.27	)
Net Asset Value, End of Period	$	31.14		$	24.35		$	19.36		$	22.68		$	20.28		$	12.92
Total return		27.89	%(5)		25.77	%		(14.29	)%		13.00	%		56.97	%		(58.20	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	4,206		$	2,536		$	2,440		$	3,450		$	4,445		$	2,871
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.53	%(6)		2.71	%		2.65	%		2.61	%		2.61	%		2.54	%
After expense reimbursement(7)		2.39	%(6)		2.39	%		2.39	%		2.39	%		2.39	%		2.42	%
Ratio of net investment loss to average net assets:
Before expense reimbursement		(0.96	)%(6)		(1.00	)%		(1.19	)%		(1.17	)%		(1.23	)%		(0.66	)%
After expense reimbursement(7)		(0.82	)%(6)		(0.68	)%		(0.93	)%		(0.95	)%		(1.01	)%		(0.54	)%
Portfolio turnover rate(8)		1	%		22	%		47	%		4	%		4	%		16	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Small Cap Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Small Cap Opportunities Fund
		Institutional Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	25.32		$	19.93		$	23.45		$	20.90		$	13.19		$	31.92
Income from Investment Operations:
Net investment income (loss)(2)		0.02			0.06			0.00	(3)		0.00	(3)		(0.01	)		0.10
Net realized and unrealized gain (loss) on investments		7.19			5.33			(3.17	)		2.95			7.72			(18.56	)(4)
Total from investment operations		7.21			5.39			(3.17	)		2.95			7.71			(18.46	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Less Distributions:
From net investment income		—			—			(0.35	)		(0.40	)		—			—
From net realized gains		—			—			—			—			—			(0.27	)
Total distributions		—			—			(0.35	)		(0.40	)		—			(0.27	)
Net Asset Value, End of Period	$	32.53		$	25.32		$	19.93		$	23.45		$	20.90		$	13.19
Total return		28.48	%(5)		27.04	%		(13.51	)%		14.10	%		58.45	%		(57.82	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	16,870		$	7,482		$	5,498		$	9,808		$	19,749		$	68,408
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.73	%(6)		1.91	%		1.85	%		1.81	%		1.81	%		1.74	%
After expense reimbursement(7)		1.44	%(6)		1.44	%		1.44	%		1.44	%		1.44	%		1.47	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.16	)%(6)		(0.20	)%		(0.39	)%		(0.37	)%		(0.43	)%		0.14	%
After expense reimbursement(7)		0.13	%(6)		0.27	%		0.02	%		0.00	%		(0.06	)%		0.41	%
Portfolio turnover rate(8)		1	%		22	%		47	%		4	%		4	%		16	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. The reimbursement comprises less than $0.005 of the NAVs for each class at the time of reimbursement and 0.03% of the total return for the Adviser Class C for the fiscal year ended December 31, 2008. There was no impact on the other classes.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Small Cap Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Market Opportunities Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009		For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	12.08		$	10.45		$	11.46		$	10.84		$	7.22		$	16.12
Income from Investment Operations:
Net investment income(2)		0.02			0.03			0.01			0.04			0.00	(3)		0.11
Net realized and unrealized gain (loss) on investments		2.67			1.80			(0.91	)		1.18			3.62			(9.02	)
Payment by adviser		—			—			—			—			—			0.06	(4)
Total from investment operations		2.69			1.83			(0.90	)		1.22			3.62			(8.85	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.01			0.01
Less Distributions:
From net investment income		—			(0.20	)		(0.11	)		(0.60	)		(0.01	)		(0.06	)
Total distributions		—			(0.20	)		(0.11	)		(0.60	)		(0.01	)		(0.06	)
Net Asset Value, End of Period	$	14.77		$	12.08		$	10.45		$	11.46		$	10.84		$	7.22
Total return		22.27	%(5)		17.52	%		(7.85	)%		11.31	%		50.21	%		(54.82	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	41,810		$	32,929		$	30,191		$	38,562		$	41,254		$	34,246
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.88	%(6)		1.97	%		1.93	%		1.92	%		1.93	%		1.82	%
After expense reimbursement(7)		1.64	%(6)		1.64	%		1.64	%		1.64	%		1.64	%		1.66	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.12	%(6)		(0.10	)%		(0.20	)%		0.06	%		(0.25	)%		0.78	%
After expense reimbursement(7)		0.36	%(6)		0.23	%		0.09	%		0.34	%		0.04	%		0.94	%
Portfolio turnover rate(8)		10	%		26	%		14	%		12	%		14	%		77	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37%, 0.38% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C and the Institutional Class, respectively, for the year ended December 31, 2008.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Market Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Market Opportunities Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	12.07		$	10.43		$	11.43		$	10.80		$	7.22		$	16.07
Income from Investment Operations:
Net investment income (loss)(2)		0.01			0.00	(3)		(0.02	)		0.01			(0.02	)		0.08
Net realized and unrealized gain (loss) on investments		2.66			1.80			(0.90	)		1.19			3.61			(8.97	)
Payment by adviser		—			—			—			—			—			0.06	(4)
Total from investment operations		2.67			1.80			(0.92	)		1.20			3.59			(8.83	)
Redemption Fees(3)		0.00			0.00			0.00			0.00			0.00			0.00
Less Distributions:
From net investment income		—			(0.16	)		(0.08	)		(0.57	)		(0.01	)		(0.02	)
Total distributions		—			(0.16	)		(0.08	)		(0.57	)		(0.01	)		(0.02	)
Net Asset Value, End of Period	$	14.74		$	12.07		$	10.43		$	11.43		$	10.80		$	7.22
Total return(5)		22.12	%(6)		17.26	%		(8.08	)%		11.11	%		49.66	%		(54.91	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	8,543		$	6,518		$	8,600		$	14,167		$	18,770		$	18,514
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.13	%(7)		2.22	%		2.18	%		2.17	%		2.18	%		2.07	%
After expense reimbursement(8)		1.89	%(7)		1.89	%		1.89	%		1.89	%		1.89	%		1.91	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.13	)%(7)		(0.35	)%		(0.45	)%		(0.19	)%		(0.50	)%		0.53	%
After expense reimbursement(8)		0.11	%(7)		(0.02	)%		(0.16	)%		0.09	%		(0.21	)%		0.69	%
Portfolio turnover rate(9)		10	%		26	%		14	%		12	%		14	%		77	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37%, 0.38% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C and the Institutional Class, respectively, for the year ended December 31, 2008.
(5)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(6)	Not annualized.
(7)	Annualized.
(8)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(9)	Portfolio turnover of The Market Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Market Opportunities Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	11.94		$	10.32		$	11.30		$	10.69		$	7.17		$	16.01
Income from Investment Operations:
Net investment income (loss)(2)		(0.03	)		(0.06	)		(0.08	)		(0.04	)		(0.06	)		0.02
Net realized and unrealized gain (loss) on investments		2.63			1.78			(0.88	)		1.17			3.59			(8.91	)
Payment by adviser		—			—			—			—			—			0.06	(4)
Total from investment operations		2.60			1.72			(0.96	)		1.13			3.53			(8.83	)
Redemption Fees		0.00	(3)		0.00	(3)		—			0.00	(3)		0.00	(3)		0.00	(3)
Less Distributions:
From net investment income		—			(0.10	)		(0.02	)		(0.52	)		(0.01	)		(0.01	)
Total distributions		—			(0.10	)		(0.02	)		(0.52	)		(0.01	)		(0.01	)
Net Asset Value, End of Period	$	14.54		$	11.94		$	10.32		$	11.30		$	10.69		$	7.17
Total return		21.78	%(5)		16.70	%		(8.51	)%		10.54	%		49.17	%		(55.13	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	4,698		$	3,932		$	4,233		$	5,569		$	6,055		$	771
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.63	%(6)		2.72	%		2.68	%		2.67	%		2.68	%		2.57	%
After expense reimbursement(7)		2.39	%(6)		2.39	%		2.39	%		2.39	%		2.39	%		2.41	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(0.63	)%(6)		(0.85	)%		(0.95	)%		(0.69	)%		(1.00	)%		0.03	%
After expense reimbursement(7)		(0.39	)%(6)		(0.52	)%		(0.66	)%		(0.41	)%		(0.71	)%		0.19	%
Portfolio turnover rate(8)		10	%		26	%		14	%		12	%		14	%		77	%

(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37%, 0.38% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C and the Institutional Class, respectively, for the year ended December 31, 2008.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Market Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Market Opportunities Fund
		Institutional Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009		May 19, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	12.10		$	10.46		$	11.48		$	10.86		$	7.21		$	13.71
Income from Investment Operations:
Net investment income(2)		0.04			0.05			0.03			0.06			0.02			0.08
Net realized and unrealized gain (loss) on investments		2.68			1.81			(0.92	)		1.19			3.64			(6.55	)
Payment by adviser		—			—			—			—			—			0.06	(3)
Total from investment operations		2.72			1.86			(0.89	)		1.25			3.66			(6.41	)
Redemption Fees		—			—			—			—			—			—
Less Distributions:
From net investment income		—			(0.22	)		(0.13	)		(0.63	)		(0.01	)		(0.09	)
Total distributions		—			(0.22	)		(0.13	)		(0.63	)		(0.01	)		(0.09	)
Net Asset Value, End of Period	$	14.82		$	12.10		$	10.46		$	11.48		$	10.86		$	7.21
Total return		22.48	%(4)		17.83	%		(7.71	)%		11.54	%		50.70	%		(46.77	)%(3)(4)
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	4,115		$	229		$	186		$	212		$	19		$	5
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.83	%(5)		1.92	%		1.88	%		1.87	%		1.88	%		1.82	%(5)
After expense reimbursement(6)		1.44	%(5)		1.44	%		1.44	%		1.44	%		1.44	%		1.44	%(5)
Ratio of net investment income (loss)to average net assets:
Before expense reimbursement		0.17	%(5)		(0.05	)%		(0.15	)%		0.11	%		(0.20	)%		0.94	%(5)
After expense reimbursement(6)		0.56	%(5)		0.43	%		0.29	%		0.54	%		0.24	%		1.32	%(5)
Portfolio turnover rate(7)		10	%		26	%		14	%		12	%		14	%		77	%

^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Includes adviser reimbursement from the net realized loss on the disposal of investments in violation of restrictions. This reimbursement contributed 0.38%, 0.37%, 0.38% and 0.44% to the returns of the No Load Class, the Advisor Class A, the Advisor Class C and the Institutional Class, respectively, for the year ended December 31, 2008.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Market Opportunities Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Alternative Income Fund
		No Load Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012(1)			For the Year Ended December 31, 2011(1)			For the Year Ended December 31, 2010(1)			For the Year Ended December 31, 2009(1)			For the Year Ended December 31, 2008(1)
PER SHARE DATA:(2)
Net Asset Value
Beginning of Period	$	83.30		$	77.90		$	83.80		$	88.60		$	76.10		$	101.70
Income from Investment Operations:
Net investment income (loss)(3)		(0.12	)		1.50			1.00			0.70			0.40			1.00
Net realized and unrealized gain (loss) on investments		1.60			6.10			(5.10	)		(4.80	)		12.10			(26.60	)
Total from investment operations		1.48			7.60			(4.10	)		(4.10	)		12.50			(25.60	)
Redemption Fees		—			0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Less Distributions:
From net investment income		—			(2.20	)		(1.80	)		(0.70	)		(0.00	)(4)		—
Total distributions		—			(2.20	)		(1.80	)		(0.70	)		(0.00	)(4)		—
Net Asset Value, End of Period	$	84.78		$	83.30		$	77.90		$	83.80		$	88.60		$	76.10
Total return		1.65	%(5)		9.90	%		(4.88	)%		(4.60	)%		16.46	%		(25.17	)%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	10,918		$	4,699		$	5,613		$	7,001		$	7,176		$	6,598
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.16	%(6)		2.55	%		2.29	%		2.17	%		2.36	%		2.20	%
After expense reimbursement(7)		0.95	%(6)		1.64	%		1.64	%		1.64	%		1.64	%		1.65	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.49	)%(6)		0.93	%		0.59	%		0.33	%		(0.26	)%		0.55	%
After expense reimbursement(7)		(0.28	)%(6)		1.84	%		1.24	%		0.86	%		0.46	%		1.10	%
Portfolio turnover rate(8)		9	%		56	%		69	%		111	%		45	%		66	%

(1)	Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013.
(2)	Information presented relates to a share of capital stock outstanding for each period.
(3)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(4)	Amount calculated is less than $0.005.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Alternative Income Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Alternative Income Fund
		Advisor Class A
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012(1)			For the Year Ended December 31, 2011(1)			For the Year Ended December 31, 2010(1)			For the Year Ended December 31, 2009(1)			For the Year Ended December 31, 2008(1)
PER SHARE DATA:(2)
Net Asset Value
Beginning of Period	$	83.40		$	77.80		$	83.50		$	88.20		$	75.90		$	101.70
Income from Investment Operations:
Net investment income (loss)(3)		(0.22	)		1.30			0.80			0.50			0.20			0.70
Net realized and unrealized
gain (loss) on investments		1.56			6.10			(5.00	)		(4.70	)		12.10			(26.50	)
Total from investment operations		1.34			7.40			(4.20	)		(4.20	)		12.30			(25.80	)
Redemption Fees		0.00	(4)		—			0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Less Distributions:
From net investment income		—			(1.80	)		(1.50	)		(0.50	)		—			—
Total distributions		—			(1.80	)		(1.50	)		(0.50	)		—			—
Net Asset Value, End of Period	$	84.74		$	83.40		$	77.80		$	83.50		$	88.20		$	75.90
Total return(5)		1.49	%(6)		9.61	%		(5.08	)%		(4.80	)%		16.21	%		(25.37	)%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	1,812		$	2,597		$	4,559		$	10,100		$	10,339		$	7,661
Ratio of operating expenses to
average net assets:
Before expense reimbursement		2.41	%(7)		2.80	%		2.54	%		2.42	%		2.61	%		2.45	%
After expense reimbursement(8)		1.20	%(7)		1.89	%		1.89	%		1.89	%		1.89	%		1.90	%
Ratio of net investment income
(loss) to average net assets:
Before expense reimbursement		(1.74	)%(7)		0.68	%		0.34	%		0.08	%		(0.51	)%		0.30	%
After expense reimbursement(8)		(0.53	)%(7)		1.59	%		0.99	%		0.61	%		0.21	%		0.85	%
Portfolio turnover rate(9)		9	%		56	%		69	%		111	%		45	%		66	%

(1)	Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013.
(2)	Information presented relates to a share of capital stock outstanding for each period.
(3)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(4)	Amount calculated is less than $0.005.
(5)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(6)	Not annualized.
(7)	Annualized.
(8)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(9)	Portfolio turnover of The Alternative Income Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Alternative Income Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012(1)			For the Year Ended December 31, 2011(1)			For the Year Ended December 31, 2010(1)			For the Year Ended December 31, 2009(1)			For the Year Ended December 31, 2008(1)
PER SHARE DATA:(2)
Net Asset Value
Beginning of Period	$	82.30		$	76.80		$	82.50		$	87.10		$	75.40		$	101.60
Income from Investment Operations:
Net investment income (loss)(3)		(0.43	)		0.90			0.40			0.10			(0.20	)		0.30
Net realized and unrealized gain (loss) on investments		1.50			6.00			(4.90	)		(4.60	)		11.90			(26.50	)
Total from investment operations		1.07			6.90			(4.50	)		(4.50	)		11.70			(26.20	)
Redemption Fees		—			—			0.00	(4)		—			0.00	(4)		—
Less Distributions:
From net investment income		—			(1.40	)		(1.20	)		(0.10	)		—			—
Total distributions		—			(1.40	)		(1.20	)		(0.10	)		—			—
Net Asset Value, End of Period	$	83.37		$	82.30		$	76.80		$	82.50		$	87.10		$	75.40
Total return		1.30	%(5)		8.96	%		(5.51	)%		(5.15	)%		15.52	%		(25.79	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	1,627		$	1,763		$	2,316		$	2,840		$	2,700		$	1,571
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.91	%(6)		3.30	%		3.04	%		2.92	%		3.11	%		2.95	%
After expense reimbursement(7)		1.70	%(6)		2.39	%		2.39	%		2.39	%		2.39	%		2.40	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(2.24	)%(6)		0.18	%		(0.16	)%		(0.42	)%		(1.01	)%		(0.20	)%
After expense reimbursement(7)		(1.03	)%(6)		1.09	%		0.49	%		0.11	%		(0.29	)%		0.35	%
Portfolio turnover rate(8)		9	%		56	%		69	%		111	%		45	%		66	%

(1)	Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013.
(2)	Information presented relates to a share of capital stock outstanding for each period.
(3)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(4)	Amount calculated is less than $0.005.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Alternative Income Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Alternative Income Fund
		Institutional Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012(1)			For the Year Ended December 31, 2011(1)			For the Year Ended December 31, 2010(1)			For the Year Ended December 31, 2009(1)			For the Year Ended December 31, 2008(1)
PER SHARE DATA:(2)
Net Asset Value
Beginning of Period	$	84.00		$	78.50		$	84.20		$	89.00		$	76.30		$	101.80
Income from Investment Operations:
Net investment income (loss)(3)		(0.04	)		1.70			1.20			0.90			0.50			1.20
Net realized and unrealized gain (loss) on investments		1.59			6.20			(5.10	)		(4.80	)		12.30			(26.70	)
Total from investment operations		1.55			7.90			(3.90	)		(3.90	)		12.80			(25.50	)
Redemption Fees		—			0.00	(4)		0.20			0.00	(4)		0.10			0.00	(4)
Less Distributions:
From net investment income		—			(2.40	)		(2.00	)		(0.90	)		(0.20	)		—
Total distributions		—			(2.40	)		(2.00	)		(0.90	)		(0.20	)		—
Net Asset Value, End of Period	$	85.55		$	84.00		$	78.50		$	84.20		$	89.00		$	76.30
Total return		1.72	%(5)		10.17	%		(4.43	)%		(4.38	)%		16.94	%		(25.05	)%

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	3,309		$	1,629		$	798		$	4,182		$	2,905		$	251
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.11	%(6)		2.50	%		2.24	%		2.12	%		2.31	%		2.15	%
After expense reimbursement(7)		0.75	%(6)		1.44	%		1.44	%		1.44	%		1.44	%		1.45	%
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		(1.44	)%(6)		0.98	%		0.64	%		0.38	%		(0.21	)%		0.60	%
After expense reimbursement(7)		(0.08	)%(6)		2.04	%		1.44	%		1.06	%		0.66	%		1.30	%
Portfolio turnover rate(8)		9	%		56	%		69	%		111	%		45	%		66	%

(1)	Per share data adjusted for 1:10 reverse stock split completed as of May 31, 2013.
(2)	Information presented relates to a share of capital stock outstanding for each period.
(3)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(4)	Amount calculated is less than $0.005.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Alternative Income Portfolio.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Multi-Disciplinary Fund
		No Load Class
	For the Six Months Ended June 30, 2013 (Unaudited)				For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009		February 11, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	11.08		$	10.09		$	10.47		$	9.86		$	8.22		$	10.00
Income from Investment Operations:
Net investment income(2)		0.11			0.34			0.83			0.35			0.09			0.01
Net realized and unrealized gain (loss) on investments		(0.05	)		1.20			(0.80	)		0.91			1.79			(1.79	)
Total from investment operations		0.06			1.54			0.03			1.26			1.88			(1.78	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—			—
Less Distributions:
From net investment income		(0.14	)		(0.43	)		(0.36	)		(0.35	)		(0.08	)		(0.00	)(3)
From net realized gains		—			(0.12	)		(0.05	)		(0.30	)		(0.16	)		—
Total distributions		(0.14	)		(0.55	)		(0.41	)		(0.65	)		(0.24	)		(0.00	)(3)
Net Asset Value, End of Period	$	11.00		$	11.08		$	10.09		$	10.47		$	9.86		$	8.22
Total return		0.63	%(4)		15.38	%		0.24	%		13.04	%		22.90	%		(17.76	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	19,832		$	19,566		$	13,389		$	3,489		$	938		$	99
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.85	%(5)(9)		2.00	%		2.38	%		6.11	%		13.11	%		17.58	%(5)
After expense reimbursement(6)		1.51	%(5)(9)		1.49	%		1.49	%		1.49	%		1.49	%		1.49	%(5)
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		1.62	%(5)(10)		2.65	%		7.09	%		(1.19	)%		(10.69	)%		(15.99	)%(5)
After expense reimbursement(6)		1.96	%(5)(10)		3.16	%		7.98	%		3.43	%		0.93	%		0.10	%(5)
Portfolio turnover rate(7)		36	%		41	%		74	%		38	%		77	%		N/A	(8)

^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Multi-Disciplinary Portfolio.
(8)	Portfolio turnover is not applicable because The Multi-Disciplinary Portfolio did not hold any long-term securities from inception date through year end.
(9)	The ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 1.83% before expense reimbursement and 1.49% after expense reimbursement.
(10)	The ratio of net investment income includes borrowing expense on securities sold short.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Multi-Disciplinary Fund
		Advisor Class A
	For the Six Months Ended June 30, 2013 (Unaudited)				For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			February 11, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	11.03		$	10.05		$	10.44		$	9.85		$	8.20		$	10.00
Income from Investment Operations:
Net investment income (loss)(2)		0.10			0.31			0.78			0.33			0.06			(0.01	)
Net realized and unrealized gain (loss) on investments		(0.04	)		1.20			(0.78	)		0.89			1.80			(1.79	)
Total from investment operations		0.06			1.51			—			1.22			1.86			(1.80	)
Redemption Fees		0.00	(3)		0.00	(3)		—			—			—			—
Less Distributions:
From net investment income		(0.13	)		(0.41	)		(0.34	)		(0.33	)		(0.05	)		(0.00	)(3)
From net realized gains		—			(0.12	)		(0.05	)		(0.30	)		(0.16	)		—
Total distributions		(0.13	)		(0.53	)		(0.39	)		(0.63	)		(0.21	)		(0.00	)(3)
Net Asset Value, End of Period	$	10.96		$	11.03		$	10.05		$	10.44		$	9.85		$	8.20
Total return(4)		0.54	%(5)		15.12	%		(0.01	)%		12.64	%		22.73	%		(17.97	)%(5)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	47,369		$	25,764		$	4,726		$	356		$	103		$	84
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.10	%(6)(10)		2.25	%		2.63	%		6.36	%		13.36	%		17.83	%(6)
After expense reimbursement(7)		1.76	%(6)(10)		1.74	%		1.74	%		1.74	%		1.74	%		1.74	%(6)
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		1.37	%(6)(11)		2.40	%		6.84	%		(1.44	)%		(10.94	)%		(16.24	)%(6)
After expense reimbursement(7)		1.71	%(6)(11)		2.91	%		7.73	%		3.18	%		0.68	%		(0.15	)%(6)
Portfolio turnover rate(8)		36	%		41	%		74	%		38	%		77	%		N/A	(9)

^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	The total return calculation does not reflect the 5.75% front end sales charge on Advisor Class A shares.
(5)	Not annualized.
(6)	Annualized.
(7)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(8)	Portfolio turnover of The Multi-Disciplinary Portfolio.
(9)	Portfolio turnover is not applicable because The Multi-Disciplinary Portfolio did not hold any long-term securities from inception date through year end.
(10)	The ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 2.08% before expense reimbursement and 1.74% after expense reimbursement.
(11)	The ratio of net investment income includes borrowing expense on securities sold short.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Multi-Disciplinary Fund
		Advisor Class C
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			February 11, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	10.96		$	10.00		$	10.40		$	9.80		$	8.17		$	10.00
Income from Investment Operations:
Net investment income (loss)(2)		0.07			0.26			0.74			0.27			0.02			(0.05	)
Net realized and unrealized gain (loss) on investments		(0.04	)		1.18			(0.78	)		0.90			1.78			(1.78	)
Total from investment operations		0.03			1.44			(0.04	)		1.17			1.80			(1.83	)
Redemption Fees		—			—			—			—			—			—
Less Distributions:
From net investment income		(0.11	)		(0.36	)		(0.31	)		(0.27	)		(0.01	)		(0.00	)(3)
From net realized gains		—			(0.12	)		(0.05	)		(0.30	)		(0.16	)		—
Total distributions		(0.11	)		(0.48	)		(0.36	)		(0.57	)		(0.17	)		(0.00	)(3)
Net Asset Value, End of Period	$	10.88		$	10.96		$	10.00		$	10.40		$	9.80		$	8.17
Total return		0.21	%(4)		14.48	%		(0.49	)%		12.13	%		22.03	%		(18.30	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	10,772		$	7,485		$	1,645		$	128		$	105		$	88
Ratio of operating expenses to average net assets:
Before expense reimbursement		2.60	%(5)(9)		2.75	%		3.13	%		6.86	%		13.86	%		18.33	%(5)
After expense reimbursement(6)		2.26	%(5)(9)		2.24	%		2.24	%		2.24	%		2.24	%		2.24	%(5)
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		0.87	%(5)(10)		1.90	%		6.34	%		(1.94	)%		(11.44	)%		(16.74	)%(5)
After expense reimbursement(6)		1.21	%(5)(10)		2.41	%		7.23	%		2.68	%		0.18	%		(0.65	)%(5)
Portfolio turnover rate(7)		36	%		41	%		74	%		38	%		77	%		N/A	(8)

^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Multi-Disciplinary Portfolio.
(8)	Portfolio turnover is not applicable because The Multi-Disciplinary Portfolio did not hold any long-term securities from inception date through year end.
(9)	The ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 2.58% before expense reimbursement and 2.24% after expense reimbursement.
(10)	The ratio of net investment income includes borrowing expense on securities sold short.

The accompanying notes are an integral part of these financial statements.

KINETICS MUTUAL FUNDS, INC. — THE FEEDER FUNDS

Financial Highlights — (Continued)

		The Multi-Disciplinary Fund
		Institutional Class
		For the Six Months Ended June 30, 2013 (Unaudited)			For the Year Ended December 31, 2012			For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Year Ended December 31, 2009			February 11, 2008^ through December 31, 2008
PER SHARE DATA:(1)
Net Asset Value
Beginning of Period	$	11.11		$	10.12		$	10.50		$	9.89		$	8.23		$	10.00
Income from Investment Operations:
Net investment income(2)		0.12			0.36			0.85			0.37			0.10			0.02
Net realized and unrealized gain (loss) on investments		(0.04	)		1.20			(0.80	)		0.91			1.81			(1.79	)
Total from investment operations		0.08			1.56			0.05			1.28			1.91			(1.77	)
Redemption Fees		—			—			—			—			—			—
Less Distributions:
From net investment income		(0.15	)		(0.45	)		(0.38	)		(0.37	)		(0.09	)		(0.00	)(3)
From net realized gains		—			(0.12	)		(0.05	)		(0.30	)		(0.16	)		—
Total distributions		(0.15	)		(0.57	)		(0.43	)		(0.67	)		(0.25	)		(0.00	)(3)
Net Asset Value, End of Period	$	11.04		$	11.11		$	10.12		$	10.50		$	9.89		$	8.23
Total return		0.73	%(4)		15.55	%		0.42	%		13.19	%		23.25	%		(17.65	)%(4)

SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000’s)	$	14,944		$	6,576		$	3,878		$	142		$	101		$	82
Ratio of operating expenses to average net assets:
Before expense reimbursement		1.80	%(5)(9)		1.95	%		2.33	%		6.06	%		13.06	%		17.53	%(5)
After expense reimbursement(6)		1.31	%(5)(9)		1.29	%		1.29	%		1.29	%		1.29	%		1.29	%(5)
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement		1.67	%(5)(10)		2.70	%		7.14	%		(1.14	)%		(10.64	)%		(15.94	)%(5)
After expense reimbursement(6)		2.16	%(5)(10)		3.36	%		8.18	%		3.63	%		1.13	%		0.30	%(5)
Portfolio turnover rate(7)		36	%		41	%		74	%		38	%		77	%		N/A	(8)

^	Commencement of operations.
(1)	Information presented relates to a share of capital stock outstanding for each period.
(2)	Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.
(3)	Amount calculated is less than $0.005.
(4)	Not annualized.
(5)	Annualized.
(6)	See Note #3, Investment Adviser, for the waiver and expense reimbursement discussion.
(7)	Portfolio turnover of The Multi-Disciplinary Portfolio.
(8)	Portfolio turnover is not applicable because The Multi-Disciplinary Portfolio did not hold any long-term securities from inception date through year end.
(9)	The ratio of expenses includes borrowing expense on securities sold short. The expense ratio excluding borrowing expenses on securities sold short was 1.78% before expense reimbursement and 1.29% after expense reimbursement.
(10)	The ratio of net investment income includes borrowing expense on securities sold short.

The accompanying notes are an integral part of these financial statements.

			Percentage
		Market	of Total
Sector Allocation*		Value	Net Assets
Information	$	87,292,163	49.1	%
Retail Trade		24,760,362	13.9	%
Arts, Entertainment, and Recreation		13,178,657	7.4	%
Management of Companies and Enterprises		12,270,201	6.9	%
Finance and Insurance		12,191,921	6.9	%
Manufacturing		6,265,588	3.5	%
Administrative and Support and Waste Management and Remediation Services		1,422,531	0.8	%
Professional, Scientific, and Technical Services		1,420,889	0.8	%
Transportation and Warehousing		1,076,268	0.6	%
Real Estate and Rental and Leasing		940,176	0.5	%

Identifier	COMMON STOCKS — 90.49%	Shares		Value
	Administrative and Support Services — 0.80%
CRMZ	CreditRiskMonitor.com, Inc.	600	$	1,722
CTRP	Ctrip.com International Ltd. — ADR*^	6,000		195,780
EXPE	Expedia, Inc.	20,300		1,221,045
IILG	Interval Leisure Group, Inc.	200		3,984
				1,422,531
	Broadcasting (except Internet) — 18.46%
CBS	CBS Corporation — Class B	55,200		2,697,624
DISCA	Discovery Communications, Inc. — Class A*^	101,700		7,852,257
SNI	Scripps Networks Interactive — Class A^	75,800		5,060,408
SIRI	Sirius XM Radio, Inc.^	46,000		154,100
STRZA	Starz — Class A*	128,200		2,833,220
TWX	Time Warner, Inc.	80,000		4,625,600
VIAB	Viacom Inc. — Class B	108,000		7,349,400
DIS	The Walt Disney Company^	34,600		2,184,990
YOKU	Youku.com, Inc. — ADR*^	2,160		41,450
				32,799,049
	Computer and Electronic Product Manufacturing — 0.28%
QCOM	QUALCOMM Inc.	8,000		488,640
ZNGA	Zynga, Inc. — Class A*^	2,000		5,560
				494,200
	Credit Intermediation and Related Activities — 0.10%
TREE	Tree.com, Inc.	10,033		171,966
	Data Processing, Hosting and Related Services — 0.14%
CSGP	CoStar Group, Inc.*^	2,000		258,140
	Data Processor — 3.74%
MA	MasterCard, Inc. — Class A	5,000		2,872,500
VRSK	Verisk Analytics, Inc. — Class A*	8,000		477,600
V	Visa, Inc. — Class A^	18,000		3,289,500
				6,639,600
	Defense — 2.77%
CACI	CACI International, Inc. — Class A*^	48,000		3,047,520
MANT	ManTech International Corporation — Class A^	72,000		1,880,640
				4,928,160
	E-Commerce — 3.05%
IACI	IAC/InterActiveCorp	113,800		5,412,328

			Principal
Identifier	SHORT-TERM INVESTMENTS — 9.46%		Amount		Value
	Commercial Paper — 4.95%
035018925	U.S. Bank N.A., 0.02%, 07/01/2013	$	8,800,000	$	8,800,000

			Shares
	Money Market Funds — 4.51%
FIGXX	Fidelity Institutional Government Portfolio — Class I, 0.01%b		8,007,797		8,007,797
	TOTAL SHORT-TERM INVESTMENTS
	(cost $16,807,797)				16,807,797
	INVESTMENTS PURCHASED WITH
	THE CASH PROCEEDS FROM
	SECURITIES LENDING — 21.78%
	Money Market Funds — 21.78%
	Mount Vernon Securities Lending Trust — Prime
	Portfolio, 0.19%b		38,696,520		38,696,520
	TOTAL INVESTMENTS PURCHASED WITH THE CASH
	PROCEEDS FROM SECURITIES LENDING
	(cost $38,696,520)				38,696,520
	TOTAL INVESTMENTS — 121.73%
	(cost $155,282,005)			$	216,323,073

* —	Non-income producing security.
^ —	This security or a portion of this security was out on loan at June 30, 2013. Total loaned securities had a market value of $37,536,613 at June 30, 2013.
+ —	Security is considered illiquid and was fair valued. The aggregate value of such securities is $0 or 0.00% of net assets.
# —	Contingent value right (contingent upon profitability of company).
b —	The rate quoted is the annualized seven-day yield as of June 30, 2013.
ADR —	American Depository Receipt.
GDR —	Global Depository Receipt.

Identifier	COMMON STOCKS — 86.10%	Shares		Value
	Apparel Manufacturing — 2.53%
MC FP	LVMH Moet Hennessy Louis Vuitton SA	1,400	$	226,876
	Arts, Entertainment, and Recreation — 0.12%
585 HK	Imagi International Holdings Limited*	1,000,000		10,701
	Asset Management — 14.43%
APO	Apollo Global Management LLC — Class A^	300		7,230
BX	The Blackstone Group LP^	2,150		45,279
BAM	Brookfield Asset Management Inc. — Class A	4,900		176,498
DDEJF	Dundee Corporation — Class A*^	13,200		267,897
JZCP LN	JZ Capital Partners Ltd.	10,000		72,626
OAK	Oaktree Capital Group LLC^	2,700		141,885
ONEXF	Onex Corporation	8,700		397,590
RCP LN	RIT Capital Partners PLC	5,000		88,215
806 HK	Value Partners Group Limited	182,000		98,086
				1,295,306
	Beverage and Tobacco Product Manufacturing — 0.13%
CWGL	Crimson Wine Group Ltd.*	1,350		11,495
	Broadcasting (except Internet) — 0.69%
STRZA	Starz — Class A*^	2,794		61,748
	Building Material and Garden Equipment and Supplies Dealers — 0.00%
OSHWQ	Orchard Supply Hardware Stores Corporation — Class A*^	132		40
	Construction of Buildings — 2.56%
BRP	Brookfield Residential Properties Inc.*	10,100		222,806
LEN	Lennar Corporation — Class A^	200		7,208
				230,014
	Crop Production — 0.15%
CRESY	Cresud S.A.C.I.F. y A. — ADR	1,765		13,114
	Electronics and Appliance Stores — 0.88%
SHOS	Sears Hometown and Outlet Stores Inc.*	1,800		78,696
	European Exchanges — 0.85%
BME SM	Bolsas y Mercados Espanoles	3,130		76,655
	Gaming — 2.19%
WYNN	Wynn Resorts Limited	1,535		196,480
	General Merchandise Stores — 1.96%
JCP	J.C. Penney Company, Inc.*^	400		6,832
SEARF	Sears Canada Inc.	1,520		15,808

Identifier	COMMON STOCKS — 91.40%	Shares		Value
	Apparel Manufacturing — 0.13%
LTD	L Brands, Inc.^	25,600	$	1,260,800
LVMUY	LVMH Moet Hennessy Louis Vuitton SA — ADR	5,200		168,589
				1,429,389
	Asset Management — 6.13%
APO	Apollo Global Management LLC — Class A^	1,000		24,100
BAM	Brookfield Asset Management Inc. — Class A^	1,267,300		45,648,146
CG	The Carlyle Group LP	100		2,570
DDEJF	Dundee Corporation — Class A*	93,400		1,895,572
JZCP LN	JZ Capital Partners Ltd.	15,200		110,391
KKR	KKR & Co. LP^	900		17,694
OAK	Oaktree Capital Group LLC^	13,900		730,445
ONEXF	Onex Corporation	327,000		14,943,900
RCP LN	RIT Capital Partners PLC	26,600		469,307
806 HK	Value Partners Group Limited	3,081,000		1,660,456
WETF	WisdomTree Investments, Inc.*	150,000		1,735,500
				67,238,081
	Beverage and Tobacco Product Manufacturing — 0.14%
BF/A	Brown-Forman Corporation — Class A	450		30,447
CWGL	Crimson Wine Group Ltd.*^	171,860		1,463,388
PM	Philip Morris International, Inc.	750		64,965
				1,558,800
	Broadcasting (except Internet) — 8.06%
CBS	CBS Corporation — Class B	559,720		27,353,516
DISCA	Discovery Communications, Inc. — Class A*^	389,623		30,082,792
SNI	Scripps Networks Interactive — Class A^	69,973		4,671,398
STRZA	Starz — Class A*	588,500		13,005,850
VIAB	Viacom Inc. — Class B	196,400		13,365,020
				88,478,576
	Building Material and Garden Equipment and Supplies Dealers — 0.00%
OSHWQ	Orchard Supply Hardware Stores Corporation — Class A*^	23,155		6,947
	Chemical Manufacturing — 1.08%
OPK	OPKO Health, Inc.*^	4,000		28,400
SIAL	Sigma-Aldrich Corporation^	145,815		11,717,693
VHI	Valhi, Inc.^	6,000		82,440
				11,828,533

			Principal
Identifier	SHORT-TERM INVESTMENTS — 7.75%		Amount		Value
	Commercial Paper — 4.92%
035018925	U.S. Bank N.A., 0.02%, 07/01/2013	$	54,000,000	$	54,000,000

			Shares
	Money Market Funds — 2.83%
FIGXX	Fidelity Institutional Government Portfolio — Class I, 001%b		31,028,631		31,028,631
	TOTAL SHORT-TERM INVESTMENTS
	(cost $85,028,631)				85,028,631

	INVESTMENTS PURCHASED WITH
	THE CASH PROCEEDS FROM
	SECURITIES LENDING — 16.94%
	Money Market Funds — 16.94%
	Mount Vernon Securities Lending Trust — Prime
	Portfolio, 0.19%b		185,945,676		185,945,676
	TOTAL INVESTMENTS PURCHASED WITH THE CASH
	PROCEEDS FROM SECURITIES LENDING
	(cost $185,945,676)				185,945,676
	TOTAL INVESTMENTS — 116.54%
	(cost $1,051,964,377)			$	1,279,026,869

Identifier	COMMON STOCKS — 98.99%	Shares		Value
	Ambulatory Health Care Services — 0.00%
AVXT	AVAX Technologies, Inc.*	50,000	$	400
	Chemical Manufacturing — 10.02%
AGEN	Agenus, Inc.*	148		561
ALKS	Alkermes PLC*^	25,000		717,000
APHB	Ampliphi Biosciences Corp.*	1,000		175
LONN VX	Lonza Group AG*	4,000		301,307
MMRF	MMRGlobal Inc.*	43,000		2,778
OSIR	Osiris Therapeutics, Inc.*^	16,000		161,120
RHHBY	Roche Holding AG Ltd. — ADR	8,000		494,920
SHPG	Shire PLC — ADR	6,000		570,660
				2,248,521
	Computer and Electronic Product Manufacturing — 0.01%
TGX	Theragenics Corporation*	655		1,356
	Pharmaceutical and Biotechnology — 83.75%
ABT	Abbott Laboratories	16,000		558,080
ABBV	AbbVie Inc.	14,000		578,760
AEZS	AEterna Zentaris Inc.*^	17,083		31,774
ARNA	Arena Pharmaceuticals, Inc.*^	45,000		346,500
AZN	AstraZeneca PLC — ADR^	12,000		567,600
ATB CN	Atrium Innovations Inc.*	4,884		67,848
BIIB	Biogen Idec, Inc.*	7,250		1,560,200
BPAX	BioSante Pharmaceuticals, Inc.*	2,246		2,246
BMY	Bristol-Myers Squibb Company^	34,000		1,519,460
CLDX	Celldex Therapeutics Inc.*^	26,294		410,449
CBST	Cubist Pharmaceuticals, Inc.*^	24,000		1,159,200
DNDN	Dendreon Corporation*^	34,000		140,080
LLY	Eli Lilly & Company	23,000		1,129,760
EPCT	EpiCept Corporation*	680		45
GSK	GlaxoSmithKline PLC — ADR	22,673		1,132,970
ISIS	Isis Pharmaceuticals, Inc.*^	17,000		456,790
ISA CN	Isotechnika Pharma Inc.*	40,000		1,236
JNJ	Johnson & Johnson^	14,000		1,202,040
LIFE	Life Technologies Corporation*	18,000		1,332,180
MAXY	Maxygen, Inc.	41,000		101,680
MRK	Merck & Co., Inc.	16,000		743,200
MYRX	Myrexis Inc.	74,000		5,550
COX FP	NicOx SA*	41,535		137,160

			Principal
Identifier	SHORT-TERM INVESTMENTS — 0.94%		Amount		Value
	Commercial Paper — 0.71%
035018925	U.S. Bank N.A., 0.02%, 07/01/2013	$	160,000	$	160,000

			Shares
	Money Market Funds — 0.23%
FIGXX	Fidelity Institutional Government Portfolio — Class I, 0.01% b		50,876		50,876
	TOTAL SHORT-TERM INVESTMENTS
	(cost $210,876)				210,876

	INVESTMENTS PURCHASED WITH
	THE CASH PROCEEDS
	FROM SECURITIES LENDING — 37.68%
	Money Market Funds — 37.68%
	Mount Vernon Securities Lending Trust — Prime
	Portfolio, 0.19%b		8,452,914		8,452,914
	TOTAL INVESTMENTS PURCHASED WITH THE CASH
	PROCEEDS FROM SECURITIES LENDING
	(cost $8,452,914)				8,452,914
	TOTAL INVESTMENTS — 137.75%
	(cost $28,602,075)			$	30,903,465

Identifier	COMMON STOCKS — 95.41%	Shares		Value
	Accommodation — 0.03%
TPCA	Tropicana Entertainment Inc.*	3,600	$	53,280
	Asset Management — 7.89%
DDEJF	Dundee Corporation — Class A*^	241,400		4,899,261
JZCP LN	JZ Capital Partners Ltd.	88,000		639,107
OCX CN	Onex Corporation	24,860		1,128,001
RCP LN	RIT Capital Partners PLC	135,200		2,385,350
SII CN	Sprott, Inc.	1,680		4,473
806 HK	Value Partners Group Limited	3,375,000		1,818,903
WETF	WisdomTree Investments, Inc.*	171,900		1,988,883
				12,863,978
	Automobile and Other Motor Vehicle Merchant Wholesalers — 0.36%
VTU LN	Vertu Motors PLC	975,000		596,140
	Broadcasting (except Internet) — 4.01%
STRZA	Starz — Class A*^	296,000		6,541,600
	Chemical Manufacturing — 2.71%
IPAR	Inter Parfums, Inc.^	155,100		4,423,452
	Construction of Buildings — 4.01%
BRP	Brookfield Residential Properties Inc.*	296,300		6,536,378
	Credit Intermediation and Related Activities — 0.45%
BOKF	BOK Financial Corporation	11,400		730,170
	Electronics and Appliance Stores — 1.02%
SHOS	Sears Hometown and Outlet Stores Inc.*	37,900		1,656,988
	Forestry and Logging — 0.02%
KEWL	Keweenaw Land Association Ltd.*	380		31,160
	Gasoline Stations — 1.99%
SUSS	Susser Holdings Corporation*	67,800		3,246,264
	Global Exchanges — 0.91%
EXAE GA	Hellenic Exchanges S.A. Holding Clearing Settlement
	and Registry	190,000		1,478,926
	Holding Company — 9.98%
IEP	Icahn Enterprises LP^	176,262		12,826,586
LVNTA	Liberty Ventures — Series A*	16,100		1,368,661
PVF CN	Partners Value Fund Inc.*	102,800		2,088,843
				16,284,090

Identifier	COMMON STOCKS — 91.61%	Shares		Value
	Accommodation — 0.23%
TPCA	Tropicana Entertainment, Inc.*	9,200	$	136,160
	Asset Management — 25.80%
APO	Apollo Global Management LLC — Class A^	13,600		327,760
BX	The Blackstone Group LP^	68,399		1,440,483
BAM	Brookfield Asset Management Inc. — Class A	64,440		2,321,129
CG	The Carlyle Group LP	100		2,570
CNS	Cohen & Steers, Inc.^	10,000		339,800
DDEJF	Dundee Corporation — Class A*^	74,600		1,514,022
JZCP LN	JZ Capital Partners Ltd.	60,600		440,112
KKR	KKR & Co. LP^	2,400		47,184
OAK	Oaktree Capital Group LLC^	32,500		1,707,875
OZM	Och-Ziff Capital Management Group — Class A^	2,400		25,056
ONEXF	Onex Corporation	60,100		2,746,570
RCP LN	RIT Capital Partners PLC	22,300		393,442
SII CN	Sprott, Inc.	41,155		109,569
TROW	T. Rowe Price Group, Inc.	3,000		219,450
806 HK	Value Partners Group Limited	960,000		517,377
WETF	WisdomTree Investments, Inc.*	269,200		3,114,644
				15,267,043
	Beverage and Tobacco Product Manufacturing — 0.07%
CWGL	Crimson Wine Group Ltd.*	5,080		43,256
	Construction of Buildings — 0.61%
BRP	Brookfield Residential Properties Inc.*	16,400		361,784
	Credit Intermediation and Related Activities — 0.30%
BBCN	BBCN Bancorp, Inc.	6,164		87,652
EWBC	East West Bancorp, Inc.	3,204		88,110
UCBHQ	UCBH Holdings, Inc.*^+	6,803		—
				175,762
	Data Processor — 4.22%
FISV	Fiserv, Inc.*	3,000		262,230
MA	MasterCard, Inc. — Class A	1,600		919,200
V	Visa, Inc. — Class A^	7,200		1,315,800
				2,497,230
	Electronics and Appliance Stores — 0.05%
SHOS	Sears Hometown and Outlet Stores Inc.*	610		26,669

Identifier	MUTUAL FUNDS — 0.01%		Shares		Value
	Funds, Trusts, and Other Financial Vehicles — 0.01%
PFN	PIMCO Income Strategy Fund II		760	$	7,995
	TOTAL MUTUAL FUNDS
	(cost $6,726)				7,995
			Principal
	SHORT-TERM INVESTMENTS — 7.39%		Amount
	Commercial Paper — 4.73%
035018925	U.S. Bank N.A., 0.02%, 07/01/2013	$	2,800,000		2,800,000

			Shares
	Money Market Funds — 2.66%
FIGXX	Fidelity Institutional Government Portfolio — Class I, 0.01%b		1,572,318		1,572,318
	TOTAL SHORT-TERM INVESTMENTS
	(cost $4,372,318)				4,372,318

	INVESTMENTS PURCHASED WITH
	THE CASH PROCEEDS FROM
	SECURITIES LENDING — 22.92%
	Money Market Funds — 22.92%
	Mount Vernon Securities Lending Trust — Prime
	Portfolio, 0.19%b		13,561,294		13,561,294
	TOTAL INVESTMENTS PURCHASED WITH THE CASH
	PROCEEDS FROM SECURITIES LENDING
	(cost $13,561,294)				13,561,294
	TOTAL INVESTMENTS – 121.93%
	(cost $60,531,322)			$	72,145,443

			Principal
Identifier	CONVERTIBLE BONDS — 1.36%		Amount		Value
	Holding Company — 1.36%
451102AB3	Icahn Enterprises LP
	4.000%, 08/15/2013#	$	240,000	$	240,360
	TOTAL CONVERTIBLE BONDS
	(cost $239,357)				240,360

	CORPORATE BONDS — 57.17%
	Beverage and Tobacco Product Manufacturing — 4.65%
02209SAK9	Altria Group, Inc.
	4.125%, 09/11/2015^		100,000		106,620
03523TBL1	Anheuser-Busch InBev Worldwide Inc.
	1.500%, 07/14/2014		126,000		127,362
10138MAH8	Bottling Group LLC
	6.950%, 03/15/2014^		100,000		104,379
191216AP5	The Coca-Cola Company
	1.500%, 11/15/2015		100,000		102,071
26138EAM1	Dr. Pepper Snapple Group, Inc.
	2.900%, 01/15/2016		200,000		208,360
761713AV8	Reynolds American, Inc.
	1.050%, 10/30/2015		175,000		175,051
					823,843
	Broadcasting (except Internet) — 4.08%
25459HAY1	DIRECTV Holdings LLC
	3.500%, 03/01/2016		150,000		157,678
25470DAB5	Discovery Communications
	3.700%, 06/01/2015		100,000		104,986
63946BAB6	NBCUniversal Media, LLC
	3.650%, 04/30/2015		100,000		105,120
88732JAQ1	Time Warner Cable Inc.
	8.250%, 02/14/2014		100,000		104,599
92553PAK8	Viacom Inc.
	1.250%, 02/27/2015		150,000		150,496
25468PCU8	The Walt Disney Company
	0.450%, 12/01/2015		100,000		99,601
					722,480

			Principal
Identifier	SHORT-TERM INVESTMENTS — 8.26%		Amount		Value
	Commercial Paper — 4.23%
035018925	U.S. Bank N.A., 0.02%, 07/01/2013	$	750,000	$	750,000

			Shares
	Money Market Funds — 4.03%
FIGXX	Fidelity Institutional Government Portfolio —
	Class I, 0.01%b		713,320		713,320
	TOTAL SHORT-TERM INVESTMENTS
	(cost $1,463,320)				1,463,320

	INVESTMENTS PURCHASED WITH
	THE CASH PROCEEDS FROM
	SECURITIES LENDING — 7.67%
	Money Market Funds — 7.67%
	Mount Vernon Securities Lending Trust — Prime
	Portfolio, 0.19%b.		1,358,632		1,358,632
	TOTAL INVESTMENTS PURCHASED WITH THE CASH
	PROCEEDS FROM SECURITIES LENDING
	(cost $1,358,632)				1,358,632
	TOTAL INVESTMENTS – 100.44%
	(cost $17,917,083)			$	17,796,136

# —	All or a portion of the shares have been committed as collateral for written option contracts.
^ —	This security or a portion of this security was out on loan at June 30, 2013. Total loaned securities had a market value of $1,323,456 at June 30, 2013.
* —	Non-income producing security.
g —	The rate shown is the purchased yield on a zero coupon bond.
1 —	The obligations of certain U.S. Government-Sponsored entities are neither issued nor guaranteed by the United States Treasury.
b —	The rate quoted is the annualized seven-day yield as of June 30, 2013.

			Principal
Identifier	CONVERTIBLE BONDS — 44.62%		Amount		Value
	Administrative and Support Services — 5.29%
	WebMD Health Corporation
94770VAH5	2.250%, 03/31/2016#	$	400,000	$	394,000
94770VAF9	2.500%, 01/31/2018#		4,875,000		4,533,750
					4,927,750
	Computer and Electronic Product Manufacturing — 3.28%
502413AW7	L-3 Communications Holdings, Inc.
	3.000%, 08/01/2035#		2,450,000		2,503,594
747906AH8	Quantum Corporation
	4.500%, 11/15/2017, Acquired 10/26/2012 at $500,000■		500,000		552,187
					3,055,781
	Holding Company — 3.66%
451102AB3	Icahn Enterprises LP
	4.000%, 08/15/2013#		3,400,000		3,405,100
	Mining (except Oil and Gas) — 5.26%
250669AA6	Detour Gold Corporation
	5.500%, 11/30/2017		1,000,000		887,500
B7W1RP3	Kirkland Lake Gold Inc.
	6.000%, 06/30/2017CAD		350,000		249,629
608753AA7	Molycorp Inc.
	3.250%, 06/15/2016#		1,500,000		1,011,562
780287AA6	Royal Gold, Inc.
	2.875%, 06/15/2019		3,014,000		2,744,624
					4,893,315
	Nonmetallic Mineral Product Manufacturing — 5.65%
69073TAQ6	Owens-Brockway Glass Container
	3.000%, 06/01/2015, Acquired 7/6/2011-3/15/2013
	at $5,151,373#■		5,170,000		5,260,475
	Oil and Gas Extraction — 7.14%
	Arcan Resources Ltd.
B4MT4X3	6.250%, 02/28/2016# CAD		1,719,000		1,103,285
B57ZB98	6.500%, 10/31/2018# CAD		2,592,000		1,515,718
	Chesapeake Energy Corporation
165167BW6	2.750%, 11/15/2035#		650,000		648,375
165167CB1	2.250%, 12/15/2038^		3,830,000		3,375,187
					6,642,565

Identifier	EXCHANGE TRADED FUNDS — 1.41%		Shares		Value
	Funds, Trusts, and Other Financial Vehicles — 1.41%
BOND	PIMCO Total Return ETF^		12,400	$	1,307,952
	TOTAL EXCHANGE TRADED FUNDS
	(cost $1,318,860)				1,307,952

	MUTUAL FUNDS — 2.03%
	Funds, Trusts, and Other Financial Vehicles — 2.03%
DSL	DoubleLine Income Solutions Fund		400		9,284
HAV	Helios Advantage Income Fund, Inc.		200		1,660
HSA	Helios Strategic Income Fund, Inc.		200		1,220
TLI	LMP Corporate Loan Fund Inc.		1,100		14,300
MTS	Montgomery Street Income Securities, Inc.		9,200		148,672
JFR	Nuveen Floating Rate Income Fund		200		2,520
PCN	PIMCO Corporate Income Fund		1,400		24,402
PCI	PIMCO Dynamic Credit Income Fund		18,000		412,380
PDI	PIMCO Dynamic Income Fund		22,200		649,350
PKO	PIMCO Income Opportunity Fund		4,200		120,120
PFL	PIMCO Income Strategy Fund		2,800		33,488
PFN	PIMCO Income Strategy Fund II		2,400		25,248
DMO	Western Asset Mortgage Defined Opportunity Fund Inc.		19,400		448,528
	TOTAL MUTUAL FUNDS
	(cost $2,043,421)				1,891,172

			Principal
	SHORT-TERM INVESTMENTS — 6.13%		Amount
	Commercial Paper — 2.26%
035018925	U.S. Bank N.A., 0.02%, 07/01/2013	$	2,100,000		2,100,000

			Shares
	Money Market Funds — 2.26%
FIGXX	Fidelity Institutional Government Portfolio — Class I, 0.01%b		2,100,000		2,100,000

Identifier	PUT OPTIONS WRITTEN	Contracts	*		Value
	Accommodation
	Carnival Corporation
CCL 140118P00024500	Expiration: January 2014, Exercise Price: $24.50	13		$	487
CCL 140118P00029500	Expiration: January 2014, Exercise Price: $29.50	10			1,075
CCL 150117P00024500	Expiration: January 2015, Exercise Price: $24.50	33			4,950
	Starwood Hotels & Resorts Worldwide, Inc.
HOT 140118P00038000	Expiration: January 2014, Exercise Price: $38.00	15			623
HOT 150117P00035000	Expiration: January 2015, Exercise Price: $35.00	15			2,092
					9,227
	Administrative and Support Services
	Accenture PLC — Class A
ACN 140118P00045000	Expiration: January 2014, Exercise Price: $45.00	10			500
ACN 150117P00045000	Expiration: January 2015, Exercise Price: $45.00	10			1,975
	Expedia, Inc.
EXPE 140118P00034480	Expiration: January 2014, Exercise Price: $34.48	15			525
EXPE 150117P00034480	Expiration: January 2015, Exercise Price: $34.48	15			3,338
	Priceline.com Inc.
PCLN 150117P00410000	Expiration: January 2015, Exercise Price: $410.00	1			990
					7,328
	Apparel Manufacturing
	L Brands, Inc.
LTD 140118P00032000	Expiration: January 2014, Exercise Price: $32.00	11			385
LTD 150117P00032000	Expiration: January 2015, Exercise Price: $32.00	11			1,787
					2,172
	Asset Management
	The Blackstone Group LP
BX 140118P00015000	Expiration: January 2014, Exercise Price: $15.00	30			1,335
BX 150117P00012000	Expiration: January 2015, Exercise Price: $12.00	30			2,670
	KKR & Co. LP
KKR 150117P00013000	Expiration: January 2015, Exercise Price: $13.00	50			4,125
	Legg Mason, Inc.
LM 140118P00023000	Expiration: January 2014, Exercise Price: $23.00	25			1,875
					10,005
	Beverage and Tobacco Product Manufacturing
	The Coca-Cola Company
KO 140222P00034000	Expiration: February 2014, Exercise Price: $34.00	5			345
KO 150117P00032500	Expiration: January 2015, Exercise Price: $32.50	5			930
KO 150117P00035000	Expiration: January 2015, Exercise Price: $35.00	8			2,096

Identifier		Contracts*		Value
	Building Equipment Contractors
	Honeywell International Inc.
HON 140118P00057500	Expiration: January 2014, Exercise Price: $57.50	10	$	855
HON 140118P00060000	Expiration: January 2014, Exercise Price: $60.00	5		522
HON 150117P00040000	Expiration: January 2015, Exercise Price: $40.00	12		1,224
				2,601
	Building Material and Garden Equipment and Supplies Dealers
	Fastenal Company
FAST 140118P00033000	Expiration: January 2014, Exercise Price: $33.00	5		313
FAST 140118P00039500	Expiration: January 2014, Exercise Price: $39.50	8		1,400
FAST 150117P00032500	Expiration: January 2015, Exercise Price: $32.50	15		3,112
FAST 150117P00034500	Expiration: January 2015, Exercise Price: $34.50	10		2,550
	The Home Depot, Inc.
HD 140118P00055000	Expiration: January 2014, Exercise Price: $55.00	5		372
HD 150117P00050000	Expiration: January 2015, Exercise Price: $50.00	20		4,130
	Lowe’s Companies, Inc.
LOW 140118P00023000	Expiration: January 2014, Exercise Price: $23.00	20		280
LOW 140118P00027000	Expiration: January 2014, Exercise Price: $27.00	5		140
LOW 140118P00030000	Expiration: January 2014, Exercise Price: $30.00	5		243
LOW 150117P00023000	Expiration: January 2015, Exercise Price: $23.00	20		1,720
LOW 150117P00025000	Expiration: January 2015, Exercise Price: $25.00	5		565
LOW 150117P00030000	Expiration: January 2015, Exercise Price: $30.00	5		1,047
	The Sherwin-Williams Company
SHW 140118P00125000	Expiration: January 2014, Exercise Price: $125.00	5		750
SHW 140118P00150000	Expiration: January 2014, Exercise Price: $150.00	2		920
SHW 150117P00150000	Expiration: January 2015, Exercise Price: $150.00	2		2,590
				20,132
	Chemical Manufacturing
	Amgen Inc.
AMGN 140118P00067500	Expiration: January 2014, Exercise Price: $67.50	10		815
AMGN 140118P00077500	Expiration: January 2014, Exercise Price: $77.50	5		878
AMGN 150117P00060000	Expiration: January 2015, Exercise Price: $60.00	10		2,215
	Celgene Corporation
CELG 140118P00052500	Expiration: January 2014, Exercise Price: $52.50	10		405
CELG 150117P00055000	Expiration: January 2015, Exercise Price: $55.00	10		2,385
	The Dow Chemical Company
DOW 140118P00020000	Expiration: January 2014, Exercise Price: $20.00	25		663
DOW 140118P00023000	Expiration: January 2014, Exercise Price: $23.00	9		427
DOW 140118P00025000	Expiration: January 2014, Exercise Price: $25.00	10		695
DOW 150117P00020000	Expiration: January 2015, Exercise Price: $20.00	29		3,016

	Clothing and Clothing Accessories Stores
	The Estee Lauder Companies Inc. — Class A
EL 140118P00047500	Expiration: January 2014, Exercise Price: $47.50	29	$	2,392
EL 140118P00055000	Expiration: January 2014, Exercise Price: $55.00	15		2,700
	Tiffany & Co.
TIF 140118P00045000	Expiration: January 2014, Exercise Price: $45.00	22		880
TIF 140118P00052500	Expiration: January 2014, Exercise Price: $52.50	46		4,508
TIF 140118P00057500	Expiration: January 2014, Exercise Price: $57.50	70		11,725
TIF 140118P00062500	Expiration: January 2014, Exercise Price: $62.50	95		25,887
TIF 150117P00060000	Expiration: January 2015, Exercise Price: $60.00	4		2,450
TIF 150117P00065000	Expiration: January 2015, Exercise Price: $65.00	9		7,403
				57,945
	Computer and Electronic Product Manufacturing
	America Movil SAB de C.V. — Series L — ADR
AMX 140118P00018000	Expiration: January 2014, Exercise Price: $18.00	180		9,000
AMX 140118P00020000	Expiration: January 2014, Exercise Price: $20.00	200		20,000
	Apple, Inc.
AAPL 140118P00360000	Expiration: January 2014, Exercise Price: $360.00	23		44,390
	Bruker Corporation
BRKR 130921P00015000	Expiration: September 2013, Exercise Price: $15.00	70		4,025
	Rockwell Collins, Inc.
COL 130720P00050000	Expiration: July 2013, Exercise Price: $50.00	56		560
COL 131019P00050000	Expiration: October 2013, Exercise Price: $50.00	10		325
	SONY Corporation
SNE 150117P00015000	Expiration: January 2015, Exercise Price: $15.00	24		3,960
SNE 150117P00017000	Expiration: January 2015, Exercise Price: $17.00	76		18,430
	Vicor Corporation
VICR 131019P00005000	Expiration: October 2013, Exercise Price: $5.00	250		2,500
				103,190
	Construction of Buildings
	Lennar Corporation — Class A
LEN 140118P00030000	Expiration: January 2014, Exercise Price: $30.00	3		563
LEN 150117P00033000	Expiration: January 2015, Exercise Price: $33.00	16		8,960
				9,523
	Couriers and Messengers
	FedEx Corp.
FDX 140118P00070000	Expiration: January 2014, Exercise Price: $70.00	6		381
FDX 140118P00075000	Expiration: January 2014, Exercise Price: $75.00	10		1,015

*	— 100 Shares Per Contract.
€	— Euros.
ADR	— American Depository Receipt.
e	— 1,000 shares per contract.
f	— 500 shares per contract.
ETF	— Exchange Traded Fund.
REIT	— Real Estate Investment Trust.
HKD	— Hong Kong Dollars.
CAD	— Canadian Dollars.

	The Internet		The Global
	Portfolio		Portfolio
ASSETS:
Investments, at value (1)(2)	$	216,323,073	$	10,473,831
Cash		—		446,274
Receivable for contributed capital		128,941		37,149
Receivable for investments sold		15,435		7,162
Dividends and interest receivable		115,194		10,833
Other accounts receivable		99,877		956
Other assets		13,086		1,886
Total Assets		216,695,606		10,978,091
LIABILITIES:
Payable to Adviser		182,834		9,174
Payable to Trustees and Officers		2,975		145
Payable for securities purchased		19,549		40,384
Payable for collateral received for securities loaned		38,696,520		1,943,040
Payable for withdrawn capital		45,408		179
Accrued expenses and other liabilities		34,047		11,863
Total Liabilities		38,981,333		2,004,785
Net Assets	$	177,714,273	$	8,973,306
(1) Cost of investments	$	155,282,005	$	9,313,101
(2) Includes loaned securities with a market value of	$	37,536,613	$	1,884,990

	The Paradigm		The Medical
	Portfolio		Portfolio
ASSETS:
Investments, at value (1)(2)	$	1,279,026,869	$	30,903,465
Cash		28,350		—
Receivable for contributed capital		5,534,426		21,874
Dividends and interest receivable		1,253,513		26,347
Other accounts receivable		4,873		—
Other assets		90,563		8,537
Total Assets		1,285,938,594		30,960,223
LIABILITIES:
Payable to Adviser		1,114,337		23,470
Payable to Trustees and Officers		17,628		366
Payable for securities purchased		168,183		—
Payable for collateral received for securities loaned		185,945,676		8,452,914
Payable for withdrawn capital		1,033,923		44,980
Accrued expenses and other liabilities		161,122		10,803
Total Liabilities		188,440,869		8,532,533
Net Assets	$	1,097,497,725	$	22,427,690
(1) Cost of investments	$	1,051,964,377	$	28,602,075
(2) Includes loaned securities with a market value of	$	180,103,335	$	7,887,464

	The Small Cap		The Market
	Opportunities		Opportunities
	Portfolio		Portfolio
ASSETS:
Investments, at value (1)(2)	$	208,943,225	$	72,145,443
Cash		—		749
Receivable for contributed capital		729,346		63,778
Receivable for investments sold		—		538,310
Dividends and interest receivable		326,192		72,371
Other accounts receivable		20,976		243
Other assets		10,109		6,010
Total Assets		210,029,848		72,826,904
LIABILITIES:
Payable to Adviser		160,509		62,935
Payable to Trustees and Officers		2,090		971
Payable for securities purchased		1,593,591		9,656
Payable for collateral received for securities loaned		45,095,910		13,561,294
Payable for withdrawn capital		60,074		2,486
Accrued expenses and other liabilities		27,079		18,164
Total Liabilities		46,939,253		13,655,506
Net Assets	$	163,090,595	$	59,171,398
(1) Cost of investments	$	173,992,258	$	60,531,322
(2) Includes loaned securities with a market value of	$	43,583,684	$	13,196,155

	The Alternative		The Multi-
	Income		Disciplinary
	Portfolio		Portfolio
ASSETS:
Investments, at value (1)(2)	$	17,796,136	$	68,021,378
Cash		1,799,474		27,820,230
Receivable for contributed capital		70,000		1,253,794
Receivable for investments sold		3,772		1,794
Dividends and interest receivable		65,131		581,203
Other assets		730		3,136
Total Assets		19,735,243		97,681,535
LIABILITIES:
Written options, at value (3)		617,988		2,474,301
Payable to Adviser		13,117		96,206
Payable to Trustees and Officers		288		1,363
Payable for securities purchased		750		28,355
Payable for collateral received for securities loaned		1,358,632		1,462,640
Payable for withdrawn capital		11,172		527,804
Accrued expenses and other liabilities		14,416		24,315
Total Liabilities		2,016,363		4,614,984
Net Assets	$	17,718,880	$	93,066,551
(1) Cost of investments	$	17,917,083	$	71,125,367
(2) Includes loaned securities with a market value of	$	1,323,456	$	1,438,865
(3) Premiums received	$	939,037	$	4,558,317

	The Internet Portfolio						The Global Portfolio
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2013			December 31,			June 30, 2013			December 31,
	(Unaudited)			2012			(Unaudited)			2012
OPERATIONS:
Net investment income (loss)	$	(606,060	)	$	189,258		$	(48	)	$	22,327
Net realized gain on sale of investments and foreign currency		2,511,921			4,840,072			79,014			105,224
Net change in unrealized appreciation of investments and foreign currency		23,053,815			19,951,987			521,674			1,012,392
Net increase in net assets resulting from operations		24,959,676			24,981,317			600,640			1,139,943
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
BENEFICIAL INTEREST
TRANSACTIONS:
Contributions		5,822,534			40,015,908			2,474,391			2,922,314
Withdrawals		(9,779,385	)		(13,342,552	)		(639,134	)		(1,645,472	)
Net increase (decrease) in net assets resulting from beneficial interest transactions		(3,956,851	)		26,673,356			1,835,257			1,276,842
Total increase in net assets		21,002,825			51,654,673			2,435,897			2,416,785
NET ASSETS:
Beginning of period		156,711,448			105,056,775			6,537,409			4,120,624
End of period	$	177,714,273		$	156,711,448		$	8,973,306		$	6,537,409

	The Small Cap						The Market
	Opportunities Portfolio						Opportunities Portfolio
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2013			December 31,			June 30, 2013			December 31,
	(Unaudited)			2012			(Unaudited)			2012
OPERATIONS:
Net investment income	$	132,311		$	225,038		$	166,810		$	196,072
Net realized gain on sale of investments and foreign currency		1,752,375			7,836,504			2,093,589			4,863,610
Net change in unrealized appreciation of investments and foreign currency		25,226,637			12,110,059			7,757,384			2,198,782
Net increase in net assets resulting from operations		27,111,323			20,171,601			10,017,783			7,258,464
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		56,193,154			355,647			16,098,837			104,996
Withdrawals		(1,801,865	)		(21,968,834	)		(10,583,759	)		(6,941,845	)
Net increase (decrease) in net assets resulting from beneficial interest transactions		54,391,289			(21,613,187	)		5,515,078			(6,836,849	)
Total increase (decrease) in net assets		81,502,612			(1,441,586	)		15,532,861			421,615
NET ASSETS:
Beginning of period		81,587,983			83,029,569			43,638,537			43,216,922
End of period	$	163,090,595		$	81,587,983		$	59,171,398		$	43,638,537

	The Alternative						The Multi-
	Income Portfolio						Disciplinary Portfolio
	For the			For the			For the			For the
	Six Months Ended			Year Ended			Six Months Ended			Year Ended
	June 30, 2013			December 31,			June 30, 2013			December 31,
	(Unaudited)			2012			(Unaudited)			2012
OPERATIONS:
Net investment income (loss)	$	(41,404	)	$	229,919		$	836,788		$	1,367,871
Net realized gain (loss) on sale of investments, foreign currency, written options, securities sold short and distributions received from other investment companies		(54,631	)		315,020			1,227,459			1,191,225
Net change in unrealized appreciation (depreciation) of investments, foreign currency, written options and securities sold short		249,892			608,301			(2,372,303	)		2,750,170
Net increase (decrease) in net assets resulting from operations		153,857			1,153,240			(308,056	)		5,309,266
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTEREST TRANSACTIONS:
Contributions		8,700,083			2,343,426			36,063,351			34,091,277
Withdrawals		(1,930,398	)		(6,080,519	)		(2,239,627	)		(3,583,117	)
Net increase (decrease) in net assets resulting from beneficial interest transactions		6,769,685			(3,737,093	)		33,823,724			30,508,160
Total increase (decrease) in net assets		6,923,542			(2,583,853	)		33,515,668			35,817,426
NET ASSETS:
Beginning of period		10,795,338			13,379,191			59,550,883			23,733,457
End of period	$	17,718,880		$	10,795,338		$	93,066,551		$	59,550,883

	Purchases				Sales
	U.S.				U.S.
	Government		Other		Government		Other
The Internet Portfolio	$	—	$	7,464,917	$	—	$	5,456,626
The Global Portfolio		—		1,424,527		—		430,386
The Paradigm Portfolio		—		22,257,740		—		18,330,273
The Medical Portfolio		—		2,517,282		—		1,415,385
The Small Cap Opportunities Portfolio		—		50,041,688		—		1,180,096
The Market Opportunities Portfolio		—		8,242,662		—		4,734,767
The Alternative Income Portfolio		944,181		12,333,722		—		964,275
The Multi-Disciplinary Portfolio		—		26,884,818		—		22,856,791

	Net
	Unrealized
	Appreciation			Unrealized		Unrealized			Tax Cost of
	(Depreciation)			Appreciation		Depreciation			Investments
The Internet Portfolio	$	37,389,100		$	47,503,009	$	(10,113,909	)	$	141,405,165
The Global Portfolio		530,504			971,345		(440,841	)		7,254,536
The Paradigm Portfolio		14,767,687			141,174,440		(126,406,753	)		1,011,194,563
The Medical Portfolio		(1,247,742	)		3,320,860		(4,568,602	)		24,573,223
The Small Cap Opportunities Portfolio		7,281,567			15,654,118		(8,372,551	)		91,276,180
The Market Opportunities Portfolio		2,202,755			7,989,874		(5,787,119	)		52,034,968
The Alternative Income Portfolio		(50,313	)		73,341		(123,654	)		2,714,513
The Multi-Disciplinary Portfolio		(869,404	)		4,870,213		(5,739,617	)		62,524,120