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June 30, 2021 www.kineticsfunds.com Semi-Annual Report The Internet Fund The Global Fund The Paradigm Fund The Medical Fund The Small Cap Opportunities Fund The Market Opportunities Fund The Alternative Income Fund The Multi-Disciplinary Income Fund The Kinetics Spin-off and Corporate Rest ructuring Fund Each a series of Kinetics Mutual Funds, Inc. KINETICS MUTUAL FUNDS, INC. Table of Contents June 30, 2021 (Unaudited) Page Shareholders’ Letter . 2 Year 2021 Semi-Annual Investment Commentary . 5 KINETICS MUTUAL FUNDS, INC. — FEEDER FUNDS AND THE KINETICS SPIN-OFF AND CORPORATE RESTRUCTURING FUND Expense Example . 10 Allocation of Assets — The Kinetics Spin-off and Corporate Restructuring Fund . 17 Schedule of Investments — The Kinetics Spin-off and Corporate Restructuring Fund . 18 Statements of Assets & Liabilities . 21 Statements of Operations . 26 Statements of Changes in Net Assets . 31 Notes to Financial Statements . 44 Financial Highlights . 73 KINETICS PORTFOLIOS TRUST — MASTER INVESTMENT PORTFOLIOS Allocation of Consolidated Portfolio Assets . 106 Consolidated Portfolio of Investments —The Internet Portfolio . 114 Consolidated Portfolio of Investments — The Global Portfolio . 117 Consolidated Portfolio of Investments — The Paradigm Portfolio . 120 Portfolio of Investments — The Medical Portfolio . 124 Consolidated Portfolio of Investments — The Small Cap Opportunities Portfolio . 126 Consolidated Portfolio of Investments — The Market Opportunities Portfolio . 129 Portfolio of Investments — The Alternative Income Portfolio . 133 Portfolio of Investments — The Multi-Disciplinary Income Portfolio . 134 Consolidated Statements of Assets & Liabilities . 136 Consolidated Statements of Operations . 140 Consolidated Statements of Changes in Net Assets . 144 Consolidated Notes to Financial Statements . 148 1 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, 2021. Equities compounded upon the gains achieved in 2020 during the first half of the year, with the S&P 500 Index rising 15.25%. The gains are likely related to optimism regarding the continued economic growth coming out of the prior year’s recession, coupled with low interest rates. We believe that the latter is having a larger impact on risk assets given the high valuation multiples, yet the equity gains came in spite of the U.S. 10-Year Treasury yield rising from approximately 0.92% at the end of last year to 1.45% at the end of June. It is likely that the market for risk assets is less sensitive to interest rate levels given the extremely low interest rate base – but only up to a point. For example, in 2016, the S&P 500 Index continued to rise in value after an initial decline following the Federal Reserve’s decision to begin increasing interest rates. The upward trajectory lasted through most of 2018, until the overnight lending rate had risen from effectively zero to nearly 2.5%. At this point, the S&P 500 Index abruptly declined nearly 19%, which prompted the Federal Reserve to lower rates, which ultimately ended back at zero in early 2020. We believe that the interplay of nominal and real interest rates, inflation, and risk asset valuations will be of critical importance in the coming months. Low long-term interest rates would appear to benefit equity and government policy alike, but in our view, inflation is the swing variable that often prevents central bankers from running too free of policies. The Funds are positioned in recognition of these dynamics and the likelihood that higher inflation levels may be permitted in this cycle, as compared to prior economic expansions. However, real yields get lower as inflation levels rise, and longer dated rates are likely to eventually rise with sustained inflation. A performance summary for the half year ended June 30, 2021 follows (No- Load Class): The Internet Fund 15.13%; The Global Fund 18.92%; The Paradigm Fund 52.40%; The Medical Fund 15.75%; The Small Cap Opportunities Fund 62.06%; The Market Opportunities Fund 36.61%; The Alternative Income Fund -0.41%; The Multi-Disciplinary Income Fund 2.04%; and the Kinetics Spin-off and Corporate Restructuring Fund 64.98%. This compares to returns of: 15.25% for the S&P 500® Index; 23.56% for the S&P 600 Small Cap Index; 12.30% for the MSCI All Country World 2 (ACWI) Index; -1.60% for the Bloomberg Barclays U.S. Aggregate Bond Index; 3.62% for the Bloomberg Barclays U.S. Corporate High Yield Index; 0.21% for the Bloomberg Barclays 1-3 Year U.S. Credit Bond Index; 12.92% for the Nasdaq Index; and 8.83% for the MSCI EAFE Index. While we continue to provide equity and fixed income reference benchmark numbers (to aid in understanding how the broad asset classes have performed throughout the first half of 2021), we do not manage our Funds against any specific benchmark, nor have we ever done so in the history of the Funds. We believe that such benchmark adherence is highly detrimental to the long-term returns of a sound investment strategy, particularly in recent years, as the benchmarks themselves have undergone distortions that make them discordant with their original objectives. In our opinion, there is an abundance of very high-quality businesses in the world, which earn very high returns on invested capital and which have attractive growth prospects. However, many of these companies are trading at valuations that require dramatic future profitability in order to provide an attractive long-term financial return. For example, the Nasdaq 100 Index currently trades at a price to earnings ratio of 46.2x. This represents a 2.2% earnings yield should the companies distribute all of this income to shareholders; however, the vast majority of the companies retain all of their earnings for reinvestment. To be fair, reinvestment at accretive rates is ultimately more beneficial to shareholders than distributed earnings, but in theory, shareholders must receive this income at some point in the future. We can assume that investors in the index today are willing to pay such a high price for the stocks due to their expectations of future earnings growth. A fundamental investor’s assumptions would require some point in time when the stocks growth abates, and the valuation (i.e., shareholder yield) becomes more attractive. We believe that a reasonable shareholder yield in a normalized economic backdrop is approximately 7%, which can be inverted into a price to earnings ratio of approximately 14.3x. If investors were to demand a 7% earnings yield on the Nasdaq 100 Index after a decade of growth, it would require cumulative earnings growth of approximately 225% or 12.5% per annum. These figures may not sound that aggressive based on current or historical growth rates for certain companies, but for this to be sustained for a decade in aggregate is a far more difficult proposition. Furthermore, in the event that nominal U.S. Gross Domestic Product (“GDP”) growth averages between 4%-6% over this time period, the ability to sustainably grow at over 2x has proven to be very limited. 3 This exercise illustrates the challenges of paying high multiples for stocks, even if they are experiencing high growth and have high quality business models. The assumptions required to achieve an earnings yield of 7% in 10 years would still only result in a break-even investment experience. In order to provide strong investment returns, the operational performance would need to be magnitudes higher. In truth, it may be overly conservative to believe that the Nasdaq 100 Index will trade at 14x earnings within the next decade, but the important factors to consider are current valuations and the sensitivity of these valuations to interest rates. On the opposite end of the investment spectrum from the high growth, highly valued Nasdaq 100 Index, are the “hard asset” companies. Even following their very strong performance in the first half of 2021, energy and materials companies still only represent 5.4% of the S&P 500 Index. The valuations of many of these companies appear to imply to us that the earnings profiles are not only never going to grow sustainably, but they will also decline to zero over time. This is a critical distinction in valuation terms: often, the largest component of a discounted cash flow-based value for a company lies in the terminal or perpetual value of the enterprise. This is despite the fact that, over a long enough time horizon, exceedingly few companies have been able to maintain above market profitability and growth, and most are eventually displaced. Thus, notwithstanding our views on inflation and various hard asset end markets, it is far more appealing to us as value investors to invest in companies with no value assigned to their long-term future, versus the broader market, which implies to us a value for strong growth and profitability into perpetuity. 4 KINETICS MUTUAL FUNDS, INC. Investment Commentary Global markets have enjoyed nearly a decade of relative calm, noted by limited volatility and rising price levels, following the global financial crisis of 2008/2009. In our opinion, two of the most disconcerting aspects of the financial crisis were how few people were able to see it coming, and the exposure of the apparent fragility of the financial system. It was previously unfathomable that declining home prices nationwide could result in the bankruptcies of many of the country’s largest financial institutions. Fast forward to 2020, it could easily have been reasoned that a global pandemic, with travel restrictions spanning over a year for much of the world, could easily topple many of the world’s largest companies. In our opinion, one of the biggest differences between 2008 and 2020 is that the root cause of the problem in 2020 was well known, even if the ultimate toll was unknowable, and policy makers learned from mistakes during the previous crisis and acted aggressively and quickly.

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