Integrity Funds N-CSRSCertified semi-annual shareholder report (management investment company)

N-CSRS

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: 811-07322

THE INTEGRITY FUNDS
(Exact name of registrant as specified in charter)

Brent Wheeler and/or Kevin Flagstad, PO Box 500, Minot, ND 58702

(Name and address of agent for service)

Registrant’s telephone number, including area code: 701-852-5292

Date of fiscal year end: July 31^st

Date of reporting period: January 31, 2021

Item 1. Report to Shareholders

THE INTEGRITY FUNDS

Integrity Dividend Harvest Fund

Integrity Energized Dividend Fund

Integrity ESG Growth & Income Fund

Integrity High Income Fund

Integrity Mid-North American Resources Fund

Integrity Short Term Government Fund

Semi-Annual Report | January 31, 2021

*The Funds are distributed through Integrity Funds Distributor, LLC. Member FINRA

IMPORTANT NOTE: Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Integrity Viking Funds’ (the “Funds”) annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the shareholder reports from the Funds or from your financial intermediary, such as a broker-dealer or bank. Instead, shareholder reports will be available on the Funds’ website (https://www.integrityvikingfunds.com/Documents), and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you hold Fund shares through a financial intermediary and you already elected to receive shareholder reports electronically through your financial intermediary, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds electronically by notifying your financial intermediary.

You may elect to receive all future shareholder reports in paper free of charge. You can inform your financial intermediary that you wish to continue receiving paper copies of your shareholder reports, or if you are a direct investor, by calling the Funds at 800-601-5593. Your election to receive reports in paper will apply to all Funds you hold directly or through your financial intermediary, as applicable.

INTEGRITY DIVIDEND HARVEST FUND

Enclosed is the report of the operations for the Integrity Dividend Harvest Fund (the “Fund”) for the six-months ended January 31, 2021 (the “Period”). The Fund’s portfolio and related financial statements are presented within for your review.

The Period saw the S&P 500 TR Index (“S&P”) return 14.47%. During the Period, the market continued to climb as the unparalleled stimulus and speed of the economic recovery boosted investor expectations. The expedited response to the Coronavirus by the U.S. Government and the Federal Reserve, who made fiscal and monetary moves the likes of which haven’t been seen since the Great Recession, instilled confidence in investors. Although multiple vaccines had been granted approval near the end of 2020, the virus had not disappeared by the end of the Period, and it is yet to be seen what moves will be necessary going forward.

The U.S. Bureau of Labor Statistics reported that the unemployment rate was still at a 50-year low of 3.5% in February 2020, before the effects of the Coronavirus economic shutdown took hold. The unemployment rate spiked to 14.8% in April 2020, but has been steadily declining since then. The Period ended with an unemployment rate of 6.3% as businesses began to re-open.

The Federal Reserve’s Federal Open Market Committee (“FOMC” or “Committee”) has not changed the target range of the federal funds rate since dropping it to near 0% in March of 2020. The FOMC has remained dovish and signaled it intends to keep rates near 0% in the near term. The Committee published updated guidance on their goals and will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.

During the Period, the Financials sector performed best with earnings surprising to the upside. While some financial firms give credit to higher-than-expected trading revenues, many of the biggest banks have said lower-than-expected loan defaults are allowing them to reverse expenses charged earlier in 2020 as loan loss reserves. Real Estate, Utilities, and Consumer Staples lagged in the risk-on market environment.

The Fund’s total returns for Class A, C, and I shares were 7.81%*, 7.46%*, and 8.03%*, respectively, for the six-months ended January 31, 2021 while the S&P gained 14.47%. The Fund is in the Morningstar Large Value category which returned 16.83% over the same time Period. The Fund underperformed its Morningstar category and the S&P. The Fund’s underperformance relative to the S&P was primarily driven by stock selection in Communication Services and overweight allocations to Consumer Staples and Utilities. Aiding relative performance was stock selection in Financials.

The Fund seeks to maximize total return by emphasizing high current income with long term appreciation as a secondary objective, consistent with preservation of capital. The Portfolio Management Team (the “Team”) considers dividend yield, dividend growth rate, earnings growth, price-to-earnings multiples, and balance sheet strength. The Team emphasizes dividend yield in selecting stocks for the Fund because we believe that, over time, dividend income can contribute significantly to total return and is a more consistent source of investment return than appreciation.

If you would like more frequent updates, visit our website at www.integrityvikingfunds.com for daily prices along with pertinent Fund information.

Sincerely,

The Portfolio Management Team

The views expressed are those of The Portfolio Management Team of Viking Fund Management. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector, the markets generally, or any of the funds in the Integrity Viking family of funds.

*Performance does not include applicable front-end or contingent deferred sales charges, which would have reduced the performance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other important information, please obtain a Fund prospectus at no cost from your financial adviser and read it carefully before investing.

INTEGRITY DIVIDEND HARVEST FUND

Comparison of change in value of a $10,000 investment

Average Annual Total Returns for the periods ended January 31, 2021

The total annual fund operating expense ratio (before expense waivers and reimbursements and including acquired fund fees and expenses) as of the most recent fiscal year-end was 1.50%, 2.25%, and 1.25% for Class A, C, and I, respectively. The net annual fund operating expense ratio (after expense waivers and reimbursements and excluding acquired fund fees and expenses) as of the most recent fiscal year-end was 0.95%, 1.70%, and 0.70% for Class A, C, and I, respectively. The Fund’s investment adviser has contractually agreed to waive fees and reimburse expenses through November 29, 2021 so that total annual fund operating expenses after fee waivers and expense reimbursements (excluding taxes, brokerage fees, commissions, extraordinary and non-recurring expenses, and acquired fund fees and expenses) do not exceed 0.95%, 1.70%, and 0.70% for Class A, C, and I, respectively. This expense limitation agreement may only be terminated or modified prior to November 29, 2021 with the approval of the Fund’s Board of Trustees.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

The table and graph above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions and redemptions of Fund shares. The graph comparing the Fund’s performance to a benchmark index provides you with a general sense of how the Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Fund’s total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities to match the index. If they could, transaction costs and other expenses would be incurred. All Fund and benchmark returns include reinvested dividends.

INTEGRITY ENERGIZED DIVIDEND FUND

Enclosed is the report of the operations for the Integrity Energized Dividend Fund (the “Fund”) for the six-months ended January 31, 2021 (the “Period”). The Fund’s portfolio and related financial statements are presented within for your review.

Market Review

The Period saw the S&P 500 TR Index (“S&P”) return 14.47%. During the Period, the market continued to climb as the unparalleled stimulus and speed of the economic recovery boosted investor expectations. The expedited response to the Coronavirus by the U.S. Government and the Federal Reserve, who made fiscal and monetary moves the likes of which haven’t been seen since the Great Recession, instilled confidence in investors. Although multiple vaccines had been granted approval near the end of 2020, the virus had not disappeared by the end of the Period, and it is yet to be seen what moves will be necessary going forward.

The U.S. Bureau of Labor Statistics reported that the unemployment rate was still at a 50-year low of 3.5% in February 2020, before the effects of the Coronavirus economic shutdown took hold. The unemployment rate spiked to 14.8% in April 2020, but has been steadily declining since then. The Period ended with an unemployment rate of 6.3% as businesses began to re-open.

The Federal Reserve’s Federal Open Market Committee (“FOMC” or “Committee”) has not changed the target range of the federal funds rate since dropping it to near 0% in March of 2020. The FOMC has remained dovish and signaled it intends to keep rates near 0% in the near term. The Committee published updated guidance on their goals and will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.

During the Period, the Financials sector performed best with earnings surprising to the upside. While some financial firms give credit to higher-than-expected trading revenues, many of the biggest banks have said lower-than-expected loan defaults are allowing them to reverse expenses charged earlier in 2020 as loan loss reserves. Real Estate, Utilities, and Consumer Staples lagged in the risk-on market environment.

Energy Review

During the 3Q2020, crude oil and energy equities continued moving higher for the majority of the quarter. However, the month of September brought a spike in COVID-19 cases that caused both crude oil and energy equities to reverse course. Additionally, the looming Presidential election created further uncertainty for the energy sector. Over the quarter, crude oil made both higher and lower attempts, but it appeared to simply be consolidating around the $40/barrel level. Crude oil demand made a strong resurgence in the 2Q2020, but that demand has stalled in the 92-93 million barrels of oil per day during the 3Q2020. This lack of demand recovery translated into minimal growth in drilling and completion activity. Going forward, we will need to see a continuation of a demand recovery, compliance within OPEC, and capital discipline in order for oil prices to move higher and incentivize higher activity levels. Longer term, the drastic reduction in capital expenditures will create a more difficult environment for the energy industry to produce enough to offset conventional declines and a recovery in demand post-pandemic. We continue to see both value and growth opportunities within the energy sector and maintain our stance of investing in peer leading companies that are well capitalized and have a proven ability to generate free cash flow through the full cycle.

For the 3Q2020, the Fund (Class A shares) returned -12.24% compared to a loss of 19.22% for the S&P 1500 Energy Index and a loss of 11.21% for the Morningstar Equity Energy category. WTI crude oil increased 1.62% to end the quarter at $40.22 and Brent crude oil increased 1.29% to end the quarter at $42.30.

The year 2020 will go down in history as a year to forget, and that certainly applies to the energy sector. Energy was not only the worst performing sector over the year; it trailed the second worst sector by over 30%. On a positive note, the energy sector was the best performing sector over the 4Q2020, finishing the year strong by returning 28.46% over the 4Q2020. The quarter started slow for the energy sector, but turned for the positive as two vaccine announcements led to a significant climb in oil and energy equities. Under a Biden administration with control of both the House and the Senate, regulations towards the energy sector will increase, as will increased support for renewable energy adoption. While COVID-19 is not behind us, light can be seen at the end of this long tunnel we’ve endured. The rollout of vaccines began in December with hopes of accelerated deliveries in the New Year. Upon reaching herd immunity, through both infections and vaccinations, we expect a ramp in oil demand followed by a return to more normalized consumption slightly below pre-pandemic levels. The demand recovery is critical for the energy sector, to allow OPEC to return barrels back to the market, to stabilize inventories and keep supply and demand balanced.

For the 4Q2020, the Fund (Class A shares) returned 21.09% compared to a gain of 28.46% for the S&P 1500 Energy Index and a gain of 37.01% for the Morningstar Equity Energy category. WTI crude oil increased 17.97% to end the quarter at $48.52 and Brent crude oil increased 19.19% to end the quarter at $51.80.

In the month of January, WTI crude prices rose 6.96% to close the month at $52.08. The Fund gained 5.14% in January, 0.51% behind of the Morningstar Equity Energy category, but 0.82% ahead of the S&P 1500 Energy Index.

For 2021, investing in energy has the potential to provide solid investment opportunities, but volatility will likely remain high. Two themes to digest will be the vaccine rollout and the Biden administration’s hostility towards conventional fossil fuels. The former should provide the much needed lift to oil demand and give a boost to equities across the energy sector. The latter, however, is much more complicated. Under a Biden administration, we expect support for renewable energy and hostility towards conventional energy. This does not mean opportunities only exist within renewable energy and not conventional energy. Energy companies involved in conventional energy that are not affected by the federal lands lease moratorium stand to benefit from lost barrels and higher oil prices that may occur due to increased regulations. 2021 should turn out to be a good year for the energy sector as tailwinds continue to build. The Portfolio Management Team will continue to seek out opportunities within the energy sector by investing in quality companies that possess strong free cash flows and revenue growth opportunities.

The Fund’s total returns for Class A, C, and I shares were 15.31%*, 14.73%*, and 15.28%*, respectively, for the six-months ended January 31, 2021, compared to returns of 27.36%, 13.58%, and 15.69% for the Morningstar Equity Energy category, the S&P 1500 Energy Index, and the S&P 1500 Index, respectively, over the same Period. Detracting from the Fund’s performance relative to its Morningstar category was selection within midstream and an underweight allocation to oilfield service. Aiding relative performance was an overweight allocation to chemicals, as well as selection within exploration & production.

If you would like more frequent updates, visit our website at www.integrityvikingfunds.com for daily prices along with pertinent Fund information.

Sincerely,

The Portfolio Management Team

The views expressed are those of The Portfolio Management Team of Viking Fund Management. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector, the markets generally, or any of the funds in the Integrity Viking family of funds.

*Performance does not include applicable front-end or contingent deferred sales charges, which would have reduced the performance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other important information, please obtain a Fund prospectus at no cost from your financial adviser and read it carefully before investing.

INTEGRITY ENERGIZED DIVIDEND FUND

Comparison of change in value of a $10,000 investment

Average Annual Total Returns for the periods ended January 31, 2021

The total annual fund operating expense ratio (before expense waivers and reimbursements and including acquired fund fees and expenses) as of the most recent fiscal year-end was 2.84%, 3.64%, and 2.61% for Class A, C, and I, respectively. The net annual fund operating expense ratio (after expense waivers and reimbursements and excluding acquired fund fees and expenses) as of the most recent fiscal year-end was 0.99%, 1.74%, and 0.74% for Class A, C, and I, respectively. The Fund’s investment adviser has contractually agreed to waive fees and reimburse expenses through November 29, 2021 so that total annual fund operating expenses after fee waivers and expense reimbursements (excluding taxes, brokerage fees, commissions, extraordinary and non-recurring expenses, and acquired fund fees and expenses) do not exceed 1.05%, 1.80%, and 0.80% for Class A, C, and I, respectively. This expense limitation agreement may only be terminated or modified prior to November 29, 2021 with the approval of the Fund’s Board of Trustees.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

The table and graph above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions and redemptions of Fund shares. The graph comparing the Fund’s performance to a benchmark index provides you with a general sense of how the Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Fund’s total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities to match the index. If they could, transaction costs and other expenses would be incurred. All Fund and benchmark returns include reinvested dividends.

INTEGRITY ESG GROWTH & INCOME FUND

Enclosed is the report of the operations for the Integrity ESG Growth & Income Fund (the “Fund”) for the six-months ended January 31, 2021 (the “Period”). The Fund’s portfolio and related financial statements are presented within for your review.

The Period saw the S&P 500 TR Index (“S&P”) return 14.47%. During the Period, the market continued to climb as the unparalleled stimulus and speed of the economic recovery boosted investor expectations. The expedited response to the Coronavirus by the U.S. Government and the Federal Reserve, who made fiscal and monetary moves the likes of which haven’t been seen since the Great Recession, instilled confidence in investors. Although multiple vaccines had been granted approval near the end of 2020, the virus had not disappeared by the end of the Period, and it is yet to be seen what moves will be necessary going forward.

The U.S. Bureau of Labor Statistics reported that the unemployment rate was still at a 50-year low of 3.5% in February 2020, before the effects of the Coronavirus economic shutdown took hold. The unemployment rate spiked to 14.8% in April 2020, but has been steadily declining since then. The Period ended with an unemployment rate of 6.3% as businesses began to re-open.

The Federal Reserve’s Federal Open Market Committee (“FOMC” or “Committee”) has not changed the target range of the federal funds rate since dropping it to near 0% in March of 2020. The FOMC has remained dovish and signaled it intends to keep rates near 0% in the near term. The Committee published updated guidance on their goals and will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.

During the Period, the Financials sector performed best with earnings surprising to the upside. While some financial firms give credit to higher-than-expected trading revenues, many of the biggest banks have said lower-than-expected loan defaults are allowing them to reverse expenses charged earlier in 2020 as loan loss reserves. Real Estate, Utilities, and Consumer Staples lagged in the risk-on market environment.

The Fund’s total returns for Class A, C, and I shares were 13.96%*, 13.83%*, and 14.11%*, respectively, for the six-months ended January 31, 2021 while the S&P gained 14.47%. The Fund is in the Morningstar Large Blend category which returned 15.11% over the same time Period. The Fund underperformed its Morningstar category and the S&P. The Fund’s underperformance relative to the S&P was primarily driven by stock selection in Consumer Staples and Materials. Aiding relative performance was stock selection in Industrials.

The Fund is managed using a blended growth and income investment strategy. The Portfolio Management Team (the “Team”) seeks to invest primarily in domestic common stocks, balancing investments between growth & dividend paying stocks, depending on where we see the best value. The Team also tries to emphasize companies we believe offer both attractive investment opportunities and demonstrate a positive awareness of their impact on the society in which they operate.

If you would like more frequent updates, visit our website at www.integrityvikingfunds.com for daily prices along with pertinent Fund information.

Sincerely,

The Portfolio Management Team

The views expressed are those of The Portfolio Management Team of Viking Fund Management. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector, the markets generally, or any of the funds in the Integrity Viking family of funds.

*Performance does not include applicable front-end or contingent deferred sales charges, which would have reduced the performance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other important information, please obtain a Fund prospectus at no cost from your financial adviser and read it carefully before investing.

INTEGRITY ESG GROWTH & INCOME FUND

Comparison of change in value of a $10,000 investment

Average Annual Total Returns for the periods ended January 31, 2021

The total annual fund operating expense ratio (before expense waivers and reimbursements and including acquired fund fees and expenses) as of the most recent fiscal year-end was 1.87%, 1.62%, and 1.62% for Class A, C, and I, respectively. The net annual fund operating expense ratio (after expense waivers and reimbursements and excluding acquired fund fees and expenses) as of the most recent fiscal year-end was 1.24%, 1.62%, and .99% for Class A, C, and I, respectively. The Fund’s investment adviser has contractually agreed to waive fees and reimburse expenses through November 29, 2021 so that total annual fund operating expenses after fee waivers and expense reimbursements (excluding taxes, brokerage fees, commissions, extraordinary and non-recurring expenses, and acquired fund fees and expenses) do not exceed 1.24%, 1.99%, and .99% for Class A, C, and I, respectively. This expense limitation agreement may only be terminated or modified prior to November 29, 2021 with the approval of the Fund’s Board of Trustees.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

The table and graph above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions and redemptions of Fund shares. The graph comparing the Fund’s performance to a benchmark index provides you with a general sense of how the Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Fund’s total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities to match the index. If they could, transaction costs and other expenses would be incurred. All Fund and benchmark returns include reinvested dividends. The results prior to August 1, 2009 were achieved while the Fund was managed by a different investment adviser. The current investment adviser may produce different investment results than those achieved by the previous investment adviser.

INTEGRITY HIGH INCOME FUND

Enclosed is the report of the operations for the Integrity High Income Fund (the “High Income Fund” or the “Fund”) for the six-months ended January 31, 2021. The Fund’s portfolio and related financial statements are presented within for your review.

Market Environment

After the historic drawdown in the first quarter and the subsequent recovery in the second quarter, the high yield market moved sideways August through October, 2020. Issuance and flows remained elevated historically, but compared to adjacent months they were mostly benign and September was the first month since March where the market was down and the asset class experienced outflows. The combination of perceived gridlock following the US elections and the positive vaccine news in November led to the final rally of 2020. Sectors most exposed to COVID lockdowns and CCCs drastically outperformed as risk-on sentiment across risk assets drove markets higher. While this theme continued into January 2021, it was more abated as the retail induced short squeezes led to a small correction to end the month. The high yield market set multiple records for the all-time low in yield to worst, bottoming at 4.1% in mid-January.

The high yield market increased +6.83% for the trailing six-month period ended January 31^st (as measured by the ICE BofAML US High Yield Constrained Index, HUC0) as spreads tightened 130 bps to 393 bps while yields decreased 1.16% to 4.32%; spreads and yields are now 689 bps tighter and 7.08% lower than they were on March 23^rd. Lower quality drastically outperformed higher quality in a reversal of the first half of 2020, with CCCs returning 18.62%, single B’s 6.02% and BBs 4.96%. Cyclical sector, specifically transportation, energy and leisure led the contributors to performance while the telecommunications, technology and utility sectors, outperformers in the first half of the year, led the detractors.

Gross issuance ($450bn), mutual fund inflows (+$44bn) and fallen angels ($238bn) all set records in 2020 as a result of the pandemic and the stark recovery. Refinancings dominated proceeds as low interest rates and strong investor demand allowed high yield issuers to access capital markets as price makers. January was a continuation of this trend, as the $56bn that printed is the second largest gross issuance month on record, following June 2020. While default activity peaked during the second quarter, the default rate peaked in October at 6.34% before settling at 6.04% by the end of January. The large amount of defaults in April and May, specifically in commodity focused sectors like energy, suppressed the recovery rate during 2020, and it finished the year at 22%.

With a 6.83% return during the trailing six-month period ended January 31^st (HUC0), high yield trailed emerging markets (EMCB), 3.86%, high grade credit (C0A0), 0.30%, 5-year Treasuries (GA05), -0.76%, and U.S. Aggregate (D0A0), -1.12%.

Market Outlook

High yield bonds have consistently rallied along with other risk asset classes since March, with spreads tightening close to 700 bps from their wide point earlier this year to 392 bps currently. While fundamentals remain challenged in a handful of sectors, most high yield issuers have the liquidity or business models to sustain the current environment through 2021. We believe corporate earnings and cash flows will continue their path to recovery through 2021 as the global population is vaccinated. Default rates will likely continue to decline from 2H20 high of 6.34% to 3-4% by the end of 2021. Investor sentiment, initially buoyed by Fed signals of support, should continue to be supportive on the back of expectations around economic recovery. With spreads near their 2020 tight and yields at all-time lows, there is limited cushion in a downside scenario; however, the high yield market is the highest quality it has ever been, with BBs accounting for 55% of the overall market, distressed debt levels are near 3 year lows and we expect fiscal and monetary policy to catalyze economic recovery in 2021 to the benefit of the high yield market.

If you would like more frequent updates, visit our website at www.integrityvikingfunds.com for daily prices along with pertinent Fund information.

Sincerely,

The views expressed are those of Robert L. Cook, Senior Portfolio Manager and Managing Director, and Thomas G. Hauser, Vice President, J.P. Morgan Investment Management, Inc. (“JPMIM”), sub-adviser to the Fund. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector, the markets generally, or any of the funds in the Integrity Viking family of funds.

*Performance does not include applicable front-end or contingent deferred sales charges, which would have reduced the performance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other important information, please obtain a Fund prospectus at no cost from your financial adviser and read it carefully before investing.

INTEGRITY HIGH INCOME FUND

Comparison of change in value of a $10,000 investment

Average Annual Total Returns for the periods ended January 31, 2021

The total annual fund operating expense ratio (before expense waivers and reimbursements and including acquired fund fees and expenses) as of the most recent fiscal year-end was 1.69%, 2.44%, and 1.44% for Class A, C, and I, respectively. The net annual fund operating expense ratio (after expense waivers and reimbursements and excluding acquired fund fees and expenses) as of the most recent fiscal year-end was 0.95%, 1.70%, and 0.70% for Class A, C, and I, respectively. The Fund’s investment adviser has contractually agreed to waive fees and reimburse expenses through November 29, 2021 so that total annual fund operating expenses after fee waivers and expense reimbursements (excluding taxes, brokerage fees, commissions, extraordinary and non-recurring expenses, and acquired fund fees and expenses) do not exceed 0.99%, 1.74%, and 0.74% for Class A, C, and I, respectively. This expense limitation agreement may only be terminated or modified prior to November 29, 2021 with the approval of the Fund’s Board of Trustees.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

The table and graph above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions and redemptions of Fund shares. The graph comparing the Fund’s performance to a benchmark index provides you with a general sense of how the Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Fund’s total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities to match the index. If they could, transaction costs and other expenses would be incurred. All Fund and benchmark returns include reinvested dividends. The results prior to August 1, 2009 were achieved while the Fund was managed by a different investment adviser. The current investment adviser may produce different investment results than those achieved by the previous investment adviser.

INTEGRITY MID-NORTH AMERICAN RESOURCES FUND

Enclosed is the report of the operations for the Integrity Mid-North American Resources Fund (the “Fund”) for the six-months ended January 31, 2021 (the “Period”). The Fund’s portfolio and related financial statements are presented within for your review.

Market Review

The Period saw the S&P 500 TR Index (“S&P”) return 14.47%. During the Period, the market continued to climb as the unparalleled stimulus and speed of the economic recovery boosted investor expectations. The expedited response to the Coronavirus by the U.S. Government and the Federal Reserve, who made fiscal and monetary moves the likes of which haven’t been seen since the Great Recession, instilled confidence in investors. Although multiple vaccines had been granted approval near the end of 2020, the virus had not disappeared by the end of the Period, and it is yet to be seen what moves will be necessary going forward.

The U.S. Bureau of Labor Statistics reported that the unemployment rate was still at a 50-year low of 3.5% in February 2020, before the effects of the Coronavirus economic shutdown took hold. The unemployment rate spiked to 14.8% in April 2020, but has been steadily declining since then. The Period ended with an unemployment rate of 6.3% as businesses began to re-open.

The Federal Reserve’s Federal Open Market Committee (“FOMC” or “Committee”) has not changed the target range of the federal funds rate since dropping it to near 0% in March of 2020. The FOMC has remained dovish and signaled it intends to keep rates near 0% in the near term. The Committee published updated guidance on their goals and will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.

During the Period, the Financials sector performed best with earnings surprising to the upside. While some financial firms give credit to higher-than-expected trading revenues, many of the biggest banks have said lower-than-expected loan defaults are allowing them to reverse expenses charged earlier in 2020 as loan loss reserves. Real Estate, Utilities, and Consumer Staples lagged in the risk-on market environment.

Energy Review

During the 3Q2020, crude oil and energy equities continued moving higher for the majority of the quarter. However, the month of September brought a spike in COVID-19 cases that caused both crude oil and energy equities to reverse course. Additionally, the looming Presidential election created further uncertainty for the energy sector. Over the quarter, crude oil made both higher and lower attempts, but it appeared to simply be consolidating around the $40/barrel level. Crude oil demand made a strong resurgence in the 2Q2020, but that demand has stalled in the 92-93 million barrels of oil per day during the 3Q2020. This lack of demand recovery translated into minimal growth in drilling and completion activity. Going forward, we will need to see a continuation of a demand recovery, compliance within OPEC, and capital discipline in order for oil prices to move higher and incentivize higher activity levels. Longer term, the drastic reduction in capital expenditures will create a more difficult environment for the energy industry to produce enough to offset conventional declines and a recovery in demand post-pandemic. We continue to see both value and growth opportunities within the energy sector and maintain our stance of investing in peer leading companies that are well capitalized and have a proven ability to generate free cash flow through the full cycle.

For the 3Q2020, the Fund (Class A shares) returned -8.56% compared to a loss of 19.22% for the S&P 1500 Energy Index and a loss of 11.21% for the Morningstar Equity Energy category. WTI crude oil increased 1.62% to end the quarter at $40.22 and Brent crude oil increased 1.29% to end the quarter at $42.30.

The year 2020 will go down in history as a year to forget, and that certainly applies to the energy sector. Energy was not only the worst performing sector over the year; it trailed the second worst sector by over 30%. On a positive note, the energy sector was the best performing sector over the 4Q2020, finishing the year strong by returning 28.46% and the Fund returning 34.95% over the 4Q2020. The quarter started slow for the energy sector, but turned for the positive as two vaccine announcements led to a significant climb in oil and energy equities. Under a Biden administration with control of both the House and the Senate, regulations towards the energy sector will increase, as will increased support for renewable energy adoption. While COVID-19 is not behind us, light can be seen at the end of this long tunnel we’ve endured. The rollout of vaccines began in December with hopes of accelerated deliveries in the New Year. Upon reaching herd immunity, through both infections and vaccinations, we expect a ramp in oil demand followed by a return to more normalized consumption slightly below pre-pandemic levels. The demand recovery is critical for the energy sector, to allow OPEC to return barrels back to the market, to stabilize inventories and keep supply and demand balanced.

For the 4Q2020, the Fund (Class A shares) returned 35.51% compared to a gain of 28.46% for the S&P 1500 Energy Index and a gain of 37.01% for the Morningstar Equity Energy category. WTI crude oil increased 17.97% to end the quarter at $48.52 and Brent crude oil increased 19.19% to end the quarter at $51.80.

In the month of January, WTI crude prices rose 6.96% to close the month at $52.08. The Fund gained 5.13% in January, 0.52% behind of the Morningstar Equity Energy category, but 0.81% ahead of the S&P 1500 Energy Index.

For 2021, investing in energy has the potential to provide solid investment opportunities, but volatility will likely remain high. Two themes to digest will be the vaccine rollout and the Biden administration’s hostility towards conventional fossil fuels. The former should provide the much needed lift to oil demand and give a boost to equities across the energy sector. The latter, however, is much more complicated. Under a Biden administration, we expect support for renewable energy and hostility towards conventional energy. This does not mean opportunities only exist within renewable energy and not conventional energy. Energy companies involved in conventional energy that are not affected by the federal lands lease moratorium stand to benefit from lost barrels and higher oil prices that may occur due to increased regulations. 2021 should turn out to be a good year for the energy sector as tailwinds continue to build. The Portfolio Management Team will continue to seek out opportunities within the energy sector by investing in quality companies that possess strong free cash flows and revenue growth opportunities.

The Fund’s total returns for Class A, C, and I shares were 27.76%*, 27.27%*, and 27.91%*, respectively, for the six-months ended January 31, 2021, compared to returns of 27.36%, 13.58%, and 15.69% for the Morningstar Equity Energy category, the S&P 1500 Energy Index, and the S&P 1500 Index, respectively, over the same Period. Aiding relative performance was an overweight allocation to renewable energy, as well as selection within oilfield service. Detracting from the Fund’s performance relative to its Morningstar category was overweight allocation to utilities.

If you would like more frequent updates, visit our website at www.integrityvikingfunds.com for daily prices along with pertinent Fund information.

Sincerely,

The Portfolio Management Team

The views expressed are those of The Portfolio Management Team of Viking Fund Management, LLC (“Viking Fund Management”, “VFM”, or the “Adviser”). The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector, the markets generally, or any of the funds in the Integrity Viking family of funds.

*Performance does not include applicable front-end or contingent deferred sales charges, which would have reduced the performance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other important information, please obtain a Fund prospectus at no cost from your financial adviser and read it carefully before investing.

INTEGRITY MID-NORTH AMERICAN RESOURCES FUND

Comparison of change in value of a $10,000 investment

Average Annual Total Returns for the periods ended January 31, 2021

The total annual fund operating expense ratio (before expense waivers and reimbursements and including acquired fund fees and expenses) as of the most recent fiscal year-end was 1.59%, 2.09%, and 1.09% for Class A, C, and I, respectively. The net annual fund operating expense ratio (after expense waivers and reimbursements and excluding acquired fund fees and expenses) as of the most recent fiscal year-end was 1.50%, 2.00%, and 1.00% for Class A, C, and I, respectively. The Fund’s investment adviser has contractually agreed to waive fees and reimburse expenses through November 29, 2021 so that total annual fund operating expenses after fee waivers and expense reimbursements (excluding taxes, brokerage fees, commissions, extraordinary and non-recurring expenses, and acquired fund fees and expenses) do not exceed 1.50%, 2.00%, and 1.00% for Class A, C, and I, respectively. This expense limitation agreement may only be terminated or modified prior to November 29, 2021 with the approval of the Fund’s Board of Trustees.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

The table and graph above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions and redemptions of Fund shares. The graph comparing the Fund’s performance to a benchmark index provides you with a general sense of how the Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Fund’s total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities to match the index. If they could, transaction costs and other expenses would be incurred. All Fund and benchmark returns include reinvested dividends. The results prior to August 1, 2009 were achieved while the Fund was managed by a different investment adviser. The current investment adviser may produce different investment results than those achieved by the previous investment adviser. The Fund’s performance prior to November 10, 2008 was achieved under the previous investment strategy, which may have produced different results than the current investment strategy.

INTEGRITY SHORT TERM GOVERNMENT FUND

Enclosed is the report of the operations for the Integrity Short Term Government Fund (the “Fund”) for the six-months ended January 31, 2021. The Fund’s portfolio and related financial statements are presented within for your review.

Market Environment

Treasury yields rose and risk assets rallied in the second half of 2020 as the progress of COVID-19 vaccines with very high efficacy rates fostered investors’ expectations of a gradual return to normalcy. The prospects of an additional fiscal stimulus package and clarity in terms of the election also propelled the equity market into yearend. Globally, substantial monetary and fiscal stimulus reduced the economic impact of the pandemic and lockdowns. In December, the European Central Bank delivered further easing by upsizing the Pandemic Emergency Purchase Program (PEPP) by 500 Billion Euros and extending the program by 9 months to March 2022. As Fed Chair Powell acknowledged, “the risk-free rate is going to be low for a sustained period”.

For the year 2020, fixed income spreads over Treasuries ended at levels very close to the beginning of the year, with significant fluctuations in between. For example, the average spread of the Bloomberg Barclays Aggregate Index started the year at 54.3 bps and closed the year at 57.4 bps. Credit and Agency MBS excess returns were -12.7% and -0.83%, respectively, at the end of the 1^st quarter and then recovered significantly after the Fed’s new bond purchase program, ending the year with excess returns of +0.18% and -0.17%, respectively. In December, real yields on U.S. Investment Grade Corporates turned negative for the first time ever, a result of both the decline in corporate bond yields and the rise in inflation breakeven levels.

The December Federal Open Market Committee (the “Committee”) meeting provided qualitative outcome-based guidance on asset purchases. Specifically, the Fed said it intends to continue the current asset purchases program until “substantial further progress” has been made toward the Committee’s maximum employment and price stability goals, and “this judgment would be broad, qualitative, and not based on specific numerical criteria or thresholds”.

Portfolio Performance and Positioning

For the six-months ended January 31, 2021, the Integrity Short Term Government Fund rose 0.97%* (I Class shares, net of fees) compared to its benchmark, the ICE BofA 1-3 Year U.S. Treasury Index, which returned 0.09%, and the Morningstar Short Government category which returned 0.04%. The Fund’s outperformance was driven mainly by MBS spread tightening and the yield differential between Treasuries and our portfolio of well-structured Agency MBS.

As designed, the portfolio continues to focus on short duration Agency Mortgage-Backed Securities (AMBS). This short duration stance should benefit the Fund on a relative basis should interest rates rise. In addition, AMBS currently provide a significant yield and income advantage in our view over similar high quality short duration alternatives. We continue to look for stable bonds that provide predictable cashflows at attractive spreads relative to the rest of the Agency MBS market. The portfolio is tilted towards lower coupon and 15-year loan term securities seeking to mitigate the risk of prepayments in the context of low overall interest rates. In addition, we believe Agency Commercial Mortgage-Backed Securities offer good relative value given increased prepayment rates on single-family AMBS.

Market Outlook

Needless to say, the progress of vaccinations to reach herd immunity and the timing and extent of lifting virus restrictions will be the key determinants of market performance in 2021. For fixed income investors, this has direct relevance to the timing of the Fed tapering their purchases. In the near term, optimism around reopening and the potential for more fiscal stimulus has pushed intermediate and longer term interest rates higher, while the Fed continues to pin down front-end interest rates. We continue to believe Agency MBS offer a premium yield and good value relative to depressed rates for Treasuries and corporate credit at historically tight spreads in the face of uncertainty. Housing activity remains robust and the Fed’s sustained monthly purchases of Agency MBS continue to absorb most of the supply in the market. Prepayments are a risk that we are monitoring very closely, but we believe that risk can be contained through careful security selection. Our focus on seasoned collateral should mitigate extension risk in an interest rate sell-off scenario. On the multifamily side, performance has remained stable, unlike certain commercial real estate sectors such as lodging and retail properties, where delinquency rates remain elevated.

If you would like more frequent updates, please visit the Fund’s website at www.integrityvikingfunds.com for daily prices along with pertinent Fund information.

Sincerely,

The Portfolio Management Team

M.D. Sass Investors Services, Inc.

The views expressed are those of M.D. Sass Investor Services, Inc., sub-adviser to the Fund. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector, the markets generally, or any of the funds in the Integrity Viking family of funds.

*Performance does not include applicable front-end or contingent deferred sales charges, which would have reduced the performance.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other important information, please obtain a Fund prospectus at no cost from your financial adviser and read it carefully before investing.

INTEGRITY SHORT TERM GOVERNMENT FUND

Comparison of change in value of a $10,000 investment

Average Annual Total Returns for the periods ended January 31, 2021

The total annual fund operating expense ratio (before expense waivers and reimbursements and including acquired fund fees and expenses) for the most recent fiscal period ended July 31, 2020 was 1.33% (annualized) and 1.08% (annualized) for Class A and I, respectively. The net annual fund operating expense ratio (after expense waivers and reimbursements and excluding acquired fund fees and expenses) for the most recent fiscal period ended July 31, 2020 was 0.80% and 0.55% (annualized) for Class A and I, respectively. The Fund’s investment adviser has contractually agreed to waive fees and reimburse expenses through January 18, 2022 so that total annual fund operating expenses after fee waivers and expense reimbursements (excluding taxes, brokerage fees, commissions, extraordinary and non-recurring expenses, and acquired fund fees and expenses) do not exceed 0.80% and 0.55% for Class A and I, respectively. This expense limitation agreement may only be terminated or modified prior to January 18, 2022 with the approval of the Fund’s Board of Trustees.

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month end (available within seven business days of the most recent month end) by calling 800-276-1262.

The table and graph above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions and redemptions of Fund shares. The graph comparing the Fund’s performance to a benchmark index provides you with a general sense of how the Fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The Fund’s total return for the period shown appears with and without sales charges and includes Fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged; there are no expenses that affect the results. In addition, few investors could purchase all of the securities to match the index. If they could, transaction costs and other expenses would be incurred. All Fund and benchmark returns include reinvested dividends.

INTEGRITY DIVIDEND HARVEST FUND

Market sectors are breakdowns of the Fund’s portfolio holdings into specific investment classes.

These percentages are based on net assets.

INTEGRITY ENERGIZED DIVIDEND FUND

Market sectors are breakdowns of the Fund’s portfolio holdings into specific investment classes.

These percentages are based on net assets.

INTEGRITY ESG GROWTH & INCOME FUND

Market sectors are breakdowns of the Fund’s portfolio holdings into specific investment classes.

These percentages are based on net assets.

INTEGRITY HIGH INCOME FUND

Market sectors are breakdowns of the Fund’s portfolio holdings into specific investment classes.

These percentages are based on net assets.