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 | 811-07527 | |||||||
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Turner Funds | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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1205 Westlakes Drive, Suite 100 Berwyn, PA |
| 19312 | ||||||
(Address of principal executive offices) |
| (Zip code) | ||||||
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Michael P. Malloy Drinker Biddle & Reath LLP One Logan Square, Suite 2000 Philadelphia, PA 19103 | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | 1-800-224-6312 |
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Date of fiscal year end: | September 30 |
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Date of reporting period: | March 31, 2015 |
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Item 1. Reports to Stockholders.
Semiannual Report
March 31, 2015 (unaudited)
Long/short equity funds
Turner Medical Sciences Long/Short Fund
Turner Spectrum Fund
Turner Titan Fund
U.S. growth equity funds
Turner Emerging Growth Fund
Turner Midcap Growth Fund
Turner Small Cap Growth Fund
Contents
2 | Letter to shareholders | ||||||
3 | Schedules of investments | ||||||
| 19 | Sector Weightings | ||||||
| 20 | Financial statements | ||||||
| 34 | Notes to financial statements | ||||||
| 42 | Board of Trustees considerations in approving the Advisory Agreement | ||||||
| 43 | Disclosure of fund expenses | ||||||
Turner Funds
As of March 31, 2015, the Turner Funds offered a series of six mutual funds to individual and institutional investors. The minimum initial investment for Institutional Class Shares in a Turner Fund is $250,000 (except for $100,000 for the Turner Medical Sciences Long/Short Fund, the Turner Spectrum Fund, and the Turner Titan Fund) for regular accounts and $100,000 for individual retirement accounts. The minimum initial investment for Investor Class Shares, Retirement Class Shares and Class C Shares is $2,500 for regular accounts and $2,000 for individual retirement accounts.
Turner Investments, L.P., based in Berwyn, Pennsylvania, serves as the investment adviser for the Turner Funds. Turner Investments, L.P., founded in 1990, manages approximately $600 million in equity investments as of March 31, 2015.
Shareholder services
Turner Funds shareholders receive annual and semiannual reports, quarterly account statements, and a quarterly newsletter. Shareholders who have questions about their accounts may call a toll-free telephone number, 1.800.224.6312, may visit our website, www.turnerinvestments.com, or may write to Turner Funds, P.O. Box 219805, Kansas City, Missouri 64121-9805.
TURNER FUNDS 2015 SEMIANNUAL REPORT 1
LETTER TO SHAREHOLDERS
To our shareholders
The fourth quarter of 2014 witnessed a resurgence of small-capitalization growth stocks with the Russell 2000 Growth Index leading the market higher coming into year-end (Russell 2000 Growth Index + 10.1% vs. S&P 500 Index 4.9% for the quarter.) With continuing concerns over slowing growth out of China, Europe, and Japan, accompanied by quantitative easing in those economies; a strengthening USD; and falling energy prices as the Northern Hemisphere experienced the winter months, the U.S. economy enjoyed a resurgence in economic growth. The unemployment rate continued to tick lower (5.6%) and the FOMC formally ended their quantitative easing program.
As we welcomed 2015, anticipated weakening global demand, combined with the strength of the USD, weighed on the profitability of many large-capitalization multi-national companies which derive a significant portion of their revenues from outside the U.S. As expected, smaller capitalization names were more richly rewarded by investors than the broad market indices (S&P 500 Index +1.0% for Q1 2015) and growth-oriented portfolios tended to outperform value portfolios. The Russell 2500 Growth Index returned 7.4% in the first quarter of 2015, leading U.S. domestic indices for the quarter.
The current investment background provides a robust environment for active stock selection strategies, particularly those emphasizing companies whose products are introducing transformative and/or disruptive innovation in sectors of the economy where growth prospects are rewarded. Specifically, we note that we have consistently witnessed this phenomenon over the years where we have identified long-term secular trends in sectors such as Technology, Consumer Discretionary and Healthcare. By no means is this idea of transformative and/or disruptive innovation limited to these "tech-rich" sectors of the economy. Indeed, there are many facets of the economy that can benefit from "new" technology, such as transportation and logistics industries, that are experiencing something of a renaissance as a result of the booming natural resources development domestically as well as strong consumer demand from online consumers with expectations of immediate fulfillment.
Merger activity remains alive and well as consolidation to build scale continues in some industries. Q1 saw the announcement of the Kraft-Heinz merger, Expedia's acquisition of Orbitz, Shire's acquisition of NPS Pharmaceuticals and NXP Semiconductor's acquisition of Freescale. Apple replaced AT&T in the Dow Jones Industrial Average and became the largest market capitalization company ever, exceeding $725 billion.
Looking ahead, as the global markets' trajectory remains fueled by the surge in liquidity from foreign monetary authority quantitative easing, Turner grows increasingly
more resolute in our commitment to the "pure growth" philosophy and discipline that have been hallmarks of our investment process since our founding twenty-five years ago this past March. We anticipate that continued, modest economic growth will be driven by innovation, as noted above, and that global monetary authorities will seek to manage their self-induced inflationary tendencies. Should the Fed be successful in draining excess liquidity from the markets, the USD will continue to strengthen, putting additional pressure on margins. Consequently, we expect to see a less homogenous equity market, with greater differentiation among stocks based on their ability to generate sustainable growth in earnings. Under the prevailing conditions, this should reward investors whose portfolios reflect their convictions and allow active portfolio management to lead to better than index returns over time.
We appreciate your investment in the Turner Funds and we look forward to continuing to serve you in the years ahead.
Sincerely,
Bob Turner
Chairman and Chief Investment Officer
Turner Investments
Past performance is no guarantee of future results. The views expressed are those of Turner Investments as of March 31, 2015, and are not intended as a forecast or investment recommendations. The indexes mentioned are not available for investment.
Bob Turner
2 TURNER FUNDS 2015 SEMIANNUAL REPORT
FINANCIAL STATEMENTS (Unaudited)
Schedule of investments
Turner Medical Sciences Long/Short Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—93.9%† | |||||||||||
Biotechnology—49.5% | |||||||||||
Aegerion Pharmaceuticals*^ | 31,010 | $ | 812 | ||||||||
AMAG Pharmaceuticals*^ | 42,220 | 2,308 | |||||||||
Amarin ADR*^ | 482,820 | 1,130 | |||||||||
ARIAD Pharmaceuticals* | 60,820 | 501 | |||||||||
Avalanche Biotechnologies* | 12,570 | 509 | |||||||||
Cancer Genetics* | 82,360 | 643 | |||||||||
Celladon* | 34,050 | 645 | |||||||||
Concert Pharmaceuticals*^ | 128,710 | 1,949 | |||||||||
CTI BioPharma* | 308,270 | 558 | |||||||||
Discovery Laboratories*^ (a) | 2,668,233 | 3,175 | |||||||||
Dynavax Technologies*^ | 35,144 | 788 | |||||||||
Emergent Biosolutions*^ | 59,710 | 1,717 | |||||||||
Heron Therapeutics*^ | 110,260 | 1,604 | |||||||||
Histogenics* (a) | 27,850 | 278 | |||||||||
Infinity Pharmaceuticals*^ | 55,830 | 781 | |||||||||
Intercept Pharmaceuticals*^ | 5,920 | 1,670 | |||||||||
Keryx Biopharmaceuticals*^ | 32,220 | 410 | |||||||||
NephroGenex* | 100,704 | 793 | |||||||||
Ohr Pharmaceutical* | 241,770 | 614 | |||||||||
Progenics Pharmaceuticals*^ | 293,110 | 1,753 | |||||||||
Prothena*^ | 165,290 | 6,304 | |||||||||
PTC Therapeutics*^ | 23,770 | 1,446 | |||||||||
Puma Biotechnology*^ | 4,035 | 953 | |||||||||
Retrophin*^ | 141,350 | 3,387 | |||||||||
Rigel Pharmaceuticals* | 195,110 | 697 | |||||||||
Trovagene* | 92,960 | 633 | |||||||||
Total Biotechnology | 36,058 | ||||||||||
Health care equipment & supplies—1.1% | |||||||||||
Unilife*^ | 193,888 | 777 | |||||||||
Total Health care equipment & supplies | 777 | ||||||||||
Pharmaceuticals—43.3% | |||||||||||
Actavis* | 3,350 | 997 | |||||||||
Alcobra*^ | 188,350 | 1,060 | |||||||||
Amphastar Pharmaceuticals*^ | 72,850 | 1,090 | |||||||||
Bristol-Myers Squibb^ | 15,000 | 968 | |||||||||
Cardiome Pharma*^ (a) | 252,863 | 2,342 | |||||||||
DepoMed*^ | 146,760 | 3,289 | |||||||||
Dermira*^ | 42,730 | 656 | |||||||||
Flamel Technologies SA ADR*^ | 130,865 | 2,353 | |||||||||
GlaxoSmithKline ADR | 20,860 | 963 | |||||||||
Horizon Pharma PLC*^ | 196,590 | 5,104 | |||||||||
Shares | Value (000) | ||||||||||
IGI Laboratories*^ | 500,442 | $ | 4,084 | ||||||||
Merck^ | 40,700 | 2,339 | |||||||||
Novartis AG ADR | 13,490 | 1,330 | |||||||||
Ocera Therapeutics*^ | 40,799 | 192 | |||||||||
Pfizer^ | 68,430 | 2,381 | |||||||||
Sagent Pharmaceuticals* | 25,220 | 586 | |||||||||
Sanofi ADR^ | 28,450 | 1,407 | |||||||||
SteadyMed* | 52,929 | 450 | |||||||||
Total Pharmaceuticals | 31,591 | ||||||||||
| Total Common stock (Cost $56,839)** | 68,426 | ||||||||||
Cash equivalent—5.4% | |||||||||||
| BlackRock Liquidity Funds TempCash Portfolio, Dollar Shares, 0.083%‡ | 4,014,997 | 4,015 | |||||||||
| Total Cash equivalent (Cost $4,015)** | 4,015 | ||||||||||
| Total Investments—99.3% (Cost $60,854)** | 72,441 | ||||||||||
Segregated cash with brokers—64.4% | 46,918 | ||||||||||
| Securities sold short—(66.1)% (Proceeds $(48,373))** | (48,200 | ) | |||||||||
Net Other assets (liabilities)—2.4% | 1,756 | ||||||||||
Net Assets—100.0% | $ | 72,915 | |||||||||
* Non-income producing security.
** This number is listed in thousands.
^ All or a portion of the shares have been committed as collateral for open short positions.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
‡ Rate shown is the 7-day effective yield as of March 31, 2015.
(a) These securities have been deemed illiquid by the Adviser and represent 6.58% of Net Assets.
ADR — American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 3
FINANCIAL STATEMENTS (Unaudited)
Schedule of securities sold short
Turner Medical Sciences Long/Short Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—36.0% | |||||||||||
Biotechnology—15.9% | |||||||||||
Acadia Pharmaceuticals | 12,660 | $ | 413 | ||||||||
Acorda Therapeutics | 31,270 | 1,041 | |||||||||
Agios Pharmaceuticals | 12,320 | 1,162 | |||||||||
Alnylam Pharmaceuticals | 6,630 | 692 | |||||||||
Bluebird Bio | 11,350 | 1,371 | |||||||||
Gilead Sciences | 10,540 | 1,034 | |||||||||
ImmunoGen | 104,540 | 936 | |||||||||
Juno Therapeutics | 17,070 | 1,035 | |||||||||
Kite Pharma | 25,920 | 1,494 | |||||||||
Ophthotech | 22,500 | 1,047 | |||||||||
Radius Health | 9,310 | 383 | |||||||||
United Therapeutics | 5,590 | 964 | |||||||||
Total Biotechnology | 11,572 | ||||||||||
Food & Staples Retailing—0.9% | |||||||||||
CVS Caremark | 6,590 | 680 | |||||||||
Total Food & Staples Retailing | 680 | ||||||||||
Health care equipment & supplies—3.8% | |||||||||||
Anika Therapeutics | 44,090 | 1,815 | |||||||||
Nevro | 19,900 | 954 | |||||||||
Total Health care equipment & supplies | 2,769 | ||||||||||
Health care providers & services—5.2% | |||||||||||
Aetna | 9,190 | 979 | |||||||||
DaVita | 16,110 | 1,310 | |||||||||
Humana | 4,490 | 799 | |||||||||
WellCare Health Plans | 8,070 | 738 | |||||||||
Total Health care providers & services | 3,826 | ||||||||||
Life sciences tools & services—5.9% | |||||||||||
BIO-Rad Laboratories, Cl A | 12,490 | 1,689 | |||||||||
Icon | 9,390 | 662 | |||||||||
Mettler-Toledo International | 3,930 | 1,292 | |||||||||
PAREXEL International | 9,600 | 662 | |||||||||
Total Life sciences tools & services | 4,305 | ||||||||||
Shares | Value (000) | ||||||||||
Pharmaceuticals—4.3% | |||||||||||
ANI Pharmaceuticals | 23,750 | $ | 1,486 | ||||||||
ENDO International PLC | 9,760 | 875 | |||||||||
Lannett | 11,270 | 763 | |||||||||
Total Pharmaceuticals | 3,124 | ||||||||||
| Total Common stock (Proceeds $26,494)* | 26,276 | ||||||||||
Exchange traded funds—30.1% | |||||||||||
| Health Care Select Sector SPDR Fund | 106,550 | 7,725 | |||||||||
| iShares NASDAQ Biotechnology ETF | 17,480 | 6,003 | |||||||||
iShares Russell 2000 Growth ETF | 65,910 | 8,196 | |||||||||
| Total Exchange traded funds (Proceeds $21,879)* | 21,924 | ||||||||||
| Total Securities sold short—66.1% (Proceeds $48,373)* | $ | 48,200 | |||||||||
Percentages disclosed are based on total net assets of the Fund at March 31, 2015.
* This number is listed in thousands.
Cl — Class
ETF — Exchange Traded Fund
SPDR — Standard & Poor's Depositary Receipt
The accompanying notes are an integral part of the financial statements.
4 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of investments
Turner Spectrum Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—93.9%† | |||||||||||
Consumer discretionary—16.8% | |||||||||||
Advance Auto Parts^ | 2,990 | $ | 448 | ||||||||
Amazon.com*^ | 670 | 249 | |||||||||
Ann*^ | 4,650 | 191 | |||||||||
Bloomin' Brands^ | 6,000 | 146 | |||||||||
BorgWarner^ | 4,940 | 299 | |||||||||
CBS, Cl B^ | 12,730 | 772 | |||||||||
Chipotle Mexican Grill*^ | 420 | 273 | |||||||||
Cinemark Holdings, Inc.^ | 3,480 | 157 | |||||||||
Dollar Tree*^ | 5,280 | 428 | |||||||||
General Motors^ | 10,580 | 397 | |||||||||
G-III Apparel Group*^ | 1,610 | 181 | |||||||||
Hanesbrands | 7,000 | 235 | |||||||||
Harley-Davidson^ | 4,990 | 303 | |||||||||
Harman International Industries^ | 1,910 | 255 | |||||||||
Hasbro | 3,000 | 190 | |||||||||
Hilton Worldwide Holdings*^ | 3,340 | 99 | |||||||||
Home Depot^ | 2,420 | 275 | |||||||||
JD.com ADR*^ | 9,000 | 264 | |||||||||
La Quinta Holdings*^ | 11,000 | 260 | |||||||||
MDC Partners^ | 8,000 | 227 | |||||||||
MGM Resorts International*^ | 10,000 | 210 | |||||||||
Mohawk Industries*^ | 1,210 | 225 | |||||||||
Monro Muffler Brake^ | 3,530 | 230 | |||||||||
Nike, Cl B^ | 1,500 | 150 | |||||||||
O'Reilly Automotive*^ | 1,060 | 229 | |||||||||
Oxford Industries | 2,460 | 186 | |||||||||
Signet Jewelers | 1,510 | 210 | |||||||||
Skechers U.S.A., Cl A*^ | 2,000 | 144 | |||||||||
Tractor Supply^ | 3,000 | 255 | |||||||||
Under Armour, Cl A*^ | 3,000 | 242 | |||||||||
Walt Disney^ | 1,240 | 130 | |||||||||
Zoe's Kitchen*^ | 5,400 | 180 | |||||||||
Total Consumer discretionary | 8,040 | ||||||||||
Consumer staples—3.8% | |||||||||||
Constellation Brands, Cl A*^ | 1,750 | 203 | |||||||||
Monster Beverage*^ | 2,720 | 376 | |||||||||
PepsiCo^ | 1,250 | 120 | |||||||||
Rite Aid*^ | 55,170 | 479 | |||||||||
Sprouts Farmers Market* | 8,730 | 308 | |||||||||
WhiteWave Foods, Cl A*^ | 7,410 | 329 | |||||||||
Total Consumer staples | 1,815 | ||||||||||
Shares | Value (000) | ||||||||||
Energy—1.6% | |||||||||||
Concho Resources* | 1,380 | $ | 160 | ||||||||
Independence Contract Drilling*^ | 34,385 | 240 | |||||||||
Range Resources^ | 4,440 | 231 | |||||||||
Whiting Petroleum* | 4,990 | 154 | |||||||||
Total Energy | 785 | ||||||||||
Financials—11.9% | |||||||||||
Ameris Bancorp^ | 9,310 | 246 | |||||||||
Bank of the Ozarks^ | 12,768 | 472 | |||||||||
BlackRock^ | 810 | 296 | |||||||||
Boston Private Financial Holdings | 8,710 | 106 | |||||||||
CME Group^ | 2,030 | 192 | |||||||||
East West Bancorp^ | 3,180 | 129 | |||||||||
Essent Group*^ | 11,410 | 273 | |||||||||
Hanmi Financial^ | 14,200 | 300 | |||||||||
Invesco^ | 9,590 | 381 | |||||||||
Janus Capital Group^ | 12,830 | 221 | |||||||||
Moelis, Cl A^ | 7,900 | 238 | |||||||||
Moody's^ | 4,970 | 516 | |||||||||
PrivateBancorp^ | 10,130 | 356 | |||||||||
Signature Bank*^ | 4,270 | 553 | |||||||||
Simon Property Group^ | 1,690 | 331 | |||||||||
Square 1 Financial, Cl A*^ | 13,660 | 366 | |||||||||
TD Ameritrade Holdings^ | 19,060 | 709 | |||||||||
Total Financials | 5,685 | ||||||||||
Health care—30.4% | |||||||||||
Actavis*^ | 1,480 | 440 | |||||||||
Aegerion Pharmaceuticals*^ | 6,320 | 165 | |||||||||
Alcobra*^ | 38,400 | 216 | |||||||||
AMAG Pharmaceuticals*^ | 8,610 | 471 | |||||||||
Amarin ADR*^ | 98,420 | 230 | |||||||||
Amphastar Pharmaceuticals*^ | 14,850 | 222 | |||||||||
ARIAD Pharmaceuticals* | 12,400 | 102 | |||||||||
Avalanche Biotechnologies* | 2,560 | 104 | |||||||||
Bristol-Myers Squibb^ | 3,060 | 197 | |||||||||
Cancer Genetics* | 15,570 | 122 | |||||||||
Cardiome Pharma*^ | 42,491 | 393 | |||||||||
Celladon* | 5,690 | 108 | |||||||||
Concert Pharmaceuticals*^ | 21,445 | 325 | |||||||||
CTI BioPharma* | 62,830 | 114 | |||||||||
DepoMed*^ | 29,917 | 670 | |||||||||
Dermira*^ | 8,710 | 134 | |||||||||
Discovery Laboratories*^ | 493,996 | 588 | |||||||||
TURNER FUNDS 2015 SEMIANNUAL REPORT 5
FINANCIAL STATEMENTS (Unaudited)
Schedule of investments
Turner Spectrum Fund
Shares | Value (000) | ||||||||||
Dynavax Technologies*^ | 7,160 | $ | 161 | ||||||||
Emergent Biosolutions*^ | 12,170 | 350 | |||||||||
Flamel Technologies SA ADR*^ | 26,679 | 480 | |||||||||
GlaxoSmithKline ADR | 3,670 | 169 | |||||||||
Heron Therapeutics*^ | 22,480 | 327 | |||||||||
Histogenics* | 5,680 | 57 | |||||||||
Horizon Pharma PLC*^ | 40,080 | 1,041 | |||||||||
IGI Laboratories*^ | 87,330 | 713 | |||||||||
Infinity Pharmaceuticals*^ | 11,380 | 159 | |||||||||
Intercept Pharmaceuticals*^ | 1,210 | 341 | |||||||||
Keryx Biopharmaceuticals* | 6,570 | 84 | |||||||||
McKesson^ | 1,280 | 290 | |||||||||
Medtronic PLC^ | 3,620 | 282 | |||||||||
Merck^ | 7,000 | 402 | |||||||||
NephroGenex*^ | 18,000 | 142 | |||||||||
Novartis AG ADR | 2,320 | 229 | |||||||||
Ocera Therapeutics* | 8,321 | 39 | |||||||||
Ohr Pharmaceutical* | 40,280 | 102 | |||||||||
Pfizer^ | 15,440 | 537 | |||||||||
Progenics Pharmaceuticals*^ | 59,750 | 357 | |||||||||
Prothena*^ | 33,690 | 1,285 | |||||||||
PTC Therapeutics*^ | 4,490 | 273 | |||||||||
Puma Biotechnology*^ | 820 | 194 | |||||||||
Retrophin*^ | 28,630 | 686 | |||||||||
Rigel Pharmaceuticals*^ | 39,770 | 142 | |||||||||
Sagent Pharmaceuticals*^ | 5,140 | 120 | |||||||||
Sanofi ADR | 4,760 | 235 | |||||||||
SteadyMed* | 9,460 | 80 | |||||||||
Thermo Fisher Scientific | 1,430 | 192 | |||||||||
Trovagene*^ | 18,950 | 129 | |||||||||
Unilife*^ | 39,526 | 158 | |||||||||
UnitedHealth Group, Cl B | 1,040 | 123 | |||||||||
Total Health care | 14,480 | ||||||||||
Industrials—9.9% | |||||||||||
AMETEK^ | 4,270 | 224 | |||||||||
Canadian Pacific Railway^ | 2,420 | 442 | |||||||||
Danaher Corp. | 1,420 | 121 | |||||||||
FedEx^ | 1,150 | 190 | |||||||||
Greenbrier^ | 4,630 | 269 | |||||||||
Honeywell International^ | 2,640 | 275 | |||||||||
Hub Group, Cl A*^ | 7,360 | 289 | |||||||||
Ingersoll-Rand^ | 1,810 | 123 | |||||||||
Kansas City Southern | 2,280 | 233 | |||||||||
Louis XIII Holdings* | 600,000 | 225 | |||||||||
Shares | Value (000) | ||||||||||
NN^ | 16,100 | $ | 404 | ||||||||
Ryder System^ | 4,130 | 392 | |||||||||
Spirit Airlines*^ | 7,100 | 550 | |||||||||
Swift Transportation*^ | 20,060 | 522 | |||||||||
TASER International*^ | 4,000 | 96 | |||||||||
United Rentals*^ | 2,230 | 203 | |||||||||
XPO Logistics* | 4,170 | 190 | |||||||||
Total Industrials | 4,748 | ||||||||||
Information technology—13.4% | |||||||||||
Actua*^ | 15,000 | 232 | |||||||||
Alliance Data Systems*^ | 1,280 | 379 | |||||||||
Apple^ | 2,290 | 285 | |||||||||
Applied Materials^ | 4,870 | 110 | |||||||||
Avago Technologies^ | 1,150 | 146 | |||||||||
Benefitfocus* | 2,200 | 81 | |||||||||
Cisco Systems^ | 6,110 | 168 | |||||||||
Criteo SA ADR*^ | 5,000 | 198 | |||||||||
Digimarc^ | 42,000 | 923 | |||||||||
Equinix^ | 620 | 144 | |||||||||
Facebook, Cl A*^ | 8,980 | 738 | |||||||||
Fortinet* | 2,200 | 77 | |||||||||
LinkedIn, Cl A*^ | 750 | 187 | |||||||||
Mobileye NV*^ | 17,160 | 721 | |||||||||
NXP Semiconductors*^ | 1,430 | 144 | |||||||||
Remark Media*^ (a) | 90,000 | 386 | |||||||||
Salesforce.com*^ | 3,040 | 203 | |||||||||
Texas Instruments^ | 5,110 | 292 | |||||||||
Visa, Cl A^ | 8,640 | 565 | |||||||||
WEX*^ | 3,830 | 411 | |||||||||
Total Information technology | 6,390 | ||||||||||
Materials—6.1% | |||||||||||
A. Schulman | 2,880 | 139 | |||||||||
Agnico Eagle Mines^ | 17,380 | 486 | |||||||||
Clearwater Paper Corp.*^ | 4,420 | 289 | |||||||||
Huntsman^ | 25,910 | 574 | |||||||||
Lyondellbasell Industries, Cl A | 850 | 75 | |||||||||
Methanex^ | 3,710 | 199 | |||||||||
Packaging Corp. of America^ | 4,370 | 342 | |||||||||
PolyOne | 2,610 | 97 | |||||||||
Potash Corp. of Saskatchewan^ | 18,060 | 582 | |||||||||
6 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of investments
Turner Spectrum Fund
Shares | Value (000) | ||||||||||
Senomyx*^ | 30,000 | $ | 132 | ||||||||
Total Materials | 2,915 | ||||||||||
| Total Common stock (Cost $39,079)** | 44,858 | ||||||||||
Warrant—0.5% | |||||||||||
Financials—0.5% | |||||||||||
Atlas Mara Co-Nvest* (a) | 472,160 | 236 | |||||||||
Total Financials | 236 | ||||||||||
| Total Warrant (Cost $92)** | 236 | ||||||||||
| Total Investments—94.4% (Cost $39,171)** | 45,094 | ||||||||||
Segregated cash with brokers—37.4% | 17,863 | ||||||||||
| Securities sold short—(60.3)% (Proceeds $(28,702))** | (28,805 | ) | |||||||||
Net Other assets (liabilities)—28.5% | 13,629 | ||||||||||
Net Assets—100.0% | $ | 47,781 | |||||||||
* Non-income producing security.
** This number is listed in thousands.
^ All or a portion of the shares have been committed as collateral for open short positions.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
(a) These securities have been deemed illiquid by the Adviser and represent 1.30% of Net Assets.
ADR — American Depositary Receipt
Cl — Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 7
FINANCIAL STATEMENTS (Unaudited)
Schedule of securities sold short
Turner Spectrum Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—42.5% | |||||||||||
Consumer discretionary—8.7% | |||||||||||
Autoliv | 4,240 | $ | 499 | ||||||||
AutoZone | 940 | 641 | |||||||||
Bed Bath & Beyond | 1,300 | 100 | |||||||||
Buffalo Wild Wings | 850 | 154 | |||||||||
CarMax | 5,510 | 380 | |||||||||
Discovery Communications, Cl A | 3,600 | 111 | |||||||||
Ford Motor | 28,540 | 461 | |||||||||
Group 1 Automotive, Inc. | 3,050 | 263 | |||||||||
KB Home | 17,700 | 276 | |||||||||
Macy's | 2,740 | 178 | |||||||||
Mattel | 7,430 | 170 | |||||||||
Swatch Group AG, Bearer Shares | 431 | 183 | |||||||||
Tumi Holdings | 15,660 | 383 | |||||||||
Yum! Brands | 4,250 | 335 | |||||||||
Total Consumer discretionary | 4,134 | ||||||||||
Consumer staples—1.7% | |||||||||||
Costco Wholesale | 1,210 | 183 | |||||||||
CVS Caremark | 1,340 | 138 | |||||||||
Hain Celestial Group | 1,510 | 97 | |||||||||
Procter & Gamble | 1,480 | 121 | |||||||||
Wal-Mart Stores | 3,170 | 261 | |||||||||
Total Consumer staples | 800 | ||||||||||
Energy—1.0% | |||||||||||
Continental Resources | 1,790 | 78 | |||||||||
Schlumberger | 4,850 | 405 | |||||||||
Total Energy | 483 | ||||||||||
Financials—5.8% | |||||||||||
Artisan Partners Asset Management | 4,220 | 192 | |||||||||
Camden Property Trust | 4,450 | 348 | |||||||||
Comerica | 2,250 | 102 | |||||||||
Commerce Bancshares, Inc. | 4,350 | 184 | |||||||||
Franklin Resources | 9,550 | 489 | |||||||||
Host Hotels & Resorts | 2,260 | 46 | |||||||||
Prudential Financial, Inc. | 1,450 | 116 | |||||||||
Realogy Holdings | 4,370 | 199 | |||||||||
Royal Bank of Canada | 6,340 | 382 | |||||||||
State Street | 1,310 | 96 | |||||||||
T. Rowe Price Group | 1,550 | 126 | |||||||||
Unum Group | 7,870 | 265 | |||||||||
Shares | Value (000) | ||||||||||
| Waddell & Reed Financial, Inc., Cl A | 4,760 | $ | 236 | ||||||||
Total Financials | 2,781 | ||||||||||
Health care—10.6% | |||||||||||
Acadia Pharmaceuticals | 2,580 | 84 | |||||||||
Acorda Therapeutics | 6,370 | 212 | |||||||||
Aetna | 1,620 | 173 | |||||||||
Agios Pharmaceuticals | 2,510 | 237 | |||||||||
Alnylam Pharmaceuticals | 1,350 | 141 | |||||||||
ANI Pharmaceuticals | 4,840 | 302 | |||||||||
Anika Therapeutics | 8,990 | 369 | |||||||||
Baxter International | 810 | 55 | |||||||||
BIO-Rad Laboratories, Cl A | 2,180 | 295 | |||||||||
Bluebird Bio | 1,900 | 229 | |||||||||
DaVita | 2,880 | 234 | |||||||||
ENDO International PLC | 1,780 | 160 | |||||||||
Express Scripts Holdings | 1,300 | 113 | |||||||||
Gilead Sciences | 1,760 | 173 | |||||||||
Humana | 920 | 164 | |||||||||
Icon | 1,650 | 116 | |||||||||
ImmunoGen | 21,310 | 191 | |||||||||
Johnson & Johnson | 630 | 63 | |||||||||
Juno Therapeutics | 2,850 | 173 | |||||||||
Kite Pharma | 5,280 | 304 | |||||||||
Lannett | 2,050 | 139 | |||||||||
Mettler-Toledo International | 720 | 237 | |||||||||
Nevro | 4,060 | 195 | |||||||||
Ophthotech | 4,590 | 214 | |||||||||
PAREXEL International | 1,690 | 117 | |||||||||
Radius Health | 1,900 | 78 | |||||||||
United Therapeutics | 1,000 | 172 | |||||||||
WellCare Health Plans | 1,650 | 151 | |||||||||
Total Health care | 5,091 | ||||||||||
Industrials—8.4% | |||||||||||
| 3M | 1,930 | 318 | |||||||||
Beacon Roofing Supply | 4,650 | 146 | |||||||||
C.H. Robinson Worldwide | 5,530 | 405 | |||||||||
| CNH Industrial NV | 30,150 | 246 | |||||||||
Deere | 8,960 | 786 | |||||||||
Hunt (JB) Transportation Services | 3,370 | 288 | |||||||||
Norfolk Southern | 3,890 | 400 | |||||||||
Owens Corning | 10,730 | 466 | |||||||||
Parker Hannifin | 590 | 70 | |||||||||
8 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of securities sold short
Turner Spectrum Fund
Shares | Value (000) | ||||||||||
Pentair PLC | 1,560 | $ | 98 | ||||||||
Rockwell Automation | 3,570 | 414 | |||||||||
Stericycle | 710 | 100 | |||||||||
Titan Machinery | 20,241 | 270 | |||||||||
Total Industrials | 4,007 | ||||||||||
Information technology—4.3% | |||||||||||
| ASML Holding NV | 530 | 54 | |||||||||
Cimpress NV | 2,520 | 213 | |||||||||
Citrix Systems | 1,240 | 79 | |||||||||
eBay | 1,250 | 72 | |||||||||
EMC | 2,720 | 70 | |||||||||
| Fairchild Semiconductor International | 5,750 | 105 | |||||||||
KLA-Tencor | 1,860 | 108 | |||||||||
Micron Technology, Inc. | 4,530 | 123 | |||||||||
Microsoft | 4,720 | 192 | |||||||||
Tech Data | 1,290 | 75 | |||||||||
Trimble Navigation | 18,990 | 478 | |||||||||
1,010 | 51 | ||||||||||
Western Union | 17,750 | 368 | |||||||||
Yelp | 1,100 | 52 | |||||||||
Total Information technology | 2,040 | ||||||||||
Materials—2.0% | |||||||||||
Agrium | 1,340 | 140 | |||||||||
Airgas | 2,410 | 256 | |||||||||
Cia de Minas Buenaventura SA ADR | 9,980 | 101 | |||||||||
FMC | 760 | 44 | |||||||||
Monsanto | 850 | 96 | |||||||||
Newmont Mining | 15,130 | 327 | |||||||||
Total Materials | 964 | ||||||||||
| Total Common stock (Proceeds $20,077)* | 20,300 | ||||||||||
Exchange traded funds—17.8% | |||||||||||
| Consumer Staples Select Sector SPDR Fund | 4,940 | 241 | |||||||||
Energy Select Sector SPDR Fund | 7,180 | 557 | |||||||||
| Health Care Select Sector SPDR Fund | 18,330 | 1,329 | |||||||||
| iShares NASDAQ Biotechnology ETF | 3,160 | 1,085 | |||||||||
iShares Russell 2000 Growth ETF | 1,200 | 182 | |||||||||
Shares | Value (000) | ||||||||||
iShares Russell 2000 Growth ETF | 11,340 | $ | 1,410 | ||||||||
iShares U.S. Financials ETF | 5,290 | 471 | |||||||||
Market Vectors Oil Service ETF | 14,730 | 497 | |||||||||
SPDR S&P 500 ETF Trust | 3,600 | 743 | |||||||||
SPDR S&P MidCap 400 ETF Trust | 900 | 250 | |||||||||
| SPDR S&P Oil & Gas Exploration & Production ETF | 4,850 | 251 | |||||||||
Teucrium Corn Fund ETF | 15,092 | 373 | |||||||||
| Vanguard Consumer Discretionary ETF | 2,310 | 283 | |||||||||
Vanguard S&P 500 ETF | 1,940 | 367 | |||||||||
Vanguard Small-Cap Growth ETF | 2,020 | 266 | |||||||||
| VelocityShares Daily Inverse VIX Short-Term ETN | 5,780 | 200 | |||||||||
| Total Exchange traded funds (Proceeds $8,625)* | 8,505 | ||||||||||
| Total Securities sold short—60.3% (Proceeds $28,702)* | $ | 28,805 | |||||||||
Percentages disclosed are based on total net assets of the Fund at March 31, 2015.
* This number is listed in thousands.
ADR — American Depositary Receipt
Cl — Class
ETF — Exchange Traded Fund
ETN — Exchange Traded Note
SPDR — Standard & Poor's Depositary Receipt
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 9
FINANCIAL STATEMENTS (Unaudited)
Schedule of investments
Turner Titan Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—80.7%† | |||||||||||
Consumer discretionary—13.9% | |||||||||||
Amazon.com* | 810 | $ | 301 | ||||||||
Bloomin' Brands | 7,100 | 173 | |||||||||
CBS, Cl B | 5,820 | 353 | |||||||||
Cinemark Holdings | 4,220 | 190 | |||||||||
Dollar Tree* | 2,180 | 177 | |||||||||
Hilton Worldwide Holdings*^ | 4,090 | 121 | |||||||||
Nike, Cl B | 1,840 | 185 | |||||||||
Walt Disney | 1,460 | 153 | |||||||||
Total Consumer discretionary | 1,653 | ||||||||||
Consumer staples—8.9% | |||||||||||
Constellation Brands, Cl A* | 2,190 | 254 | |||||||||
Monster Beverage*^ | 850 | 118 | |||||||||
PepsiCo | 1,550 | 148 | |||||||||
Rite Aid* | 30,500 | 266 | |||||||||
Sprouts Farmers Market* | 4,200 | 148 | |||||||||
WhiteWave Foods, Cl A* | 2,800 | 124 | |||||||||
Total Consumer staples | 1,058 | ||||||||||
Energy—2.7% | |||||||||||
Concho Resources* | 1,690 | 196 | |||||||||
Range Resources | 2,510 | 131 | |||||||||
Total Energy | 327 | ||||||||||
Financials—8.4% | |||||||||||
BlackRock | 1,010 | 370 | |||||||||
CME Group | 2,510 | 238 | |||||||||
East West Bancorp | 3,760 | 152 | |||||||||
TD Ameritrade Holdings^ | 6,580 | 245 | |||||||||
Total Financials | 1,005 | ||||||||||
Health care—13.2% | |||||||||||
Actavis* | 1,110 | 330 | |||||||||
McKesson^ | 1,570 | 355 | |||||||||
Medtronic PLC | 4,440 | 346 | |||||||||
Pfizer | 4,420 | 154 | |||||||||
Thermo Fisher Scientific | 1,770 | 238 | |||||||||
UnitedHealth Group, Cl B | 1,240 | 147 | |||||||||
Total Health care | 1,570 | ||||||||||
Shares | Value (000) | ||||||||||
Industrials—6.6% | |||||||||||
Canadian Pacific Railway | 800 | $ | 146 | ||||||||
Danaher Corp. | 1,740 | 148 | |||||||||
Honeywell International | 3,240 | 338 | |||||||||
Ingersoll-Rand^ | 2,210 | 150 | |||||||||
Total Industrials | 782 | ||||||||||
Information technology—25.2% | |||||||||||
Apple^ | 2,840 | 353 | |||||||||
Applied Materials | 6,040 | 136 | |||||||||
Avago Technologies | 1,400 | 178 | |||||||||
Benefitfocus* | 2,700 | 99 | |||||||||
Cisco Systems | 7,570 | 208 | |||||||||
Equinix | 780 | 182 | |||||||||
Facebook, Cl A*^ | 4,840 | 398 | |||||||||
Fortinet* | 2,700 | 94 | |||||||||
LinkedIn, Cl A*^ | 920 | 230 | |||||||||
Mobileye NV* | 2,100 | 88 | |||||||||
NXP Semiconductors* | 1,740 | 175 | |||||||||
Salesforce.com*^ | 3,770 | 252 | |||||||||
Texas Instruments | 6,210 | 355 | |||||||||
Visa, Cl A | 4,080 | 267 | |||||||||
Total Information technology | 3,015 | ||||||||||
Materials—1.8% | |||||||||||
Lyondellbasell Industries, Cl A | 1,040 | 91 | |||||||||
Potash Corp. of Saskatchewan | 3,690 | 119 | |||||||||
Total Materials | 210 | ||||||||||
| Total Common stock (Cost $8,577)** | 9,620 | ||||||||||
10 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of investments
Turner Titan Fund
Shares | Value (000) | ||||||||||
Cash equivalent—18.9% | |||||||||||
| BlackRock Liquidity Funds TempCash Portfolio, Dollar Shares, 0.083%‡ | 2,255,827 | $ | 2,256 | ||||||||
| Total Cash equivalent (Cost $2,256)** | 2,256 | ||||||||||
| Total Investments—99.6% (Cost $10,833)** | 11,876 | ||||||||||
Segregated cash with brokers—45.4% | 5,416 | ||||||||||
| Securities sold short—(45.5)% (Proceeds $(5,452))** | (5,431 | ) | |||||||||
Net Other assets (liabilities)—0.5% | 63 | ||||||||||
Net Assets—100.0% | $ | 11,924 | |||||||||
* Non-income producing security.
** This number is listed in thousands.
^ All or a portion of the shares have been committed as collateral for open short positions.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
‡ Rate shown is the 7-day effective yield as of March 31, 2015.
Cl — Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 11
FINANCIAL STATEMENTS (Unaudited)
Schedule of securities sold short
Turner Titan Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—35.4% | |||||||||||
Consumer discretionary—4.6% | |||||||||||
Bed Bath & Beyond | 1,590 | $ | 122 | ||||||||
Discovery Communications, Cl A | 4,440 | 137 | |||||||||
Tumi Holdings | 5,710 | 140 | |||||||||
Yum! Brands | 1,930 | 151 | |||||||||
Total Consumer discretionary | 550 | ||||||||||
Consumer staples—1.0% | |||||||||||
Hain Celestial Group | 1,850 | 118 | |||||||||
Total Consumer staples | 118 | ||||||||||
Energy—2.4% | |||||||||||
Continental Resources | 2,180 | 95 | |||||||||
Schlumberger | 2,270 | 190 | |||||||||
Total Energy | 285 | ||||||||||
Financials—5.8% | |||||||||||
Comerica | 2,660 | 120 | |||||||||
Franklin Resources | 1,920 | 99 | |||||||||
Host Hotels & Resorts | 2,800 | 57 | |||||||||
Prudential Financial | 1,750 | 140 | |||||||||
State Street | 1,590 | 117 | |||||||||
T. Rowe Price Group | 1,900 | 153 | |||||||||
Total Financials | 686 | ||||||||||
Health care—2.4% | |||||||||||
Baxter International | 930 | 64 | |||||||||
Express Scripts Holdings | 1,610 | 140 | |||||||||
Johnson & Johnson | 770 | 77 | |||||||||
Total Health care | 281 | ||||||||||
Industrials—7.0% | |||||||||||
C.H. Robinson Worldwide | 1,610 | 118 | |||||||||
Norfolk Southern | 1,440 | 148 | |||||||||
Parker Hannifin | 720 | 86 | |||||||||
Pentair PLC | 1,840 | 116 | |||||||||
Rockwell Automation | 2,110 | 244 | |||||||||
Stericycle | 870 | 122 | |||||||||
Total Industrials | 834 | ||||||||||
Information technology—10.8% | |||||||||||
| ASML Holding NV | 660 | 67 | |||||||||
Citrix Systems | 1,440 | 92 | |||||||||
eBay | 1,530 | 88 | |||||||||
Shares | Value (000) | ||||||||||
EMC | 3,220 | $ | 82 | ||||||||
| Fairchild Semiconductor International | 7,100 | 129 | |||||||||
KLA-Tencor | 2,300 | 134 | |||||||||
Micron Technology | 5,610 | 153 | |||||||||
Microsoft | 5,840 | 238 | |||||||||
Tech Data | 1,570 | 91 | |||||||||
1,240 | 62 | ||||||||||
Western Union | 4,600 | 96 | |||||||||
Yelp | 1,340 | 63 | |||||||||
Total Information technology | 1,295 | ||||||||||
Materials—1.4% | |||||||||||
FMC | 940 | 54 | |||||||||
Monsanto | 1,050 | 118 | |||||||||
Total Materials | 172 | ||||||||||
| Total Common stock (Proceeds $4,244)* | 4,221 | ||||||||||
Exchange traded funds—10.1% | |||||||||||
SPDR S&P 500 ETF Trust | 4,400 | 908 | |||||||||
SPDR S&P MidCap 400 ETF Trust | 1,090 | 302 | |||||||||
| Total Exchange traded funds (Proceeds $1,208)* | 1,210 | ||||||||||
| Total Securities sold short—45.5% (Proceeds $5,452)* | $ | 5,431 | |||||||||
Percentages disclosed are based on total net assets of the Fund at March 31, 2015.
* This number is listed in thousands.
Cl — Class
ETF — Exchange Traded Fund
SPDR — Standard & Poor's Depositary Receipt
The accompanying notes are an integral part of the financial statements.
12 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of investments
Turner Emerging Growth Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—96.8%† | |||||||||||
Consumer discretionary—13.8% | |||||||||||
Black Diamond*^ | 29,390 | $ | 278 | ||||||||
Boot Barn Holdings* | 68,580 | 1,640 | |||||||||
Carmike Cinemas* | 63,680 | 2,140 | |||||||||
Kona Grill* | 85,000 | 2,415 | |||||||||
LGI Homes*^ | 34,290 | 571 | |||||||||
Lithia Motors, Cl A | 11,760 | 1,169 | |||||||||
Rentrak*^ | 20,000 | 1,111 | |||||||||
The Habit Restaurants, Cl A*^ | 56,960 | 1,831 | |||||||||
The New Home* | 24,490 | 391 | |||||||||
Zoe's Kitchen*^ | 68,580 | 2,283 | |||||||||
Total Consumer discretionary | 13,829 | ||||||||||
Consumer staples—2.9% | |||||||||||
Boston Beer, Cl A* | 3,260 | 872 | |||||||||
Boulder Brands* | 63,340 | 604 | |||||||||
Smart & Final Stores* | 78,370 | 1,379 | |||||||||
Total Consumer staples | 2,855 | ||||||||||
Energy—2.5% | |||||||||||
Callon Petroleum* | 58,780 | 439 | |||||||||
Diamondback Energy* | 7,500 | 576 | |||||||||
Independence Contract Drilling* | 83,270 | 580 | |||||||||
Panhandle Oil & Gas, Cl A | 20,400 | 404 | |||||||||
PDC Energy* | 8,820 | 477 | |||||||||
Total Energy | 2,476 | ||||||||||
Financials—6.7% | |||||||||||
Banc of California | 117,560 | 1,447 | |||||||||
Bryn Mawr Bank | 53,880 | 1,638 | |||||||||
Hanmi Financial | 59,580 | 1,260 | |||||||||
Square 1 Financial, Cl A* | 88,170 | 2,361 | |||||||||
Total Financials | 6,706 | ||||||||||
Health care—31.0% | |||||||||||
Acadia Healthcare*^ | 10,780 | 772 | |||||||||
Akorn* | 20,000 | 950 | |||||||||
AMAG Pharmaceuticals* | 15,000 | 820 | |||||||||
Anacor Pharmaceuticals* | 15,000 | 868 | |||||||||
Atricure*^ | 78,370 | 1,606 | |||||||||
Avalanche Biotechnologies* | 14,690 | 595 | |||||||||
| Biodelivery Sciences International*^ | 75,000 | 788 | |||||||||
Biotelemetry* | 79,980 | 708 | |||||||||
Shares | Value (000) | ||||||||||
Cardiovascular Systems*^ | 35,000 | $ | 1,366 | ||||||||
DepoMed* | 63,680 | 1,427 | |||||||||
Discovery Laboratories* | 367,030 | 437 | |||||||||
Fluidigm*^ | 24,490 | 1,031 | |||||||||
HealthEquity*^ | 68,580 | 1,714 | |||||||||
Horizon Pharma PLC* | 73,470 | 1,908 | |||||||||
IGI Laboratories*^ | 97,960 | 799 | |||||||||
Inogen* | 19,590 | 627 | |||||||||
Intersect ENT*^ | 71,510 | 1,847 | |||||||||
LDR Holding*^ | 65,000 | 2,382 | |||||||||
NanoString Technologies*^ | 85,000 | 866 | |||||||||
Natus Medical* | 42,120 | 1,662 | |||||||||
Prothena* | 24,490 | 934 | |||||||||
PTC Therapeutics* | 18,000 | 1,095 | |||||||||
Receptos* | 17,000 | 2,804 | |||||||||
Repligen* | 48,980 | 1,487 | |||||||||
Ultragenyx Pharmaceutical* | 10,000 | 621 | |||||||||
Vascular Solutions* | 29,390 | 891 | |||||||||
Total Health care | 31,005 | ||||||||||
Industrials—7.8% | |||||||||||
Astronics* | 22,530 | 1,661 | |||||||||
Covenant Transport Group, Cl A* | 42,120 | 1,397 | |||||||||
Echo Global Logistics*^ | 35,000 | 954 | |||||||||
Multi-Color | 19,590 | 1,358 | |||||||||
PGT* | 68,580 | 766 | |||||||||
TASER International*^ | 44,080 | 1,063 | |||||||||
WageWorks*^ | 12,190 | 650 | |||||||||
Total Industrials | 7,849 | ||||||||||
Information technology—29.0% | |||||||||||
Actua* | 122,460 | 1,897 | |||||||||
Ambarella*^ | 40,000 | 3,026 | |||||||||
BroadSoft* | 30,000 | 1,004 | |||||||||
Callidus Software* | 90,000 | 1,141 | |||||||||
Canadian Solar* | 24,490 | 818 | |||||||||
Criteo SA ADR* | 48,980 | 1,935 | |||||||||
Demandware*^ | 17,630 | 1,074 | |||||||||
Digimarc^ | 58,000 | 1,273 | |||||||||
FARO Technologies*^ | 22,530 | 1,400 | |||||||||
Fleetmatics Group PLC*^ | 24,000 | 1,076 | |||||||||
Immersion* | 68,580 | 630 | |||||||||
Inphi* | 88,170 | 1,572 | |||||||||
Manhattan Associates* | 21,550 | 1,091 | |||||||||
Monolithic Power Systems | 39,190 | 2,063 | |||||||||
TURNER FUNDS 2015 SEMIANNUAL REPORT 13
FINANCIAL STATEMENTS (Unaudited)
Schedule of investments
Turner Emerging Growth Fund
Shares | Value (000) | ||||||||||
Pixelworks*^ | 160,000 | $ | 803 | ||||||||
Proofpoint* | 44,080 | 2,610 | |||||||||
SPS Commerce* | 14,690 | 986 | |||||||||
Textura*^ | 34,290 | 932 | |||||||||
The Rubicon Project* | 137,150 | 2,458 | |||||||||
TubeMogul*^ | 53,520 | 740 | |||||||||
Workiva*^ | 34,330 | 494 | |||||||||
Total Information technology | 29,023 | ||||||||||
Materials—2.0% | |||||||||||
Headwaters* | 48,980 | 899 | |||||||||
KapStone Paper & Packaging | 19,590 | 643 | |||||||||
Senomyx*^ | 108,680 | 479 | |||||||||
Total Materials | 2,021 | ||||||||||
Telecommunication services—1.1% | |||||||||||
inContact* | 97,960 | 1,068 | |||||||||
Total Telecommunication services | 1,068 | ||||||||||
| Total Common stock (Cost $73,825)** | 96,832 | ||||||||||
Cash equivalent — 28.6% | |||||||||||
| BlackRock Liquidity Funds TempCash Portfolio, Dollar Shares, 0.083%‡ (1) | 28,597,054 | 28,597 | |||||||||
| Total Cash equivalent (Cost $28,597)** | 28,597 | ||||||||||
| Total Investments—125.4% (Cost $102,422)** | 125,429 | ||||||||||
Net Other assets (liabilities)—(25.4)% | (25,400 | ) | |||||||||
Net Assets—100.0% | $ | 100,029 | |||||||||
* Non-income producing security.
** This number is listed in thousands.
(1) A portion of the Fund's position in this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2015 was $25,835**.
^ Security fully or partially on loan at March 31, 2015. The total value of securities on loan at March 31, 2015 was $23,173**. Certain of these securities may have been sold prior to period end.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
‡ Rate shown is the 7-day effective yield as of March 31, 2015.
ADR — American Depositary Receipt
Cl — Class
The accompanying notes are an integral part of the financial statements.
14 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of investments
Turner Midcap Growth Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—97.4%† | |||||||||||
Consumer discretionary—15.8% | |||||||||||
Advance Auto Parts | 34,360 | $ | 5,143 | ||||||||
Bloomin' Brands | 67,790 | 1,649 | |||||||||
BorgWarner | 62,670 | 3,790 | |||||||||
Chipotle Mexican Grill* | 6,270 | 4,079 | |||||||||
Dollar Tree* | 84,700 | 6,874 | |||||||||
GoPro, Cl A* | 49,790 | 2,161 | |||||||||
Home Depot | 13,000 | 1,477 | |||||||||
Nike, Cl B | 11,790 | 1,183 | |||||||||
Polaris Industries^ | 18,310 | 2,584 | |||||||||
| Starwood Hotels & Resorts Worldwide | 42,040 | 3,510 | |||||||||
Walt Disney | 21,180 | 2,222 | |||||||||
Wynn Resorts | 14,675 | 1,847 | |||||||||
Total Consumer discretionary | 36,519 | ||||||||||
Consumer staples—10.3% | |||||||||||
Hershey | 35,530 | 3,585 | |||||||||
Keurig Green Mountain | 24,220 | 2,706 | |||||||||
Mead Johnson Nutrition, Cl A | 53,450 | 5,373 | |||||||||
Monster Beverage* | 24,830 | 3,436 | |||||||||
Sprouts Farmers Market* | 70,190 | 2,473 | |||||||||
WhiteWave Foods, Cl A* | 141,890 | 6,292 | |||||||||
Total Consumer staples | 23,865 | ||||||||||
Energy—0.8% | |||||||||||
Concho Resources* | 16,698 | 1,936 | |||||||||
Total Energy | 1,936 | ||||||||||
Financials—10.2% | |||||||||||
Affiliated Managers Group* | 24,980 | 5,365 | |||||||||
Intercontinental Exchange Group | 12,770 | 2,979 | |||||||||
Moody's | 45,810 | 4,755 | |||||||||
Signature Bank* | 43,600 | 5,650 | |||||||||
TD Ameritrade Holdings | 130,145 | 4,849 | |||||||||
Total Financials | 23,598 | ||||||||||
Health care—18.3% | |||||||||||
Actavis* | 12,020 | 3,577 | |||||||||
Alexion Pharmaceuticals* | 28,084 | 4,867 | |||||||||
AmerisourceBergen, Cl A | 26,080 | 2,965 | |||||||||
Celgene* | 14,560 | 1,678 | |||||||||
Cooper | 16,910 | 3,169 | |||||||||
HCA Holdings* | 25,020 | 1,882 | |||||||||
Shares | Value (000) | ||||||||||
Horizon Pharma PLC* | 106,610 | $ | 2,769 | ||||||||
Intercept Pharmaceuticals* | 8,270 | 2,332 | |||||||||
Jazz Pharmaceuticals* | 26,610 | 4,598 | |||||||||
McKesson | 7,770 | 1,758 | |||||||||
Mylan NV* | 83,310 | 4,945 | |||||||||
Regeneron Pharmaceuticals* | 9,030 | 4,077 | |||||||||
Veeva Systems, Cl A*^ | 85,360 | 2,179 | |||||||||
Vertex Pharmaceuticals* | 14,680 | 1,732 | |||||||||
Total Health care | 42,528 | ||||||||||
Industrials—6.7% | |||||||||||
AMETEK | 70,010 | 3,678 | |||||||||
Honeywell International | 22,480 | 2,345 | |||||||||
Ingersoll-Rand | 43,440 | 2,957 | |||||||||
Kansas City Southern | 19,390 | 1,979 | |||||||||
Roper Industries | 26,280 | 4,521 | |||||||||
Total Industrials | 15,480 | ||||||||||
Information technology—28.8% | |||||||||||
Adobe Systems* | 17,180 | 1,270 | |||||||||
Alliance Data Systems*^ | 19,950 | 5,910 | |||||||||
Apple | 36,080 | 4,489 | |||||||||
Applied Materials | 174,990 | 3,948 | |||||||||
Avago Technologies | 53,620 | 6,809 | |||||||||
Cavium*^ | 109,769 | 7,774 | |||||||||
Facebook, Cl A* | 29,230 | 2,403 | |||||||||
HomeAway* | 93,930 | 2,834 | |||||||||
LinkedIn, Cl A* | 23,240 | 5,807 | |||||||||
Mobileye NV* | 27,680 | 1,163 | |||||||||
NXP Semiconductors* | 67,050 | 6,729 | |||||||||
Salesforce.com* | 33,600 | 2,245 | |||||||||
ServiceNow*^ | 66,530 | 5,241 | |||||||||
SunEdison* | 154,620 | 3,711 | |||||||||
Visa, Cl A | 39,440 | 2,580 | |||||||||
Workday, Cl A*^ | 45,992 | 3,882 | |||||||||
Total Information technology | 66,795 | ||||||||||
Materials—4.9% | |||||||||||
International Flavors & Fragrances | 16,310 | 1,915 | |||||||||
Methanex | 58,560 | 3,137 | |||||||||
PolyOne | 66,100 | 2,469 | |||||||||
PPG Industries | 17,280 | 3,897 | |||||||||
Total Materials | 11,418 | ||||||||||
TURNER FUNDS 2015 SEMIANNUAL REPORT 15
FINANCIAL STATEMENTS (Unaudited)
Schedule of investments
Turner Midcap Growth Fund
Shares | Value (000) | ||||||||||
Telecommunication services—1.6% | |||||||||||
SBA Communications, Cl A* | 31,230 | $ | 3,657 | ||||||||
Total Telecommunication services | 3,657 | ||||||||||
| Total Common stock (Cost $187,110)** | 225,796 | ||||||||||
Cash equivalent—11.% | |||||||||||
| BlackRock Liquidity Funds TempCash Portfolio, Dollar Shares, 0.083%‡ (1) | 26,121,486 | 26,121 | |||||||||
| Total Cash equivalent (Cost $26,121)** | 26,121 | ||||||||||
| Total Investments—108.7% (Cost $213,231)** | 251,917 | ||||||||||
Net Other assets (liabilities)—(8.7)% | (20,083 | ) | |||||||||
Net Assets—100.0% | $ | 231,834 | |||||||||
* Non-income producing security.
** This number is listed in thousands.
(1) A portion of the Fund's position in this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2015 was $20,421**.
^ Security fully or partially on loan at March 31, 2015. The total value of securities on loan at March 31, 2015 was $19,709**. Certain of these securities may have been sold prior to period end.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
‡ Rate shown is the 7-day effective yield as of March 31, 2015.
Cl — Class
The accompanying notes are an integral part of the financial statements.
16 TURNER FUNDS 2015 SEMIANNUAL REPORT
Schedule of investments
Turner Small Cap Growth Fund
March 31, 2015
Shares | Value (000) | ||||||||||
Common stock—98.5%† | |||||||||||
Consumer discretionary—16.6% | |||||||||||
Burlington Stores* | 9,500 | $ | 564 | ||||||||
Core-Mark Holding | 12,290 | 790 | |||||||||
Gentherm* | 8,000 | 404 | |||||||||
G-III Apparel Group*^ | 8,000 | 901 | |||||||||
La Quinta Holdings* | 39,170 | 928 | |||||||||
Lithia Motors, Cl A | 10,000 | 995 | |||||||||
MDC Partners | 26,000 | 737 | |||||||||
Monro Muffler Brake | 10,000 | 651 | |||||||||
Papa John's International | 8,000 | 494 | |||||||||
Restoration Hardware Holdings* | 4,730 | 469 | |||||||||
Skechers U.S.A., Cl A* | 10,000 | 719 | |||||||||
TRI Pointe Homes* | 50,000 | 772 | |||||||||
Zoe's Kitchen* | 28,350 | 944 | |||||||||
Total Consumer discretionary | 9,368 | ||||||||||
Consumer staples—0.7% | |||||||||||
Boston Beer, Cl A* | 1,390 | 372 | |||||||||
Total Consumer staples | 372 | ||||||||||
Energy—1.9% | |||||||||||
Diamondback Energy* | 14,180 | 1,090 | |||||||||
Total Energy | 1,090 | ||||||||||
Financials—6.3% | |||||||||||
Bank of the Ozarks^ | 26,500 | 978 | |||||||||
Essent Group* | 31,230 | 747 | |||||||||
Kennedy-Wilson Holdings | 14,000 | 366 | |||||||||
MarketAxess Holdings | 7,500 | 622 | |||||||||
PrivateBancorp | 23,000 | 809 | |||||||||
Total Financials | 3,522 | ||||||||||
Health care—30.1% | |||||||||||
ABIOMED* | 9,450 | 676 | |||||||||
Acadia Healthcare*^ | 9,450 | 677 | |||||||||
Akorn* | 6,000 | 285 | |||||||||
AMAG Pharmaceuticals* | 14,180 | 775 | |||||||||
Amphastar Pharmaceuticals* | 38,120 | 570 | |||||||||
Celldex Theraputics*^ | 18,000 | 502 | |||||||||
Cepheid* | 5,500 | 313 | |||||||||
CTI BioPharma* | 145,000 | 262 | |||||||||
DepoMed* | 19,000 | 426 | |||||||||
Dyax* | 30,000 | 503 | |||||||||
ExamWorks Group* | 11,340 | 472 | |||||||||
Shares | Value (000) | ||||||||||
Fluidigm*^ | 20,790 | $ | 875 | ||||||||
Horizon Pharma PLC* | 40,000 | 1,039 | |||||||||
Insys Therapeutics* | 10,000 | 581 | |||||||||
Isis Pharmaceuticals*^ | 3,500 | 223 | |||||||||
LDR Holding* | 43,200 | 1,582 | |||||||||
LifePoint Hospitals* | 9,000 | 661 | |||||||||
NxStage Medical* | 35,000 | 606 | |||||||||
Prothena* | 26,460 | 1,009 | |||||||||
PTC Therapeutics* | 6,500 | 396 | |||||||||
Puma Biotechnology*^ | 4,200 | 992 | |||||||||
Receptos* | 6,140 | 1,012 | |||||||||
Repligen* | 38,460 | 1,167 | |||||||||
Spectranetics Corp.* | 20,000 | 695 | |||||||||
Veeva Systems, Cl A*^ | 25,000 | 638 | |||||||||
Total Health care | 16,937 | ||||||||||
Industrials—10.9% | |||||||||||
Apogee Enterprises | 14,180 | 613 | |||||||||
Chart Industries* | 12,290 | 431 | |||||||||
Forward Air | 9,450 | 513 | |||||||||
Greenbrier^ | 18,630 | 1,081 | |||||||||
Insperity | 7,090 | 371 | |||||||||
Knight Transportation^ | 12,290 | 396 | |||||||||
TASER International*^ | 21,770 | 525 | |||||||||
Trex* | 12,130 | 661 | |||||||||
WageWorks* | 5,000 | 267 | |||||||||
XPO Logistics*^ | 28,350 | 1,288 | |||||||||
Total Industrials | 6,146 | ||||||||||
Information technology—27.9% | |||||||||||
Ambarella* | 12,000 | 909 | |||||||||
Belden | 11,340 | 1,061 | |||||||||
Cavium*^ | 19,000 | 1,346 | |||||||||
CoreLogic* | 20,000 | 705 | |||||||||
Criteo SA ADR* | 20,000 | 790 | |||||||||
Demandware*^ | 13,000 | 792 | |||||||||
Digimarc^ (a) | 95,000 | 2,084 | |||||||||
| Endurance International Group Holdings*^ | 18,900 | 360 | |||||||||
Envestnet*^ | 15,000 | 841 | |||||||||
Guidewire Software* | 20,790 | 1,094 | |||||||||
HubSpot* | 24,000 | 958 | |||||||||
Integrated Device Technology* | 34,000 | 681 | |||||||||
Manhattan Associates* | 8,000 | 405 | |||||||||
Monolithic Power Systems | 15,120 | 796 | |||||||||
TURNER FUNDS 2015 SEMIANNUAL REPORT 17
FINANCIAL STATEMENTS (Unaudited)
Schedule of investments
Turner Small Cap Growth Fund
Shares | Value (000) | ||||||||||
Proofpoint* | 11,340 | $ | 672 | ||||||||
Qorvo* | 8,510 | 678 | |||||||||
Synaptics* | 8,000 | 650 | |||||||||
The Ultimate Software Group* | 5,200 | 884 | |||||||||
Total Information technology | 15,707 | ||||||||||
Materials—4.1% | |||||||||||
Headwaters* | 55,420 | 1,016 | |||||||||
Platform Specialty Products* | 25,000 | 642 | |||||||||
PolyOne | 6,000 | 224 | |||||||||
Senomyx*^ | 100,000 | 441 | |||||||||
Total Materials | 2,323 | ||||||||||
| Total Common stock (Cost $43,536)** | 55,464 | ||||||||||
Cash equivalent—22.6% | |||||||||||
| BlackRock Liquidity Funds TempCash Portfolio, Dollar Shares, 0.083%‡ (1) | 12,693,853 | 12,694 | |||||||||
| Total Cash equivalent (Cost $12,694)** | 12,694 | ||||||||||
| Total Investments—121.1% (Cost $56,230)** | 68,158 | ||||||||||
Net Other assets (liabilities)—(21.1)% | (11,857 | ) | |||||||||
Net Assets—100.0% | $ | 56,301 | |||||||||
* Non-income producing security.
** This number is listed in thousands.
(1) A portion of the Fund's position in this security was purchased with cash collateral received from securities lending. The total value of such security at March 31, 2015 was $11,842**.
^ Security fully or partially on loan at March 31, 2015. The total value of securities on loan at March 31, 2015 was $10,703**. Certain of these securities may have been sold prior to period end.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
‡ Rate shown is the 7-day effective yield as of March 31, 2015.
(a) These securities have been deemed illiquid by the Adviser and represent 3.70% of Net Assets.
ADR — American Depositary Receipt
Cl — Class
The accompanying notes are an integral part of the financial statements.
18 TURNER FUNDS 2015 SEMIANNUAL REPORT
SECTOR WEIGHTINGS (Unaudited)
The following tables show the fund composition allocated by sector. The fund composition is subject to change, and the percentages are based on total investments.
1 Cash equivalent includes short-term investment held as collateral for securities lending activity. Please see Note 8 in the Notes to financial statements for more detailed information.
TURNER FUNDS 2015 SEMIANNUAL REPORT 19
FINANCIAL STATEMENTS (Unaudited)
Statements of assets and liabilities (000)
March 31, 2015
| Turner Medical Sciences Long/Short Fund | Turner Spectrum Fund | Turner Titan Fund | |||||||||||||
Assets: | |||||||||||||||
Investment securities, at cost | $ | 60,854 | $ | 39,171 | $ | 10,833 | |||||||||
Investment securities, at value | $ | 72,441 | $ | 45,094 | $ | 11,876 | |||||||||
Cash | — | 14,740 | — | ||||||||||||
Deposits with brokers for securities sold short | 46,918 | 17,863 | 5,416 | ||||||||||||
Foreign currency, at value | — | 3 | — | ||||||||||||
Receivable for investment securities sold | 3,499 | 2,359 | 1,123 | ||||||||||||
Receivable for capital shares sold | 2,716 | 61 | — | ||||||||||||
Prepaid expenses | 26 | 16 | 19 | ||||||||||||
Receivable for dividend income | 11 | 14 | 6 | ||||||||||||
Reclaim receivable | 2 | 2 | — | ||||||||||||
Total assets | 125,613 | 80,152 | 18,440 | ||||||||||||
Liabilities: | |||||||||||||||
Securities sold short, at proceeds | 48,373 | 28,702 | 5,452 | ||||||||||||
Securities sold short, at value | 48,200 | 28,805 | 5,431 | ||||||||||||
Foreign currency overdraft, at value | 2 | — | — | ||||||||||||
Payable for investment securities purchased | 4,322 | 2,686 | 1,060 | ||||||||||||
Obligation to return securities lending collateral | — | — | — | ||||||||||||
Payable for capital shares redeemed | 53 | 583 | — | ||||||||||||
Dividends payable on securities sold short (Note 2) | 22 | 41 | 6 | ||||||||||||
Payable due to investment adviser | 74 | 35 | 6 | ||||||||||||
Payable due to administrator | 4 | 3 | 1 | ||||||||||||
Payable due to shareholder servicing | 7 | 2 | — | ||||||||||||
Payable due to distributor | 2 | 1 | — | ||||||||||||
Payable due to transfer agent | 1 | 66 | 3 | ||||||||||||
Payable due to custodian | — | 19 | 2 | ||||||||||||
Payable for trustee fees | 1 | 7 | 1 | ||||||||||||
Other accrued expenses | 10 | 123 | 6 | ||||||||||||
Total liabilities | 52,698 | 32,371 | 6,516 | ||||||||||||
Net assets | $ | 72,915 | $ | 47,781 | $ | 11,924 | |||||||||
*Includes market value of securities on loan of: | $ | — | $ | — | $ | — | |||||||||
Net assets: | |||||||||||||||
Portfolio capital | $ | 65,638 | $ | 51,237 | $ | 10,757 | |||||||||
Distributions in excess of investment income | (481 | ) | (7,194 | ) | (64 | ) | |||||||||
| Accumulated net realized gain (loss) from investments, securities sold short, written options and foreign currency transactions | (4,002 | ) | (2,081 | ) | 167 | ||||||||||
| Net unrealized appreciation on investments, securities sold short, foreign currencies and translation of other assets and liabilities denominated in foreign currencies | 11,760 | 5,819 | 1,064 | ||||||||||||
Net assets | $ | 72,915 | $ | 47,781 | $ | 11,924 | |||||||||
Outstanding shares of beneficial interest — Institutional Class Shares (1) | 2,059 | 3,984 | 1,071 | ||||||||||||
Outstanding shares of beneficial interest — Investor Class Shares (1) | 2,727 | 927 | 24 | ||||||||||||
Outstanding shares of beneficial interest — Class C Shares (1) | 281 | 227 | 26 | ||||||||||||
Outstanding shares of beneficial interest — Retirement Class Shares (1) | — | — | — | ||||||||||||
Net assets — Institutional Class Shares | $ | 29,860 | $ | 37,295 | $ | 11,405 | |||||||||
Net assets — Investor Class Shares | $ | 39,153 | $ | 8,508 | $ | 258 | |||||||||
Net assets — Class C Shares | $ | 3,902 | $ | 1,978 | $ | 261 | |||||||||
Net assets — Retirement Class Shares | $ | — | $ | — | $ | — | |||||||||
Net asset value, offering and redemption price per share — Institutional Class Shares | $ | 14.50 | $ | 9.36 | $ | 10.65 | |||||||||
Net asset value, offering and redemption price per share — Investor Class Shares | $ | 14.36 | $ | 9.17 | † | $ | 10.52 | † | |||||||
Net asset value, offering and redemption price per share — Class C Shares | $ | 13.89 | $ | 8.71 | $ | 10.14 | † | ||||||||
Net asset value, offering and redemption price per share — Retirement Class Shares | $ | — | $ | — | $ | — | |||||||||
20 TURNER FUNDS 2015 SEMIANNUAL REPORT
| Turner Emerging Growth Fund | Turner Midcap Growth Fund | Turner Small Cap Growth Fund | |||||||||||||
Assets: | |||||||||||||||
Investment securities, at cost | $ | 102,422 | $ | 213,231 | $ | 56,230 | |||||||||
Investment securities, at value | $ | 125,429 | * | $ | 251,917 | * | $ | 68,158 | * | ||||||
Cash | — | — | — | ||||||||||||
Deposits with brokers for securities sold short | — | — | — | ||||||||||||
Foreign currency, at value | — | — | — | ||||||||||||
Receivable for investment securities sold | 7,136 | 4,877 | 2,308 | ||||||||||||
Receivable for capital shares sold | 40 | 82 | 10 | ||||||||||||
Prepaid expenses | 29 | 49 | 21 | ||||||||||||
Receivable for dividend income | 107 | 60 | 31 | ||||||||||||
Reclaim receivable | — | — | — | ||||||||||||
Total assets | 132,741 | 256,985 | 70,528 | ||||||||||||
Liabilities: | |||||||||||||||
Securities sold short, at proceeds | — | — | — | ||||||||||||
Securities sold short, at value | — | — | — | ||||||||||||
Foreign currency overdraft, at value | — | — | — | ||||||||||||
Payable for investment securities purchased | 3,835 | 4,271 | 2,220 | ||||||||||||
Obligation to return securities lending collateral | 25,835 | 20,421 | 11,842 | ||||||||||||
Payable for capital shares redeemed | 2,870 | 115 | 68 | ||||||||||||
Dividends payable on securities sold short (Note 2) | — | — | — | ||||||||||||
Payable due to investment adviser | 48 | 61 | 16 | ||||||||||||
Payable due to administrator | 5 | 25 | 2 | ||||||||||||
Payable due to shareholder servicing | 18 | 40 | 12 | ||||||||||||
Payable due to distributor | — | 1 | — | ||||||||||||
Payable due to transfer agent | 19 | 49 | 14 | ||||||||||||
Payable due to custodian | 2 | 4 | 3 | ||||||||||||
Payable for trustee fees | 5 | 10 | 7 | ||||||||||||
Other accrued expenses | 75 | 154 | 43 | ||||||||||||
Total liabilities | 32,712 | 25,151 | 14,227 | ||||||||||||
Net assets | $ | 100,029 | $ | 231,834 | $ | 56,301 | |||||||||
*Includes market value of securities on loan of: | $ | 23,173 | $ | 19,709 | $ | 10,703 | |||||||||
Net assets: | |||||||||||||||
Portfolio capital | $ | 62,954 | $ | 172,996 | $ | 33,788 | |||||||||
Distributions in excess of investment income | (364 | ) | (626 | ) | (1,429 | ) | |||||||||
| Accumulated net realized gain (loss) from investments, securities sold short, written options and foreign currency transactions | 14,432 | 20,778 | 12,014 | ||||||||||||
| Net unrealized appreciation on investments, securities sold short, foreign currencies and translation of other assets and liabilities denominated in foreign currencies | 23,007 | 38,686 | 11,928 | ||||||||||||
Net assets | $ | 100,029 | $ | 231,834 | $ | 56,301 | |||||||||
Outstanding shares of beneficial interest — Institutional Class Shares (1) | 569 | 1,743 | — | ||||||||||||
Outstanding shares of beneficial interest — Investor Class Shares (1) | 2,602 | 7,779 | 2,999 | ||||||||||||
Outstanding shares of beneficial interest — Class C Shares (1) | — | — | — | ||||||||||||
Outstanding shares of beneficial interest — Retirement Class Shares (1) | — | 194 | — | ||||||||||||
Net assets — Institutional Class Shares | $ | 18,488 | $ | 42,903 | $ | — | |||||||||
Net assets — Investor Class Shares | $ | 81,541 | $ | 184,758 | $ | 56,301 | |||||||||
Net assets — Class C Shares | $ | — | $ | — | $ | — | |||||||||
Net assets — Retirement Class Shares | $ | — | $ | 4,173 | $ | — | |||||||||
Net asset value, offering and redemption price per share — Institutional Class Shares | $ | 32.51 | † | $ | 24.62 | † | $ | — | |||||||
Net asset value, offering and redemption price per share — Investor Class Shares | $ | 31.34 | $ | 23.75 | $ | 18.77 | |||||||||
Net asset value, offering and redemption price per share — Class C Shares | $ | — | $ | — | $ | — | |||||||||
Net asset value, offering and redemption price per share — Retirement Class Shares | $ | — | $ | 21.46 | † | $ | — | ||||||||
(1) Unlimited authorization — par value $0.00001.
† Differences in net asset value recalculation and net asset value stated are caused by rounding differences.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 21
FINANCIAL STATEMENTS (Unaudited)
Statements of operations (000)
Turner | Turner | Turner | |||||||||||||
period ended | period ended | period ended | |||||||||||||
Investment income: | |||||||||||||||
Dividend | $ | 12 | $ | 308 | $ | 64 | |||||||||
Securities lending | — | — | — | ||||||||||||
Foreign taxes withheld | — | (3 | ) | (2 | ) | ||||||||||
Total investment income | 12 | 305 | 62 | ||||||||||||
Expenses: | |||||||||||||||
Investment advisory fees | 295 | 623 | 90 | ||||||||||||
Administration fees | 29 | 62 | 9 | ||||||||||||
Shareholder service fees (1) | 15 | 13 | 1 | ||||||||||||
Shareholder service fees (2) | 4 | 3 | — | ||||||||||||
Shareholder service fees (3) | — | — | — | ||||||||||||
Distribution fees (2) | 11 | 9 | 1 | ||||||||||||
Distribution fees (3) | — | — | — | ||||||||||||
Accounting agent fees | — | 5 | 1 | ||||||||||||
Dividend expense | 60 | 140 | 10 | ||||||||||||
Broker fees and charges on short sales | 242 | 317 | 11 | ||||||||||||
Custodian fees | 5 | 54 | 9 | ||||||||||||
Transfer agent fees | 13 | 112 | 7 | ||||||||||||
Registration fees | 23 | 27 | 24 | ||||||||||||
Professional fees | 17 | 75 | 7 | ||||||||||||
Trustees' fees | 10 | 38 | 4 | ||||||||||||
Insurance and other fees | 21 | 65 | 6 | ||||||||||||
Total expenses | 745 | 1,542 | 180 | ||||||||||||
Less: | |||||||||||||||
Investment advisory fee waiver | (252 | ) | (593 | ) | (54 | ) | |||||||||
Net expenses | 493 | 949 | 126 | ||||||||||||
Net investment income (loss) | (481 | ) | (644 | ) | (64 | ) | |||||||||
Net realized gain from securities sold | 6,497 | 8,009 | 595 | ||||||||||||
Net realized loss from securities sold short | (8,509 | ) | (4,737 | ) | (178 | ) | |||||||||
Net realized gain on foreign currency transactions | — | 1 | — | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments | 8,406 | (2,828 | ) | 445 | |||||||||||
Net change in unrealized appreciation (depreciation) on securities sold short | 405 | (2,175 | ) | (148 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on foreign currencies and translation of | — | (1 | ) | — | |||||||||||
Net realized and unrealized gain (loss) from investments, options and foreign currencies | 6,799 | (1,731 | ) | 714 | |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 6,318 | $ | (2,375 | ) | $ | 650 | ||||||||
22 TURNER FUNDS 2015 SEMIANNUAL REPORT
Turner | Turner | Turner | |||||||||||||
period ended | period ended | period ended | |||||||||||||
Investment income: | |||||||||||||||
Dividend | $ | 112 | $ | 627 | $ | 105 | |||||||||
Securities lending | 302 | 17 | 82 | ||||||||||||
Foreign taxes withheld | — | — | — | ||||||||||||
Total investment income | 414 | 644 | 187 | ||||||||||||
Expenses: | |||||||||||||||
Investment advisory fees | 591 | 837 | 425 | ||||||||||||
Administration fees | 88 | 166 | 63 | ||||||||||||
Shareholder service fees (1) | 123 | 222 | 106 | ||||||||||||
Shareholder service fees (2) | — | — | — | ||||||||||||
Shareholder service fees (3) | — | 6 | — | ||||||||||||
Distribution fees (2) | — | — | — | ||||||||||||
Distribution fees (3) | — | 6 | — | ||||||||||||
Accounting agent fees | 1 | 1 | 1 | ||||||||||||
Dividend expense | — | — | — | ||||||||||||
Broker fees and charges on short sales | — | — | — | ||||||||||||
Custodian fees | 11 | 18 | 16 | ||||||||||||
Transfer agent fees | 60 | 140 | 47 | ||||||||||||
Registration fees | 22 | 30 | 11 | ||||||||||||
Professional fees | 65 | 124 | 48 | ||||||||||||
Trustees' fees | 36 | 72 | 26 | ||||||||||||
Insurance and other fees | 71 | 131 | 49 | ||||||||||||
Total expenses | 1,068 | 1,753 | 792 | ||||||||||||
Less: | |||||||||||||||
Investment advisory fee waiver | (266 | ) | (483 | ) | (263 | ) | |||||||||
Net expenses | 802 | 1,270 | 529 | ||||||||||||
Net investment income (loss) | (388 | ) | (626 | ) | (342 | ) | |||||||||
Net realized gain from securities sold | 15,779 | 32,530 | 16,899 | ||||||||||||
Net realized loss from securities sold short | — | — | — | ||||||||||||
Net realized gain on foreign currency transactions | — | — | — | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments | (2,942 | ) | (12,014 | ) | (8,591 | ) | |||||||||
Net change in unrealized appreciation (depreciation) on securities sold short | — | — | — | ||||||||||||
Net change in unrealized appreciation (depreciation) on foreign currencies and translation of | — | — | — | ||||||||||||
Net realized and unrealized gain (loss) from investments, options and foreign currencies | 12,837 | 20,516 | 8,308 | ||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 12,449 | $ | 19,890 | $ | 7,966 | |||||||||
(1) Attributable to Investor Class Shares only.
(2) Attributable to Class C Shares only.
(3) Attributable to Retirement Class Shares only.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 23
FINANCIAL STATEMENTS
Statements of changes in net assets (000)
| Turner Medical Sciences Long/Short Fund | Turner Spectrum Fund | ||||||||||||||||||
| period ended 3/31/15 (Unaudited) | year ended 9/30/14 | period ended 3/31/15 (Unaudited) | year ended 9/30/14 | ||||||||||||||||
Investment activities: | |||||||||||||||||||
Net investment loss | $ | (481 | ) | $ | (587 | ) | $ | (644 | ) | $ | (3,760 | ) | |||||||
Net realized gain (loss) from securities sold and securities sold short | (2,012 | ) | 2,405 | 3,272 | 61,738 | ||||||||||||||
Net realized gain on written options contracts | — | — | — | 207 | |||||||||||||||
Net realized gain (loss) on foreign currency transactions | — | (2 | ) | 1 | (58 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments and securities sold short | 8,811 | 1,547 | (5,003 | ) | (38,384 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on written options contracts | — | — | — | (31 | ) | ||||||||||||||
| Net change in unrealized appreciation (depreciation) on foreign currencies and translation of other assets and liabilities denominated in foreign currencies | — | — | (1 | ) | 2 | ||||||||||||||
Net increase (decrease) in net assets resulting from operations | 6,318 | 3,363 | (2,375 | ) | 19,714 | ||||||||||||||
Dividends and distributions to shareholders: | |||||||||||||||||||
Realized capital gains: | |||||||||||||||||||
Institutional Class Shares | (1,619 | ) | (524 | ) | (20,550 | ) | — | ||||||||||||
Investor Class Shares | (454 | ) | (145 | ) | (2,460 | ) | — | ||||||||||||
Class C Shares | (176 | ) | (47 | ) | (595 | ) | — | ||||||||||||
Total dividends and distributions | (2,249 | ) | (716 | ) | (23,605 | ) | — | ||||||||||||
Capital share transactions: | |||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Proceeds from shares issued | 12,109 | 33,366 | 4,758 | 82,515 | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 1,166 | 472 | 14,745 | — | |||||||||||||||
Cost of shares redeemed | (12,566 | ) | (25,607 | ) | (79,427 | ) | (462,399 | ) | |||||||||||
Net increase (decrease) in net assets from Institutional Class Shares transactions | 709 | 8,231 | (59,924 | ) | (379,884 | ) | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Proceeds from shares issued | 36,545 | 31,610 | 1,059 | 4,871 | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 400 | 141 | 2,346 | — | |||||||||||||||
Cost of shares redeemed | (6,302 | ) | (28,345 | ) | (7,960 | ) | (34,856 | ) | |||||||||||
Net increase (decrease) in net assets from Investor Class Shares transactions | 30,643 | 3,406 | (4,555 | ) | (29,985 | ) | |||||||||||||
Class C Shares | |||||||||||||||||||
Proceeds from shares issued | 708 | 1,987 | 7 | 42 | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 142 | 42 | 565 | — | |||||||||||||||
Cost of shares redeemed | (139 | ) | (708 | ) | (910 | ) | (2,865 | ) | |||||||||||
Net increase (decrease) in net assets from Class C Shares transactions | 711 | 1,321 | (338 | ) | (2,823 | ) | |||||||||||||
Net increase (decrease) in net assets from capital share transactions | 32,063 | 12,958 | (64,817 | ) | (412,692 | ) | |||||||||||||
Total increase (decrease) in net assets | 36,132 | 15,605 | (90,797 | ) | (392,978 | ) | |||||||||||||
Net assets: | |||||||||||||||||||
Beginning of period | 36,783 | 21,178 | 138,578 | 531,556 | |||||||||||||||
End of period | $ | 72,915 | $ | 36,783 | $ | 47,781 | $ | 138,578 | |||||||||||
Undistributed net investment income (accumulated net investment loss) | $ | (481 | ) | $ | — | $ | (7,194 | ) | $ | (6,550 | ) | ||||||||
Share issued and redeemed: | |||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Issued | 882 | 2,739 | 358 | 7,042 | |||||||||||||||
Issued in lieu of cash distributions | 104 | 41 | 1,695 | — | |||||||||||||||
Redeemed | (1,018 | ) | (2,139 | ) | (8,113 | ) | (39,139 | ) | |||||||||||
Net increase (decrease) in Institutional Class Shares | (32 | ) | 641 | (6,060 | ) | (32,097 | ) | ||||||||||||
Investor Class Shares | |||||||||||||||||||
Issued | 2,738 | 2,555 | 108 | 419 | |||||||||||||||
Issued in lieu of cash distributions | 36 | 12 | 275 | — | |||||||||||||||
Redeemed | (499 | ) | (2,382 | ) | (783 | ) | (2,998 | ) | |||||||||||
Net increase (decrease) in Investor Class Shares | 2,275 | 185 | (400 | ) | (2,579 | ) | |||||||||||||
Class C Shares | |||||||||||||||||||
Issued | 53 | 163 | 1 | 4 | |||||||||||||||
Issued in lieu of cash distributions | 13 | 4 | 70 | — | |||||||||||||||
Redeemed | (12 | ) | (62 | ) | (101 | ) | (254 | ) | |||||||||||
Net increase (decrease) in Class C Shares | 54 | 105 | (30 | ) | (250 | ) | |||||||||||||
Net increase (decrease) in share transactions | 2,297 | 931 | (6,490 | ) | (34,926 | ) | |||||||||||||
24 TURNER FUNDS 2015 SEMIANNUAL REPORT
| Turner Titan Fund | Turner Emerging Growth Fund | ||||||||||||||||||
| period ended 3/31/15 (Unaudited) | year ended 9/30/14 | period ended 3/31/15 (Unaudited) | year ended 9/30/14 | ||||||||||||||||
Investment activities: | |||||||||||||||||||
Net investment loss | $ | (64 | ) | $ | (211 | ) | $ | (388 | ) | $ | (2,154 | ) | |||||||
Net realized gain (loss) from securities sold and securities sold short | 417 | 3,293 | 15,779 | 74,679 | |||||||||||||||
Net realized gain on written options contracts | — | — | — | — | |||||||||||||||
Net realized gain (loss) on foreign currency transactions | — | (2 | ) | — | — | ||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and securities sold short | 297 | (1,044 | ) | (2,942 | ) | (70,983 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) on written options contracts | — | — | — | — | |||||||||||||||
| Net change in unrealized appreciation (depreciation) on foreign currencies and translation of other assets and liabilities denominated in foreign currencies | — | — | — | — | |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 650 | 2,036 | 12,449 | 1,542 | |||||||||||||||
Dividends and distributions to shareholders: | |||||||||||||||||||
Realized capital gains: | |||||||||||||||||||
Institutional Class Shares | (1,362 | ) | (275 | ) | (8,970 | ) | (11,300 | ) | |||||||||||
Investor Class Shares | (65 | ) | (3 | ) | (49,724 | ) | (27,452 | ) | |||||||||||
Class C Shares | (31 | ) | — | — | — | ||||||||||||||
Total dividends and distributions | (1,458 | ) | (278 | ) | (58,694 | ) | (38,752 | ) | |||||||||||
Capital share transactions: | |||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Proceeds from shares issued | 2,729 | 9,298 | 268 | 12,449 | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 920 | 268 | 8,779 | 10,821 | |||||||||||||||
Cost of shares redeemed | (1,125 | ) | (22,824 | ) | (9,594 | ) | (59,692 | ) | |||||||||||
Net increase (decrease) in net assets from Institutional Class Shares transactions | 2,524 | (13,258 | ) | (547 | ) | (36,422 | ) | ||||||||||||
Investor Class Shares | |||||||||||||||||||
Proceeds from shares issued | 4 | 374 | 9,058 | 50,804 | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 65 | 3 | 46,436 | 26,301 | |||||||||||||||
Cost of shares redeemed | (325 | ) | (245 | ) | (51,445 | ) | (113,434 | ) | |||||||||||
Net increase (decrease) in net assets from Investor Class Shares transactions | (256 | ) | 132 | 4,049 | (36,329 | ) | |||||||||||||
Class C Shares | |||||||||||||||||||
Proceeds from shares issued | — | 251 | — | — | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 24 | — | — | — | |||||||||||||||
Cost of shares redeemed | — | (22 | ) | — | — | ||||||||||||||
Net increase (decrease) in net assets from Class C Shares transactions | 24 | 229 | — | — | |||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 2,292 | (12,897 | ) | 3,502 | (72,751 | ) | |||||||||||||
Total increase (decrease) in net assets | 1,484 | (11,139 | ) | (42,743 | ) | (109,961 | ) | ||||||||||||
Net assets: | |||||||||||||||||||
Beginning of period | 10,440 | 21,579 | 142,772 | 252,733 | |||||||||||||||
End of period | $ | 11,924 | $ | 10,440 | $ | 100,029 | $ | 142,772 | |||||||||||
Undistributed net investment income (accumulated net investment loss) | $ | (64 | ) | $ | — | $ | (364 | ) | $ | 24 | |||||||||
Share issued and redeemed: | |||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Issued | 240 | 851 | 7 | 207 | |||||||||||||||
Issued in lieu of cash distributions | 91 | 25 | 296 | 191 | |||||||||||||||
Redeemed | (103 | ) | (2,047 | ) | (207 | ) | (1,035 | ) | |||||||||||
Net increase (decrease) in Institutional Class Shares | 228 | (1,171 | ) | 96 | (637 | ) | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Issued | — | 34 | 284 | 855 | |||||||||||||||
Issued in lieu of cash distributions | 6 | — | 1,619 | 471 | |||||||||||||||
Redeemed | (31 | ) | (22 | ) | (1,475 | ) | (1,952 | ) | |||||||||||
Net increase (decrease) in Investor Class Shares | (25 | ) | 12 | 428 | (626 | ) | |||||||||||||
Class C Shares | |||||||||||||||||||
Issued | — | 22 | — | — | |||||||||||||||
Issued in lieu of cash distributions | 3 | — | — | — | |||||||||||||||
Redeemed | — | (2 | ) | — | — | ||||||||||||||
Net increase (decrease) in Class C Shares | 3 | 20 | — | — | |||||||||||||||
Net increase (decrease) in share transactions | 206 | (1,139 | ) | 524 | (1,263 | ) | |||||||||||||
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 25
FINANCIAL STATEMENTS (Unaudited)
Statements of changes in net assets (000)
| Turner Midcap Growth Fund | Turner Small Cap Growth Fund | ||||||||||||||||||
| period ended 3/31/15 (Unaudited) | year ended 9/30/14 | period ended 3/31/15 (Unaudited) | year ended 9/30/14 | ||||||||||||||||
Investment activities: | |||||||||||||||||||
Net investment loss | $ | (626 | ) | $ | (1,328 | ) | $ | (342 | ) | $ | (1,640 | ) | |||||||
Net realized gain from securities sold | 32,530 | 104,546 | 16,899 | 48,313 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) on investment transactions | (12,014 | ) | (59,603 | ) | (8,591 | ) | (44,329 | ) | |||||||||||
Net increase in net assets resulting from operations | 19,890 | 43,615 | 7,966 | 2,344 | |||||||||||||||
Dividends and distributions to shareholders: | |||||||||||||||||||
Realized capital gains: | |||||||||||||||||||
Institutional Class Shares | (15,809 | ) | (33,824 | ) | — | — | |||||||||||||
Investor Class Shares | (76,404 | ) | (50,614 | ) | (46,207 | ) | (40,979 | ) | |||||||||||
Retirement Class Shares | (2,077 | ) | (993 | ) | — | — | |||||||||||||
Total dividends and distributions | (94,290 | ) | (85,431 | ) | (46,207 | ) | (40,979 | ) | |||||||||||
Capital share transactions: | |||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Proceeds from shares issued | 1,979 | 34,748 | — | — | |||||||||||||||
Proceeds from Fund acquisition (Note 10) | 14,971 | — | — | — | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 13,702 | 27,598 | — | — | |||||||||||||||
Cost of shares redeemed | (21,968 | ) | (206,567 | ) | — | — | |||||||||||||
| Net increase (decrease) in net assets from Institutional Class Shares transactions | 8,684 | (144,221 | ) | — | — | ||||||||||||||
Investor Class Shares | |||||||||||||||||||
Proceeds from shares issued | 44,940 | 66,808 | 5,113 | 25,152 | |||||||||||||||
Proceeds from Fund acquisition (Note 10) | 14,263 | 16,748 | — | — | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 72,052 | 48,868 | 45,588 | 40,735 | |||||||||||||||
Cost of shares redeemed | (73,798 | ) | (175,570 | ) | (86,244 | ) | (130,206 | ) | |||||||||||
| Net increase (decrease) in net assets from Investor Class Shares transactions | 57,457 | (43,146 | ) | (35,543 | ) | (64,319 | ) | ||||||||||||
Retirement Class Shares | |||||||||||||||||||
Proceeds from shares issued | 253 | 513 | — | — | |||||||||||||||
Proceeds from shares issued in lieu of cash distributions | 2,077 | 993 | — | — | |||||||||||||||
Cost of shares redeemed | (1,138 | ) | (576 | ) | — | — | |||||||||||||
| Net increase in net assets from Retirement Class Shares transactions | 1,192 | 930 | — | — | |||||||||||||||
| Net increase (decrease) in net assets from capital share transactions | 67,333 | (186,437 | ) | (35,543 | ) | (64,319 | ) | ||||||||||||
Total increase (decrease) in net assets | (7,067 | ) | (228,253 | ) | (73,784 | ) | (102,954 | ) | |||||||||||
Net assets: | |||||||||||||||||||
Beginning of period | 238,901 | 467,154 | 130,085 | 233,039 | |||||||||||||||
End of period | $ | 231,834 | $ | 238,901 | $ | 56,301 | $ | 130,085 | |||||||||||
Distributions in excess of investment income | $ | (626 | ) | $ | — | $ | (1,429 | ) | $ | (1,087 | ) | ||||||||
Share issued and redeemed: | |||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Issued | 58 | 882 | — | — | |||||||||||||||
Shares from Fund acquisition (Note 10) | 646 | — | — | — | |||||||||||||||
Issued in lieu of cash distributions | 603 | 778 | — | — | |||||||||||||||
Redeemed | (763 | ) | (5,197 | ) | — | — | |||||||||||||
Net increase (decrease) in Institutional Class Shares | 544 | (3,537 | ) | — | — | ||||||||||||||
Investor Class Shares | |||||||||||||||||||
Issued | 3,270 | 1,719 | 208 | 616 | |||||||||||||||
Shares from Fund acquisition (Note 10) | 638 | 427 | — | — | |||||||||||||||
Issued in lieu of cash distributions | 3,286 | 1,403 | 2,694 | 1,096 | |||||||||||||||
Redeemed | (4,389 | ) | (4,578 | ) | (3,397 | ) | (3,424 | ) | |||||||||||
Net increase (decrease) in Investor Class Shares | 2,805 | (1,029 | ) | (495 | ) | (1,712 | ) | ||||||||||||
Retirement Class Shares | |||||||||||||||||||
Issued | 8 | 14 | — | — | |||||||||||||||
Issued in lieu of cash distributions | 104 | 30 | — | — | |||||||||||||||
Redeemed | (49 | ) | (16 | ) | — | — | |||||||||||||
Net increase in Retirement Class Shares | 63 | 28 | — | — | |||||||||||||||
Net increase (decrease) in share transactions | 3,412 | (4,538 | ) | (495 | ) | (1,712 | ) | ||||||||||||
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
26 TURNER FUNDS 2015 SEMIANNUAL REPORT
THIS PAGE WAS INTENTIONALLY LEFT BLANK
TURNER FUNDS 2015 SEMIANNUAL REPORT 27
FINANCIAL STATEMENTS
Financial highlights
For a share outstanding throughout each period
| Net asset value, beginning of period | Net investment income (loss)(1) | Realized and unrealized gains (losses) on investments | Total from investment operations | Dividends from net investment income | Distributions from capital gains | Total dividends and distributions | |||||||||||||||||||||||||
Turner Medical Sciences Long/Short Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 13.33 | (0.15 | ) | 2.11 | 1.96 | — | (0.79 | ) | (0.79 | ) | ||||||||||||||||||||
2014 | $ | 11.54 | (0.18 | ) | 2.33 | 2.15 | — | (0.36 | ) | (0.36 | ) | ||||||||||||||||||||
2013 | $ | 10.19 | (0.13 | ) | 1.48 | 1.35 | — | — | — | ||||||||||||||||||||||
2012 | $ | 10.35 | (0.15 | ) | (0.01 | ) | (0.16 | ) | — | — | — | ||||||||||||||||||||
| 2011 (6) | $ | 10.00 | (0.12 | ) | 0.47 | 0.35 | — | — | — | ||||||||||||||||||||||
Turner Medical Sciences Long/Short Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 13.23 | (0.17 | ) | 2.09 | 1.92 | — | (0.79 | ) | (0.79 | ) | ||||||||||||||||||||
2014 | $ | 11.48 | (0.21 | ) | 2.32 | 2.11 | — | (0.36 | ) | (0.36 | ) | ||||||||||||||||||||
2013 | $ | 10.16 | (0.16 | ) | 1.48 | 1.32 | — | — | — | ||||||||||||||||||||||
2012 | $ | 10.34 | (0.18 | ) | — | (0.18 | ) | — | — | — | |||||||||||||||||||||
| 2011 (6) | $ | 10.00 | (0.13 | ) | 0.47 | 0.34 | — | — | — | ||||||||||||||||||||||
Turner Medical Sciences Long/Short Fund — Class C Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 12.87 | (0.20 | ) | 2.01 | 1.81 | — | (0.79 | ) | (0.79 | ) | ||||||||||||||||||||
2014 | $ | 11.26 | (0.29 | ) | 2.26 | 1.97 | — | (0.36 | ) | (0.36 | ) | ||||||||||||||||||||
2013 | $ | 10.04 | (0.23 | ) | 1.45 | 1.22 | — | — | — | ||||||||||||||||||||||
2012 | $ | 10.30 | (0.25 | ) | (0.01 | ) | (0.26 | ) | — | — | — | ||||||||||||||||||||
| 2011 (6) | $ | 10.00 | (0.18 | ) | 0.48 | 0.30 | — | — | — | ||||||||||||||||||||||
Turner Spectrum Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 11.95 | (0.08 | ) | 0.12 | 0.04 | — | (2.63 | ) | (2.63 | ) | ||||||||||||||||||||
2014 | $ | 11.43 | (0.14 | ) | 0.66 | 0.52 | — | — | — | ||||||||||||||||||||||
2013 | $ | 10.89 | (0.07 | ) | 0.61 | 0.54 | — | — | — | ||||||||||||||||||||||
2012 | $ | 11.45 | (0.13 | ) | 0.04 | (0.09 | ) | — | (0.47 | ) | (0.47 | ) | |||||||||||||||||||
2011 | $ | 10.82 | (0.16 | ) | 0.79 | 0.63 | — | — | — | ||||||||||||||||||||||
2010 | $ | 10.81 | (0.13 | ) | 0.21 | 0.08 | — | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||
Turner Spectrum Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 11.78 | (0.09 | ) | 0.11 | 0.02 | — | (2.63 | ) | (2.63 | ) | ||||||||||||||||||||
2014 | $ | 11.30 | (0.17 | ) | 0.65 | 0.48 | — | — | — | ||||||||||||||||||||||
2013 | $ | 10.80 | (0.09 | ) | 0.59 | 0.50 | — | — | — | ||||||||||||||||||||||
2012 | $ | 11.38 | (0.16 | ) | 0.05 | (0.11 | ) | — | (0.47 | ) | (0.47 | ) | |||||||||||||||||||
2011 | $ | 10.78 | (0.19 | ) | 0.79 | 0.60 | — | — | — | ||||||||||||||||||||||
2010 | $ | 10.80 | (0.16 | ) | 0.21 | 0.05 | — | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||
Turner Spectrum Fund — Class C Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 11.36 | (0.12 | ) | 0.10 | (0.02 | ) | — | (2.63 | ) | (2.63 | ) | |||||||||||||||||||
2014 | $ | 10.98 | (0.25 | ) | 0.63 | 0.38 | — | — | — | ||||||||||||||||||||||
2013 | $ | 10.57 | (0.17 | ) | 0.58 | 0.41 | — | — | — | ||||||||||||||||||||||
2012 | $ | 11.23 | (0.24 | ) | 0.05 | (0.19 | ) | — | (0.47 | ) | (0.47 | ) | |||||||||||||||||||
2011 | $ | 10.72 | (0.27 | ) | 0.78 | 0.51 | — | — | — | ||||||||||||||||||||||
2010 | $ | 10.80 | (0.24 | ) | 0.23 | (0.01 | ) | — | (0.07 | ) | (0.07 | ) | |||||||||||||||||||
28 TURNER FUNDS 2015 SEMIANNUAL REPORT
| Net asset value, end of period | Total return | Net assets end of period (000) | Ratio of net expenses to average net assets* | Ratio of total expenses to average net assets | Ratio of net investment income (loss) to average net assets* | Portfolio turnover rate** | |||||||||||||||||||||||||
Turner Medical Sciences Long/Short Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 14.50 | 16.45 | %†† | $ | 29,860 | 2.35 | %† (2) | 3.63 | %† | (2.29 | )%† | 136 | % | |||||||||||||||||
2014 | $ | 13.33 | 19.08 | % | $ | 27,884 | 1.93 | %† (3) | 3.52 | %† | (1.44 | )%† | 409 | % | |||||||||||||||||
2013 | $ | 11.54 | 13.25 | % | $ | 16,742 | 1.98 | %† (4) | 2.99 | %† | (1.26 | )%† | 492 | % | |||||||||||||||||
2012 | $ | 10.19 | (1.55 | )% | $ | 37,117 | 1.87 | %† (5) | 2.09 | %† | (1.45 | )%† | 900 | % | |||||||||||||||||
| 2011 (6) | $ | 10.35 | 3.50 | %†† | $ | 45,147 | 1.93 | % (7) | 2.74 | % | (1.74 | )% | 608 | % | |||||||||||||||||
Turner Medical Sciences Long/Short Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 14.36 | 16.27 | %†† | $ | 39,153 | 2.60 | %† (2) | 3.88 | %† | (2.54 | )%† | 136 | % | |||||||||||||||||
2014 | $ | 13.23 | 18.83 | % | $ | 5,974 | 2.18 | %† (3) | 3.77 | %† | (1.69 | )%† | 409 | % | |||||||||||||||||
2013 | $ | 11.48 | 12.99 | % | $ | 3,062 | 2.23 | %† (4) | 3.24 | %† | (1.51 | )%† | 492 | % | |||||||||||||||||
2012 | $ | 10.16 | (1.74 | )% | $ | 9,606 | 2.12 | %† (5) | 2.34 | %† | (1.70 | )%† | 900 | % | |||||||||||||||||
| 2011 (6) | $ | 10.34 | 3.40 | %†† | $ | 12,777 | 2.14 | % (7) | 2.89 | % | (1.93 | )% | 608 | % | |||||||||||||||||
Turner Medical Sciences Long/Short Fund — Class C Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 13.89 | 15.85 | %†† | $ | 3,902 | 3.35 | %† (2) | 4.63 | %† | (3.29 | )%† | 136 | % | |||||||||||||||||
2014 | $ | 12.87 | 17.93 | % | $ | 2,925 | 2.93 | %† (3) | 4.52 | %† | (2.44 | )%† | 409 | % | |||||||||||||||||
2013 | $ | 11.26 | 12.15 | % | $ | 1,374 | 2.98 | %† (4) | 3.99 | %† | (2.26 | )%† | 492 | % | |||||||||||||||||
2012 | $ | 10.04 | (2.52 | )% | $ | 2,889 | 2.87 | %† (5) | 3.09 | %† | (2.45 | )%† | 900 | % | |||||||||||||||||
| 2011 (6) | $ | 10.30 | 3.00 | %†† | $ | 2,165 | 2.93 | % (7) | 3.63 | % | (2.71 | )% | 608 | % | |||||||||||||||||
Turner Spectrum Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 9.36 | 2.02 | %†† | $ | 37,295 | 2.24 | %† (8) | 3.68 | %† | (1.50 | )%† | 230 | % | |||||||||||||||||
2014 | $ | 11.95 | 4.55 | % | $ | 120,032 | 1.93 | %† (9) | 2.82 | %† | (1.18 | )%† | 443 | % | |||||||||||||||||
2013 | $ | 11.43 | 4.96 | % | $ | 481,845 | 1.93 | %† (10) | 2.75 | %† | (0.64 | )%† | 580 | % | |||||||||||||||||
2012 | $ | 10.89 | (0.77 | )% | $ | 832,857 | 1.89 | %† (11) | 2.34 | %† | (1.15 | )%† | 996 | % | |||||||||||||||||
2011 | $ | 11.45 | 5.82 | % | $ | 448,554 | 1.93 | % (12) | 2.48 | % | (1.34 | )% | 1,153 | % | |||||||||||||||||
2010 | $ | 10.82 | 0.77 | % | $ | 179,526 | 1.91 | % (13) | 2.85 | % | (1.23 | )% | 1,808 | % | |||||||||||||||||
Turner Spectrum Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 9.17 | 1.86 | %†† | $ | 8,508 | 2.49 | %† (8) | 3.93 | %† | (1.75 | )%† | 230 | % | |||||||||||||||||
2014 | $ | 11.78 | 4.25 | % | $ | 15,630 | 2.18 | %† (9) | 3.07 | %† | (1.42 | )%† | 443 | % | |||||||||||||||||
2013 | $ | 11.30 | 4.63 | % | $ | 44,139 | 2.18 | %† (10) | 3.00 | %† | (0.89 | )%† | 580 | % | |||||||||||||||||
2012 | $ | 10.80 | (0.95 | )% | $ | 126,533 | 2.14 | %† (11) | 2.59 | %† | (1.40 | )%† | 996 | % | |||||||||||||||||
2011 | $ | 11.38 | 5.57 | % | $ | 161,401 | 2.18 | % (12) | 2.70 | % | (1.61 | )% | 1,153 | % | |||||||||||||||||
2010 | $ | 10.78 | 0.49 | % | $ | 52,361 | 2.17 | % (13) | 3.12 | % | (1.52 | )% | 1,808 | % | |||||||||||||||||
Turner Spectrum Fund — Class C Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 8.71 | 1.52 | %†† | $ | 1,978 | 3.24 | %† (8) | 1.68 | %† | (2.50 | )%† | 230 | % | |||||||||||||||||
2014 | $ | 11.36 | 3.46 | % | $ | 2,916 | 2.93 | %† (9) | 3.82 | %† | (2.18 | )%† | 443 | % | |||||||||||||||||
2013 | $ | 10.98 | 3.88 | % | $ | 5,572 | 2.93 | %† (10) | 3.75 | %† | (1.64 | )%† | 580 | % | |||||||||||||||||
2012 | $ | 10.57 | (1.71 | )% | $ | 10,391 | 2.89 | %† (11) | 3.34 | %† | (2.15 | )%† | 996 | % | |||||||||||||||||
2011 | $ | 11.23 | 4.76 | % | $ | 12,478 | 2.93 | % (12) | 3.39 | % | (2.33 | )% | 1,153 | % | |||||||||||||||||
2010 | $ | 10.72 | (0.07 | )% | $ | 7,169 | 2.92 | % (13) | 3.82 | % | (2.19 | )% | 1,808 | % | |||||||||||||||||
* Inclusive of fees paid indirectly, waivers and/or reimbursements.
** Excludes effect of in-kind transfers and mergers, as applicable. Not annualized for periods less than one year.
^ For the six-month period ended March 31, 2015 (unaudited). All ratios for the periods have been annualized unless otherwise noted.
† Does not include acquired fund fees or expenses.
†† Total return is for the period indicated and has not been annualized.
(1) Based on average shares outstanding.
(2) Dividend expense totaled 0.30% of average net assets for the period ended March 31, 2015, 0.09% of which was waived. Broker fees and charges on short sales totaled 1.23% of average net assets for the period ended March 31, 2015, 1.00% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 3.44%, 3.69% and 4.44% for the Institutional, Investor and Class C Shares, respectively.
(3) Dividend expense totaled 0.16% of average net assets for the year ended September 30, 2014, 0.16% of which was waived. Broker fees and charges on short sales totaled 1.27% of average net assets for the year ended September 30, 2014, 1.27% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 3.36%, 3.61% and 4.36% for the Institutional, Investor and Class C Shares, respectively.
(4) Dividend expense totaled 0.45% of average net assets for the year ended September 30, 2013, 0.45% of which was waived. Broker fees and charges on short sales totaled 0.41% of average net assets for the year ended September 30, 2013, 0.41% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.79%, 3.04% and 3.79% for the Institutional, Investor and Class C Shares, respectively.
(5) Dividend expense totaled 0.04% of average net assets for the year ended September 30, 2012, 0.04% of which was waived. Broker fees and charges on short sales totaled 0.15% of average net assets for the year ended September 30, 2012, 0.15% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.06%, 2.31% and 3.06% for the Institutional, Investor and Class C Shares, respectively.
(6) Commenced operations on February 7, 2011. All ratios for the period have been annualized.
(7) Dividend expense totaled 0.15% of average net assets for the year ended September 30, 2011, 0.12% of which was waived. Broker fees and charges on short sales totaled 0.47% of average net assets for the year ended September 30, 2011, 0.39% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.44%, 2.65% and 3.44% for the Institutional, Investor and Class C Shares, respectively.
(8) Dividend expense totaled 0.34% of average net assets for the period ended March 31, 2015, 0.21% of which was waived. Broker fees and charges on short sales totaled 0.77% of average net assets for the period ended March 31, 2015, 0.56% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 3.01%, 3.26% and 4.01% for the Institutional, Investor and Class C Shares, respectively.
(9) Dividend expense totaled 0.40% of average net assets for the year ended September 30, 2014, 0.40% of which was waived. Broker fees and charges on short sales totaled 0.44% of average net assets for the year ended September 30, 2014, 0.44% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.77%, 3.01% and 3.77% for the Institutional, Investor and Class C Shares, respectively.
(10) Dividend expense totaled 0.45% of average net assets for the year ended September 30, 2013, 0.45% of which was waived. Broker fees and charges on short sales totaled 0.45% of average net assets for the year ended September 30, 2013, 0.45% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.83%, 3.08% and 3.83% for the Institutional, Investor and Class C Shares, respectively.
(11) Dividend expense totaled 0.20% of average net assets for the year ended September 30, 2012, 0.20% of which was waived. Broker fees and charges on short sales totaled 0.33% of average net assets for the year ended September 30, 2012, 0.33% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.42%, 2.67% and 3.42% for the Institutional, Investor and Class C Shares, respectively.
(12) Dividend expense totaled 0.28% of average net assets for the year ended September 30, 2011, 0.22% of which was waived. Broker fees and charges on short sales totaled 0.32% of average net assets for the year ended September 30, 2011, 0.25% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.40%, 2.65% and 3.40% for the Institutional, Investor and Class C Shares, respectively.
(13) Dividend expense totaled 0.45% of average net assets for the year ended September 30, 2010, 0.42% of which was waived. Broker fees and charges on short sales totaled 0.38% of average net assets for the year ended September 30, 2010, 0.37% of which was waived beginning on January 13, 2010. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.70%, 2.96% and 3.71% for the Institutional, Investor and Class C Shares, respectively.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 29
FINANCIAL STATEMENTS
Financial highlights
For a share outstanding throughout each period
| Net asset value, beginning of period | Net investment income (loss)(1) | Realized and unrealized gains (losses) on investments | Total from investment operations | Dividends from net investment income | Distributions from capital gains | Total dividends and distributions | |||||||||||||||||||||||||
Turner Titan Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 11.43 | (0.06 | ) | 0.61 | 0.55 | — | (1.33 | ) | (1.33 | ) | ||||||||||||||||||||
2014 | $ | 10.51 | (0.11 | ) | 1.15 | 1.04 | — | (0.12 | ) | (0.12 | ) | ||||||||||||||||||||
2013 | $ | 10.24 | (0.08 | ) | 0.43 | 0.35 | — | (0.08 | ) | (0.08 | ) | ||||||||||||||||||||
2012 | $ | 9.77 | (0.11 | ) | 0.67 | 0.56 | — | (0.09 | ) | (0.09 | ) | ||||||||||||||||||||
| 2011 (6) | $ | 10.00 | (0.10 | ) | (0.13 | ) | (0.23 | ) | — | — | — | ||||||||||||||||||||
Turner Titan Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 11.32 | (0.07 | ) | 0.60 | 0.53 | — | (1.33 | ) | (1.33 | ) | ||||||||||||||||||||
2014 | $ | 10.44 | (0.14 | ) | 1.14 | 1.00 | — | (0.12 | ) | (0.12 | ) | ||||||||||||||||||||
2013 | $ | 10.20 | (0.10 | ) | 0.42 | 0.32 | — | (0.08 | ) | (0.08 | ) | ||||||||||||||||||||
2012 | $ | 9.76 | (0.13 | ) | 0.66 | 0.53 | — | (0.09 | ) | (0.09 | ) | ||||||||||||||||||||
| 2011 (6) | $ | 10.00 | (0.11 | ) | (0.13 | ) | (0.24 | ) | — | — | — | ||||||||||||||||||||
Turner Titan Fund — Class C Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 11.00 | (0.11 | ) | 0.58 | 0.47 | — | (1.33 | ) | (1.33 | ) | ||||||||||||||||||||
2014 | $ | 10.22 | (0.22 | ) | 1.12 | 0.90 | — | (0.12 | ) | (0.12 | ) | ||||||||||||||||||||
2013 | $ | 10.07 | (0.16 | ) | 0.39 | 0.23 | — | (0.08 | ) | (0.08 | ) | ||||||||||||||||||||
2012 | $ | 9.72 | (0.21 | ) | 0.65 | 0.44 | — | (0.09 | ) | (0.09 | ) | ||||||||||||||||||||
| 2011 (6) | $ | 10.00 | (0.16 | ) | (0.12 | ) | (0.28 | ) | — | — | — | ||||||||||||||||||||
Turner Emerging Growth Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 54.75 | (0.09 | ) | 3.96 | 3.87 | — | (26.11 | ) | (26.11 | ) | ||||||||||||||||||||
2014 | $ | 65.25 | (0.46 | ) | 0.32 | (0.14 | ) | — | (10.36 | ) | (10.36 | ) | |||||||||||||||||||
2013 | $ | 57.68 | (0.12 | ) | 16.10 | 15.98 | — | (8.41 | ) | (8.41 | ) | ||||||||||||||||||||
2012 | $ | 45.83 | (0.34 | ) | 12.19 | 11.85 | — | — | — | ||||||||||||||||||||||
2011 | $ | 42.51 | (0.40 | ) | 3.72 | 3.32 | — | — | — | ||||||||||||||||||||||
2010 | $ | 37.78 | (0.31 | ) | 5.04 | 4.73 | — | — | — | ||||||||||||||||||||||
Turner Emerging Growth Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 53.75 | (0.13 | ) | 3.83 | 3.70 | — | (26.11 | ) | (26.11 | ) | ||||||||||||||||||||
2014 | $ | 64.38 | (0.59 | ) | 0.32 | (0.27 | ) | — | (10.36 | ) | (10.36 | ) | |||||||||||||||||||
2013 | $ | 57.16 | (0.25 | ) | 15.88 | 15.63 | — | (8.41 | ) | (8.41 | ) | ||||||||||||||||||||
2012 | $ | 45.52 | (0.47 | ) | 12.11 | 11.64 | — | — | — | ||||||||||||||||||||||
2011 | $ | 42.32 | (0.52 | ) | 3.72 | 3.20 | — | — | — | ||||||||||||||||||||||
2010 | $ | 37.71 | (0.41 | ) | 5.02 | 4.61 | — | — | — | ||||||||||||||||||||||
30 TURNER FUNDS 2015 SEMIANNUAL REPORT
| Net asset value, end of period | Total return | Net assets end of period (000) | Ratio of net expenses to average net assets* | Ratio of total expenses to average net assets | Ratio of net investment income (loss) to average net assets* | Portfolio turnover rate** | |||||||||||||||||||||||||
Turner Titan Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 10.65 | 5.43 | %†† | $ | 11,405 | 2.07 | %† (2) | 2.98 | %† | (1.03 | )%† | 386 | % | |||||||||||||||||
2014 | $ | 11.43 | 10.00 | % | $ | 9,633 | 1.93 | %† (3) | 2.85 | %† | (0.99 | )%† | 777 | % | |||||||||||||||||
2013 | $ | 10.51 | 3.43 | % | $ | 21,166 | 1.94 | %† (4) | 2.42 | %† | (0.76 | )%† | 788 | % | |||||||||||||||||
2012 | $ | 10.24 | 5.75 | % | $ | 25,811 | 1.92 | %† (5) | 2.41 | %† | (1.03 | )%† | 834 | % | |||||||||||||||||
| 2011 (6) | $ | 9.77 | (2.30 | )%†† | $ | 11,374 | 1.92 | % (7) | 3.54 | % | (1.47 | )% | 647 | % | |||||||||||||||||
Turner Titan Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 10.52 | 5.30 | %†† | $ | 258 | 2.32 | %† (2) | 3.23 | %† | (1.28 | )%† | 386 | % | |||||||||||||||||
2014 | $ | 11.32 | 9.68 | % | $ | 551 | 2.18 | %† (3) | 3.10 | %† | (1.24 | )%† | 777 | % | |||||||||||||||||
2013 | $ | 10.44 | 3.14 | % | $ | 387 | 2.19 | %† (4) | 2.67 | %† | (1.01 | )%† | 788 | % | |||||||||||||||||
2012 | $ | 10.20 | 5.44 | % | $ | 5,038 | 2.17 | %† (5) | 2.66 | %† | (1.28 | )%† | 834 | % | |||||||||||||||||
| 2011 (6) | $ | 9.76 | (2.40 | )%†† | $ | 2,711 | 2.16 | % (7) | 4.66 | % | (1.65 | )% | 647 | % | |||||||||||||||||
Turner Titan Fund — Class C Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 10.14 | 4.89 | %†† | $ | 261 | 3.07 | %† (2) | 3.98 | %† | (2.03 | )%† | 386 | % | |||||||||||||||||
2014 | $ | 11.00 | 8.90 | % | $ | 256 | 2.93 | %† (3) | 3.85 | %† | (1.99 | )%† | 777 | % | |||||||||||||||||
2013 | $ | 10.22 | 2.28 | % | $ | 26 | 2.94 | %† (4) | 3.42 | %† | (1.76 | )%† | 788 | % | |||||||||||||||||
2012 | $ | 10.07 | 4.53 | % | $ | 531 | 2.92 | %† (5) | 3.41 | %† | (2.03 | )%† | 834 | % | |||||||||||||||||
| 2011 (6) | $ | 9.72 | (2.80 | )%†† | $ | 29 | 2.92 | % (7) | 2.31 | % | (2.44 | )% | 647 | % | |||||||||||||||||
Turner Emerging Growth Fund — Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 32.51 | 11.54 | %†† | $ | 18,488 | 1.15 | % | 1.60 | % | (0.45 | )% | 52 | % | |||||||||||||||||
2014 | $ | 54.75 | (0.76 | )% | $ | 25,912 | 1.15 | % | 1.42 | % | (0.76 | )% | 78 | % | |||||||||||||||||
2013 | $ | 65.25 | 32.98 | % | $ | 72,442 | 1.15 | % | 1.31 | % | (0.21 | )% | 62 | % | |||||||||||||||||
2012 | $ | 57.68 | 25.86 | % | $ | 69,391 | 1.15 | % | 1.30 | % | (0.62 | )% | 75 | % | |||||||||||||||||
2011 | $ | 45.83 | 7.81 | % | $ | 67,035 | 1.15 | % | 1.27 | % | (0.77 | )% | 74 | % | |||||||||||||||||
2010 | $ | 42.51 | 12.52 | % | $ | 276,445 | 1.15 | % | 1.28 | % | (0.77 | )% | 96 | % | |||||||||||||||||
Turner Emerging Growth Fund — Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 31.34 | 11.38 | %†† | $ | 81,541 | 1.40 | % | 1.85 | % | (0.70 | )% | 52 | % | |||||||||||||||||
2014 | $ | 53.75 | (1.00 | )% | $ | 116,860 | 1.40 | % | 1.67 | % | (1.01 | )% | 78 | % | |||||||||||||||||
2013 | $ | 64.38 | 32.63 | % | $ | 180,291 | 1.40 | % | 1.56 | % | (0.46 | )% | 62 | % | |||||||||||||||||
2012 | $ | 57.16 | 25.57 | % | $ | 168,990 | 1.40 | % | 1.55 | % | (0.87 | )% | 75 | % | |||||||||||||||||
2011 | $ | 45.52 | 7.56 | % | $ | 159,127 | 1.40 | % | 1.55 | % | (1.01 | )% | 74 | % | |||||||||||||||||
2010 | $ | 42.32 | 12.22 | % | $ | 176,823 | 1.40 | % | 1.53 | % | (1.02 | )% | 96 | % | |||||||||||||||||
* Inclusive of fees paid indirectly, waivers and/or reimbursements.
** Excludes effect of in-kind transfers and mergers, as applicable. Not annualized for periods less than one year.
^ For the six-month period ended March 31, 2015 (unaudited). All ratios for the periods have been annualized unless otherwise noted.
† Does not include acquired fund fees or expenses.
†† Total return is for the period indicated and has not been annualized.
(1) Based on average shares outstanding.
(2) Dividend expense totaled 0.16% of average net assets for the period ended March 31, 2015, 0.06% of which was waived. Broker fees and charges on short sales totaled 0.18% of average net assets for the period ended March 31, 2015, 0.13% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.26%, 2.51% and 3.26% for the Institutional, Investor and Class C Shares, respectively.
(3) Dividend expense totaled 0.20% of average net assets for the year ended September 30, 2014, 0.20% of which was waived. Broker fees and charges on short sales totaled 0.46% of average net assets for the year ended September 30, 2014, 0.46% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.58%, 2.83% and 3.58% for the Institutional, Investor and Class C Shares, respectively.
(4) Dividend expense totaled 0.14% of average net assets for the year ended September 30, 2013, 0.14% of which was waived. Broker fees and charges on short sales totaled 0.27% of average net assets for the year ended September 30, 2013, 0.27% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.35%, 2.60% and 3.35% for the Institutional, Investor and Class C Shares, respectively.
(5) Dividend expense totaled 0.08% of average net assets for the year ended September 30, 2012, 0.08% of which was waived. Broker fees and charges on short sales totaled 0.23% of average net assets for the year ended September 30, 2012, 0.23% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.23%, 2.48% and 3.23% for the Institutional, Investor and Class C Shares, respectively.
(6) Commenced operations on February 7, 2011. All ratios for the period have been annualized.
(7) Dividend expense totaled 0.28% of average net assets for the year ended September 30, 2011, 0.22% of which was waived. Broker fees and charges on short sales totaled 0.32% of average net assets for the year ended September 30, 2011, 0.25% of which was waived. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.20%, 2.44% and 3.20% for the Institutional, Investor and Class C Shares, respectively.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 31
FINANCIAL STATEMENTS
Financial highlights
For a share outstanding throughout each period
| Net asset value, beginning of period | Net investment income (loss)(1) | Realized and unrealized gains (losses) on investments | Total from investment operations | Dividends from net investment income | Distributions from capital gains | Total dividends and distributions | |||||||||||||||||||||||||
Turner Midcap Growth Fund—Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 38.57 | (0.05 | ) | 2.26 | 2.21 | — | (16.16 | ) | (16.16 | ) | ||||||||||||||||||||
2014 | $ | 43.43 | (0.08 | ) | 4.58 | 4.50 | — | (9.36 | ) | (9.36 | ) | ||||||||||||||||||||
2013 | $ | 35.39 | (0.09 | ) | 8.68 | 8.59 | — | (0.55 | ) | (0.55 | ) | ||||||||||||||||||||
2012 | $ | 30.42 | (0.05 | ) | 5.02 | 4.97 | — | — | — | ||||||||||||||||||||||
2011 | $ | 29.90 | (0.06 | ) | 0.58 | 0.52 | — | — | — | ||||||||||||||||||||||
2010 | $ | 26.12 | (0.08 | ) | 3.86 | 3.78 | — | — | — | ||||||||||||||||||||||
Turner Midcap Growth Fund—Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 37.79 | (0.08 | ) | 2.20 | 2.12 | — | (16.16 | ) | (16.16 | ) | ||||||||||||||||||||
2014 | $ | 42.85 | (0.17 | ) | 4.47 | 4.30 | — | (9.36 | ) | (9.36 | ) | ||||||||||||||||||||
2013 | $ | 35.03 | (0.18 | ) | 8.55 | 8.37 | — | (0.55 | ) | (0.55 | ) | ||||||||||||||||||||
2012 | $ | 30.16 | (0.13 | ) | 5.00 | 4.87 | — | — | — | ||||||||||||||||||||||
2011 | $ | 29.73 | (0.13 | ) | 0.56 | 0.43 | — | — | — | ||||||||||||||||||||||
2010 | $ | 26.03 | (0.15 | ) | 3.85 | 3.70 | — | — | — | ||||||||||||||||||||||
Turner Midcap Growth Fund—Retirement Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 35.75 | (0.11 | ) | 1.98 | 1.87 | — | (16.16 | ) | (16.16 | ) | ||||||||||||||||||||
2014 | $ | 41.07 | (0.25 | ) | 4.29 | 4.04 | — | (9.36 | ) | (9.36 | ) | ||||||||||||||||||||
2013 | $ | 33.65 | (0.25 | ) | 8.22 | 7.97 | — | (0.55 | ) | (0.55 | ) | ||||||||||||||||||||
2012 | $ | 29.05 | (0.20 | ) | 4.80 | 4.60 | — | — | — | ||||||||||||||||||||||
2011 | $ | 28.71 | (0.22 | ) | 0.56 | 0.34 | — | — | — | ||||||||||||||||||||||
2010 | $ | 25.20 | (0.21 | ) | 3.72 | 3.51 | — | — | — | ||||||||||||||||||||||
Turner Small Cap Growth Fund—Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 37.23 | (0.10 | ) | 1.89 | 1.79 | — | (20.25 | ) | (20.25 | ) | ||||||||||||||||||||
2014 | $ | 44.76 | (0.33 | ) | 0.76 | 0.43 | — | (7.96 | ) | (7.96 | ) | ||||||||||||||||||||
2013 | $ | 35.96 | (0.16 | ) | 11.47 | 11.31 | — | (2.51 | ) | (2.51 | ) | ||||||||||||||||||||
2012 | $ | 27.83 | (0.23 | ) | 8.36 | 8.13 | — | — | — | ||||||||||||||||||||||
2011 | $ | 28.97 | (0.26 | ) | (0.88 | ) | (1.14 | ) | — | — | — | ||||||||||||||||||||
2010 | $ | 25.17 | (0.20 | ) | 4.00 | 3.80 | — | — | — | ||||||||||||||||||||||
32 TURNER FUNDS 2015 SEMIANNUAL REPORT
| Net asset value, end of period | Total return | Net assets end of period (000) | Ratio of net expenses to average net assets* | Ratio of total expenses to average net assets | Ratio of net investment income (loss) to average net assets* | Portfolio turnover rate** | |||||||||||||||||||||||||
Turner Midcap Growth Fund—Institutional Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 24.62 | 9.26 | %†† | $ | 42,903 | 0.93 | % | 1.37 | % | (0.35 | )% | 48 | % (2) | |||||||||||||||||
2014 | $ | 38.57 | 12.25 | % | $ | 46,253 | 0.93 | % | 1.17 | % | (0.21 | )% | 89 | % (3) | |||||||||||||||||
2013 | $ | 43.43 | 24.69 | % | $ | 205,679 | 0.93 | % | 1.08 | % | (0.24 | )% | 84 | % | |||||||||||||||||
2012 | $ | 35.39 | 16.34 | % | $ | 236,147 | 0.93 | % | 1.04 | % | (0.14 | )% | 121 | % | |||||||||||||||||
2011 | $ | 30.42 | 1.74 | % | $ | 245,480 | 0.93 | % | 1.05 | % | (0.18 | )% | 104 | % | |||||||||||||||||
2010 | $ | 29.90 | 14.47 | % | $ | 164,993 | 0.93 | % | 1.03 | % | (0.29 | )% | 90 | % | |||||||||||||||||
Turner Midcap Growth Fund—Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 23.75 | 9.17 | %†† | $ | 184,758 | 1.18 | % | 1.62 | % | (0.60 | )% | 48 | % (2) | |||||||||||||||||
2014 | $ | 37.79 | 11.88 | % | $ | 187,974 | 1.18 | % | 1.42 | % | (0.44 | )% | 89 | % (3) | |||||||||||||||||
2013 | $ | 42.85 | 24.31 | % | $ | 257,240 | 1.18 | % | 1.33 | % | (0.49 | )% | 84 | % | |||||||||||||||||
2012 | $ | 35.03 | 16.15 | % | $ | 404,427 | 1.18 | % | 1.29 | % | (0.39 | )% | 121 | % | |||||||||||||||||
2011 | $ | 30.16 | 1.45 | % | $ | 471,286 | 1.18 | % | 1.28 | % | (0.38 | )% | 104 | % | |||||||||||||||||
2010 | $ | 29.73 | 14.21 | % | $ | 751,124 | 1.18 | % | 1.28 | % | (0.54 | )% | 90 | % | |||||||||||||||||
Turner Midcap Growth Fund—Retirement Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 21.46 | 8.95 | %†† | $ | 4,173 | 1.43 | % | 1.87 | % | (0.85 | )% | 48 | % (2) | |||||||||||||||||
2014 | $ | 35.75 | 11.74 | % | $ | 4,674 | 1.43 | % | 1.67 | % | (0.68 | )% | 89 | % (3) | |||||||||||||||||
2013 | $ | 41.07 | 24.11 | % | $ | 4,235 | 1.43 | % | 1.58 | % | (0.74 | )% | 84 | % | |||||||||||||||||
2012 | $ | 33.65 | 15.83 | % | $ | 4,811 | 1.43 | % | 1.54 | % | (0.64 | )% | 121 | % | |||||||||||||||||
2011 | $ | 29.05 | 1.18 | % | $ | 3,972 | 1.43 | % | 1.54 | % | (0.63 | )% | 104 | % | |||||||||||||||||
2010 | $ | 28.71 | 13.93 | % | $ | 4,578 | 1.43 | % | 1.53 | % | (0.79 | )% | 90 | % | |||||||||||||||||
Turner Small Cap Growth Fund—Investor Class Shares | |||||||||||||||||||||||||||||||
| 2015^ | $ | 18.77 | 10.74 | %†† | $ | 56,301 | 1.25 | % | 1.87 | % | (0.81 | )% | 97 | % | |||||||||||||||||
2014 | $ | 37.23 | 0.99 | % | $ | 130,085 | 1.25 | % | 1.66 | % | (0.83 | )% | 127 | % | |||||||||||||||||
2013 | $ | 44.76 | 33.79 | % | $ | 233,039 | 1.25 | % | 1.56 | % | (0.43 | )% | 82 | % | |||||||||||||||||
2012 | $ | 35.96 | 29.21 | % | $ | 250,099 | 1.25 | % | 1.53 | % | (0.68 | )% | 100 | % | |||||||||||||||||
2011 | $ | 27.83 | (3.94 | )% | $ | 229,919 | 1.25 | % | 1.53 | % | (0.76 | )% | 119 | % | |||||||||||||||||
2010 | $ | 28.97 | 15.10 | % | $ | 274,925 | 1.25 | % | 1.52 | % | (0.74 | )% | 89 | % | |||||||||||||||||
* Inclusive of fees paid indirectly, waivers and/or reimbursements.
** Excludes effect of in-kind transfers and mergers, as applicable. Not annualized for periods less than one year.
^ For the six-month period ended March 31, 2015 (unaudited). All ratios for the periods have been annualized unless otherwise noted.
†† Total return is for the period indicated and has not been annualized.
(1) Based on average shares outstanding.
(2) If purchases of portfolio securities in connection with the reorganization of the Turner Large Growth Fund into the Turner Midcap Growth Fund had been included, the portfolio turnover rate would have been 61%.
(3) If purchases of portfolio securities in connection with the reorganization of the Turner All Cap Growth Fund into the Turner Midcap Growth Fund had been included, the portfolio turnover rate would have been 93%.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2015 SEMIANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Notes to financial statements
March 31, 2015
1. Organization:
Turner Funds (the "Trust"), a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company and thus is determined to be an investment company for accounting purposes. The funds included herein are Turner Medical Sciences Long/Short Fund ("Medical Sciences Long/Short Fund"), Turner Spectrum Fund ("Spectrum Fund"), Turner Titan Fund ("Titan Fund"), Turner Emerging Growth Fund ("Emerging Growth Fund"), Turner Midcap Growth Fund ("Midcap Growth Fund"), and Turner Small Cap Growth Fund ("Small Cap Growth Fund"), each a "Fund" and collectively the "Funds."
Each Fund is registered as a diversified portfolio of the Trust.
The Funds are registered to offer different classes of shares: Institutional Class Shares, Investor Class Shares, Retirement Class Shares, Class C Shares, or a combination of the four. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectuses provide a description of each Fund's investment objectives, policies and strategies along with information on the classes of shares currently being offered.
On January 14, 2015, the Board of Trustees of the Trust (the "Board") determined to close and liquidate the Titan Fund. The Titan Fund, which had previously been scheduled to close and liquidate on or about April 30, 2015, will close and liquidate on or about June 1, 2015. The decision was made after careful consideration of the Titan Fund's asset size, strategic importance, current expenses and historical performance. In connection with the planned liquidation, the Titan Fund discontinued accepting orders for the purchase of Fund shares or exchanges into the Titan Fund from other Turner Funds after the close of business on January 30, 2015.
2. Significant accounting policies:
The following is a summary of the significant accounting policies followed by the Funds.
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 of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Securities valuation—In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, fair value is defined as the price that
a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market.
The Trust has a three-tier fair value hierarchy that is dependent upon the various "inputs" used to determine the value of the Funds' investments. These inputs are summarized in the three broad levels listed below:
Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)
Level 3 – significant unobservable inputs (including a Fund's own assumptions in determining the fair value of investments)
Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including American Depositary Receipts ("ADRs"), are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price for long positions and the most recent quoted ask price for short positions. For securities traded on NASDAQ, the NASDAQ Official Closing Price is used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. To the extent these securities are valued at the last sales price or NASDAQ Official Closing Price, they are categorized as Level 1 in the fair value hierarchy.
Investments in other open-end investment companies are valued at net asset value. These valuations are typically categorized as Level 1 in the fair value hierarchy.
If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain bid and ask prices from two broker-dealers who make a market in the security and determine the average of the two. In this situation, valuations are typically categorized as Level 2 in the fair value hierarchy.
Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Board. The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Board. Some of the more common reasons that may necessitate that a security be valued using Fair Value
34 TURNER FUNDS 2015 SEMIANNUAL REPORT
Procedures include: the security's trading has been halted or suspended; the security has been delisted from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; the security has not been traded for an extended period of time; the security's primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government-imposed restrictions. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. Depending on the source or relative significance of the valuation inputs, these securities may be categorized as Level 2 or Level 3 in the fair value hierarchy.
For securities that principally trade on a foreign market or exchange, a significant gap in time can exist between the time of a particular security's last trade and the time at which a Fund calculates its net asset value. The closing prices of such securities may no longer reflect their market value at the time a Fund calculates net asset value if an event that could materially affect the value of those securities (a "Significant Event") has occurred between the time of the security's last close and the time that a Fund calculates net asset value. A Significant Event may relate to a single issuer or to an entire market sector.
In the event that Turner Investments, L.P. ("Turner," the "Adviser," or the "Administrator") believes that the fair values provided by a third party fair valuation vendor are not reliable, or believes that a foreign security held by a Fund should be fair valued for any other reason, the Adviser shall contact the Sub-administrator, Citi Fund Services, Ohio, Inc. ("Citi" or the "Sub-administrator"), and request that a meeting of the Committee be held. Depending on the source or relative significance of the valuation inputs, these securities may be categorized as Level 2 or Level 3 in the fair value hierarchy.
For the six months ended March 31, 2015, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.
The following table is a summary of inputs used to value the Funds' investments as of March 31, 2015. The breakdown, by sub-category, of the "common stock" category is disclosed in the Schedule of investments and Schedule of securities sold short for each Fund, as applicable.
| Level 1 (000) | Level 2 (000) | Total (000) | |||||||||||||
Medical Sciences Long/Short Fund | |||||||||||||||
Investments in Securities | |||||||||||||||
Common stock | $ | 68,426 | $ | — | $ | 68,426 | |||||||||
Cash equivalent | 4,015 | — | 4,015 | ||||||||||||
Total Investments in securities | $ | 72,441 | $ | — | $ | 72,441 | |||||||||
Securities Sold Short | |||||||||||||||
Common stock | $ | 26,276 | $ | — | $ | 26,276 | |||||||||
Exchange Traded Funds | 21,924 | — | 21,924 | ||||||||||||
Total Securities sold short | $ | 48,200 | $ | — | $ | 48,200 | |||||||||
Spectrum Fund | |||||||||||||||
Investments in Securities | |||||||||||||||
Common stock | $ | 44,858 | $ | — | $ | 44,858 | |||||||||
Warrant | 236 | — | 236 | ||||||||||||
Total Investments in securities | $ | 45,094 | $ | — | $ | 45,094 | |||||||||
Securities Sold Short | |||||||||||||||
Common stock | $ | 20,300 | $ | — | $ | 20,300 | |||||||||
Exchange Traded Funds | 8,505 | — | 8,505 | ||||||||||||
Total Securities sold short | $ | 28,805 | $ | — | $ | 28,805 | |||||||||
Titan Fund | |||||||||||||||
Investments in Securities | |||||||||||||||
Common stock | $ | 9,620 | $ | — | $ | 9,620 | |||||||||
Cash equivalent | 2,256 | — | 2,256 | ||||||||||||
Total Investments in securities | $ | 11,876 | $ | — | $ | 11,876 | |||||||||
Securities Sold Short | |||||||||||||||
Common stock | $ | 4,221 | $ | — | $ | 4,221 | |||||||||
Exchange Traded Funds | 1,210 | — | 1,210 | ||||||||||||
Total Securities sold short | $ | 5,431 | $ | — | $ | 5,431 | |||||||||
Emerging Growth Fund | |||||||||||||||
Investments in Securities | |||||||||||||||
Common stock | $ | 96,832 | $ | — | $ | 96,832 | |||||||||
Cash equivalent | 28,597 | — | 28,597 | ||||||||||||
Total Investments in securities | $ | 125,429 | $ | — | $ | 125,429 | |||||||||
Midcap Growth Fund | |||||||||||||||
Investments in Securities | |||||||||||||||
Common stock | $ | 225,796 | $ | — | $ | 225,796 | |||||||||
Cash equivalent | 26,121 | — | 26,121 | ||||||||||||
Total Investments in securities | $ | 251,917 | $ | — | $ | 251,917 | |||||||||
Small Cap Growth Fund | |||||||||||||||
Investments in Securities | |||||||||||||||
Common stock | $ | 55,464 | $ | — | $ | 55,464 | |||||||||
Cash equivalent | 12,694 | — | 12,694 | ||||||||||||
Total Investments in securities | $ | 68,158 | $ | — | $ | 68,158 | |||||||||
For each Fund, there were no transfers between the levels as of March 31, 2015 based on the input levels assigned at September 30, 2014.
Security transactions and related income—Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is
TURNER FUNDS 2015 SEMIANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (Unaudited)
recognized on the ex-dividend date. Costs used in determining realized gains and losses on the sales of investment securities are those of the specific securities lots sold.
Securities sold short—Consistent with each Fund's investment objectives, the Funds may engage in short sales. Short sales are transactions under which a Fund sells a security it does not own. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of the replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay the lender amounts equal to any dividends that accrue during the period of the loan. Dividends declared on open short positions are recorded on ex-date and shown as an expense for financial reporting purposes. To borrow the security, the Fund also may be required to pay a fee, which is shown as an expense for financial reporting purposes. The proceeds of the short sale are retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the close of a short sale.
Until a Fund closes its short position or replaces the borrowed security, the Fund will: (a) maintain a segregated account containing cash or liquid securities at such a level that (i) the amount deposited in the account plus the amount deposited with the brokers as collateral will equal the current value of the security sold short; and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time the security was sold short, or (b) otherwise cover the short positions. The Medical Sciences Long/Short Fund, Spectrum Fund and Titan Fund engaged in short sales during the six months ended March 31, 2015.
Option transactions—Consistent with each Fund's investment objectives, the Funds may write covered call options and sell put options as a means of increasing the yield on their portfolios and as a means of providing limited protection against decreases in their market value. The Funds may purchase put and call options to protect against a decline in the market value of the securities in their portfolios or to anticipate an increase in the market value of securities that the Funds may seek to purchase in the future. A put option gives the purchaser of the option the right to sell, and the writer of the option the obligation to buy, the underlying security at any time during the option period. A call option gives the purchaser of the option
the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option period. The premium paid to the writer is the consideration for undertaking the obligations under the option contract. The initial purchase (sale) of an option contract is an "opening transaction." In order to close an option position, the Fund may enter into a "closing transaction," which is simply the sale (purchase) of an option contract on the same security with the same exercise price and expiration date as the option contract originally opened. If the Fund is unable to effect a closing purchase transaction with respect to an option it has written, it will not be able to sell the underlying security until the option expires or the Fund delivers the security upon exercise. When the Fund writes (sells) an option, an amount equal to the premium received by the Fund 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.
Option contracts are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long positions are valued at the most recent bid price, and short positions are valued at the most recent ask price. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss if the cost of the closing purchase 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 security (or increases the proceeds on a sale of the security). The primary risk exposure from written and purchased options contracts is equity exposure.
During the six months ended March 31, 2015, the Funds held no written or purchased options.
Foreign currency translation—The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars on the date of valuation. The Funds do not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments in the Statements of operations. Net realized and unrealized gains and losses on foreign currency transactions represent net foreign exchange gains or losses from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement
36 TURNER FUNDS 2015 SEMIANNUAL REPORT
dates on securities transactions and the difference between the amount of the investment income and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent amounts actually received or paid.
Expenses—Expenses that are specifically attributed to one of the Funds are charged to that Fund. Certain other expenses of the Funds are prorated among the Funds on the basis of relative daily net assets.
Classes—Class specific expenses are borne by that class. Income, non-class specific expenses, and realized and unrealized gains and losses are allocated to the respective classes on the basis of relative daily net assets.
Dividends and distributions—The Funds declare and distribute net investment income, if any, annually, as a dividend to shareholders. Any net realized capital gains on sales of securities for all Funds are distributed to shareholders at least annually.
3. Administration, shareholder servicing, distribution and transfer agent agreements:
Turner provides administrative services to the Funds under an Administration Agreement with the Trust. For its services, Turner receives an annual fee of 0.15% of the aggregate average daily net assets of the Trust up to $2 billion and 0.12% of the aggregate average daily net assets of the Trust over $2 billion. Under a separate Sub-administration Agreement between Turner and Citi, Citi provides sub-administrative services, including certain fund accounting services, to the Trust. For the six months ended March 31, 2015, Citi was paid $255 (000) by Turner.
Foreside Fund Services, LLC (the "Distributor") provides distribution services to the Funds under a Distribution Services Agreement.
The Funds have adopted a Distribution Plan for Retirement Class Shares and Class C Shares (the "Distribution Plan") under which firms, including the Distributor, that provide distribution services may receive compensation. Under the Distribution Plan, which was adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, the Distributor is entitled to receive aggregate fees for distribution services not to exceed 0.75% of each Fund's average daily net assets attributable to Retirement Class or Class C Shares that are subject to the arrangement in return for providing a broad range of distribution services. Currently, the Retirement Class Shares of the Midcap Growth Fund pay the Distributor 0.25% and the Class C Shares of the Medical Sciences Long/Short Fund, Spectrum Fund and Titan Fund pay the Distributor 0.75% in distribution fees.
The Funds have also adopted Shareholder Services Plans (the "Service Plans"). Under the Service Plans, service providers are entitled to receive aggregate fees for
shareholder services not to exceed 0.25% of each Fund's average daily net assets attributable to Investor Class Shares, Retirement Class Shares and Class C Shares that are subject to the arrangement in return for providing shareholder services. Currently, Investor Class Shares of each Fund, Retirement Class Shares of the Midcap Growth Fund and Class C Shares of the Medical Sciences Long/Short Fund, Spectrum Fund and Titan Fund pay 0.25% in shareholder servicing fees.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for the Funds under a Transfer Agency Agreement with the Trust.
Certain officers and trustees of the Trust are also officers or employees of Turner or Citi. With the exception of the Trust's Chief Compliance Officer, such officers are paid no fees by the Trust for serving as officers and trustees of the Trust.
4. Investment advisory agreement:
The Trust and Turner are parties to an Investment Advisory Agreement dated April 28, 1996 under which Turner receives a fee that is calculated daily and paid monthly, based on the average daily net assets of the Funds.
Turner has contractually agreed to waive all or a portion of its fees and to reimburse expenses in order to limit total Fund operating expenses, excluding interest and borrowing cost on short and long sales and short sale dividend expenses, to a specified percentage of the average daily net assets of each Fund on an annualized basis through certain dates disclosed in the following table:
| Advisory fee | Expense cap | Date (through) | |||||||||||||
| Medical Sciences Long/Short Fund | |||||||||||||||
Institutional Class | 1.50 | % | 1.90 | % | January 31, 2016 | ||||||||||
Investor Class | 1.50 | % | 2.15 | % | January 31, 2016 | ||||||||||
Class C | 1.50 | % | 2.90 | % | January 31, 2016 | ||||||||||
Spectrum Fund | |||||||||||||||
Institutional Class | 1.50 | % | 1.90 | % | January 31, 2016 | ||||||||||
Investor Class | 1.50 | % | 2.15 | % | January 31, 2016 | ||||||||||
Class C | 1.50 | % | 2.90 | % | January 31, 2016 | ||||||||||
Titan Fund | |||||||||||||||
Institutional Class | 1.50 | % | 1.90 | % | January 31, 2016 | ||||||||||
Investor Class | 1.50 | % | 2.15 | % | January 31, 2016 | ||||||||||
Class C | 1.50 | % | 2.90 | % | January 31, 2016 | ||||||||||
Emerging Growth Fund | |||||||||||||||
Institutional Class | 1.00 | % | 1.15 | % | January 31, 2016 | ||||||||||
Investor Class | 1.00 | % | 1.40 | % | January 31, 2016 | ||||||||||
Midcap Growth Fund | |||||||||||||||
Institutional Class | 0.75 | % | 0.93 | % | January 31, 2016 | ||||||||||
Investor Class | 0.75 | % | 1.18 | % | January 31, 2016 | ||||||||||
Retirement Class | 0.75 | % | 1.43 | % | January 31, 2016 | ||||||||||
Small Cap Growth Fund | |||||||||||||||
Investor Class | 1.00 | % | 1.25 | % | January 31, 2016 | ||||||||||
TURNER FUNDS 2015 SEMIANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Prior to January 31, 2015, Turner contractually agreed to waive all or a portion of its fees and to reimburse expenses in order to limit total operating expenses to a specified percentage of the average daily net assets of each of the Funds below on an annualized basis, including interest and borrowing cost of short and long sales and short sale dividend expenses, as disclosed in the following table:
| Advisory fee | Expense cap | Date (through) | |||||||||||||
| Medical Sciences Long/Short Fund | |||||||||||||||
Institutional Class | 1.50 | % | 1.95 | % | January 31, 2015 | ||||||||||
Investor Class | 1.50 | % | 2.20 | % | January 31, 2015 | ||||||||||
Class C | 1.50 | % | 2.95 | % | January 31, 2015 | ||||||||||
Spectrum Fund | |||||||||||||||
Institutional Class | 1.50 | % | 1.95 | % | January 31, 2015 | ||||||||||
Investor Class | 1.50 | % | 2.20 | % | January 31, 2015 | ||||||||||
Class C | 1.50 | % | 2.95 | % | January 31, 2015 | ||||||||||
Titan Fund | |||||||||||||||
Institutional Class | 1.50 | % | 1.95 | % | January 31, 2015 | ||||||||||
Investor Class | 1.50 | % | 2.20 | % | January 31, 2015 | ||||||||||
Class C | 1.50 | % | 2.95 | % | January 31, 2015 | ||||||||||
5. Contingent deferred sales charges (Class C Shares):
A 1.00% contingent deferred sales charge ("CDSC") will be deducted with respect to Class C Shares of the Medical Sciences Long/Short Fund, Spectrum Fund and Titan Fund redeemed within 12 months of purchase. The CDSC will be based on the lower of the original purchase price or the value of the Class C Shares redeemed. The CDSC may be waived for certain investors, as described in the Class C Shares statutory prospectus for the Medical Sciences Long/Short Fund, Spectrum Fund and Titan Fund.
6. Investment transactions:
The cost of security purchases and the proceeds from security sales, other than short-term investments and option contracts written, for the six months ended March 31, 2015 were as follows:
Purchases | Sales | ||||||||||
Medical Sciences Long/Short Fund | $ | 68,141 | $ | 61,104 | |||||||
Spectrum Fund | 173,790 | 268,305 | |||||||||
Titan Fund | 39,349 | 39,720 | |||||||||
Emerging Growth Fund | 61,733 | 118,696 | |||||||||
Midcap Growth Fund* | 107,294 | 164,734 | |||||||||
Small Cap Growth Fund | 83,149 | 166,988 | |||||||||
* Costs of purchases and proceeds from sales of portfolio securities incurred to realign the Fund's portfolio after the reorganization of the Turner Large Growth Fund into the Midcap Growth Fund are excluded from these amounts. The cost of purchases excluded were $28,833 (000).
7. Federal tax policies and information:
Each Fund is classified as a separate taxable entity for Federal income tax purposes. Each Fund intends to continue to qualify as a separate "regulated investment company" under the Internal Revenue Code and make the requisite distributions to shareholders that will be sufficient to relieve it from Federal income tax and Federal excise tax. Therefore, no Federal tax provision is required.
The amounts of dividends from net investment income and distributions from net realized capital gains, if any, are determined in accordance with Federal income tax regulations, which may differ from those amounts determined under GAAP. These book/tax differences are either temporary or permanent in nature. These differences are primarily due to wash sales, REIT adjustments, foreign currency transactions, net operating losses, return of capital distributions, equalization and investments in partnerships and passive foreign investment companies. The character and timing of dividends from net investment income and distributions from net realized gains distributed during the fiscal year may differ from the year that the income or realized gains (losses) were recorded by the Funds. To the extent these differences are permanent, adjustments are made to the appropriate equity accounts in the period that the differences arise. The Funds may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes. Any available tax equalization will be applied prorata to short-term capital gains and to long-term capital gains, and then to net investment income, as applicable.
Withholding taxes on dividends and net realized capital gains as a result of certain investments in ADRs by the Funds have been provided for in accordance with each investment's applicable country's tax rules and rates.
The tax character of dividends and distributions declared during the years ended September 30, 2014 and September 30, 2013 were as follows (000):
| Ordinary income | Long-term capital gain | Return of capital | Total | ||||||||||||||||
Medical Sciences Long/Short Fund | |||||||||||||||||||
2014 | $ | 331 | $ | 385 | $ | — | $ | 716 | |||||||||||
Titan Fund | |||||||||||||||||||
2014 | $ | — | $ | 278 | $ | — | $ | 278 | |||||||||||
2013 | $ | 367 | $ | — | $ | — | $ | 367 | |||||||||||
Emerging Growth Fund | |||||||||||||||||||
2014 | $ | — | $ | 38,752 | $ | — | $ | 38,752 | |||||||||||
2013 | $ | — | $ | 32,864 | $ | — | $ | 32,864 | |||||||||||
Midcap Growth Fund | |||||||||||||||||||
2014 | $ | 17,823 | $ | 67,608 | $ | — | $ | 85,431 | |||||||||||
2013 | $ | 739 | $ | 7,407 | $ | — | $ | 8,146 | |||||||||||
Small Cap Growth Fund | |||||||||||||||||||
2014 | $ | 4,658 | $ | 36,321 | $ | — | $ | 40,979 | |||||||||||
2013 | $ | — | $ | 15,983 | $ | — | $ | 15,983 | |||||||||||
38 TURNER FUNDS 2015 SEMIANNUAL REPORT
As of September 30, 2014, the components of distributable earnings (accumulated losses) on a tax basis were as follows (000):
| Undistributed ordinary income | Undistributed long-term capital gains | Capital loss carryforward | Post- October losses | Late-year ordinary losses | Unrealized appreciation (depreciation) | Total distributable earnings (accumulated losses) | |||||||||||||||||||||||||
Medical Sciences Long/Short Fund | $ | 1,263 | $ | 749 | $ | — | $ | — | $ | — | $ | 1,196 | $ | 3,208 | |||||||||||||||||
Spectrum Fund | — | 23,520 | — | — | (6,549 | ) | 5,553 | 22,524 | |||||||||||||||||||||||
Titan Fund | 673 | 704 | — | — | — | 598 | 1,975 | ||||||||||||||||||||||||
Emerging Growth Fund | 420 | 58,274 | — | — | — | 24,626 | 83,320 | ||||||||||||||||||||||||
Midcap Growth Fund | 706 | 87,661 | (4,831 | ) | — | — | 49,275 | 132,811 | |||||||||||||||||||||||
Small Cap Growth Fund | — | 44,059 | — | (1,088 | ) | (323 | ) | 18,106 | 60,754 | ||||||||||||||||||||||
Under current tax law, capital losses and specified ordinary losses realized after October 31 and non-specified ordinary losses incurred after December 31 (ordinary losses collectively known as "late year ordinary loss") may be deferred and treated as having arisen in the following fiscal year.
As of the end of their latest tax year end of September 30, 2014, the Funds in the following table had capital loss carryforwards ("CLCFs"). CLCFs not subject to expiration must be used prior to using any CLCFs that are subject to expiration. A summary of these CLCFs is detailed in the tables below.
The Funds did not have any CLCFs not subject to expiration.
CLCFs subject to expiration:
Expiring September 30, | |||||||||||||||
2016 | 2017 | Total | |||||||||||||
Midcap Growth Fund | $ | 2,441 | $ | 2,390 | $ | 4,831 | |||||||||
As of August 29, 2014, the Midcap Growth Fund credited accumulated net realized loss of $95 (000) and charged paid-in-capital of $21,343 (000) and unrealized appreciation of $3,415 (000) due to the Turner All Cap Growth Fund merger with Midcap Growth Fund.
At March 31, 2015, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for the investments held by each Fund, excluding securities sold short, were as follows:
| Federal tax cost (000) | Unrealized appreciation (000) | Unrealized depreciation (000) | Net unrealized appreciation (000) | ||||||||||||||||
Medical Sciences Long/Short Fund | $ | 62,519 | $ | 13,918 | $ | (3,996 | ) | $ | 9,922 | ||||||||||
Spectrum Fund | 40,966 | 6,956 | (2,828 | ) | 4,128 | ||||||||||||||
Titan Fund | 10,916 | 1,099 | (139 | ) | 960 | ||||||||||||||
Emerging Growth Fund | 103,058 | 25,866 | (3,495 | ) | 22,371 | ||||||||||||||
Midcap Growth Fund | 213,734 | 42,067 | (3,884 | ) | 38,183 | ||||||||||||||
Small Cap Growth Fund | 58,048 | 12,746 | (2,636 | ) | 10,110 | ||||||||||||||
For the current open tax year and for all major jurisdictions, management has evaluated the tax positions taken or expected to be taken in the course of preparing their tax returns to determine whether the tax positions will "more-likely-than-not" be sustained by the Funds upon challenge by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold and that would result in a tax benefit or expense to the Funds would be recorded as a tax benefit or expense in the current period. For the six months ended March 31, 2015, the Funds did not recognize any amounts for unrecognized tax benefit/expense. A reconciliation of unrecognized tax benefit/expense is not provided herein, as the beginning and ending amounts of unrecognized tax benefit/expenses are zero, with no interim additions, reductions or settlements.
8. Loans of portfolio securities:
The Funds may lend securities in their portfolios pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned based on the previous day's market value of the securities loaned, marked-to-market daily. Any collateral shortfalls are adjusted the next business day. Cash collateral received is invested in the Dollar Shares of the BlackRock Liquidity Funds TempCash, a money market fund. All such investments are made at the risk of the Funds and, as such, the Funds are liable for investment losses. The Funds receive an annual fee for
TURNER FUNDS 2015 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (Unaudited)
their participation in the Lending Agreement based on the projected lending activity.
In the event of bankruptcy of the borrower, realization/retention of the collateral may be subject to legal proceedings.
Securities lending transactions are entered into by each Fund under a Master Securities Lending Agreement ("MSLA") which permits the Funds, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset amounts payable by the Funds to the same counterparty against amounts to be received and create one single net payment due to or from the Funds.
The following Funds had securities on loan and had invested cash collateral, subject to offset under a MSLA, with the following values as of March 31, 2015:
Fund | Value of Securities on Loan (000) | Value of Collateral (000) | Net Amount (000) | ||||||||||||
Emerging Growth Fund | $ | 23,173 | $ | 23,173 | $ | — | |||||||||
Midcap Growth Fund | 19,709 | 19,709 | — | ||||||||||||
Small Cap Growth Fund | 10,703 | 10,703 | — | ||||||||||||
9. Concentration/risks:
Certain Funds invest a high percentage of their assets in specific market sectors in order to achieve a potentially greater investment return. As a result, these Funds may be more susceptible to positive or negative economic, political, and regulatory developments in a particular market sector of the market and may experience the effect of this increased volatility on the Fund's net asset value and a magnified effect on the Fund's total return.
Governments of some developing countries exercise substantial influence over many aspects of the private sector. In some countries, the government owns or controls many companies, including the largest companies in the country. As such, government actions in the future could have a significant effect on economic conditions in developing countries in these regions, which could affect private sector companies, the Fund and the value of its securities. Furthermore, certain developing countries are among the largest debtors to commercial banks and foreign governments. Trading in debt obligations issued or guaranteed by such governments or their agencies and instrumentalities involves a high degree of risk.
The Funds enter into contracts that contain a variety of indemnifications. The Funds' maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
10. Fund Mergers:
On January 23, 2015, the Midcap Growth Fund acquired all of the net assets of the Turner Large Growth Fund ("Large Growth Fund"), an open-end investment company, pursuant to a Plan of Reorganization approved by the Large Growth Fund's shareholders at a meeting held on January 15, 2015. The purpose of the transaction was to combine the two Funds managed by the Adviser with similar objectives and policies. The acquisition was accomplished by a tax-free exchange of 811,506 Investor Class shares of the Large Growth Fund, valued at $14,264 (000), for 637,903 Investor Class shares of the Midcap Growth Fund and 843,931 Institutional Class shares of the Large Growth Fund, valued at $14,971 (000) for 646,409 Institutional Class shares of the Midcap Growth Fund outstanding on January 23, 2015. The exchange ratios (Midcap Growth Fund shares issued/ Large Growth Fund shares outstanding) were 0.79:1 for the Investor Class and 0.77:1 for the Institutional Class.
The investment portfolio of the Large Growth Fund, with a fair value of $29,261 (000) and identified cost of $28,833 (000) at January 23, 2015, was the principal asset acquired by the Midcap Growth Fund. For financial reporting purposes, assets received and shares issued by the Midcap Growth Fund were recorded at fair value; however, the cost basis of the investments received from the Large Growth Fund was carried forward to align ongoing reporting of the Midcap Growth Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
Upon the business combination of the Funds on January 23, 2015, the net assets of the Large Growth Fund, which included portfolio capital of $22,022 (000), accumulated net investment income of $1 (000), accumulated realized gains of $6,783 (000) and unrealized gains of $428 (000), combined with the Midcap Growth Fund were $225,779 (000). The undistributed net investment income and unrealized gains of the Large Growth Fund may be distributed by the Midcap Growth Fund in future periods. Immediately prior to the merger, the net assets of the Large Growth Fund and the Midcap Growth Fund were $29,234 (000) and $196,545 (000), respectively. All fees and expenses incurred by the Large Growth Fund and the Midcap Growth Fund directly in connection with the Plan of Reorganization were borne by the Advisor.
Assuming the acquisition had been completed on October 1, 2014, the beginning of the annual reporting period of the Midcap Growth Fund, the Fund's pro forma results of operations for the six months ended March 31, 2015, are as follows (000):
Net investment income/(loss): | $ | (641 | ) | ||||
Net realized/unrealized gains/(losses): | 21,477 | ||||||
Change in net assets resulting from operations: | $ | 20,836 | |||||
40 TURNER FUNDS 2015 SEMIANNUAL REPORT
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Large Growth Fund that have been included in the Midcap Growth Fund's Statement of operations since January 23, 2015.
On August 29, 2014, the Midcap Growth Fund acquired all of the net assets of Turner All Cap Growth Fund ("All Cap Growth Fund"), an open-end investment company, pursuant to a Plan of Reorganization approved by the All Cap Growth Fund shareholders at a meeting held on August 22, 2014. The purpose of the transaction was to combine the two Funds managed by the Adviser with similar investment objectives and policies. The acquisition was accomplished by a tax-free exchange of 426,504 Investor Class shares of the Midcap Growth Fund, valued at $16,748 (000), for 1,425,928 Investor Class shares of the All Cap Growth Fund outstanding on August 29, 2014. The exchange ratio (Midcap Growth Fund shares issued/All Cap Growth Fund shares outstanding) was 0.299:1 for the Investor Class.
The investment portfolio of the All Cap Growth Fund, with a fair value of $16,742 (000) and identified cost of $13,327 (000) at August 29, 2014, was the principal asset acquired by the Midcap Growth Fund. For financial reporting purposes, assets received and shares issued by the Midcap Growth Fund were recorded at fair value; however, the cost basis of the investments received from the All Cap Growth Fund was carried forward to align ongoing reporting of the Midcap Growth Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
Upon the business combination of the Funds on August 29, 2014, the net assets of the All Cap Growth Fund, which included portfolio capital of $21,131 (000), accumulated net investment loss of $95 (000), accumulated realized losses of $7,915 (000) and unrealized gains of $3,415 (000), combined with the Midcap Growth Fund
were $254,640 (000). The undistributed net investment income and unrealized gains of the All Cap Growth Fund may be distributed by the Midcap Growth Fund in future periods. Immediately prior to the merger, the net assets of the All Cap Growth Fund and the Midcap Growth Fund were $16,535 (000) and $237,892 (000), respectively. All fees and expenses incurred by the All Cap Growth Fund and the Midcap Growth Fund directly in connection with the Plan of Reorganization were borne by the Adviser.
Assuming the acquisition had been completed on October 1, 2013, the beginning of the annual reporting period of the Midcap Growth Fund, the Fund's pro forma results of operations for the year ended September 30, 2014, are as follows (000):
Net investment income/(loss): | $ | (1,355 | ) | ||||
Net realized/unrealized gains/(losses): | 47,180 | ||||||
Change in net assets resulting from operations: | $ | 45,825 | |||||
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the All Cap Growth Fund that have been included in the Midcap Growth Fund's Statement of operations since August 29, 2014.
11. Subsequent Events:
Effective May 30, 2015, the name of Turner Spectrum Fund is changed to Turner Titan II Fund. Turner Titan II Fund will no longer allocate its assets among various investment strategies within the Fund.
The Trust has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, aside from the event mentioned above, no additional disclosures and/or adjustments were required to the financial statements as of March 31, 2015.
TURNER FUNDS 2015 SEMIANNUAL REPORT 41
BOARD OF TRUSTEES CONSIDERATIONS IN APPROVING THE ADVISORY AGREEMENT (Unaudited)
Board of Trustees considerations in approving the Advisory Agreement
On February 27, 2015, the Board of Trustees (the "Board" or the "Trustees") of the Turner Funds (the "Funds" or the "Trust") held an in-person meeting to decide whether to renew the advisory agreement for each of the Turner Funds (the "Advisory Agreement") with Turner Investments, L.P. ("Turner" or the "Adviser") for the upcoming year. In preparation for the meeting, the Board requested and reviewed a wide variety of information from the Adviser. The materials described, among other things: the Adviser's business; the Adviser's organizational structure, personnel and operations; advisory services; the Funds' performance; compliance; advisory fees and expenses paid by the Funds for the fiscal year ended September 30, 2014; and information on trading.
The Trustees discussed all the issues regarding the 15(c) contract renewal, including performance, profitability both before and after 12b-1 fees, and the continuing need to receive in depth reports from portfolio managers and analysts for various funds, as had been the Board's practice over the prior years. The Board, including all of the independent Trustees, considered, among other things: (1) the nature, extent and quality of the services provided by the Adviser; (2) the performance of the Funds over the past one, three, five and ten years, where applicable, versus each Fund's respective Lipper peer universe; (3) the contractual and actual compensation to be paid under the agreements as compared to the compensation paid to relevant Lipper peer groups; (4) the expense ratios of the Funds, with expense waivers, as compared to expense ratios for relevant Lipper peer groups; (5) the qualifications of the Adviser's personnel, portfolio management capabilities and investment methodologies; (6) the Adviser's operations, compliance
program and policies; (7) the financial condition of the Adviser; (8) the cost of services provided by the Adviser and the Adviser's profitability from each Fund for the year ended September 30, 2014; (9) "fall-out" benefits to the Adviser and its affiliates from the relationship with the Funds; (10) the extent to which economies of scale are relevant given the Funds' current asset size and current asset growth potential; and (11) a comparison of the fees charged by the Adviser with fees charged by the Adviser to similar clients, to the extent the Board deemed it relevant.
After deliberating on all the materials reviewed and reported, the independent Trustees reached the following conclusions, among others, regarding the Adviser and the advisory agreements; the recent performance of the Funds was, in most cases, within industry norms. They determined that although performance lagged peer groups in the case of a number of Funds, the Funds' performance was, in general satisfactory. The Trustees committed to a continuing close review during the upcoming year of those products where performance lagged. The independent Trustees also concluded that the Funds' net total expense ratios and advisory fees were generally competitive. The independent Trustees also concluded that: they were satisfied with the quality of services provided by the Adviser in advising the Funds; the profits earned by the Adviser seemed reasonable in light of the nature, extent and quality of the services provided to each Fund; and that each Fund, and the Trust, was not large enough to attain significant economies of scale, beyond those already incorporated into the fee structures.
42 TURNER FUNDS 2015 SEMIANNUAL REPORT
DISCLOSURE OF FUND EXPENSES (Unaudited)
All mutual funds have operating expenses. As a shareholder of a mutual fund, your investment is affected by these on-going costs, which include (among others) costs for portfolio management, distribution (12b-1) and/or shareholder services and other expenses. It is important for you to understand the impact of these costs on your investment returns. Operating expenses such as these are deducted from a mutual fund's gross income and directly reduce its final investment return. These expenses are expressed as a percentage of a mutual fund's average net assets; this percentage is known as a mutual fund's expense ratio.
The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The table below and on the next page illustrates your Fund's costs in two ways:
• Actual Fund Return. This section helps you estimate the actual expenses after fee waivers that your Fund incurred over the period. The "Expenses Paid During Period" column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the "Ending Account Value" number is derived from deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under "Expenses Paid During Period."
• Hypothetical 5% Return. This section helps you compare your Fund's cost with those of other mutual funds. It provides information about hypothetical account values and expenses based on the Fund's actual expense ratio (column 3) and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. This section is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund's comparative cost by comparing the hypothetical result for your Fund in the "Expenses Paid During Period" column with those that appear in the same charts in the shareholder reports for other mutual funds.
Note: Because the return is set at 5% for comparison purposes — NOT your Fund's actual return — the hypothetical account values and expenses may not be used to estimate your actual ending account balance or expenses you paid for the period.
| Beginning Account Value 10/1/14 | Ending Account Value 3/31/15 | Annualized Expense Ratios | Expenses Paid During Period* | ||||||||||||||||
Turner Medical Sciences Long/Short Fund — Institutional Class Shares | |||||||||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,164.50 | 2.35 | % | $ | 12.68 | |||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,013.21 | 2.35 | 11.80 | |||||||||||||||
Turner Medical Sciences Long/Short Fund — Investor Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,162.70 | 2.60 | 14.02 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,011.97 | 2.60 | 13.04 | |||||||||||||||
Turner Medical Sciences Long/Short Fund — Class C Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,158.50 | 3.35 | 18.03 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,008.23 | 3.35 | 16.77 | |||||||||||||||
Turner Spectrum Fund — Institutional Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,020.20 | 2.24 | 11.28 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,013.76 | 2.24 | 11.25 | |||||||||||||||
Turner Spectrum Fund — Investor Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,018.60 | 2.49 | 12.53 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,012.52 | 2.49 | 12.49 | |||||||||||||||
| Beginning Account Value 10/1/14 | Ending Account Value 3/31/15 | Annualized Expense Ratios | Expenses Paid During Period* | ||||||||||||||||
Turner Spectrum Fund — Class C Shares | |||||||||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,015.20 | 3.24 | % | $ | 16.28 | |||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,008.78 | 3.24 | 16.23 | |||||||||||||||
Turner Titan Fund — Institutional Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,054.30 | 2.07 | 10.60 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,014.61 | 2.07 | 10.40 | |||||||||||||||
Turner Titan Fund — Investor Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,053.00 | 2.32 | 11.87 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,013.36 | 2.32 | 11.65 | |||||||||||||||
Turner Titan Fund — Class C Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,048.90 | 3.07 | 15.68 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,009.62 | 3.07 | 15.38 | |||||||||||||||
Turner Emerging Growth Fund — Institutional Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,115.40 | 1.15 | 6.07 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,019.20 | 1.15 | 5.79 | |||||||||||||||
TURNER FUNDS 2015 SEMIANNUAL REPORT 43
DISCLOSURE OF FUND EXPENSES (Unaudited)
| Beginning Account Value 10/1/14 | Ending Account Value 3/31/15 | Annualized Expense Ratios | Expenses Paid During Period* | ||||||||||||||||
Turner Emerging Growth Fund — Investor Class Shares | |||||||||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,113.80 | 1.40 | % | $ | 7.38 | |||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,017.95 | 1.40 | 7.04 | |||||||||||||||
Turner Midcap Growth Fund — Institutional Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,092.60 | 0.93 | 4.85 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,020.29 | 0.93 | 4.68 | |||||||||||||||
Turner Midcap Growth Fund — Investor Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,091.70 | 1.18 | 6.15 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,019.05 | 1.18 | 5.94 | |||||||||||||||
| Beginning Account Value 10/1/14 | Ending Account Value 3/31/15 | Annualized Expense Ratios | Expenses Paid During Period* | ||||||||||||||||
Turner Midcap Growth Fund — Retirement Class Shares | |||||||||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,089.50 | 1.43 | % | $ | 7.45 | |||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,017.80 | 1.43 | 7.19 | |||||||||||||||
Turner Small Cap Growth Fund — Investor Class Shares | |||||||||||||||||||
Actual Fund Return | 1,000.00 | 1,107.40 | 1.25 | 6.57 | |||||||||||||||
| Hypothetical 5% Return | 1,000.00 | 1,018.70 | 1.25 | 6.29 | |||||||||||||||
* Unless otherwise indicated, expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period from 10/1/14 - 3/31/15).
44 TURNER FUNDS 2015 SEMIANNUAL REPORT
Turner Funds
This report was prepared for shareholders of the Turner Funds. It may be distributed to others only if preceded or accompanied by a Turner Funds' Prospectus, which contains detailed information. All Turner Funds are offered by prospectus only.
The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds' Forms N-Q are available on the Commission's Web site at http://www.sec.gov, and may be reviewed and copied at the Commission's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
The Board of Trustees of the Turner Funds has delegated responsibility for decisions regarding proxy voting for securities held by each Fund to Turner Investments, L.P. Turner Investments, L.P. will vote such proxies in accordance with its proxy policies and procedures, which are included in Appendix B to the SAI. The Board of Trustees will periodically review each Fund's proxy voting record.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, as well as information relating to how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available (i) via the Funds' Web site, www.turnerinvestments.com; (ii) on the Commission's Web site at http://www.sec.gov; and (iii) without charge by calling 1.800.224.6312.
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48 TURNER FUNDS 2015 SEMIANNUAL REPORT
Turner Funds
P.O. Box 219805
Kansas City, Missouri 64121-9805
Telephone: 1.800.224.6312
Email: mutualfunds@turnerinvestments.com
Web Site: www.turnerinvestments.com
TUR-SA-002-0509
Item 2. Code of Ethics.
Not applicable for semiannual report.
Item 3. Audit Committee Financial Expert.
Not applicable for semiannual report.
Item 4. Principal Accountant Fees and Services.
Not applicable for semiannual report.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end management investment companies.
Item 6. Schedule of Investments.
Schedule of Investments is included as part of report to shareholders filed under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees since the registrant’s last proxy solicitation.
Item 11. Controls and Procedures.
(a) The registrant’s Principal Executive Officer and Principal Financial Officer concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 as amended (the “Act”)) were effective as of a date within 90 days of the filing date of this report, based on their evaluation of the effectiveness of the registrant’s disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rule 13a-15(b) or 15d-15(b) under the Securities and Exchange Act of 1934.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) of the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semiannual report.
(a)(2) A separate certification for the Principal Executive Officer and the Principal Financial Officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)), also accompany this filing as an Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant | Turner Funds |
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By (Signature and Title) | /s/ Stephen J. Negrotti |
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| Stephen J. Negrotti, President (Principal Executive Officer) |
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Date | 6/1/15 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Stephen J. Negrotti |
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| Stephen J. Negrotti, President (Principal Executive Officer) |
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Date | 6/1/15 |
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By (Signature and Title) | /s/ Joel B. Engle |
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| Joel B. Engle, Controller and Chief Financial Officer (Principal Financial Officer) |
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Date | 6/1/15 |
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