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: 811-08039
Third Avenue Trust
(Exact name of registrant as specified in charter)
622 Third Avenue, 32nd Floor, New York, NY | 10017 | |
(Address of principal executive offices) | (Zip code) | |
W. James Hall III, General Counsel, 622 Third Avenue, New York, NY | 10017 | |
(Name and address of agent for service) |
Registrant’s telephone number, including area code: 800-443-1021
Date of fiscal year end: October 31, 2015
Date of reporting period: April 30, 2015
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Trust’s semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), is as follows:
Third Avenue Value Fund
Third Avenue Small-Cap Value Fund
Third Avenue Real Estate Value Fund
Third Avenue International Value Fund
Third Avenue Focused Credit Fund
SEMI-ANNUAL REPORT
APRIL 30, 2015
THIRD AVENUE FUNDS
Privacy Policy
Third Avenue Funds (the “Funds”) respect your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms and from the transactions you make with us, our affiliates, or third parties. We do not disclose any information about you or any of our former customers to anyone, except to our affiliates (which may include the Funds’ affiliated money management entities) and service providers, or as otherwise permitted by law. To protect your personal information, we permit access only by authorized employees. Be assured that we maintain physical, electronic and procedural safeguards that comply with federal standards to guard your personal information.
Proxy Voting Policies and Procedures
The Funds have delegated the voting of proxies relating to their voting securities to the Funds’ investment adviser pursuant to the adviser’s proxy voting guidelines. A description of these proxy voting guidelines and procedures, as well as information relating to how a Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available by August 31 each year (i) without charge, upon request, by calling (800) 443-1021, (ii) at the website of the Securities and Exchange Commission (“SEC”) at http://www.sec.gov, and (iii) on the Funds’ website www.thirdave.com.
Schedule of Portfolio Holdings—Form N-Q
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the SEC’s website at http://www.sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Third Avenue Trust
Third Avenue Value Fund
Industry Diversification
(Unaudited)
The summary of the Fund’s investments as of April 30, 2015 is as follows:
The accompanying notes are an integral part of the financial statements.
1 |
Third Avenue Trust
Third Avenue Value Fund
Portfolio of Investments
at April 30, 2015 (Unaudited)
Principal | Value | ||||||||
Amount ($) | Security† | (Note 1) | |||||||
Corporate Bonds & Notes - 1.57% | |||||||||
Consumer Products - 0.84% | |||||||||
22,150,228 | Home Products International, Inc., 2nd Lien, Convertible, 6.000% Payment-in-kind Interest, due 3/20/17 (b)(c)(d)(e) | $ | 16,572,801 | ||||||
Oil & Gas Production & Services - 0.73% | |||||||||
17,665,000 | BreitBurn Energy Partners L.P./ BreitBurn Finance Corp., 7.875%, due 4/15/22. | 14,573,625 | |||||||
Total Corporate Bonds & Notes (Cost $34,666,856) | 31,146,426 | ||||||||
Claims - 0.40% | |||||||||
Securities Brokerage - 0.40% | |||||||||
63,101,500 | Lehman Brothers Holdings, Inc., SIPA Claims (a) | 7,887,688 | |||||||
Total Claims (Cost $9,465,225) | 7,887,688 | ||||||||
Shares | |||||||||
Common Stocks & Warrants - 93.00% | |||||||||
Agricultural Equipment - 3.06% | |||||||||
1,178,413 | AGCO Corp. | 60,700,054 | |||||||
Asset Management - 7.15% | |||||||||
2,424,813 | Bank of New York Mellon Corp. (The) | 102,666,582 | |||||||
727,904 | Brookfield Asset Management, Inc., Class A (Canada) | 39,197,630 | |||||||
141,864,212 | |||||||||
Automotive - 6.40% | |||||||||
293,083 | Cie Generale des Etablissements Michelin (France) | 32,800,259 | |||||||
1,596,400 | General Motors Co. | 55,969,784 | |||||||
667,793 | Toyota Industries Corp. (Japan) | 38,143,620 | |||||||
126,913,663 | |||||||||
Banks - 8.88% | |||||||||
2,152,249 | Comerica, Inc. | 102,038,125 | |||||||
2,086,998 | KeyCorp | 30,157,121 | |||||||
479,200 | PNC Financial Services Group, Inc. (The) | 43,957,016 | |||||||
176,152,262 | |||||||||
Consumer Products - 2.98% | |||||||||
526,368 | Home Products International, Inc. (a)(b)(c)(d) | — | |||||||
3,672,276 | Kingfisher PLC (United Kingdom) | 19,802,455 | |||||||
1,479,930 | Masco Corp. | 39,203,346 | |||||||
59,005,801 | |||||||||
Diversified Holding Companies - 10.67% | |||||||||
3,990,000 | CK Hutchison Holdings, Ltd. (Hong Kong) | 86,744,167 | |||||||
760,880 | Investor AB, Class B (Sweden) | 31,062,103 | |||||||
104,719,880 | Lai Sun Garment International, Ltd. (Hong Kong) (c) | 17,699,782 | |||||||
561,726 | Pargesa Holding S.A. (Switzerland) | 41,093,091 | |||||||
6,203,000 | Wheelock & Co., Ltd. (Hong Kong) | 35,054,467 | |||||||
211,653,610 |
Value | |||||||||
Shares | Security† | (Note 1) | |||||||
Financial Insurance - 0.01% | |||||||||
37 | Manifold Capital LLC (a)(b)(c)(d) | $ | 285,000 | ||||||
Forest Products & Paper - 3.92% | |||||||||
2,466,390 | Weyerhaeuser Co. (f) | 77,715,949 | |||||||
Industrials - 1.05% | |||||||||
165,180 | Valmont Industries, Inc. | 20,815,984 | |||||||
Insurance & Reinsurance - 7.16% | |||||||||
90,673 | Alleghany Corp. (a) | 42,935,479 | |||||||
1,051,888 | Loews Corp. | 43,800,616 | |||||||
81,699 | White Mountains Insurance Group, Ltd. (Bermuda) | 55,226,073 | |||||||
141,962,168 | |||||||||
Manufactured Housing - 4.70% | |||||||||
1,422,725 | Cavco Industries, Inc. (a)(c) | 93,288,078 | |||||||
Materials - 2.81% | |||||||||
2,808,500 | Canfor Corp. (Canada) (a) | 55,657,882 | |||||||
Media & Entertainment - 2.89% | |||||||||
923,300 | CBS Corp., Class B, Non Voting Shares | 57,364,629 | |||||||
Non-U.S. Real Estate Operating Companies - 1.57% | |||||||||
5,853,000 | Hang Lung Group, Ltd. (Hong Kong) | 31,037,578 | |||||||
Oil & Gas Production & Services - 11.06% | |||||||||
1,061,000 | Apache Corp. | 72,572,400 | |||||||
1,113,206 | Devon Energy Corp. | 75,931,781 | |||||||
1,299,649 | Total S.A. (France) | 70,754,760 | |||||||
219,258,941 | |||||||||
Semiconductor & Related - 2.33% | |||||||||
2,082,168 | NVIDIA Corp. | 46,213,719 | |||||||
Senior Housing - 1.78% | |||||||||
972,500 | Brookdale Senior Living, Inc. (a) | 35,233,675 | |||||||
Software - 2.92% | |||||||||
2,322,155 | Symantec Corp. | 57,879,713 | |||||||
Steel & Specialty Steel - 3.52% | |||||||||
1,180,432 | POSCO, ADR (South Korea) | 69,739,923 | |||||||
Telecommunications - 2.92% | |||||||||
16,353,677 | Vodafone Group PLC (United Kingdom) | 57,874,349 | |||||||
U.S. Real Estate Operating Companies - 1.53% | |||||||||
1,221,894 | Tejon Ranch Co. (a)(c) | 30,180,782 | |||||||
200,255 | Tejon Ranch Co., Warrants, expire 8/31/16 (a)(c) | 117,820 | |||||||
30,298,602 | |||||||||
Utilities - 3.69% | |||||||||
3,606,707 | Covanta Holding Corp. | 73,180,085 | |||||||
Total Common Stocks & Warrants (Cost $1,574,893,243) | 1,844,095,877 |
The accompanying notes are an integral part of the financial statements.
2 |
Third Avenue Trust
Third Avenue Value Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Investment | Value | ||||||||
Amount ($) | Security† | (Note 1) | |||||||
Limited Partnerships - 0.00%# | |||||||||
Insurance & Reinsurance - 0.00%# | |||||||||
1,805,000 | Insurance Partners II Equity Fund, L.P. (a)(b) | $ | 68,330 | ||||||
Total Limited Partnerships (Cost $0) | 68,330 | ||||||||
Total Investment Portfolio - 94.97% (Cost $1,619,025,324) | 1,883,198,321 | ||||||||
Other Assets less Liabilities - 5.03% | 99,683,297 | ||||||||
NET ASSETS - 100.00% | $ | 1,982,881,618 |
Notes:
ADR: American Depositary Receipt.
SIPA: Securities Investor Protection Act of 1970.
(a) | Non-income producing security. |
(b) | Fair-valued security. |
(c) | Affiliated issuers - as defined under the Investment Company Act of 1940 (ownership of 5% or more of the outstanding voting securities of these issuers). |
(d) | Security subject to restrictions on resale. |
Shares/ | Market | |||||||||||||
Principal | Acquisition | Value | ||||||||||||
Amount ($) | Issuer | Date | Cost | Per Unit | ||||||||||
526,368 | Home Products International, Inc. | 5/30/07 | $ | 54,667,471 | $0.00 | |||||||||
$ | 22,150,228 | Home Products International, Inc. 2nd Lien, Convertible, 6.000% Payment-in-kind Interest, due 3/20/17 | 3/16/07- 4/1/15 | 22,150,228 | 74.82 | |||||||||
37 | Manifold Capital LLC | 9/24/97-11/10/06 | 37,712,514 | 7,702.70 |
At April 30, 2015, these restricted securities had a total market value of $16,857,801 or 0.85% of net assets of the Fund. | |
(e) | Payment-in-kind (“PIK”) security. Income may be paid in additional securities. |
(f) | Security is a Real Estate Investment Trust. |
† | U.S. issuer unless otherwise noted. |
# | Amount represents less than 0.01% of total net assets. |
Country Concentration
% of | ||||
Net Assets | ||||
United States | 60.58 | % | ||
Hong Kong | 8.60 | |||
France | 5.22 | |||
Canada | 4.78 | |||
United Kingdom | 3.92 | |||
South Korea | 3.52 | |||
Bermuda | 2.79 | |||
Switzerland | 2.07 | |||
Japan | 1.92 | |||
Sweden | 1.57 | |||
Total | 94.97 | % |
The accompanying notes are an integral part of the financial statements.
3 |
Third Avenue Trust
Third Avenue Small-Cap Value Fund
Industry Diversification
(Unaudited)
The summary of the Fund’s investments as of April 30, 2015 is as follows:
The accompanying notes are an integral part of the financial statements.
4 |
Third Avenue Trust
Third Avenue Small-Cap Value Fund
Portfolio of Investments
at April 30, 2015 (Unaudited)
Value | |||||||||
Shares | Security† | (Note 1) | |||||||
Common Stocks - 98.36% | |||||||||
Asset Management - 1.92% | |||||||||
165,132 | Legg Mason, Inc. | $ | 8,694,200 | ||||||
Auto Parts and Services - 2.97% | |||||||||
122,100 | Dorman Products, Inc. (a) | 5,717,943 | |||||||
205,504 | Standard Motor Products, Inc. | 7,768,051 | |||||||
13,485,994 | |||||||||
Bank & Thrifts - 10.49% | |||||||||
72,471 | City National Corp. | 6,754,297 | |||||||
198,650 | Commerce Bancshares, Inc. | 8,484,342 | |||||||
123,900 | Cullen/Frost Bankers, Inc. | 9,037,266 | |||||||
169,563 | Prosperity Bancshares, Inc. | 9,044,490 | |||||||
159,391 | UMB Financial Corp. | 7,936,078 | |||||||
670,975 | Valley National Bankcorp | 6,327,294 | |||||||
47,583,767 | |||||||||
Business Services - 1.67% | |||||||||
285,433 | Viad Corp. | 7,583,955 | |||||||
Chemicals & Industrial Materials - 1.62% | |||||||||
420,036 | SunCoke Energy, Inc. | 7,363,231 | |||||||
Consulting and Information Technology Services - 7.94% | |||||||||
286,592 | FTI Consulting, Inc. (a) | 11,781,797 | |||||||
424,566 | Genpact Ltd. (Bermuda) (a) | 9,281,013 | |||||||
168,903 | ICF International, Inc. (a) | 6,502,766 | |||||||
187,830 | Syntel, Inc. (a) | 8,456,107 | |||||||
36,021,683 | |||||||||
Consumer Products and Services - 4.12% | |||||||||
278,400 | Ascena Retail Group, Inc. (a) | 4,173,216 | |||||||
161,015 | CST Brands, Inc. | 6,715,936 | |||||||
153,458 | VCA, Inc. (a) | 7,821,754 | |||||||
18,710,906 | |||||||||
Diversified Holding Companies - 4.88% | |||||||||
579,165 | Dundee Corp., Class A (Canada) (a) | 5,578,033 | |||||||
1,795,975 | JZ Capital Partners, Ltd. (Guernsey) | 11,743,984 | |||||||
203,082 | Leucadia National Corp. | 4,827,259 | |||||||
22,149,276 | |||||||||
Electronic Components - 4.83% | |||||||||
109,356 | Anixter International, Inc. (a) | 7,720,534 | |||||||
241,911 | Ingram Micro, Inc., Class A (a) | 6,086,481 | |||||||
282,750 | Insight Enterprises, Inc. (a) | 8,092,305 | |||||||
21,899,320 | |||||||||
Energy Exploration and Production - 1.62% | |||||||||
322,850 | Rosetta Resources, Inc. (a) | 7,370,666 | |||||||
Energy Services - 2.82% | |||||||||
63,926 | SEACOR Holdings, Inc. (a) | 4,644,863 | |||||||
96,552 | SemGroup Corp., Class A | 8,128,713 | |||||||
12,773,576 | |||||||||
Forest Products & Paper - 1.70% | |||||||||
163,505 | Interfor Corp. (Canada) (a) | 2,340,432 | |||||||
216,711 | P.H. Glatfelter Co. | 5,374,433 | |||||||
7,714,865 |
Value | |||||||||
Shares | Security† | (Note 1) | |||||||
Healthcare - 3.47% | |||||||||
189,000 | Patterson Cos., Inc. | $ | 8,874,495 | ||||||
55,907 | Teleflex, Inc. | 6,874,325 | |||||||
15,748,820 | |||||||||
Home Building - 1.89% | |||||||||
369,295 | WCI Communities, Inc. (a) | 8,586,109 | |||||||
Industrial Capital Equipment Manufacturers - 4.03% | |||||||||
250,500 | Barnes Group, Inc. | 10,045,050 | |||||||
348,579 | Rofin-Sinar Technologies, Inc. (a) | 8,247,379 | |||||||
18,292,429 | |||||||||
Industrial Equipment - 7.22% | |||||||||
257,200 | Actuant Corp., Class A | 6,126,504 | |||||||
151,206 | Alamo Group, Inc. | 9,341,507 | |||||||
63,167 | CIRCOR International, Inc. | 3,451,445 | |||||||
100,071 | EnerSys, Inc. | 6,794,821 | |||||||
166,321 | LSB Industries, Inc. (a) | 7,053,674 | |||||||
32,767,951 | |||||||||
Industrial Services - 13.10% | |||||||||
239,857 | ABM Industries, Inc. | 7,687,417 | |||||||
136,018 | Cubic Corp. | 6,743,772 | |||||||
270,561 | Darling Ingredients, Inc. (a) | 3,695,863 | |||||||
245,483 | EMCOR Group, Inc. | 10,955,906 | |||||||
55,546 | Multi-Color Corp. | 3,487,178 | |||||||
407,544 | Tetra Tech, Inc. | 11,048,518 | |||||||
50,310 | UniFirst Corp. | 5,696,601 | |||||||
182,919 | World Fuel Services Corp. | 10,152,004 | |||||||
59,467,259 | |||||||||
Insurance & Reinsurance - 6.15% | |||||||||
20,143 | Alleghany Corp. (a) | 9,538,113 | |||||||
103,190 | Arch Capital Group, Ltd. (Bermuda) (a) | 6,261,569 | |||||||
212,785 | HCC Insurance Holdings, Inc. | 12,120,234 | |||||||
27,919,916 | |||||||||
Metals Manufacturing - 2.56% | |||||||||
66,648 | Encore Wire Corp. | 2,999,826 | |||||||
107,276 | Kaiser Aluminum Corp. | 8,621,772 | |||||||
11,621,598 | |||||||||
Securities Trading/Processing Services - 1.44% | |||||||||
111,048 | Broadridge Financial Solutions, Inc. | 5,987,708 | |||||||
4,900 | DST Systems, Inc. | 563,892 | |||||||
6,551,600 | |||||||||
Software and Services - 5.88% | |||||||||
614,387 | Allscripts Healthcare Solutions, Inc. (a) | 8,171,347 | |||||||
318,298 | CSG Systems International, Inc. | 9,268,838 | |||||||
349,855 | Progress Software Corp. (a) | 9,236,172 | |||||||
26,676,357 | |||||||||
U.S. Real Estate Investment Trust - 0.90% | |||||||||
122,119 | Tanger Factory Outlet Centers, Inc. | 4,100,756 | |||||||
U.S. Real Estate Operating Companies - 5.14% | |||||||||
143,227 | Alico, Inc. | 6,698,727 | |||||||
203,867 | Brookdale Senior Living, Inc. (a) | 7,386,101 | |||||||
151,065 | Forestar Group, Inc. (a) | 2,229,719 | |||||||
70,739 | Vail Resorts, Inc. | 7,018,016 | |||||||
23,332,563 |
The accompanying notes are an integral part of the financial statements.
5 |
Third Avenue Trust
Third Avenue Small-Cap Value Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Value | |||||||||
(Note 1) | |||||||||
Total Common Stocks (Cost $335,080,299) | $ | 446,416,797 | |||||||
Total Investment Portfolio - 98.36% (Cost $335,080,299) | 446,416,797 | ||||||||
Other Assets less Liabilities - 1.64% | 7,446,184 | ||||||||
NET ASSETS - 100.00% | $ | 453,862,981 |
Notes:
(a) | Non-income producing security. |
† | U.S. issuer unless otherwise noted. |
Country Concentration
% of | ||||
Net Assets | ||||
United States | 90.60 | % | ||
Bermuda | 3.42 | |||
Guernsey | 2.59 | |||
Canada | 1.75 | |||
Total | 98.36 | % |
The accompanying notes are an integral part of the financial statements.
6 |
Third Avenue Trust
Third Avenue Real Estate Value Fund
Industry Diversification
(Unaudited)
The summary of the Fund’s investments as of April 30, 2015 is as follows:
The accompanying notes are an integral part of the financial statements.
7 |
Third Avenue Trust
Third Avenue Real Estate Value Fund
Portfolio of Investments
at April 30, 2015 (Unaudited)
Principal | Value | ||||||||
Amount | Security† | (Note 1) | |||||||
Term Loans - 0.09% | |||||||||
Non-U.S. Real Estate Operating Companies - 0.09% | |||||||||
Concrete Investment I, Term Loan (Netherlands): | |||||||||
50,450 | EUR | Tranche A2, 1.983% Cash or Payment-in-kind Interest, due 3/31/16 (d)(g)(h) | $ | 56,647 | |||||
19,273 | EUR | Tranche A3, 1.978% Cash or Payment-in-kind Interest, due 3/31/16 (d)(g)(h) | 21,641 | ||||||
Concrete Investment II, Term Loan (Netherlands): | |||||||||
34,600 | EUR | Tranche A2, 1.983% Cash or Payment-in-kind Interest, due 3/31/16 (d)(g)(h) | 38,850 | ||||||
4,818 | EUR | Tranche A3, 1.978% Cash or Payment-in-kind Interest, due 3/31/16 (d)(g)(h) | 5,410 | ||||||
IVG Immobilien AG, Term Loan (Netherlands): | |||||||||
1,081,276 | EUR | Tranche A1, 9.483% Cash or Payment-in-kind Interest, due 9/30/17 (d)(g)(h) | 1,214,113 | ||||||
1,596,094 | EUR | Tranche A2, 9.483% Cash or Payment-in-kind Interest, due 9/30/18 (d)(g)(h) | 1,792,176 | ||||||
Total Term Loans (Cost $3,770,909) | 3,128,837 | ||||||||
Shares | |||||||||
Common Stocks & Warrants - 79.96% | |||||||||
Banks - 4.32% | |||||||||
1,939,049 | PNC Financial Services Group, Inc., Warrants, expire 12/31/18 (a) | 48,708,911 | |||||||
1,156,551 | Wells Fargo & Co., Warrants, expire 10/28/18 (a) | 24,472,619 | |||||||
2,773,300 | Zions Bancorporation | 78,581,456 | |||||||
151,762,986 | |||||||||
Forest Products & Paper - 7.07% | |||||||||
3,238,700 | Rayonier, Inc. (c) | 82,878,333 | |||||||
5,251,858 | Weyerhaeuser Co. (c) | 165,486,046 | |||||||
248,364,379 | |||||||||
Lodging & Hotels - 2.48% | |||||||||
450,000 | Hyatt Hotels Corp., Class A (a) | 26,122,500 | |||||||
6,848,517 | Millennium & Copthorne Hotels PLC (United Kingdom) | 60,814,268 | |||||||
86,936,768 | |||||||||
Non-U.S. Diversified Holding Companies - 4.34% | |||||||||
7,018,000 | CK Hutchison Holdings, Ltd. (Hong Kong) | 152,574,075 | |||||||
Non-U.S. Real Estate Consulting/Management - 2.37% | |||||||||
6,002,254 | Countrywide PLC (United Kingdom) | 48,370,352 | |||||||
2,752,003 | Savills PLC (United Kingdom) | 34,998,304 | |||||||
83,368,656 | |||||||||
Non-U.S. Real Estate Investment Trusts - 10.11% | �� | ||||||||
12,070,176 | Dexus Property Group (Australia) | 70,491,983 | |||||||
366,031 | Gecina S.A. (France) | 50,265,095 | |||||||
9,910,908 | Hammerson PLC (United Kingdom) | 101,775,944 | |||||||
8,839,052 | Segro PLC (United Kingdom) | 58,206,108 | |||||||
1,154,265 | Wereldhave N.V. (Netherlands) | 74,160,998 | |||||||
354,900,128 |
Value | |||||||||
Shares | Security† | (Note 1) | |||||||
Non-U.S. Real Estate Operating Companies - 21.10% | |||||||||
1,546,126 | Brookfield Asset Management, Inc., Class A (Canada) | $ | 83,258,885 | ||||||
11,544,950 | City Developments Ltd. (Singapore) | 93,095,992 | |||||||
26,259,100 | Global Logistic Properties Ltd. (Singapore) | 54,574,157 | |||||||
14,967,134 | Globe Trade Centre S.A. (Poland) (a) | 25,736,228 | |||||||
8,377,000 | Hang Lung Properties Ltd. (Hong Kong) | 28,371,696 | |||||||
12,884,657 | Henderson Land Development Co., Ltd. (Hong Kong) | 103,568,667 | |||||||
11,373,967 | Hysan Development Co., Ltd. (Hong Kong) | 52,683,412 | |||||||
135,653,174 | Inmobiliaria Colonial S.A. (Spain) (a) | 93,218,813 | |||||||
21,869,072 | Quintain Estates & Development PLC | ||||||||
(United Kingdom) (a) | 32,226,057 | ||||||||
14,246,926 | Westfield Corp. (Australia) (c) | 106,542,465 | |||||||
11,975,500 | Wheelock & Co., Ltd. (Hong Kong) | 67,676,087 | |||||||
740,952,459 | |||||||||
Real Estate Consulting/Management - 2.14% | |||||||||
1,584,200 | Realogy Holdings Corp. (a) | 75,106,922 | |||||||
Retail-Building Products - 2.37% | |||||||||
1,206,930 | Lowe’s Cos., Inc. | 83,109,200 | |||||||
Senior Housing - 1.93% | |||||||||
1,873,595 | Brookdale Senior Living, Inc. (a) | 67,880,347 | |||||||
U.S. Real Estate Investment Trusts - 16.32% | |||||||||
3,460,150 | Equity Commonwealth (a) | 87,230,381 | |||||||
5,208,031 | First Industrial Realty Trust, Inc. | 102,754,452 | |||||||
1,223,292 | Macerich Co. (The) | 100,016,354 | |||||||
1,253,782 | Post Properties, Inc. | 71,678,717 | |||||||
2,515,510 | Starwood Waypoint Residential Trust (b) | 64,749,227 | |||||||
2,031,678 | Tanger Factory Outlet Centers, Inc. | 68,223,747 | |||||||
760,194 | Vornado Realty Trust | 78,672,477 | |||||||
573,325,355 | |||||||||
U.S. Real Estate Operating Companies - 5.41% | |||||||||
5,846,798 | Forest City Enterprises, Inc., Class A (a) | 138,919,920 | |||||||
941,627 | Tejon Ranch Co. (a) | 23,258,187 | |||||||
139,089 | Tejon Ranch Co., Warrants, expire 8/31/16 (a) | 81,833 | |||||||
3,369,445 | Trinity Place Holdings, Inc. (a)(d)(e) | 27,796,278 | |||||||
190,056,218 | |||||||||
Total Common Stocks & Warrants (Cost $2,129,997,479) | 2,808,337,493 | ||||||||
Preferred Stocks - 0.83% | |||||||||
Non-U.S. Real Estate Operating Companies - 0.83% | |||||||||
189,696 | Concrete Investments II SCA (Luxembourg) (a) | 29,287,551 | |||||||
Total Preferred Stocks (Cost $27,535,807) | 29,287,551 |
The accompanying notes are an integral part of the financial statements.
8 |
Third Avenue Trust
Third Avenue Real Estate Value Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Value | |||||||||
Units | Security† | (Note 1) | |||||||
Private Equities - 2.67% | |||||||||
U.S. Real Estate Operating Companies - 2.67% | |||||||||
28,847,217 | Newhall Holding Co. LLC, Class A Units (a)(b) | $ | 93,753,455 | ||||||
Total Private Equities (Cost $75,516,192) | 93,753,455 | ||||||||
Notional Amount | |||||||||
Purchased Options - 0.00%* | |||||||||
Foreign Currency Put Options - 0.00%* (a) | |||||||||
53,000,000 | AUD | Australian Currency, strike 0.7220 AUD, expire 5/7/15 | 42 | ||||||
38,700,000 | AUD | Australian Currency, strike 0.7215 AUD, expire 6/9/15 | 21,850 | ||||||
Total Purchased Options (Cost $275,000) | 21,892 | ||||||||
Principal Amount ($) | |||||||||
Short Term Investments - 14.24% | |||||||||
U.S. Government Obligations - 14.24% | |||||||||
500,000,000 | U.S. Treasury Bills, 0.01%-0.02% #, due 5/28/15-7/23/15 | 499,992,620 | |||||||
Total Short Term Investments (Cost $499,993,167) | 499,992,620 | ||||||||
Total Investment Portfolio - 97.79% (Cost $2,737,088,554) | 3,434,521,848 | ||||||||
Other Assets less Liabilities - 2.21% (f) | 77,453,662 | ||||||||
NET ASSETS - 100.00% | $ | 3,511,975,510 |
Notes:
AUD: Australian Dollar.
EUR: Euro.
(a) | Non-income producing security. |
(b) | Affiliated issuers - as defined under the Investment Company Act of 1940 (ownership of 5% or more of the outstanding voting securities of these issuers). |
(c) | Security is a Real Estate Investment Trust. |
(d) | Fair-valued security. |
(e) | Security subject to restrictions on resale. |
Market | ||||||||||||||
Acquisition | Value | |||||||||||||
Shares | Issuer | Date | Cost | Per Unit | ||||||||||
3,369,445 | Trinity Place Holdings, Inc. | 10/2/13 - 11/6/13 | $ | 13,477,776 | $8.25 |
At April 30, 2015, the restricted security had a total market value of $27,796,278 or 0.79% of net assets of the Fund. | |
(f) | Includes restricted cash pledged to counterparty as collateral management for forward foreign currency contracts and options. |
(g) | Variable rate security. The rate disclosed is in effect as of April 30, 2015. |
(h) | Payment-in-kind (“PIK”) security. Income may be paid in additional securities or cash at the discretion of the issuer. |
† | U.S. issuer unless otherwise noted. |
# | Annualized yield at date of purchase. |
* | Amount represents less than 0.01% of total net assets. |
Country Concentration
% of | ||||
Net Assets | ||||
United States* | 57.22 | % | ||
Hong Kong | 11.53 | |||
United Kingdom | 9.58 | |||
Australia | 5.04 | |||
Singapore | 4.21 | |||
Spain | 2.65 | |||
Canada | 2.37 | |||
Netherlands | 2.20 | |||
France | 1.43 | |||
Luxembourg | 0.83 | |||
Poland | 0.73 | |||
Total | 97.79 | % |
* Includes cash equivalents.
Schedule of Written Options
Notional | Expiration | Strike | ||||||||||||
Amount | Security | Date | Price | Value | ||||||||||
53,000,000 | AUD | Australian Currency, Call | 5/7/15 | 0.8130 AUD | $ | 42,729 | ||||||||
38,700,000 | AUD | Australian Currency, Call | 6/9/15 | 0.7900 AUD | 508,947 | |||||||||
(Premiums received $275,000) | $ | 551,676 |
AUD: Australian Dollar.
Schedule of Forward Foreign Currency Contracts
Contracts to | Settlement | Settlement | Value at | Unrealized | ||||||||||||
Sell | Counterparty | Date | Value | 4/30/15 | Depreciation | |||||||||||
112,000,000 | EUR | Goldman Sachs & Co. | 5/29/15 | $ | 122,976,336 | $ | 125,806,902 | $ | (2,830,566 | ) | ||||||
112,000,000 | EUR | Morgan Stanley & Co. LLC | 5/29/15 | 122,898,161 | 125,806,902 | (2,908,741 | ) | |||||||||
$ | (5,739,307 | ) |
EUR: Euro.
The accompanying notes are an integral part of the financial statements.
9 |
Third Avenue Trust
Third Avenue International Value Fund
Industry Diversification
(Unaudited)
The summary of the Fund’s investments as of April 30, 2015 is as follows:
The accompanying notes are an integral part of the financial statements.
10 |
Third Avenue Trust
Third Avenue International Value Fund
Portfolio of Investments
at April 30, 2015 (Unaudited)
Principal Amount‡ | Security† | Value (Note 1) | |||||||
Corporate Bonds & Notes - 1.80% | |||||||||
Oil & Gas Production & Services - 1.80% | |||||||||
5,200,000 | Petroleum Geo-Services ASA, 7.375%, due 12/15/18 (Norway) (d) | $ | 4,875,000 | ||||||
Total Corporate Bonds & Notes (Cost $4,677,861) | 4,875,000 | ||||||||
Foreign Government Bonds - 3.01% | |||||||||
11,000,000 | SGD | Singapore Government Bond, 0.500%, due 4/1/18 (Singapore) | 8,140,266 | ||||||
Total Foreign Government Bonds (Cost $7,900,112) | 8,140,266 | ||||||||
Shares | |||||||||
Common Stocks - 92.59% | |||||||||
Agricultural Equipment - 0.81% | |||||||||
250,700 | CNH Industrial N.V. (Netherlands) | 2,186,104 | |||||||
Automotive - 4.97% | |||||||||
60,867 | Daimler AG (Germany) | 5,900,188 | |||||||
116,626 | LEONI AG (Germany) | 7,539,001 | |||||||
13,439,189 | |||||||||
Building & Construction Products/ Services - 7.08% | |||||||||
9,950,277 | Tenon, Ltd. (New Zealand) (a)(b) | 15,189,060 | |||||||
157,281 | Titan Cement Co. S.A. (Greece) | 3,973,571 | |||||||
19,162,631 | |||||||||
Capital Goods - 2.23% | |||||||||
153,693 | Nexans S.A. (France) (a) | 6,039,240 | |||||||
Diversified Holding Companies - 8.80% | |||||||||
4,075,126 | GP Investments, Ltd., BDR (Brazil) (a) | 7,682,410 | |||||||
288,333 | Leucadia National Corp. | 6,853,675 | |||||||
126,807 | Pargesa Holding S.A. (Switzerland) | 9,276,572 | |||||||
23,812,657 | |||||||||
Diversified Operations - 3.92% | |||||||||
720,200 | Hutchison Whampoa, Ltd. (Hong Kong) | 10,611,742 | |||||||
Financials - 3.79% | |||||||||
1,020,086 | BinckBank N.V. (Netherlands) | 10,260,536 | |||||||
Food & Beverage - 2.11% | |||||||||
1,410,092 | C&C Group PLC (Ireland) | 5,722,131 | |||||||
Forest Products & Paper - 7.94% | |||||||||
56,796,558 | Rubicon, Ltd. (New Zealand) (a)(b) | 14,088,706 | |||||||
234,543 | Weyerhaeuser Co. (c) | 7,390,450 | |||||||
21,479,156 | |||||||||
Insurance - 5.67% | |||||||||
25,790 | Munich Re (Germany) | 5,064,812 | |||||||
15,219 | White Mountains Insurance Group, Ltd. (Bermuda) | 10,287,587 | |||||||
15,352,399 | |||||||||
Investment Technology Services - 1.71% | |||||||||
99,618 | Otsuka Corp. (Japan) | 4,613,799 | |||||||
Media - 3.40% | |||||||||
365,430 | Vivendi S.A. (France) | 9,197,401 |
Shares | Security† | Value (Note 1) | |||||||
Metals & Mining - 8.47% | |||||||||
841,187 | Antofagasta PLC (Chile) | $ | 10,090,835 | ||||||
9,219,512 | Capstone Mining Corp. (Canada) (a) | 12,837,779 | |||||||
22,928,614 | |||||||||
Oil & Gas Production & Services - 6.61% | |||||||||
1,465,323 | Petroleum Geo-Services ASA (Norway) | 9,706,935 | |||||||
16,915,700 | Vard Holdings Ltd. (Singapore) (a) | 8,181,717 | |||||||
17,888,652 | |||||||||
Pharmaceuticals - 2.39% | |||||||||
63,078 | Sanofi (France) | 6,459,441 | |||||||
Real Estate - 9.86% | |||||||||
1,713,642 | Atrium European Real Estate, Ltd. (Austria) | 8,427,842 | |||||||
3,048,500 | Global Logistic Properties Ltd. (Singapore) | 6,335,682 | |||||||
1,508,604 | Oberoi Realty Ltd. (India) | 6,389,270 | |||||||
837,474 | Segro PLC (United Kingdom) (c) | 5,514,856 | |||||||
26,667,650 | |||||||||
Retail & Restaurants - 2.89% | |||||||||
1,301,100 | Arcos Dorados Holdings, Inc., Class A (Argentina) | 7,806,600 | |||||||
Securities Brokerage - 1.74% | |||||||||
562,600 | Daiwa Securities Group, Inc. (Japan) | 4,711,893 | |||||||
Telecommunications - 6.28% | |||||||||
1,694,035 | Telefonica Deutschland Holding AG (Germany). | 10,574,047 | |||||||
1,815,462 | Vodafone Group PLC (United Kingdom) | 6,424,774 | |||||||
16,998,821 | |||||||||
Transportation Infrastructure - 1.92% | |||||||||
1,339,889 | Santos Brasil Participacoes S.A. (Brazil) | 5,203,107 | |||||||
Total Common Stocks (Cost $255,958,630) | 250,541,763 | ||||||||
Total Investment Portfolio - 97.40% (Cost $268,536,603) | 263,557,029 | ||||||||
Other Assets less Liabilities - 2.60% | 7,027,979 | ||||||||
NET ASSETS - 100.00% | $ | 270,585,008 |
Notes:
BDR: Brazilian Depositary Receipt.
SGD: Singapore Dollar.
(a) | Non-income producing security. |
(b) | Affiliated issuers - as defined under the Investment Company Act of 1940 (ownership of 5% or more of the outstanding voting securities of these issuers). |
(c) | Security is a Real Estate Investment Trust. |
(d) | Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. |
† | U.S. issuer unless otherwise noted. |
‡ | Denominated in U.S. Dollars unless otherwise noted. |
The accompanying notes are an integral part of the financial statements.
11 |
Third Avenue Trust
Third Avenue International Value Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Country Concentration
% of | ||||
Net Assets | ||||
New Zealand | 10.82 | % | ||
Germany | 10.75 | |||
Singapore | 8.37 | |||
France | 8.02 | |||
Norway | 5.39 | |||
United States | 5.26 | |||
Brazil | 4.76 | |||
Canada | 4.74 | |||
Netherlands | 4.60 | |||
United Kingdom | 4.41 | |||
Hong Kong | 3.92 | |||
Bermuda | 3.80 | |||
Chile | 3.73 | |||
Japan | 3.45 | |||
Switzerland | 3.43 | |||
Austria | 3.11 | |||
Argentina | 2.89 | |||
India | 2.36 | |||
Ireland | 2.12 | |||
Greece | 1.47 | |||
Total | 97.40 | % |
The accompanying notes are an integral part of the financial statements.
12 |
Third Avenue Trust
Third Avenue Focused Credit Fund
Industry Diversification
(Unaudited)
The summary of the Fund’s investments as of April 30, 2015 is as follows:
The accompanying notes are an integral part of the financial statements.
13 |
Third Avenue Trust
Third Avenue Focused Credit Fund
Portfolio of Investments
at April 30, 2015 (Unaudited)
Principal | Value | |||||||||
Amount‡/Units | Security† | (Note 1) | ||||||||
Corporate Bonds & Notes - 49.50% | ||||||||||
Chemicals - 0.00% | ||||||||||
17,809,061 | Reichhold Industries, Inc., due 5/8/17 (a)(b)* | $ | — | |||||||
Consumer Products - 5.88% | ||||||||||
Ideal Standard International S.A. (Luxembourg): | ||||||||||
25,868,364 | EUR | Series B, 11.750% Cash or 15.750% Payment-in-kind Interest, due 5/1/18 (g) | 27,448,774 | |||||||
30,475,697 | EUR | Series C, 11.750% Cash or 17.750% Payment-in-kind Interest, due 5/1/18 (e)(g) | 24,295,967 | |||||||
105,000,000 | Sun Products Corp. (The), 7.750%, due 3/15/21 (a) | 93,056,250 | ||||||||
144,800,991 | ||||||||||
Energy - 3.94% | ||||||||||
8,500,000 | American Eagle Energy Corp., 11.000%, due 9/1/19 (a) | 3,485,000 | ||||||||
7,650,000 | CHC Helicopter S.A., 9.250%, due 10/15/20 (Luxembourg) | 6,715,170 | ||||||||
25,000,000 | Energy XXI Gulf Coast, Inc., 11.000%, due 3/15/20 (a) | 24,000,000 | ||||||||
Global Geophysical Services, Inc., Escrow*: | ||||||||||
45,925,000 | due 5/1/17 (b)(f) | — | ||||||||
15,599,000 | due 5/1/17 (b)(f) | — | ||||||||
Hercules Offshore, Inc.: | ||||||||||
10,000,000 | 10.250%, due 4/1/19 (a) | 3,400,000 | ||||||||
32,380,000 | 8.750%, due 7/15/21 (a) | 10,604,450 | ||||||||
3,000,000 | 7.500%, due 10/1/21 (a) | 922,500 | ||||||||
5,000,000 | 6.750%, due 4/1/22 (a) | 1,512,500 | ||||||||
20,150,000 | IronGate Energy Services LLC, 11.000%, due 7/1/18 (a) | 12,996,750 | ||||||||
12,500,000 | Linn Energy LLC/Linn Energy Finance Corp., 8.625%, due 4/15/20 | 11,445,250 | ||||||||
3,000,000 | Lone Pine Resources, Inc., Escrow, due 2/15/17 (b)* | — | ||||||||
New Gulf Resources LLC/NGR Finance Corp.: | ||||||||||
10,000,000 | 11.750%, due 5/15/19 (a) | 7,850,000 | ||||||||
5,310,000 | 10.000% Cash or 12.000% Payment-in-kind Interest, due 11/15/19 (a)(g) | 1,672,650 | ||||||||
22,847,000 | Quicksilver Resources, Inc., due 7/1/21* | 3,027,228 | ||||||||
10,106,000 | CAD | Southern Pacific Resource Corp., due 1/25/18 (Canada) (a)* | 418,815 | |||||||
17,500 | ^ | US Shale Solutions, Inc., 12.500%, due 9/1/17 (a) | 9,100,000 | |||||||
97,150,313 | ||||||||||
Financials - 1.91% | ||||||||||
8,000,000 | CNG Holdings, Inc., 9.375%, due 5/15/20 (a) | 5,800,000 | ||||||||
30,000,000 | DFC Finance Corp., 10.500%, due 6/15/20 (a) | 24,150,000 | ||||||||
Lehman Brothers Holdings, Inc.*: | ||||||||||
31,000,000 | due 9/26/08 | 3,526,250 | ||||||||
17,185,861 | due 10/14/08 | 1,954,892 | ||||||||
10,000,000 | due 10/22/08 | 1,137,500 | ||||||||
25,000,000 | due 11/24/08 | 2,843,750 | ||||||||
12,205,000 | due 12/23/08 | 1,388,319 | ||||||||
6,771,301 | due 4/3/09 | 770,235 | ||||||||
30,000,000 | due 1/14/11 | 3,450,000 | ||||||||
10,000,000 | due 1/24/13 | 1,162,500 | ||||||||
7,113,000 | due 2/9/17 | 800,212 | ||||||||
46,983,658 |
Principal | Value | |||||||||
Amount‡ | Security† | (Note 1) | ||||||||
Food & Beverage - 1.62% | ||||||||||
40,755,000 | American Seafoods Group LLC/American Seafoods Finance, Inc., 10.750%, due 5/15/16 (a) | $ | 39,939,900 | |||||||
Gaming & Entertainment - 4.15% | ||||||||||
105,000,000 | Caesars Entertainment Operating Co., Inc., due 12/15/18* | 21,262,500 | ||||||||
Codere Finance Luxembourg S.A. (Luxembourg)*: | ||||||||||
54,378,000 | EUR | due 6/15/15 | 39,687,960 | |||||||
26,910,000 | due 2/15/19 (a) | 17,491,500 | ||||||||
6,000,000 | Greektown Holdings LLC/Greektown Mothership Corp., 8.875%, due 3/15/19 (a) | 6,375,000 | ||||||||
18,258,582 | Majestic Star Casino, LLC, 12.500% Cash or 14.500% Payment-in-kind Interest, due 12/1/16 (a)(g) | 17,345,653 | ||||||||
102,162,613 | ||||||||||
Healthcare - 2.67% | ||||||||||
20,000,000 | 21st Century Oncology, Inc., 11.000%, due 5/1/23 (a) | 20,025,000 | ||||||||
InVentiv Health, Inc.: | ||||||||||
37,100,000 | 10.000% Cash or 12.000% Payment-in-kind Interest, due 8/15/18 (a)(g) | 38,120,250 | ||||||||
8,000,000 | 11.000%, due 8/15/18 (a) | 7,700,000 | ||||||||
65,845,250 | ||||||||||
Home Construction - 1.69% | ||||||||||
46,312,000 | New Enterprise Stone & Lime Co., Inc., 11.000%, due 9/1/18 | 41,680,800 | ||||||||
Manufacturing - 3.45% | ||||||||||
33,000,000 | Euramax International, Inc., 9.500%, due 4/1/16 | 31,515,000 | ||||||||
53,435,000 | Liberty Tire Recycling LLC, 2nd Lien, 11.000% Cash or Payment-in-kind Interest, due 3/31/21 (a)(b)(f)(g) | 53,435,000 | ||||||||
84,950,000 | ||||||||||
Media/Cable - 4.96% | ||||||||||
43,000,000 | Cengage Learning Acquisitions, Inc., Escrow, due 4/15/20 (b)* | — | ||||||||
151,500,000 | iHeartCommunications Inc., 12.000% Cash plus 2.000% Payment-in-kind Interest, due 2/1/21 (g) | 122,146,875 | ||||||||
122,146,875 | ||||||||||
Metals & Mining - 4.57% | ||||||||||
47,500,000 | CAD | Allied Nevada Gold Corp., 8.750%, due 6/1/19 (a) | 6,307,087 | |||||||
116,582,098 | EUR | Boats Investments Netherlands B.V., 11.000% Payment-in-kind Interest, due 3/31/17 (Netherlands) (g) | 39,271,303 | |||||||
2,500,000 | FMG Resources (August 2006) Pty Ltd., 9.750%, due 3/1/22 (Australia) (a) | 2,582,812 | ||||||||
New World Resources N.V. (Netherlands): | ||||||||||
34,966,026 | EUR | 8.000% Cash or 11.000% Payment-in-kind Interest, due 4/7/20 (a)(g) | 24,145,910 | |||||||
13,403,643 | EUR | 4.000% Cash or 8.000% Payment-in-kind Interest, due 10/7/20 (a)(g) | 3,010,059 | |||||||
37,000,000 | Noranda Aluminum Acquisition Corp., 11.000%, due 6/1/19 | 35,335,000 | ||||||||
23,500,000 | Walter Energy, Inc., 8.500%, due 4/15/21 | 2,026,875 | ||||||||
112,679,046 |
The accompanying notes are an integral part of the financial statements.
14 |
Third Avenue Trust
Third Avenue Focused Credit Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Principal | Value | |||||||||
Amount‡ | Security† | (Note 1) | ||||||||
Retailers - 1.88% | ||||||||||
Claire’s Stores, Inc.: | ||||||||||
2,500,000 | 8.750%, due 3/15/19. | $ | 1,275,000 | |||||||
115,250,000 | 7.750%, due 6/1/20 (a) | 44,947,500 | ||||||||
46,222,500 | ||||||||||
Services - 6.16% | ||||||||||
129,771,112 | Affinion Group Holdings, Inc., 13.750% Cash or 14.500% Payment-in-kind Interest, due 9/15/18 (g) | 68,129,834 | ||||||||
41,552,020 | Affinion Investment LLC, 13.500%, due 8/15/18 | 23,165,251 | ||||||||
Altegrity, Inc.*: | ||||||||||
35,740,000 | due 7/1/20 (a) | 13,491,850 | ||||||||
120,871,840 | due 7/1/20 (a) | 45,024,760 | ||||||||
2,864,000 | SunGard Availability Services Capital Inc., 8.750%, due 4/1/22 (a) | 2,033,440 | ||||||||
151,845,135 | ||||||||||
Technology - 0.18% | ||||||||||
28,118,000 | THQ, Inc., due 8/15/14* | 4,358,290 | ||||||||
Telecommunications - 1.05% | ||||||||||
23,000,000 | Intelsat Luxembourg S.A., 7.750%, due 6/1/21 (Luxembourg) | 21,217,500 | ||||||||
5,000,000 | Sprint Capital Corp., 6.875%, due 11/15/28 | 4,537,500 | ||||||||
25,755,000 | ||||||||||
Transportation Services - 1.30% | ||||||||||
32,500,000 | Ceva Group PLC, 9.000%, due 9/1/21 (United Kingdom) (a) | 32,053,125 | ||||||||
Utilities - 4.09% | ||||||||||
4,000,000 | Energy Future Holdings Corp., due 11/15/34* | 4,140,000 | ||||||||
70,000,000 | Energy Future Intermediate Holdings Co. LLC/ EFIH Finance, Inc., due 12/1/18*(a) | 82,250,000 | ||||||||
Texas Competitive Electric Holdings Co. LLC/ TCEH Finance, Inc.*: | ||||||||||
60,000,000 | due 11/1/15 | 8,550,000 | ||||||||
40,000,000 | due 11/1/16 | 5,700,000 | ||||||||
100,640,000 | ||||||||||
Total Corporate Bonds & Notes (Cost $1,622,679,228) | 1,219,213,496 | |||||||||
Term Loans - 8.51% | ||||||||||
Chemicals - 1.24% | ||||||||||
4,292,000 | Reichhold Holdings International B.V., DIP Loan, 12.000% Cash or 14.000% Payment-in-kind Interest, due 3/31/17 (Netherlands) (b)(g) | 4,292,000 | ||||||||
Reichhold Holdings Inc.: | ||||||||||
1,900,212 | DIP Loan, 12.000% Cash or 14.000% Payment-in-kind Interest, due 3/31/17 (b)(g) | 1,900,212 | ||||||||
2,577,000 | Term Loan, 15.000%, due 3/31/17 (b) | 2,577,000 | ||||||||
24,937,500 | Vertellus Specialties, Inc., Term Loan, 10.500%, due 10/10/19 (c) | 21,903,429 | ||||||||
30,672,641 |
Principal | Value | |||||||||
Amount‡ | Security† | (Note 1) | ||||||||
Energy - 1.04% | ||||||||||
14,424,934 | Global Geophysical Services, Inc., Term Loan B, 15.500% Cash or Payment-in-kind Interest, due 8/9/17 (b)(f)(g) | $ | 14,424,934 | |||||||
15,000,000 | Templar Energy LLC, Term Loan B, 2nd Lien, 8.500%, due 11/25/20 (c) | 11,315,625 | ||||||||
25,740,559 | ||||||||||
Financials - 0.08% | ||||||||||
Concrete Investment I, Term Loan (Netherlands): | ||||||||||
32,255 | EUR | Tranche A2, 1.978% Cash or Payment-in-kind Interest, due 3/31/16 (b)(c)(g) | 36,217 | |||||||
12,322 | EUR | Tranche A3, 1.983% Cash or Payment-in-kind Interest, due 3/31/16 (b)(c)(g) | 13,836 | |||||||
Concrete Investment II, Term Loan (Netherlands): | ||||||||||
22,121 | EUR | Tranche A2, 1.978% Cash or Payment-in-kind Interest, due 3/31/16 (b)(c)(g) | 24,839 | |||||||
3,081 | EUR | Tranche A3, 1.983% Cash or Payment-in-kind Interest, due 3/31/16 (b)(c)(g) | 3,459 | |||||||
IVG Immobilien AG, Term Loan (Netherlands): | ||||||||||
691,308 | EUR | Tranche A1, 9.483% Cash or Payment-in-kind Interest, due 9/30/17 (b)(c)(g) | 776,236 | |||||||
1,031,820 | EUR | Tranche A2, 9.483% Cash or Payment-in-kind Interest, due 9/30/18 (b)(c)(g) | 1,158,581 | |||||||
2,013,168 | ||||||||||
Gaming & Entertainment - 0.80% | ||||||||||
20,000,000 | Land Holdings LLC, Term Loan, 12.000%, due 6/27/20 (c) | 19,700,000 | ||||||||
Healthcare - 0.91% | ||||||||||
22,412,400 | Rural/Metro Corp., Term Loan, 8.000% Cash and 1.000% Payment-in-kind Interest, due 6/30/18 (c)(g) | 22,300,338 | ||||||||
Manufacturing - 0.74% | ||||||||||
18,140,367 | Liberty Tire Recycling LLC, Term Loan, 6.330% Cash or 7.000% Payment-in-kind Interest, due 4/1/16 (b)(c)(f)(g) | 18,140,367 | ||||||||
Metals & Mining - 0.21% | ||||||||||
5,722,707 | Allied Nevada Gold Corp., DIP Loan, 12.000% Cash or Payment-in-kind Interest, due 3/12/16 (b)(g) | 5,166,010 | ||||||||
Retailers - 0.58% | ||||||||||
26,682,491 | Weight Watchers International, Inc., Term Loan, 4.000%, due 4/2/20 (c) | 14,275,133 | ||||||||
Services - 2.10% | ||||||||||
31,545,293 | Altegrity, Inc., DIP Loan A, 12.000% Cash or Payment-in-kind Interest, due 8/7/15 (b)(g) | 31,545,293 | ||||||||
Education Management LLC: | ||||||||||
8,875,618 | Term Loan A, 5.500%, due 7/2/20 (c) | 8,002,852 | ||||||||
15,038,419 | Term Loan B, 8.500%, due 7/2/20 (c) | 12,080,858 | ||||||||
51,629,003 | ||||||||||
Utilities - 0.81% | ||||||||||
20,000,000 | Longview Power LLC, Term Loan, 7.000%, due 3/1/22 (c) | 20,000,000 | ||||||||
Total Term Loans (Cost $218,577,004) | 209,637,219 |
The accompanying notes are an integral part of the financial statements.
15 |
Third Avenue Trust
Third Avenue Focused Credit Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Principal | Value | |||||||||
Amount‡ | Security† | (Note 1) | ||||||||
Claims - 1.71% | ||||||||||
Financials - 1.45% | ||||||||||
285,000,000 | Lehman Brothers, Inc., SIPA Claims (d) | $ | 35,625,000 | |||||||
Food & Beverage - 0.26% | ||||||||||
Pescanova S.A. (Spain): | ||||||||||
12,000 | EUR | Coningent Claims, due 12/31/40 (b)(d) | — | |||||||
192,215,129 | EUR | Ordinary Claims, due 12/31/40 (d) | 6,474,869 | |||||||
2,000,189 | EUR | Subordinate Claims, due 12/31/40 (b)(d) | — | |||||||
6,474,869 | ||||||||||
Total Claims (Cost $80,798,515) | 42,099,869 | |||||||||
Municipal Bonds - 0.08% | ||||||||||
Gaming & Entertainment - 0.08% | ||||||||||
5,200,000 | New York City, NY, Industrial Development Agency Civic Facility Revenue, Bronx Parking Development Co. LLC OID, due 10/1/37* | 1,872,000 | ||||||||
Total Municipal Bonds (Cost $3,058,314) | 1,872,000 | |||||||||
Shares | ||||||||||
Convertible Preferred Stocks - 0.53% | ||||||||||
Transportation Services - 0.53% | ||||||||||
4,435 | CEVA Holdings LLC, Series A-1 (d)(e) | 4,878,742 | ||||||||
10,196 | CEVA Holdings LLC, Series A-2 (d)(e) | 8,156,536 | ||||||||
Total Convertible Preferred Stocks (Cost $17,733,657) | 13,035,278 | |||||||||
Preferred Stocks - 3.24% | ||||||||||
Energy - 0.13% | ||||||||||
1,122,431 | Lone Pine Resources, Inc. (Canada) (b)(d) | 3,120,358 | ||||||||
Financials - 2.61% | ||||||||||
120,774 | Concrete Investment II SCA (Luxembourg) (d) | 18,646,543 | ||||||||
100,000 | Federal Home Loan Mortgage Corp. 5.300% (d) | 783,000 | ||||||||
60,000 | Federal Home Loan Mortgage Corp., Series G (c)(d) | 425,400 | ||||||||
89,283 | Federal Home Loan Mortgage Corp., Series H, 5.100% (d) | 744,620 | ||||||||
63,188 | Federal Home Loan Mortgage Corp., Series K, 5.790% (d) | 492,866 | ||||||||
52,500 | Federal Home Loan Mortgage Corp., Series L (c)(d) | 377,475 | ||||||||
207,640 | Federal Home Loan Mortgage Corp., Series M (c)(d) | 1,490,855 | ||||||||
23,500 | Federal Home Loan Mortgage Corp., Series N (c)(d) | 167,790 | ||||||||
336,223 | Federal Home Loan Mortgage Corp., Series P, 6.000% (d) | 2,938,589 | ||||||||
224,580 | Federal Home Loan Mortgage Corp., Series R, 5.700% (d) | 1,929,142 | ||||||||
165,000 | Federal Home Loan Mortgage Corp., Series S (c)(d) | 1,278,750 | ||||||||
100,000 | Federal Home Loan Mortgage Corp., Series U, 5.900% (d) | 445,000 | ||||||||
637,722 | Federal Home Loan Mortgage Corp., Series V, 5.570% (d) | 2,742,205 |
Value | ||||||||||
Shares | Security† | (Note 1) | ||||||||
Financials (continued) | ||||||||||
392,089 | Federal Home Loan Mortgage Corp., Series W, 5.660% (d) | $ | 1,844,779 | |||||||
203,813 | Federal Home Loan Mortgage Corp., Series X, 6.020% (d) | 986,455 | ||||||||
100,000 | Federal Home Loan Mortgage Corp., Series Y, 6.550% (d) | 487,000 | ||||||||
500,000 | Federal Home Loan Mortgage Corp., Series Z, 8.375% (c)(d) | 2,500,000 | ||||||||
96,750 | Federal National Mortgage Association, Series H, 5.810% (d) | 863,978 | ||||||||
478,000 | Federal National Mortgage Association, Series M, 4.750% (d) | 4,106,020 | ||||||||
1,293,000 | Federal National Mortgage Association, Series 0, 7.000% (c)(d) | 12,089,550 | ||||||||
100,000 | Federal National Mortgage Association, Series P (c)(d) | 449,000 | ||||||||
564,650 | Federal National Mortgage Association, Series S, 8.250% (c)(d) | 2,823,250 | ||||||||
750,000 | Federal National Mortgage Association, Series T, 8.250% (d) | 5,692,500 | ||||||||
64,304,767 | ||||||||||
Services - 0.50% | ||||||||||
118,341 | Education Management LLC, Class A-1 (d) | 7,771,063 | ||||||||
335,501 | Education Management LLC, Class A-2 (d) | 4,613,139 | ||||||||
12,384,202 | ||||||||||
Total Preferred Stocks (Cost $93,595,647) | 79,809,327 | |||||||||
Private Equities - 1.06% | ||||||||||
Automotive - 0.46% | ||||||||||
10,000,000 | International Automotive Components Group LLC (d) | 11,250,000 | ||||||||
Chemicals - 0.40% | ||||||||||
29,055 | Reichhold Cayman L.P. (b)(d) | 9,965,778 | ||||||||
Consumer Products - 0.16% | ||||||||||
1,451,633,736,280 | Ideal Standard International Equity S.A. Alpecs (Luxembourg) (d)(e) | 3,952,674 | ||||||||
Energy - 0.04% | ||||||||||
19,700 | Thunderbird Resources L.P. (b)(d)(j) | 1,043,306 | ||||||||
Total Private Equities (Cost $30,651,290) | 26,211,758 | |||||||||
Common Stocks & Warrants - 9.79% | ||||||||||
Chemicals - 2.52% | ||||||||||
867,448 | MPM Holdings, Inc. (d) | 24,722,268 | ||||||||
1,310,842 | MPM Holdings, Inc., Restricted Shares (d)(e) | 37,358,997 | ||||||||
478,500 | Phosphate Holdings, Inc. (d)(f) | 47,372 | ||||||||
62,128,637 | ||||||||||
Energy - 1.89% | ||||||||||
124,461 | Geokinetics Holdings USA, Inc. (b)(d)(e) | 10,274,256 | ||||||||
3,786,564 | Global Geophysical Services, Inc. (d)(f) | 28,399,230 | ||||||||
262,913 | Global Geophysical Services, Inc., Warrants (b)(d)(f) | — | ||||||||
374,199 | Lone Pine Resources, Inc. (b)(d) | — | ||||||||
374,199 | Lone Pine Resources Canada Ltd. (Canada) (b)(d) | 972,917 |
The accompanying notes are an integral part of the financial statements.
16 |
Third Avenue Trust
Third Avenue Focused Credit Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Shares | Security† | Value (Note 1) | ||||||||
Common Stocks & Warrants (continued) | ||||||||||
Energy (continued) | ||||||||||
1,122,431 | Lone Pine Resources, Inc. Multiple Voting Shares (b)(d) | $ | — | |||||||
5,000 | New Gulf Resources LLC, Warrants (d) | 475,000 | ||||||||
50,000 | Platinum Energy Solutions, Inc. (b)(d)(e) | 1,208,500 | ||||||||
10,874 | Platinum Energy Solutions, Inc., Warrants (b)(d)(e) | — | ||||||||
53 | Thunderbird Resources Equity, Inc. (b)(d) | 5,292,262 | ||||||||
17,500 | US Shale Solutions, Inc., Warrants (b)(d) | — | ||||||||
46,622,165 | ||||||||||
Financials - 1.15% | ||||||||||
3,725,000 | Federal Home Loan Mortgage Corp. (d) | 9,759,500 | ||||||||
1,700,000 | Rescap Liquidating Trust | 18,020,000 | ||||||||
216,382 | WMI Holdings Corp. (d) | 558,266 | ||||||||
28,337,766 | ||||||||||
Manufacturing - 0.07% | ||||||||||
2,802,126 | Liberty Tire Recycling LLC (b)(d)(f) | 1,737,318 | ||||||||
42,750 | Liberty Tire Recycling LLC, Warrants, expire 12/12/19 (b)(d)(f) | — | ||||||||
1,737,318 | ||||||||||
Media/Cable - 1.52% | ||||||||||
971,678 | Cengage Learning Holdings II, Inc. | 24,899,249 | ||||||||
2,311,360 | Radio One, Inc., Class D (d)(f) | 8,251,555 | ||||||||
681,637 | Spanish Broadcasting System, Inc., Class A (d)(f) | 4,226,149 | ||||||||
37,376,953 | ||||||||||
Services - 0.03% | ||||||||||
499,061 | Affinion Group, Inc., Warrants, Series A (d) | 474,108 | ||||||||
6,422,764 | Affinion Group, Inc., Warrants, Series B (d) | 128,455 | ||||||||
602,563 | ||||||||||
Transportation Services - 0.15% | ||||||||||
4,710 | CEVA Holdings LLC (d)(e) | 3,767,928 | ||||||||
Utilities - 2.46% | ||||||||||
32,549,441 | EME Reorganization Trust | 325,495 | ||||||||
4,509,571 | Longview Power LLC (d) | 60,315,512 | ||||||||
60,641,007 | ||||||||||
Total Common Stocks & Warrants (Cost $261,770,371) | 241,214,337 | |||||||||
Closed-End Funds - 3.32% | ||||||||||
Financials - 3.32% | ||||||||||
303,287 | Ares Dynamic Credit Allocation Fund, Inc. | 4,937,512 | ||||||||
1,971,824 | BlackRock Corporate High Yield Fund, Inc. | 22,459,075 | ||||||||
827,013 | BlackRock Credit Allocation Income Trust | 11,197,756 | ||||||||
309,656 | Deutsche High Income Opportunities Fund, Inc. | 4,576,716 | ||||||||
819,060 | First Trust High Income Long/Short Fund | 13,555,443 | ||||||||
425,826 | Neuberger Berman High Yield Strategies Fund, Inc. | 5,310,050 | ||||||||
573,749 | New America High Income Fund, Inc. (The) | 5,267,016 | ||||||||
546,533 | Western Asset High Yield Defined Opportunity Fund, Inc. | 9,023,260 | ||||||||
1,025,669 | Western Asset Managed High Income Fund, Inc. | 5,323,222 | ||||||||
Total Closed-End Funds (Cost $84,875,327) | 81,650,050 |
Principal | Value | |||||||||
Amount ($) | Security† | (Note 1) | ||||||||
Short Term Investments - 16.24% | ||||||||||
U.S. Government Obligations - 16.24% | ||||||||||
400,000,000 | U.S. Treasury Bills, 0.00%**-0.01%#, due 5/21/15-7/23/15 | $ | 399,995,489 | |||||||
Total Short Term Investments (Cost $399,997,737) | 399,995,489 | |||||||||
Total Investment Portfolio - 93.98% (Cost $2,813,737,090) | 2,314,738,823 | |||||||||
Other Assets less Liabilities - 6.02%(h)(i) | 148,247,404 | |||||||||
NET ASSETS - 100.00% | $ | 2,462,986,227 |
Notes: | |
CAD: | Canadian Dollar. |
DIP: | Debtor-In-Possession. |
EUR: | Euro. |
OID: | Original Issue Discount. |
SIPA: | Securities Investor Protection Act of 1970. |
(a) | Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. |
(b) | Fair-valued security. |
(c) | Variable rate security. The rate disclosed is in effect as of April 30, 2015. |
(d) | Non-income producing security. |
(e) | Security subject to restrictions on resale. |
Shares/ Principal Amount1 | Issuer | Acquisition Date | Cost | Market Value Per Unit | ||||||||||
4,710 | CEVA Holdings LLC | 5/29/13 | $ | 5,355,643 | $ | 799.98 | ||||||||
4,435 | CEVA Holdings LLC, Series A-1, Convertible Pfd. | 5/29/13 | 4,435,224 | 1,100.05 | ||||||||||
10,196 | CEVA Holdings LLC, Series A-2, Convertible Pfd. | 5/29/13 | 13,298,434 | 799.97 | ||||||||||
124,461 | Geokinetics Holdings USA, Inc. | 5/22/13-5/14/14 | 13,060,780 | 82.55 | ||||||||||
1,451,633,736,280 | Ideal Standard International Equity S.A. Alpecs | 10/31/14 | 9,915,530 | 0.002 | ||||||||||
30,475,697 | EUR | Ideal Standard International S.A, Series C, 11.750% Cash or 17.750% Payment-in-kind Interest, due 5/1/18 | 10/31/14-11/3/14 | 36,883,003 | 79.72 | |||||||||
1,310,842 | MPM Holdings, Inc., Restricted Shares | 10/24/14 | 21,367,809 | 28.50 | ||||||||||
50,000 | Platinum Energy Solutions, Inc. | 10/4/13 | 1,486,746 | 24.17 | ||||||||||
10,874 | Platinum Energy Solutions, Inc., Warrants | 10/4/13 | 9,743 | 0.00 |
EUR: Euro | ||
1 | Denominated in U.S. Dollars unless otherwise noted. | |
2 | Amount less than $0.01. | |
At April 30, 2015, these restricted securities had a total market value of $93,893,600 or 3.81% of net assets of the Fund. |
(f) | Affiliated issuers - as defined under the Investment Company Act of 1940 (ownership of 5% or more of the outstanding voting securities of these issuers). |
(g) | Payment-in-kind (“PIK”) security. Income may be paid in additional securities or cash at the discretion of the issuer. |
(h) | A portion is segregated for future fund commitment. |
(i) | Includes restricted cash pledged to counterparty as collateral management for forward foreign currency contracts. |
(j) | Security is held in the blocker, created to hold the investment for the Fund. |
* | Issue in default. |
^ | Expressed in units. |
† | U.S. issuer unless otherwise noted. |
‡ | Denominated in U.S. Dollars unless otherwise noted. |
** | Amount represents less than 0.01%. |
# | Annualized yield at date of purchase. |
The accompanying notes are an integral part of the financial statements.
17 |
Third Avenue Trust
Third Avenue Focused Credit Fund
Portfolio of Investments (continued)
at April 30, 2015 (Unaudited)
Country Concentration
% of Net Assets | ||||
United States* | 82.70 | % | ||
Luxembourg | 6.48 | |||
Netherlands | 2.95 | |||
United Kingdom | 1.30 | |||
Spain | 0.26 | |||
Canada | 0.18 | |||
Australia | 0.11 | |||
Total | 93.98 | % |
* Includes cash equivalents.
Schedule of Forward Foreign Currency Contracts
Contracts to Sell | Counterparty | Settlement Date | Settlement Value | Value at 4/30/15 | Unrealized Appreciation/ (Depreciation) | |||||||||
10,450,000 CAD | Goldman Sachs & Co. | 5/29/15 | $ | 8,684,541 | $ | 8,657,994 | $ | 26,547 | ||||||
72,500,000 EUR | Goldman Sachs & Co. | 5/29/15 | 79,621,965 | 81,437,503 | (1,815,538) | |||||||||
72,500,000 EUR | JPMorgan Chase Bank, N.A. | 5/29/15 | 79,491,029 | 81,437,503 | (1,946,474) | |||||||||
20,000,000 EUR | Macquarie Bank, Ltd. | 5/29/15 | 21,966,000 | 22,465,518 | (499,518) | |||||||||
$ | (4,234,983) | |||||||||||||
CAD: Canadian Dollar. | ||||||||||||||
EUR: Euro. |
The accompanying notes are an integral part of the financial statements.
18 |
[This page intentionally left blank.]
Third Avenue Trust
Statement of Assets and Liabilities
For the Six Months Ended April 30, 2015 (Unaudited)
Value Fund | Small-Cap Value Fund | Real Estate Value Fund | |||||||||||
Assets: | |||||||||||||
Investments at value (Notes 1 and 5): | |||||||||||||
Unaffiliated issuers† | $ | 1,725,054,058 | $ | 446,416,797 | $ | 3,275,997,274 | |||||||
Affiliated issuers‡ | 158,144,263 | — | 158,502,682 | ||||||||||
Total investments# | 1,883,198,321 | 446,416,797 | 3,434,499,956 | ||||||||||
Cash | 107,191,132 | 11,027,097 | 126,196,044 | ||||||||||
Dividends and interest receivable | 2,270,443 | 471,532 | 10,726,652 | ||||||||||
Receivable for securities sold | — | 1,902,787 | — | ||||||||||
Restricted cash pledged to counterparty for collateral management | — | — | 5,020,000 | ||||||||||
Receivable for fund shares sold | 86,114 | 9,182 | 4,297,820 | ||||||||||
Foreign currency at value^ | — | — | 29,033 | ||||||||||
Purchased foreign currency options* | — | — | 21,892 | ||||||||||
Unrealized appreciation for forward foreign currency contracts | — | — | — | ||||||||||
Other assets | 77,924 | 32,211 | 96,225 | ||||||||||
Other receivables | — | — | 657,204 | ||||||||||
Total assets | 1,992,823,934 | 459,859,606 | 3,581,544,826 | ||||||||||
Liabilities: | |||||||||||||
Written foreign currency options at value** | — | — | 551,676 | ||||||||||
Payable for securities purchased | 6,021,978 | 5,154,805 | — | ||||||||||
Payable for fund shares redeemed | 1,562,314 | 225,602 | 59,565,408 | ||||||||||
Payable to Adviser (Note 3) | 1,474,948 | 344,020 | 2,644,892 | ||||||||||
Unrealized depreciation for forward foreign currency contracts | — | — | 5,739,307 | ||||||||||
Payable for shareholder servicing fees (Note 3) | 465,943 | 113,368 | 686,375 | ||||||||||
Foreign capital tax payable | — | — | — | ||||||||||
Distribution fees payable (Note 6) | 18,309 | 13,330 | 97,298 | ||||||||||
Payable for reports to shareholders | 156,520 | 41,365 | 75,245 | ||||||||||
Payable to trustees and officers | 29,103 | 4,816 | 11,689 | ||||||||||
Accrued expenses | 213,201 | 99,319 | 197,426 | ||||||||||
Total liabilities | 9,942,316 | 5,996,625 | 69,569,316 | ||||||||||
Net assets | $ | 1,982,881,618 | $ | 453,862,981 | $ | 3,511,975,510 | |||||||
Summary of net assets: | |||||||||||||
Capital stock, $0.001 par value | $ | 1,516,105,552 | $ | 315,036,612 | $ | 2,682,406,428 | |||||||
Accumulated undistributed net investment income/(distributions in excess of net investment income) | (3,697,189 | ) | (6,435,491 | ) | (23,087,106 | ) | |||||||
Accumulated net realized gain/(loss) on investments and foreign currency transactions | 206,313,521 | 33,967,032 | 161,012,150 | ||||||||||
Net unrealized appreciation (depreciation) on investments and translation of foreign currency denominated assets and liabilities | 264,159,734 | 111,294,828 | 691,644,038 | ||||||||||
Net assets applicable to capital shares outstanding | $ | 1,982,881,618 | $ | 453,862,981 | $ | 3,511,975,510 | |||||||
Investor Class: | |||||||||||||
Net assets | $ | 35,272,377 | $ | 10,357,523 | $ | 435,552,911 | |||||||
Outstanding shares of beneficial interest, unlimited number of shares authorized | 602,601 | 438,957 | 13,448,131 | ||||||||||
Net asset value, offering and redemption price per share ± | $58.53 | $23.60 | $32.39 | ||||||||||
Institutional Class: | |||||||||||||
Net assets | $ | 1,947,609,241 | $ | 443,505,458 | $ | 3,076,422,599 | |||||||
Outstanding shares of beneficial interest, unlimited number of shares authorized | 33,236,060 | 18,696,572 | 94,435,541 | ||||||||||
Net asset value, offering and redemption price per share ± | $58.60 | $23.72 | $32.58 | ||||||||||
† | Cost of unaffiliated issuers | $ | 1,396,382,690 | $ | 335,080,299 | $ | 2,592,990,526 | ||||||
‡ | Cost of affiliated issuers | $ | 222,642,634 | $ | — | $ | 143,823,028 | ||||||
# | Total cost | $ | 1,619,025,324 | $ | 335,080,299 | $ | 2,736,813,554 | ||||||
^ | Cost of foreign currency | $ | — | $ | — | $ | 28,645 | ||||||
* | Cost of purchased foreign currency options | $ | — | $ | — | $ | 275,000 | ||||||
** | Premiums received for written foreign currency options | $ | — | $ | — | $ | 275,000 | ||||||
± | Redemption price is gross of redemption fees (Note 7) |
The accompanying notes are an integral part of the financial statements.
20 |
International Value Fund | Focused Credit Fund | ||||||
$ | 234,279,263 | $ | 2,186,076,898 | ||||
29,277,766 | 128,661,925 | ||||||
263,557,029 | 2,314,738,823 | ||||||
2,584,113 | 115,861,381 | ||||||
2,955,804 | 39,610,975 | ||||||
2,773,961 | 4,949,123 | ||||||
— | 960,000 | ||||||
30,274 | 4,521,035 | ||||||
4,083 | 203,793 | ||||||
— | — | ||||||
— | 26,547 | ||||||
28,449 | 77,321 | ||||||
— | 420,180 | ||||||
271,933,713 | 2,481,369,178 | ||||||
— | — | ||||||
269,355 | 9,820,435 | ||||||
437,284 | 1,839,099 | ||||||
312,029 | 1,517,432 | ||||||
— | 4,261,530 | ||||||
98,891 | 237,003 | ||||||
— | 143,002 | ||||||
5,055 | 327,789 | ||||||
93,499 | 78,305 | ||||||
5,323 | 8,901 | ||||||
127,269 | 149,455 | ||||||
1,348,705 | 18,382,951 | ||||||
$ | 270,585,008 | $ | 2,462,986,227 | ||||
$ | 285,046,508 | $ | 2,948,977,531 | ||||
(4,092,090 | ) | 79,426,140 | |||||
(5,083,326 | ) | (61,801,274 | ) | ||||
(5,286,084 | ) | (503,616,170 | ) | ||||
$ | 270,585,008 | $ | 2,462,986,227 | ||||
$ | 7,668,293 | $ | 697,375,585 | ||||
442,932 | 74,151,037 | ||||||
$17.31 | $9.40 | ||||||
$ | 262,916,715 | $ | 1,765,610,642 | ||||
15,209,365 | 187,949,214 | ||||||
$17.29 | $9.39 | ||||||
$ | 238,226,083 | $ | 2,692,929,196 | ||||
$ | 30,310,520 | $ | 120,807,894 | ||||
$ | 268,536,603 | $ | 2,813,737,090 | ||||
$ | 3,960 | $ | 204,493 | ||||
$ | — | $ | — | ||||
$ | — | $ | — |
The accompanying notes are an integral part of the financial statements.
21 |
Third Avenue Trust
Statement of Operations
For the Six Months Ended April 30, 2015 (Unaudited)
Value Fund | Small-Cap Value Fund | Real Estate Value Fund | |||||||||||
Investment Income: | |||||||||||||
Dividends - unaffiliated issuers* | $ | 14,505,739 | $ | 1,994,238 | $ | 21,644,296 | |||||||
Dividends - affiliated issuers (Note 5) | 214,739 | — | — | ||||||||||
Interest - unaffiliated issuers* | 161,258 | — | 20,275 | ||||||||||
Interest - affiliated issuers (Note 5) | — | — | — | ||||||||||
Interest - payment-in-kind unaffiliated issuers (Note 1) | — | — | — | ||||||||||
Interest - payment-in-kind affiliated issuers (Notes 1 and 5) | 645,152 | — | — | ||||||||||
Other income | 45,213 | — | 43,074 | ||||||||||
Total investment income | 15,572,101 | 1,994,238 | 21,707,645 | ||||||||||
Expenses: | |||||||||||||
Investment advisory fees (Note 3) | 9,157,846 | 2,158,691 | 15,191,495 | ||||||||||
Shareholder servicing fees (Note 3) | 993,716 | 251,056 | 1,961,436 | ||||||||||
Transfer agent fees | 307,731 | 125,796 | 230,292 | ||||||||||
Reports to shareholders | 173,561 | 48,227 | 185,959 | ||||||||||
Trustees’ and officers’ fees and expenses | 150,955 | 34,095 | 207,669 | ||||||||||
Accounting fees | 83,053 | 22,948 | 125,106 | ||||||||||
Custodian fees | 77,131 | 7,731 | 128,343 | ||||||||||
Auditing and tax fees | 69,106 | 37,379 | 45,154 | ||||||||||
Legal fees | 57,372 | 19,776 | 22,315 | ||||||||||
Administration fees (Note 3) | 55,965 | 13,192 | 92,837 | ||||||||||
Distribution fees (Note 6) | 42,071 | 12,654 | 500,967 | ||||||||||
Insurance | 41,382 | 10,085 | 51,401 | ||||||||||
Registration and filing fees | 36,928 | 19,253 | 54,468 | ||||||||||
Miscellaneous | 37,163 | 10,909 | 137,311 | ||||||||||
Total expenses | 11,283,980 | 2,771,792 | 18,934,753 | ||||||||||
Less: Expenses waived (Note 3) | — | — | — | ||||||||||
Expenses reduced by custodian fee expense offset arrangement (Note 3) | (23,818 | ) | (2,076 | ) | (82,080 | ) | |||||||
Net expenses | 11,260,162 | 2,769,716 | 18,852,673 | ||||||||||
Net investment income/(loss) | 4,311,939 | (775,478 | ) | 2,854,972 | |||||||||
Realized and unrealized gain/(loss) on investments/written options and foreign currency transactions: | |||||||||||||
Net realized gain/(loss) on investments - unaffiliated issuers# | 166,325,107 | 35,210,707 | 119,981,818 | ||||||||||
Net realized gain on investments - affiliated issuers | 3,623,201 | — | — | ||||||||||
Net realized gain on written equity options | 315,500 | — | 1,892,007 | ||||||||||
Net realized gain/(loss) on foreign currency transactions | 17,315 | (12,802 | ) | 46,012,238 | |||||||||
Net change in unrealized appreciation/(depreciation) on investments | (98,000,591 | ) | (13,622,662 | ) | 13,302,198 | ||||||||
Net change in unrealized depreciation on written equity options | (109,500 | ) | — | (1,726,607 | ) | ||||||||
Net change in unrealized appreciation/(depreciation) on translation of other | |||||||||||||
assets and liabilities denominated in foreign currency | 44,983 | (27,915 | ) | (10,073,585 | ) | ||||||||
Net change in deferred taxes on unrealized appreciation | — | — | — | ||||||||||
Net increase/(decrease) on investments and foreign currency transactions | 72,216,015 | 21,547,328 | 169,388,069 | ||||||||||
Net increase/(decrease) in net assets resulting from operations | $ | 76,527,954 | $ | 20,771,850 | $ | 172,243,041 | |||||||
* | Net of foreign withholding taxes of | $ | 681,152 | $ | — | $ | 1,632,922 | ||||||
# | Net of foreign capital gains tax of | $ | — | $ | — | $ | — |
The accompanying notes are an integral part of the financial statements.
22 |
International Value Fund | Focused Credit Fund | ||||||
$ | 2,036,681 | $ | 7,328,017 | ||||
— | — | ||||||
108,240 | 90,872,269 | ||||||
— | 913,531 | ||||||
— | 25,986,426 | ||||||
— | 631,970 | ||||||
— | 534,196 | ||||||
2,144,921 | 126,266,409 | ||||||
1,832,352 | 9,452,122 | ||||||
194,063 | 743,836 | ||||||
106,261 | 93,697 | ||||||
63,735 | 183,667 | ||||||
23,232 | 166,811 | ||||||
25,689 | 125,255 | ||||||
52,743 | 51,351 | ||||||
37,491 | 89,129 | ||||||
11,852 | 297,532 | ||||||
8,062 | 69,315 | ||||||
11,283 | 952,753 | ||||||
11,273 | 61,193 | ||||||
22,799 | 116,021 | ||||||
19,529 | 81,035 | ||||||
2,420,364 | 12,483,717 | ||||||
(354,115 | ) | — | |||||
(2,732 | ) | (37,445 | ) | ||||
2,063,517 | 12,446,272 | ||||||
81,404 | 113,820,137 | ||||||
9,639,420 | (89,459,747 | ) | |||||
323,488 | — | ||||||
— | — | ||||||
(109,367 | ) | 29,951,605 | |||||
3,076,366 | (236,998,222 | ) | |||||
— | — | ||||||
(61,781 | ) | (6,006,281 | ) | ||||
306,425 | — | ||||||
13,174,551 | (302,512,645 | ) | |||||
$ | 13,255,955 | $ | (188,692,508 | ) | |||
$ | 179,955 | $ | 474 | ||||
$ | 98,978 | $ | — |
The accompanying notes are an integral part of the financial statements.
23 |
Third Avenue Trust
Statements of Changes in Net Assets
Value Fund | Small-Cap Value Fund | |||||||||||||||||||
For the Six Months Ended April 30, 2015 (Unaudited) | For the Year Ended October 31, 2014 | For the Six Months Ended April 30, 2015 (Unaudited) | For the Year Ended October 31, 2014 | |||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income/(loss) | $ | 4,311,939 | $ | 63,706,192 | $ | (775,478 | ) | $ | (1,081,749 | ) | ||||||||||
Net realized gain/(loss) | 170,281,123 | 151,643,183 | 35,197,905 | 103,628,738 | ||||||||||||||||
Net change in unrealized appreciation/(depreciation) | (98,065,108 | ) | (48,963,218 | ) | (13,650,577 | ) | (61,145,669 | ) | ||||||||||||
Net increase/(decrease) in net assets resulting from operations | $ | 76,527,954 | $ | 166,386,157 | $ | 20,771,850 | $ | 41,401,320 | ||||||||||||
Dividends and Distributions to Shareholders from: | ||||||||||||||||||||
Net investment income: | ||||||||||||||||||||
Investor Class | (1,186,004 | ) | (1,149,550 | ) | — | — | ||||||||||||||
Institutional Class | (78,815,872 | ) | (84,085,744 | ) | — | (849,043 | ) | |||||||||||||
Net realized gains: | ||||||||||||||||||||
Investor Class | (603,699 | ) | — | (2,033,716 | ) | (750,926 | ) | |||||||||||||
Institutional Class | (37,196,365 | ) | — | (98,965,532 | ) | (40,845,424 | ) | |||||||||||||
Decrease in net assets from dividends and distributions | (117,801,940 | ) | (85,235,294 | ) | (100,999,248 | ) | (42,445,393 | ) | ||||||||||||
Capital Share Transactions: | ||||||||||||||||||||
Proceeds from sale of shares | 23,946,364 | 88,843,094 | 7,998,713 | 20,936,904 | ||||||||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 109,844,922 | 80,139,122 | 97,559,754 | 41,203,254 | ||||||||||||||||
Redemption fees | 4,244 | 13,858 | 1,193 | 3,629 | ||||||||||||||||
Cost of shares redeemed | (275,129,897 | ) | (716,104,569 | ) | (91,420,153 | ) | (220,855,475 | ) | ||||||||||||
Net increase/(decrease) in net assets resulting from capital share transactions | (141,334,367 | ) | (547,108,495 | ) | 14,139,507 | (158,711,688 | ) | |||||||||||||
Net increase/(decrease) in net assets | (182,608,353 | ) | (465,957,632 | ) | (66,087,891 | ) | (159,755,761 | ) | ||||||||||||
Net assets at beginning of period | 2,165,489,971 | 2,631,447,603 | 519,950,872 | 679,706,633 | ||||||||||||||||
Net assets at end of period* | $ | 1,982,881,618 | $ | 2,165,489,971 | $ | 453,862,981 | $ | 519,950,872 | ||||||||||||
* Including accumulated undistributed net investment income/ (distributions in excess of net investment income) of | $ | (3,697,189 | ) | $ | 71,992,748 | $ | (6,435,491 | ) | $ | (5,660,013 | ) |
The accompanying notes are an integral part of the financial statements.
24 |
Real Estate Value Fund | International Value Fund | Focused Credit Fund | ||||||||||||||||||||||||||
For the Six Months Ended April 30, 2015 (Unaudited) | For the Year Ended October 31, 2014 | For the Six Months Ended April 30, 2015 (Unaudited) | For the Year Ended October 31, 2014 | For the Six Months Ended April 30, 2015 (Unaudited) | For the Year Ended October 31, 2014 | |||||||||||||||||||||||
$ | 2,854,972 | $ | 47,668,328 | $ | 81,404 | $ | 19,064,484 | $ | 113,820,137 | $ | 267,212,698 | |||||||||||||||||
167,886,063 | 74,424,165 | 9,853,541 | 84,582,150 | (59,508,142 | ) | 32,738,809 | ||||||||||||||||||||||
1,502,006 | 155,267,873 | 3,321,010 | (160,955,559 | ) | (243,004,503 | ) | (307,052,516 | ) | ||||||||||||||||||||
$ | 172,243,041 | $ | 277,360,366 | $ | 13,255,955 | $ | (57,308,925 | ) | $ | (188,692,508 | ) | $ | (7,101,009 | ) | ||||||||||||||
(5,176,771 | ) | (1,571,043 | ) | (704,920 | ) | (394,709 | ) | (34,890,474 | ) | (81,551,899 | ) | |||||||||||||||||
(44,946,801 | ) | (20,726,891 | ) | (21,445,284 | ) | (15,699,040 | ) | (81,740,676 | ) | (114,190,590 | ) | |||||||||||||||||
(7,373,691 | ) | (2,422,235 | ) | — | — | (4,768,981 | ) | — | ||||||||||||||||||||
(55,424,653 | ) | (27,463,643 | ) | — | — | (10,581,494 | ) | — | ||||||||||||||||||||
(112,921,916 | ) | (52,183,812 | ) | (22,150,204 | ) | (16,093,749 | ) | (131,981,625 | ) | (195,742,489 | ) | |||||||||||||||||
552,237,645 | 1,206,714,273 | 6,932,127 | 51,854,263 | 678,830,429 | 2,639,140,846 | |||||||||||||||||||||||
106,285,273 | 49,667,615 | 21,124,596 | 14,817,419 | 113,137,880 | 165,082,808 | |||||||||||||||||||||||
32,747 | 70,645 | 5,909 | 16,624 | 160,497 | 250,689 | |||||||||||||||||||||||
(440,584,280 | ) | (402,672,506 | ) | (100,347,311 | ) | (899,641,397 | ) | (978,489,867 | ) | (1,400,052,915 | ) | |||||||||||||||||
217,971,385 | 853,780,027 | (72,284,679 | ) | (832,953,091 | ) | (186,361,061 | ) | 1,404,421,428 | ||||||||||||||||||||
277,292,510 | 1,078,956,581 | (81,178,928 | ) | (906,355,765 | ) | (507,035,194 | ) | 1,201,577,930 | ||||||||||||||||||||
3,234,683,000 | 2,155,726,419 | 351,763,936 | 1,258,119,701 | 2,970,021,421 | 1,768,443,491 | |||||||||||||||||||||||
$ | 3,511,975,510 | $ | 3,234,683,000 | $ | 270,585,008 | $ | 351,763,936 | $ | 2,462,986,227 | $ | 2,970,021,421 | |||||||||||||||||
$ | (23,087,106 | ) | $ | 24,181,494 | $ | (4,092,090 | ) | $ | 17,976,710 | $ | 79,426,140 | $ | 82,237,153 |
The accompanying notes are an integral part of the financial statements.
25 |
Third Avenue Trust
Statement of Cash Flows
For the Period Ended April 30, 2015 (Unaudited)
Focused Credit Fund | ||||
Cash Flows from Operating Activities: | ||||
Net decrease in net assets resulting from operations | $ | (188,692,508 | ) | |
Adjustments to reconcile net decrease in net assets resulting from operations to net cash used by operating activities: | ||||
Purchases of long-term securities | (617,050,670 | ) | ||
Proceeds from sales and paydowns of long-term securities | 1,115,124,077 | |||
Purchases of short-term securities | (1,077,098,018 | ) | ||
Sales of short-term securities | 720,321,275 | |||
Net change in unrealized (appreciation)/depreciation on investment securities and deferred taxes | 235,827,199 | |||
Net realized losses from investment transactions | 77,523,045 | |||
Payment-in-kind interest income and other non-cash receipt of income | (26,618,396 | ) | ||
Amortization of premium and discount - net | (28,026,690 | ) | ||
Increase in restricted cash pledged to counterparty for collateral management | (960,000 | ) | ||
Decrease in interest and dividends receivable | 25,773,894 | |||
Decrease in foreign currency held | 582,695 | |||
Decrease in prepaid expenses, other assets and other receivables | 654,007 | |||
Net change in unrealized (appreciation)/depreciation on forward foreign currency contracts | 6,369,751 | |||
Decrease in payable to Adviser | (395,479 | ) | ||
Decrease in accrued expenses and other liabilities | (3,580,071 | ) | ||
Net Cash Used by Operating Activities | 239,754,111 | |||
Cash Flows from Financing Activities: | ||||
Proceeds from issuance of shares | 679,167,459 | |||
Cash payments on shares redeemed net of redemption fees | (980,864,830 | ) | ||
Distributions paid to shareholders | (18,843,745 | ) | ||
Net Cash Provided by Financing Activities | (320,541,116 | ) | ||
Cash: | ||||
Net change in cash | (80,787,005 | ) | ||
Cash at beginning of period | 196,648,386 | |||
Cash at end of period | $ | 115,861,381 | ||
Noncash Investing and Financing Activities: | ||||
Capital shares issued in reinvestment of distributions paid to shareholders | $ | 113,137,880 | ||
Noncash investment transactions - Mergers, restructurings, dividend reinvestments and payment-in-kind interest income | 272,312,893 |
The accompanying notes are an integral part of the financial statements.
26 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | For the Period | |||||||||||||||||||||||
Ended | Ended | |||||||||||||||||||||||
April 30, | Years Ended October 31, | October 31, | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010* | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Investor Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $59.54 | $57.73 | $48.47 | $44.00 | $50.09 | $46.32 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income@ | 0.05 | 1.39 | ± | 0.61 | ** | 0.27 | 0.37 | 0.59 | ||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized) | 2.09 | 3 | 2.22 | 3 | 9.89 | 3 | 4.99 | 2 | (5.56 | )2 | 3.18 | 1 | ||||||||||||
Total from investment operations | 2.14 | 3.61 | 10.50 | 5.26 | (5.19 | ) | 3.77 | |||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (2.09 | ) | (1.80 | ) | (1.24 | ) | (0.79 | ) | (0.90 | ) | — | |||||||||||||
Distributions from realized gains | (1.06 | ) | — | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (3.15 | ) | (1.80 | ) | (1.24 | ) | (0.79 | ) | (0.90 | ) | — | |||||||||||||
Net asset value, end of period | $58.53 | $59.54 | $57.73 | $48.47 | $44.00 | $50.09 | ||||||||||||||||||
Total return4 | 3.74 | %5 | 6.45 | % | 22.07 | % | 12.36 | % | (10.62 | %) | 8.16 | %5 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $35,272 | $33,936 | $36,811 | $25,796 | $25,547 | $18,553 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.35 | %6 | 1.33 | % | 1.35 | % | 1.36 | % | 1.38 | % | 1.46 | %6 | ||||||||||||
After fee waivers/expense offset arrangement/recovery7 | 1.35 | %6 | 1.32 | % | 1.35 | %† | 1.40 | %† | 1.40 | %† | 1.40 | %6# | ||||||||||||
Ratio of net investment income to average net assets | 0.18 | %6 | 2.36 | %± | 1.15 | %** | 0.61 | % | 0.75 | % | 1.54 | %6 | ||||||||||||
Portfolio turnover rate | 10 | %5 | 31 | % | 21 | % | 16 | % | 6 | % | 2 | %5 |
1 | Includes redemption fees of $0.04 per share. |
2 | Includes redemption fees of $0.01 per share. |
3 | Includes redemption fees of less than $0.01 per share. |
4 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
5 | Not annualized. |
6 | Annualized. |
7 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.40%. |
† | The Adviser recovered a portion of its previously waived fees. |
# | The Adviser waived a portion of its fees. |
* | Period from December 31, 2009 (commencement of operations) through October 31, 2010. |
** | Investment income per share reflects a special dividend received during the period which amounted to $0.44 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.33% |
± | Investment income per share reflects special dividends received during the period which amounted to $0.41 per share. Excluding the special dividends, the ratio of net investment income to average net assets would have been 1.67%. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
27 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
April 30, | Years Ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Institutional Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $59.69 | $57.86 | $48.53 | $44.08 | $50.13 | $44.60 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income@ | 0.12 | 1.53± | 0.77 | ** | 0.37 | 0.43 | 0.71 | |||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized)1 | 2.10 | 2.23 | 9.87 | 4.98 | (5.51 | ) | 5.96 | |||||||||||||||||
Total from investment operations | 2.22 | 3.76 | 10.64 | 5.35 | (5.08 | ) | 6.67 | |||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (2.25 | ) | (1.93 | ) | (1.31 | ) | (0.90 | ) | (0.97 | ) | (1.14 | ) | ||||||||||||
Distributions from realized gains | (1.06 | ) | — | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (3.31 | ) | (1.93 | ) | (1.31 | ) | (0.90 | ) | (0.97 | ) | (1.14 | ) | ||||||||||||
Net asset value, end of period | $58.60 | $59.69 | $57.86 | $48.53 | $44.08 | $50.13 | ||||||||||||||||||
Total return2 | 3.89 | %4 | 6.70 | % | 22.40 | % | 12.61 | % | (10.42 | %) | 15.25 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $1,947,609 | $2,131,554 | $2,594,637 | $2,601,961 | $3,451,647 | $5,040,109 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.10 | %5 | 1.08 | % | 1.10 | % | 1.11 | % | 1.13 | % | 1.19 | % | ||||||||||||
After fee waivers/expense offset arrangement/recovery3 | 1.10 | %5 | 1.07 | % | 1.10 | %† | 1.15 | %† | 1.15 | %† | 1.15 | %# | ||||||||||||
Ratio of net investment income to average net assets | 0.43 | %5 | 2.61 | %± | 1.45 | %** | 0.83 | % | 0.86 | % | 1.55 | % | ||||||||||||
Portfolio turnover rate | 10 | %4 | 31 | % | 21 | % | 16 | % | 6 | % | 2 | % |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.15% effective December 31, 2009. |
4 | Not annualized. |
5 | Annualized. |
† | The Adviser recovered a portion of its previously waived fees. |
# | The Adviser waived a portion of its fees. |
** | Investment income per share reflects a special dividend received during the period which amounted to $0.44 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.63% |
± | Investment income per share reflects special dividends received during the period which amounted to $0.41 per share. Excluding the special dividends, the ratio of net investment income to average net assets would have been 1.92%. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
28 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Small-Cap Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | For the Period | |||||||||||||||||||||||
Ended | Ended | |||||||||||||||||||||||
April 30, | Years Ended October 31, | October 31, | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010* | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Investor Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $28.18 | $28.10 | $22.13 | $20.25 | $19.35 | $18.19 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income/(loss)@ | (0.07 | ) | (0.11 | ) | 0.06 | ** | (0.04 | ) | (0.01 | ) | 0.02 | |||||||||||||
Net gain on investment transactions (both realized and unrealized) | 1.10 | 2 | 1.96 | 2 | 6.57 | 2 | 2.01 | 2 | 1.10 | 1 | 1.14 | 2 | ||||||||||||
Total from investment operations | 1.03 | 1.85 | 6.63 | 1.97 | 1.09 | 1.16 | ||||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | — | — | (0.16 | ) | (0.02 | ) | (0.19 | ) | — | |||||||||||||||
Distributions from realized gains | (5.61 | ) | (1.77 | ) | (0.50 | ) | (0.07 | ) | — | — | ||||||||||||||
Total dividends and distributions | (5.61 | ) | (1.77 | ) | (0.66 | ) | (0.09 | ) | (0.19 | ) | — | |||||||||||||
Net asset value, end of period | $23.60 | $28.18 | $28.10 | $22.13 | $20.25 | $19.35 | ||||||||||||||||||
Total return3 | 4.34 | %4 | 6.85 | % | 30.74 | % | 9.77 | % | 5.58 | % | 6.38 | %4 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $10,358 | $9,898 | $11,995 | $8,216 | $7,490 | $4,505 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.40 | %5 | 1.35 | % | 1.37 | % | 1.38 | % | 1.39 | % | 1.42 | %5 | ||||||||||||
After fee waivers/expense offset arrangement/recovery6 | 1.40 | %5 | 1.35 | % | 1.37 | % | 1.38 | %† | 1.40 | %† | 1.40 | %5# | ||||||||||||
Ratio of net investment income/(loss) to average net assets | (0.58 | %)5 | (0.41 | %) | 0.25 | %** | (0.18 | %) | (0.07 | %) | 0.10 | %5 | ||||||||||||
Portfolio turnover rate | 10 | %4 | 40 | % | 39 | % | 33 | % | 34 | % | 9 | %4 |
1 | Includes redemption fees of $0.02 per share. |
2 | Includes redemption fees of less than $0.01 per share. |
3 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
4 | Not annualized. |
5 | Annualized. |
6 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.40%. |
† | The Adviser recovered a portion of its previously waived fees. |
# | The Adviser waived a portion of its fees. |
* | Period from December 31, 2009 (commencement of operations) through October 31, 2010. |
** | Investment income per share reflects special dividends received during the period which amounted to $0.11 per share. Excluding the special dividends, the ratio of net investment income/(loss) to average net assets would have been (0.18%). |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
29 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Small-Cap Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
April 30, | Years Ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Institutional Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $28.27 | $28.16 | $22.18 | $20.30 | $19.38 | $17.17 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income/(loss)@ | (0.04 | ) | (0.05 | ) | 0.15 | ** | 0.01 | 0.03 | 0.12 | |||||||||||||||
Net gain on investment transactions (both realized and unrealized)1 | 1.10 | 1.97 | 6.54 | 2.01 | 1.10 | 2.23 | ||||||||||||||||||
Total from investment operations | 1.06 | 1.92 | 6.69 | 2.02 | 1.13 | 2.35 | ||||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | — | (0.04 | ) | (0.21 | ) | (0.07 | ) | (0.21 | ) | (0.14 | ) | |||||||||||||
Distributions from realized gains | (5.61 | ) | (1.77 | ) | (0.50 | ) | (0.07 | ) | — | — | ||||||||||||||
Total dividends and distributions | (5.61 | ) | (1.81 | ) | (0.71 | ) | (0.14 | ) | (0.21 | ) | (0.14 | ) | ||||||||||||
Net asset value, end of period | $23.72 | $28.27 | $28.16 | $22.18 | $20.30 | $19.38 | ||||||||||||||||||
Total return2 | 4.45 | %4 | 7.09 | % | 31.05 | % | 9.99 | % | 5.80 | % | 13.73 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $443,505 | $510,053 | $667,712 | $641,684 | $794,495 | $1,050,173 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.15 | %5 | 1.10 | % | 1.12 | % | 1.13 | % | 1.14 | % | 1.16 | % | ||||||||||||
After fee waivers/expense offset arrangement/recovery3 | 1.15 | %5 | 1.10 | % | 1.12 | % | 1.13 | %† | 1.15 | %† | 1.14 | %# | ||||||||||||
Ratio of net investment income/(loss) to average net assets | (0.32 | %)5 | (0.17 | %) | 0.62 | %** | 0.07 | % | 0.15 | % | 0.65 | % | ||||||||||||
Portfolio turnover rate | 10 | %4 | 40 | % | 39 | % | 33 | % | 34 | % | 9 | % |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.15% effective December 31, 2009. |
4 | Not annualized. |
5 | Annualized. |
† | The Adviser recovered a portion of its previously waived fees. |
# | The Adviser waived a portion of its fees. |
** | Investment income per share reflects special dividends received during the period which amounted to $0.11 per share. Excluding the special dividends, the ratio of net investment income to average net assets would have been 0.19% |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
30 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Real Estate Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | For the Period | |||||||||||||||||||||||
Ended | Ended | |||||||||||||||||||||||
April 30, | Years Ended October 31, | October 31, | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010* | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Investor Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $31.84 | $29.40 | $26.53 | $21.40 | $22.90 | $20.47 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income/(loss)@ | (0.00 | )^ | 0.50 | ± | 0.10 | 0.16 | 0.02 | 0.40 | ||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized)1 | 1.62 | 2.60 | 4.99 | 4.97 | (0.63 | ) | 2.03 | |||||||||||||||||
Total from investment operations | 1.62 | 3.10 | 5.09 | 5.13 | (0.61 | ) | 2.43 | |||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (0.44 | ) | (0.26 | ) | (0.84 | ) | — | (0.89 | ) | — | ||||||||||||||
Distributions from realized gains | (0.63 | ) | (0.40 | ) | (1.38 | ) | — | — | — | |||||||||||||||
Total dividends and distributions | (1.07 | ) | (0.66 | ) | (2.22 | ) | — | (0.89 | ) | — | ||||||||||||||
Net asset value, end of period | $32.39 | $31.84 | $29.40 | $26.53 | $21.40 | $22.90 | ||||||||||||||||||
Total return2 | 5.18 | %3 | 10.84 | % | 20.61 | % | 23.97 | % | (2.89 | %) | 11.87 | %3 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $435,553 | $367,834 | $145,169 | $60,684 | $48,327 | $28,594 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.34 | %4 | 1.34 | % | 1.34 | % | 1.34 | % | 1.38 | % | 1.44 | %4 | ||||||||||||
After fee waivers/expense offset arrangement/recovery5 | 1.34 | %4 | 1.33 | % | 1.33 | % | 1.34 | % | 1.40 | %† | 1.40 | %4# | ||||||||||||
Ratio of net investment income/(loss) to average net assets | (0.03 | %)4 | 1.63 | %± | 0.36 | % | 0.68 | % | 0.11 | % | 2.27 | %4 | ||||||||||||
Portfolio turnover rate | 8 | %3 | 14 | % | 13 | % | 4 | % | 32 | % | 26 | %3 |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | Not annualized. |
4 | Annualized. |
5 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.40%. |
† | The Adviser recovered previously waived fees. |
# | The Adviser waived a portion of its fees. |
* | Period from December 31, 2009 (commencement of operations) through October 31, 2010. |
± | Investment income per share reflects a special dividend received during the period which amounted to $0.06 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 1.43%. |
@ | Calculated based on the average number of shares outstanding during the period. |
^ | Amount less than $0.01 per share. |
The accompanying notes are an integral part of the financial statements.
31 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Real Estate Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
April 30, | Years Ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Institutional Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $32.05 | $29.56 | $26.66 | $21.45 | $22.93 | $19.86 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income@ | 0.03 | 0.56 | ± | 0.18 | 0.22 | 0.06 | 0.44 | |||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized)1 | 1.64 | 2.63 | 4.99 | 4.99 | (0.62 | ) | 2.89 | |||||||||||||||||
Total from investment operations | 1.67 | 3.19 | 5.17 | 5.21 | (0.56 | ) | 3.33 | |||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (0.51 | ) | (0.30 | ) | (0.89 | ) | — | (0.92 | ) | (0.26 | ) | |||||||||||||
Distributions from realized gains | (0.63 | ) | (0.40 | ) | (1.38 | ) | — | — | — | |||||||||||||||
Total dividends and distributions | (1.14 | ) | (0.70 | ) | (2.27 | ) | — | (0.92 | ) | (0.26 | ) | |||||||||||||
Net asset value, end of period | $32.58 | $32.05 | $29.56 | $26.66 | $21.45 | $22.93 | ||||||||||||||||||
Total return2 | 5.31 | %3 | 11.11 | % | 20.87 | % | 24.29 | % | (2.66 | %) | 16.94 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $3,076,423 | $2,866,849 | $2,010,557 | $1,689,612 | $1,579,121 | $1,652,647 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.09 | %4 | 1.09 | % | 1.09 | % | 1.09 | % | 1.13 | % | 1.18 | % | ||||||||||||
After fee waivers/expense offset arrangement/recovery5 | 1.09 | %4 | 1.08 | % | 1.08 | % | 1.09 | % | 1.15 | %† | 1.14 | %# | ||||||||||||
Ratio of net investment income to average net assets | 0.20 | %4 | 1.82 | %± | 0.65 | % | 0.96 | % | 0.26 | % | 2.09 | % | ||||||||||||
Portfolio turnover rate | 8 | %3 | 14 | % | 13 | % | 4 | % | 32 | % | 26 | % |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | Not annualized. |
4 | Annualized. |
5 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.15% effective December 31, 2009. |
† | The Adviser recovered previously waived fees. |
# | The Adviser waived a portion of its fees. |
± | Investment income per share reflects a special dividend received during the period which amounted to $0.06 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 1.62%. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
32 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue International Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | For the Period | |||||||||||||||||||||||
Ended | Ended | |||||||||||||||||||||||
April 30, | Years Ended October 31, | October 31, | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010* | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Investor Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $17.58 | $19.96 | $16.14 | $15.29 | $16.31 | $15.51 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income/(loss)@ | (0.02 | ) | 0.39 | ± | 0.25 | ** | 0.08 | 0.09 | 0.32 | |||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized)1 | 0.86 | (2.55 | ) | 3.68 | 0.99 | (0.85 | ) | 0.48 | ||||||||||||||||
Total from investment operations | 0.84 | (2.16 | ) | 3.93 | 1.07 | (0.76 | ) | 0.80 | ||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (1.11 | ) | (0.22 | ) | (0.11 | ) | (0.22 | ) | (0.26 | ) | — | |||||||||||||
Total dividends and distributions | (1.11 | ) | (0.22 | ) | (0.11 | ) | (0.22 | ) | (0.26 | ) | — | |||||||||||||
Net asset value, end of period | $17.31 | $17.58 | $19.96 | $16.14 | $15.29 | $16.31 | ||||||||||||||||||
Total return2 | 5.02 | %4 | (10.96 | %) | 24.49 | % | 7.20 | % | (4.76 | %) | 5.16 | %4 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $7,668 | $12,266 | $35,013 | $18,533 | $13,997 | $6,920 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers and expense offset arrangement | 1.89 | %5 | 1.71 | % | 1.69 | % | 1.69 | % | 1.69 | % | 1.77 | %5 | ||||||||||||
After fee waivers and expense offset arrangement3# | 1.65 | %5 | 1.65 | % | 1.65 | % | 1.65 | % | 1.65 | % | 1.65 | %5 | ||||||||||||
Ratio of net investment income/(loss) to average net assets | (0.24 | %)5 | 1.99 | %± | 1.37 | %** | 0.53 | % | 0.56 | % | 2.55 | %5 | ||||||||||||
Portfolio turnover rate | 11 | %4 | 22 | % | 11 | % | 20 | % | 24 | % | 13 | %4 |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers and/or expense offset arrangement. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense offset arrangement, the total return would have been lower. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.65%. |
4 | Not annualized. |
5 | Annualized. |
# | The Adviser waived a portion of its fees. |
* | Period from December 31, 2009 (commencement of operations) through October 31, 2010. |
** | Investment income per share reflects a special dividend received during the period which amounted to $0.15 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.53%. |
± | Investment income per share reflects special dividends received during the period which amounted to $0.12 per share. Excluding the special dividends, the ratio of net investment income to average net assets would have been 1.39%. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
33 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue International Value Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
April 30, | Years Ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Institutional Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $17.63 | $20.00 | $16.16 | $15.33 | $16.33 | $15.18 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income@ | 0.01 | 0.43 | ± | 0.25 | ** | 0.12 | 0.10 | 0.24 | ||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized)1 | 0.85 | (2.54 | ) | 3.74 | 0.97 | (0.81 | ) | 1.09 | ||||||||||||||||
Total from investment operations | 0.86 | (2.11 | ) | 3.99 | 1.09 | (0.71 | ) | 1.33 | ||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (1.20 | ) | (0.26 | ) | (0.15 | ) | (0.26 | ) | (0.29 | ) | (0.18 | ) | ||||||||||||
Total dividends and distributions | (1.20 | ) | (0.26 | ) | (0.15 | ) | (0.26 | ) | (0.29 | ) | (0.18 | ) | ||||||||||||
Net asset value, end of period | $17.29 | $17.63 | $20.00 | $16.16 | $15.33 | $16.33 | ||||||||||||||||||
Total return2 | 5.20 | %3 | (10.79 | %) | 24.89 | % | 7.39 | % | (4.51 | %) | 8.84 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $262,917 | $339,498 | $1,223,107 | $1,176,256 | $1,277,674 | $1,517,296 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers and expense offset arrangement | 1.64 | %4 | 1.46 | % | 1.44 | % | 1.44 | % | 1.44 | % | 1.51 | % | ||||||||||||
After fee waivers and expense offset arrangement5# | 1.40 | %4 | 1.40 | % | 1.40 | % | 1.40 | % | 1.40 | % | 1.40 | % | ||||||||||||
Ratio of net investment income to average net assets | 0.06 | %4 | 2.19 | %± | 1.40 | %** | 0.80 | % | 0.58 | % | 1.58 | % | ||||||||||||
Portfolio turnover rate | 11 | %3 | 22 | % | 11 | % | 20 | % | 24 | % | 13 | % |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers and/or expense offset arrangement. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense offset arrangement, the total return would have been lower. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | Not annualized. |
4 | Annualized. |
5 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.40%. |
# | The Adviser waived a portion of its fees. |
** | Investment income per share reflects a special dividend received during the period which amounted to $0.15 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.56%. |
± | Investment income per share reflects special dividends received during the period which amounted to $0.12 per share. Excluding the special dividends, the ratio of net investment income to average net assets would have been 1.59%. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
34 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Focused Credit Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
April 30, | Years Ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Investor Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.61 | $11.08 | $10.25 | $10.51 | $11.36 | $10.25 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income@ | 0.43 | 1.09 | 0.88 | 0.76 | 0.85 | 0.83 | ||||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized) | (1.15 | )1 | (0.76 | )1 | 0.78 | 1 | 0.13 | 1 | (0.81 | )2 | 0.89 | 3 | ||||||||||||
Total from investment operations | (0.72 | ) | 0.33 | 1.66 | 0.89 | 0.04 | 1.72 | |||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (0.43 | ) | (0.80 | ) | (0.83 | ) | (0.69 | ) | (0.79 | ) | (0.60 | ) | ||||||||||||
Distributions from realized gains | (0.06 | ) | — | — | (0.46 | ) | (0.10 | ) | (0.01 | ) | ||||||||||||||
Total dividends and distributions | (0.49 | ) | (0.80 | ) | (0.83 | ) | (1.15 | ) | (0.89 | ) | (0.61 | ) | ||||||||||||
Net asset value, end of period | $9.40 | $10.61 | $11.08 | $10.25 | $10.51 | $11.36 | ||||||||||||||||||
Total return4 | (6.82 | %)5 | 2.67 | % | 16.61 | % | 9.60 | % | 0.24 | % | 17.19 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $697,376 | $920,914 | $752,422 | $335,216 | $338,098 | $248,975 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 1.16 | %6 | 1.16 | % | 1.16 | % | 1.14 | % | 1.18 | % | 1.20 | % | ||||||||||||
After fee waivers/expense offset arrangement/recovery7 | 1.16 | %6 | 1.15 | % | 1.16 | % | 1.14 | % | 1.18 | % | 1.21 | %† | ||||||||||||
Before interest expense | 1.16 | %6 | 1.13 | % | 1.16 | % | 1.14 | % | 1.18 | % | 1.21 | %† | ||||||||||||
Ratio of net investment income to average net assets | 8.93 | %6 | 9.35 | % | 8.12 | % | 7.61 | % | 7.64 | % | 7.69 | % | ||||||||||||
Portfolio turnover rate | 20 | %5 | 53 | % | 58 | % | 72 | % | 105 | % | 129 | % |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Includes redemption fees of $0.01 per share. |
3 | Includes redemption fees of $0.02 per share. |
4 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
5 | Not annualized. |
6 | Annualized. |
7 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 1.40%. Effective March 1, 2011, the expense limitation has been reduced to 1.20%. |
† | The Adviser recovered previously waived fees. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
35 |
Third Avenue Trust
Financial Highlights
Selected data (for a share outstanding throughout each period) and ratios are as follows:
Third Avenue Focused Credit Fund | ||||||||||||||||||||||||
For the | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
April 30, | Years Ended October 31, | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Institutional Class: | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.60 | $11.07 | $10.24 | $10.50 | $11.36 | $10.26 | ||||||||||||||||||
Income/(loss) from investment operations: | ||||||||||||||||||||||||
Net investment income@ | 0.44 | 1.12 | 0.92 | 0.79 | 0.88 | 0.86 | ||||||||||||||||||
Net gain/(loss) on investment transactions (both realized and unrealized)1 | (1.15 | ) | (0.77 | ) | 0.77 | 0.13 | (0.83 | ) | 0.87 | |||||||||||||||
Total from investment operations | (0.71 | ) | 0.35 | 1.69 | 0.92 | 0.05 | 1.73 | |||||||||||||||||
Less dividends and distributions to shareholders: | ||||||||||||||||||||||||
Dividends from net investment income | (0.44 | ) | (0.82 | ) | (0.86 | ) | (0.72 | ) | (0.81 | ) | (0.62 | ) | ||||||||||||
Distributions from realized gains | (0.06 | ) | — | — | (0.46 | ) | (0.10 | ) | (0.01 | ) | ||||||||||||||
Total dividends and distributions | (0.50 | ) | (0.82 | ) | (0.86 | ) | (1.18 | ) | (0.91 | ) | (0.63 | ) | ||||||||||||
Net asset value, end of period | $9.39 | $10.60 | $11.07 | $10.24 | $10.50 | $11.36 | ||||||||||||||||||
Total return2 | (6.81 | %)3 | 2.93 | % | 16.91 | % | 9.89 | % | 0.37 | % | 17.38 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $1,765,611 | $2,049,107 | $1,016,021 | $649,492 | $765,467 | $759,666 | ||||||||||||||||||
Ratio of expenses to average net assets | ||||||||||||||||||||||||
Before fee waivers/expense offset arrangement/recovery | 0.92 | %4 | 0.92 | % | 0.91 | % | 0.89 | % | 0.92 | % | 0.93 | % | ||||||||||||
After fee waivers/expense offset arrangement/recovery5 | 0.91 | %4 | 0.92 | % | 0.91 | % | 0.89 | % | 0.92 | % | 0.94 | %† | ||||||||||||
Before interest expense | 0.91 | %4 | 0.88 | % | 0.91 | % | 0.89 | % | 0.92 | % | 0.94 | %† | ||||||||||||
Ratio of net investment income to average net assets | 9.08 | %4 | 9.62 | % | 8.48 | % | 7.94 | % | 7.87 | % | 7.99 | % | ||||||||||||
Portfolio turnover rate | 20 | %3 | 53 | % | 58 | % | 72 | % | 105 | % | 129 | % |
1 | Includes redemption fees of less than $0.01 per share. |
2 | Performance figures may reflect fee waivers, expense offset arrangement and/or recovery of previously waived fees. Past performance is no guarantee of future results. Total return would have been lower if the Adviser had not waived certain expenses. Conversely, total return would have been higher if the Adviser had not recovered previously waived expenses. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period and is not annualized. |
3 | Not annualized. |
4 | Annualized. |
5 | As a result of an expense limitation, the ratio of expenses (exclusive of taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items) to average net assets will not exceed 0.95%. |
† | The Adviser recovered previously waived fees. |
@ | Calculated based on the average number of shares outstanding during the period. |
The accompanying notes are an integral part of the financial statements.
36 |
Third Avenue Trust
Notes to Financial Statements
April 30, 2015 (Unaudited)
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
Third Avenue Trust (the “Trust”) is an open-end, management investment company organized as a Delaware business trust pursuant to a Trust Instrument dated October 31, 1996. The Trust currently consists of five non-diversified (within the meaning of Section 5(b)(2) of the Investment Company Act), separate investment series: Third Avenue Value Fund, Third Avenue Small-Cap Value Fund, Third Avenue Real Estate Value Fund, Third Avenue International Value Fund and Third Avenue Focused Credit Fund (each a “Fund” and, collectively, the “Funds”). Third Avenue Management LLC (the “Adviser”) provides investment advisory services to each of the Funds in the Trust. The Funds seek to achieve their investment objectives by adhering to a strict value discipline when selecting securities and other instruments. Each Fund has a distinct investment approach.
Third Avenue Value Fund seeks to achieve its investment objective of long-term capital appreciation mainly by acquiring common stocks of well-financed companies (meaning companies with high quality assets and conservative levels of liabilities) at a discount to what the Adviser believes is their intrinsic value. The Fund may invest in companies of any market capitalization. The Fund may also acquire senior securities, such as convertible securities, preferred stocks and debt instruments (including high-yield and distressed securities that may be in default and may have any or no credit rating), that the Adviser believes are undervalued. The Fund invests in both domestic and foreign securities.
Third Avenue Small-Cap Value Fund seeks to achieve its investment objective of long-term capital appreciation mainly by acquiring equity securities, including common stocks and convertible securities, of well-financed (meaning companies with high quality assets and conservative levels of liabilities) small companies at a discount to what the Adviser believes is their intrinsic value. Under normal circumstances, the Fund expects to invest at least 80% of its net assets (plus the amount of any borrowing for investment purposes) in securities of companies that are considered small. The Fund considers a “small company” to be one whose market capitalization is within the range of capitalizations during the most recent 12-month period (as measured each calendar quarter end) of companies in the Russell 2000 Index, the S&P Small Cap 600 Index or the Dow Jones Wilshire U.S. Small-Cap Index at the time of investment (based on month-end data). The Fund may also acquire senior securities, such as preferred stocks and debt instruments (including high-yield and distressed securities that may be in default and may have any or no credit rating), that the Adviser believes are undervalued. The Fund invests in both domestic and foreign securities.
Third Avenue Real Estate Value Fund seeks to achieve its investment objective of long-term capital appreciation primarily by investing in equity securities, including common stocks and convertible securities, of well-financed (meaning companies with high quality assets and conservative levels of liabilities) real estate and real estate-related companies, or in companies which own significant real estate assets or derive a significant portion of gross revenues or net profits from real estate-related companies at the time of investment (“real estate companies”). The Fund seeks to acquire these securities at a discount to what the Adviser believes is their intrinsic value. Under normal circumstances, at least 80% of the Fund’s net assets (plus the amount of any borrowing for investment purposes) will be invested in securities of real estate and real estate companies. The Fund may invest in companies of any market capitalization. The Fund may also acquire senior securities, such as preferred stocks and debt instruments (including high-yield, distressed and mortgage-backed securities that may be in default and may have any or no credit rating) of real estate companies or loans secured by real estate or real estate companies that the Adviser believes have above-average yield potential. The Fund invests in both domestic and foreign securities.
Third Avenue International Value Fund seeks to achieve its investment objective of long-term capital appreciation primarily by acquiring equity securities, including common stocks and convertible securities, of well-financed companies (meaning companies with high quality assets and conservative levels of liabilities) located outside of the United States. While the Fund may invest in companies located anywhere in the world, it currently expects that most of its assets will be invested in the more developed countries and, under normal circumstances, at least 80% of its net assets (plus the amount of any borrowing for investment purposes) will be invested in securities of issuers located outside of the United States at the time of investment. The Fund may also acquire senior securities, such as preferred stocks and debt instruments (including high-yield and distressed securities that may be in default and may have any or no credit rating), that the Adviser believes are undervalued.
Third Avenue Focused Credit Fund seeks to achieve its investment objective of long-term total return mainly by investing in bonds and other types of credit instruments and intends to invest a substantial amount of its assets in credit instruments that are rated below investment grade by some or all relevant independent rating agencies, including Moody’s Investors Service, Inc., Standard & Poor’s Ratings Services and Fitch Ratings. Under normal circumstances, at least 80% of the Fund’s net assets (plus the amount of any borrowing for investment purposes) will be invested in bonds and other types of credit instruments. Credit instruments include high-yield bonds (commonly known as “junk bonds” or “junk debt”), bank debt, convertible bonds or preferred stock, loans made to bankrupt companies (including debtor-in-possession loans), loans made to refinance distressed companies and other types of debt instruments. In making these investments, the Adviser will seek to purchase instruments that the Adviser believes are undervalued. The Fund may have significant investments in distressed and defaulted securities and intends to focus on a relatively small number of issuers. The Fund may also purchase equity securities or hold significant positions in equity or other assets that the Fund receives as part of a reorganization process, and may hold those assets until such time as the Adviser believes that a disposition is most advantageous.
37 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Because of the Funds’ disciplined and deliberate investing approach, there may be times when a Fund will have a significant cash position. A substantial cash position can adversely impact Fund performance in certain market conditions, and may make it more difficult for a Fund to achieve its investment objective.
Accounting policies:
The policies described below are followed consistently by the Funds in the preparation of their financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Trust is an investment company and, accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 946-Investment Companies, which is part of U.S. GAAP.
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.
Security valuation:
Generally, the Funds’ investments are valued at market value. Securities traded on a principal stock exchange, including The NASDAQ Stock Market, Inc. (“NASDAQ”), are valued at the last quoted sales price, the NASDAQ official closing price, or in the absence of closing sales prices on that day, securities are valued at the mean between the closing bid and asked price. In accordance with procedures approved by the Trust’s Board of Trustees (the “Board”), the Funds have retained a third party provider that, under certain circumstances, applies a statistical model to provide fair value pricing for foreign equity securities with principal markets that are no longer open when a Fund calculates its net asset value (“NAV”), and certain events have occurred after the principal markets have closed but prior to the time as of which the Funds compute their NAVs. Debt instruments with maturities greater than 60 days, including floating rate loan securities, are valued on the basis of prices obtained from a pricing service approved as reliable by the Board or otherwise pursuant to policies and procedures approved by the Board. Investments in derivative instruments are valued independently by service providers or by broker quotes based on pricing models. Short-term cash investments are valued at cost, plus accrued interest, which approximates market value. Short-term debt securities with 60 days or less to maturity may be valued at amortized cost.
The Adviser has established a Valuation Committee (the “Committee”) which is responsible for overseeing the pricing and valuation of all securities held in the Funds. The Committee operates under pricing and valuation policies and procedures established by the Adviser and approved by the Board, including pricing policies which set forth the mechanisms and processes to be employed on a daily basis to implement these policies and procedures. In particular, the pricing policies describe how to determine market quotations for securities and other instruments. The Committee’s responsibilities include: 1) fair value and liquidity determinations (and oversight of any third parties to whom any responsibility for fair value and liquidity determinations is delegated), and 2) regular monitoring of the Adviser’s pricing and valuation policies and procedures and modification or enhancement of these policies and procedures (or recommendation of the modification of these policies and procedures) as the Committee believes appropriate.
Each Fund may invest up to 15% of its total net assets in securities which are not readily marketable, including those which are restricted as to disposition under applicable securities laws (“restricted securities”). Restricted securities and other securities and assets for which market quotations are not readily available are valued at “fair value”, as determined in good faith by the Committee as authorized by the Board, under procedures established by the Board. At April 30, 2015, such securities had a total fair value of $16,926,131 or 0.85% of net assets of Third Avenue Value Fund, $30,925,115 or 0.88% of net assets of Third Avenue Real Estate Value Fund, and $167,108,679 or 6.78% of net assets of Third Avenue Focused Credit Fund. There were no fair valued securities for Third Avenue Small-Cap Value Fund and Third Avenue International Value Fund at April 30, 2015. Among the factors that may be considered by the Committee in determining fair value are: the type of security, trading in unrestricted securities of the same issuer, the financial condition of the issuer, the percentage of the Fund’s beneficial ownership of the issuer’s common stocks and debt securities, comparable multiples of similar issuers, the operating results of the issuer and the discount from market value of any similar unrestricted securities of the issuer at the time of purchase and liquidation values of the issuer. The fair values determined in accordance with these procedures may differ significantly from the amounts which would be realized upon disposition of the securities.
Fair value measurements:
In accordance with FASB ASC 820-10, Fair Value Measurements and Disclosures, the Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. 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 for the investment under current market conditions. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
• Level 1 — Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access at the measurement date;
38 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
• Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;
• Level 3 — Significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in aggregate that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Funds. The Funds consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.
The Funds use valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.
The following are certain inputs and techniques that the Funds generally use to evaluate how to classify each major category of assets and liabilities for Level 2 and Level 3, in accordance with U.S. GAAP.
Equity Securities (Common Stocks, Preferred Stocks, and Warrants)—Equity securities traded in inactive markets and certain foreign equity securities are valued using inputs which include broker-dealer quotes, recently executed transactions adjusted for changes in the benchmark index, or evaluated price quotes received from independent pricing services or brokers that take into account the integrity of the market sector and issuer, the individual characteristics of the security, and information received from broker-dealers and other market sources pertaining to the issuer or security. To the extent that these inputs are observable, the values of equity securities are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
U.S. Government Obligations—U.S. Government obligations are valued by independent pricing services based on pricing models that evaluate the mean between the most recently quoted bid and ask price. The models also take into consideration data received from active market makers and broker-dealers, yield curves, and the spread over comparable U.S. Government issues. The spreads change daily in response to market conditions and are generally obtained from the new issue market and broker-dealer sources. To the extent that these inputs are observable, the values of U.S. Government obligations are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
Corporate Bonds & Notes—Corporate bonds and notes are generally comprised of two main categories: investment grade bonds and high yield bonds. Investment grade bonds are valued by independent pricing services or brokers using various inputs and techniques, which include broker-dealer quotations, live trading levels, recently executed transactions in securities of the issuer or comparable issuers, and option adjusted spread models that include base curve and spread curve inputs. Adjustments to individual bonds can be applied to recognize trading differences compared to other bonds issued by the same issuer. High yield bonds are valued by independent pricing services or brokers based primarily on broker-dealer quotations from relevant market makers and recently executed transactions in securities of the issuer or comparable issuers. The broker-dealer quotations received are supported by credit analysis of the issuer that takes into consideration credit quality assessments, daily trading activity, and the activity of the underlying equities, listed bonds and sector specific trends. To the extent that these inputs are observable, the values of corporate bonds and notes are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
Forward Foreign Currency Contracts—Forward foreign currency contracts are valued by independent pricing services using various inputs and techniques, which include broker-dealer quotations, actual trading information and foreign currency exchange rates gathered from leading market makers and foreign currency exchange trading centers throughout the world. To the extent that these inputs are observable, the values of forward foreign currency contracts are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
Claims—Claims are valued by brokers based on pricing models that take into account, among other factors, both cash and non-cash assets. The valuation is derived from expected cash flow of the claims and the non-cash assets, which include all real estate, private equity or other securities within the estate. To the extent that these inputs are observable, the values of the claims are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
Term Loans—Term loans are valued by independent pricing services based on the average of evaluated quoted prices received from multiple dealers or valued relative to other benchmark securities when broker-dealer quotes are unavailable. Inputs may include quoted prices for similar investments in active markets, interest rates, coupon rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which is then discounted to calculate fair values. To the extent that these inputs are observable, the values of term loans are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
Municipal Bonds—Municipal bonds are valued by independent pricing services based on pricing models that take into account, among other factors, information received from market makers and broker-dealers, current trades, bid-ask lists, offerings, market movements, the callability of
39 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
the bond, state of issuance, benchmark yield curves, and bond insurance. To the extent that these inputs are observable, the values of municipal bonds are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
Options (Written and Purchased)—Options are valued by independent pricing services or by brokers based on pricing models that take into account, among other factors, foreign exchange rate, time until expiration, and volatility of the underlying foreign currency security. To the extent that these inputs are observable, the values of options are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.
The following is a summary by level of inputs used to value the Funds’ investments as of April 30, 2015:
Third Avenue Value Fund | Third Avenue Small-Cap Value Fund | Third Avenue Real Estate Value Fund | Third Avenue International Value Fund | Third Avenue Focused Credit Fund | ||||||||||||||||
Level 1: Quoted Prices† | ||||||||||||||||||||
Investments in Securities: | ||||||||||||||||||||
Common Stocks & Warrants: | ||||||||||||||||||||
Building & Construction Products/Services | $ | — | $ | — | $ | — | $ | 3,973,571 | $ | — | ||||||||||
Chemicals | — | — | — | — | 47,372 | |||||||||||||||
Consumer Products | 59,005,801 | — | — | — | — | |||||||||||||||
Diversified Holding Companies | 211,653,610 | 10,405,292 | — | 23,812,656 | — | |||||||||||||||
Forest Products & Paper | 77,715,949 | 7,714,865 | 248,364,379 | 7,390,450 | — | |||||||||||||||
U.S. Real Estate Operating Companies | 30,298,602 | 23,332,563 | 162,259,940 | — | — | |||||||||||||||
Utilities | 73,180,085 | — | — | — | 325,495 | |||||||||||||||
Other** | 1,391,956,830 | 393,220,093 | 2,369,916,896 | 186,087,319 | 65,714,719 | |||||||||||||||
Preferred Stocks: | ||||||||||||||||||||
Financials | — | — | — | — | 45,658,224 | |||||||||||||||
Closed-End Funds: | ||||||||||||||||||||
Financials | — | — | — | — | 81,650,050 | |||||||||||||||
Total for Level 1 Securities | 1,843,810,877 | 434,672,813 | 2,780,541,215 | 221,263,996 | 193,395,860 | |||||||||||||||
Level 2: Other Significant Observable Inputs† | ||||||||||||||||||||
Investments in Securities: | ||||||||||||||||||||
Common Stocks & Warrants: | ||||||||||||||||||||
Building & Construction Products/Services | — | — | — | 15,189,060 | — | |||||||||||||||
Chemicals | — | — | — | — | 62,081,265 | |||||||||||||||
Diversified Holding Companies | — | 11,743,984 | — | — | — | |||||||||||||||
Forest Products & Paper | — | — | — | 14,088,706 | — | |||||||||||||||
Utilities | — | — | — | — | 60,315,512 | |||||||||||||||
Preferred Stocks: | ||||||||||||||||||||
Services | — | — | — | — | 12,384,202 | |||||||||||||||
Debt Securities issued by the U.S. Treasury and other government corporations and agencies: | ||||||||||||||||||||
Municipal Bonds | — | — | — | — | 1,872,000 | |||||||||||||||
Corporate Bonds & Notes | 14,573,625 | — | — | 4,875,000 | 1,080,846,846 | |||||||||||||||
Term Loans | — | — | — | — | 67,577,897 | |||||||||||||||
Claims | 7,887,688 | — | — | — | 35,625,000 | |||||||||||||||
Purchased Options: | ||||||||||||||||||||
Foreign Currency Put Options | — | — | 21,892 | — | — | |||||||||||||||
Foreign Government Bonds | — | — | — | 8,140,266 | — | |||||||||||||||
Short Term Investments: | ||||||||||||||||||||
U.S. Government Obligations | — | — | 499,992,620 | — | 399,995,489 | |||||||||||||||
Total for Level 2 Securities | $ | 22,461,313 | $ | 11,743,984 | $ | 500,014,512 | $ | 42,293,032 | $ | 1,720,698,211 |
40 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Summary by level of inputs (continued)
Third Avenue Value Fund | Third Avenue Small-Cap Value Fund | Third Avenue Real Estate Value Fund | Third Avenue International Value Fund | Third Avenue Focused Credit Fund | ||||||||||||||||
Level 3: Significant Unobservable Inputs | ||||||||||||||||||||
Investments in Securities: | ||||||||||||||||||||
Common Stocks & Warrants: | ||||||||||||||||||||
Consumer Products | $ | — | * | $ | — | $ | — | $ | — | $ | — | |||||||||
Energy | — | — | — | — | 46,622,165 | * | ||||||||||||||
Financial Insurance | 285,000 | — | — | — | — | |||||||||||||||
Manufacturing | — | — | — | — | 1,737,318 | * | ||||||||||||||
Services | — | — | — | — | 602,563 | |||||||||||||||
Transportation Services | — | — | — | — | 3,767,928 | |||||||||||||||
U.S. Real Estate Operating Companies | — | — | 27,796,278 | — | — | |||||||||||||||
Limited Partnerships: | ||||||||||||||||||||
Insurance & Reinsurance | 68,330 | — | — | — | — | |||||||||||||||
Convertible Preferred Stocks: | ||||||||||||||||||||
Transportation Services | — | — | — | — | 13,035,278 | |||||||||||||||
Preferred Stocks: | ||||||||||||||||||||
Energy | — | — | — | — | 3,120,358 | |||||||||||||||
Financials | — | — | — | — | 18,646,543 | |||||||||||||||
Non-U.S. Real Estate Operating Companies | — | — | 29,287,551 | — | — | |||||||||||||||
Corporate Bonds & Notes | 16,572,801 | — | — | — | 138,366,650 | * | ||||||||||||||
Term Loans | — | — | 3,128,837 | — | 142,059,322 | |||||||||||||||
Claims | — | — | — | — | 6,474,869 | * | ||||||||||||||
Private Equities: | ||||||||||||||||||||
Automotive | — | — | — | — | 11,250,000 | |||||||||||||||
Chemicals | — | — | — | — | 9,965,778 | |||||||||||||||
Consumer Products | — | — | — | — | 3,952,674 | |||||||||||||||
Energy | — | — | — | — | 1,043,306 | |||||||||||||||
U.S. Real Estate Operating Companies | — | — | 93,753,455 | — | — | |||||||||||||||
Total for Level 3 Securities | 16,926,131 | — | 153,966,121 | — | 400,644,752 | |||||||||||||||
Total Value of Investments | $ | 1,883,198,321 | $ | 446,416,797 | $ | 3,434,521,848 | $ | 263,557,028 | $ | 2,314,738,823 | ||||||||||
Investments in Other Financial Instruments: | ||||||||||||||||||||
Level 2: Other Significant Observable Inputs | ||||||||||||||||||||
Written Foreign Currency Options | $ | — | $ | — | $ | (551,676 | ) | $ | — | $ | — | |||||||||
Forward Foreign Currency Contracts - Assets | — | — | — | — | 26,547 | |||||||||||||||
Forward Foreign Currency Contracts - Liabilities | — | — | (5,739,307 | ) | — | (4,261,530 | ) | |||||||||||||
Total Value or Appreciation/(Depreciation) of Other Financial Instruments | $ | — | $ | — | $ | (6,290,983 | ) | $ | — | $ | (4,234,983 | ) |
† | The value of security that transferred from Level 2 on October 31, 2014 to Level 1 on April 30, 2015 for Third Avenue Focused Credit Fund was $7,175,626. The transfer was due to the availability of quoted prices in active market at period end. |
* | Includes investments fair valued at zero. |
** | Please refer to the Portfolios of Investments for industry specifics of the portfolio holdings. |
Transfers from Level 1 to Level 2, or from Level 2 to Level 1 are recorded utilizing values as of the beginning of the period.
41 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
Third Avenue Value Fund
Common | Corporate | Limited | ||||||||||||||||
Stocks | Bonds & Notes | Partnerships | Total | |||||||||||||||
Balance as of 10/31/14 (fair value) | ||||||||||||||||||
Consumer Products | $ | — | * | $ | 4,507,464 | $ | — | $ | 4,507,464 | |||||||||
Financial Insurance | 259,000 | — | — | 259,000 | ||||||||||||||
Insurance & Reinsurance | 40,800 | — | 92,941 | 133,741 | ||||||||||||||
Payment-in-kind | ||||||||||||||||||
Consumer Products | — | 645,152 | — | 645,152 | ||||||||||||||
Sales | ||||||||||||||||||
Insurance & Reinsurance | (49,673 | ) | — | — | (49,673 | ) | ||||||||||||
Net change in unrealized gain/(loss) | ||||||||||||||||||
Consumer Products | — | 11,420,185 | — | 11,420,185 | ||||||||||||||
Financial Insurance | 26,000 | — | — | 26,000 | ||||||||||||||
Insurance & Reinsurance | 11,870,336 | — | (24,611 | ) | 11,845,725 | |||||||||||||
Net realized gain/(loss) | ||||||||||||||||||
Insurance & Reinsurance | (11,861,463 | ) | — | — | (11,861,463 | ) | ||||||||||||
Balance as of 4/30/15 (fair value) | ||||||||||||||||||
Consumer Products | — | * | 16,572,801 | — | 16,572,801 | |||||||||||||
Financial Insurance | 285,000 | — | — | 285,000 | ||||||||||||||
Insurance & Reinsurance | — | — | 68,330 | 68,330 | ||||||||||||||
Total | $ | 285,000 | $ | 16,572,801 | $ | 68,330 | $ | 16,926,131 | ||||||||||
Net change in unrealized gain/(loss) related to securities still held as of April 30, 2015 | $ | 11,421,574 |
* | Investments fair valued at zero. |
Third Avenue Real Estate Value Fund
Preferred | Private | ||||||||||||||||||||
Common Stocks | Stocks | Equities | Term Loans | Total | |||||||||||||||||
Balance as of 10/31/14 (fair value) | |||||||||||||||||||||
Non-U.S. Real Estate Operating Companies | $ | — | $ | 33,993,569 | $ | — | $ | 3,337,522 | $ | 37,331,091 | |||||||||||
U.S. Real Estate Operating Companies | 19,295,656 | — | 100,965,259 | — | 120,260,915 | ||||||||||||||||
Payment-in-kind | |||||||||||||||||||||
Non-U.S. Real Estate Operating Companies | — | — | — | 139,901 | 139,901 | ||||||||||||||||
Net change in unrealized gain/(loss) | |||||||||||||||||||||
Non-U.S. Real Estate Operating Companies | — | (4,706,018 | ) | — | (348,586 | ) | (5,054,604 | ) | |||||||||||||
U.S. Real Estate Operating Companies | 8,500,622 | — | (7,211,804 | ) | — | 1,288,818 | |||||||||||||||
Balance as of 4/30/15 (fair value) | |||||||||||||||||||||
Non-U.S. Real Estate Operating Companies | — | 29,287,551 | — | 3,128,837 | 32,416,388 | ||||||||||||||||
U.S. Real Estate Operating Companies | 27,796,278 | — | 93,753,455 | — | 121,549,733 | ||||||||||||||||
Total | $ | 27,796,278 | $ | 29,287,551 | $ | 93,753,455 | $ | 3,128,837 | $ | 153,966,121 | |||||||||||
Net change in unrealized gain/(loss) related to securities still held as of April 30, 2015 | $ | (3,765,786 | ) |
42 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Third Avenue Focused Credit Fund
Preferred and | ||||||||||||||||||||||||
Convertible | Private | |||||||||||||||||||||||
Corporate | Common Stocks | Preferred | Equities | |||||||||||||||||||||
Bonds & Notes | Term Loans | and Warrants | Stocks | and Claims | Total | |||||||||||||||||||
Balance as of 10/31/14 (fair value) | ||||||||||||||||||||||||
Automotive | $ | — | $ | — | $ | — | $ | — | $ | 10,625,000 | (c) | $ | 10,625,000 | |||||||||||
Chemicals | — | 57,938,000 | 71,883,570 | — | — | 129,821,570 | ||||||||||||||||||
Consumer Products | 61,765,296 | — | — | — | 4,354,901 | (c) | 66,120,197 | |||||||||||||||||
Energy | 22,979,360 | * | 40,703,101 | 21,193,777 | * | 3,120,358 | (a) | 1,043,306 | (c) | 89,039,902 | ||||||||||||||
Financials | — | 2,147,439 | — | 21,642,730 | (a) | — | 23,790,169 | |||||||||||||||||
Food & Beverage | — | — | — | — | 9,431,221 | *(d) | 9,431,221 | |||||||||||||||||
Gaming & Entertainment | — | 19,600,000 | — | — | — | 19,600,000 | ||||||||||||||||||
Healthcare | — | 21,296,632 | — | — | — | 21,296,632 | ||||||||||||||||||
Media/Cable | — | * | — | — | — | — | — | |||||||||||||||||
Metals & Mining | 41,652,303 | — | — | — | — | 41,652,303 | ||||||||||||||||||
Services | — | — | 1,005,503 | — | — | 1,005,503 | ||||||||||||||||||
Technology | 4,358,290 | — | — | — | — | 4,358,290 | ||||||||||||||||||
Transportation Services | — | — | 4,533,288 | 15,623,470 | (b) | — | 20,156,758 | |||||||||||||||||
Utilities | — | 70,353,585 | — | — | — | 70,353,585 | ||||||||||||||||||
Transfer in/out of Level 3^ | ||||||||||||||||||||||||
Chemicals | 65,009,764 | — | (71,883,570 | ) | — | — | (6,873,806 | ) | ||||||||||||||||
Energy | (12,312,500 | ) | — | — | — | — | (12,312,500 | ) | ||||||||||||||||
Purchases | ||||||||||||||||||||||||
Chemicals | — | 7,960,860 | — | — | 9,965,778 | (c) | 17,926,638 | |||||||||||||||||
Energy | — | † | 13,418,141 | 26,615,862 | † | — | — | 40,034,003 | ||||||||||||||||
Manufacturing | 53,435,000 | 17,444,431 | 1,737,318 | † | — | — | 72,616,749 | |||||||||||||||||
Metals & Mining | — | 8,003,852 | — | — | — | 8,003,852 | ||||||||||||||||||
Services | — | 31,545,293 | — | — | — | 31,545,293 | ||||||||||||||||||
Utilities | — | 24,866,895 | — | — | — | 24,866,895 | ||||||||||||||||||
Sales | ||||||||||||||||||||||||
Chemicals | (49,798,789 | ) | (57,872,500 | ) | — | — | — | (107,671,289 | ) | |||||||||||||||
Consumer Products | (5,236,445 | ) | — | — | — | — | (5,236,445 | ) | ||||||||||||||||
Energy | (6,966,860 | ) | (37,975,176 | ) | — | — | — | (44,942,036 | ) | |||||||||||||||
Metals & Mining | — | (2,306,491 | ) | — | — | — | (2,306,491 | ) | ||||||||||||||||
Utilities | — | (77,308,654 | ) | — | — | — | (77,308,654 | ) | ||||||||||||||||
Bond discount/(premium) | ||||||||||||||||||||||||
Chemicals | (115,161 | ) | (208,894 | ) | — | — | — | (324,055 | ) | |||||||||||||||
Consumer Products | 859,251 | — | — | — | — | 859,251 | ||||||||||||||||||
Energy | 228 | 399,999 | — | — | — | 400,227 | ||||||||||||||||||
Gaming & Entertainment | — | 24,205 | — | — | — | 24,205 | ||||||||||||||||||
Healthcare | — | 136,023 | — | — | — | 136,023 | ||||||||||||||||||
Manufacturing | — | 83,296 | — | — | — | 83,296 | ||||||||||||||||||
Metals & Mining | 779,571 | — | — | — | — | 779,571 | ||||||||||||||||||
Utilities | — | 1,383 | — | — | — | 1,383 |
43 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Third Avenue Focused Credit Fund (continued)
Preferred and | ||||||||||||||||||||||||||
Convertible | Private | |||||||||||||||||||||||||
Corporate | Common Stocks | Preferred | Equities | |||||||||||||||||||||||
Bonds & Notes | Term Loans | and Warrants | Stocks | and Claims | Total | |||||||||||||||||||||
Payment-in-kind | ||||||||||||||||||||||||||
Chemicals | $ | — | $ | 234,712 | $ | — | $ | — | $ | — | $ | 234,712 | ||||||||||||||
Consumer Products | 5,891,981 | — | — | — | — | 5,891,981 | ||||||||||||||||||||
Energy | 310,000 | 485,519 | — | — | — | 795,519 | ||||||||||||||||||||
Financials | — | 91,202 | — | — | — | 91,202 | ||||||||||||||||||||
Healthcare | — | 112,261 | — | — | — | 112,261 | ||||||||||||||||||||
Manufacturing | — | 146,451 | — | — | — | 146,451 | ||||||||||||||||||||
Metals & Mining | — | 25,346 | — | — | — | 25,346 | ||||||||||||||||||||
Return of capital | ||||||||||||||||||||||||||
Food & Beverage | — | — | — | — | (273,962 | )(d) | (273,962 | ) | ||||||||||||||||||
Net change in unrealized gain/(loss) | ||||||||||||||||||||||||||
Automotive | — | — | — | — | 625,000 | (c) | 625,000 | |||||||||||||||||||
Chemicals | 5,215,295 | (825,777 | ) | — | — | — | 4,389,518 | |||||||||||||||||||
Consumer Products | (11,428,061 | ) | — | — | — | (402,227 | )(c) | (11,830,288 | ) | |||||||||||||||||
Energy | (2,376,754 | ) | (123,393 | ) | (1,187,474 | ) | — | — | (3,687,621 | ) | ||||||||||||||||
Financials | — | (225,473 | ) | — | (2,996,187 | )(a) | — | (3,221,660 | ) | |||||||||||||||||
Food & Beverage | — | — | — | — | (2,682,390 | )(d) | (2,682,390 | ) | ||||||||||||||||||
Gaming & Entertainment | — | 75,795 | — | — | — | 75,795 | ||||||||||||||||||||
Healthcare | — | 755,422 | — | — | — | 755,422 | ||||||||||||||||||||
Manufacturing | — | 466,189 | — | — | — | 466,189 | ||||||||||||||||||||
Metals & Mining | (15,275,905 | ) | (556,697 | ) | — | — | — | (15,832,602 | ) | |||||||||||||||||
Services | — | — | (402,940 | ) | — | — | (402,940 | ) | ||||||||||||||||||
Transportation Services | — | — | (765,360 | ) | (2,588,192 | )(b) | — | �� | (3,353,552 | ) | ||||||||||||||||
Utilities | — | (4,670,339 | ) | — | — | — | (4,670,339 | ) | ||||||||||||||||||
Net realized gain/(loss) | ||||||||||||||||||||||||||
Chemicals | (20,311,109 | ) | 1,542,811 | — | — | — | (18,768,298 | ) | ||||||||||||||||||
Consumer Products | (107,281 | ) | — | — | — | — | (107,281 | ) | ||||||||||||||||||
Energy | 39,176 | (2,483,257 | ) | — | — | — | (2,444,081 | ) | ||||||||||||||||||
Utilities | — | 6,757,130 | — | — | — | 6,757,130 | ||||||||||||||||||||
Balance as of 4/30/15 (fair value) | ||||||||||||||||||||||||||
Automotive | — | — | — | — | 11,250,000 | (c) | 11,250,000 | |||||||||||||||||||
Chemicals | — | * | 8,769,212 | — | — | 9,965,778 | (c) | 18,734,990 | ||||||||||||||||||
Consumer Products | 51,744,741 | — | — | — | 3,952,674 | (c) | 55,697,415 | |||||||||||||||||||
Energy | 1,672,650 | * | 14,424,934 | 46,622,165 | * | 3,120,358 | (a) | 1,043,306 | (c) | 66,883,413 | ||||||||||||||||
Financials | — | 2,013,168 | — | 18,646,543 | (a) | — | 20,659,711 | |||||||||||||||||||
Food & Beverage | — | — | — | — | 6,474,869 | *(d) | 6,474,869 | |||||||||||||||||||
Gaming & Entertainment | — | 19,700,000 | — | — | — | 19,700,000 | ||||||||||||||||||||
Healthcare | — | 22,300,338 | — | — | — | 22,300,338 | ||||||||||||||||||||
Manufacturing | 53,435,000 | 18,140,367 | 1,737,318 | * | — | — | 73,312,685 | |||||||||||||||||||
Media/Cable | — | * | — | — | — | — | — | |||||||||||||||||||
Metals & Mining | 27,155,969 | 5,166,010 | — | — | — | 32,321,979 | ||||||||||||||||||||
Services | — | 31,545,293 | 602,563 | — | — | 32,147,856 | ||||||||||||||||||||
Technology | 4,358,290 | — | — | — | — | 4,358,290 | ||||||||||||||||||||
Transportation Services | — | — | 3,767,928 | 13,035,278 | (b) | — | 16,803,206 | |||||||||||||||||||
Utilities | — | 20,000,000 | — | — | — | 20,000,000 | ||||||||||||||||||||
Total | $ | 138,366,650 | $ | 142,059,322 | $ | 52,729,974 | $ | 34,802,179 | $ | 32,686,627 | $ | 400,644,752 | ||||||||||||||
Net change in unrealized gain/(loss) related to securities still held as of April 30, 2015 | $ | (33,850,105 | ) |
^ | Transfers in/out of level 3 are recorded utilizing values as of the beginning of the period. The transfers are due to increase/decrease in trading activities at period end. |
* | Includes investments fair valued at zero. |
† | Includes investments acquired through corporate actions with zero cost. |
(a) | Preferred Stocks |
(b) | Convertible Preferred Stocks |
(c) | Private Equities |
(d) | Claims |
44 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
(amounts in thousands) | ||||||||||
Range | ||||||||||
Fair Value at | (Weighted | |||||||||
Third Avenue Value Fund | 4/30/15 | Valuation Technique(s) | Unobservable Inputs(s) | Average) | ||||||
Corporate Bonds | $ | 16,573 | Book Value | Restructuring value | $74.82 | |||||
Other (b) | 353 | |||||||||
$ | 16,926 | |||||||||
Range | ||||||||||
Fair Value at | (Weighted | |||||||||
Third Avenue Real Estate Value Fund | 4/30/15 | Valuation Technique(s) | Unobservable Inputs(s) | Average) | ||||||
Private Equities | $ | 93,753 | Broker Quote | # | $3.25 | |||||
Preferred Stocks | 29,288 | Broker Quote | # | $154.39 | ||||||
Common Stocks | 27,796 | Option Pricing Model (a) | Share volatility | 0.61%(N/A) | ||||||
Term Loans | 3,129 | Book Value | Restructuring value | $112.28-$112.29 | ||||||
$ | 153,966 | |||||||||
Range | ||||||||||
Fair Value at | (Weighted | |||||||||
Third Avenue Focused Credit Fund | 4/30/15 | Valuation Technique(s) | Unobservable Inputs(s) | Average) | ||||||
Corporate Bonds | $ | 83,259 | Broker Quote | # | $15.50-$106.11 | |||||
Term Loans | 74,893 | Book Value | Restructuring value | 1.0x (1.0x) | ||||||
Term Loans | 62,000 | Broker Quote | # | $98.50-$100.00 | ||||||
Corporate Bonds | 53,435 | Book Value | Restructuring value | 1.0x (1.0x) | ||||||
Common Stocks | 28,399 | Broker Quote | # | $7.50 | ||||||
Preferred Stocks | 18,647 | Broker Quote | # | $154.39 | ||||||
Common Stocks | 15,567 | Book Value | Restructuring value | $82.55-$99,854.00 | ||||||
Private Equities | 15,203 | Broker Quote | # | $0.00*-$1.13 | ||||||
Convertible Preferred Stocks | 13,035 | Broker Quote | # | $799.97-$1,100.05 | ||||||
Private Equities | 11,009 | Book Value | Restructuring value | $52.96-$343.00 | ||||||
Claims | 6,475 | Broker Quote | # | $3.37 | ||||||
Other (b) | 18,723 | |||||||||
$ | 400,645 |
# | Valuation techniques and significant unobservable inputs used by third-party pricing vendors or brokers, which are described in Note 1, were not provided to the Adviser. The appropriateness of fair values for these securities is based on results of back testing, broker due diligence, unchanged price review and consideration of macro or security specific events. |
(a) | Represents amounts used when the reporting entity has determined that market participants would take into account premiums and discounts, as applicable, when pricing the investments. |
(b) | Includes securities less than 0.50% within each respective Fund. |
* | Amount less than $0.01. |
The significant unobservable inputs used in the fair value measurement of the Funds’ investments are listed above. Generally, a change in the assumptions used in any input in isolation may be accompanied by a change in another input. Significant changes in any of the unobservable inputs may significantly impact the fair value measurement. The impact is based on the relationship between each unobservable input and the fair value measurement. Significant increases (decreases) in enterprise multiples may increase (decrease) the fair value measurement. Significant increases (decreases) in the discount for marketability may decrease (increase) the fair value measurement. |
Security transactions and investment income:
Security transactions for financial statement purposes are accounted for on a trade date basis. Dividend income is recorded on the ex-dividend date or, for certain foreign dividends, as soon as the Funds become aware of the dividends. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts for amortization of premiums and accretion of discounts. Dividend income on the Statement of Operations are shown net of any foreign taxes withheld on income from foreign securities. Payments received from certain investments held by the Funds may be comprised of dividends, capital gains and return of capital. The Funds originally estimate the expected classification of such payments. These amounts may subsequently be reclassified upon receipt of information from the issuer. Realized gains and losses from securities transactions are recorded on an identified cost basis.
Foreign currency translation and foreign investments:
The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:
• | Investments and assets and liabilities denominated in foreign currencies: At the prevailing rates of exchange on the valuation date. | |
• | Investment transactions and investment income: At the prevailing rates of exchange on the date of such transactions. |
The net assets of the Funds are presented at market values using the foreign exchange rates at the close of the period. The Funds do not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of the investments held.
Similarly, the Funds do not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of investments sold during the period. Accordingly, realized and unrealized foreign currency gains/(losses) are included in the reported net realized gain/(loss) and unrealized appreciation/(depreciation) on investments transactions and balances.
45 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Net realized gains/(losses) on foreign currency transactions represent net foreign exchange gains/(losses) from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains/(losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation/(depreciation) on the Statement of Assets and Liabilities. The change in net unrealized currency gains/(losses) for the period is reflected on the Statement of Operations.
Pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are generally treated as ordinary income.
Payment-in-kind securities:
The Funds may invest in payment-in-kind securities (“PIKs”). PIKs give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a “dirty” price) and require a pro-rata adjustment from the unrealized appreciation or depreciation on investments to interest receivable on the Statement of Assets and Liabilities.
For the six months ended April 30, 2015, the total in-kind payments with respect to PIK securities that were received by the Third Avenue Value Fund and the Third Avenue Focused Credit Fund in the amounts of $645,152 or 4.14% of total investment income and $26,618,396 or 21.08% of total investment income, respectively, are shown as a separate line item on the Statement of Operations.
Term loans:
The Funds typically invest in loans which are structured and administered by a third party entity (the “Agent”) that acts on behalf of a group of lenders that make or hold interests in the loan. These securities generally pay interest at rates which are periodically pre-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Interbank Offered Rate (“LIBOR”) or the prime rate offered by one or more major United States banks, or the certificate of deposit rate.
These securities are generally considered to be restricted, as the Funds are ordinarily contractually obligated to receive approval from the Agent bank and/or borrower prior to disposition. Remaining maturities of term loans may be less than the stated maturities shown as a result of contractual or optional payments by the borrower. Such prepayments cannot be predicted with certainty. The interest rate disclosed reflects the rate in effect on April 30, 2015.
Forward foreign exchange contracts:
The Funds may be exposed to foreign currency risks associated with portfolio investments and therefore may use forward foreign currency contracts to hedge or manage these exposures. The Funds also may buy forward foreign currency contracts to gain exposure to currencies. Forward foreign currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/(depreciation) on investments and foreign currency translations. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the Funds’ portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Funds could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts.
During the six months ended April 30, 2015, Third Avenue Real Estate Value Fund and Third Avenue Focused Credit Fund used forward foreign currency contracts for hedging against foreign currency risks.
Option contracts:
The Funds may purchase and sell (“write”) put and call options on various instruments including investments, indices, and foreign currency to manage and hedge exchange rate risks within their portfolios and also to gain long or short exposure to the underlying instruments.
An option contract gives the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying item at a fixed exercise price on a certain date or during a specified period. The cost of the underlying instruments acquired through the exercise of a call option is increased by the premiums paid. The proceeds from the underlying instruments sold through the exercise of a purchased put option are decreased by the premiums paid. Investments in over-the-counter option contracts require the Funds to fair value or mark-to market the options on a daily basis, which reflects the change in the market value of the contracts at the close of each day’s trading. The cost of purchased options that expire unexercised are treated by the Funds, on expiration date, as realized losses on investments or foreign currency transactions.
46 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
When the Funds write an option, an amount equal to the premium received by the Funds is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Funds, on the expiration date, as realized gains on written options or foreign currency. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Funds have a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the security or currency purchased by the Funds. In purchasing and writing options, the Funds bear the market risk of an unfavorable change in the price of the underlying security or the risk that the Funds may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing a security or currency at a price different from the current market value. The Funds may execute transactions in both listed and over-the-counter options. Listed options involve minimal counterparty risk since listed options are guaranteed against default by the exchange on which they trade. When purchasing over-the-counter options, the Funds bear the risk of economic loss from counterparty default, equal to the market value of the option.
During the six months ended April 30, 2015, Third Avenue Real Estate Value Fund used purchased options on foreign currency for hedging purposes and/or to protect against losses in foreign currencies.
During the six months ended April 30, 2015, Third Avenue Value Fund used written put options on equities to gain long exposure to the underlying instruments and enhance the yield of the Fund. Third Avenue Real Estate Value Fund used written call options on foreign currency for hedging purposes and written put options on equities to gain long exposure to the underlying instruments. As of April 30, 2015, the Third Avenue Value Fund and Third Avenue Real Estate Value Fund no longer held any written put options on equities.
Summary of derivatives information:
The following tables present the value of derivatives held as of April 30, 2015, by their primary underlying risk exposure and respective location on the Statements of Assets and Liabilities:
Third Avenue Real Estate Value Fund
Derivative Contract | Statement of Assets and Liabilities Location | Options | Forward Foreign Currency Contracts | ||||||||
Assets: | |||||||||||
Foreign currency contracts | Purchased foreign currency options | $ | 21,892 | $ | — | ||||||
Liabilities: | |||||||||||
Foreign currency contracts | Written foreign currency options at value | $ | (551,676 | ) | $ | — | |||||
Foreign currency contracts | Unrealized depreciation for forward foreign currency contracts | — | (5,739,307 | ) | |||||||
Total | $ | (551,676 | ) | $ | (5,739,307 | ) | |||||
Third Avenue Focused Credit Fund | |||||||||||
Derivative Contract | Statement of Assets and Liabilities Location | Forward Foreign Currency Contracts | |||||||||
Assets: | |||||||||||
Foreign currency contracts | Unrealized appreciation for forward foreign currency contracts | $ | 26,547 | ||||||||
Liabilities: | |||||||||||
Foreign currency contracts | Unrealized depreciation for forward foreign currency contracts | $ | (4,261,530 | ) |
47 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
The following tables present the effect of derivatives on the Statement of Operations during the six months ended April 30, 2015, by primary risk exposure:
Third Avenue Value Fund
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||
Written | ||||||||||||||||||
Derivative Contract | Options | |||||||||||||||||
Equity contracts | $ | 315,500 | (a) | |||||||||||||||
Amount of Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||
Written | ||||||||||||||||||
Derivative Contract | Options | |||||||||||||||||
Equity contracts | $ | (109,500 | )(b) |
Third Avenue Real Estate Value Fund
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||
Derivative Contract | Purchased Options | Written Options | Forward Foreign Currency Contracts | Total | ||||||||||||||
Equity contracts | $ | — | $ | 1,892,007 | (a) | $ | — | $ | 1,892,007 | |||||||||
Foreign currency contracts | 5,558,564 | (c) | 2,895,536 | (c) | 36,778,518 | (c) | 45,232,618 | |||||||||||
Total | $ | 5,558,564 | $ | 4,787,543 | $ | 36,778,518 | $ | 47,124,625 |
Amount of Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||
Derivative Contract | Purchased Options | Written Options | Forward Foreign Currency Contracts | Total | ||||||||||||||
Equity contracts | $ | — | $ | (1,726,607 | )(b) | $ | — | $ | (1,726,607 | ) | ||||||||
Foreign currency contracts | (1,853,711 | )(d) | (495,646 | )(d) | (7,943,125 | )(d) | (10,292,482 | ) | ||||||||||
Total | $ | (1,853,711 | ) | $ | (2,222,253 | ) | $ | (7,943,125 | ) | $ | (12,019,089 | ) |
Third Avenue Focused Credit Fund
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||
Forward Foreign | ||||||||||||||||||
Derivative Contract | Currency Contracts | |||||||||||||||||
Foreign currency contracts | $31,183,618 | (c) | ||||||||||||||||
Amount of Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||
Forward Foreign | ||||||||||||||||||
Derivative Contract | Currency Contracts | |||||||||||||||||
Foreign currency contracts | $(6,369,751 | )(d) |
(a) | Included in “Net realized gain on written equity options”. |
(b) | Included in “Net change in unrealized depreciation on written equity options”. |
(c) | Included in “Net realized gain/(loss) on foreign currency transactions”. |
(d) | Included in “Net change in unrealized appreciation/(depreciation) on translation of other assets and liabilities denominated in foreign currency”. |
48 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Derivatives volume:
The tables below disclose the volume of the Funds’ forward foreign currency contracts and options activities during the six months ended April 30, 2015 (amounts denominated in U.S. Dollars unless otherwise noted, except number of contracts). Please refer to the tables in the Summary of derivatives information for derivative-related gains and losses associated with volume activity (measured at each month-end).
Third Avenue Value Fund | Third Avenue Real Estate Value Fund | Third Avenue Focused Credit Fund | ||||||||||
Exchange Traded Options: | ||||||||||||
Average Ending Value Written | 29,429 | 23,629 | — | |||||||||
Foreign Currency Options: | ||||||||||||
Average Notional Balance Purchased | — | 89,528,571 | AUD | — | ||||||||
Average Notional Balance Written | — | 89,528,571 | AUD | — | ||||||||
Forward Foreign Currency Contracts: | ||||||||||||
Average Settlement Value Purchased | — | — | 1,357,155 | |||||||||
Average Settlement Value Sold | — | 308,126,807 | 213,675,697 | |||||||||
AUD: Australian Dollar |
Floating rate obligations:
The Funds may invest in debt securities with interest payments or maturity values that are not fixed, but float in conjunction with an underlying index or price. These securities may be backed by corporate issuers. The indices and prices upon which such securities can be based include interest rates and currency rates. Floating rate securities pay interest according to a coupon which is reset periodically.
Dividends and distributions to shareholders:
The amount of dividends and distributions paid to shareholders from net investment income and net realized capital gains on sales of securities, respectively are determined in accordance with U.S. federal income tax law and regulations which may differ from U.S. GAAP. Such dividends and distributions are recorded on the ex-dividend date. The majority of dividends and capital gains distributions from a Fund may be automatically reinvested into additional shares of that Fund, based upon the discretion of the Fund’s shareholders.
Income tax information:
The Funds have complied and intend to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies, and each Fund intends to distribute all of its taxable net investment income and net realized capital gains, if any, to its shareholders. Therefore, no provision for U.S. federal income taxes is included on the accompanying financial statements.
Income, including gains, from investments in foreign securities received by the Funds may be subject to income, withholding or other taxes imposed by foreign countries.
Management has analyzed the tax positions taken on the Funds’ U.S. federal income tax returns for all open tax years (generally the current and prior three tax years), and has concluded that no provision for U.S. federal income tax is required in the Funds’ financial statements. This conclusion may be subject to future review and adjustment at a later date based upon factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Funds are subject to possible examination by the relevant taxing authorities for tax years for which the applicable statutes of limitations have not expired.
Expense allocation:
Expenses attributable to a specific Fund are charged to that Fund. Expenses attributable to the Trust are generally allocated using the ratio of each Fund’s average net assets relative to the total average net assets of the Trust. Certain expenses are shared with Third Avenue Variable Series Trust, an affiliated fund group. Such costs are allocated using the ratio of the Funds’ average net assets relative to the total average net assets of the Funds and Third Avenue Variable Series Trust.
Share class accounting:
Investment income, common expenses and realized/unrealized gains/(losses) on investments are allocated to the two classes of shares of each Fund on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that share class.
49 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Trustees’ and officers’ fees:
The Trust does not pay any fees to its officers for their services as such, except for the Chief Compliance Officer and the Associate Director of Compliance, to whom the Trust paid $231,656 for the six months ended April 30, 2015. The Trust does pay, together with Third Avenue Variable Series Trust, Trustees a fee of $5,000 for each meeting of the Board that each Trustee attends, in addition to reimbursing all Trustees for travel and incidental expenses incurred by them in connection with their attendance at meetings. If a special meeting is required, Trustees will each receive $2,500. The Trust, together with Third Avenue Variable Series Trust, also pays each independent Trustee an annual retainer of $65,000 (the lead independent Trustee receives an additional retainer of $12,000). The Trustees on the Audit Committee each receive $2,000 for each audit committee meeting and the audit committee chairman receives an annual retainer of $6,000.
2. INVESTMENTS
Purchases and sales/conversions:
The aggregate cost of purchases and aggregate proceeds from sales and conversions of investments, excluding short-term investments, from unaffiliated and affiliated issuers (as defined in the Investment Company Act of 1940 as ownership of 5% or more of the outstanding voting securities of these issuers) for the six months ended April 30, 2015 were as follows:
Purchases | Sales | |||||||
Third Avenue Value Fund: | ||||||||
Affiliated | $ | — | $ | 17,663,259 | ||||
Unaffiliated | 189,621,432 | 432,617,381 | ||||||
Third Avenue Small-Cap Value Fund: | ||||||||
Unaffiliated | 49,117,243 | 141,198,488 | ||||||
Third Avenue Real Estate Value Fund: | ||||||||
Unaffiliated | 307,601,038 | 227,425,332 | ||||||
Third Avenue International Value Fund: | ||||||||
Affiliated | — | 652,385 | ||||||
Unaffiliated | 31,146,452 | 107,549,635 | ||||||
Third Avenue Focused Credit Fund: | ||||||||
Unaffiliated | 423,801,547 | 892,019,590 |
Unrealized appreciation/(depreciation):
The following information is based upon the book basis of investment securities as of April 30, 2015:
Value Fund | Small-Cap Value Fund | Real Estate Value Fund | International Value Fund | Focused Credit Fund | ||||||||||||||||
Gross unrealized appreciation | $ | 413,808,109 | $ | 126,105,414 | $ | 745,451,693 | $ | 46,650,291 | $ | 116,312,700 | ||||||||||
Gross unrealized depreciation | (149,635,112 | ) | (14,768,916 | ) | (48,018,399 | ) | (51,629,865 | ) | (615,310,967 | ) | ||||||||||
Net unrealized appreciation/(depreciation) | $ | 264,172,997 | $ | 111,336,498 | $ | 697,433,294 | $ | (4,979,574 | ) | $ | (498,998,267 | ) | ||||||||
Aggregate book cost | $ | 1,619,025,324 | $ | 335,080,299 | $ | 2,737,088,554 | $ | 268,536,603 | $ | 2,813,737,090 |
Written options transactions during the period are summarized as follows:
Third Avenue Value Fund
Equity Options Written | |||||||||
Number of Contracts | Premiums Received | ||||||||
Options outstanding at October 31, 2014 | 2,000 | $ | 315,500 | ||||||
Options expired | (2,000 | ) | (315,500 | ) | |||||
Options outstanding at April 30, 2015 | — | $ | — |
50 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Third Avenue Real Estate Value Fund
Currency Options Written | Equity Options Written | |||||||||||||||
Notional Amount ‡ | Premiums Received | Number of Contracts | Premiums Received | |||||||||||||
Options outstanding at October 31, 2014 | 81,000,000 | $ | 634,536 | 14,000 | $ | 1,892,007 | ||||||||||
Options written | 274,700,000 | 2,536,000 | — | — | ||||||||||||
Options expired | (264,000,000 | ) | (2,895,536 | ) | (14,000 | ) | (1,892,007 | ) | ||||||||
Options outstanding at April 30, 2015 | 91,700,000 | $ | 275,000 | — | $ | — |
‡ | In Australian Dollars |
3. INVESTMENT ADVISORY SERVICES, ADMINISTRATION AND SERVICE FEE AGREEMENTS AND EXPENSE OFFSET ARRANGEMENT
Each Fund has an Investment Advisory Agreement with the Adviser for investment advice and certain management functions. The terms of the Investment Advisory Agreements provide the annual advisory fees based on the total average daily net assets for the Funds which are indicated as below. These fees are calculated daily and paid monthly.
Fund | Annual Management Fee |
Third Avenue Value Fund | 0.90% |
Third Avenue Small-Cap Value Fund | 0.90% |
Third Avenue Real Estate Value Fund | 0.90% |
Third Avenue International Value Fund | 1.25% |
Third Avenue Focused Credit Fund | 0.75% |
Additionally, the Adviser pays certain expenses on behalf of the Funds which are partially reimbursed by the Funds, including service fees due to third parties, the compensation expense for the Funds’ Chief Compliance Officer and the Associate Director of Compliance and other miscellaneous expenses. At April 30, 2015, Third Avenue Value Fund, Third Avenue Small-Cap Value Fund, Third Avenue Real Estate Value Fund, Third Avenue International Value Fund and Third Avenue Focused Credit Fund had amounts payable to the Adviser of $175,510, $54,390, $507,743, $38,081 and $216,462, respectively, for reimbursement of expenses paid by the Adviser.
Until March 1, 2016 (subject to renewal), whenever each Fund’s normal operating expenses, including the investment advisory fee and most other operating expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary items, exceeds the expense limitation based on each Fund’s average daily net assets, the Adviser has agreed to waive a portion of its advisory fees and/or reimburse each Fund in an amount equal to that excess. The expense limitations for each Fund are disclosed in its corresponding Financial Highlights. Below are the corresponding contingent liabilities to the Adviser in effect as of April 30, 2015:
October 31, 2012 | Expenses Waived through Fiscal Periods ending October 31, 2013 | October 31, 2014 | April 30, 2015 | |||||||||||||||
Subject to Repayment until October 31, | ||||||||||||||||||
Fund | Expiration Date | 2015 | 2016 | 2017 | 2018 | |||||||||||||
Third Avenue International Value Fund | 2/28/2016 | $384,146 | $383,912 | $517,819 | $354,115 |
The waived fees and reimbursed expenses may be paid to the Adviser during the following three-year period after the end of the fiscal year in which an expense is waived or reimbursed by the Adviser, to the extent that the payment of such fees and expenses would not cause a Fund to exceed the expense limitations.
The Trust has entered into an Administration Agreement with the Adviser pursuant to which the Adviser, as administrator, is responsible for providing various administrative services to the Trust. The Adviser has in turn entered into a Sub-Administration Agreement with BNY Mellon Investment Servicing (U.S.) Inc. (“BNY Mellon”) pursuant to which BNY Mellon provides certain of these administrative services on behalf of the Adviser. Each Fund pays the Adviser a fee calculated at an annual rate of 0.0055% of the average daily net assets of each respective Fund for such services. The Adviser pays BNY Mellon an annual sub-administration fee for sub-administration services provided to the Trust equal to $202,020.
51 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Both the Trust and the Adviser have entered into agreements with financial intermediaries to provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries investing in the Funds and have agreed to compensate the intermediaries for providing those services. Certain of those services would be provided by the Funds if the shares of each customer were registered directly with the Funds’ transfer agent. Accordingly, the Funds have agreed to reimburse a portion of the intermediary fees paid by the Adviser pursuant to provisions adopted by the Board. Each Fund pays a portion of the intermediary fees attributable to shares of the Fund not exceeding the estimated expense the Fund would have paid its transfer agent had each customer’s shares been registered directly with the transfer agent instead of held through the intermediary accounts. The Adviser pays the remainder of the fees. The fees incurred by the Funds are reflected as shareholder servicing fees in the Statements of Operations. For the six months ended April 30, 2015, such fees amounted to $993,716 for Third Avenue Value Fund, $251,056 for Third Avenue Small-Cap Value Fund, $1,961,436 for Third Avenue Real Estate Value Fund, $194,063 for Third Avenue International Value Fund and $743,836 for Third Avenue Focused Credit Fund.
The Funds have an expense offset arrangement in connection with their custodian contract. Credits realized as a result of uninvested cash balances are used to reduce a portion of the Funds’ custodian expenses. The following amounts are the reduction of expenses due to this arrangement for the six months ended April 30, 2015. These amounts are reflected as “Expenses reduced by custodian fee expense offset arrangement” in the Statements of Operations.
Fund | Custody Credit | |||
Third Avenue Value Fund | $ | 23,818 | ||
Third Avenue Small-Cap Value Fund | 2,076 | |||
Third Avenue Real Estate Value Fund | 82,080 | |||
Third Avenue International Value Fund | 2,732 | |||
Third Avenue Focused Credit Fund | 37,445 |
4. LINE OF CREDIT
Each Fund and Third Avenue Variable Series Trust are participants in a single committed, unsecured $100,000,000 line of credit with The Bank of Nova Scotia, to be used only for temporary or emergency purposes. The interest on the loan is calculated at a variable rate based on the LIBOR, Federal Funds or Prime Rates. A commitment fee of 0.25% per annum of the available line of credit is charged, of which each participating Fund and Third Avenue Variable Series Trust pays its pro rata share, based on the ratio of its individual net assets to the net assets of all participants at the time the fee is due and payable. The fee is paid quarterly in arrears and is included in “Miscellaneous” expenses in the Statement of Operations. Because all of the Funds in Third Avenue Trust and Third Avenue Variable Series Trust participate, there is no assurance that an individual Fund will have access to all or any part of the $100,000,000 at any particular time. During the six months ended April 30, 2015, there were no loans outstanding under the line of credit.
5. RELATED PARTY TRANSACTIONS
Investment in affiliates:
A summary of the Funds’ transactions in securities of affiliated issuers for the six months ended April 30, 2015 is set forth below:
Third Avenue Value Fund
Name of Issuer: | Shares/ Principal Amount Held at Oct. 31, 2014 | Gross Purchases and Additions | Gross Sales and Reductions | Shares/ Principal Amount Held at Apr. 30, 2015 | Value at Apr. 30, 2015 | Investment Income Nov. 1, 2014 - Apr. 30, 2015 | ||||||||||||||||||
Cavco Industries, Inc. | 1,566,626 | — | 143,901 | 1,422,725 | $ | 93,288,078 | $ | — | ||||||||||||||||
Home Products International, Inc. | 526,368 | — | — | 526,368 | — | — | ||||||||||||||||||
Home Products International, Inc., 2nd Lien, Convertible, 6.000% Payment-in-kind Interest, due 3/20/17 | 21,505,076 | 645,152 | 1 | — | 22,150,228 | 16,572,801 | 645,152 | 1 | ||||||||||||||||
Lai Sun Garment International, Ltd. | 151,543,880 | — | 46,824,000 | 104,719,880 | 17,699,782 | 214,739 | ||||||||||||||||||
Manifold Capital LLC | 37 | — | — | 37 | 285,000 | — | ||||||||||||||||||
Tejon Ranch Co. | 1,221,894 | — | — | 1,221,894 | 30,180,782 | — | ||||||||||||||||||
Tejon Ranch Co., Warrants, expire 8/31/16 | 200,255 | — | — | 200,255 | 117,820 | — | ||||||||||||||||||
Total Affiliates | $ | 158,144,263 | $ | 859,891 |
1 | Payment-in-kind interest. |
52 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Third Avenue Real Estate Value Fund
Name of Issuer: | Shares/Units Principal Amount Held at Oct. 31, 2014 | Gross Purchases and Additions | Gross Sales and Reductions | Shares/Units Held at Apr. 30, 2015 | Value at Apr. 30, 2015 | Investment Income Nov. 1, 2014 - Apr. 30, 2015 | ||||||||||||||||||
Newhall Holding Co. LLC, Class A Units | 28,847,217 | — | — | 28,847,217 | $ | 93,753,455 | $ | — | ||||||||||||||||
Starwood Waypoint Residential Trust | 2,515,510 | — | — | 2,515,510 | 64,749,227 | — | ||||||||||||||||||
Total Affiliates | $ | 158,502,682 | $ | — |
Third Avenue International Value Fund
Name of Issuer: | Shares Held at Oct. 31, 2014 | Gross Purchases and Additions | Gross Sales and Reductions | Shares Held at Apr. 30, 2015 | Value at Apr. 30, 2015 | Investment Income Nov. 1, 2014 - Apr. 30, 2015 | ||||||||||||||||||
GP Investments, Ltd. BDR* | 6,054,307 | — | 1,979,181 | 4,075,126 | $ | 7,682,410 | $ | — | ||||||||||||||||
Rubicon, Ltd. | 57,024,696 | — | 228,138 | 56,796,558 | 14,088,706 | — | ||||||||||||||||||
Tenon, Ltd. | 10,350,426 | — | 400,149 | 9,950,277 | 15,189,060 | — | ||||||||||||||||||
Total Affiliates | $ | 36,960,176 | $ | — |
BDR: Brazilian Depositary Receipt | |
* | As of April 30, 2015, no longer an affiliate. |
Third Avenue Focused Credit Fund
Name of Issuer: | Shares/ Principal Amount Held at Oct. 31, 2014 | Gross Purchases and Additions | Gross Sales and Reductions | Shares/ Principal Amount Held at Apr. 30, 2015 | Value at Apr. 30, 2015 | Investment Income Nov. 1, 2014 - Apr. 30, 2015 | ||||||||||||||||||
Global Geophysical Services, Inc.** | — | 3,786,564 | 1 | — | 3,786,564 | $ | 28,399,230 | $ | — | |||||||||||||||
Global Geophysical Services, Inc., Escrow, due 5/1/17** | — | 45,925,000 | 1 | — | 45,925,000 | — | — | |||||||||||||||||
Global Geophysical Services, Inc., Escrow, due 5/1/17** | — | 15,599,000 | 1 | — | 15,599,000 | — | — | |||||||||||||||||
Global Geophysical Services, Inc., Term Loan B, 15.500% Cash or Payment-in-kind Interest, due 8/9/17** | — | 14,424,934 | 2 | — | 14,424,934 | 14,424,934 | 485,519 | 3 | ||||||||||||||||
Global Geophysical Services, Inc., Warrants** | — | 262,913 | 1 | — | 262,913 | — | — | |||||||||||||||||
Liberty Tire Recycling LLC** | — | 2,802,126 | 1 | — | 2,802,126 | 1,737,318 | — | |||||||||||||||||
Liberty Tire Recycling LLC, Warrants, expire 12/12/19** | — | 42,750 | 1 | — | 42,750 | — | — | |||||||||||||||||
Liberty Tire Recycling LLC, Term Loan, 6.330% Cash or 7.000% Payment-in-kind Interest, due 4/1/16** | — | 18,140,367 | 2 | — | 18,140,367 | 18,140,367 | 146,451 | 3 | ||||||||||||||||
Liberty Tire Recycling LLC, 2nd Lien, 11.000% Cash or Payment-in-kind Interest, due 3/31/21** | — | 53,435,000 | 1 | — | 53,435,000 | 53,435,000 | 913,531 | |||||||||||||||||
Phosphate Holdings, Inc. | 478,500 | — | — | 478,500 | 47,372 | — | ||||||||||||||||||
Radio One, Inc., Class D | 2,311,360 | — | — | 2,311,360 | 8,251,555 | — | ||||||||||||||||||
Spanish Broadcasting System, Inc., Class A | 681,637 | — | — | 681,637 | 4,226,149 | — | ||||||||||||||||||
Total Affiliates | $ | 128,661,925 | $ | 1,545,501 |
1 | Share increase due to corporate action. |
2 | Share increase due to corporate action and payment-in-kind interest. |
3 | Payment-in-kind interest. |
** | As of October 31, 2014, not an affiliate. |
Certain employees of the Adviser serve as members of the board of directors of companies in which the Funds have investments. As a result of such service, for the six months ended April 30, 2015, the Funds received the following board member fees from these companies that board members employed by the Adviser agreed to have paid directly to the benefit of the Funds. These fees are included in “Other Income” on the accompanying Statements of Operations.
Fund | Fees |
Third Avenue Value Fund | $45,140 |
Third Avenue Real Estate Value Fund | 9,194 |
53 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
6. DISTRIBUTION EXPENSES
The Board has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the Investment Company Act. The Plan provides that, as compensation for distribution and related services provided to Third Avenue Value Fund Investor Class (“TVFVX”), Third Avenue Small-Cap Value Fund Investor Class (“TVSVX”), Third Avenue Real Estate Value Fund Investor Class (“TVRVX”), Third Avenue International Value Fund Investor Class (“TVIVX”), and Third Avenue Focused Credit Fund Investor Class (“TFCVX”), each Fund’s Investor Class accrues a fee calculated at the annual rate of 0.25% of average daily net assets of the class. Such fees may be paid to institutions that provide distribution services. The amount of fees paid during any period may be more or less than the cost of distribution and other services provided. Financial Industry Regulatory Authority (“FINRA”) rules impose a ceiling on the cumulative distribution fees paid.
For the six months ended April 30, 2015, distribution expenses were as follows:
Fund | Distribution Fees | |||
Third Avenue Value Fund | $ | 42,071 | ||
Third Avenue Small-Cap Value Fund | 12,654 | |||
Third Avenue Real Estate Value Fund | 500,967 | |||
Third Avenue International Value Fund | 11,283 | |||
Third Avenue Focused Credit Fund | 952,753 |
7. CAPITAL SHARE TRANSACTIONS
Each Fund is authorized to issue an unlimited number of shares of each class of beneficial interest with $0.001 par value.
Transactions in capital stock of each class were as follows:
Third Avenue Value Fund:
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Investor Class | Investor Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 61,411 | $ | 3,529,419 | 128,958 | $ | 7,522,597 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 30,896 | 1,758,912 | 19,744 | 1,110,369 | ||||||||||||
Shares redeemed* | (59,672 | ) | (3,412,075 | ) | (216,421 | ) | (12,890,194 | ) | ||||||||
Net increase/(decrease) | 32,635 | $ | 1,876,256 | (67,719 | ) | $ | (4,257,228 | ) | ||||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Institutional Class | Institutional Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 358,033 | $ | 20,416,945 | 1,394,237 | $ | 81,320,497 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 1,898,244 | 108,086,010 | 1,404,457 | 79,028,753 | ||||||||||||
Shares redeemed* | (4,727,712 | ) | (271,713,578 | ) | (11,933,084 | ) | (703,200,517 | ) | ||||||||
Net decrease | (2,471,435 | ) | $ | (143,210,623 | ) | (9,134,390 | ) | $ | (542,851,267 | ) | ||||||
Third Avenue Small-Cap Value Fund: | ||||||||||||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Investor Class | Investor Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 72,721 | $ | 1,800,277 | 97,022 | $ | 2,676,320 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 88,642 | 2,021,921 | 27,798 | 749,981 | ||||||||||||
Shares redeemed* | (73,629 | ) | (1,758,671 | ) | (200,461 | ) | (5,455,727 | ) | ||||||||
Net increase/(decrease) | 87,734 | $ | 2,063,527 | (75,641 | ) | $ | (2,029,426 | ) |
54 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Third Avenue Small-Cap Value Fund (continued)
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Institutional Class | Institutional Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 262,002 | $ | 6,198,436 | 665,083 | $ | 18,260,584 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 4,170,137 | 95,537,833 | 1,498,269 | 40,453,273 | ||||||||||||
Shares redeemed* | (3,776,944 | ) | (89,660,289 | ) | (7,835,804 | ) | (215,396,119 | ) | ||||||||
Net increase/(decrease) | 655,195 | $ | 12,075,980 | (5,672,452 | ) | $ | (156,682,262 | ) | ||||||||
Third Avenue Real Estate Value Fund: | ||||||||||||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Investor Class | Investor Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 3,236,066 | $ | 104,059,016 | 9,071,471 | $ | 271,817,715 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 390,789 | 12,259,047 | 140,095 | 3,963,299 | ||||||||||||
Shares redeemed* | (1,730,899 | ) | (55,676,608 | ) | (2,597,093 | ) | (79,984,262 | ) | ||||||||
Net increase | 1,895,956 | $ | 60,641,455 | 6,614,473 | $ | 195,796,752 | ||||||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Institutional Class | Institutional Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 13,909,480 | $ | 448,178,629 | 30,409,505 | $ | 934,896,558 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 2,983,065 | 94,026,226 | 1,608,740 | 45,704,316 | ||||||||||||
Shares redeemed* | (11,907,148 | ) | (384,874,925 | ) | (10,577,919 | ) | (322,617,599 | ) | ||||||||
Net increase | 4,985,397 | $ | 157,329,930 | 21,440,326 | $ | 657,983,275 | ||||||||||
Third Avenue International Value Fund: | ||||||||||||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Investor Class | Investor Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 47,958 | $ | 790,561 | 308,783 | $ | 6,102,443 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 40,798 | 681,324 | 19,726 | 389,379 | ||||||||||||
Shares redeemed* | (343,437 | ) | (5,749,263 | ) | (1,384,742 | ) | (27,293,669 | ) | ||||||||
Net decrease | (254,681 | ) | $ | (4,277,378 | ) | (1,056,233 | ) | $ | (20,801,847 | ) | ||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Institutional Class | Institutional Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 369,158 | $ | 6,141,566 | 2,308,070 | $ | 45,751,820 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 1,227,087 | 20,443,272 | 730,534 | 14,428,040 | ||||||||||||
Shares redeemed* | (5,647,407 | ) | (94,592,139 | ) | (44,920,114 | ) | (872,331,104 | ) | ||||||||
Net decrease | (4,051,162 | ) | $ | (68,007,301 | ) | (41,881,510 | ) | $ | (812,151,244 | ) |
55 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Third Avenue Focused Credit Fund:
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Investor Class | Investor Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 13,766,341 | $ | 132,219,484 | 84,897,396 | $ | 986,124,742 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 3,949,219 | 38,586,569 | 6,954,244 | 80,285,714 | ||||||||||||
Shares redeemed* | (30,336,428 | ) | (295,036,818 | ) | (72,968,925 | ) | (860,699,914 | ) | ||||||||
Net increase/(decrease) | (12,620,868 | ) | $ | (124,230,765 | ) | 18,882,715 | $ | 205,710,542 | ||||||||
For the Six Months Ended | For the Year Ended | |||||||||||||||
April 30, 2015 | October 31, 2014 | |||||||||||||||
Institutional Class | Institutional Class | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold | 56,645,303 | $ | 546,610,945 | 140,734,447 | $ | 1,653,016,104 | ||||||||||
Shares issued upon reinvestment of dividends and distributions | 7,656,053 | 74,551,311 | 7,400,932 | 84,797,094 | ||||||||||||
Shares redeemed* | (69,634,702 | ) | (683,292,552 | ) | (46,620,041 | ) | (539,102,312 | ) | ||||||||
Net increase/(decrease) | (5,333,346 | ) | $ | (62,130,296 | ) | 101,515,338 | $ | 1,198,710,886 |
* | Redemption fees are netted with redemption amounts. |
Third Avenue Value Fund, Third Avenue Small-Cap Value Fund, Third Avenue Real Estate Value Fund, Third Avenue International Value Fund, and Third Avenue Focused Credit Fund charge a redemption fee of 1%, 1%, 1%, 2%, and 2%, respectively, for shares redeemed or exchanged for shares of another Fund within 60 days or less of the purchase date.
8. COMMITMENTS AND CONTINGENCIES
At April 30, 2015, Third Avenue Focused Credit Fund had the following commitments and contingencies.
Amount of | Funded | Value of | ||||||||||||
Issuer | Type | Commitment | Commitment | Segregated Securities | ||||||||||
Allied Nevada Gold Corp. | Debtor-In-Possession Loan | $12,700,334 | $5,722,707 | $6,977,627 |
In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
Third Avenue Focused Credit Fund is a plaintiff in two separate litigations each pertaining to counterparties not performing their contractual obligations. The Fund is seeking damages from both counterparties.
Third Avenue Focused Credit Fund is a defendant in an action initiated by the issuer of bonds currently held by the Fund pertaining to the validity of a notice of default sent to the issuer. The Fund expects the risk of any loss from this action to be remote.
9. RISKS RELATING TO CERTAIN INVESTMENTS
Foreign securities:
Investments in the securities of foreign issuers may involve investment risks different from those of U.S. issuers including possible political or economic instability of the country of the issuer, the difficulty of predicting international trade patterns, the possibility of currency exchange controls, the possible imposition of foreign taxes on income from and transactions in such instruments, the possible establishment of foreign controls, the possible seizure or nationalization of foreign deposits or assets, or the adoption of other foreign government restrictions that might adversely affect the foreign securities held by the Funds. Foreign securities may also be subject to greater fluctuations in price than securities of domestic corporations or the U.S. Government.
High yield debt:
The Funds may invest in high yield, lower grade debt (sometimes referred to as “junk bonds”). The market values of these higher yielding debt securities tend to be more sensitive to economic conditions and individual corporate developments than those of higher rated securities. In addition, the secondary market for these bonds is generally less liquid.
56 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
Claims:
An investment in claims is speculative and carries a high degree of risk. Claims are illiquid instruments which generally do not pay interest. Claims may also be allowed or disallowed in whole or part. If allowed, they may be settled by a pro-rata distribution of the assets of the estate. The markets in claims are not regulated by federal securities laws or the SEC. Because claims are unsecured, holders of claims may have a lower priority in terms of payment than certain other creditors in a bankruptcy proceeding.
Credit and interest rate risk:
The market value of debt securities is affected by changes in prevailing interest rates and the perceived credit quality of the issuer. When prevailing interest rates fall or perceived credit quality improves, the market value of the affected debt securities generally rises. Conversely, when interest rates rise or perceived credit quality weakens, the market value of the affected debt securities generally declines.
Market risk:
Prices of securities (and stocks in particular) have historically fluctuated. The value of the Funds will similarly fluctuate and you could lose money.
Counterparty risk:
The Funds are exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will default. The potential loss to the Funds could exceed the value of the financial assets recorded in the Funds’ financial statements. Financial assets, which potentially expose the Funds to counterparty risk, consist principally of cash due from counterparties and investments. The Adviser seeks to minimize the Funds’ counterparty risk by performing reviews of each counterparty and by minimizing concentration of counterparty risk by undertaking transactions with multiple customers and counterparties on recognized and reputable exchanges. Delivery of securities sold is only made once the Funds have received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.
At April 30, 2015, the Funds had counterparty concentration of credit risk primarily with Goldman Sachs International, JPMorgan Chase Bank, N.A., Macquarie Bank Ltd. and Morgan Stanley Capital Services LLC.
The Funds are party to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with select counterparties that govern transactions, over-the-counter derivatives and foreign exchange contracts entered into by the Funds and those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements of the Funds.
The considerations and factors surrounding the settlement of certain purchases and sales made on a delayed-delivery basis are governed by Master Securities Forward Transaction Agreements (“Master Forward Agreements”) between the Funds and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.
The counterparty risk associated with certain contracts may be reduced by master netting arrangements to the extent that if an event of default occurs, all amounts with the counterparty are terminated and settled on a net basis. The Funds’ overall exposure to counterparty risk with respect to transactions subject to master netting arrangements can change substantially within a short period, as it is affected by each transaction subject to the arrangement.
Collateral requirements:
For derivatives traded under an ISDA Master Agreement and/or Master Forward Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty.
Cash collateral that has been pledged to cover obligations of a Fund and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g. $500,000) before a transfer is required, which is determined at the close of business of a Fund and any additional required collateral is delivered to/pledged by a Fund on the next business day. Typically, a Fund and its counterparties are not permitted to sell, re-pledge or use the collateral they receive. To the extent amounts due to a Fund from its counterparties are not fully collateralized, contractually or otherwise, a Fund bears the risk of loss from counterparty non-performance. The Funds attempt to mitigate counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
57 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.
Third Avenue Real Estate Value Fund
At April 30, 2015, the Fund’s derivative assets and liabilities (by type) on a gross basis are as follows:
Assets | Liabilities | |||||||
Derivative Financial Instruments: | ||||||||
Options | $ | 21,892 | $ | 551,676 | ||||
Forward Foreign Currency Contracts | — | 5,739,307 | ||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | 21,892 | 6,290,983 | ||||||
Derivatives not subject to a master netting agreement or similar agreement (“MNA”) | — | — | ||||||
Total derivative assets and liabilities subject to a MNA | $ | 21,892 | $ | 6,290,983 |
The following tables present the Fund’s derivative assets by counterparty net of amounts available for offset under a MNA and net of the related collateral received by the Fund as of April 30, 2015:
Counterparty | Amount of Assets Subject to a MNA by Counterparty | Derivatives Available for Offset1 | Non-cash Collateral Received2 | Cash Collateral Received2 | Net Amount of Derivative Assets | ||||||||||||||||
Goldman Sachs International | $ | 21,850 | $ | (21,850 | ) | $ | — | $ | — | $ | — | ||||||||||
Macquarie Bank Ltd. | 42 | (42 | ) | — | — | — | |||||||||||||||
Morgan Stanley Capital Services LLC | — | — | — | — | — | ||||||||||||||||
$ | 21,892 | $ | (21,892 | ) | $ | — | $ | — | $ | — |
1 | The amount of derivatives for offset is limited to the amount of assets and/or liabilities that are subject to a MNA. |
2 | Excess of collateral received from the individual counterparty may not be shown for financial reporting purposes. |
The following tables present the Fund’s derivative liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral pledged by the Fund as of April 30, 2015:
Counterparty | Amount of Liabilities Subject to a MNA by Counterparty | Derivatives Available for Offset1 | Non-cash Collateral Pledged2 | Cash Collateral Pledged2 | Net Amount of Derivative Liabilities3 | ||||||||||||||||
Goldman Sachs International | $ | 3,339,513 | $ | (21,850 | ) | $ | — | $ | (2,280,000 | ) | $ | 1,037,663 | |||||||||
Macquarie Bank Ltd. | 42,729 | (42 | ) | — | — | 42,687 | |||||||||||||||
Morgan Stanley Capital Services LLC | 2,908,741 | — | — | (2,740,000 | ) | 168,741 | |||||||||||||||
$ | 6,290,983 | $ | (21,892 | ) | $ | — | $ | (5,020,000 | ) | $ | 1,249,091 |
1 | The amount of derivatives for offset is limited to the amount of assets and/or liabilities that are subject to a MNA. |
2 | Excess of collateral pledged to the individual counterparty may not be shown for financial reporting purposes. |
3 | Net amount represents the net amount payable to the counterparty in the event of default. |
Third Avenue Focused Credit Fund
At April 30, 2015, the Fund’s derivative assets and liabilities (by type) on a gross basis are as follows:
Assets | Liabilities | |||||||
Derivative Financial Instruments: | ||||||||
Forward Foreign Currency Contracts | $ | 26,547 | $ | 4,261,530 | ||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | 26,547 | 4,261,530 | ||||||
Derivatives not subject to a master netting agreement or similar agreement (“MNA”) | — | — | ||||||
Total derivative assets and liabilities subject to a MNA | $ | 26,547 | $ | 4,261,530 |
58 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
The following tables present the Fund’s derivative assets by counterparty net of amounts available for offset under a MNA and net of the related collateral received by the Fund as of April 30, 2015:
Counterparty | Amount of Assets Subject to a MNA by Counterparty | Derivatives Available for Offset1 | Non-cash Collateral Received2 | Cash Collateral Received2 | Net Amount of Derivative Assets | ||||||||||||||||
Goldman Sachs International | $ | 26,547 | $ | (26,547 | ) | $ | — | $ | — | $ | — | ||||||||||
JPMorgan Chase Bank N.A. | — | — | — | — | — | ||||||||||||||||
Macquarie Bank Ltd. | — | — | — | — | — | ||||||||||||||||
$ | 26,547 | $ | (26,547 | ) | $ | — | $ | — | $ | — |
1 | The amount of derivatives for offset is limited to the amount of assets and/or liabilities that are subject to a MNA. |
2 | Excess of collateral received from the individual counterparty may not be shown for financial reporting purposes. |
The following tables present the Fund’s derivative liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral pledged by the Fund as of April 30, 2015:
Counterparty | Amount of Liabilities Subject to a MNA by Counterparty | Derivatives Available for Offset1 | Non-cash Collateral Pledged2 | Cash Collateral Pledged2 | Net Amount of Derivative Liabilities3 | ||||||||||||||||
Goldman Sachs International | $ | 1,815,538 | $ | (26,547 | ) | $ | — | $ | (490,000 | ) | $ | 1,298,991 | |||||||||
JPMorgan Chase Bank N.A. | 1,946,474 | — | — | — | 1,946,474 | ||||||||||||||||
Macquarie Bank Ltd. | 499,518 | — | — | (470,000 | ) | 29,518 | |||||||||||||||
$ | 4,261,530 | $ | (26,547 | ) | $ | — | $ | (960,000 | ) | $ | 3,274,983 |
1 | The amount of derivatives for offset is limited to the amount of assets and/or liabilities that are subject to a MNA. |
2 | Excess of collateral pledged to the individual counterparty may not be shown for financial reporting purposes. |
3 | Net amount represents the net amount payable to the counterparty in the event of default. |
Loans and other direct debt instruments:
The Funds may invest in loans and other direct debt instruments issued by corporate borrowers. These loans represent amounts owed to lenders or lending syndicates (loans and loan participations) or to other parties. Direct debt instruments may involve a risk of loss in case of default or insolvency of the borrower and may offer less legal protection to the Fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk of insolvency of the lending bank or other financial intermediary. The markets in loans are not regulated by federal securities laws or the SEC.
Cash concentration:
The Funds’ cash balances are held at a major regional U.S. bank. The Funds’ cash balances, which typically exceed Federal Deposit Insurance Corporation insurance coverage, subject the Funds to a concentration of credit risk. The Funds regularly monitor the credit ratings of this financial institution in order to mitigate the credit risk that exists with the balances in excess of insured amounts.
Off-balance sheet risk:
The Fund enters into derivatives which may represent off-balance sheet risk. Off-balance sheet risk exists when the maximum potential loss on a particular investment is greater than the value of such investment as reflected in the Statement of Assets and Liabilities.
Focused investing:
The Funds hold relatively concentrated portfolios that may contain fewer securities or industries than the portfolios of other mutual funds. Holding a relatively concentrated portfolio may increase the risk that the value of a Fund could decrease because of the poor performance of one or a few investments. Additionally, the Funds may encounter some difficulty in liquidating securities of concentrated positions.
Liquidity risk:
The Funds hold investments in private debt instruments, restricted securities, and securities having substantial market and/or credit risk which may be difficult to sell at certain periods of time. The Funds may not be able to dispose of such securities at the value the Fund places on them. At April 30, 2015, the percentages of total net assets of such securities in each Fund as determined by the Adviser are: Third Avenue Value Fund, 0.85%; Third Avenue Small-Cap Value Fund, 2.59%; Third Avenue Real Estate Value Fund, 3.73%; Third Avenue International Value Fund, 10.82%; Third Avenue Focused Credit Fund, 12.22%.
10. FEDERAL INCOME TAXES
The difference between book and tax basis total unrealized appreciation/(depreciation) is primarily attributable to deferred losses on wash sales, mark-to-market treatment of investments in certain passive foreign investment companies, investments in REITs and partnerships, differences in the treatment of amortization of discount on certain debt instruments, and other timing differences. Other cost basis adjustments are primarily attributable to unrealized appreciation/(depreciation) on certain derivatives and items related to other miscellaneous investments.
59 |
Third Avenue Trust
Notes to Financial Statements (continued)
April 30, 2015 (Unaudited)
The Regulated Investment Company Modernization Act of 2010 generally allows capital losses incurred in a taxable year beginning after December 22, 2010 (“post-enactment year”) to be carried forward for an unlimited period to the extent not utilized. However, any capital loss carryforward generated in a post-enactment year must be carried forward to offset subsequent year net capital gains before any capital loss carryforward from a pre-enactment year can be used. This may increase the risk that a capital loss generated in a pre-enactment year will expire unutilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses.
As of October 31, 2014, Third Avenue International Value Fund has a capital loss carryforward which should be available to offset certain capital gains generated in future years as follows:
Capital Losses incurred | ||||||||
in a pre-enactment year | Short-Term | Long-Term | ||||||
Expiration Date | ||||||||
10/31/2018 | $ | 11,954,748 | $ | — | ||||
Capital Losses incurred in a post-enactment year | ||||||||
No Expiration Date | — | — | ||||||
Total | $ | 11,954,748 | $ | — |
No distributions of capital gains are expected to be paid to shareholders of the Third Avenue International Value Fund until either net capital gains in excess of such carryforward is recognized or such carryforward expires. It is uncertain whether the Fund will be able to realize the full benefit of pre-enactment year capital loss carryforward prior to its expiration date.
11. SUBSEQUENT EVENTS
The Adviser has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued, and has determined that there were no events requiring recognition or disclosure in the Funds’ financial statements.
60 |
Third Avenue Trust
Schedule of Shareholder Expenses
(Unaudited)
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, such as redemption fees; and (2) ongoing costs, including management fees, shareholder servicing fees, distribution fees (if applicable) and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period, November 1, 2014, and held for the six month period ended April 30, 2015.
Actual Expenses
For each Class of each Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Beginning Account Value November 1, 2014 | Ending Account Value April 30, 2015 | Expenses Paid During the Period November 1, 2014 to April 30, 2015* | Annualized Expense Ratio | ||||||||
Third Avenue Value Fund | |||||||||||
Investor Class | |||||||||||
Actual | $1,000.00 | $ | 1,037.40 | $6.82 | 1.35% | ||||||
Hypothetical | $1,000.00 | $ | 1,018.10 | $6.76 | 1.35% | ||||||
Institutional Class | |||||||||||
Actual | $1,000.00 | $ | 1,038.90 | $5.56 | 1.10% | ||||||
Hypothetical | $1,000.00 | $ | 1,019.34 | $5.51 | 1.10% | ||||||
Third Avenue Small-Cap Value Fund | |||||||||||
Investor Class | |||||||||||
Actual | $1,000.00 | $ | 1,043.40 | $7.09 | 1.40% | ||||||
Hypothetical | $1,000.00 | $ | 1,017.85 | $7.00 | 1.40% | ||||||
Institutional Class | |||||||||||
Actual | $1,000.00 | $ | 1,044.50 | $5.83 | 1.15% | ||||||
Hypothetical | $1,000.00 | $ | 1,019.09 | $5.76 | 1.15% | ||||||
Third Avenue Real Estate Value Fund | |||||||||||
Investor Class | |||||||||||
Actual | $1,000.00 | $ | 1,051.80 | $6.82 | 1.34% | ||||||
Hypothetical | $1,000.00 | $ | 1,018.15 | $6.71 | 1.34% | ||||||
Institutional Class | |||||||||||
Actual | $1,000.00 | $ | 1,053.10 | $5.55 | 1.09% | ||||||
Hypothetical | $1,000.00 | $ | 1,019.39 | $5.46 | 1.09% | ||||||
Third Avenue International Value Fund | |||||||||||
Investor Class | |||||||||||
Actual | $1,000.00 | $ | 1,050.20 | $8.39 | 1.65% | ||||||
Hypothetical | $1,000.00 | $ | 1,016.61 | $8.25 | 1.65% | ||||||
Institutional Class | |||||||||||
Actual | $1,000.00 | $ | 1,052.00 | $7.12 | 1.40% | ||||||
Hypothetical | $1,000.00 | $ | 1,017.85 | $7.00 | 1.40% | ||||||
Third Avenue Focused Credit Fund | |||||||||||
Investor Class | |||||||||||
Actual | $1,000.00 | $ | 931.80 | $5.56 | 1.16% | ||||||
Hypothetical | $1,000.00 | $ | 1,019.04 | $5.81 | 1.16% | ||||||
Institutional Class | |||||||||||
Actual | $1,000.00 | $ | 931.90 | $4.36 | 0.91% | ||||||
Hypothetical | $1,000.00 | $ | 1,020.28 | $4.56 | 0.91% |
* | Expenses (net of fee waivers and expense offset arrangement) are equal to the Class’s annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal year (181) divided by 365. |
61 |
BOARD OF TRUSTEES | |
David M. Barse | Patrick Reinkemeyer |
William E. Chapman, II | Martin Shubik |
Lucinda Franks | Charles C. Walden |
Edward J. Kaier | Martin J. Whitman |
Eric Rakowski |
OFFICERS
Martin J. Whitman — Chairman of the Board
David M. Barse — President, Chief Executive Officer
Vincent J. Dugan — Chief Financial Officer, Treasurer
Michael A. Buono — Controller
W. James Hall — General Counsel, Secretary
Joseph J. Reardon — Chief Compliance Officer
TRANSFER AGENT
BNY Mellon Investment Servicing (U.S.) Inc.
P.O. Box 9802
Providence, RI 02940-8002
610-239-4600
800-443-1021 (toll-free)
INVESTMENT ADVISER
Third Avenue Management LLC
622 Third Avenue
New York, NY 10017
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
CUSTODIAN
JPMorgan Chase Bank, N.A.
14201 Dallas Parkway, 2nd Floor
Dallas, TX 75254
ABOUT THIRD AVENUE MANAGEMENT
Third Avenue Management LLC is a New York-based global asset manager that has adhered to a proven
value investment philosophy since its founding in 1986. Third Avenue’s disciplined approach seeks to
maximize long-term, risk-adjusted returns by focusing on corporate financial stability, and price conscious,
opportunistic security selection throughout the capital structure.
If you would like further information about Third Avenue Funds,
please contact your relationship manager or email clientservice@thirdave.com
622 Third Avenue, 31st floor | New York, New York 10017
www.thirdave.com
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The Trust’s principal executive officer and principal financial officer have evaluated the Trust’s disclosure controls and procedures within 90 days of this filing and have concluded that the Trust’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Trust in this Form N-CSR is recorded, processed, summarized, and reported within the required time periods and that information required to be disclosed by the Trust in the report that it files or submits on Form N-CSR is accumulated and communicated to the Trust’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) The Trust’s principal executive officer and principal financial officer are aware of no changes in the Trust’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) | Not applicable for semi-annual reports. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the 1940 Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Third Avenue Trust
By: | /s/ David M. Barse |
Name: | David M. Barse |
Title: | Principal Executive Officer |
Date: | June 26, 2015 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the 1940 Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ David M. Barse |
Name: | David M. Barse |
Title: | Principal Executive Officer |
Date: | June 26, 2015 |
By: | /s/ Vincent J. Dugan |
Name: | Vincent J. Dugan |
Title: | Principal Financial Officer |
Date: | June 26, 2015 |