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 :811-08231
SPIRIT OF AMERICA INVESTMENT FUND, INC.
(Exact name of registrant as specified in charter)
477 Jericho Turnpike
P.O. Box 9006
Syosset, NY 11791-9006
(Address of principal executive offices) (Zip code)
Mr. David Lerner
David Lerner Associates
477 Jericho Turnpike
P.O. Box 9006
Syosset, NY 11791-9006
(Name and address of agent for service)
Registrant’s telephone number, including area code:1-516-390-5565
Date of fiscal year end:December 31
Date of reporting period:December 31, 2019
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, 450 Fifth Street, NW, 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.
ANNUAL REPORT
DECEMBER 31, 2019
Spirit of America Real Estate Income and Growth Fund
Spirit of America Large Cap Value Fund
Spirit of America Municipal Tax Free Bond Fund
Spirit of America Income Fund
Spirit of America Income & Opportunity Fund
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, David Lerner Associates Inc. or from your respective Fund(s). Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from your Fund(s) electronically by contacting your investment counselor at David Lerner Associates Inc. or, if you hold your shares directly through the Fund(s), by calling Shareholder Services at (800) 452-4892.
You may elect to receive all future reports in paper free of charge. You can inform your respective Fund(s) that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this document or by contacting your investment counselor at David Lerner Associates Inc. If you hold your shares directly through the Fund(s), you may call Shareholder Services at (800) 452-4892. Your election to receive reports in paper will apply to all funds held within the fund family.
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
MANAGEMENT DISCUSSION (UNAUDITED)
Dear Shareholder,
We are happy to have this opportunity to share with you, our shareholders, the Annual Report for the Spirit of America Real Estate Income and Growth Fund (the “Fund”). This includes a review of our performance in 2019, in addition to a discussion of the economy, and our thoughts on the securities markets.
At Spirit of America Investment Funds, our team takes a comprehensive approach to investing. We analyze economic trends, and evaluate industries that could benefit from those trends. Based upon this analysis, we select investments we believe are positioned to provide the best potential returns. Our portfolio managers and analysts utilize their extensive backgrounds in their respective fields to carefully scrutinize each security in the portfolio on an ongoing basis.
The Fund’s investment philosophy continues to be to seek enduring value in the physical structures of America by investing in real estate companies which own office buildings, shopping malls, hotels, apartments, and other income producing assets. Our goal is to maximize total return to shareholders by benefitting from the income generated through the rental of these properties, while also participating in potential long term appreciation of asset values.
We thank you for your support, and look forward to your future investment in the Spirit of America Real Estate Income and Growth Fund.
Sincerely,
David Lerner |
Doug Revello |
1 |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Economic Summary
At the end of December, the U.S. Bureau of Economic Analysis released its final reading of the third quarter 2019 gross domestic product (GDP) to show an increase in the annual growth rate of 2.1%. This pace is lower than the 3.1% pace seen in the first quarter of 2019, and slightly higher than the second quarter growth rate of 2.0%. The quarter saw increases in consumer spending, government spending, housing investment and exports, while business investment and inventory investment decreased. For the year, economists are forecasting growth around 2.3%, which would come in below the President’s 3% target.
The December data released from the U.S. Bureau of Labor Statistics revealed nonfarm payrolls rose by a disappointing 145,000, the least since May, falling below expectations of 160,000. Previous months were also revised lower. The glittering 266,000 initial estimate for November came down 10,000 while October’s fell from 156,000 to 152,000. For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011. Unemployment held steady after hitting a 50-year low in September at 3.5%. Wages rose 2.9% in December, below the 3.1% projection, slowing sharply from the decade high 3.6% pace in October. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
At the December meeting of the policymaking Federal Open Market Committee (FOMC), Fed officials voted to leave the benchmark interest rate unchanged while remaining in a range of 1.50% to 1.75%. This pause comes after three consecutive meetings at which the Fed officials chose to cut rates by 0.25%. In its summary of economic projections, the Fed signaled that it expects an extended pause in rate changes. The committee views the current stance of monetary policy as appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective. Members also noted that job gains have been solid, while the unemployment rate has remained low. Indicators suggest that household spending has been rising at a strong pace, while business fixed investment and exports remain weak. The Committee reiterated that it would continue to watch the data to see if global developments and “muted” inflationary pressures affect the U.S. economy.
Market Commentary
In 2019 the FTSE Nareit All Equity REITs Index delivered a total return of 28.66%. All 12 REIT sectors had positive total returns for the year. The S&P 500’s total return was 31.5% for the year. The leading REIT industry was the Industrial Sector which finished 2019 with a strong 48.71% total return. Three other sectors of the FTSE Nareit all Equity REITs index also saw positive returns in 2019 of over 40%; which were the Data Centers 44.21%, Timberland 42.00%, & Infrastructure 41.95% . Retail was the worst performing sector finishing 2019 with a positive total return of over 10.65%.
Fund Summary
The Spirit of America Real Estate Income and Growth Fund (the “Fund”), aims to provide high total return through a combination of capital appreciation and dividend income.
As of December 31, 2019 the Fund was invested over 95% in REITs. A REIT, or Real Estate Investment Trust, is a company that owns or finances income-producing real estate. REITs provide investors regular income streams, diversification and long-term capital appreciation. REITs typically pay out all of their taxable income as dividends to shareholders. REITs are tied to almost all aspects of the economy, including apartments, hospitals, hotels, industrial facilities, infrastructure, nursing homes, offices, shopping malls, storage centers, and student housing.
Return Summary
The Fund had a total one year return of 30.03% (no load, gross of fees). This compares to the 25.83% returned by its benchmark, the MSCI US REIT Index, for the same period. That result does not take the sales charge and expense ratio into account.
The material factors that affected the Fund were market direction and security selection. The Funds outperformance was primarily due to being overweight in the Data Center subset of the Specialty REITS sector which saw a total return of 44.21% in 2019. The Fund was also over 8% below its benchmark in the Retail REITS sector which had the lowest total return of all the REIT sectors in 2019. The Fund did not rely on derivatives or leverage strategies.
Including sales charge and expenses, as of December 31, 2019 the Fund’s Class A Shares one year return was 21.29%. The annualized five year return was 4.58% per year, while the average annual return over the past ten years was 9.94%.
2 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Summary of Portfolio Holdings (Unaudited) As of December 31, 2019 | ||||||||
Residential (REITs) | 24.55 | % | $ | 22,296,105 | ||||
Specialized (REITs) | 24.58 | % | 22,318,202 | |||||
Industrial (REITs) | 12.00 | % | 10,895,092 | |||||
Office (REITs) | 9.64 | % | 8,756,320 | |||||
Retail (REITs) | 7.39 | % | 6,707,545 | |||||
Hotel & Resort (REITs) | 6.92 | % | 6,280,309 | |||||
Health Care (REITs) | 4.52 | % | 4,107,209 | |||||
Energy | 3.70 | % | 3,356,542 | |||||
Diversified (REITs) | 3.44 | % | 3,120,860 | |||||
Mortgage (REITs) | 2.74 | % | 2,490,479 | |||||
Municipal Bonds | 0.21 | % | 193,864 | |||||
Real Estate Operating Companies | 0.14 | % | 127,960 | |||||
Financial Exchanges & Data | 0.11 | % | 102,540 | |||||
Utilities | 0.06 | % | 51,820 | |||||
Financials | 0.00 | % | 1,912 | |||||
Total Investments | 100.00 | % | $ | 90,806,759 |
3 |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Average Annual Total Returns (Unaudited) For the periods ended December 31, 2019 | ||||
1 Year | 5 Year | 10 Year | Expense Ratios3 | |
Class A Shares - with load | 21.29% | 4.58% | 9.94% | 1.54% |
Class A Shares - no load | 28.06% | 5.72% | 10.54% | 1.54% |
Class C Shares - with load1 | 26.15% | 4.99% | 9.77% | 2.24% |
Class C Shares - no load1 | 27.15% | 4.99% | 9.77% | 2.24% |
MSCI US REIT Index2 | 25.83% | 7.04% | 11.93% |
The Fund’s past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total returns, with load, include the 5.25% maximum sales charge for the Class A Shares or the 1.00% maximum deferred sales charge for the Class C Shares.
1 | Class C Shares commenced operations on March 15, 2016. Prior to March 15, 2016, performance is based on the performance of Class A Shares adjusted for the Class C Shares’ 12b-1 fees and contingent deferred sales charge. |
2 | The Morgan Stanley Capital International (“MSCI”) US REIT Index is an unmanaged index. The MSCI US REIT Index is a free float- adjusted market capitalization weighted index that is comprised of equity Real Estate Investment Trusts (“REITs”) that are included in the MSCI US Investable Market 2500 Index, with the exception of specialty equity REITs that do not generate a majority of their revenue and income from real estate rental and leasing operations. The index represents approximately 85% of the US REIT universe. The performance of an index assumes no transaction costs, taxes, management fees or other expenses. A direct investment in an index is not possible. |
3 | Reflects the expense ratio as disclosed in the Fund’s prospectus dated May 1, 2019. Additional information pertaining to the Fund’s expense ratios as of December 31, 2019, can be found in the financial highlights. |
Fixed Distribution Policy (Unaudited)
The Board of Directors of the Fund has set a fixed distribution policy whereby the Fund will declare semi-annual distributions comprised of income earned, if any, realized long-term capital gains, if any, and to the extent necessary, return of capital, payable as of June 30 and December 31 of each year in the annual aggregate minimum amount of $0.85 per share. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of these distributions. The Fund’s total return based on net asset value is presented on the prior page as well as in the Financial Highlights tables.
4 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Growth of $10,000 (Unaudited)
(includes one-time 5.25% maximum sales charge and reinvestment of all distributions)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund over the past 10 years.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and net asset value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, please call (800) 452-4892.
5 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
MANAGEMENT DISCUSSION (UNAUDITED)
Dear Shareholder,
We welcome this opportunity to share with you, our investors, the Annual Report for the Spirit of America Large Cap Value Fund, (the “Fund”) along with our thoughts on the market and recent events.
At Spirit of America, we take a comprehensive approach to investing. Our portfolio managers and analysts use their extensive backgrounds in their respective fields to carefully scrutinize each security in the portfolio on an ongoing basis. We evaluate economic trends, we analyze sectors that could benefit from those trends, and finally, invest in companies that we believe possess strong fundamentals.
We believe that investing in sound companies with attractive valuations will help enhance the long-term returns of the Fund.
The Fund’s investment philosophy continues to be to focus on the large cap value segment of the U.S. equity market. Among the valuation factors used to evaluate these stocks are companies with lower debt ratios than their peer group and companies that are undervalued vs. the company’s intrinsic worth and future income potential.
We appreciate your continued support and look forward to your future investment in the Spirit of America Large Cap Value Fund.
Sincerely,
David Lerner |
Doug Revello |
6 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Economic Summary
At the end of December, the U.S. Bureau of Economic Analysis released its final reading of the third quarter 2019 gross domestic product (GDP) to show an increase in the annual growth rate of 2.1%. This pace is lower than the 3.1% pace seen in the first quarter of 2019, and slightly higher than the second quarter growth rate of 2.0%. The quarter saw increases in consumer spending, government spending, housing investment and exports, while business investment and inventory investment decreased. For the year, economists are forecasting growth around 2.3%, which would come in below the President’s 3% target.
The December data released from the U.S. Bureau of Labor Statistics revealed nonfarm payrolls rose by a disappointing 145,000, the least since May, falling below expectations of 160,000. Previous months were also revised lower. The glittering 266,000 initial estimate for November came down 10,000 while October’s fell from 156,000 to 152,000. For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011. Unemployment held steady after hitting a 50-year low in September at 3.5%. Wages rose 2.9% in December, below the 3.1% projection, slowing sharply from the decade high 3.6% pace in October. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
At the December meeting of the policymaking Federal Open Market Committee (FOMC), Fed officials voted to leave the benchmark interest rate unchanged while remaining in a range of 1.50% to 1.75%. This pause comes after three consecutive meetings at which the Fed officials chose to cut rates by 0.25%. In its summary of economic projections, the Fed signaled that it expects an extended pause in rate changes. The committee views the current stance of monetary policy as appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective. Members also noted that job gains have been solid, while the unemployment rate has remained low. Indicators suggest that household spending has been rising at a strong pace, while business fixed investment and exports remain weak. The Committee reiterated that it would continue to watch the data to see if global developments and “muted” inflationary pressures affect the U.S. economy.
Market Commentary
The U.S. markets finished 2019 with strong performances across all the sectors, after a rough ending in 2018. The S&P 500 finished the year up 28.5%, which marked its best annual return since 2013. The NASDAQ, led by the technology sector, ended the year with a total return of 35%. The Dow Jones Industrial Average completed the year by posting a return of 22%. The markets surge can be partly attributed to the dramatic policy shift at the Federal Reserve. After raising rates four times in 2018 the philosophy completely flipped leading the Fed to lower rates three times thus leaving the Fed’s key rate back to a range of 1.50% - 1.75%. The Fed did not want the U.S dragged down with the threat of a slowing global economy. Also helping U.S. markets in 2019 was the Trump administration finalizing an initial agreement on a trade deal with China. All of these factors combined to help all the major U.S. markets finish 2019 at or near record highs.
Fund Summary
The Spirit of America Value Fund (the “Fund”), seeks to provide capital appreciation with a secondary objective of current income. The emphasis of the Fund is focused on investing in a diversified portfolio. We are invested in all 11 sectors on the S&P 500 Index.
The Fund does not make decisions based on complicated algorithms. We are not a hedge fund. At Spirit of America, technology works for us; we do not work for technology. We do not receive buy signals from a computer generated model. We invest the old fashioned way – utilizing hard work, intensive research, and intuitive decisions. Our decisions are based on the experience of our dedicated team of professionals.
Return Summary
The Fund, had a total return of 31.51% (no load, gross of fees) in 2019. This compares to its benchmark, the S&P 500 Index, which was up 31.49% for the year 2019.
7 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
The material factors that affected the Fund’s outperformance of its benchmark, the S&P 500, were market direction and security selection. Unlike the previous year which only saw 4 of the S&P 500 sectors with positive returns; 2019 finished with all eleven sectors in positive territory. The Information Technology sector ended 2019 with the highest total return of 50.29% in the S&P 500 and the Fund outweighed its benchmark in the IT sector by over 8%. The energy sector was the lowest returning sector of the S&P 500 while still managing a positive 11.81% year ending return. The Fund is only 3.85% weighted in the energy sector as opposed to its benchmark being 4.33% energy weighted. These percentage differences helped the Fund outperform its benchmark in 2019. The Fund did not rely on derivatives or leverage strategies.
Including sales charge and expenses, as of December 31, 2019 the Fund’s Class A Shares one year return was 22.72%. The annualized five year return was 7.46% per year, while the average annual return over the past ten years was 9.69%.
Summary of Portfolio Holdings (Unaudited) As of December 31, 2019 | ||||||||
Information Technology | 31.53 | % | $ | 36,021,710 | ||||
Financials | 14.78 | % | 16,892,060 | |||||
Health Care | 12.54 | % | 14,329,317 | |||||
Industrials | 9.89 | % | 11,308,331 | |||||
Consumer Discretionary | 6.93 | % | 7,922,500 | |||||
Real Estate Investment Trusts | 5.74 | % | 6,562,885 | |||||
Communication Services | 5.67 | % | 6,480,360 | |||||
Consumer Staples | 5.48 | % | 6,265,306 | |||||
Energy | 3.86 | % | 4,412,544 | |||||
Utilities | 2.20 | % | 2,519,925 | |||||
Materials | 1.38 | % | 1,572,280 | |||||
Total Investments | 100.00 | % | $ | 114,287,218 |
8 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Average Annual Total Returns (Unaudited) For the periods ended December 31, 2019 | ||||
1 Year | 5 Year | 10 Year | Expense Ratios3 | |
Class A Shares - with load | 22.72% | 7.46% | 9.69% | 1.52% |
Class A Shares - no load | 29.54% | 8.63% | 10.29% | 1.52% |
Class C Shares - with load1 | 27.59% | 7.83% | 9.50% | 2.22% |
Class C Shares - no load1 | 28.59% | 7.83% | 9.50% | 2.22% |
S&P 500 Index2 | 31.49% | 11.70% | 13.56% |
The Fund’s past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total returns, with load, include the 5.25% maximum sales charge for the Class A Shares or the 1.00% maximum deferred sales charge for the Class C Shares.
1 | Class C Shares commenced operations on March 15, 2016. Prior to March 15, 2016, performance is based on the performance of Class A Shares adjusted for the Class C Shares’ 12b-1 fees and contingent deferred sales charge. |
2 | S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure the performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The performance of an index assumes no transaction costs, taxes, management fees or other expenses. A direct investment in an index is not possible. |
3 | Reflects the expense ratio as disclosed in the Fund’s prospectus dated May 1, 2019. Additional information pertaining to the Fund’s expense ratios as of December 31, 2019, can be found in the financial highlights. |
Fixed Distribution Policy (Unaudited)
The Board of Directors of the Fund has set a fixed distribution policy whereby the Fund will declare semi-annual distributions comprised of income earned, if any, realized long-term capital gains, if any, and to the extent necessary, return of capital, payable as of June 30 and December 31 of each year in the annual aggregate minimum amount of $1.40 per share. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of these distributions. The Fund’s total return based on net asset value is presented in the table above as well as in the Financial Highlights tables.
9 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Growth of $10,000 (Unaudited)
(includes one-time 5.25% maximum sales charge and reinvestment of all distributions)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund over the past 10 years.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and net asset value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, please call (800) 452-4892.
10 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED)
Dear Shareholder,
We are very pleased to provide the 2019 Annual report for the Spirit of America Municipal Tax Free Bond Fund, (“the Fund”). We look forward to continued inflows and further development of the Fund.
Our many years of experience in the municipal bond market have helped us to pursue a balance between yield and quality. Our goal is to continue seeking current income that is exempt from federal income tax, while employing a relatively conservative approach to investing in the municipal market. Although the mandate of the Fund allows it to invest in lower rated securities, at this time, the focus will continue to be investing in bonds which are investment grade.
We appreciate your support of our fund and look forward to your future investment in the Spirit of America Municipal Tax Free Bond Fund.
Thank you for being a part of the Spirit of America Family of Funds.
Sincerely,
David Lerner |
Mark Reilly |
11 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Economic Summary
At the end of December, the U.S. Bureau of Economic Analysis released its final reading of the third quarter 2019 gross domestic product (GDP) to show an increase in the annual growth rate of 2.1%. This pace is lower than the 3.1% pace seen in the first quarter of 2019, and slightly higher than the second quarter growth rate of 2.0%. The quarter saw increases in consumer spending, government spending, housing investment and exports, while business investment and inventory investment decreased. For the year, economists are forecasting growth around 2.3%, which would come in below the President’s 3% target.
The December data released from the U.S. Bureau of Labor Statistics revealed nonfarm payrolls rose by a disappointing 145,000, the least since May, falling below expectations of 160,000. Previous months were also revised lower. The glittering 266,000 initial estimate for November came down 10,000 while October’s fell from 156,000 to 152,000. For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011. Unemployment held steady after hitting a 50-year low in September at 3.5%. Wages rose 2.9% in December, below the 3.1% projection, slowing sharply from the decade high 3.6% pace in October. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
At the December meeting of the policymaking Federal Open Market Committee (FOMC), Fed officials voted to leave the benchmark interest rate unchanged while remaining in a range of 1.50% to 1.75%. This pause comes after three consecutive meetings at which the Fed officials chose to cut rates by 0.25%. In its summary of economic projections, the Fed signaled that it expects an extended pause in rate changes. The committee views the current stance of monetary policy as appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective. Members also noted that job gains have been solid, while the unemployment rate has remained low. Indicators suggest that household spending has been rising at a strong pace, while business fixed investment and exports remain weak. The Committee reiterated that it would continue to watch the data to see if global developments and “muted” inflationary pressures affect the U.S. economy.
Market Commentary
The municipal bond market eclipsed the $400 billion mark in volume for the fourth time since 2010, thanks to taxable trend that led to a vault in fourth quarter volume. Municipal issuance picked up the pace in December to the tune of $40.79 billion, with taxable bonds accounting for about a quarter of the month’s supply. For the year, volume jumped 21.8% to $421.69 billion from $346.06 billion in 2018. December volume this year is $57.1% higher than last year and 2019’s fourth quarter total of $143.01 billion was 54.1% higher than last year’s. For the year, taxable issuance rose to $67.27 billion from $29.95 billion in 2018. The rise in issuance in 2019 was most likely due to the use of taxable advance refundings, which jump-started the year followed by three interest rate cuts, which led to a lower interest rate environment at the end of the year.
The 30 Year US Treasury yield moved from a 2.95 on 1/2/19 to a 2.39 on 12/31/19. At the same time, the MMD Tax-Free 30 Year AAA yield began the year at 2.99 on 1/2/19 and ended the year at 2.09 on 12/31/19. 2019 was a strong year for performance for municipal bonds during times of heavy volatility due to trade wars as well as the lowering of interest rates. Treasuries with two, five and seven year maturities all posted gains for the year and the Bloomberg Barclays U.S. Treasury index had a firmly positive year-to-date total return.
Fund Summary
The Spirit of America Municipal Tax Free Bond Fund (“the Fund”), seeks to provide high current income that is exempt from federal income tax, including alternative minimum tax. The Fund focuses on quality credits in the municipal market. We are targeting a balance between attractive yield and quality investments.
The Fund can invest in lower rated securities; however we have kept our focus on investing in bonds that are investment grade. Our plan is to continue with this relatively conservative approach to investing in the municipal market.
12 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
In keeping with this philosophy, the Fund has been able to maintain attractive yields without venturing into the speculative, below investment grade, segment of the municipal market. As of December 31, 2019, approximately 94.88% of the portfolio was above investment grade, with 89.12% rated “A” or better. The average rating of holdings in the Fund is Aa3/AA-.
One of the Fund’s goals has been to diversify with respect to geographic location and sector. As of the end of December 2019, the Fund consists of 265 different positions varied across 41 states, 2 territories and the District of Columbia. The holdings range throughout various sectors, including areas such as: general obligations, healthcare, education, industrial development and other public improvement bonds.
While it certainly has not been a primary goal of the Fund, we have been able to maintain a percentage of bonds in states and territories which have a state tax exemption in New York, New Jersey and Connecticut, where a majority of our clients reside. Additionally, Puerto Rico bonds are exempt from state tax. Due to the struggles Puerto Rico has been facing, the Fund has actively managed its Puerto Rico holdings. As of December 31, 2019, Puerto Rico holdings represent 0.84% of the portfolio, down slightly from 1.13% at the end of 2018.
Return Summary
The Fund’s Class A Shares Net Asset Value (NAV) went from $9.26 to $9.45 during 2019. The Fund is currently at $69,337,115 in net assets with 1,974 shareholder accounts as of December 31, 2019.
The Fund had a total one year return of 6.03% (no load, gross of fees) for 2019. This compares to the 7.54% return of its benchmark, the Bloomberg Barclays Municipal Bond Index, for the same period. That result does not take the Fund’s sales charge and expense ratio into account. The Fund’s lower performance relative to the benchmark was largely due to its shorter duration compared to the benchmark at a time of declining interest rates.
The material factors that affected the Fund were the decline in interest rates in 2019 and the selection of high quality securities. As a result of the Fund’s focus on quality, it had very little exposure to Puerto Rico whose challenges have been well documented. The Fund does not rely on derivatives or leverage strategies.
Including the sales charge and expenses, as of December 31, 2019, the Fund’s Class A Shares one year return was 0.09%. The Fund had an annualized five year return of 1.87% and an annualized return since inception of 3.37%.
Our plan is to proceed with the same strategy that we have utilized since the Fund’s inception. We will continue to seek out municipal bonds that provide a balance between credit risk and the potential to offer high current income and consistently attractive yields.
13 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Ratings are provided by Moody’s Investor Services and Standard & Poor’s.
The Moody’s ratings in the following ratings explanations are in parenthesis.
AAA (Aaa) - The highest rating assigned by Moody’s and S&P. Capacity to pay interest and repay principal is extremely strong.
AA (Aa) - Debt has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree.
A - Debt rated “A” has a strong capacity to pay interest and repay principal, although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories.
BBB (Baa) - Debt is regarded as having an adequate capacity to pay interest and repay principal. These ratings by Moody’s and S&P are the “cut-off” for a bond to be considered investment grade. Whereas debt normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal in this category than in higher-rated categories.
BB (Bb), B, CCC (Ccc), CC (Cc), C - Debt rated in these categories is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. “BB” indicates the least degree of speculation and
“C” the highest. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or market exposure to adverse conditions and are not considered to be investment grade.
D - Debt rated “D” is in payment default. This rating category is used when interest payments or principal payments are not made on the date due, even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period.
Ratings are subject to change.
Ratings apply to the bonds in the portfolio. They do not remove market risk associated with the fund.
Ratings are based on Moody’s and S&P, as applicable. Credit ratings are based largely on the rating agency’s investment analysis at the time of rating and the rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition. The rating assigned to a security by a rating agency does not necessarily reflect its assessment of the volatility of a security’s market value or of the liquidity of an investment in the security. If securities are rated differently by the rating agencies, the higher of the two rating is applied thus improving the overall evaluation of the portfolio.
14 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Summary of Portfolio Holdings (Unaudited)
As of December 31, 2019
New York | 22.11 | % | $ | 15,202,335 | ||||
Connecticut | 10.75 | % | 7,392,074 | |||||
Florida | 8.64 | % | 5,945,506 | |||||
New Jersey | 6.54 | % | 4,496,494 | |||||
Texas | 6.30 | % | 4,330,467 | |||||
Michigan | 4.36 | % | 2,997,428 | |||||
Pennsylvania | 3.86 | % | 2,654,689 | |||||
California | 3.58 | % | 2,465,325 | |||||
Massachusetts | 3.40 | % | 2,340,273 | |||||
Indiana | 3.07 | % | 2,109,540 | |||||
Georgia | 2.46 | % | 1,694,042 | |||||
District of Columbia | 1.62 | % | 1,114,723 | |||||
Washington | 1.59 | % | 1,095,190 | |||||
Maine | 1.44 | % | 990,291 | |||||
New Mexico | 1.28 | % | 879,706 | |||||
Missouri | 1.28 | % | 878,600 | |||||
Rhode Island | 1.21 | % | 832,307 | |||||
Nevada | 1.19 | % | 817,513 | |||||
Ohio | 1.10 | % | 758,900 | |||||
Arizona | 1.04 | % | 714,265 | |||||
Louisiana | 0.92 | % | 629,478 | |||||
Puerto Rico | 0.83 | % | 568,973 | |||||
Alaska | 0.79 | % | 546,800 | |||||
Wyoming | 0.73 | % | $ | 503,003 | ||||
Virginia | 0.72 | % | 496,367 | |||||
Illinois | 0.70 | % | 478,502 | |||||
Tennessee | 0.61 | % | 421,357 | |||||
Maryland | 0.60 | % | 413,311 | |||||
South Dakota | 0.60 | % | 410,353 | |||||
Kentucky | 0.48 | % | 333,278 | |||||
Utah | 0.46 | % | 315,137 | |||||
Iowa | 0.44 | % | 305,490 | |||||
Nebraska | 0.39 | % | 268,350 | |||||
Oklahoma | 0.38 | % | 259,940 | |||||
Mississippi | 0.36 | % | 250,000 | |||||
Vermont | 0.36 | % | 249,653 | |||||
North Carolina | 0.33 | % | 227,285 | |||||
Oregon | 0.20 | % | 140,767 | |||||
North Dakota | 0.15 | % | 105,317 | |||||
Virgin Islands | 0.15 | % | 100,188 | |||||
Colorado | 0.15 | % | 100,000 | |||||
Wisconsin | 0.12 | % | 80,812 | |||||
Hawaii | 0.06 | % | 40,910 | |||||
Kansas | 0.05 | % | 35,000 | |||||
Money Market Funds | 2.60 | % | 1,791,544 | |||||
Total Investments | 100.00 | % | $ | 68,781,483 |
15 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Average Annual Total Returns (Unaudited) For the periods ended December 31, 2019 | |||||
Expense Ratios3 | |||||
1 Year | 5 Year | 10 Year | Gross | With Applicable | |
Class A Shares - with load | 0.09% | 1.87% | 3.53% | 1.11% | 0.92% |
Class A Shares - no load | 5.06% | 2.87% | 4.03% | 1.11% | 0.92% |
Class C Shares - with load1 | 3.30% | 1.94% | 3.13% | 1.96% | 1.77% |
Class C Shares - no load1 | 4.30% | 1.94% | 3.13% | 1.96% | 1.77% |
Bloomberg Barclays Municipal Bond Index2 | 7.54% | 3.53% | 4.34% |
The Fund’s past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total returns, with load, include the 4.75% maximum sales charge for the Class A Shares or the 1.00% maximum deferred sales charge for the Class C Shares.
1 | Class C Shares commenced operations on March 15, 2016. Prior to March 15, 2016, performance is based on the performance of Class A Shares adjusted for the Class C Shares’ 12b-1 fees and contingent deferred sales charge. |
2 | The Bloomberg Barclays Municipal Bond Index is an unmanaged index. The performance of an index assumes no transaction costs, taxes, management fees or other expenses. A direct investment in an index is not possible. |
3 | Reflects the expense ratio as disclosed in the Fund’s prospectus dated May 1, 2019. Spirit of America Management Corp. (the “Adviser”) has contractually agreed to waive advisory fees and/or reimburse expenses under an Operating Expenses Agreement so that the total operating expenses will not exceed 0.90% and 1.75% of the Class A Shares and Class C Shares average daily net assets, respectively, through April 30, 2020. The waiver does not include front end or contingent deferred loads, taxes, interest, dividend expenses, brokerage commissions or expenses incurred in connection with any merger, reorganization, or extraordinary expenses such as litigation. Any amounts waived or reimbursed by the Adviser are subject to reimbursement by the Fund within the following three years, provided the Fund is able to make such reimbursement and remain in compliance with the expense limitations stated above. The Operating Expense Agreement may be terminated at any time, by the Board of Directors, on behalf of the Fund, upon sixty days written notice to the Advise. Additional information pertaining to the Fund’s expense ratios as of December 31, 2019, can be found in the financial highlights. |
16 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Growth of $10,000 (Unaudited)
(includes one-time 4.75% maximum sales charge and reinvestment of all distributions)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund over the past 10 years.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and net asset value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, please call (800) 452-4892.
17 |
SPIRIT OF AMERICA INCOME FUND
MANAGEMENT DISCUSSION (UNAUDITED)
Dear Shareholder,
We are pleased to send you the 2019 Annual Report for the Spirit of America Income Fund, (the “Fund”). The Fund began operations on December 31, 2008.
As 2019 has come to an end, we could not be more proud and excited about the progress of this fund. Our goal is to continue seeking current income while investing in quality fixed income securities.
We firmly maintain our philosophy that striving for the optimal balance between yield and quality will continue to position us to achieve long term success. Our dedication to providing our investors with a fund that will merit their long term commitment and satisfaction has never been stronger. Now is an excellent time to team up with your Investment Counselor to evaluate your portfolio and make sure you are properly positioned to achieve your investment goals.
Your support is sincerely appreciated and we look forward to your continued confidence in the Spirit of America Income Fund.
Sincerely,
David Lerner |
Mark Reilly |
18 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Economic Summary
At the end of December, the U.S. Bureau of Economic Analysis released its final reading of the third quarter 2019 gross domestic product (GDP) to show an increase in the annual growth rate of 2.1%. This pace is lower than the 3.1% pace seen in the first quarter of 2019, and slightly higher than the second quarter growth rate of 2.0%. The quarter saw increases in consumer spending, government spending, housing investment and exports, while business investment and inventory investment decreased. For the year, economists are forecasting growth around 2.3%, which would come in below the President’s 3% target.
The December data released from the U.S. Bureau of Labor Statistics revealed nonfarm payrolls rose by a disappointing 145,000, the least since May, falling below expectations of 160,000. Previous months were also revised lower. The glittering 266,000 initial estimate for November came down 10,000 while October’s fell from 156,000 to 152,000. For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011. Unemployment held steady after hitting a 50-year low in September at 3.5%. Wages rose 2.9% in December, below the 3.1% projection, slowing sharply from the decade high 3.6% pace in October. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
At the December meeting of the policymaking Federal Open Market Committee (FOMC), Fed officials voted to leave the benchmark interest rate unchanged while remaining in a range of 1.50% to 1.75%. This pause comes after three consecutive meetings at which the Fed officials chose to cut rates by 0.25%. In its summary of economic projections, the Fed signaled that it expects an extended pause in rate changes. The committee views the current stance of monetary policy as appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective. Members also noted that job gains have been solid, while the unemployment rate has remained low. Indicators suggest that household spending has been rising at a strong pace, while business fixed investment and exports remain weak. The Committee reiterated that it would continue to watch the data to see if global developments and “muted” inflationary pressures affect the U.S. economy.
Market Commentary
The U.S. markets finished 2019 with strong performances across all the sectors, after a rough ending in 2018. The S&P 500 finished the year up 28.5%, which marked its best annual return since 2013. The NASDAQ, led by the technology sector, ended the year with a total return of 35%. The Dow Jones Industrial Average completed the year by posting a return of 22%. The markets surge can be partly attributed to the dramatic policy shift at the Federal Reserve. After raising rates four times in 2018 the philosophy completely flipped leading the Fed to lower rates three times thus leaving the Fed’s key rate back to a range of 1.50% - 1.75%. The Fed did not want the U.S dragged down with the threat of a slowing global economy. Also helping U.S. markets in 2019 was the Trump administration finalizing an initial agreement on a trade deal with China. All of these factors combined to help all the major U.S. markets finish 2019 at or near record highs.
The municipal bond market eclipsed the $400 billion mark in volume for the fourth time since 2010, thanks to taxable trend that led to a vault in fourth quarter volume. Municipal issuance picked up the pace in December to the tune of $40.79 billion, with taxable bonds accounting for about a quarter of the month’s supply. For the year, volume jumped 21.8% to $421.69 billion from $346.06 billion in 2018. December volume this year is $57.1% higher than last year and 2019’s fourth quarter total of $143.01 billion was 54.1% higher than last year’s. For the year, taxable issuance rose to $67.27 billion from $29.95 billion in 2018. The rise in issuance in 2019 was most likely due to the use of taxable advance refundings, which jump-started the year followed by three interest rate cuts, which led to a lower interest rate environment at the end of the year.
The 30 Year Treasury yield moved from a 2.95 on January 2, 2019 to a 2.39 on December 31, 2019. At the same time, the MMD Taxable 30 Year AAA yield began the year at 3.97 on January 2, 2019 and ended the year at 3.20 on December 31, 2019. 2019 was a strong year for performance for municipal bonds during times of heavy volatility due to trade wars as well as the lowering of interest rates. Treasuries with two, five and seven year maturities all posted gains for the year and the Bloomberg Barclays U.S. Treasury index had a firmly positive year-to-date total return.
19 |
SPIRIT OF AMERICA INCOME FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Fund Summary
The Spirit of America Income Fund (the “Fund”) is the second largest fund in the Spirit of America Family of Funds based on assets under management. The Fund’s objective is to seek high current income. The emphasis of the Fund is focused on investing in a diversified portfolio of taxable municipal bonds, income producing convertible securities, preferred stocks, collateralized mortgage obligations, and master limited partnerships (MLPs).
At the end of 2019, the Fund had over 63% of its assets in taxable municipal bonds, more than 12% in preferred stock, over 10% in corporate bonds, and over 3% in MLPs. We remain diligent in our approach to the market. Here at Spirit of America each and every credit goes through rigorous credit analysis.
The Fund does not make decisions based on complicated algorithms. We are not a hedge fund. At Spirit of America, technology works for us; we do not work for technology. We do not receive buy signals from a computer generated model.
We invest the old fashioned way – utilizing hard work, intensive research, and intuitive decisions. Our decisions are based on the experience of our dedicated team of professionals. When we began the Fund, we felt the environment was favorable to start an income fund and while past performance is no guarantee of future results; our results continue to validate that belief.
Return Summary
The Fund had a total return of 12.89% (gross of fees) for fiscal year ended December 31, 2019. This compares to the 8.72% returned by its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, for the same period.
The material factors that affected the Fund were market direction and security selection. The Fund’s outperformance relative to its benchmark was principally due to its longer duration compared to its benchmark in a declining interest rate environment. The Fund does not rely on derivatives or leverage strategies.
Including the sales charge and expenses, as of December 31, 2019, the Fund’s Class A Shares one year return was 6.33%. The annualized five year return was 3.50% and the annualized ten year return was 6.16%.
We plan to proceed with the same game plan we have employed since the Fund began: pursuing a balance between yield and risk with a focus on quality.
Summary of Portfolio Holdings (Unaudited) As of December 31, 2019 | ||||||||
Municipal Bonds | 64.21 | % | $ | 84,452,398 | ||||
Preferred Stocks | 12.30 | % | 16,183,000 | |||||
Corporate Bonds | 10.17 | % | 13,378,519 | |||||
Common Stocks | 8.85 | % | 11,639,956 | |||||
Collateralized Mortgage Obligations | 0.12 | % | 162,213 | |||||
Money Market Funds | 4.35 | % | 5,725,999 | |||||
Total Investments | 100.00 | % | $ | 131,542,085 |
20 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Average Annual Total Returns (Unaudited) For the periods ended December 31, 2019 | |||||
Expense Ratios3 | |||||
1 Year | 5 Year | 10 Year | Gross | With | |
Class A Shares - with load | 6.33% | 3.50% | 6.16% | 1.13% | 1.12% |
Class A Shares - no load | 11.64% | 4.51% | 6.68% | 1.13% | 1.12% |
Class C Shares - with load1 | 9.79% | 3.71% | 5.87% | 1.88% | 1.87% |
Class C Shares - no load1 | 10.79% | 3.71% | 5.87% | 1.88% | 1.87% |
Bloomberg Barclays U.S. Aggregate Bond Index2 | 8.72% | 3.05% | 3.75% |
The Fund’s past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total returns, with load, include the 4.75% maximum sales charge for the Class A Shares or the 1.00% maximum deferred sales charge for the Class C Shares.
1 | Class C Shares commenced operations on March 15, 2016. Prior to March 15, 2016, performance is based on the performance of Class A Shares adjusted for the Class C Shares’ 12b-1 fees and contingent deferred sales charge. |
2 | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index. The performance of an index assumes no transaction costs, taxes, management fees or other expenses. A direct investment in an index is not possible. |
3 | Reflects the expense ratio as disclosed in the Fund’s prospectus dated May 1, 2019. Spirit of America Management Corp. (the “Adviser”) has contractually agreed to waive advisory fees and/or reimburse expenses under an Operating Expenses Agreement so that the total operating expenses will not exceed 1.10% and 1.85% of the Class A Shares and Class C Shares average daily net assets, respectively, through April 30, 2020. The waiver does not include front end or contingent deferred loads, taxes, interest, dividend expenses, brokerage commissions or expenses incurred in connection with any merger, reorganization, or extraordinary expenses such as litigation. Any amounts waived or reimbursed by the Adviser are subject to reimbursement by the Fund within the following three years, provided the Fund is able to make such reimbursement and remain in compliance with the expense limitations stated above. The Operating Expense Agreement may be terminated at any time, by the Board of Directors, on behalf of the Fund, upon sixty days written notice to the Adviser. Additional information pertaining to the Fund’s expense ratios as of December 31, 2019, can be found in the financial highlights. |
21 |
SPIRIT OF AMERICA INCOME FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Growth of $10,000 (Unaudited)
(includes one-time 4.75% maximum sales charge and reinvestment of all distributions)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund over the past 10 years.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and net asset value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, please call (800) 452-4892.
22 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
MANAGEMENT DISCUSSION (UNAUDITED)
Dear Shareholder,
We are pleased to send you the Annual Report for The Spirit of America Income & Opportunity Fund, (the “Fund”). The Fund began operations on July 8, 2013.
We hope you are as excited as we are to be a part of our fund. The Fund is a comprehensive portfolio of fixed income and equity securities. This fund gives our clients a solid base in high quality fixed income securities and at the same time a diverse portfolio of equity securities.
The Fund is designed to deliver attractive returns and achieve long term success for our investors. Our dedication to providing you with a fund that will merit your long term commitment and satisfaction has never been stronger. Now is an excellent time to team up with your Investment Counselor to evaluate your portfolio and make sure you are properly positioned to achieve your investment goals for the upcoming year.
We appreciate your support of our fund and look forward to your continued investment in The Spirit of America Income & Opportunity Fund.
Sincerely,
David Lerner |
Mark Reilly* |
* | Effective January 16, 2020, Mark Reilly has replaced William Mason as Portfolio Manager for the Spirit of America Income & Opportunity Fund. |
23 |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Economic Summary
At the end of December, the U.S. Bureau of Economic Analysis released its final reading of the third quarter 2019 gross domestic product (GDP) to show an increase in the annual growth rate of 2.1%. This pace is lower than the 3.1% pace seen in the first quarter of 2019, and slightly higher than the second quarter growth rate of 2.0%. The quarter saw increases in consumer spending, government spending, housing investment and exports, while business investment and inventory investment decreased. For the year, economists are forecasting growth around 2.3%, which would come in below the President’s 3% target.
The December data released from the U.S. Bureau of Labor Statistics revealed nonfarm payrolls rose by a disappointing 145,000, the least since May, falling below expectations of 160,000. Previous months were also revised lower. The glittering 266,000 initial estimate for November came down 10,000 while October’s fell from 156,000 to 152,000. For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011. Unemployment held steady after hitting a 50-year low in September at 3.5%. Wages rose 2.9% in December, below the 3.1% projection, slowing sharply from the decade high 3.6% pace in October. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
At the December meeting of the policymaking Federal Open Market Committee (FOMC), Fed officials voted to leave the benchmark interest rate unchanged while remaining in a range of 1.50% to 1.75%. This pause comes after three consecutive meetings at which the Fed officials chose to cut rates by 0.25%. In its summary of economic projections, the Fed signaled that it expects an extended pause in rate changes. The committee views the current stance of monetary policy as appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective. Members also noted that job gains have been solid, while the unemployment rate has remained low. Indicators suggest that household spending has been rising at a strong pace, while business fixed investment and exports remain weak. The Committee reiterated that it would continue to watch the data to see if global developments and “muted” inflationary pressures affect the U.S. economy.
Market Commentary
The U.S. markets finished 2019 with strong performances across all the sectors, after a rough ending in 2018. The S&P 500 finished the year up 28.5%, which marked its best annual return since 2013. The NASDAQ, led by the technology sector, ended the year with a total return of 35%. The Dow Jones Industrial Average completed the year by posting a return of 22%. The markets surge can be partly attributed to the dramatic policy shift at the Federal Reserve. After raising rates four times in 2018 the philosophy completely flipped leading the Fed to lower rates three times thus leaving the Fed’s key rate back to a range of 1.50% - 1.75%. The Fed did not want the U.S dragged down with the threat of a slowing global economy. Also helping U.S. markets in 2019 was the Trump administration finalizing an initial agreement on a trade deal with China. All of these factors combined to help all the major U.S. markets finish 2019 at or near record highs.
The municipal bond market eclipsed the $400 billion mark in volume for the fourth time since 2010, thanks to taxable trend that led to a vault in fourth quarter volume. Municipal issuance picked up the pace in December to the tune of $40.79 billion, with taxable bonds accounting for about a quarter of the month’s supply. For the year, volume jumped 21.8% to $421.69 billion from $346.06 billion in 2018. December volume this year is $57.1% higher than last year and 2019’s fourth quarter total of $143.01 billion was 54.1% higher than last year’s. For the year, taxable issuance rose to $67.27 billion from $29.95 billion in 2018. The rise in issuance in 2019 was most likely due to the use of taxable advance refunding’s, which jump-started the year followed by three interest rate cuts, which led to a lower interest rate environment at the end of the year.
The Fund invests a portion of its assets in Master Limited Partnerships (MLPs). The Alerian MLP Index (AMZ), a leading gauge of energy MLPs, had a total return of 6.29% for the period of December 31, 2018 through December 31, 2019. At the same time oil prices rose 34.46% with U.S. crude oil closing at $61.06, up from $45.41 at the end of 2018.
The 30 Year U.S. Treasury yield moved from a 3.02 on December 31, 2018 to a 2.391 on December 31, 2019. At the same time, the MMD Taxable 30 Year AAA yield began the year at a 3.97 on January 2, 2019 and ended the year at a 3.2 on December 31, 2019.
24 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Fund Summary
The Spirit of America Income & Opportunity Fund’s (the “Fund”) objective is to provide shareholders with current income and the potential for capital appreciation. The emphasis of the Fund is focused on investing in a diversified portfolio of equity securities, fixed income securities, and master limited partnerships (MLPs).
At the end of 2019, the Fund had more than 50% of its assets invested in taxable municipal bonds, over 9% in preferred stock, over 7% in master limited partnerships (MLPs), over 1% in corporate bonds, and over 9% in non-MLP common stock positions.
The Fund does not make decisions based on complicated algorithms. We are not a hedge fund. At Spirit of America, technology works for us; we do not work for technology. We do not receive buy signals from a computer generated model. We invest the old fashioned way – utilizing hard work, intensive research, and intuitive decisions. Our decisions are based on years of experience being involved with the markets.
Return Summary
The Fund had a total one year return of 13.79% (no load, gross of fees) as of December 31, 2019. This compares to the 8.72% return of its benchmark, the Bloomberg Barclay U.S. Aggregate Bond Index, for the same period. That result does not take the Fund’s sales charge and expense ratio into account.
As we mentioned earlier, yields fell on both the long U.S. Treasury Bond and the taxable municipal market over the year. Moreover, both MLPs and the overall the stock market continued to climb throughout the year. The upward trajectory of the stock market in addition to the bond market yields contributed to the Fund’s outperformance of the benchmark which is solely a measure of the bond market.
The material factors that affected the Fund were market direction and security selection. The holdings of the Fund were chosen based on consideration of several factors including credit ratings, market capitalization, and securities that provide income. The Fund did not rely on derivatives or leverage strategies.
Including the sales charge and expenses, as of December 31, 2019, the Fund’s Class A Shares one year return was 7.08%. The annualized five year return was 2.60% and the annualized return since inception was 3.50% as December 31, 2019.
Summary of Portfolio Holdings (Unaudited) As of December 31, 2019 | ||||||||
Municipal Bonds | 52.21 | % | $ | 12,167,586 | ||||
Common Stocks | 29.31 | % | 6,830,147 | |||||
Preferred Stocks | 9.36 | % | 2,180,604 | |||||
Money Market Funds | 3.98 | % | 926,320 | |||||
U.S. Government & Agency Obligations | 2.98 | % | 695,065 | |||||
Corporate Bonds | 2.16 | % | 502,368 | |||||
Total Investments | 100.00 | % | $ | 23,302,090 |
25 |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Average Annual Total Returns (Unaudited) For the periods ended December 31, 2019 | |||||
Expense Ratios3 | |||||
1 Year | 5 Year | Since Inception (July 8, 2013) | Gross | With | |
Class A Shares - with load | 7.08% | 2.60% | 3.50% | 1.33% | 1.27% |
Class A Shares - no load | 12.37% | 3.60% | 4.28% | 1.33% | 1.27% |
Class C Shares - with load1 | 10.58% | 2.73% | 3.43% | 2.08% | 2.02% |
Class C Shares - no load1 | 11.58% | 2.73% | 3.43% | 2.08% | 2.02% |
Bloomberg Barclays U.S. Aggregate Bond Index2 | 8.72% | 3.05% | 3.43% |
The Fund’s past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total returns, with load, include the 4.75% maximum sales charge for the Class A Shares or the 1.00% maximum deferred sales charge for the Class C Shares.
1 | Class C Shares commenced operations on March 15, 2016. Prior to March 15, 2016, performance is based on the performance of Class A Shares adjusted for the Class C Shares’ 12b-1 fees and contingent deferred sales charge. |
2 | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index. The performance of an index assumes no transaction costs, taxes, management fees or other expenses. A direct investment in an index is not possible. |
3 | Reflects the expense ratio as disclosed in the Fund’s prospectus dated May 1, 2019. Spirit of America Management Corp. (the “Adviser”) has contractually agreed to waive advisory fees and/or reimburse expenses under an Operating Expenses Agreement so that the total operating expenses will not exceed 1.25% and 2.00% of the Class A Shares and Class C Shares average daily net assets, respectively, through April 30, 2020. The waiver does not include front end or contingent deferred loads, taxes, interest, dividend expenses, brokerage commissions or expenses incurred in connection with any merger, reorganization, or extraordinary expenses such as litigation. Any amounts waived or reimbursed by the Adviser are subject to reimbursement by the Fund within the following three years, provided the Fund is able to make such reimbursement and remain in compliance with the expense limitations stated above. The Operating Expense Agreement may be terminated at any time, by the Board of Directors, on behalf of the Fund, upon sixty days written notice to the Adviser. Additional information pertaining to the Fund’s expense ratios as of December 31, 2019, can be found in the financial highlights. |
Fixed Distribution Policy (Unaudited)
The Board of Directors of the Fund has set a fixed distribution policy whereby the Fund will declare semi-annual distributions comprised of income earned, if any, realized long-term capital gains, if any, and to the extent necessary, return of capital, payable as of June 30 and December 31 of each year in the annual aggregate minimum amount of $0.60 per share. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of these distributions. The Fund’s total return based on net asset value is presented on the prior page as well as in the Financial Highlights tables.
26 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
MANAGEMENT DISCUSSION (UNAUDITED) (CONT.)
Growth of $10,000 (Unaudited)
(includes one-time 4.75% maximum sales charge and reinvestment of all distributions)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund since inception.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and net asset value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, please call (800) 452-4892.
27 |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
SCHEDULE OF INVESTMENTS | December 31, 2019
Shares | Market Value | |||||||
Common Stocks 97.32% | ||||||||
Diversified REITs 3.43% | ||||||||
American Assets Trust, Inc. | 8,400 | $ | 385,560 | |||||
Lexington Realty Trust | 2,700 | 28,674 | ||||||
Liberty Property Trust | 11,650 | 699,583 | ||||||
STORE Capital Corporation | 4,080 | 151,939 | ||||||
VEREIT, Inc. | 5,000 | 46,200 | ||||||
WP Carey, Inc. | 22,600 | 1,808,904 | ||||||
3,120,860 | ||||||||
Energy 3.69% | ||||||||
Cheniere Energy Partners LP | 7,100 | 282,651 | ||||||
Enterprise Products Partners LP | 48,677 | 1,370,744 | ||||||
Exxon Mobil Corporation | 750 | 52,335 | ||||||
Kinder Morgan, Inc. | 3,500 | 74,095 | ||||||
Magellan Midstream Partners LP | 8,200 | 515,534 | ||||||
Marathon Petroleum Corporation | 2,109 | 127,067 | ||||||
MPLX LP | 12,386 | 315,348 | ||||||
Parsley Energy, Inc., Class A | 500 | 9,455 | ||||||
Phillips 66 | 1,750 | 194,968 | ||||||
USA Compression Partners, LP | 12,000 | 217,680 | ||||||
Valero Energy Corporation | 2,100 | 196,665 | ||||||
3,356,542 | ||||||||
Financials 0.00% | ||||||||
Ashford, Inc.(a) | 81 | 1,912 | ||||||
Health Care REITs 4.52% | ||||||||
Global Medical REIT, Inc. | 15,000 | 198,450 | ||||||
Healthcare Trust of America, Inc., Class A | 5,000 | 151,400 | ||||||
Healthpeak Properties, Inc. | 15,768 | 543,523 | ||||||
Omega Healthcare Investors, Inc. | 1,000 | 42,350 | ||||||
Senior Housing Properties Trust | 2,900 | 24,476 | ||||||
Ventas, Inc. | 12,650 | 730,411 | ||||||
Welltower, Inc. | 29,550 | 2,416,599 | ||||||
4,107,209 | ||||||||
Hotel & Resort REITs 6.19% | ||||||||
Apple Hospitality REIT, Inc. | 54,210 | 880,912 | ||||||
Braemar Hotels & Resorts, Inc. | 17,400 | 155,382 | ||||||
DiamondRock Hospitality Company | 164,647 | 1,824,289 | ||||||
Pebblebrook Hotel Trust | 47,081 | 1,262,242 | ||||||
RLJ Lodging Trust | 66,134 | 1,171,894 | ||||||
Sotherly Hotels, Inc. | 49,000 | 332,220 | ||||||
5,626,939 | ||||||||
Industrial REITs 11.99% | ||||||||
Duke Realty Corporation | 1,000 | 34,670 | ||||||
Innovative Industrial Properties, Inc. | 800 | 60,696 | ||||||
Prologis, Inc. | 92,038 | 8,204,267 | ||||||
STAG Industrial, Inc. | 28,150 | 888,695 | ||||||
Terreno Realty Corporation | 31,525 | 1,706,764 | ||||||
10,895,092 |
See accompanying notes which are an integral part of these financial statements.
28 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Mortgage REITs 2.74% | ||||||||
Blackstone Mortgage Trust, Inc., Class A | 28,200 | $ | 1,049,604 | |||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 15,767 | 507,382 | ||||||
Starwood Property Trust, Inc. | 37,550 | 933,493 | ||||||
2,490,479 | ||||||||
Office REITs 9.57% | ||||||||
Alexandria Real Estate Equities, Inc. | 5,700 | 921,006 | ||||||
Boston Properties, Inc. | 13,015 | 1,794,248 | ||||||
City Office REIT, Inc. | 100,558 | 1,359,544 | ||||||
Hudson Pacific Properties, Inc. | 42,600 | 1,603,890 | ||||||
Kilroy Realty Corporation | 16,615 | 1,393,998 | ||||||
SL Green Realty Corporation | 14,300 | 1,313,884 | ||||||
Vornado Realty Trust | 4,600 | 305,900 | ||||||
8,692,470 | ||||||||
Real Estate Operating Companies 0.14% | ||||||||
Brookfield Property Partners, LP | 7,000 | 127,960 | ||||||
Residential REITs 24.39% | ||||||||
American Campus Communities, Inc. | 3,550 | 166,956 | ||||||
Apartment Investment & Management Company, Class A | 40,050 | 2,068,582 | ||||||
AvalonBay Communities, Inc. | 11,590 | 2,430,423 | ||||||
Camden Property Trust | 15,150 | 1,607,415 | ||||||
Equity LifeStyle Properties, Inc. | 40,300 | 2,836,717 | ||||||
Equity Residential | 33,465 | 2,707,988 | ||||||
Essex Property Trust, Inc. | 9,136 | 2,748,657 | ||||||
Mid-America Apartment Communities, Inc. | 12,522 | 1,651,151 | ||||||
Sun Communities, Inc. | 25,300 | 3,797,530 | ||||||
UDR, Inc. | 46,081 | 2,151,983 | ||||||
22,167,402 | ||||||||
Retail REITs 6.78% | ||||||||
Brixmor Property Group, Inc. | 40,675 | 878,987 | ||||||
Federal Realty Investment Trust | 9,475 | 1,219,717 | ||||||
Kimco Realty Corporation | 37,819 | 783,232 | ||||||
Realty Income Corporation | 16,980 | 1,250,237 | ||||||
Regency Centers Corporation | 12,200 | 769,698 | ||||||
Simon Property Group, Inc.(b) | 7,693 | 1,145,949 | ||||||
Spirit MTA REIT | 1,140 | 875 | ||||||
Spirit Realty Capital, Inc. | 2,280 | 112,130 | ||||||
6,160,825 | ||||||||
Specialized REITs 23.88% | ||||||||
American Tower Corporation | 2,300 | 528,586 | ||||||
CoreSite Realty Corporation | 30,825 | 3,456,099 | ||||||
Crown Castle International Corporation | 2,100 | 298,515 | ||||||
CubeSmart | 17,750 | 558,770 | ||||||
CyrusOne, Inc. | 42,700 | 2,793,861 | ||||||
Digital Realty Trust, Inc. | 39,181 | 4,691,533 | ||||||
Equinix, Inc. | 5,425 | 3,166,572 | ||||||
Extra Space Storage, Inc. | 12,695 | 1,340,846 | ||||||
Gaming and Leisure Properties, Inc. | 1,000 | 43,050 | ||||||
Life Storage, Inc. | 12,050 | 1,304,774 | ||||||
QTS Realty Trust, Inc., Class A | 64,650 | 3,508,556 |
See accompanying notes which are an integral part of these financial statements.
29 |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Specialized REITs (cont.) | ||||||||
Weyerhaeuser Company | 500 | $ | 15,100 | |||||
21,706,262 | ||||||||
Total Common Stocks | ||||||||
(Cost $53,830,020) | 88,453,952 | |||||||
Preferred Stocks 2.38% | ||||||||
Financial Exchanges & Data 0.11% | ||||||||
Arch Capital Group Ltd., Series E, 5.25% | 2,000 | 50,960 | ||||||
Arch Capital Group Ltd., Series F, 5.45% | 2,000 | 51,580 | ||||||
102,540 | ||||||||
Hotel & Resort REITs 0.73% | ||||||||
Ashford Hospitality Trust, Inc., Series F, 7.38% | 6,000 | 131,760 | ||||||
Hersha Hospitality Trust, Series D, 6.50% | 5,000 | 124,500 | ||||||
Hersha Hospitality Trust, Series E, 6.50% | 5,000 | 125,000 | ||||||
Pebblebrook Hotel Trust, Series F, 6.30% | 2,500 | 64,250 | ||||||
Sotherly Hotels, Inc., Series B, 8.00% | 6,000 | 156,360 | ||||||
Sotherly Hotels, Inc., Series C, 7.88% | 2,000 | 51,500 | ||||||
653,370 | ||||||||
Office REITs 0.07% | ||||||||
Vornado Realty Trust, Series M, 5.25% | 2,500 | 63,850 | ||||||
Residential REITs 0.14% | ||||||||
American Homes 4 Rent, Series G, 5.88% | 2,000 | 52,300 | ||||||
Bluerock Residential Growth REIT, Inc., Series A, 7.13% | 3,000 | 76,403 | ||||||
128,703 | ||||||||
Retail REITs 0.60% | ||||||||
Federal Realty Investment Trust, Series C, 5.00% | 6,500 | 167,310 | ||||||
Monmouth Real Estate Investment Corporation, Series C, 6.13% | 4,000 | 99,680 | ||||||
National Retail Properties, Inc., Series F, 5.20% | 11,000 | 279,730 | ||||||
546,720 | ||||||||
Specialized REITs 0.67% | ||||||||
Digital Realty Trust, Inc., Series I, 6.35% | 13,518 | 348,900 | ||||||
Digital Realty Trust, Inc., Series J, 5.25% | 4,000 | 103,080 | ||||||
Public Storage, Series K, 4.75% | 2,000 | 51,160 | ||||||
QTS Realty Trust, Inc., 7.13% | 4,000 | 108,800 | ||||||
611,940 | ||||||||
Water Utilities 0.06% | ||||||||
Entergy Louisiana LLC, 4.88% | 2,000 | 51,820 | ||||||
Total Preferred Stocks | ||||||||
(Cost $2,082,618) | 2,158,943 | |||||||
See accompanying notes which are an integral part of these financial statements.
30 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Municipal Bonds 0.21% | ||||||||
Franklin County Convention Facilities Authority, Revenue Bonds, 6.54%, 12/1/2036 | $ | 140,000 | $ | 193,864 | ||||
Total Municipal Bonds | ||||||||
(Cost $163,656) | 193,864 | |||||||
Total Investments — 99.91% | ||||||||
(Cost $56,076,294) | 90,806,759 | |||||||
Other Assets in Excess of Liabilities — 0.09% | 83,323 | |||||||
NET ASSETS — 100.00% | $ | 90,890,082 |
(a) | Non-income producing security. |
(b) | All or a portion of the security is held as collateral for written call options. |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
SCHEDULE OF WRITTEN OPTIONS | DECEMBER 31, 2019
Number of | Notional | Exercise | Expiration | Market | ||||||||||||||||
Written Call Options — (0.00)% | ||||||||||||||||||||
Simon Property Group, Inc. (a) | (10 | ) | $ | (148,960 | ) | $ | 150.00 | January 2020 | $ | (2,020 | ) | |||||||||
Total Written Call Options — (0.00)% | ||||||||||||||||||||
(Premiums Received $1,300) | $ | (2,020 | ) |
(a) | Non-income producing security. |
See accompanying notes which are an integral part of these financial statements.
31 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS | December 31, 2019
Shares | Market Value | |||||||
Common Stocks 98.65% | ||||||||
Communication Services 5.44% | ||||||||
AT&T, Inc. | 18,100 | $ | 707,348 | |||||
Comcast Corporation, Class A | 30,000 | 1,349,100 | ||||||
Verizon Communications, Inc. | 23,540 | 1,445,356 | ||||||
ViacomCBS, Inc., Class B | 3,050 | 128,008 | ||||||
Walt Disney Company (The) | 17,750 | 2,567,183 | ||||||
6,196,995 | ||||||||
Consumer Discretionary 6.96% | ||||||||
D.R. Horton, Inc. | 7,550 | 398,263 | ||||||
Home Depot, Inc. (The) | 12,688 | 2,770,805 | ||||||
Lennar Corporation, Class A | 6,000 | 334,740 | ||||||
McDonald’s Corporation | 8,130 | 1,606,569 | ||||||
MGM Resorts International | 6,600 | 219,582 | ||||||
Ross Stores, Inc. | 6,000 | 698,520 | ||||||
Royal Caribbean Cruises Ltd. | 600 | 80,106 | ||||||
Target Corporation | 11,100 | 1,423,131 | ||||||
TJX Companies, Inc. (The) | 6,400 | 390,784 | ||||||
7,922,500 | ||||||||
Consumer Staples 5.50% | ||||||||
Altria Group, Inc. | 10,750 | 536,532 | ||||||
Coca-Cola Company (The) | 10,900 | 603,315 | ||||||
Colgate-Palmolive Company | 2,500 | 172,100 | ||||||
Conagra Brands, Inc. | 7,100 | 243,104 | ||||||
Constellation Brands, Inc., Class A | 150 | 28,463 | ||||||
Costco Wholesale Corporation | 4,101 | 1,205,366 | ||||||
Kroger Company (The) | 3,000 | 86,970 | ||||||
Lamb Weston Holdings, Inc. | 4,800 | 412,944 | ||||||
PepsiCo, Inc. | 2,400 | 328,008 | ||||||
Philip Morris International, Inc. | 7,350 | 625,411 | ||||||
Procter & Gamble Company (The) | 4,700 | 587,030 | ||||||
Walmart, Inc. | 12,084 | 1,436,063 | ||||||
6,265,306 | ||||||||
Energy 3.88% | ||||||||
Chevron Corporation | 8,260 | 995,413 | ||||||
ConocoPhillips | 8,550 | 556,007 | ||||||
Devon Energy Corporation | 3,000 | 77,910 | ||||||
EOG Resources, Inc. | 8,700 | 728,712 | ||||||
Exxon Mobil Corporation | 8,850 | 617,553 | ||||||
Kinder Morgan, Inc. | 8,750 | 185,237 | ||||||
Marathon Petroleum Corporation | 1,579 | 95,135 | ||||||
Valero Energy Corporation | 12,350 | 1,156,577 | ||||||
4,412,544 | ||||||||
Financials 13.72% | ||||||||
American Express Company | 10,600 | 1,319,594 | ||||||
Bank of America Corporation | 45,300 | 1,595,466 | ||||||
BankUnited, Inc. | 15,350 | 561,196 | ||||||
Blackstone Group LP (The) | 16,700 | 934,198 | ||||||
Carlyle Group LP (The) | 20,950 | 672,076 | ||||||
Citigroup, Inc. | 13,200 | 1,054,548 | ||||||
CME Group, Inc. | 1,404 | 281,811 | ||||||
Fifth Third Bancorp | 15,400 | 473,396 |
See accompanying notes which are an integral part of these financial statements.
32 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Financials (cont.) | ||||||||
Goldman Sachs Group, Inc. (The) | 4,215 | $ | 969,155 | |||||
Hartford Financial Services Group, Inc. (The) | 15,000 | 911,550 | ||||||
Huntington Bancshares, Inc. | 34,750 | 524,030 | ||||||
JPMorgan Chase & Company | 16,042 | 2,236,255 | ||||||
KeyCorp | 34,575 | 699,798 | ||||||
Lazard Ltd., Class A | 10,975 | 438,561 | ||||||
M&T Bank Corporation | 2,200 | 373,450 | ||||||
Prudential Financial, Inc. | 4,500 | 421,830 | ||||||
SVB Financial Group(a) | 5,003 | 1,255,953 | ||||||
Travelers Companies, Inc. (The) | 1,400 | 191,730 | ||||||
U.S. Bancorp | 12,000 | 711,480 | ||||||
15,626,077 | ||||||||
Health Care 12.59% | ||||||||
AbbVie, Inc. | 9,950 | 880,973 | ||||||
Allergan plc | 3,300 | 630,861 | ||||||
Amgen, Inc. | 3,250 | 783,477 | ||||||
Bristol-Myers Squibb Company | 16,750 | 1,075,182 | ||||||
Centene Corporation(a) | 7,600 | 477,812 | ||||||
CVS Health Corporation | 2,961 | 219,973 | ||||||
Edwards LifeSciences Corporation(a) | 1,000 | 233,290 | ||||||
Gilead Sciences, Inc. | 5,300 | 344,394 | ||||||
Humana, Inc. | 2,800 | 1,026,256 | ||||||
Johnson & Johnson | 5,972 | 871,136 | ||||||
McKesson Corporation | 2,250 | 311,220 | ||||||
Medtronic plc | 7,469 | 847,358 | ||||||
Merck & Company, Inc. | 16,300 | 1,482,485 | ||||||
Pfizer, Inc. | 16,900 | 662,142 | ||||||
Quest Diagnostics, Inc. | 4,500 | 480,555 | ||||||
Thermo Fisher Scientific, Inc. | 2,700 | 877,149 | ||||||
UnitedHealth Group, Inc. | 7,800 | 2,293,044 | ||||||
Vertex Pharmaceuticals, Inc.(a) | 3,800 | 832,010 | ||||||
14,329,317 | ||||||||
Industrials 9.89% | ||||||||
3M Company | 2,090 | 368,718 | ||||||
American Airlines Group, Inc. | 1,000 | 28,680 | ||||||
Boeing Company (The) | 3,905 | 1,272,093 | ||||||
Caterpillar, Inc. | 10,075 | 1,487,876 | ||||||
CSX Corporation | 23,325 | 1,687,797 | ||||||
Cummins, Inc. | 2,750 | 492,140 | ||||||
Deere & Company | 6,100 | 1,056,886 | ||||||
FedEx Corporation | 8,035 | 1,214,972 | ||||||
Honeywell International, Inc. | 5,350 | 946,950 | ||||||
Johnson Controls International plc | 8,253 | 335,980 | ||||||
Masco Corporation | 11,500 | 551,885 | ||||||
United Technologies Corporation | 4,100 | 614,016 | ||||||
Waste Connections, Inc. | 13,175 | 1,196,158 | ||||||
11,254,151 | ||||||||
Information Technology 31.54% | ||||||||
Accenture plc, Class A | 6,950 | 1,463,462 | ||||||
Adobe, Inc.(a) | 3,850 | 1,269,769 | ||||||
Apple, Inc. | 19,383 | 5,691,818 | ||||||
Applied Materials, Inc. | 18,970 | 1,157,929 | ||||||
Box, Inc., Class A(a) | 7,200 | 120,816 |
See accompanying notes which are an integral part of these financial statements.
33 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Information Technology (cont.) | ||||||||
Cisco Systems, Inc. | 39,650 | $ | 1,901,614 | |||||
Cognizant Technology Solutions Corporation, Class A | 6,150 | 381,423 | ||||||
Corning, Inc. | 19,000 | 553,090 | ||||||
Dell Technologies, Inc., Class C(a) | 3,624 | 186,237 | ||||||
DXC Technology Company | 3,528 | 132,618 | ||||||
Fiserv, Inc.(a) | 1,950 | 225,479 | ||||||
Hewlett Packard Enterprise Company | 12,300 | 195,078 | ||||||
HP, Inc. | 26,000 | 534,300 | ||||||
Intel Corporation | 11,340 | 678,699 | ||||||
International Business Machines Corporation | 3,208 | 430,000 | ||||||
Mastercard, Inc., Class A | 7,400 | 2,209,566 | ||||||
Microchip Technology, Inc. | 2,050 | 214,676 | ||||||
Microsoft Corporation | 32,809 | 5,173,979 | ||||||
NetApp, Inc. | 5,600 | 348,600 | ||||||
NortonLifeLock, Inc. | 26,200 | �� | 668,624 | |||||
NVIDIA Corporation | 7,848 | 1,846,634 | ||||||
Oracle Corporation | 33,375 | 1,768,207 | ||||||
Paychex, Inc. | 8,850 | 752,781 | ||||||
Perspecta, Inc. | 764 | 20,200 | ||||||
QUALCOMM, Inc. | 8,320 | 734,074 | ||||||
Texas Instruments, Inc. | 15,125 | 1,940,386 | ||||||
Visa, Inc., Class A | 17,800 | 3,344,620 | ||||||
Workday, Inc., Class A(a) | 11,980 | 1,970,111 | ||||||
35,914,790 | ||||||||
Materials 1.38% | ||||||||
AdvanSix, Inc.(a) | 4,448 | 88,782 | ||||||
CF Industries Holdings, Inc. | 7,700 | 367,598 | ||||||
Corteva, Inc. | 7,233 | 213,807 | ||||||
Dow, Inc. | 7,583 | 415,018 | ||||||
DuPont de Nemours, Inc. | 6,894 | 442,595 | ||||||
International Paper Company | 500 | 23,025 | ||||||
WestRock Company | 500 | 21,455 | ||||||
1,572,280 | ||||||||
Real Estate Investment Trusts (REITs) 5.54% | ||||||||
Alexandria Real Estate Equities, Inc. | 2,050 | 331,239 | ||||||
American Tower Corporation | 950 | 218,329 | ||||||
Apple Hospitality REIT, Inc. | 5,550 | 90,188 | ||||||
Brixmor Property Group, Inc. | 13,500 | 291,735 | ||||||
CoreSite Realty Corporation | 550 | 61,666 | ||||||
Crown Castle International Corporation | 1,950 | 277,193 | ||||||
CyrusOne, Inc. | 11,500 | 752,445 | ||||||
DiamondRock Hospitality Company | 7,500 | 83,100 | ||||||
Digital Realty Trust, Inc. | 2,450 | 293,363 | ||||||
Equinix, Inc. | 1,750 | 1,021,475 | ||||||
Essex Property Trust, Inc. | 400 | 120,344 | ||||||
Pebblebrook Hotel Trust | 1,500 | 40,215 | ||||||
Prologis, Inc. | 6,400 | 570,496 | ||||||
QTS Realty Trust, Inc., Class A | 14,100 | 765,207 | ||||||
Realty Income Corporation | 3,550 | 261,386 | ||||||
Simon Property Group, Inc. | 250 | 37,240 | ||||||
Sun Communities, Inc. | 4,100 | 615,410 | ||||||
Terreno Realty Corporation | 3,600 | 194,904 |
See accompanying notes which are an integral part of these financial statements.
34 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Real Estate Investment Trusts (REITs) (cont.) | ||||||||
Welltower, Inc. | 3,375 | $ | 276,007 | |||||
6,301,942 | ||||||||
Utilities 2.21% | ||||||||
AES Corporation | 8,000 | 159,200 | ||||||
American Electric Power Company, Inc. | 1,750 | 165,392 | ||||||
Edison International | 1,100 | 82,951 | ||||||
NextEra Energy, Inc. | 5,600 | 1,356,096 | ||||||
WEC Energy Group, Inc. | 8,200 | 756,286 | ||||||
2,519,925 | ||||||||
Total Common Stocks | ||||||||
(Cost $61,639,208) | 112,315,827 | |||||||
Preferred Stocks 1.73% | ||||||||
Communication Services 0.25% | ||||||||
Qwest Corporation, 7.00% | 2,500 | 65,175 | ||||||
Telephone & Data Systems, Inc., 7.00% | 4,000 | 101,400 | ||||||
United States Cellular Corporation, 7.25% | 2,000 | 51,640 | ||||||
United States Cellular Corporation, 7.25% | 2,500 | 65,150 | ||||||
283,365 | ||||||||
Financials 1.11% | ||||||||
American Financial Group, Inc., 6.00% | 5,300 | 139,231 | ||||||
Annaly Capital Management, Inc., Series F, 6.95% | 2,000 | 51,700 | ||||||
Ares Management Corporation, Series A, 7.00% | 2,500 | 67,500 | ||||||
Bank of America Corporation, Series EE, 6.00% | 2,500 | 66,000 | ||||||
Bank of America Corporation, Series GG, 6.00% | 4,000 | 109,960 | ||||||
Bank of America Corporation, Series HH, 5.88% | 2,000 | 54,160 | ||||||
Bank of America Corporation, Series LL, 5.00% | 2,000 | 52,360 | ||||||
Charles Schwab Corporation (The), Series C, 6.00% | 2,000 | 52,000 | ||||||
Globe Life, Inc., 6.13% | 5,000 | 132,050 | ||||||
Hancock Holding Company, 5.95% | 2,500 | 64,125 | ||||||
JPMorgan Chase & Company, Series EE, 6.00% | 2,000 | 56,280 | ||||||
KKR & Company LP, Series B, 6.50% | 2,000 | 53,780 | ||||||
Ladenburg Thalmann Financial Services, Inc., Series A, 8.00% | 7,000 | 175,560 | ||||||
Northern Trust Corporation, Series E, 4.70% | 1,360 | 35,537 | ||||||
Prospect Capital Corporation, 6.25% | 4,000 | 101,200 | ||||||
Prudential Financial, Inc., 5.63% | 2,000 | 54,540 | ||||||
1,265,983 | ||||||||
Industrials 0.05% | ||||||||
KeyCorp, Series G, 5.63% | 2,000 | 54,180 | ||||||
Information Technology 0.09% | ||||||||
eBay, Inc., 6.00% | 4,000 | 106,920 | ||||||
Real Estate Investment Trusts 0.23% | ||||||||
Digital Realty Trust, Inc., Series L, 5.20% | 2,000 | 51,620 | ||||||
Public Storage, Series I, 4.88% | 1,917 | 49,363 | ||||||
Public Storage, Series K, 4.75% | 2,000 | 51,160 |
See accompanying notes which are an integral part of these financial statements.
35 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Real Estate Investment Trusts (cont.) | ||||||||
QTS Realty Trust, Inc., 7.13% | 4,000 | $ | 108,800 | |||||
260,943 | ||||||||
Total Preferred Stocks | ||||||||
(Cost $1,871,184) | 1,971,391 | |||||||
Total Investments — 100.38% | ||||||||
(Cost $63,510,392) | 114,287,218 | |||||||
Liabilities in Excess of Other Assets — (0.38)% | (428,060 | ) | ||||||
NET ASSETS — 100.00% | $ | 113,859,158 |
(a) | Non-income producing security. |
See accompanying notes which are an integral part of these financial statements.
36 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS | December 31, 2019
Principal | Market Value | |||||||
Municipal Bonds 96.62% | ||||||||
Alaska 0.79% | ||||||||
Alaska Housing Finance Corporation, State Single-Family Housing, Revenue Bonds, (OID), Callable 6/1/2021 @ 100, 4.13%, 12/1/2037 | $ | 45,000 | $ | 46,060 | ||||
Northern Tobacco Securitization Corporation, Refunding Revenue Bonds, (OID), 5.00%, 6/1/2032 | 500,000 | 500,740 | ||||||
546,800 | ||||||||
Arizona 1.03% | ||||||||
City of Phoenix, AZ, General Obligation Unlimited, Callable 7/1/2026 @ 100, 5.00%, 7/1/2027 | 500,000 | 614,265 | ||||||
State of Arizona Lottery Revenue, Public Improvements Revenue Bonds, (AGM), Callable 1/1/2020 @ 100, 5.00%, 7/1/2028 | 100,000 | 100,000 | ||||||
714,265 | ||||||||
California 3.56% | ||||||||
California Educational Facilities Authority, Revenue Bonds, Callable 10/1/2021 @ 100, 6.13%, 10/1/2030 | 130,000 | 141,752 | ||||||
California State Public Works Board, Revenue Bonds, Callable 11/1/2026 @ 100, 5.00%, 11/1/2029 | 600,000 | 738,834 | ||||||
City of Los Angeles, CA Wastewater System Revenue, Refunding Revenue Bonds, (OID), Callable 6/1/2022 @ 100, 3.38%, 6/1/2029 | 100,000 | 104,422 | ||||||
Los Angeles Community College District, General Obligation Unlimited, Callable 8/1/2026 @ 100, 4.00%, 8/1/2038 | 500,000 | 562,975 | ||||||
Regents of the University of California Medical Center Pooled Revenue, Revenue Bonds, Callable 5/15/2026 @ 100, 4.00%, 5/15/2037 | 145,000 | 161,288 | ||||||
State of California, General Obligation Unlimited, Callable 8/1/2025 @ 100, 5.00%, 8/1/2029 | 250,000 | 299,927 | ||||||
State of California, General Obligation Unlimited, Callable 9/1/2026 @ 100, 4.00%, 9/1/2036 | 175,000 | 197,519 | ||||||
State of California, Port, Airport & Marina Improvements, General Obligation Unlimited, (OID), Callable 11/1/2020 @ 100, 5.25%, 11/1/2030 | 250,000 | 258,608 | ||||||
2,465,325 | ||||||||
Colorado 0.14% | ||||||||
Colorado Health Facilities Authority, Refunding Revenue Bonds, Callable 1/1/2020 @ 100, 5.25%, 1/1/2030 | 100,000 | 100,000 | ||||||
Connecticut 10.66% | ||||||||
City of New Haven, CT, General Obligation Unlimited, Callable 8/15/2026 @ 100, 5.00%, 8/15/2036 | 230,000 | 266,837 | ||||||
Connecticut Housing Finance Authority, Multi-Family Housing, Revenue Bonds, Callable 11/15/2025 @ 100, 3.25%, 11/15/2036 | 250,000 | 257,553 | ||||||
Connecticut Housing Finance Authority, Multi-Family Housing, Revenue Bonds, (GO OF AUTH), Callable 5/15/2021 @ 100, 4.63%, 11/15/2041 | 215,000 | 221,020 | ||||||
Connecticut Housing Finance Authority, Refunding Revenue Bonds, Callable 5/15/2021 @ 100, 3.25%, 11/15/2027 | 150,000 | 152,631 | ||||||
Connecticut Housing Finance Authority, Refunding Revenue Bonds, Callable 5/15/2022 @ 100, 3.05%, 5/15/2031 | 200,000 | 203,428 | ||||||
Connecticut Housing Finance Authority, Refunding Revenue Bonds, (GO OF AUTH), Callable 5/15/2020 @ 100, 4.88%, 11/15/2046 | 100,000 | 100,928 | ||||||
Connecticut Housing Finance Authority, Refunding Revenue Bonds, (GO OF AUTH), Callable 5/15/2021 @ 100, 3.35%, 5/15/2028 | 250,000 | 254,435 | ||||||
Connecticut Housing Finance Authority, Refunding Revenue Bonds, (OID), Callable 11/15/2021 @ 100, 3.30%, 11/15/2037 | 250,000 | 252,875 | ||||||
Connecticut Housing Finance Authority, Revenue Bonds, Callable 5/15/2027 @ 100, 3.40%, 11/15/2037 | 25,000 | 26,088 |
See accompanying notes which are an integral part of these financial statements.
37 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Connecticut (cont.) | ||||||||
Connecticut Housing Finance Authority, State Single-Family Housing, Revenue Bonds, Callable 5/15/2021 @ 100, 3.88%, 11/15/2038 | $ | 30,000 | $ | 30,082 | ||||
Connecticut Housing Finance Authority, State Single-Family Housing, Revenue Bonds, Callable 5/15/2021 @ 100, 3.50%, 5/15/2031 | 250,000 | 253,668 | ||||||
Connecticut State Health & Educational Facility Authority, Healthcare, Hospital, & Nursing Home Improvements, Refunding Revenue Bonds, Callable 7/1/2021 @ 100, 5.00%, 7/1/2032 | 440,000 | 462,937 | ||||||
Connecticut State Health & Educational Facility Authority, Hospital Improvements, Revenue Bonds, Callable 7/1/2022 @ 100, 4.50%, 7/1/2038 | 500,000 | 521,795 | ||||||
Connecticut State Health & Educational Facility Authority, Hospital Improvements, Revenue Bonds, Callable 7/1/2022 @ 100, 5.00%, 7/1/2042 | 500,000 | 531,900 | ||||||
Connecticut State Health & Educational Facility Authority, Hospital Improvements, Revenue Bonds, (OID), Callable 7/1/2022 @ 100, 4.25%, 7/1/2031 | 500,000 | 525,795 | ||||||
Connecticut State Health & Educational Facility Authority, Private Primary Schools, Revenue Bonds, Callable 7/1/2022 @ 100, 4.00%, 7/1/2033 | 100,000 | 104,107 | ||||||
Connecticut State Health & Educational Facility Authority, Revenue Bonds, Callable 7/1/2024 @ 100, 5.00%, 7/1/2034 | 100,000 | 112,840 | ||||||
Connecticut State Health & Educational Facility Authority, Revenue Bonds, Callable 7/1/2026 @ 100, 5.00%, 7/1/2034 | 250,000 | 292,992 | ||||||
Connecticut State Health & Educational Facility Authority, Revenue Bonds, (AGM) (OID), Callable 7/1/2021 @ 100, 4.00%, 7/1/2037 | 250,000 | 255,717 | ||||||
Connecticut State Health & Educational Facility Authority, University & College Improvements, Revenue Bonds, Callable 7/1/2020 @ 100, 5.00%, 7/1/2028 | 100,000 | 101,753 | ||||||
State of Connecticut Special Tax Revenue, Highway Improvements, Revenue Bonds, Callable 10/1/2023 @ 100, 5.00%, 10/1/2030 | 250,000 | 281,175 | ||||||
State of Connecticut Special Tax Revenue, Highway Improvements, Revenue Bonds, Callable 11/1/2020 @ 100, 5.00%, 11/1/2022 | 100,000 | 103,111 | ||||||
State of Connecticut Special Tax Revenue, Public Improvements, Revenue Bonds, Callable 1/1/2023 @ 100, 5.00%, 1/1/2028 | 445,000 | 491,262 | ||||||
State of Connecticut, General Obligation Unlimited, 5.00%, 6/15/2024 | 250,000 | 289,623 | ||||||
State of Connecticut, General Obligation Unlimited, Callable 4/15/2027 @ 100, 5.00%, 4/15/2032 | 500,000 | 603,105 | ||||||
State of Connecticut, General Obligation Unlimited, 5.00%, 11/1/2020 | 100,000 | 103,212 | ||||||
State of Connecticut, Public Improvements, General Obligation Unlimited, Callable 4/15/2022 @ 100, 4.00%, 4/15/2032 | 250,000 | 261,450 | ||||||
University of Connecticut, University & College Improvements, Revenue Bonds, Callable 2/15/2024 @ 100, 5.00%, 2/15/2034 | 250,000 | 279,535 | ||||||
University of Connecticut, University & College Improvements, Revenue Bonds, (GO OF UNIVERSITY), Callable 2/15/2020 @ 100, 5.00%, 2/15/2028 | 50,000 | 50,220 | ||||||
7,392,074 | ||||||||
District of Columbia 1.61% | ||||||||
District of Columbia Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, (Fannie Mae), 4.45%, 6/15/2031 | 320,000 | 342,202 | ||||||
District of Columbia Housing Finance Agency, State Single-Family Housing, Revenue Bonds, (Fannie Mae), Callable 12/1/2021 @ 100, 4.90%, 6/1/2040 | 280,000 | 296,100 | ||||||
District of Columbia Water & Sewer Authority, Revenue Bonds, Callable 4/1/2026 @ 100, 5.00%, 10/1/2034 | 150,000 | 179,131 | ||||||
District of Columbia Water & Sewer Authority, Revenue Bonds, Callable 4/1/2026 @ 100, 5.00%, 10/1/2036 | 250,000 | 297,290 | ||||||
1,114,723 |
See accompanying notes which are an integral part of these financial statements.
38 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Florida 8.57% | ||||||||
Central Florida Expressway Authority, Revenue Bonds, Callable 7/1/2026 @ 100, 4.00%, 7/1/2035 | $ | 150,000 | $ | 167,640 | ||||
Citizens Property Insurance Corporation, Miscellaneous Purposes, Revenue Bonds, 4.75%, 6/1/2020 | 150,000 | 152,195 | ||||||
City of Miami, FL, Parking Facility Improvements, Revenue Bonds, (AGM) (OID), Callable 7/1/2020 @ 100, 5.25%, 7/1/2039 | 125,000 | 127,607 | ||||||
City of Miami, FL, Parking Facility Improvements, Revenue Bonds, (AGM) (OID), Callable 7/1/2020 @ 100, 5.25%, 7/1/2035 | 105,000 | 107,190 | ||||||
City of Orlando, FL, Public Improvements, Revenue Bonds, Callable 10/1/2024 @ 100, 5.00%, 10/1/2046 | 1,000,000 | 1,144,140 | ||||||
Escambia County Health Facilities Authority, Hospital Improvements, Revenue Bonds (OID), Callable 8/15/2020 @ 100, 5.75%, 8/15/2029 | 160,000 | 163,995 | ||||||
Escambia County Health Facilities Authority, Hospital Improvements, Revenue Bonds, (OID), Callable 8/15/2020 @ 100, 5.50%, 8/15/2024 | 250,000 | 256,205 | ||||||
Florida Gulf Coast University Financing Corporation, University & College Improvements, Revenue Bonds, Callable 2/1/2021 @ 100, 5.00%, 2/1/2028 | 100,000 | 103,814 | ||||||
Florida Higher Educational Facilities Financial Authority, University & College Improvements, Refunding Revenue Bonds, (OID), Callable 4/1/2021 @ 100, 6.00%, 4/1/2026 | 130,000 | 136,933 | ||||||
Florida Municipal Loan Council, Water Utility Improvements, Revenue Bonds, (AGM) (OID), Callable 10/1/2021 @ 100, 5.25%, 10/1/2033 | 100,000 | 106,477 | ||||||
Florida Municipal Loan Council, Water Utility Improvements, Revenue Bonds, (AGM) (OID), Callable 10/1/2021 @ 100, 5.50%, 10/1/2041 | 100,000 | 106,803 | ||||||
FSU Financial Assistance, Inc., State Single-Family Housing, Refunding Revenue Bonds, Callable 10/1/2022 @ 100, 5.00%, 10/1/2030 | 500,000 | 543,885 | ||||||
Greater Orlando Aviation Authority, Port, Airport & Marina Improvements, Revenue Bonds, Callable 10/1/2020 @ 100, 5.00%, 10/1/2025 | 200,000 | 206,022 | ||||||
Hillsborough County Industrial Development Authority, School Improvements, Revenue Bonds, 5.13%, 5/15/2037 | 210,000 | 210,170 | ||||||
JEA Water & Sewer System Revenue, Revenue Bonds, (OID), 3.88%, 10/1/2037 | 250,000 | 250,263 | ||||||
Miami-Dade County Aviation Revenue, Revenue Bonds, (OID), Callable 10/1/2020 @ 100, 5.25%, 10/1/2030 | 115,000 | 118,544 | ||||||
Miami-Dade County Aviation Revenue, Revenue Bonds, (OID), 5.25%, 10/1/2030 | 35,000 | 36,079 | ||||||
Miami-Dade County Educational Facilities Authority, University & College Improvements, Revenue Bonds, (AMBAC), 5.25%, 4/1/2031 | 260,000 | 336,913 | ||||||
North Sumter County Utility Dependent District, Water & Utility Improvements, Revenue Bonds, (AGM) (OID), Callable 10/1/2020 @ 100, 5.38%, 10/1/2040 | 400,000 | 412,180 | ||||||
Palm Beach County School District, Refunding Bonds, Certificate of Participation, 5.00%, 8/1/2024 | 45,000 | 47,781 | ||||||
School Board of Miami-Dade County/The, Certificate of Participation, Callable 2/1/2026 @ 100, 4.00%, 2/1/2033 | 1,000,000 | 1,102,240 | ||||||
Tampa-Hillsborough County Expressway Authority, Refunding Revenue Bonds, Callable 7/1/2022 @ 100, 5.00%, 7/1/2037 | 100,000 | 108,430 | ||||||
5,945,506 | ||||||||
Georgia 2.44% | ||||||||
Albany-Dougherty Inner City Authority, University & College Improvements, Revenue Bonds, Callable 7/1/2020 @ 100, 5.00%, 7/1/2035 | 250,000 | 254,157 | ||||||
Albany-Dougherty Payroll Development Authority, University & College Improvements, Revenue Bonds, (AGM) (OID), Callable 6/15/2020 @ 100, 5.50%, 6/15/2036 | 325,000 | 330,730 | ||||||
City of Atlanta GA Water & Wastewater Revenue, Revenue Bonds, Callable 11/1/2029 @ 100, 3.00%, 11/1/2037 | 500,000 | 521,175 | ||||||
Fulton County Development Authority, Georgia Tech Athletic Association, Revenue Bonds, 5.00%, 10/1/2022 | 145,000 | 160,119 |
See accompanying notes which are an integral part of these financial statements.
39 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Georgia (cont.) | ||||||||
Fulton County Development Authority, Georgia Tech Athletic Association, Revenue Bonds, 5.00%, 10/1/2022 | $ | 5,000 | $ | 5,513 | ||||
Fulton County Development Authority, Georgia Tech Athletic Association, Refunding Revenue Bonds, (OID), Callable 10/1/2022 @ 100, 4.25%, 10/1/2037 | 100,000 | 105,083 | ||||||
Fulton County Development Authority, University & College Improvements, Revenue Bonds, (OID), Callable 4/1/2021 @ 100, 5.75%, 10/1/2041 | 250,000 | 264,388 | ||||||
Fulton County Development Authority, University & College Improvements, Revenue Bonds, (OID), Callable 4/1/2021 @ 100, 5.75%, 10/1/2031 | 50,000 | 52,877 | ||||||
1,694,042 | ||||||||
Hawaii 0.06% | ||||||||
Hawai’i Pacific Health, Hospital Improvements, Revenue Bonds, (OID), 5.75%, 7/1/2040 | 40,000 | 40,910 | ||||||
Illinois 0.69% | ||||||||
Illinois Finance Authority, Hospital Improvements, Revenue Bonds, (OID), Callable 8/15/2021 @ 100, 5.88%, 8/15/2034 | 100,000 | 106,692 | ||||||
Railsplitter Tobacco Settlement Authority, Public Improvements, Revenue Bonds, (OID), 6.00%, 6/1/2028 | 250,000 | 267,103 | ||||||
University of Illinois, University & College Improvements, Revenue Bonds, Callable 4/1/2021 @ 100, 5.50%, 4/1/2031 | 100,000 | 104,707 | ||||||
478,502 | ||||||||
Indiana 3.04% | ||||||||
Town of Munster, IN, Public Improvements, Tax Allocation Bonds, (OID), Callable 7/15/2021 @ 100, 5.13%, 1/15/2031 | 2,000,000 | 2,109,540 | ||||||
Iowa 0.44% | ||||||||
State of Iowa, Revenue Bonds, Callable 6/1/2026 @ 100, 5.00%, 6/1/2027 | 250,000 | 305,490 | ||||||
Kansas 0.05% | ||||||||
Kansas Development Finance Authority, Revenue Bonds, Callable 1/1/2020 @ 100, 5.00%, 1/1/2035 | 35,000 | 35,000 | ||||||
Kentucky 0.48% | ||||||||
Kentucky Municipal Power Agency, Electric Lights & Power Improvements, Revenue Bonds, (AGM), Callable 9/1/2020 @ 100, 5.00%, 9/1/2023 | 325,000 | 333,278 | ||||||
Louisiana 0.91% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, Sewer Improvements, Revenue Bonds, Callable 2/1/2023 @ 100, 5.00%, 2/1/2035 | 100,000 | 109,918 | ||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, Sewer Improvements, Revenue Bonds, Callable 2/1/2023 @ 100, 4.00%, 2/1/2048 | 500,000 | 519,560 | ||||||
629,478 |
See accompanying notes which are an integral part of these financial statements.
40 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Maine 1.43% | ||||||||
Maine Health & Higher Educational Facilities Authority, Refunding Revenue Bonds, (OID), Callable 7/1/2022 @ 100, 3.63%, 7/1/2041 | $ | 500,000 | $ | 511,910 | ||||
Maine State Housing Authority, State Single-Family Housing, Revenue Bonds, Callable 11/15/2022 @ 100, 3.45%, 11/15/2032 | 100,000 | 102,623 | ||||||
Maine State Housing Authority, State Single-Family Housing, Revenue Bonds, Callable 11/15/2022 @ 100, 3.60%, 11/15/2036 | 100,000 | 102,521 | ||||||
Maine State Housing Authority, State Single-Family Housing, Revenue Bonds, Callable 11/15/2022 @ 100, 4.50%, 11/15/2037 | 105,000 | 110,079 | ||||||
Maine State Housing Authority, State Single-Family Housing, Revenue Bonds, Callable 11/15/2024 @ 100, 3.75%, 11/15/2044 | 100,000 | 103,360 | ||||||
Maine Turnpike Authority, Refunding Revenue Bonds, Callable 7/1/2025 @ 100, 5.00%, 7/1/2026 | 50,000 | 59,798 | ||||||
990,291 | ||||||||
Maryland 0.60% | ||||||||
Maryland Health & Higher Educational Facilities Authority, Hospital Improvements, Revenue Bonds, (OID), 4.63%, 5/15/2035 | 60,000 | 60,780 | ||||||
Montgomery County Housing Opportunities Commission, Revenue Bonds, (Freddie Mac) (Fannie Mae) (Ginnie Mae), Callable 1/1/2022 @ 100, 3.63%, 7/1/2033 | 345,000 | 352,531 | ||||||
413,311 | ||||||||
Massachusetts 3.38% | ||||||||
Massachusetts Educational Financing Authority, Refunding Revenue Bonds, (OID), Callable 1/1/2020 @ 100, 5.20%, 1/1/2027 | 40,000 | 40,036 | ||||||
Massachusetts Educational Financing Authority, Refunding Revenue Bonds, (OID), Callable 1/1/2020 @ 100, 5.25%, 1/1/2029 | 15,000 | 15,014 | ||||||
Massachusetts Health & Educational Facilities Authority, Healthcare, Hospital & Nursing Home Improvements, Refunding Revenue Bonds, (OID), Callable 7/1/2020 @ 100, 5.00%, 7/1/2030 | 130,000 | 132,428 | ||||||
Massachusetts Housing Finance Agency, Revenue Bonds, Callable 6/1/2026 @ 100, 3.15%, 12/1/2026 | 120,000 | 129,557 | ||||||
Massachusetts Housing Finance Agency, Revenue Bonds, Callable 12/1/2026 @ 100, 3.75%, 12/1/2037 | 250,000 | 266,682 | ||||||
Massachusetts Housing Finance Agency, Revenue Bonds, Callable 12/1/2025 @ 100, 3.25%, 12/1/2036 | 575,000 | 595,631 | ||||||
Massachusetts Housing Finance Agency, Revenue Bonds, Callable 12/1/2026 @ 100, 3.55%, 12/1/2037 | 250,000 | 263,385 | ||||||
Massachusetts Housing Finance Agency, Revenue Bonds, Callable 12/1/2027 @ 100, 3.25%, 12/1/2032 | 200,000 | 211,478 | ||||||
Massachusetts Housing Finance Agency, Revenue Bonds, Callable 12/1/2026 @ 100, 3.25%, 12/1/2032 | 250,000 | 262,683 | ||||||
Massachusetts Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, 4.85%, 12/1/2029 | 60,000 | 60,061 | ||||||
Massachusetts Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, 5.13%, 12/1/2039 | 65,000 | 65,075 | ||||||
Massachusetts Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, (FHA) (INS), Callable 6/1/2020 @ 100, 5.25%, 12/1/2035 | 175,000 | 177,828 | ||||||
Massachusetts School Building Authority, Revenue Bonds, Callable 8/15/2025 @ 100, 5.00%, 8/15/2026 | 100,000 | 120,415 | ||||||
2,340,273 |
See accompanying notes which are an integral part of these financial statements.
41 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Michigan 4.32% | ||||||||
Michigan Public Educational Facilities Authority, School Improvements, Refunding Revenue Bonds, 6.00%, 12/1/2035 | $ | 500,000 | $ | 500,205 | ||||
Michigan State Building Authority, Refunding Revenue Bonds, (OID), Callable 10/15/2021 @ 100, 5.38%, 10/15/2036 | 100,000 | 106,880 | ||||||
Michigan State Building Authority, Refunding Revenue Bonds, (OID), Callable 10/15/2021 @ 100, 5.20%, 10/15/2031 | 750,000 | 798,345 | ||||||
Michigan State Housing Development Authority, State Multi-Family Housing, Revenue Bonds, (GO OF AUTH), Callable 4/1/2022 @ 100, 4.50%, 10/1/2036 | 710,000 | 737,867 | ||||||
Michigan Tobacco Settlement Finance Authority, Miscellaneous Purposes, Revenue Bonds, (OID), 6.00%, 6/1/2048 | 595,000 | 601,206 | ||||||
Michigan Tobacco Settlement Finance Authority, Refunding Revenue Bonds, 6.88%, 6/1/2042 | 250,000 | 252,925 | ||||||
2,997,428 | ||||||||
Mississippi 0.36% | ||||||||
Mississippi Hospital Equipment & Facilities Authority, Refunding Revenue Bonds, Callable 1/1/2020 @ 100, 5.25%, 1/1/2030 | 250,000 | 250,000 | ||||||
Missouri 1.27% | ||||||||
Hanley Road Corridor Transportation Development District, Refunding Revenue Bonds, (OID), 5.88%, 10/1/2036 | 245,000 | 245,662 | ||||||
Health & Educational Facilities Authority of the State of Missouri, Healthcare, Hospital & Nursing Home Improvements, Revenue Bonds, (OID), Callable 11/15/2022 @ 100, 3.75%, 11/15/2039 | 100,000 | 103,113 | ||||||
Health & Educational Facilities Authority of the State of Missouri, Healthcare, Hospital & Nursing Home Improvements, Revenue Bonds, (OID), Callable 11/15/2024 @ 100, 4.00%, 11/15/2045 | 500,000 | 529,825 | ||||||
878,600 | ||||||||
Nebraska 0.39% | ||||||||
Nebraska Public Power District, Electric Lights & Power Improvements, Revenue Bonds, Callable 1/1/2022 @ 100, 5.00%, 1/1/2025 | 155,000 | 166,377 | ||||||
Nebraska Public Power District, Electric Lights & Power Improvements, Revenue Bonds, Callable 1/1/2022 @ 100, 5.00%, 1/1/2025 | 95,000 | 101,973 | ||||||
268,350 | ||||||||
Nevada 1.18% | ||||||||
City of Reno, NV, Revenue Bonds, (AMBAC) (OID), Callable 6/1/2020 @ 100, 5.50%, 6/1/2028 | 5,000 | 5,014 | ||||||
Nevada Housing Division, State Single-Family Housing, Revenue Bonds, (Ginnie Mae), Callable 4/1/2020 @ 100, 4.40%, 4/1/2027 | 10,000 | 10,047 | ||||||
Nevada System of Higher Education, Certification of Participation, Callable 7/1/2026 @ 100, 4.00%, 7/1/2027 | 700,000 | 802,452 | ||||||
817,513 | ||||||||
New Jersey 6.48% | ||||||||
Borough of Seaside Heights, NJ, General Obligation Unlimited, Callable 4/1/2025 @ 100, 4.00%, 4/1/2026 | 125,000 | 138,893 | ||||||
Essex County Improvement Authority, Public Improvements, Revenue Bonds, (AGM) (OID), 5.75%, 11/1/2030 | 250,000 | 259,358 | ||||||
Hudson County Improvement Authority, Refunding Revenue Bonds, (AGM), 5.40%, 10/1/2025 | 150,000 | 184,131 | ||||||
New Jersey Economic Development Authority, Refunding Revenue Bonds, (State Appropriation) (OID), Callable 3/1/2021 @ 100, 5.25%, 9/1/2026 | 420,000 | 438,152 | ||||||
New Jersey Economic Development Authority, School Improvements, Refunding Revenue Bonds, Callable 3/1/2023 @ 100, 5.00%, 3/1/2031 | 300,000 | 326,148 |
See accompanying notes which are an integral part of these financial statements.
42 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
New Jersey (cont.) | ||||||||
New Jersey Economic Development Authority, School Improvements, Revenue Bonds, Callable 6/15/2020 @ 100, 5.00%, 12/15/2032 | $ | 100,000 | $ | 101,472 | ||||
New Jersey Economic Development Authority, University & College Improvements, Revenue Bonds, Callable 6/15/2023 @ 100, 5.00%, 6/15/2030 | 250,000 | 278,822 | ||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, (OID), 5.00%, 7/1/2027 | 15,000 | 15,049 | ||||||
New Jersey Health Care Facilities Financing Authority, Revenue Bonds, (OID), 6.00%, 7/1/2037 | 200,000 | 214,486 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding Revenue Bonds, Callable 12/1/2020 @ 100, 5.25%, 12/1/2028 | 115,000 | 115,095 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding Revenue Bonds, Callable 12/1/2020 @ 100, 5.25%, 12/1/2032 | 100,000 | 100,081 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding Revenue Bonds, Callable 12/1/2020 @ 100, 5.00%, 12/1/2036 | 65,000 | 67,074 | ||||||
New Jersey Housing & Mortgage Finance Agency, Revenue Bonds, Callable 11/1/2025 @ 100, 3.50%, 11/1/2036 | 500,000 | 523,680 | ||||||
New Jersey Housing & Mortgage Finance Agency, Revenue Bonds, Callable 11/1/2025 @ 100, 3.90%, 11/1/2050 | 175,000 | 182,308 | ||||||
New Jersey Transportation Trust Fund Authority, Revenue Bonds, 5.00%, 6/15/2021 | 150,000 | 157,767 | ||||||
New Jersey Transportation Trust Fund Authority, Transit Improvements, Revenue Bonds, (State Appropriation), Callable 6/15/2021 @ 100, 5.00%, 6/15/2022 | 150,000 | 158,303 | ||||||
New Jersey Transportation Trust Fund Authority, Transit Improvements, Revenue Bonds, (State Appropriation) (OID), Callable 6/15/2021 @ 100, 5.25%, 6/15/2031 | 220,000 | 231,286 | ||||||
New Jersey Turnpike Authority, Highway Improvements, Revenue Bonds, 5.00%, 1/1/2031 | 200,000 | 219,452 | ||||||
State of New Jersey, Public Improvements, General Obligation Unlimited, Callable 6/1/2025 @ 100, 4.00%, 6/1/2034 | 250,000 | 273,157 | ||||||
Tenafly School District, Refunding Bonds, General Obligation Unlimited, (OID), Callable 7/15/2022 @ 100, 3.00%, 7/15/2029 | 250,000 | 256,025 | ||||||
Tenafly School District, Refunding Bonds, General Obligation Unlimited, (OID), Callable 7/15/2022 @ 100, 3.00%, 7/15/2030 | 250,000 | 255,755 | ||||||
4,496,494 | ||||||||
New Mexico 1.27% | ||||||||
New Mexico Hospital Equipment Loan Council, Hospital Improvements Revenue Bonds, (OID), Callable 8/1/2022 @ 100, 4.00%, 8/1/2042 | 500,000 | 536,880 | ||||||
New Mexico Mortgage Finance Authority, Revenue Bonds, (Freddie Mac) (Fannie Mae) (Ginnie Mae) (GTD) (INS), Callable 3/1/2022 @ 100, 3.25%, 9/1/2027 | 110,000 | 113,227 | ||||||
New Mexico Mortgage Finance Authority, Revenue Bonds, (Freddie Mac) (Fannie Mae) (Ginnie Mae) (GTD) (INS), Callable 3/1/2022 @ 100, 3.55%, 9/1/2032 | 150,000 | 153,430 | ||||||
Village of Los Ranchos de Albuquerque, NM, Refunding Revenue Bonds, OID), Callable 9/1/2020 @ 100, 4.50%, 9/1/2040 | 75,000 | 76,169 | ||||||
879,706 | ||||||||
New York 21.93% | ||||||||
Hudson Yards Infrastructure Corporation, Public Improvements, Revenue Bonds, Callable 2/15/2021 @ 100, 5.75%, 2/15/2047 | 95,000 | 99,615 | ||||||
Hudson Yards Infrastructure Corporation, Revenue Bonds, Callable 2/15/2021 @ 100, 5.25%, 2/15/2047 | 190,000 | 197,963 | ||||||
Hudson Yards Infrastructure Corporation, Revenue Bonds, 5.25%, 2/15/2047 | 10,000 | 10,472 | ||||||
Hudson Yards Infrastructure Corporation, Revenue Bonds, Series A, Callable 2/15/2027 @ 100, 4.00%, 2/15/2044 | 575,000 | 634,559 | ||||||
Metropolitan Transportation Authority, Refunding Revenue Bonds, 5.25%, 11/15/2028 | 50,000 | 58,246 | ||||||
Metropolitan Transportation Authority, Refunding Revenue Bonds, Callable 11/15/2027 @ 100, 5.00%, 11/15/2037 | 250,000 | 306,108 | ||||||
Metropolitan Transportation Authority, Revenue Bonds, 5.00%, 11/15/2028 | 250,000 | 317,360 | ||||||
Metropolitan Transportation Authority, Revenue Bonds, Callable 11/15/2027 @ 100, 5.00%, 11/15/2035 | 250,000 | 308,193 |
See accompanying notes which are an integral part of these financial statements.
43 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
New York (cont.) | ||||||||
Metropolitan Transportation Authority, Revenue Bonds, (OID), 4.75%, 11/15/2036 | $ | 140,000 | $ | 149,981 | ||||
Metropolitan Transportation Authority, Revenue Bonds, (OID), 4.75%, 11/15/2036 | 110,000 | 116,222 | ||||||
Metropolitan Transportation Authority, Transit Improvements, Refunding Revenue Bonds, 5.00%, 11/15/2028 | 250,000 | 301,395 | ||||||
Metropolitan Transportation Authority, Transit Improvements, Revenue Bonds, Callable 5/15/2023 @ 100, 5.00%, 11/15/2033 | 100,000 | 110,518 | ||||||
Monroe County Industrial Development Corporation, Hospital Improvements, Revenue Bonds, (INS), Callable 2/15/2021 @ 100, 5.75%, 8/15/2035 | 250,000 | 263,122 | ||||||
New York City Housing Development Corporation, Local Multi-Family Housing Revenue Bonds, Callable 11/1/2020 @ 100, 4.75%, 5/1/2041 | 250,000 | 255,805 | ||||||
New York City Housing Development Corporation, Local Multi-Family Housing, Revenue Bonds, Callable 3/16/2020 @ 100, 4.90%, 11/1/2040 | 250,000 | 251,400 | ||||||
New York City Housing Development Corporation, Local Multi-Family Housing, Revenue Bonds, Callable 5/1/2020 @ 100, 4.85%, 11/1/2035 | 250,000 | 252,762 | ||||||
New York City Housing Development Corporation, Local Multi-Family Housing, Revenue Bonds, 5.00%, 5/1/2020 | 150,000 | 151,891 | ||||||
New York City Housing Development Corporation, Revenue Bonds, Callable 2/1/2026 @ 100, 3.50%, 11/1/2032 | 150,000 | 159,771 | ||||||
New York City Housing Development Corporation, Revenue Bonds, Callable 11/1/2025 @ 100, 3.60%, 11/1/2031 | 250,000 | 268,347 | ||||||
New York City Housing Development Corporation, Revenue Bonds, Callable 5/1/2025 @ 100, 3.10%, 11/1/2032 | 250,000 | 259,412 | ||||||
New York City Industrial Development Agency, Recreational Facility Improvements, Revenue Bonds, (FGIC), 5.00%, 3/1/2046 | 1,500,000 | 1,515,555 | ||||||
New York City Industrial Development Agency, Recreational Facility Improvements, Revenue Bonds, (FGIC), 5.00%, 3/1/2031 | 145,000 | 146,505 | ||||||
New York City Industrial Development Agency, Recreational Facility Improvements, Revenue Bonds, (FGIC) (OID), 4.50%, 3/1/2039 | 100,000 | 101,038 | ||||||
New York City Industrial Development Agency, Recreational Facility Improvements, Revenue Bonds, (NATL-RE), 5.00%, 3/1/2036 | 115,000 | 116,195 | ||||||
New York City Industrial Development Agency, Recreational Facility Improvements, Revenue Bonds, (OID), Callable 1/1/2020 @ 100, 6.50%, 1/1/2046 | 650,000 | 652,619 | ||||||
New York City Transitional Finance Authority, Revenue Bonds, Callable 8/1/2029 @ 100, 5.00%, 8/1/2043 | 500,000 | 617,240 | ||||||
New York City Transitional Finance Authority, Revenue Bonds, Callable 8/1/2029 @ 100, 4.00%, 8/1/2044 | 250,000 | 281,165 | ||||||
New York City Transitional Finance Authority Building Aid Revenue, Public Improvements, Revenue Bonds, (State Aid Withholding), Callable 1/15/2025 @ 100, 5.00%, 7/15/2027 | 250,000 | 294,530 | ||||||
New York City Transitional Finance Authority Building Aid Revenue, Revenue Bonds, 5.00%, 7/15/2031 | 250,000 | 298,580 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Public Improvements, Revenue Bonds, 5.00%, 8/1/2023 | 100,000 | 113,728 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Public Improvements, Revenue Bonds, Callable 8/1/2026 @ 100, 4.00%, 8/1/2035 | 100,000 | 112,730 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Public Improvements, Revenue Bonds, 5.00%, 8/1/2024 | 100,000 | 117,345 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue Bonds, Callable 5/1/2027 @ 100, 4.00%, 5/1/2044 | 300,000 | 331,404 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Public Improvements, Revenue Bonds, Callable 8/1/2025 @ 100, 5.00%, 8/1/2027 | 25,000 | 29,913 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Public Improvements, Revenue Bonds, Callable 11/1/2020 @ 100, 5.00%, 8/1/2021 | 100,000 | 106,180 | ||||||
New York City Water & Sewer System, Revenue Bonds, 5.00%, 6/15/2045 | 35,000 | 37,668 |
See accompanying notes which are an integral part of these financial statements.
44 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
New York (cont.) | ||||||||
New York City Water & Sewer System, Revenue Bonds, Callable 6/15/2027 @ 100, 5.00%, 6/15/2032 | $ | 100,000 | $ | 123,027 | ||||
New York City Water & Sewer System, Revenue Bonds, Callable 12/15/2021 @ 100, 5.00%, 6/15/2045 | 215,000 | 229,130 | ||||||
New York Liberty Development Corporation, Refunding Revenue Bonds, Callable 1/15/2020 @ 100, 5.63%, 7/15/2047 | 250,000 | 250,390 | ||||||
New York State Dormitory Authority, Refunding Revenue Bonds, (State Aid Withholding), Callable 10/1/2022 @ 100, 3.25%, 4/1/2031 | 280,000 | 288,036 | ||||||
New York State Dormitory Authority, Revenue Bonds, 5.00%, 5/15/2020 | 100,000 | 101,470 | ||||||
New York State Dormitory Authority, Revenue Bonds, 5.00%, 8/15/2021 | 100,000 | 106,565 | ||||||
New York State Dormitory Authority, Revenue Bonds, Callable 3/15/2028 @ 100, 5.00%, 3/15/2043 | 250,000 | 301,782 | ||||||
New York State Dormitory Authority, Revenue Bonds, 4.75%, 10/1/2040 | 5,000 | 5,113 | ||||||
New York State Dormitory Authority, Revenue Bonds, 5.00%, 5/15/2022 | 165,000 | 180,187 | ||||||
New York State Dormitory Authority, Revenue Bonds, Callable 7/1/2025 @ 100, 5.00%, 7/1/2037 | 385,000 | 448,471 | ||||||
New York State Dormitory Authority, Revenue Bonds, 4.75%, 10/1/2040 | 160,000 | 164,558 | ||||||
New York State Dormitory Authority, University & College Improvements, Revenue Bonds, (OID), 5.25%, 7/1/2031 | 40,000 | 42,583 | ||||||
New York State Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, Callable 5/1/2020 @ 100, 4.85%, 11/1/2036 | 100,000 | 100,774 | ||||||
New York State Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, (SONYMA), Callable 5/1/2020 @ 100, 5.20%, 5/1/2042 | 500,000 | 505,000 | ||||||
New York State Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, (SONYMA), Callable 5/1/2020 @ 100, 4.75%, 5/1/2031 | 200,000 | 201,900 | ||||||
New York State Thruway Authority, Revenue Bonds, Callable 1/1/2026 @ 100, 4.00%, 1/1/2037 | 100,000 | 109,034 | ||||||
New York State Urban Development Corporation, Public Improvements, Revenue Bonds, 5.00%, 3/15/2020 | 100,000 | 100,795 | ||||||
Port Authority of New York & New Jersey, Revenue Bonds, Callable 11/15/2027 @ 100, 5.00%, 11/15/2030 | 250,000 | 313,698 | ||||||
Port Authority of New York & New Jersey, Revenue Bonds, Callable 11/15/2027 @ 100, 5.00%, 11/15/2037 | 250,000 | 306,518 | ||||||
State of New York Mortgage Agency, State Single-Family Housing, Revenue Bonds, Callable 10/1/2021 @ 100, 3.75%, 10/1/2032 | 1,000,000 | 1,023,080 | ||||||
Triborough Bridge & Tunnel Authority, Revenue Bonds, 5.00%, 11/15/2023 | 100,000 | 115,026 | ||||||
Triborough Bridge & Tunnel Authority, Revenue Bonds, 5.00%, 11/15/2027 | 100,000 | 122,352 | ||||||
Triborough Bridge & Tunnel Authority, Revenue Bonds, 5.00%, 11/15/2021 | 50,000 | 53,709 | ||||||
Triborough Bridge & Tunnel Authority, Revenue Bonds, Callable 11/15/2025 @ 100, 5.00%, 11/15/2040 | 310,000 | 365,747 | ||||||
Triborough Bridge & Tunnel Authority, Revenue Bonds, Callable 11/15/2025 @ 100, 5.00%, 11/15/2035 | 250,000 | 297,853 | ||||||
15,202,335 | ||||||||
North Carolina 0.33% | ||||||||
University of North Carolina at Charlotte/The, Revenue Bonds, Callable 10/1/2027 @ 100, 4.00%, 10/1/2037 | 100,000 | 111,873 | ||||||
University of North Carolina at Charlotte/The, University & College Improvements, Revenue Bonds, Callable 4/1/2025 @ 100, 5.00%, 4/1/2040 | 100,000 | 115,412 | ||||||
227,285 | ||||||||
North Dakota 0.15% | ||||||||
City of Bismarck, ND, Sanitary Sewer Revenue, Revenue Bonds, Callable 5/1/2025 @ 100, 3.00%, 5/1/2029 | 100,000 | 105,317 | ||||||
See accompanying notes which are an integral part of these financial statements.
45 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Ohio 1.09% | ||||||||
Buckeye Tobacco Settlement Financing Authority, Miscellaneous Purposes, Revenue Bonds, 6.50%, 6/1/2047 | $ | 80,000 | $ | 81,522 | ||||
Buckeye Tobacco Settlement Financing Authority, Miscellaneous Purposes, Revenue Bonds, (OID), 6.00%, 6/1/2042 | 420,000 | 422,596 | ||||||
Ohio Higher Educational Facility Commission, Revenue Bonds, (OID), Callable 7/1/2020 @ 100, 5.00%, 7/1/2044 | 165,000 | 168,156 | ||||||
Ohio Higher Educational Facility Commission, Revenue Bonds, (OID), 5.00%, 7/1/2044 | 85,000 | 86,626 | ||||||
758,900 | ||||||||
Oklahoma 0.37% | ||||||||
Oklahoma Municipal Power Authority, Electric Lights & Power Improvements, Revenue Bonds, Callable 1/1/2023 @ 100, 4.00%, 1/1/2047 | 250,000 | 259,940 | ||||||
Oregon 0.20% | ||||||||
Medford Hospital Facilities Authority, Refunding Revenue Bonds, (AGM), Callable 8/15/2020 @ 100, 5.00%, 8/15/2021 | 100,000 | 102,408 | ||||||
Oregon Health & Science University, Refunding Revenue Bonds, Callable 7/1/2022 @ 100, 5.00%, 7/1/2032 | 35,000 | 38,359 | ||||||
140,767 | ||||||||
Pennsylvania 3.83% | ||||||||
Allegheny County Sanitary Authority, Sewer Improvements, Revenue Bonds, Callable 12/1/2023 @ 100, 5.25%, 12/1/2044 | 500,000 | 566,010 | ||||||
City of Philadelphia, PA, Refunding Bonds, General Obligation Unlimited, (AGM) (OID), 5.25%, 8/1/2026 | 135,000 | 138,281 | ||||||
Pennsylvania Higher Educational Facilities Authority, Hospital Improvements, Revenue Bonds, Callable 11/1/2022 @ 100, 5.00%, 5/1/2037 | 100,000 | 104,928 | ||||||
Pennsylvania Higher Educational Facilities Authority, Hospital Improvements, Revenue Bonds, Callable 11/1/2022 @ 100, 5.00%, 5/1/2042 | 100,000 | 104,443 | ||||||
Pennsylvania Higher Educational Facilities Authority, Hospital Improvements, Revenue Bonds (OID), Callable 11/1/2022 @ 100, 4.00%, 5/1/2032 | 100,000 | 101,951 | ||||||
Pennsylvania Housing Finance Agency, Revenue Bonds, Callable 4/1/2027 @ 100, 3.65%, 10/1/2042 | 100,000 | 104,401 | ||||||
Pennsylvania State University, Revenue Bonds, Callable 9/1/2026 @ 100, 5.00%, 9/1/2036 | 100,000 | 120,337 | ||||||
Pennsylvania State University, Revenue Bonds, Callable 9/1/2026 @ 100, 5.00%, 9/1/2034 | 190,000 | 229,664 | ||||||
Pennsylvania State University, Revenue Bonds, Callable 9/1/2026 @ 100, 5.00%, 9/1/2035 | 125,000 | 150,757 | ||||||
Pennsylvania Turnpike Commission, Revenue Bonds, Callable 12/1/2025 @ 100, 5.00%, 12/1/2045 | 500,000 | 571,395 | ||||||
Pennsylvania Turnpike Commission, Revenue Bonds, 5.25%, 7/15/2028 | 150,000 | 195,342 | ||||||
West View Municipal Authority Water Revenue, Water Utility Improvements, Revenue Bonds, (OID), Callable 11/15/2024 @ 100, 4.00%, 11/15/2043 | 250,000 | 267,180 | ||||||
2,654,689 | ||||||||
Puerto Rico 0.82% | ||||||||
Commonwealth of Puerto Rico, General Obligation Unlimited, (AGM) (OID), Callable 7/1/2021 @ 100, 5.25%, 7/1/2026 | 100,000 | 103,830 | ||||||
Commonwealth of Puerto Rico, Refunding Bonds, General Obligation Unlimited (AGM), Callable 1/1/2020 @ 100, 5.00%, 7/1/2031 | 200,000 | 202,268 | ||||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority, Refunding Revenue Bonds, 5.00%, 7/1/2022 | 250,000 | 262,875 | ||||||
568,973 |
See accompanying notes which are an integral part of these financial statements.
46 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Rhode Island 1.20% | ||||||||
Rhode Island Housing & Mortgage Finance Corporation, Refunding Revenue Bonds, Callable 4/1/2021 @ 100, 4.10%, 10/1/2037 | $ | 45,000 | $ | 45,203 | ||||
Rhode Island Housing & Mortgage Finance Corporation, Refunding Revenue Bonds, Callable 4/1/2021 @ 100, 3.45%, 4/1/2026 | 500,000 | 510,405 | ||||||
Rhode Island Housing & Mortgage Finance Corporation, State Single-Family Housing, Revenue Bonds, (Freddie Mac) (Fannie Mae) (Ginnie Mae), Callable 4/1/2022 @ 100, 3.45%, 4/1/2035 | 235,000 | 240,478 | ||||||
Rhode Island Turnpike & Bridge Authority, Highway Improvements, Revenue Bonds, (OID), Callable 12/1/2020 @ 100, 5.00%, 12/1/2039 | 35,000 | 36,221 | ||||||
832,307 | ||||||||
South Dakota 0.59% | ||||||||
South Dakota Housing Development Authority, Revenue Bonds, Callable 11/1/2025 @ 100, 3.13%, 11/1/2036 | 150,000 | 154,000 | ||||||
South Dakota Housing Development Authority, Revenue Bonds, Callable 11/1/2025 @ 100, 2.45%, 5/1/2027 | 250,000 | 256,353 | ||||||
410,353 | ||||||||
Tennessee 0.61% | ||||||||
City of Memphis, TN, General Obligation Unlimited, Callable 4/1/2024 @ 100, 5.00%, 4/1/2044 | 100,000 | 112,730 | ||||||
Metropolitan Government of Nashville & Davidson County Convention Center Authority, Public Improvements, Revenue Bonds, Callable 7/1/2020 @ 100, 5.00%, 7/1/2026 | 200,000 | 203,686 | ||||||
Tennessee Housing Development Agency, Revenue Bonds, Callable 1/1/2027 @ 100, 3.40%, 7/1/2037 | 100,000 | 104,941 | ||||||
421,357 | ||||||||
Texas 6.25% | ||||||||
City of Houston, TX, Refunding Revenue Bonds, Callable 3/1/2029 @ 100, 4.00%, 3/1/2049 | 500,000 | 557,510 | ||||||
City of Houston, TX, Refunding Revenue Bonds, Callable 9/1/2021 @ 100, 5.25%, 9/1/2029 | 500,000 | 531,565 | ||||||
City Public Service Board of San Antonio, TX, Revenue Bonds, Callable 8/1/2026 @ 100, 5.00%, 2/1/2032 | 250,000 | 301,493 | ||||||
Clifton Higher Education Finance Corporation, School Improvements, Refunding Revenue Bonds, 4.00%, 8/15/2044 | 500,000 | 532,565 | ||||||
Comal Independent School District, School Improvements, General Obligation Unlimited, Callable 2/1/2026 @ 100, 4.00%, 2/1/2034 | 250,000 | 276,602 | ||||||
Fort Bend Grand Parkway Toll Road Authority, Refunding Revenue Bonds, Callable 3/1/2022 @ 100, 4.00%, 3/1/2046 | 250,000 | 259,760 | ||||||
Harris County Cultural Education Facilities Finance Corporation, Revenue Bonds, Callable 5/15/2026 @ 100, 4.00%, 11/15/2030 | 130,000 | 145,243 | ||||||
San Antonio Public Facilities Corporation, Public Improvements, Refunding Revenue Bonds, (OID), Callable 9/15/2022 @ 100, 4.00%, 9/15/2042 | 250,000 | 261,000 | ||||||
San Antonio Water System, Refunding Revenue Bonds, Callable 11/15/2029 @ 100, 5.00%, 5/15/2034 | 190,000 | 242,478 | ||||||
Tarrant County Health Facilities Development Corporation, Hospital Improvements, Revenue Bonds, Callable 3/9/2020 @ 100, 5.00%, 12/1/2023 | 100,000 | 100,136 | ||||||
Texas A&M University, Refunding Revenue Bonds, 5.00%, 5/15/2039 | 100,000 | 101,455 | ||||||
Texas Public Finance Authority, Revenue Bonds, Callable 12/1/2026 @ 100, 4.00%, 12/1/2031 | 200,000 | 225,116 | ||||||
Texas Water Development Board, Revenue Bonds, Callable 10/15/2029 @ 100, 4.00%, 10/15/2037 | 500,000 | 578,420 | ||||||
White Oak, TX, Independent School District, General Obligation Unlimited, Callable 2/15/2027 @ 100, 4.00%, 2/15/2029 | 190,000 | 217,124 | ||||||
4,330,467 |
See accompanying notes which are an integral part of these financial statements.
47 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal | Market Value | |||||||
Utah 0.45% | ||||||||
University of Utah/The, University & College Improvements, Revenue Bonds, 5.00%, 8/1/2043 | $ | 250,000 | $ | 284,585 | ||||
Utah Housing Corporation, State Single-Family Housing, Revenue Bonds, Callable 1/1/2021 @ 100, 5.25%, 1/1/2025 | 15,000 | 15,256 | ||||||
Utah Housing Corporation, State Single-Family Housing, Revenue Bonds, Callable 1/1/2021 @ 100, 5.75%, 1/1/2033 | 15,000 | 15,296 | ||||||
315,137 | ||||||||
Vermont 0.36% | ||||||||
Vermont Housing Finance Agency, State Multi-Family Housing, Revenue Bonds, Callable 8/15/2022 @ 100, 3.75%, 8/15/2037 | 245,000 | 249,653 | ||||||
Virgin Islands 0.14% | ||||||||
Virgin Islands Public Finance Authority, Refunding Revenue Bonds, Callable 10/1/2020 @ 100, 5.00%, 10/1/2025 | 100,000 | 100,188 | ||||||
Virginia 0.72% | ||||||||
Virginia Housing Development Authority, State Single-Family Housing, Revenue Bonds, Callable 4/1/2020 @ 100, 4.50%, 10/1/2045 | 215,000 | 216,460 | ||||||
Virginia Resources Authority, Revenue Bonds, Callable 11/1/2025 @ 100, 4.00%, 11/1/2033 | 250,000 | 279,907 | ||||||
496,367 | ||||||||
Washington 1.58% | ||||||||
Spokane Public Facilities District, Public Improvements, Revenue Bonds, Callable 6/1/2023 @ 100, 5.00%, 5/1/2043 | 1,000,000 | 1,095,190 | ||||||
Wisconsin 0.12% | ||||||||
Wisconsin Housing & Economic Development Authority, State Multi-Family Housing, Revenue Bonds, (OID), Callable 5/1/2020 @ 100, 5.63%, 11/1/2035 | 80,000 | 80,812 | ||||||
Wyoming 0.73% | ||||||||
Wyoming Community Development Authority, State Single-Family Housing, Revenue Bonds, Callable 6/1/2024 @ 100, 3.70%, 6/1/2039 | 485,000 | 503,003 | ||||||
Total Municipal Bonds | ||||||||
(Cost $63,991,567) | 66,989,939 |
See accompanying notes which are an integral part of these financial statements.
48 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Money Market Funds 2.58% | ||||||||
Morgan Stanley Institutional Liquidity Government Portfolio, Institutional Class, 1.51%(a) | 1,791,544 | $ | 1,791,544 | |||||
Total Money Market Funds | ||||||||
(Cost $1,791,544) | 1,791,544 | |||||||
Total Investments — 99.20% | ||||||||
(Cost $65,783,111) | 68,781,483 | |||||||
Other Assets in Excess of Liabilities — 0.80% | 555,632 | |||||||
NET ASSETS — 100.00% | $ | 69,337,115 |
(a) | Rate disclosed is the seven day effective yield as of December 31, 2019. |
AGM — Assured Guaranty Municipal Corp.
AMBAC — American Municipal Bond Assurance Corp.
FHA — Insured by Federal Housing Administration
GO — General Obligation
GTD — Guaranteed
INS — Insured
NATL-RE — Insured by National Public Finance Guarantee Corp.
OID — Original Issue Discount
SONYMA — State of New York Mortgage Agency
See accompanying notes which are an integral part of these financial statements.
49 |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS | December 31, 2019
Shares | Market Value | |||||||
Common Stocks 8.78% | ||||||||
Communication Services 0.99% | ||||||||
AT&T, Inc. | 18,000 | $ | 703,440 | |||||
Verizon Communications, Inc. | 10,000 | 614,000 | ||||||
1,317,440 | ||||||||
Energy 5.10% | ||||||||
CNX Midstream Partners LP | 8,500 | 139,910 | ||||||
Enbridge, Inc. | 29,763 | 1,183,675 | ||||||
Energy Transfer Equity LP | 64,571 | 828,446 | ||||||
Enterprise Products Partners LP | 42,400 | 1,193,984 | ||||||
Global Partners LP | 7,215 | 145,454 | ||||||
Magellan Midstream Partners LP | 11,700 | 735,579 | ||||||
MPLX LP | 39,269 | 999,789 | ||||||
Plains All American Pipeline LP | 3,200 | 58,848 | ||||||
Targa Resources Corporation | 12,739 | 520,133 | ||||||
TC PipeLines LP | 7,195 | 304,349 | ||||||
USA Compression Partners LP | 8,796 | 159,559 | ||||||
Western Midstream Partners LP | 24,782 | 487,958 | ||||||
6,757,684 | ||||||||
Financials 0.30% | ||||||||
Blackstone Group LP (The) | 7,100 | 397,174 | ||||||
Real Estate Investment Trusts (REITs) 2.39% | ||||||||
Apple Hospitality REIT, Inc. | 32,539 | 528,759 | ||||||
Blackstone Mortgage Trust, Inc., Class A | 11,565 | 430,449 | ||||||
City Office REIT, Inc. | 20,000 | 270,400 | ||||||
DiamondRock Hospitality Company | 25,953 | 287,559 | ||||||
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | 37,792 | 1,216,147 | ||||||
Pebblebrook Hotel Trust | 8,806 | 236,089 | ||||||
Spirit MTA REIT | 2,000 | 1,535 | ||||||
Spirit Realty Capital, Inc. | 4,000 | 196,720 | ||||||
3,167,658 | ||||||||
Total Common Stocks | ||||||||
(Cost $12,103,345) | 11,639,956 | |||||||
Preferred Stocks 12.21% | ||||||||
Financials 5.53% | ||||||||
Allstate Corporation (The), Series I, 4.75% | 20,000 | 506,400 | ||||||
American Financial Group, Inc., 5.13% | 15,000 | 439,500 | ||||||
American Financial Group, Inc., 6.00% | 8,700 | 228,549 | ||||||
Arch Capital Group Ltd., 5.25% | 20,000 | 509,600 | ||||||
Bank of America Corporation, 5.88% | 8,000 | 216,640 | ||||||
Bank of America Corporation, Series LL, 5.00% | 15,000 | 392,700 | ||||||
Bank of New York Mellon Corporation (The), 5.20% | 8,700 | 226,722 | ||||||
First Republic Bank, 5.70% | 9,000 | 230,760 | ||||||
First Republic Bank, Series J, 4.70% | 15,000 | 380,700 | ||||||
Globe Life, Inc., 6.13% | 10,000 | 264,100 | ||||||
Hancock Holding Company, 5.95% | 3,700 | 94,905 | ||||||
JPMorgan Chase & Company, Series EE, 6.00% | 20,000 | 562,800 | ||||||
KeyCorp, Series G, 5.63% | 15,000 | 406,350 | ||||||
KKR & Compnay LP, Series B, 6.50% | 10,000 | 268,900 |
See accompanying notes which are an integral part of these financial statements.
50 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Financials (cont.) | ||||||||
Northern Trust Corporation, Series E, 4.70% | 13,640 | $ | 356,413 | |||||
PNC Financial Services Group, Inc. (The), 5.38% | 4,250 | 108,842 | ||||||
Prudential Financial, Inc., 5.63% | 10,000 | 272,700 | ||||||
State Street Corporation, 5.25% | 8,050 | 206,483 | ||||||
State Street Corporation, 5.35% | 1,000 | 27,870 | ||||||
U.S. Bancorp, Series F, 6.50% | 7,300 | 201,626 | ||||||
W.R. Berkley Corporation, 5.10% | 20,000 | 503,800 | ||||||
Wells Fargo & Company, 5.20% | 15,850 | 404,809 | ||||||
Wells Fargo & Company, 5.70% | 20,000 | 523,000 | ||||||
7,334,169 | ||||||||
Industrials 0.08% | ||||||||
Pitney Bowes, Inc., 6.70% | 5,700 | 104,082 | ||||||
Real Estate 3.91% | ||||||||
Digital Realty Trust, Inc., 6.35% | 25,450 | 656,864 | ||||||
Federal Realty Investment Trust, 5.00% | 7,500 | 193,050 | ||||||
National Retail Properties, Inc., 5.20% | 25,000 | 635,750 | ||||||
PS Business Parks, Inc., 5.20% | 10,000 | 257,800 | ||||||
PS Business Parks, Inc., 5.20% | 4,000 | 102,720 | ||||||
PS Business Parks, Inc., 5.25% | 10,000 | 261,000 | ||||||
Public Storage, 4.90% | 20,000 | 509,600 | ||||||
Public Storage, 4.95% | 20,000 | 509,400 | ||||||
Public Storage, 5.13% | 10,000 | 257,000 | ||||||
Public Storage, Series I, 4.88% | 9,583 | 246,762 | ||||||
Senior Housing Properties Trust, 5.63% | 26,660 | 659,835 | ||||||
Taubman Centers, Inc., 6.25% | 13,046 | 338,022 | ||||||
Taubman Centers, Inc., 6.50% | 9,416 | 244,345 | ||||||
Vornado Realty Trust, 5.40% | 12,298 | 310,033 | ||||||
5,182,181 | ||||||||
Utilities2.69% | ||||||||
DTE Energy Company, 5.38% | 10,000 | 258,500 | ||||||
DTE Energy Company, 6.00% | 20,000 | 538,200 | ||||||
Duke Energy Corporation, 5.13% | 9,030 | 232,884 | ||||||
Entergy Arkansas, Inc., 4.88% | 20,000 | 520,600 | ||||||
Entergy Louisiana LLC, 4.88% | 10,000 | 259,100 | ||||||
Entergy Mississippi, Inc., 4.90% | 30,000 | 795,000 | ||||||
NextEra Energy Capital Holdings, Inc., 5.00% | 6,700 | 170,984 | ||||||
NextEra Energy Capital Holdings, Inc., 5.25% | 10,000 | 260,500 | ||||||
Southern Company, 5.25% | 20,000 | 526,800 | ||||||
3,562,568 | ||||||||
Total Preferred Stocks | ||||||||
(Cost $15,585,444) | 16,183,000 | |||||||
Principal | ||||||||
Collateralized Mortgage Obligations 0.12% | ||||||||
CHL Mortgage Pass-Through Trust, 2005-21, A27, 5.50%, 10/25/2035 | $ | 32,572 | 29,667 | |||||
CHL Mortgage Pass-Through Trust, 2005-21, A7, 5.50%, 10/25/2035 | 35,212 | 32,072 | ||||||
Citicorp Mortgage Securities, Inc., 1A12, 5.00%, 2/25/2035 | 98,365 | 100,474 | ||||||
Total Collateralized Mortgage Obligations | ||||||||
(Cost $117,400) | 162,213 |
See accompanying notes which are an integral part of these financial statements.
51 |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Corporate Bonds10.09% | ||||||||
Bank of New York Mellon Corporation (The),4.63%, 12/20/2049 | $ | 500,000 | $ | 526,695 | ||||
Dow Chemical Company (The),3.05%, 2/15/2022 | 1,000,000 | 996,986 | ||||||
Duke Realty LP,4.38%, 6/15/2022 | 250,000 | 262,141 | ||||||
Entergy Texas, Inc.,5.15%, 6/1/2045 | 100,000 | 107,603 | ||||||
Exelon Generation Company LLC,5.60%, 6/15/2042(a)(b) | 400,000 | 412,146 | ||||||
Fifth Third Bancorp,8.25%, 3/1/2038 | 250,000 | 382,434 | ||||||
General Electric Company,5.00%, 12/29/2049 | 765,000 | 750,450 | ||||||
Goldman Sachs Group, Inc. (The),6.45%, 5/1/2036 | 500,000 | 667,907 | ||||||
Goldman Sachs Group, Inc. (The),6.75%, 10/1/2037 | 850,000 | 1,182,258 | ||||||
Hospitality Properties Trust,4.50%, 3/15/2025 | 500,000 | 514,788 | ||||||
Kinder Morgan Energy Partners LP,6.50%, 2/1/2037 | 250,000 | 312,271 | ||||||
MetLife, Inc.,10.75%, 8/1/2039 | 1,000,000 | 1,671,865 | ||||||
MetLife, Inc.,9.25%, 4/8/2038(a) | 1,500,000 | 2,211,142 | ||||||
PECO Energy Capital Trust IV,5.75%, 6/15/2033 | 1,000,000 | 1,036,250 | ||||||
Qwest Corporation,7.13%, 11/15/2043 | 1,000,000 | 1,018,500 | ||||||
SL Green Realty Corporation,7.75%, 3/15/2020 | 1,000,000 | 1,011,075 | ||||||
Valero Energy Corporation,8.75%, 6/15/2030 | 224,000 | 314,008 | ||||||
Total Corporate Bonds | ||||||||
(Cost $12,037,352) | 13,378,519 | |||||||
Municipal Bonds 63.69% | ||||||||
Alabama2.81% | ||||||||
Health Care Authority for Baptist Health (The), Refunding Revenue Bonds,5.50%, 11/15/2043 | 2,000,000 | 2,499,100 | ||||||
University of Alabama (The), University & College Improvements, Build America Revenue Bonds, Callable 6/1/2020 @ 100,6.13%, 6/1/2042 | 500,000 | 509,185 | ||||||
University of Alabama (The), University & College Improvements, Build America Revenue Bonds, Callable 6/1/2020 @ 100,6.13%, 6/1/2039 | 715,000 | 728,135 | ||||||
3,736,420 | ||||||||
Arizona 2.10% | ||||||||
Arizona School Facilities Board, School Improvements, Certificate of Participation,6.00%, 9/1/2027 | 225,000 | 276,156 | ||||||
Northern Arizona University, University & College Improvements, Build America Revenue Bonds, Callable 8/1/2020 @ 100,5.92%, 8/1/2022 | 1,365,000 | 1,394,620 | ||||||
University of Arizona, University & College Improvements, Build America Revenue Bonds, Callable 8/1/2020 @ 100,6.64%, 8/1/2044 | 1,085,000 | 1,111,517 | ||||||
2,782,293 | ||||||||
California 4.15% | ||||||||
Alhambra Unified School District, University & College Improvements, General Obligation Unlimited,6.70%, 2/1/2026 | 465,000 | 548,114 | ||||||
City & County of San Francisco, CA, General Obligation Unlimited,6.26%, 6/15/2030 | 450,000 | 593,573 | ||||||
County of San Bernardino, CA, Refunding Revenue Bonds,6.02%, 8/1/2023 | 145,000 | 158,107 | ||||||
Oakland Redevelopment Agency Successor Agency, Economic Improvements, Tax Allocation Bonds,8.50%, 9/1/2020 | 170,000 | 177,223 | ||||||
Peralta Community College District, Refunding Revenue Bonds,7.31%, 8/1/2031 | 310,000 | 406,332 | ||||||
Peralta Community College District, Refunding Revenue Bonds,6.91%, 8/1/2025 | 500,000 | 597,580 | ||||||
San Bernardino City Unified School District, School Improvements, Certificate of Participation, (AGM) (OID),8.05%, 2/1/2023 | 1,000,000 | 1,157,500 | ||||||
San Bernardino City Unified School District, School Improvements, Certificate of Participation, (AGM) (OID),8.25%, 2/1/2026 | 500,000 | 633,520 | ||||||
University of California, Revenue Bonds, Callable 5/15/2030 @ 100,6.30%, 5/15/2050 | 510,000 | 636,118 |
See accompanying notes which are an integral part of these financial statements.
52 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
California (cont.) | ||||||||
University of California, University & College Improvements, Refunding Revenue Bonds,3.66%, 5/15/2027 | $ | 250,000 | $ | 269,697 | ||||
West Contra Costa Unified School District, School Improvements, General Obligation Unlimited,6.25%, 8/1/2030 | 250,000 | 328,160 | ||||||
5,505,924 | ||||||||
Colorado 0.94% | ||||||||
City of Brighton, CO, Public Improvements, Build America Bonds, Certificate of Participation, (AGM) (OID), Callable 12/1/2020 @ 100,6.75%, 12/1/2035 | 250,000 | 258,973 | ||||||
Colorado Mesa University, University & College Improvements, Build America Revenue Bonds, (State Higher Education Intercept Program),6.75%, 5/15/2042 | 500,000 | 726,530 | ||||||
County of Gunnison, CO, Public Improvements, Build America Bonds, Certificate of Participation, Callable 7/15/2020 @ 100,5.95%, 7/15/2030 | 250,000 | 255,048 | ||||||
1,240,551 | ||||||||
Connecticut 0.66% | ||||||||
City of Waterbury, CT, Public Improvements, General Obligation Unlimited, (AGM), Callable 9/1/2020 @ 100,6.10%, 9/1/2030 | 500,000 | 512,190 | ||||||
State of Connecticut, General Obligation Unlimited,5.85%, 3/15/2032 | 280,000 | 360,872 | ||||||
873,062 | ||||||||
Florida 4.32% | ||||||||
City of Lake City, FL Utility System Revenue, Water Utility Improvements, Build America Revenue Bonds, (AGM), Callable 7/1/2020 @ 100,6.28%, 7/1/2040 | 200,000 | 203,210 | ||||||
City of Lake City, FL Utility System Revenue, Water Utility Improvements, Build America Revenue Bonds, (AGM), Callable 7/1/2020 @ 100,6.03%, 7/1/2030 | 100,000 | 101,523 | ||||||
City of Miami Gardens, FL, Public Improvements, Build America Bonds, Certificate of Participation,7.17%, 6/1/2026 | 1,250,000 | 1,432,513 | ||||||
City of Oakland Park, FL Water & Sewer Revenue, Sewer Improvements, Build America Revenue Bonds, (AGM), Callable 9/1/2020 @ 100,6.14%, 9/1/2035 | 300,000 | 308,775 | ||||||
City of Tallahassee, FL, Utility System Revenue, Build America Revenue Bonds,5.22%, 10/1/2040 | 300,000 | 389,394 | ||||||
County of Miami-Dade, FL Transit System, Transit Improvements, Build America Revenue Bonds,5.53%, 7/1/2032 | 500,000 | 593,555 | ||||||
County of Miami-Dade, FL, Port, Airport & Marina Improvements, Build America Revenue Bonds, (AGM) (OID),7.50%, 4/1/2040 | 1,000,000 | 1,490,580 | ||||||
County of Miami-Dade, FL, Public Improvements, Build America Revenue Bonds, Callable 4/1/2020 @ 100,6.54%, 4/1/2030 | 250,000 | 252,865 | ||||||
County of Miami-Dade, FL, Recreational Facility Improvements, Revenue Bonds, (AGM),7.08%, 10/1/2029 | 250,000 | 317,765 | ||||||
Florida Atlantic University Finance Corporation, University & College Improvements, Build America Revenue Bonds,7.64%, 7/1/2040 | 165,000 | 169,732 | ||||||
Florida State Board of Governors, University & College Improvements, Build America Revenue Bonds, Callable 11/1/2020 @ 100,7.50%, 11/1/2035 | 250,000 | 261,183 | ||||||
Town of Miami Lakes, FL, Public Improvements, Build America Revenue Bonds,7.59%, 12/1/2030 | 150,000 | 205,983 | ||||||
5,727,078 | ||||||||
Georgia 4.61% | ||||||||
Cobb Marietta Georgia Coliseum, Revenue Bonds, Callable 1/1/2026 @ 100,4.50%, 1/1/2047 | 600,000 | 644,652 | ||||||
Municipal Electric Authority of Georgia, Electric Lights & Power Improvements, Build America Revenue Bonds,7.06%, 4/1/2057 | 2,487,000 | 3,366,428 | ||||||
State of Georgia, Public Improvements, General Obligation Unlimited, Callable 2/1/2024 @ 100,3.84%, 2/1/2032 | 2,000,000 | 2,089,000 | ||||||
6,100,080 |
See accompanying notes which are an integral part of these financial statements.
53 |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Hawaii 0.40% | ||||||||
State of Hawaii, General Obligation Unlimited, Callable 10/1/2025 @ 100,4.05%, 10/1/2032 | $ | 495,000 | $ | 531,590 | ||||
Idaho 0.32% | ||||||||
Idaho Water Resource Board, Water Utility Improvements, Revenue Bonds, (OID), Callable 9/1/2022 @ 100,5.25%, 9/1/2024 | 400,000 | 427,656 | ||||||
Illinois 3.14% | ||||||||
City of Chicago Heights, IL, Refunding Bonds, General Obligation Unlimited, (AGM) (OID), Callable 1/15/2021 @ 100,6.00%, 1/15/2028 | 150,000 | 155,058 | ||||||
City of Chicago, IL Waterworks Revenue, Water Utility Improvements, Build America Revenue Bonds,6.74%, 11/1/2040 | 250,000 | 348,185 | ||||||
Lake County Community Unit School District No. 187 North Chicago, School Improvements, General Obligation Unlimited, (AGM) (OID),7.13%, 1/1/2035 | 1,000,000 | 1,000,000 | ||||||
Northern Illinois University, University & College Improvements, Build America Revenue Bonds, (AGM), Callable 4/1/2020 @ 100,7.75%, 4/1/2030 | 250,000 | 252,882 | ||||||
Northern Illinois University, University & College Improvements, Build America Revenue Bonds, (AGM), Callable 4/1/2020 @ 100,8.15%, 4/1/2041 | 570,000 | 576,806 | ||||||
Village of Glenwood, IL, Public Improvements, Build America Bonds, General Obligation Unlimited, (AGM),7.03%, 12/1/2028 | 1,500,000 | 1,823,475 | ||||||
4,156,406 | ||||||||
Indiana 1.80% | ||||||||
Anderson School Building Corporation, Refunding Bonds, General Obligation Limited, Callable 7/5/2023 @ 100,3.95%, 7/5/2029 | 1,000,000 | 1,042,790 | ||||||
Anderson School Building Corporation, Refunding Bonds, General Obligation Limited, (OID), Callable 7/5/2023 @ 100,3.75%, 7/5/2028 | 1,000,000 | 1,039,230 | ||||||
Evansville Redevelopment Authority, Recreational Facility Improvements, Build America Refunding Revenue Bonds, Callable 8/1/2020 @ 100,7.21%, 2/1/2039 | 300,000 | 308,907 | ||||||
2,390,927 | ||||||||
Kentucky 0.53% | ||||||||
Kentucky Municipal Power Agency, Electric Lights & Power Improvements, Build America Revenue Bonds, (AGM), Callable 9/1/2020 @ 100,6.49%, 9/1/2037 | 250,000 | 256,973 | ||||||
Kentucky State Property & Building Commission, Economic Improvements, University & College Improvements, Build America Revenue Bonds,5.37%, 11/1/2025 | 400,000 | 444,484 | ||||||
701,457 | ||||||||
Louisiana 0.26% | ||||||||
Tangipahoa Parish Hospital Service District No. 1, Hospital Improvements, Build America Revenue Bonds, Callable 2/1/2020 @ 100,7.20%, 2/1/2042 | 340,000 | 340,979 | ||||||
Massachusetts 0.41% | ||||||||
City of Worcester, MA, Pension Funding, General Obligation Limited, (AGM) (OID),6.25%, 1/1/2028 | 175,000 | 200,690 | ||||||
Massachusetts Health & Educational Facilities Authority, Refunding Revenue Bonds,6.43%, 10/1/2035 | 250,000 | 328,998 | ||||||
University of Massachusetts Building Authority, University & College Improvements, Build America Revenue Bonds,6.57%, 5/1/2039 | 15,000 | 15,049 | ||||||
544,737 | ||||||||
Michigan 3.44% | ||||||||
Avondale School District, School Improvements, Build America Bonds, General Obligation Unlimited, (AGM), Callable 5/1/2020 @ 100,5.75%, 5/1/2032 | 500,000 | 504,425 |
See accompanying notes which are an integral part of these financial statements.
54 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Michigan (cont.) | ||||||||
Comstock Park Public Schools, School Improvements, General Obligation Unlimited, Callable 5/1/2021 @ 100,6.20%, 5/1/2024 | $ | 200,000 | $ | 211,170 | ||||
County of Macomb, MI, Retirement Facilities, General Obligation Limited, Callable 11/1/2025 @ 100,4.13%, 11/1/2030 | 250,000 | 271,533 | ||||||
Michigan Finance Authority, Revenue Bonds, Callable 9/1/2025 @ 100,3.90%, 9/1/2030 | 250,000 | 261,392 | ||||||
Michigan Finance Authority, School Improvements, Revenue Bonds, Callable 5/1/2021 @ 100,6.20%, 5/1/2022 | 245,000 | 254,957 | ||||||
Michigan Finance Authority, School Improvements, Revenue Bonds, Callable 11/1/2020 @ 100,6.38%, 11/1/2025 | 500,000 | 513,160 | ||||||
Michigan Tobacco Settlement Finance Authority, Miscellaneous Purposes Revenue Bonds, (OID),7.31%, 6/1/2034 | 2,315,000 | 2,397,113 | ||||||
Onsted Community Schools, School Improvements, General Obligation Unlimited, Callable 5/1/2020 @ 100,5.90%, 5/1/2027 | 150,000 | 151,761 | ||||||
St Johns Public Schools, General Obligation Unlimited, Callable 5/1/2020 @ 100,6.65%, 5/1/2040 | 5,000 | 5,068 | ||||||
4,570,579 | ||||||||
Mississippi 0.66% | ||||||||
Mississippi Development Bank, Highway Improvements, Build America Revenue Bonds,6.59%, 1/1/2035 | 650,000 | 868,946 | ||||||
Missouri 3.55% | ||||||||
City of Kansas City, MO, Revenue Bonds,7.83%, 4/1/2040 | 2,455,000 | 3,461,575 | ||||||
City of Sedalia, MO, Sewer Improvements, Build America Bonds, Certificate of Participation, (AGM), Callable 6/1/2020 @ 100,6.50%, 6/1/2024 | 250,000 | 254,893 | ||||||
City of St. Charles, MO, Water Utility Improvements Build America Bonds, Certificate of Participation, Callable 8/1/2020 @ 100,5.65%, 2/1/2030 | 275,000 | 280,464 | ||||||
Missouri Joint Municipal Electric Utility Commission, Electric Lights & Power Improvements, Build America Revenue Bonds,7.73%, 1/1/2039 | 475,000 | 716,143 | ||||||
4,713,075 | ||||||||
Nebraska 0.18% | ||||||||
Nebraska Public Power District, Electric Lights & Power Improvements, Build America Revenue Bonds,5.32%, 1/1/2030 | 200,000 | 235,498 | ||||||
Nevada 1.18% | ||||||||
County of Washoe, NV, Public Improvements, Build America Revenue Bonds,7.88%, 2/1/2040 | 250,000 | 420,087 | ||||||
County of Washoe, NV, Public Improvements, Build America Revenue Bonds,7.97%, 2/1/2040 | 590,000 | 912,028 | ||||||
Pershing County School District, School Improvements, Build America Bonds, General Obligation Limited, (GTD), Callable 4/1/2020 @ 100,6.25%, 4/1/2030 | 220,000 | 221,509 | ||||||
1,553,624 | ||||||||
New Jersey 2.40% | ||||||||
New Jersey Economic Development Authority, Revenue Bonds,7.43%, 2/15/2029 | 250,000 | 313,617 | ||||||
New Jersey Economic Development Authority, School Improvements, Build America Revenue Bonds, Callable 6/15/2020 @ 100,6.43%, 12/15/2035 | 500,000 | 510,170 | ||||||
New Jersey Educational Facilities Authority, University & College Improvements, Build America Revenue Bonds, Callable 7/1/2020 @ 100,6.19%, 7/1/2040 | 500,000 | 507,970 | ||||||
Township of Brick, NJ, General Obligation Unlimited,3.75%, 9/1/2028 | 1,780,000 | 1,860,118 | ||||||
3,191,875 | ||||||||
New York 7.88% | ||||||||
City of New York, NY, Public Improvements, Build America Bonds, General Obligation Unlimited,5.70%, 3/1/2027 | 145,000 | 173,218 |
See accompanying notes which are an integral part of these financial statements.
55 |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
New York (cont.) | ||||||||
City of New York, NY, Public Improvements, Build America Bonds, General Obligation Unlimited,5.21%, 10/1/2031 | $ | 100,000 | $ | 118,548 | ||||
County of Nassau, NY, Public Improvements, Build America Bonds, General Obligation Unlimited,5.38%, 10/1/2024 | 500,000 | 569,205 | ||||||
Long Island Power Authority, Revenue Bonds, (OID),5.85%, 5/1/2041 | 195,000 | 258,515 | ||||||
Metropolitan Transportation Authority, Revenue Bonds,5.87%, 11/15/2039 | 200,000 | 257,720 | ||||||
Metropolitan Transportation Authority, Transit Improvements, Build America Revenue Bonds,5.99%, 11/15/2030 | 125,000 | 156,721 | ||||||
Metropolitan Transportation Authority, Transit Improvements, Build America Revenue Bonds,6.20%, 11/15/2026 | 375,000 | 437,846 | ||||||
Metropolitan Transportation Authority, Transit Improvements, Build America Revenue Bonds,6.59%, 11/15/2030 | 395,000 | 506,765 | ||||||
Metropolitan Transportation Authority, Transit Improvements, Build America Revenue Bonds,6.69%, 11/15/2040 | 500,000 | 704,410 | ||||||
New York City Industrial Development Agency, Recreational Facilities Improvements Revenue Bonds, (NATL-RE),5.90%, 3/1/2046 | 680,000 | 791,765 | ||||||
New York City Transitional Finance Authority Building Aid Revenue, School Improvements, Build America Revenue Bonds, (State Aid Withholding),6.83%, 7/15/2040 | 500,000 | 691,840 | ||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Public Improvements, Build America Revenue Bonds,5.47%, 5/1/2036 | 815,000 | 1,057,340 | ||||||
New York City Water & Sewer System, Build America Refunding Revenue Bonds, Callable 6/15/2020 @ 100,6.49%, 6/15/2042 | 200,000 | 203,782 | ||||||
New York Municipal Bond Bank Agency, Build America Refunding Revenue Bonds,6.88%, 12/15/2034 | 500,000 | 500,970 | ||||||
New York State Dormitory Authority, Revenue Bonds, Callable 7/1/2029 @ 100,4.29%, 7/1/2044 | 250,000 | 272,620 | ||||||
Port Authority of New York & New Jersey, Port, Airport & Marina Improvements, Revenue Bonds,3.92%, 10/15/2028 | 2,115,000 | 2,252,686 | ||||||
Port Authority of New York & New Jersey, Revenue Bonds, Callable 6/1/2025 @ 100,4.82%, 6/1/2045 | 1,000,000 | 1,099,500 | ||||||
Triborough Bridge & Tunnel Authority, Revenue Bonds, Callable 11/15/2033 @ 100,5.55%, 11/15/2040 | 150,000 | 197,029 | ||||||
Western Nassau County Water Authority, Build America Revenue Bonds,6.70%, 4/1/2040 | 150,000 | 201,744 | ||||||
10,452,224 | ||||||||
North Carolina 0.18% | ||||||||
County of Cabarrus, NC, School Improvements, Revenue Bonds, Callable 4/1/2021 @ 100,5.50%, 4/1/2026 | 235,000 | 242,687 | ||||||
Ohio 2.88% | ||||||||
American Municipal Power, Inc., Electric Lights & Power Improvements, Build America Revenue Bonds,7.50%, 2/15/2050 | 500,000 | 773,090 | ||||||
American Municipal Power, Inc., Revenue Bonds,6.27%, 2/15/2050 | 500,000 | 668,750 | ||||||
Cincinnati City School District, Refunding Bonds, Certificate of Participation, (OID), Callable 12/15/2024 @ 100,4.00%, 12/15/2032 | 200,000 | 211,420 | ||||||
County of Cuyahoga, OH, Hospital Improvements, Build America Revenue Bonds,8.22%, 2/15/2040 | 1,000,000 | 1,357,970 | ||||||
Mariemont City School District, General Obligation Unlimited, Callable 12/1/2020 @ 100,5.90%, 12/1/2030 | 105,000 | 108,834 | ||||||
Mariemont City School District, General Obligation Unlimited, Callable 12/1/2020 @ 100,5.90%, 12/1/2030 | 5,000 | 5,154 | ||||||
Olentangy Local School District, Refunding Bonds, General Obligation Unlimited,3.50%, 12/1/2029 | 500,000 | 518,465 |
See accompanying notes which are an integral part of these financial statements.
56 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Ohio (cont.) | ||||||||
Springfield Local School District/Summit County, School Improvements, Build America Bonds, General Obligation Unlimited, (School District Credit Program),5.65%, 9/1/2031 | $ | 200,000 | $ | 200,472 | ||||
3,844,155 | ||||||||
Oklahoma 0.39% | ||||||||
Bryan County Independent School District No. 72 Durant, School Improvements, Build America Bonds, Certificate of Participation, Callable 1/24/2020 @ 102,6.80%, 12/1/2033 | 500,000 | 511,745 | ||||||
Oregon 0.19% | ||||||||
State of Oregon Department of Administrative Services, Hospital Improvements, Build America Bonds, Certificate of Participation, Callable 5/1/2020 @ 100,6.18%, 5/1/2035 | 250,000 | 253,607 | ||||||
Pennsylvania 2.49% | ||||||||
Pennsylvania Turnpike Commission, Build America Revenue Bonds, 6.38%, 12/1/2037 | 520,000 | 708,302 | ||||||
Philadelphia Authority for Industrial Development, Pension Funding, Revenue Bonds, (AGM) (OID),6.35%, 4/15/2028 | 630,000 | 776,683 | ||||||
Philadelphia Municipal Authority, Public Improvements, Revenue Bonds,5.09%, 3/15/2028 | 500,000 | 515,035 | ||||||
Sports & Exhibition Authority of Pittsburgh and Allegheny County, Recreational Facilities Improvements, Revenue Bonds,7.04%, 11/1/2039 | 1,000,000 | 1,304,270 | ||||||
3,304,290 | ||||||||
South Carolina 0.20% | ||||||||
Moncks Corner Regional Recreation Corporation, Recreational Facility Improvements, Build America Revenue Bonds, Callable 12/1/2020 @ 100,6.55%, 12/1/2039 | 250,000 | 258,837 | ||||||
South Dakota 0.32% | ||||||||
South Dakota State Building Authority, University & College Improvements, Build America Revenue Bonds, Callable 6/1/2021 @ 100,6.15%, 6/1/2031 | 400,000 | 421,784 | ||||||
Texas 1.92% | ||||||||
City of Lancaster, TX, Public Improvements, Build America Bonds, General Obligation Limited, Callable 3/20/2020 @ 100,6.53%, 2/15/2040 | 750,000 | 753,458 | ||||||
Ector County Hospital District, Hospital Improvements, Build America Revenue Bonds, Callable 9/15/2020 @ 100,7.18%, 9/15/2035 | 250,000 | 251,933 | ||||||
Frisco Economic Development Corporation, Public Improvements, Revenue Bonds, 4.20%, 2/15/2034 | 1,000,000 | 1,041,710 | ||||||
Midland County Hospital District, Health, Hospital & Nursing Home Improvements, Build America Bonds, General Obligation Limited,6.44%, 5/15/2039 | 260,000 | 365,773 | ||||||
Orchard Cultural Education Facilities Finance Corporation, Recreational Facility Improvements, Revenue Bonds,6.48%, 11/15/2034 | 110,000 | 114,508 | ||||||
2,527,382 | ||||||||
Virgin Islands 1.70% | ||||||||
Virgin Islands Water & Power Authority- Electric System, Electric Lights & Power Improvements, Build America Revenue Bonds, (AGM),6.65%, 7/1/2028 | 840,000 | 981,347 | ||||||
Virgin Islands Water & Power Authority- Electric System, Electric Lights & Power Improvements, Build America Revenue Bonds, (AGM),6.85%, 7/1/2035 | 1,000,000 | 1,271,320 | ||||||
2,252,667 | ||||||||
Virginia 4.30% | ||||||||
Tobacco Settlement Financing Corporation, Refunding Revenue Bonds, (OID), 6.71%, 6/1/2046 | 5,910,000 | 5,705,928 |
See accompanying notes which are an integral part of these financial statements.
57 |
SPIRIT OF AMERICA INCOME FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Washington 1.78% | ||||||||
City of Seattle, WA, Municipal Light & Power Revenue, Electric Lights & Power Improvements, Build America Revenue Bonds, (OID),5.57%, 2/1/2040 | $ | 250,000 | $ | 323,498 | ||||
Douglas County Public Utility District No. 1, Electric Lights & Power Improvements, Revenue Bonds,5.35%, 9/1/2030 | 250,000 | 294,023 | ||||||
Klickitat County Public Utility District No. 1, Electric Lights & Power Improvements, Refunding Revenue Bonds, Callable 12/1/2021 @ 100,5.25%, 12/1/2029 | 705,000 | 750,078 | ||||||
Public Utility District No. 1 of Cowlitz County, WA, Electric Lights & Power Improvements, Build America Revenue Bonds,6.88%, 9/1/2032 | 500,000 | 676,640 | ||||||
Snohomish County Public Utility District No. 1, Electric Lights & Power Improvements, Build America Revenue Bonds, (OID),5.68%, 12/1/2040 | 250,000 | 323,838 | ||||||
2,368,077 | ||||||||
West Virginia 1.60% | ||||||||
Tobacco Settlement Finance Authority, Miscellaneous Purposes Revenue Bonds,7.47%, 6/1/2047 | 2,035,000 | 2,116,258 | ||||||
Total Municipal Bonds | ||||||||
(Cost $71,805,568) | 84,452,398 | |||||||
Shares | ||||||||
Money Market Funds 4.32% | ||||||||
Morgan Stanley Institutional Liquidity Government Portfolio, Institutional Class, 1.51%(c) | 5,725,999 | 5,725,999 | ||||||
Total Money Market Funds | ||||||||
(Cost $5,725,999) | 5,725,999 | |||||||
Total Investments — 99.21% | ||||||||
(Cost $117,375,108) | 131,542,085 | |||||||
Other Assets in Excess of Liabilities — 0.79% | 1,045,898 | |||||||
NET ASSETS — 100.00% | $ | 132,587,983 |
(a) | Security exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. The security may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
(b) | Security is currently being valued according to the fair value procedures approved by the Board of Directors. |
(c) | Rate disclosed is the seven day effective yield as of December 31, 2019. |
AGM — Assured Guaranty Municipal Corp.
GTD — Guaranteed
NATL-RE — Insured by National Public Finance Guarantee Corp.
OID — Original Issue Discount
See accompanying notes which are an integral part of these financial statements.
58 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS | December 31, 2019
Shares | Market Value | |||||||
Common Stocks29.11% | ||||||||
Communication Services 2.25% | ||||||||
Alphabet, Inc., Class C(a) | 190 | $ | 254,034 | |||||
AT&T, Inc. | 4,114 | 160,775 | ||||||
Netflix, Inc.(a) | 351 | 113,573 | ||||||
528,382 | ||||||||
Consumer Discretionary 2.09% | ||||||||
Amazon.com, Inc.(a) | 60 | 110,870 | ||||||
Lennar Corporation, Class A | 3,800 | 212,002 | ||||||
Toll Brothers, Inc. | 4,285 | 169,300 | ||||||
492,172 | ||||||||
Energy 9.91% | ||||||||
Cheniere Energy Partners LP | 9,300 | 370,233 | ||||||
Energy Transfer Equity LP | 17,350 | 222,601 | ||||||
Enterprise Products Partners LP | 10,805 | 304,269 | ||||||
Exxon Mobil Corporation | 2,095 | 146,189 | ||||||
Kinder Morgan, Inc. | 7,500 | 158,775 | ||||||
Magellan Midstream Partners LP | 2,725 | 171,321 | ||||||
MPLX LP | 13,850 | 352,621 | ||||||
Targa Resources Corporation | 3,805 | 155,358 | ||||||
USA Compression Partners LP | 9,666 | 175,341 | ||||||
Viper Energy Partners, LP | 7,200 | 177,552 | ||||||
Western Midstream Partners LP | 4,500 | 88,605 | ||||||
2,322,865 | ||||||||
Financials 3.23% | ||||||||
Blackstone Group LP (The) | 7,675 | 429,339 | ||||||
Blackstone Mortgage Trust, Inc., Class A | 3,207 | 119,365 | ||||||
Fifth Third Bancorp | 3,400 | 104,516 | ||||||
Starwood Property Trust, Inc. | 4,175 | 103,790 | ||||||
757,010 | ||||||||
Industrials 1.70% | ||||||||
Caterpillar, Inc. | 700 | 103,376 | ||||||
Deere & Company | 1,150 | 199,249 | ||||||
Honeywell International, Inc. | 550 | 97,350 | ||||||
399,975 | ||||||||
Information Technology3.88% | ||||||||
Apple, Inc. | 690 | 202,619 | ||||||
NVIDIA Corporation | 2,045 | 481,188 | ||||||
PayPal Holdings, Inc.(a) | 2,100 | 227,157 | ||||||
910,964 | ||||||||
Materials 0.44% | ||||||||
Dow, Inc. | 1,900 | 103,987 | ||||||
Real Estate Investment Trusts (REITs) 4.63% | ||||||||
Apple Hospitality REIT, Inc. | 6,250 | 101,562 | ||||||
Sun Communities, Inc. | 2,564 | 384,856 | ||||||
Terreno Realty Corporation | 7,362 | 398,579 | ||||||
Welltower, Inc. | 1,160 | 94,865 | ||||||
WP Carey, Inc. | 1,340 | 107,254 | ||||||
1,087,116 |
See accompanying notes which are an integral part of these financial statements.
59 |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Utilities 0.98% | ||||||||
American Electric Power Company, Inc. | 1,155 | $ | 109,159 | |||||
Consolidated Edison, Inc. | 1,310 | 118,516 | ||||||
227,675 | ||||||||
Total Common Stocks | ||||||||
(Cost $6,256,013) | 6,830,147 | |||||||
Preferred Stocks 9.29% | ||||||||
Financials 3.16% | ||||||||
Bank of America Corporation, 6.00% | 3,800 | 100,320 | ||||||
First Republic Bank, 5.70% | 9,000 | 230,760 | ||||||
Hancock Holding Company, 5.95% | 9,200 | 235,980 | ||||||
KKR & Company LP, 6.50% | 6,481 | 174,274 | ||||||
741,334 | ||||||||
Information Technology 1.14% | ||||||||
eBay, Inc., 6.00% | 10,000 | 267,300 | ||||||
Real Estate Investment Trusts 2.30% | ||||||||
National Retail Properties, Inc., 5.20% | 6,000 | 152,580 | ||||||
Public Storage, 5.05% | 5,000 | 129,350 | ||||||
Public Storage, Series B, 5.40% | 10,000 | 258,300 | ||||||
540,230 | ||||||||
Utilities 2.69% | ||||||||
Southern Company, 5.25% | 10,000 | 263,400 | ||||||
Southern Company, 5.25% | 14,000 | 368,340 | ||||||
631,740 | ||||||||
Total Preferred Stocks | ||||||||
(Cost $2,100,456) | 2,180,604 | |||||||
Principal | ||||||||
Corporate Bonds2.14% | ||||||||
Apple Inc., 2.20%, 9/11/2029 | $ | 250,000 | 245,626 | |||||
Microsoft Corporation, 3.30%, 2/6/2027 | 240,000 | 256,743 | ||||||
Total Corporate Bonds | ||||||||
(Cost $258,206) | 502,368 | |||||||
Municipal Bonds 51.86% | ||||||||
Arizona 3.17% | ||||||||
City of Tucson, AZ, Certificate of Participation, (AGM), 4.83%, 7/1/2034 | 620,000 | 744,800 | ||||||
California 4.92% | ||||||||
City of Newport Beach, CA, Public Improvements, Certificate of Participation, 7.17%, 7/1/2040 | 800,000 | 1,154,128 | ||||||
Florida 4.58% | ||||||||
Pasco County School Board, School Improvements, Certificate of Participation, 5.00%, 12/1/2037 | 1,000,000 | 1,075,680 |
See accompanying notes which are an integral part of these financial statements.
60 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Principal Amount | Market Value | |||||||
Kansas 5.11% | ||||||||
Kansas Development Finance Authority, Revenue Bonds,4.73%, 4/15/2037 | $ | 1,000,000 | $ | 1,199,930 | ||||
Michigan 4.65% | ||||||||
County of Macomb, MI, Retirement Facilities, General Obligation Limited,4.42%, 11/1/2035 | 1,000,000 | 1,090,300 | ||||||
Nevada 0.66% | ||||||||
County of Washoe, NV, Public & Highway Improvements, Build America Revenue Bonds,7.97%, 2/1/2040 | 100,000 | 154,581 | ||||||
New York 5.97% | ||||||||
New York City Transitional Finance Authority Building Aid Revenue, School Improvements, Miscellaneous Purposes Revenue Bonds,5.00%, 7/15/2030 | 300,000 | 349,566 | ||||||
New York State Dormitory Authority, Revenue Bonds, Callable 7/1/2026 @ 100,3.88%, 7/1/2046 | 750,000 | 775,852 | ||||||
Port Authority of New York & New Jersey, Revenue Bonds, Callable 6/1/2025 @ 100,4.82%, 6/1/2045 | 250,000 | 274,875 | ||||||
1,400,293 | ||||||||
Ohio 14.58% | ||||||||
American Municipal Power, Inc., Electric Lights & Power Improvements, Build America Revenue Bonds,5.94%, 2/15/2047 | 100,000 | 138,180 | ||||||
American Municipal Power, Inc., Electric Lights & Power Improvements, Build America Revenue Bonds,7.83%, 2/15/2041 | 1,000,000 | 1,566,750 | ||||||
American Municipal Power, Inc., Electric Lights & Power Improvements, Build America Revenue Bonds,8.08%, 2/15/2050 | 1,000,000 | 1,714,550 | ||||||
3,419,480 | ||||||||
Pennsylvania 4.62% | ||||||||
City of Reading, PA, General Obligation Unlimited, (AGM) (OID), Callable 11/1/2024 @ 100,5.30%, 11/1/2033 | 1,000,000 | 1,084,090 | ||||||
Tennessee 3.60% | ||||||||
Metropolitan Government of Nashville & Davidson County Convention Center Authority, Public Improvements, Revenue Bonds,7.43%, 7/1/2043 | 500,000 | 738,330 | ||||||
Metropolitan Government of Nashville & Davidson County, General Obligation Unlimited,3.49%, 7/1/2029 | 100,000 | 105,974 | ||||||
844,304 | ||||||||
Total Municipal Bonds | ||||||||
(Cost $10,011,838) | 12,167,586 | |||||||
U.S. Government & Agency Obligations 2.96% | ||||||||
U.S. Treasury Notes1.50%, 10/31/2024 | 350,000 | 347,143 | ||||||
U.S. Treasury Notes1.38%, 10/15/2022 | 350,000 | 347,922 | ||||||
Total U.S. Government & Agency Obligations | ||||||||
(Cost $697,099) | 695,065 |
See accompanying notes which are an integral part of these financial statements.
61 |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (CONT.) | December 31, 2019
Shares | Market Value | |||||||
Money Market Funds 3.95% | ||||||||
Morgan Stanley Institutional Liquidity Government Portfolio, Institutional Class, 1.51%(b) | 926,320 | $ | 926,320 | |||||
Total Money Market Funds | ||||||||
(Cost $926,320) | 926,320 | |||||||
Total Investments — 99.31% | ||||||||
(Cost $20,249,932) | 23,302,090 | |||||||
Other Assets in Excess of Liabilities — 0.69% | 162,714 | |||||||
NET ASSETS — 100.00% | $ | 23,464,804 |
(a) | Non-income producing security. |
(b) | Rate disclosed is the seven day effective yield as of December 31, 2019. |
AGM — Assured Guaranty Municipal Corp.
OID — Original Issue Discount
See accompanying notes which are an integral part of these financial statements.
62 | SPIRIT OF AMERICA |
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2019
Spirit of America | Spirit of America | Spirit of America | Spirit of America | Spirit of America | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Investments in securities at fair value (cost $56,076,294, $63,510,392, $65,783,111, $117,375,108 and $20,249,932) | $ | 90,806,759 | $ | 114,287,218 | $ | 68,781,483 | $ | 131,542,085 | $ | 23,302,090 | ||||||||||
Receivable for Fund shares sold | 12,781 | 12,915 | 6,676 | 30,594 | 7,432 | |||||||||||||||
Dividends and interest receivable | 495,505 | 130,414 | 807,930 | 1,385,074 | 206,357 | |||||||||||||||
Prepaid expenses | 11,406 | 9,506 | 7,911 | 9,032 | 7,664 | |||||||||||||||
TOTAL ASSETS | 91,326,451 | 114,440,053 | 69,604,000 | 132,966,785 | 23,523,543 | |||||||||||||||
LIABILITIES | ||||||||||||||||||||
Options written, at value (premium received $1,300, $0, $0, $0 and $0) | 2,020 | — | — | — | — | |||||||||||||||
Line of credit payable | 261,260 | 206,837 | — | — | — | |||||||||||||||
Payable for Fund shares redeemed | 14,000 | 187,069 | 105,611 | 30,417 | 5,432 | |||||||||||||||
Payable for distributions to shareholders | — | — | 58,559 | 166,570 | — | |||||||||||||||
Payable for investment advisory fees | 74,471 | 93,078 | 21,941 | 64,661 | 7,407 | |||||||||||||||
Payable for distribution (12b-1) fees | 23,157 | 28,811 | 9,067 | 28,334 | 5,300 | |||||||||||||||
Payable for accounting and administration fees | 4,675 | 5,715 | 3,455 | 6,625 | 1,185 | |||||||||||||||
Payable for transfer agent fees | 2,261 | 2,315 | 1,207 | 3,892 | 683 | |||||||||||||||
Chief Compliance Officer | 240 | 294 | 178 | 341 | 61 | |||||||||||||||
Other accrued expenses | 54,285 | 56,776 | 66,867 | 77,962 | 38,671 | |||||||||||||||
TOTAL LIABILITIES | 436,369 | 580,895 | 266,885 | 378,802 | 58,739 | |||||||||||||||
NET ASSETS | $ | 90,890,082 | $ | 113,859,158 | $ | 69,337,115 | $ | 132,587,983 | $ | 23,464,804 | ||||||||||
| ||||||||||||||||||||
SOURCE OF NET ASSETS | ||||||||||||||||||||
As of December 31, 2019, net assets consisted of: | ||||||||||||||||||||
Paid-in capital | $ | 55,364,194 | $ | 63,068,300 | $ | 74,368,275 | $ | 118,026,158 | $ | 21,973,967 | ||||||||||
Accumulated earnings (deficit) | 35,525,888 | 50,790,858 | (5,031,160 | ) | 14,561,825 | 1,490,837 | ||||||||||||||
NET ASSETS | $ | 90,890,082 | $ | 113,859,158 | $ | 69,337,115 | $ | 132,587,983 | $ | 23,464,804 | ||||||||||
| ||||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||
Class A Shares | $ | 90,679,397 | $ | 113,819,175 | $ | 69,001,666 | $ | 132,166,073 | $ | 23,029,405 | ||||||||||
Class C Shares | $ | 210,685 | $ | 39,983 | $ | 335,449 | $ | 421,910 | $ | 435,399 | ||||||||||
SHARES OUTSTANDING ($0.001 par value, 500,000,000 authorized shares): | ||||||||||||||||||||
Class A Shares | 7,580,671 | 5,051,996 | 7,301,973 | 10,822,167 | 2,389,644 | |||||||||||||||
Class C Shares | 17,905 | 1,770 | 35,580 | 34,516 | 45,270 | |||||||||||||||
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE | ||||||||||||||||||||
Class A Shares(a) | $ | 11.96 | $ | 22.53 | $ | 9.45 | $ | 12.21 | $ | 9.64 | ||||||||||
Class C Shares(b) | $ | 11.77 | $ | 22.59 | $ | 9.43 | $ | 12.22 | $ | 9.62 | ||||||||||
OFFERING PRICE PER SHARE (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share: | ||||||||||||||||||||
Class A Shares | $ | 12.62 | $ | 23.78 | $ | 9.92 | $ | 12.82 | $ | 10.12 | ||||||||||
MAXIMUM SALES CHARGE: | ||||||||||||||||||||
Class A Shares | 5.25 | % | 5.25 | % | 4.75 | % | 4.75 | % | 4.75 | % |
(a) | A contingent deferred sales charge (“CDSC”) of 1.00% may be charged on shares held less than one year where an indirect commission was paid. |
(b) | A CDSC of 1.00% may be charged on shares held less than 13 months. |
See accompanying notes which are an integral part of these financial statements.
63 |
STATEMENTS OF OPERATIONS
Year ENDED December 31, 2019
Spirit of America | Spirit of America | Spirit of America | Spirit of America | Spirit of America | ||||||||||||||||
INVESTMENT INCOME | ||||||||||||||||||||
Dividends | $ | 2,049,539 | $ | 2,158,398 | $ | 14,799 | $ | 975,931 | $ | 645,328 | ||||||||||
Foreign dividend taxes withheld | (105 | ) | (1,312 | ) | — | (9,882 | ) | (134 | ) | |||||||||||
Interest | 8,053 | — | 2,672,835 | 5,482,041 | 580,855 | |||||||||||||||
TOTAL INVESTMENT INCOME | 2,057,487 | 2,157,086 | 2,687,634 | 6,448,090 | 1,226,049 | |||||||||||||||
EXPENSES | ||||||||||||||||||||
Investment advisory | 873,971 | 983,209 | 420,056 | 798,390 | 156,945 | |||||||||||||||
Distribution (12b-1) — Class A | 269,762 | 303,854 | 104,674 | 331,797 | 59,352 | |||||||||||||||
Distribution (12b-1) — Class C | 1,800 | 773 | 2,270 | 3,459 | 4,046 | |||||||||||||||
Accounting and Administration | 52,012 | 58,505 | 40,168 | 76,340 | 13,830 | |||||||||||||||
Transfer agent | 27,965 | 28,211 | 14,673 | 47,719 | 8,442 | |||||||||||||||
Auditing | 26,029 | 26,029 | 26,029 | 26,029 | 26,029 | |||||||||||||||
Registration | 25,571 | 26,955 | 32,112 | 32,251 | 23,642 | |||||||||||||||
Sub transfer agent | 24,311 | 24,579 | 12,195 | 40,164 | 6,858 | |||||||||||||||
Printing | 19,221 | 19,703 | 13,092 | 28,965 | 7,566 | |||||||||||||||
Directors | 12,879 | 14,815 | 10,242 | 19,298 | 3,791 | |||||||||||||||
Custodian | 10,602 | 10,761 | 5,692 | 10,272 | 4,606 | |||||||||||||||
Insurance | 8,089 | 9,604 | 6,831 | 13,103 | 2,461 | |||||||||||||||
Legal | 5,467 | 6,386 | 4,027 | 7,736 | 1,334 | |||||||||||||||
Pricing | 2,845 | 4,885 | 62,631 | 36,019 | 5,011 | |||||||||||||||
Interest | 2,808 | 1,556 | 14,880 | 9,061 | 1,142 | |||||||||||||||
Chief Compliance Officer | 2,524 | 2,844 | 1,941 | 3,698 | 672 | |||||||||||||||
Line of credit | 732 | 841 | 564 | 1,079 | 197 | |||||||||||||||
Other | 21,727 | 23,375 | 21,396 | 28,049 | 21,066 | |||||||||||||||
TOTAL EXPENSES | 1,388,315 | 1,546,885 | 793,473 | 1,513,429 | 346,990 | |||||||||||||||
Fees waived by Adviser | — | — | (145,082 | ) | (35,800 | ) | (40,635 | ) | ||||||||||||
NET EXPENSES | 1,388,315 | 1,546,885 | 648,391 | 1,477,629 | 306,355 | |||||||||||||||
NET INVESTMENT INCOME | 669,172 | 610,201 | 2,039,243 | 4,970,461 | 919,694 | |||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||||||||||||||
Net realized gain (loss) from investment transactions | 5,086,720 | 3,869,222 | (660 | ) | 1,954,158 | 241,267 | ||||||||||||||
Net realized loss on foreign currency transactions | — | — | — | (90 | ) | — | ||||||||||||||
Net realized gain on written option transactions | 1,989 | 4,167 | — | — | — | |||||||||||||||
Net change in unrealized appreciation of investments | 15,915,019 | 21,429,294 | �� | 1,444,190 | 7,823,363 | 1,694,850 | ||||||||||||||
Net change in unrealized depreciation of written options contracts | (2,839 | ) | (1,499 | ) | — | — | — | |||||||||||||
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS | 21,000,889 | 25,301,184 | 1,443,530 | 9,777,431 | 1,936,117 | |||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 21,670,061 | $ | 25,911,385 | $ | 3,482,773 | $ | 14,747,892 | $ | 2,855,811 |
See accompanying notes which are an integral part of these financial statements.
64 | SPIRIT OF AMERICA |
[THIS PAGE INTENTIONALLY LEFT BLANK]
65 |
STATEMENTS OF CHANGES IN NET ASSETS
Spirit of America Real | Spirit of America | |||||||||||||||
For the Year | For the Year | For the Year | For the Year | |||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 669,172 | $ | 1,252,958 | $ | 610,201 | $ | 711,091 | ||||||||
Net realized gain (loss) on investment transactions | 5,088,709 | 3,804,800 | 3,873,389 | 3,628,494 | ||||||||||||
Net change in unrealized appreciation (depreciation) of investments | 15,912,180 | (11,706,114 | ) | 21,427,795 | (11,829,438 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | 21,670,061 | (6,648,356 | ) | 25,911,385 | (7,489,853 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM | ||||||||||||||||
Earnings: | ||||||||||||||||
Class A | (6,302,124 | ) | (6,741,059 | ) | (4,474,877 | ) | (4,316,781 | ) | ||||||||
Class C | (13,982 | ) | (8,848 | ) | (2,225 | ) | (3,861 | ) | ||||||||
Return of capital: | ||||||||||||||||
Class A | — | — | (2,217,387 | ) | (2,203,290 | ) | ||||||||||
Class C | — | — | (1,103 | ) | (1,641 | ) | ||||||||||
Total distributions to shareholders | (6,316,106 | ) | (6,749,907 | ) | (6,695,592 | ) | (6,525,573 | ) | ||||||||
CAPITAL TRANSACTIONS | ||||||||||||||||
Class A: | ||||||||||||||||
Shares sold | 6,915,004 | 5,314,932 | 18,577,371 | 16,931,863 | ||||||||||||
Shares issued from reinvestment of distributions | 5,293,289 | 5,757,382 | 5,603,723 | 5,595,908 | ||||||||||||
Shares redeemed | (17,620,003 | ) | (24,027,001 | ) | (18,500,401 | ) | (20,640,926 | ) | ||||||||
Total – Class A | (5,411,710 | ) | (12,954,687 | ) | 5,680,693 | 1,886,845 | ||||||||||
Class C: | ||||||||||||||||
Shares sold | 73,124 | 84,318 | 14,075 | 65,630 | ||||||||||||
Shares issued from reinvestment of distributions | 11,482 | 5,691 | 1,724 | 2,450 | ||||||||||||
Shares redeemed | (15,832 | ) | — | (74,747 | ) | (10,544 | ) | |||||||||
Total – Class C | 68,774 | 90,009 | (58,948 | ) | 57,536 | |||||||||||
Increase (decrease) in net assets derived from capital share transactions | (5,342,936 | ) | (12,864,678 | ) | 5,621,745 | 1,944,381 | ||||||||||
Total increase (decrease) in Net Assets | 10,011,019 | (26,262,941 | ) | 24,837,538 | (12,071,045 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 80,879,063 | 107,142,004 | 89,021,620 | 101,092,665 | ||||||||||||
End of year | $ | 90,890,082 | $ | 80,879,063 | $ | 113,859,158 | $ | 89,021,620 | ||||||||
SHARE TRANSACTIONS | ||||||||||||||||
Class A: | ||||||||||||||||
Shares sold | 578,891 | 478,124 | 869,402 | 786,653 | ||||||||||||
Shares issued from reinvestment of distributions | 452,431 | 543,810 | 257,508 | 288,316 | ||||||||||||
Shares redeemed | (1,498,858 | ) | (2,164,837 | ) | (873,751 | ) | (957,406 | ) | ||||||||
Total – Class A | (467,536 | ) | (1,142,903 | ) | 253,159 | 117,563 | ||||||||||
Class C: | ||||||||||||||||
Shares sold | 6,336 | 7,758 | 654 | 3,011 | ||||||||||||
Shares issued from reinvestment of distributions | 997 | 550 | 79 | 127 | ||||||||||||
Shares redeemed | (1,320 | ) | — | (3,425 | ) | (468 | ) | |||||||||
Total – Class C | 6,013 | 8,308 | (2,692 | ) | 2,670 | |||||||||||
Increase (decrease) in shares outstanding | (461,523 | ) | (1,134,595 | ) | 250,467 | 120,233 |
See accompanying notes which are an integral part of these financial statements.
66 | SPIRIT OF AMERICA |
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
Spirit of America | Spirit of America | Spirit of America | |||||||||||||||||||||||||
For the Year | For the Year | For the Year | For the Year | For the Year | For the Year | ||||||||||||||||||||||
| |||||||||||||||||||||||||||
$ | 2,039,243 | $ | 2,702,614 | $ | 4,970,461 | $ | 6,452,687 | $ | 919,694 | $ | 691,904 | ||||||||||||||||
(660 | ) | 698,663 | 1,954,068 | 3,306,114 | 241,267 | 1,281,159 | |||||||||||||||||||||
| 1,444,190 | (2,814,131 | ) | 7,823,363 | (11,640,300 | ) | 1,694,850 | (3,550,159 | ) | ||||||||||||||||||
3,482,773 | 587,146 | 14,747,892 | (1,881,499 | ) | 2,855,811 | (1,577,096 | ) | ||||||||||||||||||||
| |||||||||||||||||||||||||||
(2,034,634 | ) | (2,699,488 | ) | (5,178,795 | ) | (6,822,573 | ) | (781,978 | ) | (625,316 | ) | ||||||||||||||||
(4,609 | ) | (3,124 | ) | (11,131 | ) | (8,044 | ) | (12,105 | ) | (4,821 | ) | ||||||||||||||||
— | — | (588,189 | ) | (802,507 | ) | (622,732 | ) | (882,690 | ) | ||||||||||||||||||
| — | — | (1,264 | ) | (946 | ) | (9,640 | ) | (6,805 | ) | |||||||||||||||||
(2,039,243 | ) | (2,702,612 | ) | (5,779,379 | ) | (7,634,070 | ) | (1,426,455 | ) | (1,519,632 | ) | ||||||||||||||||
| |||||||||||||||||||||||||||
10,209,193 | 5,511,959 | 18,699,813 | 11,494,042 | 3,231,027 | 1,568,591 | ||||||||||||||||||||||
1,251,649 | 1,656,049 | 3,717,612 | 4,966,249 | 862,234 | 967,064 | ||||||||||||||||||||||
| (16,718,669 | ) | (31,396,872 | ) | (35,422,187 | ) | (75,870,687 | ) | (7,649,550 | ) | (26,812,134 | ) | |||||||||||||||
| (5,257,827 | ) | (24,228,864 | ) | (13,004,762 | ) | (59,410,396 | ) | (3,556,289 | ) | (24,276,479 | ) | |||||||||||||||
256,040 | 75,070 | 179,602 | 186,536 | 99,448 | 143,792 | ||||||||||||||||||||||
4,007 | 2,675 | 9,090 | 6,663 | 21,745 | 11,609 | ||||||||||||||||||||||
| (81,461 | ) | — | (80,497 | ) | (20,728 | ) | (101,056 | ) | (19,150 | ) | ||||||||||||||||
| 178,586 | 77,745 | 108,195 | 172,471 | 20,137 | 136,251 | |||||||||||||||||||||
| (5,079,241 | ) | (24,151,119 | ) | (12,896,567 | ) | (59,237,925 | ) | (3,536,152 | ) | (24,140,228 | ) | |||||||||||||||
(3,635,711 | ) | (26,266,585 | ) | (3,928,054 | ) | (68,753,494 | ) | (2,106,796 | ) | (27,236,956 | ) | ||||||||||||||||
| |||||||||||||||||||||||||||
| 72,972,826 | 99,239,411 | 136,516,037 | 205,269,531 | 25,571,600 | 52,808,556 | |||||||||||||||||||||
$ | 69,337,115 | $ | 72,972,826 | $ | 132,587,983 | $ | 136,516,037 | $ | 23,464,804 | $ | 25,571,600 | ||||||||||||||||
| |||||||||||||||||||||||||||
1,082,115 | 593,614 | 1,547,405 | 984,445 | 328,865 | 165,524 | ||||||||||||||||||||||
132,890 | 178,381 | 308,760 | 425,219 | 89,209 | 102,338 | ||||||||||||||||||||||
| (1,780,489 | ) | (3,378,436 | ) | (2,962,822 | ) | (6,485,630 | ) | (789,496 | ) | (2,830,857 | ) | |||||||||||||||
| (565,484 | ) | (2,606,441 | ) | (1,106,657 | ) | (5,075,966 | ) | (371,422 | ) | (2,562,995 | ) | |||||||||||||||
27,026 | 7,995 | 14,842 | 15,886 | 10,192 | 15,183 | ||||||||||||||||||||||
426 | 289 | 753 | 572 | 2,255 | 1,234 | ||||||||||||||||||||||
| (8,653 | ) | — | (6,687 | ) | (1,762 | ) | (10,502 | ) | (2,063 | ) | ||||||||||||||||
| 18,799 | 8,284 | 8,908 | 14,696 | 1,945 | 14,354 | |||||||||||||||||||||
(546,685 | ) | (2,598,157 | ) | (1,097,749 | ) | (5,061,270 | ) | (369,477 | ) | (2,548,641 | ) |
See accompanying notes which are an integral part of these financial statements.
67 |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
CLASS A
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Net Asset Value, Beginning of Year | $ | 10.03 | $ | 11.65 | $ | 11.67 | $ | 11.81 | $ | 13.11 | ||||||||||
From Investment Operations: | ||||||||||||||||||||
Net investment income | 0.09 | 0.15 | 1 | 0.14 | 1 | 0.21 | 0.06 | |||||||||||||
Net realized and unrealized gain (loss) on investments | 2.69 | (0.92 | ) | 0.64 | 0.45 | (0.30 | ) | |||||||||||||
Total from investment operations | 2.78 | (0.77 | ) | 0.78 | 0.66 | (0.24 | ) | |||||||||||||
Less Distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.09 | ) | (0.40 | ) | (0.80 | ) | (0.21 | ) | (0.06 | ) | ||||||||||
Distributions from net capital gains | (0.76 | ) | (0.45 | ) | — | (0.59 | ) | (1.00 | ) | |||||||||||
Total distributions | (0.85 | ) | (0.85 | ) | (0.80 | ) | (0.80 | ) | (1.06 | ) | ||||||||||
| ||||||||||||||||||||
Net Asset Value, End of Year | $ | 11.96 | $ | 10.03 | $ | 11.65 | $ | 11.67 | $ | 11.81 | ||||||||||
Total Return2 | 28.06 | % | (6.85 | )% | 6.79 | % | 5.66 | % | (1.88 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 90,679 | $ | 80,761 | $ | 107,101 | $ | 108,790 | $ | 116,180 | ||||||||||
Ratio of net expenses to average net assets | 1.54 | % | 1.54 | % | 1.48 | % | 1.54 | % | 1.57 | % | ||||||||||
Ratio of net investment income to average net assets | 0.74 | % | 1.35 | % | 1.18 | % | 1.65 | % | 0.50 | % | ||||||||||
Portfolio turnover rate | 4 | % | 4 | % | 8 | % | 10 | % | 37 | % |
1 | Calculated based on the average number of shares outstanding during the period. |
2 | Calculation does not reflect sales load. |
See accompanying notes which are an integral part of these financial statements.
68 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND
CLASS C
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended | For the | |||||||||||||||
2019 | 2018 | 2017 | 2016* | |||||||||||||
Net Asset Value, Beginning of Period | $ | 9.90 | $ | 11.56 | $ | 11.61 | $ | 11.73 | ||||||||
From Investment Operations: | ||||||||||||||||
Net investment income | 0.08 | 0.11 | 1 | 0.07 | 1 | 0.10 | 1 | |||||||||
Net realized and unrealized gain (loss) on investments | 2.57 | (0.94 | ) | 0.63 | 0.55 | |||||||||||
Total from investment operations | 2.65 | (0.83 | ) | 0.70 | 0.65 | |||||||||||
Less Distributions: | ||||||||||||||||
Distributions from net investment income | (0.08 | ) | (0.38 | ) | (0.75 | ) | (0.18 | ) | ||||||||
Distributions from net capital gains | (0.70 | ) | (0.45 | ) | — | (0.59 | ) | |||||||||
Total distributions | (0.78 | ) | (0.83 | ) | (0.75 | ) | (0.77 | ) | ||||||||
| ||||||||||||||||
Net Asset Value, End of Period | $ | 11.77 | $ | 9.90 | $ | 11.56 | $ | 11.61 | ||||||||
Total Return2 | 27.15 | % | (7.44 | )% | 6.10 | % | 5.69 | %3 | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 211 | $ | 118 | $ | 41 | $ | 10 | ||||||||
Ratio of net expenses to average net assets | 2.24 | % | 2.24 | % | 2.18 | % | 2.24 | %4 | ||||||||
Ratio of net investment income to average net assets | 0.16 | % | 0.97 | % | 0.59 | % | 1.07 | %4 | ||||||||
Portfolio turnover rate | 4 | % | 4 | % | 8 | % | 10 | %3 |
* | For the period March 15, 2016 (commencement of operations) to December 31, 2016. |
1 | Calculated based on the average number of shares outstanding during the period. |
2 | Calculation does not reflect CDSC. |
3 | Not annualized. |
4 | Annualized. |
See accompanying notes which are an integral part of these financial statements.
69 |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
CLASS A
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Net Asset Value, Beginning of Year | $ | 18.53 | $ | 21.59 | $ | 19.01 | $ | 18.63 | $ | 19.78 | ||||||||||
From Investment Operations: | ||||||||||||||||||||
Net investment income | 0.13 | 1 | 0.15 | 1 | 0.22 | 1 | 0.29 | 0.08 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 5.27 | (1.81 | ) | 3.56 | 1.29 | (0.63 | ) | |||||||||||||
Total from investment operations | 5.40 | (1.66 | ) | 3.78 | 1.58 | (0.55 | ) | |||||||||||||
Less Distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.13 | ) | (0.15 | ) | (0.24 | ) | (0.25 | ) | (0.09 | ) | ||||||||||
Distributions from net capital gains | (0.80 | ) | (0.78 | ) | (0.24 | ) | (0.95 | ) | (0.51 | ) | ||||||||||
Distributions from return of capital | (0.47 | ) | (0.47 | ) | (0.72 | ) | — | — | ||||||||||||
Total distributions | (1.40 | ) | (1.40 | ) | (1.20 | ) | (1.20 | ) | (0.60 | ) | ||||||||||
| ||||||||||||||||||||
Net Asset Value, End of Year | $ | 22.53 | $ | 18.53 | $ | 21.59 | $ | 19.01 | $ | 18.63 | ||||||||||
Total Return2 | 29.54 | % | (7.87 | )% | 20.22 | % | 8.49 | % | (2.83 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 113,819 | $ | 88,939 | $ | 101,054 | $ | 77,579 | $ | 72,039 | ||||||||||
Ratio of net expenses to average net assets | 1.52 | % | 1.52 | % | 1.47 | % | 1.57 | % | 1.60 | % | ||||||||||
Ratio of net investment income to average net assets | 0.60 | % | 0.70 | % | 1.05 | % | 1.56 | % | 0.40 | % | ||||||||||
Portfolio turnover rate | 8 | % | 13 | % | 3 | % | 24 | % | 19 | % |
1 | Calculated based on the average number of shares outstanding during the period. |
2 | Calculation does not reflect sales load. |
See accompanying notes which are an integral part of these financial statements.
70 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA LARGE CAP VALUE FUND
CLASS C
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | For the | |||||||||||||||
2019 | 2018 | 2017 | 2016* | |||||||||||||
Net Asset Value, Beginning of Period | $ | 18.52 | $ | 21.62 | $ | 19.14 | $ | 18.29 | ||||||||
From Investment Operations: | ||||||||||||||||
Net investment (loss) income | (0.02 | )1 | — | 1,2 | 0.08 | 1 | 0.10 | 1 | ||||||||
Net realized and unrealized gain (loss) on investments | 5.26 | (1.80 | ) | 3.57 | 1.70 | |||||||||||
Total from investment operations | 5.24 | (1.80 | ) | 3.65 | 1.80 | |||||||||||
Less Distributions: | ||||||||||||||||
Distributions from net investment income | (0.08 | ) | (0.12 | ) | (0.23 | ) | — | |||||||||
Distributions from net capital gains | (0.80 | ) | (0.78 | ) | (0.24 | ) | (0.95 | ) | ||||||||
Distributions from return of capital | (0.29 | ) | (0.40 | ) | (0.70 | ) | — | |||||||||
Total distributions | (1.17 | ) | (1.30 | ) | (1.17 | ) | (0.95 | ) | ||||||||
| ||||||||||||||||
Net Asset Value, End of Period | $ | 22.59 | $ | 18.52 | $ | 21.62 | $ | 19.14 | ||||||||
Total Return3 | 28.59 | % | (8.50 | )% | 19.37 | % | 9.65 | %4 | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 40 | $ | 83 | $ | 39 | $ | 1 | ||||||||
Ratio of net expenses to average net assets | 2.22 | % | 2.22 | % | 2.17 | % | 2.27 | %5 | ||||||||
Ratio of net investment income (loss) to average net assets | (0.10 | )% | 0.01 | % | 0.39 | % | 0.64 | %5 | ||||||||
Portfolio turnover rate | 8 | % | 13 | % | 3 | % | 24 | %4 |
* | For the period March 15, 2016 (commencement of operations) to December 31, 2016. |
1 | Calculated based on the average number of shares outstanding during the period. |
2 | Rounds to less than 0.005 per share. |
3 | Calculation does not reflect CDSC. |
4 | Not annualized. |
5 | Annualized. |
See accompanying notes which are an integral part of these financial statements.
71 |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
CLASS A
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Net Asset Value, Beginning of Year | $ | 9.26 | $ | 9.47 | $ | 9.33 | $ | 9.57 | $ | 9.62 | ||||||||||
From Investment Operations: | ||||||||||||||||||||
Net investment income | 0.27 | 0.30 | 0.30 | 0.31 | 0.33 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.19 | (0.21 | ) | 0.14 | (0.24 | ) | (0.05 | ) | ||||||||||||
Total from investment operations | 0.46 | 0.09 | 0.44 | 0.07 | 0.28 | |||||||||||||||
Less Distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.27 | ) | (0.30 | ) | (0.30 | ) | (0.31 | ) | (0.33 | ) | ||||||||||
Total distributions | (0.27 | ) | (0.30 | ) | (0.30 | ) | (0.31 | ) | (0.33 | ) | ||||||||||
| ||||||||||||||||||||
Net Asset Value, End of Year | $ | 9.45 | $ | 9.26 | $ | 9.47 | $ | 9.33 | $ | 9.57 | ||||||||||
Total Return1 | 5.06 | % | 0.96 | % | 4.75 | % | 0.64 | % | 3.01 | % | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 69,002 | $ | 72,818 | $ | 99,159 | $ | 106,984 | $ | 102,805 | ||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense waiver or recoupment | 1.13 | %3 | 1.11 | %3 | 1.02 | %2 | 1.04 | % | 1.10 | %2 | ||||||||||
After expense waiver or recoupment | 0.92 | %3 | 0.92 | %3 | 0.91 | %2 | 0.90 | % | 0.91 | %2 | ||||||||||
Ratio of net investment income to average net assets | 2.92 | % | 3.21 | % | 3.16 | % | 3.17 | % | 3.50 | % | ||||||||||
Portfolio turnover rate | 6 | % | — | % | 5 | % | 10 | % | 11 | % |
1 | Calculation does not reflect sales load. |
2 | Includes interest expense of 0.01%. |
3 | Includes interest expense of 0.02%. |
See accompanying notes which are an integral part of these financial statements.
72 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND
CLASS C
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | For the | |||||||||||||||
2019 | 2018 | 2017 | 2016* | |||||||||||||
Net Asset Value, Beginning of Period | $ | 9.23 | $ | 9.45 | $ | 9.31 | $ | 9.59 | ||||||||
From Investment Operations: | ||||||||||||||||
Net investment income | 0.19 | 0.22 | 0.22 | 0.17 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.20 | (0.22 | ) | 0.14 | (0.28 | ) | ||||||||||
Total from investment operations | 0.39 | — | 0.36 | (0.11 | ) | |||||||||||
Less Distributions: | ||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.22 | ) | (0.22 | ) | (0.17 | ) | ||||||||
Total distributions | (0.19 | ) | (0.22 | ) | (0.22 | ) | (0.17 | ) | ||||||||
| ||||||||||||||||
Net Asset Value, End of Period | $ | 9.43 | $ | 9.23 | $ | 9.45 | $ | 9.31 | ||||||||
Total Return1 | 4.30 | % | 0.00 | % | 3.87 | % | (1.19 | )%2 | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 335 | $ | 155 | $ | 80 | $ | 28 | ||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Before expense waiver or recoupment | 1.98 | %4 | 1.96 | %4 | 1.87 | %5 | 1.89 | %3 | ||||||||
After expense waiver or recoupment | 1.77 | %4 | 1.77 | %4 | 1.76 | %5 | 1.75 | %3 | ||||||||
Ratio of net investment income to average net assets | 2.03 | % | 2.27 | % | 2.31 | % | 2.19 | %3 | ||||||||
Portfolio turnover rate | 6 | % | — | % | 5 | % | 10 | %2 |
* | For the period March 15, 2016 (commencement of operations) to December 31, 2016. |
1 | Calculation does not reflect CDSC. |
2 | Not annualized. |
3 | Annualized. |
4 | Includes interest expense of 0.02%. |
5 | Includes interest expense of 0.01%. |
See accompanying notes which are an integral part of these financial statements.
73 |
SPIRIT OF AMERICA INCOME FUND
CLASS A
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Net Asset Value, Beginning of Year | $ | 11.42 | $ | 12.06 | $ | 11.72 | $ | 11.66 | $ | 12.23 | ||||||||||
From Investment Operations: | ||||||||||||||||||||
Net investment income | 0.44 | 0.44 | 0.48 | 0.46 | 0.51 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.87 | (0.54 | ) | 0.39 | 0.13 | (0.53 | ) | |||||||||||||
Total from investment operations | 1.31 | (0.10 | ) | 0.87 | 0.59 | (0.02 | ) | |||||||||||||
Less Distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.39 | ) | (0.48 | ) | (0.48 | ) | (0.46 | ) | (0.51 | ) | ||||||||||
Distributions from net capital gains | (0.07 | ) | — | — | — | — | ||||||||||||||
Distributions from return of capital | (0.06 | ) | (0.06 | ) | (0.05 | ) | (0.07 | ) | (0.04 | ) | ||||||||||
Total distributions | (0.52 | ) | (0.54 | ) | (0.53 | ) | (0.53 | ) | (0.55 | ) | ||||||||||
| ||||||||||||||||||||
Net Asset Value, End of Year | $ | 12.21 | $ | 11.42 | $ | 12.06 | $ | 11.72 | $ | 11.66 | ||||||||||
Total Return1 | 11.64 | % | (0.87 | )% | 7.51 | % | 4.99 | % | (0.17 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 132,166 | $ | 136,223 | $ | 205,138 | $ | 222,220 | $ | 201,718 | ||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense waiver or recoupment | 1.14 | %2 | 1.13 | %3 | 1.05 | % | 1.09 | % | 1.15 | % | ||||||||||
After expense waiver or recoupment | 1.11 | %2 | 1.12 | %3 | 1.10 | % | 1.10 | % | 1.10 | % | ||||||||||
Ratio of net investment income to average net assets | 3.74 | % | 3.87 | % | 4.00 | % | 3.75 | % | 4.24 | % | ||||||||||
Portfolio turnover rate | 3 | % | 1 | % | — | % | 4 | % | 9 | % |
1 | Calculation does not reflect sales load. |
2 | Includes interest expense of 0.01%. |
3 | Includes interest expense of 0.02%. |
See accompanying notes which are an integral part of these financial statements.
74 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME FUND
CLASS C
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | For the | |||||||||||||||
2019 | 2018 | 2017 | 2016* | |||||||||||||
Net Asset Value, Beginning of Period | $ | 11.43 | $ | 12.08 | $ | 11.73 | $ | 11.78 | ||||||||
From Investment Operations: | ||||||||||||||||
Net investment income | 0.38 | 0.38 | 0.39 | 0.28 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.84 | (0.58 | ) | 0.39 | 0.01 | |||||||||||
Total from investment operations | 1.22 | (0.20 | ) | 0.78 | 0.29 | |||||||||||
Less Distributions: | ||||||||||||||||
Distributions from net investment income | (0.32 | ) | (0.40 | ) | (0.39 | ) | (0.29 | ) | ||||||||
Distributions from net capital gains | (0.07 | ) | — | — | — | |||||||||||
Distributions from return of capital | (0.04 | ) | (0.05 | ) | (0.04 | ) | (0.05 | ) | ||||||||
Total distributions | (0.43 | ) | (0.45 | ) | (0.43 | ) | (0.34 | ) | ||||||||
| ||||||||||||||||
Net Asset Value, End of Period | $ | 12.22 | $ | 11.43 | $ | 12.08 | $ | 11.73 | ||||||||
Total Return1 | 10.79 | % | (1.69 | )% | 6.77 | % | 2.43 | %2 | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 422 | $ | 293 | $ | 132 | $ | 95 | ||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Before expense waiver or recoupment | 1.89 | %4 | 1.88 | %5 | 1.80 | % | 1.84 | %3 | ||||||||
After expense waiver or recoupment | 1.86 | %4 | 1.87 | %5 | 1.85 | % | 1.85 | %3 | ||||||||
Ratio of net investment income to average net assets | 2.97 | % | 3.12 | % | 3.24 | % | 2.77 | %3 | ||||||||
Portfolio turnover rate | 3 | % | 1 | % | — | % | 4 | %2 |
* | For the period March 15, 2016(commencement of operations) to December 31, 2016. |
1 | Calculation does not reflect CDSC. |
2 | Not annualized. |
3 | Annualized. |
4 | Includes interest expense of 0.01%. |
5 | Includes interest expense of 0.02%. |
See accompanying notes which are an integral part of these financial statements.
75 |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
CLASS A
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Net Asset Value, Beginning of Year | $ | 9.12 | $ | 9.87 | $ | 9.50 | $ | 9.16 | $ | 10.20 | ||||||||||
From Investment Operations: | ||||||||||||||||||||
Net investment income | 0.38 | 0.16 | 0.32 | 0.19 | 0.25 | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.74 | (0.52 | ) | 0.47 | 0.58 | (0.86 | ) | |||||||||||||
Total from investment operations | 1.12 | (0.36 | ) | 0.79 | 0.77 | (0.61 | ) | |||||||||||||
Less Distributions: | ||||||||||||||||||||
Distributions from net investment income | (0.33 | ) | (0.16 | ) | (0.33 | ) | (0.19 | ) | (0.26 | ) | ||||||||||
Distributions from return of capital | (0.27 | ) | (0.23 | ) | (0.09 | ) | (0.24 | ) | (0.17 | ) | ||||||||||
Total distributions | (0.60 | ) | (0.39 | ) | (0.42 | ) | (0.43 | ) | (0.43 | ) | ||||||||||
| ||||||||||||||||||||
Net Asset Value, End of Year | $ | 9.64 | $ | 9.12 | $ | 9.87 | $ | 9.50 | $ | 9.16 | ||||||||||
Total Return1 | 12.37 | % | (3.70 | )% | 8.41 | % | 8.40 | % | (6.19 | )% | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 23,029 | $ | 25,177 | $ | 52,523 | $ | 57,829 | $ | 51,523 | ||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||
Before expense waiver or recoupment | 1.43 | %2 | 1.33 | %3 | 1.15 | % | 1.22 | % | 1.28 | % | ||||||||||
After expense waiver or recoupment | 1.26 | %2 | 1.27 | %3 | 1.25 | % | 1.25 | % | 1.25 | % | ||||||||||
Ratio of net investment income to average net assets | 3.82 | % | 1.89 | % | 3.24 | % | 1.93 | % | 2.63 | % | ||||||||||
Portfolio turnover rate | 23 | % | 4 | % | 6 | % | 12 | % | 8 | % |
1 | Calculation does not reflect sales load. |
2 | Includes interest expense of 0.01%. |
3 | Includes interest expense of 0.02%. |
See accompanying notes which are an integral part of these financial statements.
76 | SPIRIT OF AMERICA |
SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND
CLASS C
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.
For the Year Ended December 31 | For the | |||||||||||||||
2019 | 2018 | 2017 | 2016* | |||||||||||||
Net Asset Value, Beginning of Period | $ | 9.10 | $ | 9.85 | $ | 9.48 | $ | 9.14 | ||||||||
From Investment Operations: | ||||||||||||||||
Net investment income | 0.34 | 0.12 | 0.24 | 0.18 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (0.55 | ) | 0.47 | 0.44 | |||||||||||
Total from investment operations | 1.04 | (0.43 | ) | 0.71 | 0.62 | |||||||||||
Less Distributions: | ||||||||||||||||
Distributions from net investment income | (0.29 | ) | (0.13 | ) | (0.27 | ) | (0.12 | ) | ||||||||
Distributions from return of capital | (0.23 | ) | (0.19 | ) | (0.07 | ) | (0.16 | ) | ||||||||
Total distributions | (0.52 | ) | (0.32 | ) | (0.34 | ) | (0.28 | ) | ||||||||
| ||||||||||||||||
Net Asset Value, End of Period | $ | 9.62 | $ | 9.10 | $ | 9.85 | $ | 9.48 | ||||||||
Total Return1 | 11.58 | % | (4.43 | )% | 7.61 | % | 6.59 | %2 | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 435 | $ | 394 | $ | 285 | $ | 194 | ||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Before expense waiver or recoupment | 2.18 | %4 | 2.08 | %5 | 1.90 | % | 1.97 | %3 | ||||||||
After expense waiver or recoupment | 2.01 | %4 | 2.02 | %5 | 2.00 | % | 2.00 | %3 | ||||||||
Ratio of net investment income to average net assets | 3.08 | % | 1.14 | % | 2.50 | % | 0.65 | %3 | ||||||||
Portfolio turnover rate | 23 | % | 4 | % | 6 | % | 12 | %2 |
* | For the period March 15, 2016 (commencement of operations) to December 31, 2016. |
1 | Calculation does not reflect CDSC. |
2 | Not annualized. |
3 | Annualized. |
4 | Includes interest expense of 0.01%. |
5 | Includes interest expense of 0.02%. |
See accompanying notes which are an integral part of these financial statements.
77 |
NOTES TO FINANCIAL STATEMENTS | December 31, 2019
Note 1 – Organization
Spirit of America Investment Fund, Inc. (the “Company”), is an open-end diversified mutual fund registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company was incorporated under the laws of Maryland on May 15, 1997. The Company offers 6 separate series, or mutual funds, each with its own investment objective and strategy. This report includes the following funds (individually, a “Fund”, or collectively, the “Funds”):
Spirit of America Real Estate Income and Growth Fund (the “Real Estate Fund”) commenced operations on January 9, 1998. The Real Estate Fund seeks current income and growth of capital by investing in equity real estate investment trusts (“REITs”) and the equity securities of real estate industry companies.
Spirit of America Large Cap Value Fund (the “Value Fund”) commenced operations on August 1, 2002. The Value Fund seeks capital appreciation with a secondary objective of current income by investing in equity securities in the large cap value segment of the U.S. equity market.
Spirit of American Municipal Tax Free Bond Fund (the “Municipal Fund”) commenced operations on February 29, 2008. The Municipal Fund seeks high current income that is exempt from federal income tax,including the alternative minimum tax (“AMT”),investing at least 80% of its assets in municipal bonds.
Spirit of America Income Fund (the “Income Fund”) commenced operations on December 31, 2008. The Income Fund seeks high current income, investing at least 80% of its assets in a portfolio of taxable municipal bonds, income producing convertible securities, preferred stocks, high yield U.S. corporate bonds (frequently called “junk” bonds), and collateralized mortgage obligations (“CMOs”).
Spirit of America Income & Opportunity Fund (the “Opportunity Fund”) commenced operations on July 8, 2013. The Opportunity Fund seeks to achieve its investment objective of providing shareholders with current income and the potential for capital appreciation by investing a substantial percentage of its total assets in a portfolio of common and preferred stocks, fixed income securities of any grade, as well non-rated fixed income securities, both short-term and long- term, including zero-coupon securities, taxable and tax-free municipal bonds, income producing convertible securities, corporate bonds, including high-yield U.S. corporate bonds, floating rate bonds and step coupon bonds, municipal lease agreements, certificates of participation and collateralized mortgage obligations (“CMOs”), U.S. government agency securities, including securities issued by the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”), and the Government National Mortgage Association (“GNMA”), equity real estate investment companies (“REITs”), which are subject to federal income tax, and Master Limited Partnerships (“MLPs”).
Each Fund currently offers Class A Shares and Class C Shares. Each class of shares for each Fund has identical rights and privileges except with respect to distribution (12b-1) and service fees, voting rights on matters affecting a single class of shares, exchange privileges of each class of shares and sales charges. The price at which the Funds will offer or redeem shares is the net asset value (“NAV”) per share next determined after the order is considered received, subject to any applicable front end or contingent deferred sales charges. Class A shares have a maximum sales charge on purchases of 5.25% for Real Estate Fund and Value Fund, and 4.75% for Municipal Fund, Income Fund and Opportunity Fund, as a percentage of the original purchase price. A Contingent Deferred Sales Charge (“CDSC”) of 1.00% may be imposed on redemptions of $1 million or more of Class A shares that were purchased within one year of the redemption date where an indirect commission was paid. CDSC on Class C Shares applies to shares sold within 13 months of purchase.
Note 2 – Significant Accounting Policies
Each Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies”. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for investment companies.
A. Security Valuation: The offering price and NAV per share for the Funds are calculated as of the close of regular trading on the New York Stock Exchange (“NYSE”), currently 4:00 p.m., Eastern Time on each day the NYSE is open for trading. Each Fund’s securities are valued at the official close or the last reported sales price on the principal exchange
78 | SPIRIT OF AMERICA |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
on which the security trades, or if no sales price is reported, the mean of the latest bid and ask prices is used. Securities traded over-the-counter are priced at the mean of the latest bid and ask prices. Unlisted securities traded in the over-the-counter market are valued using an evaluated quote provided by the independent pricing service, or, if an evaluated quote is unavailable, such securities are valued using prices received from dealers, provided that if the dealer supplies both bid and ask prices, the price to be used is the mean of the bid and ask prices. The independent pricing service derives an evaluated quote by obtaining dealer quotes, analyzing the listed markets, reviewing trade execution data and employing sensitivity analysis. Evaluated quotes may also reflect appropriate factors such as individual characteristics of the issue, communications with broker-dealers, and other market data. Fund securities for which market quotations are not readily available are valued at fair value as determined in good faith under procedures established by and under the supervision of the Board of Directors (the “Board”).
B. Fair Value Measurements: Various inputs are used in determining the fair value of investments which are as follows:
● Level 1 – | Unadjusted quoted prices in active markets for identical investments and/or registered investment companies where the value per share is determined and published and is the basis for current transactions for identical assets or liabilities at the valuation date. | |
● Level 2 – | Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. | |
● Level 3 – | Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including each Fund’s own assumptions used in determining the fair value of investments). |
The summary of inputs used to value each Fund’s net assets as of December 31, 2019 is as follows:
Value Inputs | ||||||||||||||||
Real Estate Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Common Stocks* | $ | 88,453,952 | $ | — | $ | — | $ | 88,453,952 | ||||||||
Preferred Stocks* | 2,158,943 | — | — | 2,158,943 | ||||||||||||
Municipal Bonds | — | 193,864 | — | 193,864 | ||||||||||||
Total | $ | 90,612,895 | $ | 193,864 | $ | — | $ | 90,806,759 | ||||||||
Liabilities | ||||||||||||||||
Written Call Options | (2,020 | ) | — | — | (2,020 | ) | ||||||||||
Total | $ | (2,020 | ) | $ | — | $ | — | $ | (2,020 | ) | ||||||
Value Fund | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks* | $ | 112,315,827 | $ | — | $ | — | $ | 112,315,827 | ||||||||
Preferred Stocks* | 1,971,391 | — | — | 1,971,391 | ||||||||||||
Total | $ | 114,287,218 | $ | — | $ | — | $ | 114,287,218 | ||||||||
Municipal Fund | ||||||||||||||||
Assets: | ||||||||||||||||
Municipal Bonds | $ | — | $ | 66,989,939 | $ | — | $ | 66,989,939 | ||||||||
Money Market Funds | 1,791,544 | — | — | 1,791,544 | ||||||||||||
Total | $ | 1,791,544 | $ | 66,989,939 | $ | — | $ | 68,781,483 | ||||||||
79 |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
Value Inputs | ||||||||||||||||
Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Common Stocks* | $ | 11,639,956 | $ | — | $ | — | $ | 11,639,956 | ||||||||
Preferred Stocks* | 16,183,000 | — | — | 16,183,000 | ||||||||||||
Collateralized Mortgage Obligations | — | 162,213 | — | 162,213 | ||||||||||||
Corporate Bonds | — | 12,966,373 | 412,146 | 13,378,519 | ||||||||||||
Municipal Bonds | — | 84,452,398 | — | 84,452,398 | ||||||||||||
Money Market Funds | 5,725,999 | — | — | 5,725,999 | ||||||||||||
Total | $ | 33,548,955 | $ | 97,580,984 | $ | 412,146 | $ | 131,542,085 | ||||||||
Opportunity Fund | ||||||||||||||||
Assets: | ||||||||||||||||
Common Stocks* | $ | 6,830,147 | $ | — | $ | — | $ | 6,830,147 | ||||||||
Preferred Stocks* | 2,180,604 | — | — | 2,180,604 | ||||||||||||
Corporate Bonds | — | 502,368 | — | 502,368 | ||||||||||||
Municipal Bonds | — | 12,167,586 | — | 12,167,586 | ||||||||||||
U.S. Government & Agency Obligations | — | 695,065 | — | 695,065 | ||||||||||||
Money Market Funds | 926,320 | — | — | 926,320 | ||||||||||||
Total | $ | 9,937,071 | $ | 13,365,019 | $ | — | $ | 23,302,090 | ||||||||
* | Refer to Schedule of Investments for sector/industry classification. |
In the absence of a listed price quote, or a supplied price quote which is deemed to be unrepresentative of the actual market price, the Adviser shall use any or all of the following criteria to value Level 3 securities:
● | Last sales price |
● | Price given by pricing service |
● | Last quoted bid & asked price |
● | Third party bid & asked price |
● | Indicated opening range |
The significant unobservable inputs that may be used in the fair value measurement of the Fund’s investments in common stock, corporate bonds and convertible corporate bonds for which market quotations are not readily available include: broker quotes, discounts from the most recent trade or “stale price” and estimates from trustees (in bankruptcies) on disbursements. A change in the assumption used for each of the inputs listed above may indicate a directionally similar change in the fair value of the investment.
The following provides quantitative information about the Income Fund’s significant Level 3 fair value measurements as of December 31, 2019:
Quantitative Information about Significant Level 3 Fair Value Measurements | ||||
Asset Category | Fair Value At | Valuation Techniques | Unobservable Input(s) | Range |
Corporate Bonds | $412,146 | Comparable Security Analysis | Discount for Lack of Marketability | 1%-20% |
80 | SPIRIT OF AMERICA |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
Following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value for the Income Fund
Balance as of | Amortization/ | Change in | Balance as of | |||||||||||||
Corporate Bonds | $ | 351,597 | $ | 480 | $ | 60,069 | $ | 412,146 | ||||||||
C. Investment Income and Securities Transactions: Security transactions are accounted for on the date the securities are purchased or sold (trade date) for financial reporting purposes. Cost is determined and gains and losses are based on the identified cost basis for both financial statement and federal income tax purposes. Dividend income and distributions to shareholders are reported on the ex-dividend date. Interest income and expenses are accrued daily.
D. Federal Income Taxes: The Funds intend to comply with all requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.
E. Use of Estimates: In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
F. Distributions to Shareholders: The Funds intend to distribute substantially all of its net investment income and capital gains to shareholders each year. The Real Estate Fund intends to pay two semi-annual income dividends and other distributions on June 30 and December 31 in the annual minimum amount of $.85 per share. The Value Fund intends to pay two semi-annual income dividends and other distributions on June 30 and December 31 in the annual minimum amount of $1.40 per share. The Opportunity Fund intends to pay two semi-annual income dividends and other distributions on June 30 and December 31 in the annual minimum amount of $.60 per share. For the Income Fund and Municipal Fund, income distributions will typically be declared daily and paid monthly. Capital gains, if any, for all the Funds, will be distributed annually in December, but may be distributed more frequently if deemed advisable by the Board. All such distributions are taxable to the shareholders whether received in cash or reinvested in shares.
The Value Fund and the Real Estate Fund have made certain investments in REITs which pay distributions to their shareholders based upon available funds from operations. Each REIT reports annually the tax character of its distributions. It is quite common for these distributions to exceed the REIT’s taxable earnings and profits resulting in the excess portion of such distributions being designated as a return of capital or long-term capital gain. The Funds intend to include the gross distributions from such REITs in its distributions to its shareholders; accordingly, a portion of the distributions paid to the Funds and subsequently distributed to shareholders may be re-characterized based on the prior calendar year’s actual reported return of capital. The final determination of the amount of each Fund’s return of capital distribution for the period will be made after the end of each calendar year.
G. Allocation of Income, Expenses, Gains and Losses. Expenses incurred by the Company that do not relate to a specific fund of the Company are allocated to the individual funds by or under the direction of the Board in such a manner as the Board determine to be fair and equitable. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.
Note 3 – Derivative Transactions
Written Options Contracts – The Real Estate Fund, Value Fund and Opportunity Fund may write options contracts for which premiums received are recorded as liabilities and are subsequently adjusted to the current value of the options written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are either exercised or closed are offset against the proceeds received or the amount paid on the transaction to determine realized gains or losses. Investing in written options contracts exposes a Fund to equity price risk.
81 |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
The Funds’ use of derivatives for the fiscal year ended December 31, 2019, was limited to written options.
Following is a summary of how these derivatives are treated in the financial statements and their impact on the Funds. The month-end average notional amount for the fiscal year ended December 31, 2019 was $665 and $1,292 for Real Estate Fund and Value Fund, respectively. Following is a summary of how these derivatives are treated in the financial statements and their impact on the Funds. There were no derivatives outstanding as of December 31, 2019.
Statements of Assets and Liabilities | Statements of Operations | |||||
Fund/Financial Instrument Type | Location of | Value | Location of Gain (Loss) on | Amount of | Amount of | |
Real Estate Fund | ||||||
Written Call Options (Equity Contracts) | Options written, at value | $(2,020) | Net realized gain from written option transactions | $1,989 | ||
Net change in unrealized appreciation of written option contracts | $(2,839) | |||||
Value Fund | ||||||
Written Call Options (Equity Contracts) | Options written, at value | $— | Net realized gain from written option transactions | $4,167 | ||
Net change in unrealized appreciation of written option contracts | $(1,499) | |||||
Balance Sheet Offsetting Information – During the ordinary course of business, the Funds may enter into transactions subject to enforceable netting agreements or other similar arrangements (“netting agreements”). Generally, the right to offset in netting agreements allows a Fund to offset any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreement. Generally, a Fund manages its cash collateral and securities collateral on a counterparty basis. As of December 31, 2019, the Funds were not invested in any portfolio securities or derivatives that could be netted subject to netting arrangements. The following table provides a summary of amounts related to derivative instruments and amounts related to financial instruments and cash collateral not offset in the Statements of Assets and Liabilities as of December 31, 2019.
Amounts not Offset in Statements | ||||||||||||||||
Fund / Derivative | Gross Amounts | Financial | Cash Collateral | Net Amount | ||||||||||||
Real Estate Fund | ||||||||||||||||
Written options | $ | (2,020 | ) | $ | 2,020 | $ | — | $ | — | |||||||
Note 4 – Purchases and Sales of Securities
Purchases and proceeds from the sales of securities for the fiscal year ended December 31, 2019, excluding short-term investments, were as follows:
Fund | Purchases | Sales | ||||||
Real Estate Fund | $ | 3,574,556 | $ | 13,109,452 | ||||
Value Fund | 7,875,324 | 8,120,914 | ||||||
Municipal Fund | 4,083,769 | 12,098,167 | ||||||
Income Fund | 4,474,937 | 25,246,066 | ||||||
Opportunity Fund | 5,531,031 | 10,459,810 | ||||||
There were no purchases or sales of Long Term U.S. Government Obligations during the year ended December 31, 2019.
82 | SPIRIT OF AMERICA |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
Note 5 – Investment Management Fee and Other Transactions with Affiliates
Spirit of America Management Corp. (the “Adviser”) has been retained to act as the Company’s investment adviser pursuant to an Investment Advisory Agreement (the “Advisory Agreement”). The Adviser was incorporated in 1997 and is a registered investment adviser under the Investment Advisers Act of 1940, as amended. The Adviser, under the terms of the Advisory Agreement with respect to each Fund, manages the Funds’ investments. As compensation for its management services, each Fund is obligated to pay the Adviser a fee based on each Fund’s average daily net assets as follows:
Fund | Fee Rate | Advisory | ||||||
Real Estate Fund | 0.97 | % | $ | 873,971 | ||||
Value Fund | 0.97 | % | 983,209 | |||||
Municipal Fund | 0.60 | % | 420,056 | |||||
Income Fund | 0.60 | % | 798,390 | |||||
Opportunity Fund | 0.65 | % | 156,945 | |||||
The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses for the following funds (based on average daily net assets) through April 30, 2020 so that the total operating expenses will not exceed the amounts presented in the table below. The waiver does not include, front end or contingent deferred loads, taxes, interest, dividend expenses, brokerage commissions or expenses incurred in connection with any merger, reorganization, or extraordinary expenses such as litigation. Additionally, for the fiscal year ended December 31, 2019, the Adviser waived advisory fees, as indicated:
Fund | Class A | Class C | Fees | |||||||||
Municipal Fund | 0.90% | 1.75% | $ | (145,082 | ) | |||||||
Income Fund | 1.10% | 1.85% | (35,800 | ) | ||||||||
Opportunity Fund | 1.25% | 2.00% | (40,635 | ) | ||||||||
Any amounts waived or reimbursed by the Adviser are subject to repayment by a Fund within a period of three years after such waivers or expenses were incurred, provided the Fund is able to make such repayments and remain in compliance with the expense limitation as stated above.
The amounts subject to repayment by the Funds, pursuant to the aforementioned conditions are as follows:
Recoverable through | Municipal | Income | Opportunity | |||||||||
December 31, 2020 | $ | 118,752 | $ | — | $ | — | ||||||
December 31, 2021 | 158,909 | 34,533 | 25,613 | |||||||||
December 31, 2022 | 145,082 | 35,800 | 40,635 | |||||||||
The Funds’ Class A and Class C Shares have adopted a plan of distribution pursuant to Rule 12b-1 (the “Plan”). The Plan permits each Fund’s Class A and Class C Shares to pay David Lerner Associates, Inc. (the “Distributor”) an annual fee, accrued daily and paid monthly based on each Class of each Fund’s average daily net assets for the Distributor’s services
83 |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
and expenses in distributing shares of each Fund and providing personal services and/or maintaining shareholder accounts. For the fiscal year ended December 31, 2019, the annual fee rate and the fees paid to the Distributor under the Plan were as follows:
Class A | Class C | |||||||||||||||
Fund | Annual Rate | Fees Paid | Annual Rate | Fees Paid | ||||||||||||
Real Estate Fund | 0.30% | $ | 269,762 | 1.00% | $ | 1,800 | ||||||||||
Value Fund | 0.30% | 303,854 | 1.00% | 773 | ||||||||||||
Municipal Fund | 0.15% | 104,674 | 1.00% | 2,270 | ||||||||||||
Income Fund | 0.25% | 331,797 | 1.00% | 3,459 | ||||||||||||
Opportunity Fund | 0.25% | 59,352 | 1.00% | 4,046 | ||||||||||||
Each Fund’s Class A Shares are subject to an initial sales charge imposed at the time of purchase, in accordance with the Fund’s current prospectus. A CDSC of 1.00% may be imposed on redemptions of $1 million or more of Class A shares that were purchased within one year of the redemption date where an indirect commission was paid. CDSC on Class C Shares applies to shares sold within 13 months of purchase. For the fiscal year ended December 31, 2019, sales charges received by the Distributor from each of the Funds were as follows:
Fund | Front-End Sales | CDSC Fees | ||||||
Real Estate Fund | $ | 301,907 | $ | 344 | ||||
Value Fund | 816,914 | 34 | ||||||
Municipal Fund | 341,835 | — | ||||||
Income Fund | 684,026 | 5,771 | ||||||
Opportunity Fund | 117,264 | 618 | ||||||
Certain Officers and Directors of the Company are “affiliated persons”, as that term is defined in the 1940 Act, of the Adviser or the Distributor. Each Director of the Company, who is not an affiliated person of the Adviser or Distributor, receives a quarterly retainer of $7,580, $1,500 for each Board meeting attended and $500 for each committee meeting attended plus reimbursement for certain travel and other out-of-pocket expenses incurred in connection with attending Board meetings. The Company does not compensate the Officers for the services they provide. There are no Directors’ fees paid to Interested Directors of the Company. For the fiscal year ended December 31, 2019, the Funds were allocated $11,679 of the Chief Compliance Officer’s salary.
Note 6 – Concentration and Other Risks
The performance of the Municipal Fund, Income Fund and Opportunity Fund could be adversely affected by interest rate risk, which is the possibility that overall bond prices will decline because of rising interest rates. Interest rate risk is expected to be high for the Funds because they invest mainly in long-term bonds, whose prices are much more sensitive to interest fluctuations than are the prices of short-term bonds.
The Municipal Fund, Income Fund and Opportunity Fund may be affected by credit risk, which is the possibility that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. This risk may be greater to the extent that the Funds may invest in junk bonds.
The Municipal Fund, Income Fund and Opportunity Fund may be affected by credit risk of lower grade securities, which is the possibility that taxable fixed income or municipal securities rated below investment grade, or unrated of similar quality, (frequently called “junk bonds”), may be subject to greater price fluctuations and risks of loss of income and principal than investment-grade taxable fixed income or municipal securities. Securities that are (or that have fallen) below investment-grade have a greater risk that the issuers may not meet their debt obligations. These types of securities are generally considered speculative in relation to the issuer’s ongoing ability to make principal and interest payments. During periods of rising interest rates or economic downturn, the trading market for these securities may not be active and may reduce the Fund’s ability to sell these securities at an acceptable price. If the issuer of securities is in default in payment of interest or principal, the Fund may lose its entire investment in those securities.
84 | SPIRIT OF AMERICA |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
The Real Estate Fund invests primarily in real estate related securities. A fund that concentrates its investments among fewer sectors is subject to greater risk of loss than a fund that has more sector diversification. Investments in real estate and real estate-related equity securities involve risks different from, and in certain cases greater than, the risks presented by equity securities generally. The main risks are those presented by direct ownership of real estate or real estate industry securities, including possible declines in the value of real estate, environmental problems and changes in interest rates. To the extent that assets underlying the Fund’s investments are concentrated geographically, by property type or in certain other respects, the Fund may be subject to these risks to a greater extent. The stocks purchased by the Fund may not appreciate in value as the Adviser anticipates. In addition, if the Fund receives rental income or income from the disposition of real property acquired as a result of a default on securities the Fund owns, its ability to retain its tax status as a regulated investment company may be adversely affected.
The Value Fund may, at times, concentrate its investments in a particular sector, such as information technology, if the Adviser believes stocks in that particular sector are performing more favorably. If the Fund invests a significant portion of its total assets in certain sectors, its investment portfolio will be more susceptible to the financial, economic, business, and political developments that affect those sectors.
Other risks to the Funds may include income risk, liquidity risk, prepayment risk on collateralized mortgage obligations, municipal project specific risk, municipal lease obligation risk, zero coupon securities risk, market risk, manager risk, taxability risk, state-specific risk and exchange traded funds risk.
Note 7 – Restricted Securities
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer’s expense, either upon demand by the Funds or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid. The Funds will not incur any registration costs upon such resale. The Funds’ restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined by the Board. At December 31, 2019, the Income Fund held illiquid restricted securities representing 2% of net assets, as listed below:
Issuer Description | Acquisition | Principal | Cost | Value | ||||||||||||
Exelon Generation Co. LLC, 5.60%, 06/15/42 | 7/12/2012 | $ | 400,000 | $ | 420,050 | $ | 412,146 | |||||||||
MetLife Capital Trust X, 9.25%, 04/08/38 | 6/4/2013 | $ | 1,500,000 | $ | 2,106,905 | $ | 2,211,142 | |||||||||
Note 8 – Federal Income Taxes
The adjusted cost basis of investment and gross unrealized appreciation and depreciation of investments for federal income tax purposes for each of the Funds as of December 31, 2019, were as follows:
Fund | Gross | Gross | Net | Cost Basis of | ||||||||||||
Real Estate Fund | $ | 36,518,466 | $ | (1,782,854 | ) | $ | 34,735,612 | $ | 56,071,147 | |||||||
Value Fund | 51,979,196 | (1,188,338 | ) | 50,790,858 | 63,496,360 | |||||||||||
Municipal Fund | 3,019,573 | (23,477 | ) | 2,996,096 | 65,785,387 | |||||||||||
Income Fund | 16,379,510 | (2,202,807 | ) | 14,176,703 | 117,365,382 | |||||||||||
Opportunity Fund | 3,369,550 | (293,712 | ) | 3,075,838 | 20,226,252 | |||||||||||
(a) | The difference between book-basis and tax-basis net unrealized appreciation/(depreciation) is primarily due to wash sales, tax treatment of Trust Preferred securities and partnership investments. |
85 |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
The tax character of distributions paid by each of the Funds for the year ended December 31, 2019, was as follows:
Fund | Ordinary | Tax Exempt | Net Long-Term | Return of | Total | |||||||||||||||
Real Estate Fund | $ | 771,738 | $ | — | $ | 5,544,368 | $ | — | $ | 6,316,106 | ||||||||||
Value Fund | 620,536 | — | 3,856,566 | 2,218,490 | 6,695,592 | |||||||||||||||
Municipal Fund | 28,591 | 2,010,652 | — | — | 2,039,243 | |||||||||||||||
Income Fund | 4,448,178 | — | 764,538 | 589,453 | 5,802,169 | |||||||||||||||
Opportunity Fund | 821,229 | — | — | 632,372 | 1,453,601 | |||||||||||||||
The tax character of distributions paid by each of the Funds for the year ended December 31, 2018, was as follows:
Fund | Ordinary | Tax Exempt | Net Long-Term | Return of | Total | |||||||||||||||
Real Estate Fund | $ | 1,473,093 | $ | — | $ | 5,276,814 | $ | — | $ | 6,749,907 | ||||||||||
Value Fund | 701,358 | — | 3,619,284 | 2,204,931 | 6,525,573 | |||||||||||||||
Municipal Fund | 44,393 | 2,658,219 | — | — | 2,702,612 | |||||||||||||||
Income Fund | 6,955,985 | — | — | 803,453 | 7,759,438 | |||||||||||||||
Opportunity Fund | 695,408 | — | — | 889,495 | 1,584,903 | |||||||||||||||
Distribution classifications may differ from the Statements of Changes in Net Assets as a result of the treatment of short-term capital gains as ordinary income for tax purposes.
At December 31, 2019, the components of accumulated distributable earnings for each Fund on a tax basis were as follows:
Fund | Undistributed | Undistributed | Distributions | Accumulated | Unrealized | Total | ||||||||||||||||||
Real Estate Fund | $ | — | $ | 790,997 | $ | — | $ | — | $ | 34,734,891 | $ | 35,525,888 | ||||||||||||
Value Fund | — | — | — | — | 50,790,858 | 50,790,858 | ||||||||||||||||||
Municipal Fund | 2 | — | — | (8,027,258 | ) | 2,996,096 | (5,031,160 | ) | ||||||||||||||||
Income Fund | — | 551,692 | (166,570 | ) | — | 14,176,703 | 14,561,825 | |||||||||||||||||
Opportunity Fund | — | — | — | (1,585,001 | ) | 3,075,838 | 1,490,837 | |||||||||||||||||
At December 31, 2019, for federal income tax purposes and the treatment of distributions payable, the following Funds had capital loss carryforwards available to offset future gains, if any, to the extent provided by the Treasury regulations:
No Expiration | ||||||||||||
Fund | Short-Term | Long-Term | Total | |||||||||
Municipal Fund | $ | 2,770,180 | $ | 5,257,078 | $ | 8,027,258 | ||||||
Opportunity Fund | 1,585,001 | — | 1,585,001 | |||||||||
Management of the Funds have reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., the last three tax year ends and the interim tax period since then). Management believes there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.
86 | SPIRIT OF AMERICA |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
Note 9 – Reclassification
Permanent differences, incurred during the year ended December 31, 2019, resulting from differences in book and tax accounting have been reclassified at year end to accumulated earnings (deficit) and paid-in capital as follows:
Fund | Accumulated | Paid-In Capital | ||||||
Real Estate Fund | $ | 587 | $ | (587 | ) | |||
Value Fund | 4 | (4 | ) | |||||
Municipal Fund | — | — | ||||||
Income Fund | 3,589 | (3,589 | ) | |||||
Opportunity Fund | 834 | (834 | ) | |||||
Note 10 – Line of Credit
The Company participates in a short-term credit agreement (“Line of Credit) with The Huntington National Bank, the custodian of the Funds’ investments expiring on May 20, 2020. Borrowings under this agreement bear interest at London Interbank Offered Rate (“LIBOR”) plus 1.500%. Maximum borrowings for the Company is the lesser of $3,000,000 or 10% of the Funds’ daily market value. During the fiscal year ended December 31, 2019, each Fund’s borrowing activity was as follows:
| Real Estate | Large Cap | Municipal Tax | Income | Income & | |||||||||||||||
Total bank line of credit as of December 31, 2019 | $ | 2,738,740 | $ | 2,793,163 | $ | 3,000,000 | $ | 3,000,000 | $ | 3,000,000 | ||||||||||
Average borrowings during period | $ | 87,061 | $ | 92,347 | $ | 98,969 | $ | 179,209 | $ | 59,118 | ||||||||||
Number of days outstanding* | 77 | 44 | 50 | 32 | 17 | |||||||||||||||
Average interest rate during period | 3.810 | % | 3.906 | % | 3.995 | % | 3.940 | % | 3.995 | % | ||||||||||
Highest balance drawn during period | $ | 529,618 | $ | 330,907 | $ | 899,059 | $ | 699,409 | $ | 130,322 | ||||||||||
Highest balance interest rate | 4.006 | % | 4.006 | % | 4.006 | % | 4.006 | % | 4.006 | % | ||||||||||
Interest expense incurred | $ | 2,808 | $ | 1,556 | $ | 14,880 | $ | 9,061 | $ | 1,142 | ||||||||||
Interest rate at December 31, 2019 | 3.305 | % | 3.305 | % | 3.305 | % | 3.305 | % | 3.305 | % | ||||||||||
* | Number of days outstanding represents the total days during the year ended December 31, 2019 that each Fund utilized the line of credit. |
Note 11 – Subsequent Events
Management of the Fund has evaluated the need for disclosures resulting from subsequent events through the date these financial statements were issued. Management has determined that there were no items requiring additional disclosure.
87 |
NOTES TO FINANCIAL STATEMENTS (CONT.) | December 31, 2019
Tax Information (Unaudited)
All designations are based on financial information available as of the date of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
Fund | Qualified | Dividends | Qualified | Long-Term | Tax-Exempt | |||||||||||||||
Real Estate Fund | 16.13 | % | 12.41 | % | 73.92 | % | $ | 5,544,368 | $ | — | ||||||||||
Value Fund | 100.00 | % | 100.00 | % | N/A | 3,856,567 | — | |||||||||||||
Municipal Fund | N/A | N/A | N/A | — | 2,010,652 | |||||||||||||||
Income Fund | 17.55 | % | 21.49 | % | N/A | 764,538 | — | |||||||||||||
Opportunity Fund | 50.47 | % | 59.38 | % | N/A | — | — | |||||||||||||
|
88 | SPIRIT OF AMERICA |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
of Spirit of America Investment Fund, Inc.
Syosset, New York
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Spirit of America Real Estate Income & Growth Fund, Spirit of America Large Cap Value Fund, Spirit of America Municipal Tax Free Bond Fund, Spirit of America Income Fund, and the Spirit of America Income & Opportunity Fund (the “Funds”), a series of shares of beneficial interest in Spirit of America Investment Fund, Inc., including the schedule of investments, as of December 31, 2019, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of December 31, 2019, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the Funds’ auditor since 1998.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
TAIT, WELLER & BAKER LLP |
Philadelphia, Pennsylvania
February 28, 2020
89 |
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE SIX MONTH PERIOD July 1, 2019 TO December 31, 2019
We believe it is important for you to understand the impact of fees regarding your investment. All mutual funds have operating expenses. As a shareholder of a Fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from the Fund’s gross income, directly reduce the investment return of the Fund.
Each Fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing fees (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the six month period, July 1, 2019 to December 31, 2019.
Actual Fund Return: This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, the third column shows the period’s annualized expense ratio, and the last column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund at the beginning of the period. You may use the information here, together with your account value, to estimate the expenses that you paid over the period.
To do so, 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.”
Hypothetical 5% Return: This section is intended to help you compare your Fund’s costs with those of other mutual funds. It assumes that the Fund had a return of 5% before expenses during the period shown, but that the expense ratio is unchanged. In this case, because the return used is not the Fund’s actual return, the results do not apply to your investment. You can assess your Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of 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 sales charges (loads), or redemption fees.
90 | SPIRIT OF AMERICA |
DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONT.)
FOR THE SIX MONTH PERIOD July 1, 2019 TO December 31, 2019
Beginning | Ending | Annualized | Expenses | ||
Spirit of America Real Estate Income and Growth Fund | |||||
Class A | Actual | $ 1,000.00 | $ 1,073.50 | 1.53% | $ 8.00 |
Hypothetical2 | $ 1,000.00 | $ 1,017.49 | 1.53% | $ 7.78 | |
Class C | Actual | $ 1,000.00 | $ 1,070.80 | 2.23% | $ 11.64 |
Hypothetical2 | $ 1,000.00 | $ 1,013.96 | 2.23% | $ 11.32 | |
Spirit of America Large Cap Value Fund | |||||
Class A | Actual | $ 1,000.00 | $ 1,102.10 | 1.52% | $ 8.05 |
Hypothetical2 | $ 1,000.00 | $ 1,017.54 | 1.52% | $ 7.73 | |
Class C | Actual | $ 1,000.00 | $ 1,098.30 | 2.22% | $ 11.74 |
Hypothetical2 | $ 1,000.00 | $ 1,014.01 | 2.22% | $ 11.27 | |
Spirit of America Municipal Tax Free Bond Fund | |||||
Class A | Actual | $ 1,000.00 | $ 1,015.30 | 0.90% | $ 4.57 |
Hypothetical2 | $ 1,000.00 | $ 1,020.67 | 0.90% | $ 4.58 | |
Class C | Actual | $ 1,000.00 | $ 1,011.00 | 1.75% | $ 8.87 |
Hypothetical2 | $ 1,000.00 | $ 1,016.38 | 1.75% | $ 8.89 | |
Spirit of America Income Fund | |||||
Class A | Actual | $ 1,000.00 | $ 1,030.80 | 1.10% | $ 5.63 |
Hypothetical2 | $ 1,000.00 | $ 1,019.66 | 1.10% | $ 5.60 | |
Class C | Actual | $ 1,000.00 | $ 1,026.90 | 1.85% | $ 9.45 |
Hypothetical2 | $ 1,000.00 | $ 1,015.88 | 1.85% | $ 9.40 | |
Spirit of America Income & Opportunity Fund | |||||
Class A | Actual | $ 1,000.00 | $ 1,024.80 | 1.25% | $ 6.38 |
Hypothetical2 | $ 1,000.00 | $ 1,018.90 | 1.25% | $ 6.36 | |
Class C | Actual | $ 1,000.00 | $ 1,021.30 | 2.00% | $ 10.19 |
Hypothetical2 | $ 1,000.00 | $ 1,015.12 | 2.00% | $ 10.16 |
1 | Expenses are equal to each Fund’s annualized expense ratios, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The annualized expense ratios reflect reimbursement/recoupment of expenses by the Funds’ Adviser for the period beginning July 1, 2019 to December 31, 2019. The “Financial Highlights” tables in the Funds’ financial statements, included in the report, also show the gross expense ratios, without such reimbursements. |
2 | Assumes a 5% annual return before expenses. |
91 |
MANAGEMENT OF THE COMPANY (UNAUDITED)
Information pertaining to the Directors and Officers of the Company is set forth below. The Statement of Additional Information includes additional information about the Directors and is available without charge, upon request, by calling (516) 390-5565.
Name, (Age) and Address1 | Term of Office2 | Principal Occupation(s) | Number of | Other Directorships |
INTERESTED DIRECTORS | ||||
David Lerner3 (83) Director, Chairman of the Board, President | Since 1998 | Founder, David Lerner Associates, Inc., a registered broker-dealer and the Company’s Distributor; and President, Spirit of America Management Corp., the Company’s investment adviser. | 6 | President and a Director of Spirit of America Management Corp., the Company’s investment adviser. |
Daniel Lerner3 (58) Director | Since 1998 | Senior Vice President, Investment Counselor with David Lerner Associates, Inc., a registered broker-dealer and the Company’s Distributor, since September 2000. | 6 | Director of David Lerner Associates, Inc., a registered broker-dealer and the Company’s Distributor. |
INDEPENDENT DIRECTORS | ||||
Allen Kaufman (83) Director | Since 1998 | President and Chief Executive Officer of K.G.K. Agency, Inc., a property and casualty insurance agency, since 1963.4 | 6 | Director of K.G.K. Agency, Inc., a property and casualty insurance agency. |
Stanley S. Thune (83) Lead Director | Since 1998 | President and Chief Executive Officer, Freight Management Systems, Inc., a third party logistics management company, since 1994; private investor. | 6 | Director of Freight Management Systems, Inc. |
Richard Weinberger (83) Director | Since 2005 | Retired. Of Counsel to Ballon Stoll Bader & Nadler, P.C., a mid-sized law firm, since January 2005 to March 2011; Shareholder, Ballon Stoll Bader & Nadler, P.C., January 2000 to December 2004. | 6 | None. |
OFFICERS | ||||
David Lerner President (see biography above) |
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|
|
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Alan P. Chodosh (66) Treasurer and Secretary | Since 2003 (Treasurer) Since 2005 (Secretary) | Executive Vice President and Chief Financial Officer of David Lerner Associates, Inc. since June 1999. | N/A | N/A |
Joseph Pickard (59) Chief Compliance Officer | Since 2007 | Chief Compliance Officer of Spirit of America Investment Fund, Inc. and Spirit of America Management Corp. since July 2007; Counsel to the Interested Directors of Spirit of America Investment Fund, Inc. since July 2002; General Counsel of David Lerner Associates, Inc. since July 2002. | N/A | N/A |
1 | All addresses are in c/o Spirit of America Investment Fund, Inc., 477 Jericho Turnpike, Syosset, New York 11791. |
2 | Each Director serves for an indefinite term, until his successor is elected. |
3 | David Lerner is an “interested” Director, as defined in the 1940 Act, by reason of his positions with the Adviser, and Daniel Lerner is an “interested” Director by reason of his position with the Distributor. Daniel Lerner is the son of David Lerner. |
4 | K.G.K. Agency, Inc. provides insurance to David Lerner Associates, Inc. and affiliated entities. However, the Board has determined that Mr. Kaufman is not an “interested” Director because the insurance services are less than $120,000 in value. |
92 | SPIRIT OF AMERICA |
The following notice does not constitute part of and is not
incorporated into the prospectus of the Funds.
PRIVACY NOTICE
Rev. 5/2018
FACTS | WHAT DO THE SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND, SPIRIT OF AMERICA LARGE CAP VALUE FUND, SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND, SPIRIT OF AMERICA INCOME FUND AND SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND (THE “FUNDS”) DO WITH YOUR PERSONAL INFORMATION? | ||
Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | ||
What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include:
● Social Security number ● account balances ● account transactions ● transaction history ● wire transfer instructions ● checking account information When you are no longer our customer, we continue to share your information as described in this notice. | ||
How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Spirit of America Investment Fund, Inc. chooses to share; and whether you can limit this sharing. | ||
Reasons we can share your personal information | Do the Funds share? | Can you limit this sharing? | |
For our everyday business purposes – | Yes | No | |
For our marketing purposes – | No | We don’t share | |
For joint marketing with other financial companies | No | We don’t share | |
For our affiliates’ everyday business purposes – | Yes | No | |
For our affiliates’ everyday business purposes – | No | We don’t share | |
For our affiliates to market to you | No | We don’t share | |
For non-affiliates to market to you | No | We don’t share | |
Questions? | Call (516) 390-5565 |
93 |
What we do | |
Who is providing this notice? | Funds advised by Spirit of America Management Corp. A complete list is included below. |
How do the Funds protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
How do the Funds collect my personal information? | We collect your personal information, typically through David Lerner Associates, Inc., (“DLA”) for example, when you ● open an account ● provide account information ● give DLA your contact information ● make a wire transfer ● tell DLA where to send the money DLA may collect your information from others, such as credit bureaus, affiliates, or other companies. |
Why can’t I limit all sharing? | Federal law gives you the right to limit only ● sharing for affiliates’ everyday business purposes – information about your creditworthiness ● affiliates from using your information to market to you ● sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
Definitions | |
Affiliates | Companies related by common ownership or control. They can be financial and non-financial companies.
● Our affiliates include: Spirit of America Management Corp; David Lerner Associates, Inc.; The Great Art Fund, LLC; and SRLA, Inc. |
Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies.
● The Funds do not share with non-affiliates so they can market to you. |
Joint Marketing | ● The Funds do not jointly market. |
List of funds providing this notice | |
Spirit of America Real Estate Income and Growth Fund |
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97 |
Proxy Voting Information
The Funds’ Statement of Additional Information (“SAI”) containing a description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, along with the Funds’ proxy voting record relating to portfolio securities held during the 12-month period ended June 30 are available (i) without charge, upon request, by calling (516) 390-5565; and (ii) on the SEC’s website at http://www.sec.gov.
Portfolio Disclosure
The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC’s website at http://www.sec.gov.
Investment Adviser
Spirit of America Management Corp.
477 Jericho Turnpike
P.O. Box 9006
Syosset, NY 11791-9006
Distributor
David Lerner Associates, Inc.
477 Jericho Turnpike
P.O. Box 9006
Syosset, NY 11791-9006
Shareholder Services
Ultimus Asset Services, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
Custodian
The Huntington National Bank
7 Easton Oval
Columbus, OH 43219
Independent Registered
Public Accounting Firm
Tait, Weller & Baker LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, PA 19102-2529
Counsel
Blank Rome LLP
1271 Avenue of the Americas
New York, NY 10020
For additional information about the Funds, call (800) 452-4892 or (610) 382-7819.
This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus which includes details regarding each Fund’s objectives, risks, policies, expenses, and other information.
©Copyright 2019 Spirit of America |
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Item 2. Code of Ethics.
As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. Pursuant to Item 12(a)(1), a copy of registrant’s code of ethics is filed as an exhibit to this Form N-CSR. During the period covered by this report, the code of ethics has not been amended, and the registrant has not granted any waivers, including implicit waivers, from the provisions of the code of ethics.
Item 3. Audit Committee Financial Expert.
(a) The registrant’s board of trustees has determined that the registrant does not have an audit committee financial expert. The committee members and the full Board considered a possibility of adding a member that would qualify as an expert. The audit committee determined that, although none of its members meet the technical definition of an audit committee expert, the committee has sufficient financial expertise to adequately perform its duties under the Audit Committee Charter without the addition of a qualified expert.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees billed to the registrant by its principal accountants for the two most recent fiscal years:
Fiscal year ended 2019: $113,145
Fiscal year ended 2018: $113,145
(b) Audit-Related Fees billed to the registrant by its principal accountants for the two most recent fiscal years:
Fiscal year ended 2019: $0
Fiscal year ended 2018: $0
Fees for 2019 and 2018 related to the agreed-upon review of items within the Management’s Discussion of Fund Performance sections of the Funds’ Form N-CSR filing. Amount requiring approval of the registrant's audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(c) Tax Fees billed to the registrant by its principal accountants for the two most recent fiscal years:
Fiscal year ended 2019: $19,500
Fiscal year ended 2018: $19,500
Fees for 2019 and 2018 related to the review of the registrant's tax returns. Amount requiring approval of the registrant's audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(d) All other fees billed to the registrant by its principal accountants for the two most recent fiscal years:
Fiscal year ended 2019: $0
Fiscal year ended 2018: $0
Amount requiring approval of the registrant's audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(e)(1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X
Pre-Approval of Audit and Permitted Non-Audit Services Provided to the Company
Pre-Approval Requirements. The Committee shall pre-approve all auditing services and permissible non-audit services (e.g., tax services) to be provided to the Company by the Auditor, including the fees therefor. The Committee may delegate to one or more of its members the authority to grant pre-approvals. In connection with such delegation, the Committee shall establish pre-approval policies and procedures, including the requirement that the decisions of any member to whom authority is delegated under this section (B) shall be presented to the full Committee at each of its scheduled meetings.
De Minimis Exception to Pre-Approval: Pre-approval for a permitted non-audit service shall not be required if:
a. | the aggregate amount of all such non-audit services is not more than 5% of the total revenues paid by the Company to the Auditor in the fiscal year in which the non-audit services are provided; |
b. | such services were not recognized by the Company at the time of the engagement to be non-audit services; and |
c. | such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by one or more members of the Committee to whom authority to grant such approvals has been delegated by the Committee. |
Additionally, the Committee shall pre-approve the Auditor’s engagements for non-audit services with the Adviser and any affiliate of the Adviser that provides ongoing services to the Company in accordance with the foregoing, if the engagement relates directly to the operations and financial reporting of the Company, unless the aggregate amount of all services provided constitutes no more than 5% of the total amount of revenues paid to the Auditor by the Company, the Adviser and any affiliate of the Adviser that provides ongoing services to the Company during the fiscal year in which the services are provided that would have to be pre-approved by the Committee pursuant to this paragraph (without regard to this exception).
(e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) 0%
(c) 0 %
(d) 0%
(f) The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for fiscal years ended December 31, 2018 and December 31, 2019 are $0 and $0, respectively
(h) The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
Item 6. | Schedule of Investments. |
(a) Not applicable.
(b) 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. Purchases 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 registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-2 under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Investment Companies.
Not Applicable.
Item 13. Exhibits.
(a)(1) The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Spirit of America Investment Fund, Inc. | |
By (Signature and Title) | /s/ David Lerner | |
David Lerner, Principal Executive Officer | ||
Date | 3/2/2020 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ David Lerner | |
David Lerner, Principal Executive Officer | ||
Date | 3/2/2020 | |
By (Signature and Title | /s/ Alan P. Chodosh | |
Alan P. Chodosh, Principal Financial Officer | ||
Date | 3/2/2020 |