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: 811-21622
Thrivent Financial Securities Lending Trust
(Exact name of registrant as specified in charter)
625 Fourth Avenue South
Minneapolis, Minnesota 55415
(Address of principal executive offices) (Zip code)
Rebecca A. Paulzine
625 Fourth Avenue South
Minneapolis, Minnesota 55415
(Name and address of agent for service)
Registrant’s telephone number, including area code: (612) 844-5168
Date of fiscal year end: October 31
Date of reporting period: October 31, 2010
| Item 1. | Report to Stockholders |
Annual Report
OCTOBER 31, 2010
Thrivent Financial
Securities Lending Trust
Table of Contents
THRIVENT FINANCIAL SECURITIES LENDING TRUST
William D. Stouten, Portfolio Manager
The Thrivent Financial Securities Lending Trust seeks to maximize current income to the extent consistent with the preservation of capital and liquidity, and to maintain a stable $1.00 per share net asset value by investing in dollar-denominated securities with a remaining maturity of 397 days or less.
The Thrivent Financial Securities Lending Trust was dramatically downsized during the market turmoil in the fall of 2008. Lower demand for borrowing securities combined with the low-yield environment has kept balances relatively low. The primary challenge in managing the Trust is the low-yield environment. Low yields and less demand to borrow securities have resulted in compressed spreads and lower profitability throughout the securities lending industry. The low-yield, low-demand environment is expected to persist at least through 2010, and potentially much longer. Therefore, securities lending activity is also likely to remain subdued. Because the Trust has always been managed conservatively, complying with the new Rule 2a-7 requirements has not led to material changes in the structure of the portfolio. Liquidity and credit quality remain strong, with 42% of the portfolio invested in direct U.S. government obligations or U.S. government-supported securities as of October 31, 2010. The combination of government securities and a short weighted-average maturity provide significant liquidity that would be available in times of volatility. As in any interest rate environment, we will maintain a defensive portfolio stance that maximizes safety and liquidity.
Portfolio Composition
(% of Portfolio)
Thrivent Financial Securities Lending Trust
As of October 31, 2010*
| | | | |
7-Day Yield | | | 0.21 | % |
7-Day Yield Gross of Waivers | | | 0.18 | % |
7-Day Effective Yield | | | 0.21 | % |
7-Day Effective Yield Gross of Waivers | | | 0.18 | % |
Average Annual Total Returns**
| | | | | | | | | | | | |
For the Period Ended October 31, 2010 | | 1-Year | | | 5-Year | | | Since Inception,
9/16/2004 | |
Total Return | | | 0.22 | % | | | 2.92 | % | | | 2.90 | % |
| * | Seven-day yields of the Thrivent Financial Securities Lending Trust refer to the income generated by an investment in the Trust over a specified seven-day period. Effective yields reflect the reinvestment of income. A yield gross of waivers represents what the yield would have been if the investment Adviser, Thrivent Financial for Lutherans, were not waiving or reimbursing certain expenses. Refer to the expense table in the prospectus for details. Yields are subject to daily fluctuation and should not be considered an indication of future results. |
| ** | Average annual total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions. |
Past performance is not an indication of future results. Current performance may be lower or higher than the performance data quoted. Total investment return and principal value of your investment will fluctuate, and your shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. The prospectus contains more complete information on the investment objectives, risks, charges and expenses of the Trust, which investors should read and consider carefully before investing.
An investment in the Trust is not insured or guaranteed by the FDIC or any other government agency. Although the Trust seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Trust.
1
Shareholder Expense Example
(Unaudited)
As a shareholder of the Trust, you incur ongoing costs, including management fees and other Trust expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Trust and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2010 through October 31, 2010.
Actual Expenses
In the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid during Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
In the table below, the second line provides information about hypothetical account values and hypothetical expenses based on the Trust’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Trust’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Trust and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical example that appears in the shareholder reports of the other funds.
| | | | | | | | | | | | | | | | |
| | | Beginning Account
Value 5/1/2010 | | | Ending Account Value
10/31/2010 | | | Expenses Paid During
Period 5/1/2010 -
10/31/2010* | | | Annualized Expense
Ratio | |
Thrivent Financial Securities Lending Trust | | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 1,001 | | | $ | 0.25 | | | | 0.05 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,025 | | | $ | 0.26 | | | | 0.05 | % |
| * | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period. |
| ** | Assuming 5% total return before expenses. |
2
Report of Independent Registered Public Accounting Firm
To the Shareholders and Trustees of the Thrivent Financial Securities Lending Trust:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Thrivent Financial Securities Lending Trust (the “Trust”) at October 31, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its 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. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Trust’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at October 31, 2010 by correspondence with the custodian, provides a reasonable basis for our opinion.
December 16, 2010
PricewaterhouseCoopers LLP, Suite 1400, 225 South Sixth Street, Minneapolis, MN 55402
T: (612) 596 6000, F: (612) 373 7160, www.pwc.com/us
3
Thrivent Financial Securities Lending Trust
Schedule of Investments as of October 31, 2010
| | | | | | | | |
Principal Amount | | | Asset Backed Commercial Paper (24.2%)a | | Value | |
| | | | Bryant Park Funding, LLC | | | | |
| $ | 12,722,000 | | | 0.240%, 11/9/2010b | | $ | 12,721,321 | |
| | | | Chariot Funding, LLC | | | | |
| | 10,000,000 | | | 0.230%, 11/5/2010b | | | 9,999,744 | |
| | 10,000,000 | | | 0.230%, 11/9/2010b | | | 9,999,489 | |
| | 3,500,000 | | | 0.250%, 11/16/2010b | | | 3,499,635 | |
| | 10,000,000 | | | 0.230%, 11/26/2010b | | | 9,998,403 | |
| | | | Falcon Asset Securitization Corporation, LLC | | | | |
| | 5,000,000 | | | 0.240%, 11/4/2010b | | | 4,999,900 | |
| | 7,400,000 | | | 0.290%, 2/14/2011b | | | 7,393,741 | |
| | | | Jupiter Securitization Corporation | | | | |
| | 10,000,000 | | | 0.240%, 11/12/2010b | | | 9,999,267 | |
| | | | Liberty Street Funding, LLC | | | | |
| | 10,000,000 | | | 0.240%, 11/18/2010b | | | 9,998,867 | |
| | 10,000,000 | | | 0.240%, 11/29/2010b | | | 9,998,133 | |
| | 9,000,000 | | | 0.280%, 12/15/2010b | | | 8,996,920 | |
| | | | Nieuw Amsterdam Receivables Corporation | | | | |
| | 15,000,000 | | | 0.250%, 11/22/2010b | | | 14,997,813 | |
| | | | Old Line Funding, LLC | | | | |
| | 9,000,000 | | | 0.260%, 12/8/2010b | | | 8,997,595 | |
| | 3,500,000 | | | 0.270%, 1/20/2011b | | | 3,497,900 | |
| | | | Straight-A Funding, LLC | | | | |
| | 10,000,000 | | | 0.250%, 12/15/2010 | | | 9,996,944 | |
| | 10,000,000 | | | 0.260%, 12/17/2010 | | | 9,996,678 | |
| | 7,400,000 | | | 0.260%, 12/21/2010 | | | 7,397,328 | |
| | 10,000,000 | | | 0.260%, 1/25/2011 | | | 9,993,861 | |
| | | | Thunder Bay Funding, Inc. | | | | |
| | 5,200,000 | | | 0.250%, 11/8/2010b | | | 5,199,747 | |
| | 10,000,000 | | | 0.230%, 11/17/2010b | | | 9,998,978 | |
| | 10,000,000 | | | 0.230%, 11/18/2010b | | | 9,998,914 | |
| | | | | | | | |
| | | | Total Asset Backed Commercial Paper | | | 187,681,178 | |
| | | | | | | | |
| | |
Principal Amount | | | Financial Company Commercial Paper (15.8%)a | | Value | |
| | | | Bank of America NA | | | | |
| | 10,000,000 | | | 0.470%, 12/23/2010b,c | | | 10,001,494 | |
| | | | BNP Paribas | | | | |
| | 31,845,000 | | | 0.200%, 11/2/2010 | | | 31,845,000 | |
| | | | General Electric Capital Corporation | | | | |
| | 9,420,000 | | | 0.603%, 12/1/2010 | | | 9,456,452 | |
| | 7,200,000 | | | 0.530%, 2/16/2011 | | | 7,188,658 | |
| | | | Royal Bank of Canada | | | | |
| | 8,500,000 | | | 0.430%, 11/22/2010c | | | 8,500,000 | |
| | 5,400,000 | | | 0.256%, 12/9/2010c | | | 5,400,000 | |
| | | | Svenska Handelsbanken AB | | | | |
| | 5,000,000 | | | 0.448%, 2/9/2011c,d | | | 5,000,026 | |
| | | | Svenska Handelsbanken, Inc. | | | | |
| | 30,000,000 | | | 0.200%, 11/2/2010 | | | 30,000,000 | |
| | | | Toronto-Dominion Holdings USA, Inc. | | | | |
| | 8,000,000 | | | 0.220%, 12/28/2010b | | | 7,997,213 | |
| | | | | | | | |
Principal Amount | | | Financial Company Commercial Paper (15.8%)a | | Value | |
| | | | Variable Funding Capital Company, LLC | | | | |
| $ | 8,000,000 | | | 0.270%, 11/16/2010b | | $ | 7,999,100 | |
| | | | | | | | |
| | | | Total Financial Company Commercial Paper | | | 123,387,943 | |
| | | | | | | | |
| | |
Principal Amount | | | Government Agency Debt (35.9%)a | | Value | |
| | | | Eksportfinans ASA | | | | |
| | 1,860,000 | | | 0.230%, 11/1/2010 | | | 1,860,000 | |
| | | | Federal Agricultural Mortgage Corporation | | | | |
| | 15,000,000 | | | 0.190%, 11/19/2010 | | | 14,998,575 | |
| | | | Federal Home Loan Bank Discount Notes | | | | |
| | 10,000,000 | | | 0.180%, 1/19/2011 | | | 9,996,050 | |
| | 10,000,000 | | | 0.180%, 1/21/2011 | | | 9,995,950 | |
| | 10,000,000 | | | 0.180%, 2/25/2011 | | | 9,994,200 | |
| | | | Federal Home Loan Banks | | | | |
| | 2,175,000 | | | 0.255%, 12/10/2010 | | | 2,185,576 | |
| | 30,000,000 | | | 0.196%, 5/2/2011c | | | 29,984,908 | |
| | 10,000,000 | | | 0.270%, 5/27/2011c | | | 10,000,000 | |
| | 5,000,000 | | | 0.176%, 8/26/2011c | | | 4,997,934 | |
| | 15,000,000 | | | 0.206%, 9/15/2011c | | | 14,996,710 | |
| | 9,000,000 | | | 0.270%, 9/20/2011c | | | 9,000,000 | |
| | 10,000,000 | | | 0.330%, 3/20/2012c | | | 9,998,600 | |
| | | | Federal Home Loan Mortgage Corporation | | | | |
| | 6,000,000 | | | 0.247%, 12/16/2010 | | | 6,031,860 | |
| | 10,780,000 | | | 0.216%, 9/19/2011c | | | 10,775,100 | |
| | 8,000,000 | | | 0.330%, 11/7/2011c | | | 7,997,946 | |
| | 7,000,000 | | | 0.206%, 12/21/2011c | | | 6,995,956 | |
| | 7,000,000 | | | 0.190%, 1/13/2012c | | | 6,991,494 | |
| | 7,500,000 | | | 0.190%, 1/25/2012c | | | 7,478,418 | |
| | | | Federal Home Loan Mortgage Corporation Discount Notes | | | | |
| | 5,000,000 | | | 0.210%, 12/8/2010 | | | 4,998,921 | |
| | 20,000,000 | | | 0.190%, 12/22/2010 | | | 19,994,617 | |
| | 9,701,000 | | | 0.190%, 12/27/2010 | | | 9,698,133 | |
| | 10,000,000 | | | 0.180%, 12/31/2010 | | | 9,997,000 | |
| | 13,775,000 | | | 0.200%, 2/14/2011 | | | 13,766,965 | |
| | | | Federal National Mortgage Association | | | | |
| | 6,500,000 | | | 0.216%, 9/19/2011c | | | 6,497,091 | |
| | 8,000,000 | | | 0.430%, 9/13/2012c | | | 8,002,995 | |
| | 8,000,000 | | | 0.286%, 9/17/2012c | | | 8,000,000 | |
| | 5,000,000 | | | 0.286%, 10/18/2012c | | | 4,998,011 | |
| | | | Overseas Private Investment Corporation | | | | |
| | 4,482,758 | | | 0.240%, 3/15/2017b,c | | | 4,482,758 | |
| | 9,473,684 | | | 0.240%, 3/15/2024b,c | | | 9,473,684 | |
| | 5,785,177 | | | 0.240%, 3/15/2024b,c | | | 5,785,177 | |
| | | | | | | | |
| | | | Total Government Agency Debt | | | 279,974,629 | |
| | | | | | | | |
| | |
Shares | | | Investment Company (5.5%) | | Value | |
| | | | AIM Investments Institutional Government and Agency Portfolio | | | | |
| | 130,000 | | | 0.090% | | | 130,000 | |
| | | | BlackRock Cash Funds | | | | |
| | 20,002,000 | | | 0.230% | | | 20,002,000 | |
|
| The accompanying Notes to the Financial Statements are an integral part of this schedule. |
Thrivent Financial Securities Lending Trust
Schedule of Investments as of October 31, 2010
| | | | | | | | |
Shares | | | Investment Company (5.5%) | | Value | |
| | | | DWS Money Market Series | | | | |
| | 22,206,000 | | | 0.190% | | $ | 22,206,000 | |
| | | | Morgan Stanley Institutional Liquidity Funds | | | | |
| | 741,000 | | | 0.190% | | | 741,000 | |
| | | | | | | | |
| | | | Total Investment Company | | | 43,079,000 | |
| | | | | | | | |
| | |
Principal
Amount | | | Other Commercial Paper (10.7%)a | | Value | |
| | | | ENI Coordination Center SA | | | | |
| $ | 10,000,000 | | | 0.240%, 11/5/2010b | | | 9,999,733 | |
| | | | ENI Finance USA, Inc. | | | | |
| | 5,645,000 | | | 0.230%, 11/1/2010b | | | 5,645,000 | |
| | | | Nestle Finance International, Ltd. | | | | |
| | 10,000,000 | | | 0.200%, 12/13/2010b | | | 9,997,667 | |
| | | | Northwestern University | | | | |
| | 8,000,000 | | | 0.220%, 11/3/2010 | | | 7,999,902 | |
| | | | Private Export Funding Corporation | | | | |
| | 10,000,000 | | | 0.230%, 11/8/2010 | | | 9,999,553 | |
| | 10,000,000 | | | 0.240%, 11/15/2010 | | | 9,999,067 | |
| | | | Total Capital Canada, Ltd. | | | | |
| | 7,000,000 | | | 0.250%, 12/8/2010b | | | 6,998,202 | |
| | | | Toyota Credit Canada, Inc. | | | | |
| | 8,000,000 | | | 0.300%, 12/15/2010 | | | 7,997,067 | |
| | | | Wal-Mart Funding Corporation | | | | |
| | 15,000,000 | | | 0.250%, 11/10/2010b | | | 14,999,062 | |
| | | | | | | | |
| | | | Total Other Commercial Paper | | | 83,635,253 | |
| | | | | | | | |
| | |
Principal
Amount | | | Other Municipal Debt (2.6%)a | | Value | |
| | | | Alaska Housing Finance Corporation | | | | |
| | 10,550,000 | | | 0.350%, 11/4/2010 | | | 10,549,692 | |
| | | | Texas Public Finance Authority | | | | |
| | 9,125,000 | | | 0.320%, 12/6/2010b | | | 9,125,000 | |
| | | | | | | | |
| | | | Total Other Municipal Debt | | | 19,674,692 | |
| | | | | | | | |
| | |
Principal
Amount | | | Variable Rate Demand Note (5.3%)a | | Value | |
| | | | Denver, Colorado Airport System Revenue Bonds | | | | |
| | 8,000,000 | | | 0.260%, 11/15/2022b,c | | | 8,000,000 | |
| | | | Illinois Finance Authority Multifamily Housing Revenue Bonds (Villagebrook Apartments) | | | | |
| | 5,510,000 | | | 0.350%, 5/1/2035b,c | | | 5,510,000 | |
| | | | Oregon Health and Science University Revenue Bonds | | | | |
| | 5,675,000 | | | 0.270%, 7/1/2027b,c | | | 5,675,000 | |
| | | | St. Cloud, Minnesota Health Care Refunding Revenue Bonds (CentraCare Health System) | | | | |
| | 5,935,000 | | | 0.240%, 5/1/2042b,c | | | 5,935,000 | |
| | | | | | |
Principal
Amount | | Variable Rate Demand Note (5.3%)a | | Value | |
| | Wisconsin Health and Educational Facilities Authority Revenue Bonds (Fort Healthcare, Inc.) | | | | |
| $16,615,000 | | 0.310%, 5/1/2037b,c | | $ | 16,615,000 | |
| | | | | | |
| | Total Variable Rate Demand Note | | | 41,735,000 | |
| | | | | | |
| | Total Investments (at amortized cost) 100.0% | | $ | 779,167,695 | |
| | | | | | |
| | Other Assets and Liabilities, Net <0.1% | | | 233,068 | |
| | | | | | |
| | Total Net Assets 100.0% | | $ | 779,400,763 | |
| | | | | | |
| a | The interest rate shown reflects the yield, coupon rate or, for securities purchased at a discount, the discount rate at the date of purchase. |
| b | Denotes investments that benefit from credit enhancement or liquidity support provided by a third party bank or institution. |
| c | Denotes variable rate securities. Variable rate securities are securities whose yields vary with a designated market index or market rate. The rate shown is as of October 31, 2010. |
| d | Denotes securities sold under Rule 144A of the Securities Act of 1933, which exempts them from registration. These securities have been deemed liquid and may be resold to other dealers in the program or to other qualified institutional buyers. As of October 31, 2010, the value of these investments was $5,000,026 or 0.6% of total net assets. |
| | | | |
Cost for federal income tax purposes | | $ | 779,167,695 | |
|
| The accompanying Notes to the Financial Statements are an integral part of this schedule. |
Thrivent Financial Securities Lending Trust
Schedule of Investments as of October 31, 2010
Fair Valuation Measurements
The following table is a summary of the inputs used, as of October 31, 2010, in valuing Securities Lending Trust’s assets carried at fair value or amortized cost, which approximates fair value, as discussed in the Notes to Financial Statements.
| | | | | | | | | | | | | | | | |
Investments in Securities | | Total | | | Level 1 | | | Level 2 | | | Level 3 | |
Asset Backed Commercial Paper | | | 187,681,178 | | | | – | | | | 187,681,178 | | | | – | |
Financial Company Commercial Paper | | | 123,387,943 | | | | – | | | | 123,387,943 | | | | – | |
Government Agency Debt | | | 279,974,629 | | | | – | | | | 279,974,629 | | | | – | |
Investment Company | | | 43,079,000 | | | | 43,079,000 | | | | – | | | | – | |
Other Commercial Paper | | | 83,635,253 | | | | – | | | | 83,635,253 | | | | – | |
Other Municipal Debt | | | 19,674,692 | | | | – | | | | 19,674,692 | | | | – | |
Variable Rate Demand Note | | | 41,735,000 | | | | – | | | | 41,735,000 | | | | – | |
| | | | | | | | | | | | | | | | |
Total | | $ | 779,167,695 | | | $ | 43,079,000 | | | $ | 736,088,695 | | | $ | – | |
| | | | | | | | | | | | | | | | |
The accompanying Notes to Financial Statements are an integral part of this schedule.
6
Thrivent Financial Securities Lending Trust
Statement of Assets and Liabilities
| | | | |
As of October 31, 2010 | | Securities
Lending Trust | |
| |
Assets | | | | |
Investments at cost | | $ | 779,167,695 | |
Investments in securities at market value | | | 779,167,695 | |
Investments at Market Value | | | 779,167,695 | a |
Cash | | | 4,410 | |
Dividends and interest receivable | | | 419,190 | |
Prepaid expenses | | | 3,401 | |
Total Assets | | | 779,594,696 | |
| |
Liabilities | | | | |
Distributions payable | | | 136,361 | |
Accrued expenses | | | 40,374 | |
Payable to affiliate | | | 17,198 | |
Total Liabilities | | | 193,933 | |
| |
Net Assets | | | | |
Capital stock (beneficial interest) | | | 779,395,548 | |
Accumulated undistributed net realized gain/(loss) | | | 5,215 | |
Total Net Assets | | $ | 779,400,763 | |
Shares of beneficial interest outstanding | | | 779,395,548 | |
Net asset value per share | | $ | 1.00 | |
| a | Securities held by the Trust are valued on the basis of amortized cost, which approximates market value. |
The accompanying Notes to the Financial Statements are an integral part of this schedule.
7
Thrivent Financial Securities Lending
Trust Statement of Operations
| | | | |
For the year ended October 31, 2010 | | Securities
Lending
Trust | |
Investment Income | | | | |
Dividends | | $ | 82,675 | |
Interest | | | 1,930,553 | |
Total Investment Income | | | 2,013,228 | |
| |
Expenses | | | | |
Adviser fees | | | 342,288 | |
Administrative service fees | | | 89,759 | |
Audit and legal fees | | | 30,278 | |
Custody fees | | | 45,967 | |
Insurance expenses | | | 11,575 | |
Printing and postage expenses | | | 7,651 | |
Transfer agent fees | | | 41,497 | |
Trustees’ fees | | | 4,849 | |
Other expenses | | | 15,078 | |
Total Expenses Before Reimbursement | | | 588,942 | |
| |
Less: | | | | |
Reimbursement from adviser | | | (208,507 | ) |
Custody earnings credit | | | (179 | ) |
Total Net Expenses | | | 380,256 | |
Net Investment Income/(Loss) | | | 1,632,972 | |
Realized and Unrealized Gains/(Losses) | | | | |
Net realized gains/(losses) on: | | | | |
Investments | | | 5,215 | |
Net Realized and Unrealized Gains/(Losses) | | | 5,215 | |
| |
Net Increase/(Decrease) in Net Assets Resulting From Operations | | $ | 1,638,187 | |
The accompanying Notes to the Financial Statements are an integral part of this schedule.
8
Thrivent Financial Securities Lending Trust
Statement of Changes in Net Assets
| | | | | | | | |
| | | Securities Lending Trust | |
For the periods ended | | 10/31/2010 | | | 10/31/2009 | |
Operations | | | | | | | | |
Net investment income/(loss) | | $ | 1,632,972 | | | $ | 12,539,788 | |
Net realized gains/(losses) | | | 5,215 | | | | 50,411 | |
Net Change in Net Assets Resulting From Operations | | | 1,638,187 | | | | 12,590,199 | |
Distributions to Shareholders | | | | | | | | |
From net investment income | | | (1,632,972 | ) | | | (12,539,788 | ) |
From net realized gains | | | (50,410 | ) | | | (78,524 | ) |
Total Distributions to Shareholders | | | (1,683,382 | ) | | | (12,618,312 | ) |
| | |
Capital Stock Transactions | | | | | | | | |
Sold | | | 7,406,733,557 | | | | 8,420,471,780 | |
Redeemed | | | (7,373,984,449 | ) | | | (10,135,645,565 | ) |
Capital Stock Transactions | | | 32,749,108 | | | | (1,715,173,785 | ) |
| | |
Net Increase/(Decrease) in Net Assets | | | 32,703,913 | | | | (1,715,201,898 | ) |
Net Assets, Beginning of Period | | | 746,696,850 | | | | 2,461,898,748 | |
Net Assets, End of Period | | $ | 779,400,763 | | | $ | 746,696,850 | |
Accumulated undistributed net investment income/(loss) | | $ | – | | | $ | – | |
| | |
Capital Stock Share Transactions | | | | | | | | |
Sold | | | 7,406,733,557 | | | | 8,420,471,780 | |
Redeemed | | | (7,373,984,449 | ) | | | (10,135,645,565 | ) |
| | | | | | | | |
Total Capital Stock Share Transactions | | | 32,749,108 | | | | (1,715,173,785 | ) |
| | | | | | | | |
The accompanying Notes to the Financial Statements are an integral part of this schedule.
9
Thrivent Financial Securities Lending Trust
Notes to Financial Statements
As of October 31, 2010
(1) ORGANIZATION
Thrivent Financial Securities Lending Trust (the “Trust”) was organized as a Massachusetts Business Trust on August 4, 2004 and is registered as an open-end management investment company under the Investment Company Act of 1940. The Trust commenced operations on September 16, 2004. All transactions in the Trust are with affiliates of the Trust.
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Trust enters into contracts with vendors and others that provide general damage clauses. The Trust’s maximum exposure under these contracts is unknown, as this would involve future claims that may be made against the Trust. However, based on experience, the Trust expects the risk of loss to be remote.
(2) SIGNIFICANT ACCOUNTING POLICIES
(A) Valuation of Investments – Securities are valued on the basis of amortized cost (which approximates value), whereby a portfolio security is valued at its cost initially, and thereafter valued to reflect a constant amortization to maturity of any discount or premium. Investments in open-ended mutual funds are valued at their net asset value at the close of each business day. The Trust’s investment adviser Thrivent Financial for Lutherans (“Thrivent Financial” or the “Adviser”), follows procedures designed to maintain a constant net asset value of $1.00 per share.
Financial Accounting Standards Board (FASB) guidelines require increased fair value disclosure intended to improve the consistency and comparability of fair value measurements used in financial reporting. The guidelines define fair value, establish a framework for measuring fair value in generally accepted accounting principles and expand disclosures about fair value requirements. Various inputs are summarized in three broad levels: Level 1 includes quoted prices in active markets for identical securities, typically categorized in this level are U.S. equity securities, futures and options; Level 2 includes other significant observable inputs such as quoted prices for similar securities, interest rates, prepayment speeds and credit risk, typically categorized in this level are fixed income securities, international securities, swaps and forward contracts; and Level 3 includes significant unobservable inputs such as the Fund’s own assumptions and broker evaluations in determining the fair value of investments.
(B) Federal Income Taxes – The Trust intends to comply with the requirements of the Internal Revenue Code which are applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. The Trust, accordingly, anticipates paying no Federal income taxes and no Federal income tax provision was recorded.
U.S. Generally Accepted Accounting Principles (“GAAP”) requires management of the Trust to make additional tax disclosures with respect to the tax effects of certain income tax positions, whether those positions were taken on previously filed tax returns or are expected to be taken on future returns. These positions must meet a “more likely than not” standard that, based on the technical merits of the position, would have a greater than 50 percent likelihood of being sustained upon examination. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, management of the Trust must presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information.
Management of the Trust analyzed all open tax years, as defined by the statute of limitations, for all major jurisdictions. Open tax years are those that are open for examination by taxing authorities. Major jurisdictions for the Trust include U.S. Federal, Minnesota, Wisconsin, and Massachusetts as well as certain foreign countries. As of October 31, 2010, open U.S. Federal, Minnesota, Wisconsin, and Massachusetts tax years include the tax years ended October 31, 2007, through 2010. Additionally, as of October 31, 2010, the tax year ended October 31, 2006, is open for Wisconsin. The Trust has no examinations in progress and none are expected at this time.
As of October 31, 2010, management of the Trust has reviewed all open tax years and major jurisdictions and concluded that there is no effect to the Trust’s tax liability, financial position or results of operations. There is no tax liability resulting from unrecognized tax benefits related to uncertain income tax positions taken or expected to be taken in future tax returns. The Trust is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months.
(C) Custody Earnings Credit – The Trust has a deposit arrangement with the custodian whereby interest earned on uninvested cash balances is used to pay a portion of custodian fees. This deposit arrangement is an alternative to overnight investments.
(D) Distributions to Shareholders – Net investment income is distributed to each shareholder as a dividend. Dividends from the Trust are declared daily and distributed monthly. Net realized gains from securities transactions, if any, are distributed at least annually after the close of the fiscal year.
(E) Repurchase Agreements – The Trust may engage in repurchase agreement transactions in pursuit of its investment objective. A repurchase agreement consists of a purchase and a simultaneous agreement to resell an investment for later delivery at an agreed upon price and rate of interest. The Trust must take possession of collateral either
10
Thrivent Financial Securities Lending Trust
Notes to Financial Statements
As of October 31, 2010
directly or through a third-party custodian. If the original seller of a security subject to a repurchase agreement fails to repurchase the security at the agreed upon time, the Trust could incur a loss due to a drop in the market value of the security during the time it takes the Trust to either sell the security or take action to enforce the original seller’s agreement to repurchase the security. Also, if a defaulting original seller filed for bankruptcy or became insolvent, disposition of such security might be delayed by pending legal action. The Trust may only enter into repurchase agreements with banks and other recognized financial institutions such as broker/dealers that are found by the Adviser to be creditworthy. During the year ended October 31, 2010, the Trust engaged in this type of investment.
(F) Accounting Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates.
(G) Other – For financial statement purposes, investment security transactions are accounted for on the trade date. Interest income is recognized on an accrual basis. Discount and premium are amortized over the life of the respective securities on the interest method. Realized gains or losses on sales are determined on a specific cost identification basis. GAAP requires permanent financial reporting and tax differences to be reclassified to trust capital. No reclassifications were necessary at October 31, 2010.
(3) FEES AND COMPENSATION PAID TO AFFILIATES
(A) Investment Advisory Fees – The Trust pays Thrivent Financial a fee for its advisory services. The annual rate of fees under the Investment Advisory Agreement is calculated at 0.045% of the average daily net assets of the Trust.
The Adviser has agreed to voluntarily reimburse the Trust for all expenses in excess of 0.05% of average daily net assets. This voluntary expense reimbursement may be discontinued at any time.
(B) Other Fees – The Trust has entered into an administration and accounting services agreement with Thrivent Financial pursuant to which Thrivent Financial provides certain administrative and accounting personnel and services. For the year ended October 31, 2010, Thrivent Financial received aggregate fees for administrative and accounting personnel and services of $90,000 from the Trust.
Each Trustee who is not affiliated with the Adviser receives an annual fee from the Trust for services as a Trustee and is eligible to participate in a deferred compensation plan
with respect to these fees. Each participant’s deferred compensation account will increase or decrease as if it were invested in shares of a particular series of Thrivent Mutual Funds.
Trustees not participating in the above plan received $3,616 in fees from the Trust for the year ended October 31, 2010. In addition, the Trust reimbursed unaffiliated Trustees for reasonable expenses incurred in relation to attendance at the meetings.
Certain officers and non-independent trustees of the Trust are employed at Thrivent Financial for Lutherans and receive no compensation from the Trust.
(C) Indirect Expenses – The Trust may invest in other mutual funds. Fees and expenses of those underlying funds are not included in the Trust’s expense ratio. The Trust indirectly bears its proportionate share of the annualized weighted average expense ratio for the underlying funds in which it invests.
(4) FEDERAL INCOME TAX INFORMATION
Distributions are based on amounts calculated in accordance with the applicable federal income tax regulations, which may differ from GAAP. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassifications.
During the year ended October 31, 2010, and the year ended October 31, 2009, the Trust distributed $1,683,382 and $12,618,312 from ordinary income, respectively. At October 31, 2010, undistributed ordinary income for tax purposes was $13,818.
(5) SUBSEQUENT EVENTS
Management of the Trust has evaluated the impact of subsequent events, and, except as already included in the Notes to Financial Statements, has determined that no additional items require disclosure.
11
Thrivent Financial Securities Lending Trust
Financial Highlights
FOR A SHARE OUSTANDING THROUGHOUT EACH PERIOD*
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Income from Investment Operations | | | Less Distributions
From | |
| | | Net Asset
Value,
Beginning of
Period | | | Net
Investment
Income/
(Loss) | | | Net Realized
and Unrealized
Gain/(Loss) on
Investments(a) | | | Total from
Investment
Operations | | | Net
Investment
Income | | | Net Realized
Gain on
Investments | |
SECURITIES LENDING TRUST | | | | | | | | | | | | | | | | | | | | | | | | |
Year Ended 10/31/2010 | | $ | 1.00 | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
Year Ended 10/31/2009 | | | 1.00 | | | | 0.01 | | | | – | | | | 0.01 | | | | (0.01 | ) | | | – | |
Year Ended 10/31/2008 | | | 1.00 | | | | 0.03 | | | | – | | | | 0.03 | | | | (0.03 | ) | | | – | |
Year Ended 10/31/2007 | | | 1.00 | | | | 0.05 | | | | – | | | | 0.05 | | | | (0.05 | ) | | | – | |
Year Ended 10/31/2006 | | | 1.00 | | | | 0.05 | | | | – | | | | 0.05 | | | | (0.05 | ) | | | – | |
| (a) | The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares. |
| * | All per share amounts have been rounded to the nearest cent. |
The accompanying Notes to the Financial Statements are an integral part of this schedule.
12
Thrivent Financial Securities Lending Trust
Financial Highlights—continued
RATIOS / SUPPLEMENTAL DATA
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Ratio to Average Net
Assets** | | | Ratios to Average Net Assets
Before Expenses Waived,
Credited or Paid Indirectly** | | | | |
Total
Distributions | | | Net Asset
Value, End
of Period | | | Total
Return(b) | | | Net Assets,
End of Period
(in millions) | | | Expenses | | | Net Investment
Income/(Loss) | | | Expenses | | | Net Investment
Income/(Loss) | | | Portfolio
Turnover
Rate | |
| $ | – | | | $ | 1.00 | | | | 0.22 | % | | $ | 779.4 | | | | 0.05 | % | | | 0.21 | % | | | 0.08 | % | | | 0.19 | % | | | N/A | |
| | (0.01) | | | | 1.00 | | | | 0.76 | % | | | 746.7 | | | | 0.05 | % | | | 0.92 | % | | | 0.06 | % | | | 0.91 | % | | | N/A | |
| | (0.03) | | | | 1.00 | | | | 3.38 | % | | | 2,461.9 | | | | 0.05 | % | | | 3.36 | % | | | 0.05 | % | | | 3.36 | % | | | N/A | |
| | (0.05) | | | | 1.00 | | | | 5.46 | % | | | 5,051.1 | | | | 0.05 | % | | | 5.33 | % | | | 0.05 | % | | | 5.33 | % | | | N/A | |
| | (0.05) | | | | 1.00 | | | | 4.93 | % | | | 4,121.0 | | | | 0.05 | % | | | 4.82 | % | | | 0.05 | % | | | 4.82 | % | | | N/A | |
(b) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
| ** | Computed on an annualized basis for periods less than one year. |
The accompanying Notes to the Financial Statements are an integral part of this schedule.
13
Additional Information
(unaudited)
PROXY VOTING
The policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities are attached to the Trust’s Statement of Additional Information. You may request a free copy of the Statement of Additional Information or the report of how the Trust voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 by calling 1-800-847-4836. You also may review the Statement of Additional Information or the report of how the Trust voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 at www.sec.gov.
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS
The Trust files its Schedule of Portfolio Holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. You may request a free copy of the Trust’s Forms N-Q by calling 1-800-847-4836. The Trust’s Forms N-Q also are available at www.sec.gov. You also may review and copy the Forms N-Q for the Trust at the SEC’s Public Reference Room in Washington, DC. You may get information about the operation of the Public Reference Room by calling 1-800-SEC-0330.
14
Board of Trustees and Officers
The following table provides information about the Trustees and Officers of the Trust. In addition to serving as a Trustee of the Trust, each Trustee also serves as:
| | • | | Director of Thrivent Series Fund, Inc., a registered investment company consisting of 41 portfolios that serve as underlying funds for variable contracts issued by Thrivent Financial for Lutherans (“Thrivent Financial”) and Thrivent Life Insurance Company and investment options in the retirement plan offered by Thrivent Financial; and |
| | • | | Trustee of Thrivent Mutual Funds, a registered investment company consisting of 26 series. |
The 26 series of the Trust, the 41 portfolios of Thrivent Series Fund, Inc. and Thrivent Financial Securities Lending Trust are referred to herein as the “Fund Complex.” The Statement of Additional Information includes additional information about the Trustees and is available, without charge, by calling 1-800-847-4836.
Interested Trustee (1)
| | | | | | | | |
Name, Address and Age | | Position with Trust and Length of Service (2) | | Number of Portfolios in Fund Complex Overseen by Trustee | | Principal Occupation
During the Past 5 Years | | Other Directorships Held Currently and Within Past 5 Years |
Russell W. Swansen 625 Fourth Avenue South Minneapolis, MN Age 53 | | President since 2008; Trustee since 2009 | | 68 | | Senior Vice President, Chief Investment Officer, Thrivent Financial since 2003 | | None |
Independent Trustees (3)
| | | | | | | | | | |
Name, Address and Age | | Position with Trust and Length of Service (2) | | Number of Portfolios in Fund Complex Overseen by Trustee | | Principal Occupation During the Past 5 Years | | Other Directorships Held Currently and Within Past 5 Years |
F. Gregory Campbell 625 Fourth Avenue South Minneapolis, MN Age 70 | | Trustee since 2004 | | 68 | | President, Carthage College | | Currently, Director of Optique Funds, Inc., an investment company consisting of one portfolio; Kenosha Hospital and Medical Center, Prairie School Board and United Health Systems Board. Previously, Director of the National Association of Independent Colleges and Universities. |
15
Board of Trustees and Officers
| | | | | | | | |
Name, Address and Age | | Position with Trust and Length of Service (2) | | Number of Portfolios in Fund Complex Overseen by Trustee | | Principal Occupation During the Past 5 Years | | Other Directorships Held Currently and Within Past 5 Years |
| | | | |
Noel K. Estenson 625 Fourth Avenue South Minneapolis, MN Age 71 | | Trustee from 2004 until December 2010 | | 68 | | Retired | | None |
| | | | |
Richard L. Gady 625 Fourth Avenue South Minneapolis, MN Age 67 | | Trustee since 2004 | | 68 | | Retired; previously Vice President, Public Affairs and Chief Economist, ConAgra, Inc. (agribusiness) | | Previously, Director of the International Agricultural Marketing Association |
| | | | |
Richard A. Hauser 625 Fourth Avenue South Minneapolis, MN Age 67 | | Trustee since 2004 | | 68 | | Vice President and Assistant General Counsel, Boeing Company since 2007; President, National Legal Center for the Public Interest from 2004 to 2007 | | Previously, Director of Washington Hospital Center |
| | | | |
Paul R. Laubscher 625 Fourth Avenue South Minneapolis, MN Age 54 | | Trustee since 2009 | | 68 | | Portfolio Manager for U.S. and international equity portfolios and private real estate portfolios of IBM Retirement Funds | | None |
| | | | |
Connie M. Levi 625 Fourth Avenue South Minneapolis, MN Age 71 | | Chairperson since 2009; Trustee since 2004 | | 68 | | Retired | | Previously, Director of Norstan, Inc. |
| | | | |
Douglas D. Sims 625 Fourth Avenue South Minneapolis, MN Age 64 | | Trustee since 2006 | | 68 | | Retired; previously Chief Executive Officer of CoBank from 1994 to 2006 | | Currently, Director of Keystone Neighbourhood Company, Keystone Center and Keystone Science School. Previously, Director of the Center for Corporate Excellence |
16
Board of Trustees and Officers
| | | | | | | | |
Name, Address and Age | | Position with Trust and Length of Service (2) | | Number of Portfolios in Fund Complex Overseen by Trustee | | Principal Occupation During the Past 5 Years | | Other Directorships Held Currently and Within Past 5 Years |
| | | | |
Constance L. Souders 625 Fourth Avenue South Minneapolis, MN Age 60 | | Trustee since 2007 | | 68 | | Retired; previously Director from 1983 to 2007, Executive Vice President from 2001 to 2007 and AML Compliance Officer from 2003 to 2007 of Harbor Capital Advisors, Inc.; Director from 1992 to 2007, President from 2000 to 2007 and AML Compliance Officer from 2003 to 2007 of Harbor Services Group, Inc.; Director from 1992 to 2007, Executive Vice President from 2001 to 2007, Chief Compliance Officer from 2004 to 2007, AML Compliance Officer from 2003 to 2007, Supervisory Registered Principal from 2000 to 2007, of Harbor Funds Distributors, Inc.; Vice President from 2000 to 2007 of Harbor Funds | | None |
17
Board of Trustees and Officers
Executive Officers
| | | | |
Name, Address and Age | | Position with Trust and Length of Service (2) | | Principal Occupation During the Past 5 Years |
Russell W. Swansen 625 Fourth Avenue South Minneapolis, MN Age 53 | | President since 2008; previously, Vice President since 2004 | | Senior Vice President, Chief Investment Officer, Thrivent Financial since 2003 |
| | |
David S. Royal 625 Fourth Avenue South Minneapolis, MN Age 39 | | Secretary and Chief Legal Officer since 2006 | | Vice President and Managing Counsel, since 2006 and Interim Investment Adviser Chief Compliance Officer from May 2010 until December 2010, Thrivent Financial; Partner, Kirkland & Ellis LLP from 2004 to 2006 |
| | |
Gerard V. Vaillancourt 625 Fourth Avenue South Minneapolis, MN Age 43 | | Treasurer and Principal Accounting Officer since 2005 | | Vice President, Mutual Fund Accounting Thrivent Financial since 2006, Head of Mutual Fund Accounting, Thrivent Financial from 2005 to 2006 |
| | |
Janice M. Guimond 625 Fourth Avenue South Minneapolis, MN Age 46 | | Vice President since 2005 | | Vice President, Investment Operations, Thrivent Financial since 2004 |
| | |
Karl D. Anderson 625 Fourth Avenue South Minneapolis, MN Age 49 | | Vice President since 2006 | | Vice President, Products, Thrivent Financial since 2005 |
| | |
Brian W. Picard 4321 North Ballard Road Appleton, WI Age 40 | | Vice President Anti- Money Laundering Officer since 2006 | | Director, Product Compliance and Systems Support, Thrivent Financial since 2010; Director, Business Control Services, Thrivent Financial from 2006 to 2010; Manager of Field and Securities Compliance, Thrivent Financial from 2002 to 2006 |
| | |
Mark D. Anema 625 Fourth Avenue South Minneapolis, MN Age 49 | | Assistant Vice President since 2007 | | Vice President, Accumulation and Retirement Income Solutions, Thrivent Financial since 2007; Vice President, Strategic Planning, Thrivent Financial from 2004 to 2007 |
| | |
James M. Odland 625 Fourth Avenue South Minneapolis, MN Age 55 | | Assistant Secretary since 2006 | | Vice President and Managing Counsel, Thrivent Financial since 2005 |
| | |
Rebecca A. Paulzine 625 Fourth Avenue South Minneapolis, MN Age 31 | | Assistant Secretary since 2010 | | Counsel, Thrivent Financial since January 2010; Associate, Faegre & Benson LLP from 2005 to December 2009 |
| | |
John L. Sullivan 625 Fourth Avenue South Minneapolis, MN Age 39 | | Assistant Secretary since 2007 | | Senior Counsel, Thrivent Financial since 2007; Senior Counsel, Division of Investment Management of the SEC from 2000 to 2007 |
| | |
Todd J. Kelly 4321 North Ballard Road Appleton, WI Age 41 | | Assistant Treasurer since 2004 | | Director, Fund Accounting Operations, Thrivent Financial since 2003 |
18
Board of Trustees and Officers
| | | | |
Name, Address and Age | | Position with Trust and Length of Service (2) | | Principal Occupation During the Past 5 Years |
Sarah L. Bergstrom 625 Fourth Avenue South Minneapolis, MN Age 33 | | Assistant Treasurer since 2007 | | Director, Fund Accounting Administration, Thrivent Financial since 2007; Manager, Fund Accounting Administration, Thrivent Financial from 2005 to 2007 |
| (1) | “Interested person” of the Trust as defined in the Investment Company Act of 1940 by virtue of positions with Thrivent Financial. Mr. Swansen is considered an interested person because of his principal occupation with Thrivent Financial. |
| (2) | Each Trustee generally serves an indefinite term until her or his successor is duly elected and qualified. Officers serve at the discretion of the board until their successors are duly appointed and qualified. |
| (3) | The Trustees other than Mr. Swansen are not “interested persons” of the Trust and are referred to as “Independent Trustees.” |
19
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20
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21
This report is submitted for the information of shareholders of
Thrivent Financial Securities Lending Trust. It is not authorized
for distribution to prospective investors unless preceded or
accompanied by the current prospectus for Thrivent Financial
Securities Lending Trust, which contains more complete
information about the Trust, including investment policies,
charges and expenses.
As of the end of the period covered by this report, registrant has adopted a code of ethics (as defined in Item 2 of Form N-CSR) applicable to registrant’s Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. No waivers were granted to such code of ethics during the period covered by this report. A copy of this code of ethics is filed as an exhibit to this Form N-CSR.
| Item 3. | Audit Committee Financial Expert |
Registrant’s Board of Trustees has determined that Constance L. Souders, an independent trustee, is the Audit Committee Financial Expert.
| Item 4. | Principal Accountant Fees and Services |
The aggregate fees billed by registrant’s independent public accountants, PricewaterhouseCoopers LLP (“PwC”), for each of the last two fiscal years for professional services rendered in connection with the audit of registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements were $13,888 for the year ended October 31, 2009 and $13,888 for the year ended October 31, 2010.
The aggregate fees PwC billed to registrant for each of the last two fiscal years for assurance and other services that are reasonably related to the performance of registrant’s audit and are not reported under Item 4(a) were $0 for the year ended October 31, 2009 and $0 for the year ended October 31, 2010. The aggregate fees PwC billed to registrant’s investment adviser and any entity controlling, controlled by, or under common control with registrant’s investment adviser for assurance and other services directly related to the operations and financial reporting of registrant were $0 for the year ended October 31, 2009 and $0 for the year ended October 31, 2010.
The aggregate tax fees PwC billed to registrant for each of the last two fiscal years for tax compliance, tax advice and tax planning services were $4,730 for the year ended October 31, 2009 and $4,730 for the year ended October 31, 2010. The aggregate tax fees PwC billed to registrant’s investment adviser and any entity controlling, controlled by, or under common control with registrant’s investment adviser for services directly related to the operations and financial reporting of registrant were $0 for the year ended October 31, 2009 and $0 for the year ended October 31, 2010.
The aggregate fees PwC billed to registrant for each of the last two fiscal years for products and services provided, other than the services reported in paragraphs (a) through (c) of this item, were $0 for the years ended October 31, 2009 and October 31, 2010. The aggregate fees PwC billed to registrant’s investment adviser and any entity controlling, controlled by, or under common control with registrant’s investment adviser for products and services provided, other than the services reported in paragraphs (a) through (c) of this item, were $1,500 for the years ended October 31, 2009 and October 31, 2010. These payments were for access to a PwC-sponsored online library that provides interpretive guidance regarding U.S. and foreign accounting standards. These $1,500 figures are also reported in response to item 4(g) below.
| | (e) | Registrant’s audit committee charter, adopted in February 2010, provides that the audit committee (comprised of the independent Trustees of registrant) is responsible for pre-approval of all auditing services performed for the registrant. The audit committee also is responsible for pre-approval (subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934) of all non-auditing services performed for the registrant or an affiliate of registrant. In addition, registrant’s audit committee charter permits a designated member of the audit committee to pre-approve, between meetings, one or more audit or non-audit service projects, subject to an expense limit and notification to the audit committee at the next committee meeting. Registrant’s audit committee pre-approved all fees described above that PwC billed to registrant. |
| | (f) | Less than 50% of the hours billed by PwC for auditing services to registrant for the fiscal year ended October 31, 2010 was for work performed by persons other than full-time permanent employees of PwC. |
| | (g) | The aggregate non-audit fees billed by PwC to registrant and to registrant’s investment adviser and any entity controlling, controlled by, or under common control with registrant’s investment adviser for the fiscal years ending October 31, 2009 and October 31, 2010 were $1,500 and $1,500 respectively. These $1,500 figures are also reported in response to item 4(d) above. |
| | (h) | Registrant’s audit committee has considered the non-audit services provided to the registrant and registrant’s investment adviser and any entity controlling, controlled by, or under common control with registrant’s investment adviser as described above and determined that these services do not compromise PwC’s independence. |
| Item 5. | Audit Committee of Listed Registrants |
Not applicable.
| Item 6. | Schedule of Investments |
(a) Registrant’s Schedule of Investments is included in the report to shareholders filed under Item 1.
(b) Not applicable to this filing.
| 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 |
There have been no material changes to the procedures by which shareholders may recommend nominees to registrant’s board of trustees.
| Item 11. | Controls and Procedures |
(a)(i) Registrant’s President and Treasurer have concluded that registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) Registrant’s President and Treasurer are aware of no change in registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, registrant’s internal control over financial reporting.
(a) The code of ethics pursuant to Item 2 is attached hereto.
(b) Certifications pursuant to Rules 30a-2(a) and 30a-2(b) under the Investment Company Act of 1940 are attached hereto.
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.
| | | | | | | | |
| | Date: December 29, 2010 | | | | THRIVENT FINANCIAL SECURITIES LENDING TRUST |
| | | | |
| | | | | | By: | | /S/ RUSSELL W. SWANSEN |
| | | | | | | | Russell W. Swansen President |
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.
| | | | | | | | |
| | Date: December 29, 2010 | | | | By: | | /S/ RUSSELL W. SWANSEN |
| | | | | | | | Russell W. Swansen President |
| | | | |
| | Date: December 29, 2010 | | | | By: | | /S/ GERARD V. VAILLANCOURT |
| | | | | | | | Gerard V. Vaillancourt Treasurer |
