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 811-21897
Manager Directed Portfolios
(Exact name of registrant as specified in charter)
615 East Michigan Street Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
Scott M. Ostrowski, President
Manager Directed Portfolios
c/o U.S. Bank Global Fund Services
777 East Wisconsin Avenue, 6th Floor
Milwaukee, WI 53202
(Name and address of agent for service)
(414) 516-3087
Registrant’s telephone number, including area code
Date of fiscal year end: June 30, 2024
Date of reporting period: June 30, 2024
Item 1. Reports to Stockholders.
(a) |
Vert Global Sustainable Real Estate ETF | ||
VGSR (Principal U.S. Listing Exchange: NASDAQ Stock Market LLC ) | ||
Annual Shareholder Report | June 30, 2024 |
Fund Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
Vert Global Sustainable Real Estate ETF | $50 | 0.47% |
1 Year | 5 Year | Since Inception (10/31/2017) | |
Vert Global Sustainable Real Estate ETF NAV | 11.41 | 1.42 | 2.33 |
Vert Global Sustainable Real Estate ETF Market | 11.56 | 1.44 | 2.35 |
MSCI ACWI Net Total Return Index (USD) | 19.38 | 10.76 | 9.38 |
S&P Global REIT (US Dollar) Net Total Return | 5.10 | 0.65 | 2.37 |
* | The Fund’s past performance is not a good predictor of the Fund’s future performance. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. |
Vert Global Sustainable Real Estate ETF | PAGE 1 | TSR_AR_56170L695 |
Net Assets | $367,086,498 |
Number of Holdings | 154 |
Net Advisory Fee Paid | $1,020,774 |
Portfolio Turnover Rate | 11% |
30-Day SEC Yield | 3.59% |
30-Day SEC Yield Unsubsidized | 3.49% |
Top 10 Holdings | (% of Net Assets) |
Digital Realty Trust, Inc. | 5.1% |
Welltower, Inc. | 5.1% |
Simon Property Group, Inc. | 5.0% |
Prologis, Inc. | 5.0% |
American Tower Corp. | 4.9% |
Equinix, Inc. | 4.7% |
Goodman Group | 4.4% |
Extra Space Storage, Inc. | 3.6% |
AvalonBay Communities, Inc. | 3.2% |
Iron Mountain, Inc. | 2.9% |
Vert Global Sustainable Real Estate ETF | PAGE 2 | TSR_AR_56170L695 |
(b) | Not applicable. |
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any substantive amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.
A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that there are at least two audit committee financial experts serving on its audit committee. Messrs. Gaylord B. Lyman and Scott C. Jones are the “audit committee financial experts” and are considered to be “independent” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services and tax services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
FYE 6/30/2024 | FYE 6/30/2023 | |
Audit Fees | $13,500 | $12,500 |
Audit-Related Fees | N/A | N/A |
Tax Fees | $3,500 | $3,250 |
All Other Fees | N/A | N/A |
The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, as well as non-audit services provided to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant relating to the operations and financial reporting of the registrant.
The percentage of fees billed by Cohen & Company Ltd. applicable to non-audit services pursuant to waiver of the pre-approval requirement were as follows:
FYE 6/30/2024 | FYE 6/30/2023 | |
Audit-Related Fees | 0% | 0% |
Tax Fees | 0% | 0% |
All Other Fees | 0% | 0% |
The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years.
Non-Audit Related Fees | FYE 6/30/2024 | FYE 6/30/2023 |
Registrant | N/A | N/A |
Registrant’s Investment Adviser | N/A | N/A |
The audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser is compatible with maintaining the principal accountant’s independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
The registrant has not been identified by the U.S. Securities and Exchange Commission as having filed an annual report issued by a registered public accounting firm branch or office that is located in a foreign jurisdiction where the Public Company Accounting Oversight Board is unable to inspect or completely investigate because of a position taken by an authority in that jurisdiction.
The registrant is not a foreign issuer.
Item 5. Audit Committee of Listed Registrants.
(a) The registrant is a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934 (the “Act”), and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Act. The committee consists of the independent members of the entire Board.
(b) Not applicable
Item 6. Investments.
(a) Schedule of Investments is included as part of the financial statements filed under Item 7 of this Form.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Investment Companies.
(a) |
Shares | Value | |||||
REAL ESTATE INVESTMENT TRUSTS - 99.2% | ||||||
Diversified REITs - 6.9% | ||||||
Activia Properties, Inc. | 258 | $ 585,416 | ||||
American Assets Trust, Inc.(a) | 20,869 | 467,048 | ||||
British Land Co. PLC | 354,821 | 1,846,139 | ||||
Charter Hall Long Wale REIT | 283,965 | 616,351 | ||||
Covivio SA | 22,335 | 1,062,352 | ||||
Cromwell European Real Estate Investment Trust(b) | 59,419 | 89,156 | ||||
Daiwa House REIT Investment Corp. | 960 | 1,466,915 | ||||
Empire State Realty Trust, Inc. - Class A(a) | 53,349 | 500,414 | ||||
GPT Group | 737,839 | 1,971,066 | ||||
Growthpoint Properties Australia Ltd. | 118,508 | 171,746 | ||||
Growthpoint Properties Ltd. | 1,452,574 | 968,913 | ||||
Hulic Reit, Inc. | 585 | 530,959 | ||||
ICADE | 17,476 | 429,666 | ||||
KDX Realty Investment Corp. | 1,505 | 1,464,208 | ||||
Land Securities Group PLC | 280,871 | 2,199,519 | ||||
Merlin Properties Socimi SA | 130,952 | 1,459,623 | ||||
Mirvac Group | 1,508,418 | 1,883,835 | ||||
Mori Trust Reit, Inc. | 595 | 256,701 | ||||
Nomura Real Estate Master Fund, Inc. | 1,648 | 1,461,952 | ||||
NTT UD REIT Investment Corp. | 634 | 458,375 | ||||
Picton Property Income Ltd. | 151,733 | 129,852 | ||||
Redefine Properties Ltd. | 2,626,934 | 578,328 | ||||
Schroder Real Estate Investment Trust Ltd. | 148,475 | 83,708 | ||||
Sekisui House Reit, Inc. | 1,809 | 889,543 | ||||
Stockland | 959,702 | 2,672,711 | ||||
Suntec Real Estate Investment Trust | 873,300 | 676,602 | ||||
Tokyu REIT, Inc. | 264 | 256,352 | ||||
Tritax EuroBox PLC | 353,805 | 275,054 | ||||
25,452,504 | ||||||
Health Care REITs - 11.7% | ||||||
Aedifica SA | 19,620 | 1,191,226 | ||||
Alexandria Real Estate Equities, Inc.(a) | 64,716 | 7,569,831 | ||||
Assura PLC | 986,173 | 502,885 | ||||
Cofinimmo SA | 15,283 | 922,991 | ||||
Healthpeak Properties, Inc. | 286,234 | 5,610,186 | ||||
Ventas, Inc. | 162,635 | 8,336,670 | ||||
Welltower, Inc. | 179,989 | 18,763,853 | ||||
42,897,642 | ||||||
Hotel & Resort REITs - 2.3% | ||||||
CapitaLand Ascott Trust | 1,115,100 | 719,950 | ||||
DiamondRock Hospitality Co.(a) | 80,841 | 683,106 | ||||
Hoshino Resorts REIT, Inc. | 100 | 323,884 | ||||
Host Hotels & Resorts, Inc.(a) | 281,274 | 5,057,307 | ||||
Japan Hotel REIT Investment Corp. | 1,867 | 901,815 | ||||
RLJ Lodging Trust(a) | 64,665 | 622,724 | ||||
8,308,786 | ||||||
1 |
Shares | Value | |||||
REAL ESTATE INVESTMENT TRUSTS - (Continued) | ||||||
Industrial REITs - 18.7% | ||||||
Advance Logistics Investment Corp. | 283 | $ 211,291 | ||||
Americold Realty Trust, Inc. | 111,967 | 2,859,637 | ||||
CapitaLand Ascendas REIT | 1,476,000 | 2,788,091 | ||||
Dexus Industria REIT | 22,306 | 42,010 | ||||
Dream Industrial Real Estate Investment Trust | 52,319 | 484,439 | ||||
Frasers Logistics & Commercial Trust | 1,270,700 | 890,732 | ||||
GLP J-Reit | 1,837 | 1,499,429 | ||||
Goodman Group | 689,057 | 15,991,512 | ||||
Goodman Property Trust | 451,561 | 553,070 | ||||
Industrial & Infrastructure Fund Investment Corp. | 1,044 | 821,649 | ||||
Japan Logistics Fund, Inc. | 311 | 514,273 | ||||
LaSalle Logiport REIT | 841 | 771,675 | ||||
LXP Industrial Trust(a) | 119,138 | 1,086,539 | ||||
Mapletree Logistics Trust | 1,351,500 | 1,286,431 | ||||
Mitsubishi Estate Logistics REIT Investment Corp. | 210 | 497,389 | ||||
Mitsui Fudosan Logistics Park, Inc. | 170 | 458,131 | ||||
Nippon Prologis REIT, Inc. | 946 | 1,476,103 | ||||
Prologis Property Mexico SAB de CV | 348,961 | 1,138,171 | ||||
Prologis, Inc. | 162,289 | 18,226,678 | ||||
Rexford Industrial Realty, Inc. | 89,057 | 3,971,052 | ||||
Segro PLC | 508,224 | 5,770,425 | ||||
SOSiLA Logistics REIT, Inc. | 306 | 223,898 | ||||
STAG Industrial, Inc.(a) | 75,568 | 2,724,982 | ||||
TF Administradora Industrial S de RL de CV | 314,268 | 670,454 | ||||
Tritax Big Box REIT PLC | 915,473 | 1,794,886 | ||||
Warehouses De Pauw CVA | 66,618 | 1,806,372 | ||||
68,559,319 | ||||||
Office REITs - 6.2% | ||||||
Allied Properties Real Estate Investment Trust | 28,300 | 316,639 | ||||
Brandywine Realty Trust | 66,296 | 297,006 | ||||
BXP, Inc.(a) | 60,931 | 3,750,912 | ||||
CLS Holdings PLC | 15,840 | 18,121 | ||||
Cromwell Property Group | 647,533 | 168,658 | ||||
Derwent London PLC | 38,334 | 1,095,146 | ||||
Dexus(b) | 417,480 | 1,806,718 | ||||
Dream Office Real Estate Investment Trust | 3,508 | 46,377 | ||||
Gecina SA | 18,733 | 1,725,632 | ||||
Global One Real Estate Investment Corp. | 406 | 257,189 | ||||
Great Portland Estates PLC | 153,080 | 649,218 | ||||
Hudson Pacific Properties, Inc. | 36,698 | 176,517 | ||||
Inmobiliaria Colonial Socimi SA | 102,535 | 596,715 | ||||
Japan Prime Realty Investment Corp. | 258 | 519,657 | ||||
Japan Real Estate Investment Corp. | 546 | 1,724,282 | ||||
JBG SMITH Properties(a) | 31,650 | 482,030 | ||||
Kilroy Realty Corp. | 46,972 | 1,464,117 | ||||
2 |
Shares | Value | |||||
REAL ESTATE INVESTMENT TRUSTS - (Continued) | ||||||
Office REITs - (Continued) | ||||||
Manulife US Real Estate Investment Trust | 752,209 | $ 48,141 | ||||
Nippon Building Fund, Inc. | 631 | 2,208,461 | ||||
NSI NV | 9,879 | 203,499 | ||||
Orix JREIT, Inc. | 1,059 | 1,048,072 | ||||
Precinct Properties New Zealand Ltd.(b) | 567,414 | 385,516 | ||||
SL Green Realty Corp.(a) | 26,675 | 1,510,872 | ||||
Vornado Realty Trust(a) | 68,282 | 1,795,134 | ||||
Workspace Group PLC | 64,887 | 487,218 | ||||
22,781,847 | ||||||
Residential REITs - 15.4% | ||||||
Advance Residence Investment Corp. | 568 | 1,156,409 | ||||
Altarea SCA | 1,655 | 146,690 | ||||
AvalonBay Communities, Inc. | 57,356 | 11,866,383 | ||||
Care Property Invest NV | 6,667 | 94,319 | ||||
Centerspace(a) | 4,709 | 318,470 | ||||
Comforia Residential REIT, Inc. | 168 | 332,115 | ||||
Dream Residential Real Estate Investment Trust | 2,600 | 16,432 | ||||
Equity LifeStyle Properties, Inc.(a) | 72,106 | 4,696,264 | ||||
Equity Residential | 139,245 | 9,655,248 | ||||
Essex Property Trust, Inc.(a) | 25,606 | 6,969,953 | ||||
Home Reit PLC(b)(c) | 255,956 | 30,770 | ||||
Irish Residential Properties REIT PLC | 75,550 | 73,360 | ||||
Killam Apartment Real Estate Investment Trust | 23,142 | 288,186 | ||||
Mid-America Apartment Communities, Inc.(a) | 46,671 | 6,655,751 | ||||
Minto Apartment Real Estate Investment Trust | 11,500 | 124,215 | ||||
Sun Communities, Inc.(a) | 50,795 | 6,112,670 | ||||
UDR, Inc. | 129,533 | 5,330,283 | ||||
UMH Properties, Inc. | 25,598 | 409,312 | ||||
UNITE Group PLC | 148,588 | 1,675,437 | ||||
Veris Residential, Inc.(a) | 31,690 | 475,350 | ||||
Xior Student Housing NV | 6,822 | 218,980 | ||||
56,646,597 | ||||||
Retail REITs - 16.2% | ||||||
Brixmor Property Group, Inc. | 116,756 | 2,695,896 | ||||
CapitaLand Integrated Commercial Trust | 2,159,112 | 3,154,430 | ||||
Carmila SA | 26,911 | 451,088 | ||||
Charter Hall Retail REIT | 221,249 | 480,224 | ||||
Choice Properties Real Estate Investment Trust | 71,734 | 673,121 | ||||
Eurocommercial Properties NV | 17,241 | 415,758 | ||||
Federal Realty Investment Trust | 29,239 | 2,952,262 | ||||
First Capital Real Estate Investment Trust | 42,825 | 460,063 | ||||
Frasers Centrepoint Trust | 462,500 | 726,895 | ||||
Hammerson PLC(b) | 1,515,508 | 530,662 | ||||
Immobiliare Grande Distribuzione SIIQ SpA(b) | 20,822 | 38,473 | ||||
Japan Metropolitan Fund Invest | 2,784 | 1,566,281 | ||||
3 |
Shares | Value | |||||
REAL ESTATE INVESTMENT TRUSTS - (Continued) | ||||||
Retail REITs - (Continued) | ||||||
Kimco Realty Corp.(a) | 270,596 | $5,265,798 | ||||
Kiwi Property Group Ltd. | 582,338 | 294,524 | ||||
Klepierre SA | 86,392 | 2,312,922 | ||||
Lar Espana Real Estate Socimi SA | 19,055 | 139,484 | ||||
Lendlease Global Commercial REIT | 854,590 | 353,123 | ||||
Macerich Co.(a) | 86,424 | 1,334,387 | ||||
Mapletree Pan Asia Commercial Trust | 821,500 | 739,517 | ||||
Mercialys SA | 37,847 | 419,012 | ||||
Regency Centers Corp. | 70,329 | 4,374,464 | ||||
RioCan Real Estate Investment Trust | 62,213 | 764,279 | ||||
Scentre Group | 2,030,573 | 4,231,095 | ||||
Shaftesbury Capital PLC | 527,293 | 927,835 | ||||
Simon Property Group, Inc. | 121,231 | 18,402,866 | ||||
Unibail-Rodamco-Westfield | 46,484 | 3,662,723 | ||||
Vastned Belgium NV | 37 | 1,186 | ||||
Vastned Retail NV | 4,372 | 108,708 | ||||
Vicinity Ltd. | 1,426,042 | 1,761,910 | ||||
Wereldhave Belgium Comm VA | 447 | 21,702 | ||||
Wereldhave NV | 15,258 | 216,511 | ||||
59,477,199 | ||||||
Specialized REITs - 21.8% | ||||||
American Tower Corp. | 92,500 | 17,980,150 | ||||
Big Yellow Group PLC | 71,529 | 1,061,524 | ||||
Charter Hall Social Infrastructure REIT | 151,621 | 239,987 | ||||
Digital Realty Trust, Inc. | 123,937 | 18,844,621 | ||||
Equinix, Inc. | 23,056 | 17,444,169 | ||||
Extra Space Storage, Inc. | 85,515 | 13,289,886 | ||||
Iron Mountain, Inc. | 118,008 | 10,575,877 | ||||
Safestore Holdings PLC | 80,292 | 781,017 | ||||
80,217,231 | ||||||
TOTAL REAL ESTATE INVESTMENT TRUSTS (Cost $347,360,885) | 364,341,125 | |||||
Units | ||||||
SHORT-TERM INVESTMENTS - 8.0% | ||||||
Investments Purchased with Proceeds from Securities Lending - 7.8% | ||||||
Mount Vernon Liquid Assets Portfolio, LLC, 5.46%(d) | 28,598,645 | 28,598,645 | ||||
28,598,645 | ||||||
4 |
Shares | Value | |||||
SHORT-TERM INVESTMENTS - (Continued) | ||||||
Money Market Funds - 0.2% | ||||||
Invesco Government & Agency Portfolio - Class Institutional, 5.25% | 688,794 | $688,794 | ||||
TOTAL SHORT-TERM INVESTMENTS (Cost $29,287,439) | 29,287,439 | |||||
TOTAL INVESTMENTS - 107.2% (Cost $376,648,324) | $393,628,564 | |||||
Liabilities in Excess of Other Assets - (7.2)% | (26,542,066) | |||||
TOTAL NET ASSETS - 100.0% | $367,086,498 | |||||
(a) | All or a portion of this security is on loan as of June 30, 2024. The total market value of these securities was $28,182,004 which represented 7.7% of net assets. |
(b) | Non-income producing security. |
(c) | Fair value determined using significant unobservable inputs in accordance with procedures established by and under the supervision of Vert Asset Management LLC (the “Advisor”), acting as Valuation Designee. These securities represented $30,770 or 0.0% of net assets as of June 30, 2024. |
(d) | The rate shown represents the 7-day effective yield as of June 30, 2024. |
5 |
ASSETS: | |||
Investments, at value | $393,628,564 | ||
Foreign currency, at value | 56,044 | ||
Dividends and interest receivable | 1,518,613 | ||
Receivable for fund shares sold | 965,570 | ||
Receivable for investments sold | 639,616 | ||
Securities lending income receivable | 2,140 | ||
Total assets | 396,810,547 | ||
LIABILITIES: | |||
Payable upon return of collateral for securities on loan | 28,598,645 | ||
Payable for investments purchased | 959,992 | ||
Payable to adviser | 83,223 | ||
Payable for fund administration and accounting fees | 32,917 | ||
Payable for custodian fees | 16,755 | ||
Payable for audit fees | 15,772 | ||
Payable for printing and mailing | 4,543 | ||
Payable for compliance fees | 2,619 | ||
Payable for transfer agent fees and expenses | 49 | ||
Payable for expenses and other liabilities | 9,534 | ||
Total liabilities | 29,724,049 | ||
NET ASSETS | $367,086,498 | ||
Net Assets Consists of: | |||
Paid-in capital | $368,777,727 | ||
Total accumulated losses | (1,691,229) | ||
Total net assets | $367,086,498 | ||
Shares issued and outstanding(a) | 38,017,962 | ||
Net asset value per share | $9.66 | ||
Cost: | |||
Investments, at cost | $376,648,324 | ||
Foreign currency, at cost | 56,743 | ||
LOANED SECURITIES: | |||
at value (included in investments) | $28,182,004 | ||
(a) | Unlimited shares authorized without par value. |
6 |
INVESTMENT INCOME: | |||
Dividend income | $11,954,842 | ||
Less: Dividend withholding taxes | (575,471) | ||
Interest income | 41,688 | ||
Securities lending income | 59,239 | ||
Total investment income | 11,480,298 | ||
EXPENSES: | |||
Investment advisory fee (Note 4) | 1,310,702 | ||
Fund administration and accounting fees (Note 4) | 207,280 | ||
Custodian fees | 92,616 | ||
Federal and state registration fees | 49,804 | ||
Trustees’ fees | 29,814 | ||
Transfer agent fees | 28,073 | ||
Reports to shareholders | 27,286 | ||
Legal fees | 23,854 | ||
Audit fees | 16,546 | ||
Compliance fees | 14,346 | ||
Other | 28,444 | ||
Total expenses | 1,828,765 | ||
Expense reimbursement by Adviser (Note 4) | (289,928) | ||
Net expenses | 1,538,837 | ||
NET INVESTMENT INCOME | 9,941,461 | ||
REALIZED AND UNREALIZED GAIN (LOSS) | |||
Net realized gain (loss) from: | |||
In-kind transactions | 6,476,224 | ||
Investments | (11,338,412) | ||
Foreign currency transactions | 36,788 | ||
Net realized loss | (4,825,400) | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 32,061,366 | ||
Foreign currency translation | (1,214) | ||
Net change in unrealized appreciation | 32,060,152 | ||
Net realized and unrealized gain | 27,234,752 | ||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $37,176,213 | ||
7 |
Year Ended June 30, | ||||||
2024* | 2023 | |||||
OPERATIONS: | ||||||
Net investment income | $9,941,461 | $6,577,808 | ||||
Net realized loss | (4,825,400) | (6,274,396) | ||||
Net change in unrealized appreciation (depreciation) | 32,060,152 | (5,038,449) | ||||
Net increase (decrease) in net assets from operations | 37,176,213 | (4,735,037) | ||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||
Distributions to shareholders | (16,350,404) | (2,751,991) | ||||
Tax return of capital to shareholders | (1,283,216) | — | ||||
Total distributions to shareholders | (17,633,620) | (2,751,991) | ||||
CAPITAL TRANSACTIONS: | ||||||
Subscriptions | 100,074,661 | 179,294,885 | ||||
Redemptions | (44,380,856) | (42,029,899) | ||||
ETF transaction fees (See Note #7) | 1,284 | — | ||||
Distributions reinvested | — | 2,714,419 | ||||
Net increase in net assets from capital transactions | 55,695,089 | 139,979,405 | ||||
Net Increase in Net Assets | 75,237,682 | 132,492,377 | ||||
NET ASSETS: | ||||||
Beginning of the year | 291,848,816 | 159,356,439 | ||||
End of the year | $367,086,498 | $291,848,816 | ||||
SHARES TRANSACTIONS | ||||||
Subscriptions | 10,836,661 | 19,806,638 | ||||
Redemptions | (4,847,028) | (4,634,699) | ||||
Distributions reinvested | — | 292,187 | ||||
Total increase in shares outstanding | 5,989,633 | 15,464,126 | ||||
* | Prior to December 4, 2023 the fund operated as a traditional open-end mutual fund See Note 1. |
8 |
Year Ended June 30, | |||||||||||||||
2024(e) | 2023 | 2022 | 2021 | 2020 | |||||||||||
PER SHARE DATA: | |||||||||||||||
Net asset value, beginning of year | $9.11 | $9.62 | $11.39 | $8.59 | $10.45 | ||||||||||
INVESTMENTS OPERATIONS: | |||||||||||||||
Net investment income(a) | 0.28 | 0.30 | 0.21 | 0.19 | 0.32 | ||||||||||
Net realized and unrealized gain (loss) on investments | 0.76 | (0.67) | (1.55) | 2.76 | (1.84) | ||||||||||
Total from investment operations | 1.04 | (0.37) | 1.34 | 2.95 | (1.52) | ||||||||||
LESS DISTRIBUTIONS FROM: | |||||||||||||||
From net investment income | (0.46) | (0.04) | (0.26) | (0.15) | (0.34) | ||||||||||
From net realized gains | — | (0.10) | (0.17) | — | — | ||||||||||
Return of capital | (0.03) | — | — | — | — | ||||||||||
Total distributions | (0.49) | (0.14) | (0.43) | (0.15) | (0.34) | ||||||||||
Redemption fee per share | 0.00 | — | — | — | — | ||||||||||
ETF transaction fees per share | 0.00(b) | — | — | — | — | ||||||||||
Net asset value, end of year | $9.66 | $9.11 | $9.62 | $11.39 | $8.59 | ||||||||||
Total return | 11.41%(d) | (3.84)% | (12.41)% | 34.72% | (15.14)% | ||||||||||
SUPPLEMENTAL DATA AND RATIOS: | |||||||||||||||
Net assets, end of year (in thousands) | $367,086 | $291,849 | $159,356 | $125,923 | $50,637 | ||||||||||
Ratio of expenses to average net assets: | |||||||||||||||
Before expense reimbursement/ recoupment | 0.56% | 0.62% | 0.67% | 0.80% | 1.12% | ||||||||||
After expense reimbursement/ recoupment | 0.47% | 0.50% | 0.50% | 0.50% | 0.50% | ||||||||||
Ratio of net investment income to average net assets | |||||||||||||||
Before reimbursements | 2.94% | 3.11% | 1.64% | 1.66% | 2.64% | ||||||||||
After reimbursements | 3.03% | 3.23% | 1.80% | 1.96% | 3.26% | ||||||||||
Portfolio turnover rate(c) | 11% | 9% | 11% | 19% | 18% | ||||||||||
(a) | Net investment income per share has been calculated based on average shares outstanding during the year. |
(b) | Amount represents less than $0.005 per share. |
(c) | Portfolio Turnover rate excludes in-kind transactions. |
(d) | The performance for the Fund is calculated on a net asset value basis. |
(e) | The Fund converted from a mutual fund to an ETF pursuant to an Agreement and Plan of Reorganization on December 4, 2023. See Note 1 in the Notes to Financial Statements for additional information about the Reorganization. The financial highlights in the above table reflect the performance of the mutual fund for the period prior to December 4, 2023 and the performance of the Fund as an ETF for the period from December 4, 2023 through June 30, 2024. |
9 |
Predecessor Fund Net Assets | Shares Issued to Shareholders of Predecessor Fund | Fund Net Assets | Combined Net Assets | Tax Status of Transfer | ||||||||
$326,550,740(1) | 34,417,962 | $ — | $326,550,740 | Non-taxable | ||||||||
(1) | Includes accumulated net investment income, accumulated realized losses, and unrealized appreciation in the amounts of $12,595,314, $(13,381,718), and $(1,844,395) respectively. |
A. | Security Valuation: All investments in securities are recorded at their estimated fair value, as described in Note 3. |
B. | Federal Income Taxes: It is the Fund’s policy to comply with the requirements of Subchapter M 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 or excise tax provisions are required. |
10 |
C. | Securities Transactions, Income, Expenses and Distributions: Securities transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Interest income is recorded on an accrual basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date. The Fund invests in real estate investment trusts (REITs) which report information on the source of their distributions annually. The Fund’s policy is to record all REIT distributions initially as dividend income on the ex-dividend date and then re-designate them as return of capital and/or capital gain distributions at the end of the reporting period based on information provided annually by each REIT, and management estimates such re-designations when actual information has not yet been reported. Income on REITs may be reclassified to realized gains or as an adjustment to cost in order to correctly recognize the true character of the distributions received by the Fund. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. |
D. | Use of 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates. |
E. | Reclassification of Capital Accounts: GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. |
F. | Foreign Currency: Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors. |
G. | Events Subsequent to the Fiscal Period End: In preparing the financial statements as of June 30, 2024, management considered the impact of subsequent events for potential recognition or disclosure in the financial statements and has concluded that no additional recognition or disclosures are necessary. |
11 |
12 |
Level 1 | Level 2 | Level 3 | Total | |||||||||
REITs | $364,310,355 | $ — | $ 30,770 | $ 364,341,125 | ||||||||
Money Market Funds | 688,794 | — | — | 688,794 | ||||||||
Investments Purchased with Proceeds from Securities Lending* | — | — | — | 28,598,645* | ||||||||
Total Investments in Securities | $364,999,149 | $— | $30,770 | $393,628,564 | ||||||||
* | Investment valued using the NAV per share practical expedient. In accordance with Topic 820, the investment is excluded from the fair value hierarchy. The investment is included in the total column for the purpose of reconciling the table to the schedule of investments. |
Investments | |||
July 1, 2023 Market Value | $30,914 | ||
Purchases | — | ||
Sales proceeds (and/or rights exercised) | — | ||
Accrued discounts/premiums net | — | ||
Change in unrealized appreciation/(depreciation) | (144) | ||
Transfer in and/or (out) of Level 3 | — | ||
Balance as of June 30, 2024 | $30,770 | ||
13 |
Asset Category | Fair Value | Primary Valuation Technique | Unobservable Inputs | Input Value/Range Weighted Average(a) | Valuation from a Decrease in input | ||||||||||
REIT | $30,770 | Discount to last quoted price | Discount | 75% | Increase | ||||||||||
(a) | Weighted Averages are calculated based on Fair Value of investments. |
Vert Global Sustainable Real Estate Fund | 0.50% | ||
Vert Global Sustainable Real Estate ETF | 0.45% | ||
6/30/2027 | Total | ||
$195,771 | $195,771 | ||
14 |
Administration & fund accounting | $207,280 | ||
Custody | $92,616 | ||
Transfer agency | $28,073 | ||
Compliance | $14,346 | ||
Administration & fund accounting | $32,917 | ||
Custody | $16,755 | ||
Transfer agency | $49 | ||
Compliance | $ 2,619 | ||
Purchases | Sales | ||
$59,765,904 | $36,501,062 | ||
Purchases | Sales | ||
$42,970,324 | $ 15,533,103 | ||
Cost of investments(a) | $383,268,136 | ||
Gross unrealized appreciation | 41,334,354 | ||
Gross unrealized depreciation | (30,973,926) | ||
Net unrealized appreciation | 10,360,428 | ||
Undistributed ordinary income | — | ||
Undistributed long-term capital gain | — | ||
Total distributable earnings | — | ||
Other accumulated losses | (12,051,657) | ||
Total accumulated deficit | $(1,691,229) | ||
(a) | The difference between the book basis and tax basis net unrealized appreciation and cost is attributable primarily to wash sales and passive foreign investment companies. |
15 |
Total Accumulated Deficit | Paid in Capital | |||||
Vert Global Sustainable Real Estate ETF | $(6,106,233) | $6,106,233 | ||||
Year Ended June 30, | ||||||
2024 | 2023 | |||||
Ordinary income | $16,350,404 | $1,656,103 | ||||
Long-term capital gains | — | 1,095,888 | ||||
Return of capital | 1,283,216 | — | ||||
$17,633,620 | $2,751,991 | |||||
16 |
Overnight and Continuous | Market Value of Securities on Loan | Investment Asset Class of Securities Purchased | Collateral Proceeds from Securities Lending | Pledged Counterparty^ | Exposure | ||||||||||
Vert Global Sustainable Real Estate ETF | $28,182,004 | Non-registered money market fund | $28,598,645 | $28,598,645 | $ — | ||||||||||
^ | As of the end of the reporting period, the value of the collateral pledged from the counterparty exceeded the value of the securities out on loan. Refer to the Fund’s Schedule of Investments for details on the securities out on loan. |
17 |
18 |
Vert Global Sustainable Real Estate ETF | 38.42% | ||
Vert Global Sustainable Real Estate ETF | 0.00% | ||
19 |
(b) | Financial Highlights are included within the financial statements filed under Item 7 of this Form. |
Item 8. Changes in and Disagreements with Accountants for Open-End Investment Companies.
There were no changes in or disagreements with accountants during the period covered by this report.
Item 9. Proxy Disclosures for Open-End Investment Companies.
There were no matters submitted to a vote of shareholders during the period covered by this report.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Investment Companies.
See the Statement of Operations within Item 7(a).
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
Not applicable.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 16. Controls and Procedures.
(a) | The Registrant’s President/Principal Executive Officer and Treasurer/Principal Financial Officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service providers. |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) 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 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) Not applicable.
(b) Not applicable.
Item 19. Exhibits.
(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant’s securities are listed. Not Applicable.
(4) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(5) | Change in the registrant’s independent public accountant. Not applicable. |
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 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) | Manager Directed Portfolios |
By (Signature and Title)* | /s/ Scott M. Ostrowski | ||
Scott M. Ostrowski, President/ | |||
Principal Executive Officer |
Date | September 3, 2024 |
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/ Scott M. Ostrowski | ||
Scott M. Ostrowski, President/ | |||
Principal Executive Officer |
Date | September 3, 2024 |
By (Signature and Title)* | /s/ Ryan Frank | ||
Ryan Frank, Treasurer/ | |||
Principal Financial Officer |
Date | September 3, 2024 |
* Print the name and title of each signing officer under his or her signature.